India has recorded a 59% decline in renewable energy subsidies to ₹6767 crore after peaking at ₹16312 crore in 2016-17, according to the study by the Council on Energy, Environment and Water (CEEW) and the International Institute for Sustainable Development (IISD). The fall was a result of developmental slowdown during COVID-19 pandemic-induced lockdowns, the study said, adding that over this period grid-scale solar and wind achieved cost parity.
Compared to RE, the country’s subsidies for fossil fuels fell by 72% to ₹68,226 crore during the seven-year period between 2014 and 2021 the analyses concluded. Researchers said overall, India provided over ₹540,000 crore to support the energy sector in FY 2021 with around ₹218,000 crore in subsidies. Meanwhile, electric vehicle subsidies have more than tripled since FY17 to ₹849 crore in FY21 the study stated.
India plans to shift 81 thermal units from coal to RE by 2026
India’s Power ministry has identified 81 thermal units which will replace coal with renewable capacity by 2026 including units of state-owned NTPC, and privately owned units of Tata Power, Adani Power, CESC, Hindustan Power among others.
India is chasing an ambitious 500GW RE target while facing the annual issue of coal demand supply mismatch, the report added stating that coal-based power generation units which have high tariffs have been identified which will operate at a technical minimum (operating ratio) of 40% and balance generation capacity will be met by a renewable energy source.
Reuters quoted a ministry letter stating that about 58,000 million units of thermal power generation in the central, state and private sector can be substituted with renewable energy (RE) generation. Substitution of the capacity of the 81 thermal power utilities would lead to the saving of 34.7 million tonnes of coal and help cut carbon emissions by 60.2 million tonnes, according to the letter.
Average cost of large-scale solar rose by 19% in India, solar imports up 374% in Q1 2022
According to analysis by Mercom, the average cost to set up large-scale solar projects rose by 19% in first quarter of 2022, to $56,0512 per MW from $47,1603 same period last year. India installed 2.7 GW of large scale solar in the first quarter of 2022. The average selling price (ASP) of polycrystalline modules from China increased by 25% compared to last year. Similarly, the ASP of Chinese mono PERC modules increased by 20% compared to Q1 2021. The ASP of Indian polycrystalline modules increased by 26% compared to last year, and the Indian mono PERC module ASP also increased by 20% compared to Q1 2021, Mercom reported. Experts expect the overall project cost to increase as Indian module manufacturers mainly rely on Chinese cells for their modules.
According to government data, India imported solar cells and modules worth $1.23 billion in Q1 of 2022, an increase of 374% compared to the same period last year. Imports shot up primarily due to Indian solar developers stockpiling modules in large quantities — around 10 GW, ahead of Basic Customs Duty (BCD) on solar cells and modules, which took effect on April 1. The stockpiling was to save on module costs, which increased by 40% once BCD kicked in, Mercom reported.
Set up energy transition panels: Power minister to states
R.K. Singh, India’s minister for power, has asked the states and Union territories to set up steering committees for the energy transition and work together to add more renewables to the electricity generation mix.
The minister said both should also promote energy efficiency and increase the use of biomass and green hydrogen. Singh said the states should phase out the use of diesel in agriculture by 2024 by limiting financial assistance through the Revamped Distribution Sector Scheme that could be availed for adopting solar energy for agricultural feeders under the PM-KUSUM program.
States such as Andhra Pradesh, Kerala, Madhya Pradesh, and Uttarakhand already have such committees. Principal Secretaries of power and new and renewable energy departments, transport industries, housing and urban affairs, agriculture, rural development and public works departments will be members of the proposed committees.
Govt mulls scheme for DISCOMS to pay off mounting debt
Government has announced that it is developing a scheme to help DISCOMS to pay off debt by liquidating their dues. By May 2022, the DISCOMs owed power generators around $15.20 billion in overdue payments and around $881.13 million in late payment surcharge dues. This impacts the generators who need to assure supplies like coal and other raw materials to operate their power plants without interruptions. The scheme allows payment of dues in easy instalments by the DISCOMs who will be offered a one-time relaxation wherein the outstanding amount (principal and the late payment surcharge) will be frozen on the date of the notification without the further imposition of late payment surcharges.
DISCOMS will be allowed up to 48 installments to pay outstanding debt. The staggered liquidation of outstanding dues is expected to give DISCOMs time to consolidate their finances while developers would benefit from assured monthly payments from DISCOMs.