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