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SFCE Dec 22
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SFCE reaffirms commitment to growing US solar market
Dec 22, 2015 | Your Renewable News
Following the U.S. congress passes extension on solar investment trade credits (ITC), Shunfeng International Clean Energy Limited ("SFCE" or the "company", HK stock code: 1165) reaffirms their commitment to the U.S. solar market and their subsidiary Suniva Inc. is well positioned as the second largest solar manufacturer in US with the right... -
SFCE reaffirms commitment to the U.S. solar market; subsidiary Suniva poised for growth as solar tax credits are extended
Dec 22, 2015 | SolarServer
Following the extension on solar investment trade credits (ITC) by the U.S. congress, Shunfeng International Clean Energy Limited (SFCE, Hong Kong) reaffirms their commitment to the U.S. solar photovoltaic (PV) market. -
Beijing Air Pollution Worsens Though Red Alert Set to Be Lifted
Dec 22, 2015 | Bloomberg
Air pollution in Beijing worsened even as environmental regulators embarked on a round of inspections to evaluate emergency measures being taken in China’s north to curb the toxic levels of smog. Concentrations of PM2.5 -- the smallest particles that pose the greatest health concern ... -
The year in review: PV Tech’s top 10 stories of 2015
Dec 22, 2015 | PV Tech
By John Parnell
As expected, the global solar industry delivered another year of impressive growth in 2015 and no shortage of news for PV Tech to get stuck into. There were takeovers and bankruptcies, new money for new projects and the same old trade disputes. Governments around the world agreed to cut their carbon but offered solar varying degrees... -
EU trade case: 120 companies, associations to participate in MIP expiry review
Dec 22, 2015 | PV Magazine
By Sandra Enkhardt
The EU Commission provided a short registration deadline for solar PV companies and associations to participate as an interested party in the expiry review for the EU price undertaking. According to information obtained by pv magazine, over 120 European and Chinese companies and associations registered by Monday’s deadline. -
Sun Sets on Nevada Home Solar Subsidy
Dec 22, 2015 | BNA Daily Environment Report
By Mark Chediak and Noah Buhayar
It's about to get more expensive for homeowners to go solar in Nevada. The state's public utilities commission filed a draft order Dec. 21 that would reduce the credits that customers get when they sell power back to the grid. The so-called net metering subsidies were a strong incentive... -
India’s cutthroat solar auctions – behind the hype
Dec 22, 2015 | PV Tech
By Tom Kenning
The price of developing solar projects in India has become so low that the market is now awash with heavyweight international players looking to exploit the country’s enviable solar resources. Gaetan Tibhergain, principal investment officer at International Finance Corporation (IFC), recently described India as having the “gold medal” of... -
Energy Storage Means Never Having To Say You’re Sorry, Says Greensmith
Dec 21, 2015 | Clean Technica
By Tina Casey
We’ve been hearing big news from the US energy storage company Greensmith all year, and now there is more big news to report. Last week, Greensmith announced that the UK-based global energy company E.ON has joined in its latest round of financing, bringing the total to $18.3 million. With these two industry leaders joining forces... -
Germany's Enercon and EWE forge renewable supply alliance
Dec 21, 2015 | Recharge
By Bernd Radowitz
Germany's biggest wind turbine manufacturer Enercon and regional utility EWE plan a joint venture to develop new business concepts for local energy supply based as completely on renewables as possible, one that can be reproduced elsewhere. In a first stage, the two companies want to collaborate...
SFCE News
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SFCE reaffirms commitment to growing US solar market
Dec 22, 2015 | Your Renewable News
Following the U.S. congress passes extension on solar investment trade credits (ITC), Shunfeng International Clean Energy Limited ("SFCE" or the "company", HK stock code: 1165) reaffirms their commitment to the U.S. solar market and their subsidiary Suniva Inc. is well positioned as the second largest solar manufacturer in US with the right track of capacity expansion plan that SFCE announced at the time of acquisition in August 2015.
Last Friday, the U.S. lawmakers approved a five-year extension to the solar and wind investment trade credits (ITC) as part of omnibus spending bill, and it is believed the extension of the solar ITC will provide a significant boost to the industry and greatly facilitate the deployment of clean and affordable energy throughout the United States. According to GTM Research, it would result in 25GW of additional solar capacity over the next five years, which representing a 54 percent increase over a no-extension scenario.
"This is a fantastic development for clean energy in the United States," says SFCE CEO, Eric Luo. "This decision follows the truly transformative U.S.-led global agreement on climate and energy at COP21, reaffirming America's dedication to the clean energy revolution. The extension of the tax credits will help solidify the growing U.S. solar industry and establish clean energy as a real and affordable alternative to outdated reliance on fossil fuels. Suniva is a clear example of American leadership in the sector and the need for renewed investment in American manufacturing and products. Suniva's leading products are helping supply the growing appetite for well-made and efficient solar panels, and its capacity expansion to 400MW of Buy American Act (BAA) compliant solar products will further strengthen our competitiveness in the U.S. market."
About SFCE
Shunfeng International Clean Energy Limited (SFCE) is committed to becoming the largest low-carbon, integrated, clean energy generation provider globally. Through strategic acquisitions and integration, SFCE owns a number of well-known product and technology brands in the industry. SFCE fosters a continuous improvement in energy generation including in solar, sea water power and ground source heat pumps, combined with energy management and storage capabilities. SFCE aims to provide clean energy solutions to large scale public facilities and commercial users such as business facilities, office buildings, schools, hospitals sports stadiums and households. SFCE's energy solutions can achieve energy cost reductions of 50% - 70%, creating energy generation choices for its customers to reduce both carbon emissions and energy costs.
About Suniva
Suniva® is the leading American manufacturer of high-efficiency crystalline silicon photovoltaic (PV) solar cells and high-power solar modules. The company is known for its high-quality products, industry-leading technology, reliability and high power density. Headquartered in metro-Atlanta, Georgia, with manufacturing facilities in Georgia and Michigan, Suniva sells its advanced PV modules globally.Your Renewable News: http://www.yourrenewablenews.com/sfce+reaffirms+commitment+to+growing+us+solar+market_125483.html
Solarbe (China): http://news.solarbe.com/201512/22/94107.html
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Dec 22, 2015 | SolarServer
Following the extension on solar investment trade credits (ITC) by the U.S. congress, Shunfeng International Clean Energy Limited (SFCE, Hong Kong) reaffirms their commitment to the U.S. solar photovoltaic (PV) market.
SFCE emphasizes that their subsidiary Suniva Inc. is well positioned as the second largest solar manufacturer in U.S. with the right track of capacity expansion plan that SFCE announced at the time of acquisition in August 2015.
The extension of the solar ITC will provide a significant boost to the industry and greatly facilitate the deployment of clean and affordable energy throughout the United States. According to GTM Research, it would result in 25 GW of additional solar capacity over the next five years, which representing a 54 percent increase over a no-extension scenario.
“This is a fantastic development for clean energy in the United States,” says SFCE CEO, Eric Luo.
“This decision follows the truly transformative U.S.-led global agreement on climate and energy at COP21, reaffirming America's dedication to the clean energy revolution. Suniva is a clear example of American leadership in the sector and the need for renewed investment in American manufacturing and products. Suniva's leading products are helping supply the growing appetite for well-made and efficient solar panels, and its capacity expansion to 400 MW of Buy American Act (BAA) compliant solar products will further strengthen our competitiveness in the U.S. market.”
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Beijing Air Pollution Worsens Though Red Alert Set to Be Lifted
Dec 22, 2015 | Bloomberg
Air pollution in Beijing worsened even as environmental regulators embarked on a round of inspections to evaluate emergency measures being taken in China’s north to curb the toxic levels of smog.
Concentrations of PM2.5 -- the smallest particles that pose the greatest health concern -- rose to 435 micrograms per cubic meter at Tiananmen Square as of 3 p.m, almost double the previous day’s levels, the city’s municipal monitoring center said. The World Health Organization recommends daily average exposures of no more than 25 micrograms.
The air quality index in Beijing was 295, indicating “heavy” pollution, the local environmental monitoring center said.
Last week, the toxic smog prompted Beijing officials to issue a second red alert for the city, the highest on a four-tier warning scale. The alert, running through the end of today, has prompted school closures, traffic restrictions and limits on factory production. Air quality in the Chinese capital may improve tomorrow, the monitoring center forecasts.
Toxic smog enveloping a majority of China’s northern and eastern regions continues to apply pressure to local governments to take counter measures. Red alerts have been imposed in at least five cities including Beijing and four in the surrounding Hebei province, the Ministry of Environmental Protection said on Monday.
The ministry said it has dispatched 14 inspection teams to 11 Chinese regions to evaluate emergency actions taken to reduce pollution.
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The year in review: PV Tech’s top 10 stories of 2015
Dec 22, 2015 | PV Tech
By John Parnell
As expected, the global solar industry delivered another year of impressive growth in 2015 and no shortage of news for PV Tech to get stuck into. There were takeovers and bankruptcies, new money for new projects and the same old trade disputes. Governments around the world agreed to cut their carbon but offered solar varying degrees of opportunity to help them do so. New end demand markets made the jump from promising to promises. Underpinning all of this, and poised to do so again in 2016, are the PV technologies leaping from lab to fab and, ultimately, delivering the cost-effective energy that a power-hungry, climate-conscious world requires.
With all that in mind, the top 10 most read stories on PV Tech offer a snapshot of the good, the bad and the ugly stories that defined the solar industry’s 2015.
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At number 10, an excellent blog from ISC Konstanz’s Radovan Kopecek and Joris Libal entitled 'Bifaciality: One small step for technology, one giant leap for kWh cost reduction'. The piece includes an overview of the best environmental conditions for bifacial cells and explains why that small step offers the industry such rich potential gains in terms of LCOE and (correctly) predicts that Chile could be among the first end markets to benefit.9
It wouldn’t be the PV Tech annual top 10 stories without an efficiency record making an appearance. In at number nine is Liam Stoker’s account of Panasonic and SolarCity’s Silevo trading places within days at the top of the module efficiency leader board. That wasn’t all the two traded as Panasonic went on the offensive and challenged SolarCity to reveal more details of its own claimed record.8
While tech giant Apple garnered attention throughout the year for several major PV procurement rounds, the story that made it into the top ten owes more to schadenfreude than to any appreciation of their efforts to ‘go green’. A fire at the former GT Advanced Technologies site took 100 firefighters 30 minutes to contain and caused a section of roof to collapse. Local press photos appeared to suggest that the fire had indeed started in the vicinity of a PV array.7
At number seven is a story from PV Tech’s reporter Tom Kenning, who has had plenty to write about on his India beat this year. The specific entry making it on to the PV Tech top ten list does a rather good job of summarising the current situation in the buoyant but immature market where big promises are aplenty. In his blog post, '100GW by 2022: Behind India’s big solar numbers', Tom breaks down the raft of tenders, targets and tantalising memoranda of understanding and finds out what needs to happen if the big talk is to yield a big market.6
Number six on the list marked the first major signal that there was appetite in Washington DC to extend the investment tax credit (ITC) beyond 2016. The announcement in February by President Obama that his budget proposal included a plan to breathe new life into the ITC was a boost for the industry and demonstrated how highly the policy was valued. After nearly a year of frantic lobbying and negotiating, an extension was indeed finally agreed.5
US tech entrepreneur Elon Musk sprinkled a little of his magic dust over the renewables industry midway through the year when he unveiled plans for his much-hyped stationary storage product, the Powerwall and Powerpack battery systems. Later on in the year Musk and other executives from his company, Tesla, prompted further excitement when they suggested the that production at Tesla's Gigafactory, the facility being built in Nevada to manufacture its storage products, could be ramped much higher than initially expected. Apparently the company had devised ways of making the product more efficiently. Never one to miss an opportunity for a touch of sensation, Musk said it would be possible to shut down half the world's power plants "if you had stationary storage".4
In at number 4, a blog post from Ash Sharma and Susanne von Aichberger of market research firm IHS, giving their take on the big questions facing the global solar industry in 2015. The two analysts took on a number of the big themes currently concerning the sector, including its overall growth in 2015, the most promising emerging markets and the extent to which module and other harwdware prices would perform this year, among others. Their take on most points was broadly positive: steady growth, moderate price declines, some new markets stepping into the light. Looking back, it wasn't a bad forecast for what has been a year of decent growth for the industry, with a handful of stand-out markets - particularly China, the US and Japan.3
Another blog post at number three, this time from PV Tech's senior news editor, Mark Osborne, who took on the subject of SolarCity's planned module fab in Buffalo, New York. In 2014 SolarCity announced its intention to become the largest US PV manufacturer (as well as installer), backing up its chutzpah with the not-insignificant acquisition of module start-up Silevo. Innevitably the move raised a few eyebrows and further information on how SolarCity expects to ramp to such scales of product has been scant. The post assessed SolarCity's capabilities to deliver on its promises, based on the experiences of some of its main rivals around the world. The conclusion? Further detail required, but don't bet against SolarCity pulling it off.2
A late-year entry in at number two, the US deal to save the investment tax credit (ITC) got a huge amount of attention. After a year of fairly unoptimistic sentiments about whether the necessary political common ground could be found to save the credit, despite President Obama's intervention earlier in the year (see nuber six, above) the news it had made it on to a tax extenders bill last week was almost a bolt out of the blue. And the deal is more than many had dared hope for, offering the same 30% until 2019, before falling incrementally to 10% by 2022, at which level it will remain indefinitely. There was a last-minute wobble on Thursday last week, but the deal was finally sealed on Friday. Unsurprisingly, pundits are now predicting great things for US solar for many years to come. 1
With PV manufacturers now all planning production capacity expansions from next year and further ahead, the cell technologies they will opt for are understandably a hot topic of debate. Crystalline, thin-film, mulit, mono, CIGS CdTE... there are plenty of options out there for the next generation of PV workhorse technologies. ISC Konstanz's Radovan Kopecek and Joris Libal clearly tapped into this mood of curiosity about the next stage in the PV story with what was our top-read piece of content of the year - their blog post on the potential for n-type silicon PV to take off and challenge the predominance of p-type in recent years. Doubtless there will many who disagree, but their post certainly caught plenty of attention. -
EU trade case: 120 companies, associations to participate in MIP expiry review
Dec 22, 2015 | PV Magazine
By Sandra Enkhardt
The EU Commission provided a short registration deadline for solar PV companies and associations to participate as an interested party in the expiry review for the EU price undertaking. According to information obtained by pv magazine, over 120 European and Chinese companies and associations registered by Monday’s deadline.
This is considerably more than the number that registered two years ago, when the EU anti-dumping and anti-subsidy case was first brought against Chinese manufacturers, which resulted in the imposition of minimum import prices (MIPs) and import restrictions on the aforementioned manufacturers shipping products into the EU.
The measures are currently being checked, with the EU Commission opening an expiry review earlier this month. It could take up to 15 months to complete.
"We view it as a success, that around 80 German companies along the solar value chain have registered as interested parties – despite the tight deadline," Holger Krawinkel, spokesperson for Solar Alliance for Europe (SAFE) tells pv magazine.
The interest has also been welcomed at SolarWorld-led EU Prosun, which applied for the expiry review in Brussels. "More important than the numbers are the arguments," states Milan Nitzschke, president of the lobby group; an assessment that is shared by SAFE, despite the fact it is calling for an end to the MIP and import restrictions.
"Compared to the first survey three years ago, registrations have multiplied," says Krawinkel, "which sends an important signal to the EU that a lot of companies oppose the duties. Now it will be important to convince the commission … that the trade barriers damage the European solar industry and the climate."
Nitzschke again stressed that many of the newly registered companies have a great interest in fair competition. "There are many installers in Germany and Europe, to whom it is absolutely clear that there can be a sustainable photovoltaic market with fair competition," he states.
The registered interested parties now have the opportunity to comment on the sampling. For the expiry review, the EU Commission has named three categories: European module and cell manufacturers; EU importers; and Chinese manufacturers.
There is time until December 28 to either comment on the samples selected, or apply for an extension. Then, in January, the interested parties can give their assessments of the market situation and the EU anti-dumping measures.
The MIP undertaking will continue for Chinese manufacturers for the period of investigation, which could take up to 15 months to complete.
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Sun Sets on Nevada Home Solar Subsidy
Dec 22, 2015 | BNA Daily Environment Report
By Mark Chediak and Noah Buhayar
It's about to get more expensive for homeowners to go solar in Nevada.
The state's public utilities commission filed a draft order Dec. 21 that would reduce the credits that customers get when they sell power back to the grid. The so-called net metering subsidies were a strong incentive for individuals and businesses in the state to install their own solar panels in recent years.
The proposal comes as states across the U.S. are grappling with how to spur the development of clean energy sources while ensuring operators can collect enough money to maintain and update their grids. Warren Buffett's electric utility in Nevada, NV Energy, had proposed increased charges and reduced payments to rooftop solar customers, saying the current model forced non-solar customers to subsidize those who did use the green power.
“Under existing rates, costs are being unreasonably shifted away from small commercial and residential net metering customers to other ratepayers,” the commission said in a statement. That has resulted in “non-net metering customers paying higher rates to compensate for the reduced collection of revenue.”
The commission said annual subsidies for each residential solar net metering customer in southern Nevada averaged $623. They were $471 in northern Nevada. Under regulators’ proposal, solar customers would also have to pay increased connection charges to hook up to the grid.
Jennifer Schuricht, a spokeswoman for NV Energy, declined to comment on the net metering draft order.
Exit Fee
If approved, the draft proposal would hand another victory to NV Energy. The utility has been fighting customers who are looking to get at least some of their power elsewhere to reduce costs and draw more electricity from renewable sources. The order will need approval by Nevada's three-member commission at a meeting scheduled for Dec. 22.
Three of the largest casino operators in the state –MGM Resorts International, Las Vegas Sands Corp. and Wynn Las Vegas—filed to leave the utility earlier this year. While their proposals were approved by the PUC, the regulator said last month that they would have to pay a combined $127 million in exit fees to compensate customers who stuck with NV Energy. All three gaming companies have requested that the decision be reconsidered.
NV Energy's lobbying on the rooftop solar issue has complicated Buffett's efforts to burnish his company's green credentials. The utility unit at his Berkshire Hathaway Inc., which owns NV Energy, signed on to the Obama administration's climate pledge earlier this year. The company is one of the largest operators of wind and solar power in the country. Already, it has spent more than $15 billion developing renewable energy projects and committed to invest as much again in the years ahead.
The proposal wouldn't increase profits for NV Energy, the commission said.
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India’s cutthroat solar auctions – behind the hype
Dec 22, 2015 | PV Tech
By Tom Kenning
The price of developing solar projects in India has become so low that the market is now awash with heavyweight international players looking to exploit the country’s enviable solar resources. Gaetan Tibhergain, principal investment officer at International Finance Corporation (IFC), recently described India as having the “gold medal” of the world in terms of pricing and claimed there are no other countries where project costs are so attractive right now.
Correspondingly, the recent tariffs that developers have quoted to win capacity in the various state solar auctions have become low enough for some PV projects to be declared as having reached grid parity when compared to wind and greenfield coal-fired power plants. These winning tariffs hovering around the INR5/kWh (US$0.075) mark are described as “paradigm shifting” by some industry members, who have welcomed solar’s newfound cost-competitiveness, while others wary of project returns, viability and quality have branded it “madhouse bidding”.
Euphoria around the prices will also have been curtailed after consultancy firm Bridge to India revealed that out of 1GW of projects allocated under state policies in the past two years, nearly 40% of the capacity is either significantly delayed or cancelled for various reasons.
In any case, since July this year when Canada-based firm SkyPower won 50MW in Madhya Pradesh with what was then a record low bid of INR5.05/kWh the prices have kept tumbling, with intense competition resulting in many PV giants being shouldered out of the running in various bids. SkyPower’s submission was far lower than the 5.45 rupee benchmark set for Viability Gap Funding (VGF) by the Indian government, which meant that utility-scale solar was approaching a scenario where it no longer required government subsidies for the first time.
For the most part, the prices now consistently fall well below 5.50 rupees per unit. To give some context, the average price of winnings bids in state auctions has dropped more than 60% in five years, from INR12.16/kWh in December 2010 to a jaw-dropping INR4.63/KWh in November this year, when renewables firm SunEdison scooped the entire 500MW of capacity available for the Ghani Solar Park in Andhra Pradesh.
Japanese developer SoftBank has now matched this tariff, winning 350MW also at INR4.63 in another solar park in the same state. Jasmeet Khurana, associate director, consulting, at Bridge to India, says these latest bids mean SkyPower’s tariff now “looks attractive”.
PV Tech attended the recent Intersolar India event in Mumbai to catch up with the industry and gain an in-depth insight into the reverse e-auction process, while frenetic debates about the sub-five rupee tariffs dominated the conference.
Ministry of New and Renewable Energy (MNRE) joint secretary Tarun Kapoor says it was the first time that low bids have been seen across the country – even spreading into agricultural powerhouse Punjab where land prices are very high and irradiation not as favourable as in other states. Originally Kapoor had expected tariffs to stabilise – MNRE set the VGF at what it believed was grid parity level – but Kapoor now believes that reductions could continue for another four or five months.
He adds: “The stable tariff as of today for the country is between INR5-5.50/kWh. Anything lower than five rupees is very good.”
Clearly Kapoor welcomes the reduction in tariffs, but there is a hint that fewer than five rupees may not be sustainable. He says competition is so fierce and numerous now that when MNRE holds a pre-bid meeting, it has to hire out a large hall to accommodate all the interested players.
More optimism has been shown by energy minister Piyush Goyal, who took to Twitter to express his approval in November:
But while the ministry is showing extreme positivity in public, some industry veterans appear alarmed. Even Jigar Shah, the well-known clean energy entrepreneur and co-founder of SunEdison, who leads specialist finance company Generate Capital, said in November that tariffs under six rupees in India make “no sense” and he called for the auction process to be scrapped.
It should be noted that developers face substantial fines and penalties if they do not commission their project within their allotted timeframes.
Nevertheless, Rajnesh Trivedi, senior director, sustainable investment banking, YES Bank, says the government will continue to encourage reverse bidding, because lower tariffs mean lower prices for the consumer. Furthermore if some capacity fails to be commissioned, it is only likely to be on a small-scale in the context of India’s wider 100GW solar target. “It will not change the overall complexion of the market,” Trivedi adds. Any failed capacity will come up for bidding again.
However, for many hopeful developers, the consequences of the lower prices are less comforting. In an industry update in November, Bridge to India wrote: “India is a very competitive market and the aggressiveness of the ongoing bids will determine whether or not many of these commitments materialise. The new competitive bidding process that led to tariffs falling to INR4.63/kWh will probably mean that many of these new players will continue to look at the market from the sidelines and hope for the competition to ease before they put down their money. While India offers a very large attractive market to solar developers and manufacturers, intense competition is driving pricing down and making the risk-reward unfavourable for them.”
Bridge to India’s report on 40% of allocated projects being delayed or cancelled over the last two years under state policies is reiterated by Kamal Maheshwari, president, smart cities, at Indian integrated utility and solar developer, Essel Infra. Projects have struggled to come up even with six rupee tariffs, says Maheshwari, so it is difficult to see how they can be commissioned at under INR5 tariffs in such a short time period. However the market is enormous and Maheshwari says that once 25-35GW of capacity has been bid out to aggressive and hungry players, capacity will be left open to more “reasonable” developers.
Over-ambition in some of the low bidding has already emerged. For example, in October Gayrajan Kohli, senior manager, consulting at Bridge to India, said that discussions with an unnamed leading project developer had revealed that it may consider dropping one of the projects it won in a recent state auction through an “overly aggressive strategy”.
It was considering this action because the hit from losing the bid bond would not be as heavy as the one incurred by signing and fulfilling a power purchase agreement (PPA) for the project.
Meanwhile, It is understood that two or three projects that were won in Telangana in 2013 (at this time Telangana was part of Andhra Pradesh state) have already been hit with a tariff reduction of 0.04 rupees for missing the project completion deadline of June this year. The distribution company extended the deadline to 31 December this year and there is a likelihood that the bid may be revised further downwards if this deadline is also missed. PPA problems
It is not just aggressive developers causing concern in the industry. Relations with state governments and the PPA signing process have been major roadblocks of late.
The Madhya Pradesh Government became reluctant to sign PPAs with at least two of the winning project developers from its solar auction, because they were asking for a higher tariff than the lowest winning bidder. Meanwhile, a letter between several disgruntled PV developers revealed they were holding an emergency meeting over “severe delays” to PPA signing a full four months after the 2GW Telangana auction. The letters of approval were reportedly stuck in the chief minister’s office due to later auctions in Punjab and Andhra Pradesh receiving lower tariffs.
Bridge to India said such delays were not new, with a history of PPA refusals in the states of Chhattisgarh and Tamil Nadu specifically. It also said such uncertainty has a major negative impact on private sector confidence.
However, Prashant Panda, president, solar business of Indian developer ACME, says one should strictly avoid comparing the auctions between different states, as each bid has a unique set of criteria affecting the decisions on tariffs. These range from economies of scale, whether the plant is standalone or within a solar park, or how strong the credit rating of the off-taker is.
SunEdison, for example, won a huge capacity of 500MW in a solar park where all transmission, permitting and land acquisition is taken care of, and with the off-taker being the National Thermal Power Corporation (NTPC), which has a very strong AAA credit rating as opposed to most other Indian distribution companies. Correspondingly, financiers may even lend at higher costs of capital if the off-taker is a Discom with a low credit rating.
Quoted tariffs can also be slightly misleading. For example, Indian conglomerate Aditya Birla Nuvo’s win of 150MW in Haryana at INR5.08/kWh does not take into account the extra costs of transmission because the plant will be located in neighbouring Rajasthan and its power will have to be exported back into Haryana.
Furthermore, prices for capacity won under the Domestic Content Requirement (DCR) must take into account the 10-15% higher costs of Indian-made modules compared to Chinese imports, according to Bridge to India’s Khurana.
Fears about unrealistic bidding in November’s 500MW Andhra Pradesh auction, however, must also be tempered by the knowledge that at least nine players were confident enough to bid below INR5, with local developer Rattan Power even matching SunEdison’s INR4.63/kWh bid. Meanwhile, Softbank and three other developers also went below five rupees in December.
“Project development cost capex is coming down so quickly that you never realise what the right benchmark is,” says Moiz Saif, associate director, sustainable investment banking, YES Bank, India. “So today INR4.63/kWh might look stupid to some, but tomorrow when you have another gigawatt coming at 4.50 the 4.60 rupees starts looking like a good price.
“The way the market is growing is beyond our expectation and I think that gives a lot of credit and kudos to the government policy of getting into reverse bidding. It is aggressive, but from a consumer’s perspective, what would have been a better way of doing it?”
“Real market pricing will be discovered only when these bids which have been quoted get converted into plants,” adds Essel Infra’s Maheshwari. “Until that time it remains a guessing game rather than a solid understanding.”Business models unclear
Many commentators are unclear what the exact tactics or business models are that allow developers to be confident enough to quote such low tariffs.
“A lot of people are speculating on the bids that module prices will fall drastically,” says Vineet Mittal, vice chairman of India-based developer Welspun Renewables.
Referring to the nine companies willing to go below five rupees in the November Andhra Pradesh auction, he says that they are either disruptors or have a source of financing that is too cheap for anyone else to understand. On the other hand, some developers simply want to capture a market share.
Other commentators believe that developers see a portfolio of projects as generating a greater value than the returns of each individual project, with attractive financing options to come later on.
Project viability also increases if a project is delayed or has a long commissioning timeline, reports Bridge to India, as this helps developers reduce project costs and makes challenges such as acquiring land easier.
“Some developers exploit these uncertainties by bidding aggressively and deliberately delaying project implementation to benefit from falling equipment prices. This, of course, does not augur well for the industry particularly as international investors expect a transparent and level playing field.”
Ultimately if the low bids do result in allocated capacity not getting commissioned, Maheshwari calls on the government to introduce a cap on the tariffs, while Mittal suggests that winning bidders that fail to complete projects could be blacklisted for a couple of years to make room for other players. There will be a period of mistakes and developers not getting financing, adds Mittal, but then the tariffs will go up again.
Forecasts of a market correction have been proved wrong again and again, but many commentators still expect to see one in the next six months or so.
“Rationality is essential in the market now,” says Saif. “You don’t want to be in a position where developers bid and eventually make losses and then the sector goes in the wrong direction, so it is better that a correction happens sooner rather than later.”
The whole dialogue about Indian solar up till now has lacked the huge risk of execution, adds Mittal, from relations with local society, land acquisition, right of way and transmission permits.
Looking ahead Mittal says: “Either the ecosystem will have become more efficient and the cost will have come down drastically, or we will have stories of people selling their assets at US$1.50.”
Nevertheless, as December’s Andhra Pradesh auctions have shown, sub-five rupee tariffs could well be here to stay and there are plenty of developers showing confidence in successfully commissioning PV projects at world-beating prices across India.
The auction schedule continues with 420MW of solar park capacity in Rajasthan and 600MW in Karnataka to be tendered within the next two months.
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Energy Storage Means Never Having To Say You’re Sorry, Says Greensmith
Dec 21, 2015 | Clean Technica
By Tina Casey
We’ve been hearing big news from the US energy storage company Greensmith all year, and now there is more big news to report. Last week, Greensmith announced that the UK-based global energy company E.ON has joined in its latest round of financing, bringing the total to $18.3 million. With these two industry leaders joining forces, it’s time to close the book on that old story about wind and solar being inadequate and unreliable. Energy storage is here to stay, and thanks to companies like Greensmith, energy storage systems are getting more sophisticated and effective at managing intermittent sources of electricity.Smart Energy Storage
Greensmith is a facilitator and integrator of energy systems. We’re calling it an industry leader because of this:
Greensmith delivered one-third of the energy storage capacity installed in the United States in 2014. Its GEMS energy storage software platform is currently used by more than 20 customers for multiple applications at 50 different sites, including the single largest battery-based energy storage system deployed globally in 2014, which provides 24×7 frequency regulation services.
The GEMS platform was the topic of Greensmith’s previous announcement this fall. It involved a new layer of energy storage application for the software, enabling system owners to participate in electricity markets with the aim of getting better deals and potentially making some income off of their energy storage investment:
The new functionality provides owners and operators with a control layer for managing these aggregated front-of-the-meter and behind-the-meter energy storage systems, allowing them to integrate them into utility or ISO market communications systems so that they can use these systems to participate in resource adequacy, frequency response and other wholesale energy markets. Wind, Solar And Energy Storage
Greensmith already has the US company American Electric Power under its financial belt, and the new investment by E.ON brings it full force into the European market. The company has 33 million customers in Europe, Russia, and Turkey, as well as North America.
As a provider of conventional power as well as wind and solar, E.ON is in a tricky position. Until the energy storage market fully penetrates, conventional power sources will still be needed, but they will need some form of support to remain viable. E.ON’s strategy is to create a new company called Uniper to handle the old school technology, while the “future” E.ON leads the vanguard in energy storage and other emerging developments related to clean power. E.ON articulated its new energy position last year:
Customers no longer see themselves exclusively as the recipients of power, gas, and heat service. They are taking greater interest in the source and sustainability of their energy supply. And many are already active as self-generators and energy-efficiency managers. Alongside changing customer needs, policy and regulatory decisions of recent years have also placed an increasing emphasis on renewables, distributed generation, and energy efficiency. As a result of these developments, the traditional energy value chain is fragmenting into an increasing number of discrete market segments. This creates opportunities for new specialized market entrants and makes competition even keener.
Speaking of clean power, while some nuclear energy fans have slotted nuclear power plants into the “clean power” category, apparently E.ON is not so inclined. With some countries (Germany for example) ramping down their nuclear stake, Uniper will take up the “old” E.ON’s nuclear operations as well as its fossil sources, and according to some reports the “new” E.ON plans to ratchet down its stake in Uniper by 2018. What Does Energy Storage Mean For Natural Gas?
The US ban on crude oil exports has just lifted after a 40-year stint, and fossil companies are most likely hoping that US policy on natural gas exports will also loosen up.
To that end, the natural gas lobby has been trying to make a political case, arguing that the US can save Europe from dependency on Russia for much of its natural gas supply.
Our friends at Forbes disagree, pointing out in great detail that the global gas market doesn’t work that way.
We’re thinking that the emerging energy storage market, as exemplified by the E.ON investment, throws another significant factor into the mix, further undercutting the geopolitical case for ramping up US gas exports.
If you’re thinking along those lines (or not), please share in the comment thread.
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Germany's Enercon and EWE forge renewable supply alliance
Dec 21, 2015 | Recharge
By Bernd Radowitz
Germany's biggest wind turbine manufacturer Enercon and regional utility EWE plan a joint venture to develop new business concepts for local energy supply based as completely on renewables as possible, one that can be reproduced elsewhere.
In a first stage, the two companies want to collaborate on providing locally generated renewable energy to the district of Aurich in northwestern Germany, where Enercon is headquartered.
EWE is based in nearby Oldenburg and has a vast capacity of renewable generation, among other areas in offshore wind.
In a second stage, the partners want to use the technical solutions required for this to develop standardised and transferable elements of a building-block system for Germany's energy turnaround.
"This vision should become reality in the Aurich district and lead to innovative network system solutions that can then be successfully provided in other areas of Germany as well as in selected foreign markets," said EWE chief executive Matthias Brückmann.
Enercon will contribute its skills regarding the electrical properties of wind turbines, power electronics and project planning to the collaboration, while EWE will provide its expertise in the area of grid construction, network operation and control technology, smart grids and telecommunications.
The planned JV is subject to approval by regulatory authorities.
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