The dark secret behind India’s solar plan to bring power to all

News:

Like generations before him, the only light Jurdar Thingya has at night in his one-room mud hut in Maharashtra comes from a small wood fire on the floor. A broken solar panel is all that the 35-year-old farmer has to remind him of the government’s promise to bring electricity to all of India’s villages.

Bhamana, population 1,500, is two hours’ walk from the nearest surfaced road, across a river that is impassable for months during the monsoon rains. Like other remote villages, it was powered by renewable energy as part of a drive to take electricity to every community in the state, according to Dinesh Saboo, projects director at Maharashtra State Electricity Distribution Co., the power retailer.

Maharashtra, home to the financial capital of Mumbai, declared itself fully electrified in 2012, relying on solar panels or small wind turbines to cover remote areas. India considers a village electrified if at least 10% of the households and public places such as schools have electricity.

But theft and damage have plunged 288 villages and 1,500 hamlets in Maharashtra back into darkness, according to Saboo. “Most of the equipment is either stolen or not working,” he said. “Now we have decided that a majority of these villages will be electrified in the conventional way.”

In India, political power and electrical power are closely linked. Prime Minister Narendra Modi’s ruling Bharatiya Janata Party, which also runs the state government of Maharashtra, was elected in 2014 partly on promises to bring electricity to rural voters. It has pledged to electrify all villages by May 2018 and supply power to every citizen by 2019.

“Rural electrification is one of the most critical issues on which the elections in India are being contested,” said Sandeep Shastri, a political commentator who teaches at Jain University in Bengaluru. “People will weigh the promises of the governments—both federal and state—on the basis of implementation. Their electoral gains will be determined by the credibility of their promises.”

Shastri said rural electrification contributed to the landslide win last week of Modi’s party in Uttar Pradesh, one of India’s least-developed states, where voters compared the federal government’s efforts with the lack of progress from the incumbent state government.

Power surge

There are a lot of votes to be won. In 2014, the World Bank ranked India as home to the world’s largest unelectrified population. Power was either unaffordable, inadequate or non-existent for 240 million people, according to data from the International Energy Agency. An expanding economy and population put the country on track to be the biggest driver of global energy demand through 2040, according to the Paris-based International Energy Agency.

But progress has been patchy. The government has met 77% of its target to link villages to power grids, yet only about 14% for villages earmarked for off-grid power like solar. Some 47 million rural households are still without electricity, and even those connected to the grid suffer frequent outages.

Federal renewable energy secretary Rajeev Kapoor didn’t immediately respond to calls and a text message seeking comments.

In 2012, the nation suffered one of the worst blackouts in history when the national grid collapsed, cutting power for two days to almost half the nation’s population. About one in five Indians lacked access to electricity, compared with full electrification in China, the International Energy Agency said in a 2016 report.

When the first solar units were installed in Bhamana in 2010, most houses got a small photovoltaic panel connected to a battery that could power a light for five to six hours. Seven years later, only four or five houses still have working lamps.

Dead battery
“We have no clue how to fix the equipment,” said Achildar Pesra Pawra, a member of the Bhamana village council. “Some batteries stopped working within months. Others lasted for about two years. Some of the solar panels were broken.”

Part of the problem is that the factors that make solar attractive for isolated communities—ease of transport and installation—also make them easy to steal, said Shantanu Jaiswal, an analyst at Bloomberg New Energy Finance.

India plans to expand renewable generation capacity more than three-fold to 175 gigawatts by 2022, with the majority from solar. Almost a quarter of the total will be supplied by rooftop panels.

“The instances of theft and destruction of distributed renewable energy appliances has been very prevalent in programs especially run by aid agencies as part of corporate social responsibility or where the government provides a subsidy,” said Jarnail Singh, India director at The Climate Group, a London-based organization promoting low-carbon solutions. “This is because there is no maintenance of equipment after installation.”

Maoist guerrillas
As a result, Maharashtra’s state-owned power retailer is now planning to spend Rs3.85 billion by 2018 to connect many of the isolated villages to the grid.

That won’t be easy. Most of the 288 villages that no longer qualify to be called electrified are in mountainous and thickly forested areas. That means getting approval from the forest department to run transmission lines across the land. And in some cases it means finding contractors willing to venture into areas populated with Maoist insurgents.

“We are not able to enter some of these areas,” Saboo said. “Many contractors are not prepared to work there and those that are charge very high rates. We are already allowing the highest rates in these areas so that they can get electrified.”

For villagers like Thingya, one of the greatest losses from the failure of the solar project is at the village primary school, which was able to light its cavernous classroom even in the dark monsoon days. Now his six children learn in the open air in the dry months and don’t have light to read or study at home.

My View:

The issues related to solar power will exist if the proper maintenance is not carried out. Theft of panels,damage to panels etc. will be there if proper maintenance is not available. Government should concentrate on maintenance part so that the supply from solar panel  becomes more reliable. 

NTPC threatens cutting off Delhi’s power supply

News:

State-owned power generator NTPC Ltd has threatened to cut off the national capital’s power supply over alleged non-payment of dues by Anil Dhirubhai Ambani Group (ADAG)-owned power distribution companies BSES Rajdhani (BRPL) and BSES Yamuna (BYPL).

“In case, overdue payments are not immediately forthcoming, NTPC may be constrained to consider all options, including regulation of power supply, in the coming period,” the country’s largest electricity producer said. It added continued non-payments by Delhi Discoms would make it very difficult for NTPC to keep maintaining its reliable supplies in the ensuing peak summer season where the demand of Delhi is supposed to peak at 6,600 Megawatt as per DISCOM estimates.

When asked for comment, a BSES spokesperson said the two discoms are under huge financial stress due to non-liquidation of regulatory assets which are over Rs 16,000 crore as on March 2016. As compared to this, total overdues payable by BYPL to APCPL (a Joint Venture of NTPC, Delhi government and Haryana) is around Rs 239 crore, and this power is already being regulated for the last few months.

“BSES discoms are in regular touch with APCPL to get the regulation lifted, as also making concerted efforts to address the situation and clear pending dues in a just and equitable manner,” the BSES spokesperson said.

He added the payment of dues to power utilities by BSES discoms is sub judice in the Supreme Court and the judgement in the matter is reserved since February 2015. “We are awaiting the Supreme Court judgement, which will clear the path for recovery or liquidation of regulatory assets. Consumers will continue to get reliable power supply,” he said.

NTPC is the major supplier of power to the National Capital Territory (NCT) of Delhi which has a total allocation of 3,930 Mw from NTPC including 693 Mw from APCPL Jhajjar . Of this allocation, more than 2,000 Mw is allocated to the two BSES Discoms. NTPC supplies electricity worth around Rs 300 Crore to the BSES discoms every month.

As per the terms of the Power Purchase Agreement (PPA) between NTPC and BSES discoms, the payments of energy bills are to be made within a calendar month. NTPC, however, alleges the two discoms (particularly BYPL) are not making these payments as per the agreed provisions of the Power Purchase Agreement.

“It may be recalled that for a similar situation, NTPC had issued a notice for regulation of power to these discoms in May 2016. Subsequently, after discussions with the discoms and assurance of liquidation of outstanding dues by this financial year, NTPC had kept this regulation notice in abeyance. However, despite a lapse of almost 10 months, there is an outstanding amount of Rs 239 crore overdue for payment from BYPL,” NTPC said.

The company claims that fuel alone accounts for around 70 per cent of its generation cost and that has already been paid to fuel suppliers like Coal India (CIL). NTPC had issued a similar threat in May last year saying it would have to suspend supplies for the BSES discoms if they fail to cough up Rs 1,300 dues. The generator had then issued notices to the discoms on non-payment of dues.

My View:

Most of the Private DISCOM's situation in India is in dismal state. In this case according to PPA the payment must be settled within a month,but due to financial problem of BSES they are not able to pay the dues. Companies like BSES should analyse first the situation then they should finalize the power purchase agreement with any Generators.

States free to give coal to efficient private power producers

News:


The power ministry on Tuesday framed rules giving state governments the freedom to get power generated by the most efficient private companies in the state using the coal allocated to states by miners under a new system that replaces the earlier rigid allocation of coal to individual state-owned plants.

The rules framed in line with the cabinet decision of 4 May last year rationalising coal allocation, to allow states to invite power tariff bids from independent power producers at which they are willing to sell power using the coal that the state is willing to assign to them.

The landed cost of power from the private generation company including transmission charges has to be less than the variable generation cost of power from the state power generation unit, which the private player is seeking to replace, according to the rules released by the power ministry. Power tariff has two components—a fixed cost of the power plant and the variable or the energy cost.

The private power producer has to assess transmission infrastructure availability before making the bid. The state will check with the ministry of railways before assigning coal to the winning bidder whether transportation of the fuel to the private player’s plant was feasible.

The easing of the coal allocation rules is part of the government’s efforts to reduce power generation cost by utilising the fuel at the most efficient plant and enable distribution companies to buy more power.

On 21 December, coal and power minister Piyush Goyal had said that he had cleared the plan to allow state-owned and private companies to swap their allocations of coal so that power plants can source the fuel from the closest available location and improve power generation efficiency. The minister had also said then that eventually he would like such swap of coal to be allowed across sectors of the industry such as power, steel or cement.




My View:


The initiative by Government is quite good which will help to reduce the cost of electricity. But to come under the policy the rules are quite tough as stated in news. There should be some flexibility to private generation companies. 

35 open access companies return to Maharashtra power discom's fold

News:

Altogether 35 firms drawing power for their units have decided to become consumers of the Maharashtra State Electricity Distribution Company Limited (MSEDCL) again.

The 35 companies were among 130 firms in the Konkan region of the state power utility and had been buying power from private producers as part of the open access system introduced last year.

These consumers are known for prompt and huge payments, as they buy power in bulk. The companies had opted for the open access system. It allows the firms to buy power from independent producers located anywhere by paying some duty and the wheeling (carrying) charges to the electricity company.

What came as a boon for MSEDCL is that the state energy regulator, Maharashtra Energy Regulatory Commission (MERC), in November 2016 tariff order allowed it to increase the wheeling charges and duty for consumers buying power from other producers, which use its network to supply to its consumers.

"The result was that the electricity tariff of consumers buying power from private players became costlier. This is the reason why some of these companies have decided to return to us," a senior MSEDCL official told TOI.

The officer added out that the tariff provided to them by the independent producers was lower than that of MSEDCL. But the new conditions mean that the companies have to cough up more as power tariff.

"Had the regulator's ruling not come, these firms would not have approched the MSEDCL for power supply," said Siddharth Soni, a consumer representative from Nashik.

MSEDCL officials are, understandably, happy with the development. "We are reaching out to the companies promising best services. As a result, we are gaining back their confidence. The tariff and other conditions are favourable no doubt, but the company has also improved its services and infrastructure over a period of time," MSEDCL regional director Satish Karpe said.

My View:

Such orders will reduce the competition from the market. There are many pvt players which will get affected by such orders. Many power trading companies will  get affected as there consumers will be moving towards DISCOM's. Government should take necessary steps otherwise it will ruin the open access market in Maharashtra.

Panama Energy Sector – Overview Of Incentives

Panama is one of the the fastest growing and most dynamic economy in Latin America, with GDP growth of 6.0 percent in 2015 and estimated 6.3 percent in 2016. All of this growth has become a challenge for the energy sector by demanding more electricity and new energy sources.

Panama has traditionally relied mainly on hydroelectric production to meet its energy needs. However, during the last few years it has sought to change its energy mix due to the effect of climate change on its water reservoirs. Today, Panama's energy matrix is composed of hydropower (56.6%), thermal/oil (41.34%) and other sources (2.06%) including wind and solar.

Panama expects that its energy demand will grow at an average rate of 6% until 2030 according to a proposed 2016-30 expansion plan by state power transmission company Etesa. The plan projects that annual electricity use and load demand will grow around 6%, spurred by expansion of the likes of the Panama Canal, new airport operations and new potable water and sewerage system. Forecast demand scenarios include exchange with Central America power grid Siepac and a planned interconnection with Colombia helping position Panama as an energy hub for the Central American region.

In March 2016, the Panamanian government approved the National Energy Plan 2015-2050. This new plan proposes that by 2050, 70% of the energy matrix coming from renewal energy with emphasis in solar and wind power.

Currently, there is a planned investment of:
Construction of the 4th Transmission line with capacity of 1,280 (MW) by circuit of 500 KV with a length of 330 km.
Incorporation of liquefied Natural Gas (LNG) energy generation plants.
The Colombia-Panama interconnection line through an underwater cable with capacity of 400 megawatts ( MW ).
Construction of the large Changuinola Dam II
Update and expansion of transmission and distribution network.

As part of Panama's strategy to diversify the country's energy matrix, in 2011, 2012 and 2013, the Panamanian Government enacted various statutes that set forth tax and other incentives for renewable sources of energy, such as wind-based, biomass, natural gas-based and solar-based power generation facilities.

An excerpt of the tax benefits that applies to each of type of energy source follows:

Gas Based Power Generation Facilities

• Tax credit applicable to the income tax of a maximum of 5% of the total direct investment value for civil works that become infrastructure for public domain, like highways, road, bridges, sewage systems, schools, health centers and other of similar nature, previous to an evaluation by the Public Entity that receives the corresponding work, in coordination with the Ministry of Economy and Finance. The referred credit cannot be subject of compensation, cession or transfer.
• Exoneration of customs duties that could be caused due to the importation of equipment, machinery, materials, spare parts and others necessary for the construction, operation and maintenance of the plants.
• Right to use an accelerated amortization method to depreciate fixed assets.
• The exemption of all national taxes, for a period of 20 years, for companies dedicated to the manufacturing of natural gas generation equipment within Panama. Equipment includes mechanical, electronic, electromechanical, metallurgical and electrical type of equipment.

Wind Based Power Generation Facilities

• Tax credit applicable to the income tax of a maximum of 5% of the total direct investment value for civil works that become infrastructure for public domain, like highways, road, bridges, sewage systems, schools, health centers and other of similar nature, previous to an evaluation by the Public Entity that receives the corresponding work, in coordination with the Ministry of Economy and Finance. The referred credit cannot be subject of compensation, cession or transfer.
• Exemption of all taxes pertaining to the importation (which includes customs duties, introductions fees and VAT) of equipment and materials for the construction, operation and maintenance of wind powered generation plans. The exemption applies also to any natural or legal persons who import equipment for the construction, operation and maintenance of wind-powered generation plants with the purpose of promoting and selling this type of equipment.
• The application of the accelerated depreciation method for equipment used for wind-powered generation.
• The exemption of all national taxes, for a period of 15 years, for companies dedicated to the manufacturing and installation of wind-powered generation equipment within Panama.

Biomass Power Generation Facilities (Applicable for a period of 10 years) 

• Full income tax exemption.
• Payment exemption of commercial or industrial license tax.
• Exemption on taxes, fees, contributions or any other municipal charges.
• Exemption from VAT on importation.
• Full exemption of custom duties, applicable to equipment and materials used for the development of the power generation project

Solar-Based Power Generation Facilities

• Tax credit applicable to the income tax of a maximum of 5% of the total direct investment value for civil works that become infrastructure for public domain, like highways, road, bridges, sewage systems, schools, health centres and other of similar nature, previous to an evaluation by the Public Entity that receives the corresponding work, in coordination with the Ministry of Economy and Finance. The referred credit cannot be subject of compensation, cession or transfer.
• Exemption of all taxes pertaining to the importation (which includes customs duties, introductions fees and VAT for specific items) of equipment and materials for the construction, operation and maintenance of solar-based generation plans.The application of the accelerated amortisation method to depreciate fixed assets.

In addition to the tax incentives previously mentioned, there are additional tax benefits that applies to other renewable power projects, such as mini and small hydro generation facilities.

Progress of green energy corridor very different on paper and on ground: Mercom Capital

My View:

The Government should take necessary step to promote green corridor. It will help to reduce transmission losses and improve the quality of power if renewable power travels through green corridor. There are various Power transmission companies which will be interested to invest in green corridor if the tenders come out in faster pace and the policies become more business friendly.


News:
The critical green energy corridor, which is important to evacuate renewable energy, is still far from reality and solar power project developers believe the current grid infrastructure is inadequate to handle the increased capacity, solar sector research firm Mercom Capital today said in a report.

“For a project that has already had its share of delays and is being touted as the cure-all for grid issues, the renewable energy sector is skeptical if it will get done in time to make an impact,” Mercom said.

The solar power sector is expected to add close to 9 Gigawatt capacity in 2017 as against 4 GW added in 2016 and this more than double capacity addition would require a better transmission infrastructure.

“The infrastructural development under the green energy corridor is slow; it is not at par with the pace of tenders coming out. Over the next three quarters, solar projects of approximately 9 GW are expected to be commissioned, but the grid is not ready to handle the power produced. The progress of green energy corridor on paper and on the ground is very different,” the report said.

Mercom said the government should provide compensation for projects on standby after they have been commissioned or developers will pay the price.

The project is under implementation in Andhra Pradesh, Gujarat, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, and Tamil Nadu. Once complete, the green energy corridor is expected to facilitate evacuation from solar parks and large-scale grid-connected solar and wind projects.

The report further said solar project developers across the country are struggling with evacuation and transmission issues which account for huge losses and contributes to increased project costs.




“Developers are concerned about solar park integration into the grid as the evacuation system and infrastructure is not yet ready. Due to inadequate transmission lines and grid infrastructure, planning for the next batch of auctions has yet to begin and developers don’t know where these projects will be located,” the report said.

It added that according to some developers, tenders are released in some states without consulting the state electricity regulatory commissions. When power purchase agreements go to regulatory commissions for approval they are getting held up because the SERC is citing a lack of transmission infrastructure.

The Power Grid Corporation of India is developing the inter-state transmission corridor and the state transmission utilities are responsible for setting up and strengthening the intra-state transmission infrastructure. The MNRE will be providing 40 per cent of project costs in the form of a grant. The PGCIL has estimated that the cost to develop the corridor comes to Rs 380 billion.

The green energy corridor is expected to boost the inter-state sale of renewable energy, and coupled with the waiver of Inter State Transmission System charges, renewable energy costs are forecast to come down enough to help states fulfill their renewable purchase obligations and meet energy demand.

The corridor is expected to address certain limitations of renewable energy like intermittency and variation in power quality. Under the project, renewable energy management centres are being set up to predict renewable power generation and demand. These centres will also be interconnected with load dispatch centers to gather real-time information, as well as monitor and control capacity addition, according to CEA.

The GEC is also expected to address the curtailment of renewable energy in the future, Mercom Capital said.

RInfra exits IEX, sells 4% stake for Rs 103 cr to an FPI

My View:

IEX being No. 1 power exchange in India provides competitive price of electricity. Rinfra sold it's stake in IEX by 10 times higher than the purchase price. IEX has evolved the Power Market and now contributes almost 9%. Rinfra on other side sold its stake to reduce its debt burden.




News:
Reliance Infrastructure has sold its entire 4.12 % stake in India Energy Exchange (IEX) for Rs 103 crore, about 10 times higher than the purchase value, to a foreign portfolio investor, sources said.

IEX is the country's largest power exchange. This comes after Jindal Steel & Power sold 4.12 % in IEX to Motilal Oswal PE in March and global investment firm Bessemer selling its stake in two separate deals, to TVS Capital and the Dalmia group.

IEX has nine % of the total power market and R-Infra was a primary investor. It bought the 4.12 % stake in 2007 for Rs 1.25 crore.

It had said discussions were in an advanced stage to monetise its entire road portfolio.

The company is reportedly in talks with Canada-based Brookfield Asset Management to sell its entire portfolio in that segment. This is part of the company's strategy to restructure its heavy debt by exiting from capital-intensive businesses.

R-Infra is also present across the value chain of power businesses i.e. generation, transmission, distribution and power trading. It also provides engineering, procurement and construction services for developing power and road projects.

It reported a 33.8 % rise in consolidated net profit at Rs 570 crore for the quarter ended September, from one of Rs 426 crore in the same period a year before.

The company is targeting projects worth Rs 2 lakh crore planned by the government across infra segments, it had earlier said.

R-Infra's Mumbai Metro (Rail) earned a revenue of Rs 61 crore in the September quarter, an increase of 13 % over the same period a year before.

Haryana discom reports Rs201 crore profit in first half of 2016

My View:

It can be said that this is the result which Power ministry was expecting from UDAY scheme. Dakshin Haryana Bijli Vitaran Nigam Ltd has done significant work to come out of loss making DISCOM to profitable DISCOM. However the Uttar Haryana Bijli Vitaran Nigam Ltd has been incurring losses. Lets see whether the states which have accepted UDAY can bring some good news like this in future.




News:

One of the two state-owned power distribution companies in Haryana, Dakshin Haryana Bijli Vitaran Nigam Ltd, has become the first power utility to turn around under rescue scheme Ujjwal Discom Assurance Yojna (UDAY), rolled out in November 2015, raising hopes that fortunes of the entire electricity value chain including of coal mining and power generation will benefit from better electricity demand in coming days.

An analysis of the financial health of the utility released by the power ministry on Thursday said the company has reported “remarkable achievement of turnaround” from a loss of Rs479 crore in 2015-16 to a profit of Rs201.35 crore in the first half of 2016-17.

Turnaround of distressed state power distribution firms is crucial for the health of other segments of the electricity value chain which depends on power offtake. Better power demand from distribution firms will help generation companies, especially thermal power plants, to step up their capacity utilisation which is currently at about 60%. Coal demand, too has been sluggish in the past as loss making distribution firms were not able to cater to the actual energy demand.

Monthly coal production recovered from a contraction and grew for the first time in three months in November, indicating improving power demand during winter.

As per data from state-owned monopoly Coal India Ltd (CIL), monthly production grew 5.3% to 50 million tonnes in November from a year ago, after a bearish trend in mining since August when output had shrunk by 10%.

The power ministry analysis said that the Haryana utility still has to improve upon its performance in meeting the target of lowering losses on account of billing inefficiency and power theft.

The UDAY scheme rolled out last November gave performance and efficiency improvement targets to loss making utilities in order to narrow their gap between cost of power supply and the price realised from consumers. Their accumulated debt up to September 2015 was allowed to be taken over by respective state governments to make available low cost credit.

Haryana’s second distribution firm, Uttar Haryana Bijli Vitaran Nigam Ltd, however, continued to make losses in the first half of this year. It reported a loss of Rs1,233 crore in the first half against the loss of Rs336 crore in the full year of 2015-16, said the analysis.

Procuring wind energy through bids a positive for sector:ICRA

My View:

With the procurement of wind power through auction route will help the developer to get the offtakers.

The proper implementation of UDAY will help to get the timely payment from the DISCOM to wind developers.

If the auction goes well,it will help to achieve the target of wind power of 60 GW by 2022.



News:

The scheme for procurement of wind energy through auction is a positive for the sector but receivables (payment delays by discoms) remain an area of concern, says ICRA.

"In ICRA s view, continuing delays in the payments by the state-owned distribution utilities (discoms) in key states such as Maharashtra and Rajasthan pose a challenge for the wind energy sector, although some improvement has been seen lately," ICRA said in a statement.

On the positive side, however, ICRA believes that the MNRE scheme for procurement of 1 GW through the auction route would facilitate the offtake for wind energy players, it added.

ICRA Ratings Senior VP Sabyasachi Majumdar, said in the statement, "While there has been some improvement in payment pattern by utilities in Rajasthan, with the implementation of UDAY (Ujwal Discom Assurance Yojana) as well as by the utility in Maharashtra in the last three month, a build-up in receivable position is seen, which varies from 8 to 12 months as on November 2016 and thus remains quite significant.

In addition to payment delays by state utilities, wind energy projects remain vulnerable to the risk of non-signing of power purchase agreements (PPAs) by the utilities as seen in Maharashtra and forced back down by utilities in Rajasthan and Tamil Nadu."

Further, implementation of forecasting and scheduling framework, as approved by State Electricity Regulatory Commission (SERC) in Karnataka and in other states where draft regulations are in place, poses regulatory challenges for the sector, given the variable and intermittent nature of wind power generation and limited experience available with IPPs in forecasting and scheduling as of now, the statement said.

Also, the sector continues to face challenges due to the limited compliance of renewable purchase obligation (RPO) norms by the obligated entities as well as the variance in RPO norms across the states, it added.

Notwithstanding these near-term challenges, the long-term demand potential for wind power remains strong, given the large untapped potential, fairly attractive feed-in tariffs and relatively lower execution risks.

ICRA notes that the incremental wind-based energy capacity requirement by FY2022 is estimated at about 46 GW as against the current installed capacity of 28.1 GW.

This is assuming annual energy demand growth of 6 per cent, non-solar RPO at 12.5 per cent by FY2022 and wind as a renewable energy (RE) resource contributing to a dominant share (75%) in meeting the non-solar RPO requirement on an all India basis, it said.

"ICRA further favourably notes that the scheme for award of 1 GW through the auction route by the Ministry of New and Renewable Energy (MNRE) would facilitate the consumption of wind-based generation by distribution utilities in states with limited wind energy resources.

"This, apart from reducing the offtake risks for wind energy players, would enable the distribution utilities in such states to honour their non-solar RPO requirement to some extent , Majumdar added.

Facts

Solar Power in India:

* The installation capacity in India increased about 5 times from 941 MW in March 2012 to 5248 MW in January 2016.

* In 2015-2016, the industry added over 3 GW of solar installed capacity, which was well above the target 1.4 GW for the year.

* In 2013-14, the tariff range was Rs. 5.50- Rs. 15.99 per kWh at both state and central levels.

* In 2014-15, the tariff range was Rs. 5.25- Rs. 7.56 per kWh.

* In 2015-16, the new low of Rs. 4.34 per kWh was achieved.

* Indian rooftop solar market, which has a total installed capacity of only 1,020 MW as of September 2016, or about 10% of total installed solar capacity in the country.

Demonetisation is a positive event for power sector: Mercom Capital

My View:

Demonetisation is helping a lot to power distribution companies as the unpaid bills are getting paid at faster pace.

Also by increase in liquidity of banks will help to reduce the lending rates to the power sector. With these Demonetisation it will improve the situation in sector by more foreign investment.

News:

Demonetisation has turned out to be a positive event for the power sector with distribution companies recovering pending power bills from their customers, Mercom Capital Group said today.

Quoting a number of discoms and government officials on the issue, the consulting firm also said that the power sector could also benefit from relaxed lending and lower rates, among other things.

"Demonetisation has been chaotic and changing the way the Indian economy functions...banks suddenly flush with funds, all of which could relax lending to the power sector and potentially bring down interest rates," it said.

The government has mandated that the old notes of Rs 500 and Rs 1,000 denominations can be used to pay pending utility bills which will help discoms due to their huge backlog of unpaid bills.

Discoms are expecting a substantial influx of payments prior to the December 31 deadline after which these currency notes will become invalid. For cash-strapped discoms this is unexpected good news, it said.

It quoted an official at Maharashtra State Electricity Distribution Company Ltd as saying, "since the announcement of demonetisation, discoms in the state have seen payments of old bills cross Rs 1 billion ($ 14.74 million) within a week. The signs are positive as this will financially empower the discoms".

Due to the amnesty of taxes and penalties provided to black money holders (unaccounted currency), the government will have a huge influx of money that can to be allocated for infrastructural development and funding new projects, stated an official at Transmission Corporation of Telangana Ltd (TCTL), it said.

"India is largely a cash economy so in the short-term demonetisation is going to hurt installations as small developers will find it tough to pay for land acquisition, but in the long-term it will be beneficial as dicoms will get paid, lending rates will fall and foreign investment will increase in the face of a falling rupee and rising dollar," Mercom said quoting an official at the Ministry of New and Renewable Energy.

An official at Bihar State Power Holding Co Ltd informed the consultant that there are many ambitious projects like the Green Energy Transmission Corridor that require large investments and with consumers repaying pending bills and government taxing defaulters, nodal agencies foresee better fund allotment from the government.

It said officials at Jharkhand Renewable Energy Development Agency, Odisha Power Transmission Corp Ltd (OPTCL) and Power Management Company, Madhya Pradesh, all concurred due to demonetisation, peace is being restored in regions like Jammu & Kashmir and Jharkhand, Madhya Pradesh, Odisha, Andhra Pradesh [insurgency belt] as insurgents find it hard to fund their operations.

This will uplift the morale of developers in these regions and installations will pick up.

Tamil Nadu Generation and Distribution Corporation received tepid response for its 500 MW tender due to demonetisation, but it was an exception said an official at MNRE.

An official at Uttar Pradesh Power Transmission Corporation (UPTCL) stated that the state has been a classic example for unpaid electricity bills. Now the Discoms can get some relief with consumers using their stashed cash to pay pending bills as well as advance payment for future month's electricity bills in some cases.

A slew of government funded projects and subsidies are expected as cash deposits increase in banks, an official at the Rajasthan Renewable Energy Corporation said.

Demonetisation, Mercom said, is turning out to be an overall positive event for the renewable sector as well.

"This combined with the rapid decline in solar component costs is making a lot of low questionable bids feasible. However, we have to wait and see how government agencies handle the situation - especially payment issues - going forward," Mercom Capital Group CEO Raj Prabhu said.

Sweden to scrap taxes on solar energy in 2017 in bid to run entirely on renewables

My View:

It's a great step by Sweden to increase the share of solar energy. Reduction of taxation means less burden for developers. Also,zero tax for those who will use solar energy for there own use will promote solar rooftop in country. 

News:

Sweden is set to ditch taxes on its production of solar energy in 2017 in a bid to run entirely on renewable energy by 2040, the government said on Monday.

Solar energy is currently marginal in the Nordic nation, accounting for less than 0.1 percent of electricity production. Sweden relies mostly on hydropower (39 percent) and nuclear power (36 percent).

The finance ministry said in a statement that the production of solar electricity for own use would be entirely exempt from taxes. Electricity providers would meanwhile only be taxed 500 kronor (51 euros) per megawatt hour, which is a 98-percent reduction from the current level.

"This makes fast investments possible," Social Democratic Finance Minister Magdalena Andersson said.

The proposal is likely to be adopted by parliament, with the centre-right opposition having criticised the minister for her lack of ambition with regards renewable energy investments.

The move must also be approved by the European Commission in Brussels, which aims to boost the EU's share of renewable energy to at least 20 percent of consumption.

In October, the Swedish energy market regulator had estimated that in order to reach the target of 100 percent renewable energy, the share of solar electricity would have to rise to between five and 10 percent.

Adani to start constructing Australia solar plants next year

My View:

Adani decision to develop solar plants in Australia is a welcome step for Australians. Adani's investment in coal mines were facing huge issues in Australia. However with increased investment in Australia will help to build long term relationship. Recently in Tamilandu, Adani constructed world's largest solar plant.








News:

Indian energy giant Adani Group today announced its new venture for construction of two major solar projects in Australia next year as part of its efforts to develop renewable energy projects in the country with a total capacity of 1,500 MW within the next five years.

"Adani today announced that it proposes to commence construction of two major solar projects in Australia next year, each with an output of 100-200 MW," a company statement issued here said.

Land agreements were in place for the projects in South Australia and Queensland and Adani has commenced the design and tendering phases for both projects.

Adani aims to develop renewable energy projects in Australia with a total capacity of 1,500 MW within the next five years, it noted.

The Australian solar projects will be in addition to Adani's 16.5 billion dollar investment in the planned Carmichael coal mine in Queensland's Galilee Basin, which has faced years of legal delays over environmental approvals, as well as rail and port facilities.

The company's head of Australian operations, Jeyakumar Janakaraj, said that these projects will offer a solid foundation to Adani's renewable energy business in Australia and will contribute to meeting the country's renewable energy target commitments.

"Coupled with the company's 3.3 billion dollars of investment to date across its mine, rail and port projects in Queensland, Adani's plans to pursue solar investment opportunities reflect the confidence the company has in the Australian market," Janakaraj said.

"This reflects both Adani's commitment as a diversified energy and infrastructure company in India and a leading solar generator in that market, and the company's plans to build a long-term future with Australia," he said.

Adani has constructed approximately 793 MW of solar plant capacity in India to date, including one of the world's largest solar plants in Tamil Nadu which has a capacity of 648 MW. Adani has a further 1,225 MW in construction or late development phase in India.

The environmental organistaion Mackay Conservation Group has welcomed Adani's decision to announce a 100 to 200 MW solar farm in Central Queensland.

"This is a sensible move that recognises the long term future of electricity production is in renewables," Mackay Conservation Group coordinator, Peter McCallum said.

"We also welcome the jobs that construction of a large scale solar power plant will bring without endangering jobs in Great Barrier Reef tourism. This is a win for everybody. Adani is fundamentally an energy company, not a miner, and their expertise is shifting rapidly towards becoming a clean energy producer in India and now in Australia," he said.

The company has faced a protracted battle to establish Australia's largest thermal coal mine.

Inox bags repeat order for 40 MW project in Gujarat

My View:

Inox Wind is continuously getting projects which are helping the books of company. RDPL is investing huge in renewable energy. The big firms in India should take lessons from such firm. 

As on 30 Sep 2016,the installed capacity of wind power plant is about 28 GW.

News:

Noida based Inox Wind Limited has won a repeat order for 40 MW wind power project in Gujarat.

Inox will execute the project on turnkey basis for Roha Dyechem Private Limited, a manufacturers of natural and synthetic colours, and the project is scheduled to be commissioned by March 2017.

The 40 MW project from Roha is part of the 350 MW of orders announced by lnox Wind on 3rd October 2016, according to an Inox release.

As part of the order Inox will install 20 units of it's 2 MW-113 meter rotor diameter turbine. The wind turbine manufacturer will provide end to end solutions from development and construction to commissioning and providing long term operations and maintenance services, the media release added.

"We are pleased to further build on the success of lnox's 2 MW platform in India." said Kailash Tarachandani, Chief Executive Officer of lnox Wind Limited in his statement.

RDPL has diversified its activities in Renewable Energy, as one of the emerging sectors of its business in the years to come. RDPL has already successfully invested in an aggregate of 52.5 MW of Solar Energy and 13.5 MW in Wind Energy and further plans to reach a combined milestone of 500 MW at various locations.

Around 25,000 Megawatt of thermal power capacity running without long term pacts

My View:

The Discom's are preferring to buy cheaper power from exchanges or with short term bilateral contract. It is really hurting the generators as they are not able to get assurance related to power purchase. It would create problems in generation segment.
















News:

Thermal power projects of more than 25,000 Megawatt (MW) capacity are operating without long term power purchase agreements (LTPPA's) with state owned discoms, according to ICRA.

State owned discoms have created a trend over the past two to three years, of buying power from trading markets for a cheaper price when compared to signing fixed rate PPA's with thermal power plants, the reaserch agency added in its recent report.

This decision by state owned distributors has given them the freedom to buy power at cheaper rates from exchanges and also create a highly competitive bidding environment to lower tariffs even further.

Discoms are expected to sign LTPPA's in the future, with the implementation of UDAY across the country and improvement of discoms financial health.

Only four states namely Andhra Pradesh, Kerala, Telangana and Uttar Pradesh have invited bids to sign long term PPAs for an aggregate bid capacity of 7.5 GW.

Out of these, PPAs have been signed with utilities in Kerala (865 MW) and Telangana (500 MW) while discoms in Andhra Pradesh (2,400 MW) and Uttar Pradesh (3,800 MW) are yet to sign the PPAs, ICRA added in its report.

The 25 GW in the private IPP segment remains exposed to price and volume risks in the short term trading market, given the absence of LT PPA bids. This, in turn, has also impacted the ability of such IPPs to secure cheaper source of domestic coal under the fuel supply agreements with Coal India Limited (CIL) and its subsidiaries, given that the availability of such coal to IPPs is subject to tie-up of their capacity under long-term PPAs.

Uttar Pradesh Power Corporation Limited (UPPCL) in its recent tender for supply of 3,800 MW under design, build, finance, own and operate (DBFOO – case I) route over a period 15 years, has received bids in range of Rs 3.9 - 5.5 per nit from IPPs, according to industry sources. UPPCL has received bids totaling 6,652 MW from 18 power companies against requirement of 3,800 MW for supply starting from October 2016.

The power requirement was divided into three parts, based on fuel source, with 2,800 MW based on domestic coal linkage, 500 MW based on imported coal and 500 MW based on captive coal mine.

The lowest tariff quoted for supply using domestic linkage coal is at Rs 3.94 per unit, using coal from captive mines stood at Rs. 3.95 per unit and using imported coal stood at Rs. 4.06 per unit.

These tariffs are lower than the L1 tariff discovered through case-I bidding by the discoms of Andhra Pradesh at Rs 4.27 per unit and Kerala at Rs 4.29 per unit in the recent past, signifying increasing competition amongst thermal IPPs to secure long-term PPAs.

The heightened competition can be partly attributed to the high off-take risks for the power generation segment, wherein recently commissioned and under-construction capacity of about 24-25 GW in the private IPP segment does not have long term PPAs.

This is on account of the weak financial profile of the state owned discoms, which has constrained signing of long-term PPAs by the discoms. Also, the upward trend in quoted tariffs by IPPs since 2012 also led to slow progress in signing of long term PPAs by discoms.

Discoms have been reluctant to sign long-term PPAs at the higher tariffs offered by developers, despite the continuing power shortages in some states. Instead, discoms in a few states are more inclined to procure power on a short / medium term basis.

 

Spot power price at Indian energy exchange hits 6-month high in Oct at Rs 2.46

My View:

The price is quite competitive in IEX. The MCP of 2.46 and ACP of about 2.75 is quite cheaper. If I will compare with renewable energy pricing, still there is quite huge gap. The open access regulation must also be strengthen in few state to develop power market in full fledged way. IEX being India's no. 1 Power Exchange is facilitating and bringing competitiveness in Power Sector. 










 


News:

The average spot power price at the Indian Energy Exchange touched a six-month high of Rs 2.46 in October due to higher demand, particularly from industrial units and southern states.

"The spot price of electricity has been on a slightly higher side in October also due to high demand, particularly from industrial units and southern states," an IEX official told .

The average power price was recorded at Rs 2.91 per unit in April this year. It was on the lower side thereafter at Rs 2.32, Rs 2.31, Rs 2.16 and Rs 2.17 in May, June, July and August, respectively.

It picked up again to Rs 2.43 per unit in September this year. The spot power price was the highest in six months at Rs 2.46 per unit in October.

"October saw attractive and competitive price in IEX Spot Power Market with average Market Clearing Price (MCP) at Rs 2.46 per unit, 19 per cent less than MCP of Rs 3.03 per unit in the same month last year. The average Area Clearing Prices (ACP) ranged from Rs 2.40 to Rs 2.75 per unit across regions," IEX said in statement.

The market remained liquid with average daily sell bids of 235 MUs (million units) and purchase bids of 139 MUs. During October this year, 3,609 MUs were traded which on a daily average basis is 116 MUs, about 10 per cent increase over 105 MUs traded in the same month last year, it said.

The open access consumers (industrial units) accounted for almost 60 per cent of the cleared volume, mainly due to competitive price.

However, the congestion on the inter-state transmission network increased, affecting import of power in the Southern and Northern regions.

About 3.6 MUs were lost on a daily average basis. The Southern corridor was congested about 42 per cent of the time and the congestion was mainly due to increase in demand for power in South.

Congestion in the Northern corridor was experienced for about 16 per cent of the time during the month, it said, adding that the Term-Ahead Market remained vibrant and over 93 MUs were traded -- about 220 per cent increase over 29 MUs traded last month -- owing to increase in demand due to the festive season.

Uniform rate prevailed for three days October 7, 8 and 9 -- in line with the One Nation, One Grid and One Price motto of the Government.

Inox Wind bags 40 MW power project from Malpani Group

My View:

Inox wind is continuously getting the projects which is good for the firm. It will help the company to get more amount of projects. Wind Power as a segment is facing slowdown in recent years. Lets hope the policies and regulation help the sector to have faster pace. The target by the government is 60 GW by 2022 in India.

News:

Noida based Inox Wind today announced it has won repeat orders for two 20 MW wind power projects in Gujarat.

Inox Wind will provide end-to-end solutions from development and construction to commissioning as part of the turnkey project for Malpani Group, according to the company statement sent to Bombay Stock Exchange (BSE) .

"Inox Wind Ltd has bagged repeat orders from D J Malpani for two wind power projects of 20 MW each in the state of Gujarat. The two orders are scheduled to be commissioned by March 2017," added the company statement.

Inox has also been contracted to undertake operations and maintenance services of the projects for a multi-year period, post commissioning.

The orders involves supply and installation of 20 units of Inox Wind's 113 meter rotor diameter Wind Turbine Generator.

Malpani Group is a diversified business house with presence in renewable energy, FMCG products and real estate.

 

About NLDC

The main functions assigned to NLDC are:

• Supervision over the Regional Load Despatch Centres.

• Scheduling and dispatch of electricity over the inter-regional links in accordance with grid standards specified by the authority and grid code specified by Central Commission in coordination with Regional Load Despatch Centres.

• Coordination with Regional Load Despatch Centres for achieving maximum economy and efficiency in the operation of National Grid.

• Monitoring of operations and grid security of the National Grid.

• Supervision and control over the inter-regional links as may be required for ensuring stability of the power system under its control.

• Coordination with Regional Power Committees for regional outage schedule in the national perspective to ensure optimal utilization of power resources.

• Coordination with Regional Load Despatch Centres for the energy accounting of inter-regional exchange of power.

• Coordination for restoration of synchronous operation of national grid with Regional Load Despatch Centres.

• Coordination for trans-national exchange of power.

• Providing Operational feedback for national grid planning to the Authority and Central Transmission Utility. 

• Levy and collection of such fee and charges from the generating companies or licensees involved in the power system, as may be specified by the Central Commission.

• Dissemination of information relating to operations of transmission system in accordance with directions or regulations issued by Central Government from time to time.

Govt mulls penalties for curtailing renewable power generation

Taking serious cognizance of some states curtailing power generation from solar projects, Union Power Minister Piyush Goyal today said his ministry is looking into how mandatory electricity production from renewable sources can be enforced.

"I have come across this issue wherein certain states are resorting to curtailing generation from solar projects and instead buying cheaper power from the exchanges.

"We are finding a solution whereby anybody who does not fulfil the 'must run' status, what can be done to either enforce that or penalise them (states)," Goyal told reporters on the sidelines of an IEEMA event.

Some states including Tamil Nadu and Rajasthan have issued directives to curtail power generation from solar projects. Both the states backed down their commitment towards green power sources, claiming that they have already made provisions for it.

Power producers' body Independent Power Producers Association of India (IPPAI) had raised concerns that such decisions were affecting the generators. The government has set an ambitious target of 175 GW of power from renewable energy sources, with 100 GW from solar alone.

My View:

As we know that Rajasthan and Tamil Nadu being a renewable rich state in the country. Curtailing renewable generation can be due to:
A) To avoid instability in grid.
B) To avoid expensive power.

The Govt. should impose stringent penalties, then only states will follow. The real example can be seen from fulfillment of RPO by states, where we can see that some states are still not fulfilling RPO.



 

Wind turbines firm Senvion says big merger deal not in prospect

German wind turbines maker Senvion is not expecting to be part of any large-scale consolidation within the industry, preferring to focus on internal growth and possibly some further small acquisitions, its chief executive said on Wednesday.

Some 84 percent of Senvion's sales come from onshore wind turbines. It is also the world's third-largest maker of offshore wind turbines, behind Siemens and MHI Vestas, a joint venture between Japan's Mitsubishi Heavy Industries and Denmark's Vestas.

Aiming to cut costs by increasing global scale, Senvion's local rival Nordex earlier this year took over the wind turbines business of Spain's Acciona, while Siemens and Gamesa are forging the industry's largest player.

"Big tie-ups need to pay off. At the moment, I don't see any product offering that would cause us to take such a step," Juergen Geissinger, Senvion's chief executive since last December, told Reuters at a wind power industry conference.

"Smaller acquisitions, like the one we recently did in India, are always on our mind though."

Senvion, which listed its shares in March, last month announced the purchase of the Indian wind power business Kenersys India Private Ltd, including a production facility of about 250 megawatts (MW), to take it into one of the industry's most promising markets.

"The Indian market has an annual volume of 4-5 gigawatts (GW). That makes it bigger than Germany," said Geissinger, who was chief executive of German car parts maker Schaeffler until 2013.

He said Senvion also hoped to benefit from an expected surge in orders in the United States in the fourth quarter, as wind farm developers seek to take advantage of key tax credits before they are phased out next year.

Senvion already has 1 GW of installed capacity in the United States but no local production. "Whether we will set up local production obviously depends on order backlog. That starts to make sense from about 1 GW."

Geissinger also reaffirmed Senvion's forecast for sales this year of 2.25-2.3 billion euros ($2.52-2.57 billion) and an adjusted margin on earnings before interest, tax, depreciation and amortisation of about 9.5 percent.


My View:
Senvion being one of the top company in wind sector. They are not planning now to be more agressive in acquisition. I think they are learning from big firm like sunedision which failed miserably. Wind segment in India is now at backfoot as the new story is now solar. However still in renewable energy in India,the wind power sttill holds first place.