About rrf

Volume: XIV
Month: October ‟11
Contents of this newsletter are for informational purposes only
O
P
E
N
A
C
C
E
S
S
Vol. XIV
October
2011
www.reconnectenergy.com
Best Wishes From ,
Team REConnect
Dear Readers,
The main article this month is on the
‘Renewable Regulatory Fund’. This is a very
important regulation by CERC, that will
come in effect from January 1 ,2012. It will
require all large third party wind and solar
projects to forecast their generation on a
day-ahead basis.
This month saw the registration of the first
Solar project in Maharashtra. With this,
another milestone was achieved in the REC
markets. However, the capacity required in
the market to meet Solar RPO will be much
larger, and as of now it doesn’t appear that
even a fraction of that will be available in
the REC markets or through PPA’s. It will
be interesting to see how the regulators
respond to this in March 2012.
Trading resulted in another high in terms
of volume and prices. Over 95,000 RECs
were sold at a weighted average price of
Rs 2,710 (price of both exchanges consid-
ered). It was also a record month for REC
issuances, which crossed the 120,000
mark. The increasing trend in volume is
important because it is a signal of improv-
ing liquidity in the market.
For details on all these and more on the
REC mechanism, read on.
-Team REConnect
REConnect Energy Solutions
REC, Energy Efficiency, Electricity Portfolio Management
From Management’s Desk

Volume: XIV
Month: October „11
O
P
E
N
A
C
C
E
S
S
Vol. XIV
Introduction to Renewable Regulatory Fund
Index RRF REC Trade Report REC Project Statistics Green News About REConnect
Background
The Renewable Regulatory Fund (RRF) is a new regulation that will come into effect from 1st
Jan 2012. The importance of RRF
is that it will require all wind and solar farms over a certain capacity, and not under a PPA, to schedule power one day in ad-
vance. This will require forecasting generation from the Wind farm or solar project one day in advance and intimating it to the
relevant agency. Over or under-supply from the forecast (a variance band is defined) will attract Unscheduled Interchange (UI)
charges.
The RRF is being put in place to better manage the grid as the installed capacity in wind and solar is growing rapidly. Both wind
and solar power are ‘infirm’ in nature, that is, difficult to predict and vary significantly on an hourly, daily and seasonal basis.
For example, 60-70% of the annual wind power is generated in the ‘high season’ – a period of 3-4 months that roughly corre-
sponds to the monsoon season. Similarly, solar power varies with seasons and time-of-day (nothing is generated in the nigh
for obvious reasons). This variability makes grid-management a challenging task, and hence the RRF is being put in place. A
day-ahead prediction of generation will make the task of managing the grid a bit easier.
Applicability of RRF
The regulation will be applicable to Wind farms having capacity of 10 MW & above and Solar Generating Plants of 5MW &
above connected at connection point of 33 KV level and above, and who have not signed any as on the date of coming into
force (3.5.2010).
Procedure for scheduling and account settlement
The procedure is as follows:
For wind farms
 Responsibility for forecasting their generation up to an accuracy of 70%. Therefore, if the actual generation is beyond
+/- 30% of the schedule, UI charges would be applicable to the wind generator. For actual generation within +/- 30%
of the schedule, no UI would be payable/receivable by Generator.
 UI charges within +/- 30% would be applicable to the host state. However, the implication of these UI charges shall be
shared among all the States/UTs of the country/DVC in the ratio of their peak demand met in the previous month
based on the data published by CEA, in the form of a regulatory charge known as the Renewable Regulatory Charge
operated through the Renewable Regulatory Fund (RRF).
 Maximum generation of 150% of the schedule only, would be allowed in a time block from the grid security point of
view. For any generation above 150% of schedule, if grid security is not affected by the generation above 150%, the
only charge payable to the wind energy generator would be the UI charge applicable corresponding to 50- 50.02 Hz.
 In the case of Intra-State sale of wind energy, the transactions would be between the wind generator and the host
State at the contracted rate for actual generation. The implication due to deviations of actual generation within +/-
30% of the scheduled generation would be settled through the RRF. The implication due to deviations outside +/- 30%
would be settled directly between the host State and the Wind Farm in accordance with the energy accounts issued
by the RPC.

Volume: XIV
O
P
E
N
A
C
C
E
S
S
Vol. XIV
Index RRF REC-Trade Report REC Project Statistics Green News About REConnect
For Solar Generators
 The schedule of generation shall be given by the generator based on availability of the generator, weather forecasting,
solar insolation, season and normal solar generation curve and shall be inspected by the RLDC in which the generator
is located and incorporated in the inter-state schedule. If RLDC is of the opinion that the schedule is not realistic, it
may ask the solar generator to modify the schedule.
 No UI shall be payable/receivable by Generator.
 In the case of intra-State sale, the host State would pay the generator at the contracted rate for actual generation.
 In the case of inter-State sale, the purchasing State would pay the generator at the contracted rate for actual genera-
tion. The implication of UI charges due to the deviation for purchasing State and host State would be settled through
the RRF.
Tab 1: RRF procedure criteria for Wind & Solar.
Which agencies are involved and what will be their role?
SLDCs, RLDCs, NLDC and RPC are involved in the whole procedure. Their roles are as follows:-
State Load Despatch Centre (SLDCs)
 Scheduling on daily basis with periodic revisions.
 Schedule and ‘actual generation meter data’ to be sent to RLDCs and RPCs.
 Payments/receipts to concerned Generators and settlement of accounts with RRF.

Volume: XIV
O
P
E
N
A
C
C
E
S
S
Vol. XIV
 Regional Load Despatch Centre (RLDCs)
 Processed data of energy meters along with final schedule to be sent to RPCs on weekly basis.
 Inspection of solar generation schedule & Monitoring and performing checks.
 Direct co-ordination with Regional entities for contracts & energy meter data.
 Regional Power Committee (RPCs)
 Issuance of Statement of Energy Accounting on Weekly basis.
 Data handling of contracts and contracted price for issuance of energy and deviation accounts.
 To work out details towards Capping, Additional UI charges etc. if any.
 National Load Despatch Centre (NLDCs)
 To maintain and operate RRF.
 Settlement of payments from RRF to Various Wind/Solar power plants/ State utilities.
 Issuance of statement & collection of Renewable Regulatory Charge.
Implications for Project Owners
 If RRF is applicable, the project will have to forecast and schedule its power
 This will require:
 Installation of special energy meters (which can provide data in 15 minute time-blocks)
 Developing a method/ tool for forecasting
 Scheduling of power
 Continuous monitoring (a maximum of 8 revisions for each 3 hour time slot will be allowed)

Volume: XIV
Schedule Generation: 100 MW
Table 2: Intra-State RRF Accounting in case of Wind Generators.
O
P
E
N
A
C
C
E
S
S
Vol. XIV

Volume: XIV
The highlight of this trading session was the increase in volumes (95,504 RECs sold versus 46,362 last month) and price (Rs
2710/ REC*).
The increase in cleared volume of 106% is significant, particularly as increase in volume offered for sale increased only by
62%. This is a clear indication that sellers are expecting a higher price in the future, and are willing to hold RECs for that.
Since the price jump was significant this month (~18%, on the back of a 29% jump last month), a lot of the RECs which were
held back to be sold only at higher prices were cleared this month.
The price increase was also noteworthy. IEX price was Rs 2,700/ REC while PXIL was Rs 3,000/REC. If we consider the last few
months, prices have risen from the floor price to the current level – an increase of 80%.
This is despite that fact the demand volume grew very slowly (only 4% this month, vs 24% in September and 90% in August).
This may be due to lower participation during the Diwali holiday season, and also dampening of demand due to the high pric-
es of last month.
No Solar RECs were traded this month.
O
P
E
N
A
C
C
E
S
S
Vol. XIV
Review of REC Trading-October 2011
* Weighted Average of the prices at IEX and PXIL

Volume: XIV
Status of REC Mechanism as on October 28 ,2011
O
P
E
N
A
C
C
E
S
S
Vol. XIII
Accredited Capacity = 1686.938 MW

Volume: XIV
Status of REC Mechanism as on October 27, 2011
O
P
E
N
A
C
C
E
S
S
Vol. XIV
Registered Capacity : 1241.17 MW

Volume: XIV
O
P
E
N
A
C
C
E
S
S
Vol. XIV
 Energy Banking Provision is being withdrawn in Maharashtra
In a recent circular released by Maharashtra State Electricity Distribution Co. Ltd ( MSEDCL) which proposed new rules for
banking of power generated by renewable sources and sold under open access. For more details:
http://reconnectenergy.com/blog/2011/10/maharashtra-not-to-allow-banking-of-power-to-renewable-generators/
 Power Exchanges Raise REC Trading Charges
IEX and PXIL have raised trading charges across most categories of power trading products. However, REC trading charges
have only been revised by IEX. REC trading charges at IEX are now Rs 20/REC (up from Rs 10/REC). At PXIL, charges re-
main at Rs 10/REC.
http://www.iexindia.com/IEXPower/Uploads/ExchangeCircular/2011/October/Circular%2076.pdf
http://www.powerexindia.com/PXIL/download.aspx?did=4&type=circulars&id=74
 First Solar Project Gets Accreditated
The first solar project got accredited under the REC Mechanism. The project is of Jain Irrigation, has a capacity of 8.5 MW and
is located in Maharashtra.
https://www.recregistryindia.in/index.php/general/publics/accredited_regens
 Renewable Energy Certificates needs market push
With an extra one-and-a-half paise added into accounts of people who put up renewable energy capacities such as windmills,
biomass and solar plants is an attractive return, justifying their investments. The current scenario of the Renewable Energy
Certificates market of the country and its upcoming challenges has lots of concerns.
http://www.thehindubusinessline.com/opinion/article2549198.ece
Cumulative Capacity of Issuance Capacity( MW)
* Based on REConnect’s analysis and
assumptions regarding PLF of registered ca-
pacity.
Green News
Accredited=1686.938
Registered=1241.17
Issuance *=168.09
0
200
400
600
800
1000
1200
1400
1600
1800
Upto March April May June July Aug Sept Oct
IssuanceofREC'sImpliedCapacity
Accredited
Registered
Issuance *
MW

Volume: XIV
Month: October „11 Content of this newsletter is for informational purposes only
Consolidated Status of RPOs across various states in India - As on September 28, 2011
O
P
E
N
A
C
C
E
S
S
Vol. XIV
State Status of Regulation 2011–12 RPO
Obligation*
RPO on CPP? RPO on OA
Users?
Penalty ?
Andhra Pradesh - - - - -
Assam Final 2.70 % + 0.10% Yes Yes Yes (RECmax)
Bihar Final 2 % + 0.50% Yes Yes Yes (RECmax)
Chhattisgarh Final 5.25 % + 0.25% Yes Yes Yes (RECmax)
Delhi Draft 1.90 %+ 0.10 % Yes Yes Yes (RECmax)
Gujarat Final 5.50 % + 0.50% Yet to be notified Yes Yes (RECmax)
Haryana Final 1.25% + 0.25% Yes Yes Yes (RECmax)
Himachal Pradesh Final 11% + 0.10 % Yes Yes Yes (RECmax)
J&K Final 2.9 %+0.10 % Yes Yes Yes (RECmax)
Jharkhand Final 2.5 % + 0.50 % Yes (>5MW) Yes Yes (RECmax)
Karnataka Final 10 % + 0.25%
(BESCOM,MESCOM,CHESCO
M), 7 % + 0.25% for others
Yes (>5MW)
5% RPO
Yes (>5MW)
5% RPO
Yes (RECmax)
Kerala Final 3.05 %+0.25 % Yes Yes Yes (RECmax)
Madhya Pradesh Final 2.10 % + 0.40% Yes Yes Yes (RECmax)
Maharashtra Final 6.75% + 0.25% Yes Yes Yes (RECmax)
Meghalaya Final 0.45 % + 0.30 % Yes Yes Yes (RECmax)
Orissa Final 4.90 % + 0.10 % Yes(>5MW) Yes Yes (RECmax)
Punjab Final 2.34 %+0.03 % Yes Yes Yes (RECmax)
Rajasthan Final 9.50 % + JNNSM Yes Yes Yes (RECmax)
Tamil Nadu* Final 9.95 + 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 4.50 %+ 0.50 % Yes Yes Yes (RECmax)
West Bengal Final - NA NA REC not recognized
JERC for Goa and
UTs
Final 1.70 % + 0.30 % Yes Yes Yes (RECmax)
JERC for Manipur
and Mizoram
Final 2.75 % + 0.25% (Man)
5.75% + 0.25% (Miz)
Yes Yes Yes (RECmax)
Nagaland Draft 15.75 % + 0.25% Yes Yes Yes (RECmax)

Volume: XIV
O
P
E
N
A
C
C
E
S
S
Vol. XIV
Dear 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.html
The summary of our previous newsletters we have published is available below.
 Volume IV: November 2010
Launch of REC Market, CDM Vs. REC Mechanism - An Analysis
(Analysis of this has been also reported by Bloomberg)
 Volume V: December 2010 & January 2011
Impact Analysis of RPO
 Volume VI: February 2011
Demand and Supply Analysis of REC Mechanism
 Volume VII: March 2011
India Witnesses First Ever Trade of REC
 Volume VIII: April 2011
Solar RECs: Investor‟s perspective and feasibility study
 Volume IX: May 2011
REC Market: Another round of Regulatory Push Required
 Volume X: June 2011
Analysis on proposed Floor & Forbearance Prices for control period 2012-2015
 Volume XI: July 2011
Applicability of REC/RPO on Co-Generation Power Plants
 Volume XII: August 2011
REC & RPO: The Dilemma of Double Accounting of “Green Tags”
 Volume XIII: September 2011
Metering Issues in CPPs and Co-Gen: From REC Perspective
Past Newsletters
Feedback:
We wholeheartedly thank you for providing your valuable feed-back on our last newsletter. Your feedback on the
newsletter keeps us motivated 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 - REConnect

Volume: XIV
Services Provided by REConnect
O
P
E
N
A
C
C
E
S
S
Vol. XIV
Detailed Services in REC Space
Services for RE Generators
Services for Obligated Entities (Distribution Companies / Open Access Consumers / Captive Consumers)
Index RRF REC Trade Report REC Project Statistics The Green News About REConnect

Volume: XIV
REConnect is a venture focused on the Renewable Energy Certificates,
Energy Efficiency and Electricity Portfolio Management.
REConnect’s team has extensive experience in the environmental markets
both in India and internationally:
 Worked in the international carbon markets for several years and has
expertise in the consulting and trading of emissions reductions
 Extensive knowledge about various Renewable Energy Certificate and
Energy Efficiency Certificate markets in USA, Europe and Australia etc.
 Worked with Indian Energy Exchange (IEX), India’s leading power ex-
change, and have extensive knowledge and experience of power mar-
kets
 Alumnus of Columbia University, an Ivy League University in USA, and
IIT Bombay
 Highly experienced core team worked with organizations like
J P Morgan, Indian Energy Exchange, Asia Carbon and Gensol.
Contact REConnect
New Delhi
Vibhav Nuwal
vibhav.nuwal@reconnectenergy.com
+91 88006 79988
Bangalore
Vishal Pandya
vishal.pandya@reconnectenergy.com
+91 96202 21101
Mumbai
Ramkumar K
ramkumar@reconnectenergy.com
+91 99303 59992
About REConnect
O
P
E
N
A
C
C
E
S
S
Vol. XIV
Index RRF REC Trade Report REC Project Statistics The Green News About REConnect

About rrf

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (9)

Similar to About rrf

Similar to About rrf (20)

Recently uploaded

Recently uploaded (20)

About rrf