The Ministry of New and Renewable Energy’s (MNRE) new draft policy for repowering old wind power plants will increase wind power generation in the country and this will kickstart investments worth Rs 40,000 crore over 3-5 years, said a CRISIL report. It said that the investment will rise by three times the average annual wind power capex seen in the past four fiscal years.
The ministry recently issued the revised draft of the National Repowering Policy for Wind Power Projects, 2022, as most of the old wind power projects with sub megawatt scale wind turbines are yet to be repowered. “This may lead to replacement of ~5 GW of old windmills with new wind power plants with 2x more generation ability,” said Ankit Hakhu, Director, CRISIL Ratings. “Their viability looks good because such projects can generate double-digit returns at tariffs of ~Rs 4 per unit for the incremental capacity,” he added.
Government started driving the wind power capacity additions in India over two decades ago with supportive policies of accelerated depreciation and feed-in tariff, and availability of sites with high generation potential. Total installed capacity almost tripled from ~13 gigawatt (GW) in 2010 to ~34 GW till March 2018, the report said, maintaining that these generated less per unit of capex compared with the newer technologies. These windmills operated at hub heights of 100 metres. However after 2018, wind capacity additions slowed to ~42 GW as of December 2022.
New windmills, now, can operate at hub heights over 150 metres and generate more electricity per unit of machine capex using turbines of over 3 MW capacity. This, the report said, can leverage high-generation-potential sites that currently have the older generation turbines. “The policy provides clarity on extending eligibility of older machines from 1 GW to 2 GW to be repowered, on sale of incremental generation under open access route to C&I customers, and aggregation of projects (helping pool contiguous land parcels/ projects),” said Varun Marwaha, Associate Director, CRISIL Ratings.
Further, capital expenditure per MW will be higher for repowering because developers investing in old wind sites would pay a premium and also incur dismantling expenses of Rs 80 lakh to Rs 1 crore per MW. While generation will increase by 200- 300 per cent, the projects may still need higher tariffs (~Rs 4 per unit) than the recently discovered bids of ~Rs 3 per unit to generate double-digit returns, the report added.
India may exempt some solar projects from paying duties on equipment imports, according to government and industry sources, to bring renewable-energy capacity additions back on schedule and lower consumer power tariffs. Projects with 30 gigawatts of capacity will benefit, the sources said.
In March 2021, the government announced 25% basic customs duties on solar photovoltaic cells and 40% on solar photovoltaic modules with effect from April 1, 2022, in order to block Chinese imports and encourage indigenous manufacturing.
The exemption is being considered for projects that were awarded under tariff-based bidding by central agencies before the announcement was made on March 9, 2021, according to a government official and two company executives privy to the matter. They asked not to be named.
The exemption would speed up the implementation of the projects, which have been delayed by at least a year. The finance ministry declined to comment and the Ministry of New and Renewable Energy did not immediately respond to a query sent by Reuters.
The official added that the finance ministry was considering exempting these projects in the Feb. 1 budget for the fiscal year beginning April 1.
In September, the government provided partial relief to developers by allowing such solar projects to pass on price increases due to taxes to consumers after approval from power regulators. That resulted in higher power tariffs – and delays as developers went through the procedures.
The industry officials said these projects were under cost pressure because their developers had quoted aggressively low tariffs to win contracts in auctions held by central agencies in 2020-21 but had not expected to pay the import duties.
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Solar power projects with a combined capacity of at least 30 gigawatts have been either delayed or are facing an uncertain future due to the increase in module prices and also due to supply constraints, according to the National Solar Energy Federation of India.
More than 90% of the equipment for the Indian solar electricity industry comes from China.
Domestic manufacturing has not developed far, despite government support.
Imported solar modules cost about 40 cents per watt of capacity while domestic ones cost 37 cents per watt. This is against 27 to 28 cents per watt for imported modules three years ago.
Kochi-based solar-electric boat manufacturer Navalt Solar and Electric Boats has received its first export order. It received the order worth $650,000 (nearly ₹5 crore) from Maldives.
Maldives will use the 20 meters long and 7 meters wide ferry for inter-island passenger transport.
The boat’s 40 kW motor will be powered by a 40kWh (LFP or LTO) battery, which can be charged either with grid power or, at least partly, with a 20kW solar panel on the roof. Navalt has been selling boats since 2009, while it has been selling Aditya ferries for six years.
In a chat with businessline , Navalt’s Founder-CEO Sandith Thandasherr said the company’s Aditya boats have so far ferried 2 million passengers and saved 2,00,000 liters of diesel.
All of the company’s 20-odd boats, which include ferries, cruises, fishing boats, luxury vessels and even a ro-ro, are powered by batteries that can be partly charged by solar power.
Thandasherry said the company has orders for 35 boats that are worth $10 million (₹80 crore). He was in Chennai to take part in Climafix Summit 2022, a conference organised by the Chennai-based consultancy Energy Alternatives India (EAI) and IIT-Madras Research Park to bring together climate-tech start-ups and financiers.
Among the boats that are currently being built are two ro-ros—boats into which you can drive your car or a truck, and drive out upon reaching your destination. These boats, named Kraken, are 80-ton, 45 meters vessels that can accommodate 40 cars or four 40-ft trailers. Each costs ₹10 crore and are being built for the government of Kerala. They come with a 40kW rooftop solar panel and the batteries have a range of 40 kilometers.
On carbon credits for its customers, Thandasherry said Navalt has hired a consultant to explore this option.
Lack of government support In response to a question, Thandasherry said the company hasn’t received any support from the Central government, while the State governments are at least buying some boats.
He said that a few years back, Amitabh Kant, the then CEO of Niti Aayog, has assured that solar boats would be included in the FAME-II—a scheme that incentivises production of electric vehicles. However, nothing has happened so far, he added.
A Singapore-based company is closely monitoring the potential of producing wind energy in deep waters off Gujarat and Tamil Nadu as India progresses with its multi-billion-dollar renewable programme.
Anil Bhatia, Vice President for Renewable and Hybrid Energy at HBA, said strong winds across deep seas off Gujarat and Tamil Nadu are most suitable for installing bigger wind turbines, ranging from size of 12 MW to 18 MW, and produce 24X7 renewable energy at a competitive price.
“We are closely monitoring potential projects as the Government in New Delhi has recently issued a tender for a block of 4,000 MW wind energy development,” he said.
The continuous energy production from such offshore farms makes the production of green ammonia and hydrogen viable and competitive. Electricity in the range of Rs 8-12 per kwh is achievable, he said.
Bhatia also sees massive cost savings in setting up offshore complexes producing green ammonia, especially the cable cost to land the green energy onshore.
He compares the offshore mode of managing hydrogen-ammonia production and exports just like the way hydrocarbon production and shipments have been handled around platforms in deep water fields by the offshore oil and gas industry for many decades.
“We have the experience of handling such challenging projects,” Bhatia said on the sidelines of the Offshore South East Asia (OSEA) event held from November 15-17.
Global industrial groups are developing and are set to produce 15 MW and 18 MW wind turbines while 12 MW turbines are already operating in some of the major wind-energy-producing regions, especially Europe.
Bhatia is confident of installing wind turbines of 12 MW to 18 MW in deep waters off Gujarat and Tamil Nadu.
Using its experience of installing platforms and jackets of drilling rigs for the petroleum industry, HBA has the advantage of handling such projects in strong wind conditions, he said.
Combined solar and wind energy production, India can be among the first few countries decarbonising at full pace and even exporting green energy, he added.
“By putting together the bigger wind turbines and ammonia ships, we can produce the most competitive green ammonia for India and export markets,” Bhatia said.
Currently, India depends on imported blue ammonia, produced out of petroleum, for its ever-expanding fertiliser needs, he noted.
“But what we see out there in deep seas, offshore production of green ammonia from nitrogen and hydrogen which can then be used widely as a fuel in ships, supplementing coal in power to reduce the overall carbon footprint,” he said.
The global shipping industry has set ‘green targets’ with newer ships being built to run on hybrid fuel while the automobile industry has started producing electric vehicles and other renewable energy-powered fuels as the world decarbonises. These are some of the major changes taking place globally at a fast pace, he added.
The Japanese have already tested out ammonia for power plants, supplementing coal. Japan plans to import three million tons per year of ammonia, starting from 2026, according to energy industry veteran Hassan Basma, who founded HBA in 2015.
As pressure mounts from COP27, environmentalists and the governments’ closing in on their Net Zero targets, HBA has advanced its concepts into projects, said Bhatia, adding that a number of blocks have been set up for offshore deep water for wind energy complexes in the Southeast Asian region.
“Our plans are to export green ammonia from these projects with India being one of the most attractive markets, given the insatiable ammonia demand, especially from the fertiliser manufacturers,” said Mumbai-born Bhatia.
Bhatia sees a paradigm shift in energy usage as world leaders have come forward to show strong support for the environment.
India is looking for takers for $2.4 billion in government aid it’s offering to stimulate domestic manufacturing of solar power equipment.
The state-run Solar Energy Corp. of India is seeking bids from solar manufacturers for 195 billion rupees of financial incentives, according to documents published on the agency’s website. The government is seeking to grow the country’s module-making capacity to as much as 90 gigawatts, enough to meet its own requirements and serve export markets.
Reliance Industries Ltd. and Adani Group, industrial giants run by billionaires Mukesh Ambani and Gautam Adani, were winners in a previous round of solar manufacturing incentives and are eligible to apply again for building additional capacity, the bid documents show.
The financial assistance is part of Prime Minister Narendra Modi’s plan to turn the nation into a manufacturing powerhouse, creating jobs and reducing imports.
The focus on local production also helps India position itself as an alternative to China amid a global push to diversify supply chains in the wake of the pandemic.
Chinese companies control more than 441 gigawatts of module capacity globally, while Indian firms operate about 15 gigawatts, according to Bloomberg NEF data.
Priority will be given to firms that commit to setting up fully integrated manufacturing units, from polysilicon to modules, according to Seci. The agency has scheduled a pre-bid meeting with potential investors on Dec. 6 and bids can be submitted online by Jan. 9.
The latest grants follow an earlier 45 billion rupee offering for making modules. In addition to Reliance and Adani, Shirdi Sai Electricals also won assistance in that round.
Oil-to-telecom conglomerate Reliance Industries has entered into definitive agreements with SenseHawk Inc. for acquiring 79.4% stake in the company, through primary infusion and secondary purchase, for a total consideration of $32 million, the company said on Tuesday.
Founded in 2018, SenseHawk is an early-stage California-based developer of software-based management tools for the solar energy generation industry. SenseHawk helps accelerate solar projects from planning to production by helping companies streamline processes and use automation. It provides a solar digital platform to manage the end-to-end solar asset lifecycle. The turnover of SenseHawk for FY 2022, FY 2021 and FY 2020 was $2,326,369, $1,165,926, and $1,292,063 respectively, RIL informed in an exchange filing on Tuesday. “Sensehawk, along with the other investments of the company in new energy, will be synergistic and create unique solutions with higher value to customers. The objects and effects of the aforesaid acquisition are explained in the media release dated September 5, 2022 already filed by the company on the subject,” said RIL Chairman Mukesh-Ambani.
Ambani, who is pivoting RIL’s legacy fossil-fuel business to renewable energy business, last June, unveiled plans to set up the Dhirubhai Ambani Green Energy Giga Complex on 5,000 acres in Jamnagar, Gujarat, to create and offer a fully integrated, end-to-end renewable energy ecosystem with plans to invest $10 billion over three years. Last month, Ambani announced plans to set up a giga factory for power electronics. The SenseHawk acquisition, RIL said, does not fall within the related party transactions and none of RIL’s promoter/promoter group/group companies have any interest in the above entities, RIL said.
The transaction is subject to certain regulatory and other customary closing conditions and is expected to be completed before the end 2022, it added.
Rahul Sankhe, President and Co-Founder, SenseHawk, said, “We are on a mission to improve the solar energy ecosystem, acquiring 50% of the market by 2025 and with RIL as our partner, we will accelerate on our execution toward that goal.”
KKR and Co. is in advanced negotiations to invest around $400 million in Hero Group’s renewables energy company Hero Future Energies (HFE), in what would be the US private equity manager’s single largest cheque in the Indian clean energy space so far, said people aware of the development.
The final rounds of negotiations are ongoing before a formal announcement, which is expected in a few weeks. The investment is for a significant minority stake but comes with significant governance rights that would make KKR a co-promoter along with founder chairman and managing director Rahul Munjal. Munjal is the nephew of Pawan Kant Munjal, chairman and chief executive officer of Hero MotoCorp. The investment will largely be a primary infusion to reduce debt and grow the business. JP Morgan is advisor on the transaction.
KKR declined to comment.
Rahul Munjal and his spokesperson didn’t respond to ET queries.
Valuation may cross one billion Apart from the Hero Group, the International Finance Corporation (IFC) is an investor in the company, along with Masdar, also known as Abu Dhabi Future Energy Co., which picked up 20% stake for $150 million in November 2019, valuing the New Delhi-based company at $750 million. The KKR round is expected to see valuation cross the $1 billion threshold.
KKR will be using its infrastructure fund as the vehicle for this investment. But it will be kept outside the KKR-backed Virescent Infrastructure, which manages the Virescent Renewable Energy Trust, India’s first renewable energy infrastructure investment trust (InvIT). It is not clear yet if KKR will subsequently bring on board one of its limited partners or a co-investor.
Decade-old HFE operates in wind, grid-connected solar, rooftop sectors and energy storage and has a portfolio of 1.5 GW of operating assets and another 1.5 GW under construction. According to its website, the company has a pipeline of 500 MW of large-scale, grid-connected solar projects in Europe, Africa and South Asia. It aims to have a capacity of 5 GW by 2024. In 2021, HFE had sold a 49% stake in two of its projects totalling 500 MW to O2 Power.
HFE’s wholly owned subsidiaries include Hero Wind Energy Pvt Ltd (HWEPL), Hero Solar Energy Pvt Ltd (HSEPL) and Hero Rooftop Energy Pvt Ltd (HREPL). These in turn house the various individual projects as special purpose vehicles (SPVs) created for undertaking wind and solar energy projects.
Early this year, the company partnered with US-based Ohmium International to set up 1 GW of green hydrogen production facilities in India, the UK and Europe. Last month, the company won a contract for the construction of a 10 MW grid-connected energy storage plant in Kerala by the Kerala State Electricity Board.
he operational portfolio comprises wind capacity of over 580 MW in Rajasthan, Maharashtra, Tamil Nadu, Karnataka, Madhya Pradesh and Andhra Pradesh, as well as solar capacity of over 950 MW in Madhya Pradesh, Telangana, Andhra Pradesh, Karnataka and Rajasthan as of December 31, 2021. It has long-term power purchase agreements with the distribution companies of Rajasthan, Karnataka, Madhya Pradesh, Andhra Pradesh, Maharashtra, several private industrial and commercial customers and Solar Energy Corporation of India (SECI). The diversification of assets in terms of location and presence of strong counterparties reduces associated credit risks, experts said.
According to Crisil Ratings, the holding companies of the Hero Future Energies platform are majority owned, directly or indirectly, by the promoters of the Hero Group.
“These entities draw strength from their 20% and 13.99% stakes, respectively, in Hero MotoCorp,” said Manish Gupta, analyst with Crisil.
These promoter entities have funded the initial equity requirement for the platform.
“Presence of the Munjal family members on the board of group companies substantiates the importance of the venture to the Hero Group and the Munjal family,” Gupta said in a report in April. “The market cover of HFE holding companies declined from 5.2 in September 2021 to 3.8 as on March 23, 2022, primarily on account of fall in market capitalisation of Hero MotoCorp. The planned equity infusion in HFE by its shareholders, will be primarily utilised for reducing the debt at the holding companies by September 2022.”
In the past three months, the Hero MotoCorp stock has appreciated 7%.
HFE is expected to have cash flow for debt servicing of over Rs 1,275 crore in FY23. That will adequately cover its long-term debt obligation of around Rs 1,010 crore. In addition, HFE had cash and cash equivalents of more than Rs 720 crore on a consolidated basis on March 23, including Rs 499 crore unencumbered cash. The holding companies had unencumbered cash of about Rs 320 crore on March 23, as per Crisil’s calculations. Market cover for the consolidated debt stood at 3.8 times on March 23.
“For KKR it’s a great platform to build on while the investment will help Hero Future Energies ( HFE) to deleverage and the primary infusion will help in the growth plans,” said a person aware of the investment thesis on condition of anonymity.
KKR Infrastructure Fund’s first India transaction was a co-investment in May 2019 with Singapore’s GIC in Indigrid, an operator of 11 electricity transmission assets, where it invested $148 million. In April 2020, it acquired five operational solar energy assets from Shapoorji Pallonji Infrastructure Capital (SP Infra). It transferred those assets to Virescent Infrastructure, the renewable energy platform KKR launched in October. It entered India’s highway sector by signing definitive agreements to acquire Global Infrastructure Partners’ entire stake in Highway Concessions One (HC1) and seven highway assets totalling 487 km for an undisclosed sum.
GE Energy Financial Services (GE EFS) on Wednesday said it has bought a 49% stake in Continuum Green Energy’s 148.5 MW Morjar onshore wind project in Gujarat for an undisclosed amount. Continuum Green Energy is majority owned by global infrastructure fund managed by Morgan Stanley Infrastructure.
Morgan Stanley, which owns an over 85% stake in Continuum Green, had been looking for investors to sell its majority stake in the company since 2015. In the past, US-based SunEdison, Norwegian energy major Statkraft and India’s ReNew Power had evinced keen interest to acquire the stake. However, none of the discussions could reach a fruitful conclusion.
Continuum Green Energy has a portfolio capacity of 4 GW, which comprises 855.40 MW operational capacity, 444.40 MW under-construction projects and 2.7 GW under-development projects.
This transaction is the first equity investment by GE EFS in any onshore wind project in Gujarat using a structured preferred equity solution. The wind turbine equipment manufacturer believes that similar financial solutions can be replicated for future renewable energy opportunities across India and global markets for energy transition purpose.
The Morjar project will be equipped with 55 units of GE’s 2.7-132 onshore wind turbines and will begin commercial operations in June 2022. Upon completion, Morjar onshore wind farm will provide power to local communities which will be equivalent to 125,000 households. GE Renewable Energy recently supplied 37 units of these onshore wind turbines to Continuum’s 240 MW wind-solar hybrid project in Gujarat, GE Energy said in a statement.
Gaurav Raniwala, global renewable energy leader, GE Energy Financial Services, said providing a bespoke financing product to a strategic customer strengthens GE’s partnership to continue to deliver accessible, affordable and reliable renewable energy across India to support the country’s decarbonisation and renewable energy targets. “We look forward to furthering the partnership with Continuum on future renewables projects with GE’s innovative financing and technology solutions.”
GE EFS has invested in over 1 GW of renewable energy projects in various states, including Madhya Pradesh, Rajasthan, Karnataka, Uttar Pradesh, Maharashtra, Andhra Pradesh and Gujarat.
Arvind Bansal, CEO, Continuum Green Energy, said, “The Morjar onshore wind investment through GE EFS can be replicated to enable future development of wind and hybrid projects in India.”
National Investment and Infrastructure Fund (NIIF) backed Ayana Renewable Power Private Limited (Ayana) has signed an expression of interest with the Government of Karnataka to develop wind and solar power projects totaling 2-gigawatt (GW) capacity in Karnataka with an investment of around Rs 12000 Crore.
This capacity addition will be enough to provide clean energy for nearly 2 million households, the company said in a statement.
At present, Ayana has an operational portfolio of 340 megawatt-alternate current (MWAC) in the State.
“Karnataka is a big pull for the renewable energy industry, and we are pleased to have partnered with it to expand the sector further,” said Shivanand Nimbargi, MD & CEO, Ayana.
“The State under its Renewable Energy Policy 2022-27 aims to develop 10GW of additional renewable energy projects. Ayana is keen to help it achieve that target, creating an attractive and sustainable ecosystem for clean and green energy development,” he added.
Ayana Renewable Power is developing utility-scale wind, solar and hybrid energy projects in South Asia. By 2025, the company aims to develop 10 GWAC (Government wide acquisition contracts) portfolio.
Ayana is a majority-owned company of the National Investment and Infrastructure Fund (NIIF). British International Investment (formerly CDC Group) and EverSource Capital-managed Green Growth Equity Fund (GGEF) are other shareholders in the company.
Solar capacity installations in the country jumped by a record 210 percent to 10 gigawatts during 2021, Mercom Communications India said in a report on Thursday. The green capacity installations reached a level of 3.2 gigawatts (GW) in 2020, the research firm said in its ‘Indian Solar Sector Market Leaders’ report.
“In CY 2021, India saw a record 10 GW of new solar capacity installed, a big jump of 210 percent compared to 3.2 GW the year before. The newly installed solar capacity in 2021 reached a record high, making up 62 percent of the total power capacity additions in 2021,” it said.
According to the report, utility-scale projects accounted for 83 percent of the total installations and the top ten developers of such projects accounted for 68 percent of the total installed projects in the calendar year 2021.
ReNew Power was the top utility-scale solar developer which commissioned the maximum projects during the year, followed by Adani Green.
In 2021, 1.7 GW of rooftop solar capacity was added. Tata Power Solar led the list of rooftop solar installers, accounting for 20 percent of the total installations in the segment.
“Companies offering solar Engineering, Procurement and Construction (EPC) services saw a significant number of projects moving to 2021 from the previous year. Sterling & Wilson topped the list of EPC providers during the year, closely followed by Siemens Gamesa and Tata Power Solar,” the report said.
Sungrow was the top solar inverter supplier in 2021, while Arctech Solar was the top supplier of solar trackers during the year.
Solar imports in 2021 saw a massive increase of 641 percent year-on-year. LONGi Solar was the leading module supplier to India for the second consecutive year.
Open access solar installations grew 222 percent in 2021 compared to the previous year, making it the second-best year on record, it said.
Mercom Communications India, a subsidiary of the US-based Mercom Capital Group, is a clean energy research and communications firm providing expertise in Indian cleantech markets.
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