Greentech Lead India: India’s largest solar project under Renewable Energy Credits (REC) was commissioned last week.
The solar REC project of 33 MW is promoted by Giriraj Enterprises. Sterling and Wilson were responsible for the EPC for the entire 33 MW. They will also look after the Operation and Maintenance (O&M) of the plant for the next five years.
The project is registered under the REC registry as three separate projects of 11 MW, 19 MW and 3 MW in western state of Rajasthan. The project was registered on March 21st 2013.
Under REC, solar energy producers can earn certificates for the energy they send to the grid. They can sell the credits to state power distributors that are obliged to buy a portion of their electricity from clean sources such as wind, solar and water.
Giriraj has signed a power purchase agreement with the local state-owned electricity distributor in Rajastan.
Giriraj will be able to sell electricity at an average price of 2.7 rupees (5 cents) a unit, and expects to trade 53,000 certificates a year. RECs will be availed over and above the PPA.
REC demand in India tripled last month to 435,481 in the run-up to the fiscal year end. Solar credits were sold for 13,400 rupees apiece on the Indian Electricity Exchange, according to industry reports. This is in contrast to the non-solar REC market, which is trading at the floor price of INR 1,500 per REC.
The REC market is considered risky by investors mainly due to the non-enforcement of the RPO on obligated entities. No concrete announcements are made with regards to the enforcements of RPO. Due to these reasons, REC projects of this size are not a normal practice in India, according to analysts.