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Supply emergency! 239GW PV projects may be delayed

published: 2024-06-26 18:02

Due to the inability of manufacturing capacity for critical components, such as power transformers, Indian solar developers are facing a surge in demand and supply chain bottlenecks. The delivery cycle for 220kV transformers has extended from 8-9 months to 14 months.

 According to Mercom India Research's latest report on the Indian solar market for the first quarter of 2024, approximately 143GW of large-scale solar projects are in various stages of development, with an additional 96GW of solar projects in the bidding and sale stages, leading to an explosive growth in demand for transformers.

The rapid expansion of railways, metro systems, transmission infrastructure, power projects, and solar projects, coupled with global supply chain disruptions, copper fluctuations, and raw material shortages, have driven a surge in demand for transformers, pushing up their prices. When it comes to BOS (Balance of System) components, which refer to all system components except for photovoltaic modules and mainly include inverters, mounting systems, cables, and other major equipment, the long manufacturing cycle of transformers often results in the longest delivery times. Additionally, many Indian EPC contractors are undertaking projects overseas, further increasing the export of power transformers.

Electrical steel and copper are two critical raw materials for power transformers. According to a recent report by Wood Mackenzie, over the past two years, delivery times for procuring transformers have steadily increased, ranging globally from 120 weeks to 210 weeks. Since January 2020, driven by rising copper prices, transformer prices have increased by an average of 60% to 80%, with copper prices rising by more than 40% over the same period. Globally, 25% of renewable energy projects face delays due to transformer delivery times.

A spokesperson for transformer manufacturer Shirdi Sai Electricals (SSEL) stated that the main reason for the extended global delivery times is the strong demand, coupled with the limited supply of specific components such as bushings and sensors worldwide. The company noted that this will extend delivery times in the United States to nearly three years and in India to more than a year. The company has called for government intervention to relax import policies for critical raw materials that are in short supply in India. The current capacity utilization rate of the Indian transformer industry is only 60% to 70%.

Source:PV Insight

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