SOLAR POWER TARIFF HITS A NEW LOW

During the auction for a 250 MW capacity for Adani Renewable Energy Park in Bhadla, Rajasthan, the solar tariff fell to a new low of Rs 2.62 per unit. The previous low in tariff was  at an auction in Andhra Pradesh where the price was set at Rs 3.15 per unit. In the auction, Phelan Energy Group and Avaada Power, companies based in South Africa won the bid to build capacities of 50 MW and 100 MW by bidding at Rs 2.62 kWh per unit.

This low also beats the average price of power generated at the coal based plants owned by India’s largest power generation utility, NTPC Ltd. India is set to come to the position of being the third-biggest solar market globally in 2017 to  fulfill the 8.8 GW capacity addition projected for the year.

The article can be accessed here.

Our analysis of the previous lows seen in solar tariff can be accessed here.

TNERC NOTIFIES SOLAR TARIFF FOR FY 2017-18

 Tamil Nadu Electricity Regulatory Commission, in its latest order dated 28th March, 2017, has released the tariff values for solar projects in the state.

The tariff values are given as follows:

There has been a slight decrease in tariff for both solar PV and solar thermal this year as compared to the last FY. A comparison of the same is given as follows:

 

The order can be accessed here

SOLAR TARIFF PRICES HIT A NEW LOW:

The solar tariff prices have hit a new low of Rs 3.15 per unit in an auction on Wednesday . The previous low in tariff was Rs 3.30 per unit in an auction which took place in the month of February.

 Source: Livemint (Dated: 13 Apr 2017)
In an article by Livemint, Mercom Capital Group has the following observations: This decrease in tariffs is causing the states to rethink and they are demanding a new power purchase agreement (PPA). This is causing the process of tendering and auctioning to slow down. An example of a state where such a thing has happened is Jharkhand. It is yet to sign its PPA for the 1000 MW solar capacity it had auctioned last year. The reason behind this is the subdued demand and poor financial condition of the discoms. The discoms which had signed their PPAs at a higher tariff are now going to find them unpalatable as they would lean towards cheaper tariff. Therefore, projects locked at higher tariffs will face delays in payments or power offtake curtailments. This might not only affect renewable energy power but also have an impact on renewable energy contracts.

DEMAND FOR SOLAR TO BE HIT DESPITE LOW TARIFF RATES

In a Business Standard article, though solar tariff rates have hit an all time low in the REWA bidding, the future of solar projects seems bleak as there are no new tenders from the big states. Tenders from SECI and NTPC are facing delays and those from Rajasthan and Andhra Pradesh are getting downsized. In states like Rajasthan, Andhra Pradesh and Karnataka, the project biddings have been postponed. For the year 2016-17, only 10 GW of solar power has been awarded out of which 30% has been by the states and the rest has been from SECI and NTPC.

Solar Power Tariff hits new low

A recent article in the Business Standard highlighted the solar power tariff which has hit a new low.  In a Solar Energy Corporation of India’s auction of rooftop solar power projects, Gurgaon-based Amplus Energy Solutions quoted a tariff of Rs. 3 /unit defeating the previous low of Rs 4 /unit for a solar park in Rajasthan by a quarter. The rooftop projects will be installed on buildings of NGOs, educational institutes, hospitals, trusts and not for profit companies in these states.

The lowest tariff quote for these projects is same as average tariff offered by state-run generation utility NTPC for power from its coal-fired plants and nearly half of tariffs charged by some private power producers.

Till now, a solar project at Badhla in Rajasthan held the record for the lowest tariff at Rs 4 per unit in the solar park category. The lowest tariff before that was Rs 4.34 per unit, quoted by Fortum India in January.

RERC Draft Solar Tariff Policy for FY 2016-17

Rajasthan Electricity Regulatory Commission (RERC) recently  proposed a levelized tariff under a draft regulation (RERC Terms & Conditions for Determination of Tariff for Renewable Energy Sources Regulations, 2016) issued for Solar power generators of the state.

The graph below depicts the change in the tariff from the past year:

 

RERC has invited the comments and suggestions by 13th September 2016 on the same. The tariff proposed for FY 16-17 is much lower than the tariff of previous year in case of both Solar PV and Rooftop Solar PV, It can be said that the reason behind the reduction in the tariff of Solar PV is because of decreasing prices of Solar PV cells.

The regulation can be accessed here.

 

MPERC Determines Tariffs for Solar Power Projects

Madhya Pradesh Electricity Regulatory Commission recently released its tariff order for energy procured from solar power based projects for the control period from 31st March 2016 to 31st 2019. The tariff determined by the Commission in this will be applicable to the following Projects located in the State of Madhya Pradesh and selling electricity to the distribution licensees within Madhya Pradesh only:-

(a) Solar PV Power Plants

(b) Solar Thermal Power Plants

The Commission came out; vide its proposal for categorization of solar PV and thermal projects as well as for fixing the norms for technological specific parameters.

The Commission has fixed the normative capital costs inclusive of all components as well as taxes etc. for solar thermal and solar PV projects by keeping in line with the CERC benchmark capital cost of Rs. 12 Crore and 5.3crores per MW for 2016-17. The graphs below gives a comparison of the Capital cost and levelized tariff from the previous control period:

 

The MPERC Regulation can be accessed here.

The MPERC Previous tariff Order can be accessed here.

 

CSERC Determination of Generic Tariff for Renewable Energy for FY 2015-16

The Chhattisgarh Electricity Regulatory Commission came up with its final order on the CSERC (Terms and Conditions for Determination of Renewable Energy (RE) Tariff) Regulations, 2015, (“the RE Tariff Regulations”) on 1st May, 2016. The RE Tariff Regulations specify the Terms and Conditions and the Procedure for determination of Generic Tariff by the Commission. Central Commission has specified capital cost as Rs.619.16 Lakh/MW for wind energy projects for the year 2015-16.The graph below gives a comparison of the RE tariff determined in year 2013-14, 2014-15 to 2015-16 for wind generators.

In the Draft Generic Tariff Order, the normative Capital Cost for the Solar PV power projects for was not declared by CERC and accordingly, the Commission proposed to consider the same Capital Cost of Rs. 605.85 lakh/MW for the Solar PV Projects and Rs. 1200 lakh/MW for Solar Thermal Projects to be commissioned in the period from 1 April, 2015 to 31 March, 2016.

The graph below gives comparison of Generic Tariffs for Solar Projects in the period from 2015– 2016 to the previous years. The tariff has been determined depending on the type of solar project as follows:

The Order can be accessed here.

MERC Determination of Generic Tariff for Renewable Energy for FY 2016-17

The Maharashtra Electricity Regulatory Commission came up with its Draft order on the MERC (Terms and Conditions for Determination of Renewable Energy (RE) Tariff) Regulations, 2015, (“the RE Tariff Regulations”) on 1st April, 2016.The RE Tariff Regulations specify the Terms and Conditions and the Procedure for determination of Generic Tariff by the Commission. The graph below gives a comparison of the RE tariff determined in year 2014-15, 2015-16 to 2016-17 for wind and mini & micro hydro generating stations.

In the Draft Generic Tariff Order for FY 2016-17, the normative Capital Cost for the Solar PV power projects for FY 2016-17 was not declared by CERC and accordingly, the Commission proposed to consider the same Capital Cost of Rs. 605.85 lakh/MW for the Solar PV Projects to be commissioned in the period from 1 April, 2016 to 31 March, 2017.

The graph below gives comparison of Generic Tariffs for Solar Projects in the period from 2016– 21017 to the previous year. The tariff has been determined with AD benefits depending on the type of solar project as follows.:

 

The Generic Tariffs for Wind Energy Projects in the period from 1 April, 2016 to 31 March, 2017 have been determined as follows.  The discount factor for levelisation of Tariff for Wind Energy Projects works out to 10.54%.

The Commission has invited Comments, suggestions and objections from the public and stake-holders, including RE Developers, Distribution Licensees, MEDA, electricity consumers, etc. are on this draft Suo Moto Order.

The Order can be accessed here.

 

KERC Determines tariff for Grid Interactive Megawatt scale Solar Power Plants

The Commission, in its Order dated 1st January, 2015 on BESCOM’s Review Petition noted that there was substantial reduction in the capital cost of grid connected solar power plants.

Therefore, it examined the need to curtail the present control period and re-determine the tariff in separate proceedings, in the midcourse. The Commission, in modification of its Order dated 10th October, 2013, decided that the norms and tariff determined in this Order shall be applicable to all new grid connected MW scale solar PV and solar thermal power plants, entering into Power Purchase Agreement (PPA) on or after 1st September, 2015 to 31st March, 2018.

For determining the tariff of the same, comments/suggestion of the stakeholders on the capital cost, operational and financial parameters were invited. The table below depicts the proposed capital costs for solar PV projects and solar thermal projects before and after the midcourse re-determination of tariff.

Based on the comments and suggestions received from various stakeholders on the abstract of the parameters considered for determination of the tariff, the commission approved the following tariff on 30th July 2015 which differs from the earlier determined tariff.

The final commission order can be read here.

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