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MNRE Sets Terms for Real Estate Developers to Avail CFA Under PM Surya Ghar

ENGIE to Build 22 MW Solar Project for Saudi Cement Factory

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					</table>The Central Electricity Authority (<a href="https://cea.nic.in/?lang=en" target="_blank" rel="noopener">CEA</a>) has responded to the Central Electricity Regulatory Commission&#8217;s (<a href="https://cercind.gov.in/" target="_blank" rel="noopener">CERC</a>) draft order, which <a href="https://www.mercomindia.com/cerc-changes-price-discovery-mechanisms/" target="_blank" rel="noopener">addresses</a> concerns related to price discovery mechanisms, market liquidity, and contract structuring in the power exchanges. The CEA provided feedback, especially on segments like Term Ahead Market (TAM), Day Ahead Contingency (DAC), and Intraday contracts.
CERC&#8217;s draft order proposes withdrawing intraday contracts from all power exchanges due to their low liquidity and the presence of the real-time market as an alternative. CEA has supported the move, as it would help streamline and consolidate the currently fragmented market.
TAM
The Term Ahead Market (TAM) offers short-term power procurement for delivery dates ranging from T+2 to T+90 days. This segment includes four contract types: Daily, Weekly, Monthly, and Any-Day Single-Side Reverse Auction. The price discovery for daily, weekly, and monthly contracts uses a Uniform Price Step Auction, while the Any-Day Single-Side Contract relies on a Reverse Auction mechanism.
The TAM bidding window is open from 12:00 to 17:00 for daily, weekly, and monthly contracts, after which orders are matched based on predefined rules. However, CEA observed irregular trading patterns, with some days seeing no transactions and others having only one buyer and one seller. Additionally, data analysis for March 2024 revealed that most bids were submitted close to the 4:00 PM mark.
On multiple days, a single buyer or seller submitted bids during the final minutes of the auction window, sometimes receiving a counteroffer within seconds. This behavior raises suspicions of potential collusion; as such, last-minute bids give little time for other participants to respond.
In TAM, most trading volume occurs through any-day single-side and daily contracts, which allow market participants to customize delivery profiles. However, in weekly and monthly contracts, only fixed-duration products are available. Different exchanges offer various delivery-based products, categorized into specific slots for daily, weekly, and monthly contracts, allowing trades during specific periods like evening peak, morning peak, and round-the-clock (RTC) slots.
The Hourly product, available only for daily contracts in IEX and HPX, allows customized delivery but is non-standardized, which can hinder competition. PXIL offers hourly slots for all contract types, further fragmenting the market. Power exchanges generally promote competition through standardized contracts rather than customized ones.
Although TAM contracts (daily, weekly, and monthly) can trade daily, analysis shows transactions occur on a limited number of days each month across exchanges.
The multitude of trading sessions available for varying delivery dates or custom ranges has fragmented market liquidity. Other segments like GTAM and HPTAM add to this fragmentation.
To mitigate last-minute bidding, CEA proposed a time extension for bids received after 16:45. For any bid submitted in the last five minutes of this extension, the market should extend by another 15 minutes, with extensions allowed until midnight if necessary.
CEA also recommended limiting trading days for monthly contracts to twice per month and weekly contracts to one day (e.g., Tuesday of the previous week) to enhance liquidity.
It has also proposed limiting daily contract deliveries to a maximum of six days per trading session for delivery between T+2 to T+8. For example, if a participant seeks delivery from November 7–17, 2024, they could use daily contracts for November 7–11.
DAC
DAC market operates from 13:00 to 23:30 each day, beginning after the close of the Day Ahead Market (DAM). In DAC, matching is continuous, meaning that buy or sell offers are immediately matched when a counteroffer appears, and bids exit the system once matched. Market participants can view the best available buy and sell offers for specific delivery periods and product categories.
DAC offers several delivery-based products across exchanges, including:
<ul>
<li>Standard Contracts: Available in 15-minute and hourly blocks and for round-the-clock power.</li>
<li>Green DAC Segment: Available for solar, non-solar, and hydro power in 15-minute and hourly blocks. Participants can bid on either regional or national levels, with the standard and green DAC segments accessible on both IEX and HPX.</li>
</ul>
For DAC Continuous Static products, delivery ranges are split into hourly bids (e.g., a bid from 03:00 to 06:00 would split into hourly bids from 03:00 to 04:00, 04:00 to 05:00, and 05:00 to 06:00). In DAC Dynamic, however, a delivery bid like 13:15 to 15:45 remains a single block and matches only with an identical delivery range bid.
Data analysis from March to May 2024 shows low market depth across exchanges. The data also highlights a low level of liquidity in DAC, further complicated by the long trading window (13:00 to 23:30) and the ability to submit customized delivery bids. Most transactions conclude before 18:00, exacerbating low liquidity later in the day.
DAC data reveals low liquidity often results in limited open offers for particular delivery periods. When a buy or sell offer is made, it frequently receives an immediate counteroffer, which raises concerns about pre-arranged transactions between specific participants. Furthermore, DAC Dynamic, which allows bidding only within customized blocks, fosters a non-standardized and less competitive environment.
DAC and TAM allow sellers to submit regional or national bids, while buyers can choose any contract. Ideally, bids should match at the national level. However, due to congestion in certain transmission zones, regional bids are permitted, further fragmenting the market as regional bids match only with others from the same region. This results in price disparities across regions for the same delivery period.
The DAC market is a backup for participants needing power the following day, either because their DAM bids weren&#8217;t cleared or due to unforeseen contingencies. While DAC operates under a continuous matching framework, CEA&#8217;s analysis suggested that its low liquidity, extended trading hours, and continuous matching methodology limit competition, making non-competitive transactions more likely.
CERC&#8217;s draft order proposed a temporary solution by requiring buy and sell offers to be visible 10 minutes before processing, allowing for best-offer matching. However, CEA raised concerns that this solution lacked clarity, such as when the 10-minute window begins or how to handle unmatched offers. Proper testing and a structured framework are necessary for effective implementation.
To enhance competition and efficiency in DAC, CEA recommended:
Switching from continuous matching to an open auction system, similar to the one used in daily, weekly, and monthly contracts, could increase competitiveness. This approach, also recommended by CERC, would involve splitting the current trading session (13:00 to 23:30) into three separate sessions:
<ul>
<li>Session I: 13:00 – 15:00</li>
<li>Session II: 17:00 – 19:00</li>
<li>Session III: 21:00 – 23:00</li>
</ul>
This structure ensures that the third session covers contingencies occurring late in the day, while the first session provides time to address early-day needs.
Given that DAC Dynamic allows matching only within customized delivery blocks, which restricts standardization and competition, CEA suggests discontinuing this product to foster a more standardized and competitive environment.
To address transmission congestion, CEA recommends adjusting matching algorithms to prioritize national-level bids. This approach could also be extended to TAM for improved liquidity and competition.
Any-Day Single-Sided Contracts (ADSS)
The draft order outlines timelines for various stages of ADSS contracts, such as the bid receiving period, initial public offer (IPO) auction, reverse auction, and bid acceptance window.
CEA sees this as a positive development but notes that only maximum time limits have been set for the bid-receiving window and IPO auction. To enhance transparency and competition, CEA suggests also defining minimum time limits for these stages.
Additionally, CEA recommends holding the reverse auction exclusively during regular business hours.
Subscribe to Mercom&#8217;s real-time <a href="https://www.mercomindia.com/product/mercoms-renewable-energy-regulatory-updates" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don&#8217;t miss any critical updates from the renewable industry.

CEA Supports Withdrawing Intraday Contracts from Power Exchanges

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					</table>U.S.-based independent developer, owner, and operator of commercial-scale solar projects, <a href="https://www.altuspower.com/" target="_blank" rel="noopener">Altus Power</a>, entered a definitive agreement to acquire about 220 MW of solar assets for ~$293 million from the funds managed by <a href="https://truegreencapital.com/" target="_blank" rel="noopener">True Green Capital Management</a>.
The transaction to acquire the solar assets under construction is expected to close during the first quarter of 2023.
The solar assets will help Altus Power scale its renewables portfolio in its major existing markets, including California, Colorado, Illinois, Massachusetts, New Jersey, and New York.
Additionally, the solar power developer will enter the Delaware and South Carolina clean energy markets with the acquisition.
Altus said it aims to fund the transaction with its long-term funding facility led by the U.S.-based investment management firm <a href="https://www.blackstone.com/" target="_blank" rel="noopener">Blackstone Structured Finance</a> and with cash in hand.
Initially, the transaction will add approximately 207 MW of commercial scale-solar assets to Altus&#8217; operations, with the remaining 13 MW to be added in the final stages of the construction.
The company aims to use solar assets to offer additional electrification solutions, including battery storage and electric vehicle or fleet charging stations.
Co-CEO of Altus Power Gregg Felton said, &#8220;True Green Capital has a long history of successfully investing in commercial-scale solar with underwriting standards consistent with our own. Altus Power&#8217;s strengths in asset on-boarding and long-term customer servicing combined with our scalable funding architecture create a natural partnership.&#8221;
Managing Partner and Co-Founder of True Green Capital Panos Ninios commented, &#8220;Altus Power&#8217;s capacity to execute with efficiency and focus on building long-term relationships has made them an extremely valuable partner in both of our transactions. They share our founding belief that commercial-scale distributed solar generation is the most attractive segment of our industry. Our collaboration has facilitated TGC&#8217;s successful forays into new solar markets.&#8221;
Earlier this year, Altus Power announced the signing of definitive agreements to <a href="https://mercomindia.com/project-finance-brief-lightsource-bp-closes-financing-for-a-210-mw-solar-project/" target="_blank" rel="noopener">acquire</a> around 97 MW of operating solar assets from undisclosed sellers for $220 million through a combination of cash and assumed liabilities.
Last October, the company <a href="https://mercomindia.com/project-finance-brief-altus-power-sale-leaseback-solar-funding/" target="_blank" rel="noopener">completed</a> a sale-leaseback tax equity financing amounting to $42 million for several unspecified solar projects in Minnesota and Massachusetts.

Altus Power to Acquire 220 MW of Solar Assets for $293 Million in US

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					</table>The Indian Energy Exchange (<a href="https://www.iexindia.com/" target="_blank" rel="noopener">IEX</a>) traded 536 million units (MU) of renewable energy in June 2022, a 16.5% decrease month-over-month (MoM) compared to 642 MU <a href="https://mercomindia.com/renewable-energy-trading-up-by-91-mom-at-iex-in-may-2022/" target="_blank" rel="noopener">traded</a> in the previous month.
The exchange traded 8,267 MU of energy during the month. The traded energy comprised 7,058 MU in the conventional power market, 536 MU in the green power market, and 673 MU in the renewable energy certificate (REC) market, registering 17% YoY growth across all segments.
Green Market: Day-Ahead and Term-Ahead 
The Green Market comprising the Green Day-Ahead Market (GDAM) and Green Term-Ahead Market (GTAM) traded 536 MU volume during the month, registering a YoY growth of 30%.
The GDAM traded 362 MU with a weighted average price of ₹5.94 (~$0.075)/kWh. In all, 148 entities participated in the process. The highest number of participants in a single day was 110 on June 23, 2022.
GTAM traded 173 MU volume during the month and saw participation from 24 entities. The average monthly price for solar was ₹3.83 (~$0.048)/kWh, while the average monthly price for non-solar was ₹8.13 (~$0.103)/kWh, and the average monthly price for hydro was ₹6.75 (~$0.085)/kWh.
Distribution utilities from Haryana, Telangana, Karnataka, Uttar Pradesh, and several industrial entities participated in the trading process in June.
Electricity Market: Day-Ahead, Term-Ahead, and Real-Time Market
In June 2022, the Day-Ahead Market (DAM) traded 4.085 BU of energy, registering a decline of 5% YoY and a growth of 29% MoM during June. The average market clearing price in June was ₹6.49 (~$0.082)/kWh.
The Term-Ahead Market (TAM) comprising intra-day, contingency, daily, and weekly contracts traded 759 MU, registering 18% YoY growth.
The Real-Time Electricity Market traded 2.214 BU, registering a growth of 28% YoY. The highest single-day volume of 96.43 MU was on June 14, 2022.
Renewable Energy Certificate Market 
 June saw a total of 673,000 RECs cleared, registering a growth of 145% MoM. The volume comprised 459,000 non-solar RECs with a clearing price of ₹1,000 (~$12.67) per REC and 214,000 solar RECs with a clearing price of ₹1,500 (~$19.03). The next REC trading session is scheduled for July 27, 2022.
 Recently, the Central Electricity Regulatory Commission <a href="https://mercomindia.com/cerc-approves-forward-contracts-indian-energy-exchange/" target="_blank" rel="noopener">approved</a> the introduction of additional Term-Ahead and Green Term-Ahead contracts beyond T+11 days (T indicating zero-day of trading) on power exchanges. Earlier, exchanges were allowed to sell contracts for up to 11 days. With the introduction of longer-duration contracts, they will now be able to facilitate trade contracts comprising daily, weekly, and monthly contracts for up to three months.
Earlier, CERC <a href="https://mercomindia.com/cerc-regulations-boost-renewable-energy-certificates-trading/" target="_blank" rel="noopener">issued</a> ‘Terms and Conditions for RECs for Renewable Energy Generation Regulations, 2022.’ According to these regulations, renewable energy generating stations, captive generating stations based on renewable energy sources, distribution licensees, and open access consumers are now eligible to issue RECs.

Renewable Energy Trading on IEX Declines by 16.5% MoM in June

Mercom India Research, the research arm of Mercom India has released a whitepaper ‘India Solar Market – An Overview,’ in partnership with the Renewable Energy India Expo and Conference. The conference will be in Greater Noida from September 18 to 20, 2018.
The complimentary whitepaper provides an in-depth look at the market drivers and challenges facing the Indian solar market.
<a href="https://mercomindia.com/rei-expo-2019-whitepaper-download-form/" target="_blank" rel="noopener noreferrer">Click here</a> to download the complete whitepaper.<a href="https://mercomindia.com/rei-expo-2019-whitepaper-download-form/"><img loading="lazy" decoding="async" class="aligncenter wp-image-15546 size-full" src="https://mercomindia.com/wp-content/uploads/2019/09/India-Solar-Market.png" alt="India Solar Market" width="882" height="491" /></a><a href="https://mercomindia.com/india-solar-capacity-q2-2019-1-5-gw/">Recently</a>, Mercom India Research released its <a href="https://mercomindia.com/product/q2-2019-india-solar-market-update/" target="_blank" rel="noopener noreferrer">Q2 2019 India Solar Market Update</a>, a report that covers the state of the Indian solar market in detail.  According to the report, cumulative large-scale solar installations reached 31.5 GW by the end of Q2 2019 with large-scale solar projects accounting for 88% and rooftop solar making up the remaining 12%.
Mercom India Research forecasts India to install over 8 GW of solar capacity in the calendar year 2019. The report estimates solar installations in India to reach 70 GW by the end of 2022 based on current market dynamics.
“It has been a rough couple of quarters for the Indian solar market, exacerbated by tough lending conditions. Post elections, we expect the second half of the year to be slightly better, but liquidity issues need to be resolved for the market to recapture momentum,” commented Raj Prabhu, CEO, and co-founder of Mercom Capital Group.
Renewable energy capacity additions continue to increase at a significant pace in India, accounting for approximately 35.4% of India’s power capacity mix cumulatively. Solar accounted for 41% of the new power capacity added in 1H 2019.
<a href="https://mercomindia.com/wp-content/uploads/2019/09/India-Solar.png"><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-15548" src="https://mercomindia.com/wp-content/uploads/2019/09/India-Solar.png" alt="India Solar" width="1024" height="512" srcset="https://cms.mercomindia.com/wp-content/uploads/2019/09/India-Solar.png 1024w, https://cms.mercomindia.com/wp-content/uploads/2019/09/India-Solar-300x150.png 300w, https://cms.mercomindia.com/wp-content/uploads/2019/09/India-Solar-768x384.png 768w, https://cms.mercomindia.com/wp-content/uploads/2019/09/India-Solar-650x325.png 650w, https://cms.mercomindia.com/wp-content/uploads/2019/09/India-Solar-624x312.png 624w, https://cms.mercomindia.com/wp-content/uploads/2019/09/India-Solar-600x300.png 600w" sizes="(max-width: 1024px) 100vw, 1024px" /></a>
Visit Mercom India team in REI at Hall 10 Booth 402, and also attend the session powered by Mercom India along with key industry executives on 19th September 2019 at 4.00 PM to 5.30 PM.

Mercom India Research Releases White Paper on Indian Solar Market at REI Expo

India was the second largest solar market in the world surpassing the United States in terms of solar capacity addition in the first half (1H) of 2018. While China added 24.3 GW of solar PV capacity in 1H of 2018, India added 4.9 GW in 1H 2018 and the United States added 4.7 GW of solar PV capacity.
The United States installed more capacity than India in the second quarter of 2018 with 2,273 MW in comparison to India’s 1,599 MW. This was a reversal compared to the <a href="https://mercomindia.com/india-3gw-solar-supasses-united-states-q1-2018/" target="_blank" rel="noopener">first quarter</a> of 2018, in which India installed <a href="https://mercomindia.com/solar-installations-india-q1-2018/" target="_blank" rel="noopener">over 3 GW</a> in the quarter. In Q1, the United States installed 2,427 MW compared to India’s 3,344 MW, according to Mercom India Research.
<a href="https://mercomindia.com/wp-content/uploads/2018/10/top3.png"><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-11447" src="https://mercomindia.com/wp-content/uploads/2018/10/top3.png" alt="India Was the Second Largest Solar Market in First Half of 2018" width="517" height="304" srcset="https://cms.mercomindia.com/wp-content/uploads/2018/10/top3.png 517w, https://cms.mercomindia.com/wp-content/uploads/2018/10/top3-300x176.png 300w" sizes="(max-width: 517px) 100vw, 517px" /></a>
The top three solar markets in the world – China, India, and the United States together installed a combined 33.9 GW. In Q1 2018, the three top solar markets accounted for 15.4 GW of solar PV capacity.
According to a recent <a href="https://www.seia.org/research-resources/solar-market-insight-report-2018-q3" target="_blank" rel="noopener">report</a> released by Solar Energy Industries Association (SEIA), the United States installed 2.3 GW of solar PV, a 9 percent year-over-year (YoY) decrease and a 7 percent quarter-over-quarter (QoQ) decrease.
However, this trend is unlikely to continue as the project development pipeline in India is relatively weak going into the second half of the year as safeguard duty, module prices and policy uncertainties are expected to take a toll on installations.
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