Investments in global Renewable Energy Sector including India seems to decline in short term...

 

According to the a report published by leading consultancy firm Deloitte on Renewable Energy, the global investments in Renewable Energy Sector will be facing a short term sluggishness.

Under the said report titled as "Alternative Thinking 2013 Renewable Energy under the Microscope" Deloitte has done a through analysis of various countries and according to the same, the global trend in the investments in Renewable Energy sector is showing sign of decline owing to the global economic slowdown.

As per the Report, the causes of this slowdown in India are:

• Lack of implementation of Renewable Purchase Obligation (RPO) by the distribution utilities and other Obligated Entities.
• Removal of Accelerated Depreciation and lack of clarity regarding generation based incentive,

However, the report noted that the prospects for global renewable energy industry would be attractive in the long term as around 118 countries have renewable energy targets in place and the demand for clean energy is also on the rise.

Further during the long term, the Renewable Energy sector is perceived to be more attractive owing to improvement in the technology and decline of costs.

As a sign of this, fossil fuels received almost twice the amount of government funded support than the total amount of public and private sector investment in renewable energy in 2012. This equates to a total of USD 523 billion in subsidies provided worldwide, in contrast to the USD 269 billion of total investment in renewable energy in 2012.

 

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Additional Reading...

• http://economictimes.indiatimes.com/news/news-by-industry/energy/power/india-faces-short-term-setback-in-renewable-energy-investment-report/articleshow/21339721.cms
• http://www.deloitte.com/assets/Dcom-Global/Local%20Assets/Documents/Energy_Resources/dtt_er_28123A%20Alternative%20thinking%20HI%20RES_07182013.pdf

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JSW Energy has put on hold its expansion projects owing to current regulatory issues...

 

It seems that JSW Energy has put on hold its expansion project excluding the hydropower project due to the current regulatory issues being faced by the infrastructure projects in India such as power projects.

 

As per the company's announcement during the 19th Annual General Meeting of the company,

"Pending clarity on policy and regulatory issues, your company decided to consolidate our operations and has put most of its expansion projects, with the exception of the Kutehr hydro project, on hold.

Your company's focus remains on strengthening the balance sheet and keeping ourselves ready for growth opportunities. Further, as the regulatory scenario eases and an opportunity to participate in competitive bids opens up, we plan to grow organically while reducing our exposure to merchant capacities.

We believe as the sector matures and consolidates, there will be inorganic growth opportunities for evaluation with a strategic fit to your company,"

The Mumbai based, JSW Energy, has increased its operational capacity to 3,1450 MW in the March quarter after it started generation at four uits of its lignite based power plants at Barmer in Rajasthan.

However, currently JSW Energy seems to has no plans to review new projects which are put on hold due to recent policy hurdles. The only project it plans to go ahead with is the 240 mw-hydro power project in Kutehr, Himachal Pradesh.

 

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Additional Reading...

http://economictimes.indiatimes.com/news/news-by-industry/energy/power/jsw-energy-puts-expansion-plans-on-hold/articleshow/21335218.cms

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Gujarat announces new wind policy giving higher tariff and exemption from electricity duty...

 

Gujarat Government, has today announced a new wind energy policy providing higher tariff for wind purchase and exemption from electricity duty in addition to some other incentives.

 

 

As per the revised policy,

• The Tariff/price has been increased to Rs. 4.15 per unit which will be applicable for next 25 years.
• Further, the Gujarat Government has proposed exemption from electricity duty to wind power producers.
• Power producers can also use the wind power for captive consumption in their own units in the state after paying wheeling and transmission charges and Rs. 0.05 per unit extra if the power is supposed to be wheeled to more than one location.
• Surplus power, after the captive consumption, can be sold to the State Transmission Utility at Rs. 3.52 per unit (i.e. 85% of the tariff)
• Power producers can also sell their wind energy to third party after paying the necessary wheeling and transmission charges.
• Government has proposed to allot wasteland in interior regions of the state to set up the wind projects.

As per the Gujarat Government, the state is having share of renewable energy at 10% of the total whilst other states are having the share at 2-3% of total power.

 

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Additional Reading...

• http://www.business-standard.com/article/economy-policy/gujarat-govt-floats-new-wind-energy-policy-113072500932_1.html
• http://www.narendramodi.in/new-encouraging-wind-energy-policy-approved-in-gujarat/

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NTPC plans capital outlay of Rs. 89 Billion towards its 6 coal mines...

 

National Thermal Power Corporation (NTPC) is considering to invest around Rs. 89 Billion for developing its own coal mines and subsequently reduce the share of imported coal. 

Company is aiming to reduce the imported coal's share of its total consumption from 21% at present to 10% within three (3) years.

Further, the move will also help NTPC to reduce its dependence on Coal India Limited (CIL), the largest coal mining company of India.

Thus, NTPC's plan to get into coal mining business will assist the company to attain fuel security, both in terms of quality and quantity.

As estimated by the company, due to this move, coal imports will decline from 24 Million tonnes this year to as low as 13 Million tonnes by 2017.

So far, the company has already spent around Rs. 14 Billion in the six (6) mines which have been allotted to them and further plans include Rs. 75 Billion capital outlay in next four (4) years.

Six Coal Blocks/mines allotted to NTPC includes:

• Pakri Barwadih
• Chatti Bariatu
• Kerandari
• Dulanga
• Talaipalli
• Chatti Bariatu (South)

 

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Additional Reading...

• http://www.indiainfoline.com/Markets/News/NTPC-to-pump-in-Rs-89bn-to-develop-captive-coal-mines/5739923728
• http://www.infraline.com/News/Ntpc-To-Pump-In-Rs-89-Bn-To-Develop-Captive-Coal-Mines-To-Educe-The-Share-Of-Imported-Coal-In-Its-Total-Cons/1/4/1/07_24_2013.htm

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Shri Infratech is considering to enter into the Solar Energy Sector...

 

Shri Infratech, Delhi Based, Land & Infrastructure Development company is considering to foray into the Solar Energy Sector.

According to the company, the main reason behind entering into Solar Energy Sector is the possibility of providing power to the village and rural towns & diminishing coal and oil resources.

As per the company website...

"Shri Infratech Group is serious about building an environment friendly India. Its area of expansion is into Solar Power, clean energy generation through solar photo voltaic power projects.

This will be undertaken with solid participation from the private and public sector, in total unison with the state government policies on clean energy.

The Group’s endeavor is to develop and provide the latest and most efficient solar power technologies of the world to India. The challenge it has taken on is to provide cost-efficient, sustainable solar power solutions at a people-friendly cost.

The dream of providing 24 hours of electrical energy to the far flung rural areas of the country as well providing the future surging demands of our urban centers… will now be fulfilled through the employment of Solar Power."

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Additional Reading....

• http://www.indiainfoline.com/Markets/News/Shri-Infratech-Enters-Solar-Power/5739293791
• http://www.businesswireindia.com/PressRelease.asp?b2mid=36052

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Alstom T&D received Rs. 255.8 Crorers contracts from Power Grid Corporation for development of substations

 

Alstom T&D India Ltd has received five contracts worth Rs. 255.8 Crorers from the Power Grid Corporation of India Ltd  (PGCIL) for development of substation at various locations.

 

The brief summary of the contracts won by Alstom T&D are:

• Two contracts worth Rs 166 crore for supply, erection, testing and commissioning of 400 kV substation extension packages.
• Contract worth Rs. 40 Crores for delivery of high-tension 765 kV circuit breakers for various substations across India.
• Contract worth Rs. 27 Crores for supply of 765 kV reactors for Power Grid's Padghe, Aurangabad, Bhiwani, and Meerut substations.
• Contract Worth Rs. 22.8 Crores for supply of 400 kV reactors for Power Grid's Khandwa Purnia, Gajuwaka Baripada and Bhiwani
  

As per the company officials, once commissioned, these substations will help make more power available to meet the growing demand for electricity in the western region and will significantly improve the reliability and efficiency of the transmission grid. These reactors will strengthen power transmission network in northern and western regions of India 

All circuit breakers will be manufactured and supplied by the company from its factory located at Padappai in Tamil Nadu.

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Additional Reading...

• http://economictimes.indiatimes.com/news/news-by-industry/energy/power/alstom-td-bags-5-contracts-worth-rs-256-crore-from-power-grid/articleshow/21330121.cms
• http://www.thehindubusinessline.com/companies/alstom-td-bags-rs-256cr-powergrid-contract/article4952178.ece

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Indian government to disallow the ecb from china for power projects to protect the domestic market...

 

Indian Government has decided to disallow the cheaper External Commercial Borrowings  from China in terms of Yuan credit for power plants to protect the domestic power equipment manufacturers market.

External Commercial Borrowings (ECB) refers to commercial loans from overseas lenders. It can be in the form of bank loans, buyers’ credit, suppliers’ credit or securitized instruments (e.g. floating rate notes and fixed rate bonds, non-convertible, optionally convertible or partially convertible preference shares). The minimum average maturity of such loans is three years. ECB is usually considered cheaper compared with domestic loans.

Currently, Indian companies are allowed to raise such loans up to a limit of $1 billion.

Earlier, to mitigate the high power shortage in the country, the decision was taken to allow ECB in Chinese Currency to facilitate imports of power equipment's such as Boiler, Turbine, Generated and related accessories.

However, post that the share of Chinese Equipment's in the domestic market has been raised to as high as 50% and according to the Reserve Bank of India availability of long-term, low interest export credit from China will further distort the status in favor of Chinese manufacturers adversely affecting the domestic manufacturers.

Meanwhile, domestic companies got some relief last year, when import duty was raised on imported equipment for power projects.

 

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Additional Reading...

• http://www.thehindubusinessline.com/industry-and-economy/to-halt-chinese-imports-govt-to-bar-yuan-borrowings-for-power-sector/article4949460.ece
• http://www.metisbs.com/details/new/38911/to-halt-chinese-imports-govt-to-bar-yuan-borrowings-for-power-sector.html

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Jindal Power secured Rs. 5,418 Crores debts for its tamnar project in chhatisgarh...

 

Jindal Power Limited, a wholly owned subsidiary of Jindal Steel and Power, has secured loans of Rs. 5,418 Crorers for two units of its upcoming 2,400 MW Power Generation Project at Tamnar in Chhattisgarh.

The proposed Project will consist of four units of 600 MW each and will have investment requirement of around Rs. 13,500 Crores. Out of this the firs two units will cost around Rs. 7,740 Crores and are being fund with a Debt-Equity ratio of 70:30.

According to sources, all the required clearances are in place for the Project and first two units are nearing for commissioning. Both of thes units will get 65% of their coal requirement from Coal India while the balance 35% requirement will be met through imports.

Debts of Rs. 5,418 Crorers have been financed by a consortium of nine banks with State Bank of India as lead banker.

According to Company officials, additional 600 MW unit is also being tried to be commissioned during current fiscal howver it is yet to secure a coal linkage.

Updates on Jindal Power:

• Current generation capacity of 1,000 MW at the same location which is being operated at Plant Load Factor (PLF) of over 95% for the past two years; power from the project is being sold through short and medium term power purchase agreements.
• Company is targeting 10,000 MW of generation capacity by 2020 at an investment of about Rs 70,000 to 80,000 Crores.
• Out of that about 7,000 MW of the new capacity will be added in India, either by setting up a new plant or acquiring the existing projects, while the remainder will be developed overseas, mostly in Africa.
• The company is in talks with government agencies in Botswana and Senegal for setting up plants; the cost of generating power in African countries is about Rs 11-12 Crores per MW, compared with the Indian average of Rs 7-8 Crores per MW.

 

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Additional Reading...

• http://economictimes.indiatimes.com/news/news-by-industry/energy/power/jindal-power-ties-up-rs-5418-crore-loans-for-chhattisgarh-plant/articleshow/21303909.cms
• http://www.thehindu.com/business/jindal-power-gets-environmental-nod-for-tamnar-expansion-project/article2630669.ece

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Indian Government considering to bring back the tax and fiscal incentives to revive domestic wind market...

 

It seems that the Indian Government is considering to revive the domestic wind energy market by reintroducing tax and fiscal incentives (Accelerated Depreciation and Generation Based Incentive) which were removed during the last year.

 

 

According to the Indian Wind Power Association (IWPA), the removal of above incentives have caused a fall of atleast 1,500 MW installations of wind project during the financial year 2012-13.

Accelerated Depreciation Benefits are the tax benefits which significantly reduces the tax liabilities of the Project Developer; Generation Based Incentive (GBI) is fiscal benefits which increases the revenue stream of the Project by giving additional revenue per unit which is over and above the tariff.

Ministry of New and Renewable Energy (MNRE) has prepared a draft paper for this and circulated to various ministries to get their opinion. It seems that the Ministry of Finance has agreed and moved the note ahead.

According to the  audit and consulting firm Ernest & Young’s Renewable Energy Country Attractiveness Index released on 22 June 2013, which covers all forms of renewable energy India’s ranking slipped from the fourth position (April-June last fiscal) to eighth position in the last quarter.

However, according to some of the experts, the withdrawal of incentives has helped the wind business in some way to streamline the business. As the Accelerated Depreciation has been vanished, which has removed the retail market of wind projects and more emphasis was given to the Independent Power Producers (IPPS) which fare committed to set up quality projects.

So far, India has an installed power generation capacity of around 2,25,133 MW out of which as high as 12.2% or 27, 542 MW is of Renewable Energy including 19,618 MW of Wind Projects.

According to the industry experts, the official communication for the renewal of incentives is expected to come by end of this month.

 

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Additional Reading...

http://www.ey.com/Publication/vwLUAssets/Renewable_energy_country_attractiveness_indices_-_Issue_37/$FILE/RECAI-May-2013.pdf

http://www.livemint.com/Industry/HzQ1NGtt9kX7MqsJcJPcmO/India-seeks-to-revive-interest-in-wind-sector.html

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