ANNOUNCEMENTS
By studying the price trends and market liquidity and demand and supply in India, as well as regulatory changes, we will assess the Renewable Energy Certificate (REC) Market in India. The goal was to the factors affecting the REC market along with their implications for forecasting, participation in the market and policy effectiveness.
To start, the study conducted statistical and trend analysis of previous REC prices in detail. Using data from Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL) for the study, statistics for mean, median and mode were computed to identify normal price behavior. Line charts and descriptive statistics were used to study volatility in REC prices. Also, a Simple moving average (SMA) model with a period of 3 months was used to forecast price on 6 months horizon. (SMA is a simple yet useful method of forecasting price) Demand and supply data trends were also visualized and analyzed to understand their alignment or gaps and their direct relationship with price movements.
Then, the study investigated market liquidity, volume patterns and types of participants. The frequency and volume of REC trades showed how well the market is functioning and how developed it is. It was highlighted that the issue of demand lagging behind supply is a persisting one. Thus, it fails to let prices stabilize. The rising number of participants over time reflected their increasing awareness and compliance with RPOs (renewable purchase obligations). Nevertheless, the unavailability of disaggregated data by type of participant restricted detailed analysis.
A qualitative content analysis of significant legislative and regulatory changes impacting the REC market was part of the third component. The contribution of regulatory changes like the unification of solar and non-solar RECs and the implementation of floor and forbearance prices to improving market stability and participation was evaluated. The REC market's sensitivity to incentives and clear regulations was confirmed by the findings that these interventions had a significant impact on pricing and trade volume.
All things considered, the study shows that although the REC market in India has grown more organized and transparent, it still has problems like unstable markets, unequal demand, and a lack of reliable forecasting tools. The study emphasizes that in order to progress, better market design, data accessibility, and participant-specific insights are required.
Key Words: REC, RPO, Energy Exchange, Price, Analysis.
