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. and Tata Power Co. 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.
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.