Govt plans new import tax on solar equipments starting August

Source: Business Standard, Jun 24, 2020

MUMBAI: India’s renewable energy ministry has proposed imposing customs duty on some solar power equipment starting Aug. 1 as part of the country’s goal of becoming self-sufficient, the Press Information Bureau said in a statement.

The ministry has proposed taxing imports of solar cells, modules and inverters starting August, the statement said, citing power minister Raj Kumar Singh’s interaction with the industry. The decision comes amid recent border skirmishes with China, which accounts for nearly 80% of module supplies in the country.

Indian Prime Minister Narendra Modi gave a call for self-reliance, echoing a global sentiment to diversify supply chains in the post-pandemic world. Recent border tensions with China have made that campaign more urgent.

A clear trajectory of customs tax will be declared in due course, the statement said, without giving further details. India currently levies safeguard duty on imports of solar cells and modules from China and Malaysia. That tax expires at the end of July.

Singh asked the industry to consider stopping imports of products whose domestic supplies are adequate and added that developers using domestic equipment will get cheaper loans from lenders Power Finance Corp. and REC Ltd., according to the statement.

Solar cells import may get costlier; govt pushes domestic buying amid India-China clash

Source: Financial Express, Jun 23, 2020

To curb the procurement of solar generation equipment from China, and increase the reliance on domestic manufacturing, the government is planning to impose the basic customs duty (BCD) on imports of such products.

Though solar imports from China have gradually fallen since the imposition of the safeguard duty in July 2018, it still remained the largest source of solar cells and panels in April-December FY20 with imports worth $1.2 billion. A 20% BCD on these products was proposed in the Budget, but the Ministry of New and Renewable energy (MNRE) had clarified that the levy will not be imposed at least till the expiry of the safeguard duty regime.

People aware of the development told FE that the MNRE will soon be sending its recommendations to the finance ministry, suggesting levying 20% BCD on imports of solar cells and panels. The duty will progressively be increased to 30% and 40%, one of the sources said.

The government in July 2018 had imposed a 25% safeguard duty on import of solar cells from China, Malaysia and developed countries. The duty period ends next month, and currently the safeguard duty stands at 15%.

In the first nine months of FY20, solar equipment of $1.5 billion have been imported and Chinese companies found new ports to export their products. Imports of solar cells and modules from Vietnam ($127.2 million) and Thailand ($110.4 million) were 842% and 1,352% higher, respectively, compared to FY18 when there was no safeguard duty.

Overall imports of solar equipment fell 60.2% between FY18 and April-December FY20, while imports from China declined 65.5% in the same period.

The country’s domestic manufacturing capacity stands at 11 GW for panels and 3 GW for cells, though about 50% of the capacity remains unutilised due to price and quality concerns. However, the gap between the landed cost of local product and its Chinese counterpart has gradually narrowed to about 1.5 cents per watt. As on May 31, the installed renewable energy capacity was 87.4 gigawatt (GW). Further, an additional 35 GW is under various stages of implementation and 34.5 GW under different stages of bidding.

NTPC plans a greener option to power A&N

Source: LiveMint.com, Jun 17, 2020

NEW DELHI : The Andaman and Nicobar (A&N) islands are set to go green with state-run power generator NTPC Ltd poised to call bids to build a floating micro-liquefied natural gas (LNG) terminal to power the Indian archipelago, said two people aware of the development.

This will not only reduce the carbon footprint by ending the practice of diesel-based power generation, but will also provide a much cheaper source of generating electricity.

The improved infrastructure will also allow India to secure the strategic advantage the islands offer in the Indian Ocean and protect its trade routes at a time when China is expanding its naval reach. India’s only tri-service command is based in A&N at the entrance to the Malacca Strait, the world’s busiest shipping route. Tensions along the Line of Actual Control between India and China have spiked with an Indian army officer and two soldiers killed in the Galwan area of Ladakh.

The clean fuel sourced through the Floating Storage Regasification Unit (FSRU) will help generate 50MW at Hope Town, South Andaman, enough to power the islands and replace the current system of generating power from diesel.

“Diesel is the worst polluting,” said the first person cited above requesting anonymity.

“The tender will be floated shortly,” added the second person cited above who also declined to be named.

Currently, the difference between the average cost of supply and average realizable revenue (ACS-ARR) for electricity generated from diesel on the island is about ₹17 per unit, with the government bridging the subsidy amount. Power generated from LNG is expected to cost about ₹5 per unit.

The plan has been in the works for more than a year with Prime Minister Narendra Modi laying the foundation stone of the 50MW LNG-based power project on 30 December 2018.

The plant is to be set up by NTPC Vidyut Vyapar Nigam (NVVN), a unit of India’s largest power generator.

A spokesperson for NTPC did not respond to queries emailed on Sunday.

The LNG-fuelled power project is among several projects implemented in the islands to showcase India’s presence in the region and beyond. These include the expansion of naval air stations and building a railway line from the capital of Port Blair to Diglipur on North Island. State-run National Highways and Infrastructure Development Corp. Ltd (NHIDCL) is also building bridges and roads in A&N at an investment of around ₹3,000 crore.

The Centre also plans to establish ship-building and ship-repairing facilities at the islands. It is laying a submarine optical fibre cable between Chennai and Port Blair and five other islands of Havelock, Little Andaman, Car Nicobar, Kamorta and Campbell. It also plans to add new ships to the fleet for improving connectivity between the mainland and the islands. India has been trying to augment its strategic capabilities in the region against the backdrop of China’s One Belt One Road initiative, which seeks to invest billions of dollars in infrastructure projects including railways, ports and power grids across Asia, Africa and Europe.

Andhra Pradesh Cabinet approves mega solar power project

Source: The Hindu Business Line, Jun 11, 2020

Hyderabad: Andhra Pradesh Government has approved the proposal to set up a 10,000 MW solar power project which is aimed at providing nine-hour power supply to farmers during the daytime besides setting up of an Integrated Renewable Energy Project (IREP).

The State Cabinet, chaired by Chief Minister YS Jagan Mohan Reddy. cleared this project, port and airport plans apart from taking several decisions.

Briefing the media after the cabinet meeting, Information and Public Relations Minister Perni Venkataramaiah said that as part of the IREP, 550 MW of Wind Power, 1200 MW of pumped storage hydelpower plant and 1000 MW of Solar power will be set up.

Under the Green Energy Development Charge, the State government will get Rs 32 crore per annum.

Port

The State cabinet has cleared the Ramayapatnam port works and examined the Detailed Project Report. It is expected to be completed in five phases with an estimated budget of Rs 3736 Crore in the first phase of works. The State plans to seek funds from the Centre.

The State reviewed the Bhogapuram Airport project which was awarded to GMR for development. The State reduced the built area from the proposed 2700 acres to 2200 acres and the remaining 500 acres will be handed over to the State government as commercial space, the Minister said.

For the irrigation projects, the State Government earmarked some funding for relief and rehabiiliitation. For Veligonda Project Rs 1411.56 crore was earmarked for land acquisition and compensation and Rs 522.85 crore was set apart for R&R package of Gandikota reservoir.

Directorate

The Cabinet also approved the move to establish AP State Directorate of Revenue Intelligence to monitor tax evasions. It was also decided to set up a Tribal Engineering College under JNTU-K in Kurupam with a budget of Rs 153 crore. During the meeting, it cleared allotment of 385 acres of land to the greyhounds for settig up of a training campus in Visakhapatnam.

Adani wins world’s largest solar project order; to invest Rs 45,000 cr

Source: Business Standard, Jun 09, 2020

New Delhi: Billionaire Gautam Adani’s renewable energy firm Adani Green Energy on Tuesday said it has won the world’s largest solar order to build 8 gigawatts of photovoltaic (PV) power plant along with a domestic solar panel manufacturing unit at an investment of Rs 45,000 crore.

Under the offering of domestic manufacturing-lined solar projects from state-owned renewable energy agency SECI (formerly Solar Energy Corp of India), Adani Energy will set up a domestic solar panel manufacturing capacity of 2 GW (2,000 megawatts) as well as built 8 gigawatts (GW) of generation projects.

The firm will get a fixed tariff of Rs 2.92 per kilowatt-hour (per unit) from the power plant over a contract period of 25 years.

“This is the world’s largest tender of such large capacity being bid out,” Adani said on a call.

“This will help take Adani Green closer to its target of becoming the world’s largest renewable power company by 2025.”

With this contract, Adani Green now has a portfolio of 15 GW of renewable power generating assets.

It hopes to win tenders for another 10 GW of capacity this year to help it achieve the 25 GW target, said Adani, who heads the USD 15-billion Adani Group — a sprawling conglomerate with interests in energy, agri-business, real estate and defence, among others.

The first 2 GW of generation capacity will start by 2022, with the rest installed in 2-GW annual increments through 2025, Adani said.


While the company will build the projects at various locations, the solar manufacturing facility will be ready by 2022.

Asked about the viability of Rs 2.92 per unit fixed tariff for 25 years, Adani said, “There is enough margin available. Plus we also have 3-5 years to implement the project. We are quite comfortable with the tariff as enough margin is available”.

Also, safeguard duty against cheap imports of solar modules, largely made in China or Chinese companies in South East Asia that are hugely subsidised by Beijing, is also a comforting factor.

“Adani Green Energy Ltd (AGEL) has won the first-of-its-kind manufacturing linked solar agreement from SECI,” the company said in a statement. “This award will take the company closer to its target of achieving an installed generation capacity of 25 GW of renewable power by 2025 which in turn will see it committing an investment of Rs 1,12,000 crore (USD 15 billion) in the renewable energy space over the next 5 years.”

Shares of the company rose 5 per cent to a record high of Rs 312.75 on the BSE on Tuesday.

Adani said the project will help India achieve its COP21 target of reducing carbon emission as it will displace 900 million tonnes of carbon dioxide over its lifetime.

“This award is yet another step in our nation’s climate change promise to the world as well as enabling our nation’s Atmanirbhar Bharat Abhiyan (self-reliant India programme). It is another step towards fulfilling our group’s nation-building vision,” he said.

The projects will include a variety of locations, including a 2 GW single-site generation project that is tied for the rank of the largest single-site project announced globally, it added.

The solar cell and module manufacturing capacity of 2 GW will be established by 2022 and along with the existing 1.3 GW of capacity will further consolidate the group’s position as India’s largest solar manufacturing facility, the statement said.

Railways to set up 3GW solar capacity on vacant land

Source: LiveMint.com, Jun 04, 2020

NEW DELHI: In what will add further heft to India’s credentials as a clean energy champion, state run Railway Energy Management Company Ltd. (REMCL) will tender, supervise and manage electricity supply from 3 gigawatt (GW) of solar plants that will be built on vacant Railway’ land.

In the union budget presented earlier this year, finance Minister Nirmala Sitharaman had proposed to set up large solar power capacity alongside rail tracks, on land owned by Railways.

“The project will be divided into 3 phases of 1 GW each. First and third phase of 1 GW each will be on PPP basis under Design, Build, Finance, Operate and Transfer model. Second phase of the project (1 GW) will be on ownership model of REMCL, which will be eligible for capital subsidy under CPSE investment scheme. The Railways have already identified suitable land to be leased to REMCL on nominal lease rent,” the company said in a statement.

REMCL is a subsidiary of state-run transport engineering consultant RITES Ltd; wherein 51% stake is held by it and the balance by Indian Railways.

The national carrier has a rail network of around 125,000 km, the world’s largest, under a single management. It also has large tracts of land along its network, which will be used to set up solar power generation capacities. Indian Railways plans to become “net zero” carbon emitter by 2030. India is the biggest emitter of greenhouse gases after the US and China, and is among countries most vulnerable to climate change.

“REMCL is mandated to handle entire Power procurement under open access for Indian Railways besides handling renewable energy and energy efficiency projects. REMCL is presently handling about 74% of the traction power of Railways through open access mechanism,” the statement added.

The previously articulated plan will also help the national carrier reduce its power procurement costs. With a requirement of about 12 billion units of electricity a year, Indian Railways’ power consumption has been growing at an average 5% a year. The railways plan to source 10% of its electricity needs through renewable energy sources by 2020. The Railways’ plan assumes importance as India has 34.6 GW of solar power and 38GW of wind power, and runs the world’s largest clean energy programme.

Curbs are wind in sails for green firms

Source: LiveMint.com, May 19, 2020

The nearly two-month-long lockdown has drastically cut pollution levels in India and influenced local weather, thereby improving solar radiation and wind patterns, bringing cheer to solar and wind energy developers.

While this has helped improve electricity generation, it comes at a time when the lockdown has led to a drop in the country’s power demand. The lockdown, one of the world’s strictest, has now been extended till 31 May although many restrictions have been eased.

“The lockdown has had a positive impact on renewable power generation. We are seeing an over 5-10% improvement in generation in solar, based on the location of the plant. On wind, we are seeing a short-term improvement in generation, but one would need more analysis in the longer term to evaluate the positive impact,” said Tejpreet S. Chopra, chief executive, BLP Group, a renewable energy generation and technology company.

Given that the financial and technical modelling of such projects depend on past weather data, the changing meteorological and weather variations have been negatively impacting India’s green energy generation. This is a challenge as the revenue model of solar projects is solely dependent on the radiation levels received.

India seeks to produce 100 gigawatts (GW) from solar projects and 60GW from wind power plants by March 2022. The country now has 33GW of solar power and 38GW of wind power.

Some renewable energy producers said that the trend needs to continue to make a meaningful impact on business operations.

“In general, we have been seeing increased generation in the solar plants in north India over the past 2-3 years, especially during late winters. This year, the generation has further improved in the months of April and May due to lesser environmental pollution, owing to the lockdown. However, we must remember that these may be short-term variations and shall not be taken as the forecast for the project life,” said Sanjeev Aggarwal, founder and managing director of Amplus, one of India’s largest rooftop solar power producers.

According to the National Aeronautics and Space Administration (Nasa), the aerosol concentration has fallen drastically over north India, bringing clear skies after decades.

The impact is more evident over the Indo-Gangetic region, one of the most polluted and densely populated regions in the world.

Aerosols are particles in the atmosphere around which water droplets tend to condense and form clouds. But, their role is not just limited to cloud formation; these particles also absorb and reflect sunlight in the atmosphere.

“While I would agree that reduced pollution and aerosol in the atmosphere has provided better radiation for solar and, therefore, enhanced generation, on the other hand, it may also be observed that more cloud cover in the past three months, in some cases, has undone the extra generation which one would have got. You have seen unprecedented lower temperatures in the northern belt at this time of the year,” said Sunil Jain, chief executive officer, Hero Future Energies Pvt. Ltd.

Sanjay Aggarwal, managing director of Fortum India Pvt. Ltd, said that though pollution levels have come down, “trying to decipher change in weather pattern and their impact on renewables with so limited data is akin to reading the tea leaves.”

“One needs to evaluate at least three-year data to really figure out if long-term structural changes have happened as there is wide variability and it gets harmonized as we get more data,” he said.

Fortum is one of the largest nuclear and hydropower generators in Europe and Russia.

Due to climate change, rainfall patterns and warming are changing, along with the changes in the wind regime, leading to variability in wind-speeds.

“For wind, the pattern looks better but too early to predict as Indian wind season starts from May. Winds are linked to our monsoon pattern and, therefore, we will have to wait and watch. But the early indicators are positive for wind also. Internationally, offshore wind patterns are far more encouraging,” said Jain.

The improvements in solar and wind power come at a time when India’s renewable energy companies are facing headwinds. “There are 37GW of solar and wind projects currently in the pipeline. Excluding 3GW capacity in the manufacturing-linked tender, the remaining 34GW is due for completion in the next two years. But we expect only 24GW to be added in this period in view of the various operational and financing challenges,” consulting firm Bridge to India wrote in a report. “Our revised renewable capacity estimate for March 2022 is 116GW, including rooftop solar and open access projects.”

India’s ultra mega solar parks offer $500-700 billion investment potential

Source: Business Standard, May 14, 2020

Bhubaneswar: The country’s ultra mega solar parks have offered potential investors an opportunity to join $500-700 billion renewable energy and grid infrastructure investment boom in the coming decade, a study noted.

“The ultra-mega solar parks have attracted foreign capital as well as top global developers to India and in return have provided investors with an opportunity to join a $500-700 billion renewable energy and grid infrastructure investment boom in the coming decade”, said Kashish Shah, research analyst at IEEFA.

India now has a capacity of 1 Gw across multiple ultra-mega solar parks, two of which are the largest commissioned in the world.

The Bhadla solar park in Rajasthan is the world’s largest such installation to date, covering more than 14,000 acres with total capacity of 2245 Mw.

The ultra-mega power plant (UMPP) concept involves a state government or local distribution company providing a single central grid connection and acquiring land on which the project can be built, shielding developers from procurement and time-delay risks.

“This approach has driven economies of scale and attracted global capital into India’s renewable energy sector over the last five years, with an immediate boon in mid-2017 of halving solar tariffs to a record low of Rs 2.44 per kWh ($39/MWh) at the prevailing exchange rate,” said Shah.

India pioneered the concept of the ultra mega power plant (UMPP) in a single solar industrial park. In 2016, the Ministry of New and Renewable Energy (MNRE) initially set a target for 40 industrial solar parks with a combined capacity of 20 GW, and in 2017 doubled this target to 40 GW by 2022.

According to the report, utility-sale solar parks in India have successfully overcome the three major risks associated with renewable energy development in India, namely project execution risk, off-taker risk and operation and maintenance risk.

The country’s land acquisition process is one of the most critical roadblocks to infrastructure projects. But, the state government renewable development energy agencies have helped in acquiring large-scale government and privately-owned land for the solar parks. The solar parks also have cushioned developers from the hassles of arranging the connection of generation units to the nearest sub-station.

Besides, the introduction of reverse bidding auctions has helped curtail prices. In reverse bidding auctions, developers bid for the lowest attainable tariff at which to supply power. The auction mechanism drives prices down by promoting competition, but also has introduced transparency and efficiency in the process of contracting new renewable energy capacity.

Solar, gas power generation shoots up even as electricity consumption falls

Source: Business Standard, May 04, 2020

Chennai: India’s solar and gas-fired electricity generation rose in April even as overall power demand fell at the steepest monthly rate in at least thirteen years, a Reuters analysis of provisional government data showed.

Solar-powered electricity generation rose 16.9 per cent, accounting for a record 5.6 per cent of the country’s total output, while gas-fired power output was 13.7 per cent higher, an analysis of daily load despatch data from state-run power operator POSOCO showed.

However, wind-powered electricity generation fell 11.4 per cent.

Electricity generation from coal – India’s primary source of electricity – fell 32.3 per cent to 1.91 billion units per day, the data showed, with its contribution to overall electricity generation falling to 65.5 per cent, compared with an average of over 73.7 per cent last year.

“Solar production was ramped up in the southern states, while gas-fired power plant operators in the west used cheap imported gas to address peak demand,” a senior power ministry official said, adding that many coal-fired utilities were shut for maintenance.
 

India – the world’s second-largest consumer, importer and producer of coal and the third-largest greenhouse gas emitter – expects to remain heavily dependent on coal for electricity but has pledged that clean energy will account for at least 40 per cent of its installed capacity by 2030, up from about 22 per cent now.

Overall electricity use fell by about 24 per cent in April, the data from POSOCO showed, as all industries and offices not categorized “essential” were shut as a part of a nationwide lockdown to prevent the spread of the coronavirus.

With the lockdown extended with certain relaxations for another two weeks, state-run Coal India Ltd might face higher inventory and lower sales, while Indian utilities could face more financial stress.

Utilities were suffering from a prolonged industrial slowdown before the pandemic struck, with electricity demand rising only 1.2 per cent during the fiscal year ending March 2020 – the second slowest growth rate since 1984/85.

Industries and commercial plants account for over half of India’s annual consumption of electricity, with residences making up nearly a quarter and agriculture accounting for over a sixth.

Ratings agency Moody’s unit ICRA expects annual power demand to fall for the first time during the year ended March 2021, while losses at state-run electricity distribution utilities (DISCOMs) are set to rise to 500 billion rupees ($6.6 billion). Barring two hilly states in the country’s north east with little industrial load, power use fell across all regions, the data showed. Consumption in industrial states fell steeply, with states such as Gujarat and Tamil Nadu recording a fall of about 30 per cent, while Maharashtra’s fell over 20 per cent.

Deadline extended for clean energy projects

Source: LiveMint.com, Apr 22, 2020

NEW DELHI: India has asked its agencies implementing clean energy projects to allow developers more time to complete such projects, on account of delays caused by the nationwide lockdown to contain the coronavirus pandemic.

In an attempt to help the country get back on its clean energy trajectory, this time extension will be equivalent to the period of lockdown and an additional thirty days for normalisation of services after the lockdown ends.

Recognizing that the 40-day nationwide lockdown will delay all execution, the move will protect clean energy developers from the risk of penalties, including fines and encashment of bank guarantees for missing their project completion deadline.

“In an order issued on 17-4-2020, the Ministry noted that, thus, the extension will be for the period of lockdown plus 30 (thirty) days. This will be a blanket extension – there will be no requirement of case to case examination. There will be no need to ask for any evidence for extension due to lockdown,” the ministry of new and renewable energy said in a statement on Tuesday.

This comes in the backdrop of India extending the lockdown by another 19 days till 3 May; while allowing a conditional withdrawal of the lockdown from 20 April in areas where the spread has either been contained or prevented.

“The Ministry has also said that all Renewable Energy implementing agencies of the Ministry of New & Renewable Energy (MNRE) will treat lockdown due to COVID-19, as Force Majeure ,” the statement added.

This announcement comes in the backdrop of the government’ earlier decision to consider the disruption in the supply chains due to spread of coronavirus under the force majeure clause.

Mint reported on 6 February that power project developers in India, who source solar modules from China, plan to declare force majeure on meeting project completion deadlines because of supply disruptions caused by the coronavirus outbreak. Invoking the force majeure clause enables a developer to cite disruption from an unforeseen event—in this case the flu epidemic—to justify the delay.

According to power purchase agreements (PPAs), delays in project completion timelines attract penalties. India is running what will become the world’s largest clean energy programme with the aim to have 175 GW of clean energy capacity by 2022. By then, it plans to add 100GW of solar capacity, which may need investments of around $80 billion, growing more than threefold to $250 billion by the end of 2030. Starting 20 April, India is allowing key parts of the economy, including agriculture, logistics, infrastructure, e-commerce and factories (located outside the municipal corporations and municipalities’ limit), to return to work in areas where no infections have been reported. In addition, construction activities for those roads, irrigation projects, buildings and industrial projects have been allowed where workers are available on site and no workers are required to be brought in from outside.