Sep-26th,2012

Non-solarRECs

 Prices remained at floor price this month as supplyhas remained far in excess of demand. The over-supply situation has persistedfor the last few months – this month 7.11 lakh RECs were bid for sale (up 13%from August), while demand was for 2.64 lakh RECs (down 6.7%).

 Demand has remained depressed due to enforcementconcerns. As a result, the demand-supply is continuing to widen. RECs issuanceshave been robust but demand has been growing slowly.

Demand is a function of RPO enforcementexpectations. Recent court rulings in this will help but we do not expect itseffects to be visible in the market for a few months.

Cleared volume at IEX was 239,364 (Aug – 248,168;down 3.5%) and at PXIL was 25,082 (Aug – 25,725; down 2.5%)

Solar RECs

Demand decreased from last month (from 2,331 to1,852; down 21%). On the other hand, RECs bid for sale increased significantlyas more solar capacity was commissioned (1621 vs 550; up 194%). The marketclearing price on IEX was Rs 12,500 and on PXIL was Rs 12,900 (last month itwas Rs 12,850 on both exchanges). In total, 1,160 Solar RECs were sold (lastmonth it was 379).