Non-solar demand was significantly higher than in?March 2017, and also last month. In total 27.69 lakh RECs were traded (211.63% higher than March 2017, and 17.43% higher than in February 2018), and clearing ratios on IEX and PXIL were 100% and 100% respectively. Total traded value was Rs 415 crores (This value is calculated considering the rate of Rs 1500 per REC out of which Rs 1000 go to the generator and Rs 500 goes to CERC).
Trading of solar RECs continues to be suspended due to the stay imposed by the Supreme Court.
This value is calculated considering the rate of Rs 1500 per REC out of which Rs 1000 go to the generator and Rs 500 goes to CERC
- All the wind turbine generators with the capacity of 1MW or below would be eligible for repowering.
- The Policy offers incentives in form of an additional interest rate rebate of 0.25% over existing rebate available to the new wind projects by IREDA.
- Secondly through benefits like Accelerated Depreciation or GBI that would be made available to the repowering project.
- The power generated corresponding to average of last three years’ generation prior to repowering would continue to be procured on the terms of existing PPA.
- Augmentation of transmission system from pooling station onwards to be carried out by the respective STU.
- During the period of execution of repowering, wind turbines would be exempted from not honoring the PPA for the non-availability
- ?Similarly, in case of repowering by captive user they will to be allowed to purchase power from grid during the period of execution of repowering.
The Policy can be accessed?here.
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Analysis of Trading:-
Non Solar – Clearing ratio in exchange were at 0.92% and 0.75% in IEX and PXIL respectively for Non Solar RECs. A total of 107,281 RECs were redeemed in this trading session. There was a fall of approx. 30 % in the current trading session w.r.t to July.
?Solar – Clearing ratio stood at 1.52% and 1.86% in IEX and PXIL respectively. Solar RECs rose staggeringly from 17,952 in July to 41,928 this trading session, a rise of 133%. This was good signs for solar, as it has recovered again from major fall last MONTH,
Over the longer term, increasing focus on RPO both from the courts and from regulators is expected to increase demand. Over the last several months many developments have taken place, including the draft Electricity Act, orders from the ApTel and from the Supreme Court. The most recent development was the release of the draft of Renewable Energy Act 2015. An analysis of the Act can?here
The Government had earlier expressed its intention of bringing amendment in the Electricity Act 2003 along with the introduction of the Renewable Energy Act.
The amendment of The Electricity Act has been presented in the parliament by the government. The mains highlights of the proposed amendment are as below:
- The Concept of multiple distribution licensee will be introduced, meaning that a consumer will be have multiple options with regards to choosing its electricity supplier.
- The amendment proposes to separate the content and carriage business. Some companies will own the wire business while the other electricity suppliers or distributors will pay a specified fees to them.
- The timely revision of electricity tariff will be made mandatory under the proposed amendment. If the electricity suppliers do not approach the Regulatory commissions seeking revision in tariff, the commission will have the right to do so at its discretion.
- The Bill also proposes that a power generator can sell the surplus power generated within a state to entities outside it (Inter-state Open Access).
- The amendments proposes that the regulatory commissions can initiate Suo-motu proceedings to determine the rate in case a utility/generating company doesn’t file its petition on time. This will empower the regulatory commissions to take action on tariff determination and revision at the right time.
- The amendment also proposes that the central government will have power of imposing penalties of up to Rs. 1 Crore on entities violating norms under the Electricity Act.
The proposed changes will also promote competition, efficiency in operations and improvement in quality of supply of electricity, as private electricity suppliers will focus on bringing efficiency. But such models have already been experienced in some cities like Delhi and Mumbai, without much improvement. Promoting Open Access will induce more competition resulting in higher efficiency and competitive electricity prices, unless the commissions decide otherwise at the state level.
The timely revision of Discom tariffs has been a major area of concern, since losses or gains are linked with it to a greater extent. This amendment proposed to address the issue on a stricter note. Fixing timelines for tariff petitions and tariff revisions will significantly reduce political influence on electricity tariffs, especially when elections are round the corner.
Apart from the points highlighted above, the amendment might entail a lot more reforms to address current issues in the Power sector, not undermining the Renewable sector, which has been a major focus area of the new government. Grid operations, including Scheduling of Renewable Power might find a mention in the amendment.
It is to be seen how the amendments, when they come into force, impact the sector, as all stakeholders would want to foresee the commercial and operational implications in the longer run.
The related news articles can be read in the links below:
Economic Times
Business Standard
“We’re looking at presenting amendments to the Electricity Act in this session of parliament, for strengthening the penalty provisions manifold in the renewable purchase obligations, to make these more stringent,” said Mr. Piyush Goyal, Minister of Power, in a statement.
He said that the current renewable purchase obligation (RPO) is also being re-looked and added, “Earlier, we had certain set of targets till 2022, which we are bringing forward to 2019, we hope that 15 per cent of the renewable power purchase obligation can be enforced to 2015”.
The concept of RGO will also be introduced in the act, in which companies setting up new power projects will have obligation to generate 10% Renewable Energy component.
The amendment will focus on bringing RE into mainframe, as the REC market has not been performing well and there is little RPO compliance by the obligated entities. The RGO will help the govt. to meet its ambitious target of 100 GW solar power by 2022 with wind capacity addition of 10 GW per year.
The provision for forecasting and scheduling of Renewable Energy is expected in act. Also the concept of ‘Must Run’ and ‘Deemed Generation’ are also expected to be part of this amendment. The idea of ‘Hydro Purchase Obligation’ and the provision of giving Renewable status to large Hydro projects can also be included.
It will be interesting to see how this amendment affects the market performance, before the proposed Renewable Energy Act is passed early next year.
Media Articles:
]]>Earlier Prime Minister Modi led government decided to come up with a Renewable Energy Act by February 2014, just before the Renewable Energy Global Investors Meet and Expo (RE-INVEST) to be organized by MNRE.
In a statement given by Mr. Upendra Tripathy, Secretary, MNRE said that – “A technical committee is working on it and they are likely to get back to us with the first draft of the legislation in 20-25 days. After that we will put it out for inviting suggestions and objections from all stakeholders including the state governments. I believe clarity in policy will help bring in much needed investment into the sector in India. This legislation will be complementary to the Electricity Act”.
The Renewable Energy Act will be work as a milestone for promoting green energy and is expected to attract huge investment in the sector. The new govt. has already showed its intentions by setting a target of 100GW solar energy by the end of 2022, which previously was 20 GW under JNNSM.
The Electricity Act 2003 provided great impetus to the power sector in many aspects as it underwent major reforms over the period of last 10 years. It is to be seen how the Renewable Energy Act shapes up, as it is expected to resolve some of the major issues the industry is facing today and at the same time provide a platform for a new revolution in RE, with creation of ample opportunities for all stakeholders and long term road-map for RE.
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