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Day-4, Mr. MG Raout
 

Day-4, Mr. MG Raout

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Day-4, Mr. MG Raout

Day-4, Mr. MG Raout

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    Day-4, Mr. MG Raout Day-4, Mr. MG Raout Presentation Transcript

    • Presentation on Promotion of Renewable Energy – Exchange perspective The Regulators & Policymakers Retreat 2013, Goa August 4, 2013
    • 2 Wind Power, 18552 MW, 69% Small Hydro, 3506 MW, 13% Biomass, 124 9 MW, 5% Bagase cogeneration , 2281 MW, 8% Solar, 1236 MW, 4%Municipal Waste, 96 MW, 0% Nuclear 4,780 MW, 2% Hydro 39,623 MW, 18% Renewable Energy 27,542 MW, 12% Coal 131,628 MW, 58% Gas 20,360 MW, 9% Diesel 1,200 MW, 1% Renewable Energy Source: CEA Report – May 2013 Renewable Energy Potential (GW) Installed Capacity 223,125 MW Source: MNRE, 28709 MW – June 30,2013
    • 3 Legal & Regulatory provisions  Section 86 (1) (e) of EA 2003 provides the Regulatory framework “Section 86 (Functions of the State Commission) Promote co-generation and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity to any person, and also specify, for purchase of electricity from such sources, a percentage of the total consumption of electricity in the area of a distribution licensee;”  All SERC’s have notified Regulations on Regulated purchases and RPO Obligation  Specified categories for promoting different types of RE technologies  Solar, Non Solar [Small Hydro (< 25 MW), Mini Hydro, Bio Mass/Bio Gas & Co-Generation]
    • 4 RPO target S. No. State Source FY 12-13 FY 13-14 FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 Wind 5.50% Solar 1.00% Others 0.50% Total 7.0% Non-solar 7.75% 8.50% 8.50% 8.50% Solar 0.25% 0.50% 0.50% 0.50% Total 8.0% 9.00% 9.00% 9.00% 3 Chhattissgarh 5.75% Non-solar 3.40% 4.70% 6.00% Solar 0.60% 0.80% 1.00% Total 4.0% 5.50% 7.00% Non-solar 2.60% Solar 0.40% Total 3.00% Non-Solar 5.0% Solar 0.5% Total 5.5% Non-Solar 5% Solar 1.00% Total 6% Non-Solar 6.35% 7.00% Solar 0.75% 1.00% Total 7.10% 8.20% Non-Solar 10.00% 10.00% 10.00% 11.00% 12.00% 13.00% 14.00% 15.00% 15.50% 16.00% Solar 0.25% 0.25% 0.25% 0.25% 0.25% 0.50% 0.75% 1.00% 2.00% 3.00% Total 10.25% 10.25% 10.25% 11.25% 12.25% 13.50% 14.75% 16.00% 17.50% 19.00% Non-Solar 2.83% 3.37% 3.81% Solar 0.07% 0.13% 0.19% Total 2.90% 3.50% 4.00% Non-Solar 2.00% 3.00% Solar 0.05% 0.10% Total 2.05% 3.10% Non-Solar 3.25% 4.60% 6.0% 7.30% 8.65% Solar 0.15% 0.20% 0.3% 0.30% 0.35% Total 3.40% 4.80% 6.2% 7.60% 9.00% 13 Jammu & Kashmir Total 5% 4 Madhya Pradesh 10 Punjab 9 8 Rajasthan 12 Delhi 5 JERC For Goa and UT's 11 Haryana State-wise Yearwise RPO targets Himachal Pradesh 7 Uttar Pradesh 1 Gujarat 2 Maharashtra 6 Uttaranchal
    • 5 RPO target S. No. State Source FY 12-13 FY 13-14 FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 Solar 0.15% 0.20% 0.25% 0.30% Non-solar 1.4% 1.6% 1.8% 2% Co-gen 3.95% 4.2% 4.45% 4.70% Total 5.50% 6% 6.5% 7% Solar 1.0% Non-solar 3.0% Total 4.0% Non-solar 3.75% 4.70% 5.60% 6.50% 7.40% Solar 0.3% 0.3% 0% 0.5% 0.6% Total 4.00% 4.0% 5.00% 6.00% 7.0% 8.0% Non-solar 4% 4.00% 4.25% Solar 0% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 2.00% 2.50% 3.00% Total 4% 5% 5% 18 Tamil Nadu 9% Non-solar 4.75% 4.75% 4.75% 4.75% 4.75% Solar 0.25% 0.25% 0.25% 0.25% 0.25% Total 5.0% 5.0% 5.0% 5.0% 5.00% 20 Karnataka 11% Non-Solar 3.65% 3.95% 4.25% 4.55% 4.85% 5.15% 5.45% 5.75% 6.05% 6.35% Solar 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% Total 3.9% 4.2% 4.5% 4.8% 5.10% 5.40% 5.70% 6.00% 6.30% 6.60% Non-solar 4% 5% 7% Solar 0.15% 0.20% 0.25% Total 4.20% 5.60% 7.00% Non-Solar 4% 5% 7% Solar 0.10% 0.15% 0.20% Total 4.20% 5.60% 7.00% 24 Meghalaya 1% Non-Solar 4.75% Solar 0.25% Total 5% Non-solar 6.75% Solar 0.25% Total 7% Non-solar 1.90% Solar 0.10% Total 2% Non-solar 7.75% Solar 0.25% Total 8.00% 27 Tripura 28 Nagaland State-wise Yearwise RPO targets Mizoram Orissa14 25 19 23 15 Jharkhand 26 Manipur Kerala21 22 Assam Arunachal Pradesh 17 Bihar Andhra Pradesh 16 West Bengal
    • 6 Framework RE Generation Sale at Preferential Tariff Distribution licensees Sale under REC Framework Electricity Component Distribution licensee at a Price not more than Average Power Purchase Cost Third Party sale at mutually agreed Price Sale through Power Exchange Renewable Component Sold to Obligated / Voluntary Entity (on Power Exchange)
    • 7 Salient Features of REC Regulations  REC Issuing Authority  The National Load Despatch Centre (NLDC) is the Nodal Agency for implementing the REC scheme  NLDC to issue REC to the Eligible entities based on the Energy Injection Report prepared by SLDC  Trade of REC  REC is valid for a period of 730 days from the date of issuance  Transaction of REC shall takes place only at Power Exchanges  REC issued to an Eligible entity is redeemed on being sold to an Obligated or Voluntary Entity  Only single trade (once through) permissible, multiple trades not allowed  Price Range Particular Period : Apr 2012 – Mar 2017 Solar Non Solar Floor Price (in `) 9300 1500 Forbearance Price (in `) 13400 3300
    • 8 REC – Issuance & Trade  H1 generally Seller drive vis-à-vis H2 being Buyer driven – Q3 & Q4 of FY 12-13 subdued vis-à-vis Q3 & Q4 of FY 11-12  Obligated entities tend to participate in Q4 to comply with RPO target 73,965 25,47,987 0 500000 1000000 1500000 2000000 2500000 0 100000 200000 300000 400000 500000 600000 700000 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 REC(Closingbalance) NoofRECs(Issuance&Redemption) REC Issued REC Redeemed Closing Balance
    • 9 REC Trade Price (Solar & Non-Solar) 0 2000 4000 6000 8000 10000 12000 14000 16000 0 500 1000 1500 2000 2500 3000 3500 4000 4500 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 PriceSolarREC(in`) PriceNonSolarREC(in`) Month Mar- 11 Apr- 11 May- 11 Jun- 11 Jul-11 Aug- 11 Sep- 11 Oct- 11 Nov- 11 Dec- 11 Jan- 12 Feb- 12 Mar- 12 Apr- 12 May- 12 Jun- 12 Jul-12 Aug- 12 Sep- 12 Oct- 12 Nov- 12 Dec- 12 Jan- 13 Feb- 13 Mar- 13 Apr- 13 May- 13 Jun- 13 PXIL Solar MCP (Rs./REC) 1300 1250 1280 1285 1290 1250 1210 1210 1250 1300 1300 1200 1099 9300 IEX Solar MCP (Rs./REC) 1300 1275 1280 1285 1250 1268 1272 1262 1250 1250 1340 1220 1149 9300 PXIL MCP (Rs./REC) 2225 0 1500 1500 1550 1710 2300 3000 2800 2950 3051 3051 3100 2201 2150 2460 2202 1555 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 IEX - MCP(Rs./REC) 3900 1500 1500 1505 1555 1800 2300 2700 2900 2950 3051 3066 2900 2201 2402 2402 2000 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 Monthly REC Trade Price
    • 10 Challenges for REC mechanism  Comprehensive monitoring & Verification of compliance to RPO targets to be devised for all States  Laxity in levying penalty in case of non-compliance  Arrest the long period of non-compliance Developers & Investors are revisiting REC route as a viable mechanism
    • 11 Alternate approach (1/2)  Mandatory purchase by Thermal Generating plants  ISGS have contracted their capacities with beneficiaries (i.e. all the States and UTs of the country)  ISGS that generate power from Thermal sources vis. from Coal and Gas, should be levied RPO targets on behalf of the beneficiaries  ISGS to purchase RECs on PXs by participating in monthly REC Auctions  REC purchase cost to be a pass-through in ARR of beneficiaries  International experience  South Korea enacted the Renewable Portfolio Standard -2010,  Generators >500 MW to generate a minimum of 2% from Renewable sources in 2012.  Target is increased by 1% every year and eventually reaches 10% by 2022  Defaulting Generators to fulfill their targets by purchasing RECs on Power Exchange
    • 12 Alternate approach (2/2)  Benefits under proposed mechanism:  Ease in monitoring compliance to RPO targets as energy injection from Generating sources is recorded on monthly basis  Cash flow situation of Developers improves by active participation from Generators  Provides a fillip to the Market based mechanism for promotion of investments in Renewable energy based projects  Distribution licensees avoid the hardship of allocation of funds for purchase of RECs  The redemption Price would happen within the Floor and Forbearance band instead of the current phase of redemption that’s happening at Floor Price during the past 10 Monthly Auction
    • 13 New avenues to promote REC  Policy related measure  Incentivise compliance to RPO targets undertaken by Distribution licensees  Voluntary participation as Corporate Social Responsibility (CSR) needs to be encouraged  Purchase of RECs to be linked with Tax-breaks  Change in Trade Mechanism:  > 2.6 Mn RECs are available in the Market  Introducing Continuous trading by allowing Voluntary Buyers and Traders to take position on PXs  Generators realise revenues immediately, improve their cash flows  Obligated entities to purchase RECs as and when required.  RECs would be subject to continuous trading till its residual maturity or till the Obligated entities surrender them for RPO compliance Explore new avenues for trading in RECs
    • 14 Way forward  Promote all avenues to increase Renewable Energy capacity  Share of renewables have increased over the past, from 2% in 2003-04 to 6% in 2006-07 and now to 12% in 2012-13  Strengthen REC Mechanism  Reward complaint Obligated entities / Penalise defaulting entities  Initiate Monitoring of RPO targets on Quarterly basis  Encourage avenues of Voluntary participants  Develop alternate models for trading of RECs on PXs Strengthening REC Mechanism is need of the hour
    • THANK YOU POWER EXCHANGE INDIA LIMITED 5th Floor, Tower 3, Equinox Business Park, (Peninsula Techno Park) Off BKC, L.B.S. Marg, Kurla (W), Mumbai-400 070, India Tel: +91-22-26530500 Fax: +91-22-26598512 website: www.powerexindia.com
    • 16 Salient Features of REC Regulations PARTICIPANTS  BUYERS: Obligated Entities or Voluntary Entities  Obligated entities - Distribution licensees, OA User, Captive Consumer  Voluntary: Any entity or group of individuals or as defined by Ministry of Heavy Industries & Public Enterprises, CPSEs  SELLERS: Eligible Entities  All sources recognised by MNRE under Renewable Energy Category  Two Categories of Certificates depending on the Source: Solar and Non-Solar  Grid Connected RE Power Projects having No PPA at Preferential Tariff and received accreditation certificate from State Agency  RE projects which have not availed of  Concessional/promotional Transmission or Wheeling charges;  Banking facility benefit and;  Waiver of Electricity Duty