States Need to do More to Provide Open Access
Planning Commission deputy chairman, Montek Singh Ahluvalia has said "states need to make all-out efforts to expedite reforms in power distribution and do more to provide open access". His comments were were made meeting with Western region states which was part
Pramod Deo, Chairman, CERC Talks About Open Access and the State of Electricity Markets
The Business Standard published a very interesting interview of Pramod Deo, Chairman, CERC today. The highlights of what he said are: There are several difficulties in implementing Open Access at the intra-state level Discoms have been very slow to give open access due
PSERC notifies final regulation on RPO
Honorable Punjab State Electricity Regulatory Commission (PSERC) notified final regulation on Renewable Purchase Obligation and its compliance. PSERC specified the RPO percentage of 2.37% (Non Solar – 2.34 % and Solar – 0.03 %) for current financial year 2011-2012. The
CERC to determine Floor & Forbearance Price of RECs post 2012
Central Electricity Regulatory Commission (CERC) has come out with a suo-motu order on determining new Floor and Forbearance price for REC (Solar & Non-Solar) for the period post 2012. The draft copy of the order and a notice for the
TNERC Proposes Amendment to RPO Regulation
The TNERC notified the draft amendment to the Renewable Purchase Obligation Regulation on 19th May, 2011. The draft resembles the CERC regulations except for few minor changes. The key highlights of the draft regulations are, Captive & Open Access Consumers have
RPO Compliance May be Required More Frequently
After the low trading volumes in April, we strongly advocated quarterly compliance in order to make the REC market functional. Now it has been reported that the CERC has been actively considering such a proposal (See Business Standard article here). An
Significant Jump in REC Trading Volume in May
Review of REC Trading – May 2011 After a slow start, REC Trading picked up this month. There was a significant increase in the volume – combined volumes on both exchanges was 18,500 RECs (representing 18.5 million units). This is
Important Order from CSERC on Metering
An important order was passed by Chattisgarh State Electricity Regulatory Commission (CSERC). Metering in the case of captive units has been an issue in claiming REC. While the CERC procedures are very clear about the requirements - need for a
REC Trading Off to a Slow Start
Further to our analysis of REC trading in April, The Hindu recently covered the same, and so did Business Standard, which mentioned that the REC price declined by 61.5% in just the second trade. We agree with their comment of REC Trading needing a 'booster'. However, we believe that booster will come in the form of more frequent compliance requirement - clearly, if the obligated entity has time till March 2012 to meet the compliance requirement, why bother spending the money now?
Solar RECs: Investor’s perspective and feasibility study
Solar Projects are the flavour of the season. The National Solar Mission (NSM) has laid out an ambitions goal to make India the global leader in solar energy, and plans to develop capacity of 20 GW by 2020. This analysis focuses on the impact and feasibility of Solar RECs as a mechanism to finance and operate solar energy plants. As a significant number of companies and investor consider solar energy opportunities, we present an analysis of how workable solar energy plants are under the REC mechanism. Solar RPO are included in most state regulations RPO regulations in each state require fulfilling a separate Solar RPO. At present the solar RPO requirement ranges from 0% to 0.5% of total electricity consumed. It is expected to go upto 3% by 2022. At the same time, a separate Solar REC will be issued to generators who meet the eligibility criterion. These Solar RECs will have a floor price of Rs 12/kwh and a forbearance price of Rs 17/kwh. Demand for Solar RECs Our analysis suggests that Solar RECs demand will be robust. Majority of the upcoming capacity in solar energy is either through state feed-in tariffs, or though the NSM. In either case, that capacity will not access the REC market. At the same time, there will be robust demand as every obligated entity will also need to buy Solar RECs. REConnect’s analysis suggests that 2011-12 demand of Solar power for RPO requirements will be in excess of 1,300 million units* (roughly translating into 600MW of capacity). As a result, we expect Solar RECs to sell at a high price. *Calculated from CEA data : For a detailed analysis please contact us. Most state regulations provide that in the event for inadequate availability of Solar RECs, the Solar RPO requirement can be fulfilled through Non-Solar RECs. Since Non-solar RECs are significantly cheaper that Solar RECs, this can present issues in the Solar RECs markets – companies may wait for the Solar REC supply to be exhausted so that they can buy non-solar RECs for compliance, and it may result in a downward pressure on Solar REC prices. More clarity is needed on the implementation of this clause is the state RPO regulations.