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Solar Energy RECs Trades - 31st July 2013 Session 31st July 2013

Solar RECs Buy Volume 1983 46 2029
Solar RECs Sell Volume 12,486 9194 21,680
Solar RECs Market Clearing Price(Rs. Per REC) 9,300 9,300

Renewable Energy Breakup in India - June 2013

Renewable Energy Breakup in India - June 2013

Solar Power Cheaper Than Coal Foreseen By German Solar CEO

In a new interview with Deutsche Welle, the CEO of a Germany-based global solar developer made a good case for the potential for solar power to become cheaper than coal sooner rather than later. That would be Bernhard Beck, CEO of BELECTRIC. In the interview Beck had some interesting things to say about the direction of the global solar market and the potential for growth in large-scale solar power generating plants, and if anything, we think his forecast could come true even sooner than he thinks.

BELECTRIC specializes in utility-scale solar power plants as well as rooftop solar, and the former area is where the focus of the Deutsche Welle interview takes place. According to Beck, large scale solar power in Germany is already “approaching the costs” of conventional power, at 10 euro cents per kilowatt-hour (kWh)

Beck was reluctant to lay out a specific timetable, but he did predict that with additional technological improvements, the cost of solar power in Germany (and by extension, other relatively sun-poor countries), will ultimately fall below the cost of conventional energy.

He foresees a much shorter time span in “sun-rich” countries, where the trend is rapidly moving in the direction of solar power for less than 10 euro cents per kWh. That could put solar power below the cost of wind power as well as coal or gas.

However, Beck indicates that these countries have some obstacles to overcome. By “sun-rich” he means countries with a less developed transmission infrastructure, which puts large scale power plants at a disadvantage in terms of operating costs. Also contributing to higher operating costs is the characteristic dust-heavy environment of the “sun-rich” countries to which he refers, which translates into higher costs for cleaning and maintaining solar panels.

Power crisis may deepen: Report

HYDERABAD: The state is spending Rs 15 crore every day to buy power for supply to consumers. But, new principal secretary of the energy department Mrutyunjay Sahoo has set alarm bells ringing by submitting an internal report predicting that things could turn worse what with power surpluses in other states also likely to dwindle.

In future, power will not be available from other states even at a higher price, the report says.

The report submitted to the chief minister points out that the present situation, in spite of such high purchases, cannot be said to be very rosy. Out of 9,300 feeders in the state that transmit power to consumers, 4,000 are not getting adequate supply while 2,000 are getting negligible supply, the report points out.

Because of this, the state is not able to provide a continuous seven-hour supply to the agriculture sector, the report said.

While the shortage in the state was 17.2% last month, it is expected to go up with the current dry spell likely to prolong. The dry spell is also deepening the crisis as power consumption is higher in areas under borewell agriculture.

Though Sahoo's appointment last fortnight was greeted by rains in Andhra Pradesh and Karnataka, this proved to be a shortlived joy. The dry spell has again set in the state and inflows into Srisailam are on the decline. The demand supply-gap is presently at 50 million units. "The demand is 265 million units and the supply is 215 million units. The gap is expected go up in the next few months," the report said.

The situation has worsened because of closure of the hydel plants.

"In normal conditions, the state gets about 3,100 MW power from hydel projects and the share of Srisailam and Nagarjunasagar is about 1,600 MW. Now, with the drying up of reservoirs, the hydel power generation has come down to almost nil," the report said.

Meanwhile, the power shortage issue is now taking a regional dimension. On Saturday, the Telangana Rashtra Samithi (TRS) alleged that the region was discriminated regarding power supply to agriculture.

Demanding a seven-hour power supply to farmers in the Telangana region, a delegation of TRS leaders submitted a memorandum to APGenco chairman K Vijayanand. TRS floor leader Etela Rajender accused the power utilities of discrimination against the Telangana region in the supply of power compared to Seemandhra.

Madhya Pradesh Solar Policy

Madhya Pradesh Government in its endeavor to encourage renewable energy to meet its power deficit (of nearly 1200+ MW) has announced a new Solar Policy. This is a welcome step considering the fact that M.P. has huge potential for Solar Energy.

There are 4 Categories of Solar Projects that have been identified.

  • Category I : Projects selected as per the competitive bidding process for selling power to MP Discoms / MP Power Management Company.
  • Category II : Projects set up for captive use or sale of power to 3rd party within or outside the state or for sale of power to other states through open access.
  • Category III : Projects set up under Renewable Energy Certificate (REC) mode.
  • Category IV : Projects under Jawaharlal Nehru National Solar Mission.

12th Plan power capacity target cut to 88,000 Mw

In line with the depressed projections of economic growth, the Planning Commission on Wednesday lowered the target for power capacity addition during the 12th Plan period ending March 2017 to 88,000 Megawatt (Mw) from 100,000 Mw set earlier. Also, state power ministers raised concerns over 55 of the 89 thermal power generating units running on low capacity.

Every one per cent increase in Gross Domestic Product (GDP) requires power capacity to grow by 0.9 per cent in India. Power is one of the eight core infrastructure sectors, which have a combined weight of 38 per cent in the Index of Industrial Production (IIP).

“Now that we are realistically thinking of lowering the 12th plan GDP growth target to 8-8.5 per cent, the overall target for power generation capacity is also expected to be brought down,” Planning Commission deputy chairman Montek Singh Ahluwalia said, after a meeting of state power ministers.

The meeting noted 55 power plants were currently unable to run on full capacity owing to coal shortage. India currently has 89 thermal power generating units.

The deputy chairman also pitched for ramping up coal imports by CIL during the five-year period raising doubts over the state-owned miner Coal India Ltd’s ability to meet the entire domestic requirement alone. He said the commission was in favour of price pooling of the imported coal quantity. The pooling proposal will be mentioned in the 12th Plan document.

He also asked states to increase electricity charges and use power subsidy to improve essential services like drinking water, education and health. "This situation can be handled through a combination of tariff increase and serious efforts to reduce Aggregate Technical and Commercial losses."

On the issue of Fuel Supply Agreements with power companies, Power Secretary P Uma Shankar called for Coal India to commit supply at 80 per cent of the contracted quantity in new pacts.

Meanwhile, Rajasthan, Andhra Pradesh, Haryana, Punjab and some other states aired differences with the Centre's proposal for debt restructuring of state power distribution companies.

These states, including Rajasthan, Andhra Pradesh, Haryana and Punjab, said they were particularly opposed to a proposal under which half of Rs 120,000 debt will be met through bonds issued by DISCOMs backed by a guarantee of the state concerned.

India to exceed its Solar Power Target !

India’s got big plans for its renewable energy sector.

This is the latest in a pattern of energy companies paying increasing attention to renewable power—just last month, India’s biggest wind power developer CLP Holdings Ltd. stated that it will be focusing more on renewable development after noting consistent conventional fuel shortages.

India’s government aims to establish 20 gigawatts of solar power generating capacity by 2022. Welspun, which has been signing numerous agreements over the last year to build 1,500 megawatts of solar power, says that they are more likely to hit 40 gigawatts given the increasing parity between renewable and fossil fuel costs.

India has seen explosive economic growth over the past few years with a 9 percent growth rate. However, to maintain that rate, the nation will need to add another 169 gigawatts of power capacity in five years according to the Indian Planning Commission.

The recent economic slowdowns worldwide have affected India’s growth as well; in the three months ending March, GDP rose by 5.3 percent. That is the slowest rate of growth in the past nine years.

Vineet Mittal, managing director of Welspun Energy, told Bloomberg:

“India is different from the U.S. or Europe because renewables aren’t just competing on cost with fossil fuels. It’s a question of energy security.”

And, he says, the fact that renewable energy is innately resistant to disruptions—a common feature of the conventional power infrastructure in India—makes it highly attractive to investors and consumers alike.

Today, 70 percent of India’s power supply comes from conventional fuels—coal, oil, gas—and the supply is frequently unreliable thanks to an aging rail and pipeline infrastructure. Solar and wind power costs have already fallen below that of diesel.

Welspun plans to replace diesel generation units at its group companies with renewable options over the next 18 months.

Solar power shines on photo voltaic panel price crash

Riding on the crash in photo voltaic (PV) panel prices, the solar power sector in India had a dream run last year with capacity ballooning to 940MW in 2011-12 from a paltry 20MW in 2010-11. That's just statistics. What's significant and not borne out by these statistics is the fact that the cost of power from solar is now on a par with the cost of power from new coal-based plants.

In industry parlance, it's referred to as grid parity, considered the holy grail of solar power. Grid-parity is the point where the cost of electricity generated from sunshine becomes competitive with that of power produced from coal, gas, wind and hydro-based plants.

Going forward, the appetite of the private sector can only increase with the government setting a target of adding 20,000MW capacity by 2020 under the Jawaharlal Nehru National Solar Mission (JNNSM). The flow of private investments into the country's solar sector has already seen a seven-fold jump to $4.2 billion in 2011, according to a latest report by Pew Charitable Trust.

"If we compare the cost of power from new coal-based plants, it will be at par with that of solar. If one takes into account the total duration of the power purchasing agreement, which is 25 years, grid-parity is already there. Solar power needs only a one-time investment in the form of land and PV panels. Its fuel, which is sunshine, is free unlike coal where price will head only northwards," said Gaurav Sood, managing director, Solairedirect, a solar power producer. Solairedirect was the lowest bidder at Rs 7.49 per unit for a 5MW plant auctioned under JNNSM in December, 2011. The average tariff bid for 350MW under the mission was Rs 8.8 per unit.

Three years ago, the cost of generating a unit of solar energy was around Rs 18. In fact, solar has already taken over diesel as a cheaper form of energy and a lot of telecom towers are now being run on solar power.

In recent years, there has been a sharp decline in capital costs for solar PV plants. PV module prices have fallen a sharp 80% in the last five years and 30% during last year alone. A Crisil report released a few weeks ago said, "Capital costs fell by 30% from a year ago to Rs 10 crore per MW (megawatt) by the end of 2011. The fall was driven by 50% drop in prices of solar PV modules, which account for almost half the capital costs of a PV project. The sharp fall in capital costs has improved the returns from the projects that were commissioned in FY12."

Heavy subsidies by China to its domestic manufacturers have been a major factor in driving down module prices. The recent reduction of subsidy to the sector by Germany, the largest solar power generator in the world, has also pushed down prices further.

While the solar power generators are basking in the sunshine with optimism, the module makers are fighting to stay afloat. The nascent solar equipment industry in India is facing the heat and looking for ways to survive the Chinese subsidy onslaught that has already consumed many leading global manufacturers such as Solyndra (US), Q Cells and Solar Millennium (both in Germany) which have filed for bankruptcy.

Funding to the sector has also seen an uptick, even though banks are still cagey about rock-bottom tariffs and higher debt levels. "We are keen to assist solar projects as they are pollution free. But we would prefer a lower debt-equity ratio in the range of 60:40," said B K Batra, executive director, IDBI Bank. The bank has funded half a dozen projects in the past. Given its green energy status, it's also not surprising that agencies such as US EXIM bank, ADB and IFC have also been active in the space.

Power Minister to inaugurate new energy-efficiency scheme

The Power Minister, Mr Sushilkumar Shinde, will inaugurate the ‘Perform, Achieve, Trade’ (PAT) scheme in New Delhi tomorrow.

The much-awaited, path breaking scheme that could engender an ‘energy efficiency industry’ is meant to give a boost to energy conservation efforts in the country. It basically creates a market for energy efficiency, through tradeable ‘energy savings certificates’, or ESCerts.

You consume less energy against a benchmark, you get an ESCert that you can sell. It will be bought by an entity whose consumption is above the norm. Therefore, the scheme operates pretty much on the same principle as carbon credits or the ‘renewable energy certificates’.

A Ministry of Power press release issued on Monday describes the PAT mechanism as “an innovative programme with no precedence anywhere else in the world”. The Ministry expects the mechanism to bring about a “transformational change in energy efficiency”.

‘PAT’ is a step taken under the National Mission for Enhanced Energy Efficiency, one of the eight National Missions under the National Action Plan of Climate Change.

“The scheme provides the option to trade any additional certified energy savings with other designated consumers to comply with the Specific Energy Consumption reduction targets,” says the press release.

“The Energy Savings Certificates (ESCerts) so issued to those who exceed their saving targets, will be tradable on special trading platforms to be created in the two power exchanges (Indian Energy Exchange and Power Exchange India),” it says. The Ministry of Power has notified 478 ‘designated consumers’, 8 industrial sectors (and railway workshops) for the operation of the scheme.

The Government has notified targets for the 478 industrial units and thermal power stations as of March 30, 2012. These targets are to be achieved by 2014-15. Any additional saving will qualify for earning EScerts which could be sold to designated consumers who fall short of the target.

The Bureau of Energy Efficiency will set up a company, Energy Efficiency Services Ltd, which will function as an implementation and monitoring agency for the scheme. BEE had estimated that the capital investments that would be made in 2011-14 at Rs 30,603 crore.