The month of August saw a spate of developments in the Indian solar industry amid regulatory uncertainties, especially in the face of growing ambiguity surrounding safeguard duty. Here is a capsule of a few important developments from the sector:
Solar installations in India in Q2 2018 declined significantly with 1,599 MW, a 52 percent decrease compared to 3,344 MW installed in Q1 2018. Installations were also down by 21 percent year-over-year (YoY) compared to 2,025 MW installed in Q2 2017, according to Mercom India Research’s newly released Q2 2018 India Solar Market Update.
Solar renewable energy certificate (REC) trading slumped in August 2018, whereas non-solar REC trading climbed up after months of decline. In August 2018, 486,129 solar RECs were traded. This was 896,503 fewer solar RECs than the 1,382,632 solar RECs traded in July 2018. All solar RECs were traded at a price of ₹1,000 (~$14.50).
The Department of Biotechnology (DBT), India’s Ministry of Science and Technology, and the International Energy Agency (IEA) have signed a Memorandum of Understanding (MoU) which aims at enhancing innovation for the clean energy transition. The parties signed the agreement in New Delhi. The MoU aims to deepen their co-operation in support of clean energy innovation to accelerate research, development, and demonstration (RD&D) of clean energy technologies in India and recognize the need to support the generation of data for policy-making and improve knowledge of good policy practice for innovation in India and around the world.
Telangana has become the first state to comply with the Energy Conservation and Building Code Guidelines (ECBC). The ECBC compliance has been incorporated in an online building approval system (DPMS) of urban local bodies and 38 ECBC third party assessors are empanelled with the Telangana State Renewable Energy Development Corporation and GHMC.
The first batch of auctioned interstate transmission system (ISTS)-connected wind energy projects have been commissioned in India. These projects were tendered by the Solar Energy Corporation of India (SECI) in November 2016 under Tranche I. Ostro Kutch Wind Private Limited has commissioned partial capacity of 126 MW, located in Bhuj, Gujarat.
The central government has approved a subsidy corpus of ₹55 billion (~$0.78 billion) to be disbursed under the second phase of Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME) program. The FAME II program will be in force for five years. Under the program, subsidy will be provided on the purchase of all types of electric vehicles.
The Indian solar sector received investments to the tune of $1.86 billion in the second quarter (Q2) of calendar year (CY) 2018. Investments declined 26 percent quarter-over-quarter compared to $2.5 billion that poured into the sector in Q1 CY 2018.
India’s solar imports declined drastically in the second quarter (Q2) of calendar year (CY) 2018. Solar modules and cells worth $436.6 million were imported by India in Q2 CY 2018, almost 60 percent less than the ~$1 billion of solar cells and modules imported by India in the previous quarter Q1 CY 2018. In Q2 CY 2018, India exported solar cells and modules worth $17.4 million, an almost 9 percent decline when compared to Q1 CY 2018. In Q1 CY 2018, India had exported solar cells and modules worth $19.15 million.
India’s biggest natural gas transporting and marketing company, the Gas Authority of India Limited (GAIL), a government owned entity, is looking to diversify its portfolio. The company has sought the approval of its shareholders to amend the charter of the company so that it can start investing in solar power projects, various start-ups, and EV charging infrastructure across the country.
KfW, a leading German financial institution, has signed a €200 million (~$228.15 million) loan agreement with India’s Rural Electrification Corporation Limited (REC), a state-run power sector financer. KfW signed the agreement on behalf of German Federal Ministry for Economic Cooperation and Development (BMZ). The REC will fund renewable energy project developers in the form of low-interest loans. These loans will be supplemented by counterpart contributions of up to 30 percent from the borrowers as well as contributions from other banks.
According to the data released by the Central Electricity Authority (CEA), solar power generation in the second quarter (Q2) of calendar year (CY) 2018 spiked by 73 percent year-over-year (YoY) to 9,514 million units (MUs) compared to Q2 2017 when approximately 5,487 million units (MUs) were generated by solar projects.
The government has approved the launch of “Scale Up of Access to Clean Energy” program for the period financial year (FY) 2018-19 and FY 2019-20. The program is one of the four components under the United Nations Development Program (UNDP) and the Global Environment Facility’s (GEF) project on Scale Up of Access to Clean Energy for Rural Productive Uses (India ACE Project), which is being implemented in the states of Assam, Madhya Pradesh, and Orissa.
The Central Electricity Authority (CEA) has formulated a plan for developing transmission system to accommodate wind energy aggregating 4,950 MW. The transmission system will be augmented in Gujarat and Tamil Nadu to accommodate wind energy capacity tendered by SECI.
During the first quarter (Q1) of financial year (FY) 2018-19, India’s power supply deficit declined to 0.6 percent, according to the Central Electricity Authority (CEA). During the three-month period of April – June 2018, 323,418 MUs of electricity were supplied against a demand of 325,428 MUs. This was a decrease of 2,009 MUs over the targeted energy requirement.
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