REC Trade Result November 2016

This month trading saw stagnant results in respect to the demand for Non-Solar REC’s. The demand for solar REC saw marginal improvement in respect to the last month. The total transaction value stood at 53.6 Crores in comparison to 50.6 Crores last month.

 

Analysis of Trading:

 

Non Solar – The clearing ratio stood at 1.85% and 2% in both IEX and PXIL, with a significant increase of 2.25% in the no. of REC’s traded as compared to last month

Solar – Clearing ratio stood at 1.13 % and 0.96% in IEX and PXIL respectively, with an increase of 17.5% in total demand of Solar RECs as compared to last month.

 

This month also saw significant increase in total REC issuance, where the demand increased by 9 lakh in comparison to October. This could be attributed due to the impact of CERC’s 4th amendment to RECs regulations.

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 September 2016

The month of September trading saw significant decrease in the demand for both Solar and Non-Solar RECs as compared to last month. The total transaction value stood at 37.5 Crores in comparison to 52 Crores last month.

Analysis of Trading:

Non Solar – The clearing ratio stood at 1.36% in both IEX and PXIL for Non Solar REC’s.  A total of 1, 75,525 RECs were traded this month as compared to 2, 58,891 RECs traded in last month, a decrease of 32%.

Solar – Clearing ratio stood at 0.8 % and 0.98% in IEX and PXIL respectively, with significant decrease of 20% in total demand of Solar RECs as compared to last month.

 

 

 

In contradictory to the total demand, this month also huge rise in the total REC issuance where the issuance increased by more than 5 lakhs as compared to the past month’s total issuance. 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.

Ministry of Power sets green energy targets for State Discoms

The Ministry of Power has issued guidelines, for long term growth trajectory for RPO of Non solar as well as for Solar. Though the guidelines have been issued, the final targets will be set by each individual state’s electricity regulatory commission (SERC).

In order to achieve the target of 1, 75,000 MW of renewable capacity by March, 2022, MNRE has notified the RPO uniformly for all States/ UTs initially for three years from 2016-17 to 2018-19 as given in the table below:

 

 

State Discoms will have to mandatorily draw at least 2.75% of their total power consumption from solar plants in the current fiscal, according to the renewable purchase obligation (RPO) norms laid down by the power ministry. Considering this proposed regulatory changes and stricter enforcement by states FY2016-17 is expected to bring a good fortune to the REC Market.

 

The article can be accessed here.

REC Trade Result July 2016

In contrast to June 2016, which saw huge demand for both Non-solar and Solar RECs, this month trading did not fare that well.  This month trading saw a dip in the demand for both Solar and Non-Solar RECs. The demand though increased twice the amount in comparison to July 2015.  The total transaction value stood at roughly half as compared to previous month, i.e. 40 Crores as compared to 80 Crores last month.

Analysis of Trading:

Non Solar – Clearing ratio in exchange stood at 1.91% and 1.69 % in IEX and PXIL respectively for Non Solar REC’s.

Solar – Clearing ratio stood good at 1.17% and 0.97% in IEX and PXIL respectively.

The graphs are given below:

 

 

REC Trade Result June 2016

This month trading saw a huge surge in the demand for both Solar and Non-Solar RECs. The demand rose approximately 2.5 times for both non-solar and solar, while also registering good clearing ratios at both the exchanges, as compared to June 2015. The total transaction value stood at roughly 80 Crores as compared to 31.5 Crores last month.

The positive movement in demand can be attributed to the order of UERC on 20th of June, wherein they have directed all obligated entities to strictly fulfil their RPO obligation of FY 2015-16, by July 2016. This month also saw marginal fall in total REC issuance, and despite the rise in total sell bids, the market showed positive signs of recovery. We expect the other states to enforce RPO more strictly in the months to come.

 

Analysis of Trading:

 

Non Solar – Clearing ratio in exchange stood at 4.01% and 1.50 % in IEX and PXIL respectively for Non Solar REC’s. A total of 417,426 RECs were traded as compared to 161,858 RECs traded in May.

 

Solar – Clearing ratio stood good at 1.24% and 2.28% in IEX and PXIL respectively, with total clearing volume being 2.5 times of the previous month.

 

The detailed result is tabled below:

The positive movement in demand can be attributed to the order of UERC on 20th of June, wherein they have directed all obligated entities to strictly fulfil their RPO obligation of FY 2015-16, by July 2016. This month also saw marginal fall in total REC issuance, and despite the rise in total sell bids, the market showed positive signs of recovery. We expect the other states to enforce RPO more strictly in the months to come.

 

We are hopeful that the FY 2016-17 will bring good fortune to the REC market, considering the proposed regulatory changes and more stricter enforcement by states, which will bring back stakeholders confidence.

 

 

 

REC Trade Result May 2016

May 2016 saw reduced traded volumes compared to last month and from May 2015. Generally early months of the compliance year see significantly reduced trading volumes. However, May 2015 saw high trading volume due to the Supreme Court order on RPO compliance.

Compared to last month, this month saw a reduction of demand by approximately 44.3% and 21.7%, for non-solar and solar respectively. The total transaction value stood at 31.5 Crores as compared to 113 Crores last month.

This month also saw significant rise in total REC issuance, which stood more than double of what it was last month. However, while solar issuance fell marginally, there was a steep rise in issuance of non-solar RECs. This also resulted in increased quantum of Sell bids at the exchanges.

Analysis of Trading:

Non Solar – Clearing ratio in exchange stood at 1.15% and 1.38% in IEX and PXIL respectively for Non Solar REC’s. A total of 161,858 RECs were traded as compared to 290,457 RECs traded in April.

Solar – Clearing ratio stood good at 0.61% and 0.41% in IEX and PXIL respectively, with total clearing volume falling marginally as compared to last month.

 

The graph below is a Y-o-Y graph which depicts the comparison of REC Traded from May 2014 to May 2015 and May 2015 to May 2016.

 

 

 

REC Trade Result April 2016

April, being the first month of the Financial Year to, saw good demand in both segments, as compared to the April-2015. The total transaction value stood at 113 Crores as compared to 213 Crores last month.

 

Analysis of Trading:

 

Non Solar – Clearing ratio in exchange stood at 2.66% and 1.38% in IEX and PXIL respectively for Non Solar REC’s. A total of 290,457 RECs were traded as compared to 11, 14,319 RECs traded in March.

 

Solar – Clearing ratio stood good at 0.98% and 0.26% in IEX and PXIL respectively, with total clearing volume of 25,653, as compared to 152,006 last month.

 

The detailed result is given below:

The graph below is a Y-o-Y graph which depicts the comparison of REC Traded from April 2014 to April 2015 and April 2015 to April 2016.

 

This month also saw significant fall in REC issuance to almost one-third to what it was in March. This can be primarily attributed to the recent amendment to principal REC Regulation, which has caused reduction in supply of RECs to the market from Captive/Self-consuming RE entities. For more details refer our blog.

We are hopeful that the FY 2016-17 will bring good fortune to the REC market, considering the proposed regulatory changes and more stricter enforcement by states, which will bring back stakeholders confidence.

Maharashtra Published RPO Regulations for FY 2016-17 to FY 2019-20

Maharashtra published RPO regulations covering the period FY 2016-17 to FY 2019-20. The highlights of the regulation are:

 

  • RPO % in FY 2016-17 is 11% in total (10% non-solar and 1% solar). This will increase to 15% by FY 2019-20 (11.5% non-solar and 3.5% solar)

 

  • The regulations are broadly in line with the standard regulations of RPO across various states, except the following clauses:

 

  • RPO is no longer exempt on co-generation power. The Statement of Reasons (SOR) accompanying the regulations refers to the National Tariff Policy as a reason for removing exemption from RPO on co-gen power.

 

  • RPO is applicable only on consumption of conventional power. This is a significant deviation as the Electricity Act/ CERC/ other states require calculation of RPO on “total consumption”. By leaving out RE power from RPO calculation, Maharashtra risks providing double benefit to RE generators – it is possible that a consumer that consumes power from RE sources does not attract RPO provisions and at the same time claims offset of such RE power towards meeting RPO on conventional power.

 

  • RPO is applicable on CPPs with installed capacity of 5MW or more and open access consumers with a contract demand of 5 MVA or more. This will leave out significant open access and captive capacity form the ambit of RPO applicability.

The regulation can be accessed here.

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