Power Exchange India attracts ‘First Sell bid of Solar REC’ [ 30 May 2012]

Power Exchange India (PXIL) conducts the first Sell bid of Solar Renewal Energy Certificate. The trading of RECs makes it easy for several obligated entities that may be required to purchase a certain quantum in either green power or RECs. M and B Switchgears becomes the first solar power producer in India to be issued 249 Solar RECs by the National Load Dispatch Centre in New Delhi.

RECs are tradable on the power exchanges and are bought by ‘obligated entities’ which are either specified consumers or electricity distribution companies (under RPO – Renewable Purchase Obligation). The Electricity Act 2003 mandates the state commissioning to specify a percentage of the total consumption of electricity in the area of distribution licensee, for purchase of electricity from renewable sources – renewable purchase obligation (RPO).

Rupa Devi Singh, Managing Director, PXIL says, “REC was conceived to overcome the limitation of uneven distribution of RE sources. These certificates will help our participants to meet their obligations. This also gives RE generators an alternate option to sell the renewal component at a secured market determined price. The first Solar Certificate to be issued marks the evolution of the solar market to the next stage. We are proud to be a part of the history being created in the renewal energy space”.

The Indore based M and B Switchgears commissioned India’s first Grid Connected solar power plant (2MWp) – under REC Mechanism at Rajgarh (Biora) district of Madhya Pradesh, in March 2012. The project may also generate carbon revenues as it is currently undergoing validation in the Clean Development Mechanism (CDM). According to Vikalp Mundra, Director, M and B Switchgears, “The company is expected to generate close to 3,200 RECs in 2012-13. The project will be generating approximately 32 lakh units of electricity per annum and saving carbon emission equivalent to 3360 tonnes annually. For M and B Switchgears Ltd., the trading of RECs is expected to cause additional revenue of approximately Rs. 4 crore".

Sharing information about company's future plans, Mr. Mundra further added, "We are currently planning to set up a 20 MW solar power project under the REC scheme. Along with, we had devised a product, in which we provide complete plug & play solution to an investor for putting up a solar power plant. It gives a very good annuity based IRR for investors with benefits of 80-I(A) & super normal IRR if 100 per cent depreciation benefits can be utilised".

Renewable Energy Certificate (REC) mechanism has been promoted by Ministry of New and Renewal energy (MNRE) in order to encourage non-conventional energy sources. Central Energy Regulatory Commission has launched detailed procedures of this mechanism in June 2010.

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