Breaking News

Tweet TWEET

India Renewable-Credit Trades Plunge as Enforcement Lags

Renewable-energy credit trading in India slumped to a record-low this month as states failed to enforce rules requiring utilities, steelmakers and mining companies to buy the allowances.

Bids to sell wind, hydro and biomass credits outnumbered bids to buy them more than 70-fold. That meant only 40,889 trades were cleared, or 1.4 percent of the credits available for sale, the lowest percentage since trading began in 2011, according to data from trader REConnect Energy Solutions Pvt.

The government requires companies such as Coal India Ltd. (COAL) and Tata Power Co. (TPWR) to get as much as 10 percent of their energy from renewables. Those unable to source enough locally can meet targets by purchasing credits from clean-energy utilities sold on the power exchanges.

The credits are languishing at their minimum price because the rules haven’t been strictly enforced, according to the Ministry of New and Renewable Energy. Regulators in Gujarat state, India’s third-largest for renewable capacity, this month waived targets and fines for local utilities including Torrent Power Ltd. (TPW)

Wind, hydropower and biomass credits traded at their floor price of 1,500 rupees ($22) for a 12th straight month. Solar credits, which trade separately, also cleared at their minimum price of 9,300 rupees. Each credit represents 1 megawatt-hour of electricity fed into the grid.

To contact the reporter on this story: Natalie Obiko Pearson in Mumbai at npearson7@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.