CEE Oct-Dec 2012

\ Renewable Energy RENEWABLE ENERGY TRADE GAINING GROUND Renewable Energy Certificate (REC) trade a mechanism to trade renewable energy including solar, wind, biomass and small hydro projects on platforms similar to stock exchanges is slowly gaining ground in India. REC trade, which began in India in March has already gained popularity in countries such as Australia and Japan. REC trade through the Indian Energy Exchange and Power Exchange India Ltd (PXIL) has till date generated R431 crore for the country's renewable energy producers. One REC equals 1 MW of electricity produced from renewable resources. "The current market size is around Rs. 30 crore per month and is expected to grow to Rs.1 00 crore by the end of 2012," Rupa Devi Singh, managing director, PXIL, said recently. "It could even achieve a market size of more than R10 ,000 crore in a few years." REC trade on exchanges began after recommendations were issued in the National Action Plan on Climate Change by Prime Minister's Council on Climate Change. In 16 months since its introduction, 11.5 per cent of the total installed capacity of renewable energy sources 2,913 MW out of the total 25,409 MW has been registered with the REC scheme. Courtesy: Total Energy, Jul.-Aug. 2012, Pp18-19. GREEN ENERGY TO GET RS 25,000 CR PRIVATE EQUITY Private equity investors are expected to invest Rs 25,000-30,000 crore in green energy projects. Gujarat, Rajasthan and Karnataka are likely to benefit as these States are close to finalizing norms to promote green energy ventures. Industry estimates are that about 10,000 MW of renewable energy projects will come up with investments of about Rs 60,000 crore in three years. Of this, solar alone is expected to account for Rs 13,000 crore for 1,000 MW. Mr Vinayak Mavinkurve, Group Head, IDFC Project Finance and Principal Investments, said private equity will increase with the launch of more projects. "If one excludes private sector utilities such as Torrent, Adani Tata Power and CESC, most of other developers are primarily funded through private equity or IPO. More than 50 per cent of the proposed funding for new projects could be through private equity," he said. IDFC has funded renewable and clean technology projects worth close to $1 billion (over Rs 5000 crore). The renewed focus on solar projects and the excess solar cell production capacity overseas have led to a sharp fall in solar power project cost. The capital cost for one MW of solar power has come down to Rs 9 crore from Rs 15 crore in 2011. Tariffs have also fallen to Rs 9.40 per unit from Rs 17.90. Investors find green projects a safe bet given the various delays plaguing other infrastructure projects including government approvals. Mr Mavinkurve said private equity investors are drawn to green projects because of the predictable returns, generation-based incentives and expectations of an upside in REC (Renewable Energy Certificate) market. Courtesy: Total Energy, Jul.-Aug. 2012, P23. NEW ORDER FOR HIGHER APPC BY TNERC The Tamil Nadu Electricity Regulatory Commission has come out with a new order on the pooled cost of power purchase by Tamil Nadu Generation and Distribution Corporation Limited for 2012-2013, under which it has fixed the annual pooled purchase cost (APPC) at Rs 2.54 per kWh. The new APPC is nearly 6.3 per cent higher than the existing Rs 2.39 per kWh. Market experts believe that the higher APPC will give a boost to wind power developers that have set up or are in the process of setting up projects under the REC scheme. The new APPC has come into effect from September 3, 2012 (the date of issue of the order) and will be applicable till March 31, 2013 and beyond in case no new rate is notified by then. Courtesy: Renewable Watch, Oct. 2012, PB. RE RESEARCH CENTRE IN TN Virginia Polytechnic Institute and State University (Virgina Tech) will set up a research centre in Tamil Nadu, focused on improving and adapting wind turbines and solar panels for use in Indian rural households. The research centre will be located at MARG Swarnabhoomi, a multi– service special economic zone located between Chennai and Puducherry. Courtesy: Renewable Watch, Oct. 2012, PB. 25