Bridge India

Duty announcement seems imminent

Since announcement of preliminary findings by Director General of Safeguards (DGS) last month, a decision on provisional safeguard duty has been anxiously awaited by the Indian solar industry. We understand that the government is leaning towards a 20-25% duty and the decision process is fairly advanced. In fact, a DGS Board meeting had been convened last week. But a delayed High Court hearing in response to an appeal by Shapoorji Pallonji Infrastructure Capital, a project developer, has deferred the duty announcement.

On 22nd January this year, the US government imposed 30% safeguard duty on imported solar cells and modules. The duty has been imposed for four years but will reduce by 5% every year. First 2.5 GW of imports every year shall be exempted from duties. As per WTO laws, imports from specified developing countries shall also be exempt from duties up...
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It’s raining RE tenders in India

Gujarat Urja Vikas Nigam Limited (GUVNL), Gujarat government holding company for power distribution and transmission businesses in the state, announced a new 500 MW solar tender last week. The tender has an innovative provision in the form of a 500 MW green-shoe option. If GUVNL deems the lowest auction tariff attractive, it can exercise an option to increase the tender capacity up to 1,000 MW provided bidders are willing to match the tariff. With this tender, total new RE capacity tendered in India from December 2017 onwards has gone up to 12,755 MW.

The Indian Finance Minister announced budget for the financial year 2018-19 last week. Being this government’s last budget before general elections due in early 2019, the focus was unsurprisingly on populist measures related to agriculture, rural development and health. But we still found it remarkable how little attention was paid to the entire energy sector.
  • Focus is on rural electrification,...
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Karnataka announced results of an 860 MW state solar tender last week. 11 developers have won 48 projects aggregating 760 MW at tariffs ranging between INR 2.94 – 3.54/ kWh. Big winners include Shapoorji Pallonji (185 MW), Acme (106 MW), ReNew (99 MW), Asian Fab Tech (85 MW) and Greenko (45 MW). Prominent losers include Aditya Birla, Avaada, Orange and EdF. 100 MW of the allocated capacity was reserved for domestic module manufacturers, but we expect this to be cancelled in view of the ongoing WTO dispute.

5 charts to capture 2017

2017 was an extraordinary year in many ways for the Indian RE sector. The year will be known for record capacity addition, drastic fall in tariffs and start of the new trade investigations by Indian government into imports of cells and modules. We look at 5 charts summarizing key trends for the sector in 2017. Sector added record new capacity 2017 RE...
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A mix of policy uncertainty and slowing pipeline is forcing Indian project developers, suppliers and contractors to look for opportunities anew – inorganic expansion, looking at other business segments, new markets outside India or even diversification into other parts of the energy sector.

  • Private sector players have scaled up hugely in anticipation of rapid year-on-year growth but if the market slows down permanently, there is a risk of many of them turning away to other opportunities;
  • Many developers, suppliers and contractors are looking to shift focus to the rooftop solar and open access markets;
  • Larger players are even looking to tap fast-growing emerging markets in the rest of Asia and Africa;

In our last few bulletins, we have written extensively upon the recent challenges faced by the RE sector. Here, we take a look at what to expect in 2018. The year has obviously started on a shaky note with the 70% provisional duty recommendation on cell/module imports. The trade investigations are likely to drag on for a few months and we expect an eventful year ahead, dogged by uncertainty, disputes and litigation. We already see many developers and contractors slowing execution as even a marginal duty imposition will make many projects unviable.