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Indian Energy ExchangeSeptember 2020
For Public Use1
Company Snapshot
95% Market Share 6000+ MW average daily trade
6000+ Participants
4100+ Industries 70+ Commercial 50+ Discoms
500+ Conventional Generators 1500+ RE Participants
Competition
LiquidityTransparency
Market Share-FY 20 (DAM+TAM)Average Daily Trade- FY20(DAM)Participation-as 30th June 2020
IEX Market SegmentsDay-Ahead Marketsince June,08
• Delivery for next day• Price discovery: Closed , Double-sided Auction
Term-Ahead Contracts since Sep,09
• For delivery up to 11 days• Daily Contracts, Weekly Contracts
Renewable Energy Certificatessince Feb,11
Energy Saving Certificatessince 27 Sep’17
Intraday Market & Day-Ahead ContingencyRound the clock since Jul’15
• Intraday: For Delivery within the same day• Day Ahead Contingency: Another window for next day• Gate closure : 3.5 hours
• Green Attributes as Certificates• Sellers : RE generators not under feed in tariffs• Buyers: Obligated entities; 1MWh equivalent to 1 REC
• 1 Escert= 1 Mtoe( Metric Tonne Oil Equivalent)• Trading Session on every Tuesday of the Week• Trading time 1300 hrs to 1500 hrs
Auction
Continuous
• Delivery within an hour• Price discovery: Closed , Double-sided Auction
Real-Time Marketsince 1 Jun’20
• Intraday, DAC (commenced) Daily and Weekly(starting soon)Green Term Ahead Marketsince 21 Aug ,2020
Installed RE Capacity
Source: CEA , MNRE
372,692 MW Total Installed Capacity as on 31st Aug’20
88,793 MW Renewable Installed Capacity as on 31st Aug’20
Thermal231420
Nuclear 6780
Hydro 45699
RES 88793
Total Installed Capacity
Wind Power, 37,999
Small Hydro Power , 4,739
Biopower, 10,146
W to P, 168
Solar, 35,739
Renewable Installed Capacity
Projects registered since inception of
REC Mechanism
5
Year Total Registered till 31.03.2018
Re-Validated(after end of Five years)
RegistrationRevoked/Expired
Registered as on 31.03.2018
No. of Projects
Capacity No. of Projects
Capacity No. of Projects
Capacity No. of Projects
Capacity
2010-11 18 166 0 0 0 0 10 70
2011-12 346 2,087 0 0 0 0 177 1,018
2012-13 330 1,271 0 0 10 97 158 711
2013-14 239 811 0 0 13 70 220 669
2014-15 163 642 0 0 3 27 136 486
2015-16 86 311 8 67 35 334 80 263
2016-17 87 555 98 671 199 1,103 86 553
2017-18 38 179 184 752 142 443 38 179
Total 1,307 6,022 290 1,490 402 2,073 905 3,948
DISCOMS
2016-17 2 NA 0 NA 0 NA 2 NA
Schemes to promote RE in the country
Accelerated Depreciation Scheme
Generation Based Incentive Scheme
Renewable Purchase obligation
Mid 1990sFocused on
capacity addition
2009Shifted focus from capacity
addition to generation
Electricity Act, 2003, National Tariff Policy, 2006 and National Action
Plan on Climate Change, 2008 provided impetus to further RE
growth
REC Genesis:Separating green attribute from electricity
Un-bundled Green Power
Seller (RE power)
REC(Green Attributes)
Electricity
REC(Green Attributes) Buyer (RPO Compliance)
Electricity
Bundled Green Power
Seller (RE power) Buyer (RPO Compliance)
Issues
•Schedulability•Uncertainty•Transmission Loss & Charge
Solution•No geographic barriers
• Reduced transaction cost
•Flexibility in meeting the RPO
Discoms, Power exchanges , Bilateral
Contracts
9
Compliance Market: Overview of Legal Framework2008 : National Action Plan on Climate Change (NAPCC)
• RPO at 5% in year 2010, increasing 1% every year for 10 years.
• Authorities may issue tradable certificates and penalties for shortfall
Jan’10 : CERC issued REC Regulation
• CERC designated National Load Despatch Centre (NLDC) as Central Agency: Notification dated 29.01.2010
June’10 : CERC approved Procedures for Accreditation, Registration & Issuance
Sep’10: First amendment of REC Regulation
July’13: Second amendment to REC Regulation
• Amendment in eligibility, Self consumption and Validity period
Dec’14 : Third Amendment to REC Regulations
Mar’16 : Fourth Amendment to REC Regulations
•A distribution licensee shall be eligible for issuance of RECs•Vintage Multiplier ,Validity of RECs for 1095 Days , Revision in price band of Solar RECs
• Terms and Conditions for recognition & issuance of Renewable Energy Certificate for Renewable Energy Generation
REC Participants: Sellers/Eligible EntityIdentified Sources for RE
REC Market Participants: Sellers/Eligible Entity
ELIGIBILITY CRITERIA
Self consumption
No promotional Banking/
Wheeling
ELIGIBLE
Sale through: Open Access/Bilateral
Sale at Mutually agreed price
ELIGIBLE
PPAs with distribution
licensee
PPA at APPC
ELIGIBLE
PPA at state regulated tariff
NOT ELIGIBLE
REC Market Participants : Buyers
Obligated Entities
• Distribution Companies
• Open Access Consumers
• Industries consuming Captive Power
Voluntary Entities
• Corporates under CSR
• Individuals
Mechanisms to fulfill compliance
Feed in Tariff
Regulated tariff
Purchase of electricity from RE
Generator at Regulated tariff
Purchase of RE at market price
Buy from third party
REC (Renewable Energy
Certificates) at PXs
Non Solar REC
Solar REC
Penalty for non compliance in the provisions
• If an obligated entity fails to comply with the RPO, it shall also be liable for penalty as may be decided by the commission under section 142 of Electricity Act, 2003:
• The Commission may direct the entity to deposit penal charges equivalent to the forbearance price of REC multiplied by shortfall in units of RPO
Salient Features of REC Mechanism
Participation Voluntary
REC Denomination 1 REC = 1 MWh
Validity 1095 Days after issuance*
Categories 1. Solar REC 2. Non-Solar REC
Trading Platform Power Exchanges only
Banking/Borrowing Not Allowed
Transfer Type Single transfer only , repeated trade of the same certificate is notpossible
Solar RECs Floor Price: Rs 0/MWhForbearance Price: Rs 1000/MWh
Non Solar RECs(After 01.04.2017) Floor Price: Rs 0/MWhForbearance Price: Rs 1,000/MWh
Non Solar RECs(before 01.04.2017) Floor Price: Rs 1500/MWh
Forbearance Price: Rs 3,300/MWh
Penalty for Non-compliance ‘Forbearance’ Price (Maximum Price)
Price Guarantee Through ‘Floor’ Price (Minimum Price)
CERC order dated 17th June’20
REC Mechanism
Procedure for ACCREDITION (Through State nodal Agency)
Procedure for REGISTRATION (Through Central Agency NLDC)
Procedure for ISSUANCE (Through Central Agency NLDC)
Procedure for TRADING & REDEMPTION(Through PXs)
Trading at IEX
Trading Day Last Wednesday of every Month
Market Clearing Closed Double sided auction
Trading Time 1300-1500 Hrs
By 1530 HrsVerification by Central agency for Valid REC by cleared seller at IEX
By 1600 Hrs Central agency confirms REC
By 1630 Hrs IEX finalizes trade
By 1700 Hrs Buyer & Sellers informed to Central Agency
By 1800 Hrs Invoice raised (proof of REC trade)
10
0 R
EC B
uy
@ R
s 3
30
0
BUY SELL
A 100 REC @ Rs 3300
A 100 REC @ Rs 1500
B 600 REC @ Rs 2200
B 200 REC@ Rs 1700
C 200 REC @ Rs 1700
C 300 REC @ Rs 2000
3300
200 REC buy @ 1700
No of REC
Pri
ce in
Rs/
REC
2200
600
600 REC buy @ Rs2200
200 REC sell @ Rs 1700 300 REC sell @ Rs 2000
10
0 R
EC S
ell
@ R
s 1
50
0
Cleared volume : 600 RECs MCP: Rs 2200/REC
Accreditation Fee & Charges
Application Processing Fee
Rs. 5000
Accreditation Charges (One Time –
for 5 Years)
Rs. 30,000
Annual Charges Rs. 10,000
Re-Validation Fees (After 5 Years
Rs. 15000
Registration Fee & Charges
Application Processing Fee
Rs. 1000
Registration Charges (One Time –
for 5 Years)
Rs. 5000
Annual Charges Rs. 1000
Re-Validation Fees (After 5 Years
Rs. 5000
State Nodal Agency Central Agency
Issuance Fee & Charges
Fees Per REC issued
Rs. 4.0
Central Agency
REC: Fee & Charges
Redemption Fee & Charges
Fees Per REC traded
Rs. 20
IEX
REC - Fee & Charges Impact
Assumptions:
• Project of Capacity = 1 MW
• Capacity Utilisation Factor = 22%
• No. of Units Generated = 1.927 MU
• No. of REC Issued = 1927
Cost Impact of Fee and charges in First Year
Cost Head REC @ 1500 REC @ 2600 REC @ 3300
Accreditation 45,000 45,000 45,000
Registration 7,000 7,000 7,000
Issuance 7,708 7,708 7,708
TOTAL COST 59,708 59,708 59,708
Revenue from REC
28,90,800 50,10,720 63,59,760
% Cost Incurred
2.07% 1.19% 0.94%
Paise Impact Per Unit (kWh)
3.09 3.09 3.09
Similarly the cost impact (in Paise / Unit) for:
TWO Year THREE Year FOUR Year
2.03 Paise 1.68 Paise 1.5 Paise
Market Snapshot
Accredited
Capacity
(MW)
Registered
Capacity
(MW)
No. of
Projects
Registered
No of RECs(in Cr)
Issued TradedSelf
RetainedInventory
Non -Solar 4,314 3,694 637 5.71 4.81 0.22 0.30
Solar 967 925 382 1.18 1.13 0.01 0.03
Total 5,281 4,619 1,019 6.89 5.95 0.24 0.34
REC Inventory Status
As on 31st Aug 2020
Projects under REC Mechanism
RP : 3975 MWAP : 4336 MW
As on : 4th January,2014
Source: REC registry India
As on 12th
Feb ,2014
As on
As
As on 2ndJuly 2014As on 11th Aug’14As on 4th Sept’14As on 10th Dec’14As on 9th jan’15As on 12th Feb’15
Registration Capacity: 4,773 MWAccreditation Capacity : 4,989 MW
Accredited Capacity : 5,056 MWRegistered Capacity : 4,785 MW
Data as on 31st Aug’20
2653
378
420
250
8733
2718
821
479
275
934
5
Source wise RE capacity (MW)
Wind Bio-fuel cogeneration Biomass Small Hydro Solar Others
Accreditated Projects
Registered Projects
Accreditated Projects
Registered Projects
Projects under REC Mechanism
As on 31st October’2013
Source: REC registry India
As on 12th Feb 2014As on 6th March ,2014
As on 7th May 2014
As on 2nd July 2014As on 11th Aug’14As on 4th Sept’14As on : 14-10-14As on 7th Nov’14As on 10th Dec’14As on 12th Feb’15Accredited Capacity : 5,112 MWRegistered Capacity : 4,838 MW
Data as on 31st Aug’20
1159
980
279
561
127
686
175
24825
15157 1651159
1027
735
616
127
733
175
250
2515157
213
State-wise RECapacity (MW)
Tamil Nadu Maharashtra Uttar Pradesh Gujarat Karnataka Rajasthan
Andhra Pradesh Madhya Pradesh Chhattisgarh Punjab Himanchal Pradesh Others
Registered Projects
Accreditated Projects
Key statistics: REC Market at IEX
Market Share
State Utilities
Generators
Industrial Consumers
Cleared
Volume
28 States I 8 UTs
1162
>3 Crore RECs
Highest: 32,39,142 RECs (Dec’17)
3284
IEX Data as on 31ST Aug’20
76%
Registered Participants 4526
Obligated Entity 3528
DISCOMs 46
OA consumers 3087
Captive Consumer 197
Voluntary 37
Eligible Entity (Sellers) 1162
Participation Details at IEX
As on 31st Aug 2020
• Less predictable
• Less controllable
• Require better prediction tools over one-day
• Scheduling changes till one-hour before
Schedulability
• More System imbalances
• Discoms to spend on more reserves to avoid UI
• More reserves required to balanceHigh Overheads
• Payment of Transmission, Wheeling Charges, Losses and Scheduling Charges is higher than purchase of RECs
Open Access costly
Why REC a better option than
‘buying renewable power’ ?
RECs are better way to transfer green premium than green energy
N-Solar & Solar REC trade detail
1,36,979
3,24,029
2,21,674 1,91,988
2,91,588 2,44,401
2,95,010
3,55,657
2,95,601
5,47,166
6,75,592 7,16,929
1,61,949
4,16,264
3,27,688
3,87,715
2,36,801
4,74,837
3,88,821
2,91,932 3,19,265
-
500
1,000
1,500
2,000
2,500
-
1,00,000
2,00,000
3,00,000
4,00,000
5,00,000
6,00,000
7,00,000
8,00,000
REC
Tra
de
d
Non-Solar
REC Traded MCP(Rs/REC)
6,44,151
3,93,822 2,88,070
8,08,324
2,16,223
13,59,045
1,30,279 32,556 88,272 97,277 62,853
1,34,68892,0931,04,76056,80958,91959,94436,80141,204
-
500
1,000
1,500
2,000
2,500
3,000
-
2,00,000
4,00,000
6,00,000
8,00,000
10,00,000
12,00,000
14,00,000
16,00,000
REC
Tra
de
d
Solar
REC Traded MCP(Rs/REC)
Off take Routes & RECs issued against the projects
28
S no. RouteOff-take
Total registered till 31.03.2018
Registration Revoked/Expired
Registered as on 31.03.2018 No. of RECs
issued
No.ofProjects
Capacity in MW
No.ofProjects
Capacity in MW
No.ofProjects
Capacity in MW
1 OA 368 1,112 72 279 296 833 8,068,723
2 APPC 425 2,055 121 396 304 1,659 16,359,559
3 CGP 355 2,137 161 1,156 194 981 16,602,593
4 APPC/OA 4 57 1 24 3 33 444,418
5 CGP/OA 96 428 1 2 95 427 3,824,715
How to Start
Two step Process
• Registration
– Become Member with IEX
– Become Client through any of IEX members
• Start Trading
– Last Wednesday of every Month
Continuous communication with Users
IEX Daily SMS Service for Trade Details
IEX Monthly Bulletin
IEX 15 min Trade Prices displayed on its website
