2012 has been a remarkable year for Solar in India. The country continued its journey towards better energy security this year witnessing significant solar capacity additions. Having ended 2011 on a relatively small high of 300 MW of solar capacity addition, India finally entered the 1 GW solar club during the middle of 2012. This could not have come sooner as in this year, we waded through some dark tides – the biggest blackout in history – which exposed the growing need for alternative sources of power generation to reduce our dependence on fossil fuels while also unearthing the inadequacies of an aging power infrastructure.
The quarter was perhaps the busiest during the whole year in terms of actual work on the ground. Project developers and EPCs were working at a frantic pace to commission projects before the deadline under the Gujarat policy and the JNNSM.
- Gujarat Electricity Regulatory Commission (GERC) extended the commissioning deadline from 31st December 2011 to 29 January 2012, thereby providing relief to several developers.
- NVVN signs PPA with most of the developers who were allotted projects under the Batch 2, Phase 1 of JNNSM
- The first project under the JNNSM Batch 1, Phase 1 commissioned by Azure. Several other projects under the same programme, including those by Mahindra, Sun Edison and Moser Baer(among others) were commissioned in the month.
- Several projects under the Gujarat policy also were commissioned(Sun Edison, Power and GMR)
- REC trading(non-solar) started on a very positive note, with record sales till date.
- Alex Green Energy has emerged the lowest bidder in the 25 MW solar PV programme of the Odisha government, quoting a historic low of Rs. 7 a unit which remains unmatched.
- Bank guarantees of Lanco, 13 others encashed for missing deadline under JNNSM.
- Delhi government scraps roof top solar policy citing concerns over exploitation of the scheme using cheaper sources of power to avail the solar FiT.
- Center for Science and Environment (CSE) alleges LANCO Solar violated norms to bag solar projects under JNNSM.
- Reliance Energy commissions a 40 MW solar power plant in Rajasthan making it one of the largest operational single solar power plant in the country with Larsen & Toubro offering the EPC services.
- 221 MW of solar capacity was commissioned under the National Solar MissionJNNSM up to the end of the first quarter of 2012 which took the total installed capacity in the country to 500 MW.
- NVVN stated that they would encash the bank guarantees of 14 developers for failing to meet the second deadline (February 9th 2012) to commission projects under Phase 1, Batch 1 of the JNNSM.
- Madhya Pradesh announced its plans to setup 200 MW of solar capacity with an interesting note suggesting that the solar power plants could be installed in any state.
- The Kerala government announced plans to add 10 MW of solar capacity in the state through 10,000 rooftop solar power plants each with a capacity of 1 kW.
- Initial reports emerge of alarmingly high failure rates for First Solar’s modules under extremely hot weather conditions.
The second quarter was quite frustrating for stakeholders primarily because the allocation of projects under the Rajasthan Solar Policy was postponed indefinitely. On the bright side, Karnataka and Madhya Pradesh awarded projects to numerous developers and the first solar REC was traded in the market.
- Tamil Nadu Energy Regulatory Commission(TNERC) increases the power tariff by 37%
- Gujarat Chief Minister Narendra Modi dedicates 600 MW solar power projects in Gujarat to the nation.
- Sun Edison commissions 1 MW project over the Narmada Canal in Gujarat.
- 80 MW of solar projects(60 MW PV and 20 MW CSP) allocated under the Karnataka Solar Policy after a lengthy delay. The lowest discovered tariff for PV stood at Rs. 7.94 per kWh.
- Rajasthan announces that allocations under the Rajasthan solar policy would be delayed.
- Gujarat allots 5 MW(2.5 MW each) for solar PV rooftop projects to Azure Power and Sun Edison.
- 58.05 MW of the 98.05 MW allotted under the RPSSGP scheme commisioned.
- Solar Energy Industry Advisory Council (SEIAC) of India meets for the first time.
- The first solar REC certificates were issued to M&B Switch Gears for their 2 MW power plant in Madhya Pradesh in May proving the viability of solar projects under the REC/RPO mechanism while bringing to life the long dormant solar REC market.
- Rajasthan (RRECL) postpones the last date of submission of RfS bid documents indefinitely without citing any reasons. These submissions were previously announced to be delayed to August 2012.
- Madhya Pradesh invites bids for 200 MW of solar projects to be allocated under the state’s solar policy. 125 MW of the 200 MW solar capacity was bagged by Welspun with a PPA signed for a tariff of Rs. 8.05 per kWh. The lowest tariff quoted was Rs. 7.90 per kWh.
- 5 solar RECs were traded at the IEX for an average price of Rs 13,000 and an additional 5 solar RECs were traded for an average price of Rs 13,000 at PXIL.
- Globally, the solar sector attracted total funding of over $ 4.3 billion through 66 deals in the second quarter. This included two Indian deals – Reliance Power securing a USD 103 million loan from Asian Development Bank (ADB) and Azure Power securing USD 70.4 million in long-term financing from the Export Import Bank of the US.
- TATA BP solar becomes a wholly owned subsidiary of TATA Power after the TATA power company bought out BP Alternative Energy Holding’s 51% stake in the JV.
- Domestic power tariff in Delhi was raised by 24.15% by power regulator DERC.
- Madhya Pradesh Power Management Company Limited (MPPMCL) announced plans to procure 125 MW of solar power from two power plants (to be commissioned under MAHAGENCO’s solar park tender) in the state in order to meet its RPO.
- BHEL announced plans to setup a 250 MW solar PV cell manufacturing facility at a cost of Rs. 3000 crores at Sakoli.
- LANCO Infratech absolved of any wrong doings under the phase 1 batch 1 allocation process under the JNNSM.
- 336 solar RECs were traded at the IEX for an average price of Rs 12,750 while 6 solar RECs were traded for an average price of Rs 12,506 at PXIL.
The third quarter was a headline grabbing quarter with India entering into the 1 GW solar club. Equally headline grabbing was the fact that 620 million Indians were left in the dark for a couple of days due to massive failures in the power infrastructure. On the bright side, the AP solar policy was announced and all 27 developers who won project allocations under the second batch of phase 1 of the JNNSM achieved financial closure.
- India enters the 1 GW solar club with the cumulative capacity additions crossing 1000 MW for the first time in the country.
- India witnessed the largest blackout ever experienced in the world – a blackout which affected over 620 million people further galvanizing the need for alternative power sources as well as the need to overhaul the existing power infrastructure to accommodate the growing energy requirements.
- Forum of Regulators (FOR) draws up RPO Trajectory for states suggesting the RPO targets under the 12th five year plan and beyond.
- Punjab comes up with a renewable energy policy that targets installation of 100 MW of solar power in the state.
- Madhya Pradesh government approves new solar energy policy to setup four solar parks of 200MW each.
- Bihar shortlists proposals for 198MW of solar power projects with BREDA agreeing in principle to setup solar power plants in the state.
- MNRE initiates measures to install 60 solar radiation monitoring stations across the country (adding to the 51 stations already installed) to aid developers with accurate on the ground information of solar radiation pattern in the various states.
- 93 solar RECs were traded at the IEX for an average price of Rs 12,800 while 86 solar RECs were traded for an average price of Rs 12,800 at PXIL.
- Uttar Pradesh announces plans to setup 1000 MW of solar capacity by 2017.
- Maharashtra power regulator MERC approved an overall increase of 16.48% in average tariff charged by state-owned utility MSEDCL.
- Madhya Pradesh Power Management Company signed PPA with MK Solar Energy for procurement of 25 MW of solar power.
- 129 solar RECs were traded at the IEX for an average price of Rs 12,850 while 250 solar RECs were traded for an average price of Rs 12,800 at PXIL.
- 27 projects allotted under the Batch 2, Phase 1 of JNNSM achieve financial closure as per NVVN.
- KPMG predicts that solar rooftop market could touch 4 GW cumulative installed capacity by 2016-17
- Government of India approves Rs. 1900 Billion discom loan recast.
- Andhra Pradesh announces solar policy
- Gujarat announces 5 more solar rooftop projects totaling 25 MW
- 735 solar RECs were traded at the IEX for an average price of Rs 12,500 while 425 solar RECs were traded for an average price of Rs 12,900 at PXIL.
The fourth quarter of this year compensated for all the inactivity through the rest of the year. Tamil Nadu blazed the new solar trail by announcing a solar capacity target of 3000 MW and immediately followed it with an announcement of 1000 MW of capacity additions. Andhra Pradesh followed this releasing tender documents for 1000 MW of capacity allocations. Finally Rajasthan also released an RfP inviting bids for 200 MW of solar capacity to be built in a single location. Finally, the year ended on a high with robust growth in REC trading with the month witnessing the largest REC trades.
- The ambitious Tamil Nadu solar policy announced. Target – 3 GW in 3 years
- First Solar continues to show its dominance in the Indian solar sector by tying up deals to sell its Thin Film modules to two power plants (totaling 50 MW) in Rajasthan under the second batch of the JNNSM.
- 99.25 MW capacity allocation awarded to M&B Switch Gears to setup solar power plants under the REC mechanism in Madhya Pradesh.
- Kerala announces plan to promote installation of 10,000 rooftop solar PV systems.
- Of the 2,964 solar RECs available for sale sale, 1,971 were purchased. 820 solar RECs were sold at IEX @ Rs 12,680/REC and 971 were sold @ Rs 12,500/REC at PXIL.
- CERC revises the capital cost guidelines for Solar PV projects with the new CAPEX being pegged at Rs. 8 Crores per MW.
- Kerala proposes FiT guidelines for capacity addition under Kerala’s Solar Policy.
- MNRE starts releasing performance data of power plants commissioned under Phase 1 Batch 1 of the NSM to better aid developers by giving them indicative performance (CUF data) of power plants in various regions for the months of October and November.
- Rajasthan resumes the bidding process (which was indefinitely postponed earlier this year) after a period of 11 months for 100 MW of capacity allocation (both PV and CSP) under the Rajasthan Solar Policy.
- Off-grid PV benchmark tariff and plant capacity for subsidy eligibility was revised by MNRE.
- The Ministry of Commerce announced that it would start anti dumping investigations concerning imports of all solar modules originating in or exported from Malaysia, China PR, Chinese Taipei and USA.
- 733 solar RECs were traded at the IEX for an average price of Rs 12,720 while 486 solar RECs were traded for an average price of Rs 12,100 at PXIL.
- Draft guidelines for project allocation under the second phase of the JNNSM was released by MNRE.
- Tamil Nadu releases the bid document for 1000 MW of solar power plants to allocated in early January 2013, with a pre bid meeting for prospective developers organized in mid December by TANGEDCO.
- Andhra Pradesh joined in on the action with the release of RfP for the allocation of 1000 MW of solar power under the AP Solar Policy. A pre bid meeting was also conducted in a similar vein as Tamil Nadu in mid December.
- Odisha allots 25 MW of solar PV capacity with the PPA signed for a tariff of Rs. 7.2 per kWh with ACME Bikaner which is an increase of Rs 0.2 per kWh from the previous allocation price of Rs. 7 per kWh awarded to Alex Solar for 5 MW in the state.
- CERC initiates discussions to extend the REC validity period beyond 365 days to aid renewable power developers.
- Power plants scheduled to be commissioned under the second batch of the JNNSM start coming online with the first one – a 5 MW plant in Rajasthan being commissioned by PR Fonroche (with Mahindra Solar providing EPC services) in late December.
- 931 solar RECs were traded at the IEX for an average price of Rs 12,620 while 277 solar RECs were traded for an average price of Rs 12,100 at PXIL.
The Indian solar sector is witnessing a paradigm shift with the adoption of the new L1 bidding process as opposed to the traditional reverse bidding process in view of the dropping solar prices. In addition, a new funding mechanism – the viability gap funding (VGF) mechanism is proposed to be debuted under the second phase of the JNNSM. The sector is also likely to witness the rise of BoS equipment manufacturers as EPC solutions providers over the coming years, displacing some of the entrenched stand-alone EPC stalwarts. With growing interest and sweeping changes made to the regulations to better accommodate developers, we are hopeful of seeing further meteoric growths in the solar energy sector next year.
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