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Aluminium Association of India urges CERC to look into markets for Renewable Energy Certificates

Metal News - Published on Thu, 28 May 2020

Image Source: Aluminium
The Aluminium Association of India has urged the Central Electricity Regulatory Commission to look into the market of Renewable Energy Certificates which, according to it, is resulting in artificial demand and price increase in the power exchange. AAI vice-chairman Rahul Sharma said that the association feels it is apparent that price of solar RECs in the last one year have shot up by more than 125% from INR 1000/MWhr to INR 2250/MWhr, resulting in an additional burden of Rs 1.25/kwh of RE energy compliance for all consumers. He said "This huge burden on the consumers is due to non- revision of REC prices since 2017 by the regulator despite steep fall in RE generation costs.”

In a recent representation to the CERC, the AAI had said: "There is an acute shortage of Renewable Energy Certificates in the market which has prompted the market to be a sellers one. REC prices have spiked up in past 12 months to as high as INR 2.25 /kwh for solar RECs while it is a known fact that Solar power itself has been getting auctioned at average rate of INR 2.50 /kwh since FY17-18.”

AAI has further submitted that the primary reason for illiquidity in the power exchange or REC market for failed trades is that the utilities or demand side participants understand that the actual price of REC is much lower than the floor price allowed by the Commission and the REC prices are expected to go down in time.

The current market is facing more than 90% deficit in the supply of REC, the representation said adding that the Revised Tariff Policy, 2016 provides discretion to the Commission to prescribe a vintage based REC multiplier in order to grant a higher or lower number of RECs.

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Posted By : Yogender Pancholi on Thu, 28 May 2020
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