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