REC Trade Result August 2016

This month trading saw marginal increase in the demand for both Solar and Non-Solar RECs as compared to last month. Compared to August 2015, demand was almost double this month.  The total transaction value stood at 52 Crores in comparison to 40 Crores last month.

This month also saw significant fall in the total REC issuance with 40% reduction as compared to the past month’s total issuance. However, this is likely to be a temporary blip as RECs issuances are yet to catch up after the impact of CERC’s 4th amendment to RECs regulations.


Analysis of Trading:


Non Solar – Clearing ratio in exchange stood at 1.86% and 2.27%in IEX and PXIL respectively for Non Solar REC’s.  A total of 2, 58,891 RECs were traded as compared to 2, 35,007 RECs traded in July, an increase of 10%.



Solar – Clearing ratio stood good at 0.99% and 1.4% in IEX and PXIL respectively, with a marginal increase of 5% in total demand of Solar RECs as compared to last month.

Confusion over new Renewable Purchase Obligations

The Ministry of Power (MoP) had recently declared the national RPO trajectory.  The order had enlisted the yearly RPO trajectory for both non-solar and solar power purchase from 2016-17 till 2018-19. For non-solar, the targets ranges from 8.75 % to 10.25 % and for solar from 2.75% to 6.75%. The target is to reach 17% of total energy consumption.


These RPO targets have led to confusion amongst the state owned power distribution companies and thus the Union government is likely to revise the renewable purchase obligation (RPO) targets. Following were some of the issues raised:


  • The industry executives have said that no order was officially released by any government department.
  • Few states have asked MoP for provisions in the RPO target as the targets are stringent and mandatory.
  • Some north-eastern & northern states, which are either hydro-rich or with low solar radiation have opposed RPO targets for solar being
  • These states want solar RPO to be removed for them and let it be resource flexible.


The officials of MNRE and MoP have said that they are likely to revisit the target as it was under wide consultation for the states. Since few states cannot meet the solar targets, the targets will be set in line with the regulations and commitments regarding climate change.

The above update has been taken from Business Standard’s article published on 22nd August, 2016 which can be accessed here.

Our previous blog on National RPO Trajectory declared by MoP can be accessed here.

MPERC(Cogeneration and Generation of Electricity from Renewable Sources of Energy) (Revision-I)

Madhya Pradesh Electricity regulatory Commission (MPERC) recently ordered amendment for its Cogeneration and Generation of Electricity from Renewable Sources of Energy Regulation 2010.

The new amendment has defined the minimum quantum of electricity to be procured by all the Obligated Entities from Co-generation from Renewable Sources of electricity expressed as % of their total annual procurement of Electrical Energy.

The new amendment has excluded consumption met from hydro sources of power during the following Financial Years given as under:-

Sr. No.

Financial Year

Solar (%) Non Solar (%) Total (%)


2010-11 0.80 0.80


2011-12 0.40 2.10 2.50


2012-13 0.60 3.50 4.00


2013-14 0.80 4.70 5.50


2014-15 1.00 6.00 7.00


2015-16 1.00 6.00 7.00


2016-17 2.75 8.75 11.50


2017-18 4.75 9.50 14.25


2018-19 6.75 10.25 17.00

As the Ministry of Power (MoP) declared the national RPO trajectory recently, all the states are expected to declare their RPO trajectory soon.

The MPERC Draft can be accessed here.

Policy for Repowering of the Wind Power Projects

The Ministry of New & Renewable Energy in consultation with various stakeholders including the Industry and States had come up with the Draft Policy for Repowering of the Wind Power Projects in the month of March this year. After 4 months the Policy has been finalised with an objective to promote optimum utilization of wind energy resources by creating facilitative framework for repowering. Some of the key pints of the policy are mentioned below:

  • All the wind turbine generators with the capacity of 1MW or below would be eligible for repowering.
  • The Policy offers incentives in form of an additional interest rate rebate of 0.25% over existing rebate available to the new wind projects by IREDA.
  • Secondly through benefits like Accelerated Depreciation or GBI that would be made available to the repowering project.
  • The power generated corresponding to average of last three years’ generation prior to repowering would continue to be procured on the terms of existing PPA.
  • Augmentation of transmission system from pooling station onwards to be carried out by the respective STU.
  • During the period of execution of repowering, wind turbines would be exempted from not honoring the PPA for the non-availability
  •  Similarly, in case of repowering by captive user they will to be allowed to purchase power from grid during the period of execution of repowering.

The Policy can be accessed here.




National RPO Trajectory Declared

The Ministry of Power (MoP) declared the national RPO trajectory recently. According to the notification, overall RPO % is expected to be 11.5% in 2016-17 (including 2.75% of solar), and rising to 17% in three years (including 6.75% solar).

This trajectory is higher than the current RPO in most states. The onus will now be on the SERCs to amend their RPO regulations to bring it in line with the notification. Infact, Chhattisgarh has already made a beginning with draft regulations published within a week of the notification (the draft regulation is analyzed in the second part of this article).

The notification mentions two other important aspects of calculating RPO:

  •  RPO to be applied on co-generation power
  •  Consumption from hydro sources to be excluded


Announcing the national RPO trajectory is a welcome step. The entire objective of the RPO and REC regulations was to have a uniform consumption of RE power across the country even though the RE resources differ widely across states. However, this objective was lost along the way. The National RPO trajectory can go a long way is having uniform RPO% across the country. However, there are some issues with the RPO trajectory notification:

  • “Are SERCs obligated to follow? This question remain unanswered. The notification itself says…”
  • SERCs may consider to notify RPO for their respective states in line with the aforesaid uniform RPO trajectory.
  • The RPO trajectory itself has been declared for 3 years only. It would have been good to see a longer trajectory.
  • The exclusion of hydro will need amendments in state RPO regulations
  • Similarly, including co-generation power in RPO calculations will require some states like Rajasthan and MP to amend their regulations

Chhattisgarh Draft RPO regulations – Analysis
Immediately after the notification of the national RPO trajectory, Chhattisgarh announced draft RPO regulations. Key points on the draft regulations are:

  • The RPO % is proposed to increase steeply – from 7.25% in 2015-16 to 20% in 2020-21.
  •  The regulation proposes to apply RPO on co-generation power
  •  Both these changes will have significant impact on Chhattisgarh. It is a state with large captive generation capacity, a large portion of which is from co-generation.



* Draft regulation

** In Karnataka RPO differs slightly for each Discoms


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