Power Exchange bets on renewable energy; to focus on revival of REC market

Power Exchange India Limited (PXIL), the power trading platform of National Stock Exchange (NSE), is putting its bets on renewable energy after its re-launch. It will focus on reviving the Renewable Energy Certificates (REC) market which has been facing tepid interest from the market.

PXIL faced financial crisis in 2017 when it’s net worth eroded and promoters of NSE and NCDEX wanted to shut it down prior to NSE’s proposed initial public offering (IPO).

“Promoters have been keen that they develop different market places. The catch-22 situation was erosion of net worth and finding external financing which was difficult. But FY18 onwards, PXIL has been making profit. The main reason for revival was shifting focus on our strength areas,” Prabhjit Kumar Sarkar, managing director of PXIL told Business Standard.

Sarkar said PXIL’s emphasis primarily has been on term-ahead market (TAM) and RECs in the in last two years.“ and now we have enough liquidity to also have day-ahead spot market on a large scale,” he added.

Power trading market has two platforms in India – PXIL and India Energy Exchange (IEX). IEX holds 95 per cent of the day-ahead spot power trading market. PXIL holds 40 per cent market share in REC and term-ahead market (TAM).

REC was launched in 2010 as a means for companies and states to purchase renewable energy without physically setting up renewable power plants. Project developer can sell the energy produced as REC. One REC represents 1mw-hour of power produced from a renewable energy source and is tradable at power exchanges. It is divided into Solar REC and non-solar REC.

renewable energy market.

Apart from NSE and NCDEX, the companies that form part of the PXIL board are GMR Energy, Tata Power, and JSW Energy, state-owned Power Finance Corporation, Gujarat Urja Vikas Nigam Limited (GUVNL) and West Bengal State Electricity Distribution Company.