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Renewable Energy Credit Physical Trading starts in Indian Energy Exchange;Volumes expected by 2012

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Renewable Energy Certificate (REC) are one of the most important tools for promoting alternative energy in India.The Central Regulatory Commission (CERC) alongwith energy exchanges has been working on making trading in RECs happen since the last one year.Trading in RECs started last week with small amounts of  REC trading at the Delhi based Indian Energy Exchange.Note most of the volumes are expected to be traded in the July-Sept Wind Season and October Bagasse planting season.While only small amounts were traded as physical trade is only allowed for 2 hours on last Wednesday of every month,volumes trading should start in 2012.The IEX is targeting around $8 billion in REC trade by 2017 as Renewable Energy in India grows at a faster rate.

INTERVIEW – India green credit trade seen ramping up from 2012

India’s largest power exchange is hoping to ramp up volumes in the trade of renewable energy credits from April 2012, its chief said, seeking to tap a market estimated to be worth $8 billion by 2017.

Jayant Deo, chief executive of Indian Energy Exchange (IEX) which this week launched the inaugural trading session for certificates aimed at rewarding producers of clean energy, said volumes would increase once the process to issue renewable credits to companies was streamlined.Trade bodies told Reuters only two projects had received the go-head to sell renewable credits. However, the website of the official agency administering the project showed no certificates had yet been issued.Deo told Reuters there was huge interest in the renewable energy certificates (RECs), which he said would encourage project developers to invest in solar, wind and biomass.”We have developed a platform of physical trade between buyer and seller, but it is not a futures platform where speculators can take positions.”

Under the scheme, REC trading would occur for two hours during the last Wednesday of every month.A central agency administers the certificates trading among renewable power generators.Deo said the exchange had received a total of 136 bids, including 11 for solar plant units, while the rest were for wind, hydropower or biomass projects.Deo said RECs trading would receive a boost in the June- September monsoon season when wind energy projects would run full capacity, and also from October when sugar mills start producing bagasse during the cane season.


Abhishek Shah

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