Sales of renewable energy certificates (RECs) jumped about 245 percent to 15.68 lakh this January, from 4.54 lakh in December last year.
Power distribution companies as well as open access and captive consumers are under obligation to buy RECs from renewable energy producers under renewable purchase obligations (RPOs) as mandated by central and state regulatory commissions.
RECs are aimed at providing an easier avenue for various entities, including power distribution companies, to meet their green energy obligations.
Two power exchanges -- Indian Energy Exchange (IEX) and Power Exchange India Ltd (PXIL) -- approved by the Central Electricity Regulatory Commission hold auction of RECs last Wednesday of every month.
As per available data, the sale volume of RECs at the two exchanges in January was 15,68,192 as against 4,54,038 in December 2016.
As many as 12,87,814 RECs were sold at IEX in monthly auction on January 25. Similarly 2,80,378 RECs were sold at PXIL last Wednesday.
"With trade of 12.48 lakh RECs, the market has set an all-time high predominantly on purchase by discoms followed by open access and captive consumers," IEX has said in a statement.
According to the statement, so far this fiscal (April-January), IEX has traded about 31 lakh RECs. The REC volume trade saw an increase of over 412 percent over 2.51 lakh in the previous month of the same fiscal.
The total cleared volume at PXIL was 2,80,378 RECs in January compared with 2,02,717 RECs in December 2016.
In a statement, PXIL has said that before January 25, more than 1.92 crore RECs were available in the market for trade, but the clearance ratio was low as large obligated entities like distribution utilities did not participate in today's monthly auction.
The traded volume and clearance ratio is expected to increase further in the remaining two monthly sessions of the fiscal year when large obligated entities purchase RECs to meet their RPO target for the year, it said.
One REC is equivalent to 1 MWh of electricity generated from renewable sources.
Under the REC mechanism, an entity can generate power through renewable resources in any part of the country. The generator receives the cost equivalent of electricity produced from any source while the environment attribute is sold through the exchanges at market-determined price.
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