India’s largest power exchange began trading the country’s first renewable-energy credits, saying the new commodity may develop a liquid market by year-end.
The first trading session today on the Indian Energy Exchange received 11 buy bids seeking certificates from solar plants and 125 bids for certificates for renewable energy from wind, hydropower or biomass projects, according to Jayant Deo, chief executive of the exchange.
“We should see some liquidity roughly in 10 months,” Deo said by telephone from New Delhi.
A certificate represents one megawatt-hour of renewable electricity fed into the transmission grid. Regulated power distributors and large industrial consumers, which are required to get as much as 14 percent of their supplies from renewable sources, are expected to be the buyers of the certificates.
Clean-power producers such as wind farms and biomass plant owners won’t begin to supply certificates until later this year, Deo said.
Wind farms produce the most power from May to September during the monsoons and will begin accumulating certificates to sell during that season, he said.
Most of the country’s biomass projects are located at sugar mills and run on bagasse, he said. Those plants will start earning certificates during their peak season from October to March, he said.
“Probably in the first quarter of next year we should start to see a buzz in the market,” Deo said.
Trading of renewable energy certificates, or RECs, will be through closed double-side auctions on the last Wednesday of every month and bids will be accepted on the day from 1 p.m. to 3 p.m. local time, the exchange said in a statement.
