Indian power giants oppose solar cell imports from China!
In a recent case before India's Central Electricity Regulatory Commission (CERC), Indian power giant NTPC has opposed a solar developer's plan to continue importing solar cells at higher prices.
Pune-based solar developer Solairepro Urja Pvt Ltd filed a case with CERC seeking compensation.
The company is seeking compensation for the increase in safeguard duty imposed on solar cells imported from foreign countries such as China. The Government of India imposed higher tariffs on such imports in July 2018 and has not taken adequate steps to explore other options that could reduce the higher costs. As a purchaser of renewable power from Solairepro, NTPC objected to imports from China.
He reasoned that "the applicant has failed to demonstrate any action taken to mitigate the increase in cost and continues to source solar cells from China even after the imposition of safeguard duty, resulting in increase in CIF cost of the equipment. Therefore, the Commission should not allow the increase in cost without taking mitigating measures and should not pass on the cost to the Andhra Pradesh State Electricity Distribution Company, NTPC and the consumers at large."
What is this case all about?
Solairepro Urja is developing a 250MW solar project at the Kadapa Ultra solar power plant in Andhra Pradesh.
NTPC is the nodal agency facilitating power purchase and sale through its subsidiary NTPC Vidyut Vyapar Nigam Limited (NVVN). Andhra Pradesh South Power Distribution Company Limited (APSPDCL) and Andhra Pradesh Eastern Power Distribution Company Limited (APEPDCL) are the distribution companies in the state of Andhra Pradesh and are also respondents in this case.
Solairepro Urja submitted its bid for the project on December 14, 2016.On December 11, 2017, Solairepro Urja signed a power supply agreement with NTPC and Andhra Pradesh State Power Distribution Company.On February 7, 2018, Solairepro Urja signed a power purchase agreement with NTPC. The planned commercial shipment date is February 9, 2019.
However, Solairepro said the higher tariffs (imposed by a notification in 2018) on solar cell imports jacked up its total cost and demanded compensation accordingly.
"During the implementation of a solar project, letting the modules sit idle at the project site significantly reduces the performance and hence the solar modules are procured at the end of the project implementation. Even under the original plan for the Power Purchase Agreement (with a planned commercial shipment date of February 10, 2019), the modules should have been scheduled to be received at the project site several months prior to the planned commercial shipment date.
Therefore, it is unlikely that these components could have been scheduled for import before July 30, 2018 (the date of implementation of safeguard tariffs).The notification of implementation of safeguard tariffs on July 30, 2018 was notified. Therefore, it is practically impossible to expect the applicant to mitigate the impact of the safeguard tariffs before then."
CERC Final Order
It is well established that renewable energy companies are entitled to compensation when CERC approves such action as a "change in law" event.
In this case, after hearing NTPC and Andhra Pradesh State Electricity Distribution Company (APEDC), CERC declared the hike in solar cell import tariff as a 'change in law' and awarded compensation to the companies involved.
"The safeguard duty was levied through the Safeguard Tariff Notification, 2018 on July 30, 2018, i.e., after the submission of the tender by the applicant (December 14, 2016) and prior to the date of planned commercial shipment of the project (i.e., February 9, 2019)," it said. Therefore, considering the principles identified in the preceding clause, we are of the view that the applicant can avail the protection of the 'Change in Law' clause in Clause 12 of the Power Purchase Agreement."
The CERC order also added: "The Commission is of the view that the compensation for imposition of 'safeguard duty' shall be paid by the applicant and the respondent in a lump sum in a time-bound manner within sixty days from the date of issuance of this order or within sixty days from the date of filing of the claim by the applicant (whichever is later) with effect from July 30, 2018, failing which a surcharge on late payment shall be levied in accordance with the Power Purchase Agreement. Alternatively, the parties may mutually agree on a mechanism for payment of such compensation in the form of an annuity for a period not exceeding the term of the power purchase agreement at a percentage of the agreed tariff in the power purchase agreement."
India's First Anti-Dumping Sunset Review Final Ruling on China's EVA Plastic Sheets for Solar Modules
Beyond the case, there is one other recent official Indian development of interest.
On December 28, 2023, India's Ministry of Commerce and Industry (MoC&I) issued a public notice, making the first anti-dumping sunset review affirmative final determination on EVA plastic sheets (Ethylene Vinyl Acetate (EVA) Sheet for Solar Module) originating from or imported into China, recommending to continue to levy anti-dumping duties on the Chinese products involved for a period of five years. The company recommended to continue to impose anti-dumping duties on the Chinese products in question for a period of five years.
Ltd. was US$590 per ton, and the other producers were US$897 per ton. The Indian customs codes of the products involved are 39201011, 39201019, 39201099, 39206190, 39206290, 39209919, 39209939, 39209999, 39209099.