Proposal for Implementation of a pilot Contract for Difference (CfD) Scheme for Renewable Energy- reg. – EQ
Summary:
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## **1. Objective & Context**
– **Nodal Agency:** Solar Energy Corporation of India (SECI)
– **Purpose:** Implement a 500 MW pilot CfD mechanism to supply **1500 MWh of renewable power daily during non-solar hours** (e.g., evening peak).
– **Financial buffer:** A **₹76 crore CfD Stabilization Fund** provided by the Government of India.
– **Goal:** Test a market-based renewable integration model that ensures stable developer revenues while maintaining competitive power exchange pricing.
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## **2. How the CfD Works**
– **Strike price** discovered via reverse auction by SECI (with possible ceiling).
– **Reference price** = zonal Day-Ahead Market (DAM) price.
– **Settlement:**
– If market price > strike price → excess goes to CfD pool.
– If market price < strike price → CfD pool pays developer the shortfall.
– **Profit/loss sharing (daily, reconciled monthly):**
– 30% to developer, 70% to CfD pool.
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## **3. Key Implementation Guidelines**
| Aspect | Detail |
|——–|——–|
| **Contract term** | 12 years (build-own-operate). After that, developer free to exit or sign PPAs. |
| **Capacity limits** | Max 125 MW per bidder (375 MWh). |
| **Bidding sequence** | GDAM → OCF to DAM → any residual/curtailed volume to RTM. |
| **Stabilization fund** | ₹76 crore revolving buffer. If pool is negative, SECI replenishes from its own resources (Govt outgo limited to ₹76 crore). |
| **SECI’s fee** | Up to 25% of net pool profits (after developer’s 30% share). 2-year moratorium on withdrawal; then quarterly max 30% of entitled share based on liquidity. |
| **REC revenue** | RECs issued for RE sold in brown markets (DAM/RTM) must be sold and proceeds deposited into CfD pool. |
| **Transparency** | SECI may use power exchange clearing corporation for settlement. Must follow CERC/SEBI rules. |
| **Post-12 years** | SECI reconciles, audits, and seeks MNRE direction on any surplus funds. |
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