Stung by the high solar tariff of Rs 3.48 per unit at an auction for 1,000 MW, conducted by the Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) a fortnight back, the state government has cancelled the auction and is going in for re-bidding.
The reverse auction for grid-connected solar projects conducted on July 10 saw participation from 13 companies. Mahoba Solar, an Adani group company, quoted the lowest tariff of Rs 3.48/kWh to develop 250 MW of projects. Maheshwari Mining & Energy (MMEPL) also quoted Rs 3.48/kWh to develop 20 MW. Other bidders included ACME Solar Holdings, which secured the largest capacity by bidding at Rs 3.54/kWh for 150 MW of solar PV projects, Feynman (Canadian Solar), Sukhbir Agro Energy, Rays Power Infra, EDEN Renewables, Azure Power and Hero Solar.
However, tariffs are much higher than in some of the recent auctions, including the latest tenders by Solar Energy Corporation of India (SECI), where the L1 bid quoted was Rs 2.44 per unit.
Speaking to FE, chairman of UPPCL Alok Kumar said the state government as well as the SECI feel that the tariff is very high, and so the UPNEDA should go in for re-bidding. “We think we can discover tariffs between `3.05 and rs 3.10/kWh,” he said, adding that final touches are being given to bid documents and that those would soon be uploaded.
It may be mentioned that solar developers had been anticipating the cancellation of the bids by the Uttar Pradesh government, and the National Solar Energy Federation of India (NSEFI), representing solar energy developers, has written to the state energy minister, requesting him to intervene and issue suitable directives to Uttar Pradesh Power Corporation to honour the tariff and the bidding process as cancellation of the auction might set a bad precedent.
“NSEFI has apprehension that the government of Uttar Pradesh may not honour the bidding process… even through a transparent bid process followed, which saw overwhelming participation,” the association’s letter to the state energy minister said, adding that there shouldn’t be any comparison as tariff varies from state to state based on various bid factors.
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Bharat Heavy Electricals (BHEL) on Wednesday reported a net profit of `155.6 crore, up 92.6% year-on year (y-o-y), for the three months to June.
The profits come off a low base and were below analysts’ estimates. The company recorded a revenue of Rs 5,790 crore, up 8%, in Q1FY19. Earnings before interest taxes depreciation and amortisation (Ebitda) was `288 crore while the Ebitda margin was 4.9%. The engineering firm’s order book stands at around Rs1.17 lakh crore.
The state-owned company spent Rs250 crore lower on excise duty and depreciation and amortisation expenses than the corresponding quarter last year. It also gained about `300 crore y-o-y from changes in product inventories.
The company said the profit was achieved “through prudent strategies of accelerated execution, cost control and resource optimisation measures”. Emission control equipment for Telangana power plants constituted major orders won by BHEL in the quarter.
As reported by FE earlier, the drive to make power plants compliant with environmental norms opens up a Rs1.3-lakh-crore opportunity in the next three years for emission control equipment providers. The company’ profit from the power business segment increased by more than 11% to `487.8 crore.
The company has also received significant orders from the industry business segment including a 120 MW blast furnace/coke oven gas based captive power plant from Tata Steel, 20 MW solar power project from Gujarat Alkalies and Chemicals, and 10 MW solar project from Gujarat State Fertilizers and Chemicals.
BHEL has bagged orders from the Indian Railways for propulsion systems, traction motors, and transformers for trains.
"...India has been an easy dumping ground for Chinese goods on account of low price of Chinese goods, poor enforcement and porous border, both at sea and land," the standing committee on commerce said in a report tabled in Parliament on Thursday. It said the US and the European Union have been "quite aggressive and agitated over the erosion of their domestic industry and loss of employment" and recommended that the government be more "proactive" in trade defence measures, such as anti-dumping and anti-subsidy actions, while imposing other restrictions.
The panel estimated that dumping of Chinese solar panels in India has resulted in nearly two lakh job losses. Similarly, it pointed out that a large quantity of under-invoiced bicycles were entering the Indian market due to "lax enforcement". It cited the public bike sharing plan initiated by Smart City administrators as one of the reasons behind surge in shipments from China, which offered cheaper cycles.
Although Chinese goods have traditionally faced the highest anti-dumping action, the committee believes that they are "relatively few in comparison to the kind of dumping" that has taken place. "The impact of Chinese imports has been such that India is threatened to become a country of importers and traders with domestic factories either cutting down their production or shutting down completely," it said.
Over the last few years, the government too has been worried about the widening trade deficit and is seeking that China open up its markets to more Indian goods to reduce the gap between imports and exports. Rice, meat, pharma and information technology are sectors where the government is seeking greater play for Indian companies in China, which has been reluctant to open up.
The fear of Chinese goods swamping the market has prompted the government to tread carefully on Regional Comprehensive Economic Partnership - the proposed free trade agreement involving India, China, Asean countries, Australia and New Zealand.
Besides, other countries have shown little interest in giving Indian software professionals, nurses and other service providers easier access to their markets. In a separate report, the panel slammed some of the provisions of the free trade agreement with Asean, such as services where even the government believes that the treaty is lopsided.
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The national committee on transmission is expected to take a call on Friday on the proposed Rs 393-crore schemes to improve electricity evacuation infrastructure in Gujarat and Tamil Nadu.
Inadequate transmission infrastructure in these wind-rich states has been an impediment to wind power developers, and this was one of the reasons behind a number of them not participating in the latest auction for 2,000 MW of wind capacity conducted by the Solar Energy Corporation of India (SECI) in April, experts noted.
These two states have been the most coveted locations for wind power developers. Out of 6,050 MW of wind power bid by the SECI, 950 MW is at Tirunelveli pooling station in Tamil Nadu and 4,000 MW is at Bhuj pooling station in Gujarat.
Inox Wind, Adani Green, ReNew and Sembcorp are building 800 MW, 650 MW, 565 MW and 550 MW, respectively, through the Bhuj pooling station itself.
Sources have said the Bhuj Pooling station can accommodate maximum 2,700 MW of wind power projects. In order to facilitate evacuation system for the fourth tranche of SECI bid, along with 4,000 MW potential of wind power in Bhuj area, additional transmission system needs to be planned. To address the issue, a joint study meeting between the Central Electricity Authority, PGCIL, POSOCO and Gujarat’s state transmission company was convened in early June.
The wind power generation projects won in the first three SECI auctions are scheduled to be commissioned by October 2018, May 2019 and November 2019, respectively.
Experts have noted that the Bhachau–Varsana transmission line remains critically loaded even without wind and solar plants injecting power at the Bhuj pooling station.
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