REChronicles - From the Editor's desk - EfficientCarbon

Dec 26, 2012 - released the Draft RfS document for its 1000 MW Solar capacity addition .... More interesting and exciting articles on Renewable Energy ...
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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 things have happened in the month of December. Andhra Pradesh has released the Draft RfS document for its 1000 MW Solar capacity addition programme. A pre-bid meeting in this regard was also conducted on 14th December. Having started early, Tamil Nadu is ahead of Andhra Pradesh on its plans to add 1000 MW Solar capacity. The last date for submitting the bids for TN 1000 MW Solar PV bidding scheme is 4th January, 2013. A pre-bid meeting was recently conducted by TANGEDCO and clarifications regarding the queries raised have been put up on the website. In order to instil confidence among bankers/funding agencies to fund the projects, TANGEDCO has also released draft PPA document. Check out the Renewable Energy News section on Page 6 for more info on these. 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 December. Non-Solar trading witnessed a jump in trading volume due to a 107% increase in Buy-bids (all of which were cleared) as compared to November. 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 – December 2012 REC Inventory: Opening at close to 1.56 Million, December trading session closed with an inventory balance close to 1.634 Million RECs. The following sections give an update on the Non-Solar and Solar front.

Non-Solar The month of December started with an Opening Balance of 1559699 Non-Solar RECs. Over the course of the month, 348198 Non-Solar RECs were issued thus putting the available number at a little over 1.9 Million. Of these, only 1453626 were put up for trading. Buy bids of 273644, all of which were cleared, led to a closing balance of 1634253. Following table gives the Non-Solar REC Inventory statistics for the last 3 months. Non-Solar REC Inventory for Oct-2012 to Dec-2012 (as on 26-Dec-2012) Month, Year

Opening Balance

REC Issued

REC Redeemed

Closing Balance

October, 2012

902320

619946

222700

1299566

November, 2012

1299566

392485

132352

1559699

December, 2012

1559699

348198

273644

1634253

Solar Opening at 469 Solar RECs, 992 were issued over the course of the month thus putting the total available Solar RECs at 1461 - all of which were put up for trading. The trading session closed with a Closing Balance of 253. Following table throws more light on the Solar REC Inventory statistics for the last 3 months. Solar REC Inventory for Oct-2012 to Dec-2012 (as on 26-Dec-2012) Month, Year

Opening Balance

REC Issued

REC Redeemed

Closing Balance

October, 2012

464

1412

1791

85

November, 2012

85

1603

1219

469

December, 2012

469

992

1208

253

REC trading: Sudden jump in the number of Non-Solar RECs traded resulted in a higher Trading Value as compared to last month. Solar REC trading continued to do well though there was a dip in the buy bids. Here are a few numbers and forecast for next month.

Non-Solar RECs Trading: Supply continues to outstrip Demand (by a factor of 5). However, there was a steep jump in the number of Buy Bids as compared to last month (107% increase). As is the trend, all the Buy Bids were cleared resulting in a Trading Value of Rs.41 Crores. Clearing Price stood at 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 October – December 2012 1600000

1500

1500

400000

1600 1500

1400000 V 1200000 o 1000000 l u 800000 m 600000 e

1500 1453626

1400 1300

1230061

1200

1012660

1100 1000 273644

222700

132352

200000

900 800 700

0

600 October'12

Buy Bid (No. of certificates)

November'12 Sell Bid (No. of certificates)

December'12 Traded Volume

Clearing Price

Forecast for December trading session: High Closing Balance continues to worry project developers and investors. The upcoming hearing related to extension of validity of RECs (check Renewable Energy News on Page 6 section for more on this) is a welcome step from the CERC and we expect that the validity of RECs would be increased to 2 years. This should give a relief to project developers who consider the 365 day validity period of RECs as a discernible risk under the current trading situation.

P r i c e

Solar RECs Trading: Solar REC trading continues to fare well as compared to Non-Solar Trading. Higher demand (2191) and still insufficient supply (1461) made sure that the clearing price stayed high. Against Buy Bids of 2191, 1461 Solar RECs were put up for sale and 1208 got cleared at an average Clearing Price (IEX and PXIL) of Rs.12501 resulting in a Trading Value of Rs.1.51 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 October – December 2012 4000

12800 12582 12473

V 3000 o l u 2000 m e

12501

12600 12400

3363

12200 2578

12000

1876 1688 1791

2191 1461

11800 11600

1000

1219

1208

11400 11200

0

11000 October'12 Buy Bid (No. of certificates)

November'12 Sell Bid (No. of certificates)

December'12 Traded Volume

Clearing Price

Forecast for December trading session: Trading is expected to be smooth as it was in the last few months. As number of Buy-Bids kept decreasing during this quarter, further decrease can lead to Supply meeting Demand at which point the Clearing Price could start going down. Demand and Supply are still very low compared to the actual capacity required for Obligated Entities to meet their respective RPOs. Unless there is a major push from CERC and respective SERCs, it is difficult for the Solar REC market to grow at a good rate.

P r i c e

REC Capacity Addition - December A total of 44.12 MW was Accredited and 9.85 MW was Registered during the course of the month. The tables below indicate the Resource-wise capacity addition in December and the total capacity as on 26th December, 2012. Capacity Addition (MW) in December (As on 26th December 2012) 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 24.62 0 1.5 18 0 0 0 44.12

Registration 1.65 0 0 0 0 8.2 0 9.85

Capacity in MW based on Type of RE Source (As on 26th December 2012) 2500.00 2040.18

2000.00

Capacity Accredited (in MW)

1876.38

Capacity Registered (in MW) 1500.00 1000.00

777.27 583.95

718.7

562.9

500.00 179.2 158.7 0

0

20.91 18.16

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 CERC hearing on extension of validity of RECs: CERC released Petition No. 266/SM/2012 on 19th December, 2012 announcing that a hearing will be held on 15th January, 2013 related to the extension of validity of RECs from the current validity of 365 days as per Regulation 10 (1) of CERC (Terms & Conditions for issuance of Renewable Energy Certificate for Renewable Energy) Regulations, 2010. While extending validity of RECs may benefit the supplier, it is to be noted that focussing on RPO Enforcement is the single biggest driver of the market. Complete document can be found at http://bit.ly/RfO0rX

MNRE releases JNNSM Phase-2 draft document: MNRE has released the draft document of Phase 2 of JNNSM. The draft talks about 3 different routes of supporting grid-connected projects – Bundling Scheme, Viability Gap Funding and Generation Based Incentive. Several issues have been raised about the applicability of these routes and several alternatives have been proposed by industry experts. It is to be seen how the final document will ensure that the solar industry is supported while at the same time ensuring quality of the projects. Complete document can be found at http://bit.ly/Ucq5p0

State AP Solar Draft RfS document: APTRANSCO released the draft RfS document for its flagship Solar Programme that is expected to add 1000 MW Solar Capacity in Andhra Pradesh. We have tried to summarize the 88 page document and have provided the important points in our summary document which can be accessed at http://bit.ly/W6rleT

AP Solar Pre-bid meeting: The AP Solar Pre-bid meeting happened on 14th December, 2012 at Vidyut Soudha office in Hyderabad. Several questions were raised and issues pointed out by the attendees. Though a lot of these questions went unanswered, we, at EfficientCarbon were present at the meeting and captured most of the points discussed. Our blogpost on the same can be accessed on http://bit.ly/YPbHe6

APTRANSCO officials informed that the final RfS document could be released by the end of this month or in the first week of January. The actual RfS document can be accessed on http://bit.ly/VfQvI9 TANGEDCO releases Pre-bid clarifications: Further to the pre-bid meeting on 19th December, 2012, TANGEDCO has released clarifications to the several queries/issues raised. The same can be found at http://bit.ly/WU7CFh

TANGEDCO releases Draft PPA for Solar Energy Purchase: Owing to concerns raised by prospective projected developers regarding funding from banks, TANGEDCO has released a draft version of the Power Purchase Agreement that would be signed between the distribution licensee and the project developer. This draft PPA contains various terms and conditions including payment terms which would be of interest to banks/funding agencies interested in funding projects under the scheme. The draft PPA document can be found at http://bit.ly/TAKSJd

Technology Atmospheric Vortex Engine: Developed by AVEtec Energy Corporation, the Atmospheric Vortex Engine (AVE) creates artificial tornadoes in a controlled environment to generate large amount of electricity by running multiple wind turbines. More on http://bit.ly/5pLEXR and http://bit.ly/ZmdtVq

(Image Source: Gizmag.com)

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 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 January  REC projects capacity addition in January  Policy Update (If any)  More interesting and exciting articles on Renewable Energy developments from across the world and India.

Editorial Team -------------------------------------------------------------------------------------------------------------------------------------Pradeep Palelli Harsha Yadav Managing Partner, Co-Founder, EfficientCarbon 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