Demand for Indian renewable-energy credits plunged 41 percent in November from the previous month as the failure of regulators to enforce clean-energy targets prompted companies to abstain from trading, REConnect Energy Solutions Pvt. said.
That drop in demand drove the price of a credit down to 1,500 rupees ($28), the minimum set by the country’s Central Electricity Regulatory Commission, Vishal Pandya, a director at Indore-based REConnect, said today in a phone interview.
Cash-strapped state distribution companies, the main intended buyers, are ignoring their obligations counting on government leniency. Private companies are now following suit, Pandya said.
The government requires companies including state-run power distributors, Coal India Ltd. (COAL), Oil & Natural Gas Corp. (ONGC), Tata Power Co. (TPWR) and other large power consumers to buy as much as 10 percent of their electricity every year from renewable sources. Those unable to secure enough clean power locally can meet their target by purchasing credits sold by wind and solar farms, hydropower and biomass plants from the country’s two power exchanges.
“The market condition looks very gloomy,” Pandya said.
Each credit represents one megawatt-hour of clean electricity fed into the grid.
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