Feb 25 (Reuters) - * Renewable credit market seen at up to $8 bln
* Price band for solar credit at $264-$374 per unit
* Wind, biomass certificates range $33-$86 per unit
By Ratnajyoti Dutta
NEW DELHI, Feb 25 (Reuters) - India's largest power exchange is hoping to ramp up volumes in the trade of renewable energy credits from April 2012, its chief said, seeking to tap a market estimated to be worth $8 billion by 2017.
Jayant Deo, chief executive of Indian Energy Exchange (IEX) which this week launched the inaugural trading session for certificates aimed at rewarding producers of clean energy, said volumes would increase once the process to issue renewable credits to companies was streamlined.
Trade bodies told Reuters only two projects had received the go-head to sell renewable credits. However, the website of the official agency administering the project showed no certificates had yet been issued.
Deo told Reuters there was huge interest in the renewable energy certificates (RECs), which he said would encourage project developers to invest in solar, wind and biomass.
"We have developed a platform of physical trade between buyer and seller, but it is not a futures platform where speculators can take positions."
Under the scheme, REC trading would occur for two hours during the last Wednesday of every month.
Last year, India crafted rules for domestic REC trading, a move aimed to boost the share of electricity from green sources in the world's third-worst greenhouse gas emitter.
RECs can be bought by companies to meet statutory obligations to purchase a minimum level of renewable energy. One REC represents one megawatt-hour of energy generated from renewable sources and remains valid for a year.
Renewable energy accounts for barely 8 percent of India's total power generation capacity of about 150,000 megawatts but the government aims to double green power generation to 25,000 megawatts in three years.
The rules stipulate clean energy producers either sell their electricity at a preferential tariff fixed by provincial power regulators or sell the electricity generation and environmental attributes associated with renewable power separately.
A central agency administers the certificates trading among renewable power generators.
For full details of new rules, double click: http://cercind.gov.in/Regulations/REC_PRESS_RELEASE_2010.pdf
Deo said the exchange had received a total of 136 bids, including 11 for solar plant units, while the rest were for wind, hydropower or biomass projects.
The price band for solar certificates will be $264-$374, and the band for wind and biomass certificates ranges $33-$86 per unit.
NEW DOMESTIC MARKET
Deo said RECs trading would receive a boost in the June- September monsoon season when wind energy projects would run full capacity, and also from October when sugar mills start producing bagasse during the cane season.
India is one of the world's top producers of wind energy, and also generates solar energy as well as power from biomass and biogas, such as capturing methane from animal waste.
It hopes to attract about $21 billion worth of investments in renewable energy by 2012.
India offers subsidised loans to companies building alternative energy power plants and provides tax breaks and tariff subsidies to encourage development of the renewables industry.
At the New Delhi-based IEX, power distribution companies and large power users with mandatory obligations to get a tenth of their supplies from clean sources, are potential REC buyers.
Carbon businesses have welcomed the REC scheme, saying such market-based innovations would help propel renewable energy development in the country.
"It is a good beginning and the platform will act as a price discovery platform for RECs," said Ashutosh Pandey, chief executive of Emergent Ventures' clean energy advisory business.
He expected the number of renewable energy projects eligible to receive RECs to grow quickly over the coming months as more are accredited. (Writing by Krittivas Mukherjee; Editing by David Fogarty)