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Renewable Energy Certificate Framework

Renewable Energy Certificate Framework. S.K. Chatterjee Dy. Chief (RA). Structure of the presentation. Overview of legal framework New Policy Initiatives Renewable Energy Certificate Mechanism CERC REC Regulations Information Required from SLDCs Steps taken so far.

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Renewable Energy Certificate Framework

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  1. Renewable Energy Certificate Framework S.K. Chatterjee Dy. Chief (RA)

  2. Structure of the presentation • Overview of legal framework • New Policy Initiatives • Renewable Energy Certificate Mechanism • CERC REC Regulations • Information Required from SLDCs • Steps taken so far

  3. Overview of Legal framework 3

  4. Electricity Act, 2003 : Enabling Provisions • NEP to aim for optimal utilisation of resources including renewable sources • Tariff regulations of Commissions to be guided by promotion of generation of electricity from RE sources • SERCs to specify Renewable Purchase Obligations (RPOs) • Regulatory Commissions required to promote the development of power markets

  5. Regulatory Initiatives RPO Status :- FY 2009-10

  6. Regulatory Initiatives :Preferential Tariff • SERCs have determined preferential tariff for different RE sources • CERC has issued comprehensive tariff guidelines for renewable energy as mandated in tariff Policy

  7. Installed Generation Capacity in India

  8. Installed Renewable Generation Capacity

  9. Renewable Energy Capacity Year Wise Is the growth slowing down?

  10. Cumulative achievements: Grid-interactive RE power

  11. New Policy Initiatives

  12. National Action Plan onClimate Change (NAPCC)-2008 • Suggests RPO at 5% in year 2010, increasing 1% every year for 10 years. • Appropriate authorities may issue certificates that procure RE power in excess of the national standard. • Such certificates may be tradable, to enable utilities falling short to meet their RPS. • Penalties may be levied, falling short in RPS

  13. FOR Working Group : Recommendations • Inter-State exchange of RE power is desirable from national perspective and the same should be promoted • Concept of REC as a tool for promotion of RE sources • REC mechanism can be introduced within existing framework of EA 2003 • Co-operation amongst States is essential and SERCs should recognize procurement of RE generated in other States for purpose of compliance as RPO

  14. Renewable Energy Certificate Mechanism

  15. REC: Context • Present installed capacity based on renewable is about 16 GW require to be increased to 45 GW in next five years if RPO level is to go up to 10% nationally, as suggested in NAPCC • Large part of untapped potential is located in the states which have already achieved high levels of RPO • Infirm nature of RE power and high cost generation REC mechanism is expected to overcome geographical constraints and provide flexibility for effective implementation of RPO compliance, reduce risks for local Discom by limiting its liability to only electricity purchase , reduce transaction costs and create competition among different RE technologies

  16. CERC REC Regulation dated 14/01/10 The Central Electricity Regulatory Commission (Terms and Conditions for recognition and issuance of Renewable Energy Certificate For Renewable Energy Generation) Regulations, 2010

  17. Salient features ofREC Mechanism Objective • Market based instrument to promote RE and facilitate RPO • Aimed at addressing the mismatch between availability in state and the requirement of the obligated entities to meet the RPO

  18. Salient features of REC Mechanism Options available to RE Generator • RE generators will have two options for sale: • either to sell the renewable energy at preferential tariff , or • to sell electricity generation and environmental attributes associated with RE generation in the form of REC separately • Cost of electricity generation from renewable energy under REC framework: • cost of electricity equivalent to conventional energy sources and • the cost for environmental attributes

  19. RE Generation Sale at Preferential Tariff Conventional Electricity Component REC Component Obligated Entities Distribution Company / Third Parry Sale/ Power Exchange Obligated Entities Conceptual Framework

  20. Salient features …… Eligibility • Grid connected RE as approved by MNRE would be eligible under this scheme • Existing projects having firm PPA would not be eligible till the end of the contract period

  21. Qualifying Criterion for RE Generator • Grid connected RE Generators based on RE Sources as approved by MNRE would be eligible under this scheme • RE generators that are under PPA will not be eligible to access the REC market for a period of 3 years if they cancel the PPA before its expiry for the purpose of availing REC benefit. However, • The 3 year period does not apply if: • The REC markets are accessed after the expiry of the • If the Distribution Licensee cancels or withdraws the PPA or defaults the terms under PPA

  22. Salient features …… Recognition • SERC to recognize REC as valid instrument for RPO compliance State Agency • SERC to designate State Agency for accreditation for RPO compliance and REC mechanism at State level Central Agency • CERC to designate Central Agency for registration, issuance of REC, repository for implementation of REC framework at national level • Only accredited project can register for REC at Central Agency

  23. Salient features …… Denomination • One REC will be issued to the RE generators for 1 MWh of electricity injected into the grid from renewable energy sources • REC would be issued to RE generators only • Apply for REC within 3 months of generation Categories of Certificates • Solar and Non-solar Validity • 365 days from the date of issuance of such certificate

  24. Salient features …… Dealing in REC • REC would be exchanged only in the CERC approved power exchanges. • REC would be exchanged within the forbearance price and floor price. • Forbearance and floor price would be determined by CERC in consultation with Central agency and FOR from time to time

  25. Information Required from SLDCs • Following information needs to be validated by SLDC for each RE Generator: • A. Total Quantity of Energy Injection (MWh) during the Month (including self consumption in case of CPP) • B. Quantum of Energy sold under preferential tariff

  26. Format-Energy Injection Report

  27. Steps Taken So Far…… • CERC designated National Load Despatch Centre (NLDC) as Central Agency: Notification dated 29.01.2010 • CERC Order on determination of forbearance price and floor price: Petition No. 99/2010, dated 1.06.2010

  28. Steps Taken So Far…… • CERC Order on detailed procedures under REC mechanism submitted by the Central Agency : Dated 1st June 2010 • Model Procedure/Guidelines for accreditation for RE Project • Procedure for Registration of eligible entities • Procedure for Issuance of RECs • Procedure for redemption of REC • CERC notified REC fees & Charges vide Order dated 21st September, 2010.

  29. Status of REC Regulations of SERCs (as on 12/10/2010)

  30. REC mechanism: Way forward • Stimulate competition amongst renewable energy sources • Create a market for power across States • Help in bringing early grid parity for renewable energy sources

  31. Thank You

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