An aggregate of 59.5 million renewable energy certificates (RECs) worth INR 9,266 crore (USD 1.24 billion) has been traded on the two Indian power exchanges since these market-based instruments’ launch in 2010, according to a study by the CEEW Centre for Energy Finance (CEEW-CEF).
RECs help power distribution companies (discoms) and others meet their renewable purchase obligations (RPOs) without actually buying renewable power. Each REC issued corresponds to 1 MWh, or 1,000 kWh, of electricity injected into the grid.
The report highlights that the REC market is RPO-driven, with as many as 99% of all REC purchases dome to fulfill RPO requirements of Discoms, but is still grappling with insufficient demand.
“Poor RPO compliance [by Discoms] across India has contributed to a demand shortfall of 7%, represented by the 5.1 million RECs unsold as of December 2020,” according to the report.
“Solar, which forms the centerpiece of India’s renewable energy (RE) ambitions, remains vastly underrepresented in REC issuances. To date, only 16% of RECs issued to power generators were against solar projects; wind and other renewable energy projects accounted for the balance 84% of REC issuances to power generators,” it added.
Source: ELETimes
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