Rec Trade Results March 2015

We are pleased to share the Result of REC trading for the month of March-15.

  • Solar RECs – Overall market clearance remained optimistic this time, with good demand at PXIL and overall good clearance at both the exchanges. Demand rose from close to 44,869 last month to 68,982 this time, albeit the huge inventory still left to be carried over to the next FY. Market clearing ration also improved significantly over previous month, but not convincing as compared to March 2014, where the clearing ratio was 7.37%.
  • Non Solar REC market unexpectedly dipped from 747,487 last month to 654,985 RECs this month due to some states allowing carry forward of RECs to next FY. The clearing ratio was good, but considering that in March last year it was 12.03%, it was significantly lower. Inventory continues to pile up, and has reached an overwhelming figure of close to 10.5 million.

Comparing trading volumes this quarter with the corresponding quarter last year provide a better picture of the REC markets. In the last quarter of FY 2013-14 approximately 13.5 Lakh REC’s were redeemed whereas this quarter of FY 2014-15, approximately 20 Lakh REC’s have been redeemed  - an increase of approx. 48 %.

The REC trade results in the FY 2014-15 is summarized below for your reference.

Non-Solar RECs

 

Solar RECs

 

REConnect Energy is the market leader in the REC Market in India, with 36% market share and a portfolio of over 3 GW RE. We have been recently acknowledged with the REC Trader of the Year 2014.

Team REConnect

REC Trade Results Feb 2015

We are pleased to share the Result of REC trading for the month of FEB-15.

  • Solar RECs – Overall market clearance remained optimistic this time, with steep rise in demand at PXIL and overall good clearance at both the exchanges. Demand rose from close to 30000 last month to 44,869 this time, albeit the huge inventory waiting to be cleared.
  • Non Solar REC market also showed good signs of improvement with total of 747,487 Non-Solar RECs getting cleared in today’s trade session, compared to 537,009 in the last trading session.

Detailed trade results are tabled below for your kind reference.

Non-Solar RECs

Solar RECs

REConnect Energy is the market leader in the REC Market in India, with 36% market share and a portfolio of over 3 GW RE. We have been recently acknowledged with the REC Trader of the Year 2014.

Team REConnect

 

 

REC Trade Results – January 2015

We are pleased to share the Result of REC trading for the month of JAN-15.

  • Solar RECs – Overall market clearance remained low at PXIL in Solar whereas IEX reflected a good clearance ratio in Solar Market. Steep hike in demand for Solar at IEX can be attributed to reduced price of Solar RECs.
  • Non Solar REC market showed some signs of improvement with total 537,009 Non-Solar RECs getting cleared in today’s trade session.
    • While the demand looks improving owing to compliance year end approaching, hon’ble GERC(Gujarat Electricity Regulatory Commission) showed leniency on DISCOMs in Gujarat to adjust surplus solar RECs with non-solar RECs and also allowed reduction in total RPO targets for FY13-14. Detailed analysis can be read here.

Detailed trade results are tabled below for your kind reference.

Non-Solar RECs

Solar RECs

REConnect Energy is the market leader in the REC Market in India, with 36% market share and a portfolio of over 3 GW RE. We have been recently acknowledged with the REC Trader of the Year 2014.

Team REConnect

GERC Maintains Leniency over RPO Compliance

The Gujarat Electricity Regulatory Commission (GERC) in its orders Dated 16th Jan 2015, has given relief to the state distribution companies against their RPO compliance for the year 13-14. The summary of the GERC orders is given below:

 Orders on GUVNL: GUVNL complied with 5.26% out of 6% obligations for non-solar and achieved 2.18% of Solar against 1% obligation. But overall attained a renewable purchase level of 7.44% against the RPO of 7%. Highlighting this the GUVNL requested before the commission to adjust its excess solar energy purchased into the non-compliance in the Non-solar part. While the Indian Wind Energy Association (IWPA) objected saying that this would result in loss for the wind generators as there is huge amount of Non-solar REC’s available for purchase.

 The commission in its order granted the permission for adjusting the excess purchase by GUVNL from Solar against the wind and other category compliance saying that the solar energy is costlier than the Non-solar energy and further more purchase of non-solar renewable would result in an additional burden on consumers of the distribution licensee.

Order on MPSEZ Utilities – MPSEZ Utilities submitted that it is having a revenue gap and therefore the enforcement of RPO on them will further burden the deemed licensees of SEZ areas. The commission in the order said that looking to the nascent stage of operation of the deemed distribution licensees of SEZ and quantum of power requirement by them for fulfillment of RPO, which is very less, so the commission exempted the licensee from applicability of RPO for FY 13-14.

 Order on Torrent Power ltd. – Torrent power submitted that it has complied with RPO of 4.55% in case of Non-solar against total 6%, and solar RPO of .07% against 1% in the regulation. Saying that due to non-availability of Renewable Energy and factors beyond control, which lead to shortfall in RPO compliance for FY13-14. And requested before commission to revise the RPO percentage of FY 13-14 to the actual targets achieved by the company. IWPA in its submission said that the distribution company had the option of redeeming REC’s from exchange, as huge no. of solar and non-solar REC’s are available for sell.

 The commission in the order said that the petitioner has made sufficient efforts to fulfill the solar and non-solar energy and REC’s as well, also said due to non-availability of renewable energy and factors beyond controlled resulted in shortfall in RPO compliance. And said that any further purchase of REC’s will result in the burden for consumers hence we cannot force the petitioner to buy more REC’s. The commission ordered to revise the RPO of the petitioner company as non-solar RPO at 4.55 % and Solar RPO at 0.07 % for FY 2013-14.

 The decision of GERC to allow the defaulted distribution companies, adjusting their non-renewable RPO with their excess solar energy, and waiving off RPO for Deemed Distribution licensees (Torrent Energy Ltd and MPSEZ Utilities Pvt. Ltd.), and also reducing RPO to match the extent of sourced energy, will adversely impact the REC market which is going through a bad stage.

 These steps even though appear to be practical may give other states chance to be more lenient over RPO enforcement, which could result in effecting the renewable industry badly as they rely on strict RPO enforcement. The step of giving solar power beneficial treatment over other RE power could be discouraging to other RE generators. May be the stagnancy in the REC market is the result of domino effect started by GERC and some other regulatory commissions.

The GERC Order on GUVNL & MPSEZ can be accessed here, and the order on torrent power can be accessed here.

REC Trade Report of December Trading Session

Non Solar RECs

In November 2014, demand improved substantially over the previous month, closing over 3 Lakh. Clearing ratios showed significant improvement over the last month. The closing balance of REC inventory for Non- Solar RECs did not show much rise. Issuance has been generally high in the last quarter. Trading is expected to show significant improvement over the next 3 months. Clearing price remained glued to 1500.

 

Solar RECs

This trading session, demand almost doubled over previous month, rallying behind good demand from some states, albeit it remained very low considering the huge inventory. Clearing ratio rose marginally on both IEX and PXIL. Demand showed good signs of recovery, and with the recent amendment to the REC mechanism, Floor price of Solar RECs being reduced to Rs 3500 from previous Rs 9300 per REC, the demand for Solar is expected to skyrocket in the coming 3 months. Clearing price remained at 9300.

Contributed By: Team REConnect

Media coverage: Bloomberg

APTEL directs NLDC to issue RECs from COD

Appellate Tribunal of Electricity (APTEL) in its order dated 28.11.2014, has directed NLDC to issue Renewable Energy Certificates (RECs) from the date of commercial operation (COD).

As per the recent CERC amendment dated 10.07.2013 to REC Regulation, which specifies that the renewable generating plant would be eligible for issuance of RECs from COD or from the date of registration whichever is later. The said amendment is as follows:

“10 (1) After registration, the renewable energy generation plant shall be eligible for issuance of Certificates under these Regulations from the date of commercial operation or from the date of registration of such plant by the Central Agency whichever is later.”

However, the main regulation also quotes:

“7 (1) The eligible entities shall apply to the Central Agency for Certificates within three months after corresponding generation from eligible renewable energy projects.”

The language used is ‘eligible entities’ and not ‘registered entities’. Irrespective of the date of registration, an eligible entity is entitled to apply for RECs within three months from the date of commissioning and generation of electricity as Regulation 7 (1) has not been made subject to Regulation 5 (1) of the REC Regulations which describes only the eligibility and registration for certificates.

A perusal of the above regulation does not show that there is limit to RECs being issued against generation only after the date of registration since the registration process is merely procedural with a view to verify and confirm that the substantive conditions under the REC Regulations have been fulfilled. But, fulfillment is not from the date of registration, but from when the generation of electricity commences.

The APTEL has held that the regulations has to be interpreted and applied in the light of the object to promote the renewable generators and not in a restrictive manner to deprive the generators of any benefit that may be available to them.

As a result, the APTEL has said that Appellants would be entitled to the REC for the electricity generated from COD and the same ought not to be postponed to the generation after completion of the procedural formalities of registration.

The order may only have a small positive impact in number of RECs issued, and issuance of RECs will not be affected by delays in registration process by SNAs.

The order can be accessed here.

Contributed by Venkataramana Mutharasu

APERC Proposes Draft Amendment for RPO Regulation

Andhra Pradesh Electricity Regulatory Commission (APERC), joint commission for the Andhra Pradesh and Telangana, has proposed separate drafts for the amendment in its Renewable Purchase Obligation (RPO) Regulation 2012, for Andhra Pradesh and Telangana.

The summary of the proposed amendments for the both the states is as below:

  1. According to the proposed draft, the commission proposed to remove the .25% solar purchase obligation for distribution licensee & captive generating plants out of the total of 5% RPO, and has proposed that RPO shall be fulfilled by purchase of any renewable source of energy.
  2. The commission has proposed that the Lapsed Banked Energy (Renewable) as according to Open Access regulation 2006 shall be considered towards the RPO of the distribution licensee.
  3. Consumption from captive co-generation power plant, is exempted for levy of RPO.

The commission has also proposed changes in eligibility of and registration for REC’s, which are highlighted below –

  1. The power generating plant shall be of 1 MW and above capacity for obtaining accreditation from the state agency.
  2. A roof top or ground mounted solar power plant of 100 kW and above, shall be eligible for obtaining RECs for the entire generation from such plant.
  3. The entire electricity generated from Captive Power Plant & Co-Generation Plants based on Renewable Sources of Energy, including self-consumption shall be eligible for issue of REC’s.
  4. In case of pre-mature termination of the power purchase agreement (PPA) with a consumer or DISCOM, a generator will not be eligible for REC’s for three years, starting from the date of termination of the agreement.

The proposed draft will directly affect the solar power generators as the Solar RPO has been merged with Non-solar RPO in the state. In our opinion, since the floor price of solar REC’s are much higher, the obligated entities will not purchase solar REC at all.

In contrast to Tamil Nadu, which has moved to Supreme Court, with a clear objective of implementing Solar Purchase Obligation (SPO) of 6% in the state, APERC does not seem to be in favour of incentivising solar power by having separate RPO status for solar in the two states. In addition to this, the cap of 1 MW on Non-Solar and 100 KW on Solar projects, will only deter smaller projects from coming up in future.

The commission through separate Public notices for Telangana and Andhra Pradesh, has invited the comments and suggestions by 08th September 2014.

The Draft Proposed for Andhra Pradesh can be accessed here

The Draft Proposed for Telangana can be accessed here

Contributed by Dheeraj Babariya

 

Kerala Finalizes Solar Rooftop Policy

Kerala State Electricity Regulatory Commission (KSERC) through an order on 10th June 2014, has finalized its policy for solar rooftop systems. The policy is named Grid Interactive Distributed Solar Energy Systems.

The policy is aimed at promoting solar power in the state by involving more generators. The policy is applicable for all the distribution licensees in the state and to all consumer availing electricity at voltage levels below 11kV, and shall come into force from the date of publication in the official gazette.

According to the regulation, any consumer may install the solar energy system owned by him or by other third party, provided that the installed energy system should fall under the rated limits, as defined under the regulation, and should comply with the systems of the distribution licensee.

The rated capacity of the installed system shall not be less than 1KWp (Kilo Watt peak) and shall not exceed 1MWp (Mega Watt peak).

The output of the solar system shall comply with provisions of the Kerala Electricity Supply Code 2014, which is defined as -

Sl. No. Type of connection Supply Voltage Output specifications
1 Low Tension Single phase 240 V 240 V, 50 Hertz
2 Low Tension Three phase 415 V 415 V, 50 Hertz
3 High Tension 11000 V 11000 V, 50 Hertz

Banking facility: The solar energy systems installed under this regulation are eligible for the banking facility and shall be done on the basis of the readings taken for the billing period applicable to him.

Metering arrangements: The net meters shall be installed at the interconnection point of the consumer with the network of the distribution licensees, and the solar meters shall be installed at the delivery point of the solar systems to measure the energy generated. The commercial settlement shall be done on the basis of readings of this meters.

The eligible consumers have the right to avail open access for wheeling the excess energy generated to one or more premises owned by him within the area of supply of the distribution licensee. Such right for wheeling access energy shall be available only if the wheeled energy to other premises exceeds 500 units in month and the consumer will be able to avail only 95% of the total energy wheeled, while remaining 5% will be adjusted towards distribution losses.

Accounting and settlement – The accounting of the energy generated, consumed and injected by the consumer shall be done on the basis of the readings taken by the meters, for the period applicable to him.

Solar RPO – The energy generated from the solar energy systems of any consumer shall be accounted towards RPO if the consumer is an obligated entity, and if not, then such energy shall be accounted towards RPO of the distribution licensee.

Banking and Cross Subsidy Charge – The eligible consumers generating solar power under this regulation, shall are exempted from banking and cross subsidy surcharge.

The details of the order can be found here

For more details on net metering, click here

 

REC Trading Report – June 2014

REC trade session for June 2014 was conducted on 25th June 2014. The following is a summary of results -

The total transactional value of non-solar RECs was INR 208.8 million and for solar RECs it was INR 15.4 million. The closing balance of REC inventory for non solar RECs breached the 7 million mark this  month whereas solar RECs crossed 0.23 million mark.

 

 

Non Solar RECs -

In case of non- solar RECs demand almost quadrupled (up by 376%) as compared to last trade session (refer  - May 2014 trade report) and Supply grew by 5.23 %. Non Solar price continued to remain at floor (INR 1,500 per REC). More insights provided in graphical charts below :

Solar RECs -

Total solar RECs issued this month was 27,787 and redeemed were 1654 only. In contrast to non-solar RECs, the demand for solar RECs took a beating as it went down by 22%. Supply rose by 11% w.r.t May 2014.  More details can be found in the graphs below -

Solar RECs finished trading at floor for consecutive 12 months.

Relevant media article can be read here.

Andhra Pradesh declares APPC for FY15

Hon’ble Andhra Pradesh Electricity Regulatory Commission (APERC) in an order (DATED – 31 MAY 2014) has determined the APPC for FY 14-15.

The definition of the APPC being followed by APERC can be read as –

‘Pooled Cost of Power Purchase (PCPP)’ means the weighted average pooled price at which the distribution licensee has purchased electricity in the previous year from all the long-term energy suppliers excluding the purchases based on liquid fuel. Provided that the purchases from traders, short-term purchases and purchases from renewable sources shall not be taken into account while determining Pooled Cost of Power Purchase.

AP’s APPC definition is not in sync with that of CERC as it excludes power purchases from suppliers based on liquid fuel, Purchases from Traders, short term purchases and purchases from Renewable sources.

The APPC for FY 14-15 has been calculated as Rs. 3.38 per unit.

The APPC is AP has been growing steadily with a CAGR of 7.91%.

The order by APERC can be found here.

Our previous Blog posts on APPC of other states can be Read here.

Contributed by – Dheeraj Babariya

Go to top