Telecom Tower companies soon to be powered by Renewable Energy to reduce operating costs…

Power India found that various Telecom Tower Providers are considering the alternate of renewable energy generation to reduce the operational costs of electricity.

 

As learnt from various sources, these companies are planning to invite proposal for setting up setting up independent renewable energy companies that will generate and supply green power to run towers. This move will help save the cost of diesel for running towers especially in areas where grid electricity is not available.

 

TAIPA, the industry association representing tower infrastructure providers across the country, is working on a “Request For Proposal” (RFP) this purpose.

 

As said by Director General, Umang Das:

• "The RFPs should be out by next week, followed by a pre-bid conference,"

 

TAIPA has further proposed to created a “Renewable Energy Service Providing Companies” (RESCOS) whose main objective will be to set up independent plans to sell power to the Tower companies or TELCOs.

The surplus power may sale back to the grid.

 

Power India beleve that the move is caused due to the erratic power supply to the Tower units most of which are in remote areas and due to which around 4,00,00 telecom towers are depended on diesel generators.

 

According to TRAI (Telecom Sector Regulator) the above said telecom towers roughly consume around 2 Billion litres of oil every year. The regulator has directed them to reduce their dependence on diesel and cut carbon emissions by running at least 50% of all rural towers and 20% of the urban towers on hybrid power by 2015.

 

Some of the Tower firms have been partially successful in their experiments with producing power from solar energy, fuel cells and other renewable sources.

 

For examply, Bharti Infratel, the tower arm of Bharti Enterprises, has been able to save 25.64 million litres of diesel after powering 12,000 tower sites with solar energy.

 

Further, the regulator has proposed changes in fee structure and wants to bring tower firms under the unified licensing regime, which will force them to pay revenue to the government. Other changes, such as the cut in FDI to 74%, have also deterred foreign investment and put a question mark over the shareholding patterns of companies such as the American Towers Corp India.

 

 

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More Literature on this topic:

• http://articles.economictimes.indiatimes.com/2012-05-08/news/31626625_1_indus-towers-tower-arm-telecom-tower

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CESC, RP Goenka Group Company, is having plans to develop 500 MW of Renewable Energy projects by 2015…

Power India found that CESC is planning to add 500 MW renewable energy capacity by 2015 through solar, wind and small hydro projects.

 

Brief on CESC & its projects

• CESC is a R P Sanjiv Goenka - led Rs. 10,000 power company
• CESC has recently commissioned 9 MW solar project in Kutch in Gujarat with an investment of Rs. 110 Crores.
• The company’s short term plans include solar projects with total capacity of 50 MW across Maharashtra, Gujarat and Rajasthan.
• Its 15 MW wind farm in Jaisalmer project is also proposed to be commissioned by December this year.
• A 100 MW hydel project in Arunachal Pradesh is under construction and it’s further plants on hydro involves two more hydro projects with combined capacity of 250 MW.

 

As said by Subrata Talukda, Executive Director Finance, CESC

"We are creating a land bank in Rajasthan for solar projects. We already bought 250 acres," said Subrata Talukdar, executive director, finance, CESC.

 

CESC hopes the proposed solar, wind and hydel projects will help the company meet renewable purchase obligation (RPO) without buying renewable energy certificates (RECs) from the power exchanges.

 

Besides the renewable energy projects with combined capacity of 500 MW, CESC is also planning to add 7000 MW coal-based power capacity in six years by investing Rs 36,000 crore

 

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More Literature on this topic:

• http://www.hindustantimes.com/business-news/CorporateNews/CESC-to-add-500-MW-renewable-energy-by-2015/Article1-852235.aspx
• http://www.energynext.in/cesc-plans-to-add-500-mw-of-clean-energy-through-solar-wind-and-shp-by-2015/

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GMDC awarded Rs 305 Crore Contract for a 50 MW Wind Power Project at Jamnagar of Gujarat…

Power India found that Suzlon Energy, largest domestic wind turbine manufacturer, has signed a contract for 50 MW Wind Power Project with Gujarat Mineral Development Corporation (GMDC)

Brief of Project

• EPC Cost: Rs. 305.32 Crores
• Location: Jamnagar District, Gujarat
• WTGs: 24 Nos of 2.1 MW WTGs (Suzlon make S95 model)

 

Current Wind Power Portfolio of GMDC

• At present, GMDC has an existing installed base of 100.50 MW
• Out of which the major part -over 60 MW – has been supplied by Suzlon and is operating in cities across Gujarat.
• The new order takes GMDC’s total installed capacity to 150.50 MW

 

As said by Tulsi Tanti, chairman, Suzlon:

``Suzlon is pleased to once again partner with GMDC in driving their commitment to sustainable energy and through this contribution to the development of Gujarat`s low carbon economy. The state of Gujarat is blessed with immense wind potential and we are proud of our contribution in harnessing this potential.``

 

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More Literature on this topic:

• http://myiris.com/newsCentre/storyShow.php?fileR=20120508092145715&dir=2012/05/08&secID=livenews

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Update on Power Generation during March 2012 by Gujarat Solar Power Projects….

Power India found that around 32 Solar Power Project Developers of Gujarat have started producing the sola energy and feeding the same to the Gujarat Grid.

 

Further, the State Load Dispatch Centre (SLDC) of Gujarat have in its month Energy Accounts of March 2012 captured the generation from these solar plants.

 

As estimated by Gujarat SLDC,

• Total Export: 1181.35 MWhs
• Total Import: 919.63 MWhs
• Net Solar Energy Generation: 70261.73 MWhs

 

Developer wise break-up shall be as below:

Sr. No.	Name of Power Station	Energy Exported (MWH)	Energy Import (MWH)
1	Lanco	2,516.95	24.49
2	Solitaire	2,365.00	-
3	Precious	2,349.20	18.80
4	Azure Power	1,848.00	5.80
5	Sun Edison	102.98	1.08
6	Welspun	3,034.50	25.00
7	Green infra	1,704.70	13.50
8	Aravali infra	573.10	10.70
9	66kv Vadgam(Azure,ESP,Visual,Millenium,Emco)	7,232.00	72.00
10	BITA Solar Power	6,657.10	47.86
11	Konark	926.80	6.50
12	Backbone	829.05	8.85
13	ICML	1,228.10	10.25
14	TATA(Mithapur)	4,259.30	30.05
15	GHI (Helabeli)	1,735.70	12.10
16	Rasana	296.48	3.99
17	Rajesh	155.47	0.09
18	MBH solar	87.71	0.02
19	GIPCL	731.48	2.34
20	Essar	152.45	1.17
21	Louroux	2,125.20	262.20
22	Waa Solar	1,880.00	11.00
23	PLG	2,836.00	19.40
24	Thavar	560.50	26.29
25	Charanka SolarPark	21,866.91	328.14
26	Jai Hind	401.79	0.36
27	ACME Solar	670.80	4.80
28	ACME Solar	676.00	11.20
29	Harsha	440.46	5.02
30	PDPU	161.85	-
31	Abellon Cleanenergy Ltd.	440.54	3.06
32	Universal Solar	335.24	-
		71,181.35	919.63

 

 

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More Literature on this topic:

• http://urvishdave.wordpress.com/2012/05/08/gujarat-solar-projects-generation-data-for-march-2012/
• http://www.sldcguj.com/energyaccount/energy_account_new.asp

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Wind Incentives–Do we need Tax Incentive on Project Cost or Electricity Produced…

Power India has done a study on the comparative analysis of two major incentives being given to Wind Projects – Accelerated Depreciation and Generation Based Incentives.

 

Background

• Although the Accelerated Depreciation (AD) Scheme contributed more to make India’s wind installation globally one of the largest with 15,000 MW however the same was also a reason for poor quality of projects leading to lower generation.
• Under AD Scheme, developers were able to get 80% depreciation benefit (against the normal rate of 15%) in the initial years only which was causing them to focus little on Plant Load Factor (PLF), Machine Availability, Actual Generation, Losses and other quality aspects of the Project.
• Due to this despite having large capacity of wind projects, India’s actual wind power generation is very poor.
• Although, Accelerated Depreciation benefit for Wind Projects has been withdrawn by Income Tax Department on 30^th March 2012[1], have since been conflicting reports that it would be revived.

 

We are giving a snapshot of the comparison between the AD Scheme & GBI Scheme.

 

1. Current major Initiatives

a. Accelerated Depreciation

• Government of India (“GoI”) had introduced Accelerated Depreciation scheme (“AD Scheme”) in mid nineties.
• Wind energy producer were entitled to claim up to 80% accelerated depreciation in the first year itself.
• Over the years AD was the major driver for the development of the wind industry in the country.

 b. Generation Based Incentive

• MNRE has introduced a Generation Based Incentive scheme (“GBI Scheme”) on 17^th December 2009.
• GBI Scheme entitles the wind energy producer to get Rs. 0.50/unit (over and above the tariff) of electricity produced for the first 10 years of project life subject to maximum cap of Rs. 62 Lacs/MW.
• The scheme was can be availed only if AD Scheme has not been availed. Further, the maximum capacity of the projects under this scheme was capped at 4000 MW and was applicable for the projects commissioned till 31^st March 2012.
• It is expected that extending the validity and incentives of GBI Scheme is under consideration however; currently no official notification to this effect has been published.

2. AD Scheme (Key driver):

• Ownership of wind assets appeared more attractive for a “diversified” corporate taxpayer, being eligible for an Accelerated Depreciation (80%/40%) of the cost of the asset (in the initial years of operation), with equity financing of only 30%.
• As a consequence, functionality of the wind asset came to be determined by the tax absorption capacity of the corporate, rather than aspects such as optimal capacity of the wind farm, prospective revenue stream etc.
• However, for Independent Power Producers (IPPs) the extant scheme only offers a marginal benefit, since the entire depreciation needs to be absorbed within 5 years of commissioning, for the income-tax holiday to be fully availed.

3. Current Mix – AD vs IPPs:

• Historically 80%-90% of wind projects being installed in India are under AD Scheme due to the higher profitability of wind energy projects considering the benefits of AD Scheme.
• According to recent data of IREDA[2], the registering authority of AD Scheme, ~1300 MW of Wind Projects have been registered under AD Scheme out of the total installations of ~3600 MW during the period 2010-11 & 2011-12.
• During recent years, large IPPs started setting up wind projects and share of AD has gone down. The current market share of wind projects under AD Scheme is roughly ~40%.

4. Impact of removal of AD benefits:

• Wind Projects to be installed after 31^st March 2012, will not be able to take benefits of AD Scheme.
• IT Depreciation is reduced to 15% from the earlier level of 80%, which is in line with the other projects. This will take away the entire AD Scheme driven market of ~40%.
• Last FY (2011-12) Wind installations were in the range of 3200 MWs (around 40% were expected to be from AD market). These customers unlikely to be interested in the wind projects any more. GBI Scheme which was mutually exclusive to AD has also expired on 31^st Mar 2012.
• It is expected that Wind Industry will take a hit on this and expected installations next FY will be restricted to ~ 2000 MW only.
• However, quality of projects (i.e. size of wind farms, capacity of machines) are expected to increase going forward as only serious players will going to be in the wind business.

 

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[1] Notification No. 15/2012 [F.No.149/21/2010-SO(TPL)] Dated 30-3-2012

[2] IREDA has started issuing unique identification nos to the registered WTGs under AD Scheme from the end 2009.

 

 

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More Literature on this topic:

• http://economictimes.indiatimes.com/opinion/editorial/wind-power-needs-a-tax-incentive-on-the-power-produced/articleshow/13060155.cms

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EGoM suggest to formulate a policy on use of surplus coal by UMPPs; may cause RPower’s Tilaiya UMPP to wait for coal usage…

Power India found that the Empowered Group of Ministers (EGoM) in its meeting on April 27, has asked the Coal Ministry to formulate a policy for use of surplus or incremental coal available for Ultra Mega Power Projects (UMPPs).

Reliance Power will have to wait for a new coal surplus policy before it can use the surplus coal from its Tilaiya Ultra Mega Power Project. The Coal Ministry has been asked to formulate a policy for use of surplus or incremental coal available for ultra mega power projects (UMPPs).

 

 

The process of policy formation as suggested by the EGoM is as below:

• A committee of Secretaries will be asked to give its recommendation
• This will be followed by inter-ministerial discussions
• The Cabinet Committee of Economic Affairs (CCEA) will take a call after that.
• The new policy will be implemented prospectively

 

It is quite clear from the above process that the new policy process will not affect the permissions already give to Sasan & Chitrangi UMPPs of Reliance Power.

 

However, it will be applicable for the coal blocks allocated to the Tilaiya UMPP and hence, RPower will have to wait till the said Policy formation to use the coal of Tilaiya UMPP.

 

Some more Juice Picking

The EGoM had, in its meeting on August 14, 2008, decided to recommend to the Coal Ministry to allow use of incremental coal for other projects.Tata Power has taken issue against this approval. The matter is pending in the Supreme Court.

The Government is looking to set up 16 UMPPs in the country. Each of the projects is given fuel linkages, which means captive supply of coal. Of 16, three (Sasan in Madhya Pradesh, Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand) has been awarded to Reliance Power and one (Mundra in Gujarat) to Tata Power.

 

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More Literature on this topic:

• http://www.thehindubusinessline.com/companies/article3398159.ece
• http://www.metisbs.com/details/news/16678/use-of-surplus-coal-reliance-power-needs-to-wait-for-new-policy.html

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