The I-REC market continues to grow exponentially and it expands into new territories, both through regulatory policy interaction and the expansion of issuance criteria within those jurisdictions and by approving new countries for I-REC(E) issuance.

Still, the I-REC(E) market revolves largely around Latin America and the Caribbean (hereinafter referred to as the Americas), and Asia. This is reflected also in the issuance and redemption of I‑REC(E)s of the 2022 vintage. A considerable surplus is expected in Asia as the supply side has not yet adjusted to the demand to the same extent as in the Americas. However, regardless of region, there is a considerable untapped capacity registered under the I-REC(E) system that ought to make it easier for buyers of 2022 vintages to dictate prices on the market.

Nine new countries were approved for I-REC(E) issuance in 2022, including 

 was suspended due to the sanctions imposed following the invasion of Ukraine. These developments brought the total number of countries approved for I-REC(E) issuance to 54 at the end of 2022.

 experienced a temporary suspension because of ownership claims made by the national power utility, indicating the importance of considering potential implications of trading EACs in regulated power markets.

were expanded to interact with and complement the national FiT non-fossil certificates (NFCs), to provide end-consumers with greater attribute granularity for increased consumer choices.

, the I-REC(E) issuance criteria were also changed to avoid double issuance. Requirements on renewable plants commissioned after August 2014 are now required to both be registered under the national Clean Energy Certificates (CELs after the national name Certificados de Energías Limpias), and provide proof of voluntary cancellation, of the same volumes of CELs, for any I-REC(E) issuance request approval.

I-REC(E) 2022 Supply and Demand Balance and Forecast

As of the end of 2022, intra-vintage I-RECs of about 74.4 TWh and 29.9 TWh had been issued and redeemed, respectively, with a large concentration of activity in Asia, followed by the Americas. These regions account for 98 % of both issued and redeemed I-REC 2022 vintage certificates.

Regional Distribution of Vintage 2022 Market Activities

Based on the quarterly issuance and redemption trends for 2020 and 2021 vintages in Asia and the Americas, the I-REC 2022 vintage is expected to see a peak in issuance and redemption during Q1 2023, followed by a gradual drop, resulting in a surplus of I-RECs of 146.5 TWh and 13.1 TWh in Asia and Americas, respectively. However, it could be expected that issuance in Asia may deviate from the 2021 vintage issuance pattern and thus the statistical-based prediction, as non-state entities in China, which were allowed to register for issuance in 2021, may seek to lower their issuance costs by aligning their supply of I-REC(E)s to the demand.

Vintage 2022 I-REC Market Activities and Statistical Trend

The issuance of I-REC(E)s is only made on request from the registrant of a production device. This balance is better reflected in the Americas compared with Asia; the installed capacity in the Americas is higher than in Asia but issuance and redemption activities are lower. The untapped capacity under I-REC(E) markets ought to make it easier for buyers of 2022 vintages to influence prices on the market. However, it is important to keep in mind that there can be significant differences based on market boundary policies and the availability of I-REC(E) suppliers in specific countries.

I-REC Installed Capacity as of end of 2022

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2022 has been another strong growth year for the I-REC(E) market, with issuance and redemption activities experiencing increases of 179 % and 102 %, respectively. In the normal fashion for intra-year activities, 2022 vintage issuance and redemption made up a minority (35%) of the total activities in 2022, with the majority of the 2022 vintage activities expected to be completed in the coming months. This annual analysis looks at some I-REC(E) highlights for 2022 and makes statistical-based predictions for the supply-demand balance of 2022 vintages for the coming months and years.

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I-REC(E) 2022 Annual Analysis

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