covid related disruption causes sharp slowdown in project ...€¦ · border disputes with china...

© BRIDGE TO INDIA, 2018

Q2INDIA SOLAR COMPASS 2020

Lost quarterCOVID related disruption causes sharp slowdown in project construction; government mulls duties to spur local manufacturing

© BRIDGE TO INDIA Energy Private Limited, 2020This report is for use only by authorised, paying subscribers of BRIDGE TO INDIA Energy Private Limited. Unauthorised use, reproduction, production, distribution and transmission of this report is expressly not permitted.

TERMS OF USE

© 2020 BRIDGE TO INDIA Energy Private Limited

Authors

Dhruv Tyagi, BRIDGE TO INDIASai Siddhartha Nandamuri, BRIDGE TO INDIASamriti Chawla, BRIDGE TO INDIAVinay Rustagi, BRIDGE TO INDIA

C 8/5, DLF Phase I Gurgaon 122001 India

www.bridgetoindia.com

For all other enquiries,please contact

[email protected]

Subscribe to our reports [email protected]

Track the Indian renewable powersector with our reports and blogwww.bridgetoindia.com/reports

This report is owned exclusively and is meant for use only by authorised, paying subscribers of BRIDGE TO INDIA Energy Private Limited and is protected by Indian copyright, international copyright and intellectual property laws.

BRIDGE TO INDIA hereby grants the user a personal, non-exclusive, non-transferable license to use the report pursuant to the terms and conditions of this agreement. The user cannot engage in any unauthorized use, reproduction, distribution, publication or electronic transmission of this report or the information/forecasts therein without the express written permission of BRIDGE TO INDIA.

The information contained in this report is of a general nature and is not intended to address the requirements of any particular individual or entity. BRIDGE TO INDIA aims to provide accurate and up-to-date information, but is not legally liable for accuracy or completeness of such information.

REPORT PURCHASE

To purchase the full report, please write to [email protected]


Contents

Executive summary 1

1. Commissioned and pipeline capacity 4

2. Capacity addition 62.1 Performance of states 62.2 Progress on key projects2.3 Estimate for next two quarters

77

3. Leading players 93.1 Project developers 93.2 Module suppliers 93.3 Inverter suppliers 103.4 EPC contractors 103.5 Domestic manufacturers 11

4. Tender progress updates 134.1 New tender issuance 13

184.3 Tenders cancellations4.2 Auction results

224.4 Tenders pending allocation 22

5. Pricing update 275.1 Modules 275.2 Inverters 275.3 EPC cost 28

6. Funding 296.1 Equity funding 296.2 Debt funding 306.3 Mergers and acquisitions 32

7. Policy and regulatory updates 357.1 Central government 357.2 State government 367.3 Others 36

8. Market trends and developments 388.1 Falling module prices bring cheer 38

8.2 Manufacturing-linked solar tender PPAs yet to be signed 388.3 First round-the-clock auction heralds a step away from vanilla solar 388.4 Border dispute leads to manufacturing push 398.5 States resist amendments to the Electricity Act 398.6 Bank funding dries up 39


List of figures

Figure 1.1: Total installed and pipeline capacity as on 30 June 2020,MW

4

Figure 1.2: State-wise utility scale solar commissioned andpipeline capacity, MW

5

Figure 1.3: Top 20 developers by commissioned capacity, MW 5

Figure 2.1: 6

Figure 2.2: State-wise utility scale solar capacity addition in Q2 2020, MW 6

Figure 2.3: Estimated capacity addition in Q3 and Q4 2020, MW 8 Figure 3.1: Leading developers by capacity commissioned in Q2 2020, MW 9

Figure 3.2: Market share of module suppliers by projects commissionedin Q2 2020

9

Figure 3.3: Market share of inverter suppliers by projects commissionedin Q2 2020

10

Figure 3.4: Market share of EPC contractors in Q2 2020 10Figure 3.5: Market share of domestic module manufacturers in Q2 2020 11

Figure 4.1: Capacity tendered in Q2 2020 by tendering authority 13Figure 4.2: Utility scale solar tender issuance and auctions, MW 13Figure 4.3: Utility scale solar tenders issued in Q2 2020, MW 14Figure 4.4: Project development capacity allocation, MW 18Figure 4.5: Auction results, INR/ kWh 19Figure 4.6: Bid results for NHPC Pan India Solar, 2,000 MW 20Figure 4.7: Bid results for SECI Pan India RTC Tranche-I, 400 MW

(Solar-Wind-Storage Hybrid)21

Figure 5.1: BTI India Module Price Index, US cents/ W 27Figure 4.8: Bid results for SECI Pan India Solar Tranche-IX, 2,000 MW 21

Figure 5.2: BTI India Solar Inverter Price Index, INR/ W 27Figure 5.3: BTI India Solar EPC Cost Index, INR/ Wp 25Figure 5.4: BTI India Rooftop Solar EPC Cost Index, INR/ Wp 28

Figure 6.1: PE fund flow in the Indian solar sector, USD million 29Figure 6.2: Renewable stock trading pattern 30Figure 6.3: State Bank of India MCLR, % 31Figure 8.1: Total lending exposure of government Fls and banks to the

power sector, INR billion40

Utility scale solar capacity addition by type of tenders, MW


List of tables

Table 4.1: Key details of tenders issued in Q2 2020 14Table 4.2: Rooftop solar tenders issued in Q2 2020 18 Table 4.3: Tenders pending allocation 22 Table 6.1: Equity transactions in the sector 29 Table 6.2: Offshore debt funding deals 31Table 6.3: M&A transactions in Indian solar sector 33Table 7.1: Revised prices for solar and non-solar RECs 36

© BRIDGE TO INDIA Energy Private Limited, 2020Page 1This report is for use only by authorised, paying subscribers of BRIDGE TO INDIA Energy Private Limited. Unauthorised use, reproduction, production, distribution and transmission of this report is expressly not permitted.

Executive summary

Capacity addition was significantly below our estimate of 500 MW in the quarter due to extended lockdown and consequent effect on movement of people and goods. Construction activity picked up towards the end of the quarter, but labour shortage and restrictive work practices continued to affect progress.

India’s total solar capacitygrew to 38,377 MW by

June 2020

India added just 351 MW of solar power generation capacity in Q2 2020 taking total installed capacity to 38,377 MW by 30 June 2020. Capacity addition was down sharply (64% decrease QOQ) due to COVID related constraints. New capacity addition was split 60:40 between utility scale solar – 211 MW and rooftop solar 140 MW. Total commissioned utility scale, rooftop solar and off-grid solar capacity stands at 32,497 MW, 5,880 MW and 981 MW respectively.

Total project pipeline – projects allocated to project developers and at various stages of development – stood at 42,229 MW as on 30 June 2020.

Figure: Total installed and pipeline capacity as on 30 June 2020,MW

Source: BRIDGE TO INDIA research, MNRENotes : ‘Others’ include projects executed under open access, REC and other

miscellaneous categories. All project and tender capacity numbers in this report are stated in AC MW, unless noted explicitly otherwise.

Rooftop solar5,880

Off-gridsolar981

NTPC offtake3,922

Others4,602

SECI offtake 5,555

Public sectordevelopment

1,595

State government

tenders16,224

Public sectordevelopment

1,100

NTPC offtake 1,400

SECI offtake 28,606

State government

tenders 8,806

Others227

Commissioned39,358

Central government

tenders 11,671

Centralgovernment

tenders33,195

Pipeline42,228

Others599

Others2,089

© BRIDGE TO INDIA Energy Private Limited, 2020Page 2This report is for use only by authorised, paying subscribers of BRIDGE TO INDIA Energy Private Limited. Unauthorised use, reproduction, production, distribution and transmission of this report is expressly not permitted.

Rooftop solar added only 140 MW capacity in the quarter. The sector is struggling with contraction in demand, higher working capital and payment delays. Our estimate for rooftop solar capacity addition over Q3 and Q4 is 600 MW (23% decrease YOY).

Tender issuance dropped by 65% in comparison to Q1 2020. 14 utility scale solar tenders (10 utility scale solar, 3 floating solar and 1 solar-wind hybrid) aggregating 5,053 MW were issued in Q2 2020. SECI issued 3 new tenders accounting for nearly half of total tendered capacity. Tender issuance by states dropped by 87% over previous quarter.

Module prices fell sharply during the quarter to US cents 16.5/ W for multi-crystalline modules and US cents 17.5/ W for mono-PERC modules. However, we expect prices to recover in the coming quarters. EPC cost for rooftop solar installations remained unchanged at INR 32.5/ Wp because the reduction in module prices was offset by rise in BoS prices.

There were significant developments on policy front. MNRE issued guidelines for tariff based competitive bidding process for procurement of 2,500 MW ‘blended wind’ power. Border disputes with China have strengthened calls for ‘Make in India’. In addition to extending safeguard duty by a year, there are proposals to levy 20% BCD on cell and module imports for an extended period of time. Other incentives such as 5% interest subvention and production-linked subsidies are also under consideration.

Project construction is expected to pick up pace over the coming quarters. We expect 4,720 MW to be commissioned in H2 2020, bringing total commissioned capacity for 2020 to 5,620 MW. This is the lowest capacity addition over the last 3 years. Lower equipment prices and lifting of lockdown related restrictions should help developers bounce back with higher capacity addition in 2021.

Figure: Utility scale solar capacity addition, MW

Source: BRIDGE TO INDIA research

Central government tenders State government tenders Others

-

2,000

4,000

6,000

8,000

10,000

-

1,000

2,000

3,000

4,000

5,000Q

3 20

17

Q4

2017

Q1

2018

Q2

2018

Q3

2018

Q4

2018

Q1

2019

Q2

2019

Q3

2019

Q4

2019

Q1

2020

Q2

2020

Q3

2020

e

Q4

2020

e

Moving 12 month average (RHS)

Module prices fell sharply during the quarter but we

expect prices to recover slightly in the coming

quarters

Border disputes with China have strengthened calls for

‘Make in India’ with the government considering

proposals to levy BCD on cell and module imports

For subscription enquiries, please contact – [email protected]

Subscribe to the most comprehensiveinsight into India’s burgeoning RE sector

India RE Weekly Our analytical comment on latest developments in the sector

India Solar CompassA quarterly sector update covering project and tender progress, auctions, industry players, policies and other market trends

India RE Policy Brief and India RE Market Brief A series of 6 reports across the year with a deep dive into critical issues facing the sector

Analyst time Your chance to ask us what you want, when you want

covid related disruption causes sharp slowdown in project ...€¦ · border disputes with china...

Documents