The Low-Cost Renewable Energy Trend In India Might Not Last For Long

 


India may soon become a victim of the enviable success achieved so far in its renewable energy auctions by forcing down prices to a point it is no longer profitable, according to inside sources.

According to Sumant Sinha, founder and CEO of ReNew Power, in GTM's Energy Gang podcast “Developers have been willing to cut their margins, and that is not healthy in the long run. Some of the bidders who bid aggressive numbers are going to end up having a problem eventually.”

In a fierce bidding war, solar developers are willing to tender increasingly lower bids in government auctions as they anticipate a further drop in prices of solar panels. This is according to Sinha, whose company has already two projects - a 2 GW wind and solar project. The company is also planning a 10 GW in the future.

Module prices in India fell below $0.30 per watt about four months ago. Sinha said consumers had expected the prices to go down to mid-twenties within the next three months. Instead, it had gone into the mid-thirties. He observed that some Chinese suppliers of modules are now renegotiating previously agreed prices. “It’s going to result in some unprofitable projects being done,” he said.

“From a health of the private sector and the development community standpoint, I would say that these reverse auctions have not been a great success, even though they’ve resulted in very low tariffs. And partly it is the developers themselves who are to blame for it.”

How string Inverters are Changing Solar Management On The Grid
 
Several companies are getting hurt in increasing numbers by the low-cost renewable energy trends in India. SunEdison, one of the popular solar plant developers, sold their Indian portfolio and pipeline after it had gone bankrupt. It had been reported in the local press that most of its upcoming projects were not viable.

Hyderabad based Greenko Energy Holdings bought the entire lot for a miserly $315 million, in what had been described as “the biggest distress sale of all time in the sector,” according to The Economic Times of India.  

The latest company to be hit in this gale of crashing prices of renewable energy in India is Acme Solar Holdings. It won a bid in May this year with a record-low tender price of $0.038 per kilowatt-hour, but just three months down the line, it was already placing the 200 MW project it had earlier won for sale. Soaring prices of solar panels from China severely affected that project.
A renewable energy analyst firm based in New Delhi, Bridge to India,  had said that  “Indian solar developers typically factor in a 15 to 20 percent annualized fall in the cost of solar modules when bidding for new projects.”

The solar sector is not alone in this ordeal. The wind industry is also taking the hit. Inox Group had had won 250 MW project at a bid of $0.054 per kilowatt-hour but had put the project on the block just last month.  The wind sector is also facing connectivity issues which have delayed a second auction by the government.

To observers from the outside, India’s low-cost renewable energy project is a huge success. According to Sinha, “They would look at the only metric they care about, which is what has happened to tariffs. And tariffs have been driven down quite dramatically. A year ago, we were looking at tariffs of around 8 or 9 cents. Today tariffs are in the range of 4 or 5 cents," he said.

Comments

Post a Comment

Popular posts from this blog

Pin Mill Technology for High-Efficiency Classifiers

Image
Advancements in pin mill technology offer quality grinding with a lesser energy expense when compared to usual air-swept mills. Previous versions of mills were considered obsolete when it comes to reducing the size of high-efficiency classifiers. Not so long ago, the air-swept classifying mills were the newest and most advanced trend in the milling industry. They were designed to perform different non-abrasive milling application during a simple two-phase process. This, once state of the art, high-efficiency classifier performance was based on a simple selection process. The first stage was assortment as it only used particles that were, according to the predetermined size, as was the finished product in the mill. Air-swept mills were considered efficient because they provided the best performance according to standardised norms. However, this milling technology was costly and needed substantial investments. The required components of machinery included baghouse filters that separa...
Read more

Factors to keep in mind while assembling a bulk material handling unit

Some measures and considerations have to be put in place when bulk material equipment or systems are being installed. It is not only for safety reasons but also to facilitate ease in the industrial procedure during assembly of a bulk material handling unit. Material handling equipment manufacturers should note that not every equipment is supposed to be used with every type of material, as the consistency of the material will impact the quality of the finished product. In the course of equipment selection, some factors that should be considered are as follows: Bulk density Average particle size Particle properties Environmental effects Material base Material handling equipment manufacturers do have an essential task before they begin with any process. They are advised to conduct thorough material tests so that the critical processing characteristics can be fully comprehended. For instance, some particle densities change at different phases of the material handling process...
Read more

Equipment used in handling Bulk Materials

By the task that every unit is meant to complete, bulk material equipment and systems are manufactured, but a lot of systems add the regular components and features. Material handling equipment manufacturers already have a set picture of the task that each unit is designed to have. Bulk material handling equipment manufacturers make specified tools on different scales that suit their specifications and selected operations and procedures. Dominant in industrial production routines, the handling equipment is grouped by the type of materials they are designed to handle and also the type of applications for which they are made. The system that handles materials for manufacturing is a widely known type of bulk material handling system among experts and users. For example, bulk material handling systems are used by paper mills and sawmills to handle sawdust, logs, and woodchips for subsequent manufacturing. Coal-fired utility boilers are fed and used in flour mills by this kind of bulk ...
Read more