Demand for Indian renewable-energy credits fell 16 percent in January from the previous month as the failure of regulators to enforce clean-energy targets prompted companies to abstain from trading.
Credits sold for 1,500 rupees ($28) each, the floor price set by the regulator, according to REConnect Energy Solutions Pvt., an Indore-based trader said. Demand for solar credits bucked the trend by climbing almost 20 times in the period.
“The government hasn’t been very forceful in levying penalties on companies that haven’t met their targets to buy credits, especially in the case of non-solar credits, and that has meant lower demand,” said Vibhav Nuwal, a director at REConnect Energy Solutions. “In the case of solar, there has been more interest as there’s more pressure from the authorities.”
The Indian government requires companies including state-run power distributors, Coal India Ltd., Oil & Natural Gas Corp., Tata Power Co. 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.
Each credit represents one megawatt-hour of clean electricity fed into the grid.