Author: Solar Power Portal

Lightsource BP completes first Indian solar farm to government fanfare

Lightsource BP has completed its first utility-scale solar farm in India after bringing online a 60MW project in Maharashtra, having won the contract through a competitive 450MW tender process completed in September 2016.

The solar farm in Wagdari was awarded by Solar Energy Corporation India (SECI) to Lightsource BP as one of just two contracts to be won by non-Indian firms, after it bid for one of the lowest levels of viability gap funding (VGF) support at INR1.96 million (£21,741) per megawatt.

The project was financed in partnership with UK Climate Investments (UKCI), a joint venture between Macquarie’s Green Investment Group and the Department for Business Energy and Industrial Strategy (BEIS).

As the company’s first project of its size in India, chief executive Nick Boyle said the completion of the project was “testament to Lightsource BP’s ability to deliver”.

Construction, module supply, and technical expertise for the project were provided by Sterling & Wilson and LONGi Solar, which supplied 200,000 modules to the 97-hectare development. Project finance was provided by Rabobank.

Richard Abel, managing director of UKCI, added: “Official commissioning of the site is a major milestone towards providing clean electricity for around 20,000 homes in the Maharashtra region.

“UK Climate Investments is proud to have worked with Lightsource BP in their first solar project in India, bringing together private sector expertise and catalytic climate finance funding to support India’s transition towards a low carbon economy.”

Prior to the 43% acquisition of Lightsource by BP in December, the British solar developer had said its work with UKCI would lead to the development of at least 300MW of new Indian PV projects, as well as the acquisition of operational assets.

This was followed in April with the launch of a fund management platform by Lightsource BP and Indian private equity firm Everstone Group, with the initial Green Growth Equity Fund (GGEF) targeting £500 million to invest in green infrastructure in India.

UK exporting ‘home grown expertise’ as national deployment falters

The ongoing work has been singled out by the UK’s energy and clean growth minister Claire Perry as evidence of the UK’s ability to export its solar expertise to other markets such as India.

“I am delighted that UKCI is working alongside London-based Lightsource BP to leverage the UK’s expertise in solar and support India’s ambitions for renewable energy,” she said.

“The UK has a track record of exporting our home-grown expertise to the rest of the world and this partnership is a perfect example of the public and private sectors working together to deliver our respective climate, development and growth objectives that will benefit the entire planet.”

Once the most prolific solar developer in the UK, Lightsource BP has readily sought opportunities abroad along with a number of other British companies following the drastic scaling back of government support for new solar under the watch of Perry and her predecessors.

Since the closure of the Renewables Obligation regime in 2017, and the previous cuts to the small-scale feed-in tariff, deployment under the FiT remains around 80% lower than before. Similarly,  ground-mount solar installations have all but come to a halt as developers seek to bring forward subsidy-free projects.

Meanwhile, large scale solar remains the only form of renewable generation to be locked out of the Contracts for Difference auctions despite offering one of the cheapest forms of generation.

UK joins International Solar Alliance with visit from Indian PM Modi

Indian prime minister Narendra Modi will visit the UK on 18 April when he will welcome the country to the International Solar Alliance (ISA) as its newest member.

Following an invitation to London by prime minister Theresa May, Modi said: “My visit to London presents another opportunity for both countries to infuse fresh momentum to this growing bilateral engagement. I will be focusing on enhancing India-UK partnership in the areas healthcare, innovation, digitization, electric mobility, clean energy, and cybersecurity.”

The ISA had its founding ceremony in New Delhi last month, spearheaded by Modi and French president Emmanuel Macron, with multiple development banks signing significant partnership agreements. The Alliance has its eye on 1,000GW of PV with US$1 trillion funding by 2030, mainly through promoting skill sharing and bold international efforts to progress solar in emerging markets – particularly in countries located between the tropics.

India, which regards European innovation highly and has had a clean energy partnership with Germany for many years (Indo-German Energy Forum), is also looking for established markets including the likes of the UK – with around 13GW of installed solar capacity – to support this knowledge sharing.

Over a dozen members of the Solar Trade Assocaition (STA) will join it’s cheif executive Chris Hewitt; Upendra Tripathy, director of the International Solar Alliance (ISA); and the Department for International Development’s secretary of state Penny Mordaunt at the London Stock Exchange today to formally sign up the UK to the ISA.

“The UK solar industry has exceptional experience developing high quality, cost-effective solar projects, and on a large scale. Our members are delighted by the ambitions of the ISA which are in step with the challenges presented by climate change and which demonstrate the global importance of solar technology,” Hewitt was expected to say.

“Having the ISA standing behind projects, including billions of pounds of investment in Africa, will give developers confidence to accelerate deployment in the places that most need solar power.”

Indian power minister R.K. Singh had recently urged the Indian solar industry to look abroad and set up projects in member countries of the International Solar Alliance (ISA), but no such request has been made of developers from other countries as yet.

Frans Van Den Heuvel, cheif exeuctive of Solarcentury, which now operates in more than a dozen countries around the world, hopes to work with the ISA to “unlock further investment in these regions”.

He added: “We are very pleased to see the UK sign up to the ISA. It becomes clearer every year just how substantial a role solar and associated technologies will play in building a low-carbon global energy system fit for this century. Solar continues to set records for low costs and speed of deployment, and across Solarcentury’s global business we see many of our most ground-breaking projects in emerging markets.”

The ISA already has at least 60 signatories, of which 30 have ratified the agreement, having been launched by Modi in partnership with France back in 2015.

This week, Modi will also be visiting Sweden where he will also be discussing clean energy among a host of other topics.

BP combines with Lightsource to fuel significant solar partnership

BP is to acquire a 43% stake in prolific UK-based solar developer Lightsource in what stands to be a significant new solar partnership.

The duo will form a strategic partnership which will help fund Lightsource’s worldwide solar pipeline. BP will pay US$200 million (£148 million) for the stake over three years and gain two seats on Lightsource’s board of directors.

The company is to be renamed Lightsource BP in the process and will complement BP’s existing alternative energy business which has lacked a photovoltaic division.

Lightsource BP is to target demand for utility-scale solar projects, either connected to the grid or to corporates through private wire agreements, in the US, India, Europe and the Middle East.

Lightsource said it had a pipeline of around 6GW to deliver.

However the duo said they also saw further value in integrating solar into other divisions of BP as well as its trading teams.

Nick Boyle, group chief executive at Lightsource, said the company had chosen to partner with BP because of the duo’s matched ambitions.

“Not only does this partnership make strategic sense, but our combined forces will be part of accelerating the low-carbon transition. Solar power is the fastest growing source of new energy and we are excited to be at the forefront of this development,” he said.

It is now however BP’s first foray into photovoltaics. BP Solar – formed through various acquisitions in the 80s and 90s – was famously shuttered in late 2011 after years of sell-offs and factory closures.

At the time BP blamed “continuing global economic challenges” that had significantly impacted the solar industry, making it difficult for BP to achieve a return on its initial investment.

As a result solar had been somewhat neglected from BP’s alternative energy efforts, until now.

Bob Dudley, group chief executive at BP, said the company was “excited to be coming back to solar” after a six-year hiatus.

“While our history in the solar industry was centred on manufacturing panels, Lightsource BP will instead grow value through developing and managing major solar projects around the world. I am confident that the combination of Lightsource’s expertise and experience with BP’s relationships and resources will propel this innovative business to even more rapid growth,” he said.

Modi and May unveil £10 million UK-India solar R&D drive

The Indian and UK prime ministers Narendra Modi and Theresa May have unveiled plans to establish a joint research and development centre to support solar innovations.

Speaking earlier today at the start of the India-UK Tech Summit in New Delhi, Modi said that the Indian and UK science communities were “providing solutions for clean energy and climate change mitigation”.

“We have agreed to establish [the] India-UK Clean Energy R&D Centre on solar energy with joint investment of £10 million,” Modi added.

An Indian government release confirmed that it would be investing INR500 million (£6 million) over five years with a matching contribution from Research Councils UK as part of the Newton Bhabha Fund, an effort to bring together UK and Indian R&D sectors.

The same release stated that new efforts will be linked to both countries’ commitment to the Solar Alliance and focus on systems-level design and development.

Speaking ahead of the event, May said that she believed the two countries could “achieve great things” by collaborating, developing “new technologies and improving our cities, tackling terrorism and climate change”.

The speech kicked off May’s first international trade delegation which involves the heads of more than 30 British businesses, unveiling commercial deals which the government claims will create more than 1,300 jobs in the UK.

“This is a partnership about our shared security and shared prosperity. It is a partnership of potential. And on this visit I intend to harness that potential, rebooting an age-old relationship in this age of opportunity and with that helping to build a better Britain,” she said.

Of the delegates listed by Number 10, perhaps the most interesting from a renewable energy perspective is the presence amongst the delegation of Green Investment Bank chief executive Shaun Kingsbury. A sale of the GIB is widely considered to be nearing closure, with Macquarie the clear frontrunner.

During last year’s Autumn Statement the then chancellor George Osborne announced a doubling of the UK’s energy innovation budget, handing the now defunct Department of Energy and Climate Change up to £500 million to be invested over the next five years.

While at least half of that figures has been earmarked for nuclear technology projects, renewables would also stand in line to receive some of that figure.

Solar Power Portal contacted the Department for Business, Energy and Industrial Strategy to clarify any additional details regarding the fund, however the department has yet to respond.

India’s second wave of solar tendering offers market entry opportunity

Low tariffs and the increasing dominance of Indian corporates have made entry into the India solar market increasingly tricky over the last year, but a market correction could open up new opportunities. Major international firms started flocking to India once the Narendra Modi-led government turned talk of a 100GW solar target into a concrete action last year. However, players showed a voracious appetite for the massive capacities being tendered across the country and aggressive competition led to low tariff records being broken on a monthly basis. Even during the early stages, many industry commentators claimed the tariffs had already become too low to make viable projects. More worrying for overseas developers was a recent market update from analyst firm Bridge to India showing that Indian corporates had started to dominate the auctions.

However, speaking to Solar Power Portal at Clean Energy Live, Bob Smith, executive vice president of India-based renewables firm Mytrah Energy, said that most of the major players have now got their foot in the door and will need to focus on actually building their projects in time for strict deadlines before considering bidding for more capacity. As a result the next wave of solar auctions may see a slowing down in the involvement of these large players that have the means to bid so low. Smith even forecast that tariffs would soon stabilise and possibly even start to rise again.

“For me that initial flurry of activity is sort of over and I think there’s an opportunity now in the next round of tariff auctions,” said Smith. “There’s an opportunity now for some smaller players to come in and grab some action and probably to grab some action at a slightly better price. From our point of view we are not chasing the current round because we think it’s just too low.” 

As a result, the big players taking huge swathes of capacity is no reason to be put off trying to enter India, but the unique challenges of India need to be understood.

For example, choosing whether to aim for capacity inside the government-built solar parks or to construct a standalone project is a choice faced by new developers. Smith said that a foreign developer may enjoy the easy development process offered by a solar park where the government sorts out land acquisition, off-taker and transmission, but only by having a standalone project can one take advantage of the margin opportunities presented by having autonomy over these elements of development. For this reason domestic players may prefer to aim for standalone projects, while foreign players may avoid the extremely challenging land acquisition process but for lower project returns.

One plus point of the Indian market is that it is less reliant on the input of the government. “You are selling a product that people fundamentally want and you are selling it at a price that they are willing to pay, because you are essentially at grid parity already with solar in India. The starting point for all this is you don’t actually need that much help from the government.”

As a result, with ingenuity, players can find a way into the market regardless of government policy, which as it happens is already very favourable to the solar market.

While much of the focus has been on utility-scale solar and there are still a huge amount of greenfield sites available for development, the commercial solar opportunity is beginning to rise. The average consumer pays a very low rate for electricity, which is subsidised by the very high rate that commercial consumers pay for electricity. This means solar firms can come in and offer a tariff to commercial entities that competes with these higher prices, said Smith. The only trouble is getting funding for commercial solar at present as the off-taker credit rating can come into question.

Even with the unique challenges posed by India’s market and its strong competition, there are clearly still plenty of avenues to build successful projects across India and in the various segments. Even with multiple Gigawatts already tendered this year, this is a country that plans add roughly 12GW every year in the run up to 2022 so the impetus is there.

Smith added: “India as a country is fundamentally short of power and that gives you a sense that there will always be demand for the projects.”

Lightsource lands maiden India solar tender

Lightsource Renewable Energy, the most prolific developer of utility-scale solar in the UK, has won its maiden tender in India.

Lightsource has secured an element of the latest 450MW tender for the Indian state of Maharashtra, managed by Solar Energy Corporation of India, which will see the firm develop a 50MW ground-mount solar farm in the state.

It will receive benchmark tariff support of INR4.43/kWh (£0.05), combined with viability gap funding (VGF) of INR1.96 million/MW (£22,445).

The support framework means that upon the project’s commission, Lightsource will receive a one-off payment of £1.122 million, followed by tariff support of £5/MWh throughout the array’s operational lifetime.

Lightsource has held a long-term ambition of breaking into the exploding Indian solar market and has maintained a presence on various trade delegations between the two countries since Indian PM Narendra Modi established the country’s 100GW solar target.

The company’s maiden tender success comes less than a year after it signed a major deal to partner with infrastructure finance firm Srei Infrastructure Finance to develop as much as 3GW of utility-scale solar in the country.

Nick Boyle, chief executive at Lightsource, said: “We are delighted to be taking the first steps towards our ambitions for investment in India’s solar PV market. The Indian government has a huge appetite for solar energy and we believe that Lightsource will contribute significantly towards their targets.”

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