REC Market. Business Development March 14

Transcription

1 REC Market Business Development March 14

2 In this presentation Renewable Energy in India Introduction to REC Mechanism Market snapshot Voluntary REC Market IEX

3 Installed RE Capacity Hydro 40,867 Total Installed Capacity Renewable Installed Capacity RES 31,692 Biomass, 1,365 W to E, 108 Bagasse, 2,800 Solar, 3,063 Nuclear 5,780 Thermal 180,362 Small Hydro Power, 3,991 Wind Power, 22,465 2,58,701 MW Total Installed Capacity as on 31 st Jan 15 33,791 MW Total Installed Capacity as on 31 st Dec 14 Source: CEA, MNRE

4 A vast RE Potential to harness Source: MNRE, Installed capacity as on 31 st Dec, 2014

5 Schemes to promote RE in the country Accelerated Depreciation Scheme Generation Based Incentive Scheme Renewable Purchase obligation Mid 1990s Focused on capacity addition 2009 Shifted focus from capacity addition to generation Electricity Act, 2003, National Tariff Policy, 2006 and National Action Plan on Climate Change, 2008 provided impetus to further RE growth

6 Introduction to REC Mechanism

7 REC Genesis: Separating green attribute from electricity Bundled Green Power Seller (RE power) Buyer (RPO Compliance) Un-bundled Green Power Issues Schedulability Uncertainty Transmission Loss & Charge Seller (RE power) REC(Green Attributes) Electricity Electricity REC(Green Attributes) Buyer (RPO Compliance) Discoms, Power exchanges, Bilateral Contracts Solution No geographic barriers Reduced transaction cost Flexibility in meeting the RPO

8 REC Participants:Sellers/Eligible Entity Identified Sources for RE Wind Solar Small Hydro Biomass, Biofuel, Cogenerat ion Municipal Waste Black Liquor Source appro ved by MNRE

9 REC Market Participants: Sellers/Eligible Entity ELIGIBILITY CRITERIA Self consumption Sale through: Open Access/Bilateral PPAs with distribution licensee No promotional Banking/ Wheeling Sale at Mutually agreed price PPA at APPC PPA at state regulated tariff ELIGIBLE ELIGIBLE ELIGIBLE NOT ELIGIBLE

10 REC Market Participants : Buyers Obligated Entities Distribution Companies Open Access Consumers Industries consuming Captive Power Voluntary Entities Corporates under CSR Individuals

11 Mechanisms to fulfill compliance Feed in Tariff Purchase of RE at market price REC (Renewable Energy Certificates) at PXs Regulated tariff Buy from third party Non Solar REC Purchase of electricity from RE Generator at Regulated tariff Solar REC 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

12 Salient Features of REC Mechanism Participation Voluntary REC Denomination Validity 1 REC = 1 MWh 1095 Days after issuance* Categories 1. Solar REC 2. Non-Solar REC Trading Platform Banking/Borrowing Transfer Type Solar RECs Non Solar RECs Penalty for Non-compliance Price Guarantee Power Exchanges only Not Allowed Single transfer only, repeated trade of the same certificate is not possible *Floor Price: Rs 3,500 /MWh *Forbearance Price: Rs 58,00/MWh Floor Price: Rs 1,500/MWh Forbearance Price: Rs 3,300/MWh Forbearance Price (Maximum Price) Through Floor Price (Minimum Price) *CERC Order dated: 30 Dec 14

13 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)

14 Trading REC at IEX Trading Day Market Clearing Trading Time By 1530 Hrs By 1600 Hrs By 1630 Hrs By 1700 Hrs By 1800 Hrs Last Wednesday of every Month Closed Double sided auction Hrs Verification by Central agency for Valid REC by cleared seller at IEX Central agency confirms REC IEX finalizes trade Buyer & Sellers informed to Central Agency Invoice raised (proof of REC trade)

15 100 REC Rs REC Rs 1500 Price in Rs/REC Cleared volume : 600 RECs MCP: Rs 2200/REC BUY SELL A 100 Rs 3300 A 100 Rs B 600 Rs 2200 B 200 Rs REC Rs REC Rs 2000 C 200 Rs 1700 C 300 Rs REC Rs2200 No of REC REC 1700

16 REC: Fee & Charges Accreditation Application Processing Fee Accreditation Charges (One Time for 5 Years) Fee & Charges Rs Rs. 30,000 Annual Charges Rs. 10,000 Re-Validation Fees (After 5 Years Issuance State Nodal Agency Fees Per REC issued Rs Central Agency Fee & Charges Rs. 4.0 Registration Application Processing Fee Registration Charges (One Time for 5 Years) Fee & Charges Rs Rs Annual Charges Rs Re-Validation Fees (After 5 Years Redemption Fees Per REC traded Central Agency IEX Rs Fee & Charges Rs. 20

17 REC - Fee & Charges Impact Cost Impact of Fee and charges in First Year Assumptions: Project of Capacity = 1 MW Capacity Utilisation Factor = 22% No. of Units Generated = MU No. of REC Issued = 1927 Cost Head Accreditation 45,000 45,000 45,000 Registration 7,000 7,000 7,000 Issuance 7,708 7,708 7,708 TOTAL COST 59,708 59,708 59,708 Revenue from REC % Cost Incurred Paise Impact Per Unit (kwh) Similarly the cost impact (in Paise / Unit) for: TWO Year THREE Year FOUR Year 2.03 Paise 1.68 Paise 1.5 Paise 28,90,800 50,10,720 63,59, % 1.19% 0.94%

18 Market Snapshot

19 An update on RECs Accredited Capacity (MW) Registered Capacity (MW) RECs Issued RECs Traded Balance Non -Solar 4,406 4,179 19,669,143 8,516,950 10,917,504 Solar ,730, ,211 1,555,527 As on 5 th March 2015 Source: REC registry India

20 Projects under REC Mechanism Registered MW Capacity = 4357 MW Accredited : 4928 MW Accredited Capacity = 4852 MW Registered Registered 4716 Capacity : 4740 MW = 4319 MW Accreditated Capacity = 4775 MW RP : 3975 MW AP : 4336 MW As As on As on : As 4on As th on As As January, on th 11 on on Sept th 9Aug 14 th th 12 jan 15 Dec 14 th Feb 15 As As on 12 th Feb,2014 As on 2 nd July 2014 Source: REC registry India

21 Source: REC registry India Projects under REC Mechanism As on 12 th Feb 2014 As As As on As on As on 7on 11 2on th 10 nd th Nov : th July Aug 14 Dec 14 th Feb As As on As on 631 th 4 th st March October 2013 Sept 14,2014 As on 7 th May 2014

22 Key statistics: REC Market at IEX Portfolios State Utilities Generators Industrial Consumers Cleared Volume IEX Data as on 28 th Feb States I 5 UTs >4 million RECs Highest: 423,731 RECs REC Market Share PXIL, 35% IEX, 65%

23 Participation Details at IEX Registered Participants 2372 Buyer Mix FY '13-14 Open Access /Captive, Captive, Obligated Entity 1638 DISCOMs 24 OA consumers 1532 Captive Consumer 60 OA + Captive 20 Discom + Captive 1 Voluntary 12 Eligible Entity (Sellers) 714 Open Access, Voluntary, 650 Discoms, As on 28 th Feb 2015

24 Non Solar REC Trade details

25 Solar REC Trade details

26 N-Solar REC trade detail

27 Solar REC trade detail

28 Why REC a better option than buying renewable power? Why IEX Schedulability Less predictable Less controllable Require better prediction tools over one-day Scheduling changes till one-hour before High Overheads More System imbalances Discoms to spend on more reserves to avoid UI More reserves required to balance Open Access costly Payment of Transmission, Wheeling Charges, Losses and Scheduling Charges to LDCs(50-100p/kWh) visà-vis 7p/kWh in RECs RECs are better way to transfer green premium than green energy

29 Voluntary REC Market

30 Voluntary REC Market

31 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

32 Why RECs for voluntary purchase RECs have several advantages as an instrument to meet SD objectives: Measurable RECs are measurable and it is easy to verify which specific project they are coming from Transparent RECs are issued by government appointed agency, and the process and eligibility criterion are objective and transparent Effortless RECs are de-linked from physical power, which makes the consumption of green power easier to manage Cost effective Both Solar and Non Solar RECs currently traded at the floor price

33 ree 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

34 IEX

35 How to Start Two step Process Registration Become Member with IEX Become Client through any of IEX members Start Trading Last Wednesday of every Month

36 Company Snapshot 96% Market Share ~80,000MWh average daily trade Participants Industries Transparency Liquidity Competition

37 Participation Increasing Participation

38 Transparency Continuous communication with Users IEX Daily SMS Service for Trade Details IEX Monthly Bulletin IEX 15 min Trade Prices displayed on its website

39 Thank You for your attention Best Power Exchange in India Enertia Awards 14, 13 & 12 India Power Award 2014 Power Business View Award 2014 Inc India Innovative 100 Award for Innovation in Product and Technology Best Performing Power Exchange Power Line Awards 13 & 12 Best E-enabled consumer platform India Power Awards 09