CERC Approves Modified Procedure for Issuance of REC
The Central Electricity Regulatory Commission (CERC) recently approved the modification in REC procedure for issuance. This procedure will provide guidance to the entities to implement Renewable Energy Certificate mechanism as envisaged under Central Electricity Regulatory Commission and is termed as ‘Procedure for Issuance of Renewable Energy Certificates to the Eligible Entities.This procedure will be applicable to RE projects and distribution Licensees who have received “Certificate of Registration” from the Central Agency, and will be eligible to avail Renewable Energy Certificates from the date of commercial operation.
PM Modi Dedicates 750 MW Rewa Solar Project to the Nation
The Prime Minister Narendra Modi dedicated the Rewa Ultra Mega Solar Power project to the Nation via video conference. Rewa project is Asia’s largest power project.This Project comprises three solar generating units of 250 MW each located on a 500 hectare plot of land situated inside a Solar Park (total area 1500 hectare). Central Financial Assistance of Rs. 138 crore has been provided to RUMSL for development of the Park. The Rewa Solar Project was the first solar project in the country to break the grid parity barrier. Speaking on the occasion the Prime Minister said the Rewa project will make the entire region a major hub for pure and clean energy in this decade. The Prime Minister praised the effort in that it will also supply power to the Delhi Metro, along with the entire region surrounding Rewa.
Enel Green Power and Norfund Join Forces to Develop Renewable Projects in India
Enel Green Power (“EGP”), through its Indian subsidiary for renewables Enel Green Power India (“EGP India”), and the Norwegian Investment Fund for developing countries Norfund, have signed a long-term agreement to jointly finance, build and operate new renewable projects in India.The agreement is a collaborative investment framework under which EGP India will be responsible for the development and construction of each project, while Norfund will have the right to invest in the projects once a specific milestone in their completion is reached, thus becoming equity partner with EGP India in the project. In addition, within the partnership, EGP India will support each project by providing technical services starting from the preliminary development activities. Through the agreement, the partners, in line with their sustainability, decarbonization and renewables targets, aim at boosting the development of a clean energy footprint in India, which is rich in renewable sources and has ambitious green energy goals. India’s government is committed to achieve 100 GW of solar and 60 GW of wind power generation capacity by 2022, up from around 35 GW of solar and about 38 GW of wind as of today.
IEX Electricity Market Trades 4790 MU Volume in June, Marks 5% YOY Increase
The electricity market at the Indian Energy Exchange witnessed a total trade of 4790 MU in June ‘20 recording a 5% YoY increase, despite the national peak demand registering a 10% YoY decline during the month. Increased economic activity and easing of the lockdown restrictions in most parts of the country coupled with peaking summers contributed to national peak demand at 165 GW and energy consumed at 107 BU, according to data released by NLDC. The Day-Ahead Market (DAM) traded 4174 MU and witnessed high sell side liquidity in the month, with total sell bids at 10164 MU being close to 1.5X the buy bids at 4661 MU. The average market clearing price during the month was at Rs. 2.35 per unit registered a whopping 29% YoY decline over a price of Rs. 3.32 in June’19. The increased availability of power and attractive prices in the market ensured that the industries as well as the distribution utilities continue to have access to lower electricity prices leading to greater savings as well as assisting them in building the much needed financial liquidity which is critical at this hour. Infact, the open access volume in June witnessed a 30% m-o-m increase.
Module Prices to Fall Further to $0.14-0.16/wp by the End of Fiscal 2021: CRISIL
A chance coming together of several positives has led to a new record low tariff bid in the interstate transmission system (ISTS) Tranche IX auctions of the Solar Energy Corporation of India (SECI). At Rs 2.36/kWh, the new low is a tad more than 3% below the previous lowest of Rs 2.44 /kWh seen in 2018, and ~19% lower than the weighted average tariff of Rs 2.90 per unit in fiscal 2020. The weighted average tariff for the previously allocated SECI ISTS tranches (I to VIII) was Rs 2.76 per unit, though ISTS VIII, held in February this year, had drawn bids at the Rs 2.5 per unit mark, CRISIL, Global analytics company stated.According to research company, The positives include a surge in interest from foreign shores. Indeed, six out of seven winners are global energy firms. These bidders have a portfolio of ~1-1.5 GW in India, and would be keen to expand, especially given the environment of lower returns globally after the Covid-19 pandemic. The interest comes at a time when the top seven developers have a pipeline of ~26-27 GW. Coupled with a large capacity under execution, existing developers are also grappling with delayed payments from the financially weak state distribution utilities.
Greater Policy Focus Towards Domestic Manufacturing a Positive for Indian Solar OEMs; Long-term Policy Clarity on Customs Duty & Other Concessions Awaited: ICRA
The Government of India (GoI) has recently increased its policy focus on domestic manufacturing through its “Atmanirbhar Bharat Abhiyan” as well as “Make in India” initiatives. In an endeavour to support domestic module manufacturers, the GOI has formulated various schemes in the last one year such as the Central Public Sector Undertaking (CPSU) Scheme which envisages installation of 12 GW solar power capacities by FY2023 with a defined sourcing requirement from domestic module manufacturers. Further, the Ministry of Railways has a plan to meet 10-15% of its energy requirements through solar power over the medium term by setting up about 3 GW of projects on barren land available alongside the railway tracks as part of the “Make in India”initiative. In addition, there has been a greater thrust on the domestic manufacturing linked orders by the Ministry of New &Renewable Energy (MNRE), GoI. ICRA notes that the Indian solar sector has been import dependent with respect to procurement of cells, modules and other equipment given the cost competitiveness of imports as compared to domestically manufactured products. The safeguard duty on cells and modules imports from China and Malaysia, currently at 15%, is about to expire in July 2020.
Solar Energy to Make Indian Railways A Complete Green Mode of Transportation
A new dawn ushers on Indian Railways as it endeavors to be self-reliant for its energy needs as directed by the Prime Minister and solarise railway stations by utilizing its vacant lands for Renewable Energy (RE) projects. Railway is committed to utilize solar energy for meeting its traction power requirements and become a complete ‘Green mode of transportation’. The Ministry of Railways has decided to install solar power plants on its vacant unused lands on mega scale. The use of solar power will accelerate the Minister of Railways, Piyush Goyal’s mission to achieve conversion of Indian Railways to ‘Net Zero’ Carbon Emission Railway. Indian Railways present demand would be fulfilled by the solar projects being deployed, making it the first transport organisation to be energy self-sufficient. This would help in making Indian Railways green as well as ‘Atma Nirbhar’.
MNRE Forms Committee To Review Solar ALMM Issues
The Ministry of New and Renewable Energy (MNRE) has issued a notification stating that it is setting up a committee to review the issues with the ‘Approved Lists of Models and Manufacturers’ (ALMM) of solar photovoltaic (PV) modules. This decision came after representations received from various RE stakeholders. The committee will consist of Addl. Secretary (Chairman), Joint Secretary (Solar), Joint Secretary (Wind) of MNRE, Director (Solar) of SECI and one representative from Solar Power Developers’ Association (SPDA). The Committee will make recommendations on the manner and date of implementation of ALMM Order and submit its report within 15 days of its constitution, the Ministry stated. Besides, It has also been decided that ALMM Order will only apply to those bids that are held 30 days after the ALMM is finalized and published.
CleanMax Receives Financing From GCPF for Southeast Asia Expansion
The Global Climate Partnership Fund (GCPF) and CleanMax announced the closure of a transaction, which will enable the commercial and industrial (C&I) solar leader to expand its operations into Southeast Asia, targeting Thailand as its first new market. With a total facility size of USD 10m, of which USD 5m is already committed, CleanMax has engaged solid off-takers, including a 3.5 MW rooftop solar plant for a leading multi-billion dollar conglomerate. As the biggest C&I solar player in India and the UAE, CleanMax has completed over 500 projects with over 150 corporate clients and has an operating capacity of over 600 MW, with another 200 MW expected to be built over the next 12 months.The transaction is a perfect fit for GCPF as it supports the development of the C&I sector in the region, where local commercial bank financing is typically not yet available for similar projects.
Near Term Regulatory Risk for Third-party Off-take Based Renewable IPPS to Increase,Given the Adverse Impact of Covid-19 on Cash Flows of the Distribution Utilities: ICRA
The State Electricity Regulatory Commission (SERC) in Maharashtra has recently approved the levy of additional surcharge on group captive projects, as per the order issued in April 2020. Group captive consumers were earlier exempt from such levy in Maharashtra. Risk of such levy by SERCs in other states cannot be ruled out for group captive IPPs.The state power policies in many states have been amended over a period and the states have either completely withdrawn or reduced incentives given to open access customers (mainly commercial & industrial (C&I) consumers) for power procurement from renewable energy projects, as tariff competitiveness of wind and solar power has shown a significant improvement. Further, the open access charges applicable in case of third party sale of power have also shown an increasing trend across the key states, highlighting the rising regulatory risk for such IPPs. Commenting on this trend, Mr. Girishkumar Kadam, Sector Head & Vice President, ICRA Ltd says, “The renewable IPPs based on third party / group captive off-take remain exposed to regulatory risk, which is set to augment even more, given the likelihood of an increase in open access charges due to an adverse impact of the lockdown/restrictions to control COVID 19 outbreak on the cash flows and revenue profile of the state owned distribution utilities. Further, with the improved tariff competitiveness for wind and solar energy against the conventional power sources, the open access charges for renewable energy projects are likely to remain aligned as that for conventional power sources, going ahead.”
