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30th August 2011

Hello everyone,

Welcome to the latest edition of the EAI newsletter.

The Central Electricity Regulatory Commission (CERC) has announced the revised price band for the solar and non-solar Renewable Energy Certificates. The key highlights are

  • Non-solar REC – the floor price remains unchanged. Thus biomass/wind generators are expected to get the same minimum revenue as they have been getting earlier.
  • Solar REC– the floor price has seen a cut of about 18% from current levels.

EAI has done a basic analysis of the impact of the new price band and found that REC mechanism can give higher returns compared to signing a long term PPA under a Feed-in-Tariff mechanism similar to the JNNSM. This is however dependent on the strict enforcement of the Renewable Purchase Obligations (RPO) by the State Electricity Regulatory Commissions (SERC). More details are available here.

Delhi Government has increased the electricity tariffs by 21.77% across the board. Given the precarious condition of the various state electricity boards, we can expect to see electricity tariff increase in more states. The details of the electricity tariff increase in Delhi are available here.

These and other recent developments in the solar sector are updated in EAI’s solar PV advisor. The details of the solar PV advisor are given in the next section.

You will find other news updates related to the Indian renewable energy sector in the sections below.

Take care

Madhavan Nampoothiri

EAI – Energy Alternatives India @ www.eai.in

Mob: +91-98848-29214

Email: madhavan@eai.in  

EAI India Solar PV Report – Comprehensive, Updated and Insightful

Following the successful completion of the first stage of the National Solar Mission, a number of businesses in India and outside have been keenly awaiting the final document for the Expression of Interest from the MNRE. Now that they have come up with revised guidelines, investors and entrepreneurs are charged up to best foot forward and channelize all your efforts to get allotments.

Apart from JNNSM, a few states like Gujarat, Rajasthan and Karnataka have come up with their own policies and states like Tamil Nadu, Maharashtra and Andhra Pradesh are in the process of drafting one soon.  There are going to be series of schemes and project allotments in the next few months.

EAI, the leading industry research and consulting company for the Indian renewable energy industry, had earlier in the year published its EAI India Solar PV Report targeted at developers and investors in the solar PV industry. The report was developed owing to a specific need in the market for a authoritative intelligence report that provides an idea not only about the various details of the National Solar Mission and how to benefit from the oncoming revolution in solar PV power generation, but also about the other attractive opportunities along the entire solar PV industry value chain. The report has recently been updated with the new NVVN guidelines and all the financial models have been updated based on present investment requirements and revenue possibilities.

  • Report Last Updated: August 2011
  • # of pages: 230
  • Target audience: Those keen on developing or investing in solar PV power plants in India

Key take-always from the report:

  1. The top three states in India for solar PV potential are respectively Gujarat, Rajasthan and Tamil Nadu

  2. Under the Jawaharlal Nehru National Solar Mission (JNNSM), India is expected to reach a total solar installed capacity (both PV and CSP) of 20,000 MW and a total electricity generation of 25-30 TWh per year by 2022.

  3. For the allocation in Batch II of Phase I, the CERC base price for solar PV projects is Rs 15.39/kWh.

  4.  Batch 2 of the first phase of the JNNSM allocation continues to follow the reverse bidding model with more stringent restrictions and penalties.

  5. Currently, the capital cost for a solar PV power plant using c-Si technology is about Rs 12 - 13.5 crores per MW(mid 2011), with about 50% of it going towards solar panels, 25% towards inverters and balance of systems, and final 25% towards installation and other infrastructure. This could further reduce to close to Rs. 10 crores /MW by mid-2012.

  6. Capital cost for TFPV power plants is in the range of Rs 10 crores to Rs. 11.5 Crores per MW.

  7. Under the National Solar Mission, depending on the final feed-in-tariff, investors can expect equity IRR in the range 15-19% and project IRRs in the range 12-15%. The payback period is about 8-10 years.

  8. A 1 MW solar PV power plant can generate about 1.5-1.6 million units (kWh) of electricity per year depending on the location.

  9. The levelized cost of electricity production from solar PV is about Rs 10 per kWh (including amortization costs).

  10. Business opportunities in the solar PV industry go far beyond power plants; these opportunities are present in all three sectors: manufacturing, trading and services. Among these, the largest numbers of opportunities are present in the manufacturing segment, followed by services.

  If you wish to know more about  the EAI India Solar PV Report or if you need the preview copy of the updated report, please send a note to Sumukhi Sreevatsan at  sumukhi@clixoo.com or call her at +91- 99621-40666. More details of the report can be found here - http://www.eai.in/ref/reports/solar.html .  

Major Companies who have benefited from our PV advisor report

  • Accenture – India’s leading management consulting, technology and outsourcing company - www.accenture.com

  • Reliance Solar – Reliance Solar is the solar initiative of the Reliance Group - www.relsolar.com

  • Vedanta Resources –Vedanta Resources is a diversified metals/mining company, and the first Indian manufacturing company to be listed on the London Stock Exchange.http://www.vedantaresources.com

  • Indian Railways– The largest railways in Asia - http://www.indianrail.gov.in/

  • SJVN-  A joint venture of the Government of India ( GOI ) and the Government of Himachal Pradesh (GOHP) to plan, investigate, organize, execute, operate and maintain Hydro-electric power projects - http://sjvn.nic.in/

  • NMDC - India's single largest iron ore producer and exporter, a Government of India fully owned public enterprise under the Ministry of Steel - www.nmdc.co.in

  • Emerson Network Power - A diversified global manufacturing and technology company with sales of over $25 billion - www.emersonnetworkpower-partner.com

  • Cethar Vessels - A leading boiler manufacturer - http://www.cethar.com

  • Danfoss Solar, Denmark – It is one of the largest industrial companies in Denmark. The global group is well known for its research, development and production, sales and service of mechanical and electronic components for several industries - www.danfoss.com

  • Anna University– An affiliating university, with almost all engineering colleges in the state of Tamil Nadu - www.annauniv.edu

  • Minda Group - NK Minda Group is India 's foremost manufacturer of a range of automotive components - http://www.mindagroup.com/

  • Hirco Group - Hirco Group is India's largest residential builder and leading developer of mixed-used townships - http://www.hirco.com/

  • Maharashtra Metal Powder Ltd - A leading name in the Aluminum powder and pastes sector- http://www.mmpowders.com/

  • pManifold - A consulting and support services provider for the energy, utilities and infotech industries – http://web.pmanifold.com

  • Taurian Steel - a leading iron ore exporter from India - http://www.tauriansteel.com/

  • Panchshil - Panchshil Realty is a leading name in construction, real estate development and project Management - http://www.panchshil.com/

  • Denmark Embassy - The Danish Embassy in New Delhi, www.ambnewdelhi.um.dk

  • Vimal Fire Controls Pvt Ltd (VFCPL)- Forerunner among the Indian Fire & Safety Equipment and Systems manufacturing companies – www.vimalfire.com

Stay connected to EAI at  http://www.facebook.com/IndiaEnergy


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