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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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- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- Carbofer General Trading SA - India
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- Borneo Indobara - Indonesia
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Petron Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- Marubeni Corporation - India
- Global Coal Blending Company Limited - Australia
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PTC India Limited - India
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- New Zealand Coal & Carbon
- Billiton Holdings Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
- MS Steel International - UAE
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- Samtan Co., Ltd - South Korea
- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Georgia Ports Authority, United States
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Australian Coal Association
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- Sojitz Corporation - Japan
- Planning Commission, India
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- ASAPP Information Group - India
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- McConnell Dowell - Australia
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- Salva Resources Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- Heidelberg Cement - Germany
- Eastern Coal Council - USA
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Bhatia International Limited - India
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- Orica Australia Pty. Ltd.
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
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