ACME Solar Holdings’ ₹29 Billion IPO to Hit the Market on November 6, 2024

Jodhpur DISCOM Tenders 333 MW Solar Projects Under PM KUSUM

CIE Automotive to Procure Power from ReNew’s 7.8 MW Captive Solar Project

John Cockerill to Supply Electrolyzers to AM Green’s Ammonia Project

Varroc to Procure Power from AMPIN’s 27 MW Solar Project in Maharashtra

JinkoSolar’s Revenue Drops 23% YoY in Q3 Due to Lower Module Prices

First Solar Revenue Falls Short in Q3, Revises 2024 Guidance Amid Sector Pressures

Tata Power Records 20th Consecutive Quarter of Profit in Q2 FY 2025

SECI Floats Tender to Procure 1.2 GW Round-the-Clock Renewable Power

Daily News Wrap-Up: APTEL Criticizes MERC for Denying Petitioner Relief

<table id="amazon-polly-audio-table">
						<tr>
						<td id="amazon-polly-audio-tab">
							<div id="amazon-ai-player-label">Listen to this article</div>
							<div id="amazon-ai-player-container">
			<audio class="amazon-ai-player" id="amazon-ai-player" preload="none" controls controlsList="nodownload" >
				<source type="audio/mpeg" src="https://cms.mercomindia.com/wp-content/uploads/2021/02/amazon_polly_24403.mp3?version=1706675942">
			</audio>
		</div>
							<div id="amazon-polly-subscribe-tab"></div>
							<div id="amazon-polly-by-tab"></div>
						</td>
						</tr>
					</table>The Solar Power Developers Association (<a href="http://solarpda.com/" target="_blank" rel="noopener">SPDA</a>) has written to the Prime Minister&#8217;s Office (PMO), against the delays in signing the power purchase agreements (PPA) by the Gujarat Urja Vikas Nigam (<a href="https://www.gseb.com/" target="_blank" rel="noopener">GUVNL</a>) for 700 MW of projects at the 1,000 MW Dholera Solar Park.
Last week, the Gujarat Electricity Regulatory Commission (GERC) had <a href="https://mercomindia.com/gujarat-regulator-scraps-solar-auction/" target="_blank" rel="noopener">allowed</a>  GUVNL to cancel the 700 MW solar auction and retender it (Phase IX) in an attempt to discover a lower tariff for the projects. This is not the first time that GUVNL has canceled the auctions citing high tariffs.
The park comes under the Dholera Special Investment Region (<a href="https://www.dholeraproject.in/" target="_blank" rel="noopener">DSIR</a>), which is expected to become a global manufacturing hub. The invitation for bids was issued on February 16, 2019, with a ceiling tariff of ₹2.75 (~$0.038)/kWh.
However, due to operational challenges at the site, the tender was undersubscribed. Eventually, <a href="https://www.tatapowerrenewables.com/" target="_blank" rel="noopener">Tata Power Renewable Energy</a> was <a href="https://mercomindia.com/gujarat-dholera-solar-auction-250-mw/" target="_blank" rel="noopener">awarded</a> 250 MW at ₹2.75 (~$0.038)/kWh.
A second tender was <a href="https://mercomindia.com/gujarat-solar-parks-tender-950-mw/" target="_blank" rel="noopener">issued</a> for the remaining 750 MW on June 24, 2019, which received a poor response of just 50 MW. Tata Power was again awarded the 50 MW capacity.
Both projects were approved by the Gujarat Electricity Regulatory Commission (<a href="https://gercin.org/" target="_blank" rel="noopener">GERC</a>) and are under construction.
Both tenders were undersubscribed due to the difficult terrain at the Dholera Solar Park, which has failed to attract investors at a ceiling tariff of ₹2.75 (~$0.038)/kWh.
Some of the issues at the location that inflate the cost of project construction and maintenance include:
<ul>
<li>Frequent flooding of nearby rivers and the Gulf of Cambay gushing into the site&#8217;s low lying areas, which leaves it waterlogged for at least nine months a year.</li>
<li>The groundwater is around 1.5-2 meters heavily laced with chlorides and sulfates, which, coupled with the coastal environment, results in heavy corrosion and needs superior quality design and materials.</li>
<li>The site is not suitable for the latest bifacial modules due to soil conditions and frequent flooding, restricting the choice of technology.</li>
</ul>
Since the tenders were undersubscribed, GUVNL took up the matter with Solar Energy Corporation of India (<a href="https://www.seci.co.in/" target="_blank" rel="noopener">SECI</a>), Gujarat Power Corporation (<a href="https://gpcl.gujarat.gov.in/" target="_blank" rel="noopener">GPCL</a>), which is the implementing agency, and the Department of Industrial Policy and Promotion (<a href="https://dipp.gov.in/" target="_blank" rel="noopener">DIPP</a>).
SECI, which had plans to develop 5000 MW at DSIR, proposed a new tariff of ₹3.06 (~$0.042)/kWh, saying  the ceiling tariff was too low at ₹2.75 (~$0.038)/kWh.
However, GUVNL raised the ceiling to ₹2.92 (~$0.40)/kWh. Based on the new tariff, GUVNL floated the remaining 700 MW tender, which was <a href="https://mercomindia.com/gujarat-retender-700-mw-solar/" target="_blank" rel="noopener">oversubscribed</a> by seven bidders to an aggregate of 1,300 MW. Eventually, after conducting a reverse <a href="https://mercomindia.com/winners-gujarat-solar-auction/">auction</a>, the project was awarded in the range of ₹2.78 (~$0.038)/kWh to ₹2.81 (~$0.039)/kWh. The LoA was subsequently issued on October 9, 2020.
The PPAs that were scheduled to be signed on January 9, 2021, are pending. The developers have alleged that GUVNL was unfairly <a href="https://mercomindia.com/gujarat-regulator-scraps-solar-auction/">comparing</a> the Dholera project tariffs to lower tariffs discovered in subsequent auctions.
The developers claim that such comparisons were unfair, given the challenges on-site at DSIR, and when a transparent bidding process was followed, and tariffs were discovered in the range of ₹2.78 (~$0.038)/kWh and ₹2.81 (~$0.039)/kWh, which were lower than the ceiling of ₹2.92 (~$0.040)/kWh.
The five developers selected for the project are O2 Power, ReNew, Tata Power, SJVN, and Vena Energy.
The developers have requested the PMO to intervene in the matter as the land on the project site has already been demarcated, and a few have already paid for land-related charges. The developers have only received 15 months to execute the project.
They have said that the stance of GUVNL would have huge repercussions on the investment environment in Gujarat and India.

Developers Write to Prime Minister’ Office on the Gujarat Solar Auction Fiasco

According to a communique reviewed by Mercom, the Indian Prime Minister Narendra Modi’s office has proposed waiving the Goods and Services Tax (GST) Compensation Cess, (earlier called the Clean Energy Cess which was India’s version of carbon tax) on coal to reduce the financial strain on distribution companies, besides helping the thermal power projects install flue gas desulphurization to curb pollution.
This proposal comes in light of the mandate to implement flue gas desulphurization (FGD) at thermal power projects in the country. The resulting investment in the FGD process is expected to result in increased power prices for customers.
FGD is the process of removing sulfur dioxide from exhaust flue gases of fossil-fuel power plants, and sulfur oxide emissions from processes like the incineration of waste material.
Earlier this year, the Ministry of Power (MoP) <a href="https://mercomindia.com/700-million-plan-for-ev-infrastructure-revamp/" target="_blank" rel="noopener noreferrer">proposed</a> a ₹835 billion ($11.70 billion) plan to meet the cost of development of Flue Gas Desulfurization to improve air quality and to conform to new norms notified by the Ministry of Environment Forest and Climate Change (MoEF &amp; CC) for power plants.
Projects which have the FGD facility at their sites would have to sell power at a higher cost after factoring in implementation costs. The communique stated that even with financing, the power tariff would increase by ₹0.30 – 0.35 (~$0.004 – 0.005)/kWh and would further burden DISCOMs that already <a href="https://mercomindia.com/discom-dues-to-power-generators-october-up-yoy/">owe</a> power developers over ₹844 billion (~$11.83 billion) in outstanding dues.
The National Clean Energy Fund (NCEF) was created in 2010 to fund the cost of research and innovative projects using clean energy technologies by public and private sector entities. The fund has evolved under the NDA administration and was rebranded as the Clean Environment Cess, from the earlier Clean Energy Cess, to include river cleaning and other projects. The Cess, which was ₹50 (~$0.74)/ton when it was introduced in 2010, was raised to ₹100 (~$1.5)/ton in 2014 and to ₹200 (~$3)/ton in the 2015-2016 budget. It was again doubled from ₹200 (~$3)/ton to ₹400 (~$6)/ton in the 2016-17 budget.
From 2010 to 2017, about ₹864 billion (~$13.3 billion) <a href="https://mercomindia.com/mnre-receive-rs-53-41-billion-817-million-national-clean-energy-fund-fy2017-2018/" target="_blank" rel="noopener noreferrer">has been collected</a> through the Clean Environment Cess, out of which only ₹296 billion (~$4.6 billion) was transferred to NCEF. Ministry of New and Renewable Energy (MNRE) had only received about ₹171 million (~$2.6 million) to that point.
The Government of India then enacted a bill to utilize the Clean Environment Cess (India’s version of carbon tax) collected on coal, to finance the Goods and Services Tax (GST) Compensation Fund, a non-lapsable fund that will form part of the public account of India.
The Goods and Services Tax (Compensation to States) Act, 2017 which came into force in April 2017, states that coal cess, along with other cess on pan masala, tobacco, aerated water etc., would constitute GST Compensation Fund and would be utilized to fund the States for five years to compensate them for potential losses on account of GST implementation. After five years, any amount left was to be shared on a 50 percent basis between the Center and States.
The PMO explained that by waiving the ₹400 (~$5.61)/ton cess, the increase in tariff would not be transferred to customers. Consequently, the requirement of subsidies from the government would also not increase, and this would make up for losses to the GST compensation cess.
This move, while positive for the Indian coal industry would, however, would make coal power slightly more competitive with solar and wind energy.
The total power capacity <a href="https://mercomindia.com/solar-accounts-india-total-installed-power-capacity/" target="_blank" rel="noopener noreferrer">installed</a> in India stood at 366 GW at the end of September 2019, with coal accounting for 53.8% and renewable energy capacity (including large hydro), making up 35.7% of the total installed power capacity in the country.
“The amount of clean energy cess fund going towards renewable energy and MNRE was only about 20% in 2017. The funds were already being diverted to river cleaning, water and sanitation, and other areas. The impact of this proposal on renewable energy development is likely to be minimal,” said Raj Prabhu, CEO of Mercom Capital Group.
Image credit: Shivang Dubey [CC BY-SA <a href="https://creativecommons.org/licenses/by-sa/4.0" target="_blank" rel="noopener noreferrer">4.0</a>]

Prime Minister’s Office Proposes Waiving Carbon Tax on Coal

The National Solar Energy Federation of India (<a href="http://nsefi.in/" target="_blank" rel="noopener">NSEFI</a>) has written a letter to the Prime Minister’s Office (PMO) regarding the new External Commercial Borrowings (ECB) policy framework implemented by the Reserve Bank of India (RBI), which is against the best interests of the domestic renewable industry according to the Federation.
The federation has argued that renewable energy generation projects require huge amounts of capital and long-term financing for 20-25 years. However, there is a lack of availability of domestic debt funds for renewable power projects. Foreign lenders are also hesitant to take risks before commercial operation, citing issues with land acquisition and laying of the transmission system.
Therefore, renewable power developers first take pre-construction and under-construction loans from domestic lenders at relatively higher interest rates and later refinance such high-cost rupee loans by low-cost foreign currency loans from foreign lenders through External Commercial Borrowings once the project is operational. Such a method is an accepted alternate funding practice for the renewable energy projects.
The RBI has allowed the external borrowing in the form of security bond/loan in U.S. dollar to replace the Indian rupees loan having a tenure of 10 years or more given by the domestic banks and financing institutions.
However, as per the notification issued by the RBI on January 16, 2019, in order to rationalize the framework for ECB and rupee denominated bonds to improve the ease of doing business &#8211; Tracks I and II have been merged as &#8216;Foreign Currency denominated ECB&#8217; and Track III and rupee denominated bonds framework are combined as &#8216;Rupee Denominated ECB&#8217;.
In the revised Foreign Currency ECB framework, the existing end-use of repayment or refinancing of the rupee loan taken under Track-II of ECB has not been considered. This makes the repayment of rupee loan to domestic lenders by solar or wind project developers through ECB proceeds impossible.
NSEFI, in the letter, has requested the PMO to intervene in the matter and give the required directions to the RBI in this matter.
“RBI should carve out a special category such as earlier Track-II with ECB with a minimum average maturity period of 5 years and above within the new merged foreign currency ECB category and permit renewable project developers for repayment of their rupee loans to domestic lenders from ECB proceeds.”
It has also requested to rationalize the new ECB framework suitably excluding repayment of rupee loans from the negative list.
<a href="https://mercomindia.com/nsefi-recommendations-growth-solar-india/" target="_blank" rel="noopener">Recently,</a> NSEFI also issued recommendations to help attain India’s solar targets.
Image credit: Azure

RBI’s New Policy on ECBs Could Leave Renewable Energy Projects Stranded

pmo

Get the most relevant India solar and clean energy news.

RECENT POSTS