3 developers call off NTPC’s solar contracts  over regulatory delays

Source: LiveMint.com, Jan 29, 2019

Solar power contracts of three major power plant developers with state-run NTPC Ltd have been cancelled due to delays in regulatory approvals, potentially disrupting India’s clean energy trajectory by knocking 1,400MW off it.

These firms had participated in what was the first interstate transmission system (ISTS)-connected solar auction conducted by NTPC, India’s largest power generation utility, for building power plants and supplying 2,000MW in August 2018. These bids contributed toward lowering India’s solar power tariff trajectory. While Acme Solar Holdings, Shapoorji Pallonji Infrastructure Capital Co. Ltd and New York Stock Exchange-listed Azure Power Global Ltd bid ₹2.59 per kilo-watt hour (kWh) to win contracts to build plants of 600MW, 500MW and 300MW each, respectively, SoftBank-owned SB Energy bid ₹2.60 per kWh at which it will sell solar power, to win contracts to develop 600MW.

The terms of the PPAs allowed the developers to opt for their termination in case of delays.

“The PPAs of Acme Solar, Azure Power and Shapoorji Pallonji group have been terminated with only SB Energy’s remaining,” said a person aware of the development requesting anonymity.

This comes against the backdrop of termination of wind PPAs of Hero Future Energies, ReNew Power Ventures and Mytrah Energy with NTPC Ltd to supply 300MW each.

“Only PPAs of Actis Llp’s renewable energy platform Sprng Energy and Continuum Wind Energy Pte Ltd remain to supply 200MW and 50MW, respectively,” said the person quoted above.

India, the world’s third-largest energy consumer after the US and China, is running what will become the world’s largest clean energy programme with an aim of having 175 gigawatts (GW) of clean energy capacity by 2022 as part of its global climate change commitments. It plans to add 100GW of solar capacity by 2022, including 40GW from rooftop projects. Wind power projects are to contribute 60GW. India currently has an installed renewable energy capacity of around 84.39GW. An NTPC spokesperson in an emailed response confirmed the development and said, “Under the provisions of power purchase agreement (PPA) signed by solar power developers (SPDs) and wind power developers (WPDs) with NTPC, it was required that discoms buying above power would obtain approval from the regulatory commission(s) within a period of two months from the date of signing of agreement. In the event of delay in regulatory approval SPDs- WPDs/discoms can terminate the agreement without any financial liability to either party.”

“Due to delay of more than two months in regulatory approval in the above cases, some of the SPDs/WPDs have opted for termination of PPAs under the PPA provisions,” the spokesperson added.

Read the rest of this entry »

EQT, Temasek launch $500 mn renewable energy platform

Source: LiveMint.com, Jan 23, 2019

MUMBAI: European alternative asset manager EQT and Singapore’s state investment firm Temasek Holdings Pte. on Wednesday announced that they have jointly set up O2 Power, a $500-million renewable energy platform in India.

O2 Power will target more than four gigawatts (GWs) of installed capacity across solar and wind projects, comprising both greenfield projects, as well as mergers and acquisitions, the companies said in a joint statement.

This would be EQT Infrastructure’s first investment in India. EQT is investing in the platform through its EQT Infrastructure IV fund. With this transaction, EQT Infrastructure IV is expected to be 60-65% invested.

The investment is in line with EQT’s thematic approach to invest in sustainable solutions, guided by the United Nations’ Sustainable Development Goals, the statement said. The platform will be headed by Parag Sharma as chief executive.

“India presents significant investment opportunities being the second largest renewable energy market in the world and EQT is delighted about teaming up with Temasek and O2 Power. CEO Parag Sharma and his management team have a successful track record and EQT looks forward to work together in creating a future-proofed renewable energy platform,” said Fabian Gröne, partner, EQT Partners, and investment advisor to EQT Infrastructure.

Stockholm-based EQT is a global investment organization with more than €62 billion in raised capital and around €41 billion in assets under management across 19 active funds. EQT funds have portfolio companies in Europe, Asia and the US.

“We seek opportunities to invest in solutions that contribute to a better and more sustainable world. The partnership with EQT to establish O2 Power is consistent with our focus on sustainable living and, in particular, the development of eco-conscious energy solutions,” said Nagi Hamiyeh, joint head, investment group, Temasek.

With O2 Power, EQT and Temasek join several other foreign investors who have set up investment platforms in India to either develop or acquire renewable energy projects.

Last year, Piramal Enterprises Ltd tied up with Canada’s largest pension fund manager, Canada Pension Plan Investment Board (CPPIB), to co-sponsor India’s first renewable energy-focused infrastructure investment trust (InvIT). The proposed InvIT will have an initial targeted corpus of up to $600 million with an option to scale up further and will seek to acquire up to 1.5-2 GWs of cash-generating renewable assets solar and wind assets.

CPPIB is also an investor in ReNew Power, one of the largest renewable energy producers in the country, having invested $391 million in the company in 2018.

Another Canadian pension fund manager Caisse de dépôt et placement du Québec (CDPQ) too has made significant investments in the Indian renewable energy sector with investments in CLP India and Azure Power Global Ltd

GIC and Abu Dhabi Investment Authority own Greenko Group, a major renewable energy producer. In 2019, the two sovereign funds invested over $800 million into the company.

Clean power push: Govt adds over 50,000 MW in 5 years

Source:  The Hindu Business Line, Jan 13, 2020.

New capacity addition up 52% in April-December 2019 period

The renewable energy sector has made rapid strides under the Modi government with 50 GW plus of new capacity coming into the grid in the last five years.

This is despite the doubts being raised over the government’s target of achieving of 175 GW by 2022.

The December quarter of 2019 saw India’s cumulative clean energy capacity cross 85,000 MW, of which more than 50,000 MW of new capacity addition was achieved in the past five years.

As on December 31, 2019, the total grid-connected installed renewable power capacity in India stood at 85,908 MW, aided by support of several policy measures in recent years, , according to Ministry of New and Renewable (MNRE) energy data.

Five years ago, India’s cumulative grid-interactive clean energy installed capacity was about 33,792 MW.

Though the wind segment is still leading now with a total installed capacity of 37,505 MW as of December 31, 2019, solar is fast growing and is likely to overtake the wind sector in the next fiscal.

The solar segment’s (which includes ground-mounted and rooftop) total capacity was 33,730 MW as of December 2019.

To achieve the 175 GW target by 2022, the sector has to set up 90 GW capacity.

Concerns and issues

However, industry analysts have warned that capacity additions in renewable energy may fall short of the 2022 goal due to headwinds facing the sector.

A couple of months ago a Crisil report stated that tariff caps should be relaxed to improve the viability and attract new players.

Also, it underscored the need for a consistent and stable policy environment, especially as prolonged disputes can hamper the projects’ debt-servicing ability, impacting player-level interest and denting investor confidence.

Read the rest of this entry »

Mahindra Renewables plans $171 mn investment for solar project in Rajasthan

Source: Business Standard, Jan 09, 2019

Chennai: Mahindra Renewables Private Limited (MRPL), a wholly owned subsidiary of Mahindra Group (worth $20.7 billion) cleantech arm Mahindra Susten Private Ltd (MSPL) is planning to invest around $171 million to set up a 250 mega watt (MW) solar power project in Rajasthan. The project will be backed by International Finance Corporation (IFC).

The proposed project will consume around 1200 acres (486 hectares) at Bhiv ji ka gaon Village in Bap Tehsil, Jodhpur District in Rajasthan.

IFC’s estimated project cost is Rupee equivalent of around $171 million. The project involves an IFC ‘A’ Loan investment of Rupee equivalent of $36 million to the company and assistance in mobilisation of the syndicated parallel loan of Rupee equivalent of $93 million for the development, financing, construction of the Project.

IFC will provide fixed interest rate local/Rupee currency loan with long term maturity of up to 20 years. This will improve Project viability against interest rate fluctuations. Moreover, longer tenure loans can help increase the overall competitiveness of the project. IFC’s involvement will facilitate involvement of other lenders to finance the project, especially in a market context where local lenders are facing sectoral headwinds, said the World Bank’s investment arm.

MRPL is an existing portfolio client of IFC having committed a 20-year local currency loan in February 2018 for development of a 250 MW solar project within the Rewa Ultra Mega Solar Park in the State of Madhya Pradesh.

MRPL was awarded the development of 250MW solar photovoltaic power project in the state of Rajasthan under an electronic reverse auction held by the Solar Energy Corporation of India (SECI). The auction was part of SECI’s 2 gigawatt (GW) Interstate Transmission System (ISTS)-connected multiple solar projects across the country. The bid for this project was put by MSPL and the project is housed in MRPL as per the provisions of the tender.Mahindra Susten is a leading solar EPC services company/contractor in India which offers solar power, renewable energy solutions and utility scale solar plants.

India set to cross 100-GW renewable energy capacity mark in 2020

Source: Business Standard, Dec 27, 2019

India is set to cross the 100-Gw renewable energy capacity mark in 2020 and can make rapid strides towards the ambitious 175 Gw clean energy target by 2022 provided the government keeps a close eye on key issues and deals with those well in time. The government, however, needs to promote storage to ensure 24×7 clean energy supply as coal fired thermal power still remains the base load in the country.

Presently, the issues hampering growth of renewables in India are lack of interest of financial institution to fund renewable energy projects, safeguard duty on imported solar panels, ambiguity over goods and services tax (GST) on solar equipment and low investor sentiment due to delayed or non-payment by discoms to clean energy developers.

India’s installed renewable energy generation capacity touched around 86 Gw by November-end. This includes solar, wind, small hydro, biomass, waste to energy and others.

Around 30 Gw renewable capacity, including 18 Gw solar and 10 Gw wind energy, is under implementation. Besides, around 40 Gw including 36 Gw solar and 3.4 Gw wind energy, is being tendered.

“Together with other schemes being implemented by the government, I expect RE (Renewable Energy) sector to get a big boost in 2020 and the years thereafter. I expect our RE capacity to cross 100GW mark in 2020,” Power and New & Renewable Energy Minister R K Singh told PTI.

NTPC to invest Rs 50k crore to add 10GW solar capacity by 2022

Source: Financial Express, Dec 26, 2019

State-owned power giant NTPC is planning to add 10 GW of solar energy generation capacity by 2022, which entails an investment of around Rs 50,000 crore, to be funded mainly by green bonds, a source has said.

At present, NTPC has installed renewable energy capacity of 920 MW, which includes mainly solar energy. It has formulated a long-term plan to become a 130 GW company by 2032 with a 30% non-fossil fuel or renewable energy capacity. “The company will complete tendering of 2,300 MW of solar energy capacity by the end of this fiscal. Thereafter, it has planned to add 4GW each in 2020-21 and 2021-22. “The company is open to any borrowing option in the market, which is economical. However, the company would mainly rely on green bonds which are offered for pure clean energy projects. The company wants to raise money through domestic as well as overseas green bonds,” the source said.

NTPC’s plans to add 10 GW solar energy capacity assumes significance in view of India’s ambitious target of having 175 GW of clean energy by 2022.

The source said that the company would also set up some of its solar energy projects under scheme where it gets viability gap funding to keep the tariff below Rs 3 per unit level.

Besides, the company will also set up solar energy projects without any long term (for 25 years) power purchase agreements (PPAs) as it intends to sell the electricity to industrial as well as commercial consumers and also at energy exchanges, the surce added.

The sector regulator Central Electricity Regulatory Authority (CERC) has already approved the real-time power market, which is expected to kick in by April 1, 2020.

In the real-time power market, there would be 48 sessions of half an hour each in a day.

This will allow consumers to get desired power supply within an hour of buying at the energy exchanges. At present, power is traded for two hours in a day from 10 am to 12 am, where consumer can schedule delivery in a day advance.

The source also said the company intends to capitalise on real time power market, which is just three months away.

Rajasthan revises developer contribution in solar policy

Source: Financial Express, Dec 24, 2019

The Rajasthan Government has fine-tuned the rates for developer contributions towards the Renewable Energy Development Fund (REDF) for solar projects in the Solar Energy Policy 2019.

Industry players expressed dissatisfaction over the contribution demanded under the draft policy at between Rs 2.5 lakh and Rs 5 lakh/MW per year as cess for supplying power to utilities other than discoms in Rajasthan.

The Rajasthan Renewable Energy Corporation said in its Solar Energy Policy 2019 that large-scale integration of wind and solar power into the grid requires upgradation of transmission and distribution infrastructure of power utilities, leading to increase in system-level cost. “This increased cost has to be borne by state utilities and the government in various forms, mainly as expenditure for development of large power system infrastructure for grid management.”

To meet this requirement, the government has come out with a Renewable Energy Development Fund. In case of solar power projects developed in Rajasthan for sale of power to parties other than discoms of Rajasthan, developers will have to contribute towards the fund.

The Solar Energy Policy 2019 has categorised the contribution from developers under four brackets with respect to date of commissioning. For solar projects to be commissioned by March 2024, the contribution has been fixed at Rs2 lakh/MW/year; for projects to be commissioned between April 2024 and March 2025, it will be Rs 3 lakh/MW/year; for projects getting commissioned between April 2025 and March 2026, the contribution has been fixed at Rs 4 lakh/MW/year; and for projects getting commissioned on or after April 2026, the same will be at Rs 5 lakh/MW/year.

Read the rest of this entry »