rsm gc advisory renewable purchase obligation (rpo) & renewable energy certificates (rec) - ver5

Renewable Purchase Obligation (RPO) / Renewable Energy Certificates (REC) Advisory and Trading

www.general-carbon.com

Target Clients

Renewable Energy Generators in India

RPO mandated entities in India

Investors seeking to invest in renewable energy generation in India

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About RPO The Electricity Act & National Action Plan on

Climate Change (NAPCC) provide roadmap for increasing renewable energy in total generation

Renewable Purchase Obligation (RPO) – is mandated by SERC for promotion of renewable energy

RPO stipulates minimum percentage of renewable energy in energy mix of♦ Distribution licensee♦ Open Access Consumer♦ Captive consumer

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National Action Plan on Climate

Change (NAPCC) – June 2008

5% 1

0%

15%

The Electricity Act, 2003

Optimal utilization of resource incl. RE

Tariff regulation for RE power promotion

Specify purchase obligation from RE sources

2010 2015 2020


Notified RPO by States

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State Non Solar RPO % (FY 13-14)

Solar RPO% (FY 13-14)

Maharashtra 8.50 0.50

Madhya Pradesh 4.70 0.80

Tamil Nadu* 9.00 0.10

Rajasthan 8.20 1.00

Haryana 3.00 0.10

Gujarat* 6.00 1.00

Chhattisgarh* 5.25 0.50

Karnataka 10.00 0.25

Andhra Pradesh 4.75 0.25

Orissa 5.80 0.20


Renewable Energy Certificates (REC) REC is a tradable certificate of proof that one MWh of electricity has been injected (or

deemed to have been injected) to grid by an RE generator.

MNRE approved renewable energy sources: Wind, Biomass, Small hydro, Solar, Bagasse based Co-generation, MSW, Biogas,

Black Liquor

REC types & Price band:

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REC April 2012 - April 2017

Non Solar Rs 1,500 - 3,300

Solar Rs 9,300 – 13,400


Who is eligible to participate in REC?

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RE Generator

(1)

Captive Consumption

No Concessional Transmission, Wheeling or

Banking

Eligible

(2)

Open Access or 3rd Party Contract

At Mutually Agreed Price

Eligible

(3)

Bilateral Contract

At Mutually Agreed Price

Eligible

(4)

PPA with DisCom

At Average Power Purchase Cost (APPC)of

DisCom

Eligible

At Preferential Tariff specified by

the SERC

Not Eligible


REC Eligibility Preferential tariff PPA

♦ Not eligible for 3 years if they cancel PPA ♦ Eligible if DISCOM cancels PPA or after expiry of PPA

Captive consumption♦ Eligible if no promotional benefit

Concessional wheeling/transmission charges Banking facility Electricity duty waiver

♦ Not eligible for 3 years even if generator foregoes benefits♦ Eligible if concessions are withdrawn by SERC

GBI and Accelerated depreciation benefits are not considered concessional7


REC Eligibility…..continued REC and CDM benefits can coexist

Not available for off grid projects

Auxiliary consumption not eligible

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REC Process - Timeline

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Accreditati

on

•RE Generator applies to the State agency for accreditation upto 6 month before Commissioning

•Process time: ~ 6-8 weeks

Registratio

n

•RE Generator applies for registration of accredited project with NLDC


Issuance

•May apply fortnightly basis; within 6 months of injection to grid


Redemptio

n

•Last Wednesday of every month between 1300 – 1500 hrs

State AgencyNLDC

Power Exchange


Demand for RECs DISCOMs

♦ Already procuring under preferential PPAs♦ Impact on their bottom line

Open access consumers♦ Inter-state plus intra-state (small segment)

Captive consumers♦ Large market made up of industrial users (cement, steel, chemical etc.) having

thermal capacity♦ Likely to focus on RE development, RE PPAs or REC

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Our Services

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Service Insight

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RPO impact assessment

Development of RPO compliance plan

REC Development Advisory

Accreditation

Registration

IssuanceREC Trading

REC Market Insight


Assessment of impact of RPO Renewable Purchase Obligation (RPO) is the minimum percentage of renewable

energy share in the area of a ♦ Distribution Licensee♦ Open Access Consumer♦ Captive Consumer

RPO will impact you♦ If you are buying power from the bilateral market or exchanges♦ If you have captive generation capacity at your plants

Existing wind capacity where you are availing preferential wheeling and banking benefits will not be eligible to help you fulfill your RPO?

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Assessment of impact of RPO … continued RPO regulations vary by state and distribution company; understand what applies to

your units.

Assess total power consumption and identify power sourced from:♦ Open Access (Bilateral or Exchange)♦ Captive Generation

Compute any renewable power in your mix

Compute your RPO and therefore your shortfall

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Development of RPO compliance plan Assess the options available

♦ Buy vs BuildTechnology (Wind, Solar, Biomass, Small Hydro etc.)Suitability of TechnologyCost of power from shortlisted technology

Regulatory support♦ Petitioning / facilitate in regulatory clarification (e.g. inclusion of WHR /

cogeneration projects as renewable) RPO compliance cost

♦ Likelihood of enforcement♦ Cost of procurement of REC

Finalize RPO plan

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RPO Compliance

We help the obligated entities fulfill their RPO by assisting them:♦ build their own renewable energy assets, ♦ acquire old assets, tie-up with renewable energy IPPs♦ purchase of RECs from the exchanges.

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REC Development AdvisoryWe advice and help Clients with accreditation, registration, issuance of REC projects. Specifically

included in our services:

Completeness check and Due diligence for eligibility: ♦ Performing a thorough check for all mandatory requirements and a total quality control of the

documentations that are to be submitted to State and Central Regulatory bodies. Advising Clients for every necessary action to be taken to fulfill the REC eligibility criteria.

Accreditation and Registration Support: ♦ Assisting Clients with the entire accreditation and registration procedure with the state &

central agency respectively.

Assistance in Issuance of REC: ♦ Assisting Clients in filing application & compliance report for successful issuance of REC.

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REC Trading and Market Insight We are deeply engaged in the REC market - We help clients with appropriate trading

strategies and provide monetization support for their RECs. We provide assistance for trading of the RECs on Power Exchange/s. We are Members on both the approved Power Exchanges i.e. IEX and PXIL certified for

trading RECs. We trade RECs on behalf of:

♦ Eligible Entities (Registered RE generator)♦ Obligated Entities (Discom, Captive Power Producer & Open Access Consumer)♦ Voluntary Entities (Voluntary Corporates / Organisation / Individuals / etc)

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Membership Facilitation under RSM GC Advisory

on Exchange

Open new bank account OR link

current operating Account

Trading on last Wednesday of every month

Put Buy / Sell Bids: Quantity &

Price (Anonymous

Bidding)

Bid matched based on approved exchange algorithm


Advantages RSM GC Thought leaders

♦ Participated in regulation formulation (states as well as central)♦ Sharing Insights through Monthly Newsletter: REC Market Update♦ Invited to speak at major RE trade fairs, seminars, conferences & workshops

Helped in capacity building exercise in major states for REC

Managing over INR 750 million worth yearly REC transaction portfolio (buy & sell)

Some of the first & largest REC projects in their category

Shortest time for accreditation to registration19


Experience Experience with over 8000 MWs power project portfolio

♦ Wind projects of over 2000 MWs across India♦ Over 350 MW of REC projects across India

Client list includes some of the largest IPPs & CPPs in India♦ Tata Power, Lanco, GVK, GMR, Renew, GreenKo, JSW, Mahindra, etc.

Broad spectrum of technological expertise♦ Wind, solar, hydro, biomass, Waste to Energy, etc.

Executed projects under various structures♦ APPC + REC, Captive, Third party sale, other exotic structures, etc

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www.general-carbon.com 21

Select Clients


Contact Us

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Mumbai – Mr. Rameez Shaikh

5th floor, Great Social Building60, Sir Pherozeshah Mehta Road, FortMumbai 400001

Phone: +91 22 2266 3201/3301 Mobile: +91 99200 33866

Email: [email protected]

Chennai – Ms. Priya Ranganayaki

E-3, 4th Floor, "RM Towers“108 Chamiers Road, NandanamChennai 600018

Phone: +91 44 42167331 Mobile: +91 99625 26876

Email: [email protected]

www.general-carbon.com www.astuteconsulting.com

Thank You

rsm gc advisory renewable purchase obligation (rpo) & renewable energy certificates (rec) - ver5

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