REC Trade Results – May 2018

In both Solar and Non-solar RECs, demand was robust, considering that this was only the second trading session of the new financial year.

Analysis of Trading:

Non-Solar – Non-solar RECs inventory was not completely exhausted in the May 2018 trading session (15,51,691 RECs were retained of 43,44,976).  A total of 401214 RECs were traded, despite demand being at 629069 (as compared to 538,371 RECs traded April 2017; an increase of 16.84%). RECs traded at the floor price of Rs 1,000/ REC at PXIL but increased to Rs 1,010/ REC at IEX.

Solar – A total of 914412  RECs were traded this month (Increase of 4.4% over April 2017). Clearing ratio for both non-solar and solar stood well.

The below graph depicts the Clearing ratio trend of Non-solar and Solar. In case of Non-solar, the clearance was 86.25% at IEX and 94.23% at PXIL and for solar, the clearance was at 14.20% and 23.38% in IEX and PXIL respectively

 

Creation of an RPO compliance cell, MNRE declares in its order

According to a recent order by Ministry of New and Renewable Energy (MNRE) dated 22 May 2018, a creation of Renewable Purchase Obligation (RPO) Compliance cell is in process. This cell will be handling all the matters related to RPO compliance across states and publishing monthly reports on the updates.

The cell is expected to work in accordance with Central Electricity Regulatory Commission (CERC) and SERCs. The cell is also expected to coordinate on publishing a periodic report with the Government of India and take up non-compliance issues with appropriate authorities.

In the past, there have been several efforts initiated by MNRE to increase awareness among RPO obligated entities regarding RPO obligations, and explaining its advantages to them.

With the help of this cell, data management, a repository of obligated entities, preparing state-wise defaulters lists and storing authorities specific information would be convenient.

Currently, there are some gaps in the implementation of RPO in some states, and with the creation of this cell, the issues can be taken care of state-wise, bringing the country closer to achieving its national target of installing 175 GW of renewable energy till 2022.

With the cell formation, supervision of the Renewable Purchase Obligation process across the country can be performed in a seamless manner. All the stakeholder information associated with the process can be maintained in one place making implementation and invigilation easy.

This is a very positive step by MNRE, as there will be a cell responsible for looking over the RPO compliance in the country, ensuring consistent implementation of RPOs across the states while publishing timely reports.

BESCOM proposes incentive scheme to bring back HT consumers in the new tariff order 2018-’19

BESCOM announced its new tariff order for FY 2018-2019. New points introduced in the order include providing incentives to the HT consumers, for them to return back to state DISCOMs and not purchase power via Open Access.

Since HT consumers have been purchasing power via Open Access, the DISCOMs are deprived of the sales to the paying consumers, in turn impacting the finances of the distribution licensees.

Base consumption:

The monthly average consumption out of energy supplied by BESCOM during the non-peak hours’ period between 10.00 Hours and 18.00 Hours of the day, during the period from 01-04-2017 to 31-03-2018 as recorded in Time of Day (ToD) meter will be reckoned as base consumption.

Incentive scheme:

  • Any excess energy consumed by the eligible consumers during the non- peak period between 10.00 Hours and 18.00 Hours, over and above the average base consumption as stated, will be allowed a discount of Rs.1.00/- per unit in the bill, to the eligible consumers.

  • Further, the eligible consumers will be allowed an incentive of Rs.2.00 per unit in the bill for the energy consumed during the period between 22.00 Hours and 06.00 Hours as against the normal ToD rebate of Re.1.00 per unit.

Consumer

Slabs

Exiting rates (Ps/Unit)

Proposed Incentive rates (Ps/Unit)

HT2a(i)

0-1 lakh units

665

665

above 1 lakh units

695

HT2a(ii)

0-1 lakh units

660

660

above 1 lakh units

680

HT2b(i)

0-2 lakh units

845

845

above 2 lakh units

855

HT2b(ii)

0-2 lakh units

825

825

above 2 lakh units

835

HT2c(ii)

0-1 lakh units

740

740

above 1 lakh units

780

There are also some amendments in the wheeling charges applicable to the renewable generators.

  • The RE generators will be liable to pay 25% of the normal transmission charges and/or wheeling charges.

  • They will be liable to bear the applicable lines losses as decided by the commission.

  • Also be liable to other applicable charges including 2% of banking charges.

RE projects

Time period

Transmission/wheeling charges

Banking

Line losses

Wind projects

10.10.2013 to 0.09.2017

25% normal transmission/wheeling charges

exempted

Solar projects

On or earlier than 31.03.2017

exempted

The RE projects commissioned on or after 1.04.2018 shall be liable to 25% of the normal transmission and/or wheeling charges, in cash, and the applicable line losses and banking charge, in kind, as determined by the Commission in its Tariff Orders, from time-to-time, in addition to the other applicable charges.

The Captive Generators, availing of the benefit of the Renewable Energy Certificate (REC) mechanism, shall be liable to pay the normal Transmission, Wheeling, and other charges, as specified in the Commission’s Order dated 09.10.2013.

The order is in effect since 1.04.2018 until 31.02.2020 unless any other order comes into effect.

CERC gives a positive nod to extend the validity on RECs

CERC recently announced in its order dated 15th May 2018 that the RECs will be valid till 30th October 2018, which were otherwise expired/likely to be expired between 1st April 2018 and 15th October 2018.

The commission declared this in accordance to its power under Regulation 15 of REC regulations.

The extension related dates are as below:

Duration

Status of RECs

Validity as per the order

1st April 2018 to 14th May 2018

Expired

Extended till 30th October 2018

15th May 2018 to 30th October 2018

Likely to be expired

Extended till 30th October 2018

The issues which were prevailing since early 2017 and saw petitions from various parties seems to have finally come to rest.

More than 10 lakh RECs (9,52,533 Solar RECs; 1,09,520 Non-Solar RECs) were being affected due to the pending petitions. Majority of these RECs were solar which saw a halt in trading for almost 11 months since 8th May 2017.

Since ApTel was in the reviewing process of the petitions, the commission could not take any action on the extension of REC validity before 31st March 2018.

ApTel in its judgment as on 12th March 2018 has disposed all the petitions and upheld the commission’s order dated 30th March 2017 to continue the REC Floor and Forbearance Price applicable from 1st April 2017 onwards.

 The Commission was of the view that there was a requirement to extend the validity since the appeals were dismissed by the ApTel and there was no stay.

Earlier, the commission extended the validity up to 31 st March 2018 which was expired between 1st October 2017 and 31st March 2018 based on Supreme Court’s order dated 29.09.2017 on seeking necessary direction for extension of the validity of RECs.

Based on the recent order, the expired RECs will be added back to the seller’s account which was then removed by NLDC till 31.03.2018.

As per the recent trade dated 25th April 2018 on IEX and PXIL after a halt of a year, the clearance was as below:

Trading portal

Solar

Non-solar

IEX

6,44,151

1,36,979

PXIL

2,30,967

50,564

National hybrid wind and solar policy announced by MNRE

Ministry of New and Renewable Energy (MNRE) announced the National Wind-Solar Hybrid policy in a press release on 14th May 2018. The objective behind this is to provide a framework for promoting large grid-connected wind and solar PV hybrid system for efficient utilization of transmission infrastructure and land. Along with this, it also aims to help reduce the inconsistency in the renewable power generation and in turn achieve better grid stability.

The policy also intends to encourage new technologies, methods, and solutions related to the combined operation of wind and solar PV plants.

The summary of the policy is as below:

  • According to the policy, the Wind Turbine Generators (WTGs) and Solar PV systems both will be configured to operate at the same point of grid connection.

  • The integration of wind and solar can vary depending on the size of each source and their technology type.

  • If the wind turbines are connected to the grid at a fixed speed using an inducing generation, the integration can be on the High Tension (HT) side at the AC output bus.

  • And in case of variable speed, wind turbines using inverters for connecting to the grid, the wind, and solar system can be connected to the intermediate DC bus of the AC-DC-AC converter.

  • Depending on the size of the respective renewable capacity, the other resource can be integrated. However,  a plant will only be considered hybrid if the power capacity of anyone resources is at least 25% of the rated power capacity of the other resource. (i.e. wind and solar).

  • The implementation will depend on various configuration and technology:

                      1. Wind-Solar hybrid – AC integration

                      2. Wind-Solar hybrid – DC integration

                      3. New Wind-Solar hybrid plants

  • The hybrid power generated from the wind-solar hybrid project can be used for captive, sale to third-party through Open Access, sale to the distribution company (ies) either at tariff determined by the respective SERC or at tariff discovered through transparent bidding process; and ) sale to the distribution company (ies) at APPC under REC mechanism and avail RECs.

  • In case of bidding, the Central/State can follow competitive bidding process and can select the winner on the basis of the tariff.

  • The additional power generated from the hybrid plant can also be used for solar/non-solar RPO fulfillment.

  • Battery storage is also enabled in the hybrid projects.

Central Electricity Authority and CERC shall formulate necessary standards and regulations including metering methodology and standards, forecasting and scheduling regulations, REC mechanism, grant of connectivity and sharing of transmission lines, etc. for wind-solar hybrid systems.

With significant capacity additions in renewables in recent years and with Hybrid Policy aiming at better utilization of resources, it is envisaged that the Hybrid Policy will open-up a new area for availability of renewable power at competitive prices along with reduced variability. A scheme for new hybrid projects under the policy is also expected shortly.

In conclusion, the new policy for hybrid wind-solar plants seems to be a good move at a Pan-India level as all the states will get an opportunity to utilize the much abundant renewable sources (Wind and Solar) in the country. We here at REConnect feel that if the implementation of this policy is done correctly, India will get a step closer to its goal of installing 175 GW renewable capacity till 2022.

The detailed policy can be found here.

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