EQ Magazine September 2019 - Part 1/4 by EQ Int'l Solar Media Group

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18-20 SEPTEMBER, 2019

SMALL COMPONENTS, BIG IMPACT

More than 255 GW successfully connected Attention to precision and reliability. In every detail. As a pioneer and global market leader for connectors, Stäubli Electrical Connectors has amassed over 20 years of experience in the photovoltaics industry. To date, more than 255 GW or 50% of the PV power worldwide has been successfully installed using over 1 billion original MC4 connectors. As of January 2017, original MC4 inventor Multi-Contact conducts its business and services as Stäubli Electrical Connectors. Your bankable partner Visit us: Renewable Exhibition, 2019 September 18-20 September 2019 | booth 7.90, hall 7 The Stäubli team will be happy to welcome you at our booth. www.staubli-alternative-energies.com

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Original MC4 Connector

CONT EN T

Solar pv module Global Study raises questions over long term performance of fielded pv modules

56 14 india Solar energy installations for Green Railways: Piyush Goyal

34 Business & Finance Greenko raises $950 mn in mega green bond sale

Technology Growatt Launched New SinglePhase Inverter

41 interView

Mr. Sunil rathi, Director, Waaree energies

48 INTERVIEW JinkoSolar SWAN Bifacialâ&#x20AC;&#x2122;s True Potential: The Importance of Innovation Excellence in Ensuring Yield Gains

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Wind Energy

Govt amends bidding guidelines for wind power projects

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cLEAN eNERGY Global Demand for PV Modules Temporarily Decreases in 3Q19, But Annual Demand May Still Go Above 120GW, Says EnergyTrend

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Research & Analysis

Global Solar Installations to Reach Record High in 2019

Renegotiation of Power Sale Contracts in Andhra Pradesh Exerts Added Cashflow Pressure and Impairs Investor Confidence

India India’s renewable energy capacity crosses 80GW: R K Singh

Interview Electric Vehicles 5,645 electric buses sanctioned for 65 cities: Amitabh Kant

43 Research & Analysis

Schemes are being rationalised to reduce cost of supply and power: AK Bhalla, Power Secretary

36 Research & Analysis INTERNATIONAL

WORLD CLEAN ENERGY INVESTMENT SLIPS IN 1H 2019, DESPITE BILLIONDOLLAR FINANCINGS OF SOLAR IN DUBAI AND OFFSHORE WIND IN TAIWAN

IRENA and UAE Ministry of Education Inspire Next Generation on Renewable Energy

EQ NEWS Pg. 08-33

Enforcing Payment Security Mechanism: A Bold Move Challenging To Implement, Benefits Uncertain

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Power Demand Surges due to Extended Summer; Spot Prices Remain Stable as Supply from All Sectors Improves

Solar Projects

Demand remains strong; focus on distribution reforms

rENEWable energy

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Goldi Solar Pvt. Ltd. (formerly Goldi Green Technologies Pvt Ltd) is one of the leading solar PV module manufacturing companies. We have increased our manufacturing capacity to 500MW and subsequently we aim to scale it up to 1GW. We are ISO 9001:2015, ISO 14001:2015 and OHSAS 18001:2007 certified. Our Manufacturing Capabilities: Our modules undergo all stringent quality tests at reputed third-party laboratories, along with being certified for PID resistance. Besides, we are one of the few companies globally to have 4mm glass certification. We are also a leading OEM supplier catering to many international brands across the globe and delivering unmatched quality at a competitive price. Best Manufacturing Practices: Our modules are stringently tested for all product reliability factors across various parameters. Besides having a robust and automatic manufacturing line based on Japanese & German technology, we follow best quality, environment and safety practices at our manufacturing process. We have an Internal Quality circle team, which meets regularly to focus on continuous improvements. Having adopted the best methodologies in our manufacturing process, we also conduct regular in-house training for our Quality & Production teams. All these efforts, backed by zero tolerance for any compromise on quality, help us maintain and deliver excellence in our products and manufacturing. EPC – A natural extension of our expertise: Apart from having a significant & established presence in the solar PV module market as quality manufacturers, Goldi has created significant in-roads in the EPC segment with value-based services and record time completion of projects. Armed with an in-house team of highly experienced engineers with technical expertise we develop the most cost effective and energy efficient solar power plants. Client satisfaction being on the top of our priority list, our EPC services are the ‘best value for money’ investment.

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SOLAR PROJECTS

Jakson Group to set up 50 Mw greenfield solar plant for Rs 300 cr in UP Spread over 300 acres, the independent power project is projected to be operational in 18-24 months. Solar energy company Jakson Group is investing nearly Rs 300 crore in a solar power plant in Jhansi district of Uttar Pradesh.

he 50 megawatt (Mw) independent power plant (IPP), spread over 300 acres, is projected to be operational in 1824 months, company managing director Sameer Gupta told Business Standard in Lucknow. He said the focus of the central and state governments on green and renewable energy, including electric vehicles, had provided the much needed boost to the sector, which is projected to grow substantially owing to proactive policies and consumer demand. Gupta said the foundation of the plant would be laid during the second Ground Breaking Ceremony (GBC2) in Lucknow on July 28-29, where union home minister Amit Shah would be the chief guest. Projects totalling over Rs 60,000 crore are lined up for foundation laying during the two-day mega event, which would be attended by top industry captains, including Kumar Mangalam Birla,

We are confident of posting 20 per cent growth in turnover from Rs 2,500 crore during 2018-19 to Rs 3,000 crore in the current financial year. - Sameer Gupta, CMD, Jakson Group

Gautam Adani, Anand Mahindra, Sanjiv Puri and N Chandrasekaran. GBC2 is a follow up on UP Investors Summit 2018, when the Yogi Adityanath government had garnered investment proposal of Rs 4.68 trillion. Meanwhile, Jakson is expecting its solar energy portfolio to touch one gigawatt (Gw) soon, including 150 Mw of captive installations. The Noida-based company has three business verticals, including manufacturing generator sets,

solar energy and undertaking EPC (engineering, production and construction) projects. “We are confident of posting 20 per cent growth in turnover from Rs 2,500 crore during 2018-19 to Rs 3,000 crore in the current financial year,” Gupta said. The company is eyeing a turnover of about Rs 5,000 crore in the next three years. India is targetting total solar energy capacity of 100 GW by 2022. In line with the ambitious target, the different states have also begun to work up their green energy portfolio. Recently, Prime Minister Narendra Modi had also laid emphasis on renewable energy, including solar power, and electric vehicles for cutting on annual oil import bill of almost Rs six trillion. The money thus saved, he noted, could be invested in ramping up basic infrastructure in India. According to a report by the International Renewable Energy Agency (IRENA), India is the lowest-cost producer of solar power. The report titled ‘Renewable Power Generation Costs in 2018’ claimed total installed costs of utility-scale solar photovoltaic (PV) in India is as low as $793 per kilowatt (kw) in 2018, which is 27 per cent lower than for projects commissioned in 2017. IRENA had analysed eight major solar PV markets from 2010 to 2018, including India, China, France, Germany, Italy, USA Japan and the UK. The agency concluded India possessed high solar potential that led to improved asset utilisation, while the country Source: business-standard

LUBI To Solarize The World’s Biggest Cricket Stadium The Sardar Patel Stadium, well known as the “Motera” Cricket Stadium is currently under an overhaul. The stadium, built in 1982, catered a seating capacity of 54,000 seats until 2015, before going under the hammer.

he stadium, being pipped as a ‘dream project’ shall boast of a seating capacity of over 1 lakh, overtaking MCG as the worlds largest stadium. The stadium spread over 63 acres of land has been designed to manage huge crowds, with parking areas capable of handling around 3000 cars and 10,000 two wheelers. The stadium shall house four dressing rooms, clubhouse equipped with 55 rooms and an gargantuan swimming pool. The project intends to utilize sustainable power at all levels.

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Currently, the stadium premise shall house a solar power plant to feed its key utilities. LUBI Solar shall undertake the supply and commissioning of the proposed solar power house. The power house will utilize solar panels manufactured at LUBI’s state-of-art manufacturing unit in Gandhinagar. The power house will

be erected in line with global renewable energy standards to derive optimum performance and hassle free operation. The project erecting the world’s largest stadium has a sanctioned load capacity of around 4 MW with a proposed backup of around 3 MW. Using renewable energy sources to power key utilities in the stadium is expected to take out load on the traditional power suppliers, at the same time ensuring access to clean and cost effective power. The world class multifacility stadium is being re-erected by Larson & Toubro and is expected to complete around the end of the year 2019. Source: lubisolar

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SOLAR PROJECTS

Rooftop Solar Power System â&#x20AC;&#x201C; Initiatives by BBMB Bhakra Beas Management Board (BBMB) in its overall plan to produce green energy has taken-up installation of grid connected rooftop solar PV projects on the roofs of its non-residential Buildings/ Offices, Ground Mounted and Floating Solar PV Plants.

his is part of its contribution to renewable energy initiatives of Ministry of New and Renewable Energy, Government of India. In the series, BBMB has already commissioned 435 kWp Rooftop Solar Power Plants at Chandigarh, Jamalpur, Jalandhar, Narela and Punjabi Bag at New Delhi. Continuing the process, BBMB has further commissioned four grid connected Roof-top Solar Projects at 31 non-residential buildings with total installed capacity of 950kWp at Ganguwal (100 kWp) and at Nangal (850kWp) on 12th June, 2019 and 23rd June, 2019

respectively. With the commissioning of these plants, BBMB has completed installation of 37 rooftop solar stations on non-residential buildings with a total capacity of 1385 kWp. All these solar rooftop power plants are SCADA compliant for data transmission and monitoring purposes. Roof-top Solar Power Plants of around 1154 kWp are at different stages of execution at various Project sites and Sub-stations of BBMB. Besides installation of more rooftop PV plants on the sub-station and non-residential buildings, installation of 4 MWp ground mounted solar PV plant at Nangal & Talwara and 15 MWp floating solar PV plant at Nangal has also been taken in hand.Sh. D.K.Sharma, Chairman, BBMB congratulated BBMB employees for this achievement and intimated that BBMB would produce sufficient solar power for its own use in offices, schools, hospitals and other infrastructures as well as for supply to the partner states. Source: bbmb.gov.in

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SOLAR PROJECTS

Tata Power ties up with NTT Com-Netmagic to set up 50 MW solar project Godrej & Boyce Mfg Ltd proudly announces the successful commissioning of 1 MW solar rooftop at Munjal Auto Industries Ltd., Vadodara, Gujarat The project, executed by Godrej & Boyce Mfg. Co Ltd will help reduce CO2 emission by about 1300 Kilo tonnes per annum.

odrej & Boyce Mfg. Co. Ltd (G&B) is pleased to announce commissioning of 1 MWp solar rooftop order from M/s Munjal Auto Industries for their Vadodara unit. The plant is expected to generate nearly 1.3 million units to 1.5 million units of energy per year and help offset approximately 1300 tonnes of CO2. Godrej delivered the plant with a robust safety management system. The key highlight of the project was the innovative design of Balance-of-System (BoS) and cabling, along with optimized selection of evacuation system. With this order, G&B has expanded their portfolio to Gujarat state. The plant has been appreciated by Munjal senior officials for completing installation within time with utmost safety & highest quality standards. With successful commissioning of this project, G&B is all geared up for future endeavours of Munjal Group.

This 1000 kWp roof top project with leading giant automobile firm will add another feather in the cap of Godrej & Boyce and demonstrates its execution capabilities in solar field. - Mr. Raghavendra Mirji,

Associate Vice President & Head – Power Infrastructure & Renewable Energy vertical G&B plans to play a larger role as an EPC Player for both On-Grid and Off-Grid solar power generation. Being driven by the focus on sustainability, reliability, values, G&B intends to enhance its presence in the sphere of Renewable Energy and will focus on various green initiatives aimed at reducing the carbon footprint. Source: godrej

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Tata Power said it has partnered with NTT Com-Netmagic to build 50 MW solar photovoltaic power plant in Solapur, Maharashtra. The NTT Com-Netmagic is a managed hosting and multi-cloud hybrid IT solution provider. “This initiative enables NTT Com-Netmagic to meet the green energy needs and optimise operating costs. This solar power project is aimed at reducing CO2 emission at an average by about 70,000 tonne per annum, with the increased power and cooling demands of NTT ComNetmagic’s data centres in the city,” according to a statement by Tata Power.

he power will be supplied through open access under a long-term power purchase agreement, said the statement. Poolawadi Windfarm Ltd, a subsidiary of Tata Power Renewable Energy Ltd (TPREL), has signed definitive agreements to supply 50-MW solar power to NTT Com-Netmagic. The capacity will be built in a phased manner with an initial capacity of 35 MW increasing up to 50 MW within 24 months of initial commissioning of the plant.

This project epitomises our continued commitment to ensuring sustainable development of India’s digital growth story. We have also been using renewable sources of energy, including wind and solar power plants in Bengaluru and Chennai through open access. - Sharad Sanghi,

MD and CEO of NTT Com-Netmagic

This is our first big initiative through a captive route and the company continues to build the foundation for a significant growth in renewables. - Praveer Sinha,

CEO & MD of Tata Power Source: PTI

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SOLAR PROJECTS

BHEL wins Rs 100 crore order from NTPC to set up solar power plant in Andhra Pradesh BHEL further said that it has been contributing significantly to the nation’s green initiatives for developing and promoting renewable energy over the past three decades.

tate-owned engineering firm BHEL Sunday said it has bagged a Rs-100 crore order from NTPC for setting up a 25 MW floating solar photovoltaic power plant at Simhadri in Andhra Pradesh. The plant will be set up on the raw water reservoir of NTPC’s Simhadri Thermal Power Plant, BHEL said in a statement. “BHEL has won an order for setting up a 25 MW floating SPV power plant on EPC (engineering, procurement and construction ) basis, at Simhadri in Andhra Pradesh. Notably, this is the second order of floating

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SPV plant from NTPC Ltd, the earlier being 100 MW floating SPV plant at Ramagundam in Telangana,” it said. With this order, BHEL said, it has emerged as the largest EPC player in the floating solar PV segment in India with a portfolio of 130 MW. The engineering firm is offering EPC solutions for both off-grid and gridinteractive ground mounted, rooftop, floating solar & canal top solar plants, with current portfolio of more than 1 GW of SPV plants. BHEL further said that it has been contributing significantly to the nation’s green initiatives for developing and promoting renewable energy over the past three decades. The enhancement of its

state-of-the-art manufacturing lines of solar cells and solar modules has further strengthened its presence in the SPV segment, it said. In addition, spacegrade solar panels using high efficiency cells and space-grade battery are being manufactured at its electronics systems division, Bengaluru. Source: PTI

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SOLAR PROJECTS

AGEL plans to add 800 MW of renewable energy projects Adani Green Energy Limited plans to add over 800 MW of renewable energy projects in the current financial year and 3300 MW in two more years, the company said in a statement.

dani Green Energy Limited plans to add over 800 MW of new capacity of wind and solar projects during the current financial year. Adani Green is India’s one of the fastest-growing renewable energy firms with over 2000 MW of operational assets and 3300 MW capacity to be commissioned in two more years to become 5,000 MW renewable entity by 2022. It is considering fundraising drive through suitable instruments to finance this expansion,” it said in a statement on Wednesday. Adani Group company has a current project portfolio of 4,560 MW including 46 operational projects and 18 projects under construction. “The company management has sought shareholders’ nod to raise up to Rs 5,000 crore to fund its existing and upcoming renewable energy projects,” the company

We are committed to create a greener future. Our vision is to have a portfolio of 10 GW of renewable energy projects by 2022. We are investing to tap value-accretive opportunities to deliver on this goal. AGEL is the first Indian company to reach the milestone of 4.5 GW organically.

Jayant Parimal, Adani Green CEO

(He quoted as saying in company’s latest annual report issued ahead of its annual general meeting scheduled on August 7)

said. According to its filing on BSE, Adani Green reported continued to have plant availability in excess of 99 per cent for the first quarter of the current fiscal. During this period, its grid availability stood at 98.7 per cent, which was 95.5 per cent in the corresponding period of the previous fiscal. According to its statement, the Company sold 1,058,475 MW per hour in the quarter ended on June 30 this year as against 839,672 MW per hour for the corresponding period of the previous fiscal. “Adani Green is the only Indian pure play renewable energy company to be listed on Indian stock exchanges and disclosing its financial and operational performance periodically. Among others, Azure Power is the only Indian renewable venture to get listed on NYSE,” it said. Source : PTI

Tata Power arm to develop 250 MW solar project in Gujarat Tata Power said its renewable energy subsidiary TPREL has received a letter of award from Gujarat Urja Vikas Nigam Ltd (GUVNL) to set up a 250 MW solar project in Dholera Solar Park in Gujarat. This is in addition to the 100 MW project awarded by GUVNL in May 2019 for Raghanesda Solar Park.

ata Power Renewable Energy Ltd (TPREL), a whollyowned subsidiary of Tata Power, has received a Letter of Award (LoA) from GUVNL to develop a 250 MW solar project in Dholera Solar Park of Gujarat. The LoA was received on July 25, 2019, Tata Power said in a statement. The energy, Tata Power said, will be supplied to GUVNL under a power purchase agreement (PPA) valid for a period of 25 years from the scheduled commercial operation date. The company has won this capacity in a bid announced by GUVNL in January 2019. The project has to be commissioned

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This is an important milestone in our endeavour to generate 35-40 per cent of Tata Power’s total generation capacity from clean energy sources.

Ashish Khanna,

President-Renewables, Tata Power within 15 months from the date of execution of the PPA, it said. With this win, TPREL’s capacity under implementation would become 650 MW which is in addition to Tata Power’s operating capacity of 2,476 MW, it added. The project is expected to generate 635 MUs of energy per year and will annually offset approximately 635 million kg of carbon dioxide. TPREL is Tata Power’s primary invest-

ment vehicle for clean and renewable energy-based power generation capacity. The company is also in the process of implementing 650 MW of renewable power projects at various locations on a greenfield basis, it said. Tata Power is India’s largest integrated power company and, together with its subsidiaries and jointly controlled entities, has an installed capacity of Source : PTI 10,957 MW.

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TECHNOLOGY

Some Glimpse from the conference held in Telangana on July 5, 2019 by Growatt.

Growatt Launched New Single-Phase Inverter in India Growatt and 3S Solutions held a conference in Telangana of India on July 5 with a large crowd of installers, EPCs and system integrators from across the region. Mr. Neelam Janaiah, managing director from TSREDCO (Telangana State Renewable Energy Development Corporation Ltd.) attended the event. Mr. Neelam Janaiah showed high recognition of Growatt’s products and outstanding achievements in India. Growatt entered Indian solar market back in 2011 and its focus on product quality and technological innovation had driven its strong sales growth in Indian rooftop sector over the past eight years.

Growatt is a global leading brand in solar inverter industry and we’ve shipped over 1.33 million inverters worldwide. According to IHS Markit Growatt has become the TOP 3 world single-phase PV inverter supplier by 2018.” - Rucas wang,

Growatt Regional Director

peaking at the event, 3S Solutions managing director Mr. Suresh Bhavani said, “3S Solutions is committed to providing high quality solar products and services. Growatt inverters can perfectly work at high altitudes, dusty locations and hot & cold areas. We are pleased to collaborate with Growatt and help bring its reliable PV solutions to the Indian solar industry.” In a step to further strengthen its market position, at the event Growatt launched its most up-to-date residential inverter MIN 2500-6000 TL-X in India. “Our new inverter MIN has got very impressive features. For instance, at first glance a lot of customers like its compact design and elegant looking. It comes with OLED display and touch button, which has a longer lifespan and

can last over three million clicks! MIN uses ‘aerospace grade’ flame-retardant lightweight materials, making it easy to carry and install. Overall, customers will have a better user experience. ” Wang presented at the product launching ceremony. To expand business across India, Growatt has built a strong local service team with over 15 experienced service engineers. “Customer service is at the center of our collaboration with our clients. We’ve established our service center and warehouse in Hyderabad, where we have sufficient inventory of inverter service parts and replacements. A toll-free service hotline has also been set up to provide fast response for our customers. Usually our service team can provide solutions for clients within 48 hours when an issue of the inverter occurs. And for systems in some remote areas, we can solve the issues within 72 hours. ”

“By partnering with 3S Solutions, we are actively exploring the business opportunities across Telangana and Andhra Pradesh. And with Growatt’s high quality products and professional customer services, we look forward to seeing good results at the end of this fiscal year! - Rucas wang,

Regional Director, Growatt

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TECHNOLOGY global market share of 1.6 percent in 2018, down only slightly from 1.8 percent in 2017, despite last year’s slowdown in the Chinese market. Overseas projects in countries like Egypt offset some of the company’s domestic market decline. Inverter manufacturer Sungrow also demonstrated the rising prominence of its EPC business by ranking second in China and third globally with a 1.3 percent market share.

Fragmentation increases

The 30 largest EPC providers in 2018 installed 19 GW of non-residential PV, representing 21 percent of the total market. This slight decline from 23 percent in 2017 demonstrates the increasing fragmentation of the EPC market on a global scale.

Sterling and Wilson takes the lead in the solar EPC market in 2018 India-based Sterling and Wilson ascended to the top position in the global solar engineering, procurement and construction (EPC) market in 2018, as the company’s PV installations more than doubled for the year.

“Sterling and Wilson’s rising market share come partly as the result of the company’s continued leadership in India’s expanding photovoltaic (PV) market. EPC solar installations in the country rose by 39 percent last year. However, Sterling and Wilson also benefitted from large overseas projects, most notably the 1.2-gigawatt (GW) Sweihan project in Abu Dhabi—which will be the world’s largest solar plant when operating.

terling and Wilson’s PV installations rocketed by 127 percent last year, reaching 2.7 gigawatts (GW), up from 1.2 GW in 2017, according to the Solar EPC and O&M Provider Tracker. This allowed the Indian company to surpass China’s TBEA Xinjiang Sunoasis as the largest EPC provider globally. TBEA Xinjiang Sunoasis had occupied the market’s top spot from 2015 through 2017. Company market share rose to 2.9 percent in 2018, up from 1.3 percent in 2017. TBEA Xinjiang Sunoasis maintained a

Non-residential PV growth presents opportunities

In 2018, the non-residential PV market outside of China expanded by a robust 34 percent, mainly as a result of growth in India, Australia, Europe, the Middle East and Latin America. This has enabled established EPC providers to grow globally, but also has opened up opportunities for local entrants. Seven of the 15 largest companies outside of China—including Sterling and Wilson, Risen Energy, ACS, Acciona and BayWa—installed projects in more than one region, an indication of the growing internationalization of the EPC market.

About the IHS Markit IHS Markit Downstream PV Intelligence Service

More details on the global solar EPC business, including regional market shares, can be found in the Solar EPC and O&M Provider Tracker., which is published as part of the IHS Markit Downstream PV Intelligence Source: ihsmarkit Service.

- Josefin Berg,

Research & Analysis Manager, Solar & Energy Storage, IHS Markit

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TECHNOLOGY

IHS: GoodWe jumps to the 4th position in the global ranking of three-phase string inverters 2018 was a brilliant year for GoodWe in the global market and this is now starting to be reflected on international rankings, where the position of the company has continued to move up, confirming the positive trends built over the years and heralding a bright future.

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he good news to share today is that according to the PV Inverter Market Tracker recently released by IHS, GoodWe has become the world’s 4th largest supplier of three-phase inverters for use on Commercial and Industrial (C & I) applications. Only five years ago GoodWe was not even on the Top 10 list but the growth has been consistent and thanks to our technological improvements and the contribution of our international teams, our sales of this kind of inverters have accelerated. Last year the company shipped more than 2GW of three-phase string inverters, allowing for a significant rise in the world ranking. The expansion of GoodWe in this segment has been particularly visible acrosslarge strategic markets, such as India, where in just some few years the company has almost tripled its shipments. Other outstanding markets where the growth has been remarkable are Australia and the Netherlands, which are mature and sophisticated solar markets and the great giant of South America, Brazil, where we are witnessing an explosion in the market of DG, in

which many C & I users are starting to look at GoodWe as a very competitive choice. Other markets of significant growth are Turkey, Mexico and Argentina. In the Chinese domestic market, the GoodWe three-phase commercial inverters are also present in all kinds of projects: from installations to supply solar energy to urban tram systems, to solar parking lots all the way to farms, technological companies and poverty alleviation projects in which our inverters help to support communities, achieve savings and contribute to clean the environment. At present the portfolio of GoodWe three-phase C & I inverters consists of our models SDT, SMT and MT. Since last year the company has launched the Second Generation of these inverters and it’s certain that the better technology and the new functionalitythat GoodWe offershave been an important part of the explanation of the successachieved domestically and overseas. Another important GoodWe improvement not to forget and that has also contributed to this success is the establishment of service teams that have helped the company to give assurance to our C & I customers and provide timely technical support. The new and expanding strengths of the MT inverter include different power capacitiesthat range from 50 to 80KW, great efficiency, capability to fully operate at 50°C and oversizing capabilities of up to 50%. The second generation has added compatibility with bifacial modules, string level monitoring and PLC communications, AFCI and a very long list of strengths. This inverter has become a sort of presentation card for GoodWe, having been successfully installed across large projects worldwide by international EPCs. Being up on this international ranking attests to the trust that solar developers are putting on the GoodWe C & I solutions, but there’s something that investors love in our products: the extremely low startup voltage, manifested in the fact that they are capable of generating power at a very early stage and for longer hours. GoodWe is thus increasingly seen as good value for commercial projects and investors are realizing that purchasing GoodWe is a reliable and safe investment. For many years GoodWe has only been seen as an important player in the residential sector.We have worked hard to expand our good reputation to the C & I market and this rise to the 4th position in the international ranking of the three-phase is a recognition that motivates us to keep improving. We believe that we are just getting started in this long race and we anticipate more good things to come, especially in the form of better products and more partnerships across the

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INTERNATIONAL

Members consider requests for panels to review US safeguard on solar cells At a meeting of the Dispute Settlement Body (DSB) on 22 July, WTO members considered a request from China for a dispute panel to review a US safeguard measure on imports of crystalline silicon photovoltaic products.

embers also considered three separate requests from Brazil, Australia and Guatemala for panels to review India’s support measures for the sugar sector.United States – Safeguard Measure on Imports of Crystalline Silicon Photovoltaic Products. China submitted

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its first request for a panel to review a US safeguard measure on imports of crystalline silicon photovoltaic cells. China noted that the measure, which took effect in January 2018, is in the form of a tariff rate quota imposed for a period of four years, with unchanging in-quota quantities and annual reductions in the rates of duty applicable to goods entered in excess of those quantities in the second, third and fourth years. The duty rate for the first year was set at 30%. China said the measure violates the core principles of the WTO disciplining the proper use of safeguard measures. The United States failed to provide a reasoned and adequate explanation of any of the essential conditions justifying the imposition of a safeguard, it said. This is not the first challenge against US safeguard measures, China noted, with several prior challenges resulting in the US measures being found WTO-inconsistent and Korea

initiating similar proceedings against the US solar cells safeguard last year. Consultations were held on 22 October 2018 with a view to reaching a mutually satisfactory solution, China noted, but the talks failed to resolve the dispute, prompting China to submit its request for the panel. The United States said that WTO rules allow a member to temporarily suspend concessions in order to take a safeguard action when a product is being imported into its territory in such increased quantities and under such conditions as to cause serious injury or threat of serious injury to the member’s domestic industry. The US has exercised this right with respect to crystalline silicon photovoltaic products and imposed a safeguard. The US process was open and transparent, and fully in accordance with both US domestic safeguard law and WTO obligations. In addition, China’s request for a panel improperly includes a claim not raised in its request for consultations. For these reasons, the US said, it is not in a position to agree to the establishment of a panel. The DSB agreed to revert to the matter. Source: wto.org

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INTERNATIONAL

IRENA and UAE Ministry of Education Inspire Next Generation on Renewable Energy UAE Minister of Education and IRENA DirectorGeneral sign agreement to explore integrating renewables into education system

Alfanar & Taqnia signed MoU for alternative energy projects Alfanar and Taqnia Energy have recently signed a memorandum of understanding to develop alternative energy and the localization of energy products.

The Saudi market’s optimistic view to adapt to the renewable initiative has further strengthened the determination of the companies to jointly identify the opportunities in the sector. Additionally, the companies will capitalize on the most modern technologies available in the sector to provide efficient and sustainable solutions to the users in the Kingdom. - Wasim Al-Mallouhi,

Vice President — growth and strategy, Alfanar Construction

he signing is a testimony to the commitment of both Alfanar and Taqniya to reducing dependence on non-renewable energy and to shift to developing green energy projects in line with Saudi Vision 2030, the companies said. Abdullah Al-Hammad, president, Alfanar Construction, and Wasim AlMallouhi, vice president — growth and strategy, Alfanar Construction, signed the agreement with Ali Al-Ayed, CEO, Taqnia, and Wail Bamhair, CEO, Taqnia Energy. The agreement will explore previously untapped alternative energy areas in the Saudi market, such as the hybrid off-grid solution and the electric vehicles charging infrastructure, which is an emerging technology worldwide and is a cornerstone of the Kingdom’s megaprojects. The agreement further aims at developing the local economy and technology advancement through Alfanar’s and Taqnia’s combined knowledge on worldwide trends and the local markets. The companies will further explore the local and international markets and opportunities in the Renewable Energy Projects Development Office (REPDO), NEOM, Red Sea Project, Qiddiya, energy service companies, and off-grid hybrid solutions. Taqnia Energy is a subsidiary of the Saudi Technology Development and Investment Company (Taqnia), which was established in 2014 and is headquartered in Riyadh. The company was founded with a mandate to develop and invest in bankable technology-focused energy business

he UAE Ministry of Education and the International Renewable Energy Agency (IRENA) signed an agreement to cooperate on the integration of renewable energy and sustainable development into the national education system. The Memorandum of Understanding (MoU) was signed by His Excellency Hussain Ibrahim Al Hammadi, the U.A.E. Minister of Education and Mr. Francesco La Camera, Director-General of IRENA at the 17th IRENA Council in Abu Dhabi. The agreement, signed in the presence of Her Excellency Dr. Amna Al Dahak Al Shamsi, Assistant Under-Secretary of Activities and Dr. Nawal Al-Hosany, the UAE Permanent Representative to IRENA, identifies areas of cooperation between the Agency and the Ministry of Education to introduce training initiatives around lowcarbon forms of energy into federal education. The cooperation aims to promote and support the achievement of the relevant Sustainable Development Goals (SDGs) in the UAE and around the world, namely SDG 7 (affordable and clean energy for all) and SDG 13 (climate action).

We are delighted to form this partnership with IRENA, which serves as a blueprint for the integration of sustainable development into national education systems around the world. This agreement supports the UAE’s 2030 agenda for sustainable development. - H.E. Hussain Ibrahim Al Hammadi, U.A.E. Minister of Education

Source: arabnews

SEPTEMBER 2019-A

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INTERNATIONAL

China’s war on air pollution could boost solar power – study China’s so-called photovoltaic potential fell by an average of up to 15% between 1960 and 2015 as a result of pollution

H.E. Al Hammadi also confirmed that this memorandum reflects the interest of both parties in promoting the concept of sustainable development, making it part of the educational system, and devoting best educational practices in this area in order to achieve the UAE Agenda and its future objectives with regard to sustainable development. “The Ministry of Education is determined to build a comprehensive and integrated educational system that contributes to the development of the cognitive aspects of students in various fields with renewable energy and sustainability at the forefront of this agenda,” he concluded.

It is critically important that we engage young people in the pursuit of sustainable development and climate action,The UAE has demonstrated its commitment to playing a leading role in the global energy transformation, and to adopting a sustainable development model. Working with the Ministry of Education, we aim to inspire youth to support the action agenda and develop a model of collaboration that can be replicated in countries all over the world. - Francesco La Camera, Director-General

Youth development is a high priority for the UAE’s visionary leadership and stems from its conviction that when we invest in our youth, we invest in our future. The new partnership between the Ministry of Education and IRENA is indeed a promising one. Incorporating renewable energy and sustainable development into the educational curricula will not only enable us to harness young minds and prepare them to become environmental stewards, but also pique their interest in pursuing careers in the emerging domains.” - H.E. Dr Thani bin Ahmed Al Zeyoudi, Minister of Climate Change and Environment

Renewable energy is a key solution to climate change and an enabler of universal energy access, however, it is also a critical contributor to a number of UN’s 2030 SDGs. Good health and wellbeing (SDG 3), quality education (SDG 4) and sustainable economic growth (SDG 8) represent a few of the goals served by the increasing use of renewable energy. Source: irena.org

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hina’s efforts to reduce chronic air pollution could increase its ability to generate solar power by up to 13% by allowing more sunlight to reach the earth, according to a new study published recently. China’s so-called photovoltaic potential fell by an average of up to 15% between 1960 and 2015 as a result of pollution, climate researchers from Switzerland, the Netherlands and China said in a report published by the Nature Energy journal. Reverting back to 1960s radiation levels could increase power generation by 12% to 13%, the researchers said, boosting Beijing’s efforts to increase solar’s contribution to the national grid and bring down costs. China has been working to curb choking levels of pollution by cutting coal use, improving fuel standards and encouraging cleaner forms of industry and energy. Hazardous airborne particles known as PM2.5 fell by 42% in 74 major cities from 2013 to 2018. The country’s total installed solar capacity stood at 170 gigawatts at the end of 2018, about 9% of total generating capacity. Solar last year produced 177.5 terawatt-hours of electricity, about 2.5% of the total. China is keen to boost the profitability of solar firms in order to reduce the subsidies paid to renewable energy providers, with the rapid rise in new capacity creating a payment backlog expected to reach 60 billion yuan ($8.7 billion) by next year. The average price paid to solar producers has already been cut from more than 1 yuan/kWh in 2011 to around 0.3 yuan/kWh this year. Regulators said earlier this year that subsidies would be cut to zero by 2021 for onshore wind power generators, meaning they would sell power at the same price as traditional energy sources. Experts say solar could also reach “grid price parity” very soon. China is also launching a series of ($1 = 6.89 yuan)

Source: reuters

SEPTEMBER 2019-A

INTERNATIONAL NORTHEASTERN Harbin

Embarking on round two of Saudi Arabia’s National Renewable Energy Program

SEPTEMBER 2019-A

Beijing

NORTHERN WESTERN

TIBETAN

Wuhan Chengdu CENTRAL

Shanghai

EA STE RN

he Renewable Energy Project Development Office (REPDO) of Saudi Arabia's Ministry of Energy, Industry and Mineral Resources (MEIM) has announced details of the bidding process and the timeline for 12 renewable energy projects to be tendered in 2019. These projects will have a total capacity of more than three gigawatts (GW). Requests for proposals (RFPs) for the first four projects will be launched in July, another two will be launched in August and the remaining six will be launched in the fourth quarter of 2019. The projects, which are part of the Kingdom’s round two of the National Renewable Energy Program (NREP), are divided into small ‘Category A’ projects with the capacity to produce 100 megawatts (MW) or less, and larger ‘Category B’ projects with a capacity above 100 megawatts (MW). The smaller-scale projects are designed to create greater opportunities for local companies to participate in NREP. In January, REPDO invited expressions of interest (EOIs) for the first six solar photovoltaic (PV) projects to be tendered in round two of the NREP, with generation capacity ranging from 20 to 600 MW. The RFQ window closed on 18th of April, with 60 companies securing the initial qualification, including 28 Saudi companies. This is compared to a total of 42 companies which qualified for round one NREP projects in 2017. On July 18th, REPDO will invite companies to submit proposals for the first four Category B projects: 1. Al-Faisaliah Project (600MW) 2. Jeddah Project (300MW) 3. Rabigh Project (300MW) 4. Al-Qurayyat Project (200MW) On August 1st, RFPs will be launched for the following Category A projects: 1. Medina Project (50MW) 2. Rafha Project (20MW) The Ministry expects these projects to attract approximately 5.2 billion Saudi riyals (USD $1.4 billion) of private sector investment.

Urumqi

SOUTHERN Shenzhen

CHINA

Reduction in Photovoltaic Generation Due to Aerools (KWh/m2/day) 0.0

0.5

1.0

1.5

Air In China Is So Polluted That It’s Affecting Solar Power Generation When you think of air pollution, the first country that probably comes to your mind is China. Air pollution has always been an issue for China, but things are getting serious now.

A gigawatts of solar energy by 2030, which is literally 400% more than what it was doing back in say, 2010

ccording to new reports, air pollution in China has started dimming the sunlight. That’s right. It looks like the country is putting out so much smoke that it’s essentially dimming the sun, thereby affecting solar power generation. W e’re talking about coal-driven pollution here i.e. air pollution caused due to burning coal. This coal-driven air pollution is said to be releasing so much smoke that it’s literally covering the sun, rendering solar farms useless. As noted by the folks over at Ars Technica, China has done a phenomenal job of commissioning new solar infrastructure. The country is expected to produce as much as 400 gigawatts of solar energy by 2030, which is literally 400% more than what it was doing back in say, 2010. However, that number could have been a lot more if they would have accounted for the damage caused by decades of coal-burning. There has been a spike in the amount of particulate matter put into the air by emissions. This, in case if it isn’t obvious enough, is also a huge problem for the Chinese people. Now let’s consider India for a moment. The rate at which air pollution is increasing in our country, it’s possible that we may have overtaken China. 22 of the world’s 30 most polluted cities are in India, remember? It’s also worth pointing out that India’s solar power infrastructure isn’t as well-established as China. India is still heavily relying on coal, and it’s here to stay despite India’s ambitious goals for renewable energy. We don’t really have to break down it down from here, do we? It’s pretty obvious that India will also face a similar issue in the near future, if not the immediate one. So what can we do to prevent it? Well, it’s not possible to stop coal-driven pollution immediately. What we can do is at least try and control the air pollution from our end like stop bursting crackers, use EVs as much as possible, etc. The transition is going to take time, but it’s a first that we have to take to not save ourselves, but also safeguard the ability to generate renewable energy.

Source: Nature Energy

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INDIA

EDF Renewables and Total Eren sign contracts for the sale of electricity for more than 700 MWp of solar energy in India Total Eren and EDF Renewables announce the signing of four Power Purchase Agreements (PPAs), each of 25 years duration. They concern four solar power projects located in northern India with a total capacity of 716 MWp. These photovoltaic projects were won by EDEN Renewables India, a joint venture with two PV partners in India.

EDEN Renewables India has signed :

At the end of June, a contract for the sale of electricity with the federal government agency SECI (Solar Energy Corporation of India) for a solar project with a capacity of 450 MWp [1] in the State of Rajasthan; In the spring of 2019, three PPPs for two solar projects with a unit capacity of 98 MWp [2] and a solar project with a capacity of 70 MWp [3] following the call for tenders launched by the local network manager UPPCL (Uttar Pradesh Power Corporation Limited) in the state of Uttar Pradesh.

ith an annual output of about 1200 GWh per year, these solar photovoltaic plants will generate the energy needed to meet the annual electricity needs of nearly 1.1 million Indian homes. The launch of the construction is scheduled for the end of the year and commissioning by the end of 2020. EDEN Renewables India has been developing, building and operating solar projects in India since 2016. Through their local presence and their team of experts based in Delhi, EDF Renouvelables and Total Eren already operate four solar plants in India for a total of 207 MWp of electricity. installed capacity in the states of Rajasthan, Uttarakhand and

We are delighted to have signed these PPAs for our four solar power plants, which will help meet the energy needs of the people of Uttar Pradesh and Rajasthan, as well as the development of renewable energy projects at the local level. We will quadruple our installed capacity in India! The signing of these PPPs represents a significant advance in our development in this market, which still offers many growth opportunities. I look forward to working on other renewable energy projects in India with our partner EDF Renouvelables via our joint EDEN subsidiary, which plays a key role in achieving our local ambitions .

- Fabienne Demol, Executive VP – Global Head of Development

NOTE

1. equivalent to 300 MWac 2. equivalent to 70 MWac 3. equivalent to 50 MWac

We welcome the signing of electricity sales contracts that will enable residents of Uttar Pradesh and Rajasthan to access low-carbon electricity. These large-scale projects, a lever for local economic development, allow us to consolidate our presence in India and to consider new projects in this country, which is one of the strategic markets for EDF Renewables. These developments are fully in line with EDF Group’s Cap 2030 strategy, which aims to double its renewable capacity between 2015 and 2030, in France and internationally.

- Frédéric Belloy, EDF Renouvelables’ International Director

ACME Solar terminates deal with NTPC for 600 MW project, wants bank guarantee refund in 3 days

NTPC has decided to reduce the tariff by 31 paise from the allotted tariff of Rs 2.59 per unit if Acme denies the imposition of the safeguard duty.

cme Solar, one of India’s fastest growing companies in the solar energy sector, has refused to work on a 600 MW project of the NTPC. Acme Solar has told NTPC that the agreement is no longer feasible as the Telangana government did not give regulatory approvals within two months of signing the power purchase agreement (PPA).

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The solar developer had quoted a tariff of Rs 2.59 per unit to win the project in an auction. In the PPA, the trading margin and the power capacity had to be approved by the Telangana State Regulatory Commission (TSERC). Acme has now asked NTPC to return its bank guarantee within three days, reported Economic Times. NTPC, on the other hand, has asked for an extension that was denied by Acme stating terms of uncertainty in the project and questioning the commercial feasibility and financial viability of the project if it is

taken forward. NTPC has decided to reduce the tariff by 31 paise from the allotted tariff of Rs 2.59 per unit if Acme denies the imposition of the safeguard duty. Safeguard duty of 26 per cent was imposed by the Director-General of Trade Remedies in July last year between the bid submission for the NTPC auction and the holding of the actual reverse auction. Acme has disagreed with the imposition stating that it is not permissible by law to impose new conditions after the bidding process is completed.

SEPTEMBER 2019-A

INDIA

Tenaga Nasional Berhad plans to set up green energy platform in India The Malaysian government-owned Tenaga Nasional Berhad is mulling over the option of setting up a renewable energy platform in India.

he Malaysian governmentowned Tenaga Nasional Berhad is mulling over the option of setting up a renewable energy platform in India. In April 2019, Petroliam Nasional Bhd, or Petronas, had acquired Amplus Energy Solutions. The oil and gas company had paid Rs 2,700 crore for the deal. Tenaga Nasional Berhad is looking to set up a renewable energy platform and also acquire assets. The company had earlier invested in GMR Energy. GMR Energy is a joint venture between GMR Group and Tenaga Nasional Berhad, wherein GMR Group holds a 52 percent stake, while Tenaga Nasional Berhad holds 30 percent. In another development, EDEN Renewables India, a joint venture (JV) between Total Eren and EDF Renewables, has inked four power purchase agreements (PPAs) for solar power projects totalling 716 MW in northern India. EDF Renewables and Total Eren already operate four solar power plants in India totaling 207 MWp of installed capacity in Rajasthan, Uttarakhand and Madhya Pradesh.

SJVN, BHEL in MoU for solar projects The MoU aims at building a strategic partnership between the parties for jointly pursuing commercial solar power projects through participation in tariff/viability gap funding based competitive bidding process.

JVNNSE 6.20 % Ltd on Tuesday said it has entered into a MoU with Bharat Heavy Electrical Ltd for development of solar power projects in India.The MoU aims at building a strategic partnership between the parties for jointly pursuing commercial solar power projects through participation in tariff/viability gap funding based competitive bidding process. As per MoU, BHEL -0.15 % will be an engineering, procurement, construction

and project management contractor for SJVN projects. In addition to this, BHEL will also provide operation and maintenance services after commissioning of project.SJVN Ltd has commissioned five projects totalling 2015.2 mw of installed capacity including solar and wind.The company is presently implementing power projects in Himachal Pradesh, Uttarakhand, Bihar, Maharashtra and Gujarat in India besides neighbouring countries viz. Nepal and Bhutan. This is one of steps for SJVN towards becoming 5000 mw company by 2023, Source: economictimes.indiatimes and 25000 mw by 2040.

Solar panels to come up on farmlands in Delhi by year-end Senior officials of the Delhi government said applications will be soon invited from those farmers who are interested in signing up for the ambitious ‘Mukhyamantri Kisan Aay Badhotri Solar Yojana’.

olar power generation through panels installed on agricultural lands is set to become a reality in the national capital by end of this year. Senior officials of the Delhi government said applications will be soon invited from those farmers who are interested in signing up for the ambitious ‘Mukhyamantri Kisan Aay Badhotri Solar Yojana’, which aims to enhance their income. In its 2018-19 Green Budget, the city government had announced the scheme to achieve solar targets as per the Delhi

Solar Policy 2016. It will also help farmers to earn extra money without affecting the normal farming activities. “The development department is preparing to hold workshops to sensitise farmers and create awareness. The plan couldn’t take off as guidelines for Virtual Net-Metering (VNM) were not finalised,” said an official associated with the project. “Solar scheme couldn’t move as officials who were involved in the project were transferred. In fact, two farmers had approached us when the initiative was launched in July last year.”

Source: projectstoday

SEPTEMBER 2019-A

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INDIA Average spot power price fell 11 per Andhra Guards damage cent to Rs 3.32 per unit in June compared to the year-ago month, the Indian crores worth solar panels Energy Exchange (IEX) said. due to lack of compensaJune spot power price dips tion, four held 11% to Rs 3.32/unit The accused, who were working as security guards, had damaged the solar panels as the management had taken their lands but failed to give them compensation.

olice arrested four persons in connection with the destruction of solar panels at a solar plant located in Mydukur mandal. Speaking to the media in Jammalamadugu on Saturday, DSP K Krishnan said that a police team led by Circle Inspector Manjunath Reddy, SIs Pravin Kumar and Dhanunjayudu arrested N Nagarjuna, N Ramesh, Y Ganga Raju and A Pedda Subba Rayudu for damaging solar panels. The DSP said that the four accused damaged the solar panels in the solar plant located between Ponnampalle-Ramachandrayapalle in Mylavaram mandal in the early hours of July 1. Solar plant in-charge D Dastagiri lodged a complaint with the Mylavaram police about the incident. The accused had damaged the solar panels as the solar plant management had taken their lands, but failed to give compensation to them. The management also removed them from service and stopped hiring their tractors and SUVs. The accused developed a grudge and damaged solar panels worth crores of rupees.“A few more persons will be arrested in connection with the case,” the DSP said.

ith trading of 4,207 million units (MU) of electricity, the volume in the day-ahead-market (DAM) grew 12 per cent month-onmonth. As compared to June 2018, the trading volume fell 15 per cent. On daily average basis, around 140 MUs were traded in June 2019, the exchange said. “The average Market Clearing Price (MCP) at Rs 3.32 per unit (in June 2019) declined 11 per cent over Rs 3.73 per unit in June 2018 mainly on account of reduced demand in the short-term market,” the IEX said. Greater availability of power from hydro, solar, coal- based power generating stations having long-term contracts with discoms along with better availability of domestic and imported coal were the key reasons for decline in traded volume on IEX. The hydro, solar and coal generators saw an increase of 5 per cent, 52 per cent and 9 per cent, respectively, IEX said citing National Load Dispatch Centre (NLDC) data. According to the NLDC data, the all-India peak demand met reached a new high of 183 GW in June 2019, an increase of 7 per cent over 170 GW peak demand met in the year-ago month. On all-India basis, the energy met was 119 billion units (BU) in June 2019.

The government is in the process to identify institutions or department, where renewable energy is to be diverted.

- said another official

The Delhi Electricity Regulatory Commission (DERC) has now finalised and notified the guidelines paving the way for the scheme, said the official. VNM refers to when solar power is not used on-site but is transferred to the subscribers. In this case, the power generated in farms is likely to be used in water and sewage treatment plants run by the Delhi Jal Board (DJB) or government hospitals located in their vicinity. Under the scheme, the private companies, under the Renewable Energy Service Company (RESCO) model, will install solar panels. Only one-third of the total land owned by a farmer can have solar panels. These solar panels will be 3.5 metre above the surface which will allow smooth movement of tractors and

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unhindered farming activities. In return, the farmers will get Rs 1 lakh per acre as rent with 6 per cent annual increase for 25 years. The farmers will also be entitled to get 1,000 units of free electricity every year for each acre of land. “Tender to invite private companies will be issued soon. By December, the network will be functioning. The scheme will increase income of farmers by three-four times,” said an official.

Taking the lead

Recently, the Delhi Police had announced that all its buildings will have rooftop solar power plants. It is estimated to generate about 3-4 MW of power.

Source: newindianexpress

SEPTEMBER 2019-A

INDIA

Ignoring Centre’s advise, Andhra to go ahead with PPAs review Ignoring the Centre’s advise to exercise restraint on the issue of Power Purchase Agreements (PPAs), the Andhra Pradesh government decided to go ahead with the review of all PPAs.

rincipal advisor to Chief Minister, Ajeya Kallam, said that all PPAs signed during the term of the previous Telugu Desam Party (TDP) will be reviewed as they were causing huge losses to state exchequer. He said the review of all PPAs was necessary as the state agreed to pay higher tariff in the agreements signed with renewable power producers. Union Power Minister R.K.

energy, more than 70 per cent of about Rs 40,000 crore value of PPAs signed after 2014 benefitted only 5 players,” he said. He alleged that wind and solar projects were sanctioned indiscriminately by the government, knowing very well that Renewable Power Purchase Obligation (RPPO) was far surpassed, without assessing financial implications. PPAs worth thousands of crores of rupees were signed with a handful of developers without going through a transparent procurement process, ignoring the lower

We are pained because rather than appreciating the Chief Minister for trying to weed out corruption, he is being questioned for trying to stop this bleeding of our precious state resources for the financial gain of a few people.

- Ajeya Kallam,

Principal advisor to Chief Minister

Singh had last week written to Chief Minister Y.S. Jagan Mohan Reddy to honour the contracts. “If an impression goes out that the rule of law does not prevail or the contracts are not honoured, the investments will dry up and growth will come to a halt,” Singh said. Defending its move, the YSR Congress Party (YSRCP) government said the state would have to bear the high cost of wind and solar power for the next 25 years and incur a loss of Rs 3,000 crore every year. He told reporters that the Chief Minister had brought the irregularities under Prime Minister Narendra Modi’s notice during the latter’s visit to Tirupati last month. He said the government was deeply committed to protect and promote the interests of the investors and the rule of law through transparent policies and sustainable power prices. “Of the 221 PPAs in wind

SEPTEMBER 2019-A

rates prevalent in the country and surpassing the RPPO. There is no way this could have happened without the then leadership being aware of these irregularities, he said. Kallam pointed out that the government constituted an expert committee on power and also a cabinet sub-committee to probe serious irregularities in PPAs. “Once the committees give their reports, our government will examine the criminal angle, and appropriate legal action will be initiated against those responsible,” he said. The government also constituted a high-level negotiation committee to hear the developers, negotiate these high cost renewable agreements and bring down the unsustainable costs. Source: IANS

AP govt reviewing PPAs in public interest: Official The Andhra Pradesh government has initiated an exercise to review power purchase agreements in the interest of the public and the State, a top official said and added it is not for antagonising the Centre and all facts will be brought to its notice.

he State will go ahead with the exercise, Ajay Kallam, Principal Advisor to Andhra Pradesh Chief Minister Y S Jagan Mohan Reddy, asserted. He was responding to a query on the Centre’s reported objection to the state government’s decision to review PPAs during the Telugu Desam Partys rule on the ground of corruption. “Absolutely there is no issue. They must have responded based on whatever has come to their notice. They may not be knowing facts. We will bring the facts to their notice. Now we will go on doing the exercise,” Kallam told reporters here. Union Minister of State (Independent) for Power and Renewable Energy R K Singh had reportedly objected to the AP government’s move in a two-page letter last week. Emphasising India’s environmental and power requirements, the letter reportedly warned the State saying that the exercise would halt flow of foreign investments into the sector. Kallam claimed that the Centre may not be aware of “certain facts.” “In governance, it is natural to refer certain pleas to concerned governments or agencies. That does not mean they are finding fault with us or we are antagonising them. They are doing their job, we are doing ours. We are doing it for the sake of public and in the interest of the state,” he added. Source: PTI

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INDIA

India’s renewable energy capacity crosses 80GW: R K Singh

5-fold rise in renewable workforce in 5 year

India’s renewable energy capacity has crossed the 80GW-mark, which includes 29.55 GW of solar energy and 36.37 GW wind power, Parliament was informed.

India’s renewable energy workforce has grown five-fold in the past five years, according to a new report.

he government has set an ambitious target of having 175 GW of clean energy capacity by 2022, including 100 GW solar and 60 GW of wind energy. “The Government is regularly monitoring the progress being made to achieve the target of 175 GW by 2022. As per India’s submission to the United Nations Framework Convention on Climate Change on Intended Nationally Determined Contribution (INDC), a cumulative electric power capacity of 40 per cent from non-fossil fuel-based energy resources is to be installed by 2030. Accordingly, the government has set a target of installing renewable energy capacity of 175 GW by the year 2022, the minister said. In a separate reply to the House, Singh said that solar power capacity addition was 5,525.98 MW in 2016-17, 9,362.63 MW in 2017-18 and 6,529.20 MW in 2018-19. In another reply, the ministry also told the House that a total of 42 solar power parks with an aggregate capacity of around 23.40 GW have been approved by the government so far to facilitate achievement of 100 GW target by March, 2022. Out of approved capacity of 23.40 GW, power purchase agreements (PPAs) have been signed for around 9.20 GW and out of this, around 6.40 GW of capacity has been commissioned in various solar parks as on June 30, 2019, he said. The minister also informed the House that availability of land and power evacuation are two main constraints in setting up of solar parks. To address these issues, a new mode (Mode-7) has been introduced in the Solar Park scheme, allowing Solar Energy Corporation of India (SECI) to act as the Solar Power Park Developer (SPPD). The SECI, with the assistance of the states, will make land available to successful bidders for setting up renewable energy projects and also get the external power evacuation infrastructure of the parks developed through External Transmission Development Agencies (ETDA) like Central Transmission Unit (CTU), State Transmission

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n 2019, nearly 100,000 workers are employed in the solar and wind industry, up from 19,800 in 2014. Of these, 12,400 workers were employed in FY19 and 30,000 in FY18 by utility-scale solar, rooftop solar and wind energy projects. These findings were released here by the Council on Energy, Environment and Water (CEEW), the Natural Resources Defense Council (NRDC) and the Skill Council for Green Jobs (SCGJ). Rapid capacity addition in India’s solar and wind sectors has been the primary factor behind the growth, according to the report ‘Powering Jobs Growth with Green Energy’. Achieving the 175 GW renewable energy target by 2022 could create over 330,000 jobs in the wind and solar sectors; as many as 230,000 additional employment between now and 2022.

A total of 80.46 GW of renewable energy capacity has been installed in the country as on June 30, 2019 which includes 29.55 GW from Solar & 36.37 GW from Wind power. - R K Singh ,

Power and New & Renewable Energy Minister (He said in a written reply to the Rajya Sabha) Source: PTI

“India is at the centre of the global energy transition and its successful renewable energy programme is inspiring and enabling similar low-carbon transitions across other emerging economies,” CEEW CEO Arunabha Ghosh told IANS. In the last two years, the renewable energy capacity addition outweighed additions in thermal power. “While India deepens its renewable energy market to ensure that the employment potential is met, it would also need to increase focus on creating a skilled workforce and designing quality training programmes,” Ghosh said. The CEEW, NRDC, SCGJ analysis finds that 45,000 workers could be employed in solar module manufacturing in India as part of the 100 GW solar target.However, policy certainty, the government support and reduction in the cost of finance will be key to sustaining the growth of the renewable energy markets and the renewable energy workforce. Renewable energy jobs growth slowed in 2019 because of the 20 per cent decline in capacity additions in the solar and wind sector. The goods and services tax (GST), imposition of safeguard duty, payment delays by power distribution companies, lack of finance and infrastructure constraints were key reasons behind the slowdown. “Strategic thinking is needed to grow sustainable jobs in India and around the world, especially supporting decentralised renewable energy. “The 100,000 clean jobs happening now are vital to powering India’s economic growth and meeting climate targets,” said Anjali Jaiswal, Senior Director with NRDC.

Source: IANS

SEPTEMBER 2019-A

BUSINESS & FINANCE

Suntuity Group announces foray into Indian renewable energy market

Sterling and Wilson Solar gets Sebi nod for Rs 4,500 crore IPO The IPO will be an OFS by the Chairman Khurshed Yazdi Daruvala and Shapoorji Pallonji and Company.

Illustration: Ankit Pandey

terling and Wilson Solar Ltd (SWSL) has received approval from markets regulator Sebi to float its Rs 4,500-crore initial public offering. The capital markets regulator issued its final observations on SWSL’s IPO proposal on July 4, according to information available on Sebi’s website. The total size of the initial public offering (IPO) is about Rs 4,500 crore. The IPO will be an offer-for-sale by the company’s Chairman Khurshed Yazdi Daruva-

US-based solar solutions provider Suntuity Group Tuesday announced its foray into the Indian renewable energy sector with the commissioning of its maiden project in Maharashtra.

he company, part of Suntuity Group, is proud to announce its maiden roof-top project. This 103-kW (kilowatt) rooftop solar project is at an educational institution in South Mumbai. The project marks the foray of Suntuity Group in India,” Suntuity Renewable Energy India said in a statement. The company said Vikram Solar has manufactured the modules used in

“Our solutions cater to assist reducing carbon footprint and help in a clean way of life. We have deployed many installations across the world, and it’s a great feeling to know that we play a part in moulding young minds towards energy conservation with this maiden project.”

The balance of the shares in the SEIL is owned by SCU’s local partner, Gayatri Energy Ventures.

- Imaan Javan, The Suntuity Group develops, finance, build, own and operate residential, commercial and utility-scale renewable energy solutions across the world. The company has installed over 250 megawatt (MW) of solar PV since its formation in 2008. Suntuity installs over 4,000 residential solar systems every year in the US. (This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.) Source: devdiscourse

SEPTEMBER 2019-A

Sembcorp to infuse equity worth Rs 516.9 crore in SEIL

embcorp Industries Wednesday announced infusion of equity worth Rs 516.9 crore into its India arm Sembcorp Energy India (SEIL) to support its renewable energy business in the country. The equity injection is funded through a mix of internal funds and borrowings, Sembcorp has said in a filing to the Singapore stock exchanges. The equity infusion results in the subscription to 275 million additional shares in the SEIL by the Sembcorp’s whollyowned subsidiary, Sembcorp Utilities (SCU), the company statement said.

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BUSINESS & FINANCE la, and Shapoorji Pallonji and Company, the promoter selling shareholders. The company had filed its draft red herring prospectus for the IPO with Sebi on April 15 this year. Sebi’s observations are necessary for any company to launch public issues such as IPO, follow-on public offer (FPO) and rights issue. ICICI Securities, Axis Capital, Credit Suisse Securities (India), Deutsche Equities India, IIFL Holdings and SBI Capital Markets are the global coordinators and book running lead managers and IndusInd Bank NSE -3.66 % and YES Securities are the book running lead managers to the issue. The shares of Sterling and Wilson are proposed to be listed on BSE and NSE. The company’s order book was Rs 4,309.09 crore as of December 31, 2018. Source: PTI

With this infusion of about Rs 516.9 crore into the SEIL to support the growth of its India renewable energy business, Sembcorp’s effective stake in the energy arm has increased from 93.73 per cent to 94.05 per cent, it added. The balance of the shares in the SEIL is owned by SCU’s local partner, Gayatri Energy Ventures NSE 0.00 %. SEIL is one of the leading independent power producers (IPP) in India with a balanced portfolio of thermal and renewable energy assets totalling approximately 4.37 GW capacity in operation and under construction. SEIL, which has operating assets across seven states in India, owns 100 per cent of Sembcorp Green Infra. It has a wind and solar power portfolio of more than 1,700 megawatts. Late last year, SEIL became the first company to deliver a 250 MW wind farm project ahead of schedule. SEIL had secured the project in an auction conducted by the state-run Solar Energy Corporation of India (SECI). SEIL is now making progress in the development of two additional wind power projects, SECI 2 and SECI 3, which it also won in nationwide wind tenders by SECI. Sembcorp Industries is listed on the main board of the Singapore Exchange, SCI is a component stock of the Straits Times Index, several MSCI and FTSE indices, as well as the SGX Sustainability Leaders Index and the Dow Jones Sustainability Asia Pacific Index.

Sungrow Reaches 4 GW Milestone in Indian Market Sungrow, the global leading inverter solution supplier for renewables, announced recently that the Company’s performance in India has reached 4 GW, establishing it as a major contributor to the decarbonization of fast-growing Indian economy.

ndia is undoubtedly one of the dynamic solar hubs in the world on account of ample sunshine, magnitude of demand of power as well as the incentive policy – the Indian government has pitched for 100 GW PV installations by 2022,and called to build climate resilient communities across the sub-continent. Sungrow is taking the lead in supporting the Indian energy transition and is witnessing a standout performance with optimal products and established service networks. In particular, the Company ranked No.1 in utility-scale applications in 2018, sourced by Bridge to India, an authoritative research institute.

Pioneering the road not taken

The Indian solar market offers huge untapped potential while with that comes an array of challenges. Sungrow provides the industry’s most proven and reliable product lineup in response to a huge geographic spread and tough climatic conditions. With current offices sited in four

We’re evolving and innovating as we move forward . An updated product portfolio will be unveiled at REI (Renewable Energy India) 2019, which we expect to create significant buzz in the industry.

- Mr. Hu Yukun,

Country Manager of Sungrow India different cities, Sungrow can take on-the-ground commitment to meet diversified criteria. The Company also received award of Best Service Network Solar Inverter Company in India. Furthermore, the newly-established manufacturing base in Bangalore with annual capacity of 3 GW eminently enhances the delivery capability while stimulating job creation at large in the global tech-city.

Open to more inquiries

Currently the 12.5 MW block with 3.125MW turnkey solution, C&I string inverters and the energy storage systems are the most popular Sungrow products deployed to the region. For those interested in Sungrow products, please feel free to contact Sungrow India team by india@sungrow.cc, and connect with us at REI 2019 at the historically most-visited booth 3.132 during September 18-20. Source: in.sungrowpower

Source: PTI

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SEPTEMBER 2019-A

Andhra Pradesh

Andhra Pradesh govt strikes a defiant note, tells PMO it intends to enquire into past PPAs AP govt will go ahead in renegotiating power purchase agreements with private developers Earlier, central government is attempting to steer Andhra Pradesh government away from altering existing power purchase agreements power comes from only 5 producers,” the letter says. “Wind energy in excess of RPPO was purchased at Rs. 4.84 a unit, while thermal energy was available at Rs. 4.2.”

he Andhra Pradesh government has struck a defiant note and will go ahead in renegotiating power purchase agreements with private developers, the state government said in a recent letter to the Prime Minister’s Office. Mint has seen extracts from the letter. “We have inherited a bankrupt exchequer with a huge deficit of Rs. 2.62 lakh crore, the discom’s (electricity distribution companies) unpaid generator dues of Rs. 20,000 crore and accumulated losses of discoms of Rs.15,000 crore.” The letter goes on to say that the state incurred losses dues to the previous government accepting long-term tariffs that were above those being signed elsewhere in the country and because the state had chosen to procure more renewable power than coal-fired power. “The state incurred losses due to high-cost purchases beyond renewable power purchase obligations (RPPO). Surprisingly, 70% of this

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Accounting for the fixed costs that have to be paid for thermal power even if the power is not procured, the effective price of procurement for wind energy in the state is Rs. 5.94 a unit and for solar energy is Rs. 8.09 a unit while thermal power is available at Rs. 4.2 a unit. These cause losses of over Rs. 1500 crore a year. The letter argues that wind energy has been available at Rs. 2.43 a unit in Gujarat and solar energy at Rs. 2.44 a unit in Rajasthan, based on reverse tendering process of Solar Energy Corporation of India (SECI). The letter says the government will conduct a free and fair enquiry and also form a cabinet sub-committee to enquire into “serious irregularities.” Last week, the central government is attempting to steer the newly elected Andhra Pradesh government away from altering existing power purchase agreements (PPAs). In a letter dated July 9, RK Singh, Minister of State for Power and New and Renewable Energy, has asked Andhra chief minister YS Jagan Mohan Reddy to not cancel PPAs unless there is a clear evidence of corruption. The new state government has indicated over the last few weeks that it will review, negotiate and bring down the cost of wind and solar PPAs tied-up by the discoms, to the consternation of private power developers like Greenko, Renew and Tata Power, public developers like NTPC and SECI, which conducts the reverse bidding process. The AP government’s letter goes on to say that “Though we are aware of the legal nature of contracts and their importance, the divided state of Andhra Pradesh and the discoms which are in a debt trap are helpless to honour these high-cost renewable power purchase agreements done with mala fide intent.” Source : livemint

government misleading people with false reports: Chandrababu Naidu TDP chief Chandrababu Naidu accused the Chief Minister of having the House adjourned after his speech, for not allowing the Opposition to react.

eader of the Opposition N Chandrababu Naidu has accused the State government of misleading people with false reports and claims and described the claims of advisor to the government Ajay Kallam as wrong. Participating in the discussion on the Power Purchase Agreements in the State Assembly on Friday, Naidu said the claims that the TDP government policies and measures had resulted in Rs 3,000 crore loss were not true. He claimed that because of the reforms brought by the TDP government in the power sector in 1999, AP became a power surplus State, but in 2014, there was a deficit of 22.5 million units, which was overcame in just two months. “They (ruling party) say the Renewable Purchase Obligations (RPOs) were only 5 per cent, which is not true. A letter dated June 14, 2018, from the Ministry of Power clearly states that the long-term RPO trajectory (non-solar and solar) for 2016-17 was 11.5 per cent, which was increased to 17 per cent in 2018-19 and by 2021-22, it was 21 per cent,” he explained. On the issue of gas allocation to Spectrum and Lanco and not considering GMR for the same, the Leader of Opposition clarified that gas was to be supplied by the Centre and when the proposal for GMR was made, the Centre had agreed to provide gas from Godavari Power Plant for six months only and GMR did not agree to the same. Speaking to media persons, Naidu accused the Chief Minister of having the House adjourned after his speech, for not allowing the Opposition to react. “The Chief Minister failed to answer even a single question,” he said.

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Andhra Pradesh

No cut in solar tariff: SECI to APSPDC

Andhra pradesh govt order puts Rs 21,000-cr renewables sector debt servicing at risk: Crisil The Andhra Pradesh government’s move to review and cut the purchase cost of wind and solar energy could stress 5.2-GW renewables projects with estimated debt exposure of over Rs 21,000 crore,” Crisil said.

State-run Solar Energy Corporation (SECI) has refused to lower tariff for 400 MW electricity supplied from a solar park at Galiveedu Mandal in district Kadapa to Andhra Pradesh South Power Distribution Company Ltd (APSPDCL).

ECI has also refused to attend a tariff negotiation meeting called by the discom on Monday (July 22), as per a letter shot off by the corporation to the APSPDCL earlier this month. The discom had asked SECI to reduce the tariff for the 400MW supply to Rs 2.44 per unit from Rs 4.5 fixed earlier. In its letter, SECI stated that the tariff of Rs 4.5 was fixed after competitive bidding as per provisions of the Electricity Act. It said the tariff of Rs 2.44 per unit was arrived at in a separate auction for a solar project in different circumstances. SECI explained that the tariff cannot be negotiated as the power purchase agreement has been signed. APSPDCL had claimed that no tariff-based competitive bidding was held and the tariff fixed was detrimental to the public interest. Source : PTI

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he he move could also aggravate the problem of delayed payments from distribution companies (discoms), it said. According to the agency’s statement, nearly half of this 5.2-GW capacity is at higher risk of default since they lack liquidity support beyond project level. “The order, issued on July 1, 2019, directs a high-level negotiation committee to use current rates, rates prevalent at the time of commissioning of projects, and the current opportunity cost of other sources of power to benchmark and renegotiate agreements, and also submit its report to the state in 45 days,”it stated. Around 5.2 GW projects out of 7.5 GW in Andhra Pradesh are supplying power to state discoms under long-term power purchase agreements (PPAs) at pre-determined tariffs. They now face renegotiation risk given that their tariffs are above the recent auction prices of below Rs 3 per unit for renewable projects and average power purchase cost of Rs 3.8 per unit in Andhra Pradesh in fiscal 2019. This excludes inter-state transmission system projects of 2 GW capacity, where exposure is to central counter parties (of NTPC and Solar Energy Corporation of India) and are relatively safe as the payments to the developers are from the counterparties’ pooled cash flows.

- Manish Gupta,

Senior Director, Crisil Ratings This excludes inter-state transmission system projects of 2 GW capacity, where exposure is to central counter parties (of NTPC and Solar Energy Corporation of India) and are relatively safe as the payments to the developers are from the counterparties’ pooled cash flows, he added. Assuming a typical debt funding per MW of Rs 4 crore, this would put Rs 21,000 crore of debt at risk of default. That is because, in the event of any adverse recommendation by the com-

mittee, generators may take the legal route to stall implementation, which will prolong resolution and result in further delays in payment to renewable projects, Crisil said. The Andhra Pradesh discoms are already facing a significant resource crunch with revenue gap (revenue generated less the operating expenses) widening in fiscal 2019. Consequently, discoms have been delaying payments to generators by 6 to 12 months. Any prolonged delay would put 50 per cent of capacity (2.6 GW with Rs 10,600 crore of debt) at immediate risk of default in debt servicing as these projects would have no other liquidity support apart from project-level liquidity reserves typically six months of debt servicing.

- Ankit Hakhu,

Associate Director, Crisil Ratings The rest 50 per cent of the capacity (with Rs 10,400 crore of debt) may get a temporary lifeline being part of renewable groups or being part of corporates with strong financial flexibility. Such groups are prudently earmarking liquidity from recently raised capital at the holding company level, and may sustain debt servicing of such projects by another 6 to 12 months, as per the statement. Issues of tariff renegotiation have also surfaced in the past in Andhra Pradesh when discoms requested renegotiation of contracted wind tariffs to lower levels, which was rejected by the Andhra Pradesh Electricity Commission (APERC) by upholding the terms of the signed power purchase agreements, the agency said. However, it said that there has been no stance from the APERC on the current issue, so far. A quick resolution here is also necessary to prevent vitiating of investor confidence in the sector, which is crucial to achieving the central government’s goal of 175 GW renewables capacity by fiscal 2022, it added.

Source : PTI

SEPTEMBER 2019-A

Andhra Pradesh

AP has no right to issue directions to state power discoms: J Sagar Associates

The Andhra Pradesh high court on Thursday stayed the state government’s July 1 order seeking renegotiation of all renewable energy power supply contracts.

he Andhra Pradesh government has no right to issue directions to state power distribution companies and the state’s directive to renewable energy plants to lower tariffs is against the Electricity Act, said law firm J Sagar Associates that represented power companies in high court against the order. The Andhra Pradesh high court on Thursday stayed the state government’s July 1 order seeking renegotiation of all renewable energy power supply contracts. The order has been stayed for four weeks and the next date for hearing has been fixed at August 22.

Amit Kapur, Joint Managing Partner, J Sagar

Only the Regulatory Commission can issue directions to discoms. Therefore, there was no legal basis for the State Government to prejudge the issue and direct reduction in tariff across the board.

The stated objective of the Electricity Act is to distance and reduce interference of the government in functioning of discoms. Under the Electricity Act, power of the state government to issue directions is limited to generating companies. The actions of the state government were not only contrary to the Act but also Supreme Court’s judgment that renewable energy power purchase agreements can only be reopened to incentivise renewable projects. The high court has correctly stayed the government decisions. This is a much needed relief since huge investment in the renewable space was under a cloud, he said.

Waaree Energies offers easy financing solutions to catalyze solar adoption in residential and SME segments Waaree Energies Ltd., India’s leading EPC player and largest solar PV manufacturer, today announced a unique financial lending facility for solar solutions with the aim to make solar energy accessible to the masses. With special focus on the residential and the small-scale segment, the loan will cover up to 70 percent of the total project cost repayable via easy EMIs. For this purpose, Waaree has partnered with Metafin Cleantech, an NBFC specialising in renewable energy and clean tech. We have observed that despite increasing awareness and demand of solar solutions in small and residential segment ,the adoption of such technologies is slower due to the high cost of solar projects. It is relatively easier for the mid and large segment to avail of the OPEX model and thus eradicate the need for heavy investments. Hence, the ease of financing through Waaree in association with NBFCs is intended to bridge such gaps and cater to the ever-evolving need of the solar segment. Coupled with state specific residential subsidies, this offering is expected to create financial viability for the end consumer. With our countrywide network, we aim to make this feature available across India and provide benefits of green energy.

- Sunil Rathi,

Director, Waaree Energies

Source: economictimes.indiatimes

SEPTEMBER 2019-A

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dISTRIBUTED sOLAR

50,000 Solar Pumps to Be Given to Farmers and ‘gaushalas’ in Haryana: Banwari Lal, Minister

Fifty thousand solar pumps will be given to farmers and ‘gaushalas’ in Haryana with the assistance of NABARD, Minister of State for New and Renewable Energy Banwari Lal said.

In our view retail segment for solar is currently relatively underpenetrated. This is largely due to the lack of financing options to solve the upfront capital problem, availability of reliable system installation & technology and ongoing system maintenance. By partnering with Waaree Energies (and their retail network) along-with our innovative financing schemes we believe we can solve these problems for retail customers resulting in accelerated adoption of solar as a preferred source of energy.

bout Rs 1,696 crore will be spent on this special scheme, he added. The minister was speaking at an event in Kadipur village of district Mahendragarh. Lal said that about 238 megawatt of green energy will be generated in the state with the installation of these solar pumps.

“This will not only save the diesel used to run the pump, but also prevent pollution caused by the diesel pump,” he said.

Metafin’s strength in credit assessment, deep understanding of the solar sector and innovative financial products designed around our customer’s needs positions us well to scale robustly at a PAN-India level. We enable customers to adopt solar power to reduce their cost of energy which has driven significant inbound demand over the past several months.

- Aditya Shah, Director, Metafin

To achieve India’s ambitious 175 GW target, the solar capacity of India has witnessed substantial growth, especially in the commercial and industrial segments. This innovative financing option is India’s first and only option available for these small-scale projects otherwise ignored by large banks due to their lower monetary value.

He further said that providing the cheapest energy is the priority of the government. A solar energy-based project of about 413 MW capacity has been set up by the government in the state. The state government has approved 672 MW of solar projects, which will be completed this year, he was quoted as saying in an official statement. The minister said in order to increase the income of farmers, the government has prepared a draft for pilot project in districts Karnal and Yamunanagar. Under this scheme, 11 agricultural feeders have been selected, under which 468 electricity-based tube wells will be converted into solar energy-based tube wells. The extra electricity produced from these solar energy-based tube wells will be provided to the farmers. About Rs 26 crore is estimated to be spent on this scheme, he added. Apart from this, the Haryana government is also considering a proposal for setting up of agro-based bio-ethanol and bio-CNG plants. For this, an agreement has been signed with Indian Oil Corporation, he said. source : pti

Source: waaree

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SEPTEMBER 2019-A

BUSiNESS AND FINANCE

I Greenko raises $950 mn in mega green bond sale

n one of the largest overseas green bonds raised by an Indian clean energy producer, GIC Holdings Pte. Ltd and Abu Dhabi Investment Authority (ADIA) backed Greenko Energy Holdings raised $950 million on Monday. The bond raise followed after the two sovereign wealth funds agreed to pump in an additional $329 million in Greenko Energy Holdings. Mint reported about the proposed bond raise on 17 July.

4.2 GW

Greenko owns operating assets

7GW

under-construction assets of greenko It had raised $1 billion through dollar denominated bonds in 2017.

We successfully raised the bond for 950 million with over three times oversubscribed by global investor’s. This is largest high yield bond from India this year and largest Green Bond from Asia. The pricing was 5.5 yield and all process was completed in five days. - Mahesh Kolli, Group President and Joint Managing Director, Greenko

$495 This follows the $495 investment in June by the sovereign wealth funds in Greenko to build power storage projects.

$2.2 Greenko was founded by Mahesh Kolli and Anil Kumar Chalamalasetty. Kolli added that the bonds were rated Ba1 by Moody’s.

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With multilateral and bilateral agencies, as well as sovereign wealth funds, not showing interest in businesses contributing to climate change, the two sovereign funds have so far infused $2.2 billion in Greenko.

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BUSiNESS AND FINANCE

ast year, Indian companies had raised $6.3 billion through dollar denominated bonds, down 51.7% from the previous year as the number of bond sales more than halved, according to data from Thomson Reuters.

GIC ADIA GREENKO

100

$250

80 60

$80

GIC and ADIA hold 61% and 15%, respectively, in Greenko, Kolli and Chalamalasetty own the remaining 24%.

Greenko’s bond issuance comes at a time when India’s emerging green economy will require additional investments of around $80 billion till 2022 Growing more than threefold to $250 billion during 2023-30. Indian companies have been raising debt from overseas markets to take advantage of lower interest rates.

Deal is among the largest overseas green bond sales by an Indian clean energy firm Greenko Energy is backed by GIC Holdings and Abu Dhabi Investment Authority India is ranked fourth and fifth, globally, in installed capacities for wind and solar power, respectively. India has become one of the top renewable producers globally with ambitious capacity expansion plans.

ith competitive solar bids and India’s wind energy sector having transitioned from a feed-in tariff regime, which ensures a fixed price for wind power producers, to tariff-based competitive auctions, obtaining finance at the lowest cost has become key. The global energy landscape has also been rapidly evolving. From the London Stock Exchange (LSE) classifying oil and gas stocks as non-renewable energy to the decision of Norway’s Government Pension Fund Global (GPFG), the world’s largest sovereign wealth fund, to stop investing in oil and gas explorers globally, there has been a fundamental change in the global investment culture against the backdrop of growing climate concerns.

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80 GW

175 GW

500 GW

The country has an installed renewable energy capacity

India is running the world’s largest renewable energy programme with plans to achieve 175GW by 2022

To Achieve by 2030, , as part of its climate commitments

Graphic: Ankit Pandey, Source: livemint

SEPTEMBER 2019-A

RESEARCH AND ANALYSIS

Enforcing Payment Security Mechanism:

A Bold Move Challenging To Implement, Benefits Uncertain India Ratings and Research believes the Ministry of Powerâ&#x20AC;&#x2122;s (MOP) order notified on 28 June 2019 for implementing the letter of credit (LC) payment security mechanism could improve the predictability of cash flows for generating companies in the long term; in the short term, however, there are several implementation challenges.

38Â

SEPTEMBER 2019-A

Distribution companies (discoms) would have to create LC for about

300

Before August 2019 figure in Inr

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RESEARCH AND ANALYSIS

By Divya Charen C

istribution companies (discoms) would have to create LC for about INR300 billion before August 2019, if the circular has to be implemented. Also, clarity on payment of existing dues is still awaited. Additionally, given the erratic payment behaviour of discoms, banks could issue LCs subject to 100% margin back–up. The standalone credit profiles of several discoms are frail; therefore, LC issuance by a bank could be a litmus test for discoms. While the insistence on establishing LC could create credit discipline in the long term, it is vital for discoms to address the issue of mounting payment delays. Both the financial restructuring plan (2012) and UDAY (2015) have only provided shortterm respite; a sustainable solution to the quandaries of the power sector has proved to be elusive. The consequences of non-creation of LC include stopping despatch from generating companies, preventing trading through power exchanges, and not allowing short-term open access. These consequences are quite severe as they could force discoms to resort to load-shedding; thus, this could prove to be effective for ensuring timely payments from discoms. Load-shedding would be politically sensitive and push back is likely from discoms and state governments against the timeline for implementing the MOP order and its consequences. Discoms have to pay fixed charges even if despatch is stopped for the above reasons. Generally, PPAs require the creation of LCs for at least one month’s billing, which is unconditional and irrevocable, for a tenor of one year. However, till date, the establishment of LC has been a mere clause in PPA, with actual implementation not adhered to. The MOP has announced that the despatch of power to discoms will be subject to the opening of LCs under respective PPAs. In case of non-payment beyond the permitted grace period under PPAs, LCs shall be encashed. Despatch could be stopped if the LC is not opened and nonpayment of power purchase dues continues. Operationalising of the mechanism to ensure opening of LCs might not be a straightforward process, as severe cash

If the receivable cycles of Andhra Pradesh and Telangana discoms remain long for another two or three months, it could lead to a liquidity crunch for many renewable developers, as the exposure to these entities account for about 15-20% of most renewable developers’ portfolios. crunches have rendered some discoms incapable of paying power purchase bills in a timely manner. Cash crunches could be caused by delays in subsidy realisation from state governments, high receivables, or high aggregate technical and commercial losses. Improvement in the cash flows would require continuous concerted efforts; however, the notified framework for controlling despatch based on opening LCs and timely clearing of power purchase dues could create urgency in discoms and state governments to make the discoms operate profitably. In Ind-Ra’s portfolio, none of the thermal projects have the benefit of LC from counterparties. Among rated renewable SPVs, Bangalore Electricity Supply Company Limited has created all required LCs; NTPC Limited has created LCs under some PPAs; and no LC has been created under the PPAs signed by Solar Energy Corporation of India (SECI). Single counterparty exposure for project SPVs has led to volatile payment patterns. While renewable PPAs with SECI and NTPC are perceived to be better than those directly signed with discoms (except for discoms with strong credit profiles), the PPA provision indicate a significant dependence on discoms that have signed backto-back power supply agreements against each PPA of SECI/NTPC. SECI and NTPC PPAs (signed or draft PPAs notified in bids

Major renewable developers, who have sizeable portfolios (>2GW operating), depend significantly on internal accruals to infuse equity in new projects. Delays from counterparties could jeopardise the implementation of projects that have been already awarded and slow down competition in future auctions.

during 2019) have increased the emphasis on the back-to-back nature of significant obligations under their PPAs. These SECI and NTPC PPAs articulate that tariff payment obligations (on monthly bills and supplementary bills which include change in law amounts) are a direct obligation on SECI and NTPC. Hence, SECI and NTPC PPAs fare better in terms of tariff payment obligations compared to directly selling to discoms. However, every obligation other than tariff payment obligation needs to be met by SECI and NTPC only to the extent that the same obligations are met on a back-to-back basis by discoms. Creation of the payment security mechanism, including opening of LC and payment security fund, are to be complied by SECI and NTPC only if LCs are created by discoms on a back-to-back basis. Ind-Ra believes that when an obligation is not directly on SECI or NTPC, the benefit of such obligations is unlikely to accrue to project companies, as already evident from the lax conformance to the creation of LCs under SECI PPAs. The MOP’s order does not offer any specific information regarding the manner in which renewable companies will be compensated in case of non-creation of LCs by buying entities. If the MOP’s order is applied for renewable projects, and if the undespatched generation is compensated at full tariff, it would be significantly positive for renewable projects as well. The compensation clause for backdown (for reasons other than transmission unavailability or grid security issues) in recent renewable PPAs is at the half of the contracted tariff for the lost quantum of generation due to such backdown. Feed-intariff wind PPAs and solar PPAs signed in 2016 or earlier don’t include any provision for compensation for such backdowns. Lack of transparency in the financial and liquidity position of discoms has impeded liquidity planning by renewable companies. Also, working capital tie-ups are dependent on existing lenders of project companies offering fresh working capital loans to protect their exposure from default. Other lenders are hesitant to sanction working capital, majorly due to the reluctance of term loan lenders to share first charge on receivables with new working capital lenders and also due to the high levels of perceived uncertainty in discom receivables.

Transparency on the part of counterparties (including SECI and NTPC) in terms of the likelihood of making/receiving payments in the next three or six months would be key to improve the liquidity planning by project companies, even in times of receivable stress. Source: indiaratings.co.in

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SEPTEMBER 2019-A

SOLAR PROJECTS

INDIA

Andhra Pradesh

Renegotiation of Power Sale Contracts in Andhra Pradesh Exerts Added

Cashflow Pressure and Impairs Investor Confidence India Ratings and Research (Ind-Ra) believes the recent constitution of High Level Negotiation Committee (HLNC) by Government of Andhra Pradesh to review and renegotiate the signed power purchase agreements (PPAs) with wind and solar power developers has the potential to impair the cash flows of projects and may impact investor sentiments in the sector. By Ashwin B

tate discoms have accumulated payables of over eight months in Ind-Ra’s portfolio and if continued to be unpaid, the tariff renegotiation process will open an avenue for further delay in the payments until the renegotiations conclude. Generally, stoppage of payments either precedes or succeeds a renegotiation process. Ind-Ra will, thus, monitor cashflows, liquidity buffers and the available sponsor support to the project developers and take rating actions accordingly. Ind-Ra’s portfolio has solar and wind projects selling 474MW power to Andhra Pradesh discoms.Ind-Ra considers PPA renegotiation or cancellation to be an event risk and a deviation from normal business proceedings, as these are not embedded in the contracts. Andhra Pradesh, one of the leading states in using renewable energy, has more than 7,700MW of solar and wind projects. Given the already weak funding atmosphere for infrastructure assets, any misstep, such as renegotiation of contracts not only creates anxious times for the sector but also magnifies the risk a project could undergo during its PPA tenure. Notwithstanding the outcome of the committee decision, reopening of PPAs will dent

SEPTEMBER 2019-A

investor sentiments. Additionally, banks will be forced to recognise these assets as non-performing if payments are stopped, thereby creating further stress for the lending sector. Usually, states see renegotiation as insurance against the rising cost of power procurement and increasing power purchase dues. While it is not established by the government order G.O.RT.No.63 (GO) whether the negotiations will be done for feed in tariff projects or for reversebidding based projects or both, Ind-Ra believes that significant uncertainty exists for wind-based and solar-based independent power producers (IPPs), whose tariffs are higher than the weighted average power procurement cost of discoms (INR4.46/ kwh in FY18). Andhra Pradesh Electricity Regulatory Commission (APERC) in its FY20 tariff order has approved average power procurement cost of INR 4.00/kwh. Renewable energy constitutes 24% of approved FY20 power purchase at the rate of INR4.59/kwh. However, such cancellation or renegotiation, if finalised by discoms along with the state government, may be legally challenged by the affected IPPs. Legal notices and law suits from either party will aggravate the obstacles faced by the projects and affect the financial profile of the emerging renewable energy sector.

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SOLAR PROJECTS

As per the GO dated 1 July 2019, the Government of Andhra Pradesh took the decision to constitute the committee after reviewing the financial crisis of two discoms – Southern Power Distribution Company of Andhra Pradesh Limited (APSPDCL) and Eastern Power Distribution Company of Andhra Pradesh Limited (APEPDCL) – which have power purchase dues amounting to INR200 billion, as on 1 July 2019. The GO further adds that the need to review and renegotiate the exorbitantly-priced wind and solar PPAs arises to provide affordable power to consumers and to pull discoms out of their financial distress. APSPDCL and APEPDCL have not

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sought any tariff hike for FY20 and the same has been approved by APERC. FY20 is the second successive year without any tariff hike. The increasing dependence on subsidy has rendered Andhra Pradesh discoms vulnerable to the finances of the state. Ind-Ra had highlighted these developments in Receivable Disruption from Counterparties More Frequent, to Impair Renewable Progress. The GO has mandated that the HLNC be guided by benchmarks during negotiations that include: a) the lowest wind and solar energy rates in the corresponding years in the country, b) rates prevailing currently, and c) the opportunity cost for power from Andhra Pradesh Generation Company

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SOLAR PROJECTS (APGENCO) projects, existing thermal contracts, and central generating stations allocations. The committee has been given 45 days to complete the negotiation and to submit its report to the government at the end of this period. Just like Karnataka, Uttar Pradesh, Gujarat and Madhya Pradesh, Andhra Pradesh, too, has made various attempts in the past to revisit and renegotiate power purchase contracts. Earlier this year, state utilities of Andhra Pradesh had moved a petition before the APERC seeking consent for revisiting PPAs already signed with wind developers and to truncate the length of PPAs to five years from the existing 25 years. The distribution utilities also sought relief in the terms and conditions for tariff determination for wind power projects in the state between FY15-FY16 and FY19FY20 and the tariff fixed by APERC. In March 2017, Andhra Pradesh discoms requested the state regulatory commission to not adopt the tariffs of 41 completed power projects (totalling over 800MW). Earlier, in June 2019, Ministry of New and Renewable Energy (MNRE) instructed the Government of Andhra Pradesh to not revisit contractual agreements without

any bonafide reason and to not create any uncertainty. However, the current proposal of state-supported disruption in PPA tariffs through renegotiations will adversely affect the investment climate in the state by dampening investor confidence and undermines the sanctity of PPA contracts. PPAs are signed either under Section 62 or under Section 63 of the Electricity Act 2003. As per Section 62, the tariff is determined by the state regulatory commission in line with the Central Electricity Regulatory Commission (CERC). As per Section 63, the tariff is arrived at through a transparent, public, and competitive bidding process as per the bidding guidelines laid down by the MNRE. Generally, renewable energy PPAs tied up with state-owned discoms lack termination penalty clause, do not have any deemed generation clause and are based on single part tariff which is linked to actual units of generation. Resultantly, renewable energy projects with PPAs at a relatively higher tariff, vis-à-vis average power purchase cost of the off-taker discom, remains exposed to a risk of forced back-down/grid curtailment – a situation that has been a common occurrence in a few states in the

past. In the worst-case scenario of PPA renegotiation or termination, such projects may be forced to sell either via merchant route or via group captive route. The viability of this sale route would depend on multifold factors like the ability to identify thirdparty customers or provide discount on the prevailing grid tariff and open-access charges in the state. The renegotiation of PPAs is understandable, provided the utilities commence it prior to the lending by banks and investments made by project developers. However, for a project with significant operational track record, the renegotiation could dent its long-term debt serviceability and would necessitate additional liquidity buffers in the short term. Given the central government’s ambitious target of installing 175GW of renewable energy capacity before FY22, these radical moves by state governments are sending confusing signals to the market. The renegotiation risk, if it becomes rampant across states, could pose a risk to generators, paving the way for the conversion of a healthy asset to non-performing asset. Source: indiaratings.co.in

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exclusive interview

Mr. Sunil rathi Director, Waaree energies Q.-1: What’s your view on the Government of India’s target of 100GW Solar and 75GW Wind Power by 2022? Can we achieve that? SR: India has laid out an aggressive target of 175GW of renewable capacity by 2022, out of which, 100 GW will be contributed by solar energy. Currently, we have achieved 30% of the goal, with a 4% increase in solar installation in Q1 2019, over Q4 2018. The rooftop segment is expected to contribute 40% of the target, but currently only includes 12% of the solar installations in India. Despite a positive outlook, the country’s solar installations have witnessed a 49% Y-o-Y dip this year. This decrease can be attributed to delays and hurdles in Government approvals,due to the instability caused by the general elections. After 2 years of phenomenal growth in the solar industry, this slowdown has resulted in India missing its 2018-19 targets by almost 45%. In light of the significant slowdown, the target capacity this year has been revised to 11,802 MW, which is almost 25% lower than the previous target. With the current growth trajectory witnessed by the industry, only 70% of the target seems achievable by 2022. Thus, strong, favourable policies and regulations from the Government are integral to propel growth in the solar industry. Q.-2: The Government of India’s target is 40GW Rooftop Solar by 2022. Can the industry achieve this target? SR: In order to achieve the 40 GW target set for the rooftop solar segment, India will need to expand its capacity by 19 times, over the next 3 years. With the segment only encapsulating 12% of the total solar installations in the country, this massive gap appears to pose a serious question on the possibility of meeting the target. However, the Government has shown support in the form of implementation of solar policies like the SRISTI scheme, and innovative advancements in technology, which can help the industry in achieving this target. Q.-3: Please describe in brief about your company, directors, promoters, investors, its vision & mission

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SR: Waaree Energies Ltd. was established in 2007 under the Waaree Group and today it is the largest solar PV module manufacturer in India, with a capacity of 1.5 GW. Our vision is to provide high quality and cost effective sustainable energy solutions across all the markets, reducing carbon foot print – paving way for sustainable energy thereby improving quality of present and future human life.Additionally, we are one of the leading players in EPC services, project development, rooftop solutions, solar water pumps, and as an Independent Power Producer. Through its one-of-a-kind franchise system, Waaree has a robust network witha presence in over 270 locations nationally, and 68 countries globally. Waaree Energies intends to become one of the global benchmarks for solar modules, while ensuring that the end customers get the best, always. Q.-4: Kindly highlight your product, technology & company USP’s, distinctive advantages etc. SR: Waaree Energies focuses vastly on technological innovation, with a goal of making solar accessible to all, regardless of geographical boundaries. Our acclaimed post-sales service is one of our differentiating factors, which has put us on the top of the consideration deck for sustainability partners for leading corporations. We are the largest PV manufacturer in India, and specialize in a variety of modules to suit a wide array of establishments. We have also ventured into the Energy Storage Solutions space to develop Lithium-ion batteries to contribute to India’s energy needs. The Indian Energy Storage market is on the edge of becoming an important market within the solar segment, especially due to the growing market for Electrical Vehicles. Talking about the growth of Electrical Vehicles, Waaree has introduced a unique peel-andstick type module designed especially to power EVs in the market. The customizable module is unique in its flexibility and easy installation that makes it a perfect solution for the energy needs of an EV. The module aims to make ‘charging-on-the-move’ an integral part of the EV Revolution in the country, today. Waaree has recently launched a unique 400 Wp bifacial solar

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exclusive interview Q.-7: What according to you are the current opportunitiesor biggest challenges in Indian Solar Market?

module called Super 400 Pro, which is touted to be the future of rooftop solar. Bifacial modules offer higher efficiency than traditional modules, owing to better utilization of space, especially in the rooftop segment. These benefits, therefore, indicate the potential of the use of such modules in the future of the Indian Solar market.With India losing its special trade status in the US, Indian manufacturers have lost their cost advantage in the US market. The exemption on bifacial modules is one of the very few respites Indian manufacturers witness in the market. Q.-5: What is your commitment towards the solar sector in India? SR: Waaree views the rooftop segment as an extremely lucrative segment for the growth of not only the company, but also as the key to achieving the 175GW target set by the Government. The projected growth for the next 3 years in the rooftop segment is almost 50%, and thus, Waaree is currently focused on growing in the rooftop segment.With the goal of making India solar-reliant for a wide range of purposes, Waaree has also ventured into the industry with utility products like off-grid invertersand flexible modules for EVs, as well as DIY kits for residential establishments. Waaree’s primary goal is to make solar accessible to all, regardless of geographical boundaries, and thus, it operates in a unique franchise system with over 270 franchises across the country. This robust network allows us to provide our products and services to every corner of the country, and therefore, take a step further in making India solar-reliant. Identifying the potential that the solar industry holds to contribute to the employment scenario in India, our franchise network is the key to increasing our workforce. We are dedicated to not only creating employment opportunities, but also providing specialized training that is required in the industry today, to undertake the over 1 million employment opportunities in the market today. Q.-6: What are your views on proposed Safeguard Duty on Module/Cells Import? SR: The safeguard duty has provided significant interim relief to domestic manufacturers by granting them a level playing field with their international counter parts. However, with the duty being only imposed on certain countries, international players now reroute the modules through countries like Thailand and Vietnam. Thus, the intended benefits of the safeguard duty have been slightly diminished. With the expiration of the safeguard duty now on the horizon, we are hoping to see significant policy changes in terms of the implementation of the much awaited antidumping duty on these countries.

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SR: The most recent hurdle on the road to success for India’s solar industry is the loss of the special trade status India originally enjoyed from the US. The US market was an important source of revenue for Indian manufacturers, with 47% of India’s solar exports in 2018 directed to the country. With the 30% additional tax being set-off from the end customer, Indian players have now lost their cost advantage in the US market. Thus, the need of the hour for the growth of such companies is to explore other countries while laying greater emphasis on the domestic market. Although the exemption of tax from bifacial modules provides some relief, the lack of clarity in the duration of the exemption has led to uncertainty in the scope of the market. Thus, it has become increasingly important for the Government to formulate favorable policies and regulations that support Indian manufacturers within the domestic market. Bid cancellations are another major setback in the growth of the Indian Solar Industry, especially considering the large size of the cancelled projects. An estimate of 8,000 MW solar capacities worth INR 40,000 crore was cancelled in FY 2018-19. The absence of a consensus on tariff rates, coupled with unfavorable and confusing GST rates, are the main reasons for such heavy cancellations. The discussion of the anti-dumping duty has been on the table for a long while, but not much movement has been witnessed on the same. Despite the implementation of the safeguard duty in 2018, the rerouting of modules through countries like Thailand and Vietnam, has significantly affected the potential of domestic manufacturers. The lack of direction on this matter in the latest Union Budget 2019, has been a considerable setback,for the industry as a whole. Thus, although the Indian industry holds massive potential, it will remain untapped without proper policy formation and Government support. Q.-8: Solar Cities : How many solar cities are announced and describe in detail as to what will happen in these solar cities SR: One of India’s major concerns is the rampant urbanization of the country, which is leading to increased energy requirements across India. The rapid rise in demand for electricity, however, has proven to be a difficult aspect to cope with, for local electricity utilities. Thus, a large number of cities are still facing electricity shortages due to inefficiencies in the utility systems in the area. The creation of solar cities in the country is, therefore, imperative for its sustenance. Solar cities aim at a 10% reduction in projected demand of conventional energy through the adoption of renewable energy and efficient energy conservation mechanisms. Currently, a total of 60 cities have been proposed during the 11th Plan period, out of which,proposals for 31 cities have been approved and sanctioned. Q.-9: Present some noteworthy projects, case studies of solar plants built using your solar modules SR: This April, Waaree Energies commissioned a 49.5 MW ground mounted project in Vietnam. The project has been developed for Song Giang Solar Power JSC in the KhanhHoa province, and is expected to generate over 78,600 MWh per year. Approved by Vietnam Electricity, the project witnessed Waareebeing the turnkey EPC partner, as well as overseeing Operations & Management. As one of the 20 fastest growing economies in the world, the project is touted to make a significant contribution to the Vietnamese Government’s target of 12 GW from solar installations.This flagship project also indicates Waaree’s first foray into the country, while establishing its stronghold in both national and international markets.

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RESEARCH AND ANALYSIS

WORLD CLEAN ENERGY INVESTMENT SLIPS IN 1H 2019, DESPITE BILLION-DOLLAR FINANCINGS OF SOLAR IN DUBAI AND OFFSHORE WIND IN TAIWAN

The slowdown in investment in China is real, but the figures for first-half 2019 probably overstate its severity. We expect a nationwide solar auction happening now to lead to a rush of new PV project financings. We could also see several big deals in offshore wind in the second half.” - Justin Wu, Head of Asia-Pacific for BNEF

Hiatus in renewable energy project deals in mainland China pulls down global investment in clean energy by 14% to $117.6 billion in first half of 2019

he first half of 2019 saw a 39% slowdown in renewable energy investment in the world’s biggest market, China, to $28.8 billion, the lowest figure for any half-year period since 2013, according to the latest figures from BloombergNEF (BNEF). The plunge in activity in China, as the country shifts this year away from government-set tariffs to auctions for new wind and solar capacity, also depressed the 1H 2019 global investment figure – to $117.6 billion, down 14% compared to the first half of 2018.

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RESEARCH AND ANALYSIS

Al Maktoum IV is an unusual one in combining three different types of solar – the thermal technologies of parabolic trough and tower, with conventional PV – but it is also a strong signal of the appetite for solar electricity on the part of both Middle Eastern countries and international financiers. - Jenny Chase, Head of solar analysis for BNEF

The other highlight of global clean energy investment in 1H 2019 was the financing of multi billion-dollar projects in two relatively new markets – a solar thermal and photovoltaic complex in Dubai, at 950MW and $4.2 billion, and two offshore wind arrays in the sea off Taiwan, at 640MW and 900MW and an estimated combined cost of $5.7 billion. The Dubai deal in late March, for the Mohammed bin Rashid Al Maktoum IV project, is the biggest financing ever seen in the solar sector. It involves $2.6 billion of debt from 10 Chinese, Gulf and Western banks, plus $1.6 billion of equity from Dubai Electricity and Water Authority, Saudi-based developer ACWA Power and equity partner Silk Road Fund of China. The two Taiwanese offshore wind projects, Wpd Yunlin Yunneng and Ørsted Greater Changhua, involve European developers, investors and banks, as well as local players. Offshore wind activity is broadening its geographical focus, from Europe’s North Sea and China’s coastline, toward new markets such as Taiwan, the

U.S. East Coast, India and Vietnam. BNEF’s figures for clean energy investment in the first half of 2019 show mixed fortunes for the world’s major markets. The “big three” of China, the U.S. and Europe all showed falls, but with the U.S. down a modest 6% at $23.6 billion and Europe down 4% at $22.2 billion compared to 1H 2018, far less than China’s 39% setback. Japan attracted $8.7 billion of investment, up 3% on 1H 2018, and India $5.9 billion, up 10%, as it continued its drive toward its ambitious target for 175GW of renewable energy by 2022. Brazil saw investment of $1.4 billion, up 19%. In Europe, Spain was the star performer at $3.7 billion, up 235% on the same period a year earlier, while the Netherlands was 41% lower at $2.2 billion, Germany down 42% at $2.1 billion, the U.K. up 35% at $2.5 billion and France down 75% at $567 million. Sweden saw investment jump 212% to $2.5 billion, and the Ukraine 60% to $1.7 billion. Breaing global clean energy invest-

ment[1] down by type of transaction, asset finance of utility-scale generation projects such as wind farms and solar parks was down 24% at $85.6 billion, due in large part to the China factor. Financing of small-scale solar systems of less than 1MW was up 32% at $23.7 billion in the first half of this year. Investment in specialist clean energy companies via public markets was 37% higher at $5.6 billion, helped by two big equity raisings for electric vehicle makers – an $863 million secondary issue for Tesla, and a $650 million convertible issue for China-based NIO. Venture capital and private equity funding of clean energy companies in 1H 2019 was down 2% at $4.7 billion. There were three exceptionally large deals, however: $1 billion each for Swedish battery company Northvolt and U.S. electric vehicle battery charging specialist Lucid Motors, and $700 million for another U.S. EV player, Rivian Automotive. Source: bloomberg.net

Figure 1: Global clean energy investment, 2004 to 1H 2019, $ billion

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SOLAR PV MODULE

By DuPont Photovoltaic Solutions

he DuPont Global Field Reliability Program is a highly developed field inspection and analysis program that tracks material degradation and its effect on module performance. This 2019 field analysis was compiled from inspection and analysis by DuPont teams of nearly 2 GW of PV installations around the globe. While our field analysis looks at all component materials, we focus special attention on backsheet durability, which plays a critical role in ensuring modules will last long enough to reach the financial objectives of their owners.

6.5M Modules

2019 Study 355 Installations

With 1.8 GW of fields inspected, the following observations were made: Total module defects: 34% Total backsheet defects: 14% Backsheet defects increased 47% from 2018 Cracking comprises 66% of all backsheet defects

1.85GW Total power

Compared to the analysis from 2018: The number of fields grew from 275 to 355. The number of panels increased from 4.2 million to over 6.5 million (1.04 GW to 1.8 GW). Overall module defect rates increased since 2018. Year-over-year backsheet defects increased 47%.

TFP19_24658_EQ_Field_Study_Article_me02_02.indd 1

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7/30/19 2:07 PM

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47Â

SOLAR PV MODULE

48Â

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SOLAR PV MODULE

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49Â

exclusive interview resulting in 20% reduction of labor cost. What historically was a two man lift may require three men resulting in greater labor costs. Compared with Swan, conventional double glass bifacial requires trackers to be stronger and piles to be deeper, which leads to 15% more mounts costs and 5% more O&M cost. EQ:Will the bifacial module height off the ground lead to higher BOS costs? DQ: If compared with bifacial dual glass, Swan bifacial with transparent backsheet is proved to reduce approximately 3% BOS costs. EQ: Glass/glass modules are known to have offgassing issues, how does Swan overcome it?

Dany qian Global vice president,

jinko solar Co., Ltd

JinkoSolar SWAN Bifacial’s True Potential:

the Importance of Innovation Excellence in Ensuring Yield Gains

ifacial technology was one of the most talked technology trends in the PV industry since 2018. With cell makers able to manufacture bifacial products at only a marginally higher cost than monofacial, the incentive to add rear-side power output to a PV module becomes compelling. Take China for example, PV InfoLink reports that share of bifacial modules has increased from 2% in 2017 to 10% in 2018, driven by China’s Top Runner program, which incentivizes high efficiency solar technologies. Among those Tier1 manufactures, JinkoSolar is not only the first one dipping into bifacial, but also the first one commercializing bifacial technology with transparent backsheet, Swan. What are their considerations?

EQ: All leading manufacturers are developing glass-glass bifacial modules, why is JinkoSolar promoting the use of transparent backsheet? DQ: Frameless double-glass modules field failure is not uncommon. Bowing or deformation in frameless, dual glass modules were occasionally reported, causing the

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cells to crack and the glass to break. But framed double glass is too heavy, resulting in higher EPC and O&M costs substantially. The increased cost on logistic, freight, labor, plus additional burden on mounting structure offsets the benefits of generation enhancement. While JinkoSolar’s Swan bifacial with transparent backsheet provides a 25% less weight alternative,

DQ: Swan series using Tedlar PFV filmbased backsheet has an acetic acid diffusion rate of 30mg/m2/day1, sufficient to bring the concentration down substantially to prevent corrosion and power loss. This breathable design that releases moisture and acetic acid, preventing encapsulant degradation while reducing the risk of delamination and corrosion. EQ: Customers sometimes point out that when you go for the conventional bifacial, the front side becomes less efficient as a 400W panel may step down to 390W for example. How does Swan overcome it? DQ: Swan bifacial provides meshed transparent backsheet option, which can increase the second reflection from gap between cell/cell and cell and can achieve the power almost the same as mono-facial module. EQ: Does bifacial require a bit more land than mono-facial with wider array spacing to allow more light to the back? DQ: GCR means the distance between arrays. Land cost is one of the key factor when we do initial system investment assessment, considering about the low irradiance (135W/m2 defined by TUV Rhein when define module integrity power) absorbed by rear side. GCR design is much related to the front side shading consideration. As to certain project module capacity, when we do the system design, both front and rear side module power shall be considered, else it will go beyond the initial system capacity. Therefore, bifacial module efficiency (total power output) will be higher than mono-facial module, then actually less land is required. If under same module quantity condition, land area is same while project yield will be more.

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exclusive interview

Schemes are being rationalised to reduce cost of supply and power: AK Bhalla, Power Secretary Various reasons like availability of fuel for plants and absence of power purchasing agreement has created stress in the power sector, says AK Bhalla, Power Secretary, Government of India. During an interview with Swati Khandelwal, Zee Business, Mr Bhalla said High-level committee was formed to look into the sectorial problems of the power sector mainly related to coal supply. Edited Excerpts: Q: Several things have been spoken about the power sector and several things have happened in the past two years. Update us on the steps taken by the government to reenergise the sector and by when it will fructify? A: We were developing infrastructure in rural areas intending to provide electricity to every village and every home, till date, before which we were engaged in strengthening the power generation and its transmission and it was completed. The most important thing that we are supposed to do now is 24*7 power supply in a very stable manner and in a way that people can afford it. So, we are working on it intending to further strengthen it. The process will be completed in association with state governments because every state has different demand. A lot of capital investment has been made on it and schemes have also been launched like ‘Deen Dayal Upadhyaya Gram Jyoti Yojana’ (DDUGJY), ‘Pradhan Mantri Sahaj Bijli Har Ghar Yojana’ “Saubhagya” and in urban areas under integrated ‘Power Development Scheme’ (IPDS). Interestingly, the money allocated for Saubhagya scheme has been spent and infrastructure is being developed by using the allocations of other two schemes. After this, if there is any dearth of things in the state and there is a need to reduce the losses there and why it is not going down, then we are also working on that. I

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think that in the next 2-3 years, we will be able to ensure 24*7 power supply across the country that it is available in a reliable manner. Q: How will you address the problems related to deficit, transmission and distribution (T&D) losses, the financial health of the DISCOMS among others? A: Ujwal DISCOM Assurance Yojana (UDAY) was introduced for the purpose and under the scheme, their debt was taken over by the state government and the process helped in improving their balance sheet. Usually, it is said that this is a one-time measure and it will be needed once again after 5-10 years. But, Uday Scheme was slightly different from such schemes and it was complemented, as I said that we invested in infrastructure and its improvement across the country. The UDAY scheme isn’t unsuccessful as the debt was taken over but the adjustments in books of some states are unfinished, which makes one feel that there is huge debt on balance sheets. The effort was beneficial as tariff setting applications came in regularly in most of the states, improvements made way and the gap between the average cost of supply versus the revenue has reduced. Besides, as coal became expensive and freight increased, the gap seems to widen in the year 2018-2019. We are addressing it by rationalising some schemes and are aiming

to reduce the cost of supply and power. Q: Banks are facing stress from the power sector and are reluctant to fund. How grave is this issue and by when it will be resolved? A: There were various reasons for the stress in the power sector like the issues of fuel availability for some plants, some plants were created without having a power purchasing agreement, some had the capacity but lacked coal-linkage and power purchasing agreement. The stress from these problems resulted in sectoral issues for the government. The banks had already granted loans so couldn’t grant further. As a result, a high-level committee was formed where the sectorial problems mainly related to coal supply were addressed. New instructions have been approved by the Cabinet and there is an improvement in the coal availability from Coal India. The gaps are needed to be met and we had undertaken to bid for aggregation by bringing in a PPA of 1900 megawatt for a medium-term. We tried for the 2500 megawatt but were able to get a bid of 1900 megawatt. The DISCOMS have signed for 1900 megawatt and the power purchase has started. We also

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exclusive interview have a slot for 2500 megawatt and the next round of 2500 MW will be planned with coal linkage. With this, we are trying to resolve the issue of the commissioned stressed assets that are unable to function. The second mechanism that contributed to stress is payment security because DISCOMS were delaying the payments. Thus, there was a need to improve their financial conditions and increase their tariff so that they can recover. At places, the regulators were making regulatory assets which are due and are unable to recover. We have tried to address these issues in a new order under which every DISCOM will be required to open a letter of credit with a generator and maintain the amount of money in a revolving way so that the payment follows. The chain is disturbed if the generator is not paid. The efforts have been made and we are helping both sides and asking the DISCOMS to do what has been said and trying to reduce the cost of electricity to the best levels that we can. Besides, the coal linkage – whose movement was multidirectional – has been rationalised and this rationalisation has helped in reducing coal movement and is saving some freight. As a result, electricity became cheaper. Electricity is sold on a merit order, but we have bought a new scheme under which the emphasis will be given on the availability of cheaper electricity. Apart from this, Security Constraint Economic Dispatch has also been introduced under which a plant that is running on 80% and has completed its contract but the plant is 20% cheaper then it will be operated under this scheme. The pithead plants of NTPC are working on 100% plant load factor (PLF) and they are supplying electricity against the contract of an expensive plant which is not unable to function. Thus, we are putting in efforts to make electricity inexpensive and now DISCOM should complement our effort, become efficient, get tariff in such a manner that they can pay, and we hope to see it. Q: How do you see the RBI’s revised February 12th circular? Do you think that the problem has been addressed completely or does any issue persist? A: The new circular has brought a fair responsibility to the lenders. If they want to solve the assets, they can do so. Earlier, there was an issue of 100% lenders which has been relaxed. So now, if they think, what they have is resolvable, they should agree and do it. If they delay it, then they’ll have to make the provisions in the balance sheet. Doing so might also cause losses to some banks. I hope lenders will not delay the resolvable projects this time and many discussions have going on and inter-creditor agreements have been signed-in some places and 7-8 solvable

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commissioned projects like many megawatt projects, if resolved then the commission capacities will fair. As far as noncommissioned capacities are concerned then I doubt if we can do anything for it because we have worked very less in their case. So, we will have to accept things that come out through liquidation. But, if lenders can solve them outside the NCLT, then it would be a good step, and if any issue arises, then we are trying to resolve it. Q: What is the total amount of stress in this sector? How many megawatts and how much worth lakhs of crores of Rupees? A: It is difficult to say anything about it as we have always dealt with coal-based plants in a certain category. Lenders daily observe if any plant is stuck in stress and we brought around 10 projects into normal standard and 7-8 more projects can be solved under the new circular that has been issued. The remaining projects are not commissioned projects as our capacity was 15 thousand, which came under the aggregation model, the 1900-megawatt model, the 2500-megawatt model and the others will come under the next round. If they get the power purchase agreements, then those will be solved. The remaining, where we haven’t worked a lot, are in NCLT. Q: Can we say that 50% of the problem will be resolved? A: More than 50% of the problem will be resolved. We had around 40 thousand megawatts out of which 10 thousand megawatts has already been solved and we’ll try to resolve another 15 thousand megawatts. As a result, the issue of 25 thousand megawatts can be solved. In terms of value, it is difficult for me to state the numbers because I don’t have the figures readily. It was considered that they had a debt of around Rs1 lakh 70 thousand crore but many accounts of those have been standardised and more than 50% of the amount will be recovered. Q: Discussions are revolving around giving a specific timeframe to Open Access Permissions for bringing in more competition. Are you working on these lines? A: We are planning to introduce reforms in our tariff policy and our Minister has also said that a new tariff policy will be brought soon. The experience of the DISCOMS, issues on functioning, regulators and policy gaps will be considered while bringing in new tariff policy and they’ll get implemented as soon as they are approved. The charges on Open Access Permissions were high enough which made

it unworkable many times. There is a need to reduce the tariff structure in the crosssubsidy as it is sending people to have open access because they are receiving costly electricity from the DISCOMS. If the tariff is rationalised, then those people will not find the need to depart outside and will obtain electricity here itself. While the policy gets implemented soon, we expect easier open access as well as its minimum requirement. The policy was ready earlier and is awaiting the Cabinet approval. Q: This means the policy is ready. A: It is ready and was ready earlier. However, it was decided that it will be approved after the elections are over. Q: Power availability is a matter of concern and renewable energy also has its contribution to the power pool. Thus, how renewable energy will be contributing to the power segment of India? A: We have commitments for it and it includes the Paris Agreement, in which we have committed that 40% of the installed capacity should be from non-fossil fuels by 2030 and by addition of 175-gigawatt renewable energy by 2022, we will be reaching that capacity of 2022 itself. So, whatsoever we have at present is quite good as we have a renewable capacity – including solar and wind both – of around 79-gigawatt. This supplements the grid. However, it is facing the issues related to integration, but coal is the baseload for us at present, which is balanced by hydroplants in morning and evening hours. The remaining gap is met by flexibilization of the coal plant under which the coal powerplant is brought to 55% plant load factor (PLF) from 85% PLF and then it is ramped up. So, we have ramping capacities and the plants are identified. Currently, we don’t have problems that require its integration. But, we are not going to stop with it and have ambitious projections which will be achieved by 2030. So, we have projected a requirement of around 830-gigawatt for 2030 and solar power will have a contribution of more than 300-gigawatt to it and we have created a model to integrate it. So, it is not a problem as it is very easy to integrate. Rather, we are doing much more ambitious projections by 2030 in which we will be integrating more solar and wind energy to it. Q: Electric Vehicles (EVs) and electric charging infrastructure is an important part and is linked to your ministry to a great extent. How will you address it and by when its infrastructure will be ramped up?

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exclusive interview A: Several policies have been framed by different ministries and NITI Aayog was coordinating it. We have introduced Charging Infrastructure Policy and have also issued guidelines that talk about what will be considered as the public charging infrastructure. Heavy Industry Ministry has released FAME-II scheme that will be providing vehicle head support will be provided and some funds will be released in the form of subsidy to support the infrastructure. Apart from this, the Road and Transport Ministry has also announced something for it. Similarly, several things were announced in the 2019 Budget. So, this is the beginning. Earlier, we were thinking of installing the charging infrastructure and that’s why subsidy provisions have been kept making sure that the user doesn’t feel that sufficient charging infrastructure is not available in the country. Besides, we expect that it is time for the automobile manufacturer to come forward and announce as one company has launched a vehicle in recent past. So, we expect that other automobile manufacturers should come out and announce their plans for it. Rest will follow the announcement because it will take some time to transit. So, these two things will happen, and we are prepared for it. In the process we have introduced a policy for it and also creating an infrastructure to support it, for instance, we have created certain infrastructure in NDMC (New Delhi Municipal Council) area and the NCR region will be looked after in the next round. Apart from this, we are also facilitating certain cities that are coming forward with an interest. It is not mandatory that we should be brought in for the purpose, but the state government is free to choose and hire any agency that it wants and create the infrastructure. We have laid down the norms that ask for the installation of fast chargers in the charging infrastructure while slow chargers can be used at the homes/residential building itself. We are bringing a provision of creating such facilities in the building code. Q: So, the upcoming buildings will have to create such facilities. A: Yes, the Ministry of Housing and Urban Affairs has released a guideline under which it should be done. Q: Lot of work was done on the consolidation of Power Finance Corporation (PFC) and Rural Electrification Corporation (REC). By when the process will be completed? A: PFC has taken over REC and the apprehensions that propped up in the market has been addressed and both the companies are doing very well as their profits and shares have gone up. So, both the companies have performed well despite one company has been taken over by the other. We have now

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Q: Any timeline for it? A: I can’t provide any timeline now, but we will have to look into the government equity percentage in it, whenever the plan is created. Presently, such companies should have 51% government equity. So, we will have to look that will it have 51% equity in a plain merger or not and if not, then consultants will be providing the ways to do so. Thus, any view can be created after looking at it. Q: What are the next round as there were talks related to NTPC-SJVN merger and so? A: Such talks came in news last year, but we were not able to conclude the process and secretary disinvestment has once again said that it is in further agenda. So, we will be looking after the companies that are controlled by us and find out the advantage of which should take over to the other. For instance, if we want to merge SJVN with someone after acquiring it then will it create a big company of hydro-sector or not or it should be diversified so that a thermal company takeover a green asset. Thus, we will be able to say anything on it after discussing it. Q: But, it was discussed last year with NTPC? A: Last time, it was one direction that NTPC should takeover SJVN and it remained at the same stage and we moved ahead with PFC and REC. Q: Will it proceed, or it can be changed? A: It can be changed as whosoever takes over and we must see the combined entity is much more productive and useful. Q: Which are the companies that are looking forward to it? A: See, we have several hydro PSUs like SJVN, TSDC. They are companies with one or two projects and are trying to expand themselves. We will have to look at who should be merged with whom to increase its competence and scope. Thus, decisions will be made on lines of who will be more competent to take over and produce better results. Q: What are your top priorities for FY20 that can be completed in this fiscal itself? A: Tariff Policy and we are looking forward to. We also want to bring a scheme that is linked with the outcome of UDAY scheme to find out deficiencies of every state so that we can help them out. It will vary for each

state so that a specific requirement of each state will be met. The third thing is related to prepaid smart meters – our minister has also spoken about it – which will be installed across the country. We have devised a three-year timeframe for the purpose and have already had several rounds of discussion with the meter manufacturers and have asked them to increase their manufacturing capacity and how it will be operated, as in, it should be done by adopting CapEx model or by outsourcing the same. These things are going on at our end and this smart metering program will be launched at a big scale. Apart from this, we also have a target of reducing the losses to make DISCOMS commercially viable entities. We also have the vision to list few DISCOMS on the exchange as PSUs were listed on the indices and become professional companies. They should be listed not to turn up just profit-making companies but also be able to capitalise itself in the market. Q: Investors are quite worried for the sector because it is going through problems even the banks have a big exposure on it and NCLT results have not been declared yet. How are you encouraging/inspiring PSUs like NTPC and others to perform better so that they can compete well with the private players? How these PSUs can become better financially? A: Frankly saying that in today’s time our companies are doing very well financially, and their turnovers and profits are very high. We have a set of a generation that looks under stress for a time being. Otherwise, the power sector is one thing which is going to grow, and we have been growing by more than 5.6-6%. Generally, it grows along with the GDP which is growing by 8% and we have grown up to 6.5% under normal conditions. Growth is going to take place, but we are just looking at a small stressed group but if you have a look then you will find that competition has increased in transmission and transmission companies are doing very well. Improvement in the distribution sector will improve a lot of other things. We have a scope of growth in the intrastate transmission of the states. Our projection for the year 2030 seeks huge investment in generation and for the purpose, we have placed a draft energy mix plan at the website of Central Electricity Authority and plans can also be made after the finalisation of the draft. There is plenty of scope for investment tariff policy will bring in competition, even for government companies, which power grid is already doing while competing with private sector companies in the transmission projects. This is a win-win situation for everybody. The consumer gets the benefit of lower tariffs and the companies are also competing with each other. Source: zeebiz

SEPTEMBER 2019-A

RESEARCH AND ANALYSIS

- Lions Shih

Research Manager, Trend Force

Global Demand for PV Modules Temporarily Decreases in 3Q19, But Annual Demand May Still Go Above 120GW, Says EnergyTrend

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Ever since Chinaâ&#x20AC;&#x2122;s 531 New Policy came into effect back in 2018, Chinese manufacturers impacted by the policy actively sought expansion overseas in order to lessen the risks from the policy. Adding that the distribution of global markets is becoming more diverse and dispersed, we see global demand for PV modules being pushed up as a result.

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SEPTEMBER 2019-A

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RESEARCH AND ANALYSIS

Source: Trendforce.com

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Source: Trendforce, jul., 2019

Forecat for global top20 module demand markets , 2019-2020

Source: Trendforce, jul., 2019

ccording to EnergyTrend’s statistics, Chinese exports to overseas regions from January to May, 2019, came to a total of 28.5GW, nearly doubling YoY from a 14.68GW (before China’s 531 New Policy; a 92.6% growth) for last year. After the New Policy came into effect, the exports from June to December in 2018 totaled 26.3GW. Judging from regional markets, Europe has been the spotlight region for this period. Europe officially removed trade barriers against Chinese suppliers in September 3, 2018, allowing modules made in China to compete in free European markets, unhampered by any trade barriers. In 2H18 post-June and from January to May in 2019, Chinese module exports to European regions grew nearly every month, demonstrating that the removal of European Minimum Import Price (MIP) trade barriers opened up a new export channel for Chinese suppliers impacted by China’s 531

Graph: 1

Chinese Module Exports to Double amid China’s 531 New Policy and the Removal of European MIP Trade Barriers

China module exports 2018- may 2019

Graph: 2

nergyTrend, a division of TrendForce, gives the following outlook for 2H19: Clients will slightly reduce pullins for 3Q, but this is expected to be a temporary state of rest for the market, which may still see demand for the whole 2019 year rise above 120GW.

Global Market Becomes More Dispersed, With a Burgeoning European Market Likely to increase the proportion of renewable verall, module demand for 2019 is energy in an attempt to reduce carbon expected to reach 125.5GW, a 16% emissions. This brought module demand growth over 108.2GW in 2018. to rise from 11.9GW in 2018 to 21.8GW The growth trend is expected to persist into in 2019. The demand is expected to keep 2020. EnergyTrend predicts that global demand growing to 24GW in 2020, registering a growth of over 10%. will become more and more dispersed Apart from European regions, in 2019, with GW-scale markets to South America, the Middle East, increase from 16 in 2018 to 21 in Africa and other emerging 2019, mainly because markets regions each have at least 2-3 are popping up all over the countries with GW-scale markets. world. Aside from the five In fact, the Paris Agreement major markets, traditionally consists of Nationally Determined China, the US, India, Contributions to renewable energy Japan and Australia, there development by each member of the has been signs of revival United Nations (UN). Thus besides the in some European markets, governmental subsidies and support each old and new alike. The country provides, the annually dropping revival stemmed from costs of PV installations of nowadays is the Paris Agreement, turning PV into a solution that emerging in which members countries may utilize to solve energy of the EU shortages and reduce their contribution continued

SEPTEMBER 2019-A

E LECTRIC VEHICLES

ndia has put in place a game plan for electric vehicles (EV) and its components like batteries to ensure clean cities, reduce imports and utilise solar power, NITI Aayog CEO Amitabh Kant said. He said domestic battery manufacturing for electric vehicles provides a “massive market opportunity”, and also quickens the transition to such environment-friendly transport, which is vital for the country to help combat pollution, congestion, strengthen energy security and create jobs. Addressing a conference on sustainable mobility through video link, Kant said the country’s EV focus should mainly be on two-wheeler and three-wheeler vehicles and public transport. With low per capita car ownership, which currently is 20 vehicles per 1000 people, India has an opportunity to leap frog ahead of the legacy model of individually owned internal combustion Indian vehicles that are utilised by only 5 per cent of the people, he said.

India has game plan for electric vehicles - Amitabh Kant To facilitate charging infrastructure, Kant said newer models should be explored and start-ups must be facilitated in this area. “We have a game plan to drive electric vehicles, particularly two and three-wheelers, public transport and manufacturing of batteries in India. Our objective is that we should first work on about 80 per cent of components of two and three-wheelers and buses and also push manufacturing of batteries in India. Our objective is to clean up cities, reduce imports, and utilise the sun and its energy for driving electric vehicles. From the perspective of energy security and competitive advantage, new mobility solutions will reduce oil import costs, lower India’s trade deficit and limit our vulnerability to oil supply disruptions.”

“India’s low per capita car ownership affords the chance to pursue a different model from the western world. Our emphasis must be shared, connected electric transportation,” he said. He said to create a unique eco-system to enable ‘Make in India’, and drive the movement for manufacturing in India, the country will require a phased programme across the entire value chain, an efficient fiscal impact structure, and size and scale aligned to the country’s ambition to produce world- class vehicles for domestic and international markets. “With batteries accounting for almost 40 per cent of total cost of EVs today, domestic battery manufacturing is a massive market opportunity for India to rapidly enable the transition to EVs,” Kant said. “New battery technologies like solid state lithium ion battery, sodium ion battery, and silicon based batteries are underdeveloped. India needs to vigorously pursue research and development and have a clear road map for manufacturing on a mega scale,” he said. To facilitate charging infrastructure, Kant said newer models should be explored and start-ups must be facilitated in this area. He said new cities like Dholera (coming up near Ahmedabad) should allow maximum number of EVs. Source: PTI

Talking to reporters on the sidelines of the conference, Chief Secretary J N Singh said Gujarat is poised to lead in the field of e-mobility. “Dholera is emerging as a very important township for this. A big company will announce investment in Dholera in lithiumion battery manufacturing for EVs….We plan to develop a 5,000-MW solar power plant, and 250 MW plant will be ready soon. We are in the last stage of discussion with Tata Chemicals for lithium-ion battery manufacturing plant. The battery is vital for e-vehicles and comprises 40 per cent of car cost.”

- Amitabh

SEPTEMBER 2019-A

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POlicy AND REGULATION

Government’s approval mandating opening and maintenance of adequate Letter of Credit (LC) as payment security mechanism by power distribution utilities (discoms) under its power purchase agreements (PPAs), effective from August 1, 2019, would be a positive for the power generation companies. This is following the continued delays in making payments by the discoms to generation companies, leading to liquidity constraints for the power generation companies. However, the implementation of these provisions remains to be seen, given the challenges in securing the large quantum of LCs by the discoms, in view of the loss-making operations of the discoms in most states.

- Girishkumar Kadam, Sector Head & Vice President, ICRA Ratings

Directive on payment security mechanism and favourable regulatory orders positive for IPPs: ICRA ICRA’s projection is based on improved growth to 6.7% on a Y-o-Y basis from a low of 1.5% in Q4 FY2019.

Limited or no tariff hikes approved and slow progress in reducing distribution loss levels, is likely to increase the discom loss levels in FY2020 and increase the dependence on subsidy support from respective state governments. ICRA estimates the overall subsidy dependence of the state-owned power distribution utilities for FY2020 at around Rs. 960 billion, an increase of about 11-12% over the previous fiscal year. The increase in the subsidy requirement for FY2020 over the previous year is predominantly driven by the continuation of subsidised tariffs by state governments, even in case of an upward revision in the cost of supply for the discoms. Given the rising dependence on subsidy for discoms, timeliness and adequacy of subsidy support from their respective state governments assumes critical significance, from the discoms’ liquidity perspective.

- Vikram V,

Associate Head & Assistant VP, ICRA Ratings Source: economictimes.indiatimes

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CRANSE 0.02 % expects thermal capacity utilization to improve to 64% in FY2021, led by sustained demand growth coupled with a slowdown in addition of new capacities and decommissioning of older units. ICRA’s projection is based on improved growth to 6.7% on a Y-o-Y basis from a low of 1.5% in Q4 FY2019. “Share of renewable energy (RE) based capacity has seen a sharp increase over the past two years, the thermal segment would continue to remain as the major source of electricity generation in the near term. Apart from demand boost, the generation sector is expected to benefit from certain key policy recommendations such as directive on payment security,” said ICRA in a report. In another key development, the regulators have issued favourable orders in the recent past for thermal IPPs allowing pass-through of higher cost of imported coal in lieu of shortfall in supply from domestic linkage sources. This would enable resolu-

tion for affected domestic coal-based IPPs, aggregating to 14-15 GW having long-term PPAs with state distribution utilities and facing coal supply shortfall from domestic linkage sources. Further, Central Electricity Regulatory Commission (CERC) has allowed pass-through of higher cost of imported coal for Adani Mundra project, affected by change in mining regulations in Indonesia, subject to certain covenants. However, any appeal against the CERC order would delay the resolution process for other similarly affected projects. While electricity distribution segment has seen significant reduction in losses and debt levels following debt restructuring under the UDAY scheme, the slow progress in improving operating efficiencies and inadequate tariff revisions by the SERCs over the past three years, has slowed down the loss reduction process for discoms. Out of the 14 states where tariff orders have been issued for FY2020, the median tariff hike continued to remain low at 1% with the SERCs in five states not approving any tariff hike for the year and two states lowering tariff rates.

SEPTEMBER 2019-A

INDIA

Solar energy installations for Green Railways: Piyush Goyal Replying to supplementaries during the Question Hour, Piyush Goyal said the Railways had set the target of 100 per cent electrification of its tracks by 2022.

“By 2022, we are going to do full electrification of Railways.” - Angadi Suresh Channabasappa , Minister of State for Railways

fforts are on to make Indian Railways the first Green Railways in the world in the next 10 years with steps like setting up solar energy installations on its unutilised land, electrification of tracks and moving to bio-diesel, Minister Piyush Goyal told the Rajya Sabha. Replying to supplementaries during the Question Hour, he said there was no proposal at present to change Railway fares, after the recent hike in diesel costs due to increased excise duty in the general budget. The minister said the Railways had set the target of 100 per cent electrification of its tracks by 2022. He informed the House that Railways was reducing its diesel cost inputs by electrifying its tracks on a large scale and will also produce solar energy on its vacant land.

“Probably 10 years from now, can we make Indian Railways the world’s first 100 per cent Green Rail,” he said announcing that this was yet another ambitious plan and efforts may take some time to fructify. We are trying to see how we can expand the solar energy on all the unutilised land of the Railways across the country, as it will save the land from encroachments. We are trying to produce power from such solar installations and feed that into the grid and use that for the Railways. Responding to criticism by members about “grand announcements” made by the minister, Goyal said, “Unless you aspire for big goals, you cannot achieve big targets. He added that the Railways was fast electrifying its tracks and was regularly bringing its diesel inputs down.” - Piyush Goyal,

Railway Minister, India In response to another supplementary on whether the Railways intends to raise its fares, Goyal said there is no such proposal now. “At present, there is no proposal to change the fares,” he said. The minister said during 201314, the Railways has electrified 650 kms of track, while in 2017-18 it has electrified 4,000 plus kms and in 2018-19 Railways has electrified over 5200 kms.

Source: PTI

“We aspire for big targets and this year’s targets are even bigger than last year. While the Railways will move towards complete electrification, there will still be some tracks like in border areas and in narrow gauge where it will continue to use diesel. We are also working towards the use of biodiesel instead of diesel on such tracks. But, there will still be requirement of diesel for border areas, or narrow-gauge line, where “we are making an effort to move from diesel to bio-diesel or environmentally friendly materials” - Piyush Goyal, Railway Minister, India Both these moves will be transformational in terms of the impact of climate change that Railways contributes, he noted.

SEPTEMBER 2019-A

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RENEWABLE ENERGY

- Shreyas Vaidya Corporates

Power Demand Surges due to Extended Summer; Spot Prices Remain Stable as Supply from All Sectors Improves

n June 2019, All-India energy demand grew 7.4% yoy and energy supply increased 7.5% yoy, resulting in lower deficit of 0.4%. The All-India thermal plant load factor (PLF) increased to 62.2% in June 2019 (June 2018: 59.4%), due to an improvement in the private and state sectors’ PLF by 660bp and 380bp, respectively. The increase in PLF was driven by extended summer season with increased demand and sufficient coal supply. The central sector PLF further declined to 66.9% in June 2019 (May 2019: 68.5%, April 2019: 74.6%). The short-term power price at Indian Energy Exchange (IEX) remained stable at INR3.32/KWh in June 2019 (May 2019: INR3.34/KWh) but declined 11.1% yoy due to lower demand in the short-term market. The total power trade at IEX fell 15% yoy to 4,211 million units in June 2019. The fall in short-term demand was on account of improved supply from long-term contracts as the generation improved yoy across all sectors including thermal (8.7%), hydro (7.9%) and renewables (4.7%). The

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thermal sector, which remains the highest contributor to the overall generation (83%), witnessed an improvement in total generation to 112.8 billion units (BUs) due to higher yoy availability of both domestic and imported coal. While coal inventory at thermal power stations rose 72.4% yoy to 26.6 million tonnes in June 2019, it declined from the peak of 31.6 million tonnes in April 2019 due to higher electricity generation owing to summer season and elections. Subsequently, while the number of thermal power plants with sub-critical level of coal decreased to five in June 2019 from 15 in June 2018, the number increased from zero in March 2019. The coal inventory decreased from 18 days of consumption equivalent on 31 March 2019 to 15 days on 30 June 2019. Transmission line addition continued to be sluggish with 659 circuit kilometres added in June 2019 (June 2018: 1,905 circuit kilometres) with 98% of addition coming from state sector. Data Source: Central Electricity Authority, IEX, Infraline, Coal India Limited

Highlights – June 2019

. . .

Merchant power prices declined year-onyear (yoy) to INR3.32/kWh Power demand increased 7.4% yoy

All-India electricity generation (excluding renewables) increased 8.5% yoy; energy deficit and peak demand deficit reduced to 0.4% and 0.7%, respectively

. .

Coal production decreased 0.5% yoy to 45.1 million tonnes (mt) Coal inventory at power stations for 15 days of generation, although improved 72.4% yoy

45MW of thermal capacity added in June 2019

SEPTEMBER 2019-A

RENEWABLE ENERGY Thermal Capacity Addition to Remain Subdued over FY20-FY21

Key Points The short-term power prices remained stable month-onmonth in June 2019, driven by greater availability of power despite continuing higher demand from northern India due to the extended summer season. However, prices were lower 11.1% yoy in June 2019, driven by higher yoy domestic coal availability and higher hydro generation.

central, state and private sectors. During FY13-FY17, excess capacity in the thermal power sector had increased to an average of 42% on account of a significant increase in capacity and lower-than-expected growth in power demand. The excess capacity touched a peak of 45% in FY16, and then declined subsequently to around 42% at FYE19. Power demand is likely to see healthy growth during FY20-FY24, and only a part of the incremental demand can be met by existing and upcoming renewable capacities. Considering the absence of any major alternatives to meet the growth in demand, the proportion of excess capacity in the thermal power sector would decline further during

FY20-FY24, in Ind-Ra’s opinion. The slowdown in new thermal capacity addition by the state and central thermal sectors would also support the absorption of the excess thermal capacity over this period. FPS for thermal projects declined steeply to a mere 1.6GW in FY19 from an average of 10GW per year over FY15-FY18. The private sector’s contribution to fresh projects was nil during FY19, signalling the lack of interest of private players in the thermal sector. FPS by the state and central sector too has declined meaningfully owing to the gradual shift towards renewable capacity addition, given the single part tariff and the cost competitiveness of such tariffs.

Deficit Watch Merchant Power Prices Increased

Figure 1: Exchange Power Price Versus Demand

Source: The Indian Energy Exchange, Ind-Ra

ndia Ratings and Research (Ind-Ra) expects coal-based capacity addition in the Indian power sector, which fell to a low of 3.6GW in FY19, to remain subdued at 5GW-6GW per year in FY20 and FY21. This is attributed to the following factors: i) the decommissioning of nearly 2GW annually as the plants complete their useful life; and ii) the stress in nearly 85% of the private under Nitin Bansal, construction capacity, Senior Analyst, Corporates given the issues with regards to availability of funds, coal, power purchase agreements and evacuation; and iii) decline in fresh project starts (FPS) across the

Energy Deficit reduced to 0.4% in June 2019

Figure 3: Peak Demand Deficit Increased to 0.7% in June 2019

Source: CEA, Ind-Ra

Key Points In June 2019, the increase in all-India energy requirements was limited to 7.4% yoy, while the available energy increased 7.5% yoy, causing the energy deficit to narrow to 0.4% (June 2018: 0.6%).

Source: CEA, Ind-Ra

Figure 2: Energy Deficit

SEPTEMBER 2019-A

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RENEWABLE ENERGY

Generation Watch Increase in Electricity Generation (Excluding Renewables)

Figure 5: Electricity Generation (Excluding Renewables)

Figure 6: Year-on-Year Increase in All-India Coal and Lignite PLF

Source: CEA, Ind-Ra

Key Points Thermal PLF improved to 62.2% in June 2019 (June 2018: 59.4%) on account of an increase in PLF in the private and state sectors.

Source: CEA, Ind-Ra

Key Points All-India electricity generation (excluding renewables) increased 8.5% yoy to 112.8BUs, driven by an 8.7% yoy increase in thermal generation. The total power generation increased 6.4% yoy in 1QFY20.

Figure 4: Energy Demand Across States June 2019

Source: Central Electricity Authority, Ind-Ra

Key Points The top five states contributed around 43% to the power demand with maximum growth in Punjab.

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Figure 7: Coal and Lignite PLF Across Sectors

Source: CEA, Ind-Ra

Key Points The PLF for the private and state sectors improved to 59.7% (June 2018: 53.1%) and 60.7% (56.9%), respectively. The central sector PLF declined further to 66.9%, registering continued decline since the last three months.

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RENEWABLE ENERGY Renewable Watch Year-on-Year Increase in Renewable Energy Generation

Figure 8: Renewable Energy Generation

Source: CEA, Ind-Ra

Key Points Total renewable power generation grew 4.7% yoy to 13.4BUs in June 2019, driven by higher wind generation.

Renewable Energy Generation Breakdown

Figure 10: May 2019

Figure 11: Renewable Capacity Trend

Source: CEA, Ind-Ra

Key Points Renewable capacity addition in 1QFY20 was backed by solar capacity addition of 6.5GW qoq and wind capacity addition of 2.3GW qoq.

Source: CEA, Ind-Ra

Figure 9: May 2018

Source: CEA, Ind-Ra

Key Points The share of wind generation is maximum in the overall renewable power generation.

SEPTEMBER 2019-A

Coal Watch Coal Inventory at Power Station improved 72.4% YoY in June 2019

Figure 12: Coal Production (CIL)

Source: CIL, Ind-Ra

Key Points CIL’s monthly coal production marginally increased 0.5% yoy to 45.1mt in June 2019. The coal production in 1QFY20 also increased marginally by 0.1% yoy to 136.96mt. The rise in thermal generation has been met by increased reliance on imported coal.

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RENEWABLE ENERGY

Key Points The number of power plants with subcritical levels of coal increased to five in June 2019 from two in May 2019, but declined compared to 15 in June 2018. However, the overall coal availability at pithead and non-pithead plants on 30 June 2019 remained at 12 and 16 days, respectively. The actual number of non-pithead plants with coal stock lower than 7 days remain at 32, due to inclusion of pro rata supply by CIL, payment-related issues, etc.

Source: CEA, Ind-Ra

Figure 14: Subcritical Level of Coal Inventory at Power Stations (<7 Operating Days)

Source: CEA, Ind-Ra

Capacity Watch Thermal Capacity Addition in June 2019

Figure 15: Generation Capacity Addition

Source: CEA, Ind-Ra

Key Points In June 2019, 45MW of thermal capacity was added.

Figure 13: Coal Inventory at Power Stations

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Figure 16: Sector-wise Capacity

Source: CEA, Ind-Ra

Key Points With the total coal-based capacity at 194.4GW, India remains dependent on coalbased power generation. While capacity addition in other sectors remained weak, renewable capacity addition was at 11.4GW, up 16.6% yoy.

Source: CEA, Ind-Ra

Key Points Coal inventory at power stations improved 72.4% yoy in June 2019. The inventory was supported by higher production from the hydro and renewable segments, which led to lower reliance on the thermal segment.

SEPTEMBER 2019-A

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RENEWABLE ENERGY

Transmission Watch Transmission Line Addition Slowed Down in June 2019

Breakdown of Transmission Line Addition by Ownership

Figure 19: June 2019

Key Points In June 2019, the transmission line addition from central sector decreased to 16 circuit kms (June 2018: 1,328 circuit kms)

Source: CEA, Ind-Ra

Figure 18: June 2018

Source: CEA, Ind-Ra

Key Points In June 2019, the state sector contributed about 98% to the transmission line addition.

Source: CEA, Ind-Ra

Figure 17: Transmission Line Capacity Addition

Source: CEA, Ind-Ra

Key Points In June 2019, the transmission line addition slowed down to 659 circuit kms (June 2018: 1,905 circuit kms).Transmission line addition declined 2.9% yoy in FY19.

Figure 20: Major Transmission Lines Commissioned – June 2019

Source: CEA, Ind-Ra

Regulation Watch Power Minister Approves Implementation of Payment Security Mechanism for Power Purchase by DISCOMs As per the proposal, the distribution licensees are required to open and maintain adequate letters of credit as payment security mechanism under power purchase agreements from 1 August 2019. The step is aimed at bringing discipline and making the sector viable. Rating Actions by Ind-Ra in Power Sector in June 2019 India Ratings Assigns Sterlite Power Grid VenProposed NCDs tures’ Additional Proposed NCDs ‘Provisional India Ratings Affirms Mytrah Vayu (Krishna)’s IND A+’/Stable Bank Loans at ‘IND A(SO)’/Stable India Ratings Affirms THDC India and its India Ratings Affirms and Reassigns Emami NCDs at ‘IND AA+’/Stable; Rates Additional Power’s Bank Loans ‘IND A-’/Stable

Source: indiaratings.co.in

SEPTEMBER 2019-A

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Wind ENERGY

Govt amends bidding guidelines for wind power projects The amendments have been made based on the experience of bidding and consultation with various stakeholders, the Ministry of New and Renewable Energy said in a statement on July 24.

n a bid to fast-track wind energy projects, the Centre has made certain amendments to the bidding guidelines for such projects, according to an official statement. The amendments have been made based on the experience of bidding and consultation with various stakeholders, the Ministry of New and Renewable Energy said in a statement on July 24. The development assumes significance as the government has set an ambitious target of having 175 GW of clean energy capacity by 2022, including 100 GW solar and 60 GW of wind energy.

As per the statement, now the timeline for land acquisition for wind power projects has been extended from seven months to scheduled commissioning date i.e. 18 months. This, the ministry said, will help wind power project developers in states where land acquisition takes longer time.

“The guidelines for tariff-based competitive bidding process for procurement of power from grid connected wind power projects was notified on December 8, 2017. Based on experience of bidding and after consultation with stakeholders, following amendment to these standard bidding guidelines for wind power projects is carried out,” it said.

The penalty on shortfall in energy corresponding to the minimum CUF has now been fixed at 50 per cent of the PPA tariff for the shortfall in energy terms liable to be paid by the wind power generator to the procurer, the ministry said. Further, the penalty shall be passed on by the intermediary procurer to the end procurer after deducting the losses of intermediary procurer.

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“Also the window for revision of declared CUF (capital utilisation factor) of wind power project has been increased to three years. The declared CUF is now allowed to revise once within three year of commercial operation date, which was earlier allowed within one year only,” it said.

The ministry also said that in cases of early part commissioning, the procurer may purchase the generation, at full PPA tariff. “Commissioning schedule of wind power project has been defined as 18 months from the date of execution of the PPA or PSA, whichever is later. The amendments intended not only to reduce the investment risks related to the land acquisition and CUF but also to provide incentives for early part commissioning of project. The risk of wind power developers in case of delay in signing of PSA has been mitigated by starting time-line of execution of project from date of signing of PPA or PSA, whichever is later,” the statement said. While Power and New and Renewable Minister R K Singh is positive on achieving 175 GW renewable energy target, several recent reports have cautioned that India is unlikely to meet the capacity targets for wind and solar power. Source: PTI

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RESEARCH AND ANALYSIS

Demand remains strong; focus on distribution reforms The Government’s resolve of reviving the Indian Power seems strong with demand growth being maintained even after the general elections in May’19 as evidenced from the 7.4% growth in Jun’19 demand.

ower demand in Q1FY20 has been robust with a base demand growth of 6.7%. Peak demand has been very strong with 14GW growth in Apr’19 and 11.5GW growth each in May’19 and Jun’19. Lately, the ministry of power has been looking at implementing measures to improve the liquidity situation in the entire value chain through advisories and the upcoming National Tariff Policy. Although some of the options may not be easy to implement, it gives out a stern message of discipline. We believe these measures will improve the health of discoms as well as the liquidity situation of the generators.

Some of the key issues being addressed are

Improving payment security mechanism .1.Opening of LCs for power purchases 2. Increase regulatory independence ..Creation/liquidation of regulatory assets

State-specific issues such as in Andhra Pradesh to be resolved through dialogue and regulatory autonomy

.. .. 4. Encourage efficient generation .Expedite retirement of old and inefficient plants and implement

3. Improving discom viability Prepaid meters to be introduced mandatorily Privatisation of distribution in loss-making areas Tariff rationalisation Providing off-grid solutions for subsidised segment of consumers

increased ‘flexibility’ of existing plants

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As against the many sections of opinion suggesting UDAY has been a failure, we believe the outcome suggests otherwise. AT&C losses and annual losses of discoms have reduced to 18.4% and Rs 230 bn in FY19 although higher than its target, but lower than the FY15 levels of 25.7% and Rs 550 bn respectively. However, cashflows of discoms got stressed since Jan’19 as dues from government departments to various state discoms increased to ~Rs 400 bn, which impacted payments to generators (Rs 260 bn overdue to generators as in May’19). We expect this to be addressed through the implementation of prepaid meters and enforcement of opening of letters of credit by discoms. The stressed assets situation is also expected to be resolved soon (three assets totaling 2.6 GW have already been resolved) with the revised 7th June RBI circular; however, the process faced a setback due to an adverse ruling in the case of Prayagraj (1,980 MW) where the state regulator intervened and asked for a tariff cut in line with the haircuts taken by debt and equity investors. This has been challenged in the APTEL and judgment is awaited. The ministry of power is also expected to soon issue an advisory to prevent such events in the future, which may jeopardise stressed asset resolution. We believe the government is seriously looking at improving the financial condition of the both discoms and generators while keeping tariffs in check. The Indian electricity sector is also witnessing a major transfor-

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RESEARCH AND ANALYSIS any future procurement of power. In case the discoms are not able to open an LC, they can also pay in advance to the gencos, through the electronic mode, the amount equal to at least one day’s purchase of electricity, and then inform the same to the respective LDC. The LDC shall then schedule the power to the discom, limited to the quantum for which the money has been deposited by it. As delayed payment may lead to load shedding, we believe discoms will start taking steps in the right direction. 2. Increase regulatory independence The key challenges faced in this regard are accumulation of regulatory assets, lack of financial independence and autonomy, capacity limitations due to staffing issues and lack of unison in regulatory practices adopted in different states. Key measures to resolve these issues taken are: Regulatory asset creation/liquidation: On a pan-India basis, across all the discoms, there are regulatory assets of Rs1.2trn, which have been created over the many years against which debt has been taken by the discoms. Regulatory assets are basically revenue of discoms, which is not charged as tariff to final consumers against which higher cost has been incurred. In the revised National Tariff Policy, this issue is expected to be tackled: No new regulatory assets to be created, hence, subsidy has to be paid by state governments if tariffs are not hiked. Direct Benefit Transfer to be used by to pay subsidies Accumulated regulatory assets to be liquidated in five years Establishment of a State Electricity Regulatory Commission Fund by state governments to enable the SERCs to perform their responsibilities Independent selection process of members of SERCs with the Central government having a say in the process APTEL to issue directions wherever necessary for performance of its statutory functions A case has risen in Andhra Pradesh where the state government recently issued notices to wind and solar developers asking them to reduce tariffs in the older PPAs to the current prevailing rates. This however has been stayed by the APTEL because certain cases were already in the hearing stage.

mation in respect of demand growth and energy mix. Even without considering any pick-up in industrial demand and creation of reserve capacity for reliability, we are of the opinion that the country’s current capacity and planned expansions can at best cater to FY23E peak demand. We believe there is an immediate need to restart the capex cycle in ‘efficient generation’ followed by ‘transmission’ (with a lag of two years). However, ‘distribution’ needs immediate attention! Top picks – Power Grid (TP: Rs252/share) and NTPC (TP: Rs168/share). Beneficiaries of discom privatisation – Torrent Power (TP: 327/ share), CESC (TP: 881/share), Tata Power (TP: 87/share).

Key steps taken 1. Improving security mechanism by making Letter of Credit (LC) mandatory: The ministry of power has issued an order asking state discoms to maintain adequate LCs. As per the order, from 1st Aug’19, NLDCs and RLDCs under Section 28 (3) (a) will dispatch power only after the generating

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company and distribution company intimate that an LC of the desired quantity has been issued. RLDC’s were intimated to dispatch power only up to the value of LC. The genco will be entitled to encash the LC after expiry of grace period (45-60 days as mentioned in the PPA). In the event of regulation of power due to non-payment, the discom will have to continue paying the fixed charge to the generating company. Another major move restricts the defaulting discom to purchase power in the shortterm market and no short-term open access (STOA) will be granted during this period. This provision of opening LCs is already a part of almost all PPAs signed between the genco and discom. However, it was mostly not enforced due to the stressed financial health of discoms. Such a decision may be difficult to implement in totality as many discoms may find it difficult to get LCs for a month or more due to their financial constraints; however, it sends a very strong message to the discoms that timely payment of dues going ahead is very critical. Our understanding is that the ministry of power, after discussing with various stakeholders, is relaxing the 1-month LC criteria to anywhere between one day to one week also for

. . . . . . .

However, this seems to be a draconian move and can create NPAs. Despite intervention by the Central government, the state government of Andhra Pradesh has not agreed to reconsider its demand. We believe the only way is to appeal with the state regulator/APTEL, which has the authority to block such arbitrary moves by state governments. Hence, a robust and independent regulatory framework is imperative for a stable investment climate.

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RESEARCH AND ANALYSIS Chart 1: Accumulated regulatory assets in FY16 vs FY19

3. Improving discom viability UDAY has shown good progress operationally as well as financially as it can be seen that the annual losses, AT&C losses and ARR-ACS gap has reduced since its implementation in FY16.

Chart 2: Annual losses of discoms

Chart 3: ARR-ACS gap

Chart 4: All-India AT&C losses

Chart 5: Total overdue amount as in May’19 stood at Rs260bn

.Prepaid metering to be introduced: The

government is working on a distribution plan that lays emphasis on 100% metering of all consumers and providing electricity connection on demand. The plan also envisages frontier technology initiatives with an objective of providing reliable quality power supply to consumers. It also envisages conversion of all electricity consumer meters into smart meters in prepaid mode within the next three years. Prepaid metering will

SEPTEMBER 2019-A

provide additional liquidity with the discoms especially for collections from the commercial and government establishments. This will also help in remote energy audits.

Facilitate implementation of KUSUM and SRISTI for reducing technical losses in agricultural and low-end residential segments:

KUSUM: The Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM) scheme

consists of three components – 10GW of decentralised ground- mounted grid connected renewable power plants (component-A); installation of 1.75mn solar powered agriculture pumps (component-B); and solarisation of 1mn grid-connected solar powered agriculture pumps (component-C). The three components aim to add 25GW of solar capacity by FY22 with Central assistance of Rs344bn. Under Component-A, renewable plants of capacity 500KW to 2MW will be set up

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RESEARCH AND ANALYSIS by individual farmers, cooperatives, panchayats, or farmer producer organisations (FPO) on their barren or cultivable lands. The power generated will be purchased by discoms at feed in tariffs determined by respective SERCs. Performance-based incentives at Rs0.40 per unit for five years will be provided to discoms. Under component-B, individual farmers will be supported in installing standalone solar pumps of capacity up to 7.5HP. Under component-C, individual farmers will be supported to solarise pumps of capacity up to 7.5 HP. For both components-B&C, central financial assistance (CFA) equivalent to 30% of the benchmark cost will be provided. The states will give a subsidy of 30%; and the remaining 40% will be provided by the farmer (bank finance may be made available for meeting 30% while only 10% will be provided by the farmer).

The government is looking to privatise discoms where the AT&C losses have been consistently high and a preferred route will be in the form of distribution franchises (DFs). In the past six months, two DFs have been awarded (Thane Urban – Torrent Power; Malegaon – CESC) while we expect at least 8-10 circles being bid out in the next 12-18 months. The government is also looking at bringing in more than one supplier to a common circle to make it competitive. Rationalise and simplify tariff structures and try to make it common for all states. Ensure universal access to reliable 24x7 supply of electricity: Establish service level agreements for discoms for reliability of supply and penalise for power cuts, etc.

Implementation for Solar Transfigurationof India (SRISTI) scheme aims to provide 40% subsidy on the capital cost of setting up 1-3kW systems in residential buildings. Such schemes help reduce grid load to agricultural/residential sectors, which is the subsidised sector and has higher commercial losses as well.

In a scenario with 130GW of renewables by FY22, the PLFs of coal plants during peak solar months could drop to 35-40%. Hence, the minimum technical limit has to be brought to 55% across generation plants and operational ramp rates have to be ensured to 2%/minute across coal plants. Retire all sub-critical plants and replace them with super and ultra-super critical plants.

.SRISTI: The Sustainable Rooftop

.Introduce competition in retail

supply business:

. .

4. Expedite retirement of old and inefficient plants and implement increased ‘flexibility’ of existing plants

Table 1: Capacity eligible for retirement (>25 years)

Source : CEA, I-Sec research

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RESEARCH AND ANALYSIS Table 2: Inefficient plants used 25mnte excess coal

Source : CEA, I-Sec research

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RESEARCH AND ANALYSIS Indiaâ&#x20AC;&#x2122;s power supply position has imc proved significantly in the previous decade and has achieved universal energy access Chart 6: Installed capacity (MW) and growth (%)

Chart 7: Breakup of installed capacity

Chart 8: Power demand (MW) and demand growth (%)

Chart 9: Peak demand (MW) and peak demand growth (%)

Table 3: Monthly peak demand in India

Growth in demand from major states Table 4: Yearly peak demand for major states

Source : CEA, I-Sec research

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SEPTEMBER 2019-A

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RESEARCH AND ANALYSIS Table 5: Yearly base demand of major states

Source : CEA, I-Sec research Table 6: Yearly base demand: region-wise

Source : CEA, I-Sec research Chart 10: Annual capacity addition (MW) vs deficit going ahead (%)

Chart 11: PLF of state, central and private

Source : CEA, I-Sec research Table 7: Peak demand vs peak supply

Source: MoP, I-Sec research

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RESEARCH AND ANALYSIS Table 8: Segment-wise peak availability estimates

Source: CEA, I-Sec research Chart 12: Domestic Coal supply

Chart 13: Coal imports

Chart 15: IEX market clearing prices (MCP)

Chart 14: Imported coal prices (US$/te) (Indonesian coal - 5,900kcal/kg)

Chart 16: Power cuts trend

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SEPTEMBER 2019-A

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RESEARCH AND ANALYSIS PRICE CHARTS

In case of industry/sector reports or a report containing multiple stocks, the rating/recommendation for a particular stock may be based on the last released stock specific report for that company. New I-Sec investment ratings (all ratings based on absolute return; All ratings and target price refers to 12-month performance horizon, unless mentioned otherwise) -By ICICI Securities, Inc.

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RESEARCH AND Development

Scientists at IIT Hyderabad have developed low-cost, environment-friendly solar cells by employing an off-theshelf dye used to make kumkum or vermilion in India.

IIT Hyderabad develops low-cost, eco-friendly solar cells using

‘kumkum dye’

he dye-sensitised solar cell (DSSC) is based on New Fuchsin (NF) dye with aqueous electrolyte and platinumfree counter electrodes, according to the research published in the Solar Energy journal. The most familiar solar cells today are made up of silicon and can be seen in the various overhead panels and other places, noted Professor Sai Santosh Kumar Raavi from Department of Physics, Indian Institute of Technology (IIT) Hyderabad. However, this technology is limited by huge fabrication costs as silicon processing is very expensive and involves very high temperature methods that leave a large carbon footprint, Raavi, who led the project, told PTI. In order to get around the limitations of using silicon, the IIT Hyderabad team started working on solar cells based on organic materials, which were supposedly inexpensive and easy to fabricate. However, there were many drawbacks impeding the organic photovoltaic technology as organics (plastic) are less robust. Many dye molecules developed for efficient DSSC devices are very expensive and toxic upon ingestion. Also, most DSSC devices tend to get degraded as they come in contact with atmospheric moisture, Raavi said. Since 2010, lot of efforts have been

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ent conductive oxides, like indium tin oxide (ITO) and a liquid electrolyte with an excess of electrons. Sunlight is absorbed by the dye molecule and gets excited. The electrons from the excited dye molecule get injected into the conduction band of TiO2. “The electrons are transported to the charge collector. The dye cation (after losing its electron) takes an electron from the surrounding electron-rich liquid electrolyte. The counter electrode, typically, is platinumcoated ITO,” Raavi said. DSSCs, Raavi noted, are generally considered eco-friendlier to produce than conventional solar cells because they require little energy to manufacture. The best performing DSSCs use organic solvent-based liquid electrolytes. These liquid-electrolytes come with various drawbacks such as high vapour pressure, toxicity and sometimes explosives resulting in severe environmental impact in addition to being corrosive to the platinum counter-electrodes, thereby limiting longtime stability of the devices. “In spite of extensive search for various alternatives, to address the fore-mentioned issues, one of the most important aspects still unresolved in the DSSC community is the contamination of standard aprotic DSSC systems by means of moisture or water. In this scenario, focus on dye-sensitised solar

“In view of being cost-effective and stable in the aqueous environment, an ideal DSSC should consist of inexpensive sensitiser, water-based non-toxic electrolytes, and platinum-free counter electrode, giving the true definition of ‘green’ photovoltaic device”

- Sai Santosh Kumar Raavi,

Department of Physics, IIT Hyderabad made to use water-soluble natural and synthetic dyes to make water-based solar cells. In their latest work, Raavi’s team consisting of researchers from Department of Physics and Chemistry (IIT Hyderabad), ARCHEM (University of Hyderabad) NIT Kurukshetra and IFSC-USP, Brazil, employed a very cheap magenta-dye called New Fuchsin, which is used to make kumkum or vermillion when grounded with turmeric. “It’s cheap, non-toxic and is soluble in water and importantly does not degrade in the presence of water,” Raavi said. Dye-sensitised solar cell (DSSC) is a third-generation thin-film organic moleculebased energy conversion device. “DSSC takes its inspiration from nature, almost mimicking the primary process of photosynthesis the phenomenon in plants,” Raavi explained. DSSC consists of three components: A monolayer of dye molecule adsorbed on semiconductor material, titanium dioxide (TiO2) deposited on transpar-

cells which are inherently in the aqueous medium have taken precedence,” he said. The best device, he said, showed a photoconversion efficiency of about three per cent which is among the best obtained with DSSC with other natural photosensitisers with a simple molecular structure. This technology using NF dye, researchers said, could be used to build integrating photovoltaics. NF is an inexpensive dye available off-shelf in most supermarkets in India, and in its purest form costs USD two per gramme. By the choice of cell components during the fabrication, a low-cost eco-friendly DSSC based on NF dye with aqueous electrolyte and platinum-free counter electrodes is achieved, Raavi said. “The idea of this work is not to run behind the best efficiency. Sometimes, the cost for achieving the highest efficient device overwhelms the actual motivation behind developing a particular class of solar cell technology- which is to be eco-friendly and inexpensive,” he added. Source : indiatvnews

SEPTEMBER 2019-A

Electric Vehicles

5,645 electric buses sanctioned for 65 cities: Amitabh Kant Last week, the GST Council headed by finance minister Nirmala Sitharaman decided to cut the tax rates on e-vehicles from 12 per cent to 5 per cent with effect from August 1.

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iti Aayog CEO Amitabh Kant on Monday said an inter-ministerial panel has sanctioned 5,645 electric buses for operations in 65 cities, a move seen towards environment-friendly mobility. Last week, the GST Council headed by finance minister Nirmala Sitharaman decided to cut the tax rates on e-vehicles from 12 per cent to 5 per cent with effect from August 1. The Centre has been taking initiatives to popularise environment-friendly electric vehicles. In the Union Budget 2019-20, the government proposed additional income tax deduction of Rs 1.5 lakh on the interest paid on loans taken to purchase electric vehicles. Besides, certain parts of EVs have been exempted from customs duty to further incentivise e-mobility in the country. The Centre has also approved Rs 10,000 crore under the FAME II scheme, which aims to encourage faster adoption of such vehicles by right incentives and charging infrastructure. Recently, Kant had said electric vehicles are a sunrise opportunity as India has over 72 per cent two-wheelers. Niti Aayog has proposed that two-wheelers below the capacity of 150cc sold in the country after March 31, 2025, should be electric ones only. It also proposed that three-wheelers sold in the country after March 31, 2023 should be electric ones.

"The inter-ministerial committee for EVs today sanctioned 5,645 electric buses for intracity operations in 65 cities and for intercity operations to 8 state transport undertakings. This will give huge impetus to automobile sector, clean up our cities & drive Make in India." Amitabh Kant said this in a tweet Source: economictimes.indiatimes

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RESEARCH AND ANALYSIS

Global Solar Installations to Reach Record High in 2019

Countries installing between 1 to 5 gigawatts annually will be the market’s growth engine. In 2018, there were seven such markets. By 2022, we forecast that there will be 19, with new names added to the list including Saudi Arabia, France and Taiwan.

Wood Mackenzie’s Tom Heggarty describes what’s shaping today’s global solar market

Global PV market continues to diversify rapidly

Number of Markets by Annual Solar Capacity Installed, 2010-2024E

lobal solar PV installations will reach a new high of 114.5 gigawatts in 2019, up 17.5 percent over 2018. According to Wood Mackenzie Power & Renewables’ new report, Global Solar PV Market Outlook Update: Q2 2019, the market is now back on a strong growth trajectory after a slowdown in 2018. Annual installations are expected to rise to around 125 gigawatts per year by the early 2020s. Global growth will continue despite a gradual decline in China, the world’s largest PV market. The Chinese market peaked at 53 gigawatts in 2017, driven by generous feed-in tariffs. We anticipate that a move toward more competitive procurement of solar PV will lead to more sustainable annual additions of 30 to 40 gigawatts.

Source: Wood Mackenzie’s Global Solar PV Market Outlook: Q2 2019

Annual PV demand by major region

Source: Wood Mackenzie’s Global Solar PV Market Outlook: Q2 2019

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SEPTEMBER 2019-A

RESEARCH AND ANALYSIS

In India, auction activity is starting to recover after a slowdown caused by land and transmission constraints. In the U.S., announcements of new state utility integrated resource plans, in Florida for example, are good news for the solar PV market. The European market will grow strongly as policy-driven markets look to deliver on 2020 and 2030 renewable energy targets. In Latin America, Brazil looks to be the most exciting market of the moment, with both auctioned power-purchase agreements with distributors and free market contracts with large consumers on offer.

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In the Middle East, all eyes are on the upcoming 1.5-gigawatt auction in Saudi Arabia, which is set to be extremely competitive.

China’s first solar PV auction

China recently announced the results of its first solar PV auction which resulted in a staggering 22.8 gigawatts of projects being awarded contracts. Awarded projects are intended to be connected by the end of 2019, facing tariff cuts for any delays. This is by far the world’s largest completed auction, with the next largest being the award of 3.9

gigawatts of solar PV in Spain during July 2017. In June’s A-4 auction, Enerlife/Lightsource BP was awarded a contract for the 2,020 MW Milagres project for just $16.95/ MWh — $2/MWh lower than the $18.93/ MWh awarded in 2017 to Neoen’s Pachamama PV project in Mexico. Auctions will remain the driver of growth in many global PV markets. We expect to see 90 gigawatts of solar PV projects awarded contracts through auctions in 2019, up from 81 gigawatts in 2018. Source: greentechmedia

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Electric Vehicles

Magenta Power ropes in HPCL as strategic investor, eyes 500 EV charging points in FY20 The company is targeting to set up at least 500 EV charging points across India by the end of this fiscal and has entered into partnerships with various malls, restaurants and institutional entities to set up of the infrastructure.

We are happy to announce that HPCL is now a strategic investor in our company as well. They have evinced confidence in the work we are doing. They have actually supported us Maxson Lewis, Managing Director, Magenta Power

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olar power systems provider Magenta Power has roped in state-owned Hindustan Petroleum Corporation Ltd (HPCL) as a strategic investor as it bids to accelerate deployment of electric vehicle (EV) chargers across India, according to a top company official. The company is targeting to set up at least 500 EV charging points across India by the end of this fiscal and has entered into partnerships with various malls, restaurants and institutional entities to set up of the infrastructure. While he declined to share financial details of the investment, Lewis said the partnership will enable Magenta Power to closely work with HPCL to set up EV charging solutions not just at the fuel filling stations of the stateowned oil marketing major but also beyond. When asked if Magenta Power is still looking for more funds to meet its expansion requirements, Lewis replied in the affirmative saying the company’s business is asset heavy and capital intensive. “We are looking for more investors at this point of time. There are a couple of discussions going on,” he said without elaborating. Commenting on the company’s future expansion plans, Lewis said, “we are invested in setting up the infrastructure… As far as numbers are concerned, we intend to set up at least 500 charging points across India by the end of this fiscal.”

At this point of time, he added,”it looks like we are ahead of schedule and looks like we will end up doing more than 500 charging points.” He said 2019, is going to be a year when a lot of the EV ecosystem will fall into place, be it infrastructure, battery optimisation or technology. “And we believe that in 2020 the take off is going to happen,” Lewis said, adding “we have taken a collaborative view, with various malls, restaurants institutional entities to support us in setting up of the infrastructure”. Magenta Power has developed three different types of EV chargers for individual (home), institutional and public charging which have been developed keeping the Indian conditions in mind and can support from two and three-wheelers to four wheelers of both old and new generations of EVs, he added. The company on July 25 introduced its ‘Charge Grid Pro’ series which is targeted at community charging — be it offices, malls and residential societies, priced between Rs 32,499 to Rs 39,499. It comes online connected with a mobile app and command centre allowing EV owners to locate charging stations on map, book charging slots and get charging updates, the company said. Source: PTI

SEPTEMBER 2019-A

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