Re connect newsletter xxvi

184 views

Published on

Published in: Technology, Business
  • Be the first to comment

  • Be the first to like this

Re connect newsletter xxvi

  1. 1. Page1Volume: XXVIMonth: October’12Contents of this newsletter are for informational purposes onlyOOOOPPPPEEEENNNNAAAACCCCCCCCEEEESSSSSSSSVol. XXVIOctober2012www.reconnectenergy.comDear Readers,REC prices remained at floor price due to thelarge gap in supply and demand. This trendhas persisted for the last several months now.Even with recent pronouncements by the Ra-jasthan High Court (covered in Septembernewsletter) and some action by state ERCs,demand fell this month compared to last month.At the same time, supply is continuing to in-creasing with over 5 lakh RECs being issuedevery month. After the end of the trade ses-sion, close to 13 lakh RECs remain unsold – thisis more than 5 month supply at current demandlevels.In October, CERC came out with the order onUP Co-gen plants. The order lays down severalprinciples which further clarify the eligibility ofRE generators for REC mechanism. However,several questions still remain before RECs canbe issued to UP Co-gen plants. Our main arti-cle provides a detailed analysis.Several states have also been coming out withtheir solar policies. This month we analyze theTN solar policy.As always, detailed trading statistics, analysisand regulatory updates are available in thisnewsletter.Happy reading and we look forward to hear-ing feedback from you.• Team REConnectREConnect EnergyIndia’s Largest Green Credits Trading CompanyThe verdict by CERC on eligibility for REC of UP Sugar Co-GenFrom Management’s DeskRegulatory Updates REC Trade Report REC Project Statistics Green News About REConnectIndex UP Sugar Co-GenThe CERC recently gave its order in the long standing issue on RECs issuances to UPsugar plants. The order is important as it sheds light on eligibility of RECs, particu-larly in the case of self-consumption, and is also likely to have a significant impacton the RECs markets (over 650 MW capacity of sugar mills is registered in the RECsmechanism from UP alone).The important points that CERC considered were:•Eligibility of UP Co-gen plants for RECs for the self-consumption portion•Roles and responsibility of SLDC•Various other miscellaneous clarifications on points raised by UP SLDC.The key outcome of the order is that in case a RE generator does not consume 51%or more of the power generated, such a generator cannot be classified as a captivepower plant (CPP). Such a generator will be considered as any other RE generatorsupplying electricity to a consumer. The self-consumption portion of the power willbe eligible for RECs provided no benefits that are available to CPPs are claimed. Incase such benefits are availed, they will have to be foregone.In UP, electricity duty is waived on all CPPs since 1998.Eligibility for RECs based on the order can be summarized as below (specifically inthe case of UP):2200 MW+2200 MW+2200 MW+2200 MW+Portfolio under REC16 States16 States16 States16 StatesProjects under RECOver 50%Over 50%Over 50%Over 50%Market Share in REC Trade7 States7 States7 States7 StatesPhysical Presence51% or more power isconsumed in-houseAvails Electricity dutywaiverNot eligible51% or more power isconsumed in-houseDoes not avail Elec-tricity duty waiver orother concessionalbenefitsEligible for RECs This is unlikely inUP as ED waiverhas been availableto all CPPs since1998Less than 51% ofpower is consumed in-houseAvails Electricity dutywaiverEligible for RECsonly after foregoingED waiverSee ‘open ques-tions’ section be-lowLess than 51% ofpower is consumed in-houseDoes not avail Elec-tricity duty waiver orother concessionalbenefitsEligible for RECs
  2. 2. Page2 www.reconnectenergy.comRegulatory Updates REC Trade Report REC Project Statistics Green News About REConnectIndex UP Sugar Co-GenThis order leaves some questions unanswered:• If a RE generator is determined to be not a CPP and foregoes the benefits available to CPP, will they be immediately eli-gible for RECs or will the 3 year restriction apply?A simple reading of the order does not provide any answer to this. In our opinion the 3 year restriction may not apply as inthe CERC regulations pertaining to eligibility, the 3 year restriction is a clause specific to CPPs.• Determination of CPP - Electricity Rules provides that“no power plant shall qualify as a ‘Captive Generating Plant’ unless 26% of the ownership is held by the captive user(s) and not less than 51% of the aggregate capacity generated in such plant, determined on annual basis, isconsumed for the captive use.” (emphasis supplied)According to this definition, the status of a power plant as CPP or otherwise needs to be determined on the basis of its an-nual power generation/ consumption. In such a case, applying for RECs may be a challenge as such an application has to bemade within 3 months of generation. In that duration, the status of a plant as CPP may be unclear. Moreover, the statusmay change from year to year based on the consumption pattern.Given these issues, in our opinion, it will be some more time before any capacity from UP sugar plants access the RECs mar-kets.The CERC order also alludes to further clarity on this through an amendment in the REC mechanism.Impact of the order in other statesAndhra Pradesh: E-Duty is still applicable for self-consumption as per CERC order. Since the case against E-Duty is pending atHC AP, it cant be determined whether E-Duty is exempted or not. If only E-Duty is concerned, as per CERC order, a co-genunit can forgo the benefit of E-Duty exemption and avail RECs.Note: its important to highlight that only E-duty will not make project eligible or ineligible for REC. There is a statement byCERC in its order which says "any other benefits applicable to CPP" which needs to be looked into more carefully.Karnataka: KERC regulation mandates that a project must be a captive power project to qualify for REC. Co-Gen units by na-ture in Karnataka, would not fall under the category of CPP and hence as per KERC regulation, sugar Co-Gen units will not beeligible. Since the KERC regulation itself is radically different than CERC regulation, the CERC order will have no impact unlessKERC regulation falls in-line with central regulation.2200 MW+2200 MW+2200 MW+2200 MW+Portfolio under REC16 States16 States16 States16 StatesProjects under REC55%55%55%55%Market Share in REC Trade7 States7 States7 States7 StatesPhysical PresenceVolume: XXVIMonth: October’12Contents of this newsletter are for informational purposes onlyOPENACCESSVol. XXVI
  3. 3. Page3 www.reconnectenergy.comRegulatory Updates REC Trade Report REC Project Statistics Green News About REConnectIndex UP Sugar Co-GenTamil Nadu recently announced its Solar Policy. The policyaims to achieve an ambitious target of 3000 MW by 2015in phased manner with capacity addition of• 1500 MW from utility scale projects• 350 MW from roof top installations• 1150 MW under REC mechanism.Key Differentiator: The policy unlike any other state pol-icy, highlights the NET METERING ARRANGEMENTS forfeeding excess power back to grid for Rooftop Solar. Pro-jects to evacuate power at following voltages .What does it mean: The current REC policy recognisesonly grid connected RE projects under REC. With Net Me-tering, even small scale roof-top solar projects can partici-pate into REC.1000 MW out of 1500 MW utility scale capacity to befunded by Solar Purchase Obligation (SPO) and balance500 MW through Generation based incentive (GBI) by thegovt. The utility scale projects are also expected to be de-veloped through competitive bidding process.Solar Purchase Obligation: The SPO to be administered byTANGEDCO has been mandated as 3% till Dec’13 andscaled up to 6% from Jan’14 ,is applicable on all HT Con-sumers (HT Tariff I to V) & LT Commercial (LT Tariff V).Domestic consumers, huts, cottage & tiny industries,power looms, LT industrial consumers and AgriculturalConsumers are exempted from SPO.What does it mean: As per TANGEDCO, HT Consumers(Cat I to V) and LT Commercial consumers, would collec-tively consume about 25 BUs annually (FY 12-13).This means, at 3% SPO, Tamil Nadu will require about 500 MWof Solar power to meet SPO of 3%. To meet 6% of SPO, the to-tal Solar power required will be about 1000MW.Two RPO Structures? – TNERC also has specified 0.05% of SolarRPO. With state policy in effect, there will be dual RPO imposedon HT and LT Commercial consumers. The state commissionmight have to realign the Solar RPO to align the RPO structureto meet the policy objective.Promotion of Solar Rooftops:GBI for Solar Roof top : All domestic solar & solar-wind hybridrooftops to be installed before 31stmarch’14 will be providedwith GBIs at Rs. 2/kWh for first two years, Rs. 1/kWh for thenext two years and Rs. 0.5/kWh for the subsequent two years.All new government/local buildings shall necessarily install so-lar rooftop.Other initiatives and exemptions:• Solar water heating systems mandatory for Public Buildingsand Industries using hot water boiler/steam boiler usingfossil fuels.• Wheeling & Banking Charges applicable as per TNERC or-ders.• Exemption of Electricity Duty for 5 years for using solarpower from projects of self consumption/sale to utility.• Tax Concessions as per TN Industrial policy.• TEDA designated as single window clearance agency whowould be coordinating power evacuation approval, approv-als related with connectivity to substation, approvals frompollution control board etc.• Empowered committee to accord project clearances.Even though the policy looks quite ambitious, overall its quiteencouraging for the investors.Regulatory Updates: Tamil Nadu Solar Policy2200 MW+2200 MW+2200 MW+2200 MW+Portfolio under REC16 States16 States16 States16 StatesProjects under RECOver 50%Over 50%Over 50%Over 50%Market Share in REC Trade7 States7 States7 States7 StatesPhysical PresenceSolar PV System size Grid Connected<10 kWp 240 V10 kWp to 15 kWp 240 V/415V15 kWp to 50 kWp 415 V50 kWp to 100 kWp 415 V>100 kWp 11 kVVolume: XXVIMonth: October’12Contents of this newsletter are for informational purposes onlyOPENACCESSVol. XXVI
  4. 4. Page4 www.reconnectenergy.comNon-solar RECsThe prices remained at floor price this month (Rs.1500/REC at IEX and PXIL; this is the same in September) as supply has remained far inexcess of demand. The total RECs available this month was 15 lakh out of which only 2.22 lakh RECs were redeemed leaving an inven-tory of 12.8 lakh RECs .10 lakh RECs were bid for sale ( up by 42 % from last month) while demand was for only 2.22 lakh RECs (down 16 %).Demand has remained low in the last couple of months. The major reason slow progress on enforcement by SERCs. Clearing ratios wereapproximately 30% on IEX and 70% on PXIL.Solar RECsDemand went up by 82% from last month whereas the supply also went up by 15%. The market clearing price on IEX was Rs 12,680 andon PXIL was Rs 12,500 (last month it was Rs 12,900 on PXIL and Rs.12,500 on IEX). In total, 1,791 Solar RECs were sold (last month it was1,160).Review of REC Trading- October 2012Regulatory Updates REC Trade Report REC Project Statistics Green News About REConnectIndex UP Sugar Co-Gen2200 MW+2200 MW+2200 MW+2200 MW+Portfolio under REC16 States16 States16 States16 StatesProjects under RECOver 50%Over 50%Over 50%Over 50%Market Share in REC Trade7 States7 States7 States7 StatesPhysical PresenceVolume: XXVIMonth: October’12Contents of this newsletter are for informational purposes onlyOPENACCESSVol. XXVI
  5. 5. Page5 www.reconnectenergy.comStatus of projects in REC MechanismAccredited Capacity : 3556.451 MWRegulatory Updates REC Trade Report REC Project Statistics Green News About REConnectIndex UP Sugar Co-Gen2200 MW+2200 MW+2200 MW+2200 MW+Portfolio under REC16 States16 States16 States16 StatesProjects under REC55%55%55%55%Market Share in REC Trade7 States7 States7 States7 StatesPhysical PresenceVolume: XXVIMonth: October’12Contents of this newsletter are for informational purposes onlyOPENACCESSVol. XXVI
  6. 6. Page6 www.reconnectenergy.comStatus of projects in REC MechanismRegistered Capacity : 3291.798 MWRegulatory Updates REC Trade Report REC Project Statistics Green News About REConnectIndex UP Sugar Co-Gen2200 MW+2200 MW+2200 MW+2200 MW+Portfolio under REC16 States16 States16 States16 StatesProjects under RECOver 50%Over 50%Over 50%Over 50%Market Share in REC Trade7 States7 States7 States7 StatesPhysical PresenceVolume: XXVIMonth: October’12Contents of this newsletter are for informational purposes onlyOPENACCESSVol. XXVI
  7. 7. Page7 www.reconnectenergy.com• Clean Energy Fund headed nowhereThe clean energy fund is being used more to meet the budgetary shortfall of various ministries than to promote energy-related research and projects. In the last few years, India has taken a number of concrete steps to propel its economy on agreener, low-carbon pathway. The National Action Plan on Climate Change and National Clean Energy Fund (NCEF) are twosuch ambitious endeavours.http://www.thehindubusinessline.com/opinion/clean-energy-fund-headed-nowhere/article4051259.ece?homepage=true• WInd energy industry seeks incentivesWind energy equipment manufacturers hope the government would put policies for incentives to enable the wind energygeneration industry to reach its potential. Absence of proper incentives -- including the proposed generation-based incentive(GBI) and accelerated depreciation benefits, which were earlier enjoyed by the industry -- had hit the industry hard, saidRamesh Kymal, chairman, Indian Wind Turbine Manufacturers Association (IWTMA).http://www.business-standard.com/india/news/wind-energy-industry-seeks-incentives-/490823/• MNRE targets 45,000 sq m of solar collectors, identifies five user industriesThe Ministry of New and Renewable Energy (MNRE) has said it would facilitate the installation of 45,000 square metres of so-lar collectors — panels that generate heat from the sun’s rays — by March 2017. (Only last month the Ministry had indicateda target of 15,000 sq m by 2016. Yet, the estimated reduction in carbon di-oxide reduction has been kept unchanged at39,200 tonnes)http://www.thehindubusinessline.com/industry-and-economy/economy/article3980957.ece• Punjab Biomass Plans 96 Megawatts of Capacity by 2017Punjab Biomass Power Ltd., a developer of clean-energy projects in India, plans to set up 96 megawatts of plants fueled byrice straw by 2017. The company, backed by Infrastructure Leasing & Financial Services Ltd. and Bermaco Energy Ltd., expectsto raise 800 million rupees ($15.2 million) by February for its next plant in northern Punjab state, Bermaco Managing DirectorMonish Ahuja said in a phone interview today from Mumbai. It has an existing 12-megawatt plant in Patiala districthttp://www.bloomberg.com/news/2012-10-17/punjab-biomass-plans-96-megawatts-of-capacity-by-2017.htmlGreen NewsRegulatory Updates REC Trade Report REC Project Statistics Green News About REConnectIndex UP Sugar Co-Gen2200 MW+2200 MW+2200 MW+2200 MW+Portfolio under REC16 States16 States16 States16 StatesProjects under RECOver 50%Over 50%Over 50%Over 50%Market Share in REC Trade7 States7 States7 States7 StatesPhysical PresenceVolume: XXVIMonth: October’12Contents of this newsletter are for informational purposes onlyOPENACCESSVol. XXVIMeet us atVibhav Nuwalvibhav.nuwal@reconnectenergy.com+91 88006 79988Vishal PandyaVishal.pandya@reconnectenergy.com+91 96202 21101
  8. 8. Page8 www.reconnectenergy.comStatus of RPOs across various states in India - As on October 31, 2012State Status of Regulation 2012–13 RPOObligationRPO on CPP? RPO on OAUsers?Penalty ?Andhra Pradesh Final 4.75 % + 0.25 % Yes Yes Not SpecifiedAssam Final 4.05 % + 0.15 % Yes Yes Yes (RECmax)Bihar Final 3.25 % + 0..75 % Yes Yes Yes (RECmax)Chhattisgarh Final 5.25 % + 0.50 % Yes Yes Yes (RECmax)Delhi Final 3.40 %+ 0.15 % Yes Yes Yes (RECmax)Gujarat Final 6.00 % + 1.00 % Yet to be notified NA Yes (RECmax)Haryana Final 1.50 % + 0.50 % Yes Yes Yes (RECmax)Himachal Pradesh Final 10.00 % + 0.25 % Yes Yes Yes (RECmax)J&K Final 4.75 %+0.25 % Yes Yes Yes (RECmax)Jharkhand Final 3.00 % + 1.00 % Yes (>5MW) Yes Yes (RECmax)Karnataka Final 10 % + 0.25 %(BESCOM,MESCOM,CHESCOM), 7 % + 0.25 % for othersYes (>5MW)5% RPOYes (>5MW)5% RPOYes (RECmax)Kerala Final 3.35 %+0.25 % Yes Yes Yes (RECmax)Madhya Pradesh Final 3.40 % + 0.60 % Yes Yes Yes (RECmax)Arunachal Pradesh Final 4.1 % +0.1 % Yes Yes Yes (RECmax)Maharashtra Final 7.75 % + 0.25 % Yes Yes Yes (RECmax)Meghalaya Final 0.60 % + 0.40 % Yes Yes Yes (RECmax)Orissa Final 5.35 % + 0.15 % Yes(>5MW) Yes Yes (RECmax)Punjab Final 2.83 %+0.07 % Yes Yes Yes (RECmax)Rajasthan Final 7.10 % + JNNSM Yes Yes Yes (RECmax)Tamil Nadu Final 8.95 % + 0.05 % Yes Yes Yes (RECmax)Tripura Final 0.90 % + 0.10 % Yes (>5MW) Yes Yes (RECmax)Uttrakhand Final 4.5 % + 0.025 % Yes Yes Yes (RECmax)Uttar Pradesh Final 5.00 %+ 1.00 % Yes Yes Yes (RECmax)West Bengal Final 4 % + NA NA NA Draft Proposed now.JERC for Goa andUTsFinal 2.60 % + 0.40 % Yes Yes Yes (RECmax)JERC for Manipurand MizoramFinal 4.75 % + 0.25% (Man)6.75% + 0.25% (Miz)Yes Yes Yes (RECmax)Nagaland Final 7.75 % + 0.25% Yes Yes Yes (RECmax)2200 MW+2200 MW+2200 MW+2200 MW+Portfolio under REC16 States16 States16 States16 StatesProjects under RECOver 50%Over 50%Over 50%Over 50%Market Share in REC Trade7 States7 States7 States7 StatesPhysical PresenceVolume: XXVIMonth: October’12Contents of this newsletter are for informational purposes onlyOPENACCESSVol. XXVI
  9. 9. Page9 www.reconnectenergy.comDear Readers,Our previous newsletters are available at our website www.reconnectenergy.com and can be downloaded from :http://www.reconnectenergy.com/rec/index.php/newsletters-on-rec-mechanism.htmlThe summary of our previous newsletters we have published is available below.• Volume XV: November 2011Renewable Purchase Obligation – A Demand - Supply Analysis• Volume XVI: December 2011Analysis of Draft RPO of Andhra Pradesh + REC Market Update• Volume XVII: January 2012Voluntary Market for RECs• Volume XVIII: February 2012Off Grid Projects and REC: A new socio-development tool?• Volume XIX: March 2012Applicability of RPO on Co-Generation Projects (An Update)• Volume XX: April 2012Analysis of the Energy Savings Certificate Markets• Volume XXI: May 2012Trading of First Solar RECs - Interview with Mr Vikalp Mundra of M&B Switchgear Ltd• Volume XXII: June 2012Waste-to-energy projects and REC Mechanism, and REC trading updates• Volume XXIII: July 2012Analysis of report on RPO trajectory and impact• Volume XXIV: August 2012RPO Compliance: The Shifting Focus• Volume XXV: September 2012Analysis on Andhra Pradesh State Solar PolicyPast NewslettersFeedback:We wholeheartedly thank you for providing your valuable feed-back on our last newsletter. Your feedback on the newsletter keeps usmotivated and would certainly help us to improve the quality of it. Kindly keep writing to us. We are eager hear your views.Best Regards, Team - REConnect2200 MW+2200 MW+2200 MW+2200 MW+Portfolio under REC16 States16 States16 States16 StatesProjects under RECOver 50%Over 50%Over 50%Over 50%Market Share in REC Trade7 States7 States7 States7 StatesPhysical PresenceVolume: XXVIMonth: October’12Contents of this newsletter are for informational purposes onlyOPENACCESSVol. XXVI
  10. 10. Page10 www.reconnectenergy.comServices Provided by REConnectDetailed Services in REC SpaceServices for RE GeneratorsServices for Obligated Entities (Distribution Companies / Open Access Consumers / Captive Consumers)Regulatory Updates REC Trade Report REC Project Statistics Green News About REConnectIndex UP Sugar Co-Gen2200 MW+2200 MW+2200 MW+2200 MW+Portfolio under REC16 States16 States16 States16 StatesProjects under RECOver 50%Over 50%Over 50%Over 50%Market Share in REC Trade7 States7 States7 States7 StatesPhysical PresenceOPENACCESSVol. XXVI
  11. 11. Page11 www.reconnectenergy.comREConnect is a venture focused on the Renewable Energy Cer-tificates, Energy Efficiency and Electricity Portfolio Man-agement.REConnect’s team has extensive experience in the environ-mental markets both in India and internationally:• Worked in the international carbon markets for severalyears and has expertise in the consulting and trading ofemissions reductions• Extensive knowledge about various Renewable EnergyCertificate and Energy Efficiency Certificate markets inUSA, Europe and Australia etc.• Worked with Indian Energy Exchange (IEX), India’s leadingpower exchange, and have extensive knowledge and ex-perience of power markets• Alumnus of Columbia University, an Ivy League Universityin USA, and IIT Bombay• Highly experienced core team worked with organizationslike J P Morgan, Indian Energy Exchange, LEK EnergyConsulting (UK) and Asia Carbon.Contact REConnectContact REConnectContact REConnectContact REConnectNew DelhiNew DelhiNew DelhiNew DelhiVibhav NuwalVibhav NuwalVibhav NuwalVibhav Nuwalvibhav.nuwal@reconnectenergy.com+91 88006 79988BangaloreBangaloreBangaloreBangaloreVishal PandyaVishal PandyaVishal PandyaVishal Pandyavishal.pandya@reconnectenergy.com+91 96202 21101Anurag DhyaniAnurag DhyaniAnurag DhyaniAnurag Dhyani (Solar Markets)(Solar Markets)(Solar Markets)(Solar Markets)Anurag.Dhyani@reconnectenergy.com+91 77603 00499MumbaiMumbaiMumbaiMumbaiRamkumar KRamkumar KRamkumar KRamkumar Kramkumar@reconnectenergy.com+91 99303 59992ChennaiChennaiChennaiChennaiRajesh VaidyulaRajesh VaidyulaRajesh VaidyulaRajesh Vaidyularajesh.vaidyula@reconnectenergy.com+91 99404 78306Suresh KumarSuresh KumarSuresh KumarSuresh Kumar (for RPO)(for RPO)(for RPO)(for RPO)suresh.kumar@reconnectenergy.com+91 99727 24727AhmedabadAhmedabadAhmedabadAhmedabadMohit TyagiMohit TyagiMohit TyagiMohit Tyagimohit.tyagi@reconnectenergy.com+91 9099002333About REConnectRegulatory Updates REC Trade Report REC Project Statistics Green News About REConnectIndex UP Sugar Co-GenVolume: XIIMonth: June ’12Contents of this newsletter are for informational purposes onlyOPENACCESSVol. XXVI2200 MW+2200 MW+2200 MW+2200 MW+Portfolio under REC16 States16 States16 States16 StatesProjects under RECOver 50%Over 50%Over 50%Over 50%Market Share in REC Trade7 States7 States7 States7 StatesPhysical PresenceVolume: XXVIMonth: October’12Contents of this newsletter are for informational purposes only

×