In an order issued on July 24, APTEL postponed the RECs trading session scheduled on July 29, 2020 by four weeks in three separate appeals filed by Green Energy Association, IWPA (Indian Wind Power Association) and Techno Electric and Engineering Company Ltd against the CERC order issued on fixing REC floor and forbearance price.
“Trading of RECs scheduled on July 29, 2020 shall be postponed by four weeks. It is made clear that if validity for any REC is going to be expired within four weeks, as stated above, the same shall be extended by the concerned authority,” the APTEL order said.
There was no trading of RECs or green certificates in July. REC trading is done at two power exchanges — Indian Energy Exchange (IEX) and Power Exchange of India Ltd (PXIL) — on last Wednesday of every month.
Under the renewable purchase obligation (RPO), bulk purchasers like discoms, open access consumers and capacitive users are required to buy certain proportion of RECs. They can buy RECs from renewable energy producers to meet RPO norms.
One REC is created when one megawatt hour of electricity is generated from an eligible renewable energy source.
“The recent CERC order on correction of the floor and forbearance prices of RECs is aligned with the price discovery through the RE (renewable energy) auctions from time to time. We feel this move is in line with times when RE prices have come down,” Rajesh Kumar Mediratta, Director – Strategy and Regulatory, Indian Energy Exchange told .
He further said, this will encourage buyers to come to REC market to meet RPO.
“On petition filed by few RE associations, APTEL has stayed the REC trading for 4 weeks, and we could not facilitate REC trading on July 29. We are of the view that REC trade sessions should not have been halted as it prevents needy Discoms and OA (open access) customers to meet their statutory requirement of RPO,” he said.
The forbearance price and floor price fixed by the CERC are effective from July 1, 2020 to June 30, 2021 or until further orders of the Commission. In June, the Supreme Court had refused to entertain Green Energy Association (GEA) appeal on stopping REC price revision by the CERC.
Industry experts think that the higher REC prices put additional burden on consumers in power tariff.
Sales of renewable energy certificates declined over 29 per cent to 89.27 lakh units in 2019-20, compared to 1.26 crore units in 2018-19.