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REC and RPO market and trading on the exchange platform Presented By Pravin Abraham

REC and RPO market and trading on the exchange platform Presented By Pravin Abraham Executive Director Manikaran Power Ltd. www.manikaranpowerltd.in. MAIN DRIVERS OF REC. The Electricity Act, 2003 Section 61(h)- Promotion of Cogeneration & generation of Electricity from RE sources.

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REC and RPO market and trading on the exchange platform Presented By Pravin Abraham

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  1. REC and RPO market and trading on the exchange platform Presented By Pravin Abraham Executive Director Manikaran Power Ltd. www.manikaranpowerltd.in

  2. MAIN DRIVERS OF REC • The Electricity Act, 2003 • Section 61(h)- Promotion of Cogeneration & generation of Electricity from RE sources. • Section 86 (i)e- Promote Cogeneration & generation of RE sources of Energy by providing suitable measures for connectivity with the grid & 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 Distribution Licensee. • Tariff Policy (6th Jan 2006) • Appropriate Commission shall fix RPO & preferential tariffs. • In long term, RE technologies need to compete with all other sources in terms of full costs.

  3. Present Status Installed Renewable Generation Capacity 1,76,430 MW Capacity as on 31st May 2011 19,974 MW Capacity as on 31st May 2011

  4. REC Sellers : Approved Sources

  5. CHARACTERISTICS OF REC

  6. FEATURES OF REC • Overcome geographical constraints & reduce transaction costs for RE transmissions. • Create competition among different RE technologies. • Enables effective implementation of RPO. • Can be implemented with GBI / AD as both mechanisms are based on Certification of generation. • Is independent of Carbon Credits (CDM).

  7. Eligibility Criteria

  8. Process to get REC

  9. REC - Fee & Charges State Nodal Agency Central Agency Central Agency IEX

  10. Renewable Purchase Obligation (RPO) RPO is the obligation mandated by the SERC under the Act to purchase minimum quantum of Renewable Energy out of the total consumption by the ‘Obligated Entity’. Types - Solar and Non-solar Obligated Entity means the • Distribution Licensees • Open Access consumers • Consumers owning Captive Power Plants.

  11. RPO Management Every Obligated Entity must meet its RPO by way of • Own generation or procurement of RE power from developer, OR • Purchase of Renewable Energy Certificates (RECs), solar and non-solar from the Power Exchanges. • Combination of any of the above options. • Solar obligation can be met by purchase of Solar RECs only, but on non availability, can be substantiated by non solar RECs on permission from SERC.

  12. RPO for RE consumers • If REC benefits are taken for a specified capacity of RE power, then it ceases to be green power and hence cannot be utilised for fulfilling RPO. • CPP user avails REC for his generation under consumption, then his consumption shall become obligated and hence RPO is applicable. • RECs received cannot be kept back for RPO fulfillment. They have to sell the RECs and buy RECs from the Power Exchange for RPO.

  13. TRADING AT IEX

  14. REC price 1 REC = 1000 kwh For FY 2011-2012 • Floor Price – Rs. 1500 /REC • Forbearance Price- Rs.3900/REC For FY 2012-2013 onwards • Floor Price – Rs. 1500 /REC • Forbearance Price- Rs.3300/REC

  15. Cleared volume : 600 RECs MCP: Rs 2200/REC 100 REC Sell @ Rs 1500 100 REC Buy @ Rs 3900 200 REC sell @ Rs 1700 300 REC Sell @ Rs 2000 2200 600 REC Buy @ Rs 2200 200 REC Buy@ Rs 1700 600

  16. REC Traded prices

  17. Effects of Default on non Purchase of REC • Obligated entities have to deposit amount at the forbearance price decided by the Central Commission into a separate fund on the basis of the shortfall in units of RPO. • Separate fund to be created and maintained by such obligated entities. • Such funds to be utilized for purchase of the certificates. • If the distribution licensee fails to deposit the amount directed by the Commission within 15 days shall be considered breach of its license condition. • Where any obligated entity fails to comply shall also be liable for penalty as may be decided by the Commission under section 142 of the Act. • In case of genuine difficulty in complying with the RPO because of non-availability of certificates, the obligated entity can approach the Commission for carry forward to the next year.

  18. Manikaran Power Ltd. - Scope of Services Our services include : • Application preparation, filing & liaison with concerned authorities for issuance of REC • Accreditation , Registration and Issuance of REC • REC Sale/Purchase facilitation services • Electricity Component Trading • Advisory Services

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