Date post: | 09-May-2015 |
Category: |
Technology |
Upload: | vibhav-nuwal |
View: | 84 times |
Download: | 0 times |
Page 1
Volume: XXVI Month: October’12 Contents of this newsletter are for informational purposes only
OOOO
PPPP
EEEE
NNNN
AAAA
CCCC
CCCC
EEEE
SSSS
SSSS
Vol. XXVI October 2012
www.reconnectenergy.com
Dear Readers,
REC prices remained at floor price due to the
large gap in supply and demand. This trend
has persisted for the last several months now.
Even with recent pronouncements by the Ra-
jasthan High Court (covered in September
newsletter) and some action by state ERCs,
demand fell this month compared to last month.
At the same time, supply is continuing to in-
creasing with over 5 lakh RECs being issued
every month. After the end of the trade ses-
sion, close to 13 lakh RECs remain unsold – this
is more than 5 month supply at current demand
levels.
In October, CERC came out with the order on
UP Co-gen plants. The order lays down several
principles which further clarify the eligibility of
RE generators for REC mechanism. However,
several questions still remain before RECs can
be issued to UP Co-gen plants. Our main arti-
cle provides a detailed analysis.
Several states have also been coming out with
their solar policies. This month we analyze the
TN solar policy.
As always, detailed trading statistics, analysis
and regulatory updates are available in this
newsletter.
Happy reading and we look forward to hear-
ing feedback from you.
• Team REConnect
REConnect Energy India’s Largest Green Credits Trading Company
The verdict by CERC on eligibility for REC of UP Sugar Co-Gen
From Management’s Desk
Regulatory Updates REC Trade Report REC Project Statistics Green News About REConnect Index UP Sugar Co-Gen
The CERC recently gave its order in the long standing issue on RECs issuances to UP
sugar plants. The order is important as it sheds light on eligibility of RECs, particu-
larly in the case of self-consumption, and is also likely to have a significant impact
on the RECs markets (over 650 MW capacity of sugar mills is registered in the RECs
mechanism from UP alone).
The important points that CERC considered were:
•Eligibility of UP Co-gen plants for RECs for the self-consumption portion
•Roles and responsibility of SLDC
•Various other miscellaneous clarifications on points raised by UP SLDC.
The key outcome of the order is that in case a RE generator does not consume 51%
or more of the power generated, such a generator cannot be classified as a captive
power plant (CPP). Such a generator will be considered as any other RE generator
supplying electricity to a consumer. The self-consumption portion of the power will
be eligible for RECs provided no benefits that are available to CPPs are claimed. In
case such benefits are availed, they will have to be foregone.
In UP, electricity duty is waived on all CPPs since 1998.
Eligibility for RECs based on the order can be summarized as below (specifically in
the case of UP):
2200 MW+2200 MW+2200 MW+2200 MW+
Portfolio under REC
16 States16 States16 States16 States
Projects under REC
Over 50%Over 50%Over 50%Over 50%
Market Share in REC Trade
7 States7 States7 States7 States
Physical Presence
51% or more power is
consumed in-house
Avails Electricity duty
waiver
Not eligible
51% or more power is
consumed in-house
Does not avail Elec-
tricity duty waiver or
other concessional
benefits
Eligible for RECs This is unlikely in
UP as ED waiver
has been available
to all CPPs since
1998
Less than 51% of
power is consumed in
-house
Avails Electricity duty
waiver
Eligible for RECs
only after foregoing
ED waiver
See ‘open ques-
tions’ section be-
low
Less than 51% of
power is consumed in
-house
Does not avail Elec-
tricity duty waiver or
other concessional
benefits
Eligible for RECs
Page 2
www.reconnectenergy.com
Regulatory Updates REC Trade Report REC Project Statistics Green News About REConnect Index UP Sugar Co-Gen
This order leaves some questions unanswered:
• If a RE generator is determined to be not a CPP and foregoes the benefits available to CPP, will they be immediately eli-
gible for RECs or will the 3 year restriction apply?
A simple reading of the order does not provide any answer to this. In our opinion the 3 year restriction may not apply as in
the CERC regulations pertaining to eligibility, the 3 year restriction is a clause specific to CPPs.
• Determination of CPP - Electricity Rules provides that
“no power plant shall qualify as a ‘Captive Generating Plant’ unless 26% of the ownership is held by the captive user
(s) and not less than 51% of the aggregate capacity generated in such plant, determined on annual basis, is
consumed for the captive use.” (emphasis supplied)
According to this definition, the status of a power plant as CPP or otherwise needs to be determined on the basis of its an-
nual power generation/ consumption. In such a case, applying for RECs may be a challenge as such an application has to be
made within 3 months of generation. In that duration, the status of a plant as CPP may be unclear. Moreover, the status
may change from year to year based on the consumption pattern.
Given these issues, in our opinion, it will be some more time before any capacity from UP sugar plants access the RECs mar-
kets.
The CERC order also alludes to further clarity on this through an amendment in the REC mechanism.
Impact of the order in other states
Andhra Pradesh: E-Duty is still applicable for self-consumption as per CERC order. Since the case against E-Duty is pending at
HC AP, it can't be determined whether E-Duty is exempted or not. If only E-Duty is concerned, as per CERC order, a co-gen
unit can forgo the benefit of E-Duty exemption and avail RECs.
Note: its important to highlight that only E-duty will not make project eligible or ineligible for REC. There is a statement by
CERC in its order which says "any other benefits applicable to CPP" which needs to be looked into more carefully.
Karnataka: KERC regulation mandates that a project must be a captive power project to qualify for REC. Co-Gen units by na-
ture in Karnataka, would not fall under the category of CPP and hence as per KERC regulation, sugar Co-Gen units will not be
eligible. Since the KERC regulation itself is radically different than CERC regulation, the CERC order will have no impact unless
KERC regulation falls in-line with central regulation.
2200 MW+2200 MW+2200 MW+2200 MW+
Portfolio under REC
16 States16 States16 States16 States
Projects under REC
55%55%55%55%
Market Share in REC Trade
7 States7 States7 States7 States
Physical Presence
Volume: XXVI Month: October’12 Contents of this newsletter are for informational purposes only
O
P
E
N
A
C
C
E
S
S
Vol. XXVI
Page 3
www.reconnectenergy.com
Regulatory Updates REC Trade Report REC Project Statistics Green News About REConnect Index UP Sugar Co-Gen
Tamil Nadu recently announced its Solar Policy. The policy
aims to achieve an ambitious target of 3000 MW by 2015
in phased manner with capacity addition of
• 1500 MW from utility scale projects
• 350 MW from roof top installations
• 1150 MW under REC mechanism.
Key Differentiator: The policy unlike any other state pol-
icy, highlights the NET METERING ARRANGEMENTS for
feeding excess power back to grid for Rooftop Solar. Pro-
jects to evacuate power at following voltages .
What does it mean: The current REC policy recognises
only grid connected RE projects under REC. With Net Me-
tering, even small scale roof-top solar projects can partici-
pate into REC.
1000 MW out of 1500 MW utility scale capacity to be
funded by Solar Purchase Obligation (SPO) and balance
500 MW through Generation based incentive (GBI) by the
govt. The utility scale projects are also expected to be de-
veloped through competitive bidding process.
Solar Purchase Obligation: The SPO to be administered by
TANGEDCO has been mandated as 3% till Dec’13 and
scaled up to 6% from Jan’14 ,is applicable on all HT Con-
sumers (HT Tariff I to V) & LT Commercial (LT Tariff V).
Domestic consumers, huts, cottage & tiny industries,
power looms, LT industrial consumers and Agricultural
Consumers are exempted from SPO.
What does it mean: As per TANGEDCO, HT Consumers
(Cat I to V) and LT Commercial consumers, would collec-
tively consume about 25 BUs annually (FY 12-13).
This means, at 3% SPO, Tamil Nadu will require about 500 MW
of Solar power to meet SPO of 3%. To meet 6% of SPO, the to-
tal Solar power required will be about 1000MW.
Two RPO Structures? – TNERC also has specified 0.05% of Solar
RPO. With state policy in effect, there will be dual RPO imposed
on HT and LT Commercial consumers. The state commission
might have to realign the Solar RPO to align the RPO structure
to meet the policy objective.
Promotion of Solar Rooftops:
GBI for Solar Roof top : All domestic solar & solar-wind hybrid
rooftops to be installed before 31st
march’14 will be provided
with GBIs at Rs. 2/kWh for first two years, Rs. 1/kWh for the
next two years and Rs. 0.5/kWh for the subsequent two years.
All new government/local buildings shall necessarily install so-
lar rooftop.
Other initiatives and exemptions:
• Solar water heating systems mandatory for Public Buildings
and Industries using hot water boiler/steam boiler using
fossil fuels.
• Wheeling & Banking Charges applicable as per TNERC or-
ders.
• Exemption of Electricity Duty for 5 years for using solar
power from projects of self consumption/sale to utility.
• Tax Concessions as per TN Industrial policy.
• TEDA designated as single window clearance agency who
would be coordinating power evacuation approval, approv-
als related with connectivity to substation, approvals from
pollution control board etc.
• Empowered committee to accord project clearances.
Even though the policy looks quite ambitious, overall its quite
encouraging for the investors.
Regulatory Updates: Tamil Nadu Solar Policy
2200 MW+2200 MW+2200 MW+2200 MW+
Portfolio under REC
16 States16 States16 States16 States
Projects under REC
Over 50%Over 50%Over 50%Over 50%
Market Share in REC Trade
7 States7 States7 States7 States
Physical Presence
Solar PV System size Grid Connected
<10 kWp 240 V
10 kWp to 15 kWp 240 V/415V
15 kWp to 50 kWp 415 V
50 kWp to 100 kWp 415 V
>100 kWp 11 kV
Volume: XXVI Month: October’12 Contents of this newsletter are for informational purposes only
O
P
E
N
A
C
C
E
S
S
Vol. XXVI
Page 4
www.reconnectenergy.com
Non-solar RECs
The prices remained at floor price this month (Rs.1500/REC at IEX and PXIL; this is the same in September) as supply has remained far in
excess of demand. The total RECs available this month was 15 lakh out of which only 2.22 lakh RECs were redeemed leaving an inven-
tory of 12.8 lakh RECs .
10 lakh RECs were bid for sale ( up by 42 % from last month) while demand was for only 2.22 lakh RECs (down 16 %).
Demand has remained low in the last couple of months. The major reason slow progress on enforcement by SERCs. Clearing ratios were
approximately 30% on IEX and 70% on PXIL.
Solar RECs
Demand went up by 82% from last month whereas the supply also went up by 15%. The market clearing price on IEX was Rs 12,680 and
on PXIL was Rs 12,500 (last month it was Rs 12,900 on PXIL and Rs.12,500 on IEX). In total, 1,791 Solar RECs were sold (last month it was
1,160).
Review of REC Trading- October 2012
Regulatory Updates REC Trade Report REC Project Statistics Green News About REConnect Index UP Sugar Co-Gen
2200 MW+2200 MW+2200 MW+2200 MW+
Portfolio under REC
16 States16 States16 States16 States
Projects under REC
Over 50%Over 50%Over 50%Over 50%
Market Share in REC Trade
7 States7 States7 States7 States
Physical Presence
Volume: XXVI Month: October’12 Contents of this newsletter are for informational purposes only
O
P
E
N
A
C
C
E
S
S
Vol. XXVI
Page 5
www.reconnectenergy.com
Status of projects in REC Mechanism
Accredited Capacity : 3556.451 MW
Regulatory Updates REC Trade Report REC Project Statistics Green News About REConnect Index UP Sugar Co-Gen
2200 MW+2200 MW+2200 MW+2200 MW+
Portfolio under REC
16 States16 States16 States16 States
Projects under REC
55%55%55%55%
Market Share in REC Trade
7 States7 States7 States7 States
Physical Presence
Volume: XXVI Month: October’12 Contents of this newsletter are for informational purposes only
O
P
E
N
A
C
C
E
S
S
Vol. XXVI
Page 6
www.reconnectenergy.com
Status of projects in REC Mechanism
Registered Capacity : 3291.798 MW
Regulatory Updates REC Trade Report REC Project Statistics Green News About REConnect Index UP Sugar Co-Gen
2200 MW+2200 MW+2200 MW+2200 MW+
Portfolio under REC
16 States16 States16 States16 States
Projects under REC
Over 50%Over 50%Over 50%Over 50%
Market Share in REC Trade
7 States7 States7 States7 States
Physical Presence
Volume: XXVI Month: October’12 Contents of this newsletter are for informational purposes only
O
P
E
N
A
C
C
E
S
S
Vol. XXVI
Page 7
www.reconnectenergy.com
• Clean Energy Fund headed nowhere
The clean energy fund is being used more to meet the budgetary shortfall of various ministries than to promote energy-
related research and projects. In the last few years, India has taken a number of concrete steps to propel its economy on a
greener, low-carbon pathway. The National Action Plan on Climate Change and National Clean Energy Fund (NCEF) are two
such ambitious endeavours.
http://www.thehindubusinessline.com/opinion/clean-energy-fund-headed-nowhere/article4051259.ece?homepage=true
• WInd energy industry seeks incentives
Wind energy equipment manufacturers hope the government would put policies for incentives to enable the wind energy
generation industry to reach its potential. Absence of proper incentives -- including the proposed generation-based incentive
(GBI) and accelerated depreciation benefits, which were earlier enjoyed by the industry -- had hit the industry hard, said
Ramesh Kymal, chairman, Indian Wind Turbine Manufacturers Association (IWTMA).
http://www.business-standard.com/india/news/wind-energy-industry-seeks-incentives-/490823/
• MNRE targets 45,000 sq m of solar collectors, identifies five user industries
The Ministry of New and Renewable Energy (MNRE) has said it would facilitate the installation of 45,000 square metres of so-
lar collectors — panels that generate heat from the sun’s rays — by March 2017. (Only last month the Ministry had indicated
a target of 15,000 sq m by 2016. Yet, the estimated reduction in carbon di-oxide reduction has been kept unchanged at
39,200 tonnes)
http://www.thehindubusinessline.com/industry-and-economy/economy/article3980957.ece
• Punjab Biomass Plans 96 Megawatts of Capacity by 2017
Punjab Biomass Power Ltd., a developer of clean-energy projects in India, plans to set up 96 megawatts of plants fueled by
rice straw by 2017. The company, backed by Infrastructure Leasing & Financial Services Ltd. and Bermaco Energy Ltd., expects
to raise 800 million rupees ($15.2 million) by February for its next plant in northern Punjab state, Bermaco Managing Director
Monish Ahuja said in a phone interview today from Mumbai. It has an existing 12-megawatt plant in Patiala district
http://www.bloomberg.com/news/2012-10-17/punjab-biomass-plans-96-megawatts-of-capacity-by-2017.html
Green News
Regulatory Updates REC Trade Report REC Project Statistics Green News About REConnect Index UP Sugar Co-Gen
2200 MW+2200 MW+2200 MW+2200 MW+
Portfolio under REC
16 States16 States16 States16 States
Projects under REC
Over 50%Over 50%Over 50%Over 50%
Market Share in REC Trade
7 States7 States7 States7 States
Physical Presence
Volume: XXVI Month: October’12 Contents of this newsletter are for informational purposes only
O
P
E
N
A
C
C
E
S
S
Vol. XXVI
Meet us at
Vibhav Nuwal
+91 88006 79988
Vishal Pandya
+91 96202 21101
Page 8
www.reconnectenergy.com
Status of RPOs across various states in India - As on October 31, 2012
State
Status of Regulation
2012–13 RPO
Obligation
RPO on CPP?
RPO on OA
Users?
Penalty ?
Andhra Pradesh Final 4.75 % + 0.25 %
Yes
Yes
Not Specified
Assam Final
4.05 % + 0.15 %
Yes
Yes
Yes (RECmax)
Bihar
Final
3.25 % + 0..75 %
Yes
Yes
Yes (RECmax)
Chhattisgarh
Final
5.25 % + 0.50 %
Yes
Yes
Yes (RECmax)
Delhi Final
3.40 %+ 0.15 %
Yes
Yes
Yes (RECmax)
Gujarat
Final
6.00 % + 1.00 %
Yet to be notified
NA
Yes (RECmax)
Haryana
Final
1.50 % + 0.50 %
Yes
Yes
Yes (RECmax)
Himachal Pradesh
Final
10.00 % + 0.25 %
Yes
Yes
Yes (RECmax)
J&K
Final
4.75 %+0.25 %
Yes
Yes
Yes (RECmax)
Jharkhand
Final
3.00 % + 1.00 %
Yes (>5MW)
Yes
Yes (RECmax)
Karnataka
Final
10 % + 0.25 % (BESCOM,MESCOM,CHESCO
M), 7 % + 0.25 % for others
Yes (>5MW)
5% RPO
Yes (>5MW)
5% RPO
Yes (RECmax)
Kerala
Final
3.35 %+0.25 %
Yes
Yes
Yes (RECmax)
Madhya Pradesh
Final
3.40 % + 0.60 %
Yes
Yes
Yes (RECmax)
Arunachal Pradesh Final 4.1 % +0.1 % Yes Yes Yes (RECmax)
Maharashtra
Final
7.75 % + 0.25 %
Yes
Yes
Yes (RECmax)
Meghalaya
Final
0.60 % + 0.40 %
Yes
Yes
Yes (RECmax)
Orissa
Final
5.35 % + 0.15 %
Yes(>5MW)
Yes
Yes (RECmax)
Punjab
Final
2.83 %+0.07 %
Yes
Yes
Yes (RECmax)
Rajasthan
Final
7.10 % + JNNSM
Yes
Yes
Yes (RECmax)
Tamil Nadu
Final
8.95 % + 0.05 %
Yes
Yes
Yes (RECmax)
Tripura
Final
0.90 % + 0.10 %
Yes (>5MW)
Yes
Yes (RECmax)
Uttrakhand
Final
4.5 % + 0.025 % Yes
Yes
Yes (RECmax)
Uttar Pradesh
Final
5.00 %+ 1.00 %
Yes
Yes
Yes (RECmax)
West Bengal
Final
4 % + NA
NA
NA
Draft Proposed now.
JERC for Goa and UTs
Final
2.60 % + 0.40 % Yes
Yes
Yes (RECmax)
JERC for Manipur and Mizoram
Final
4.75 % + 0.25% (Man) 6.75% + 0.25% (Miz)
Yes
Yes
Yes (RECmax)
Nagaland
Final
7.75 % + 0.25%
Yes
Yes
Yes (RECmax)
2200 MW+2200 MW+2200 MW+2200 MW+
Portfolio under REC
16 States16 States16 States16 States
Projects under REC
Over 50%Over 50%Over 50%Over 50%
Market Share in REC Trade
7 States7 States7 States7 States
Physical Presence
Volume: XXVI Month: October’12 Contents of this newsletter are for informational purposes only
O
P
E
N
A
C
C
E
S
S
Vol. XXVI
Page 9
www.reconnectenergy.com
Dear Readers, Our previous newsletters are available at our website www.reconnectenergy.com and can be downloaded from : http://www.reconnectenergy.com/rec/index.php/newsletters-on-rec-mechanism.html The summary of our previous newsletters we have published is available below. • Volume XV: November 2011
Renewable Purchase Obligation – A Demand - Supply Analysis • Volume XVI: December 2011
Analysis of Draft RPO of Andhra Pradesh + REC Market Update
• Volume XVII: January 2012 Voluntary Market for RECs
• Volume XVIII: February 2012
Off Grid Projects and REC: A new socio-development tool? • Volume XIX: March 2012
Applicability of RPO on Co-Generation Projects (An Update) • Volume XX: April 2012
Analysis of the Energy Savings Certificate Markets
• Volume XXI: May 2012 Trading of First Solar RECs - Interview with Mr Vikalp Mundra of M&B Switchgear Ltd
• Volume XXII: June 2012 Waste-to-energy projects and REC Mechanism, and REC trading updates
• Volume XXIII: July 2012
Analysis of report on RPO trajectory and impact
• Volume XXIV: August 2012 RPO Compliance: The Shifting Focus
• Volume XXV: September 2012 Analysis on Andhra Pradesh State Solar Policy
Past Newsletters
Feedback: We wholeheartedly thank you for providing your valuable feed-back on our last newsletter. Your feedback on the newsletter keeps us motivated and would certainly help us to improve the quality of it. Kindly keep writing to us. We are eager hear your views. Best Regards, Team - REConnect
2200 MW+2200 MW+2200 MW+2200 MW+
Portfolio under REC
16 States16 States16 States16 States
Projects under REC
Over 50%Over 50%Over 50%Over 50%
Market Share in REC Trade
7 States7 States7 States7 States
Physical Presence
Volume: XXVI Month: October’12 Contents of this newsletter are for informational purposes only
O
P
E
N
A
C
C
E
S
S
Vol. XXVI
Page 10
www.reconnectenergy.com
Services Provided by REConnect
Detailed Services in REC Space Services for RE Generators
Services for Obligated Entities (Distribution Companies / Open Access Consumers / Captive Consumers)
Regulatory Updates REC Trade Report REC Project Statistics Green News About REConnect Index UP Sugar Co-Gen
2200 MW+2200 MW+2200 MW+2200 MW+
Portfolio under REC
16 States16 States16 States16 States
Projects under REC
Over 50%Over 50%Over 50%Over 50%
Market Share in REC Trade
7 States7 States7 States7 States
Physical Presence
O
P
E
N
A
C
C
E
S
S
Vol. XXVI
Page 11
www.reconnectenergy.com
REConnect is a venture focused on the Renewable Energy Cer-
tificates, Energy Efficiency and Electricity Portfolio Man-
agement.
REConnect’s team has extensive experience in the environ-
mental markets both in India and internationally:
• Worked in the international carbon markets for several
years and has expertise in the consulting and trading of
emissions reductions
• Extensive knowledge about various Renewable Energy
Certificate and Energy Efficiency Certificate markets in
USA, Europe and Australia etc.
• Worked with Indian Energy Exchange (IEX), India’s leading
power exchange, and have extensive knowledge and ex-
perience of power markets
• Alumnus of Columbia University, an Ivy League University
in USA, and IIT Bombay
• Highly experienced core team worked with organizations
like J P Morgan, Indian Energy Exchange, LEK Energy
Consulting (UK) and Asia Carbon.
Contact REConnectContact REConnectContact REConnectContact REConnect
New Delh iNew Delh iNew Delh iNew Delh i Vibhav NuwalV ibhav NuwalV ibhav NuwalV ibhav Nuwal v ibhav.nuwal@reconnectenergy .com +91 88006 79988
BangaloreBangaloreBangaloreBangalore Vishal PandyaVishal PandyaVishal PandyaVishal Pandya v ishal .pandya@reconnectenergy .com +91 96202 21101 Anurag Dhyani Anurag Dhyani Anurag Dhyani Anurag Dhyani (Solar Markets)(Solar Markets)(Solar Markets)(Solar Markets) Anurag.Dhyani@reconnectenergy .com +91 77603 00499
MumbaiMumbaiMumbaiMumbai Ramkumar KRamkumar KRamkumar KRamkumar K ramkumar@reconnectenergy .com +91 99303 59992
ChennaiChennaiChennaiChennai Rajesh VaidyulaRajesh VaidyulaRajesh VaidyulaRajesh Vaidyula ra jesh.va idyula@reconnectenergy .com +91 99404 78306 Suresh Kumar Suresh Kumar Suresh Kumar Suresh Kumar ( for RPO)( for RPO)( for RPO)( for RPO) suresh.kumar@reconnectenergy .com +91 99727 24727
AhmedabadAhmedabadAhmedabadAhmedabad Mohit TyagiMohi t TyagiMohi t TyagiMohi t Tyagi mohi t . tyag i@reconnectenergy .com +91 9099002333
About REConnect
Regulatory Updates REC Trade Report REC Project Statistics Green News About REConnect Index UP Sugar Co-Gen
Volume: XII Month: June ’12 Contents of this newsletter are for informational purposes only
O
P
E
N
A
C
C
E
S
S
Vol. XXVI
2200 MW+2200 MW+2200 MW+2200 MW+
Portfolio under REC
16 States16 States16 States16 States
Projects under REC
Over 50%Over 50%Over 50%Over 50%
Market Share in REC Trade
7 States7 States7 States7 States
Physical Presence
Volume: XXVI Month: October’12 Contents of this newsletter are for informational purposes only