UPDATE ON HEARING ON PRICE AND TRADING OF SOLAR RECS IN APTEL

We attended the hearing at ApTel today. The court has dismissed all the petitions – implying that the CERC order remains as is. More details will be available once the final order is uploaded on the ApTel’s website (generally by end of day or tomorrow).
Since the stay on trading for Solar RECs was till the order of ApTel, it stands automatically vacated, and trading will resume from this month (unless a fresh stay is obtained by the generators).
We will provide a very detailed analysis of the order once it becomes available.

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

REC TRADE RESULTS FEBRUARY 2018

Non-solar demand was significantly higher than inFebruary 2017, and also last month. In total 23.58 lakh RECs were traded (125.85% higher than February 2017, and 91.61% higher than in January 2018), and clearing ratios on IEX and PXIL were 19.84% and 69.80% respectively. Total traded value was Rs 353 crores*.

REConnect shifted its major volume on PXIL in a timely manner this trade session due to higher demand as compared to IEX.

The written submission for the case on stay of trading of solar RECs has been done and the judgment is reserved.

*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.

REC TRADE RESULTS JANUARY 2018

Non-solar demand was marginally lower than in January 2017, and also significantly than last month. However, it must be kept in mind that last month traded volumes were at a record high, and overall, this year has seen significantly higher demand.

In total 12.30 lakh RECs were traded (19.04% lower than January 2017, and 76.41% lower than in December 2017), and clearing ratios on IEX and PXIL were 7.83% and 30.55% respectively. Total traded value was Rs 184 crores*.
REConnect shifted its major volume on PXIL in a timely manner this trade session due to higher demand, resulting in higher clearing.
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 is retained by CERC

Telangana releases draft RPO policy for the first time

Telangana State Electricity Regulatory Commission (TSERC) has released draft regulations for the compliance of Renewable Purchase Obligations for the state. These regulations are first of its kind in the state. Before this, the state was following RPO percentages determined by APERC (Andhra Pradesh Electricity Regulatory Commission) through its latest regulation.

 

Comments on these regulations are invited till 9 February 2018.

 

The RPO percentages determined in the regulation are as follows:

In the order, the RPO percentages were only given in terms of total of both solar and non-solar percentages. As per the National Tariff Policy 2016, the solar RPO percentage for states across the country shall reach 8% whereas in the mentioned order, the total RPO percentage (including solar and non-solar is 7.5% ie. 0.5% lower.

The RPO trajectory declared by TSERC as compared to that declared by MoP  for the FY 2018-19 can be seen below:

 
The draft regulation can be accessed here. The public notice can be accessed here.

REC TRADE RESULTS DECEMBER 2017

This month’s trading session saw highest ever trade in the REC markets – 2nd time in a row after the record trading session last month. Non-solar demand was significantly higher than in December 2016, and also last month. In total 52.17 lakh RECs were traded (1,136% higher than December 2016, and 136% higher than in November 2017), and clearing ratios on IEX and PXIL were 46.09% and 58.15% respectively.  Total traded value was Rs 782 crores.

The increase in traded volumes have been driven by demand from both Discom’s and captive generators. Several regulatory commissions have issued orders and notices in the recent past. This trend is expected to continue into the last quarter of the financial year.

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

REC TRADE RESULTS SEPTEMBER 2017

Non-solar demand was significantly higher than in September 2016, and also higher than last month. In total 3.82 lakh RECs were traded (47.56% higher than September 2016, and 32% higher than in August 2017), and clearing ratios on IEX and PXIL were 3.56% and 2.36% respectively.

Overall, for the six months ended September, Non-solar demand is up by 11% compared to the same period last year. Solar demand is up by 27% despite reading only in April this year. Since then, trading has been suspended due to the stay imposed by the Supreme Court.

 

REC TRADE RESULT AUGUST 2017

Supreme Court allowed conditional trading of Non-solar RECs in an order dated July 14, 2017 . Demand was expected to be low for two reasons – 1) obligated entities are required to pay at old RECs rate (Rs 1500/ REC); and 2) compliance is required to be done by March to obligated entities have enough time to comply even after the final order of Aptel is received.

This is the second month when trading has taken place after CERC allowed conditional trading of Non-Solar RECs but the demand was not as robust as last time .

Non-solar demand was marginally higher than in August 2016 , and significantly lower than last month. In total 2.89 lakh RECs were traded (11.83 % higher than August 2016), and clearing ratios on IEX and PXIL were 1.05% and 4.96% respectively.


Solar RECs were not traded as the stay imposed by the Supreme Court remains in force in the case of Solar RECs.

DERC NOTIFIES RPO REGULATION

The DERC has released draft RPO regulations in an order dated 28/07/2017. Following are the salient features of the regulation:

 

  1. RPO Compliance:

  • Aggregate from the gross purchases from generating stations by Obligated entities shall be considered as the quantum of RE purchase for RPO compliance.

  • All the power produced from Waste-to-energy plants shall be procured by the distribution licensee. This will also contribute towards RPO compliance.

  • Quarterly reports shall be submitted by the obligated entities which will include parameters such as capacity addition, generation and purchase of electricity from RE sources. The same shall also be posted on their website.

  1. Role of SNA:

 

  • Protocol development for regular information collection from RE generating companies, obligated entities, SLDC, chief electrical inspector, ets.

  • RE procurement and RPO compliance reports on a monthly basis by obligated entities which shall also go on their websites. This shall be done by the 10th of the next month.

  • It shall also receive information on or before 30th April from captive users who are consuming electricity generated from captive generating plants about electricity consumption and purchase from RE sources.

  • The same shall be applicable for open access consumers.

This regulation isn’t very different from the previous RPO regulation which was released in October 2012.

The order can be accessed here. The public notice can be accessed here.

CERC REJECTS IEX’S PROPOSAL FOR GDAM

The Indian Energy Exchange (IEX), so as to provide the obligated entities more number of ways to fulfill their RPO compliance, had proposed to the CERC to allow the existing renewable energy generators to trade RE on IEX.

 

For the same, it had proposed that the following contracts including Green Day Ahead Market (G-DAM) which includes Solar and non-solar day ahead market be introduced. If the bid made in the G-DAM is not cleared or cleared partially, they can bid in DAM. Also, in lieu of the bid cleared in DAM, the seller will get equal number of RECs.

This order was rejected by the CERC and the following reasons were given for the same:

  • As per CERC, the status regarding the availability of surplus power is not clear. Also, based on the experiences in the past, it can be established that such trade will not lead to addition of new RE capacity.

  • The IEX has supposed that there are no discrepancies in the forecasting and scheduling for RE generators which is not the case. Therefore, their suggestions of remove the need for revision flexibility during the day is not valid.

  • Based on the suggestions of IEX which mentioned that in case if the bid made in the G-DAM is not cleared or cleared partially, they can bid in DAM, it can be assumed that the situation will lead to registration of RE sellers for FIT route as well as REC mechanism. This will demand that a system be established where there is proper accreditation, registration, accounting of RE generation and settlement mechanism.

  • The G-DAM market may dissuade the buyers from entering into long term contracts which provide comfort to RE investors.

  • The guidelines related to the timelines for scheduling of power traded will have to be amended as per IEX which the commission felt will be an unnecessary step right now.

  • IEXs recommendations assume that the the green power traded in G-DAM will follow the same scheduling procedure as that followed by conventional power. Therefore, the commission feels that there is no need to introduce a separate segment for trading.

The order can be accessed here.

Go to top