Saturday, November 7, 2015

500 MW of NSM bids in Andhra Pradesh to close below INR 5.37/kWh

Photo Credit Greentech Lead
First round bid results have been released today for the 500 MW National Solar Mission (NSM) tender in Andhra Pradesh. Bids were submitted for over 5.5 GW by 30 developers with tariffs ranging between INR 5.21/kWh and INR 6.45/kWh. 28 developers have been selected to move to the second round of electronic bidding and the highest qualifying bid to move into the second round stands at INR 6.01/kWh.
  • The winning bids in the online bidding tomorrow will be INR 5.37/kWh or lower
  • If there was no requirement for these projects to be inside a solar park, the cost-adjusted maximum tariff could have been INR 5.11/kWh
  • BRIDGE TO INDIA believes that in view of around 5 GW of projects due for auction in the next 3 months, such aggressive bidding is unlikely to continue
Trina Solar is believed to have quoted the lowest tariff of INR 5.21/kWh, followed by developers such as First Solar at INR 5.35/kWh, SunEdison at INR 5.37/kWh, Energon at INR 5.39/kWh, Renew Power at INR 5.39/kWh, Aditya Birla at INR 5.45/kWh, Essel Green at INR 5.49/kWh and Tata Power at INR 5.49/kWh, all quoting tariffs below INR 5.50/kWh. SoftBank, whose bid has been anticipated for some time now, played relatively safely with a tariff of INR 5.65/kWh. Some of the other prominent bidders who have moved to the second round include Reliance at INR 5.52/kWh, JSW Power at INR 5.71/kWh, Azure at INR 5.73/kWh, Fortum at INR 5.75/kWh, Acme at INR 5.89/kWh, Welspun at INR 5.90/kWh, SkyPower at INR 5.94/kWh and Hero Future Energies at INR 6.01/kWh. Suzlon is one of the two bidders who will not move into the second round of the bid.
With the entire 500 MW getting subscribed by just three bids at and under INR 5.37/kWh, the winning bids tomorrow will definitely close below INR 5.37/kWh. In this second round of bidding tomorrow, bids are likely to go down even further. However, BRIDGE TO INDIA is of the opinion that tariffs below INR 5.25/kWh will move into the realm of being unattractive investments.

There are two schools of thought on how to interpret these tariffs for future guidance. The first is that because Andhra Pradesh solar park has relatively very high solar park charges (refer) and most of the bidders will end up being unsuccessful, future bids in Rajasthan and Karnataka will be even more aggressive, probably breaching the INR 5.00/kWh level. The second school of thought is that the tariffs have already reached unsustainable levels and competition in this tender is higher because this is the first NSM tender after a long time. But as several new tenders are on the anvil, we will see some rationalization of tariffs in the next few months.
We will find out which school of thought is correct in the days to come.
Original Post: bridgetoindia

Make in India, don’t just make do in India




An Indian woman about to marry a Chinese man was warned by a friend, "Don't do it, he won't last". The joke was doing the rounds at a time in the '90s when cheap and flimsy Chinese products had flooded the Indian market. Like all good jokes, there was a hint of truth in the punch line. Smuggled Chinese torches fell apart after a few blinks of light, cheap cordless phones looked good but rarely worked, as did digital watches, sports shoes, electric pumps and bicycles. The rush to imitate the world's material goods and resell them was a dismal public relations phenomenon for China. People across the globe suffered the indignity of second-rate Chinese products. The bad publicity however was an essential introduction to the country's developing abilities, and ensured the Chinese their future prospects in the global market. Things could only get better. 

They did. After a decade of poking fun at the Chinese, Indian ridicule has turned into admiration. Both the quality and range of items improved so much that they began to draw outsiders to China's celebrated markets for a bonanza of international sales, export and clever marketing. In fact, two years ago when designing an office building in Bangalore, our client insisted that all the construction finishing material be procured from there. A trip to Guangzhou's construction material warehouses spared me the tedious detail of shopping and haggling for lights, plumbing fixtures, wiring, flooring and plaster boards in a variety of markets spread over Bangalore. Instead, a golf cart whisked me through miles of displays, while I made the selection. At the end of the day, the shipment was on its way to Chennai. 

If there are any lessons to be learnt from the 'Made in China' model, it is the necessity of following the rigorous path of imitation, self-assessment, invention and application. The Modi Make in India campaign however is meant merely to promote industrial growth. Cheap Indian labour and skills are to be directed towards producing cars, chemicals, textiles, electronics and inviting foreign companies for mining, tourism, aviation and biotechnology. The objective of improving GDP growth by attracting foreign capital makes India nothing more than a destination for product outsourcing. There is little incentive to plough funds into the important arena of research and development. Foreign companies that do invest in research direct their work primarily to the home market. Indian companies barely use a tenth of their profits for new experiments; consequently India — despite being one of the largest economies — ranks a lowly 76 on the Global Innovation Index. 

By their own admission, even industrialists say that their immediate goals are merely to increase profits and production. While upscale cars like BMW and Audi begin manufacturing operations in India, Indian car makers themselves only promote expensive models. In cities with dangerous pollution levels, shouldn't a zero-carbon car or solar bus be part of the Make in India campaign? Many builders construct luxury villas and million-dollar vacation homes. Does this make sense in a country with a shortfall of over six million urban homes in the low and mid-level housing sector? The campaign's promotion of the tourism industry similarly overlooks the structure of Indian domestic travel and seeks large scale high-end hospitality. When 60 million Indians are on the move annually, wouldn't a restructuring of domestic hotel and travel facilities make more sense? 

Most countries rely on their own initiatives to create effective solutions. The pod hotel — where guests are literally inserted into a drawer bed for the night — is the outcome of a Japanese requirement to reduce hotel space. Japan's Kochofucu factory came up with an air-conditioned jacket. Rather than cooling a whole room, the wearer merely dons the jacket in summer and plugs in to the nearest socket. A Swedish inventor, while in Africa, constructed a device that absorbs harmful dust particles in a 50-foot radius. In parts of West Africa, rural schools are assembled from pre-fabricated parts in a matter of days. There could be no better market for all four devices than India. Yet the Indian mind — and Make in India in particular — promotes ideas and projects that are neither relevant to Indian conditions, nor promise any gain in innovation. 

Unless the Make in India campaign can put its mind to making life less of a struggle for Indians through innovations for rural schools, latrines, urban transport, housing, water supply, cooking fuel and energy, it will peter out into a hollow slogan. The campaign's unspoken agenda should not only lift millions out of poverty, but provide an enriching physical landscape for their lives. That however would require some serious seasoned thinking beyond the scope of mere economics and GDP. 

The writer is an architect.


Original Post : TOI