Review of REC Trading-June 2011
Compared to REC Trading for last month, this month saw a larger level of participation from buyers in REC market. For example, in this trade session, IEX witnessed 72,002 RECs* from buy side whereas, PXIL saw demand of 10,000 RECs.
Order on APPC of HPSEB Ltd for FY 2011-12
The revised Pooled Cost of Power Purchase has been worked out as Rs. 2.24 per unit for the FY 2011-12. The order on APPC of HPSEB Ltd for FY 2011-12 is available here.
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
KERC Proposes Amendments to RPO Regulations
KERC has notified First Amendment to KERC (Procurement of Energy from Renewable Resources) Regulations on May 30th 2011. The draft of the proposed amendment is available in www.kerc.org. The highlights of the amendment are: RPO obligation is on captive plant or
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
Supreme Court Allows Open Access in Maharashtra
The Supreme Court has dismissed the petition of MSEDCL for a stay on Open Access in Maharashtra. For those in the industry who have been tracking this issue for a while now, the Supreme Court action came quickly (only very
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
Lessons to learn from REC Trade in April-2011
India witnessed first ever trade of REC in March 2011 where 424 Non-Solar RECs got traded collectively through Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL) at Market Clearing Price (MCP) of Rs. 3900/REC and Rs. 2225/REC respectively. Market got super excited seeing REC prices touching forbearance price at IEX. However, the market got little surprise as well as shock in the very next trade session that got executed in April-2011, in which buyers were hard to find at both the Power Exchanges (PXs). Based on its existing strong hold in the market, IEX managed to get 260 Non-Solar RECs from buy side whereas their counterpart – PXIL could not get a single bid from REC buyers! This came as a little surprise to us (REConnect) as well as the market. We were expecting that the market would see a strong dip in the price due to following factors:
- Most of the distribution companies & obligated entities might still be busy settling their financial accounts
Demand Side participation in REC Mechanism
In the REC Mechanism , obligated entities like distribution licensees, open access consumers and captive consumers having Renewable Purchase Obligation (RPO), need to buy either physical renewable energy or REC to meet RPO compliance. This provision would ensure that obligated entities that are not able to procure physical renewable energy, would purchase RECs to avoid penalty. Even though, the regulatory provision has been provided for mandatory RPO compliance, as the provision being enforced for the first time in India, a question on every stakeholder’s mind is “Who will actually buy RECs?” With the RPO being enforced, it is anticipated that only distribution licensees would contribute in bringing demand for RECs in the market. However, we believe that in the initial years, they would not be the only significant buyers of RECs in the market place. This is mainly because they already buy a significant volume of green power under preferential tariffs. Further, the revised RPOs set by various SERCs are set up in such a way that the net shortfall of renewable energy for a distribution licensee to meet its RPO would very minimal.