CERC Grants Trading License to Renew Energy

In a recent order, the Central Electricity Regulatory Commission (CERC) has granted ReNew Energy Markets Private Limited’s (formerly known as Renew Vayu Power Private Limited) request to be granted Category `IV` Trading Licence, which permits the inter-state trading of maximum 2,000 MUs of electricity in one financial year across the nation. The application from Renew follows a strong year for the firm, with plans to target the corporate PPA market, besides other opportunities.

The Trading Licence Regulations, 2020, were finalised by CERC in January last year after consultations with stakeholders.

“During the past decade, many developments have taken place in the Indian power sector viz. new energy procurement and sale contracts, increased volumes at power exchanges, cross border trade of electricity etc. which has necessitated revisiting the trading licence and trading margin regulations,” the commission opined in its order notifying the new regulations and eligibility criteria for the applicant to successfully become a trading licensee:

As per the Trading Licence Regulations, 2020, a person or firm applying for Category `IV` trading licence should have net worth of Rs. 10 crore and should have maintained minimum current ratio and liquidity ratio of 1:1 as on date of audited balance sheet accompanying the application. As per the Special Balance Sheet submitted by ReNew Energy in August, the company possesses the required net worth, current ratio and liquidity ratio for the grant of Category “IV” trading licence. As a result, the commission released an order in October, proposing to grant the requested licence.

In recent months, the CERC has been active in both the grant and cancellation of trading licenses. The long term target for 25% share of power from trading has opened up a large opportunity in the segment, especially with the GTAM and GDAM markets for renewable energy.

Recently, REC (Renewable Energy Certificates) trading also resumed after a gap of almost 18 months on the power exchanges.