REC Trade Results November 2015

RECs demand has been steadily rising, and this month results have been very encouraging. Non Solar REC’s and Solar REC’s traded this month were 9.5% and 533% higher compared to trading session of October. The total transaction value of REC’s hit a sum total of Rs 111.7 crores, compared to Rs. 36.5 crores last month.

Analysis of Trading:

Non Solar – Clearing ratio in exchange were at 1.44% and 1.90% in IEX and PXIL respectively for Non Solar REC’s. A total of 2, 31,545 RECs were traded in this trading session (in October 2, 11,442 RECs were traded)Clearing ratio at PXIL reduced marginally but picked up on IEX, as compared to last month.

Solar – Clearing ratio stood at 2.07% and 4.97% in IEX and PXIL respectively, compared to 0.54% and 0.33% last month. A total of 87,767 REC’s were sold in this session, 6.33 times compared to October.

Trading volumes are expected to increase significantly going forward, as most obligated entities are now gearing up to fulfill their obligation considering that only 4 trading sessions are remaining in the current FY . Further, this year we have seen regulatory action in the form of compliance orders and/ or proceedings in several states like Orissa, Kerala, UP, MP and Maharashtra, to name a few. Overall the market showed clear signs of recovery, and is expected to grow further in the closing months of the FY.

The October’s trade results can be accessed here.

OERC (Procurement of Energy Renewable Sources and its Compliance) Regulations, 2015

Orissa Electricity Regulatory Commission released the notification on Procurement of energy from Renewable Sources on 10th October, 2015. This regulation set the basic principle for promoting the sale of power from renewable sources to any person within the state of Orissa. Below mentioned are the key points of the regulation:

  • These regulation shall be applicable to all Obligated entities in the state of Orissa, the obligated entities include :
    • Distribution Licensee or any other entity procuring power on their behalf and;
    • Any person consuming electricity

a)      Generated from Conventional Captive Generating plant having capacity of 1MW and above for his own use and or

b)      Procured from conventional generation through open access and third party sale.

  • Every Obligated Entity shall meet its RPO target from its own Renewable Sources or by purchase of REC’s or procurement of power from other developer of Renewable Energy Sources.
  • The minimum quantity of energy to be procured from Renewable Sources by obligated entity is mentioned in the table below :

  • The Cross Subsidy Surcharge is exempted for procurement of power through third party sale from Renewable Energy Sources.
  • No Banking facility is provided for supply (Third Party sale) from Renewable Energy Sources through open access.
  • The energy generation from Third Party sale in each 15 min time block shall be set off against the captive/open access users’ consumption in the same 15 min time block.

In closure we would like to say that this regulation would help the state of Orissa to comply with its solar and non solar RPO targets and promote the procurement of renewable energy.

The detailed document can be accessed here.

REC Trade Results September 2015

Demand for both Solar and Non Solar REC’s remained lackluster in this trading session. A sum total of 1, 93,619 Solar and Non Solar RECs were sold in the current trading session. The total transaction value of REC’s was a paltry Rs.35.1 crores.

Analysis of Trading:-

Non Solar – Clearing ratio in exchange were at 1.68% and 0.77% on IEX and PXIL respectively for Non Solar RECs. A total of 1, 83,599Non Solar RECs were redeemed in this trading session. However the demand improved by 72% with respect to the August trading session.

Solar – Clearing ratio stood at 0.45% and 0.18% on IEX and PXIL respectively. Demand for Solar REC’s dipped to a low figure of 10,020 REC’s, 75% lower thanthe trade during August trading session.

The responses seen in the Solar REC’s segment were lower than expected. In August, total 41,928 RECs were sold.

Over the longer term, increasing focus on RPO both from the courts and from regulators is expected to increase demand. For instance OERC in its recent order on 11th August, 2015 stated that the reasons quoted by the obligated entities for non-compliance were found inappropriate and it is expected that in line with the order, the obligated entities will comply with the RPO targets, and thus we expect a surge in demand for Solar RECs in the coming months. More about the order can be read here.


Gujarat Solar Power Policy 2015

Gujarat came up with its new solar power policy on 13th August 2015, which would be operative up to March 31, 2020. This new policy intends to facilitate and promote large scale promotion of the solar power generation capacities in the state and the interests of all the investors, developers, consumers and various other stakeholders.

The main features of the Policy are as follows:

-The minimum size of a MW scale project shall be 1 MW and 1 Kw for KW scale projects.

-Any company or group of individuals shall be eligible for setting up a solar generating plant, irrespective of whether they or not fall under REC mechanism in accordance with Electricity Act 2003.

-There are project based provisions and incentives provided for Rooftop solar PV systems with net metering depending on the type of consumers. The same are listed in the table below (Click on the table for a larger view) :

The state is blessed with several natural resources of energy that augments its renewable energy growth. Through its proactive planning on capacity addition front it has successfully managed to eliminate the demand supply deficit. In sync with the solar power policy the Government has also launched the Industrial Policy 2015, through which Government would encourage private participation in all energy generation to meet the growing demands in the state.

The Gujarat power policy document can be accessed here.

The CEA installation and operations of meters regulation 2014 can be accessed  here.

The Industrial Policy document can be accessed here.


August trading session saw a stagnant response from the Non-Solar demand side. However the Solar RECs saw a huge recovery from rise in demand during trading session. A sum total of 149,209 RECs were redeemed in this session, compared to 173,223 in July. Demand took a fall of approx. 14 % w.r.t July.

Analysis of Trading:-

Non Solar – Clearing ratio in exchange were at 0.92% and 0.75% in IEX and PXIL respectively for Non Solar RECs. A total of 107,281 RECs were redeemed in this trading session. There was a fall of approx. 30 % in the current trading session w.r.t to July.

 Solar – Clearing ratio stood at 1.52% and 1.86% in IEX and PXIL respectively. Solar RECs rose staggeringly from 17,952 in July to 41,928 this trading session, a rise of 133%. This was good signs for solar, as it has recovered again from major fall last MONTH,

Over the longer term, increasing focus on RPO both from the courts and from regulators is expected to increase demand. Over the last several months many developments have taken place, including the draft Electricity Act, orders from the ApTel and from the Supreme Court. The most recent development was the release of the draft of Renewable Energy Act 2015. An analysis of the Act can here

Maharashtra: RPO Compliance and target for 2015-16

The Maharashtra Energy Development Authority submitted the RPO settlement data for MSEDCL on 14th September, 2014. There have been major shortfalls in meeting RPO targets. As for the total RPO targets set, a comparison below shows that MEDA had exceeded the NAPCC expectations in RPO for states.

The status of achievement of RPO targets by MSEDCL, based on the revised details provided by MEDA, MSEDCL and MSLDC for FY 2010-11 to FY 2013-14 are depicted in the graphs below.

Regarding Solar RPO targets, the Commission has allowed MSEDCL to cumulatively fulfil its Solar RPO targets by FY 2015-16. The Commission observed that MSEDCL has shortfall of 684.89 MU for FY 2012-13 in meeting their Non-Solar RPO targets. After considering the surplus of 386.52 MU of previous years, there is still a shortfall of 298.37 MU in FY 2012-13. Thus MSEDCL was allowed to meet its Non-Solar RPO shortfall of 298.37 MU for FY 2012-13 in FY 2013-14 on cumulative basis. The shortfall in Hydro should also be fulfilled by 2015-16.

MSEDCL was directed by commission to constitute a separate ‘RPO Regulatory Charges Fund’, to purchase Solar and Non-Solar RECs and/or to procure power, to meet the shortfall against RPO targets by the end of March, 2016.

The relevant order can be accessed here.


Punjab Regulatory takes Strict note on RPO complaince of PSPCL

The PSERC (Punjab Electricity Regulatory Commission) in response to a petition filed by Punjab State Power Corporation Limited (PSPCL) pertaining to RPO compliance of FY 2014-15, in which the PSPCL has requested before the commission for carrying forward the compliance of RPO to next financial year (FY 2015-16).

Earlier the commission provided carry forward to the PCPCL for unmet RPO of FY 13-14 to FY 14-15 which were be met along with the RPO for FY 2014-15. PSPCL in its petition provided the status of its RPO compliance for FY 14-15 including for FY 2013-14, which is given in the table below:

PSPCL in its petition for carry forward of RPO cited various reasons for non-compliance of RPO. The reasons cited by PSERC were:

  1. Delay in the commissioning of the Project during FY 14-15.
  2. Financial constraints to purchase RECs.
  3. And also stated that it was due to factors beyond control of PSPCL and RPO targets being set by the commission are unachievable.

PEDA in its submission stated that PSPCL misconstrued the RPO targets fixed by commission, as RPO targets can be met through alternate channels and not only by way of RE purchases.

The commission in its order stated that it does not accept that the RPO targets were unachievable and that the shortfall in compliance was not out of control. The commission also stated that it does not accept the argument of alleged financial constraints of PSPCL and its inability to purchase RECs.

The commission also cited the APTEL Judgment which has issued directions to State Electricity Regulatory Commissions and Joint Electricity Regulatory Commission to enforce RPO, and Thus the Commissions are bound to enforce their respective RPO Regulations.

The commission in its judgement has provided the carry forward to FY 15-16 and has taken strict not for the Non-compliance of the RPO, directing the PSPCL to comply with the RPO obligations latest by 30th Dec 2015 and communicated that failing which further action as per Regulations may be initiated.

REC Trade Results July 2015

July’s trading session saw a stagnant response from the demand side. Though, the current demand while comparing it to previous year’s session of July was 3 times higher in Solar and 5 times in Non Solar segment, it indicated a lower compliance when comparing it to trading sessions of 2015. A sum total of 173,223 Lakh RECs were redeemed in this session. Demand took a fall of approx. 5 % w.r.t June.  The demand in last two trading sessions was due to the judgment by Supreme Court.

 Analysis of Trading:-

 Non Solar – Clearing ratio in exchange were at 1.33% and 1.15% in IEX and PXIL respectively for Non Solar RECs. A total of 155,271 RECs were redeemed in this trading session. There was seen a fall of approx. 4 % in the current trading session w.r.t to June in Non Solar RECs.

 Solar – Clearing ratio stood at 0.84% and 0.29% in IEX and PXIL respectively. Solar RECs remained at 17,952, which is a show towards a downfall in the demand in the solar RECs segment; it shows a fall of 5640 RECs from June trading session.

Over the longer term, increasing focus on RPO both from the courts and from regulators is expected to increase demand. Over the last many months several developments have taken place including the draft Electricity Act, orders from the ApTel and from the Supreme Court. The most recent development was the release of the draft of Renewable Energy Act 2015. An analysis can be read here.

Team REConnect

GERC RPO Regulation Applicable on Captive and OA consumers

The Gujarat Electricity Regulatory Commission (GERC) in a notification dated 1st July 2015, has made  RPO (Renewable Purchase Obligation) regulation applicable on captive and Open Access consumers of the state.

The quantum of RPO applicable on the OA and Captive users will be same as for the distribution licensee. The percentages of RPO targets applicable in the state are shown in the graph below:

Earlier the RPO regulation was not applicable for Captive and OA users as there were ambiguities among the regulations of various states and the pending court cases by affected stakeholders, caused the major issues for applicability of RPO on such consumer.  But with the recent Supreme Court Judgement (Read here) on the issue has cleared all the major doubts, and as results we have seen good response in the recent trade sessions and also some states coming forward and enforcing RPO regulation on the OA and captive users.

The recent Notification of the GERC can be read here.


REC Trade Results – June 2015

The June trade session remained below expectations compared to May’15 month performance. However, if we compare the performance with Jun’14, the response was still far better. After the announcement of an important judgment by Supreme Court, the market looks upbeat and we can expect better demand in upcoming trade sessions.

Analysis of Trading:

Non-Solar – Total 161,845 RECs were cleared in this trading session. IEX and PXIL had a clearing ratio of 1.6% and 0.84% respectively. Total RECs redeemed this month was approx. 1 Lakh RECs lower w.r.t May’15.

Solar - RECs redeemed this month remained at 23,648 RECs. The clearing ratio was 1.4% and 0.17% in IEX and PXIL respectively. Solar REC traded this month were approximately 60 (sixty) thousand lower w.r.t to May trading session.

The REC trade results in the FY 2015-16 are summarized below for your reference.

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