Solar minima: Spain’s Solarpack set a new record low tariff of Rs2.36/unit for a 300MW project in SECI’s recently held auction for 2GW of solar power | Photo: Energy Infra Post

Tariff hits new low at ₹2.36; will developers complete the job or go ACME way?

India set a fresh record of low tariff — ₹2.36/kWh, in a 2GW auction by Solar Corporation of India (SECI). This is about 3.3% lower than the previous lowest bid of ₹2.44 (~$0.032)/kWh, which was won by ACME in 2017 and 2018. This time, six foreign companies won projects, while Renew Power was the only Indian firm among the winners. 

Spain’s Solarpack won 300 MW at Rs2.36 per unit, while Italy’s Enel and Germany’s IB Vogt won 300MW each at ₹2.37 per unit. Canada’s AMP Energy and New York-based Eden won 100MW and 300MW at ₹2.37 per unit. ReNew won 400 MW at Rs2.38 (~$0.0316)/kWh. 

Italy’s biggest power utility Enel will be financially backed by Norwegian Investment Fund Norfund to build its renewable projects in India. 

Why the new low? Experts say this is one of the “vanilla” solar tenders, and not the more complex round-the-clock and peak power schemes which fetch higher tariffs. Developers say the Basic Customs Duty (BCD) for the projects whose auctions were held before July 29 will be exempted, and even the Approved List of Models and Manufacturers (ALMM) will not be applicable, Mercom reported. Critics say it could also go the ACME way. The company is in a legal battle with the regulator over reneging on a contract.

Centre extends RE project deadline by 98 days, developers say not enough

As a relief to solar energy companies struck by COVID-19 disruptions, the Centre has extended project deadlines by 98 days — 68 days of the lockdown period from March 25 to May 31, and an additional 30 days to cope up with disruptions. 

This may not help the developers facing different lockdown durations in states such as Maharashtra, Tamil Nadu and Jharkhand, which have extended lockdowns to July 31.

Developers are also badly hit by the labour crisis following the mass exodus to villages earlier on. The government has already declared the lockdowns a force majeure for renewable energy companies. Developers have asked for a grace period of six months. In May, solar developer ACME dropped out of a 2018 project citing COVID-19 uncertainties.  

India-China Border tension: Delays ‘hurting’ domestic solar projects; 40% duty on imports from August 1

Border tensions with China are impacting Indian solar energy projects. The consignments that the developers have already paid are stuck at the ports, delaying the projects across the country, which imports around 65% of the panels from China.

Amid the border issues, India has decided to raise basic Custom duties on Chinese solar products by 40% in a year, beginning from 20-25% from August. Experts said the country requires solar modules worth ₹15,000 crore per year, and  80% of it is imported. 

Meanwhile, the government may not charge import duties from developers who have valid power purchase agreements (PPAs) as on 1 August, 2020. If duty exemption is not available, the government will reimburse developers for duties paid.

India’s solar capacity addition ‘to drop by 15%’ in FY21; India to add only 60GW RE by 2025? 

Ratings agency ICRA said COVID-19 disruptions will result in 15% drop in India’s domestic solar capacity compared to its previous estimate of 7.5GW. India is expected to add about 5.5 GW during the financial year 2020-21 (FY21), the report stated. 

The drop in demand post lockdown impacted revenues of the state-owned distribution utilities, which has increased the credit risks. The payment delays from Andhra Pradesh, Telangana, and Tamil Nadu remained severely stretched at 10-12 months, impacting the overall liquidity position of developers, the report said.

Meanwhile, in an abjectly low projection, a new study says India is expected to add only 60GW of renewable energy capacity in the next five years. The Bridge To India’s renewable energy CEO survey report 2020 projects a “very low” 12GW per annum capacity addition. The government wants to achieve 175GW by 2022 and 450GW by 2030. India’s utility scale solar capacity was 32.2GW and wind capacity was 37.6GW as on March 31, 2020.

ISA going strong: India’s NTPC to help set up 500MW solar park in West Africa

State-owned National Thermal Power Corporation (NTPC) will help set up 500MW solar park in Mali, in West Africa. The NTPC has a target to set up a total 10GW of similar solar projects in other member states of the International Solar Alliance. 

Indian state-owned companies, including Solar Energy Corporation of India, are entering international business space under the aegis of International Solar Alliance (ISA), as China continues to co-opt countries into its ambitious One Belt One Road initiative.

ISA’s business model is to reduce costs by aggregating the demand from member nations and then call for tenders. ISA has aggregated demand for solar pumps, rooftops, mini-grids, parks and home systems that require around $5 billion of financing requirement, Mercom reported.

RE projects roundup: Greenko to develop 1GW solar project in Andhra Pradesh, Avaada and Tata Power set to start Maharashtra assignments 

The state of Andhra Pradesh approved Greenko to set up an integrated renewable energy project (IREP) at Pinnapuram village in Kurnool district. Within four years Greenko must set up 1,000MW of solar projects, 550MW of wind projects, and 1,200MW of pumped storage capacity, failing which the government will take back the 4,766.28 acres of land allotted to the company. 

The Maharashtra State Electricity Distribution Company Ltd (MSEDCL) awarded 350MW of solar project to Avaada, expected to roll by January 2022. Tata Power will develop 100MW of solar projects for MSEDCL at a tariff of Rs2.90 (~$0.04)/kWh. 

The Rajasthan State Agricultural Marketing Board announced a tender for about 1.6 MW of locally manufactured rooftop solar systems, linked to the grid. The project is estimated to cost Rs103.3 million (~$1.37 million) and is expected to be completed in a year. 

Wind power generation doubles in Gujarat amid heavy rains

Gujarat’s average wind power generation has doubled in the past couple of days following strong winds accompanying heavy rains in many parts of Gujarat. This has led to a reduction in electricity generation from thermal (coal, gas and lignite) power plants in the state, ET reported. 

Wind power generation last Sunday was 88MW, which according to state data, contributed almost 20% of the peak power demand of 12,136 MW on Tuesday. Gujarat’s current installed wind power generation capacity is 5,691MW. Pre-monsoon activity pushed up average wind power generation to a high of 3,947 MW on May 28.

Denmark’s Orsted, Taiwan’s TSMC sign world’s largest wind power deal

Taiwan Semiconductor Manufacturing Co (TSMC) is set to buy the entire power produced by Denmark’s Orsted which the company produces at its third offshore wind farm in Taiwan. In what Orsted called the largest-ever contract of its kind within renewable energy, for the next 20 years TSMC will buy 920 MW of wind power from the project scheduled to be finalised by 2025 or 2026.

BP to invest $70 million to UK-India green growth fund

Oil and gas giant BP will invest $70 million in the UK India Green Growth Equity Fund (GGEF), which is backed by the UK and Indian governments. The deal will allow BP to become a limited partner in the GGEF, with representation on its advisory committee and scale up “commercially viable, integrated low-carbon energy projects” alongside the GGEF, BP said. The company plans to go carbon neutral by 2050.

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