REC Trade Results November 2015

RECs demand has been steadily rising, and this month results have been very encouraging. Non Solar REC’s and Solar REC’s traded this month were 9.5% and 533% higher compared to trading session of October. The total transaction value of REC’s hit a sum total of Rs 65.5 crores, compared to Rs. 36.5 crores last month.

Analysis of Trading:

Non Solar – Clearing ratio in exchange were at 1.44% and 1.90% in IEX and PXIL respectively for Non Solar REC’s. A total of 2, 31,545 RECs were traded in this trading session (in October 2, 11,442 RECs were traded)Clearing ratio at PXIL reduced marginally but picked up on IEX, as compared to last month.

Solar – Clearing ratio stood at 2.07% and 4.97% in IEX and PXIL respectively, compared to 0.54% and 0.33% last month. A total of 87,767 REC’s were sold in this session, 6.33 times compared to October.

Trading volumes are expected to increase significantly going forward, as most obligated entities are now gearing up to fulfill their obligation considering that only 4 trading sessions are remaining in the current FY . Further, this year we have seen regulatory action in the form of compliance orders and/ or proceedings in several states like Orissa, Kerala, UP, MP and Maharashtra, to name a few. Overall the market showed clear signs of recovery, and is expected to grow further in the closing months of the FY.

The October’s trade results can be accessed here.

Analysis of Model Regulations on Forecasting and Scheduling of Wind and Solar Generating Stations at State Level

As you may be aware, CERC had notified forecasting and scheduling (F&S) regulation for inter-state sale of power a few months back. Now, with the intent of having compatible regulations, the Forum Of Regulators (FOR) has come up with model regulations. It is expected that states will adopt this model regulation or something on these lines in the near future.

Executive Summary:

  • Forecasting and scheduling will be required by all wind and solar project, regardless of the date of commissioning and capacity
  • Deviations will be calculated on the basis of total available capacity
  • Penalty is a fixed amount beyond the error range (10% in case of new projects, 15% in case of old projects)
  • Settlement will be done through the “Qualified Coordinating Agency” or QCA.

Detailed Analysis:

Forum of Regulators have recently come up with model regulation for forecasting and scheduling and deviation settlement mechanism. The primary objective is two fold: a) facilitate large-scale grid integration of solar and wind generating stations, and b) maintaining grid stability and security.

Highlights of the model regulation are below:

–          All solar and wind generators connected to State grid have to provide day-ahead and week-ahead schedule

–          Revisions can be made on a one-and-half hourly basis.

–          Payment for generation shall be as per actual generation (this is different from the inter-state regulation, where payment is on the basis of scheduled generation). .

–          The deviation slab has been narrowed for upcoming projects (i.e., +/-10%) but has been kept as (+/-)15% for existing generators at Intra-state level

–          Penalty is calculated at fixed amounts per unit (whereas, for Inter-state it is calculated as a percentage to PPA rate)

–          RPO accounting can continue as per existing arrangement, and needs no change.

Applicability of Regulations

All wind and solar generators connected to the State grid are covered:

  • regardless of date of commissioning,
  • including those connected via pooling stations
  • selling power within or outside the state.

Detailed Mechanism defined for Deviation Settlement

Deviation calculation both for Inter-state and Intra-state has been kept as :

*Available Capacity would ideally be the Installed Capacity, unless any of the turbines are on outage. Similarly for solar panels.

In case of Intra-State transmission, Penalty Mechanism for existing generators :

In case of Intra-State transmission, Penalty Mechanism for up-coming generators :

The detailed Regulation can be accessed here.


Orissa to Set up 1000MW Solar Power Park

The Orissa government plans to add aggregate clean energy capacity of 1,000 MW by establishing solar parks in the state by 2020. The target, fixed by the state government in its draft Orissa Solar Park Policy, 2014, primarily aims at facilitating accelerated deployment of solar energy in the state to support sustainable development and address the climate change issues.

The state government had set an ambitious target of adding 3,000 Mw of renewable energy capacity by 2022 in the draft policy. The park has been approved by Ministry of New and Renewable Energy which will likely involve investment of about Rs 6,500 crores.

A total of 5000 acres of land would be required for setting up of the solar park. Since it’s difficult to find this stretch of land in Orissa, the park would be developed in three to four Green Energy Development Corporation of Orissa Ltd (Gedcol) will be signing a pact with Solar Energy Corporation of India clusters, where Gedcol will act as the nodal agency.

The above update has been taken from Business Standard’s article published on 17th October, 2015 which can be accessed here.

OERC (Procurement of Energy Renewable Sources and its Compliance) Regulations, 2015

Orissa Electricity Regulatory Commission released the notification on Procurement of energy from Renewable Sources on 10th October, 2015. This regulation set the basic principle for promoting the sale of power from renewable sources to any person within the state of Orissa. Below mentioned are the key points of the regulation:

  • These regulation shall be applicable to all Obligated entities in the state of Orissa, the obligated entities include :
    • Distribution Licensee or any other entity procuring power on their behalf and;
    • Any person consuming electricity

a)      Generated from Conventional Captive Generating plant having capacity of 1MW and above for his own use and or

b)      Procured from conventional generation through open access and third party sale.

  • Every Obligated Entity shall meet its RPO target from its own Renewable Sources or by purchase of REC’s or procurement of power from other developer of Renewable Energy Sources.
  • The minimum quantity of energy to be procured from Renewable Sources by obligated entity is mentioned in the table below :

  • The Cross Subsidy Surcharge is exempted for procurement of power through third party sale from Renewable Energy Sources.
  • No Banking facility is provided for supply (Third Party sale) from Renewable Energy Sources through open access.
  • The energy generation from Third Party sale in each 15 min time block shall be set off against the captive/open access users’ consumption in the same 15 min time block.

In closure we would like to say that this regulation would help the state of Orissa to comply with its solar and non solar RPO targets and promote the procurement of renewable energy.

The detailed document can be accessed here.

National Offshore Wind Energy Policy 2015

The Ministry of New and Renewable Energy released its first ever National Offshore Wind Energy Policy on 1st October 2015. India has already achieved significant success in the onshore wind power development with about 24 GW of wind energy capacity installed. The introduction of this policy, will replicate the success of onshore wind power development in the offshore wind power development.

Following are some of the key points of the policy:

  • The offshore wind farms can be built in the following two maritime areas :
    • Indian territorial waters, which generally extend up to 12 nautical miles (nm) from the baseline; and
    • Exclusive Economic Zone, beyond the 12 nm limit and up to 200 nm, where India has right to construct structures such as wind farm installations.
  • The MNRE will act as the “Nodal Ministry” for development of Offshore Wind Energy in India and will work for Development and Use of Maritime Space within the Exclusive Economic Zone.
  • The National Institute of Wind Energy will act as the “Nodal Agency” for the development of offshore wind energy and will call for proposals under International Competitive Bidding (ICB).
  • A preliminary assessment suggests potential to establish around 1 GW capacity wind farm each along the coastline of Rameshwaram and Kanyakumari in Tamil Nadu.
  • The table below gives the essential elements and objectives of the policy for development of offshore wind farm:

Thus with optimum exploitation of the offshore wind energy and this supportive National Offshore Wind Energy policy regime India will be able to meet its energy demands and will contribute to fulfill the missions of National Action Plan on Climate Change.

The Policy can be accessed here.

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