COVID-19 has failed to stop the cost of renewables from falling, according to agencies IRENA and IEEFA. Infact, according to IEEFA, COVID-19 added to the decline in the capital cost of solar and the cost of funding. The Institute for Energy Economics and Financial Analysis (IEEFA) said the pandemic caused a collapse in market interest rates, which helped solar tariffs to fall further. Solar tariff is directly proportional to the cost of modules, the capital cost of installation and rate of return, said Tim Buckley of IEEFA.
The capital costs fell following a 20% drop in costs of solar modules over the past one year and the decline in the cost of funding, which made renewables set new records amid the rising spread of COVID-19 in April and May.
According to data released by the International Renewable Energy Agency (IRENA), solar costs have fallen 82% over the past 10 years. The fall in onshore and offshore wind projects during the same time has been nearly 40% and 30% respectively. IRENA said the levelized cost of power from large-scale solar plants is around $0.068/kWh, compared to $0.378 in 2010 and the cost declined 13.1% between 2018 and 2019. In the past decade, the global solar capacity rose from 40 GW to 580GW, the report said, adding that during the same period, costs of solar modules fell 90%.
Adani Green to build 8 GW solar projects in India at cost of $6 billion
India’s Adani Green has won a massive 8GW government contract to build solar plants for $6 billion by 2025. The company will ready 2 GW of solar capacity by 2022, and the rest by 2025, in three increments of 2GW annually in various parts of the country. Following the announcement company’s shares jumped 5% to a record high of $4.14.
The contract from the state-run Solar Energy Corp of India (SECI) requires Adani to set up a solar manufacturing capacity of 2GW by 2022 in Gujarat. The project is likely to generate 400,000 direct and indirect jobs and displace 900 million tonnes of CO2 over its lifetime, Mercom reported.
Railways to set up 3GW solar projects on vacant land by 2023
Indian Railways will set up 3GW solar power plants on vacant land owned by Railways. The three-phased project of 1GW each will be set up by Railway Energy Management Company, a joint venture between Indian Railways and state-owned engineering consultancy Rites Ltd. The first and the third phase will be on a public-private partnership basis. The second phase of 1GW will be completely owned by REMC, eligible for the Centre’s subsidy. The 3GW projects are expected to be completed by 2023.
Study: India’s renewable energy market to contract in next five years
A recent study by renewable energy consultancy firm Bridge to India has warned that the Indian renewable energy market is set to shrink in the next five years (2020-2024) due to a fall in power demand growth, worsening Discom debts and constraints in debt ﬁnancing. The consultancy has marked ‘at risk’ the recently completed auctions such as the 4,000MW manufacturing-linked tender, 1,200MW peak power tender and 400MW round-the-clock power tender.
The BTI study lowered India’s base-case capacity addition significantly, from 43GW solar and 15GW wind to 35GW of solar and 12GW of wind power capacity over 2020-24. With COVID-19 cases rising, business activity has come to a halt, leading to a power demand drop of 30%. If power demand continues to fall, the discoms won’t sign fresh PPAs, the BTI report said.
Japan’s TEPCO Renewables plans to build green power projects worth $18 billion by 2035
Japanese firm TEPCO Renewables plans to develop 6-7 GW of offshore wind and hydroelectric power projects in the next 15 years (by 2035) at an estimated cost of $9-18 billion. In 2018, the company’s parent firm TEPCO announced it would develop 2-3 GW off-shore wind projects in Japan and overseas and 2-3 hydroelectric projects abroad. The company plans to set up off-shore wind projects in Southeast Asia and North America and hydroelectric projects in Southeast Asia. TEPCO is also trying to relaunch their nuclear power facilities after the 2011 Fukushima disaster.
China’s draft solar PV efficiency norms to bring current production lines to abrupt halt?
China is planning to raise its solar panel quality standards, which experts say will bring the recent expansions in production capacities by solar companies to a grinding halt, overnight. China’s new draft policy proposes to increase the 2018 quality standards, which required solar mono cells to have 21% efficiency and modules to be 17.8% efficient, to 23% and 20% respectively.
The draft policy will not apply retrospectively, but if implemented, it would impact up to around 100GW of new production lines this year alone. The proposals, if turned into law, would mostly impact over $14.1 billion mono PERC production explosion, which is currently set to 2018 quality standards.
Following the pandemic outbreak, there’s a fall in PV demand, which has caused a glut in the Chinese solar market. Experts say the superior next-generation technology of solar cells and modules would exceed the draft quality arms, but they would be costlier, and therefore few players would be interested in making them, unlike companies that massively expanded production of cheaper mono PERC.
The new quality standards will help China restrict solar equipment production and tackle the glut. The surge in production had helped China achieve grid parity, where power from solar and coal could be priced the same, but it also encouraged producers to dump cheap products abroad. China produced nearly 94% of the world’s silicon wafer production (173.7 GW).