The Reserve Bank of India’s (RBI) moratorium on cash-strapped Yes Bank, one of the largest lenders to renewable energy projects, has sent developers into a panic mode. They say they cannot risk raising finance for almost 30GW of renewable energy projects that are now in the pipeline and will require funds to the tune of ₹1 trillion.
India’s renewable energy programme will require $80 billion in investments till 2022. Mint reported that Yes Bank’s loan exposure to India’s clean energy sector is expected to be to the tune of ₹12,000 crore.
Renewable energy firms spooked: Will govt extend safeguard duty by 4 more years?
With Covid-19 already impacting project-commissioning schedules, the government has also moved to raise import tariffs on equipment. The domestic solar manufacturers’ lobby (ISMA) has asked the government to extend safeguard duty for another four years on solar imports – it expires on July 29 this year – to protect the businesses of domestic players. The Centre has initiated a probe to decide if it should extend the duty. In July 2018, the government had imposed safeguard duty for a period of two years on solar imports from China and Malaysia. From 2018 to 2019, 25% safeguard duty was imposed, which was reduced to 20% from July 30, 2019, to January 29, 2020, and 15% from January 30, 2020, to July 29, 2020.
India imported solar equipment worth $1,180 million from China in April-December FY20.
Total value of solar photovoltaic cells or solar cells imports, whether or not assembled in module or panel, stood at $1,525.8 million for the April-December period of FY20, ET reported.
Andhra Pradesh discoms clear dues till Sep 2019, pay wind, solar developers
In a big relief to renewable energy developers, Andhra Pradesh discoms have cleared dues as directed by the court and cut down the practice of reducing purchase of renewable energy. The discoms paid ₹600 crore that they owed to wind and solar developers till September 2019. The court directed the state to pay wind developers at a tariff of ₹2.43 per unit and solar developers at ₹2.44 per unit. The YSR Congress-led government wants to renegotiate solar and wind power purchase agreements signed by the previous administration because it believes the contracts were signed at rates higher than those in other states.
Sop to meet 175GW by 2022? Centre removes upper tariff ceiling, developers celebrate
In order to meet the ambitious 175GW by 2022 target, the Centre has removed the upper ceiling tariffs in future bids for solar and wind projects. Developers are applauding the decision as a “win-win situation” for the industry and the government, Mercom reported. Developers said the decision would make tariffs purely market-driven without artificial caps. They pointed out that it may not make much of a difference to the actual tariffs in solar reverse auctions, which have already touched the ₹2.50 (~$0.03)/ kWh level in the latest bidding. For the wind sector, this decision may mean higher tariffs. The Centre has asked central implementing agencies such as SECI and state discoms to purchase renewable energy from a single source or a combination of renewable sources, with or without storage as per their buying policy.
Wind sector grew by 38%, but domestic wind equipment manufacturing sector slumped
The first 11 months of the current fiscal year (2019-2020) witnessed a 38% spike in the wind energy sector. India set up 2,043 megawatt (MW) wind power capacity during this period compared to 1,480 MW added in the last financial year, new and renewable energy minister RK Singh said. The minister said the government has a target of achieving 60,000 MW of installed wind power capacity by December 2022, of which, a capacity of 37,669 MW has already been commissioned as on 29 February of FY20, with 9,236 MW of projects under implementation and 1,200 MW under bidding.
However, the introduction of a competitive bidding mechanism proved bad for the growth of the sector. The fall has been attributed to shoddy assessment of ground situations, which adversely affected the manufacturing sector. DTE reported that auctions are carried out, as part of the bidding mechanism, without a time-table; there is no assurance of a take off.
The wind energy sector is growing globally. According to a recent study, the market for global wind turbine materials is forecast to surpass $8 billion by 2029 on the back of an anticipated Compounded Annual Growth Rate (CAGR) of around 7%, backed by an increasing number of wind power installations globally.
IEA warns coronavirus could spell a slowdown in clean energy transition
Covid-19 poses a threat to long-term climate action by undermining investment in renewable energy projects, that’s the warning of the International Energy Agency (IEA). The global energy watchdog expects the economic fallout of Covid-19 to wipe out the world’s oil demand growth for the year ahead, curbing the fossil fuel emissions that contribute to the climate crisis. However, IEA chief Fatih Birol has warned the outbreak could spell a slowdown in the world’s clean energy transition unless governments use green investments to help support economic growth through the global slowdown. He said in the absence of the right policies and structural measures this decline will not be sustainable.