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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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Saturday, 17 July 21
COAL PRICES TRADE AT DECADE HIGH OF $140 PER TONNE, HERE ARE SOME FACTORS AT PLAY: CNBC-TV18
Coal prices are trading at $140 per tonne. In the last one week, coal has seen more than 8 percent gains; the last one month has seen 24 percent ju ...
Thursday, 15 July 21
U.S. FOSSIL FUEL CONSUMPTION FELL BY 9% IN 2020, THE LOWEST LEVEL IN NEARLY 30 YEARS - EIA
U.S. fossil fuel consumption fell by 9% in 2020, the lowest level in nearly 30 years
In 2020, total consumption of fossil fuels in t ...
Thursday, 15 July 21
IN 2020, U.S. COAL PRODUCTION FELL TO ITS LOWEST LEVEL SINCE 1965 - EIA
U.S. coal production totaled 535 million short tons (MMst) in 2020, a 24% decrease from the 706 MMst mined in 2019 and the lowest level of coal pro ...
Wednesday, 14 July 21
MARKET INSIGHT - INTERMODAL
In its latest Global Economic Prospects report, the world bank recorded the strongest post-recession global growth in 80 years, but emerging and de ...
Tuesday, 13 July 21
JAPAN STILL SEEKING TO EXPLOIT COAL POWER LOOPHOLES - IEEFA
JBIC wants to continue burdening developing nations with its expensive coal-fired power technology
Japan is continuing to push its expensive c ...
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- Agrawal Coal Company - India
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Madhucon Powers Ltd - India
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- ASAPP Information Group - India
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- Parry Sugars Refinery, India
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- Grasim Industreis Ltd - India
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- Port Waratah Coal Services - Australia
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Thiess Contractors Indonesia
- Australian Coal Association
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Economic Council, Georgia
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Larsen & Toubro Limited - India
- Siam City Cement - Thailand
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- CNBM International Corporation - China
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Sinarmas Energy and Mining - Indonesia
- Riau Bara Harum - Indonesia
- Makarim & Taira - Indonesia
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- VISA Power Limited - India
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- Australian Commodity Traders Exchange
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
- TeaM Sual Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- Ambuja Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
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