SunEdison Inc plans to sell solar power capacity worth about 400 megawatts in India for roughly $350 million, as the US-based solar company looks to shed assets to boost balance sheet, said two sources with direct knowledge of the matter
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Year-to-date, solar installations in India stand at 1,652 MW, with cumulative solar installations in the country totalling 4,816 MW
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The government of India has set an ambitious target of achieving 100 GW solar power capacity by 2022 compared to China’s 100 GW by 2020
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Solar could scale up substantially to be a significant energy source by 2025, with the market penetration of solar power expected to be 5.7 per cent (54 GW) by 2020 and 12.5 per cent (166 GW) by 2025.India aims to reduce emission intensity of its GDP by 33 to 35 per cent by 2030 from 2005 levels, and solar power is likely to contribute 4 per cent towards this target, stated KPMG in India’s report, titled ‘The Rising Sun – Disruption on the horizon’.The report was released by Piyush Goyal, Minister of State (IC) for Power, Coal, and New and Renewable Energy and Dharmendra Pradhan, Minister of State (IC) – Petroleum and Natural Gas at ENRich 2015, KPMG in India’s annual energy conclave. Other eminent dignitaries present during the report launch included Richard Rekhy, CEO, KPMG in India, Michiel Soeting, Global Chair for ENR, KPMG, Arvind Mahajan, Partner and Head of Infrastructure, Government & Energy, KPMG in India, Nitin Atroley, Partner and Head, Sales and Markets, KPMG in India and Manish Aggarwal, Partner and Head – Energy and Natural Resources, KPMG in India among others.The report talks about how the scale up and competitiveness of solar power could disrupt the traditional generators. The disruptive force is expected to start being felt from 2017 and may accelerate post 2020. In some states which are promoting solar (and also wind power) aggressively, conventional coal generators could see their Plant Load Factors (PLFs) fall by as much as 10-15 per cent by 2020, as solar replaces coal-fired generation in the daytime hours. This effect may speed up post 2020 with the annual addition of large amounts of solar (estimated to exceed by 20 GW per year by 2022-23).The report highlights that the price for solar power has seen a decline; today, in India, solar prices are within 15 per cent of the coal power prices on a levelised basis and, it is expected that that by 2020, solar power prices would be approximately 10 per cent lower than coal power prices. The solar rooftop power, today, is already competitive compared to grid power for many consumers and, as per the report, if combined with storage, it could be cheaper than grid power after 2022 for a large section of the consumers and drive a considerable shift to rooftop power. A ‘Solar House’ that is self-sufficient in energy terms could be a reality within the coming decade.Piyush Goyal, Honourable Minister of State (IC) for Power, Coal and New and Renewable Energy said, “We need to re-engineer our process to create energy efficiency and conservation to give India an affordable energy access. It is important that we remove all disparity at the root level to ensure social harmony for all in India and also to compete globally. A holistic vision is the need of the hour in order to reach 200 million people at a faster rate. I am personally convinced that any amount of investment in this sector will have a quick pay back. This is possible and achievable and I am confident that the era of shortage is over and we are now in the era of surplus. I am hopeful that you will see the economy picking up rapidly and the benefits would be seen across the nation.”“The power sector in India is going through a significant change and solar is expected to play a dominant role in it. This presents a great opportunity for India, especially in the current political-social environment where the country has embarked on a vision to have energy security, by providing affordable and sustainable power to all. The Government of India has laid down its ambitious vision for the renewable sector, especially solar, and some of the global developments also point in the direction to achieve it, provided we understand the implications, and gear up to plan for this fundamental shift. Also, the issue is not about coal vs solar since India needs to harness all its natural resources for achieving energy security at affordable prices, which at the same time provides reasonable return to investors. The government has also identified the goal of ’Power for all by 2022’, and renewable energy sources, such as solar, are expected to play an important role in this,” said Manish Aggarwal, Partner and Head – Energy and Natural Resources, KPMG in India.The report highlights the need for the government to significantly strengthen the planning infrastructure and processes, and emphasises the energy sector’s need for a new planning paradigm which takes into account the expected emphasis on renewable energy in India. The Government needs to focus on significant strengthening of the planning infrastructure and processes.The right incentives for investments in grid integration of solar and balancing services should be put in place early. The report also recognises that significant conventional generation capacities are also needed to meet the country’s growing energy demand. In fact, conventional generators will need to contribute 60 per cent of incremental capacity needs up to 2025, with solar contributing between 20-25 per cent, and considering another 15 per cent coming from wind. However, these additional capacities will need different attributes from the ones we have seen so far. These attributes are related to flexibility in generation (in terms of ramp rates and minimum thresholds) and low fixed cost, and higher variable cost preference, rather than vice versa.(BW Online Bureau)
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Shravan Sampath Last week, the big news in the energy business was the solar bids in Andhra Pradesh. Eyebrows were raised when a 500 MW solar park bid attracted a lowest bid of Rs 4.63 per kilowatt-hour. Such aggressive bids have usually been the hallmark of Indian promoter groups who are hoping to change the goalpost at a later date. However, this aggressive bid was by Sun Edison, an internationally reputed and NYSE listed project developer, whose stock unfortunately appears to be in a perilously downward spiral. While most market experts feel that such aggressive bids will never be commercially viable, Sun Edison appears to be confident. Apart from redefining the price point for solar in the country, Sun Edison has also established new benchmarks in sycophancy by attributing their success to Minister of Power and Renewable Energy Piyush Goyal.Taking a cue from Indian promoters' ability to profusely thank the government at every small opportunity, Pasupati Gopalan, the president & managing director of Sun Edison Asia Pacific is reported to have said "These low bids are the result of the tireless efforts of the minister (Piyush Goyal) and the ministry. They took a lot of feedback from the industry, assured the investors about the transmission and evacuation of power and land availability for the project. Then, an entity like NTPC is also involved. As the risks were significantly reduced, all this was factored in the low bids that were quoted." One can only hope that when his wonderful solar plant starts generating power, Gopalan would not attribute the bright shining sun also to the minister's tireless efforts.However, for industry watchers, it is quite depressing to note that while bids become more and more aggressive, the commercial framework around solar seems to be stagnating. The innovation shown by the conventional power sector even way back in 2006-07 in formulating of standard bidding documents seems to be missing in formulating a bidding framework for solar. It appears that there are so many more areas where it is possible to optimize the bidding framework. For instance, a distinct improvement on the bidding framework that is waiting to happen is different tariffs for different blocks of years. For instance, bidders can be asked to enter different tariffs for the first 12-15 years and a different tariff for the remainder of the PPA tenure. This could enable bidders to financially structure the bid tariff such that the project cash flows match with the debt servicing tenure. This structure was employed by the first generation of standard bidding documents issued by the Ministry of Power way back in 2006-07 itself, but has not yet been discovered by solar.Another suggested optimization, which, it is understood, is already in the works due to the "tireless efforts of the minister" is bidding in US dollars. Most of the financing today is obtained internationally and it would greatly help for the projects to have a dollarized revenue stream as well. Once again, imported coal based power bidding was introduced in 2006-07 itself with these parameters, and there is nothing new about this. Large projects like Tata Mundra and Adani Mundra have been set up with the imported coal price being denominated in US Dollars, and this has not hurt the procurers one bit.Another interesting innovation can be to utilize the international drop in module prices to provide the best tariff to the power procurer. The bidders in the market today are betting on the fact that the module prices are likely to fall next year and the developers can make a neat margin by building the plant on a reduced capital cost. To enable this benefit to pass on to the power procurer, a part of the tariff can be benchmarked to an international module indicator, and this can be increased or decreased based on the drop or increase in the index. Again, this innovation has been employed in fixed costs for thermal power that have been indexed to Wholesale Price Index (WPI) and Consumer Price Index (CPI).Another interesting possibility is to move from generation based Power Purchase Agreements (PPAs) to capacity based PPAs like conventional power. At the moment, solar power is purchased for each unit of power generated (or kWh), as against conventional power, which is based on the power capacity set up (or MW). At the moment, the developer has to take a call on solar radiation levels, and estimate how much solar power can be generated per Megawatt of capacity set up. He (or she, as the case may be) then bids based on the actual energy likely to generated in kWh. Thus, the solar radiation risk is taken by the developer. An option to be explored is whether solar power can be procured with the procurer providing an assumption of Plant Load Factor (PLF), and asking the developer to bid based on the assumed PLF. This could be employed in states where solar radiation data is unknown or limited, such as the north eastern states for instance.With such innovative structuring possible in the bids, it is difficult to understand why our state utilities and the Ministry of New and Renewable Energy have not yet incorporated any such structures in solar bids. There is clearly a long way to go in improving the bidding documents and commercial frameworks around which solar power is being procured.(The author, Shravan Sampath, is CEO, Oakridge Energy)
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Renewable energy supply in eight major economies will collectively more than double by 2030 due to new national climate and energy plans, according to a study by the think tank World Resources Institute (WRI).Total clean energy supply from eight of the world's 10 largest greenhouse gas emitters - Brazil, China, the European Union, India, Indonesia, Japan, Mexico and the United States - will jump to 20,000 terawatt hours (TWh) from around 9,000 TWh in 2009.That is equivalent to India's current energy demand."These new renewable energy targets send strong signals to energy markets and investment circles," said Jennifer Morgan, Global Director, Climate Program, WRI."Combined with the Paris climate agreement, it's clear that renewable energy is poised to surge forward in the next 15 years bringing clean and affordable power to millions of people worldwide."These economies are among many which have announced new renewables targets in the past 12 months ahead of a United Nations' climate conference in Paris from 30 November to 11 December to fight global warming from 2020.Canada and Russia, which are also among the world's top 10 emitting countries, were not included in the study because they have not announced post-2020 renewable energy targets.So far, plans submitted to the UN by around 150 countries to cut greenhouse gases will only slow climate change and not limit rising global temperatures to two degrees Celsius, a threshold seen by scientists as avoiding the worst effects of climate change.(Reuters)
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U.S.-based SunEdison has won a bid to sell solar power in India at a record low tariff, which could boost the appeal of the renewable source at a time when Prime Minister Narendra Modi is pushing for clean energy to combat climate change. Solar energy still has a long way to go before it can effectively compete with coal, given questions over consistent supply and transmission. But falling rates could unlock more government support for solar and wind energy. Modi's government expects clean energy to yield business worth $160 billion in India in the next five years, and established U.S. companies like SunEdison and First Solar Inc are likely to be the biggest beneficiaries. SunEdison won the auction for a 500 megawatt project in the southern state of Andhra Pradesh, bidding to supply power at 4.63 rupees ($0.0706) per kilowatt-hour, Upendra Tripathy, new and renewable energy secretary, told Reuters on Wednesday. Maryland Heights, Missouri-based SunEdison did not immediately reply to requests for comment. "Delighted that an all time low solar tariff ... has been achieved during reverse e-auction conducted by NTPC," tweeted power, coal and renewable energy minister Piyush Goyal, referring to India's biggest power utility. The previous lowest solar tariff in India was about 5.05 rupees per kilowatt-hour for Canadian company SkyPower's project in Madhya Pradesh state in central India. Coal power costs anywhere between 1.5 rupees to 5 rupees, according to a government official who declined to be named. India is providing cheap loans to set up solar projects and helping companies buy land to meet its ambitious target of multiplying renewable energy generation to 175 gigawatts by 2020. Solar energy is targeted to leap five-fold to 100 gigawatts. The country is relying on renewables to fight climate change rather than committing to emission cuts like China, arguing that any target could hinder economic growth vital to lifting millions of its people out of poverty. Deep-pocketed investors like Japan's Softbank and iPhone maker Foxconn have already pledged to invest about $20 billion in solar projects in India. (Reuters)
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ACME, solar power generator in India, has won a deal as a Solar Power Developer for 50 MW solar PV power projects by Uttarakhand.ACME won this competitive bid that witnessed participation from 97 companies.Manoj Kumar Upadhyay, Founder & Chairman, ACME said, “The emergence of ACME in this bid reinstates our expertise in the solar power sector that helped us to become the country's largest solar power developer with over 1 GW projects under our portfolio.”The company has an existing portfolio of around 1150 MW including 440 MW in Telangana, 104 MW in Punjab, 160 MW in Andhra Pradesh, 100 MW JNNSM Phase II Projects in Rajasthan and other projects in the states of Gujarat, Madhya Pradesh, Rajasthan, Odisha, Bihar, Uttar Pradesh, Assam, Tamil Nadu and Chhattisgarh.ACME, solar power generator in India announced that is has expanded its portfolio to around 1200 MW and aims to generate 7500 MW by the year 2019. The company has been selected as the Solar Power Developer for 50 MW solar PV power projects during the final bids opening by Uttarakhand state on 28th October. ACME has received one of the largest share of 29% of the 170MW tender.(BW Online Bureau)
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Solar module manufacturer Vikram Solar has concluded an agreement with British Solar Renewables (BSR), a leading British project developer, to supply modules with a total output of 30 MW.Angus MacDonald, CEO at British Solar Renewables, the UK’s largest integrated solar developer and operator comments on the collaboration: "Based on the precise, power-optimized string-layout in our solar parks, the performance is far above average, which makes it extremely attractive to our investors and future buyers. In Vikram we have found a technology partner who meets our high engineering standards while being cost-efficient. The Vikram brand is also recognized across the industry, which makes it easier to resell the solar parks upon completion.”BSR will be installing the PID-resistant Eldora Ultima modules in their upcoming solar parks with a total output of 80 MW, to be finished by the end of March 2016. Macquarie Bank has agreed to provide the financial backing for the projects.Before signing the supply agreement, British Solar Renewables conducted due diligence on both Vikram Solar and the Eldora Ultima modules. Vikram Solar’s tier 1 status, the financial stability of the Vikram Group and the technical quality of the products were among the decisive criteria in favour of the collaboration. Supplementary reinsurance from Solarif will cover replacement modules as needed.Gyanesh Chaudhary, MD and CEO of Vikram Solar adds: “We already supply the UK’s largest builders’ merchant, EH Smith, and the country’s largest electrical wholesaler, Edmundson Electrical. The collaboration with British Solar Renewables fits well with our goal of making Vikram Solar modules available across the market and recruiting the best partners in each market segment.”(BW Online Bureau)
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Simar Singh At the India-Africa Forum Summit that is set to kick off on the upcoming Monday (26 October), Prime Minister Narendra Modi is likely to announce a global alliance of 110 countries to promote the adoption of solar power to address growing energy needs climate change concerns. The summit which will be held in the Capital’s Indira Gandhi Indoor Stadium will see participation from all 54 members of the African Union including, at least, 41 countries engaging at the level of president, vice president, prime minister and king. Reportedly, this global alliance is to be known as the International Agency for Solar Power and Application and will be expected to do business worth $100 billion by 2020. This alliance will be in sync with policy trends in both India as well as Africa. Under the Modi administration’s aegis, there has been a drive to promote the nationwide increase in solar power capacities. African nations, too, have been moving in a similar direction. Most recently, politicians from 14 African nations joined hands with former United Nations Secretary-General Kofi Annan and Virgin head Richard Branson to launch a global campaign with aims to bring solar energy to 620 million people across the continent who still have little or no access to electricity. PM Modi had previously pitched the idea of such a global alliance earlier this year. At the time, it found support from China, Australia, Brazil, New Zeland and African countries. This initiative is also a part of the climate change agenda which was submitted by New Delhi to the United Nations ahead of the Paris Climate Change Conference which will be held in December. India has pledged to fulfil at least 40 per cent of its energy requirements from renewable and low-carbon-emitting sources by 2030. With costs associated with solar energy installations sharply dropping and access to related technology becoming easier, India is likely to provide a platform for developing countries to share knowledge and other resources related to this. For a long time, one of the biggest issues that have plagued global climate talks, pitting developing and developed countries against each other is the reluctance of the latter to transfer clearer energy know-how at lower costs. A collaborative of this nature could be good for Indian businesses and will help strengthen India’s bilateral and multilateral relationship with African nations.
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