India to cut renewable certificate prices from April

India is preparing to cut the price of solar and non-solar renewable energy certificates (RECs) from the start of April, it was announced last week.

For many months RECs in India have been trading at floor prices because certificate supply is much greater than demand. Indian consultant REConnect Energy Solutions Pvt said that the reduction of prices would come as good news for the entities that have to buy RECs to meet green energy requirements, but renewable power plant operators may be hurt by the move.

The table shows how prices will change under the proposal:

“Most captive and open access based customers will find it easier to buy RECs than to buy green power. Therefore, the low prices may lead to an increase in the REC demand,” REConnect comments. It also expects a jump in the unsold inventory.

Unsurprisingly, demand in March 2017 is seen to be very weak ahead of the REC price reduction. Up to now, near the end of India’s fiscal year, or March 31, demand for the certificates used to surge, but the situation this month will be different.

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