it “pays” to be environment friendly renewable energy certificates: ipp perspective
TRANSCRIPT
It “Pays” to be Environment Friendly
It “Pays” to be Environment Friendly
Renewable Energy Certificates
A concept developed under the Electricity Act, 2003 and National Action Plan on Climate Change (NAPCC) to enhance the share of renewable in the total generation capacity of the country.
1 REC = 1 MWh of electricity injected in grid
It “Pays” to be Environment Friendly
Salient features of RECTo Promote RE & to facilitate RPO
Framed by CERC
Governed by NLDC
Trading at Power Exchanges
Solar & Non Solar
It “Pays” to be Environment Friendly
Power Scenario in Himachal PradeshConsiderable increase in power generation in last three decades observed
Strong morphology and network of rivers and glaciers – great potential for hydro power
Hydropower generation is more economical than thermal power generation in Himachal Pradesh
Solar is also being greatly encouraged
It “Pays” to be Environment Friendly
Ctd…Estimated installed capacity of SWH: 14,460 m2
Hydropower potential in Himachal Pradesh
It “Pays” to be Environment Friendly
Major sources for meeting power requirement
Own hydel generation
Free power entitlement of GoHP
Central sector stations where HPSEB has share allocations
Purchased through private micro hydel plants installed in the State and bilateral short term contracts
It “Pays” to be Environment Friendly
Pricing of Electricity Market prices of electricity
Done based on supply-demand dynamics Price discovery generally through competitive bidding or power
exchanges
Average Power purchase price Calculated by pooling the price from all sources of power for a state Generally lower than normative tariff
Feed-in-tariff or the Preferential tariff
It “Pays” to be Environment Friendly
RPO Status (2009-10)
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TargetAcheived
It “Pays” to be Environment Friendly
REC in Himachal Pradesh
Applicability of RPPOThe distribution licenseeAny other person consuming electricity
generated from conventional Captive Generating Plant having capacity of 1 MW and above for his own use and/orprocured from conventional generation through open access third party sale
Notification by HPERC on the Regulations: 26th May 2010Designation of “Directorate of Energy” as a state agency: 19th June 2010
It “Pays” to be Environment Friendly
Ctd…Defined ‘minimum percentage’ to be abided as per RPPO
Year Minimum Quantum of purchase (in %) from renewable sources (in terms of energy in kWh) of total consumption
(1)Total
(2)Non -Solar
(3)Solar
(4)2010-11 10% 10 % 0%
2011-12 11.1% 11% 0.1%
2012-13 12.1% 12% 0.1%
i) The distribution licensee shall purchase electricity (in kWh) from renewable sources, at a defined minimum percentage of the total consumption including transmission and distribution losses, within the area of the distribution licensee, during a year
ii) The Captive and Open Access User(s)/ Consumer(s), shall purchase electricity (in kWh) from renewable sources, at a defined minimum percentage of his total consumption
It “Pays” to be Environment Friendly
Ctd…
Certificate by CERC: Instrument of discharge of obligation
Segregated meeting of obligation viz. a viz. Solar and Non-solar
Consequence of defaultPenaltyCreation of separate fund
It “Pays” to be Environment Friendly
Ctd…
No project accredited till date PPA for maximum number of projects have been signed on
preferential tariff. Projects intended for third party sale are in process of commissioning.
It “Pays” to be Environment Friendly
Alternate Revenue Stream AnalysisHydro power generation PPA with
DISCOM @ preferential
tariff
PPA with DISCOM @
APPCThird party
sale - within state
Third party sale - outside
state
Electricity tariff 2.95 1.48 3.5 3.5
REC Benefits 0 1.5 1.5 1.5
Transmission losses in CTU 0% 0% 0% 4%
Wheeling charges & losses 0 0 10% 10%
Royalty 0 0 12% 12%
CTU charges per kWh 0 0 0 0.16
Net realization 2.95 2.98 3.9 3.54
Upside in % wrt Option 1 0.00% 1.02% 32.20% 20.00%
*APPC price for 2009-10 as per CERC** Deduced from last two year data of power exchange
It “Pays” to be Environment Friendly
Liability
It “Pays” to be Environment Friendly
Risk Assessment• On non abidance of RPO
It “Pays” to be Environment Friendly
Ctd…• On abidance of RPO
With the availability of RECs
It “Pays” to be Environment Friendly
Ctd…
It “Pays” to be Environment Friendly
Recommendations
It “Pays” to be Environment Friendly
Ctd…For Bankers
APPC along with REC generates considerable revenue. Hence, shouldn’t be rejected.
For Project participantsIncreased awareness requiredCompetitive bidding tariff appears most profitable
For regulating agenciesStringency in abidance of RPO obligation required.Appropriate channelization of defaulters
It “Pays” to be Environment Friendly
THANK YOU!!!