1. February 2013 REC Update
Highlights:
 Monthly Issuance of 3,17,677 RECs, up by 3%
 Buyers demand down by 21%, Supply more than 13 times the demand
 IEX cleared near 3% and PXIL cleared near 49% of sell volume of Non Solar
 Total both exchanges traded 1,55,186 RECs with 19,43,208 RECs (i.e. 91% of bid
volume) carried forward to next session
 Market value came down to INR 25.7 Cr from 31.88 Cr
Analysis of Non-Solar REC trading:
The February month REC trade session started with new issuance of 3, 15,795 RECs.
Non Solar
IEX 48,093
Buy Qty 152,952
PXIL 104,859
IEX 1,526,114
Sell Qty 1,742,421
PXIL 216,307
IEX 1,500
Traded Price (Wt) 1,500.00
PXIL 1,500
IEX 48,093
Traded Qty 152,952
PXIL 104,859
Volume
 IEX – Buy demand reduced from 1,90,875 to 48,093 RECs from last session, 72% down
from last time
 PXIL – Buy demand rocketed to 1,04,859 RECs from 2,462 in last session, its highest
demand so far.
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2.  The total demand of RECs came down to 1,52,952 from 1,93,337 RECs in last session, a
21% decrease
 The total supply shot up to 17,42,421 RECs, a miniscule increase from last month
 At the end of session, 15,89,469 RECs remained untraded on exchanges
 Total of 3,52,840 RECs did not participate in the trade, showing 50% increase in non
participation, possibly an effect of validity extension by CERC
Price
 Price on IEX and PXIL remained same as last time, i.e. INR 1,500
Analysis of Solar REC trading:
Solar
IEX 4,574
Buy Qty 6,777
PXIL 2,203
IEX 2,416
Sell Qty 2,726
PXIL 310
IEX 12,500
Traded Price (Wt) 12,569
PXIL 13,000
IEX 1,924
Traded Qty 2,234
PXIL 310
 Buy demand in February session decreased from 42,245 to 6,777 Solar RECs showing
84% decrease
The untraded 15,89,961 RECs plus non participant 3,53,247 will serve as the opening balance
for the next month (trade session on 28th March 2013).
PXIL led the market with 68% share of the trade. The waiver of transaction fees to buyers could
have been a motivator for the shift to PXIL. While due to poor demand in last session on PXIL,
many sellers shifted their participation to IEX, which has resulted in almost 49% clearing ratio of
Non-Solar RECs on PXIL. However the Solar REC market has been majorly captured by IEX,
though price at PXIL almost touched forbearance.
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3. Market Updates:
REC Validity: 730 days
CERC orders on extension of REC validity as the market is piled up with RECs without many
buyers. This step tough a breather for the RE generators, the immediate cash flow need not be
guaranteed as the clearing ratio is expected to reduce significantly
CERC expresses inability to enforce RPO
A much anticipated clarification for many in the industry on enforcement on RPO has come as
CERC clearly conveyed that the enforcement of RPO lies purely under the jurisdiction of
respective SERCs. While REC mechanism is regulated by CERC, the RPO cause can be taken
forward by the state commissions only.
Wind power association’s runs to APTEL for RPO enforcements
APTEL admitted to hear petition of two of the largest wind power associations to enforce the
RPO on the obligated entities to revive REC buy market. Almost 56% of the projects in REC
market are wind power projects
Cogeneration based power to fulfill RPO says APTEL
APTEL decreed that consumption from co-generation (irrespective of its nature of fuel) could be
used to fulfill the RPO obligation. This judgment sets aside the Orissa State Commission’s order
which imposed RPO on cogeneration based CPPs.
New Checklist process causing delays in Registration at NLDC
Further to the CERC order on CPP criteria and UP Sugar Cogen, NLDC has issued a checklist to
stringently review the power off-take & promotional benefits status of applicants from the
State Agencies. This new procedure is causing further operational delays in the registration
process.
Obligated Entities in Rajasthan receive Compliance letters
Rajasthan state nodal agency (RRECL) sent letters to the open access & captive consumers
asking to furnish the data on consumption and compliance of RPO as mandated by the
Commission and further confirmed by the High Court. The letter refers to penalties in case of
non-compliance.
APTEL Suo-motu tariff revision - stringent monitoring
APTEL took forward Power Ministry initiative by making clear that the SERCs must carry out
tariff revisions every year and publish by 1st April. Meanwhile, many ERCs including Gujarat,
Andhra Pradesh, Karnataka and Haryana have initiated activities for tariff revision proceedings
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4. Solar shines, though prices eclipse
AP had floated for 1000 MW solar power projects bid, while it received over 1350 MW bids
(180 bids) under the state solar policy. TN solar tender recently went undersubscribed, the bid
capacity was still one of the largest in solar segment (about 500 MW compared to 1000 MW
sought). Up north Rajasthan saw lowest ever bid of INR 6.45/kWh for solar power delivery in
India.
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