NSE and BSE-listed M and B Switchgear Ltd (M&B) went down into history books for being the company to be the recipient of India’s first solar renewable energy certificate (REC). M&B received 249 RECs by the National Load Despatch Centre in New Delhi on Thursday, May 24.
RECs are generation-based ‘certificates’ awarded (electronically, in demat form) to those generating electricity from renewable sources such as wind, biomass, hydro and solar, if they opt not to sell the electricity at a preferentially higher tariff. These certificates are tradeable on the power exchanges and are bought by ‘obligated entities’ that are either specified consumers or electricity distribution companies.
These obligated entities may be required to purchase a certain quantum of either green power or RECs. The obligations are split into non-solar and solar — which means the obligated entities have to purchase either power from solar power projects or RECs generated by them.
M&B, headquartered in Indore, is a manufacturer of transformers. In 2010-11, the company’s turnover was Rs 37 crore on which it made a net profit of Rs 77 lakh. The company also has a 2 MW solar photovoltaic power plant. In 2012-13, this plant is expected to generate close to 3,250 RECs, says Mr Vishal Pandya, Director, REConnect, M and B Switchgear’s consultants for REC-related matters.
The government fixes the floor and ceiling prices of RECs for a specified period. The minimum and maximum prices for solar RECs for 2012-17 are Rs 9,300 and Rs 13,400 respectively. Therefore, if M&B’s solar plant generates 3,250 RECs, the company could be richer by anywhere between Rs 3 crore and Rs 4.35 crore.