FY12 Wind based capacity addition to be 2800 MW…

ICRA has published a Press Release on 10th January 2012, predicting the wind based capacity addition during the FY 2011 – 12 and thereafter. As per the ICRA, the wind based capacity addition during the current FY be around 2800 MW as against the 2350 MW during last FY. The same may grow at an annual rate of 15% going forward.

 

The key drivers of the wind based capacity addition are (i) growing demand from Independent Power Producer (IPP) segments (ii) commencement of trading of Renewable Energy Certificates (REC) on Power Exchanges as well as long-term certainty over the floor/cap pricing mechanism of REC.

 

Further, according to ICRA, the spiraling international cost of conventional energy sources and persistent domestic fuel shortages make wind energy more cost-competitive. 

The new wind-based projects/IPPs may prefer the REC route against the preferential tariff route, and within the REC route, many IPPs would prefer to sign their power purchase agreements (PPAs) with discoms at their average power purchase cost (APPC) instead of selling on merchant/short-term basis. This is due to open-access and banking facility constraints and volatility in merchant tariffs, although the merchant option under the REC route is the most remunerative option available.

According to ICRA, following issues could adversely affect the capacity addition of wind projects.

• Implementation issues in complying with Renewable energy Portfolio Obligation (RPO) norms due to lack of consistency and a wide divergence in RPO norms across states, risk of any amendment in RPO norms by SERC (as observed in few states), no precedence of any enforcement of penalty on obligated entities† for shortfall in RPO & absence of regular monitoring of RPO compliance by state agencies
• The counter-party credit risks of state utilities in most of the states having wind energy potential have increased significantly as evident from persisting defaults to wind mills in the states of Tamil Nadu and Rajasthan.
• Execution risks associated with strengthening of the intra-state transmission network beyond the inter-connection point remains a challenge for the utilities across the states, also given their weak financial position
• With respect to tariff regulations, implementation of wind-zone specific tariffs (as devised by CERC in its generic tariff principles) remains uncertain in Maharashtra, which is the first state to adopt such tariffs. On the other hand, preferential tariffs continue to vary across the states, and remain fixed for a longer control period which could impact the returns of new projects commissioned

 

Free download of the Report

Read More...

GVK Power & Infrastructure – Stock Update…

According to Mr. Manoj Murlidharan Vayalar, Associate VP Derivatives, IIFL PReMIA,stock prices of  GVK Power & Infrastructure can test the level of Rs 17.20.

 

According to Mr. Murlidharan,

"In GVK Power & Infrastructure in last seven days there is good accumulation happening. But the thing is you know it's beaten down very badly. The thing is there is some investment or possibly some traders were taking at least long positions in that. So I would still bet on GVK Power. Around Rs 17.20 odd is what we can expect in that at least in the short term."

The company's trailing 12-month (TTM) EPS was at Rs 0.43 per share. (Sep, 2011). The stock's price-to-earnings (P/E) ratio was 31.58. The latest book value of the company is Rs 16.05 per share. At current value, the price-to-book value of the company was 0.85.

Stock Chart (Courtsey:Moneycontrol)

Read More...

Power Trading update – 9th Jan 2012

Power Trading snapshots of two major exchanges  IEX (Indian Energy Exchange) and PXI (Power Exchange of India) for 9th January 2012. On IEX around 52544 Mn Units were sold as against demand of 68071 Mn Units. Similarly on PXI around 3974 Mn Units were sold as against demand of 4419 Mn Units. Detailed report of both the exchanges are depicted below:

 

 

 

Market Snapshot on IEX

Category	Purchase Bid (MWh)	Sell Bid (MWh)	Unconstrained MCV(MWh)	Constrained MCV (MWh)	Unconstrained MCP(Rs/MWh)
Total	68070.9	52544.5	37529.09	31219.87	-
Max	3926.7	3316.9	1961.2	1662.7	4588.85
Min	1994.4	1409	934.2	862	1769.15
Average	2836.29	2189.35	1563.71	1300.83	3411.71

 

Market Snapshot on PXI

Category	Purchase Bid (MWh)	Sell Bid (MWh)	Unconstrained MCV(MWh)	Constrained MCV (MWh)	Unconstrained MCP(Rs/MWh)
Total	4418.85	3974.39	1059.49	599.6	--
Max	252.07	267	129.81	53.74	7010
Min	65.53	75.81	12.07	7.35	2060
Average	184.12	165.6	44.15	24.98	3952.5

 

Legends:

• MCV : Market Clearance Volume
• MCP: Market Clearance Price

Read More...

Gujarat to become 7000 MW power surplus state by end 2012…

Narendra Modi, the CM, Gujarat Government, has announced today that, the state is aiming to generate 7,000 MW of surplus power at the end of 2012. The announcement was made on the day of 10th Pravasi Bharatiya Diwas – 2012 held in Jaipur.

 

According to the statements of Gujarat Government, the state had a shortage of 2,000 MW power in the year 2001. However, for the past few years, Gujarat has become a power surplus state. Currently, Gujarat has 4000 MW of surplus electricity and will generate 7000 MW of surplus power by the end of 2012.

 

According to Sh. Modi, this development came due to the Jyotigram Scheme of the State Government which  provides round-the-clock power in every nook and corner of Gujarat.

Speaking on the solar power capacities in Gujarat, Modi mentioned that the state had become a global capital of solar energy generation.

Gujarat is the first state in India to have a solar energy policy which was later adopted by the Government of India. World’s largest solar park with 3,000 Mw of capacity is being established in Gujarat jointly with Clinton Foundation.

Sh. Modi suggested to the Central Government to consider setting up huge solar power projects on Western Indo-Pak border, which can be managed by the Border Security Force (BSF).

Read More...

Mahindra to invest Rs. 1000 Crs in solar projects….

Mahindra Solar One, a Joint Venture between the Mahindra Group and Kiran Energy, is planning to invest around Rs. 1,000 crore in solar power generation to build a capacity of 100 megawatts over the next two years, continuing the trend of large business houses investing heavily in the sector.

 
As per the Vice-chairman and MD of Mahindra & Mahindra, Mahindra Solar One is targeting to become among the top three players in the solar industry in next five year’s time.

 

India's solar energy sector has attracted several last business groups such as the Tatas, Anil Ambani's Reliance Power, GMR and the Adani group, which last week commissioned India's biggest solar unit to generate 40 mw.

 

M&M has forayed into the renewable space through Mahindra Cleantech Ventures, which has set up three divisions - Mahindra Solar for power generation, Mahindra EPC for engineering of solar projects and Mahindra Off-grid solutions that offers rooftop setups for solar power generation.

 

Foreign companies are also bidding for projects as India aims to scale up its solar power generation capacity to 20,000 mw by 2020 from around 250 mw now.

M&M has recently commissioned its first grid-connected solar power unit of 5 MW in Rajasthan. 

Read More...