REC Trade Result October 2016

Analysis of Trading:

 

Non Solar – The clearing ratio stood at 1.9% and 2.06% in both IEX and PXIL, with a significant increase of 46% in the no. of REC’s traded as compared to last month

Solar – Clearing ratio stood at 0.86 % and 1.16% in IEX and PXIL respectively, with an increase of 13% in total demand of Solar RECs as compared to last month.

This month trading saw significant improvement in the demand for both Solar and Non-Solar RECs as compared to last month. The total transaction value stood at 50.66 Crores in comparison to 37.5 Crores last month.

In contradictory to the total demand, this month saw a dip in the total REC issuance, where the demand increased by 1 lakh in comparison to September. This could be attributed due to the impact of CERC’s 4th amendment to RECs regulations.

 

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.

UERC Order on Non Compliance of RPO

UERC Maintains its tough stand for non compliance of RPO. In a recent order the Uttarakhand Electricity Regulatory Commission has directed UPCL to procure non-solar RECs equivalent to 7.50% of unmet non-solar RPO up to FY 2015-16 latest by 31st July’16. UPCL had submitted the following unmet RPO data to the commission:

The Commission has directed UPCL to meet the overall RPO FOR 2016-17 which is 8% for non solar and 1.5% for solar, either through purchase of energy from RE sources or through purchase of RECs equivalent by March, 2017. The Commission has denied UPCL to continue carrying forward of all the unmet non-solar RPO since, it has failed to tap the available power due to its own dilapidated distribution system for evacuation of power.

Also as mentioned in the order, Non-compliance of RPO will attract action against the officers responsible for compliances of regulations.

Earlier in year 2014, UERC had considered UPCL’s non-compliance as willful contravention of the direction of the Commission and had imposed penalty of Rs.20, 000/- on the Managing Director of UPCL. Thus this seems to be a strict order but in a positive direction which will help in streamlining the REC market overall.

 

The order can be accessed here.

UERC Order on Non Compliance of RPO

UERC Maintains its tough stand for non compliance of RPO. In a recent order the Uttarakhand Electricity Regulatory Commission has directed UPCL to procure non-solar RECs equivalent to 7.50% of unmet non-solar RPO up to FY 2015-16 latest by 31st July’16. UPCL had submitted the following unmet RPO data to the commission:

The Commission has directed UPCL to meet the overall RPO FOR 2016-17 which is 8% for non solar and 1.5% for solar, either through purchase of energy from RE sources or through purchase of RECs equivalent by March, 2017. The Commission has denied UPCL to continue carrying forward of all the unmet non-solar RPO since, it has failed to tap the available power due to its own dilapidated distribution system for evacuation of power.

Also as mentioned in the order, Non-compliance of RPO will attract action against the officers responsible for compliances of regulations.

Earlier in year 2014, UERC had considered UPCL’s non-compliance as willful contravention of the direction of the Commission and had imposed penalty of Rs.20, 000/- on the Managing Director of UPCL. Thus this seems to be a strict order but in a positive direction which will help in streamlining the REC market overall.

 

The order can be accessed here.

 

MPERC Finalizes APPC for FY 15-16

The Madhya Pradesh Electricity regulatory Commission (MPERC) has determined the Average pooled power purchase cost (APPC). The new APPC rates will be during financial year 15-16. The definition of the APPC followed by the MPERC -

for the purpose of these regulations ‘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 definition excludes only renewable energy for APPC rate calculation, which is same as followed by CERC.

Accordingly the APPC rates determined for FY 15-16 is Rs. 2.79 per unit, the APPC for FY 14-15 was Rs. 2.66 per unit. The graph below shows the APPC rates for previous years and the change in percentage year-wise.

As it is visible from the Graph that the commission has increased the APPC almost same as previous year, i.e. close to 5% increase for two consecutive years.

The MPERC Order can be accessed here.

KERC Revises APPC for FY 14-15 & Finalizes for FY 15-16

The Karnataka Electricity Regulatory Commission (KERC) in its order dated 31.03.2015 has finalized the APPC applicable for FY 15-16 and has also revised the APPC applicable for FY 14-15.

Previously the commission in its notification dated 30.06.2014 set the APPC rate for FY 14-15 at Rs. 3.11 per unit, but now through revision, the commission has reduced that from 3.11 per unit to 3.06 per unit for FY 14-15.

The commission in its order said that as the ESCOM’s have finalized their accounts for FY13-14 and based on the same the APPC for FY 14-15 is to be Rs. 3.06 per unit. The order also said mentioned that the difference of 5 paisa per unit shall be recovered by the ESCOM’s from the RE generators in three equal installments.

The commission in the order has also finalized the APPC applicable for FY 15-16 at Rs. 3.06 per unit, this APPC might go through another revision once the ESCOM’s will finalize their accounts for FY 14-15. The graph below gives the APPC’s given by the KERC in its various orders.

The commission order can reached here.

MNRE issues Draft Guidelines for JNNSM Phase-2 Batch-2 Scheme

MNRE (Ministry of New and Renewable Energy), has officially issued Draft Guidelines for selection of 1500 MW Grid Solar PV power projects under National Solar Mission, Phase-II Batch-II Scheme.

Here are some key points of the proposed scheme:

  • It is to be carried out by NVVN (NTPC Vidyut Vyapar Nigam Limited) through a transparent, tariff based reverse bidding process.
  • NVVN shall enter into suitable Power Purchase Agreement (PPA) with Solar Power Developers and Power Sale Agreement (PSA) with Distribution Companies/ Utilities/ other Bulk Consumers.
  • There will be two bid tranche: 750 MW in 2014-15, and remaining 750 MW in 2015-16.
  • Projects with minimum capacity of 10 MW and maximum capacity of 50 MW, and connection level with transmission utilities at 33kV and above, shall be permitted to bid.
  • A company can only bid for a maximum capacity of 100 MW per tranche.
  • DCR to be 500 MW out of the total 1500 MW. It was 50 % (375 MW) in Phase-II Batch-I scheme.

Interested stakeholders are required to send their comments by 23rd July, 2014.

It is interesting to note that out of the target capacity of 9000 MW in Phase 2 (2013-2017), 750 MW bids have been successfully completed, and as per this scheme 1500 MW bids will be completed by 2015-16. That leaves just 2 years i.e. 2016-17 and 2017-18 for the remaining 6750 MW of bid capacity.

Target achievement will be difficult but not impossible, considering that by 2017 India aims to achieve Grid Parity with respect to Solar Power, by extending the incentives (concessional customs duty) given to the Solar manufacturing sector and inflow of funds from NCEF.

The draft document can be accessed here.

Our previous Blog on JNNSM Phase-II Batch-I can be accessed here.

APTEL’s verdict on inclusion of Banked Energy in accounting APPC

Appellate Tribunal for Electricity (APTEL) in a judgment on 01st July 2014 has dismissed a petition filed by Himalaya Power Producers Association (Association of persons who are involved in the development and promotion of hydro power projects in Himachal Pradesh).

The summary on the petition and the judgement can be found in below mentioned points:

  • The Association through petition requested before APTEL that the State Commission has erroneously included electricity procured through banking (banked energy) for the calculation of Average Pooled Power Purchase Cost (APPC) for FY 13-14.
  • The Association argued that such inclusion of Banked energy in the determination of APPC leads to an artificially reduced APPC, which is threatening the Renewable Energy Generators in the state.
  • After hearing all the respondents, the Tribunal dismissed the appeal of the Association saying that the state commission has legally and correctly included the banked energy in the determination of the APPC for FY 13-14, citing regulatory reasons in support of the method followed by the state commission.

This order also gives a detailed insight into what is Banking of Energy, and its effect on calculation of APPC.

The more details on the APTEL judgment can be accessed here.

Our previous blog post on Himachal Pradesh APPC can be read here.

Contributed By: Dheeraj Babariya

India to Launch Bidding for 1500 MW of Solar Power Projects under JNNSM

India under its JNNSM (Jawaharlal Nehru National Solar Mission) is about to launch bidding for 1500 MW of solar power projects.

The bidding will come under the JNNSM Phase 2 Batch 2, which aims to achieve 10 GW of solar power by 2017, and as a part of this phase the government has already tendered 750 MW of solar power projects earlier in January this year, and plans to have a total of 20 GW of solar power capacity by 2022. The solar power produced under this phase would be bundled with the conventional power and will be sold to distribution licensees at an average rate of power purchase (APPC).

The selling and bundling of power would be handled by NVVN (NTPC Vidyut Vyapar Nigam), a subsidiary of India’s power giant NTPC. According to NVVN officials the cost of bundled power would be around Rs. 4-4.5 per unit.

The development is confirmed by Mr Tarun Kapoor Joint Secretary MNRE saying that – “We are in consultation with all the stakeholders and would come out with bidding guidelines soon, most likely the bidding would commence by July-August”.

Mr. Piyush Goyal (Hon’ble Minister of Power, Coal and New & Renewable Energy in the Government of India.) had given an indication earlier about setting up higher targets and advancing the timeline of the Solar Mission. “With both power and renewable energy under the same minister, it was easy to co-ordinate with the power department to allocate conventional power for bundling solar power“, said a senior official at the (MNRE).

The last batch of bidding under JNNSM had fixed the tariff at Rs. 5.45 per unit supported with viability gap funding. A senior MNRE official said that “it was effort of NVVN that the cost of solar power came down by Rs. 8-10 per unit from Rs. 17 per unit in 2011 “, also added that the ministry is hopeful of achieving grid parity by 2017.

You can access our earlier blog post on the results of JNNSM Phase 2 Batch 1 here.

Recent media article can be accessed – Economic Times

REConnect Newsletter Volume 42 – OPEN ACCESS

Dear Reader,

We are pleased to present Open Access Vol 42 – our monthly newsletter covering RECs and regulatory and market developments in the renewable energy space.

 Key points covered in this newsletter are:

 1) Analysis of Karnataka’s solar policy

 2) Regulatory updates including important changes in RPO regualtions in Rajasthan, Order of JERC for enforecemnt of RPO including    imposition of penalty, and other regulatory updates

 3) Analysis of the most recent trading session of RECs and capacities in the REC mechanism

 Past newsletters can be accessd here - http://www.reconnectenergy.com/newsletter/past-newsletters/

For latest news and updates, please visit our blog at – http://reconnectenergy.com/blog/

 As always, we will love to hear your feedback on the newsletter.

- Team REConnect

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