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Renewable Energy Certificate – Legal Framework

Renewable Energy Certificate – Legal Framework. Devesh Singh – Regional Manager (SR) RENERGY 2012, Chennai Email: devesh.singh@iexindia.com. Promoters. Who are we ?. Joint Equity Partners: . Technology : . Renewable Energy Certificates … Genesis. 3. In-firm nature

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Renewable Energy Certificate – Legal Framework

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  1. Renewable Energy Certificate – Legal Framework

    Devesh Singh – Regional Manager (SR) RENERGY 2012, Chennai Email: devesh.singh@iexindia.com
  2. Promoters

    Who are we ?

    Joint Equity Partners: Technology :
  3. Renewable Energy Certificates … Genesis 3 In-firm nature Scheduling for sale within State – can be only on monthly basis Scheduling in MW outside State – very difficult Difficulty in fixing preferential tariffs for each technology, vintage etc. Disparities among States Surplus States (having abundant Renewable resource) - cannot absorb renewable power at preferential tariff Deficit States - Only through scheduling , no other manner for procuring renewable energy Solution Convert (Renewable) Green Energy = Electricity + Green Attribute Sell Electricity @normal prices Sell Green Attributes @ some premium
  4. Legal Framework Federal Structure Electricity is a concurrent subject. Electricity Act, 2003 Basic policy and regulatory framework Regulatory Framework Central level Central Electricity Regulatory Commission (CERC) (inter-State issues) Province level State Electricity Regulatory Commission (SERCs) (intra-State issues) Forum of Regulators - for harmonization
  5. The Electricity Act, 2003 : Enabling provisions Section 86(1)(e): Specify Renewable Purchase Obligation (RPO) from renewable energy sources Section 61(h): Tariff regulations to be guided by promotion of renewable energy sources Section 3: National Electricity Policy, Tariff Policy and Plan Section 4: National Policy permitting stand alone systems including renewable sources of energy for rural areas
  6. The Electricity Act, 2003: Section 86(1) (e) The State Commission shall discharge the following functions, namely: “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 licensee;”
  7. The Electricity Act, 2003: Section 61(h) The Appropriate Commission shall, subject to the provisions of this Act, specify the terms and conditions for the determination of tariff, and in doing so, shall be guided by the following, namely:- (h) the promotion of co-generation and generation of electricity from renewable sources of energy;
  8. National Electricity Policy: (12th February, 05) Urgent need of promotion non-conventional and renewable sources of energy Efforts need to be made to reduce the capital cost of such projects Cost of energy can be reduced by promoting competition within such projects Adequate promotional measures would have to be taken for development of technologies and sustained growth of these sources SERCs to provide suitable measures for connectivity with grid and fix percentage of purchase from Renewable sources Progressively the such share of electricity need to be increased
  9. Tariff Policy: (6th January 2006) Appropriate Commission shall fix RPO and SERCs shall fix tariff Initially Appropriate Commission to fix preferential tariffs In future Discoms to procure RE through competitive bidding within suppliers offering same type of RE In long-term, RE technologies need to compete with all other sources in terms of full costs CERC to provide guidelines for pricing non-firm power if RE procurement is not through competitive bidding
  10. National Action Plan on Climate Change (NAPCC), 30th June,2008 National level target for RE Purchase 5% of total grid purchase in 2010, to be increased by 1% each year for 10 years: 15% by 2020 SERCs may set higher target Appropriate authorities may issue certificates that procure RE in excess of the national standard Such certificates may be tradable, to enable utilities falling short to meet their RPO RE generation capacity needed: From 18000 to 45500 MW by FY2015
  11. National Solar Mission, 2009 Target (grid connected) 20 GW by 2022: Phase I (upto 2013) – 1 GW, Phase II (2013-17) – 4 GW, Phase III (2017-22) – 20 GW Solar Purchase Obligation: 0.25% in the Phase I and to go up to 3% by 2022 Bundling of solar power with un-allocated quota of central stations by NVVNL for resale to utilities GBIs and incentive schemes from state governments
  12. Tariff Policy Amendment : Para 6.4 (1) Dated 20/1/2011 SERC shall fix a minimum percentage of the total consumption of electricity in the area of a distribution licensee Such purchase should takes place more or less in the same proportion in different States SERCs shall also reserve a minimum percentage for purchase of solar energy Up to 0.25% by the end of 2012-2013 Further up to 3% by 2022 Renewable Energy Certificate (REC) would need to be evolved with separate solar specific REC
  13. Implementation of REC Mechanism January,2010 : CERC issues REC Regulation on 14th Jan,2010 CERC(Terms and Conditions for recognition and issuance of Renewable Energy Certificate For Renewable Energy Generation) Regulations, 2010 CERC designated National Load Despatch Centre (NLDC) as Central Agency: Notification dated 29.01.2010 June,2010 : CERC approved Procedures for Accreditation, Registration & Issuance June,2010 : CERC Order on determination of forbearance price and floor price Sep,10 :First amendment of REC Regulation Feb’11 : CERC Approves Business Rules of Exchange Mar’11 : First Trade of REC in India
  14. Important Provisions Eligibility for REC : A Generating company is eligible for obtaining accreditation from the State Agency if : It does not have any PPA at a preferential tariff. Sells to distribution licensee at a price not exceeding the pooled cost of power purchase, Sells to open access consumer at mutually agreed price. Sells through power exchange at market determined price. Non-compliance of RPO :If the obligated entity does not fulfill the RPO as per the regulations, The Commission may direct the obligated entity to deposit into a separate fund, to be created and maintained by the State Agency (SLDC), such amount as the Commission may determine on the basis of the shortfall in units of RPO and the forbearance price decided by the Central Commission (NLDC). The penal charges will be equivalent to the forbearance price multiplied by shortfall in units of RPO.
  15. Summary of REC Regulations REC Regulations All States except AP, Delhi and WB RPO Regulations All States except Delhi RPO for OA /CPPs All States except Delhi, WB, Sikkim, AP, Kerala + Few NE States State Agency Regulations All States except AP, WB + Few NE States RPO Issued
  16. RECs Floor/Forbearance Price 1 REC is equivalent to1 MWh Reference : CERC Order in matter of Petition no. 99/2010, dated March 23, 2010
  17. Performance so far
  18. Non-Solar REC Trade at IEX
  19. Participation Trend - Buyer
  20. Participation Trend - Buyers
  21. ThankY u www.iexindia.com
  22. Status of Accreditated & Registered Project
  23. Source–wise number of projects
  24. State-wise RE Capacity
  25. Source-wise RE Capacity
  26. State –wise number of projects
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