Second half of 2018 begins with a bang

The first week of July saw a broad range of developments in clean energy, affecting technology costs, factories, investment and policy. Solar tariffs in India made headlines again — reaching back to the record low levels seen last year — as did Tesla’s successful race to a self-defined finish line for car output, though doubts remain about the sustainability of the pace of production seen in the last week of June.

Solar tariff hits Rs 2.44 again: India’s solar tariffs, which had been inching up over the last few months, touched the record low of Rs 2.44 per unit once more in last week’s auction of 2,000 megawatts by Solar Energy Corporation of India. The other winning bids in the auction were all below Rs 2.55.

Solar panel prices have been declining, and will continue to slide down as more efficient products that generate more power per unit area find their way to an oversupplied market. Panels are also becoming a smaller part of the cost of a solar plant — from 58 per cent in 2010 to about a third currently, as per Bloomberg NEF’s global benchmark capex for megawatt-scale systems. By 2025, the cost of a panel is forecast to fall to a little over a quarter of a rapidly declining figure for the total capital cost of a solar project.

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“We did it!!”: This is what Elon Musk, Tesla’s chief executive officer, told his team in a congratulatory email sent out on  July 1. Tesla managed to beat its target of producing 5,000 units of its Model 3 electric sedan per week. Output reached 5,031 units in the last week of the last quarter. Can this rate be sustained? Musk was confident, and said the company was on track to reach a production level of 6,000 units per week in August. “I think we just became a real car company...,” he said.

Sovereign wealth funds and renewables: Six of the world’s largest sovereign wealth funds, from Norway, Kuwait, Saudi Arabia, Qatar, the UAE and New Zealand, met in Paris last week to align their climate strategies. They reportedly agreed to two things: 
  • To nudge companies they invest in to include a strategic assessment of climate change risk and to look at low-carbon-use plans
  • To commit a part of their funds to renewable energy investments
If Norway’s sovereign wealth fund – the world’s largest at over $1 trillion – was to commit even 5 per cent of its portfolio to renewables, it would translate into an investment of over $50 billion, or almost a sixth of global investment in clean energy in 2017.

US Environmental Protection Agency has a new head: As Scott Pruitt resigned last week amidst allegations of ethical missteps and abuses of power. Andrew Wheeler, a former lobbyist for a large US coal company and the EPA’s second most senior official, has taken over as acting administrator. The change is unlikely to lead to any dramatic alteration of policy.

The author is editor, Global Policy, for Bloomberg New Energy Finance. She can be reached at vgombar@bloomberg.net


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