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Power
THERMAL
India’s coal and electricity supplies are more comfortable this autumn: Kemp
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India’s electricity supply appears much more comfortable than a year ago, when coal and generation shortages led to grid instability and widespread blackouts. Power consumption has grown significantly, but coal stocks are more than double than last year’s level and grid frequency is staying closer to the target. Between June and August, total electricity demand met was up by 22 billion kilowatt-hours (6%) compared with the same period in 2021. The increase was supplied by extra solar generation (+6 billion kWh) and thermal power plants (+16 billion kWh) mostly burning coal. India’s installed capacity from solar farms and wind turbines had grown 16% by the end of August 2022 compared with August 2021, helping increase the share of output from renewables. Government policy has encouraged the maximisation of domestic coal and prioritised solid fuel movements on the rail network to ensure generators have enough fuel on hand to run when called. Domestic coal production increased by 27 million tonnes (17%) between June and August compared with the same period a year earlier. The number of loaded coal trains despatched from the mines to power plants averaged 253 per day. Coal deliveries to power producers totalled 177 million tonnes between June and August up from 150 million tonnes in 2021.
Coal phase out in India could make electricity cost 40% less by 2050
A new research article published in a peer-reviewed journal shows that India could cut its electricity costs by about 40 per cent with a rapid transition of its power sector from coal to renewables by 2050. The study, published in the prestigious journal Nature Communications and authored by researchers at Lappeenranta-Lahti University of Technology (LUT), modelled the Indian power sector transition in a state-wide resolution on an hourly timescale up to 2050 for the first-time. According to the study, some key Indian states could have 100 per cent sustainable energy by as early as 2035. Some of the coal dependent states such as Uttar Pradesh, Odisha, West Bengal, Maharashtra, Gujarat and Jharkhand can phase out coal as early as 2040. The study estimates a deflationary cost for renewable energy. Solar and wind power costs decline significantly compared to coal and are expected to fall further by another 50-60 per cent by 2050. Whereas per megawatt cost of electricity from coal is expected to increase 70 per cent and the cost for nuclear power is expected to increase by more than 13 per cent.
Power Minister Says Country Will Add More Coal-Fired Plants
The leader of India’s power sector has said the country is preparing to add as much as 56 GW of coal-fired generation capacity by 2030 in order for the country to meet growing demand for electricity. He also said India must invest in energy storage, in concert with supporting more wind and solar power development, to reach the country’s goal of 500 GW of renewable energy generation capacity by 2030. The increase in coal-fired capacity would represent about a 25% jump above the country’s current 204 GW of coal-fueled generation. India will continue to support investment in renewable energy, but he said officials will prioritize “reliable” power to further economic growth, the Government has said. Indian officials already have said they will delay the closure of some of the country’s older coalfired power plants, while calling for an increase in output from domestic coal mines. Officials in early September extended a deadline for coalfired power plants to install equipment to cut emissions of sulfur by two years, the third time that date has been pushed back.
Power Grid Rating: Buy a powerpacked deal on the cards
Media reports indicate that power ministry is in talks with Power Grid (PGCIL) to purchase PFC’s 52.63% stake (`144 bn) in REC. Rationale is for PFC to finance power projects through REC stake sale proceeds. PGCIL has sufficient cash and we remain positive on the 1-yr and mediumterm transmission spend growth story. But, this is a near-term dampener and could negatively impact FY23e-25e EPS by 3-5%. Dividend yield could also be lower at 4% vs 6% in FY23e. Good governance history under the scanner: PGCIL has a commendable execution track record and a dominant leadership position in transmission even with private competition being introduced 2013 onwards. NTPC in the past made investments outside the core like fertilisers on ministry directives, but PGCIL has been relatively insulated. If stake purchase news materialises, multiple is likely to get impacted. PGCIL could potentially trade at the lower end of 2-2.2x PB, where it has traded when visibility on T&D capex and rising earnings growth picked up.
PXIL introduces daily, weekly, monthly contracts for electricity trade
Power Exchange of India Ltd (PXIL) launched daily, weekly and monthly contracts for meeting power trading requirements for up to 90 days ahead. The introduction of daily, weekly and
monthly contracts is in line with the approval granted by the Central Electricity Regulatory Commission (CERC) on June 7, 2022. The price discovery for these contracts will be through a uniform price matching mechanism through an open auction system. The delivery under daily contract would commence from 'T+2' up to 'T+90' days ahead, with 'T' being the day of transaction. The delivery under weekly contract would commence from week-1 to week-12, considering the week in which transaction occurs as week-0. Delivery under monthly contract would commence from month-1 to month-3. These new contracts introduced in PXIL's proprietary transaction system 'PRATYAY' are double sided open auctions enabling market participants to manage their portfolios efficiently and transparently for a long duration, it added.
RENEWABLES
India’s power play in semiconductor business – a ticket to becoming global?
India continues to aspire to become a semiconductor hub and attract electronics ecosystem players across the value chain including manufacturers of highly sophisticated and sensitive equipment, material (high purity gases, chemicals, wafers, photo-masks), and equipment service providers. To accelerate its plans, India unveiled a $10 billion incentive programme for semiconductor and display manufacturers in December last year. The government also approved modifications in the programme for the development of semiconductors and display manufacturing ecosystems in India. The global semiconductor industry already has a connection with India, which designs most of the advanced chips. Once the designs are completed, they are shipped to countries including the US, China, South Korea, and Taiwan. The Indian semiconductor market was valued at $27.2 billion in 2021 and is expected to grow to $64 billion in 2026, according to Vedanta. The country’s semiconductor imports increased 65 percent in 2021-22 from 2019-20, as per data from the commerce and industry ministry.
India working to transform its energy landscape with significant clean energy share: Minister Jitendra Singh
India is working to transform its energy landscape with a significant clean energy share, Science and Technology Minister Jitendra Singh has told the international community while asserting the country will achieve net zero emissions by 2070. By 2030, India has agreed to reach 500GW nonfossil energy capacity , shift 50 per cent of energy its requirements to renewable sources, lower overall anticipated carbon emissions by one billion tonnes and reduce carbon intensity of the economy by 45 per cent over the 2005 levels. Highlighting the need to strengthen long-term private sector engagement, he said the transition to bioeconomy is based on projects under development and deployment with high investment and high-risk ambitions.
India Races to Meet Dec Target for Renewable Energy But 4 Big States Behind Half of Total Shortfall: Report
As India races against time to meet its December 2022 target of achieving 175 GW of installed renewable energy capacity, four big states continue to account for over half of the total shortfall, says a new report. According to the latest assessment done by
global energy think tank Ember, India is still 58 GW away from meeting its 2022 goal. At least 61 per cent of the current shortfall is in Maharashtra (11.1 GW), Uttar Pradesh (9.7 GW), Andhra Pradesh (9.2 GW), and Madhya Pradesh (6.5 GW) — states that built less than 3 per cent of India’s renewables installed till August. The analysis based Ministry of New and Renewable Energy (MNRE) data, shows that by August, India had installed 11.1 GW of renewable capacity compared to 9.5 GW in the same period in 2021. While there was a strong yearon-year growth of 17 per cent in the first eight months of the year, it may still fall short of realising the year-end goal. The 2030 target, however, seems well within reach, says the report, but for that India would need to install renewables 2.5 times faster to maintain the required monthly build-rates. Solar continues to power the clean energy transition and constitutes 89 per cent of all renewables growth. While the new solar installations rose from January to August by 22 per cent year-on-year, new wind installations increased by only 7 per cent, with only 1.1 GW installed between January to August 2022, shows data.
The Centre is ramping up measures to increase volumes of green hydrogen generation, Union minister BhagwantKhuba said, reiterating government’s commitment for making India carbon-emission free in future. “The government is also ramping up measures to increase volumes of green hydrogen generation and the support of industrialists is a boon to flourish in the segment,” the minister said. He highlighted that India is “growing vigorously” in the sector of renewable energy and alternative sources such as solar, wind, and electrical energy. Yogesh Mudras, managing director of Informa Markets in India, said India has emerged as the fourth largest country in the world in terms of installed renewable energy capacity and registered the highest growth rate in RE capacity addition. Besides, the 2070 target of net zero carbon emission as committed by Prime Minister NarendraModi could boost India’s economy by 4.7 per cent above projected baseline and create 20 million additional jobs by 2032.
India mulls $2.5 billion aid to manufacture grid-scale batteries
India’s power ministry is proposing a nearly $2.5 billion incentive plan to encourage domestic manufacturing of grid-scale batteries, aiming at bringing down the cost of energy storage to speed up its energy transition. Worried over rival China’s dominance in lithium, the nation is in talks with countries including Australia to secure supplies of the battery metal. India also plans to promote other battery technologies. Lower storage costs will be key to providing around-the-clock renewable power supplies from intermittent renewable sources like wind and solar. Until that happens, India is prioritizing energy security, with plans to expand its coal power fleet by a quarter through 2030 unless cheaper storage becomes available. The battery plan would follow the blueprint of Prime Minister NarendraModi’s Make In India initiative. The government has offered financial incentives to spur domestic manufacturing of everything from solar panels to car batteries and electronics goods, in order to reduce dependence on imports and create local jobs.
Amazon to set up 3 solar farms in India
Amazon announced it will set up three solar farms in Rajasthan with a combined capacity of 420 megawatt (MW). This will be the first time that the e-commerce major is setting up a solar farm in the country. These would include a 210 MW project to be developed by ReNew Power, a 100 MW project to be developed by Amp Energy India, and a 110 MW project to be developed by Brookfield Renewable Partners, for which
power purchase agreements (PPAs) have been signed, it said in a statement. Further, Amazon will also set up 23 new solar rooftop projects – with a capacity to generate an additional 4.09 MW of power — across 14 cities in India. This would increase the company’s total number of solar rooftop projects in the country to 41 with 19.7 MW of renewable energy capacity. Besides these PPAs, our efforts include providing training for developers and other buyers on how to structure these agreements for mutual benefit. Combined, these farms have the capacity to generate 1.07 million megawatt hours (1,076,000 MWh) of renewable energy per year, enough to power more than 360,000 averagesized households in New Delhi annually.
Hydro policy may link free power with project progress
The Centre is considering a new hydro power policy that may link free power from a project to the host states to the progress of the projects, offer annuity to project-affected families on early completion and devise other measures to lower project costs and tariffs. The draft proposal circulated among states for discussion seeks to address problems that have discouraged private investment and stagnated the capacity addition, said a government official. Time and cost overruns can raise tariffs from new hydro projects up to Rs. 8 per unit but with these measures the government believes a Rs. 4.5 per unit price may be possible. Hydro power is envisaged to play a vital role in the country meeting Nationally Determined Contribution (NDC) climate commitments. The proposed policy seeks budgetary support for enabling infrastructure around new hydro projects, and waiver of inter-state transmission fees for 18 years. India currently has 48 GW hydro capacity, with a potential for total 145 GW generation. The government is targeting 70 GW capacity by 2030.
Gujarat: SardarSarovar dam's hydropower output nearly doubles this year
Good rainfall in the catchment area of the SardarSarovar dam in Gujarat's Narmada district has led to the generation of 2,142 million units (MUs) of hydropower so far this year, nearly double as compared to the corresponding period last year. The month of August has contributed the most to it, the official data has shown. As per the India Meteorological Department (IMD), both Gujarat and neighbouring Madhya Pradesh have received excess rainfall this monsoon season. Of the Narmada river's total basin area of 97,410 sq km, a total of 85,858 sq km area lies in Madhya Pradesh and 9,894 sq km in Gujarat. From the River Bed Power House (RBPH) turbines at the dam located in Kevadia, 2,142 MUs of electricity was produced till September 20 this year as compared to 1,129 MUs units till September end in 2021, the data shared by the SardarSarovar Narmada Nigam Limited (SSNNL) said.
Inox Wind commissions India’s first 3.3MW wind turbine in Jasdan
Gujarat CM Bhupendra Patel commissioned India’s first 3.3 MW wind turbine at Ranparda village of Jasdantaluka in Rajkot district. The wind turbine has been established by wind energy solutions provider, Inox Wind. The turbine developed has a 100 metre tubular tower and 146 metre rotor blades and incurs the lowest possible cost of energy. KailashTarachandani, CEO,Inox Wind, said, “The 3.3 MW turbine has been specifically designed for the Indian low wind regions. Due to its size, capacity and competitiveness, it will be a game changer in the Indian market. . Inox Wind’s initiative in the direction of fulfilling the promise of wind energy is a big eap in fulfilling this dream in Gujarat”.
