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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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Friday, 09 July 21
CAN WE EXPECT AFFORDABLE POWER SUPPLY BY REPLACING COAL BASED POWER WITH LNG? - FINANCIAL EXPRESS
Bangladesh government’s recent decision to cancel the contracts for 10 coal fired power plants in late June 2021 has invited interest in the ...
Thursday, 08 July 21
STRONGEST HALF YEAR FOR SHIPPING MARKETS SINCE 2008 - CLARKSONS
A year on from peak trade disruption, we update our half year report for the shipping industry profiling a strong recovery and some exceptional ind ...
Tuesday, 06 July 21
INDONESIA COAL PRICE REFERENCE RISES TO 112 MONTHS HIGH IN JULY 2021; 121.15% HIGHER COMPARED TO THAT IN JULY 2020 PRICE
COALspot.com: The Indonesia coal price reference for July 2021 fixed at US$ 115.35 per ton FOB vessel.
The Indonesia coal price referenc ...
Tuesday, 06 July 21
INDONESIAN COAL EXPORTS FELL BY 37% YOY IN 1Q21 DUE TO ADVERSE WEATHER CONDITIONS - FITCH RATINGS
Chinese coal imports declined by 25% yoy in 5M21as a result of both restrictions on Australian coal and the high base in 2020. Import volume in Jan ...
Tuesday, 06 July 21
INDONESIAN 4,200 INDEX HAS ALSO INCREASED TO OVER USD50 PER TONNE SINCE MAY THIS YEAR REFLECTING STRONG CHINESE IMPORT DEMAND - FITCH RATINGS
Price Surge Since March
APAC thermal coal has resumed its price surge since March this year. The benchmark Newcastle 6,000kcal/kg grade c ...
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- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- Central Java Power - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Binh Thuan Hamico - Vietnam
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- White Energy Company Limited
- Malabar Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Economic Council, Georgia
- Videocon Industries ltd - India
- Electricity Authority, New Zealand
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Interocean Group of Companies - India
- PTC India Limited - India
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Mining Services - Indonesia
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Deloitte Consulting - India
- Aboitiz Power Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- India Bulls Power Limited - India
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- The Treasury - Australian Government
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Siam City Cement - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Kepco SPC Power Corporation, Philippines
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Coalindo Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Heidelberg Cement - Germany
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- Bhatia International Limited - India
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- Sical Logistics Limited - India
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Semirara Mining Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Jindal Steel & Power Ltd - India
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