Aug 28, 2013 - the lowest solar tariff quoted was Rs.5.51/unit (without any escalation). Further ... the Floor Price of
REChronicles - From the Editor’s desk Hello Readers. Hope you enjoyed reading our previous issue of REChronicles. This month has seen a number of happenings in the RE Industry. The demand for Non-Solar RECs saw a decrease this month. On the Solar REC front, there was an increase in demand. Similar to last month, the supply was higher than demand. This month again, owing to the massive influx of RECs issued, the supply was about around 13 times that of the demand with the solar inventory closing at an all-time high. On the national policy front, a bit of good news for the Wind Industry as Generation Based Incentive (GBI) has been reinstated for Wind Power. Also, after a long wait, SECI finally announced the results of the Phase-II of Solar Rooftop bidding. At the state level, quite a few updates this time. The much talked about GUVNL plea for Solar Tariff reduction has been rejected by GERC giving respite to developers. Bihar, which had already once extended the last date of bidding for it Solar bidding process has once again extended it to 14th September. In what may be considered fairly optimistic for REC market, Maharashtra and Punjab SERCs have issued orders asking their respective DISCOMs to meet their cumulative RPO (for the current and last 2 years) by year-end. However, it is to be seen whether the DISCOMs are going to take this seriously and act on it. Very recently, Uttarakhand has announced a scheme for Grid-Interactive rooftop and Small Scale SPV plants. Down South, APTRANSCO has formally announced closure of its Solar bidding process which started way back in January. However, sources indicate that PPAs haven’t been signed yet and it might take a few more weeks for things to draw to a close. TNERC released a Consultative Paper proposing a tariff of Rs.5.78/unit for Solar PV which caused the TN Solar bidders to worry as they were already offered a tariff of Rs.6.48/unit (+5% escalation per year upto year 10) by TANGEDCO. However, it’s unlikely that the TNERC tariff will be applicable to the TN Solar bidders. Tamil Nadu, which announced its Net Metering Policy a few weeks back has announced guidelines for the same. Andhra Pradesh followed suit by announcing its own guidelines for the Net Metering Policy. Financial bids of the Karnataka 130 MW Solar bidding process were finally opened giving a shocker to everyone as the lowest solar tariff quoted was Rs.5.51/unit (without any escalation). 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 – August 2013 REC Inventory: Opening at close to 2.72 Million, August trading session closed with the inventory balance of 3.18 Million RECs. The following sections give an update on the Non-Solar and Solar front.
Non-Solar The month of August started with an Opening Balance of 2709391 Non-Solar RECs. Over the course of the month, 488333 Non-Solar RECs were issued thus putting the available number at 3197724. Of these, only 2974694 were put up for trading. Buy bids of 40889, all of which were cleared, led to a closing balance of 3156835. Following table gives the Non-Solar REC Inventory statistics for the last 3 months. Non-Solar REC Inventory for Jun-2013 to Aug-2013 (as on 28-Aug-2013) Month, Year
Opening Balance
REC Issued
REC Redeemed
Closing Balance
June, 2013
2187389
292928
72486
2407831
July, 2013
2407831
462962
161402
2709391
August, 2013
2709391
488333
40889
3156835
Solar Opening at 19651 Solar RECs, 12890 were issued over the course of the month which is the highest so far thus putting the total available Solar RECs at 32541 all of which were put up for trading. The trading session closed with a Closing Balance of 30182 after the redemption of only 2359 Solar RECs. Following table throws more light on the Solar REC Inventory statistics for the last 3 months. Solar REC Inventory for Jun-2013 to Aug-2013 (as on 28-Aug-2013) Month, Year
Opening Balance
REC Issued
REC Redeemed
Closing Balance
June, 2013
3130
2802
1479
4453
July, 2013
4453
17227
2029
19651
August, 2013
19651
12890
2359
30182
REC trading: The number of Non-Solar Buy-bids decreased drastically as compared to that of July. Solar REC buybids however increased as compared to last month with the clearing price still 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 fell this month by 75% as compared to the previous month. As is the trend, all the Buy Bids (40889) were cleared. This resulted in a Trading Value of Rs.6.13 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 June’13 – Aug‘13 3000000
2974694 2772198
2700000 V o l u m e
2400000
2000 1900 1800
2388934
2100000
1700
1800000
1600
1500000
1500
1500
1500
1500
1200000
1400
900000
1300
600000 300000
1200 72486
161402
June'13
July'13
40889
0
1100 1000
Buy Bid (No. of certificates)
Sell Bid (No. of certificates)
August'13 Traded Volume
Clearing Price
Forecast for August trading session: The Non-Solar inventory closed at a balance of 3.15 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. The SERCs of Maharashtra, Punjab and Delhi recently issued notifications asking their respective DISCOMs to meet their RPOs till 2013-14 by year end. If the DISCOMs indeed take the order seriously, considerable trading can be expected to happen in the next few months.
P r i c e
Solar RECs Trading: This month, supply of solar RECs was 13 times that of demand. The clearing price for both the exchanges remained at the floor price – Rs.9300/REC. The total number of Sell Bids was 39% more than that of July and the total number of Buy Bids was about 16% more. Also similar to last month, all the Buy Bids (2359) got cleared resulting in a Trading Value of Rs.2.19 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 June’13 – Aug‘13
45000 13000
40000 V o l u m e
35000 30099
30000 25000
12000 11000
21680
20000 10000
15000 10000 5000 0
9300
9300
9300 9000
5932 1479 1479
June'13 Buy Bid (No. of certificates)
2029 2029
2359 2359
July'13
August'13
Sell Bid (No. of certificates)
Traded Volume
8000 Clearing Price
Forecast for August trading session: 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 closing at a 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 the orders of Maharashtra, Punjab and Delhi SERCs asking the DISCOMs to meet their RPOs are seriously considered.
P r i c e
REC Capacity Addition – August’13 A total of 52.6 MW was Accredited and 28.5 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 28th August, 2013. Capacity Addition (MW) in August (As on 28th August 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 47.6 0 0 5 0 0 0 0 0 52.6
Registration 8.5 0 0 5 10 0 0 0 5 28.5
Capacity in MW based on Type of RE Source (As on 28th August 2013) 2500.00
2253.18 2043.54
Capacity Accredited (in MW)
2000.00
Capacity Registered (in MW) 1500.00 1000.00 639.90
777.87 582.9
672.3
500.00 171.68 162.68 218.0 197.5 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 Generation Based Incentive for Wind Power being reinstated by Government of India: In the budget of 2013-14, Finance Minister P. Chidambaram had promised reinstating Generation Based Incentive program for Wind Energy in India. The resolution has been passed by the cabinet which met on August 1st. Here is the link to our blogpost for more information on this resolution. List of successful bidders – SECI – Grid connected Rooftop Solar PV Phase II: The list of successful bidders for Solar Energy Corporation of India’s (SECI) second RFS for allocation of Rooftop Solar PV projects in selected cities has been released. Azure Power quoted the lowest price – Rs.58/Wp. Check out our blogpost for further details regarding this list of successful bidders.
State Bihar – Further extension of last date for its 150 MW Solar PV bid: Further to extending the last date for online sale of tender document to 14th August, Bihar State Power (Holding) Company Limited once again extended the last date for online sale of the tender to 14th September. The date and time of opening of technical bid has been extended to 16th September at 15:00 hrs. More information regarding this extension is available on our blogpost here. GERC rejects GUVNL’s plea to lower Solar Tariff: Subsequent to the petition filed in July by Gujarat Urja Vikas Nigam Limited (GUVNL) with Gujarat Electricity Regulatory Commission (GERC) to reduce the tariff paid to solar power, GUVNL has passed an order rejecting this plea. Even though GUVNL now has the option of approaching the Appellate Tribunal, this order brings a sigh of relief to the project developers. Here is a link to our blogpost for more details regarding this order.
APTRANSCO notification regarding closure of Solar bidding process: APTRANSCO published a notification intimating the closure of Solar bidding process. According to this notification, all the bidders who have decided not to go ahead with the tariff of Rs.6.49/unit are required to collect their BGs from APTRANSCO before 19-08-2013. More information regarding this notification can be accessed on our blogpost here. Tamil Nadu Net Metering for Rooftop Solar PV – Draft procedure: Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) submitted a document with detailed procedure (draft) for net metering. The last date for submission of comments/suggestions to TANGEDCO related to this document was closed on 15 th August and the final procedure is awaited. Details about this procedure are available on our blogpost here. TNERC consultative paper on Solar Tariff: Close to a month ago, TNERC released a consultative paper on Solar tariff for Solar PV, Solar Thermal and kW Scale systems. Working on assumptions such as 12% interest rate and Nil auxiliary consumption, the paper proposes a tariff of Rs.5.78/unit (with no escalation) for Solar PV. Here is a link to our blogpost for more details regarding this tariff. Maharashtra and Punjab – Strict enforcement of RPO compliance: Maharashtra Electricity Regulatory Commission (MERC) and Punjab State Electricity Regulatory Commission (PSERC) have taken a decision to strictly enforce RPO compliance. Maharashtra has directed all the obligated entities to fulfil their RPO targets cumulatively before 31st March, 2014. Punjab has allowed Punjab State Power Corporation Limited (PSPCL) to carry forward it’s shortfall in RPO compliance for FY 2012-13 along with the remaining shortfall from FY 2011-12 to be compiled by 31st December, 2013. Our blogpost for more details regarding these orders can be accessed here. AP Net Metering Policy – Guidelines for implementation: Subsequent to the order released by Government of Andhra Pradesh for making payments for surplus energy injected into the grid as a part of its rooftop net metering policy, it has released guidelines for implementation of this policy. More information about these guidelines can be accessed on our blogpost here.
Karnataka 130 MW Solar bidding – Financial bids opened: The financial bids for Karnataka’s 130 MW capacity solar bidding were opened on 19th August. As per the results, Sun Pharma Medication Private Limited quoted the lowest effective tariff – Rs.5.51/unit while both Welspun Solar Kannada Private Ltd and Heidelberg Solar Pvt Ltd quoted the highest – Rs.8.05/unit. Our blogpost on these results can be accessed here. Uttarakhand – Scheme for setting up grid interactive rooftop and small SPV power plants: Uttarakhand Renewable Energy Development Agency (UREDA) has released a document with three options as a part of their scheme for setting up of grid interactive rooftop and small solar PV power plants. This policy aims at utilising the existing rooftop space thereby, reducing the dependency on conventional source of energy. Our blogpost for more information regarding this scheme 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. Following is a correction in our July issue: Solar RECs Trading – Page 4: Line 4 should read ‘June’ instead of ‘May’ Please make not of the above correction. We have ensured that there are no mistakes in the current issue. 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 September REC projects capacity addition in September 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
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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
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Accreditation, Registration, Issuance and Trading
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