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