RENEWABLES: 40GW of RE each year till 2028, India’s renewables growing faster than China, Solar drops to 2.44 again

India to auction 40GW of renewables each year till 2028 to meet 2030 power demand

MNRE will auction 40GW worth of renewable energy projects (30GW solar + 10GW wind) every year from 2018-2028 to meet the country’s expected power demand of 862GW by 2030. The figure is based on CEA’s calculation of about a 6% annual growth in electricity demand till 2027, of which the ministry is aiming to supply 500GW through solar (350GW) and wind energy (140GW). India’s current installed renewables capacity stands at just under 70GW.

Closed-envelope bids are also likely to be invited going forward to address concerns over unsustainably low tariffs.

India’s renewables growing faster than China

New BNEF study shows India’s renewable investments rose 22% in the first half of 2018 compared to the same period last year, while China investments fell 15% during the time. “At this rate, India is expected to overtake China to become the target growth market by late 2020s.”

Again: tariff drops to all-time low of Rs. 2.44/kWh

Solar tariffs once again fell to all-time low of INR 2.44/kWh ($0.035) at SECI’s 2 GW auction recently. ACME won 600 MW bidding lowest (Rs. 2.44/kWh) tariff, a record it had set at Bhadla in May 2017. “Positive momentum” was attributed to recent policy announcements clarifying stand on GST, new bidding norms and withdrawal of solar subsidies in China.

3 days later, why have tariffs shot up?

Tariffs again shot up to Rs 2.70 to 2.71 per unit at Solar Energy Corporation of India’s (SECI) 750 MW Andhra Pradesh auction. Experts attributed the difference to high solar park charges in Andhra Pradesh, and the shorter one-year deadline (the former 2 GW auction involved Inter State Transmission System projects, that could be set up anywhere, within 2 years.)

NTPC’s 2GW project oversubscribed by over 3 times

Meanwhile, NTPC’s 2 GW March 2018 solar tender have been oversubscribed by over three times. 14 bidders showed interest. Domestic developers’ complaint that the maximum allowable capacity to be bid was “too large” was ignored as government pushes to meet 100 GW by 2022 target.

SEZs to spoil Import duty plans?

Major domestic players, including Adani, who have sought 95% duty on solar imports, may themselves face the proposed safeguard duties on their products manufactured in SEZs, as according to DG Safeguards, “a unit operating in SEZ cannot claim market disruption due to imports…(they) are deemed to be outside Indian Customs Territories and not competing with other domestic units.” Experts say developers operating from SEZ “tax havens”, can’t wish to impose duties on competitors, while they push up power prices.

Local manufacturing key to large solar power projects

The government plans to make local manufacturing key for big solar power projects. “If one player takes it all, that will be unfair, It would be difficult to attract manufacturers with smaller bid sizes”. It’s not mandatory to use locally manufactured panels, to keep the tenders WTO compliant.

Niti Aayog CEO: If you are not competitive, don’t attempt it

The Centre think tank Niti Aayog chief said he doesn’t support protectionism. To domestic manufacturers his message: If you are not competitive in solar manufacturing “right till the back-end, do not attempt that”. Experts say to boost domestic manufacturing India needs a better eco-system rather than protectionist measures. Why tax US$20bn pa of solar installations to protect the tax-free SEZs, analysts ask.

Over 30 GW solar tendered in 2018

After 10 GW in May, India issued 8 GW of wind and solar tenders in June, allowing developers to choose the project sites. Over 30 GW of solar have been tendered in the first half of 2018, but only 15% was actually auctioned. “Auctions are when bidding occurs…Tenders by themselves don’t mean a whole lot as many tend to get postponed multiple times and quite a few of them also get cancelled”

‘75% India power from renewables by 2050’

India will generate 75% power from renewables in 2050 according BNEF. “Of this, 34% would be solar, and 32% wind. “Wind and solar will surge to almost 50% of world generation by 2050 backed by falling costs, and advent of cheaper batteries.”

Renewables employed 432,000 Indians in 2017, Up 12% from 2016

Recent global study says in 2017 renewables employed 432,000 in India, 3.8 million in China & EU (1.2 million). To ensure job boom is inclusive, the sector must train unskilled and semi-skilled workers from rural India, including women, the report noted.

ADB’s solar loan to Bangladesh, study backs wind power

The Asian Development Bank (ADB) will give $20 million loan to Bangladesh for off-grid solar projects, and $25.44 million for solar irrigation pumps. Replacing diesel pumps is expected to cut 17,261 tons of CO2 emissions annually. Meanwhile, new study backed by USAID, conducted over 3 years, says wind power is best suited for Bangladesh.

Sweden to meet targets 12 yrs early

Sweden is set to meet renewables target 12 years early by 2018 end, thanks to surge in wind energy. The surge is worrying power producers banking on subsidies. Forward prices are 70% lower for 2021 than a year earlier “because of all the new installations.” Once 2030 target is met, there’ll be no subsidies.

Wind Projects: China moves to auctions

China is moving from feed-in tariff model to auctioning wind projects through bidding. The government will set tariff which cannot be exceeded. Meanwhile, India has called for procuring power from small solar and wind projects through feed-in tariffs set by state regulators (SERCs).

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