Demand for solar energy credits in India more than doubled this month as regulators strengthened efforts to enforce renewable targets on power distributors.
More than 6,700 solar credits were sold in the September trading session, up from 2,359 the previous month, according to data from Indore-based trader REConnect Energy Solutions Pvt.
The government requires power distribution utilities and large industrial companies including 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 comply by purchasing credits from clean-energy plants sold on power exchanges.
The market, established in 2011, has struggled to take off with credits languishing at their floor prices amid weak enforcement. That is starting to change with stringent regulatory action, REConnect said in a note to clients.
The electricity regulator in northern Uttarakhand in a Sept. 11 order threatened to fine the local state-run power distributor for failing to meet its targets in the financial year ended March 31, 2012. Uttarakhand Power Corporation Ltd. has until March 31 to buy credits to meet those targets retroactively or face possible penal proceedings, the Uttarakhand Electricity Regulatory Commission said.
In this month’s session, wind, hydropower and biomass credits traded at their floor price of 1,500 rupees ($24) for a 13th 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.