REChronicles - From the Editor's desk - EfficientCarbon

Jul 31, 2013 - domain. This month has seen a few interesting happenings in the RE Industry. The demand for ... Buy bids of 161402, all of which were cleared, led to a ..... Drop us an email at [email protected] or give a call on.
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REChronicles - From the Editor’s desk Hello Readers. Hope you enjoyed reading our previous issue of REChronicles. It’s been exactly a year since we started REChronicles and here we are, at your service with the promise of bringing you the most comprehensive analysis of REC trading in India and the latest happenings in the Renewable Energy domain. This month has seen a few interesting happenings in the RE Industry. The demand for Non-Solar RECs saw an increase this month as well. On the Solar REC front, there was an increase in its demand. Similar to last month, the supply was higher than demand. However, this month owing to the massive influx of RECs issued, the supply was about ten times that of the demand with the solar inventory closing at an all-time high. On the national policy front, CERC issued the final version of the Second Amendment to REC regulations. According to this amendment, the validity of RECs has been extended to 730 days from their date of issue. Under the directions of MNRE, SECI issued a RFE of companies for installation of Mini and Micro grid Solar PV power plants for rural electrification in India. The last date for this RFE was recently extended to 12th August. MNRE released a format to assist solar power developers to feed solar capacity addition data. This format is for projects set up all over the country. At the state level, the AP Government subsequent to its order on net metering, released another order to make provisions for payment for surplus/excess energy injected into the grid. Regarding the AP solar bidding, APTRANSCO received responses from 35 bidders for setting up 418 MW capacity solar PV plants under the state solar bidding. Following this, the AP Government decided to allow any company to set up a Solar PV plant while assuring them Rs. 6.49 per unit price. Bihar extended the last date for online submission of its tender for its 150 MW Solar PV bidding. Punjab handed over LoAs to 26 developers for setting up 250 MW solar PV projects under its state solar bidding. Odisha finally released a draft Solar Policy – 2013 in line with the National Solar Mission with an objective to promote solar energy in the state. Further information on these updates is in the Renewable Energy News section on pg.6 of this issue. We have, as always put in our best efforts in order to come up with the articles in this issue. We hope you enjoy reading them as much as we did while preparing this issue. Kindly give us your valuable feedback on how we can improve REChronicles and make it even more interesting for you to read. Happy reading!!

REC Trading Update – July 2013 REC Inventory: Opening at close to 2.41 Million, July trading session closed with the inventory balance of 2.72 Million RECs. The following sections give an update on the Non-Solar and Solar front.

Non-Solar The month of July started with an Opening Balance of 2407831 Non-Solar RECs. Over the course of the month, 460471 Non-Solar RECs were issued thus putting the available number at 2868302. Of these, only 2772198 were put up for trading. Buy bids of 161402, all of which were cleared, led to a closing balance of 2706900. Following table gives the Non-Solar REC Inventory statistics for the last 3 months. Non-Solar REC Inventory for May-2013 to Jul-2013 (as on 31-Jul-2013) Month, Year

Opening Balance

REC Issued

REC Redeemed

Closing Balance

May, 2013

1991136

249221

52968

2187389

June, 2013

2187389

292928

72486

2407831

July, 2013

2407831

460471

161402

2706900

Solar Opening at 4453 Solar RECs, 17227 were issued over the course of the month which is the highest so far. Thus putting the total available Solar RECs at 21680 all of which were put up for trading. The trading session closed with a Closing Balance of 19651 after the redemption of only 2029 Solar RECs. Following table throws more light on the Solar REC Inventory statistics for the last 3 months. Solar REC Inventory for May-2013 to Jul-2013 (as on 31-Jul-2013) Month, Year

Opening Balance

REC Issued

REC Redeemed

Closing Balance

May, 2013

860

3973

1703

3130

June, 2013

3130

2802

1479

4453

July, 2013

4453

17227

2029

19651

REC trading: The number of Non-Solar Buy-bids increased as compared to that of June. Solar REC buy-bids also increased as compared to last month with the clearing price remaining at floor price – Rs.9300. This section has more information on Non-Solar and Solar REC trading along with the forecast for next month.

Non-Solar RECs Trading: The demand for non-solar RECs picked up this month, as compared to the previous month the number of Buy Bids this month increased by 122%. As is the trend, all the Buy Bids (161402) were cleared. This resulted in a Trading Value of Rs.24.21 Crores. Clearing Price stood at the usual Rs.1500 owing to oversupply. 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 May’13 – July‘13 3000000

2000 2772198

2700000 V o l u m e

2400000

1800

2388934

2100000

1700

2093090

1800000 1500000

1900

1600 1500

1500

1500

1500

1200000

1400

900000

1300

600000 300000

52968

72486

161402

0

1200 1100 1000

May'13 Buy Bid (No. of certificates)

June'13 Sell Bid (No. of certificates)

July'13 Traded Volume

Clearing Price

Forecast for August trading session: The Non-Solar inventory closed at a balance of 2.72 Million RECs. Clearing Price is bound to stick to the Floor Price of Rs.1500/REC as the inventory continues to pile up and the demand continues to stay low.

P r i c e

Solar RECs Trading: This month, supply of solar RECs was 10.6 times higher than the demand with the number of sell bids this month being the highest since the Solar REC trading started. The clearing price for both the exchanges remained at the floor price – Rs.9300/REC. The total number of Sell Bids was 265% more than that of May and the total number of Buy Bids was about 37.18% more. Also similar to last month, all the Buy Bids (2029) got cleared resulting in a Trading Value of Rs.1.88 Crore. 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 May’13 – July‘13

45000 13000

40000 V o l u m e

35000

12000

30000 25000

11186

21680

11000

20000 10000

15000

9300

9300

10000 5000 0

1999 1703

May'13 Buy Bid (No. of certificates)

9000

5932

4833 1479 1479

June'13 Sell Bid (No. of certificates)

2029

2029

8000

July'13 Traded Volume

Clearing Price

Forecast for August trading session: As anticipated last month, the month of July has witnessed a massive increase in the number of solar RECs issued. This trend could continue in August or the coming months as well. Similar to last month, all the solar REC buy bids got cleared this month and there is a possibility of this trend continuing in the coming months as well. Also, with the solar inventory closed at a closing balance of 19651, it is quite possible for the supply of Solar RECs to continue to overshoot the demand and the clearing price to remain at the bottom, unless there is a significant increase in the demand.

P r i c e

REC Capacity Addition – July’13 A total of 16.85 MW was Accredited and 24.25 MW Registered during the course of the month. The tables below indicate the Resource-wise capacity addition in June and the total capacity as on 31st July, 2013. Capacity Addition (MW) in July (As on 31st July 2013) S.No. 1. 2. 3. 4. 5. 6. 7. 8. 9.

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

Accreditation 0.85 0 0 6 0 0 0 10 0 16.85

Registration 0 0 0 4.25 0 0 0 16 4 24.25

Capacity in MW based on Type of RE Source (As on 31st July 2013) 2500.00 2205.58 2035.04

Capacity Accredited (in MW)

2000.00

Capacity Registered (in MW) 1500.00 1000.00 639.90

777.87 582.9

667.3

500.00 166.68 157.68 218.0 187.5 3

0

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

Renewable Energy News National REC regulations – Second amendment – resolving important issues: The Central Electricity Regulatory Commission (CERC) on 10th July issued a final version of the Second Amendment to REC Regulations. As per this document, Electricity Duty waiver benefit has been removed as one of the disqualification criteria for eligibility for issuance of certificate on selfconsumption of a Captive plant. Also, the validity of RECs has been extended to 730 days from their date of issue. Here is the link to our blogpost for more information regarding this amendment. SECI – RFE of companies – mini and micro grid solar PV implementation for rural electrification: Under the directions of Ministry of New and Renewable Energy (MNRE), Solar Energy Corporation of India (SECI) has issued a document inviting Request for Empanelment (RFE) of companies for implementation of mini and micro grid SPV power plants for rural electrification in India. Through this RFE, SECI is inviting applications from eligible and competent entities for participation in the empanelment process to execute projects across India. Check out our blogpost for further information regarding this empanelment process. SECI – Extension of last date – RFE of companies – mini and micro grid solar PV: On 24th July, one day before the last date for submission of application for RFE, SECI extended this last date. This extension is because of an amendment/clarification which is under issue. More information about this extension can be accessed on our blogpost here. SECI – Amendments and Clarifications – RFE of companies – mini and micro grid solar PV: SECI published a document on 31st July, 2013 with amendments and clarifications to the RFE document. As per this document, the last date for submission of the RFE document at the SECI office is 12th August, 2013 at 2.30 pm. Our blogpost on these amendments/clarifications can be accessed here. MNRE – Guidelines for feeding Solar Power Project capacity addition data: The Ministry of New and Renewable Energy (MNRE) has released a format for feeding solar capacity addition data. This guideline is provided to assist solar power developers to feed solar capacity addition so that MNRE complies the solar power generation capacity throughout the country. Our blogpost for more information regarding this format and guidelines can be accessed here.

State AP Government order – Net metering – Payment for surplus energy injected into grid: Subsequent to Andhra Pradesh’s Government Order announcing the state’s solar policy on net metering the Government on 19th June released another order after receiving representations for changes to be made. As per this G.O provision will be made for payment for surplus/excess energy injected into the grid. More information regarding this order is available on our blogpost here. AP Solar bidding – Responses received for 418 MW: As per the article published in The Hindu Business Line on 2nd July, 2013 APTRANSCO received responses for setting up 418 MW capacity solar PV plants in response to the state’s solar bidding. These offers were received from 35 bidders who accepted the solar purchase price at Rs. 6.49/unit and Letter of Intent (LOI) have been issued to 21 bidders (contributing to 144 MW). Here is a link to our blogpost for more details regarding this. AP Solar bidding – More companies allowed to set up solar PV plants: Having received offers from 35 bidders for setting up solar PV plants in AP, the state Government has decided to allow any company to set up a solar PV plant assuring them Rs. 6.49 per unit. This information was published in The Hindu Business Line on July 10th, 2013. Our blogpost on this update can be accessed here. Bihar 150 MW Solar PV bidding – extension of last date: Following the pre-bid meeting conducted on 1st June, 2013, Bihar State Power (Holding) Company Limited (BSPHCL) issued a Corrigendum No. II with responses to the clarifications/queries raised at the meeting. The last date for online sale of Tender document has been extended to 14th August up to 17.00 hrs and the last date for online submission of Tender to 16th August up to 13.00 hrs. More details about this extension and clarifications/queries are available on our blogpost here. Punjab 300 MW Solar PV Bidding – Letter of Awards issued to 26 developers: According to an article published in Business Standard on 25th July, 2013, Punjab Deputy Chief Minister Sukhbir Singh Badal has handed over Letter of Awards (LoA) to 26 developers for setting up 250 MW solar PV projects having joint investment of Rs. 2500-3000 crore. Here is a link to our blogpost for more details regarding this update.

Odisha Solar Policy (Draft) – 2013: The Government of Odisha released a draft Solar Policy – 2013 in line with the National Solar Mission with an objective to promote solar energy in the state. Odisha Renewable Energy Development Agency (OREDA) will invite ‘Request for Selection’ from time to time for setting up projects under – tariff based competitive bidding process, captive consumption, REC mechanism, third party sale of power within the state etc. Our blogpost for more details regarding this document can be accessed here.

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 happy to inform that there were no mistakes identified in the previous issue of REChronicles. We have ensured that there are no mistakes in the current issue too. Please bring to our notice any mistakes you identify so that we can publish the same in the next issue for the benefit of all the readers. Thank you!!

What next? We hope that we have met your expectations thus far. If you think 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 August  REC projects capacity addition in August  Policy Update (If any)  More interesting and exciting articles on Renewable Energy developments from across the world and India.

Editorial Team -------------------------------------------------------------------------------------------------------------------------------------Pradeep Palelli Harini Challapally Managing Partner, Consultant, EfficientCarbon EfficientCarbon -------------------------------------------------------------------------------------------------------------------------------------We would love to hear from you. Drop us an email at [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 reputed 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 an 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