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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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Friday, 09 July 21
CAN WE EXPECT AFFORDABLE POWER SUPPLY BY REPLACING COAL BASED POWER WITH LNG? - FINANCIAL EXPRESS
Bangladesh government’s recent decision to cancel the contracts for 10 coal fired power plants in late June 2021 has invited interest in the ...
Thursday, 08 July 21
STRONGEST HALF YEAR FOR SHIPPING MARKETS SINCE 2008 - CLARKSONS
A year on from peak trade disruption, we update our half year report for the shipping industry profiling a strong recovery and some exceptional ind ...
Tuesday, 06 July 21
INDONESIA COAL PRICE REFERENCE RISES TO 112 MONTHS HIGH IN JULY 2021; 121.15% HIGHER COMPARED TO THAT IN JULY 2020 PRICE
COALspot.com: The Indonesia coal price reference for July 2021 fixed at US$ 115.35 per ton FOB vessel.
The Indonesia coal price referenc ...
Tuesday, 06 July 21
INDONESIAN COAL EXPORTS FELL BY 37% YOY IN 1Q21 DUE TO ADVERSE WEATHER CONDITIONS - FITCH RATINGS
Chinese coal imports declined by 25% yoy in 5M21as a result of both restrictions on Australian coal and the high base in 2020. Import volume in Jan ...
Tuesday, 06 July 21
INDONESIAN 4,200 INDEX HAS ALSO INCREASED TO OVER USD50 PER TONNE SINCE MAY THIS YEAR REFLECTING STRONG CHINESE IMPORT DEMAND - FITCH RATINGS
Price Surge Since March
APAC thermal coal has resumed its price surge since March this year. The benchmark Newcastle 6,000kcal/kg grade c ...
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- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- Petron Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Goldman Sachs - Singapore
- Central Java Power - Indonesia
- VISA Power Limited - India
- MS Steel International - UAE
- Renaissance Capital - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- PTC India Limited - India
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMC Global Power, Philippines
- Singapore Mercantile Exchange
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- Central Electricity Authority - India
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Directorate General of MIneral and Coal - Indonesia
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- Romanian Commodities Exchange
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Intertek Mineral Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Straits Asia Resources Limited - Singapore
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- The University of Queensland
- Mercator Lines Limited - India
- White Energy Company Limited
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Vedanta Resources Plc - India
- Australian Coal Association
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PNOC Exploration Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- Marubeni Corporation - India
- Pendopo Energi Batubara - Indonesia
- Kaltim Prima Coal - Indonesia
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- Bangladesh Power Developement Board
- Bukit Baiduri Energy - Indonesia
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