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Q1 INDIA SOLAR COMPASS 2020 Lockdown hurts Severe disruption in project construction as COVID-19 hits equipment supply chains and workforce availability
Page 1© BRIDGE TO INDIA, 2018
Q1INDIA SOLAR COMPASS 2020
Lockdown hurtsSevere disruption in project construction as COVID-19 hits equipment supply chains and workforce availability
© 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
Sai Siddhartha Nandamuri, BRIDGE TO INDIASamriti Chawla, BRIDGE TO INDIAVinay Rustagi, BRIDGE TO INDIA
C 8/5, DLF Phase I Gurgaon 122001 India
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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
78
3. Leading players 93.1 Project developers 93.2 Module suppliers 93.3 Inverter suppliers 103.4 EPC contractors 113.5 Domestic manufacturers 11
4. Tender progress 134.1 New tender issuance 13
204.3 Tenders cancellations4.2 Auction results
234.4 Tenders pending allocation 23
5. Equipment prices 275.1 Modules 275.2 Inverters 275.3 EPC cost 28
6. Funding 306.1 Equity 306.2 Debt funding 326.3 Mergers and acquisitions 33
7. Policy and regulatory updates 367.1 Central government 367.2 State government 38
8. Market trends and developments 418.1 Weak power demand negative for renewables 41 8.2 DGTR to investigate solar cell and module imports 428.3 Increasing regulatory interference and delays 428.4 Evolving tender designs 42
© 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.
List of figures
Figure 1.1: Total installed and pipeline capacity as on 31 March 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 Q1 2020, MW 6
Figure 2.3: Actual vs target capacity addition in Q1 2020 7 Figure 2.4: Estimated capacity addition in Q1 2020 and Q2 2020, MW 8
Figure 3.1: Leading developers by capacity commissioned in Q1 2020, MW 9Figure 3.2: Market share of module suppliers by projects commissioned
in Q1 202010
Figure 3.3: Market share of inverter suppliers by projects commissionedin Q1 2020
10
Figure 3.4: Market share of EPC contractors in Q1 2020 11Figure 3.5: Market share of domestic module manufacturers in Q1 2020 11Figure 4.1: Capacity tendered in Q1 2020 by tendering authority 13Figure 4.2: Utility scale tender issuance and auctions, MW 13Figure 4.3: Utility scale solar tenders issued in Q1 2020, MW 14Figure 4.4: Project development capacity allocation, MW 20Figure 4.5: Auction results, INR/ kWh 21Figure 5.1: BTI India Module Price Index, US cents/ W 27Figure 5.2: BTI India Solar Inverter Price Index, INR/ W 28Figure 5.3: BTI India Solar EPC Cost Index, INR/ Wp 28Figure 6.1: PE fund flow in the Indian solar sector, USD million 30Figure 6.2: Renewable stock trading pattern 31Figure 6.3: State Bank of India MCLR 32Figure 8.1: Peak power demand, MW 41
Utility scale solar capacity addition by type of tenders, MW
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List of tables
Table 4.1: Key details of tenders issued in Q1 2020 14Table 4.2: Rooftop solar tenders issued in Q4 2019 20 Table 4.3: Tenders pending allocation 24 Table 6.1: Equity transactions in the sector 30 Table 6.2: Offshore debt funding deals 33Table 6.3: M&A transactions in Indian solar sector 34Table 7.1: Jharkhand RPO targets, % 39
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Executive summary
1,864 MW of utility scale solar capacity was scheduled to be commissioned in Q1 2020. Actual completion at 689 MW, comprising 19 projects split between central government tenders (257 MW, 37%), state government tenders (415 MW, 60%) and others (18 MW, 3%) was far below the estimate partly due to COVID-19 related disruption. Effects of the pandemic were felt starting late January followed by the Chinese new year holiday and subsequent lockdown in India.
India added 989 MW of solar power generation capacity in Q1 2020 taking total installed capacity to 37,916 MW by 31 March 2020. New capacity addition was split 70:30 between utility scale solar – 689 MW and rooftop solar – 300 MW. Total utility scale, rooftop solar and off-grid solar capacity stands at 32,176 MW, 5,740 MW and 978 MW respectively.
Total project pipeline – projects allocated to project developers and at various stages of development – stood at 28,972 MW as on 31 March 2020.
Source: BRIDGE TO INDIA research, MNRENotes: ‘Others’ include projects executed under open access, REC and other
miscellaneous categories. All project capacity numbers in this report are stated in AC MW, unless noted explicitly otherwise.
Figure 1.1: Total installed and pipeline capacity as on 31 March 2020, MW
Rooftop solar 5,740
Off-gridsolar 978
NTPC offtake 3,922
Others 4,425
SECI offtake 5,455
Public sectordevelopment
1,595
Others 531
Others 129
State government
tenders16,242
Public sectordevelopment
1,150
NTPC offtake 1,400
SECI offtake 17,736
State government
tenders 8,380
Others 177
Commissioned38,894
Central government
tenders 11,503
Centralgovernment
tenders20,415
Pipeline28,972
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The government imposed complete lockdown in commercial and business activity starting 25 March. Project construction was allowed to commence from 20 April but significant slippage in commissioning progress is likely because of constraints in equipment and labour availability. We expect progress to be very slow in Q2 and Q3 2020 with capacity addition of only 500 MW and 1,184 MW respectively.
Rooftop solar has also been hit badly with only 300 MW of estimated capacity addition in the busiest quarter of the year. This market may take longer to recover as consumers prioritise core business operations and conserve cash in view of the economic uncertainty. Our revised estimate for rooftop solar capacity addition over Q2 and Q3 is 360 MW.
Despite the execution slowdown, tender issuance boomed in Q1 as SECI alone issued 9,414 MW of tenders. Total tender issuance and auctions during the quarter stood at 14,293 MW and 8,241 MW respectively.
There was a rush of policy announcements mainly related to COVID-19 and project procurement guidelines. Meanwhile, weak power demand growth has resulted in thermal PLFs falling steadily from 78% in FY 2010 to 56% in FY 2020 and spot power prices falling to around INR 2.40/ kWh. Power demand had begun to inch up gradually in January and February but then fell by as much as 25-30% towards end March as the lockdown took effect. If demand remains depressed, as widely expected in wake of the COVID-19 pandemic, renewable power prospects would be seriously affected.
Source: BRIDGE TO INDIA research
Central government tenders State government tenders Others
2,0821,856
3,833
7201,178 990
1,8851,104 1,734 1,845
5006901,184
-
1,000
2,000
3,000
4,000Q
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
e
Q3
2020
e
Figure: Utility scale solar capacity addition, MW
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