I-REC January-August demand surpasses whole of 2023

Market: Electricity
04/09/24

International renewable energy certificate (I-REC) demand in January-August surpassed consumption in all of 2023, with 20pc more I-RECs redeemed in August compared with the same month last year.

Higher redemptions in Colombia, Malaysia and India last month outpaced lower demand from key buyers Brazil and China.

Global I-REC redemptions totalled 9.9TWh in August, higher than 8.2TWh in August 2023 and broadly steady on the month, according to data from UK-based global registry Evident. A total of around 182TWh was redeemed in January-August this year, surpassing the 176TWh redeemed in all of 2023.

There were 14.2TWh of I-RECs issued in August, up from 12.7TWh in July but below the 14.9TWh a year earlier. The 12-month rolling average of issuances is 25.8TWh.

Latin America

I-REC redemptions in Latin American countries totalled 4.1TWh in August, up from 3.1TWh a year earlier. Colombia accounted for around 65pc of redemptions with 2.65TWh — the highest in at least three years — surpassing Brazil, which accounted for almost 20pc.

Brazilian I-REC demand was around two-thirds lower last month compared with August 2023, with 762GWh redeemed compared with 2.4TWh a year earlier. But the country is still the largest I-REC consumer in 2024 so far, with 41.3TWh redeemed over January-August.

Issuances in Brazil more than halved on the year to 532GWh in August, the lowest since June 2022.

Brazilian 2024 hydropower and wind/solar I-RECs were last assessed at $0.17/MWh and $0.19/MWh, respectively, on 28 August, both steady since the end of July.

I-REC demand was nearly 10 times higher on the year in Chile, where redemptions were at 266GWh last month compared with 29GWh in August 2023. But they declined from both June and July, with almost 700GWh redeemed in each month.

Asia-Pacific

Redemptions in the Asia-Pacific region edged up to 3.6TWh in August from 3.1TWh a year earlier, as a slight decline in Chinese demand was offset by a surge in redemptions in Malaysia.

Redemptions in China were at 2.2TWh last month compared with 2.3TWh in August 2023, although they still accounted for the biggest share in the region at 61pc. Chinese I-REC issuances also declined last month and were at 5TWh, down by 2TWh year-on-year.

There were 1.1TWh of I-RECs redeemed in Malaysia in August, the highest since February and nearly 12 times higher than August 2023. Approximately 8.4TWh have been redeemed in the country so far this year, compared with 9.1TWh in all of 2023. Hydropower comprises the biggest share of redemptions so far in 2024 at 7.1TWh, followed by solar with 1TWh.

The volume of I-REC issued in Malaysia edged down to 623GWh last month from 672GWh in August 2023.

Malaysian current-year hydro I-RECs were assessed at $1.30/MWh throughout August, broadly steady since Argus assessments began in February. Solar I-RECs with 2024 vintage were at $5.60/MWh at the end of last month, up from $5.25/MWh when assessments first launched on 15 February.

South Asia

Redemptions in India continued to rise last month to 854GWh, up from 813GWh in July and 550GWh in August 2023.

I-REC issuances were at 1.1TWh in August, down from 1.17TWh in July but nearly two times above the 576GWh issued in August last year. Earlier this week, the International Tracking Standard Foundation announced that ICX, a wholly-owned subsidiary of Indian Energy Exchange (IEX), has been approved as the country's first local issuer of I-RECs for renewable electricity.

The latest Argus assessments for 2024 Indian hydro and wind/solar I-RECs were $0.50/MWh and $0.65/MWh, respectively, on 29 August, both down by $0.05/MWh on the week after holding steady since the end of July.

By Giulio Bajona

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