In Rajasthan solar power tariff go as low as Rs 4.34 a unit

In the bidding for solar projects totalling 420 MW in Rajasthan under the National Solar Mission, the winning solar power tariff bid touched a new low of Rs 4.34 per unit, entered by Finnish solar power company Fortum Energy for a 70 Mw project. However, lowering of benchmark tariff by the central government did not go too well in Maharashtra which saw subdued interest from the companies participating in bidding for 500 MW in the state.

Rajasthan saw a spurt of foreign companies lining up for solar projects. American company Rising Sun Energy quoted a solar power tariff of Rs 4.35 per unit for two projects with total capacity of 140 MW. French major Solaire Direct has quoted same tariff for same capacity projects. Among the domestic ones, India Bulls through its subsidiary Yarrow Infra won 70 MW by quoting Rs 4.36 per unit.

Fortum’s quoted tariff is the lowest bid received in solar power projects till yet. The last lowest bid was Rs 4.63 per unit by Japan’s SoftBank through its joint venture in India – SBG Cleantech for 350 MW in Andhra Pradesh.

In the wake of constantly falling solar tariff, the government benchmarked the solar tariff at Rs 4.43 per unit. Maharashtra’s 500 mw was the first one to come up for bidding under the changed norm. At this fixed tariff the government is providing viability gap funding of up to Rs 1 crore for each MW (Rs 1.3 crore for domestic content based projects) payable in six instalments. VGF-based bidding is conducted by the Solar Energy Corporation of India.

Bidders will be allocated projects on the basis of most competitive VGF quotes. The Maharashtra tender received bids from 14 developers for total capacity of less than 1.8 GW in contrast to NTPC’s recent 500 MW tender in Andhra Pradesh which received bids aggregating 5.5 GW from 30 bidders. Market experts said the reason for subdued demand was because the change was made at the last moment.

The last bidding for solar power park of 500 MW in Andhra Pradesh witnessed lowest bid of Rs 4.63 per unit by US solar company SunEdison.

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IFC helps to develop world’s largest single site solar project In India

India’s plans to implement ultra mega solar power projects have received a very major boost following a commitment from the International Finance Corporation (IFC), a member World Bank Group, to the Madhya Pradesh Government in order to develop the world’s largest single site solar project.

The International Finance Corporation (IFC) has signed an agreement with the government of the state of Madhya Pradesh in India to set up a 750 MW solar PV power plant — expected to be among the first ultra mega solar power projects to be commissioned in India and will be the world’s largest single site solar project till date.

The project is supported by the Ministry of New and Renewable Energy, Government of India, under its solar parks development scheme. Madhya Pradesh Urja Vikas Nigam Limited (MPUVN) and the Solar Energy Corporation of India have created a joint venture company — REWA Ultra-Mega Solar Power Limited — to implement the project.

The IFC will extend its global expertise to structure and implement the transaction to help attract private investments of about $750 million. IFC’s work on this project will be supported by its partnership with Australia’s Department of Foreign Trade. 

The government of Madhya Pradesh has already approved the project following which the process of land acquisition was initiated. The project is expected to required a total investment of around $500-600 million as per the current capital cost requirements. In 2014, the IFCstated that it was ready to provide debt finance for the project. The Solar Energy Corporation of India (SECI) is expected to float tender for the project soon.

The SECI is working on around 2 dozen ultra mega solar power projects which will have installed capacity of up to 4 GW each.

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Suzlon enters Solar space in India

Pune-based maker of wind turbines and end-to-end EPC player , Suzlon Group, announced its entry into the solar power space. Led by Tulsi Tanti, Suzlon will diversify outside the wind energy space where it is one the leading players globally.

Suzlon won a contract from the Southern Power Distribution Company of Telangana Ltd (TSSPDCL), through a competitive bidding process, to develop 210 MW of solar power in the state. This 210 MW of project consists of six different units – one of 100 MW, one of 50 MW and four units of 15 MW each – located across state of Telangana. The company will be signing six different power purchase agreements (PPA) this month with the state utilities for a period of 25 years each. TSSPDCL had invited bids for these solar power projects in April 2015.

The company did not disclose the investment that Suzlon would be making to develop the solar power project. But as a rule of thumb, an investment of Rs 6 crore is required to develop one megawatt of solar power. By this calculation, Suzlon may have to shell out around Rs 1,260 crore to develop 210 MW of power.

Suzlon’s spokesman said that the tariff at which the company intend to sell power to the Telangana state utility from the six solar power units will range from Rs 5.49 to Rs 5.59 per kWh.  And, according to solar industry experts, a of Rs 5 per kilowatt hour (kWh) is a commercially viable option for solar power in India.

“This 210 MW-project will reinforce our commitment to execute tangible capacities in solar energy every year while expanding our footprint,” said Rohit Modi, CEO (international operation and new business), Suzlon. “Suzlon will develop these projects on a turnkey basis.”

In a statement, the Suzlon Group’s chairman Tulsi Tanti said that solar and wind energy is complementary and Suzlon would leverage its project execution capabilities and end-to-end solutions to deliver solar power projects, wind power projects or hybrid wind-solar projects. “We are also working on integrated renewable energy solutions by combining wind and solar projects at a single location”, he added.

The current government, under the leadership of Prime Minister Narendra Modi, has been bullish on the prospects of developing renewable power in the country and has set a target of developing 60 GW (gigawatt) of wind power and 100 GW of solar power by 2022.

Suzlon has been struggling with losses since the financial year of 2009 and only posted its first quarterly operating profit in three years in the first quarter of the current fiscal. Due to a combination of domestic and international headwinds in the wind energy space and the overall economy, Suzlon found itself laden with significant debt and mounting losses.

However, a round of debt restructuring, sale of the company’s crown jewels like Senvion, a German wind turbine maker, in 2014, and the entry of Sun Pharmaceutical Industries managing director Dilip Shanghvi as a white knight investor are helping Suzlon regain its feet.

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Grid Connected Rooftop – Overlooked solar market

The problem of energy access in India is enormous. According to the International Energy Agency, some 237 million Indians (close to a fifth of the population) were living without electricity as of 2015.

Many more have only limited access, with some getting power for just a few hours per day. People often rely on diesel generators as a result, which are dirty, noisy and expensive — about the worst solution one can imagine from a public policy point of view.

To handle rising demand, India will have to add about 15 gigawatts of capacity per year for 30 years. Indian coal-fired plants, which currently provide 70 percent of the country’s electricity, are particularly dirty. Although cheap on a per-kilowatt-hour basis for now, the environmental costs of relying on coal would be disastrous.

According to MIT Technology Review, if India grew its power supply through conventional means, by 2050, it would be adding more new carbon to the atmosphere every year than total U.S. emissions in 2013.

Aside from coal, there are few other conventional options. About 15 percent of total capacity is from hydropower, but this is vulnerable to drought, and only a limited number of new dams can be built. About 3.2 percent of all electricity in India comes from nearly 6 GW of nuclear, but adding nuclear capacity is slow and carries its own significant risks. The country also has little in the way of natural-gas resources.

As such, renewables are seen as critical for the future. India is seeking to add 175 gigawatts of renewable capacity through 2022, up from its current 36 gigawatts. The government wants 100 gigawatts of that capacity to be solar.

Today, solar systems in India span a wide spectrum. Off-grid systems are mainly used in rural areas. These have an immediate impact on energy poverty and air pollution and have captured the imagination of many Western social impact investors. However, these systems can be very expensive if high availability is the goal.

On the other end are utility-scale installations, which are being bid at record lows as foreign players compete for projects.  The challenge with centralized solar is that India’s distribution companies can barely transmit the power they have now, let alone large additions of variable solar energy. They suffer over 22.7 percent losses from transmission inefficiencies and theft, and have around $70 billion in collective debt. Debt relief and reforms are underway, but they will take time, especially because local governments control rate structures.

Between the two extremes of this solar generation spectrum, there is a critical gap in the middle.

This gap must be filled to help solve India’s generation and distribution problems. There is growing hope that grid connected rooftop solar will be the answer. The Indian government has recognized this and announced that of its 100-gigawatt solar target by 2022, 40 gigawatts should be rooftop.

However, strategies for promoting grid connected rooftop solar used in other parts of the world will not work as well in India. As mentioned, prices are distorted by politically-influenced low rate structures.

Read More here…

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4.8GW utility-scale solar to be installed in 2016

According to the latest market update, nearly 4.8 gigawatts of utility-scale solar capacity will be installed in India, in 2016, up 140% from 2GW in 2015, .

Most of the new utility-scale solar projects will be installed in the southern states of Tamil Nadu, Andhra Pradesh, Telangana and Karnataka, contributing nearly 80% of all new capacity additions.

The utility-scale market is also on track to meet its targets for the next financial year, mainly due to a strong pipeline of state-level projects set to be commissioned through the year.

A significant amount of utility-scale solar capacity from government allocations is also expected in the first quarter of 2017. The burst of government allocations in early 2017 is due to delays in new allocations from state-owned companies National Thermal Power Corporation (NTPC) and the Solar Energy Corporation of India (SECI).

This means most capacity under the National Solar Mission (NSM) will only get commissioned within the first half of 2017. In any case, this may assist the government in reaching its target of 7.8GW for utility-scale projects for 2016/17. The annual capacity is also expected to be increased to 10GW in 2017/18.

But, this momentum may not keep its pace once the government allocations dry up and states become responsible for utility-scale solar growth.

Evacuation of power and grid stability were cited as key bottlenecks in the future, and therefore the speed of implementing the country’s green energy corridors between states would be critical.

India installed 2GW in 2015, less than the market’s projected number, due to delays in projects in Andhra Pradesh, Telangana, Tamil Nadu, Karnataka and Punjab.

The 2GW commissioned in 2015 were comprised of:

  • 700MW under central government allocations
  • 850MW under state allocations
  • 450MW under other heads, including private initiatives
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India gets $1.5 Billion loan for Rooftop Solar Program

The Modi government is playing high on the rooftop solar systems and have received a much-needed boost even as the target of 40 GW installed rooftop solar power capacity by 2022 looks extremely ambitious.

The Ministry of New & Renewable Energy (MNRE) gave information about Loan received from the World Bank, the Asian Development Bank, and the newly-founded BRICS development bank. An amount of $500 million from each of the bank has been sanctioned for development of rooftop solar power projects in the country.

The funds will be utilized to provide a 30% subsidy to public, non-commercial institutions to set up rooftop solar power systems. Individuals or entities not eligible for this subsidy may also be able to source low-cost debt finance from these funds.

India has set a target to have 100 GW of solar power capacity operational by April 2022 which includes 40 GW for rooftop solar power systems. Right now, the rooftop solar power capacity in India is just 10% of the 5 GW of the total operational solar power capacity. Increasing the capacity to 40 GW in about 75 months will be a very difficult task.

The government has taken initiatives to boost development of the sector. The Cabinet of Ministers recently approved a proposal that will increase the subsidy for rooftop solar power systems to $770 million by 2022, which is expected to be in addition to the debt funds raised from international development banks.

Thankfully, both project developers and consumers are now looking to increase their presence in the rooftop solar power market. A subsidiary of Azure Power, one of the largest solar power project developers in India, recently secured $20 million from Overseas Private Investment Corporation to develop 19 MW of rooftop solar power capacity. SunEdison is also working in several states in India to set up rooftop and off-grid solar power systems. The US-based project developer has also set up a number of rooftop solar power projects for the Delhi Metro Rail Corporation.

A number of state governments are also working on policies to mandate implementation of rooftop solar power systems on government-buildings as well as all newly developed buildings.

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500 MW Solar Power Tender Floated by SECI

Yet another tender for a solar plant of 500 megawatt capacity have been floated by Solar Energy Corporation of India as it looks to achieve the highly ambitious targets set by the government of India.

The Solar Energy Corporation of India (SECI) floated a request for selection (RfS) for a 500 MW of solar pv projects under the Phase II Batch III of Jawaharlal Nehru National Solar Mission (JNNSM). This batch of NSM pertains to projects commissioned through the viability gap funding route. The deadline for submissions is 12 January 2016.

According to request, the project developers shall set up the projects in the southern state of Andhra Pradesh and will be allowed to bid for units of 50 MW capacity each. The developers will, however, not be bidding for tariffs, but rather for capital cost assistance that they will require from the government. The developer that quotes the lowest bid for assistance required will be selected first.

The Ministry of New & Renewable Energy recently lowered the tariff at which these projects shall sell power to the SECI. At least 2 GW of solar power capacity will be auctioned through the viability gap funding route and selected projects will receive Rs 4.43 per kWh.

The tariff has been reduced, keeping in view with the rapidly falling capital cost requirement and increasing competitiveness among project developers.

SECI has also signed an MoU with the Russian Energy Agency (REA) for both parties to implement solar projects and manufacturing facilities in India up to 2020.

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Ajmer airport to run on solar energy

The Airport Authority of India will generate 100MW power from solar energy to light up the under-construction Ajmer airport at Kishangarh. In this regard, the AAI’s technical team recently earmarked an area to install the solar cell plates recently. “The solar electricity generated will be given to the Ajmer Vidyut Vitran Nigam Limited which in turn will provide it to the Ajmer airport,” said BK Tailang, airport director, Jaipur, who is incharge of the Ajmer airport.

The electricity produced here would be sufficient to run the airport initially. A technical team has inspected the area and found it suitable to install a solar plant. Meanwhile, considering the scarcity of water in Kishangarh area, the AAI is building a water harvesting system. TNN

“The new airport will witness some ‘experiments’ to ensure that it produces its own resources,” said Tailang. The authorities have roped in IIT-Bombay for developing a modern sewage treatment plant for re-use of water.

The availability of water is a prime concern for the AAI as the groundwater table in Kishangarh is very deep and the quality of water is also not good.

The Ajmer airport will have a building management system which will automatically light up the room sensing presence of passengers. “As part of our social responsibility, we will develop some facilities in nearby villages too. We will develop toilets under Swachh Bharat Abhiyan,” said Tailang.

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India-Russia relations on Solar Power Development

Russia has agreed to form relations with India to help India with Solar power development and to help achieve its massive solar power targets.

The Solar Energy Corporation of India (SECI) and Russian Energy Agency (REA) have recently signed a memorandum of understanding (MoU) to set up large scale solar photovoltaic (PV) projects in India between 2016 to 2022. 

Under the terms of the agreement, initially a 500 MW pilot solar PV project will be developed. Both agencies have agreed to devise a roadmap for the development of solar projects that involves establishment of equipment manufacturing facilities in India.

REA will offer its ‘state-of-the-art’ advanced technologies and low cost financing, while SECI will assist in securing relevant approvals and clearances for the development of solar projects and manufacturing facilities. A working group will be established to drive and plan the next steps forward.

This collaboration would boost India’s flagship ‘Make in India’ program which was launched last year with an aim to establish India as worldwide manufacturing hub. According to the Ministry, India currently has an installed manufacturing capacity of 1,386 MW of solar cells and 2,756 MW of solar modules. However, there is no facility in the country that manufactures polysilicon ingots and wafers.

The total solar power installed capacity in India has crossed 5 GW; including 4.7 GW of utility-scale solar and 525 MW of rooftop solar power capacity.

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Investment in Solar market of India

As recently as a few months ago, the alternative energy targets announced by Indian prime minister Narendra Modi’s government in 2014 seemed wildly overambitious — even to solar electricity enthusiasts in the industry. But a surge of investment in solar power stations now makes them look merely optimistic.

“In 2009, when I said that India would have two to three gigawatts [of solar energy] by 2015, people said ‘That’s not possible’,” says Inderpreet Wadhwa, founder and chief executive of Azure Power, one of the country’s biggest producers. “Today we have 5GW running.” Mr Wadhwa left a technology career in California after he came home to India on what was supposed to be a short personal trip eight years ago and saw the “huge” opportunities presented by the shortage of electricity.

He started with small solar plants for electricity-hungry districts and rooftop systems for companies to replace costly diesel generators. Today, Azure Power — which is part-owned by the World Bank’s International Finance Corporation as well as Foundation Capital and Helion Ventures and is poised for an initial public offering — is one of dozens of domestic and international investors putting money into building or supplying equipment to large-scale solar photovoltaic power stations across India.

Mr Modi has championed solar power and helped launch a global solar alliance at the Paris climate summit to mobilise an attention-grabbing $1tn of funds worldwide by 2030.

India itself, with current electricity grid capacity of less than 300 gigawatts, aims to increase its solar installations from below 5GW now to 100GW by 2022 — more than double the present solar capacity of China and Germany, the two biggest solar nations.

The latest contract awards suggest that, in sunny India at least, solar power can compete head-on with coal in terms of price, albeit not in terms of 24-hour availability.

SB Energy — a joint venture between Japan’s SoftBank (which has promised 20GW or $20bn of solar investment in India), Bharti Enterprises of India and Foxconn of Taiwan — last month won a reverse auction for a 25-year, 350MW project in Andhra Pradesh.

The price of the electricity to be sold, Rs4.63 per kilowatt hour, equalled the record-low winning bid of SunEdison, the struggling US group, for a 500MW project auctioned earlier in the same state.

That price, says Mr Wadhwa, is cheaper than for the power to be supplied by recently auctioned projects using imported coal. “Maybe another year, and you’ll be cheaper than new domestic coal projects as well,” he says, noting that Indian conglomerates with interests in coal are now among the active bidders for solar plants.

Read More here…

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