Power

Power demand up 23% in March

Even as the electricity demand has recorded an annual rise for the seventh straight month in March, power demand in FY21 is set to drop by 0.8% on a year-on-year (y-o-y) basis. According to data from the National Load Despatch Centre, as much as 115.2 billion units (BU) of electricity were supplied in the first 29 days of March, translating into 3.9 BU per day. Moody's expects OIL's leverage will weaken to around 16% for FY22 from 51% in FY20, which is significantly below the 20%-25% threshold required to maintain the 'baa3' BCA. Moody’s lowers Oil India’s credit assessment on Numaligarh refinery buyout With this, Wabag has successfully achieved the financial closure of its second HAM project within this financial year,” Rajneesh Chopra, global head, business development, VA Tech Wabag, said. WABAG secures financial closure of its second HAM project; partners with PTC India Financial Services. At this rate, 123.2 BU of electricity will be supplied in March 2021, which is 22.9% higher than the monthly consumption in the same month last year, when the countrywide lockdown was first implemented to contain the coronavirus outbreak. Electricity demand in the April-February period was lower by 2.8% on a y-o-y basis. Power consumption in the country fell 8.5% y-o-y to 625.6 BU in the first half of FY21 as industrial and commercial activities remained muted amid lockdowns. Demand started increasing from September. With the sharp rise in temperatures in northern India, the average daily power demand in the country increased 3.4% annually to 3.7 BU in February.

Power demand likely to touch 222MU per day soon: Energy minister

As part of its summer action plan, the government is now focusing on providing uninterrupted power supply. At a review meet with officials, energy minister Balineni Srinivasa Reddy pointed out that the state was currently meeting its energy demand of 220.6 MU/day as on March 27 and that this demand is likely to go up to 222 MU/day over the coming days. The minister said the government’s decision to supply nine hours of free power to the agriculture was one of the reasons behind the increase in energy demand. He directed officials to place special focus on effective implementation of free power to the sector. “AP is the only state successfully implementing artificial intelligence to forecast energy demand in summer. This will help avoid shortages and save money for power utilities,” he said. In view of the huge demand, power utilities will have to utilise multiple sources to meet expected higher daily grid demand. “All long-term resources of power generation available with discoms would be utilised in full and power would also be purchased from power exchanges to meet additional demand,” he explained.

All-India energy demand to be higher in January-March: India Ratings and Research

The all-India energy demand is expected to be higher in March quarter of 2020-21 compared to same period a year ago despite the partial lockdown in some states due to a surge in COVID-19 cases, India Ratings and Research (Ind-Ra) said. Ind-Ra has published the March 2021 edition of its credit news digest on the power sector. The report highlights the trends in the power sector, with a focus on capacity addition, generation, transmission, merchant power, deficit, regulatory changes and the recent rating actions by Ind-Ra. "The all-India energy demand is expected to be higher in 4QFY21 on a year-on-year basis, despite partial lockdowns in some of the states on account of an increase in COVID 19 cases," it said. In February 2021, the all-India energy demand increased 0.2 per cent year-on-year to 104.6 billion units. The energy demand in April-February 2020-21 was lower by 2.8 per cent, the report said. The short-term power price at Indian Energy Exchange continued its improving trend on a year-on-year basis with the prices breaching Rs 4/unit in March 2021 for the first time since October 2018. In February 2021, a 19.5 per cent increase (5,124 million units) in the traded volumes was witnessed in the day-ahead market.

India can hold electricity-sector emissions by rising clean power capacity

India can hold its greenhouse gas emissions from the electricity sector at 2018 levels by increasing its clean power capacity, according to a Berkeley Lab-led team of researchers. A new study recently published in the Proceedings of the National Academy of Sciences from researchers at Berkeley Lab, University of California, Santa Barbara, and University of California, Berkeley, shows India can aim even higher with its renewable energy goals. "By increasing its clean power capacity from the current target of 450 gigawatts within the next decade to 600 gigawatts, the nation can hold its greenhouse gas emissions from the electricity sector at 2018 levels while nearly doubling the supply of electricity to meet economic development needs," according to a statement.

The costs, the researchers demonstrated, would be comparable to those of a fossil fueldominated grid, the report said, noting that India had set ambitious targets for renewable power, with plans to quintuple its current wind and solar energy capacity by 2030. India's transition away from fossil fuels will have a significant impact on global climate efforts since it is the world's third-largest greenhouse gas emitter, although its per capita emissions are below the global average, it said.

Power generators can exit loss making contracts with states

The government has given freedom to the central sector power producers such as NTPC, NHPC and SJVN to sell power relinquished by state discoms to new buyers under long or short term contracts or place the surplus power on exchanges for discovery of price in the day ahead, term ahead and real time markets. The move is expected to provide new avenues to central generating stations (CGS) who could now find buyers with better paying capacity for power relinquished by state discoms that have often been found to delay payment to power generators. Total dues owed by electricity distribution companies to power producers have risen sharply to reach closer to Rs 1.40 lakh crore now, reflecting deep stress in the sector. In a set of guidelines on distribution of power after the termination of power purchase agreements (PPAs), the Power Ministry has said relinquished power (the capacity that comes out of the PPAs existing with state discoms) could be sold by CGS under various avenues including tie up with another buyer willing to go in for long term, medium term (up to 5 years) or short term PPAs through competitive bidding route. This power could also be sold through power exchanges and also reallocated to willing buyers.

Discom overdue increases 5.5-times in 5 states; disputes rising too

Power distribution companies (discoms) in 26 of India’s 36 states and union territories (UT) have witnessed an increase in overdue since last year; with 30 territories having dues pending for more than two months. The power ministry, in a written reply to Rajya Sabha, said that over a third of the Rs 1,35,497 crore of the loans sanctioned by Rural Electrification Corporation (REC) and Power Finance Corporation (PFC) has been released. The government had announced a liquidity infusion scheme last year under its Atmanirbhar Bharat Abhiyan initiative to help discoms clear their dues. However, data shows that the discom overdue has increased by 24 per cent since 2020. Discoms owe Rs 1,23,341 crore to central public sector enterprises (CPSE), state generators, independent power purchasers and renewable energy generators till January 2021, compared to Rs 99,489 crore last year. Dues jumped by 24 per cent despite the pandemic, whereas the increase for the corresponding period last year was 61 per cent. Monthly data indicates that in the last one year it was only in three months that the payment by discoms (including the amount paid against outstanding) exceeded the amount billed to discom in that month. Not just dues, even the disputed amount has been rising. Bills worth Rs 12,856 crore were in dispute till January 2020, the amount has risen to Rs 15,098 crore.

Discoms have been sanctioned Rs 1.35 trillion in loans, get Rs 46,000 cr

Power distribution utilities or discoms in the country have been sanctioned loans of Rs 1.35 lakh crore and disbursed Rs 46,321 crore so far under the liquidity infusion scheme, Parliament was informed. "So far, loans of Rs 1,35,497crore have been

sanctioned and Rs 46,321 crore have been released to states/DISCOMs by REC and PFC (Power Finance Corporation)," Power Minister R K Singh said in a written reply to the RajyaSabha. The central government had announced a liquidity infusion scheme as part of AatmaNirbhar Bharat Abhiyan on May 13, 2020, in the backdrop of the outbreak of global pandemic COVID-19 in the country. Due to the consequent nationwide lockdown, the revenues of the power distribution companies (DISCOMs) nosedived, as people were unable to pay for electricity consumed, the minister told the House. Under the scheme, PFC and REC have extended special long-term transition loans at concessional rates to DISCOMs against the receivables of the discoms from the state government in the form of electricity dues and subsidy not disbursed, to enable them to clear their outstanding dues as existed on June 30, 2020 towards Central Public Sector Undertaking (CPSU) Generation (Genco) & Transmission Companies (Transcos), Independent Power Producers (IPPs) and Renewable Energy (RE) generators.

Basic customs duty to cost Rs 9 billion annually for discoms: India Ratings

The imposition of basic customs duty (BCD) on solar cells and modules with effect from 1 April 2022 would lead to an increase in solar tariffs, reducing the overall attractiveness of solar projects to off-takers and finally end-consumers, according to India Ratings and Research (Ind-Ra). “The increase in tariffs will increase power purchase costs for solar off-takers by Rs 9 billion annually, considering that about 10 GW of solar capacity will come on stream in the next 12 months,” said Asmita Pant, senior analyst, IndRa. She added that this amount would increase exponentially with the commissioning of new projects, till the time the duty is in place or import costs and cost of local manufacturing achieve parity and is likely to also affect the government’s target of 280 GW solar capacity by 2030. The BCD would also be applicable for already bid out projects. According to the research firm, the timeframe for which BCD would be applicable is uncertain, creating additional risk for domestic manufacturers in incurring significant capex.

Import duty won’t make solar tariffs go through the roof, say experts

Tariffs for future solar auctions might not rise as exponentially as initially feared due to the proposed steep hike in import duties on solar modules and cells from April next year, industry executives told ET. The government had earlier this month announced basic customs duty (BCD) of 40% on solar modules and 25% on cells from April 1, 2022, in a bid to encourage domestic manufacturing of solar equipment. Various industry players and research firms estimate that the BCD may lead to an increase in tariffs of solar projects by between 30 paise and 45 paise per unit. Terming the BCD a “nonevent”, an executive of a renewable energy developer said an internal analysis of his company predicted a hike of around 30 to 35 paise due to BCD. Research firm JMK Research and ratings agency ICRA have pegged the rise at around 40 to 45 paise while India Ratings and Research (Ind-Ra) has estimated the annual cost of the duty at Rs 900 crore for the solar industry. At present, India levies a safeguard duty of 14.5% on solar components imported from abroad while there is no customs duty. India is chasing an aggressive target of building 175 gigawatts of renewable energy capacity — including 100 gw of solar energy — in the country by 2022.

The country’s solar industry is dependent on imports to meet its equipment requirements with China alone accounting for nearly 80% of solar modules and cells used in the country.

Solar tariffs expected to rise in near term: ICRA Ratings

Policy support and tariff competitiveness factors were expected to drive investments in the renewable energy sector, while the risk of delays in signing of power purchase agreements (PPAs) and power sale agreements (PSAs) would be a key downside risk, said ICRA Ratings. “Given the expected increase in solar tariff rates amid the imposition of basic customs duty (BCD) on imported solar PV cells and modules, the key downside risk for the sector in the near term arises from the risk of delays in signing of the PPAs and PSAs,” said Girishkumar Kadam, co-group head, ICRA. He added that about 20 GW capacity tendered by the central intermediate procurers such as the Solar Energy Corporation of India (SECI) and the NTPC was yet to tie up PPAs and PSAs. According to the research agency, the COVID-19 pandemic induced lockdown restrictions had slowed down the RE capacity addition during the initial months of FY21. However, the capacity addition picked up from October 2020, driven by the easing of lockdown restrictions and supply chain challenges. It saidthat the sector added 5.9 GW in the first 11 months of FY21, which was expected to increase to 7.5 GW to 8.0 GW by March 2021.

170 GW of renewable energy capacity either operational or under development: R K Singh

As much as 170.14 gigawatts (GW) of renewable energy capacity, excluding large hydropower units, has either been installed or under various stages of development or bidding at Februaryend this year, Parliament was informed. The statement assumes significance in view of India’s ambitious target of having 175 GW installed renewable energy capacity by December 2022. “A total of 92.97 GW renewable energy capacity (excluding large hydro) has been cumulatively installed in the country as on February 28, 2021. Further, a capacity of 50.15 GW is under various stages of under-implementation, and a capacity of 27.02 GW is under various stages of bidding. “Therefore, a total of 170.14 GW capacity has either been installed or under various stages of implementations/bidding,” Power and New & Renewable Energy Minister R K Singh said in a written reply to a query in the LokSabha.

ReNew Power commissions 300MW wind farm in Gujarat

ReNew Power, India’s leading renewable energy firm said it has commissioned a 300-megawatt (MW) wind power generation facility at Kutch, Gujarat. The project would provide clean power to Haryana and Orissa at a rate of Rs 2.44 per unit. According to the company press release, the project would also provide direct employment to over 200 people. “The team worked hard to put together one of the largest wind farms in Gujarat with 120 turbines, 73 km of extra high voltage transmission lines and over 330 km of medium-voltage transmission lines despite major disruptions due to the COVID-19 pandemic,” said Sumant Sinha, founder, chairman and chief executive officer, ReNew Power. The project was awarded to ReNew’s subsidiary ReNew Wind Energy in an e-reverse auction conducted by the Solar Energy Corporation of India.