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Thursday, 01 July 21
WHY INDIA’S SOLAR POWER TARIFFS ARE CLIMBING AFTER HITTING RECORD LOWS LAST YEAR - IEEFA
What’s behind the recent increase?
Solar tariffs are deflationary. Prices have fallen by 75% in seven years in India, and in 2020 solar tariffs hit record lows.
From 2019 to the first quarter of 2020, most of India’s newly-auctioned solar projects saw tariffs in the range of Rs2.5-2.87/kilowatt hour (kWh). Then in February 2020, the Ministry of New and Renewable Energy (MNRE) removed ceiling tariffs for all new solar and wind tenders to hasten tender activity and capacity allocation. From Quarter 2 of 2020, prices were in the range of Rs1.99-2.97/kWh, with bids thereby hitting the new record low tariff.
The reasons for such low tariffs were access to low cost financing (cheaper interest rates) by international developers based out of Saudi Arabia (Aljomaih Energy and Water Co.) and Singapore (Sembcorp) as well as government entities like NTPC which can secure debt at a rate of 7-7.5%. And since they can source funds at lower rates, their return on equity expectation is also lower. Also, these tenders are likely to be exempted from the Safeguard Duty (SGD) and Basic Customs Duty (BCD) on solar cell and module imports. Another key factor was power purchase assurance for the developers, for example, the power sale agreement (PSA) between the intermediary procurer, Solar Energy Corporation of India (SECI), and the buying entity, Rajasthan power distribution company (Discom) Rajasthan Urja Vikas Nigam Ltd. (RUVNL). The other tender was issued by Gujarat Discom, Gujarat Urja Vikas Nigam Ltd. (GUVNL).
In 2021, however, solar tariffs saw an upward trend. In January and February, the lowest tariffs discovered in auctions were Rs2.22/kWh and Rs2.25/kWh, by Torrent Power Ltd. (TPL) and NTPC Ltd. The tariff increases could be attributed to lack of participation by international developers like Aljomaih Energy and Water Co. and Sembcorp. Moreover, module prices increased from US$0.20/Wp in July 2020 to US$0.22-0.23/Wp in January 2021, causing solar prices to increase. Further, module suppliers are now selling modules at FOB (free on Board) prices instead of CIF (cost, insurance, and freight) prices, which is also impacting solar prices in India.
Then in March, the Government of India announced it will impose a 40% basic customs duty (BCD) on solar modules and 25% on solar cells from 1 April 2022 in a move to promote domestic manufacturing. The imposition of BCD is likely to increase solar tariffs by approximately 25%. The lowest tariff delivered in the first solar auction result after the BCD announcement – GUVNL’s 500MW auction in Gujarat – was Rs2.22/kWh, a 21 paisa (12%) increase per kWh from the previous GUVNL tender under the same conditions.
Lower prices are favourable for renewable energy growth. However, aggressive tariffs come with risks, and developers need to properly factor these risks into their bids. With improved module technology, generation will increase. Another factor that will pull down solar prices is access to low cost financing. On the other hand, a rise in module costs due to various global demand and supply factors and floating interest rates that change in line with Reserve Bank of India (RBI) guidelines could push prices upwards.
Vibhuti Garg is an Energy Economist and Lead India at IEEFA
This article was first published in SolarQuarter India
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Monday, 23 August 21
CHINESE COAL PRODUCTION RISES 4.9 PCT IN 1ST 7 MONTHS OF 2021 - NBS
Official figures demonstrated that the Chinese raw coal production surged 4.9 percent annually to 2.26 billion tonnes in the January-July period of ...
Friday, 20 August 21
ARE WE LOOKING AT THE NEXT DRY BULK SUPER CYCLE? IS IT EVEN A CYCLE? - BIMCO
Throughout the first half of the year, talk of a new dry bulk super cycle has been on many lips as commodity prices have soared to multi-year highs ...
Friday, 20 August 21
BIMCO'S SHIPPING NUMBER OF THE WEEK: CHINESE IRON ORE IMPORTS FALL TO 14-MONTH LOW IN JULY - PETER SAND
Chinese iron ore imports fell to 88.5 million tonnes in July, the lowest level since May 2020. The fall in July means that accumulated imports are ...
Friday, 20 August 21
SOARING DEMAND FOR THE WORLD’S LEAST-LIKED COMMODITY SEES THERMAL COAL PRICES JUMP 106% THIS YEAR - CNBC
Soaring electricity demand, infrastructure woes and a surge in global gas prices have triggered an extraordinary rally for the world’s least ...
Friday, 20 August 21
CHINA’S IRON ORE IMPORTS CONTRACTED YEAR-ON-YEAR BY 2% IN 2018 AND GREW YEAR-ON-YEAR BY ONLY 1% IN 2019 - COMMODORE RESEARCH
Examining the last ten years of China’s crude steel output and iron ore imports shows that China’s iron ore imports have stayed r ...
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- GVK Power & Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Singapore Mercantile Exchange
- GMR Energy Limited - India
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- The University of Queensland
- Lanco Infratech Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- The Treasury - Australian Government
- Bhatia International Limited - India
- Sical Logistics Limited - India
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- Minerals Council of Australia
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- Agrawal Coal Company - India
- Edison Trading Spa - Italy
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Romanian Commodities Exchange
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Mercator Lines Limited - India
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Posco Energy - South Korea
- Vizag Seaport Private Limited - India
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Indonesian Coal Mining Association
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- VISA Power Limited - India
- Economic Council, Georgia
- Toyota Tsusho Corporation, Japan
- Indian Oil Corporation Limited
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Orica Mining Services - Indonesia
- Medco Energi Mining Internasional
- Mercuria Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Green Power PLC Corporation, Philippines
- Larsen & Toubro Limited - India
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- Kartika Selabumi Mining - Indonesia
- New Zealand Coal & Carbon
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Xindia Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Ceylon Electricity Board - Sri Lanka
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
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