REChronicles - From the Editor's desk - EfficientCarbon

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Feb 27, 2013 - Quite a few interesting updates this month. Andhra Pradesh Solar bidding was closed on 15th. February and
REChronicles - From the Editor’s desk Hello Readers. Hope you enjoyed the last issue of REChronicles. We would love to have your feedback on which articles you liked and which ones you didn’t. Quite a few interesting updates this month. Andhra Pradesh Solar bidding was closed on 15th February and the list of bidders details were announced subsequently. An analysis of data available revealed much interesting insights. More on this in our Renewable Energy News section. Also contained in this section is news about the recent REC validity extension to 2 years and Kerala Solar Policy draft. We are once again bringing to you the monthly REC Inventory and Trading update and the capacity addition under REC scheme in the month of February. While Non-Solar trading continued to do bad, Solar trading continued its new year bash. More on this in our REC trading section. We have published a separate article on Rooftop policies in India that have been in action for quite some time and also those that are yet to see implementation. Turn to page 6 for more on this. We have, as always put in our best efforts in order to come up with the articles in this issue. We hope you would enjoy it as much as we did while preparing it. Kindly give your valuable feedback on how we can improve REChronicles and make it even more delightful and interesting for you. Happy reading!!

REC Trading Update – February 2013 REC Inventory: Opening at close to 1.78 Million, February trading session closed with an inventory balance of a little over 1.94 Million RECs. The following sections give an update on the Non-Solar and Solar front.

Non-Solar The month of February started with an Opening Balance of 1779466 Non-Solar RECs. Over the course of the month, 315795 Non-Solar RECs were issued thus putting the available number at 2095261. Of these, only 1742421 were put up for trading. Buy bids of 152952, all of which were cleared, led to a closing balance of 1942309. Following table gives the Non-Solar REC Inventory statistics for the last 3 months. Non-Solar REC Inventory for Dec-2012 to Feb-2013 (as on 27-Feb-2013) Month, Year

Opening Balance

REC Issued

REC Redeemed

Closing Balance

December, 2012

1559699

382391

273644

1668446

January, 2013

1668446

304357

193337

1779466

February, 2013

1779466

315795

152952

1942309

Solar Opening at 1251 Solar RECs, 1882 were issued over the course of the month thus putting the total available Solar RECs at 3133 - out of which only 2726 were put up for trading. The trading session closed with a Closing Balance of 899 after the redemption of 2234 Solar RECs. Following table throws more light on the Solar REC Inventory statistics for the last 3 months. Solar REC Inventory for Dec-2012 to Feb-2013 (as on 27-Feb-2013) Month, Year

Opening Balance

REC Issued

REC Redeemed

Closing Balance

December, 2012

469

992

1208

253

January, 2013

253

3306

2308

1251

February, 2013

1251

1882

2234

899

REC trading: The number of Non-Solar Buy-bids fell once again – by 21% compared to that of January. Solar REC trading, on the other hand, continued the new year bash. Here’s more on Non-Solar and Solar trading in the second month of 2013.

Non-Solar RECs Trading: Against expectations, no increase in trading has been witnessed even in the penultimate month of the Financial Year. As can be witnessed, there was actually a dip in demand (21%) and thus, trading volume. Supply continues to outstrip Demand (by a factor of 11). As is the trend, all the Buy Bids (152952) were cleared resulting in a Trading Value of Rs.22.94 Crores. Clearing Price stood at the usual Rs.1500. Closing Balance continues to rise owing to higher and ever increasing Supply. The graph below shows the trends in Buy Bids, Sell Bids, Traded Volume and Clearing Price for the last 3 months. Non-Solar REC trading from December ’12 – February ‘13

1800000 1600000 V 1400000 o l 1200000 u 1000000 m 800000 e 600000 400000

1742421

1741892 1500

1500

1500

1453626

1600 1500 1400 1300 1200 1100 1000

273644

900 193337

200000

152952

800 700

0

600 December'12

Buy Bid (No. of certificates)

January'13 Sell Bid (No. of certificates)

February'13 Traded Volume

Clearing Price

Forecast for March trading session: The number of Non-Solar RECs available for trading in February crossed 2 Million. As inventory piles up, Trading Price is bound to stick to the Floor Price of Rs.1500/REC if the demand continues to stay low. The recent CERC order on REC validity extension to 2 years can be a useful tool in improving the price as developers can now put-off trading to a point when demand increases (which again is unpredictable) thus creating a supply shortfall in the short-term.

P r i c e

Solar RECs Trading: Solar REC trading continued its good run in the second month of the New Year. Though the demand was not as high as in January, the Traded Volume was close to that of last month. The high demand and comparatively low supply made sure that the clearing price stayed high. Against Buy Bids of 6777, 2726 Solar RECs were put up for sale and 2234 got cleared at an average Clearing Price (IEX and PXIL) of Rs.12569 resulting in a Trading Value of Rs.2.81 Crore. The Clearing Price touched Rs.13000/REC at PXIL only for the second time since the trading began in May last year. Clearing price at IEX stood at Rs.12500/REC. The graph below shows the trends in Buy Bids, Sell Bids, Traded Volume and Clearing Price for the last 3 months. Solar REC trading from December ’12 – February ‘13

42245

45000

V o l u m e

13000

40000

12900

35000

12800

30000 25000

12569 12501

12500

12400

15000

12300 6777

10000 0

12600 12500

20000

5000

12700

2191 1208

1461

December'12 Buy Bid (No. of certificates)

2308

3559

January'13 Sell Bid (No. of certificates)

2234

2726

12200 12100 12000

February'13 Traded Volume

Clearing Price

Forecast for March trading session: Being the last month of the financial year, March could witness good trading activity as was the case with the first 2 months of the quarter. There doesn’t seem to be any possibility of a fall in Clearing Prices atleast in the short term as demand continues to be higher than supply.

P r i c e

REC Capacity Addition - February A total of 9.5 MW was Accredited and 89.55 MW was Registered during the course of the month. The tables below indicate the Resource-wise capacity addition in February and the total capacity as on 27th February, 2013. Capacity Addition (MW) in February (As on 27th February 2013) S.No. 1. 2. 3. 4. 5. 6. 7.

Source Wind Urban or Municipal Waste Solar PV Small Hydro Others Biomass Bio-fuel Cogeneration Total

Accreditation 5 0 4.5 0 0 0 0 9.5

Registration 40.95 0 4 24 0 10 10.6 89.55

Capacity in MW based on Type of RE Source (As on 27th February 2013) 2500.00 2048.08

Capacity Accredited (in MW)

1910.03

2000.00

Capacity Registered (in MW) 1500.00 1000.00

787.87 571.45

729.3

562.9

500.00 208.0 187.5 0

0

32.42 23.67

0

16 0

0

0.00 Wind

Solar Thermal

Solar PV

Small Hydro Geo Thermal

Biomass

Bio-fuel Urban or Cogeneration municipal waste

1.67

1.67

Others

Rooftop Solar in India The energy consumption in our developing nation is soaring and we are facing severe electricity shortages in several cities and towns. Conventional energy sources are already making a serious environmental impact. So to have an ecologically sustainable growth and to overcome energy security challenges, we have to turn to clean and renewable energies –like solar. A 1 MW solar PV (photovoltaic) generation plant requires approximately 4.5-5 acres. Although India is quite vast, given our population density, the per capita land availability is low. Exclusive dedication of such large tracts of land for installation of solar arrays will come at the consequence of forsaking other necessities that require land. So the best suitable long term design solution for India would be a highly distributed set of individual rooftop power generation systems connected through a local grid. The rooftop power plants offer several other advantages including: -

Decrease in Transmission and Distribution (T&D) losses Low gestation time Improvement of tail-end grid voltages

The current cost of setting up an off-grid PV plant for a medium sized home is approximately Rs. 22.5 lakhs (for a 1-1.5 KW system with battery backup). To attract individual and average family size household consumer, the market price of solar technology has to go further down or the government should bring out policies to subsidize and support them.

JNNSM (Jawaharlal Nehru National Solar Mission): While JNNSM’s main focus has been on large scale grid connected solar projects, it does give incentives for small scale grid connected and off grid projects. Small grid connected rooftop PV plants (2 MW or less capacity, grid connection at < 33kV) are supported under the RPSSGP (Rooftop PV and Small Scale Generation Programme). The selected developers will be paid a levelized tariff as determined by State Electricity Regulatory Commissions (SERCs) for 25 years. Phase I of JNNSM targeted 100 MW capacity development of which 90MW are HT level (capacity of 0.1-2 MW) and 10 MW are LT level (