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

Target Clients Renewable Energy Generators in India RPO mandated entities in India Investors seeking to invest in renewable energy generation in India

National Action Plan on Climate Change (NAPCC) – June 2008 About RPO National Action Plan on Climate Change (NAPCC) – June 2008 5% 10% 15% The Electricity Act, 2003 Optimal utilization of resource incl. RE Tariff regulation for RE power promotion Specify purchase obligation from RE sources 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

Notified RPO by States State Captive Open access Non Solar RPO % (FY 15-16) (FY 16-17) Solar RPO% Remarks Maharashtra Y 8.50 0.5 0.2 small hydro power Madhya Pradesh 6 1 Tamil Nadu* 9.00 2 Rajasthan 8.20 8.90 2.5 FY 15-16(7.30% wind, 0.90% biomass) FY 16-17 (7.80% wind, 1.10% biomass) Haryana 2.75 0.75 Gujarat* 8.25 1.75 FY 15-16 & 16-17( 7.5% wind, 0.5% Biomass) Chhattisgarh* 6.25 Biomass- 3.75% Karnataka 10.00 0.25 Non-solar target of 7% for HESCOM, GESCOM and Hukkeri Society. 5% RPO target for Captive and OA consumers Andhra Pradesh 4.75 Orissa 6.70 0.30

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: 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? RE Generator (1) Captive Consumption No Concessional Transmission, Wheeling or Banking Eligible (2) Open Access or 3rd Party Contract At Mutually Agreed Price (3) Bilateral Contract (4) PPA with DisCom At Average Power Purchase Cost (APPC)of DisCom 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 concessional

REC Eligibility…..continued REC and CDM benefits can coexist Not available for off grid projects Auxiliary consumption not eligible

REC Process - Timeline Power Exchange State Agency NLDC Accreditation RE Generator applies to the State agency for accreditation upto 6 month before Commissioning Process time: ~ 6-8 weeks Registration RE Generator applies for registration of accredited project with NLDC Process time: ~ 2-3 weeks Issuance May apply fortnightly basis; within 6 months of injection to grid Process time: ~ 3-4 weeks Redemption Last Wednesday of every month between 1300 – 1500 hrs State Agency NLDC

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

Our services

Service Insight REC Development Advisory REC Trading Accreditation RPO impact assessment Accreditation Registration Issuance Development of RPO compliance plan 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?

Assessment of impact of RPO RPO regulations vary by state and distribution company; assistance in working out what applies to your units . Assessment of total power consumption and identification of power sourced from: Open Access (Bilateral or Exchange) Captive Generation Computation of any renewable power in your mix Computation of RPO and therefore shortfall

Development of RPO compliance plan Assessment of the options available Buy vs Build Technology (Wind, Solar, Biomass, Small Hydro etc.) Suitability of Technology Cost of power from shortlisted technology Regulatory support Petitioning / facilitate in regulatory clarification (e.g. inclusion of WHR / cogeneration projects as renewable) Estimation of RPO compliance cost – taking into account factors such as Status and impact of enforcement Cost of procurement of REC Assistance in finalization of RPO plan

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.

REC Development Advisory We advise 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 obtaining Issuance of REC: Assisting Clients in filing application & compliance report for successful issuance of REC.

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) 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 registration

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

Clients

Contact us Mr. Anupam Das Purkayastha Mr. Rameez Shaikh Senior Manager Phone :+91 22 2757 5346/ 4336 Mobile :+91 9920033866 Email : rameez.shaikh@general-carbon.com Mr. Anupam Das Purkayastha Director Phone :+91 22 2266 3201/3301 Mobile :+91 9029002980 Email : anupam.das@general-carbon.com

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