As Renew Solar Withdraws, 2 New Licences Issued for Power Trading

Highlights :

  • CERC has approved Renew Solar’s surrender of its Category IV inter-state trading licence and granted new ‘Category V’ inter-state trading licences to energy firms Shubheksha Advisors and Reneurja Power.
  • The 2009 Trading Licence Regulations was repealed last year, in place of which the 2020 Trading Licence Regulations was notified.

The Central Electricity Regulatory Commission (CERC) has issued three new orders pertaining to trading licences, approving Renew Solar’s surrender of its ‘Category IV’ inter-state trading licence and granting new ‘Category V’ inter-state trading licences to energy firms Shubheksha Advisors and Reneurja Power.

In 2017, Renew Solar Services Private Limited was granted licence for Category IV to trade in electricity in accordance with the Central Electricity Regulatory Commission (Procedure, Terms and Conditions of Trading licence and other related matters) Regulations, 2009. The 2009 Trading Licence Regulations was repealed last year, in place of which the 2020 Trading Licence Regulations was notified.

Under the provisions of the latter, Renew Solar recently approached CERC to surrender its inter-state trading licence, submitting that it had not undertaken any trading activity since January 2021. The firm also submitted that it had not committed any breach of any of the provisions of the licence or the 2020 Regulations and had paid all applicable fees for the financial year 2021-22. Accordingly, the commission directed that the trading licence granted to Renew Solar be revoked from the date of issuance of order. CERC also said that an extract copy of the order was to be sent to the Ministry of Power as well as CEA for their information and record.

Additionally, Shubheksha Advisors Private Limited, a company registered under the Companies Act, 2013, and Reneurja Power LLP, registered under the Limited Liability Partnership Act, 2008, recently requested CERC under Section 14 of the Electricity Act, 2003 to be granted Category V trading licence for inter-state trading in electricity across the country.

In accordance with the 2020 Trading Licence Regulations, a person applying for Category V trading licence should have net worth of Rs. two 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 sheets submitted by two applicants, they were found to possess the required net worth, current ratio and liquidity ratio for grant of Category V trading licence.

Accordingly, CERC approved the issuing of such licenses to both the companies, provided that they fulfil certain conditions throughout the period of subsistence of the licence, such as complying with the orders and directions issued by the commission from to time; charging trading margin strictly in accordance with the 2020 Trading Licence Regulations; etc.

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Soumya Duggal

Soumya is a master's degree holder in English, with a passion for writing. It's an interest she has directed towards environmental writing recently, with a special emphasis on the progress being made in renewable energy.

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