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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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Sunday, 11 July 21
COAL SHOWS ITS STAYING POWER AS ECONOMIES BOUNCE BACK - THE WALL STREET JOURNAL
Coal use is surging in some of the world’s largest economies as electricity demand rebounds from the pandemic, illustrating the challenges to ...
Sunday, 11 July 21
ROBUST CHINA COAL DEMAND AMID AUSTRALIA IMPORT BAN FUELS PRICE RALLY - REUTERS
Seaborne coal has become a quiet winner among energy commodities, lacking the attention of higher-profile crude oil and liquefied natural gas (LNG) ...
Saturday, 10 July 21
OVERESTIMATED LCOES OF COAL-FIRED POWER PLANTS CREATE A FINANCIAL BUBBLE - IEEFA
Massive stranded asset risk detrimentally affects the financial and power distribution
India’s future coal-fired power project pipeline ...
Friday, 09 July 21
EIA FORECASTS COAL’S GENERATION SHARE IN U.S TO RISE FROM 20% IN 2020 TO 24% THIS YEAR BUT TO FALL TO 22% NEXT YEAR
The July Short-Term Energy Outlook (STEO) of EIA remains subject to heightened levels of uncertainty related to the ongoing economic recovery from ...
Friday, 09 July 21
KOREA SOUTH-EAST POWER CO., LTD. INVITES BIDS FOR 1.86 MILLION TONS OF COAL OF 5600 & 4000 NCV COAL FOR THREE YEARS
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 280,000 – 300,000 MT of Min. ...
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- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- Coal and Oil Company - UAE
- Kalimantan Lumbung Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PNOC Exploration Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Independent Power Producers Association of India
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Intertek Mineral Services - Indonesia
- Thiess Contractors Indonesia
- Vedanta Resources Plc - India
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Parliament of New Zealand
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- CIMB Investment Bank - Malaysia
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- GVK Power & Infra Limited - India
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Romanian Commodities Exchange
- Chamber of Mines of South Africa
- Altura Mining Limited, Indonesia
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- AsiaOL BioFuels Corp., Philippines
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- CNBM International Corporation - China
- Coalindo Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- ASAPP Information Group - India
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The University of Queensland
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- India Bulls Power Limited - India
- Bukit Makmur.PT - Indonesia
- Australian Coal Association
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Planning Commission, India
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- Indika Energy - Indonesia
- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Thai Mozambique Logistica
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
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