CERC introduces floor price for energy savings certificates

The CERC has introduced a floor price or a minimum price at which Energy Savings Certificates shall be traded on the power exchanges

New Delhi: The Central Electricity Regulatory Commission (CERC) has introduced a floor price or a minimum price at which Energy Savings Certificates shall be traded on the power exchanges, said a notification. “The floor price for the trading of Energy Savings Certificates as mentioned in the Energy Conservation Rules shall be fixed at 10 percent of the price of one metric tonne of oil equivalent of energy consumed as may be notified by the Central Government, by notification in the Official Gazette for every Perform, Achieve and Trade Cycle,” said the CERC. “These regulations shall come into force with effect from the date of their publication in the Official Gazette,” it added.

Until now, the market price of ESCerts was discovered through the process of
bidding at the respective power exchange, without a minimum price.

Energy Savings Certificates: Floor price will balance buyers’, investors’ interests

Explaining the rationale behind introducing a floor price, the CERC said, “The proposition of floor price in the draft amendment regulation is based on the provision in the PAT Amendment Rules, 2022, and seeks to balance the interests of the investors as well as the buyers.”

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“As per the Energy Conservation Rules, 2012, the value of one ESCert shall be equal to one metric ton of oil equivalent of energy consumed. The price of one metric tonne of oil equivalent is defined for every PAT cycle after the assessment year is over. Accordingly, floor price shall be defined for every PAT cycle Trading,” said the CERC.

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