Mon, Oct

Sterlite Power expects renewable energy to boost private participation as tussle over project allocations continues

Power transmission projects for connecting upcoming renewable energy capacities would take forward public-private-partnerships in the sector, Pratik Agarwal, CEO, Sterlite Power, said on Monday. “We expect Rs 3-4 lakh crore worth of transmission projects under the tariff based competitive bidding (TBCB) category in the next five years,” Agarwal added, while announcing the commissioning of the 414 kilometres long transmission project to augment electricity supply capacities to Jammu and Kashmir.

The aggressive target of having 175 giga-watt (GW) of renewable energy capacity by FY22 warrants major ramping up of transmission capacity. Company officials pointed out the need of more transmission lines, apart from the Union government’s ongoing green energy corridor scheme, to support renewable energy integration.

Inadequate transmission infrastructure has been a longstanding impediment to wind power developers, forcing the government to reduce capacities offered in the upcoming auctions by more than 50% to 1,200 MW. A 2,000 MW wind tender announced in April had also been cancelled due to this. The parliamentary standing committee on energy had noted earlier this year that the green energy corridor scheme has been a “non-starter”.

The private sector has been vocal about the government not awarding all transmission projects through TBCB and allocating a number of works to state-owned Power Grid Corporation of India — an allegation opposed by the central transmission utility. Till date, as many as 23 TBCB transmission schemes are under implementation and 14 have been commissioned. Only five of these have been completed on time.

“Commissioning the Kashmir project two months ahead of schedule testifies that the private sector is no longer reluctant to take up transmission projects through rough terrains and this should inspire the Centre and the states to take up more PPP projects,” Agarwal said.

The cost of the project is about `3,000 crore and the company expects to earn `437 crore annually on a levelised basis over 35 years.

When asked if competitive bidding would push bidders to quote unviably aggressive tariffs, as it happened in the power generation sector, Agarwal said that the power transmission industry is insulated from such adversities as mostly serious players participate in such auctions. “There should be severe penalties for project abandonment,” Agarwal said.

Read more: Sterlite Power expects renewable energy to boost...

Tata Power aims to grow solar rooftop business four-times in four years

Tata Power Renewable Energy, the wholly-owned subsidiary of Tata Power Company, plans to grow its rooftop business four-fold to around 1,000 MW from present 250 MW in next three to four years, even as the company plans awareness campaigns in 100 cities by end of FY19.

Ashish Khanna, President — Renewables, Tata Power Group, and Managing director & CEO of Tata Power Solar Systems, told Financial Express, that the company is working with financial companies and at advocacy level to provide a holistic solution to the residentials and commercial & industrials as the segment failed to grow to the level it should have due to inverted tariff structure.

He feels the trust factor for quality of products for 25 years was also missing.

“Even the financial offerings were not there as public sector banks considered them under house loans. We have come out with a scheme with Tata Cleantech Capital to offer the products under a bouquet of offerings to the residential sector. We have started this scheme in Mumbai last month and plan to take this to 100 cities in FY19,” Khanna said.

“We have around 250 MW capacity in rooftop solar and around 10,000 customers as of now,” Khanna added.

The current initiative is to make the residential sector aware of the savings benefits that are available from the project. “Our main intention is to create awareness about the benefits of net metering and savings on electricity. We have been working with the state government to see there is a win-win situation for all.

“We are taking the cream of consumers, who are also selling the power back to the grid. They will also become service providers to the discoms,” he said.

In 2015, the ministry of new and renewable energy announced 40,000 MW target for rooftop installations by 2022 which was backed by a 30% subsidy for residential buildings.

Besides, the government also urged the state governments to announce policies to enable net-metering, a billing mechanism that enables power consumers to be paid for injecting renewable power into the grid.

“However, this failed to enthuse home owners, the majority of whom pay small electricity bills and find the cost of solar equipment prohibitive in comparison.

Commercial and industrial building owners have shown more enthusiasm as their large power bills justify the expense of solar power systems, even though they get no subsidy.

But here, policy and regulation are blocking the way, say a range of industry participants, including installation businesses, consultants and power distribution companies (discoms).

As of March 31, 2018, India installed 2,538 MW of rooftop capacity, according to the consultancy Bridge to India. This gives rooftop solar a 10% share in India’s overall solar capacity installation with large-scale and off-grid solar installations cumulatively nearing 22,000 MW during the same period.

Tata Power Renewables Energy (TPREL) posted a net profit of Rs 71 crore in Q1FY19 as against `56 crore in Q1FY18, while the Walwhan Renwable Energy, the business bought from Welspun Renewable Energy, recorded a profit of `101 crore in Q1FY19 against a profit of Rs 60 crore a year ago.

Read more: Tapping sunshine: Tata Power aims to grow solar...

renewable energy, latest news, important news, trending news, news now, news today, news update, trending news, important news Wood Mackenzie’s solar analyst Rishab Shrestha said India faces a myriad of challenges in the renewables industry. (Reuters)

India may achieve about 76 percent of the target of having 175 gigawatts of renewable power generation capacity by the scheduled date of 2022 as it faces myriad challenges, Wood Mackenzie said Monday. India is targetting 100 GW of solar capacity and 75 GW of wind power by 2022. “Even with significant cost declines, Wood Mackenzie expects about 76 percent of the target to be met by 2022 and this would still be a noteworthy achievement,” the world’s leading research and consultancy firm said in a report. Wood Mackenzie’s solar analyst Rishab Shrestha said India faces a myriad of challenges in the renewables industry.

“The recent cancellation of auctions risks jeopardising investor confidence. Various duties on equipment and the associated uncertainty has led to a short-term uptick in solar prices. This leads to the knock-on effect on already cash-strapped state distribution companies who are showing an unwillingness to green light high priced solar projects,” he said.

Nonetheless, the government’s commitment and support towards renewables remain strong. The government has been swift and adaptable at responding to various industry hurdles and are helping reduce project risks. As a result, renewable prices continue to remain competitive. Wood Mackenzie said combined wind and solar capacity have almost doubled from 2014 levels to 61 GW this year. “Driving this growth is the significant cost decline that auctions continue to deliver,” Shrestha said.

“In the next five years, capital costs are expected to decline by 23 percent for wind and 31 percent for solar. This trend will only continue as new generation technologies replace old ones.” Wood Mackenzie expected non-hydro renewables to make up 13 for percent of power generation mix by 2023. Improving grid flexibility through storage and flexible power generation will be extremely crucial in achieving high levels of renewable penetration, it said, adding that economic competitiveness, technological maturity, and financially healthy off-takers will provide a solid base for renewable capacity growth to cater to electricity demand growth.

“Over the longer-term horizon of 2040, India is forecasted to increase its renewable capacity by around seven times to 384 GW. This share will be driven by diverse sub-segments which include offshore wind, hybrid projects, floating solar and distributed solar. The 384 GW of non-hydro renewables will ultimately contribute 20 percent of generation share by 2040,” Shrestha said. Wood Mackenzie, however, said coal remains principal energy driver in near term. Its coal principal analyst Pralabh Bhargava said: “We have increased India’s imports for thermal coal from 158 million tonnes to 164 million tonnes in 2018 with a further upside risk of 3-4 million tonnes as coal stocks at Indian power plants and Coal India Ltd are at historically low levels”.

India’s spot market prices, for both coal and power, are expected to remain strong in the coming months as continuous industrial production growth is pushing demand, while supply remains tight. “Growth in domestic coal production and dispatches can only partially meet the growing demand for coal, which is resulting in increased reliance on imports. With a decade-low stockpile at Coal India’s mines and more than half of the plants with a supercritical level of less than seven days’ stock, the reliance on imported coal for several power plants will increase the flow of imports into India,” Bhargava said.

Until recently, the demand for imported thermal coal was driven by non-utilities, where a lack of domestic supply and the need for high-energy coal kept the segment active in the seaborne market. With the power sector increasingly relying on imports, Wood Mackenzie expected the rally in Indian imports to continue till early next year. It said industrial production in India has grown at an average of more than 7 percent this year, leading to an increase in power generation by 6 percent over January to August 2018. Cement production was up 16 percent and steel production 4 percent for the same period.

“Policies to improve the power sector have started to have an impact. At the end of the financial year in March 2018, the performance of several states in reducing technical and commercial losses as well as increasing tariffs was improving. The government is looking to de-stress some power-generating units, which may result in improvements in load factors at several plants in the short-to-medium term,” it said.

India’s rupee depreciating against US dollar from an average of 63.65 to a US Dollar in January 2018 to 73.56 in the first week of October has increased the costs of imports and only the lack of domestic coal availability is forcing companies to import.

Read more: India to achieve 76% of renewable energy target...

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