REC trading for the month of May 2013 concluded yesterday. In a sharp turn of fortunes, the Solar REC segment which has so far seemed resilient to the ill fortunes of the non-solar REC market has experienced a downward trend hitting its lowest discovered price per REC since the solar REC trading began.
The non-solar REC segment maintained its status quo. Though there hasn’t been significant movement, the total number of buy bids increased by 19% while the number of sell bids too increased by 11%. The supply glut is expected to continue in the non-solar REC segment with the number of RECs being injected into the market increasing at a similar or faster pace when compared to the number of RECs being bought out. The non-solar REC price continues to flatline, languishing at the base price of Rs. 1500 per REC both at the IEX and PXIL. Interestingly, PXIL seems to be gaining the upperhand over IEX as the preferred exchange for trading non-solar RECs with the traded volume in PXIL being about 46% higher than IEX.
The demand for solar-RECs too dropped significantly perhaps representing ominous signs for the future. The total number of buy bids (demand indicator) fell by about 76% while the total number of sell bids (supply indicator) grew by 36% compared to the levels seen last month. Total volume traded, as expected, fell by about 30%. Most worringly, the solar-REC price has reached new lows. The price discovered at IEX was Rs. 11,490 per REC while it was Rs. 10,990 in the PXIL trading session with the weighted average solar-REC price standing at Rs. 11,186.42. Both these prices are the lowest the respective exchanges have seen. As it stands though, there should be no cause for concern as even at the floor prices, REC based solar projects are viable especially considering the low tariffs being offered to developers across the country.
With the solar-REC supply expected to increase owing to numerous REC based power projects coming up in Rajasthan and other places, perhaps we might start witnessing the downward trend the non-solar REC segment saw unless some significant counter measures are taken….quickly.
The REC trading details for the previous months are available here and here.
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