REC Market

As of Feb’16
Email: info@iexindia.com

For Public Use

In this presentation

Renewable Energy in India

Introduction to REC Mechanism

Market snapshot

Voluntary REC Market

Trading @ IEX
Installed RE Capacity
Total Installed Capacity Renewable Installed Capacity
Hydro 42,623 Solar, 4,879

W to E, 127

Biopower,
4,551
RES 37,416

Small Hydro
Nuclear 5,780 Power , 4,177
Wind Power,
25,088
Thermal
198,484

284,303 MW Total Installed Capacity as on 31st Dec’15 38,822 MW Renewable Installed Capacity as on 31 st Dec’15

Source: CEA , MNRE

REC Genesis:
Separating green attribute from electricity
Bundled Green Power
Issues
•Schedulability
Seller (RE power) Buyer (RPO Compliance) •Uncertainty
•Transmission
Loss & Charge
Un-bundled Green Power

Electricity
Solution
Seller (RE power) •No geographic
REC(Green Attributes) barriers

• Reduced
transaction cost

Buyer (RPO Compliance) •Flexibility in

REC(Green Attributes) meeting the RPO

Discoms, Power exchanges ,

Electricity Bilateral Contracts
REC Participants: Sellers/Eligible Entity
Identified Sources for RE

Wind Solar Small Biomass, Municipa Black Source

Hydro Biofuel, l Waste Liquor appro
Cogenera ved by
tion MNRE
REC Market Participants:
Sellers/Eligible Entity

ELIGIBILITY CRITERIA

PPAs with
Self Sale through: Open
distribution
consumption Access/Bilateral
licensee

No promotional
Banking/ Sale at Mutually PPA at state
PPA at APPC
agreed price regulated tariff
Wheeling

ELIGIBLE ELIGIBLE ELIGIBLE NOT ELIGIBLE

REC Market Participants : Buyers

Obligated Entities
• Distribution Companies
• Open Access Consumers
• Industries consuming Captive Power

Voluntary Entities
• Corporates under CSR
• Individuals
Mechanisms to fulfill compliance
REC (Renewable
Purchase of RE
Feed in Tariff Energy
at market price
Certificates) at PXs

Buy from third

Regulated tariff Non Solar REC
party

Purchase of
electricity from RE
Solar REC
Generator at
Regulated tariff

Penalty for non compliance in the provisions

• If an obligated entity fails to comply with the RPO, it shall also be
liable for penalty as may be decided by the commission under
section 142 of Electricity Act, 2003:
• The Commission may direct the entity to deposit penal charges
equivalent to the forbearance price of REC multiplied by shortfall in
units of RPO
Salient Features of REC Mechanism
Participation Voluntary

REC Denomination 1 REC = 1 MWh

Validity 1095 Days after issuance*
Categories 1. Solar REC 2. Non-Solar REC
Trading Platform Power Exchanges only
Banking/Borrowing Not Allowed
Transfer Type Single transfer only , repeated trade of the same certificate is not
possible
Solar RECs *Floor Price: Rs 3,500 /MWh
*Forbearance Price: Rs 5,800/MWh
Non Solar RECs Floor Price: Rs 1,500/MWh
Forbearance Price: Rs 3,300/MWh
Penalty for Non-compliance ‘Forbearance’ Price (Maximum Price)
Price Guarantee Through ‘Floor’ Price (Minimum Price)

*CERC Order dated: 30 Dec’14

REC Mechanism

Procedure for ACCREDITION (Through State nodal Agency)

Procedure for REGISTRATION (Through Central Agency NLDC)

Procedure for ISSUANCE (Through Central Agency NLDC)

Procedure for TRADING & REDEMPTION(Through PXs)

Trading REC at IEX
Trading Day Last Wednesday of every Month

Market Clearing Closed Double sided auction

Trading Time 1300-1500 Hrs

Verification by Central agency for Valid REC by

By 1530 Hrs cleared seller at IEX

By 1600 Hrs Central agency confirms REC

By 1630 Hrs IEX finalizes trade

By 1700 Hrs Buyer & Sellers informed to Central Agency

By 1800 Hrs Invoice raised (proof of REC trade)

Cleared volume : 600 RECs MCP: Rs 2200/REC

BUY SELL
Price in Rs/REC

3300 A 100 REC A 100 REC

@ Rs 3300 @ Rs 1500
B 600 REC B 200 REC
Rs 3300

@ Rs 2200 @ Rs 1700
200 REC sell @
C 200 REC C 300 REC
@1500

Rs 1700 300 REC sell @ Rs 2000 @ Rs 1700 @ Rs 2000

2200
Buy
RECSell @ Rs

600 REC buy @ Rs2200

100REC

200 REC buy @

100

1700
600

No of REC
REC: Fee & Charges

State Nodal Agency Central Agency

Accreditation Fee & Charges Registration Fee & Charges
Application Rs. 5000 Application Rs. 1000
Processing Fee Processing Fee
Accreditation Rs. 30,000 Registration Rs. 5000
Charges (One Time – Charges (One Time –
for 5 Years) for 5 Years)

Annual Charges Rs. 10,000 Annual Charges Rs. 1000

Re-Validation Fees Rs. 15000 Re-Validation Fees Rs. 5000
(After 5 Years (After 5 Years

Central Agency IEX

Issuance Fee & Charges Redemption Fee & Charges
Fees Per REC Rs. 4.0 Fees Per REC Rs. 20
issued traded
REC - Fee & Charges Impact
Cost Impact of Fee and charges in First Year

Cost Head REC @ 1500 REC @ 2600 REC @ 3300

Assumptions:
• Project of Capacity = 1 MW
Accreditation 45,000 45,000 45,000

• Capacity Utilisation Factor = 22% Registration 7,000 7,000 7,000

• No. of Units Generated = 1.927 MU Issuance 7,708 7,708 7,708

• No. of REC Issued = 1927 TOTAL COST 59,708 59,708 59,708

Revenue from
28,90,800 50,10,720 63,59,760
REC
% Cost
2.07% 1.19% 0.94%
Incurred
Paise Impact
Per Unit 3.09 3.09 3.09
(kWh)
Similarly the cost impact (in Paise / Unit) for:
TWO Year THREE Year FOUR Year
2.03 Paise 1.68 Paise 1.5 Paise
 An update on RECs

Accredited Registered RECs Issued RECs Traded Inventory

Capacity (MW) Capacity (MW) so far

Non -Solar 4,484 4,151 2.61 Crores 1.17 Crores 1.39 Crores

Solar 632 617 38.25 Lacs 6.50 Lacs 31.6 Lacs

As on 2nd Feb’2016

Source: REC registry India

Projects under REC Mechanism
As As
on on
10 th
12 th Feb’15
Dec’14
Accredited
AsAs Capacity
on As on
th :95,056
th th jan’15MW
Asonon
th 4
As on :Capacity 11Sept’14
4 January,2014Aug’14
Registered : 4,785 MW
As on 2nd July 2014
As

As on
12th
Registration Capacity: 4,773 MW Feb
RP : 3975 MW
Accreditation Capacity : 4,989 MW ,2014
AP : 4336 MW

Source: REC registry India

 Projects under REC Mechanism
As on 12 th Feb th 2014
th Dec’14
Accredited As
Capacity As
on7:on10 12
5,112 Feb’15
JulyMW
As on
on
As th
11
on th
Nov’14
: 14-10-14
Aug’14
AsAson
Ason th
on631 th
4AsMarch
st Sept’14nd
on 2 ,2014
October’2013 2014
Registered Capacity : 4,838 MW

As on 7th May 2014

Source: REC registry India

Key statistics: REC Market at IEX

Portfolios 2700+

State 17 States I 5 UTs

Utilities

Generators 808

Industrial 1936
Consumers

Cleared >6 million RECs

Highest: 865,675 RECs
Volume
IEX Data as on 31st Jan 2016
Participation Details at IEX
Captive
User
10%
Non-Solar Buyer Mix
Open Access
FY 14-15
Registered Participants 2756 Consumer/Captive
User
2%
Open Access
Consumer
22%
Voluntary
Obligated Entity 1936 0%
Distribution
Licensee
DISCOMs 27 66%

OA consumers 1800
Open Access Solar Buyer Mix
Captive Consumer 81 Consumer/Captive
User FY 14-15
Open Access 6%
OA + Captive 27 Consumer
11%
Discom + Captive 1
Voluntary
Voluntary 12 0% Captive User
35%

Eligible Entity (Sellers) 808 Distribution

Licensee
48%

As on 31st Jan 2016

Non Solar REC Trade details
Solar REC Trade details
N-Solar REC trade detail
Solar REC trade detail
Voluntary REC Market
Corporate Social Responsibility through REC

Companies Bill,2012: Mandates 2% of profits in CSR for all companies with:

net worth ≥ 500 crore/
turnover ≥1000 crore/
net profit ≥ 5 crore

Profit making CPSEs are required to spend upto 0.5% of their profit after tax
(PAT) on Sustainable Development

The Department of Public Enterprises (DPE) came out with an amendment to

Sustainable Development (SD) Guidelines in December 2011:

• CPSEs can purchase RECs on voluntary basis as a part of their Energy

Management
Free Participation for Voluntary Client at IEX

To promote Voluntary purchase of

RECs by individuals and corporate

No fees will be charged from

Voluntary Clients registered at IEX
Company Snapshot

96% Market Share ~90,000MWh average daily

trade
3800+ Participants 3300+ Industries
Transparency Liquidity

Competition
Thank You for your attention
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