The lack of enthusiasm for REC trading has prompted the Central Electricity Regulatory Commission(CERC) to rethink the validity of the RECs, which is currently at 365 days.
As the CERC put it,” It is noticed that non-solar REC prices have remained at floor price since September 2012 as supply of REC remains far in excess of demand. The total RECs available in October were 15 lakhs, out of which only 2.2 lakh RECs had been redeemed, leaving an inventory of 12.8 Lakh RECs. As the number of RECs available for sale are much larger than RECs being actually sold, this has the effect of sizable quantity of RECs being lapsed after their validity period of 1 year. Needless to say, the main reason for lapsing of RECs is the reluctance and/or apathy on the part of distribution licensees to come forward to buy the RECs to meet their RPOs…. The commission considers it necessary to extend the validity period of RECs appropriately, in order to give the RE generators sufficient time and opportunity to trade the RECs at the power exchanges.”
The RE generators, NLDC and the Power Exchanges(IEX and PXIL) have been directed to provide their inputs by 5th January 2013. The petition will be heard on 15th January 2013.
The notification can be accessed here.
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