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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, 16 October 21
DESPITE HIGHER COAL PRICES, U.S. COAL RECOVERY LOOKS WEAK BY MOST MEASURES - IEEFA
U.S. coal sector is locked into a long-term sectoral decline
Coal prices have surged to the highest level in years in the U.S., and have soare ...
Saturday, 16 October 21
COAL IS 'KING' AS GAS PRICES SOAR, TOTAL CEO SAYS - AND IT’S BACKFIRING ON CLEANER ENERGY GOALS - CNBC
Surging natural gas prices have led to a jump in coal use, with plants in Europe and Asia firing back up as temperatures decline and the world grap ...
Saturday, 16 October 21
VIETNAM'S COAL-FIRED POWER MAY DOUBLE BY 2030 UNDER DRAFT ENERGY PLAN - REUTERS
Vietnam may double the amount of coal-fired electric generation it installs by 2030 under a draft power development plan submitted to the prime min ...
Friday, 15 October 21
AUSTRALIA'S WHITEHAVEN EXPECTS TO BE DEBT-FREE NEXT YEAR AS COAL PRICES SOAR - REUTERS
Australia’s Whitehaven Coal WHC.AX said on Thursday it expects to be debt-free by early 2022, as thermal coal prices surge to record highs on ...
Friday, 15 October 21
WINTER CHILL KEEPS CHINA'S COAL PRICES HIGH, POWER CRUNCH STOKES INFLATION - REUTERS
China coal prices held near record highs on Thursday as cold weather swept into the country’s north and power plants stocked up on the fuel t ...
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- Indogreen Group - Indonesia
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Economic Council, Georgia
- Mercuria Energy - Indonesia
- Attock Cement Pakistan Limited
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Latin American Coal - Colombia
- Petron Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Marubeni Corporation - India
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Meenaskhi Energy Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Ambuja Cements Ltd - India
- Simpson Spence & Young - Indonesia
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Madhucon Powers Ltd - India
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- Central Electricity Authority - India
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- Renaissance Capital - South Africa
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- Energy Development Corp, Philippines
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Baramulti Group, Indonesia
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
- Eastern Energy - Thailand
- The University of Queensland
- Aditya Birla Group - India
- Sindya Power Generating Company Private Ltd
- SN Aboitiz Power Inc, Philippines
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Kohat Cement Company Ltd. - Pakistan
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- PTC India Limited - India
- Edison Trading Spa - Italy
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- TeaM Sual Corporation - Philippines
- Georgia Ports Authority, United States
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- Gujarat Sidhee Cement - India
- Krishnapatnam Port Company Ltd. - India
- Indika Energy - Indonesia
- Planning Commission, India
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Straits Asia Resources Limited - Singapore
- Heidelberg Cement - Germany
- Pendopo Energi Batubara - Indonesia
- Independent Power Producers Association of India
- Carbofer General Trading SA - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maheswari Brothers Coal Limited - India
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