Terms and Conditions for recognition and issuance of Renewable Energy Certificate for Renewable Energy Generation Regulations,

2010

Kiran Kumar (P111008) K Srinivas (P111018) Kumar Rathnam (P111021) Nikhil Yadav (P111030) Pratik Kundu (P111038) Saachi Singla (P111042) Shradha Sapra (P111047) Vikas Patel (P111054)

What is an REC?
A

Renewable Energy Certificate is a commodity representing the attributes of electricity generated from renewable energy sources. Renewable Energy Certificates (RECs) have been used by certain countries as a market instrument for the development of RE technologies.

Title

RPO Concept
The Electricity Act 2003;86(e):
Promote cogeneration and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and 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 a distribution license

RPO Trajectory suggested by NAPCC

16% 14% 12% 10% 8% 6% 4% 2% 0% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15%

NAPCC RPO Target

Source: NAPCC Document published by MoEF

REC Mechanism-Conceptual Framework

REC Option
Electricity Green Attributes

Feed-in Tariff
[State Regulated Tariff]

Sale of Electricity at Market Price in open market

REC
[Solar & Non-Solar]

Sale of electricity to DISCOMs at State regulated tariff

Sell to DisComs at Price Pooled Cost of Power Purchase*

Sale of RECs at Power Exchange

Eligibility

Source: http://reconnectenergy.com/blog/2011/03/renewable-energy-certificates-an-introduction/

Distribution Licenses

OBLIGATED ENTITIES

Captive Consumers

Open Access Users

Salient Features of REC Mechanism

Participation
REC Denomination

Voluntary
1 MWh

Validity
Claim of RECs Categories Trading Platform Banking Borrowing Transfer Type Penalty for Non-compliance

365 Days after issuance

Within 3 months of injection period 1. Solar REC 2. Non-Solar REC Power Exchanges only Not Allowed Not Allowed Single transfer only , repeated trade of the same certificate is not possible Forbearance Price (Maximum Price)

Price Guarantee
Price Discovery Mechanism Trading Calendar Trading Period Market Clearing Financial Settlement

Through Floor Price (Minimum Price)

Closed Double-sided Auction Last Wednesday of the month (T day) 1300-1500 hrs (T day) 1700 hrs(T day) Buyers pay upfront (T day) and Sellers receive on (T+1 day)

REC

Solar
Floor Price: Rs. 9300/MWh Forbearance Price: Rs. 13400/MWh
Source: CERC.gov.in

Non-Solar
Floor Price: Rs.1500/MWh Forbearance Price: Rs. 3300/MWh

Key Stakeholders

Source: http://reconnectenergy.com/blog/2011/03/rec-implementation-mechanism/

REC Implementation Mechanism

Source: http://reconnectenergy.com/blog/2011/03/rec-implementation-mechanism/

Information Requirement for Accreditation

Section A: Owner Details Section B: Operator Details Section C: RE Generating Station Details Section D: Connectivity Details with concerned licensee Section E: Metering Details Section F: Statutory Clearance Details Section G: General Details Section H: Details of Fees and Charges Section I: Declaration Source: CERC.gov.in

Fee and Charges for REC Process

PROCESS Application fees for Accreditation AccreditationCharge PAYABLE TO State Nodal Agency State Nodal Agency FEE Rs. 5,000 Rs. 30,000

Annual Charge
Application fees for Registration RegistrationCharge Annual Charge REC Issuance Charge

State Nodal Agency

Central Agency Central Agency Central Agency Central Agency

Rs. 10,000
Rs. 1,000 Rs. 5,000 Rs. 1,000 Rs.10/ Certificate

Source: http://reconnectenergy.com/blog/2011/03/rec-implementation-mechanism/

Current Scenario of RECs in India

1%

RE Generators Accredited Under the REC scheme 420

0% 13% 12% 5%
Wind Bio-fuel cogeneration Biomass Small Hydro

69%

Others
Solar PV

Source: https://www.recregistryindia.in/index.php/general/publics/Rec_Source_Wise_Breakup

RE Generators Registered Under the REC scheme Current Scenario of RECs in India contd - 338

0% 12% 15% 4%
Wind Bio-fuel cogeneration Biomass Small Hydro

69%

Others

Source: https://www.recregistryindia.in/index.php/general/publics/Rec_Source_Wise_Breakup

RECs Summary
250000 200000 150000 100000 50000 0

Opening Balance
REC Issued REC Redeemed Closing Balance

Source: https://www.recregistryindia.in/index.php/general/publics/index

REC Trading

Source: http://reconnectenergy.com/blog/2012/02/rec-trading-report-%E2%80%93-february-2012/

Source: http://reconnectenergy.com/blog/2012/02/rec-trading-report-%E2%80%93-february-2012/

Way Forward.

Increasing liquidity in the REC market is important for the mechanism to encourage developers.

Implementation of RPOs would go a long way in facilitating this. It has been observed that states with low renewable energy potential are reluctant to participate in REC trading.

To avoid this, penalty mechanisms need to be strictly enforced and biannual or quarterly compliance of RPOs may be introduced.
Increasing the validity of RECs as well as the trading frequency and allowing discoms to issue RECs beyond their RPO targets can be some of the solutions. Though at a nascent stage, RECs are an important mechanism given the skewed distribution of renewable sources across the country and the flexibility these certificates offer in carrying out renewable energy transactions.

Source: Renewable Watch, December 2011 Issue

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