REC Trading – March 2013 – Solar REC hits Forbearance Price

REC trading for the month of March 2013 concluded early this week. It is important to note that March marks the end of the compliance year (2012-13) and this has had significant impact on the trading statistics seen this week. The trading data for the month is provided below.

 Non-Solar RECs
As we hit the end of the compliance year, the non-solar REC segment witnessed significant growth in both the number of buy bids as well as the volume traded. The number of buy bids have increased signficantly by about 179% as compared to same period last month indicating last gasp efforts by various obligated entities to fulfil their obligation requirements. The total volume traded too increased by a similar amount (179%). This increase in the buy bids though did not warrant an  increase in price of the non-solar RECs due to the excess inventory of RECs that the market is grappling with as prices remained at Rs. 1500 per REC across both IEX and PXIL. The increase in the validity life beyond 365 days to two years will serve only to add to this excess inventory if proper RPO enforcement guidelines is not in place.
The bad news in the non-solar REC segment is counterbalanced by some good news in the Solar REC trading. Solar RECs, for the first time since they have begun trading have hit the forbearance price for the first time. The Solar RECs were traded at Rs. 13,400 in IEX with a trade volume of 2632. Prices at PXIL though remained the same at Rs. 13,000 per solar REC. The volume traded across both the exchanges increased by a modest 42% this month when compared with the non-solar REC segment boosted by no other reason than end of year compliance. With low supply in the solar REC segment, solar RECs are expected to continue to trade at or near the forbearance price in the short-medium term.
The REC trading details for the previous months are available here and here.
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