Indian Economy News

India's renewable energy projects at all-time high

New Delhi: Renewable energy projects of close to 6,650 megawatt (Mw) will be tendered in Fepuary, taking the total for 2017-18 past 10,000 M w—a record in a financial year. Of these, wind power projects account for 2,500 M wand solar power4,150 Mw.

Renewable energy projects of close to 6,650 megawatt (Mw) will be tendered in Fepuary, taking the total for 2017-18 past 10,000 Mw — a record in a financial year.

Of these, wind power projects account for 2,500 Mw and solar power 4,150 Mw.

These include state-level projects in Uttar Pradesh (1,000 Mw), Karnataka (200 Mw), Maharashtra (1,500 Mw), and Andhra Pradesh (750 Mw).

Wind power projects totalling a generation capacity of 2,000 Mw will be farmed out by Solar Energy Corporation of India (SECI), a state-run company under the aegis of the Union Ministry of New and Renewable Energy (MNRE). Maharashtra accounts for the remaining 500 Mw.

Under the Paris Climate Change accord, India has committed itself to building renewable energy projects with a combined capacity of 175 gigawatt (Gw) by 2022. Of the 175 Gw, 60 Gw is solar and 40 Gw wind.

The Narendra Modi government last year introduced a competitive bidding process for wind power projects on the lines of solar.

Of the 1,500-Mw projects that have been tendered, the wind power tariff has fallen to ~2.34 per unit. The lowest tariff in solar stands at ~2.44 per unit.

In its latest report, research body Mercom Capital Group has said India has achieved a milestone 20 Gw in cumulative solar installations, though the MNRE website maintains that the solar capacity in India is at 16 Gw.

The Mercom report says the top state for solar installations is Telangana, followed by Karnataka, Andhra Pradesh, and Rajasthan.

“20 Gw of solar installations is a laudable achievement for India, considering the initial goal. However, it took eight long years to reach 20 Gw and hopefully the pace will pick up. Private solar companies in India have gained vital experience over the years and are looking to the government to create an environment conducive to growth and remove the policy uncertainties currently plaguing the industry,” said Raj Prabhu, chief executive officer, Mercom Capital Group.

According to Mercom’s third-quarter 2017 India Solar Market Update, 1,456 Mw of solar projects were tendered and 1,232 Mw auctioned in the third quarter of 2017.

That was a marked reduction from what had been seen in the second quarter of 2017, when 3,408 Mw was tendered and 2,505 Mw auctioned. According to the annual plan of the ministry, solar power projects of 3 Gw were to be tendered in December last year, followed by 3 Gw in January, 5 Gw in Fepuary, and 6 Gw in March.

According to the plan, 30 Gw each will be tendered in 2018-19 and 2019-20. However, market experts are cautious about the coming financial year because several regulatory changes would affect the renewable energy landscape.

While there is an impending decision on dumping imported solar panels, the recent increase in the Customs duty due to an additional 10 per cent surcharge will escalate the price of solar projects, and thereby affect tariffs. Sector executives say the surcharge will escalate the cost of panels.

Close to 80 per cent of India’s solar power is based on imported content. The Customs duty on solar panels has been 7.5 per cent since last year.

The surcharge comes at a time when there are fears of safeguards and anti-dumping duties on solar imports from China and Malaysia.

The Directorate General of Safeguards, in its preliminary report investigating the dumping of solar cells (whether or not assembled in modules or panels), has suggested a duty of 70 per cent on imports from China.

The industry expects a hike of ~1-2 per unit in solar tariffs if the duty is imposed.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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