The Iran Energy Exchange has so far sold “Capacity Certificate” worth 18.24 trillion rials ($70 million) since the financial instrument was first launched in February 2020.
Certificates changed hands in 253 deals that require buyers to generate 1,521 megawatts of electricity, IRNA reported, citing data released by Iran Grid Management Company (IGMC).
Launched by IRENEX, the certificate is a tradable security that customers purchase based on the amount of power capacity they need as a prerequisite to the grid connection.
Customers give assurance that the required equivalent capacity is provided without undermining the power supply to other users when they connect to the grid. The securities are issued subject to the capacity of new power plants which are connected to the grid. Each certificate is backed by 1 kilowatt energy which the buyer should supply.
According to the IGMC, 243 subscribers have applied for the capacity certificates via IRENEX.
New customers should purchase capacity certificates in proportion to their needs while existing customers can purchase the financing instrument if they want added MWs.
Investors sell capacity certificates in proportion to new capacity they add to the grid. Price of the certificates is determined based on a supply/demand.
Customers can also sell capacity certificates in proportion to their lower demand.
IRENEX has another plan to improve energy efficiency. It is xet to launch “Energy Saving Certificates” to help optimize energy consumption across industries.
ESCs are tradable certificates that typically represent one megawatt-hour of energy saving and are used to provide evidence of compliance with an obligation on electricity producers, suppliers or consumers to use a specific type of energy.
If energy producers do not meet the mandated target for energy consumption they are penalized. The certificates are given to the producers whenever an amount of energy is saved whereupon the producer can use the certificate for their own target compliance or sell it to those who cannot meet their targets.
