REC Trading October 2014 Results

REC trading session of Oct -14 was conducted on 29th Oct 2014.  Below is a summary of the result:- The Total closing balance for the October Trading session was around 11 Million RECs. The RECs inventory is piling up and increasing per month by around 8%, which if seen from the demand point of view is more than the total RECs cleared in the current financial year. In a recent proposal by CERC, the REC prices are expected to reduce to half of existing Floor and Forbearance price.

Non Solar REC The demand for Non Solar RECs stood at 74 thousand RECs. The Total Transaction was close to around 111 Million INR. The market was optimistic for Non Solar RECs. The RECs traded at their floor price of INR 1500.

Solar REC The demand for Solar RECs took a hit in this trading session as it stagnated to 379 RECs. Demand was lowest in the history of the Solar RECs. The Total Supply grew by 22% from the previous month  The Total Solar REC market transaction stood at around 12 Million INR. The Solar RECs Traded at floor Price of 9300 INR.

Contributed By: Cigil

CSERC’s order on non compliance of RPO by Discoms for the year 2011-12 & 2012-13

Chhattisgarh State Electricity Regulatory Commission (CSERC) passed an order on 15th October 2014 on non compliance of RPO by DISCOM’s of Chhattisgarh for the year 2011-12 and 2012-13.  In the order CSERC said that they will close this matter of non compliance of RPO by DISCOMs. The questions arises in the order is how, as CSERC has not mentioned about any action to be taken or any penalty to be imposed on the discoms for their non compliance. CSERC in its order have concluded that

“Our attention has been drawn towards the fact that in CSPDCL’s tariff determination, final true up for FY 2011-12 has been completed. Therefore, in our opinion, it would not be appropriate to force them for compliance of RPO for FY 2011-12 at this stage. We are also of the view, that penalizing the other respondents/DISCOM for non fulfillment of their RE obligation for year 2011-12 is unjustified”

Similar order was also given for FY 2012-13. The commission has only asked the Discoms to be more vigilant on fulfillment of RPO in the coming years.

The order can be accessed here ( FY 2011-12) and here ( FY 2012-13).

 

MPERC imposes penalty for non compliance of RPO

In an order dated 20th October 2014, Madhya Pradesh Electricity Regulatory Commission (MPERC) has imposed a token penalty of Rs. 25,000 for non compliance of RPO.  The order is the outcome of the petition filed by M/S Green Energy Association in the matter of non compliance of solar RPO by the obligated entities for the period of FY 2011-12 to FY 2013-14. The respondent Madhya Pradesh Power Management Co Ltd (MPPMCL) plea was that they could not fulfill the RPO in the past years through purchase of RECs due to poor financial condition of Discoms. On hearing both the parties the commission  found the plea of MPPMCL to be illogical at this stage as RECs are available in the market and the retail tariff order for FY 2014-15 includes the amount to procure energy from renewable sources to meet RPO.  Therefore, now non compliance of RPO cannot be neglected and go unpunished.

The order states that

“ The Commission, therefore, imposes a token penalty of Rs. 25,000.00 on the respondent towards non-compliance of the solar RPO target as per the provisions of MPERC (Co-generation and Generation of Electricity from Renewable Sources of Energy) Regulations, 2010, which is to be deposited with the Commission within 30 days of the issue of this order. It may be emphasized that the penalty is a token and does not redeem the failure of the respondent in the matter. The Commission would like to warn the respondent that future non-compliance in this regard would be dealt with severely. “

This order will be appreciated by the RE generators who have a large inventory of RECs lying with them. Similar orders from SERC of Uttarakhand and Union Territories were made in the past. This is a welcome step and we expect other SERCs to come up with similar orders and take strict action against non compliance of RPO.

The order can be accessed here.

MNRE Releases Draft Guidelines for 3000 MW Solar Under JNNSM

Ministry of New and Renewable Energy (MNRE) has recently released the draft guidelines for selection of 3000 MW grid connected Solar PV Power Projects under Phase-II, Batch-II & tranche-I of JNNSM.

Under Part-I of Tranche-I, 1000 MW Solar PV Projects would come up in the Solar Park to be developed by the Joint Venture company of SECI, NEDCAP & APGENCO at Kurnool district in Andhra Pradesh.

The key points proposed in the draft are as below:

  1. The Scheme will be implemented by NVVN.
  2. The selection of Grid Connected Solar PV Projects of 1000 MW will be carried out by NVVN through a transparent tariff based bidding process.
  3. The generated power from developer will be purchased by NVVN and sold to AP distribution companies.
  4. To connect the projects to the transmission utility substations at 132kV and above, the Project capacity should be 50 MW.
  5. The maximum capacity to be allocated to a company or its group companies should be limited to a total of 250 MW.
  6. Out of total 1000 MW Under this scheme a capacity of 250 MW will come under Domestic Content Requirement (DCR).
  7. Keeping the slow-moving REC market in mind, it has been proposed that the NVVN will purchase 1 (One) Non- Solar REC (or proportionate Solar REC so as to match expenditure on non-Solar REC) for every 40,000 Units of bundled power purchased. The power sold to DISCOMs will cost them an extra Rs. 0.05/Unit, which is quite insignificant.
  8. The 1000 MW purchased by NVVN, will be bundled with 500 MW thermal power from NTPC.

 Time Schedule for Solar PV Projects:  Selection of Solar PV Projects shall be carried out according to the timeline given below:

The total bundled power of 1500 MW purchased, will result in injection of approximately 2250-2300 million units. As a result, NVVN will buy 56000-57500 REC per annum, which is insignificant compared to current inventory of 10.5 million RECs.

The relevant order can be accessed here.

Our previous Blog on MNRE JNNSM Phase-2 Batch-2 Scheme can be read here.

Contributed by Dheeraj Babariya.

REConnect awarded REC Facilitator of the Year

With dedicated effort and high efficiency in facilitating REC trading for our esteemed REC clients, and with a leading market share in excess of 30%, REConnect Energy Solutions has been acknowledged with the REC Facilitator of the Year Award at the 4th Indian Electricity Markets 2014 conference on 15th October, New Delhi.

We are highly obliged to our clients for trusting us, and would continue to serve them with same vigor and passion.

Congratulations to the REC Team, and to everyone else involved in one way or the other.

Rajasthan Approves Solar Energy Policy 2014

Rajasthan Renewable Energy Corporation (RREC) has notified its new Solar Energy Policy 2014. On 08th October 2014. The new policy will supersede the previous Rajasthan Solar Policy 2011.

Previously RREC circulated a draft policy and invited comments and suggestions from the interested stakeholders. The key features of the new policy are mentioned in the points below:

 

The policy is finalized with a vision of further enhancing the Solar Sector in the state. The state receives highest solar irradiation in the country with availability of low cost land and receives highest no. of sunny days. This conditions has made it the ideal destination for investments in the solar energy space.

The policy has given investors considerable benefits like making availability of land for project development and amending the land rules so as to remove the difficulties in procuring land for projects.

The policy can accessed here.

The FAQ’s on the policy can be read here.

Our previous blog on comparison with previous Solar policy can be read here.

Contributed by Dheeraj Babariya

Bihar Releases Draft for Determination of Solar Tariff

Bihar Electricity Regulatory Commission (BERC) in its latest notification dated 30thSeptember 2014, have released a draft for determination of solar tariffs for FY 2014-15, for power generated from solar power PV projects including rooftop solar PV and small power projects which are to be commisioned up to to 31.03.2016 and for solar Thermal Projects which are to be commisioned up to 31.03.2017 and for which Power Purchase Agreement (PPA) is signed up to 31.03.2015.

Some important key-points about the proposal are:

1. Control Period: 3 years upto FY 2015-16

2. Tariff Period: 25 years

3. Debt-Equity ratio: 70:30

4. Depreciation: 7% for the first 10 years, and remaining depreciation shall be spread over the remaining useful life of the project from 11th year onward.

The details of the tariff proposed is given below:

The tariff proposed is higher as compared to the tariff defined by the CERC for FY 14-15. The higher tariff may have proposed in order to push the Solar Generation in the state which is lagging behind in the sector.

This is a welcome move by the state, as it has fixed the tariffs for 25 years, providing long term commercial visibility.

In Bihar, the potential for wind power is zero whereas small hydro power potential was 213 MW, 619 MW from biogass and 300 MW from cogeneration bagasse. The waste to energy potential in Bihar was estimated to be 73 MW. An analysis of Solar potential by WISE-Pune, reveals a potential of 8500 MW Grid Connected Solar and 3200 MW Off-Grid Solar.

The Commission has invited comments and suggestion from stakeholders by 20th September 2014, a public hearing in the matter will be held on 21st October 2014.

The draft released can be found here.

Our blog on Bihar Biomass and Bagasse Tariffs can be accessed here.

Contributed by Dheeraj Babariya

KSERC (Kerala) Determines APPC and OA Charges for FY 14-15

Kerala Electricity Regulatory Commission (KSERC) through its order notified on 30th September 2014 has determined the APPC and the Open Access charges for FY 14-15.

APPC – The APPC definition followed by KSERC can be read as - “for the purpose of these regulations ‘Pooled Cost of Purchase’ means the weighted average pooled price at which the distribution licensee has purchased the electricity including cost of self-generation, if any, in the previous year from all the energy suppliers long-term and short term, but excluding those based on renewable energy sources, as the case may be.”

The APPC Approved for FY 14-15 is Rs. 3.14/Unit.

Open Access Charges – The Commission in its order also has calculated the OA charges payable during 14-15.

The Relevant Order can be accessed here.

Our previous blog on Kerala Rooftop Policy can be read here.

Contributed by Dheeraj Babariya

Renewable Energy Act proposed for Feb, 2015

In the past decade, Renewable Energy in India has witnessed mixed growth curves. While Solar has shown relatively healthy growth year-on-year, wind energy capacity addition has suffered a setback in the recent years, while Biomass and Small Hydro have also seen feeble growth. One of the main reasons for this is the lack of explicit long term vision in state renewable policies and regulations, because of which investors are always skeptic about long term viability of renewable energy projects.

It seems that the new government has been looking at means to enhance the growth of this sector, and are slowly moving in that direction. The government has decided to come up with a Renewable Energy Act that will not only attract investors and further capacity additions, but also look to streamline supply and establish a viable commercial atmosphere through tariffs.

With the recent meetings of the PM of India with business powerhouses of US and the Renewable companies there, it is clear that the Act will proactively encourage more FDI’s into this sector, which already exists up to 100%.

The concrete policy related to the Act would come in place by February next year before Renewable Energy Global Investors Meet and Expo (RE-INVEST) to be organized by the Ministry of New and Renewable Energy. MNRE has also requested the RBI to bring renewable energy funding into the priority sector, so that the funding process can be streamlined along the lines of other priority sectors.

The Act will also emphasize on the development of Off-Grid systems mainly solar roof-tops that will cater to the needs of both the urban and rural populations.

The relevant media article can be read here.

Bihar finalizes tariff for Bagasse and Biomass Projects

Bihar Electricity Regulatory Commission (BERC) in its order dated 22nd September 2014 has declared tariff for the Biomass and Bagasse based Co-gen plants. The tariff will be applicable to the plants commissioned during FY 14-15 and will be applicable until next tariff order for the same.

The details of the tariff declared are as below:

The tariff declared by the BERC has come in order to promote the biomass based power generation in the state, as the state has vast potential for biomass power. However attractive the tariffs are, since there has been no definite timeline defined for these tariffs, it would be difficult for project proponents and investors to foresee long term feasibility of projects.

The BERC order can be accessed here.

Our blog post on CERC 3rd amendment to REC Regulation can be read here.

Contributed by Dheeraj Babariya.

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