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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Mahagenco to develop 200 MW of Solar Projects by 2015…

Power India found that he Maharashtra State Power Generation Company (Mahagenco) is planning to set up four more solar power plants in the State with a total capacity of about 200 MW by 2015.

 

Current Projects

Mahagenco, currently, is executing a 150 MW solar power project at Sakri town in Dhule district. Work on this project began last May.

 

Proposed Projects

• Mahagenco is proppsing to set up plants in Beed, Sangli, Parbhani and Osmanabad districts, which have good solar radiation and almost 300 days of sunshine.
• Mahagenco’s local administration has been ordered to find suitable land parcels for setting up the projects.

Land identification

• As land acquisition has become a major challenge in Maharashtra, therefore non-cultivable lands are being surveyed for acquisition. Preference would be given to 100 hectare plots, which are fully owned by the government.
• All the power produced by the plants would be bought by the Maharashtra State Electricity Distribution Company (Mahadiscom) without any preconditions.
• This will also ensure that Mahadiscom meets the mandatory requirement of sourcing power from renewable sources, the official said.

Feasibilty of Solar Projects

• The rising demand for power and delays in setting up conventional thermal coal plants is pushing the government to look for non-conventional energy resources for power generation.
• Mahagenco will examine the feasibility of using either thin film or crystalline based photovoltaic technology for the plants.
• There is a good potential to produce solar power in Maharashtra, as many areas have solar radiation, comparable to those in Rajasthan.
• However a  good State level solar policy is required, which can encourage private sector to put up solar power plants in Maharashtra such as in Gujarat and Rajasthan.

Last year Sakri project had hit a major hurdle as the State Forest Department had claimed ownership of the project site. However, the State Government settled the issue and construction work has already begun, the official added.

 

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More Literature on this topic:

• http://www.thehindubusinessline.com/industry-and-economy/economy/article3394393.ece?ref=wl_industry-and-economy

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Moser Baers Rs. 739 Crore CDR Proposal got in-principal approval from bankers…

Power India found that, the Rs. 739 Crores Corporate Debt Restructuring (CDR) proposal of Moser Baer India for Moser Baer Solar has received the in-principle approval from the bankers.

As captured by Power India earlier, Moser Baer Solar has approached the CER Cell for the above purpose in April 2012.

Moser Baer Solar’s Bankers are Punjab National Bank (PNB), State Bank of India (SBI), Bank of Baroda (BoB), IDBI Bank and Indian Overseas Bank (IOB) and a few other banks, which have give the above approval.

As per the preliminary information received by Power India…

• CDR will encompass a Rs 500-crore term loan, working capital loans of Rs 230 crore and the remaining Rs 9 crore of dollar loans.
• PNB’s exposure to MBS is to the tune of Rs200 crore, SBI’s Rs150 crore, IOB’s Rs130 crore and BoB’s Rs60 crore.
• Few other banks account for the rest i.e. Rs199 crore.

As a process of CDR, the approval will be followed by a new plan for repayment of Moser Baer’s loans. The company will be relieved from interest payment. Repayment tenure will be also extended.

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More Literature on this topic:

• http://www.dnaindia.com/money/report_moser-solar-s-cdr-plan-gets-bankers-nod_1685805
• http://www.indianpowersphere.com/2012/04/moser-baer-solar-enters-debt.html

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Discom losses reached to the level 2 lakh Crores… High need of strong reforms…

Power India found that according to the recent insights published by CRISIL, the losses of power distribution companies have crosses Rs. 2 Lacs Crores at end of March 2012 due to lower tariffs and higher fuel costs.

As outlined by the Report to primary reasons for the decreased bottom lines of Discoms are inadequate increase in tariffs of the power and inefficient harnessing of fuels such as coal, gas etc.

Issues relating to Tariff Side

• Over the second half of the previous decade, power tariffs in India grew by under 5% p.a.
• Against this, per capita income grew by 13.4% p.a. while household expenditure grew at 10.6% p.a.
• Consequently, the share of energy expenses in Indian households declined for the first time in two decades, during this period.
• Power tariffs have also lagged inflation.
• As said by MD and CEO of CRUSIL, Roopa Kudva, Managing Director and CEO, CRISIL,

“This indicates that Indian consumers can bear higher tariffs, and policy makers may have more flexibility to increase tariffs than they are currently exercising. Had power tariffs been hiked to keep pace with other household expenses, power utilities would have earned additional revenue of about Rs.950 billion in this period. Instead of making aggregate losses of Rs.870 billion, they would have made an aggregate profit of Rs. 80 billion.

Issues relating to Fuel Costs

• Indian coal production has remained stagnant in the last 4 years at 400-440 million MT.
• The power sector’s reliance on more expensive imported coal therefore doubled from 7% of coal-based power generation in FY 2007 to 15% in FY 2012.
• Imported coal is priced at 1.6 times domestic coal and typical transportation cost for imported coal is 1.5 times that for domestic coal.

Suggested Reforms

• The key reform would be to devise a mechanism to enable an automatic pass through of fuel price increases to power tariffs.
• The problem of delays in payment of subsidies by state governments to utilities can be addressed by setting up an appropriate escrow mechanism operated by the Reserve Bank of India to ensure timely subsidy payments.
• Utilities must be required to disclose their circle-wise technical and commercial losses along with the improvement targets for each circle.
• Further, we must effectively harness our coal reserves by formulating mining policies that incentivise timely development and production by mine licensees.

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More Literature on this topic:

• http://profit.ndtv.com/News/Article/power-distribution-companies-losses-cross-rs-2-lakh-crore-says-crisil-303681
• http://www.crisil.com/Ratings/Brochureware/News/CRISIL-Infrastructure-Advisory-power-tariffs_070512.pdf
• http://www.indianpowersphere.com/2012/05/distribution-companies-losses-to-reach.html

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Planning Commission and Power Ministry on 12th Power Capacity Addition targets…

Power India found that the Planning Commission and Power Ministry officials are going to meet tomorrow to narrow the gap differences of likely power capacity addition  and to finalize the 12th Plan targets for the capacity addition in the Power Sector.

As posted by us earlier, Power Ministry expects that at max 76,000 MW of capacity addition can be done during the 12th Plan, whilst the Planning Commissions says the same should be over 90,000 MW.

The meeting is expected to be chaired by Planning Commission Member B K Chaturvedi.

The Power Ministry has pitched for capacity addition target of about 76,000 MW in the 12th Plan, considering the backdrop of acute fuel shortages impacting electricity generation.

Further as per the data provided by CEA, capacity addition during 11th Plan was only 55,000 MW against the reduced target of 62,000 MW. (which earlier targeted at 79,000 MW)

As expected by the Power Sector professionals, Thermal projects are expected to account for more than 50,000 MW of capacity addition and out of that around 50% will come from super critical capacity (Unit capacity > 660 MW).

This is envisaged by the current capacity construction going in the country which is having around 35,290 MW under construction super critical projects.

On the estimated fund requirement side; the same is expected to be around Rs 13,72,580 Crores for the power sector out of which the power generation segment will need around Rs. 6,38,000 Crores and power distribution segment will need around Rs. 3,06,235 Crores.

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More on this topic…

• http://economictimes.indiatimes.com/news/economy/policy/planning-commission-power-ministry-to-finalise-capacity-addition-targets-for-power-sector/articleshow/13048006.cms
• http://www.livemint.com/2012/02/06233912/Government-may-lower-power-gen.html
• http://www.indianpowersphere.com/2012/01/mop-forwards-12th-plan-capacity.html

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ReNew Wind Power commissions 25.2 MW Wind Project in Gujarat…

Power India found that ReNew Wind Power (Mumbai based Independent Power Producer) has recently commissioned its first wind power project of 25.2 MW in Jasdan site, Rajkot, Gujarat.

 

A little brief on ReNew Wind Power:

• ReNew Wind Power is founded by Mr. Sumant Sinha who was earlier the Chief Operating Officer CEO) of Suzlon Energy. (More info on Sumant Sinha)
• It aims to become the leading renewable energy IPP in India by tapping the large wind and solar power potential in the country and creating a high quality and sustainable business.
• The company also want to look at expanding its operations into alternative energy sources like biomass and hydro in diverse locations, for which it has built a highly qualified team with significant operating expertise who deeply understand the dynamics of the renewable business.
• ReNew Wind Power, has secured an equity investment of up to Rs 1,000 crore from Goldman Sachs (NYSE: GS) on September 26, 2011, (Goldmand Sachs - a leading global investment bank and active investor in alternative energy/clean technology.) This was the largest investment in India’s renewable energy generation sector.

Something on Company’s Plans & Projects

• Renew Wind Power plans to develop 1000 MW of Renewable Energy projects by 2015.
• The first project is a Twenty Five MW project which is getting commissioned in February 2012 and is developed in the state of Gujarat.
• 75 MW of projects are getting commissioned in first half of FY13.
• And another Two Hundred MW of additional projects are in pipeline which will be commissioned in rest of FY13.
• The company is also acquiring land parcels with superior wind potential across various states in India with an intent to develop large number of MW by itself in the next couple of years.
• The company has signed business framework agreements with Kenersys GmBH, Regen Powertech Pvt and Suzlon Energy Ltd. to establish and operate wind farms throughout India.

 

What about the 25.2 MW Project in Gujarat?

• Site: Jasdan, Rajkot Dist. Gujarat
• Turbines: 12 Wind Turbines of 2.1 MW each (Suzlon Make S88 Model)
• EPC Contractor: Suzlon Energy Ltd
• Total Investment: Around 140 Crs (unverified)
• Power Purchase Agreement: Gujarat Urja Vikas Nigam Ltd (23.1 MW) Philips India (2.1 MW).
• Financing: At 70:30 D:E Ration by PTC Indian Financial Sertices Ltd (An Investment Vehcile promoted by PTC India Ltd)

 

As said by Mr. Summant Sinha:

"With this project we further establish the vision of rapidly expanding our footprint in the growing Indian wind energy market. We at ReNew Power are confident of becoming one of the leading Renewable Energy producers in India,"

The project of ReNew Wind Power was inaugurated by Hon’ble Chief Minister of Gujarat, Mr. Narendra Modi on May 6, 2012

 

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Seeking for More ?

http://renewpower.in/images/Press-Release.PDF

http://www.narendramodi.in/state-government-desires-to-maximize-the-usage-of-all-means-of-non-conventional-energy-sources-cm/

http://www.evwind.es/noticias.php?id_not=18379

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