RE Chronicles - From the Editor's desk - EfficientCarbon

lower than this figure owing to lower clearing prices which will stay at ... Against Sell Bids of 3363, 1876 RECs were put up for sale and 1791 got cleared at an .... Tamil Nadu can have remarkable opportunities in the solar energy domain.
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RE Chronicles - From the Editor’s desk Hello Readers. Hope you enjoyed the third issue of RE Chronicles. We would love to have your feedback on which articles you liked and which ones you didn’t. The Tamil Nadu Solar Policy released on 20th October, 2012 has received attention from entire nation for its progressive nature and imposition of high Solar Power Obligation (SPO) on industries. While the Solar industry welcomed the policy, concerns are being raised on the applicability and ability to meet such stringent requirements under such short notice. Not to mention the power crisis that has already emaciated the industry sector. Turn to page 6 for a separate article covering the various features of this Solar Policy. 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 October. Though the Solar REC trading grew by 54% both in terms of number of RECs traded and Traded Value, the Non-Solar REC trading continued to be gloomy with Supply standing at 5 times that of demand. This resulted in a very high closing balance and hence a very high opening balance for next month. We, at EfficientCarbon, are committed to providing the most accurate information to all our readers. However, we also realize that getting the information to our readers in the shortest time is also important so as to keep them informed. Hence, starting next month, we shall be sending RE Chronicles on the immediate next day of REC Trading. We have, as always put in our best efforts in order to come up with the articles in this fourth issue. We hope you would enjoy it as much as we did. Kindly give your valuable feedback on how we can improve RE Chronicles and make it even more delightful and interesting for you. Happy reading!!

REC Trading Update – October 2012 REC Inventory: Opening at a little over 0.9 Million, October trading session closed with an inventory balance of close to 1.3 Million RECs. The following sections give an update on the Non-Solar and Solar front.

Non-Solar The month of October started with an Opening Balance of 902320 Non-Solar RECs. Over the course of the month, 619946 Non-Solar RECs were issued thus putting the available number at a little over 1.52 Million. Of these, only 1012660 were put up for trading. Buy bids of 222700, all of which were cleared, led to a closing balance of 1299566. Following table gives the Non-Solar Inventory statistics for the last 3 months. Non-Solar REC Inventory for Aug-2012 to Oct-2012 (as on 31-Oct-2012) Month, Year

Opening Balance

REC Issued

REC Redeemed

Closing Balance

August, 2012

397941

474594

273893

598642

September, 2012

598642

568124

264446

902320

October, 2012

902320

619946

222700

1299566

Solar Due to an increase in issuance in September, the opening balance for October was 464 compared to 181 in September. During the month, 1412 Solar RECs were issued. However, a clearing volume of 1791 led to a sharp decline in closing balance with the final count at a mere 85. Following table throws more light on the Solar Inventory statistics for the last 3 months. Solar REC Inventory for Aug-2012 to Oct-2012 (as on 31-Oct-2012) Month, Year

Opening Balance

REC Issued

REC Redeemed

Closing Balance

August, 2012

370

190

379

181

September, 2012

181

1443

1160

464

October, 2012

464

1412

1791

85

REC trading: The best way to put it would be – “The trend continues”. REC trading activity in October was more or less the same as in September i.e. oversupply of Non-Solar RECs which led to Clearing Price sticking to Floor Price; higher trading volume of Solar RECs resulting in higher trading value as the Clearing Price stayed above Rs.12500. Here are a few numbers and forecast for next month’s trading.

Non-Solar RECs Trading: As expected, the number of Sell Bids touched 1 Million in October. This figure is 66% of the number of Non-RECs available. The reason for putting up lesser number of RECs for sale is the continuing trend of low clearing price. The Clearing Price for Non-Solar RECs has stayed at the Floor Price of Rs.1500 for the last 3 months. Despite this, the number of Buy Bids still hovered in the 2-3 Lankh range. The number of Buy-Bids was 222700 which is a mere 20% of the Sell bids. As usual, all of these were cleared resulting in trading value of Rs.33.4crores. The graph below shows how Buy-Bids and Traded Volume are travelling hand-in-hand over the last few months. The session closed with a balance of 1299566 Non-Solar RECs. Non-Solar REC trading from August – October 2012 1200000 1000000 800000 600000 400000 200000 0 August'12 Buy Bid (No. of certificates)

September'12 Sell Bid (No. of certificates)

October'12 Traded Volume

Forecast for November trading session: A closing balance of 1.3 Million is certainly going to worry the project developers and investors. Looking at the increasing trend in number of Non-Solar RECs issued, the number of Non-Solar RECs available for the November trading session could touch 2 Million. Sell Bids are expected to be far lower than this figure owing to lower clearing prices which will stay at Rs.1500 in the short-term.

Solar RECs Trading: The October trading session for Solar RECs once again proved to be encouraging to the investors. Higher demand (3363) and still insufficient supply made sure that the clearing price stayed above Rs.12500. Against Sell Bids of 3363, 1876 RECs were put up for sale and 1791 got cleared at an average Clearing Price (IEX and PXIL) of Rs.12647 resulting in a Trading Value of Rs.2.25 Crore. Solar REC trading from August – October 2012 4000

3000

2000

1000

0 August'12 Buy Bid (No. of certificates)

September'12 Sell Bid (No. of certificates)

October'12 Traded Volume

Forecast for November trading session: A closing balance of just 85 will make sure that the number of Solar RECs available for trading in the next trading session stays low thus ensuring a Clearing Price in the Rs.12500-13000 band unless demand falls abruptly for unexpected reasons. Investing in REC based Solar projects definitely seems to be a good option at the moment as the prices are good and the total Accredited and Registered Capacity are a mere 19.41 MW and 18.16 MW respectively which are hardly sufficient to meet the demand.

REC Capacity Addition - October Wind, as asual, encountered the highest capacity addition under REC scheme in September. Small Hydro, Biomass and Bio-Fuel Cogeneration also witnessed capacity additions while the remaining RE sources where fairly stagnant. The tables below indicate the Resource-wise capacity addition in October and the total capacity as on 31st October, 2012. Capacity Addition (MW) in October 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 41.9 0 0 0 0 23.33 11.77 77

Registration 79.4 0 0 0 0 30.28 57.17 166.85

Capacity in MW based on Type of RE Source (As on 31st October 2012)

2500 2019 2000

1874

Capacity Accredited (in MW)

Capacity Registered (in MW)

1500 1000

771 582

500 0 0 0

19

18

173 154

0 0

555

717

16 0

2

2

Policy Update: Tamil Nadu Solar Energy Policy Tamil Nadu is the pioneer state in Renewable Energy. With an installed capacity of 6970 MW representing 40% of the national total Wind Power and the second largest in Biomass with 488 MW installed capacity. It also has the largest number of accredited and registered RE projects. But in terms of Solar Power, TN has an installed grid-interactive capacity of 15 MW, a mere 1.5% of the nation’s 1044 MW. In this article, we try to present you a concise summary of the Tamil Nadu Solar Energy Policy – 2012 released on 20th October. The policy set the goals to generate 3000 MW of Solar Energy while achieving grid parity by 2015, which if realized will project Tamil Nadu as the Solar Hub of India. This state is one of the most highly suited places in the country for solar projects with a reasonably high insolation of 5.6-6 kW-h/sq. m and 300 clear sunny days in a year. Although still more expensive than other REs, Solar Energy is quoted as the best viable solution to ensure long term energy sustainability due to its natural advantages of abundance, permanence, clean power, generation at point of consumption, reduced T&D losses, and zero fuel cost. In TN’s context, Solar has advantages over Wind Power as a more evenly distributed resource with easy scalability (in the case of Solar PV) and availability during day time at peak demand. There are certain other benefits such as storage of heat energy in Solar Thermal Power Generation, which is not only the cheapest form of energy storage but also enables power generation even when the sun is not shining. So for TN, Solar Power will make a much firmer complement to Wind Energy. The policy discusses at length the two types of Solar Technologies: 1. Solar Photovoltaic 2. Concentrated Solar Power based Solar Thermal Power Plant a. Parabolic Trough Systems b. Power Tower Systems c. Parabolic Dish Systems But there are no further details as to the relative potential of these systems in the 3000 MW target capacity.

Mission 2015: TN plans to achieve generation of 3000 MW Solar Power by 2015 through Utility Scale projects, Rooftops, and under REC Mechanism, as summarized in the table below. Together, the three areas total to an addition of 1000 MW each year starting 2013. Utility Scale (MW)

Solar Roof Tops (MW)

REC (MW)

Total (MW)

(a)

(b)

(c)

(a)+(b)+(c)

2013

750

100

150

1000

2014

550

125

325

1000

Year

2015

200

125

675

1000

Total

1500

350

1150

3000

The government proposes various methods for funding and promoting this development. Utility scale with 1500 MW capacity is 50% of the total 2012-2015 phase target, of which 1000 MW is to be funded by SPO and the remaining 500 MW through Generation Based Incentive (GBI). Solar Rooftops, 350 MW or 11.7%, are promoted through GBI for all domestic consumers (Rs.2 per unit for first 2 years, Rs.1 per unit the next 2 years, and Rs.0.5 per unit for subsequent 2 years) with solar or solar-wind hybrid rooftops installed before 31 March 2014. However, it will be only rooftops with grid connection that can be metered for power credits. A capacity addition of 50 MW is estimated from this scheme. Rooftops are promoted in the government too: installing Solar Home Lighting in 300,000 houses under CMSPGHS, energizing 100,000 street lights, mandating new government/local body buildings with solar rooftops and retrofitting existing buildings and street lights in a phased manner. Solar Water Heating Systems are also mandated for designated residences and buildings as well as industries using water boilers/steam boilers operating with fossil fuels.

REC Capacity and Solar Purchase Obligation (SPO): Unlike its neighbor Andhra Pradesh, which released its Solar Policy last month with incentives extending to REC based projects, Tamil Nadu seems to have chosen to go along with CERC rules. REC based projects, contributing to 38.3% of total target, have not been given any promotions/incentives. TN will mandate a 6% SPO (starting with 3% till Dec 2013 & 6% from Jan 2014) for HT consumers including SEZs, Industries with guaranteed 24/7 power supply, IT parks, Telecom Towers, Colleges, Residential Schools and buildings with built up area > 20,000 sq.m. The SPO excludes LT commercial sections like domestic consumers, cottage and tiny industries, power looms, huts, agriculture and LT industrial consumers. The obligated consumers have to fulfill their SPO by either generation of equivalent or more than SPO captive solar power or buying from other third party developers or buying RECs or purchasing power from TANGEDCO at Solar Tariff. This mechanism is expected to generate 1000 MW by 2015.

Support for manufacturing facilities: The policy also makes place for promotion of integrated solar generation and manufacturing parks for the entire ecosystem of solar manufacturing – including wafer, cell and module making. Such an indigenous manufacturing (around 1000 MW/annum) will result in a substantial direct and indirect job creation in the supporting sectors. Plans to invite global leaders to invest in manufacturing facilities, if successful, will help bring in the R&D and technical knowledge necessary to make products of international standard, with longer life and better performance. With a strong commitment of the state government and rapidly declining Solar Power costs added to its geographical advantage, Tamil Nadu can have remarkable opportunities in the solar energy domain. A combination of high wind potential of the geography and conducive state policies put TN

at top in India’s Wind Energy and we can hope to anticipate similar success on the solar energy front. The target of 3000 MW is nearly three times the current grid-interactive solar PV capacity in the nation (~ 1040 MW). It is highly laudable that the state shows its commitment to the solar mission by setting itself a target far beyond the JNNSM targets (~ 10,000 MW addition for the entire country during 2013-2017). If TN successfully implements this policy, the Solar REC trading will also receive a huge boost with substantial increase in credit supply, which has been outstripped by demand so far.

Impact on Solar REC Trading: From the perspective of Solar RECs trading, even a partial fulfilment of the 3000 MW target will mark major changes. The past five months of solar REC trading has seen the demand outstrip the supply. The largest volume traded was 1791 credits in October 2012. If TN implements its policy successfully, Solar REC trading will get a huge boost from fresh crop of generated credits inundating the market.

The complete Tamil Nadu Solar Power Policy document http://www.teda.in/pdf/tamilnadu_solar_energy_policy_2012.pdf

is

available

at:

Renewable Energy News National Andhra Pradesh gearing up for inviting bids for 1000 MW of Solar Power: After releasing its Solar Power Policy on 26th September, 2012, Andhra Pradesh is now getting ready to issue a bidding process for 1000 MW of Solar Power. This comes as a welcome note as the Solar Power Policy that was released a month back did not have any mention of Preferential Tariff. Through this reverse bidding process, investors can bid for Solar Power plants based on a ceiling price that is yet to be announced. While news from several sources state that this ceiling price could be Rs.8.2 per unit, APERC is yet to approve the same. More details on the plant sizes and the schemes available under this process are awaited. Here’s the link to an article on Business Line on this matter http://bit.ly/WOiJjb

Technology Amonix Solar crosses ‘Third of the Sun’ record for commercial outdoor solar panels: It is a well known fact that CPV technology has the highest efficiency among all the 3 types of Solar PV technology. This is mainly due to the high concentration of Solar Energy on to small areas of PV material. California (U.S.) based company Amonix recently announced that it broke all records for commercial solar panels establishing a peak solar efficiency of 34.3% and a stabilized efficiency of 33.5%. CPV is perceived as an expensive technology and hence does not find large scale adoption across the world. Breakthroughs like this can certainly improve the prospects for CPV technology. More on Amonix News website - http://bit.ly/TaC2gu

(Image Source: Amonix.com)

VESTAS wind turbine size upgraded: The prestigious project that VESTAS announced a few months back to develop a 7 MW wind turbine that has a rotor diameter of 164m is on track to completion. But here's the real update - the capacity of the turbine has been upgraded from 7 MW --> 8 MW owing to technological improvements. If released on time, this could be the world’s largest wind turbine ready for commercial setup.

(Image Source: VESTAS)

More info at http://bit.ly/PQUpWs

To Err is Human As true as that quote may be, we try to avoid any mistakes in the information we give our readers. We are glad to inform that there are no corrections in the previous issue. Please bring to our notice any mistakes in the current or previous releases of RE Chronicles that might have missed our notice. Thank you!!

What next? We hope we have met your expectations thus far. If we haven’t, do write to us or call us on the contact details provided below. Our next issue will contain:  RE Trading Update for November  REC projects capacity addition in November  Policy Update (If any)  More interesting and exciting articles on Renewable Energy developments from across the world and India.

Editorial Team -------------------------------------------------------------------------------------------------------------------------------------Pradeep Palelli Sindhura Gangireddy Managing Partner, Freelance Writer (Renewable Energy) EfficientCarbon -------------------------------------------------------------------------------------------------------------------------------------We would love to hear from you. Drop us an email to [email protected] or give a call on +91-9052224701. Thank you!

About EfficientCarbon EfficientCarbon (http://efficientcarbon.com/) is a Hyderabad based company working in the Energy, Environment and Sustainability domain. We provide focussed services in the following areas:

Renewable Energy Technical Consulting

REC Advisory

Carbon Management

Sustainability Strategy

Our team consists of graduates from respected institutions such as BITS-Pilani and IFMR-Chennai with several years of experience in companies like Infosys, Godrej and Titan. We are also supported by a team of advisors who, on average, have more than 25 years of experience in the above mentioned areas. We have successfully executed several projects for our esteemed clients such as Maha Cements, Andhra Pradesh State Co-operative Bank (APCOB), Ramco Systems, Capital IQ, GTP Granites and Andhra Pradesh Pollution Control Board (APPCB). Renewable Energy and REC Advisory: We have a highly qualified team with expert knowledge on the commercial and technical aspects of various Solar Energy technologies. Also, we pride ourselves in being capable of delivering the best services on the REC front as we are backed-up by a powerful back-end which constantly monitors the REC Market.

Renewable Energy Certificates

Solar Power Plants

Accreditation, Registration, Issuance and Trading

Financial Analysis for Industrial and Gridscale Evaluating technology options

Financial Analysis for projects Market Assessment and Pre-Feasibility Reports Market Intelligence

Preparing Bid documents for tenders