Inergystat- Renewable Energy Sector - March 2020 in Minutes

Check out the important news of the Renewable Energy sector happened during March 2020:

• The total REC cleared during the month is 838448 including both solar and non-solar REC's which is 61.34% less with respect to last month i.e. February 2020 and 51.77% less with respect to March 2019. The market share of IEX in the sale is 68.52% while share of PXIL is 31.48%.
• The government classified renewable energy generation as an essential operation and allowed the movement of products needed for it. MNRE asked all states to exempt renewable energy generating stations from Section 144, nationwide lockdown, curfew and any restrictions in the movement of necessary staff and products.
• NTPC and SECI will soon be signing an agreement with the Rajasthan government for setting up of 2 renewable energy parks of 5 GW capacity each. This will be the first phase of the proposed 25 GW ultra mega renewable energy park in Jaisalmer, Rajasthan.

Along with this MNRE also finalized contours for setting up of 25 GW renewable energy park in the Khavada village of Gujarat.

• CERC has extended the applicability of the Renewable Energy Tariff Regulations, 2017, for three months (from April 01, 2020, to June 30, 2020). Commission further noted that the generic tariff issued by the Commission in the order dated March 19, 2019, will continue to remain in force until June 30, 2020.
• Government has decided that all the renewable energy projects that are under implementation will be provided further time extension for completion. However, the extension of the time period will be decided after considering the factors such as the time period of lockdown and the time required for the workforce to remobilize.
• New and renewable energy minister R K Singh stated that the installed capacity of renewable energy generation in the country has grown 72 percent from 80 GW to 138.9 GW during the past six years. He further added that the foreign direct investments of $6.1 billion flew into the Indian clean energy sector -- including solar, wind, biomass, large hydro and nuclear -- in the five year period 2014-19.
• Investment in the country's renewable energy sector dropped by 14 percent to Rs 68,550 crore in the calendar year 2019.

The trend during previous years are: Rs 79,606 crore in 2018, Rs 81,080 crore in 2017, Rs 1,00,982 crore in 2016 and Rs 72,972 crore in 2015.

• As on 29th February 2020, a cumulative renewable energy capacity of 132.15 GW had been installed in the country, with an additional capacity of 46.69 GW under various stages of implementation and 34.07 GW under various stages of bidding.
• To improve the business environment for clean energy projects and attract investments, the government has decided to treat letter of comfort (undertaking) issued by state-run shadow banking firms PFC, REC and IREDA at par with bank guarantees. Developers need bank guarantees for placing bids for clean energy projects offered by nodal agencies like SECI and NTPC.

Now treating letter of comfort issued by PFC, REC, and IREDA would reduce procedural delay to seek bank guarantee for bidding for clean energy projects.

The ministry also ordered SECI and NTPC to pay safeguard and GST pass through on an annuity basis to further ease the financial stress being faced by RE investors.

• The Gujarat State Electricity Corporation Limited (GSECL) has successfully managed to operate its 500 MW Ukai unit under its coal-based power project at 40% of its capacity during a recently conducted low load test run.

This move is now the state’s first successful attempt to achieve greater load flexibility at its coal-based project to boost the integration of renewable power into its mix. According to the Greening the Grid (GTG) Program these low-load tests will allow the power generators to more easily adapt their generation when the need for integrating more renewable energy in their mix arises.

The low load test run was conducted under a pilot implemented under USAID’s GTG – Renewable Integration and Sustainable Energy (RISE) initiative in partnership with GSECL and Bharat Heavy Electricals Limited (BHEL), which is the Original Equipment Manufacturer.

• A Parliamentary panel has expressed dismay over MNRE missing targets continuously and has suggested the ministry to identify weak areas and take corrective actions without any further delay. The Ministry has continuously failed to achieve its yearly physical targets. 

The panel expressed concerns that the ministry may also find it difficult to achieve 175 GW target by 2022.

For the years 2017-18 and 2018-19, against the grid-connected renewable energy target of 14,445 MW and 15,355 MW, the Ministry could achieve 11,876.82 MW and 8519.52 MW, respectively. Similarly, during the year 2019-20 (up to January 2020), 8,004.64 MW could be installed against the target of 11,852 MW. it said.

On budgetary allocation for the renewable sector, the committee said an allocation of Rs 9,523.04 crore was sought by the Ministry for the year 2020-21, but only Rs 5753.00 crore have been sanctioned.

• Renewable Energy Minister R K Singh stated that based on standard capital cost per MW, an investment of around Rs 1.34 lakh crore is estimated to have been made in the renewable energy sector during last three years i.e. 2017-18 to 2019-20 (up to January 2020).

He further added that most of the grid-connected renewable energy projects are being implemented by private sector developers selected through a transparent competitive bidding process.

• MNRE has issued a directive to SECI, NTPC, and state government departments, in which it is mentioned that there will be no tariff cap on renewable energy project auctions, with the government deciding to do away with the upper ceiling — a move it hopes will boost investment in solar and wind power projects.

The move comes after industry requested the government to remove the ceiling on the bidding. Several states and SECI have a capped tariff rate, beyond which companies cannot quote while bidding for solar and wind power projects.

The tariff caps ranged from Rs 2.9 per unit by SECI in some solar power tenders in 2019 to Rs 3.5 per unit by some states such as Maharashtra, Rajasthan and Uttar Pradesh. This led to a lot of tenders going undersubscribed or drawing no interest from industry which found the caps to be too low. An industry expert mentioned that the prevailing market conditions made the projects unviable for companies. 

In the same notice, MNRE also directed SECI, NTPC and the state power departments to procure renewable energy either through the single renewable source or various combinations of renewable sources with or without storage as per their procurement policies.

• Sweden and India have launched a joint funding program under which the best of Swedish and Indian innovators can forge partnerships and develop Smart Grid solutions that will benefit both sides to help integrate the increasing amounts of renewable energy.

The India-Sweden Collaborative Industrial Research & Development Programme is co-funded by Indian Department of Science & Technology (DST) and Swedish Energy Agency.

The program aims to bring together companies, research organizations, academics and other collaborators from both countries for the joint development of innovative products or processes.

• The ratings of solar power projects are likely to remain stable next financial year (2020-21) given revenue generation in line with projections and limited exposure to weak counterparties. Also, construction completion of projects with strong counterparties will be positive for projects, India Ratings said.
• As per the MNRE monthly report, new capacity additions in January 2020 seem to be 412.65 MW, since it places cumulative RE additions till January at 8004.64MW, versus 7591.99MW till December 2019. Using the same sources, Wind additions seem to be 110 MW, while solar additions in January came in at 300 MW.

That takes total installed RE capacity according to MNRE, to 86.32 GW as of January 31, 2020. Wind leads with 37.61 GW, Solar power at 34.03 GW, with Bio-Power at 10 GW and small hydro at 4.68GW bringing up the rest.

On the expenditure front, the ministry reports spending Rs 3152 crores till January, which is 84.21 percent of the revised estimate for it for the year till March 2020.

The report also highlights projects of 35.09 GW under various stages of implementation, and a further 34.47 GW in the bidding pipeline.

• About 2,676 MW of renewable tenders were issued in February 2020, including 1,887 MW of utility-scale solar tenders, 600 MW of wind tenders, 150 MW of renewable power procurement tenders and 40 MW rooftop solar tenders. 

Auctions have been completed for about 4.9GW of tenders. Moreover, about 364MW of new solar capacity and 107MW of new wind capacity is added.

• India’s power generation from renewable energy sources stood at 10.325 BU in January 2020, a 9.46 percent increase from 9.433 BU generated in the same month last year. 

The combined generation from solar, wind, small hydro, biomass, bagasse, and other sources stood at 10.647 BU in December 2019, as against 9.083 BU of green energy generation recorded for the same month in 2018.

India installed 2,308 MW of solar and 817 MW of wind energy generation capacity in the fourth quarter of 2019.

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