During the June trade session, RECs worth Rs 98 crores were transacted.
Non-Solar: Non-Solar RECs traded at the price of INR 1,000/REC (floor price) at both the exchanges. A total of 6,30,822 RECs were traded in this session. No Vintage RECs were traded.?
Solar: The total number of solar RECs traded in this session was 2,34,993 at INR 1500/REC at both the exchanges.
During the May trade session, RECs worth Rs 57 crores were transacted.
Non-Solar: Non-Solar RECs traded at the price of INR 1,000/REC (floor price) at both the exchanges. A total of 252,589 RECs were traded in this session. No Vintage RECs were traded.
Solar: The total number of solar RECs traded in this session was 142,781 at INR 2,201/REC at IEX and INR 2,300/REC at PXIL.
These regulations differ in many significant ways from the existing REC regulations. A brief summary is provided below:
It is important to note that these regulations, though final, are not yet operational – they will come into force from date as notified by the Commission in the Official Gazette.
Key Changes in the REC Mechanism 2022, are as follows:
- Eligibility for RECs:
- Significantly expanded list of eligible projects
- RE projects, Captive projects, Discoms and open access consumers are eligible for RECs, subject to minimal conditions (should not have availed concessions on transmission or wheeling charges)
- “banking of energy” related provisions have been done away with (ie, even if banking or “preferential banking” is availed, it does not disqualify a project
- Large Hydro projects are also likely to be eligible for RECs (till now, only small hydro projects were eligible)
- REC multiplier for different technologies:
- The REC Multiplier concept is introduced where some technologies like Biomass will get >2 RECs for every MWH of power generated. (see detailed table below)
- REC pricing:
- Floor and forbearance prices have been done away with
- The Price of REC Certificate will be as discovered in the Power Exchange(s) or as mutually agreed between eligible entities and the electricity traders.
- Trading of RECs:
- Direct trading of RECs to be possible. REC Certificates can be exchanged through power exchanges or through electricity traders.
- The Certificates issued shall remain valid until they are redeemed
Details of Certain Features of the new REC regulation
- Eligibility for REC
2. CERC has? introduced Multiplier, as below, which will be effective from the date of notification of the regulation for a period of 3 years and will? be reviewed from time to time.
The multiplier once assigned will be valid for a period of 15 years.
It is important to note that the certificate multipliers will only be provided to projects commissioned after the date of effect of these regulations
]]>During the April trade session, RECs worth Rs 55.40 crores were transacted.
Non-Solar: Non-Solar RECs traded at the price of INR 1,000/REC (floor price) at both the exchanges. A total of 331,284 RECs were traded in this session. No Vintage RECs were traded.
Solar: The total number of solar RECs traded in this session was 140,186 at INR 2,200/REC at IEX and INR 2,300/REC at PXIL.
During the March trade session, RECs worth Rs 97 crores were transacted.
Non-Solar: Non-Solar RECs traded at the price of INR 1,000/REC (floor price) at both the exchanges. A total of 342,067 RECs were traded in this session. No Vintage RECs were traded.
Solar: The total number of solar RECs traded in this session was 278,343 at INR 2,250/REC at IEX and? INR 2205/REC at PXIL.
During the February trade session, RECs worth Rs 102 crores were transacted.
Non-Solar: Non-Solar RECs traded at the price of INR 1,000/REC at IEX (floor price) INR and 1000/REC at PXIL (floor price). A total of 604,997 RECs were traded in this session. No Vintage RECs were traded.
Solar: The total number of solar RECs traded in this session was 180,037 at INR 2,300/REC at IEX and INR 2,201 at PXIL.
Also note that CERC has proposed significant changes in the RECs mechanism. A detailed analysis is here – http://www.slotln.online/cerc-proposes-drastic-changes-in-the-rec-mechanism/
Comments are due by March 15, 2022.
]]>Key Changes provisioned in the draft REC Mechanism 2022:
- Captive projects are proposed to be eligible for RECs, subject to some conditions (they were disqualified by an earlier amendment).
- REC Multiplier concept is proposed to be introduced. Some technologies like Biomass will get >1 RECs for every MWH of power generated.
- Direct trading of RECs to be possible. REC Certificates can be exchanged through power exchanges or through electricity traders.
- The Price of REC Certificate will be as discovered in the Power Exchange(s) or as mutually agreed between eligible entities and the electricity traders. It appears that the floor and forbearance prices will be done away with.
- It appears that Lage Hydro projects will also be eligible for RECs (till now, only small hydro projects were eligible)
- Consumers and Discoms who consume renewable energy in excess of RPO will also be eligible for RECs.
Main Features of the draft REC Mechanism 2022:
Eligible Entities:
As per the draft order, following entities will be eligible for issuance of certificates.
Exchange and Redemption of Certificates
Major changes have been introduced in the redemption of REC certificates as below:
- Certificates can be exchanged through power exchanges or through electricity traders which will allow the direct trading of certificates.
- Eligible entities selling certificates through electricity traders will have to inform the central agency in advance upon which central agency will block those certificates
- Upon trading of those blocked certificates, Electricity traders will have to inform to central agency to update the registry
- CERC will continuously monitor the possibility of abnormality in price & volume of certificates to avoid hoarding and market manipulation.
Certificate Multiplier:
CERC also proposes to introduce Multiplier, as below, which will be reviewed regularly.
*1 REC = 1 MWh
Why Certificate Multiplier?
Dramatic fall in the capital cost of Wind and Solar technologies significantly lowered the tariffs. Probably, this has resulted in some established technologies like small hydro and biomass to become commercially unviable as described below. Technology Multiplier can be a great initiative to incentivize such projects.
It is important to note that the certificate multipliers will only be provided to projects commissioned after the date of effect of these regulations
Additionally, the Central Agency will issue the Detailed Procedure after stakeholders’ consultation within a period of 3 months of notification of these regulations.
]]>The January trade session again saw significant volume, with RECs worth Rs 182 crores being transacted.
Non-Solar: Non-Solar RECs traded at the price of INR 1,000/REC at IEX (floor price) INR and 1000/REC at PXIL (floor price). A total of 12,32,865 RECs were traded in this session. No Vintage RECs were traded.
Solar: The total number of solar RECs traded in this session was 2,54,018 at INR 2,300/REC at IEX and? INR 2,400 at PXIL.
The December trade session saw significant volume, with RECs worth Rs 245 crores being transacted.
Non-Solar: Non-Solar RECs traded at the price of INR 1,000/REC at IEX (floor price) INR 1000/REC at PXIL (floor price). A total of 17,16,925 RECs were traded in this session. No Vintage RECs were traded.
Solar: The total number of solar RECs traded in this session was 3,33,887 at INR 2,211/REC at IEX and? INR 2,100 at PXIL.
In order to cater the new issues related to energy-mix and large procurement by distribution licensee, earlier mechanisms are further extended to hydro power power and battery energy storage along with thermal and renewable energy. This would ultimately benefit the distribution licensee to meet their RPO within the existing contract capacity and without any additional financial burden.
Applicability of the projects:
Following three types of projects will be eligible under the scheme:
- RE power plant co-located within the premises of a generating station
- RE power plant located in the vicinity i.e., within 100 km of a generating station
- RE power plant co-located within the premises or located in the vicinity of a generating station supplying RE power to procurers of another generating station, located at a different location and owned by the same generating company.
According to MoP, All new and existing coal/lignite/gas based thermal generating stations or hydro power stations are considered as a ‘generating station’ for the purpose of this scheme.
How would the tariff of RE power plants be determined?
- In case of RE power plant located within the premises of generating station under section 62, appropriate commission will determine the tariff of renewable energy supplied.
- In case RE power plant located in the vicinity of the generating station under section 62 or 63, renewable energy will be procured on a competitive bid basis.
Concession on Transmission Charges
In case of RE power plant located within or located in the vicinity of a generating station, No additional transmission charges will be levied.
In case RE power plant situated at one generating station supplying to procurers of another generating station located at different locations and owned by the same generating company, No transmission charge will be levied for using Interstate transmission system(ISTS).
Scheduling and commercial mechanism
Once the schedule for next day is received from the generating station, the generating company can use thermal/hydro and RE Power to meet the scheduled generation. Sum of all the power supplied from thermal/hydro and RE will be considered for DSM purposes.
Important point to note is that the scheduled capacity of the thermal/hydro will be with respect to the PPA agreement and availability of primary fuel and can not be based on the availability of RE power.
The tariff at which the RE power (with or without Energy storage system) supplied to the beneficiaries will be less than ECR (Energy change rate) of the originally scheduled generating station.
The net saving realised under this scheme will be passed on to the beneficiary by the generating company in the ratio of 50:50 subject to the cap of 7 paise/ kWh to the generator.
DSM and Scheduling
As per the scheme, once the schedule for a specific thermal/hydro generating station has been received, then depending upon the forecast available for RE, the generating station will supply to meet the schedule from thermal/hydro power and replacement of RE power.
The deviation will be applicable to the scheduled generation from thermal/hydro stations and sum of actual generation from thermal/hydro and RE power sources. In case the generating station is able to meet its scheduled generation by supplying thermal/hydro and RE power in any ratio, No DSM charge will be applicable.
Additional mechanism for RE bundling
- Requirement of additional agreement to PPA/PSA : Distribution Licensee can procure RE power within existing PPA to meet their RPO, There will not be any requirement for signing additional agreement
- Requirement of selling the RE power in the power market when it is not feasible to replace the thermal/ hydro power : Even though the first priority of RE power must be given to the PPA holders, according to the scheme, In case it is not feasible to supply the RE power by the generating station, they can sell such RE power to third parties/power exchange without any clearance from the beneficiaries. Also, during such conditions, there will be no requirement of sharing gains/losses with the beneficiaries.