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