Who All Are Liable For REC

REC is currency of renewable energy market & following are liable for REC

1)

All State Utility In India

28 States28 States

2)

Union Territory Utilities Open Access Consumers

8 Territory of UT

3)

1560 Large Industries

(Medium and small Industries survey is in progress)

Captive Consumers
4)

210 Large captive consumer Industries

(Medium and small Industries survey is in progress)

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RPO Obligation by Indian Company is RPO Opportunity for Industry

Solar RPO are the minimum amount of solar energy one have to deliver or consume as a percentage of their total available electricity. This vary across states but set around 0.25% of total consumption in that state. This obligation is fulfilled either by purchasing the required quantity of Solar power OR by purchasing REC. CERC has determined that non compliance of RPO will met with highest price of a REC

RPO is implemented to create demand for REC & this is to fulfill the obligation India has to meet UNFCC/NAPCC. Year wise conception/ development is as Below: National action plan for climate change 2001 Electricity Act 2003 Electricity Policy 2005 Tariff Policy 2006 R. P. O. JNNSM -- SOLAR R.P.O. Indian Electricity Grid Code 2010

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Solar Power MARKET FOR

2013 2022
Solar Energy Requirement (MU) for RPO Compliance (A) *(B) 2,556 5,478 8,806 12,582 16,588 25,258 34,761 Solar Capacity Requirement for RPO compliance (MW)

Following table illustrates the Solar RPO requirement by 2022 on the basis of expected demand in India
Year Energy Demand (MU) (A) Solar RPO (%) (B)

2012-13
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

1,022,287
1,095,555 1,174,074 1,258,221 1,348,399 1,443,326 1,544,936

0.25%
0.50% 0.75% 1.00% 1.25% 1.75% 2.25%

2019-20
2020-21 2021-22 Source : MNRE

1,653,700
1,770,120 1,894,736

2.50%
2.75% 3.00%

41,343
48,678 56,842

Solar RPO Present market size 2013 An analysis:

Installed capacity as on March 2013 (MW)

State/Union Territory

Capacity Projected required for Electricity Solar RPO Solar RPO meeting solar Demand (Mus) Target(%) Target (Mus) RPO (MW)

Total capacity tied up as March 2013 (MW)

Yr. 2013 Gap to be filled (MW)

82.65 0.57 4.23 48.96 71.98 34.21 39.74 -197.88 188.36 13.76

Andhra Pradesh Arunachal Pradesh Assam Bihar Chhattisgarh Delhi JERC (Goa and Uts) Gujarat Haryana Himachal Pradesh Jammu & Kashmir Jharkhand Karnataka Kerala

1,06,752 664 7,685 16,298 22,410 30,572 13,790 85,508 43,754 9,162

0.25 0.15 0.2 0.5 0.75 0.2 0.5 1.5 0.75 0.25

266.88 1 15.37 81.49 168.07 61.14 68.95 1282.61 328.15 22.91

160.35 0.6 9.23 48.96 100.98 36.74 41.43 770.62 197.16 13.76

77.7 0.03 5 0 29 2.53 1.69 968.5 8.8 0

23.35 0.03

4 2.53 1.69 824.09 7.8

14,904 7,140 69,782 22,300

0.25 1 0.25 0.25

37.26 71.4 174.45 55.75

22.39 42.9 104.81 33.5

0 36 159 0.03

16 14 0.03

22.39 6.9 -54.19 33.47

S Present market ::::::Continued: Solar RPO olar RPO

Installed capacity as on Projected Capacity required Total capacity tied March State/Union Electricity Demand Solar RPO Solar RPO for meeting solar up as March 2013 2013 Territory (Mus) Target(%) Target (Mus) RPO (MW) (MW) (MW)
Madhya Pradesh Maharashtra Manipur Mizoram Meghalaya Nagaland Odisha Punjab Rajasthan Sikkim Tamil Nadu Tripura Uttarakhand Uttar Pradesh West Bengal 57,187 1,61,244 680 440 2,409 635 25,599 51,173 58,890 487 97,584 1,076 12,669 90,720 45,381 0.8 0.5 0.25 0.25 0.5 0.25 0.2 0.13 1 0 0.05 0.1 0.05 1 0.25 457.49 806.22 1.7 1.1 12.04 1.59 51.2 66.52 588.9 48.79 1.08 6.33 907.2 113.45 274.87 484.39 1.02 0.66 7.24 0.95 30.76 39.97 353.82 29.32 0.65 3.81 545.07 68.16 211.75 75.5 0 0 0 0 78 51.83 331.15 0 20.11 0 5.05 93.38 52.05 11.75 34.5

Yr. 2013 Gap to be filled (MW)

63.12 408.89 1.02 0.66 7.24 0.95 -47.24 -11.86 22.67 0 9.21 0.65 -1.24 451.69 16.11

13 9.33 442.25 17.06 5.05 12.38 2

What Is Available In Market

Model 1 Feed in tariff (closed)(Invited thru tendering process) Model 2 APPC + REC (closed) ..do.. Model 3 Open Access + REC Model 4 Captive + REC

We consider Model 3 & Model 4

Model -3: OA + REC
Project enter into independent PPA with a third party (typically be an industry, commercial or residential consumer like Malls/ Hospital/ College) and in addition REC are availed.
OPEN ACCESS Tariff Rs. 5/- Unit REC @ floor price till March17 Rs. 9.3/unit After March17 Rs. 6/ unit Wheeling loss Transmission In loss Wheeling Charges Transmission Charges Electricity duty Banking Charges CSC REC Cost Net realization (March17) After March 17 3.5% at 33kv 4.5% 0.2062/ unit 0.641/ unit 0.25/unit N/A 1.72/unit(33 kv) 0.75 11/- unit 33kv 09/-

Model 4 : Captive + REC

Commercial Or Industrial Consumers of grid electricity set up a Solar REC project for the self- consumption of solar power. Tax Includes such as 80% accelerated depreciation can be availed in first year itself.
CAPTIVE + REC
Tariff REC @ Floor Price till March 2017 Wheeling Loss (%)* Transmission Loss ( % ) Wheeling Charges (Rs.) Transmission Charges (Rs.) Electricity Duty (Rs.) Banking Charges (Rs.) Cost for REC ( Power Exchange + Issuance + Consultancy Fee) Net Realisation (Rs / Unit ) till March 2017 After March 2017 INR 6.5/ Unit INR 9.3/ Unit

3.47% (@ 33V ) 4.60% INR 0.2062 / Unit INR 0.641/ Unit INR 0.25 / Unit 2% 0.75
INR 13.00/ Unit INR 10/ Unit

Minimum of 26% stake in the project from the power consumer. Minimum of 51% of the electricity should be self-consumed.

Future of SOLAR REC

The barometer of solar industry is INTERSOLAR, CIPV China, SNEC PV trade shows. There is regular increase of adoption of PV by mass across the world. All related agencies are promoting the novel method of harnessing the sunshine. In real sense, there is no alternative, so the market is expected to increase in many fold. This is unquestionable. Recent tariff increase by all utility in India, encouraging sign of possible DISCOM participation. Demand will exceed supply for solar REC for the foreseeable future. Unlike in the non-solar REC markets, in solar there is no legacy capacity in the market in India. This also favors early Solar Projects. A little over solar 10,000 REC traded so far as compared to 40 Lacs non solar REC, So solar REC has bright future. In next few years this is going to spread in leap and bounds due to inherent qualities.

Buyers of Solar REC

Some of prominent buyers are like:
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. ACC Limited IFFCO Aditya Birla Group GAIL a Navratna Company Of Govt. Of India M & B, Bhopal, MP Gujarat Fluorochemicals POSOCO (Govt. Of India) IREDA (Govt. Of India) Rashtriya Ispat Nigam (Govt. Of India) Security Printing & Minting Corporation (Govt. Of India) Manikaran Power Trading EKI Energy Services List is continued