Essar Power to set up 90 MW solar plant in Madhya Pradesh for Rs 300 crore

Source: The Economic Times, Feb 24, 2021

Ruia-family run Essar Power Ltd will foray into renewable energy, setting up a 90 MW solar plant in Madhya Pradesh at an investment of Rs 300 crore, CEO Kush Singh said Wednesday. The entry into the renewable segment is part of a strategic decision to rebalance the power portfolio.

“The board of Essar Power Ltd, an investee company of Essar Global Fund (EGFL), has approved an investment of Rs 300 crore in a 90 megawatt (MW) PV Solar power plant in Madhya Pradesh, marking the fund’s foray into renewable energy,” he said.

The renewable energy venture comes close on the heels of EGFL investing in hydrogen power in the UK and coal gas in India.

The fund has overseen the completion of the deleveraging program of investee companies in the next two quarters.

It intends to repay the balance debt Rs 10,000 crore which is largely in the power portfolio.

“The strategic plan to rebalance our energy portfolio is in line with our move to an asset-light structure. In a series of calibrated steps, this shift will allow the company to bring down its debt from the current level of Rs 10,000 crore to Rs 3,000 crore through restructuring and monetisation of existing assets and further investments in this green portfolio,” Singh said.
Riding on success in unconventional energy generation such as coal-bed methane (CBM) and the hydrogen generation programme at its Stanlow refinery in the UK, Essar’s foray into renewable energy will also be a precursor to an exit from coal.

“Along with the ongoing hydrogen generation programme in our Stanlow refinery, UK, we have kicked off our transition to a new phase of investment-led growth, with the energy portfolio taking the lead,” said Singh.

“We have taken this step in line with the major thrust given by the Government of India in promoting and achieving the ambitious target of an installed capacity of 450 gigawatts of renewable energy by 2030.”

The proposed power plant is a solar photovoltaic project to be set up in Bhander, in the Datia district of Madhya Pradesh across 105 hectares of land and will be executed in two parts – 33.7 MW and 56.17 MW.

Electricity generated from this plant will be evacuated at 132 kV level and is proposed to be connected to the Bhander substation, which is located at approximately 5 km and will be supplied to industrial consumers within Madhya Pradesh.

The project is expected to be completed by June 2022.

Essar Power has a current operating capacity is around 3,185 MW.

EGFL has invested about Rs 32,000 crore in the power portfolio including 12000 crore of equity.

It has also invested in the transmission business by constructing a 465 km interstate transmission system, which spans three states.

The other two businesses of the fund’s energy portfolio are also making impressive progress both in India and the UK. Essar Oil Exploration and Production Ltd (EOGEPL) is the country’s largest unconventional energy player.

India adds 3.2 GW solar capacity in 2020; lowest in 5 years: Report

Source: LiveMint.com, Feb 23, 2021

NEW DELHI: India added 3,239 megawatt (MW) solar capacity in 2020, down 56 per cent from the previous year, according to a report.  The adding of 3,239 MW of solar capacity was the lowest addition in five-years-time, Mercom India Research said in its report on Tuesday.     

“India added 3.2 GW or 3,239 MW of solar capacity in 2020, a 56 per cent decline year-over-year (YoY) compared to 7,346 MW installed in 2019,” it said adding the country’s total solar installed capacity was at 39 GW gigawatt (GW) as of December 2020.   

The large-scale solar projects accounted for 78 per cent of installations with 2,520 MW, registering a 60 per cent year-on-year (y-o-y) decline. The addition of the remaining 719 MW rooftop installations was also down 22 per cent compared to the installation in 2019.      

Andhra Pradesh, Rajasthan, and Gujarat were the top three states for large-scale solar capacity additions, representing around 51 per cent of 2020 installations.      

“India’s solar installations in 2020 were the lowest in five years. While other top solar markets in the world have experienced positive growth, India, which had one of the most stringent lockdowns in response to the pandemic, took a while to get back up and running.

However, we expect the industry to experience significant positive growth in 2021,” said Raj Prabhu, Chief Executive Officer of Mercom Capital Group.     

According to the report, besides COVID-19, another significant bottleneck in the market has been the difficulty facing government agencies to get distribution companies (DISCOMs) to sign power sale agreements (PSA). This has left about 17-18 GW of projects without a PSA. Other short-term challenges included the rise in module prices, increased shipping and freight charges in the range of 500 per cent-800 per cent, and a surge in raw material costs.       

“As a result, the average large-scale solar project costs increased slightly by 2 per cent quarter-over-quarter (q-o-q) in Q4 (October-November) 2020. However, project costs were 2.5 per cent lower compared to the same quarter in 2019,” according to the report.    

On its outlook for 2021, the report said it expects the industry to experience positive growth in 2021. Mercom India Research is forecasting over 10 GW of solar installations in 2021.      The rooftop solar market is experiencing a turnaround, with installations improving significantly over the second half of the year. Fourth-quarter was the strongest for rooftop installations, and the report predicts momentum to continue into Q1 (January-March) 2021.

India’s green energy goals boosted by return of foreign backers

Source: LiveMint.com, Jan 26, 2021

India’s goal of doubling renewable power by next year is getting a boost from international investors who see the massive market’s potential outweighing significant risks.

French oil major Total SA’s $2.5 billion investment in Adani Green Energy Ltd. last week is a sign that global companies increasingly under pressure to invest in environmental assets are eyeing India’s 1.3 billion energy users, despite a mounting debt at generation companies and attempts by some provinces to renege on power purchase contracts.

Foreign investments are key to meeting Prime Minister Narendra Modi’s target to nearly double renewable energy capacity by 2022 and raise it five-fold to 450 gigawatts over the next decade. The plan offers investment opportunities of $20 billion a year through 2030, Modi told investors at a gathering last year.

“For India, the Total-Adani deal can also be perceived as a reflection of increasing confidence among foreign investors in India’s power sector,” said Charanjit Singh, head of ESG research at consultant firm Acuity Knowledge Partners. “With an improvement in the commercial viability of the power distribution sector, more foreign investments in the space could be expected.”

India’s renewables industry should be a prime candidate for investors increasingly demanding products that comply with the Paris climate agreement. The country is expected to have the world’s second-largest clean energy fleet by 2050, and unlike No. 1 China, it isn’t dominated by state-owned giants.

For investments to rise more, though, the country may need to fix its ailing power distribution sector. Power producers have been beset by delayed payments from provincial distribution utilities, which are often forced by local governments to sell power below cost.

Andhra Pradesh, a southern state in the country, decided to renegotiate renewable power purchase contracts in 2019, saying they were “exorbitantly priced” and needed to be reviewed to ease the financial burden of the state’s utilities and reduce power costs for consumers.

The decision, now under litigation, soured the mood of investors who kept away from project auctions for months. With the federal government’s pledge to protect the investments and enforce contracts, investors seem to be regaining that lost confidence, with participation rising in recent auctions.

In addition to Total, oil majors such as BP Plc and Malaysia’s Petroliam Nasional Bhd have invested in the sector, along with private equity and pension funds of countries including Canada and Singapore. India’s low per capita energy use, which is a third of the world average, holds promise of consistent demand growth. “A key reason that draws investors to India is the scope for growth in energy use, led by urbanization, applications from homes to transport, and a switch to green energy,” said Kameswara Rao, leader for energy and mining at PwC India. Still, “they will look for mature platforms that shuffle their assets and improve quality and lower risk.”

Govt extends transmission charge waiver for solar projects facing delays

Source: Financial Express, Jan 20, 2021

In a bid to provide relief to renewable power producers facing delays in project commissioning due to reasons beyond their control, the government has allowed solar and wind-based generation projects to avail transmission charge waivers even if they fail to set up their plants within June 30, 2023 — the deadline set for projects to receive the benefit.

The move is seen to benefit about 6,000 MW of solar projects that are currently facing delays in construction due to issues such as land availability, inadequate transmission capacity and supply disruptions due to Covid. At present, as much as 13,816 MW solar plants are being constructed through auctions conducted by the Centre.

Through its latest order issued on Tuesday, the Union power ministry said that “any renewable power project which is eligible for waiver of inter-state transmission charges and is having its scheduled date of commissioning on or before June 30, 2023, is granted extension of time from the commissioning on account of force majeure or for delay on the part of the transmission provider in providing the transmission even after having taken the requisite steps in time; or on account of delays on the part of any government agency, and the power plant is commissioned before the extended date; it will get benefit of waiver of inter-state transmission charges on the transmission of electricity generated by the power plant”. Transmission charges add about Rs 0.20–0.50 per unit to every unit of thermal power. The policy of waiving this charge for renewables was designed to make solar and wind more attractive for cash-strapped discoms. As FE recently reported, solar projects with combined capacity of 18,000 MW are facing grim prospects with the state-run discoms developing cold feet on buying power from them, as tariffs discovered under subsequent auctions have fallen to the record low of Rs 1.99/unit, buoyed by lower interest rates, falling solar panel prices, improved technology and assured purchase of power.

2021: India to bank on innovative ways to garner Rs 1.75 lakh cr investment for renewable energy sector

Source: Economic Times, Dec 26, 2020

NEW DELHI: India will look to be more innovative in its approach to garner additional investments worth Rs 1.75 lakh crore for having 35 GW of renewable power generation capacity next year to meet the ambitious target of 175 GW of clean energy capacity by 2022.

At present, the country has a total installed renewable energy capacity of 90 GW. This includes 39 GW of wind and 37 GW of solar generation capacity. Around 50 GW of renewable energy capacity is under construction and there is also a strong pipeline of 30 GW for new bids. “There is a fund requirement of Rs 1.75 lakh crore to achieve the balance capacity of 35 GW (under bidding/ to be bid out/ auctioned) to achieve an overall target of 175 GW,” Director General of Solar Power Developers Association Shekhar Dutt told PTI.

He also said that implementation of renewable projects and innovation in tendering them to attract investors would play a key role in 2021. According to him, India needs to design innovative tenders with the inclusion of wind, solar and energy storage to ensure that renewable can replace fossil fuels to a great extent.

This year has been challenging for the renewable energy sector but the industry has been able to withstand the crisis caused by the pandemic with support of the government. Moreover, confidence of investors in the sector has soared further as was evident from solar power tariff breaching the psychological barrier of Rs 2 per unit. Solar power tariff dropped to an all-time low of Rs 1.99 per unit in an auction of projects of 500 MW capacity by Gujarat Urja Vikas Nigam Ltd (GUVNL) in December. Prior to that, the tariff had declined to a record low of Rs 2 per unit in an auction for 1,070 MW projects conducted by the Solar Energy Corporation of India (SECI) in November. In July this year, solar power tariffs fell to a low of Rs 2.36 per unit in an auction of 2 GW capacities by the SECI.

Now, in order to maintain the momentum, the government will have to be more proactive and innovative to attract investors into the sector.  India had set an ambitious target of having 175 GW of renewable energy capacity by 2022. This includes 100 GW from solar, 60 GW from wind, 10 GW from biomass and 5 GW from small hydro power.

Talking about the challenge of bringing required investment next year to achieve the 175 GW target, Union Power and New & Renewable Energy Minister R K Singh said, “We are going to come out with more innovative bids (in 2021).” He told PTI that earlier efforts of the government helped to position India as the most favourite destination for investment, especially in the clean energy sector and it is evident from USD 64 billion investment in renewables. The minister also cited some examples of round the clock, hybrid and manufacturing linked auctions for clean energy in the country.

As per the government estimates, the demand for domestically manufactured solar cells and modules is likely to be around 36 GW over next three years. In November, Prime Minister Narendra Modi said there are huge renewable energy deployment plans for the next decade. “These are likely to generate business prospects of the order of around 1.5 lakh crore rupees or USD 20 billion per year. This is a big opportunity to invest in India,” Modi had said.

With the impact of COVID-19 on a gradual decline and higher visibility of vaccine availability, 2021 promises to be an exciting year for the renewable sector. As per industry estimates, the cumulative capacity of 20 GW clean energy is scheduled to be commissioned, which shows increased opportunities for equipment suppliers.

Dutt said that agencies implementing renewable energy projects are facing challenges with respect to signing Power Sales Agreements (PSA) for around 16 GW with power distribution companies (discoms) and electricity procurers. Such a situation shows that the implementation of the ambitious target of 175 GW will be possible only when there are assured buyers for clean energy across the country. Otherwise, it will not be viable to set up huge generation capacities. Meanwhile, there is a continued focus on ‘Aatmanirbhar Bharat’ initiative to boost local PV (Photo Voltaic) manufacturing as well as ensure quality and competitiveness against imported PV cells. This is being done by way of providing support through the government’s PLI (Performance Linked Incentive) scheme.  However, Dutt said that till the time domestic manufacturing capacity of requisite quality is not enough to meet demand, restrictive measures must be avoided.

According to industry players, the current focus is on developing large-scale ultra mega solar power projects but there are challenges such as land acquisition, sub-optimal utilisation of power evacuation infrastructure and higher transmission losses and charges.

“India is endowed with abundant sunshine across the country with a variation of 15-20 per cent. Hence, small to medium scale projects (50-100 MW) can be developed at load centres in 700+ districts located across the country, which will result in lower transmission losses, better utilisation of transmission assets, equitable job creation and development etc,” Dutt said. Structural reforms for discoms are being looked at to ensure timely payment to power producers.  Amendments to Electricity Act, 2003 and Tariff Policy, which has provisions to address the issues, are awaited by the industry.

Imaan Javan, Director of Operations at Suntuity REI, said that “with sufficient government policies, support and schemes in place and educating people on the advantages of clean and sustainable energy, I believe that we can definitely achieve our renewable energy target of 175 GW by 2022”.  “Though we have already seen various measures from the government like Safeguard Duty, ‘One Sun One World One Grid’ initiative, anti-dumping duty, Vocal for Local and Make in India, more strict imposition of these policies will help India be at par with her global counterparts and penetrate into the world market,” Javan said.

Suntuity REI is a leading solar energy solutions provider.

The renewable energy industry also expects higher coordination between central transmission utility and agencies implementing renewable energy projects to ensure seamless development of transmission evacuation infrastructure. About increasing the share of renewables in the country’s energy mix, the minister said that India already has 38 per cent installed electricity generation capacity (140 GW) coming from clean energy and that the 40 per cent target will be surpassed in 2021.

India has set an ultimate target of having 450 GW of clean energy by 2030.

Actis, Brookfield look to buy Mahindra’s EPC, solar assets

Source: Livemint.com, Dec 18, 2020

Private equity firm Actis Llp and Brookfield Asset Management Inc., among others, are eyeing Mahindra Susten’s engineering, procurement and construction (EPC) business, besides its under-construction 600MW solar assets, said two people aware of the development, seeking anonymity. The deal is valued around $500 million, they added.

The sale of Mahindra Susten’s assets, and the EPC business is being handled by EY.

This is in addition to the sale of the 600MW operational solar projects, which is being handled by Rothschild. This sale process has seen interest from the likes of National Investment and Infrastructure Fund (NIIF) and the Canada Pension Plan Investment Board (CPPIB).

Mahindra Susten, which builds and sells solar power projects, offers diversified services in the renewable energy and cleantech space. Earlier this year, it had sold around 160MW of solar projects to CLP India. Its portfolio comprises 1,569MW of solar power projects.

“The process run by EY has been underway for more than a month. The under-construction 600MW solar projects may have an enterprise value of around ₹2,400 crore and an equity value of around ₹1,000 crore. Actis is looking at the entire piece, including the EPC business,” said one of the people mentioned above.

A deal’s value can be calculated on the basis of either enterprise value (EV) or its equity value. EV is the value based on market capitalization of a company’s equity, total debt and cash reserves. “The EPC business may command an equity value of around ₹2,500 crore,” said the second person. The development follows Mahindra and Mahindra Ltd’s announcement that it plans to take 10 of its most promising units, including Mahindra Susten, public in the next 5-7 years, as it aims to unlock value in the units by bringing in new investors.

Spokespersons for Mahindra Susten, Brookfield Asset Management Inc. and EY chose not to comment. Queries emailed to an Actis Llp spokesperson on Saturday afternoon remained unanswered.

The Mahindra Susten sale process comes at a time when India’s solar power tariffs hit a record low of ₹1.99 per unit at an auction conducted on Saturday by Gujarat Urja Vikas Nigam Ltd. The rates are expected to decline further. The tariffs had hit ₹2 per unit last month at an auction by state-run Solar Energy Corp. of India Ltd (SECI). Also, India plans to impose a basic customs duty (BCD) of 40% on modules and 25% on cells from 1 April 2022, as reported by Mint earlier.

“We believe such bids are a reflection of lower interest rates coupled with lower project risks on the back of assured power purchase agreements (PPAs) from financially strong discoms or entities. All the winners of the bids have strong and deleveraged balance sheets and access to cheaper funds,” ICICI Securities wrote in a 20 December report. In fact, India’s green energy deals are getting better valuations to pre-covid levels, as yield-seeking funds and financial investors flush with capital are driving up prices.

15 firms look to invest $3 billion in solar manufacturing

Source: LiveMint.com, Dec 17, 2020

US silicon wafer maker 1366 Technologies and First Solar are among 15 companies that are considering total investments of around $3 billion to build solar equipment manufacturing facilities capitalizing on the Indian government’s initiative to push local manufacturing.

A government official aware of the development that these companies have communicated to the government on their plans to manufacture a total of 10 gigawatt (GW) of wafer, and 20GW each of solar cells and modules. The other major companies who have shown interest include Acme Solar, Vikram Solar, ReNew Power and Adani Solar, the official said, requesting anonymity.

These initiatives follow the Indian government announcing a production-led incentive (PLI) scheme that offers manufacturers in 10 sectors, including those of high-efficiency solar modules, total benefits of ₹1.97 trillion. Separately, the government also articulated its plans to impose a basic customs duty of 40% on modules and 25% on solar cells imports from 1 April 2022. The government also plans to build three large manufacturing zones in a coastal state, a hill state and a land-locked state for power and renewable energy equipment by offering incentives to the manufacturers.

“All the companies which have expressed intent to manufacture in solar, are expected to create a manufacturing capacity of 20GW module, 20GW cell and 10GW wafer in India,” the official cited above said.

Wafers and ingots—building blocks for manufacturing solar cells and modules—are key to India’s ambitious clean energy plans. India plans to encourage self-reliance and reduce dependence on Chinese equipment. Globally, the manufacturing of solar wafers and ingots is dominated by China, but India does not have any such capacity so far. India has a domestic manufacturing capacity of 2GW for solar cells and 10GW for modules.

“Incidentally, when we announced that we are going to impose customs duty, we have got expressions of interest or letters of intent for manufacturing of almost 20GW of cells and modules,” power and new renewable energy minister Raj Kumar Singh told Mint in an interview.

Prime Minister Narendra Modi has said India will not be able to fully use its solar power potential unless it develops better solar panel, battery and storage manufacturing capacity.

“I can confirm that we are actively exploring opportunities to build a wafer and cell manufacturing plant in India,” said a 1366 Technologies spokesperson in an emailed response. Queries emailed to a spokesperson for First Solar late Tuesday night remained unanswered till press time.

While Vikram Solar is planning to reach a 5GW capacity over the next three years, Acme Solar is interested to build a 1.5GW solar module manufacturing capacity. ReNew Power plans to set up a 2GW solar cell and module manufacturing facility in India and Adani Solar, which has a 1.5GW solar cell and modules manufacturing capacity, is building another 2GW capacity.

“Vikram Solar presently has 1.2GW of solar module capacity. We are expanding our capacity in Tamil Nadu by building about 3GW of manufacturing plant, consisting of solar modules, solar cells and solar wafer, the entire value chain,” said Saibaba Vutukuri, CEO of Vikram Solar, in an emailed response. “Overall, we are planning a total capacity expansion to 5GW in the next three years”. “ReNew Power’s plan to set up a 2GW manufacturing facility for solar modules as well as solar cells is very much on track. We are in advanced negotiations with a few shortlisted states to set up the facility, and hope to conclude the discussions soon,” said Sumant Sinha, CMD, ReNew Power in an emailed response.

Solar module imports to face 40% customs duty, cells 25%

Source: LiveMint.com, Dec 14, 2020

India plans to impose new tariffs on imports of solar cells and modules from 1 April 2022, power and renewable energy minister Raj Kumar Singh said.

The finance ministry will issue an order to impose a basic customs duty of 40% on modules and 25% on solar cells as part of the Atmanirbhar Bharat or self-reliant India strategy, Singh said in an interview. The customs duty will replace a 15% safeguard duty that is being imposed on imports from China and Malaysia.

Such a move will make solar cells and modules imported from China expensive and is being seen as part of an economic response to the violent face-off with China along the Ladakh border. Along with leveraging its growing green energy market to boost manufacturing, India is looking to play a larger role in global supply chains. Read the rest of this entry »

India seeks cheaper renewable power contracts to spur solar, wind projects

Source: Business Standard, Dec 10, 2020

India is considering plans to assist renewable energy developers as cash-strapped utilities shun the long-term contracts needed to underwrite new wind and solar projects, according to people familiar with the proposals.

State-run Solar Energy Corp. is discussing an option to pool electricity supply from renewable energy projects by developers including Adani Green Energy Ltd. and offer it to utilities at a more affordable price, according to the people, who requested anonymity to discuss private details. That should help the firms seal pacts with utilities and enable construction to start on as much as 15.2 gigawatts of renewable energy capacity, a sixth of current installations, and help the government meet its climate goals.

India’s renewable energy ministry didn’t respond to an emailed request for comment. Read the rest of this entry »

8 MW solar energy capacity at NTPC Auraiya project commercially operational

Source: Business Standard, Nov 10, 2020

NTPC on Tuesday said 8 MW solar energy generation capacity at its Auraiya project in Uttar Pradesh has been made commercially operational.

The remaining 12 MW solar capacity under implementation is expected to be operational by March 2021.

“Consequent upon successful commissioning, 8 MW part capacity of 20 MW Auraiya Solar PV Project at Auraiya, UP, has been declared on Commercial Operation w.e.f. 00:00 Hrs. of 10.11.2020,” NTPC said in a BSE filing.

The present installed capacity of NTPC Group comprises 46 NTPC stations–24 coal- based, 7 combined cycle gas/liquid fuel, 1 hydro, 14 renewables.

Besides, it has 25 JV & subsidiaries stations– 9 coal, 4 Gas/liquid fuel, 8 hydro, 4 renewables.