Author: PPD Team Date: 12/03/2025
CERC dismisses PXIL’s proposal for new REC trading mechanisms
The Central Electricity Regulatory Commission (CERC) has dismissed Power Exchange India Limited’s (PXIL) proposal to introduce new trading mechanisms for Renewable Energy Certificates (RECs), including reverse auction, forward auction, and continuous matching contracts. The decision, dated March 1, 2025, was made to avoid market fragmentation and liquidity issues in the REC market, which remains relatively small.
PXIL had sought approval for these mechanisms to enhance trading flexibility and efficiency, arguing that the current bi-weekly auction sessions limit market participation. However, the CERC expressed concerns that introducing multiple contracts could dilute liquidity and complicate price discovery. The Commission also highlighted potential risks of market manipulation and increased compliance costs for obligated entities, particularly with forward auctions.
While rejecting the new mechanisms, the CERC acknowledged the need for more frequent REC auction sessions. It directed Grid Controller of India (Grid-India) to review recent REC transaction trends and recommend adjustments to the auction frequency.
Petition No: 11/MP/2024 | Read the full order here.
CERC approves HPX’s amendments to REC trading rules
The Central Electricity Regulatory Commission (CERC) has approved Hindustan Power Exchange’s (HPX) proposed amendments to its business rules for Renewable Energy Certificate (REC) trading, aligning them with the REC Regulations, 2022, and other regulatory changes. However, the Commission expressed dissatisfaction with HPX’s delay in seeking approval, warning against future procedural lapses.
HPX filed the petition under Section 66 of the Electricity Act, 2003, seeking approval for amendments to its business rules following the introduction of the REC Regulations, 2022, which eliminated the categorization of RECs into solar and non-solar, removed floor and forbearance prices, and allowed bilateral trading. The amendments also align with the General Network Access (GNA) Regulations and the Indian Electricity Grid Code (IEGC) of 2023.
The CERC noted that HPX had been conducting REC trading sessions since November 2023 without prior approval, unlike other power exchanges that sought timely approvals. While the Commission granted a one-time relaxation to avoid adversely affecting stakeholders, it emphasized the need for prompt compliance with regulatory requirements in the future.
HPX was directed to align its business rules and byelaws with the approved amendments and notify market participants through circulars. The Commission warned that any discrepancies or non-compliance could lead to further directives.
Petition No: 37/RC/2024 | Read the full order here.
Featured photograph is for representation only.
