Energy Transition, Renewables
September 10, 2024
Thai I-REC redemptions hit YTD low in August on supply glut
HIGHLIGHTS
Redemptions down 73.44% at 94.6 GWh
Issuances down 46.6% at 317.9 GWh
Traders expect higher demand in Q4 despite low redemptions
Thailand's International Renewable Energy Certificate redemptions plunged 73.44% on the month to a year-to-date low of 94.6 GWh in August, the latest data from the International Tracking Standard Foundation, or I-Track Foundation, showed, as the market continued to grapple with oversupply.
Meanwhile, the country's I-REC issuances declined 46.6% on the month to 317.9 GWh in August, the data showed. This marked the lowest since April, when issuances stood at 289.4 GWh.
"We are currently stagnant and are looking for increased trading activity in the next quarter," a trader said.
Many market participants have chosen to hold onto their inventory, expecting stronger demand in the upcoming quarter.
"We will transfer a volume around the fourth quarter," an asset owner said.
Breaking down the I-REC redemption volume by technology, 90.8% came from solar, totaling 85 GWh; 8.7% from biomass at 8 GWh; and less than 1% from hydro and wind. This indicated strong interest in solar I-RECs in August, but limited demand for other technologies such as biomass and hydro.
On the I-REC issuance front, biomass accounted for 58% of the total at 184 GWh, followed by 40.5% from solar at 128 GWh and 1.4% from wind at 4 GWh.
Traders also highlighted the increasing demand for current-year solar I-REC vintages.
"We are seeing growing demand for solar current-year vintages and future vintages from 2025 onward," a second asset owner said.
Generators anticipated an increase in solar I-REC supply next quarter to meet rising demand, with a second trader saying, "Volatility for solar vintage 2024 is high, with demand likely to climb in Q4 2024 and early 2025."
While solar I-RECs remained the preferred option for buyers, market participants noted that if the price gap widens, some might consider biomass as an alternative.
Platts, part of S&P Global Commodity Insights, assessed vintage 2024 solar I-RECs at $1.50/MWh, vintage 2023 solar I-RECs at $0.90/MWh, vintage 2024 hydro I-RECs at $1.18/MWh, vintage 2023 hydro I-RECs at $0.87/MWh, vintage 2024 biomass I-RECs at $0.60/MWh and vintage 2023 biomass I-RECs at $0.42/MWh on Sept. 10, all stable on the day.
