REC trade results – August 2018

Non-Solar: Non-solar RECs prices continue to rise with robust demand but the clearance volume is constrained due to limited supply availability. This session the RECs were traded at the price of INR 1101 at PXIL (10.1% above the floor price) and INR 1200 at IEX (20% above the floor price). The non-solar REC inventory completely exhausted in August 2018 with a clearing ratio of 100% at PXIL & IEX both respectively. A total of 3,33,479 RECs were traded in this session.

Solar: Total number of solar RECs traded in this session was 4,86,129 (184% decrease from the last trade). The clearing ratio was 29.06% at PXIL & 15.42% at IEX respectively. RECs traded at the floor price, i.e. INR 1000 at PXIL and IEX both respectively.

The overall trade volume of (8,19,608) decreased almost by 50% from the last trade (16,18,069).

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.

PORTUGAL RUNS ON RENEWABLES FOR FOUR AND A HALF DAYS

In a remarkable achievement reported by The Guardian, the country of Portugal ran only on renewable power for 107 hours in the month of May. The sources of renewable power that the country relied on were hydro, wind and solar power.

During the year 2016, 59% of the national energy production was fulfilled through renewable energy while the remaining was from fossil fuels. Out of the 59% yielded from renewable sources, 2% was from solar, 25% was from wind and remaining 32% was from hydro. The article quoted  “the managing director of the Portuguese Renewable energy association Apren, believes that by 2020, Portugal will be able to generate 60% of its energy from renewables and will be able to completely rely on renewable power by the end of 2040”.

UPERC Proposes RE Tariff

The Uttar Pradesh Electricity Regulatory Commission (UPERC) in its latest notification on 5th November 2014 has proposed draft for Renewable Energy Tariff. The Commission has invited comments and suggestions by 21st November 2014.

The details of the tariffs proposed are as below:

Uttar Pradesh has been in seeing very slow growth in RE generation. In case of solar, the tariff proposed by commission, is close to 15 % higher than the tariff finalized by CERC for FY 14-15. It can inferred that the higher tariff has been proposed to encourage the solar generation in the state.

The proposed draft can be accessed here.

Our Previous blog post on MNRE draft guidelines can be read here.

Contributed by Dheeraj Babariya

KERC: No CSS, Wheeling and Banking charges for Solar power generators

Karnataka Electricity Regulatory Commission (KERC) in its order dated 18th August has exempted Solar Power generators from Cross Subsidy Surcharge (CSS), Wheeling and Banking charges.

On the basis of the comments received by the commission on the discussion paper released by the commission on 7th July 2014, the commission has given this final order. The Summary of the order is as below:

  • All solar power generators in the State achieving commercial operation between 1st April 2013 and 31st March 2018 are exempted from payment of wheeling and banking charges and cross subsidy surcharge for a period of ten years from the date of commissioning. This is also applicable for captive solar power plants for self-consumption within the State.
  •  Captive solar power plants opting for Renewable Energy Certificates shall pay the normal wheeling, banking and other charges as specified in the Commission’s Order dated 9th October 2013.

The table below illustrates the high CSS applicable for commercial consumers availing RE (Non-Solar), under Third Party Sale (For Group Captive consumers CSS = 0). All values in Rs/KWh.

This will bridge the gap between the Solar tariff and Non-Solar RE tariffs prevalent in the state, and encourage more competition between them.

The Commission said that there is need for encouraging solar generation, as only 41 MW of installed solar capacity is existent in the state, whereas the Karnataka Solar Policy aims to achieve 2000 MW of Solar capacity by 2018.

As per earlier order, solar power generators are also exempted from paying transmission charges and are also exempted from wheeling and transmission losses.

The KERC Order can be accessed here

Our previous blog post on the KERC Wheeling charges can be read here.

Contributed by Dheeraj Babariya & Nikhil Dhamankar.

Reinstatement of Accelerated Depreciation benefit for wind and its impact on the Renewable Energy Industry

Earlier last month, when the Union Budget was presented, there was a mention of reinstatement of Accelerated Depreciation ( AD ) for Wind Energy generators, in the Hindi version of the budget, whereas it found no mention in the English version. This caused confusion in the RE industry circles. However, the government clarified that AD has indeed been brought back on wind investments.

Wind Power development in India started in the early 90s. As per Section 80(J) of Income Tax Act 1961, industries were allowed 80% depreciation on capital invested. Since then till 2012 (when the benefit was removed), Wind Power development and growth has always relied primarily on Accelerated Depreciation (AD).

New wind capacity additional peaked in 2011-12 at about 3,200 MW, falling sharply to 1,700 MW the next year as AD benefits were removed. The argument put forward at that time by policy makers was that wind industry had matured, and the focus needed to shift to solar. This fits well with the objectives of the National Solar Mission.

The decline in wind investment due to withdrawal of AD coincided with healthy growth of close to 60% in Solar Power in 2012-13 and 2013-14. The market momentum had definitely shifted in favor of Solar. Our analysis suggests that Wind AD market had an investing capital of close to 7300 crores. This shifted to Solar AD market which saw increase in investments worth Rs 7500 crores during 2012-13.

The new government has announced that it was reintroducing AD (80%) in 2014, much to the delight of Wind Power stakeholders. We believe that the investment momentum will shift again to wind due to more mature policies and attractive tariffs.

Wind tariff in recent years have become very attractive and are close to solar tariff in many states. In Rajasthan, Maharashtra and MP, tariff in the range of Rs. 5, whereas solar tariffs are generally in the range of Rs. 6, leaving a very small gap.

With this, there will certainly be a diversion in investments from Solar to Wind power in the times to come.

These can also be understood from the table and graph below.

The green dots represent the advantage to the sector.

 

REC Trading Report July-2014

REC trading session of July-14 was conducted on 30th July 2014.  Below is a summary of the result:-

The total transaction value of non-Solar RECs reached 47.7 INR million and for Solar RECs was 61.5 INR million. The closing balance of RECs showed a whopping increase of 1.3 million in Non Solar RECs and 0.05 million in Solar RECs. The demand in PXIL fared better in PXIL than IEX for Solar this month. The clearing ratio for PXIL in Solar was 5.5 % whereas for IEX it showed 0.28%.

 Non Solar REC

The demand was to the lower side as Total RECs issued were 1.38 million whereas Total Redeemed was 31809 RECs. The demand took a dive by 77% as compared to the month of June. The supply rose by a whopping margin of 235% as compared to June. Non Solar price remained at 1500 INR (Floor Price). This month showed the highest number of issuance of RECs for the financial year. More insight can be seen in the graphical chart below.

 

 

Solar REC

Total RECs issued this month was 55545 whereas the total redeemed was 6633. It rose by 301% w.r.t June whereas, supply shot up by 23%w.r.t.  June session. The solar demand tripled as compared to previous month.  More details can be seen in the graph.

 

Market Clearing Percentage

 

Credits by: Bloomberg NEF

Contributed By: Cigil

CSERC Drafts RE Tariff for FY 2014-15

Chattisgarh State Electricity Regulatory Commission (CSERC) has released a draft on 18th July 2014 for the determination of preferential tariff for Renewable Sources of Energy. The commission has invited comments and suggestions latest by 12th August 2014 and a public hearing will be held for the same on 22nd August 2014.

The details of the proposed tariff are highlighted in the table below:

The tariff proposed by the CSERC is in line with the tariff determined by CERC (Refer). CSERC has reduced the solar tariff compared to previous years, whereas there is slight increase in tariffs of other RE sources.

The CSERC draft can be accessed be here

Our Previous Blog on CERC RE Tariff can be read here

Contributed by Dheeraj Babariya

Tripura Draft Amendment in RPO Regulation

Tripura Electricity Regulatory Commission (TERC) on 18th July 2014 has notified a draft for the amendment in its Renewable Purchase Obligation (RPO) compliance Regulation 2010. In this amendment, TERC has proposed RPO percentages for the next three years (i.e. till FY 16-17).

It is clearly visible that the TERC in the proposed draft has reduced its total the RPO percentage for 2014-15, as compared to 2013-14, but has increased the percentage of Solar RPO significantly. The decrease in the total RPO may be adjudged to the lack in Renewable Energy generation in the state and the increased solar RPO percentage shows that the state commission is setting an ideology to improve the solar energy generation in the state.

The proposed draft can be accessed here.

Contributed by Dheeraj Babariya.

PSERC Draft RE Tariffs for FY 2014-15

Punjab State Electricity Regulatory Commission (PSERC) has released a draft for determination of tariff for Renewable Energy sources on 11th July 2014. PSERC has Invited comments and suggestions by 6th Aug 2014.

The graph below shows a comparison between tariff’s of CERC and PSERC over last three years (note that the tariff of PSERC for FY 14-15 is proposed and not approved).

It is evident from above that the tariff of PSERC over the period is same as the tariff determined by CERC. So it can be presumed that the final tariff of PSERC for FY 14-15 could be same as tariff determined by CERC. It is worth noting that the tariffs for Wind and Hydro have been marginally increasing over the last 3 years, which is contrary to the trend for Solar.

For further details please refer here.

Contributed by Dheeraj Babariya.

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