Indian Energy Exchange September 2018 For Public Use 1
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Indian Energy Exchange September 2018
For Public Use 1
In this presentation
Installed RE Capacity
Source: www.cercind.gov.in
345,493 MW Total Installed Capacity as on 31st July’18
70,646 MW Renewable Installed Capacity as on 31st July ’18
Thermal 222662 Nuclear 6780
Hydro 45403
RES 70648
Total Installed Capacity
Wind Power, 34,293
Small Hydro Power , 4,493
Biopower, 8,700
W to P, 138
Solar, 23,022
Renewable Installed Capacity
New REC Projects Registration
Trend
218
65
212
299 246
1088
850
263 203 187
60 110
83 100
0
200
400
600
800
1000
1200
FY 11-12 FY 12-13 FY 13-14 FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19
Non Solar Capacity Solar Capacity
Data upto 10th Sep 2018
Registration revoked/expired:2073 MW
Projects registered since inception of
REC Mechanism
5
Year Total Registered till 31.03.2018
Re-Validated(after end of Five years)
Registration Revoked/Expired
Registered as on 31.03.2018
No. of Projects
Capacity No. of Projects
Capacity No. of Projects
Capacity No. of Projects
Capacity
2010-11 18 166 0 0 0 0 10 70
2011-12 346 2,087 0 0 0 0 177 1,018
2012-13 330 1,271 0 0 10 97 158 711
2013-14 239 811 0 0 13 70 220 669
2014-15 163 642 0 0 3 27 136 486
2015-16 86 311 8 67 35 334 80 263
2016-17 87 555 98 671 199 1,103 86 553
2017-18 38 179 184 752 142 443 38 179
Total 1,307 6,022 290 1,490 402 2,073 905 3,948
DISCOMS
2016-17 2 NA 0 NA 0 NA 2 NA
A vast RE Potential to harness
Source: www.mnre.gov.in, Installed capacity as on 31st January 2018
48500 50000
23000
15000
32,848
17,052
8,413
4,418
0
10000
20000
30000
40000
50000
60000
Wind Solar Biomass + BagasseCogen
Small Hydro
MW
Potential Installed Capacity
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
REC Genesis: Separating green attribute from electricity
Un-bundled Green Power
Seller (RE power)
REC(Green Attributes)
Electricity
REC(Green Attributes) Buyer (RPO Compliance)
Electricity
Bundled Green Power
Seller (RE power) Buyer (RPO Compliance)
Issues
•Schedulability •Uncertainty •Transmission Loss & Charge
Solution •No geographic barriers • Reduced transaction cost •Flexibility in meeting the RPO
Discoms, Power exchanges , Bilateral
Contracts
10
Compliance Market: Overview of Legal Framework 2008 : National Action Plan on Climate Change (NAPCC)
• RPO at 5% in year 2010, increasing 1% every year for 10 years.
• Authorities may issue tradable certificates and penalties for shortfall
Jan’10 : CERC issued REC Regulation
• CERC designated National Load Despatch Centre (NLDC) as Central Agency: Notification dated 29.01.2010
June’10 : CERC approved Procedures for Accreditation, Registration & Issuance
Sep’10: First amendment of REC Regulation
July’13: Second amendment to REC Regulation
• Amendment in eligibility, Self consumption and Validity period
Dec’14 : Third Amendment to REC Regulations
Mar’16 : Fourth Amendment to REC Regulations
•A distribution licensee shall be eligible for issuance of RECs •Vintage Multiplier ,Validity of RECs for 1095 Days , Revision in price band of Solar RECs
• Terms and Conditions for recognition & issuance of Renewable Energy Certificate for Renewable Energy Generation
REC Participants: Sellers/Eligible Entity Identified Sources for RE
REC Market Participants: Sellers/Eligible Entity
ELIGIBILITY CRITERIA
Self consumption
No promotional Banking/
Wheeling
ELIGIBLE
Sale through: Open Access/Bilateral
Sale at Mutually agreed price
ELIGIBLE
PPAs with distribution
licensee
PPA at APPC
ELIGIBLE
PPA at state regulated tariff
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
Feed in Tariff
Regulated tariff
Purchase of electricity from RE
Generator at Regulated tariff
Purchase of RE at market price
Buy from third party
REC (Renewable Energy
Certificates) at PXs
Non Solar REC
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
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 1000/MWh Forbearance Price: Rs 2400/MWh
Non Solar RECs(After 01.04.2017) Floor Price: Rs 1,000/MWh Forbearance Price: Rs 3,000/MWh
Non Solar RECs(before 01.04.2017) Floor Price: Rs 1500/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 Mar’17
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 at IEX
Trading Day Last Wednesday of every Month
Market Clearing Closed Double sided auction
Trading Time 1300-1500 Hrs
By 1530 Hrs Verification by Central agency for Valid REC by 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)
10
0 R
EC B
uy
@ R
s 3
30
0
BUY SELL
A 100 REC @ Rs 3300
A 100 REC @ Rs 1500
B 600 REC @ Rs 2200
B 200 REC @ Rs 1700
C 200 REC @ Rs 1700
C 300 REC @ Rs 2000
3300
200 REC buy @ 1700
No of REC
Pri
ce in
Rs/
REC
2200
600
600 REC buy @ Rs2200
200 REC sell @ Rs 1700
300 REC sell @ Rs 2000
10
0 R
EC S
ell
@ R
s 1
50
0
Cleared volume : 600 RECs MCP: Rs 2200/REC
Accreditation Fee & Charges
Application Processing Fee
Rs. 5000
Accreditation Charges (One Time –
for 5 Years)
Rs. 30,000
Annual Charges Rs. 10,000
Re-Validation Fees (After 5 Years
Rs. 15000
Registration Fee & Charges
Application Processing Fee
Rs. 1000
Registration Charges (One Time –
for 5 Years)
Rs. 5000
Annual Charges Rs. 1000
Re-Validation Fees (After 5 Years
Rs. 5000
State Nodal Agency Central Agency
Issuance Fee & Charges
Fees Per REC issued
Rs. 4.0
Central Agency
REC: Fee & Charges
Redemption Fee & Charges
Fees Per REC traded
Rs. 20
IEX
REC - Fee & Charges Impact
Assumptions:
• Project of Capacity = 1 MW
• Capacity Utilisation Factor = 22%
• No. of Units Generated = 1.927 MU
• No. of REC Issued = 1927
Cost Impact of Fee and charges in First Year
Cost Head REC @ 1500 REC @ 2600 REC @ 3300
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
28,90,800 50,10,720 63,59,760
% Cost Incurred
2.07% 1.19% 0.94%
Paise Impact Per Unit (kWh)
3.09 3.09 3.09
Similarly the cost impact (in Paise / Unit) for:
TWO Year THREE Year FOUR Year
2.03 Paise 1.68 Paise 1.5 Paise
Market Snapshot
An update on RECs
Source: www.recregistryindia.nic.in
As on 10th September 2018
Accredited
Capacity
(MW)
Registered
Capacity
(MW)
No. of
Projects
Registered
No of RECs (in Cr)
Issued Traded Self
Retained Inventory
Non -Solar 3906 3240 550 4.04 3.68 0.16 0.19
Solar 746 743 362 0.82 0.59 0.088 0.22
Total 4652 3983 912 4.86 4.19 0.17 0.42
Projects under REC Mechanism
RP : 3975 MW AP : 4336 MW
As on : 4th January,2014
Source: www.recregistryindia.nic.in
As on 12th Feb ,2014
As on
As
As on 2nd July 2014 As on 11th Aug’14 As on 4th Sept’14 As on 10th Dec’14 As on 9th jan’15 As on 12th Feb’15
Registration Capacity: 4,773 MW Accreditation Capacity : 4,989 MW
Accredited Capacity : 5,056 MW Registered Capacity : 4,785 MW
As on 30-06-18
1137
839
327
267
127
627
167
208 25 15 97 147 1150
925
749
266
127
635
167
208
25 63 106
231
State-wise RE Capacity (MW)
Tamil Nadu Maharashtra Uttar Pradesh Gujarat Karnataka Rajasthan
Andhra Pradesh Madhya Pradesh Chhattisgarh Punjab Himanchal Pradesh Others
Registered Projects
Accreditated Projects
Data as on 10th September,2018
Projects under REC Mechanism
As on 31st October’2013
Source: www.recregistryindia.nic.in
As on 12th Feb 2014 As on 6th March ,2014
As on 7th May 2014
As on 2nd July 2014 As on 11th Aug’14 As on 4th Sept’14 As on : 14-10-14 As on 7th Nov’14 As on 10th Dec’14 As on 12th Feb’15 Accredited Capacity : 5,112 MW Registered Capacity : 4,838 MW
As on 30-06-18
2210
429
423
179
743 0
2254
883
525
242
746
2
Source wise RE capacity (MW)
Wind Bio-fuel cogeneration Biomass Small Hydro Solar Others
Accreditated Projects
Registered Projects
Accreditated Projects
Registered Projects
Data as on 10th September,2018
Key statistics: REC Market at IEX
Market Share
State Utilities
Generators
Industrial Consumers
Cleared
Volume
28 States I 5 UTs
790+
>2 Crore RECs
Highest: 32,39,142 RECs (Dec’17)
2,750+
IEX Data as on 10th Sep , 2018
63%
Registered Participants 3591
Obligated Entity 2778 DISCOMs 34
OA consumers 2534
Captive Consumer 163
OA + Captive 46
Discom + Captive 1
Voluntary 21
Eligible Entity (Sellers) 792
Participation Details at IEX
As on 10th September 2018
• Less predictable
• Less controllable
• Require better prediction tools over one-day
• Scheduling changes till one-hour before
Schedulability
• More System imbalances
• Discoms to spend on more reserves to avoid UI
• More reserves required to balance High Overheads
• Payment of Transmission, Wheeling Charges,
Losses and Scheduling Charges is higher than purchase of RECs
Open Access costly
Why REC a better option than
‘buying renewable power’ ?
RECs are better way to transfer green premium than green energy
N-Solar & Solar REC trade detail
364,820 378,417 81,545
292,482 342,121
1,889,982
3,239,142
182,254 390,158
2,079,799
136,979 323,634 221,674 191,988
291,588
-
200
400
600
800
1,000
1,200
1,400
1,600
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
No
of
REC
S C
lear
ed
Non-Solar
REC Traded MCP(Rs/REC)
FY 18: 9,240,740 I FY 19 (YTD): 1,586,330
88,533
644,151
393,822
288,070
808,324
-
200
400
600
800
1,000
1,200
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
No
. of
REC
s Tr
aded
Solar
REC Traded MCP(Rs/REC)
88,533
Off take Routes & RECs issued against the
projects
29
S no. Route Off-take
Total registered till 31.03.2018
Registration Revoked/Expired
Registered as on 31.03.2018
No. of RECs
issued
No.of Projects
Capacity in MW
No.of Projects
Capacity in MW
No.of Projects
Capacity in MW
1 OA 368 1,112 72 279 296 833 8,068,723
2 APPC 425 2,055 121 396 304 1,659 16,359,559
3 CGP 355 2,137 161 1,156 194 981 16,602,593
4 APPC/OA 4 57 1 24 3 33 444,418
5 CGP/OA 96 428 1 2 95 427 3,824,715
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
Key Recent Developments & their likely impact
REC Market
• Supreme Court Judgment on Renewable
Purchase Obligations Applicability in Rajasthan
• Gujarat High Court judgment in the case of
Hindalco (Birla Copper), and others
• Recent APTEL Judgments related to RPO / RECs
– Case 1: IWEA, IWTMA, VS All SERCS
– Case 2: IWPA VS GERC & all Gujarat discoms
Company Snapshot
97% Market Share + 5000 MW average daily trade
6200+ Participants
4000+ Industries 70+ Commercial 50+ Discoms
480+ Conventional Generators 1500+ RE Participants
Competition
Liquidity Transparency
33
Market Share-FY 18 (DAM+TAM) Average Daily Trade- FY18(DAM) Participation-as on 30 June’’18
Continuous communication with Users
IEX Daily SMS Service for Trade Details
IEX Monthly Bulletin
IEX 15 min Trade Prices displayed on its website
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