REC TRADE RESULTS MARCH 2018

For the first time after 2012, the total demand in REC (Non-Solar Segment) market exceeded the supply available. The trade session in March 2018 also ended the dry run that REC Market has been under since 2012 with 100% clearance on both the Power Exchanges!

Non-solar demand was significantly higher than in March 2017, and also last month. In total 27.69 lakh RECs were traded (211.63% higher than March 2017, and 17.43% higher than in February 2018), and clearing ratios on IEX and PXIL were 100% and 100% respectively. Total traded value was Rs 415 crores (This value is calculated considering the rate of Rs 1500 per REC out of which Rs 1000 go to the generator and Rs 500 goes to CERC).

Trading of solar RECs continues to be suspended due to the stay imposed by the Supreme Court.

 

This value is calculated considering the rate of Rs 1500 per REC out of which Rs 1000 go to the generator and Rs 500 goes to CERC

RERC PROVIDES CLARIFICATION REGARDING DURATION AND TARIFF OF PPAS EXECUTED UNDER REC MECHANISM

Rajasthan Electricity Regulatory Commission (RERC) has released an order clarifying the duration of PPA’s executed under REC mechanism and for setting of tariff for the PPA’s executed under REC framework.

A petition was filed by Jaipur Vidyut Vitran Nigam Ltd., Ajmer Vidyut Vitran Nigam Ltd, Rajasthan Urja Vikas Nigam Ltd. and Jodhpur Vidyut Vitran Nigam Ltd. seeking clarifications with regards to PPA executed under REC mechanism from RERC.

 

The commission came to the conclusion that the operating period of PPAs shall be governed by the terms of PPA. Since as per the petitioners, all the PPAs executed under REC framework are valid upto 31.03.2019, it shall be followed. Also, the pricing methodology for determining the APPC under REC mechanism has been provided in the RERC (Renewable Energy Certificate and Renewable Purchase Obligation Compliance Framework) Regulations, 2010, it shall be followed. RERC will take the suggestions of the petitioners into consideration as and when it amends the REC regulations, 2010.

RECONNECT ENERGY WINS SMART STARTUP OF THE YEAR AWARD

We are happy to announce that REConnect Energy has won the Platinum Award in the ISGF Innovation Awards, 2018  in the Smart Startup of the Year category.

 

 

Go on the link to watch a brief video of the innovations done by REConnect Energy in the Renewable Sector: Youtube link.

 

REVISION OF REC PROCEDURES BY CERC

Central Electricity Regulatory Commission (CERC) has released Model Guidelines for Accreditation of a Renewable Energy Based project or Distribution Licensee, as the case may be under REC mechanism. These regulations shall be applicable to all renewable energy based projects of generating companies which are grid connected. All sources recognized and approved by the Ministry of New and Renewable Energy shall come under these regulations. Following are the major changes proposed in the procedures:

 

  1. Those renewable energy based Captive Generating Plants which do not fulfill the criteria as prescribed in the Electricity Act, 2005, shall not be eligible for accreditation for the energy generated by the plant for self consumption.

  1. Ownership of existing valid RECs shall be transferable by the central agency in case of change of legal status of registered entity. The procedures include the following conditions as change of legal status:

Change from partnership to company, Pvt. Limited to Public Limited, new entity subsequent to demerger, change in ownership of the company and asset sale/ transfer to another company, etc.”

  1. Revision of formats for Recommendation (checklist) from state agency and declaration.

  2. Application for revalidation or extension of validity of existing RECs shall be done at least three months in advance,prior to the expiry of existing registration by generating companies and distribution licensees.

  3. In case of reduction of the registered capacity of the RE generating plants, the application should be submitted online.

RULING FROM COMPETITION COMMISSION MAY RESULT IN SIGNIFICANT CHANGES IN ELECTRICITY SECTOR

In a recent Judgement, the Competition Commission of India (CCI) considered the case of an electricity consumer that was repeatedly denied open access permission. In this case, the consumer approached the CCI alleging “abuse of dominant position” on part of the state utilities. The case was filed by HPCL-Mittal Pipelines Limited (‘HMPL’) against denial of open access. In this case, “upstream network constraints” were cited to disallow OA application multiple times.

 

The CCI found that prima facie denial of open access in the above case did result in violation of Sec 4(2)(c) of the Competition Act 2002. This clause refers to “abuse of dominant position by denial of market access”. The CCI has ordered a detailed investigation in the matter.

 

The CCI also made certain other interesting observations in the case:

 

  1. In the above case, it identified “conflict of interests situation” between the various constituents of the electricity utilities like the Discom, TransCo, SLDC, etc due to “structural linkages”, i.e. common holding structure. The order states the following:

It appears that OP-2 has leveraged its dominant position in the relevant market to adversely affect the competition in the downstream market, where it is present through its group entity OP-3. The structural linkages between the OPs as depicted in the diagram illustrated earlier also points toward the conflict of interest that exists in the present case. Thus, given the conflict of interest situation that exists in the present case, anti-competitive motive behind such denial by OP-2 cannot be ruled out and may need to be tested in detailed investigation.

 

  1. The case dwells in depth on the jurisdiction of the CCI to rule on such cases given that the EA2003 is also a special statute that deals with all matters of electricity. The CCI finds that there are enough grounds and supporting case laws to justify its jurisdiction as far as competition related matters are concerned across all sectors.

 

This judgement is certainly a very interesting development for the electricity sector, as denial of open access permissions is a problem across most states. The inherent conflict of interest is evident, as often the Discom itself has to approve OA applications, in what will effectively result in taking away of its own best paying consumers.

The regulatory regime of the sector itself, especially the State Regulatory Commissions (SERCs) have so far taken a view that has supported the Discom’s, at the cost of the overall market and sector. Examples include setting of Cross-subsidy surcharges without regards to the formula and limits defined in the National Tariff Policies, upholding denial of open access in many cases, etc.

 

It is hoped that an outsider, for example CCI, which does not bring with it the baggage of the SERCs, or the “conflict of interest” that results from the government appointing the electricity regulator and owning the entire value chain, will catalyse real change in the electricity sector.

TARIFF OF RS 2.85 DETERMINED AT THE LATEST WIND AUCTION

In an auction conducted by Maharashtra State Electricity Distribution Company Limited (MSEDCL) for a 500 MW grid connected wind project, the lowest tariff quoted was Rs 2.85/kWh.

This tariff was quoted  by Adani Green Energy and KCT Renewable Energy Private Limited to develop wind projects of 75 MW each. Wind tariff  determined through auctions not gone above Rs 3/unit since the dip in SECIs second wind tariff auction in the month of September last year.

 

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