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