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REC Mechanism -A overview
- 2. Outlines
Overview of RPO ,SPO
State wise RE Potential
Introduction to REC mechanisms
RPO obligated entities
REC generator
Categories of certificates
General procedure for issuance of REC
Salient features of RECs
Few statistics about REC
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© 2013 UPES
- 3. Overview of RPO & SPO
NAPCC that aims at 15% renewable energy mix in overall Energy mix
in India ,by 2020
RPOs was initiated by CERC to mandate the State utilities procure
the power from RE sources ,section 86(1) e under EA act 2003
RPO target are fixed by respective state electricity regulatory
commission
RPO are enforced on three categories of power consumersDistribution licensee, Open access consumer and captive consumers
SPO is solar purchase obligation
Every states is having different potential of renewable energy
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© 2013 UPES
- 4. •
Renewable Energy Certificates (RECs) represent the attributes of
electricity generated from renewable energy sources
• Two products-the attributes embodied in the certificates and the
commodity electricity are sold or traded separately
• ONE REC represents that 1MWh of energy is generated from
renewable sources
• Expected to become the currency of renewable energy markets
because of their flexibility
• RECs are not subjected to the geographic and physical limitations of
commodity electricity
•
Traded in Indian Energy exchange and Power exchange of India ltd
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© 2013 UPES
- 5. • Entities mandated to purchase a defined quantum of renewable energy
of their overall consumption are Obligated entities
• Obligated entities may either purchase renewable energy or can
purchase RECs to meet their Renewable purchase Obligation (RPO)
set under Renewable Purchase Obligation of their respective
States.
• Following entities are obligated in the State:a. Distribution Licensees
b. Captive Consumers
c. Open Access users
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© 2013 UPES
- 6. • This concept seeks to address the mismatch between availability of RE
sources and the requirement of the obligated entities to meet their RPO.
• It is expected to encourage the RE capacity addition in the States where
there is potential for RE generation as the REC framework seeks to create a
national level market for such generators to recover their cost.
• Central Electricity Regulatory Commission (CERC) has notified
Regulation on Renewable Energy Certificate (REC) in fulfillment of its
mandate to promote renewable sources of energy and development of market
in electricity
• The framework of REC is expected to give push to RE capacity addition in
the country
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© 2013 UPES
- 7. Categories of Certificates
Solar Certificates issued to eligible entities for
generation of electricity based on solar as renewable
energy source
Non-solar certificates issued to eligible entities for
generation of electricity based on renewable energy
sources other than solar( Wind , biomass ,Small
hydro, co-generation etc. )
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© 2013 UPES
- 8. Trading price of RECs
The price of REC would be determined in power exchange.
REC would be traded in power exchange within the forbearance price
and floor price determined by CERC from time to time
Floor Price : price has been determine in the basic min requirement
for insuring the viability of RE project set up to meet the RE target
Forbearance price : Price has been derived based on the highest
different between cost of generation of RE technology and average
power purchase cost
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© 2013 UPES
- 9. Eligibility Criteria for Selling RECs
•
Renewable source is approved by MNRE and respective State Commission
•
Do Not have any Power Purchase Agreement (PPA) for the capacity related
to such generation to sell electricity at a preferential tariff determined by the
appropriate commission
•
Do Not have agreement to sell electricity to local distribution company at
pooled cost of power purchase of that distribution company
•
Sells electricity to the
i. Distribution licensee of the area at the pooled cost of power
purchase of such distribution licensee
ii. To any other licensee or to an open access consumer at a
mutually
agreed price,
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© 2013 UPES
- 12. 1. State Nodal Agency (SNA) authorizes or endorses the RE Generator and
recommends it for registration
2. NLDC (Central Agency) registers their Generator as ‘Eligible Entity’ for its
RE Generation Project
3. The electricity generated from RE project is injected into the grid and sold to
either a distribution licensee or open access consumer with whom it has
contract or sold through the power exchange
4. Once the RECs are issued to the RE Generator (Eligible
Entity), sale/purchase of RECs amongst Eligible RE Generators and
Obligated entities to be undertaken only through Power Exchanges.
5. The Obligated Entities purchase RECs through PXs and to surrender to SERC
or other agency as specified by SERCs as to meet their RPO.
6. NLDC (REC Registry) maintains record of RECs sold and purchased
7. Compliance Auditors to monitor and report the compliance of REC Regulations
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© 2013 UPES
- 15. • RE generators with capacity untied in PPA will have an option to sell
electricity and REC separately
• REC will be issued to RE Generators only
• Purchase of REC would be considered as purchase of RE for purpose of
RPO
compliance
• Grid Connected RE technology approved by MNRE would be eligible for
REC mechanism
• Separate category of Solar REC
• Provision of regulatory charge to enforce compliance of RPO
• RECs are intra-country tradable certificates and are distinct from carbon
credits
• It is proposed to make RECs eligible for compliance with energy saving
obligations
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© 2013 UPES
- 16. Few statistics about REC
REC trading day is last Wednesday of Month
First Solar REC project was 2 MW developed by M& B switchgear
limited traded on may 2012
Non Solar REC market is active since may 2011
Total 903 project are developed under REC mechanism till date
No of Project accreditated
16%
0%
Wind
0%
9%
Small Hydro
Biomass
7%
3%
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Nov 2013
Biofuel-cogen
65%
Solar PV
© 2013 UPES