How to increase the trading volume of recently launched RECs for promoting renewable energy in India?
Friday, April 1, 2011 2 comments
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One of the most important developments in renewable energy space went unnoticed in most of the newspapers and websites. The much-anticipated Renewable Energy Certificates (RECs) went on trading floor at Power Exchange India Limited (PXIL) and India Energy Exchange (IEX) for first time on March 30, 2011. Just give a brief highlight of the trading session:
- A total of 424 non-solar RECs traded on two power exchanges
- 274 non-solar RECs - clearing price of Rs 2225 per REC - PXIL
- 150 non-solar RECs – clearing price of Rs 3,900 per REC – IEX
- Major buyers: Reliance Infrastructure and LNJ Bhilwara, distribution companies and industries
- National Load Despatch Centre has issued a total 532 RECs till date
Now the thought over here is that the next trading session is April 27, 2011 around one month of gap between the trading sessions. While it is understood that the trading activity would be low, the gap of one month seems a bit on the higher side. So, what can be done? One aspect is that the REC needs to be positioned as a mandatory commodity for utility companies and high carbon emission companies. A legislative must be brought upon in the parliament session on a higher cap on the permissible emission levels. The same could be amplified through higher marketing of the product through print and electronic media. The power of people could be leveraged over here with a nation-wide campaign of sustainable growth. There is a rising consciousness among the India consumers relating to the overall environmental issues. But it needs to be brought at par with the same level as that of the European and American counterparts.
The trading data could be made public for companies buying REC reflects the social and environmental-consciousness of the company. Though it might be seem a bit stretched but unless the public awareness is taken to a new level, it would be difficult for the REC to serve its true purpose i.e. aimed towards rewarding companies investing in renewable energy domain. The likes of Greenpeace could come up to appreciate the companies involved in buying the REC as a mandatory or voluntary way of supporting renewable energy.
RECs could be a great tool for improving the profitability of companies investing in the renewable energy domain. Their profitability would in turn bring in more companies coming up plans to invest in the similar projects. Please feel free to let me know your views on the same.
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