REC Trade Result February 2016

RECs demand has shown significant improvement over last month trading session. Non Solar REC’s and Solar REC’s traded this month were 70% higher and 57% higher respectively, compared to trading session of January 2016. The total transaction value of REC’s hit a sum total of Rs 119.5 crore, compared to Rs. 71.78 crore last month.

Analysis of Trading:

Non Solar – Clearing ratio in exchange stood at 3.89% and 4.75% in IEX and PXIL respectively for Non Solar REC’s. A total of 586,501 were traded as compared to 344,519 RECs traded in January, but much lower than the volume cleared in December trading session.

Solar – Clearing ratio stood good at 2.14% and 3.58% in IEX and PXIL respectively, with total clearing volume of 90,236, as compared to 57,420 last month. The increase is significant, with much better performance expected next month.

 

Trading volumes are expected to increase significantly during March trading session, as most obligated entities will want to fulfill their obligation for the FY. This trading session results are encouraging, considering last month performances, riding on higher demand on both exchanges. However, compared to the trading session of February 2015, where Non-Solar and Solar clearing volume stood at 747,487 & 44,869 respectively, the performance of Non-Solar RECs was below par whereas Solar RECs demand more than doubled.

 

The trade result for the month of January can be accessed here.

Rajasthan publishes draft Forecasting and Scheduling regulations

RERC has released draft forecasting and scheduling (F&S) regulations. Rajasthan has become the 4th state to release draft F&S regulations in recent days (MP, Karnataka and Tamil Nadu are the others).

The key points of the regulations are:

  • The regulations will be applicable on all wind and solar generators with individual or combined capacity of 5MW and above that are connected to the state grid

  • Deviation will be calculated on the basis of available capacity

  • Settlement with the buyer will be on the basis of actual generation

  • Qualifying Coordinating Agency (QCA) will play a key role in the total process. QCA will be responsible for forecasting, telemetry, scheduling and settlement of deviation.

The draft regulations are in-line in every aspect with the model F&S regulations released by FoR earlier and can be accessed here.

NLDC Invites Comments for bi-monthly REC Trading Session

National Load Dispatch Centre has invited comments and suggestions, on the REC Procedure considering bi-monthly REC trading sessions, by 1st March 2016 to the Central Agency. The following modification has been proposed for the “Procedure for Redemption of REC’s”:

  • All valid RECs excluding the RECs applied for Self-retention shall be traded on the second and last Wednesday of every month.
  • The eligible entity shall exclude the RECs applied for self-retention in the particular month, if applicable, for dealing on Power Exchange.

It’s a much needed step by NLDC as it enhances the platform for a better market price discovery. This change would be beneficial for the generators and to the obligated entities, since if the RECs are not traded in the current month, they would not have to wait for an entire month to clear the REC’s.

Also it would promote the developers to meet their RPO as we have seen many regulatory actions coming up in the form of compliance orders and proceedings in several states like Orissa, Kerala, MP and Maharashtra recently.

We also feel that the bi-monthly REC trading could be intensified if quarterly or at least half yearly compliance of RPO is made compulsory instead of yearly. This would push the obligated entities more to gear up and fulfill their obligation and thus benefit the REC market.

 

TNERC Draft Intrastate Regulation on Forecasting and Scheduling of Wind and Solar Generating Stations

The Forum of Regulators recently announced a Model Regulation on intra-state RE deviation settlement regulation which will cover all the existing and upcoming wind and solar power producers in India. States like Karnataka and Madhya Pradesh electricity regulators have already announced their draft regulation on wind/solar forecasting and scheduling, in line with FOR’s Model Regulation.

Tamil Nadu Electricity Regulatory Commission also, recently came up with its first Intrastate draft regulation on Forecasting and Scheduling of Wind and Solar Generating stations.

Detailed Analysis

The draft regulation broadly covers the following aspects:

  • Mandatory forecasting and scheduling of all the existing and upcoming wind/solar power generation at interstate level.
  • The state load dispatch centers are also mandated to carry out their own parallel forecasting mechanism primarily to manage secure grid operations.
  • A wind/solar power producer can either choose to have his own forecast or opt for SLDC’s forecast for the scheduling purpose. The deviations arising due to a difference between the scheduled generation and actual generation will be settled as per the penalty mechanism adopted under the respective regulations.
  • Similar to the FOR’s Model Regulation the Qualified Coordinating Agency (QCA) will manage the entire exercise of forecasting, scheduling, energy metering, telemetry, deviation management and penalty de-pooling at every wind/solar pooling station.
  • In deviation Settlement, the deviations and errors are quantified w.r.t available generation capacity at the time of scheduling. This will reduce the absolute error magnitude especially during low wind/solar seasons and thus reducing the penalty amount that a generator may have to absorb.
  • A permissible deviation band of +/-10% (w.r.t available capacity) and a permissible deviation band of within 5 % (w.r.t available capacity) have been permitted without any penalty separately for all the existing wind and solar power producers respectively.
  • Deviation Charges in case of under or over-injection by wind generators, for sale of power within the State.
  • Deviation Charges in case of under or over-injection by solar generators, for sale of power within the State.
  • Though the draft regulation is in line with the Model Regulation. The table below depicts how the two regulations vary with each other in terms of the Deviation charges and the deviation band for solar and wind generators :
We feel that though this regulation will help to streamline the large scale grid integration and security and benefit intrastate sale of power but it is a much more stringent regulation than the other regulations, since the error deviation has been narrowed down from +/-15% to +/-10% for Wind and +/-5% for Solar.

The Draft Order can be accessed here.

 

HPERC Declares APPC for 2015-16

The Himachal Pradesh Electricity Regulatory Commission (HPERC) recently came up with its order on the Average Pooled Power Purchase Cost (APPC) for the financial year 2015-16.

The definition of APPC followed by HPERC is in line with the CERC definition and can be read as:

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 for the financial year 15-16 has been determined as Rs. 2.31 per Unit, by the commission which shall continue for further period with such variation or modification as may be ordered by the Commission for the next financial year.

The APPC for FY 15-16 is 3.12% higher as compared to the APPC of FY 14-15.The graph given below depicts the APPC’s determined by HPERC over last four years and how the APPC rates have increased over the past three years :

The HPERC order can be accessed here.

International Solar Alliance

The 2015 United Nations Climate Change Conference, COP 21 was held in Paris France, from 30 November to 12 December 2015. The COP21 witnessed a major alliance (ISA- International Solar Alliance) between India and France, towards their effort to combat the impacts of Climate Change.

The ISA which is a partnership of 120 solar rich countries was officially and jointly launched by Prime Minister Narendra Modi and French President Francois Holland on 30th November 2015, in Paris. The foundation-laying ceremony of the Interim Secretariat of ISA was done by both on January 25, 2016 at the National Institute of Solar Energy in Gurgaon. It has been confirmed that the ISA headquarters will come up on five acres of land in the campus of the National Institute of Solar Energy (NISE).

India plays a major role in this since Government of India will support ISA by hosting its secretariat for an initial period of five years and thereafter it would be generating its own resources and become self-financed. The total financial support by India, including cost of the land, will be Rs 400 crores while the French president has committed to the amount of 300 million Euros for the initial projects of the ISA

Objective:  The objective of the alliance is

  • To create a collaborative platform for increased deployment of solar energy technologies, this will enhance the energy security & sustainable development.
  •  Improve access to energy and opportunities for better livelihoods in rural and remote areas.

ISA plans to work on five key areas to achieve the above objectives:-

  • Promote solar technologies and investment in the solar sector to enhance income generation for the poor and global environment:
  • Formulate projects and programmes to promote solar applications:
  • Develop innovative Financial Mechanisms to reduce cost of capital:
  • Build a common Knowledge e-Portal:
  • Facilitate capacity building for promotion and absorption of solar technologies and R&D among member countries

Following the International Solar Policy, Ministry of New and Renewable Energy has also promised to come up with a policy next month for creation of special solar zones across India having an area of 100 sq.km at least. The MNRE Secretary said that they would also explore option of hybrid zones which would have possibility of setting up both wind and solar power projects.

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