The Appellate Tribunal for Electricity (APTEL) postponed trading of renewable energy certificates (REC) scheduled on July 29, by four weeks in 3 separate appeals filed by Green Energy Association, IWPA (Indian Wind Power Association) and Techno Electric and Engineering Company Ltd against the CERC order issued on fixing REC floor and forbearance price.
August 03, 2020. By Manu Tayal
The Appellate Tribunal for Electricity (APTEL) has postponed the trading of renewable energy certificates (REC) scheduled on July 29, by four weeks in 3 separate appeals filed by Green Energy Association, IWPA (Indian Wind Power Association) and Techno Electric and Engineering Company Ltd against the CERC order issued on fixing REC floor and forbearance price.
“Trading of RECs scheduled on July 29, 2020 shall be postponed by four weeks. It is made clear that if validity for any REC is going to be expired within four weeks, as stated above, the same shall be extended by the concerned authority,” the APTEL order issued on July 24, 2020 said, quoted PTI report.
Moreover, there was no trading of RECs or green certificates in July. The trading of REC is done on the last Wednesday of every month at 2 power exchanges i.e. Indian Energy Exchange (IEX) and Power Exchange of India Ltd (PXIL).
Under the renewable purchase obligation (RPO), bulk purchasers like Discoms, open access consumers and capacitive users are required to buy certain proportion of RECs. They can buy RECs from renewable energy producers to meet RPO norms. One REC is created after 1MWh of electricity is generated from an eligible renewable energy source.
Commenting on the development, Rajesh Kumar Mediratta, Director - Strategy and Regulatory, IEX said, quoted PTI that “the recent CERC order on correction of the floor and forbearance prices of RECs is aligned with the price discovery through the RE (renewable energy) auctions from time to time. We feel this move is in line with times when RE prices have come down.”
Mediratta further added that, this will encourage buyers to come to REC market to meet RPO.
“On petition filed by few RE associations, APTEL has stayed the REC trading for 4 weeks, and we could not facilitate REC trading on July 29. We are of the view that REC trade sessions should not have been halted as it prevents needy Discoms and OA (open access) customers to meet their statutory requirement of RPO,” he said.
As per the June CERC order, the floor price of solar and non-solar RECs have been reduced to zero from Rs 1,000 earlier.
Similarly, the forbearance (ceiling) price of solar and non-solar was reduced to Rs 1,000 for both from Rs 2,400 and Rs 3,000 respectively.
The forbearance price and floor price fixed by the CERC are effective from July 1, 2020 to June 30, 2021 or until further orders of the Commission.
Last month, the Supreme Court had refused to entertain Green Energy Association (GEA) appeal on stopping REC price revision by the CERC.
Moreover, industry experts think that the higher REC prices put additional burden on consumers in power tariff.
Meanwhile, sales of RECs declined more than 29 per cent to 89.27 lakh units in 2019-20, against 1.26 crore units in 2018-19.
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