In order to increase the interest of renewable energy companies to explore the untapped avenue of power generation from beyond the country’s landmass, the government announced the target of having 30 GW of offshore wind capacity by 2030. In the short term, the aim is to install 5 GW of such power plants by 2022.
The government, in April, had invited expressions of interest for the development of India’s maiden commercial offshore wind farm, and had proposed a 400 sq km area to set up 1,000 MW of wind capacity near the Pipavav port. The ministry of new and renewable energy said the invitation “has evoked keen response from the industry both global and Indian”.
“Given India’s coastline of 7,600 km, the country has enormous potential for offshore wind energy and it can potentially repeat the success achieved in onshore wind energy,” said Suzlon Group CMD Tulsi Tanti.
S&P Dow Jones Indices said on Tuesday that GE, an original member of the Dow when it was formed by Charles Dow in 1896 and a continuous member since 1907, will be replaced in the 30-component stock average by drug store chain Walgreens Boots Alliance Inc prior to the start of trading on June 26. GE’s stock slipped 1.5 percent in after-hours trading following the announcement while Walgreens jumped 3 percent.
A decade and a half ago GE was the world’s most valuable public company. But it foundered in several key industrial markets in recent years, and a diversion into financial services steered it into the eye of the global financial crisis in 2008.
It now ranks as the sixth smallest member of the Dow by market value and carries the index’s lowest stock price, making it the least influential component of the price-weighted average.
Faced with weak profits and calls to be broken up, the 126-year-old company is aggressively cutting costs, selling businesses and trying to strengthen its balance sheet under new managers and a new board.
Its stock has fallen nearly 80 percent from highs in 2000. Last month, chief executive John Flannery warned that GE may not be able to pay its 2019 dividend.
"It was at one time perhaps one of the quintessential US companies, and like others that have been taken out of the Dow, it’s a reflection that they’re no longer seen in that light," said Rick Meckler, a partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
Walgreens helps reflect US economy
The shifting sands of the Dow are testament to the various companies that were unassailable household names for decades before becoming the victims of an evolving economy. Some simply disappeared, while others found new life even if they did not reclaim their prior economic influence. They include Eastman Kodak, Sears Roebuck, International Paper, Goodyear, Bethlehem Steel, Westinghouse, General Motors Co and Chrysler.
Co-founded by inventor Thomas Edison, GE was the largest US company by stock market value starting in 1993, with brief interruptions from Microsoft Inc until Exxon Mobil Corp overtook it in 2005.
With the addition of Walgreens, the Dow will better reflect the role of consumers and healthcare in the US economy, S&P Dow Jones Indices said in a statement.
While analysts had anticipated GE’s exit from the Dow because of its falling share price, it is a blow to the company to lose its status as the only original member of the iconic index. GE did leave the Dow after the index was founded in 1896 but rejoined in 1907 and has been a constant member since then, according to S&P Dow Jones Indices.
In a statement, GE said: "We are focused on executing against the plan we’ve laid out to improve GE’s performance. Today’s announcement does nothing to change those commitments or our focus in creating in a stronger, simpler GE."
Some index watchers had expected GE’s troubles to lead to its removal from the elite index.
Not all companies that have lost their place in the Dow have gone to their graves. Bank of America Corp has outperformed the Dow by 46 percentage points since it was removed in 2013.
GE had fallen on hard times even as former chief executive Jeffrey Immelt sought to jettison ailing businesses and focus on the company’s industrial roots in power plants, jet engines, locomotives and other large equipment. Its industrial software business did not perform as expected, forcing GE to scale in its ambitions last year.
Immelt also built up GE’s exposure to manufacturing and servicing coal and gas-fired electricity plants, only to see demand for such plants fall dramatically in recent years as sales of suddenly cost-competitive renewable wind and solar systems increased.
Aiming to generate cash and restore profitability, CEO John Flannery, who took over from Immelt last August, is exiting $20 billion in additional GE assets, including the locomotive business and a unit that makes small power-plant engines.
Changes to the Dow are made on an as-needed basis and selection is not governed by quantitative rules, according to published methodology for the index.
For the first time ever, Moody’s Investors Service cut its outlook for US utilities to negative, warning that the sector’s debt levels have reached their highest since the financial crisis and may remain there for months.
The sector’s consolidated debt-to-equity ratio has hit the highest level since 2008 as companies finance mergers, acquisitions and other investments in renewable energy and pipelines, Moody’s analysts led by Ryan Wobbrock said in a note Monday. The federal tax overhaul signed by President Donald Trump stands to make matters worse, since utilities that depend on regulated returns are collecting less cash from customers to cover their tax expenses, the ratings firm said.
“Many companies are executing plans to strengthen their balance sheets in the face of increased financial risk,” said Moody’s, which projected that it may take more than 12 to 18 months for the sector’s financial metrics to improve. “Other companies, although faced with negative credit trends, are making no material changes to financial policies.”
The downgrade underscores how a massive buying spree and rising dividends have affected the industry’s debt levels. Power companies have been turning to M&A to fuel growth as demand for electricity weakens and the costs of maintaining their infrastructure rise. The industry racked up a combined $68.2 billion of acquisitions in 2017, the most in a decade, according to data compiled by Bloomberg. Meanwhile, companies including Duke Energy Corp. and Southern Co. have sought to raise billions in equity to make up for revenue losses at their utilities due to the tax changes.
The downgrade marks the first time Moody’s has given the regulated utilities sector a negative outlook since it began offering sector outlooks, according to Joe Mielenhausen, a spokesman for the ratings agency.
“High leverage will persist due to growing capital spending and rising dividends,” Moody’s said, while adding that its outlook may change if the sector’s cash flows improve.
Bond prices of some of the country’s biggest utilities have been falling since the start of the year: NextEra Energy Inc.’s 3.55 percent bonds due 2027 have fallen to 96 cents on the dollar, from above 101 cents, according to Trace bond-price data. Duke Energy’s 3.15 percent bonds due 2027 last traded at less than 93 cents, down from as high as 99 cents in early January.
Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) plans to conduct reverse auction for its first large solar project of over 1,000 MW capacity by July end. The tender document for internationally competitive bidding was initially issued in January, but was amended and reissued in April this year. The tender generated strong interest from domestic and foreign investors which led to participation by around 13 bidders with over 37 bids for 1,870 MW capacity.
According to an official working on the project, the technical bids for the project opened last month while the financial bids will open on June 21. “We plan to conduct the reverse auction for the project in July,” the official added.
Sources close to the development told FE there are some 13 domestic and foreign investors who have participated in the bid with interest for around 1,870 MW of project capacity. The list of participants include Azure Power with five bids for 300-MW capacity, Adani and Essel with five bids for 250 MW each, ACME Solar with six bids for 300 MW, ReNew Power with six bids for 280 MW capacity and Hero Renewables with two bids for 100 MW. The other foreign investors include Reynman (Canadian Solar) with two bids for 100 MW, and Fortune Credit Capital with one bid for 70 MW capacity. Some other players were Eden Renewable, Ray Power Infra and MMEPL for up to 100 MW capacity.
The entire cost of transmission including the cost of line construction, wheeling charges and losses will be borne by the developer. The successful developers will enter Power Purchase Agreements (PPAs) with Uttar Pradesh Power Corp(UPPCL) for a period of 25 years. The UPNEDA has also specified that it will penalise project developers for delay in project commissioning. If for any contract year it is found that the developer has not been able to generate minimum energy as per agreement, the developer shall pay a penalty equal to 25% of the project tariff to the procurer, for such shortfall in units, the tender document said.
General Electric Co has lost its spot in the Dow Jones Industrial Average after over a century...
General Electric Co has lost its spot in the Dow Jones Industrial Average after over a century...
Madhya Pradesh is implementing 26MWp rooftop solar programme via Renewable Energy Service Company (RESCO) mode. The projects are being implemented largely in the government buildings using the subsidy of Central and state governments, Madhya Pradesh Urja Vikas Nigam Ltd (MPUVNL) said in a statement.
Under the RESCO model, the project developer invests, builds and operates the rooftop solar project using its own funds and/0r taking debt to generate electricity and sell it to the beneficiary. This programme is in line with India’s ambitious target to achieve 40 GW of solar rooftop installation by 2022.
MPUVNL said the second pre-bid meeting for this tender will be held in New Delhi on June 22. RESCOs from across the country are expected to participate in this meeting. Bids for the tender are to be submitted by July 9, 2018. Under the provisions of the tender, the rooftop projects are targeted for commissioning within 9 months from the date of execution of power purchase agreement (PPA) with the beneficiary procurers.