Discusses about Renewable Energy certificates mechanism in India.

1. 1
Renewable Energy Certificates
Presented By:
Jaspal Singh (Dy. Mgr. – NETRA)

2. 2
Renewable Energy Certificates
Installed generation capacity
66%
21%
3% 11%
Thermal
Hydro
Nuclear
Renewable
Source: Ministry of Power
Total installed capacity as on 31-12-2011 : 1,86,654 MW

3. 3
Renewable Energy Certificates
RE Generation capacity
Total renewable
Generation capacity
(31-03-2011)
: 19,974 MW
70.0%
15.0%
5.0%
8.0%
0.5% 0.2%
Wind power
Small Hydro
Bimass Power
Bagasse cogeneration
Waste to energy
Solar Power

4. 4
Renewable Energy Certificates
 The Electricity Act, 2003, the policies framed under the Act, as also the
National Action Plan on Climate Change (NAPCC) provide for a roadmap for
increasing the share of renewable in the total generation capacity in the country.
 NAPCC envisages Renewable purchase obligation target of 5% at national
level for 2010 with 1 % annual increase so as to reach around 15 % RPO (
Renewable Purchase Obligation) by 2020.
 RPO : Distribution companies need to purchase certain percentage of their
total power requirement from renewable energy sources.
 RPO targets are set by SERC
Policies to Enhance Renewable Energy

5. 5
Renewable Energy Certificates
States 2011-12 2012-13 2013-14 2014-15
TAMIL NADU 14%
KARNATKA 10% 10%
MAHARASTRA 7% 8 %
KERALA 3.3% 3.6 % 3.9 % 4.2 %
GUJARAT 6% 7 %
RAJSTHAN 9.5%
AP 5%
UP 5 %
HP 11.10 % 6 %
CHHATISGARH 5.25 % 12.10 %
PUNJAB 2.31 % 2.49 % 2.68 % 2.85 %
RPO Trajectory

6. 6
Renewable Energy Certificates
State FY11-12 @MW FY12-13 @MW
Gujarat 0.5 % 186 1.00 % 372
Uttar Pradesh 0.5 % 173 1.0 % 345
Rajasthan 0.5 % 112 0.75 % 168
Tamil Nadu 0.15 % 65 0.25 % 110
Orissa 0.10 % 13 0.15 % 20
Haryana 0.0047 % 0.77 0.0063 % 1
HP 0.10 % 4 0.10 % 4
Solar RPO

7. 7
Renewable Energy Certificates
RE selling options
• RE generators can following options to sell the electricity
RE Generators
Sale at
preferential
tariff
Obligated entities
Electricity
Component
Distribution
company /
Third party sale
REC
Component
Obligated entitiesSelf
Consumption

8. 8
Renewable Energy Certificates
What are REC
Renewable Energy Certificates (RECs)
represent the attributes of electricity
generated from renewable energy sources.
These attributes are unbundled from the
physical electricity and the two products—the
attributes embodied in the certificates and the
commodity electricity—may be sold or traded
separately

9. 9
Renewable Energy Certificates
Eligibility conditions for REC
REC Eligibility
Self consumption
Captive use
No concessional
transmission
No Banking Facility
Benefit
No Electricity Duty
Waiver
Sale to Distribution
licensee, open
access, power Xchg
Sale at Market
determined price
PPA with
Distribution
Licensee
PPA at preferential
tariff
PPA with discom at
<= APPC
Eligible if all Three conditions met Eligible EligibleNot Eligible
Source: Water & Energy International

10. 10
Renewable Energy Certificates
Salient features of REC
• Categories of Certificates
 Solar certificates and Non-solar certificates
• Issuing agency
 The Central Agency (designated by the Central Commission for registration of RE
generators participating in the scheme) will issue the REC to RE generators
• Denomination
 1 REC = 1 MWh
• Validity of Certificates
 Apply for REC within 3 months of generation
 Validity : 1 year from the date of issuance of such certificate
• Minimum capacity of Plant to claim REC
 250 Kwp
• REC trading only through power exchange(s)
 For price discovery and ensuring transparency

11. 11
Renewable Energy Certificates
REC mechanism Benefits
• Overcome geographical constraints
 REC’s are devised to address the above issue of un-even spread of
renewable energy sources
• Reduce risk for local Discom by limiting liability to only electricity
purchase
• Reduce Transaction cost
• Provide flexibility for effective implementation of RPO purchase
 States having less renewable energy potential can buy REC’s to fulfill
there Renewable purchase obligation (RPO)
• Widening participation beyond Local discoms
 Captive consumers, Open access consumers & Voluntary market

12. 12
Renewable Energy Certificates
Registration of Eligible entities
(Central level agency)
Accreditation of RE power
plants
(State nodal agency: SNA)
Information related to accreditated RE plants for registered
entities sent to REC registry
Sale of electricity at par
with conventional power
Discom issuing
RE injection
certificate
State Load
Despatch Centre
(SLDC)
RE
Generator
Central REC
Registry (NLDC)
REC exchange
Auditing Panel
SERC: Compliance
based on SNA
Report
1
2
3
5
6
4
Information
related to RE
generation
electricity
Energy
accounting
Issuance of REC
Information
on REC
purchase/
redemption
State Nodal
Agency SNA

13. 13
Renewable Energy Certificates
Various stakeholders for implementing REC
• CERC – to regulate the entire set-up
• SERC - to implement and monitor the compliance levels
• MNRE – Definition of RE
• MoP – representing Central Government
• Central Agency (NLDC)
– Registration, issuance of certificates, maintaining accounts, settlement,
repository, Monitoring
• Power Xchange(s) – For Trading
• State level agencies : verifiers : (SLDC/State Nodal Agencies)
• State Transmission Utilities (STU) : Reporting

14. 14
Renewable Energy Certificates
REC’s Price Band
• REC’s price shall be determined by the market however it shall trade in
between the band set by Floor price and forbearance price.
• Floor price and forbearance price shall be determined by CERC
Non –Solar
REC (Rs/ MWh
Upto Mar
2012)
Non –Solar REC
(Rs/ MWh)
From Apr
2012 – Mar
2017
Solar REC
(Rs/ MWh)
Upto Mar
2012
Solar REC
(Rs/ MWh)
From Apr
2012 – Mar
2017
Forbearance
price
3900 3300 17000 13400
Floor Price 1500 1500 12000 9300

15. 15
Renewable Energy Certificates
18 % reduction
every year
Comparison of 1 MW Solar plant using PPA and REC market
Case study
25 % reduction
every year
Plant Capacity 1 MW
Units generated / year 1664000
Years
INR
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0 5 10 15 20 25 30
REC@18 % PPA REC @ 25%

16. 16
Renewable Energy Certificates
Challenges for REC
• Reducing floor Price
• RPO levels are different for different states
• APPC is dynamic
• Solar Project financing is not possible if project feasibility is
based on REC
• Periodicity of compliance for RPO - Annually

17. 17
Renewable Energy Certificates
Way Forward
• Vintage based Floor price for Solar REC
– Multiplier linked to reduction in floor price
• Same RPO level across the country
• Trading of REC
– Secondary Market
– Multiple trading
• Periodicity of RPO compliance – Quarterly for stabilization in
price

18. 18
Renewable Energy Certificates