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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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Sunday, 11 July 21
COAL SHOWS ITS STAYING POWER AS ECONOMIES BOUNCE BACK - THE WALL STREET JOURNAL
Coal use is surging in some of the world’s largest economies as electricity demand rebounds from the pandemic, illustrating the challenges to ...
Sunday, 11 July 21
ROBUST CHINA COAL DEMAND AMID AUSTRALIA IMPORT BAN FUELS PRICE RALLY - REUTERS
Seaborne coal has become a quiet winner among energy commodities, lacking the attention of higher-profile crude oil and liquefied natural gas (LNG) ...
Saturday, 10 July 21
OVERESTIMATED LCOES OF COAL-FIRED POWER PLANTS CREATE A FINANCIAL BUBBLE - IEEFA
Massive stranded asset risk detrimentally affects the financial and power distribution
India’s future coal-fired power project pipeline ...
Friday, 09 July 21
EIA FORECASTS COAL’S GENERATION SHARE IN U.S TO RISE FROM 20% IN 2020 TO 24% THIS YEAR BUT TO FALL TO 22% NEXT YEAR
The July Short-Term Energy Outlook (STEO) of EIA remains subject to heightened levels of uncertainty related to the ongoing economic recovery from ...
Friday, 09 July 21
KOREA SOUTH-EAST POWER CO., LTD. INVITES BIDS FOR 1.86 MILLION TONS OF COAL OF 5600 & 4000 NCV COAL FOR THREE YEARS
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 280,000 – 300,000 MT of Min. ...
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- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Global Business Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- Ministry of Transport, Egypt
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Baramulti Group, Indonesia
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Energy Link Ltd, New Zealand
- Coalindo Energy - Indonesia
- Rio Tinto Coal - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- The State Trading Corporation of India Ltd
- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- IHS Mccloskey Coal Group - USA
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Standard Chartered Bank - UAE
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- Miang Besar Coal Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Parliament of New Zealand
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Ind-Barath Power Infra Limited - India
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Anglo American - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- Orica Mining Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Minerals Council of Australia
- Central Electricity Authority - India
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- Sinarmas Energy and Mining - Indonesia
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Ambuja Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Electricity Authority, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Banpu Public Company Limited - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- Borneo Indobara - Indonesia
- Heidelberg Cement - Germany
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Binh Thuan Hamico - Vietnam
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- Marubeni Corporation - India
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- Petron Corporation, Philippines
- Economic Council, Georgia
- Australian Coal Association
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Jindal Steel & Power Ltd - India
- Star Paper Mills Limited - India
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Sojitz Corporation - Japan
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Sarangani Energy Corporation, Philippines
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