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

REVISION OF REC PROCEDURES BY CERC

Central Electricity Regulatory Commission (CERC) has released Model Guidelines for Accreditation of a Renewable Energy Based project or Distribution Licensee, as the case may be under REC mechanism. These regulations shall be applicable to all renewable energy based projects of generating companies which are grid connected. All sources recognized and approved by the Ministry of New and Renewable Energy shall come under these regulations. Following are the major changes proposed in the procedures:

 

  1. Those renewable energy based Captive Generating Plants which do not fulfill the criteria as prescribed in the Electricity Act, 2005, shall not be eligible for accreditation for the energy generated by the plant for self consumption.

  1. Ownership of existing valid RECs shall be transferable by the central agency in case of change of legal status of registered entity. The procedures include the following conditions as change of legal status:

Change from partnership to company, Pvt. Limited to Public Limited, new entity subsequent to demerger, change in ownership of the company and asset sale/ transfer to another company, etc.”

  1. Revision of formats for Recommendation (checklist) from state agency and declaration.

  2. Application for revalidation or extension of validity of existing RECs shall be done at least three months in advance,prior to the expiry of existing registration by generating companies and distribution licensees.

  3. In case of reduction of the registered capacity of the RE generating plants, the application should be submitted online.

Chhattisgarh State Electricity Regulatory Commission (Intra-state Availability Based Tariff and Deviation Settlement) Regulations, 2016

The Forum of Regulators (FoR) had come up with model regulations for forecasting and scheduling at the intra-state level last year. In line with that Chhattisgarh recently came up with its Intra-state deviation settlement Regulation.

Executive Summary:

  • The regulations will be applicable on all wind and solar generators with individual or combined capacity of 5MW and above that are connected to the state grid
  • Deviation will be calculated on the basis of available capacity

The draft regulations are in-line in every aspect with the model F&S regulations released by FoR earlier. However, the model FoR regulations had proposed a 10% deviation band for new projects and 15% for existing projects. Chhattisgarh has proposed a 10% band for all projects for both Solar and Wind.

Detailed Analysis:

Forum of Regulators have recently come up with model regulation for forecasting and scheduling and deviation settlement mechanism. The primary objective is twofold:

a) Facilitate large-scale grid integration of solar and wind generating stations, and b) maintaining grid stability and security.

Highlights of the regulation are below: –

  • All solar and wind generators connected to State grid have to provide day-ahead and week-ahead schedule – Revisions can be made on a one-and-half hourly basis.
  • Payment for generation shall be as per actual generation (this is different from the inter-state regulation, where payment is on the basis of scheduled generation).
  • The deviation slab has been kept as (+/-) 10% for all generators at Intra-state level.

Settlement calculation or Intra-state sale of power is as follows:

In case of Intra-State transmission, Penalty Mechanism for wind/solar generators:

The regulation can be accessed here.

 

Odisha Declares Open Access Charges for 2014-15

Odisha Electricity Regulatory Commission (OERC) has determined the Open Access charges through a notification dated 11thApril 2016.

The new charges determined are applicable for FY 16-17 with effect from 11th April 2014. The details of the charges are in the table below:

 

 

The normative transmission loss at EHT (3.70%) and normative wheeling loss for HT level (8%) are applicable for the year 2016-17.

Additional Surcharge: No additional surcharge over and above the Cross-Subsidy Surcharge needs to be given to the embedded licensee.

No Cross-subsidy surcharge are payable by the consumers availing Renewable power.

20% wheeling charge is payable by the consumer drawing power from Renewable source excluding Co-generation & Bio mass power plant.

The order can be accessed here.

 

 

MERC Distribution Open Access 2016

MERC (Maharashtra Electricity Regulatory Commission) has come up with the new distribution open access regulation 2016 on 30th March 2016 in the state of Maharashtra.

The key changes in the regulation are:

  1. Allowing sourcing of power from multiple sources.
  2. Allowing sourcing of power from power exchange.
  3. Day ahead open access- The application for grant of day ahead shall be made only 1 day prior to the date of scheduling (Before it was 2 day)
  4. Consumer shall install Special Energy Meter (SEM).
  5. The draft OA regulation had proposed that a consumer having Contract Demand of 500 kW and above will be eligible for OA. However, in the final regulation the existing limit of 1MW has been retained. Had MERC lowered the limit, it would have potentially resulted in a much larger OA market in Maharashtra.
  6. Banking of Renewable Energy is introduced-

6.1.             Credit of banked energy is not permitted during the months of   April, May, October & November.

6.2.           Credit of energy banked during other months is as per the energy injected in the respective TOD (Time of Day) slots.

6.3.           Energy Banked during peak TOD slots can be credited during off-peak TOD   slots whereas energy banked during off- peak TOD slots cannot be credited during peak TOD slots.

 

Illustration: Energy banked during:

 

  • Night off-peak TOD slot (2200 hrs. – 0600 hrs.) may only be drawn in the same TOD slot.
  • Off-peak TOD slot (0600 hrs. – 0900 hrs. & 1200 hrs. – 1800 hrs.) may be drawn in the same TOD slot and also during Night off-peak TOD slot.

(The energy banked during night off peak and off-peak shall not be drawn during morning peak and evening peak)

  • Morning peak TOD slot (0900hrs – 1200hrs) may be drawn in the same TOD slot and also during off-peak and Night off-peak TOD slots.
  • Evening peak TOD slot (1800hrs- 2200hrs) may be drawn in the same TOD slot and also during Off-peak and Night off-peak TOD slots.

 

Impact of the Regulation

MERC has proposed a progressive open access regulation. Consumers in Maharashtra has faced various problems in the past to avail the power through open access such as power from one source only, revision of contract demand and banking of renewable power.

Multiple sources will increase the competitiveness in the market and it will promote the open access. It will also help the renewable sector to boom in Maharashtra as the rate will become more competitive.

Banking of non-firm power will be a boon for the renewable sector mainly solar. As per the credit table depicted above, the generated units in the off-peak and morning peak time can be adjusted in the peak hours.

The regulation can be accessed here.

Meghalaya finalizes New RPO regulation 2015

Meghalaya State Electricity Regulatory Commission (MSERC) on 12th March has finalized its new regulation for renewable Purchase Obligation (RPO). The regulation will be called as MSERC (Renewable Energy Purchase Obligation & its compliance) Regulations, 2015.

The regulations will come into force from the date of their publication In the Official Gazette and will remain operative until it is revised. The minimum quantum of RPO (in %) defined under the regulation are in the graphs below:

 

The previous RPO regulation of the state gave RPO till FY 12-13 only after that the same was being considered for FY 13-14 & FY 14-15 as there was no RPO defined. The RPO target of the commission for FY 12-13 was only 1% (Wind 0.20, Solar % 0.4 % and others 0.4 %).

As can be seen from the graphs above, the total RPO target for the defined period is nowhere close to the NAPCC targets, and even the targets defined for Solar RPO are significantly lower than the National Tariff Policy (NTP) 2006 Solar targets. The low RPO targets are due to the fact that the NE states do not have significant RE potential, and due to low retail tariffs in the states, higher RPO may have significant impact on retail tariffs.

The Relevant order can be accessed here.

our previous post on Meghalaya Draft Net Metering regulation can be read here.

 

REConnect Newsletter Volume 37 – OPEN ACCESS

We are pleased to present the 37th Volume of “OPEN ACCESS” – our monthly newsletter on REC Mechanism. 

The present volume covers analysis on following main topics:
 
  • Recent steps taken by Tamil Nadu, Maharashtra & Delhi towards small scale solar projects. 
  • MERC order on solar RPO for Tata Power Company – Distribution.
  • ApTel’s judgment on fossil fuel based co-gen plants..
  • CERC’s order on REC issuance of UP’s co-gen plants. 
  • REC Trade Analysis – November 2013 & December 2013. 

To access the current volume (OPEN ACCESS Vol. 37) please Click Here.

To read past volumes of our newsletter please follow this link

We hope you will find this volume of OPEN-ACCESS an insightful read. As always, look forward to your feedback and continued support. 
 

Regards,

Team REConnect

DISCOMs not to be fastened with purchase obligation from conventional co-gen plants : APTEL

A full bench of the tribunal on 2nd Dec’13, pronounced a landmark judgment on the issue of fastening of purchase obligation on DISCOMs, for power procurement from fossil-fuel based co-generation (co-gen) units. The petitioner (Lloyds Metal & Energy Ltd) had filed a petition against MERC for not extending relief in terms of determination of separate tariff and fixing of purchase obligation.

APTEL has taken this laudable decision with an intent to answer an important question of “whether fastening of purchase obligation can be one of the methods to pro-mote fossil fuel based co-gen plants or not”

The APTELs decision which was negative to the above question can be read as –

“Upon conjoint reading of the provisions of the Electricity Act, the National Electricity Policy, Tariff Policy and the intent of the legislature while passing the Electricity Act as reflected in the Report of the Standing Committee on Energy presented to Lok Sabha on 19.12.2002, we have come to the conclusion that a distribution company cannot be fastened with the obligation to purchase a percentage of its consumption from fossil fuel based co-generation under Section 86(1)(e) of the Electricity Act, 2003. Such purchase obligation 86(1)(e) can be fastened only from electricity generated from renewable sources of energy. However, the State Commission can promote fossil fuel based co-generation by other measures such as facilitating sale of surplus electricity available at such co-generation plants in the interest of promoting energy efficiency and grid security, etc.“

A favorable decision for Lloyds Metals & Energy Limited, in this case, would have given DISCOMs an additional source to procure power from, to offset their RPO tar-gets. This might have impacted the REC markets consid-erably, as then DISCOMs would have shied away from participating as a prospective buyer of RECs.

The copy of judgment can be assessed here.

Kerala finalizes its Solar Energy Policy 2013

Kerala is the latest state to  join the league of states (TN,AP,Gujarat,MP, Rajasthan) which have final state solar energy policies in place. On 25th Nov 2013, the state finalized its state solar policy. The following are the highlights of the policy:

  • Kerala aims to have an installed capacity of 500 MW till 2017 and of 2500 MW by 2030. The policy will remain in force till any further solar energy policy is introduced.
  • Net-metering is available for all agencies that consume grid power and have some solar installations with govt. subsidies. KSERC will notify the pooled cost of power purchase and feed-in-tariff for procurement by KSEB.
  • Solar procurement obligation (SPO) is mandated for all HT/EHT consumers to the tune of 0.25 % till March 2015 (with annual increase of 10%).  April 2015 on-wards the same shall become applicable for commercial & LT consumers also.
  • Incentives –
  1. No open access charges  for wheeling of solar power within the state.
  2. No wheeling charges and T&D losses for solar captive generators.
  3. Electricity Duty exempted for projects under the policy.
  4. Banking facility (conditional) available for captive generators.
  • ANERT shall be the nodal agency for facilitating the provisions under the policy.

For other provisions please refer the policy document  – here

Media articles can be assessed on the following links:

Hindu Businessline

The Hindu

 

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