India plans to slash renewable energy certificate prices

The Central Electricity Regulatory Commission of India proposed a sharp reduction in the floor price of renewable energy certificates (REC) from April 1, 2017, a move that could increase demand and benefit sellers who have huge inventories of unsold credits.

The commission wants to lower the floor price of solar RECs from 3,500 rupees ($52) to 1,000 rupees ($15), and of non-solar RECs from 1,500 rupees ($22) to 1,000 rupees ($15). The proposal is open for comment until March 20.

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Introduced in 2010, the REC program floundered almost from the start, as purchase obligations were not strictly enforced and no penalties were levied on those failing to meet targets. REC prices have been reduced at least twice before to make them attractive to buyers.

India also saw a lowering of tariffs in Asia’s first auction for wind. Solar Energy Corporation of India, which conducted the auction for the government, received bids to supply wind power for 3.46 rupees (5 US cents) a kilowatt-hour. Previously, feed-in tariffs for wind energy ranged from 4 rupees to 5 rupees a kilowatt-hour across India’s windy states. The successful bidders that will each build 250 megawatts are Mytrah Energy, Green Infra Wind Energy, Inox Wind, Actis-backed Ostro Kutch Wind and Adani Green Energy.

note from Bloomberg New Energy Finance last week said that such low bids would likely prompt states to discard feed-in tariffs and shift towards competitive bidding.

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