The days have come in which renewable energy certificates (RECs) are traded like shares.
RECs are a market-based instrument that power subsidiaries and renewable energy sellers offer conditions for and sign contracts on prices they want.
The latest step raises convenience of participants’ transactions and payment settlements compared to the conventional contract market.
Small-sized renewable energy sellers have welcomed the latest step.
Korea Power Exchange (KPX) held a ceremony to open the interactive REC spot market and inaugurate the new transaction system on March 28.
The REC spot market is n market for renewable energy sellers and polluter entities, who want to buy RECs as carbon credits, under long- and short-term contracts, like the oil products market in Singapore.
The conventional transaction market of the spot market replied on a one-way method in which renewable energy sellers first registered sales offers and renewable portfolio standard entities participated in bidders.
The conventional method was similar to that of an art auction. Both sides struck one-on-one contracts following the successful bidding.
Under the conventional method, renewable energy sellers could not readjust their selling prices. Renewable energy providers had a disadvantage in which they have to strike contracts with power subsidiaries following successful biddings. The former system had small-sized RECs disregarded.
Under the newly introduced interactive REC transaction system, renewable energy providers are allowed to watch transactions and register their sales in real time like a stock market. Small-size renewable energy providers find it easy to sell their RECs under contracts with their selling prices.
KPX serves as a transaction institution, so the payment settlement period has reduced from 14 days to two days.
A view of Korea Power Exchange’s Central Power Control Center. (Photos: KPX)
KPX Ramps Up Positive Administration and Regulatory Reform
Korea Power Exchange announced a master plan to execute positive administration for the year 2022 to spread positive administration on May 26.
The plan calls for setting six action steps: strengthening positive administration delivery regimes, expanding exemption from punishment related to positive administration, ramping up compensations and support related to positive administration.
It also involves removing passive administration, actualizing positive administration and spreading related awareness, and strengthening action regimes for regulatory reform, and establishing 12 core tasks.
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