Malaysian I-REC issuances fall 60% in July despite supply shortage

Malaysian International Renewable Energy Certificate issuances fell 60.2% on the month in July, the latest data from the International Tracking Standard Foundation, or I-Track, Foundation showed, even as the market continues to grapple with supply shortage.

The decline in volume was primarily due to a sharp drop in hydro I-REC issuances, which fell to 94 GWh in July from 516.80 GWh in June, according to the data.

Solar I-REC issuances saw a modest decline, falling to 67 GWh in July from 82 GWh in June. In contrast, biomass I-REC issuances increased, rising to 104 GWh in July from 67 GWh in June.

Meanwhile, Malaysian I-REC redemptions over January-July in both 2023 and 2024 grew noticeably, according to I-Track Foundation data, reflecting a strong demand for I-RECs in the country.

Total I-REC redemptions also rose between end-July 2023 and end-July 2024 to 7.24 TWh from 4.52 TWh, the data showed.

Market sources attributed the shortage of I-RECs in the market, despite strong demand, to the fact that sellers were only willing to offer them if prices were attractive.

"When there are strong bids and high interest, sellers are willing to prioritize and fulfill those offers," one of the sources said.

The Ministry of Energy Transition and Water Transformation said in July that the government will introduce the Corporate Renewable Energy Supply Scheme, or CRESS, in September to enhance corporate entities' access to green electricity.

Under CRESS, eligible renewable energy generators and corporate companies can arrange green electricity supply with agreed terms through the existing supply system.

CRESS, however, will affect I-REC prices, with a market participant saying, "This policy implementation will make prices of the environmental commodity more competitive."

On a week-on-week basis, the Platts-assessed vintage 2024 solar I-RECs fell 25 cents to $5.25/MWh, vintage 2023 solar I-RECs fell 5 cents to 4.10/MWh, vintage 2024 hydro I-RECs fell 14 cents to $1.09/MWh and vintage 2023 hydro I-RECs fell 17 cents to 90 cents/MWh on Aug. 8, according to data from S&P Global Commodity Insights.