Due to lack of takers, renewable energy certificates (RECs) for power generated from wind, bio-mass, bio-fuel and small hydro plants are stacking up, eroding a key incentive for renewable electricity. Out of 8.5 lakh such certificates offered for sale in December, barely 1.73 lakh found buyers - at a price of Rs 1,500 each, which is about 45 per cent lower than a year ago.
According to data provided by the Indian Energy Exchange, the number of certificates being offered for sale is steadily increasing since April, when it was about 1 lakh. However, buy bids have been hovering at 2 lakh and below every month, except for June when it touched 3.3 lakh.
During November as many as 9.2 lakh RECs were offered for sale - the highest so far. Only about 55,000 were sold during the same month. An energy certificate is a tradable certificate that represents 1,000 units of power generated from renewable sources and sold to the grid. State utilities are to buy these certificates from a power exchange like the Indian Energy Exchange (IEX) or the Power Exchange India, to meet their obligation of sourcing 5 per cent of power from renewable sources in a year.
These certificates have a life of one year and if they are not sold at the power exchanges during a year they lapse - meaning the non-renewable power generators' income from sale of power turn out to be marginal.
Energy certificate prices were ruling at Rs 2,700 during October 2011. This dipped to Rs 1,500 per certificate during October 2012 - a 45 per cent fall.
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