Sept. 27 (Bloomberg) -- Demand for renewable-energy credits in India declined this month because of a supply glut and concern regulators may not enforce clean-energy targets on utilities.
Bids from companies seeking to buy credits fell 7 percent from the August trading session, while sell bids gained 13 percent, according to data from REConnect Energy Solutions Pvt., an Indore-based trader. The credits sold for 1,500 rupees ($28) each, the floor price set by the regulator.
“Demand has remained depressed due to enforcement concerns,” REConnect said in a note to clients.
The government requires power distributors, steelmakers, miners and other energy users to buy as much as 10 percent of their need every year from renewable utilities. State-run distribution companies, the main intended buyers, are failing to meet those targets because they are cash-strapped and count on government leniency, Debashish Majumdar, head of the state-run Indian Renewable Energy Development Agency, said this week in Mumbai.
Each credit represents one megawatt-hour of clean electricity fed into the grid. Companies facing the target include Coal India Ltd., Oil & Natural Gas Corp., Tata Power Co. and Reliance Infrastructure Ltd.
Companies failing to secure enough renewable power locally to meet the target can opt to buy credits sold by wind farms, hydropower and biomass plants over the country’s two power exchanges.
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