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RNI No.:MAHENG/2010/39548

Vol. No. 7

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Issue No. 6

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February - March 2017

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Mumbai

Cover Focus

Solar Power PV Sector India Key Challenges Solar PV - India Rooftop Solar PV - India Solar PV - EPC- India Industry Insight

Wind Power - Under Hard Hit of Hammer Sector Review

Thermal Power - Stringent Emission Norms

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EDITOR’S NOTE

Renewable Energy

Government and stakeholders need to deal with prevailing sector challenges for a smooth sector growth

Editor-In-Chief: Pankaj V Chauhan

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Editorial Team: P Khode, Rahul Vyas, Devendra Mittal

enewable Energy is the new focus area and government is pushing hard for its fast growth. India’s demand for renewable energy is expected to grow seven times by 2035, according to the latest edition of BP Energy Outlook. India, which is the biggest greenhouse gas emitter after the US and China, renewable energy currently accounts for 15 percent, of the total installed capacity of over 3,10 GW. The power from sun has become a competitive energy source vis-à-vis the coal-fuelled conventional source of electricity, after the record low-winning bids of Rs. 2.97 per kilowatt-hour (kWh) to build 750 mega watt (MW) plant at Rewa in Madhya Pradesh (MP). The sector is recording a superb growth as the installed capacity of solar power in the country has crossed 10GW mark – good news! However, to reach 100 GW by 2022 the sector needs to overcome certain issues like land acquisition challenges, evacuation challenges as well as having in place a proper financing mechanism.

Research Team: Santosh Kaushik, Deepti Mishra Vipul Singh, Priya Nair, Sonal Shah Marketing & Sales: Pankaj Chauhan – CEO pankaj@vision-media.co.in Navin SIngh – Head Marketing marketing@vision-media.co.in K. Pushpageetha – Regional Manager geetha@vision-media.co.in

The other shining knight of the Indian Renewable energy sector, “Wind Power” has also seen some key development during 2016-17. The centre organised the first ever offshore wind auctions, held by SECI in February 2017. Though the centre’s initiative of auction was in good intentions to bring down cost as well as help open up new market for the wind power companies, the total resultant of the action has opened up new challenges for the sector as the tariff quoted under February bidding of Rs. 3.46 a kWhr is much lower than feed-in tariffs of Rs. 4 to 5 prevailing across India’s most windy states. Now, following the Centre’s example, all states are eager to match the lower costs achieved in the auctions and reluctant to stick with deals done under the old system. Now, if the states are reluctant to stick with the deals under the old system, the developers locked into higher feed-in tariffs may run into difficulty because their equipment and finance costs are predicated on the tariff.

Naveen Bharadwaj – North Region delhi@vision-media.co.in Subscription & Circulation Team: Geetha, Sunil, Ajay, Vidya Creative Head: Prashant S. Kharat Graphic Designer: G. Sanjay Production Head: Shantanu Singh

Now the Modi government will have to come up with a stable policy measures - that too soon, to support these two leading renewable sector that are going to a play a leading role in achieving India’s ambitious targets of 175GW of renewable energy by 2022.

All right reserved while all efforts are made to ensure that the information published is correct, Power Insight holds no responsibility for any unlikely errors that might have occurred. The information on products & projects is being provided for the reference of the readers. However, readers are cautioned to make inquires & consult experts before taking any decision on purchase of equipment or investment. Power Insight holds no responsibility for any decision taken by readers on the basis of information provided herein. All disputes are subjected to Mumbai Jurisdiction only.

We in this issue have focused on solar power sector to look into the growth, trends and challenges while also tried to look into the after affects of the wind auctions that were held recently-with more to come during the current fiscal. No doubt the clean energy is need of the hour, however, I feel, the country alongside also needs to focus on the industry stakeholders so as to bring in a conclusive growth of renewable energy across the country... Happy Reading....

Printed, Published, Edited and Owned by PANKAJ V CHAUHAN, Printed at MAGNA GRAPHICS (INDIA) LTD.,101, C & D GOVT. IND. ESTATE, KANDIVLI (WEST), MUMBAI 400 067 and Published from G-3A, JUNGLEE PEER DURGAH, K.A.GAFFARKHAN ROAD, WORLI, MUMBAI 400 018.

Pankaj V Chauhan Editor - in - Chief Email : pankaj@vision-media.co.in

Editor: PANKAJ V CHAUHAN RNI. NO. : MAHENG/2010/39548

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What’s Inside

Contents 18 Solar PV Sector India

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Rooftop Solar in India

Sector Focus

Overview & Outlook

Column By :

Urvish Dave

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Though utility scale solar power plant contribution in total solar mix is more and is bound to remain more in future also because it makes a sensible business sense & revenue model, still the real strength of solar lies in the distributed solar energy generations or the rooftop solar power plants....

Solar PV Sector – Key Challenges Though Solar PV sector may seem attractive and financially viable, there is a flurry of problems faced by different players in this field – especially the developers of the solar power projects. These problems - if not addressed - could deter the growth over the coming years.....

30 Solar EPC – Industry & Challenges Optimal design and implementation of power plants can significantly increase productivity which requires significant skills and expertise which is brought together by an EPC company..

Industry Insight

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Industry Interview

Rays Power Infra

Indian Wind Power Under Hard Hit of Hammer!

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Chief Executive Officer

Rays Power Infra

Regular

Though, the first ever wind power auction of February took place under an arrangement to help expands the market for wind power companies with good intentions. However, it resulted in some up-and-coming issues that have hit the sector hard - particularly, at a time when India is racing fast to double its wind capacity to 60 GW by 2022.....

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Ketan Mehta

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01 Editor’s Note : Renewable Energy ! 04 Power Generation - Conventional 06 Power Generation - Renewables 10 Transmission & Distribution 14 Miscellaneous 44 Events Diary


What’s Inside

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Sector Review

Stingent Emmision Norms The Environment Ministry to impose stringent emission norms for Thermal Power Plants. According to estimates, the retrofitting cost of an old power project to meet the new standards will be around Rs. 1 crore per MW...

Communication Features

40 Tata Power touches over 5 lakh lives through various CSR initiatives

40 Adani Group becomes member of GEIDCO 41 NTL Lemnis Introduces Pharox ‘Helio Plus’ Street 42 Adani Power’s Mundra TPP creates a new national record by running continuously for 600 days

42 KPTL received new orders of RS 1,200 croreLight 43 CG announces sale of B2B Automation business to Alfanar

43 H.B. Fuller completes first phase of USD 20 million investments and expands capabilities in India

Next Issue Editorial Attraction

v Review : Indian Power Sector 2016-17 v Thermal Power Sector Overview & Outlook v Solar PV - Mounting Solutions v Rural Electrification v Electrical Insulator Industry www.vision-media.co.in

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SECTOR UPDATES

Generation - Conventional 20 hydro projects of 6,329 MW stalled Approval for SJVN’s 900 MW Arun-III Hydro Electric Project in Nepal or stressed, says Piyush Goyal As many as 20 under construction hydro power projects totalling 6,329 MW are either stalled or stressed in the country and Rs 30,147.08 crore has already been spent on them, stated Power Minister Piyush Goyal in a written reply to the parliament.

tainable, various options are under consideration.”

In a separate reply to the House, the Minister said, “In order to promote clean and renewable hydro electric power and make it sus-

power generation in the country during 2016-17 up to February 25, 2017) is 113.53 Billion Units.

In respect of hydro project above 25 MW capacity, the total hydro power generation capacity in the country stands at 44,413.42 MW as on February 25, 2017. While the total hydro

25-yr old power plants to be turned into super critical plants: Piyush Goyal Power Minister Piyush Goyal told Lok Sabha during Question Hour that all power plants, which are over 25 years old, will be phased out and converted into ‘super critical plants’ to augment generation capacity and reduce pollution. He said that the old power plants of NTPC, which together produced around 11,000 MW power, will be phased out gradually

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and converted into ‘super critical plant’ as super critical plants are six to eight time less pollutant and will be able to generate more power. He added that during 12th Plan till September 2016, a total of 3,000 MW of inefficient thermal generating capacity has been retired, which will result in better utilisation of more efficient plants.

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The Cabinet Committee on Economic Affairs has approved the investment proposal for 900 MW ArunIII Hydro Electric Project in Nepal, Satluj Jal Vidyut Nigam (SJVN) CMD, R N Mishra said. This run-of-the-river project is located in Sankhuwasabha District of Nepal on the river Arun and will be executed through SJVN Arun-III Power Development Company (SAPDC) which is a wholly owned subsidiary of SJVN and has already been registered in Nepal as per Nepalese Companies Act in 2013.

The estimated cost of project is Rs 5723.72 crore at May 2015 price levels, Misra said, adding completion period of the project shall be 60 months from the date of financial closure which is planned for September 2017. SJVN bagged the project through International Competitive Bidding and Memorandum of Understanding (MOU) was signed with the Govt. of Nepal for the project on BOOT basis. The project will generate employment for around 3000 persons in the construction phase.

India lost 15 BU of electricity generation last quarter owing to gas India lost 15 billion units of power generation in the quarter ended December due to short supply of natural gas to run power plants, according to power ministry data. The loss amounted to more than 5 per cent of the planned quarterly power production of 295 billion units from conventional sources.

cent in November and 26.6 per cent in December.

According to fresh data released by Central Electricity Authority (CEA), the power ministry’s technical and planning wing, power plants received only 28.6 per cent of the total allocated gas in October. The supply dropped to 27.1 per

The projects which suffered the highest level of loss belonged to the private sector. The cumulative generation loss from private companies and Independent Power Producers during the quarter stood at 13 billion units.

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The government had allotted gas supply of 9,527 million standard cubic meter per day (mmscmd) to gas-based projects for the three months period ended December but supply stood at a mere 2,609 mmscmd or 28 per cent.


SECTOR UPDATES India fast-tracks hydro projects in Kashmir

Bhel’s first 800 Megawatt supercritical thermal power plant operational

India has fast-tracked hydropower projects worth $15 billion in Kashmir in recent months, three federal and state officials said, ignoring warnings from Islamabad that power stations on rivers flowing into Pakistan will disrupt water supplies.

Power equipment maker Bhel today commenced commercial operations of its first 800 MW unit, supercritical thermal plant. It also marks Bhel’s foray as a developer into the field of power generation. Karnataka Power Corporation Ltd (KPCL) and Bhel are the main equity partners of RPCL, the owner and operator of this power plant. “The milestone was achieved for

The swift approval of projects that had languished for years came after Prime Minister Narendra Modi suggested last year that sharing the waterways could be conditional on Pakistan clamping down on anti-India militants that New Delhi says it shelters. Pakistan has opposed some of these projects before, saying they violate a World Bank-mediated treaty on the sharing of the Indus river and its tributaries upon which 80 percent of its irrigated agriculture depends. India says the projects are “run-of-the-river” schemes that use the river’s flow and elevation to generate electricity rather than large reservoirs, and do not contravene the treaty.

the first unit of the 2x800 MW Yeramarus thermal power station of Raichur Power Corporation Limited (RPCL), in Raichur district of Karnataka,” Bhel said in a statement. Bhel is also presently executing KPCL’s first gas-based combined cycle power project of 370 MW capacity involving a fuel-efficient advanced-class gas turbine at Yelahanka, Bengaluru.

Power Finance Corp provides Rs 2,703 crore to West Bengal’s first super “PFC, a Non-Banking Financial Company (NBFC) in power sector, has sanctioned a term loan of Rs 2,703.88 crore to West Bengal Power Development Corporation Ltd (WBPDCL) for construction of Unit 5 (1 X 660 MW) under phase III of Sagardighi Thermal Power Station in Murshidabad,” the company said in statement. According to the statement, WBPDCL is a company owned by the West Bengal government for

generation and supply of electric power in the state. The 660 MW Sagardighi Unit 5 is the first super critical thermal power plant being developed by WBPDCL in the state, which is expected to be commissioned by October 2020 at an estimated cost of Rs 3,862.69 crore. It will generate approximately 4,209 million units of energy to meet the future power requirement of West Bengal.

Far from fighting pollution, defiant power plants Thermal power generation to reduce by half in next five years snub green rules, CAG finds While, the government is taking numerous measures to cut down on environmental pollution levels, an audit report by the Comptroller and the Auditor General of India (CAG) has indicated that existing power plants in the country are not adhering to the norms meant to safeguard ecological interests. The CAG report covered 216 projects that were granted environmental clearances (ECs) between January 2011 and July 2015. It also checked the post-EC monitoring of 352 projects which had been granted EC between

2008 and 2012. Of the 24 thermal power plants verified by CAG, eight had various non-compliances related to fly ash storage. The report also indicated that power plants did not take required measures to control emissions. The report also observed some irregularities in coal procurement procedures in some of the thermal power plants it examined. India aims to cut its emissions intensity by 33-35% by 2030 from 2005 levels, according to the 2015 Paris agreements.

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CEA has estimated that coal-fired power plants are likely to generate 9,58,444 million units of power in 2017-18. In contrast it had estimated a total generation of 9,21,129 million units of power in 2016-17. About 89 per cent of the estimated power generation from coal-fired power plants has already been achieved between April 1, 2016 and January 2017. The estimate pegs growth of conventional power generation, which includes thermal, nuclear, hydel and import from Bhutan, at 4.35 per cent during 2017-18. Around 12,29,400 MU of power is likely to be generated from the conventional sources in 2017-18 against 11,78,000 MU in 2016-17. |

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SECTOR UPDATES Generation - Renewables NLC India has proposed to set 500 GHMC plans solar plants on its roofMW solar power plants in Tamil Nadu tops in phased manner NLC India Limited has proposed to set up solar power plants at the cost of 2,170 crore with a total capacity of 500 Megawatt in various parts of Tamil Nadu. The company has floated tenders and received quotations from different firms for setting up of the plants

with capacity not less than 50MW each. Power generated from the proposed solar plants will be fed to Tamil Nadu power generation and distribution corporation (Tangedco). The company has already signed a power purchase agreement with Tangedco. It has proposed to generate 83 crore units of power per annum through the proposed solar plants. Power generation will commence within 13 months from the date of work order given to the selected firms.

The Greater Hyderabad Municipal Corporation (GHMC) has decided to install rooftop solar-powered plants to be connected to grids in a phased manner. To begin with, 44 of 942 buildings owned by the GHMC have been identified for these installations. The corporation expects to supplement nearly 47 per cent of its total energy consumption through solar power. The decision was taken by the GHMC commissioner B Janardhan Reddy as the corporation pays

Mytrah Energy signs pacts for 2000-MW renewable projects in Andhra Pradesh According to an official statement released by Mytrah Energy, it has signed pacts for 2,000 MW of renewable power projects worth Rs 13,000 crore in Andhra Pradesh. The MoUs were inked in the presence Chief

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The MoUs has been signed for 1,000 MW of wind power and 1,000 MW of solar power projects involving a total investment of Rs 13,000 crore and are expected to create employment for 4,000 skilled and unskilled workers. These projects will be spread across eight districts of Andhra Pradesh and upon commissioning of all the assigned projects, Mytrah will become the state’s largest renewable power IPP (independent power producer).

Minister N Chandrababu Naidu in January at the Partnership Summit held in Visakhapatnam.

Mytrah is planning to implement and execute the projects within three years from the date of getting all statutory clearances from the state government.

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huge power consumption charges for its various office buildings which can be minimised by installing grid-connected rooftop solar power generating plants on GHMC-owned buildings. GHMC had called for ‘Expression of Interest’ from consultancy services for survey and preparation of a feasibility report and a detailed project report in September 2016 and two bidders M/s. TUV South Asia and M/s. The Energy and Resources Institute were declared qualified.

Budget 2017 gives big boost to renewable energy The Budget has given a boost to renewable energy, announcing another 20,000 mw of solar park development in phase II and a slew of duty reductions on components for fuel cell-based power generating and biogas systems, as well as wind energy equipment. The Budget announced solar power supply at about 7,000 railway stations in the medium term though a beginning has already been made at 300 stations, said finance minister Arun Jaitley. Work will be taken up for 2,000 railway stations as part of the 1000 MW solar mission, he added.


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SECTOR UPDATES India looking at solar power storage technology from Belgium India is looking at an innovative Belgian solar storage technology that promises to offer consumers a source of quality power as a green and reliable alternative to flickering supply from battery storage or diesel generators in distant or off-grid locations.

The government’s collections from the clean environment cess imposed are likely to touch Rs 54,336 crore by March, according to a finance ministry document.

In this area, NISE (National Institute of Solar Energy), an autonomous entity under the new and renewable energy ministry, and Tiger Power of Belgium, have inked a MoU for validation of the technology that combines

solar panels, normal leadacid battery and hydrogen fuel cells to produce steady power. Simply put, the package is essentially a solar-battery storage module with a hydrogen fuel cell in tandem. The solar panels

Solar tariff reaches a historic low of Rs 2.97 a unit at Rewa bidding In what could be termed as a historic event for the Indian solar sector, the first year tariff for the 750 Megawatt Rewa solar park, achieved through reverse bidding, has gone to record low level of Rs 2.97 per unit. The lowest first year tariff for unit I of the solar power plant has been quoted by Mahindra Renewables at Rs 2.979 while for the second unit, Acme Solar

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Clean Energy Cess collections rises, but spending low

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has become the successful bidder with a tariff quote of Rs 2.970. For the third unit of the solar ultra mega power plant, Solenergi has won the bidding round with a first year tariff quote of Rs 2.974 a unit. There would be a 5 paise escalation of for 15 years and 33 paisa would be added for the levelised tariff. Rewa ultra mega solar power project - a 50:50 joint venture of Madhya Pradesh Urja Vikas Ltd and Solar Energy Corp of India - will sell the electricity produced to Madhya Pradesh utilities and Delhi Metro Rail on an open access basis.

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charge the battery during daytime for power in the night. But in case the battery becomes weak or fails in the absence of sun, an inbuilt electronic brain switches on the fuel cell to maintain power supply.

However, only Rs 9,021 crore, or about 17% of the expected total, has been spent through the National Clean Energy Fund (NCEF) to which Rs 25,810 crore has been transferred from the amount collected. The spending falls short of the estimated Rs 34,811 crore needed to subsidise some 55 renewable energy projects, as recommended by an inter-ministerial group.

Telangana mulls setting up solar power generation systems atop water bodies Telangana government is planning to set up solar power generation system on water bodies, special chief secretary of the state energy department, Ajay Mishra said. “A proposal has come to the department regarding producing solar energy atop water bodies. One French company is in negotiations with irrigation department... we had a coordination meeting,” Mishra said addressing the ASSOCHAM Conference on Solar Invest 2017. He said the company is

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setting up a pilot project for Solar Power Plants on water bodies. “They should be setting up a pilot project on whichever water body mutually acceptable to this company and to the irrigation department,” he said. “This will be a pilot project for demonstration and then based on experience we will see how to it can be implemented on other water bodies,” Mishra added.


SECTOR UPDATES Sebi to finalise norms for Green Bonds post comments from MNRE Capital markets regulator Sebi will soon finalise its guidelines for listing of Green Bonds, which would facilitate raising of funds for investment in renewable energy space, after incorporating comments from the Ministry of New and Renewable Energy (MNRE). Over a year ago, Sebi’s board had approved detailed draft norms for issuance and listing of Green Bonds in the stock market to help meet the huge financing requirements worth USD 2.5 trillion for climate change actions in India by 2030. However, the final guidelines are hanging in balance

since then for want of certain inputs from the government side, a senior official said. Green bonds can be key to help meet an ambitious target India has of building 175 gigawatt of renewable energy capacity by 2022, which will require a massive estimated funding of USD 200 billion. “Sebi had sent a draft of the proposed guidelines to Ministry of Finance for their comments. After discussion with concerned departments, the Finance

Cabinet approves doubling of solar park capacity to 40,000 MW In a major thrust to solar power, the Cabinet Committee on Economic Affairs has approved doubling the capacity of solar parks in the country of 40,000 MW. The enhanced capacity would ensure setting up of at least 50 solar parks each with a capacity of 500 MW and above in various parts of the country. Smaller parks in Himalayan and other hilly states where contiguous land may be difficult to acquire in view of the difficult terrain, will also be considered under the scheme. The capacity of the solar park scheme has been enhanced after considering the demand for additional

NTPC commissions 115 MW capacity at Bhadla solar project State-run power producer NTPC has commissioned 115 MW capacity out of 260 MW of Bhadla Solar Power Project. With this, the installed capacity of NTPC’s solar power projects touches 475 MW.

Ministry had forwarded comments of the Ministry of Environment, Forest and Climate Change to the markets regulator. “However, Sebi was informed that the MNRE’s comments were still awaited and would be forwarded to the markets regulator immediately upon receipt of the same,” the official said.

NTPC has planned capacity addition of about 1,000 MW through renewable resources by 2017. In this endeavour, NTPC has already commissioned 310 MW solar PV projects. NTPC intends to become a 130 GW company upto 2032 with a with diversified fuel mix. The company wants share of renewable energy (including hydro) to be 28 per cent.

Wind Power likely to move entirely towards auction-based allocation: Bridge to India

solar parks from the States. All the states and union territories will be eligible for benefits under the enhanced solar park scheme. The states will first nominate the Solar Power Park Developer (SPPD) and also identify the land for the proposed solar park Ministry of New and Renewable Energy (MNRE) is already implementing a scheme for development of at least 25 solar parks with an aggregate capacity of 20,000 MW, which was launched in December 2014. As on date, 34 solar parks of aggregate capacity 20,000 MW have been approved which are at various stages of development.

Following the record-breaking success of the recent 1,000 Megwatt wind power auction, the sector is likely to shift entirely towards auction-based allocation route but this transition may lead to short-term hiatus on the market, renewable energy research firm Bridge to India said in a report.

record low wind power tariff of Rs 3.46 per unit, just marginally higher than the record low levelised tariff of Rs 3.29 per unit in the recent Rewa solar auction.

“Indian government wants to tender out 4 GW of wind capacity next year but capacity addition through the tendering process often takes a long time. This may lead to a short-term demand hiatus in the market,” it said. India’s first ever wind power auction has resulted in a

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SECTOR UPDATES

Transmission & Distribution Kerala, Tripura, Arunachal Pradesh take states’ list under UDAY to 26 Twenty six states are now part of the UDAY scheme, meant for the revival of debt stressed discoms, after Kerala, Arunachal Pradesh and Tripura formally joined the programme. “An overall net benefit of approximately Rs 4,178 crore, Rs 309 crore and Rs 810 crore would accrue to the states of Kerala, Arunachal Pradesh and Tripura respectively, by opting to participate in UDAY, by way of cheaper funds, reduction in AT&C and transmission losses, interventions in energy efficiency, etc during the period of turnaround,” a Power Ministry statement said. The Government of India, Kerala and Kerala State Electricity Board Ltd signed a Memorandum of Understanding (MOU) under the Scheme Ujwal DISCOM Assurance Yojana (UDAY) for operational improvement of the Power Utility on March, 2

2017. Arunachal Pradesh and Tripura also joined the scheme for operational improvement of the States’ Power Distribution Departments here today. With this, the total count of states under UDAY reaches 26, it said. Power Minister Piyush Goyal said,”UDAY is the most comprehensive power sector reform ever planned and executed in the country. It is a classic example of comprehensive, cooperative, collaborative, competitive, consensual and compassionate federalism.” “We have a deep focus on monitoring and accountability and are working towards a clear strategy with visionary goals for which the roadmap has been drawn with a view to bring in efficiency in the whole power sector value chain,” he added.

India, Nepal to build new crossborder power lines India and Nepal have agreed to build new cross-border power transmission lines to help in the distribution of electricity from power projects being developed in Nepal. The new Butwal(Nepal)-Gorakhpur (India) and Lumki (Nepal) –Bareilly ( India) transmission lines and new 400 kV sub-stations at Dhalkebar, Butwal and Hetauda, all in Nepal, were discussed during the fourth meeting of the Indo-Nepal joint working group and joint steering committee (JSC) on power cooperation. The modalities for building and funding the transmission lines will be discussed by the joint technical team. The Indian side expressed its readiness to consider new letters of credit (LOCs) for building infrastructure on the Nepalese side, said a statement from the Indian embassy in Kathmandu.

Enough transmission capacity till 2022: CEA India will not need power transmission projects in addition to the already planned capacity till 2021-22, a report by power sector planner Central Electricity Authority (CEA) said, citing low electricity consumption, delay in development of proposed power generation plants and high growth in power transmission capacity.

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ern region) are sufficient to cater to the assessed import requirement of SR/NR for year 2021-22 under base as well as N-1 contingency conditions,” CEA said in the draft national electricity plan for transmission.

“From system studies, it was observed that the already planned transmission corridors towards SR (southern region) and NR (north-

It is estimated that an expenditure of Rs 260,000 crore would be carried out during 2017-22 for addition to transmission system capacity. CEA said that the already planned transmission corridors between various regions

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is sufficient to tackle variations in generation from wind and solar power plants. It has been argued that the country has over achieved transmission system capacity addition targets, based on the reasons that some power generation projects have got stuck on account of various factors including shortage of finance on the other hand there has been lack of demand for electricity from distribution utilities.


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SECTOR UPDATES Rajasthan privatises power distribution in Bikaner - CESC wins franchisee bid CESC Ltd on February 7 said it had secured through competitive bidding, the franchise to distribute power in Bikaner as it looks to ramp up revenue from electricity sales in three towns of Rajasthan to Rs1,200 crore in the next fiscal year. CESC currently supplies power in Bharatpur and Kota, having taken over the franchises from the state government. The company says it is impressed with the administrative support it has received from the

state government of Rajasthan as it revamps the local power distribution business, where losses are high due to poor metering and power theft. Transmission and distribution (T&D) losses in Rajasthan have already been brought down to less than 30%, a spokesperson for CESC said. CESC has gained “valuable experience” from customer-focused initiatives launched at Kota and Bharatpur, group chairman Sanjiv Goenka said in a statement. At Bikaner, the company will follow the same principal to gain acceptability among consumers and bring down power theft.

CERTs to check cybersecurity threat in Power sector The government has constituted Computer Emergency Response Teams (CERTs) to check cybersecurity threat in the power sector. “Government of India, in line with National Cyber Security Policy, 2013 has created sectoral CERTs to mitigate cyber security threat in power systems,” Power Minister Piyush Goyal said in a written reply to Rajya Sabha. The Centre has taken several steps to make power utilities and key stakeholders aware and take precautions against cyber threats. For cyber security in power systems, four sectoral CERTs, CERT (Transmission), CERT (Thermal), CERT (hydro) and CERT (Distribution) have also been formed to coordinate with power utilities. The relevant stakeholders of Smart Grid have been advised to identify critical infrastructure and use end-to-end encryption for data security.

BERC approves 55 per cent power tariff hike in Bihar Power utilities push for tariff hike, KERC to decide by March-end “Various Electricity Supply Companies (ESCOMS) have approached Karnataka Electricity Regulatory Commission (KERC) for increase in power rate by 1.48 per unit,” said Power Minister D K Shivakumar. He was addressing the Legislative Council on the second day of the session. JD(S) MLC N Appajigowda had earlier raised question on power hike proposal. The state needs around 200 to 208 million units of power of which Bengaluru alone requires 45 to 52 million units every day. The minister said: “KERC will fix the price after holding pub-

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lic consultation meetings at different places across the state with stakeholders. The new price will come into effect from April 1, 2017.” “There is a demand for 9,500 Megawatt from public, farmers and industries, but we are geared up to supply 10,500 MW as we have tied up with private and other government agencies for power purchase,” he said. “We are even ready to give 24 hours supply to industries if required. There will be no usual power cuts this summer,” he claimed.

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Bihar’s power tariff revision, which comes after a three-year status quo on prices, has come as a shocker to consumers. The Bihar Electricity Regulatory Commission (BERC) has approved an unprecedented 55 per cent increase in electricity tariff. The hike is expected to boost distribution companies’ (discoms) kitty by Rs 4,700 crore. From April 2017, consumers will have to shell out Rs 2.75 to Rs 3.65 more per unit under the approved tariff for the next financial year. “The discoms have proposed an overall hike of about 84 per cent in the tariff for FY18, whereas we have approved an increase of about 55 per cent without taking the state government’s subsidy into

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account,” said BERC chairman S K Negi. “However, if the state government extends subsidy to BPL (below poverty line) and rural consumers as agreed in the Ujjwal DISCOM Assurance Yojna (UDAY), the increase may come down to around 28 per cent only,” he added. However, even after the adjustment of subsidy into the revised tariff, it would still be the sharpest ever increase in power tariff. With no change in Bihar electricity tariffs during the past three years, discoms have been struggling with unsustainable financial burdens due to their increased consumer base by more than 4 times. Moreover, rising coal price also contributed to the cost.


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SECTOR UPDATES

Miscellaneous REC is targeting to scale up with averages 30,000 new connections per week India is in electrification overdrive, with about 30,000 new electricity connections being granted every week State-run Rural Electrification Corporation is targeting to scale up the drive to grant 100,000 connections every week, its executive director Dinesh Arora said. India has never seen electrification at such large scale earlier, and neither have details been made available on electrification

at household level. Electrification data was only captured for families below poverty line earlier. As per the Garv-2 portal, 23,000 new electricity connections were given last week and 41,000 in the previous week. In the ninth week of this calendar year, 28,000 power consumers were taken on board. The Garv-2 portal was launched on December 20, 2016.

Govt cuts 23 million tonne CO2 emission in a year by using LED bulbs The government has cut 23 million tonnes carbon dioxide emission the use of energy efficient LED bulbs and has saved 28,588 million units of energy, power minister Piyush Goyal said in a tweet. So far, the government has distributed over 220 million LED bulbs under its UJALA scheme and the country has saved Rs 11,437 crore in one year, according to data

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by the Ministry of Power. The UJALA initiative is part of the government’s efforts to promote efficient usage of energy at the residential level, enhance the awareness of consumers about the efficacy of using energy efficient appliances and aggregating demand. In 2014-15, the total number of LED bulbs that were distributed was around 30 lakhs, which in 2015-16 crossed, 15 crore, where nine crore LED bulbs were distributed under UJALA and the remaining were contributed by the industry. UJALA is the largest non-subsidised LED programme in the world.

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Email or text meter reading for power bill in UP Residents of the city can now look forward to submitting their electricity meter reading online or through SMS message by themselves instead of relying on line-men or power department officials to generate their meter readings. The process, called ‘trust billing’, was announced on Tuesday by Desh Deepak Verma, chairman of Uttar Pradesh Electricity Regulatory Commission (UPERC), to be implemented with immediate effect across the state. The bill generation and payment are done according to the billing cycle prescribed by the licensee discom.

Uncertainty over micro-grids future roadblock for the sector: Feedback Uncertainty around tariff payment and its future in case grid power reaches villages are major areas of concern plaguing the micro grid sector, according to Feedback Business Consulting. “The biggest challenge in operating a micro-grid is the uncertainty around tariff payment and the absence of large commercial loads in villages. Developers wants to ensure steady recovery of their capital investment and requires funds for maintenance. The second challenge is in the form of sustainability of the venture in case gridpower reaches the village and villagers decided to switch to the grid network

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due to lower tariff. “There are no proper exit strategy. Most of these projects hold considerable risks and developers, mostly small time private entrepreneurs should have access to cheap loan. Another challenge is to ensure security of the assets. Many developers, according to the report, have filed cases of asset theft, and breakage of solar panels. Other challenges include receiving approvals for laying underground cables when the network crosses any highway, less or no growth in electricity demand from the villagers and limited scope of expansion to other villages.


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SECTOR Review

Stringent Emission Norms The Environment Ministry to impose stringent emission norms for Thermal Power Plants. According to estimates, the retrofitting cost of an old power project to meet the new standards will be around Rs. 1 crore per MW...

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ndia is the biggest emitter of greenhouse gases after the US and China as 61 per cent of the country’s installed power generation capacity of 3,10,005 MW is fuelled by coal. In December 2015, for the first time, the Ministry of Environment Forest and Climate Change (MoEFCC) notified new emission standards for SO2, NOx and Hg[2]. The notification of the emission standards in 2015 was an acknowledgement of the fact that, coal power plants greatly contribute to the increasing air pollution levels across the country, and that it was imperative to control the highly polluting

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substances. The ministry of environment, forest and climate change (MoEFCC) has decided to amend the Environment (Protection) Rules, 1986, with the Environment (Protection) Amendment Rules, 2015, wherein the deadline to meet the strict norms for emissions of particulate matter (PM), sulphur dioxide, nitrogen oxides, mercury and reduced water usage by coal-fuelled thermal power plants was fixed as December 2017. But then, news articles and statements made by government authorities suggested the dilution of the very

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same emission standards or even a delay in the implementation date.

A Strong Decision: Sending a strong message to coalbased power plants across the country, the environment ministry has made it clear that it will neither dilute the emission norms for thermal power plants, as notified on December 7, 2015, to minimise air pollution, nor relax deadline for implementation of the stricter standards. “The revised emission standards for thermal power plants were notified with respect to Particulate Matter


SECTOR Review (PM), Sulphur Dioxide (SO2), Nitrogen Oxide (NOx), Mercury (Hg) and water consumption on December 7, 2015, and shall come into force from December 6, 2017,” said environment minister Anil Madhav Dave. Besides notifying new emission norms in 2015, the government had taken other steps to clean up the environment in areas adjoining thermal power plants. It included installation of continuous emission/ effluent monitoring systems (CEMS), revised norms for fly ash utilisation, industry specific action plans for critically polluted areas where significant number of thermal power plants are located and development of green belt in surrounding areas.

the same is most likely to pass on to the end consumers may result in higher electricity tariffs. As reported by The Indian Express on 9 February, the government has decided to relax the December 2017 deadline and even dilute the standards it had set. The environment ministry is likely to defer the implementation of the stringent emission norms by two years to December 2019 as thermal power plants con-

Care4Air and Help Delhi Breathe gathered together calling on the Environment Minister, Anil Madhav Dave, to challenge all attempts at relaxing or diluting the Thermal Power Plants emission standards. The activists who were dressed in oversized lung-shaped costumes to visually represent the impacts of worsening air pollution, along with over 105241 citizen’s petition, was brought to Minister Dave, and handed

According to the ministry, 142 out of 162 standalone power plants have so far installed CEMS. Among these, 102 have also initiated online transmission of emission/effluent data to Central Pollution Control Board (CPCB) whereas six plants have installed flue gas de-sulphurisation (FGD) system for control of SO2 emissions. Apprehending dilution of emission norms following industries appeal to the Centre, several NGOs flagged the issue and submitted a signed petition of over 1 lakh citizens to the joint secretary Arun Kumar Mehta and requested the ministry to have a mechanism in place to monitor implementation of emission standards.

The Cost Affects: According to estimates, the retrofitting cost of an old power project to meet the new standards will be around Rs1 crore per MW. For new projects, the cost may be around Rs50 lakh per MW. The move to implement new standards has also seen stiff resistance from electricity generation firms including stateowned NTPC Ltd. Industry experts believe that implementing the standards will result in (the price of) electricity generated from these projects going up by around 50 to 60 paise per unit and

stitutes the back bone of the Indian power sector the industry and the relaxation would bring succour to nearly two-thirds of India’s power projects. As reported by financial daily “Mint” – “The environment ministry is likely to defer the implementation of the stringent emission norms....by two years to December 2019 ....or may be revisiting the guidelines for sulphur oxides (SOx), nitrogen oxides (NOx) emitted by the thermal power projects given the stiff opposition by the developers due to electricity tariffs going up.”

The Advocator However, experts close to development said that a lot of effort has gone into devising strict emission standards for thermal power plants and the focus should now be on their implementation. In this regard, on March 30th, a collaborative, non-violent demonstration by a group of volunteers and activists representing Greenpeace India, www.vision-media.co.in

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over to Mr Mehta who is the Joint Secretary at MOEFCC. We were assured that the emission norms for thermal power plants as notified on December 7, 2015, will not be diluted.

In a Nutshell: On one hand, given the stiff opposition by the developers due to electricity tariffs going up the Thermal Power industry has its fingers crossed in anticipation that MoEFCC may be revisiting the guidelines for sulphur oxides (SOx), nitrogen oxides (NOx) emitted by the thermal power projects or could delay the dates of implementation. While on the other, the advocators hope that the government should come forward as the guardian of the people and the environment to make sure that the notified emission standards for coal based thermal power plants are implemented as soon as possible and also frame a larger robust Clean Air Action Plan for India. n

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Sector FOCUS

Solar PV

Sector - India

Overview & Outlook

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ndia’s ambitious renewable energy plan is the country’s attempt to address not just climate change but also the air quality issues that have plagued major cities. The country, which is one of the biggest greenhouse gas emitter after the US and China, is focusing in a big way on renewable energy which currently accounts for 15 per cent or 45,917 MW, of the total installed capacity of 3,10,005 MW. The country has seen a strong push to renewable energy segment especially solar power sector since the NDA government has come into power. The pace of sector activity has picked up tremendously in the last two years because of strong government support and the increasing price competitiveness of solar power. India is expected to become the world’s third biggest solar market next year, after China and the US. According to industry experts, an average annual capacity addition of 8-10 GW per annum of solar power is expected from next year.

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Sector Overview: Solar power in India is a fast-growing industry. As of 31 March 2017, the country’s solar grid had a cumulative capacity of 12.289 GW compared to 6.76 GW at the end of March 2016. India saw a sudden rise in use of solar electricity in 2010, when 25.1 MW was added to the grid, and the trend accelerated when 468.3 MW was added in 2011. In January 2015, the Indian government expanded its solar plans, targeting US$100 billion of investment and 100 GW of solar capacity, including 40 GW from rooftop solar, by 2022. Recent growth has been over 3,000 MW per year and is set to increase yet further. Utility-scale solar is at the forefront and accounts for more than 85 per cent of the total installed capacity in the country. On the other hand, rooftop solar has also grown at a healthy CAGR of 98 per cent between 2011

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Sector FOCUS Region Wise Solar Power Growth during FY15 , FY16 & FY17 Regions

MW as of 31-03-15

MW as of 31-03-16

MW as of 31-01-17

Northern Region

1226.4

1897.32

2353.93

Western Region

1926.98

2378.88

2580.41

Southern Region

524.93

2321.34

4001.85

Eastern Region

54.97

96.17

214.14

North Eastern Region

5.03

5.27

17.09

Island Region

5.85

64.16

67.85

Top 10 States Solar Power Growth during FY15 , FY16 & FY17 States

MW as of 31-03-15

MW as of 31-03-16

MW as of 31-01-17

Tamil Nadu

142.58

1,061.82

1,590.97

Rajasthan

942.10

1,269.93

Gujarat

1,000.05

1,119.17

1,159.76

Telangana

167.05

527.84

1,073.41

Andhra Pradesh

137.85

572.97

979.65

Madhya Pradesh

558.58

776.37

850.35

Punjab

185.27

405.06

592.35

Maharashtra

360.75

385.76

430.46

Karnataka

77.22

145.46

341.93

Uttar Pradesh

71.26

143.50

269.26

Others

101.45

355.26

629.49

Total

3744.16

6763.14

9235.27

1,317.64

Installed Capacity Growth during last 5 years

and 2015 and currently accounts for about 10 per cent of the sector. The rooftop segment is expected to play an increasingly important role in the solar power sector. There are some important aspects that can be observed in the growth of the Indian solar market so far. Among the states, Tamil Nadu has the highest installed capacity, followed by Rajasthan, Andhra Pradesh, Gujarat, Telangana, Madhya Pradesh and Punjab. These seven states collectively accounted for more than 80 per cent of total installed capacity as of December 2016. Some of the larger power consuming states such as Maharashtra and Uttar Pradesh are way behind in the sector.

Falling tariffs Industry experts believe that the trigger for acceptability of solar power has been its falling tariffs due to the lower cost of raising finances, and the solar module

Year

Mar - 2013

Mar - 2014

Mar - 2015

Mar - 2016

Mar - 2017

Capacity (MW)

2319 MW

2632 MW

3744 MW

6763 MW

12,289 MW

prices taking a nose dive. Solar tariffs declined from Rs. 10.95- 12.76 per kwh during the 2011 financial year to Rs. 4.34 per kwh last year. According to Bridge to India, ‘Most of this fall can be attributed to lower equipment cost (solar module prices have fallen by 26% in the last year) and an improved contractual structure.’ Solar power tariff hit an all-time low with the record lowwinning bids of Rs. 2.97 per kilowatt-hour (kWh) to build 750 mega watt (MW) plant at Rewa in Madhya Pradesh. With effective levelized tariff—the value financially equivalent to different annual tariffs over the 25 year period of the power purchase agreement—of around Rs3.30 per unit, the power from sun has become a competitive energy source vis-à-vis the coal-fuelled conventional source of electricity. While it seems that the tariffs may stay at this point as a drop further down may put pressure on margins of the key stake holders in the solar value chain and may as

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Sector FOCUS well affect the viability of the project and sustainability of the sector, however some believe that the solar power tariffs may fall further.

Solar Park programme: The government originally envisaged developing 20,000 MW of solar park capacity with capacity of at least 500 MW each or more across the country by 2020. These parks are to be set up in partnership with Solar Energy Corporation of India (SECI) and the state governments. Under the first phase of the solar parks scheme introduced in 2014, 34 projects with capacity of 20,000MW are in various stages of implementation. Looking at the enthusiastic response that the scheme has received from the private sector, the government has recently announced an ambitious scheme to double solar power generation capacity under the solar parks scheme to 40,000 megawatts (MW) by fiscal 2020. The centre

2022. This is because a solar park will provide the building blocks—land and grid connectivity—to set up big solar projects. Thus the solar park scheme will also been instrumental in tackling the two major issues of land acquisition and power evacuation for project development. Further, eight green energy corridors are under construction, with financial assistance from German development bank KFW, to evacuate and integrate the growing share of renewable energy into the grid. The corridors will allow transmission of solar power from the solar rich states to other states.

Rooftop solar: India is witnessing a huge paradigm shift when it comes to solar power. Airports (Kochi went fully solar in 2015), the Delhi Metro, the railways, solar-powered toll plazas, farmers’ cooperatives, canal-top solar generation in Gujarat and even a solar-powered blood bank in Arunachal Pradesh, the list goes on. But the best opportunity that remains as-yet untapped is the ‘roof top solar’ for the vast country as diverse in terrain as India. While India’s 100 GW solar target is ambitious, many argue that its 40 GW rooftop solar target is unachievable, since it is starting from a smaller base (< 1 GW), and also because rooftop solar development is harder for the government to accelerate on its own. Even where the government has issued tenders for solar systems on the rooftops of government buildings, it has not seen a large enough response or follow-through from the industry to achieve the full potential.

“The government has announced an

ambitious scheme to double solar power generation capacity under the solar parks scheme to 40,000 MW by fiscal 2020..... proposes to extend Rs. 8,100 crore in assistance to fund 30 per cent of the initial project cost of developers. State governments keen on solar parks will allocate land for the project and nominate a project developer to the central government, which in turn will grant Rs. 25 lakh to the developer for preparing a detailed project report and financial assistance of Rs. 20 lakh per MW or 30% of the project cost, whichever is lower. The move, is an important step in creating an ecosystem which will enable the scaling of solar power in the country to achieve the target of generating 100GW of solar power by

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Attracting Investments: There is immense potential for research and development in the

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solar energy field. The challenge is to come up with technology suitable to Indian market requirements even when several private companies, both domestic and foreign, are eyeing a big pie. The growing solar market in India has attracted the attention of leading investors from both India and other countries, including the US, Europe, Japan and China. The list of active project developers in the market includes prestigious names including Softbank, Fortum, CLP, Adani, Tata Power, ReNew and First Solar, etc. There’s been a steady decline in solar power prices— on the back of cheaper solar panel costs and lower financing costs—that has made the sector increasingly attractive to investors.

Conclusion: Power requirement in India is estimated to grow at an average of 5.2 per cent during the 10 years between 2014 and 2024, according to a report by Tata Power. Currently, India requires 1,068,923 million units of electricity annually but the supply falls short by 3.6 per cent. On the other hand, a quick tariff comparison with conventional fuel sources - solar energy is no longer being a green fad but a game changer in India’s energy mix. Also, unlike a number of other infrastructure projects, there seems to be no dearth of land for solar power projects, with more than 467,021 sq km of wastelands in the country. We expect that additions under central and state policies will decline with capacity additions being driven by parity. While overseas investors have been showing interest in the Indian renewable energy market, concerns over grid stability remain with solar being an intermittent electricity supply source. Experts believe the technological breakthrough that Indian solar energy sector awaits is commercially viable energy storage solutions which will also help towards grid stability.n


Sector FOCUS

Rooftop Solar in India

Author:

Urvish Dave Solar Project Consultant Urvish Dave is working as a Project Consultant in the Renewable Energy arena with an expertise and keen focus on Solar Energy Sector viz. Rural Electrification, Off-Grid Solar Projects, Rooftop Solar Projects,Utility Scale Grid connected SPP, Captive power plants, Renewable Energy Certificates (REC) Mechanism etc. for various Renewable Projects in India along with market intelligence pertaining to renewable energy sector. He holds the distinction of executing numerous Solar projects during the career path including EPC projects for Rural Electrification, Solar Grid Connected Projects, Off-Grid Projects etc.

I

ndia recently witnessed crossing of more than 12000 MW of Solar capacity across the country as on March 31, 2017 and is about to see this figure changing into multiplication of many times from current capacity on year to year basis. Out of which around 5.5 GW installed in FY2016-17itself ! Moreover while there is continuous ‘Trendy’ hype across the utility scale solar segment in India & another very interesting solar arena is not far behind in making news – the “Rooftop solar” power segment in India !

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Though utility scale solar power plant contribution in total solar mix is more and is bound to remain more in future also because it makes a sensible business sense & revenue model, still the real strength of solar lies in the distributed solar energy generations or the rooftop solar power plants. The government of India in 2014 revised the national solar installation target from 22 GW to an aggressive 100 GW by 2022. The target was split between large-scale solar (60 GW) and distributed solar/ rooftop solar (40 GW)

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Sector FOCUS

Rooftop Solar Potential :

MNRE ROOTOP SOLAR TARGETS OF 40 GW IN INDIA BY 2022

According 2011 Census India is having 330 million houses, of which 166 million are the electrified houses. In rural areas over 76 million houses still use kerosene for lighting. As per the estimates of MNRE there are 140 million houses with proper roof (Concrete or Asbestos / metal sheet) which can accommodate about 1-3 kWpof solar PV system.Similarly the large industrial rooftops can accommodate larger capacities in the range of 100-500 kWp. Now considering just 20% of these roofs, there is a potential of about 25000 MW rooftop solar PV capacity that can be accommodated on roofs of these buildings alone !! Although these are ultra-ambitious targets being set by the government a lot less has been achieved during past year. So far, about 1100+ MW have been installed and about 3,000+ MW has been sanctioned which is under installation. All major sectors i.e. Railways, Airports, Hospitals, Educational Institutions, Government Buildings of Central/State/PSUs are being targeted besides, the private sector. Though the government is positively pushing the development of rooftop solar segment across India with various policies, incentives & schemes, still we are hugely missing the targets set by them which needs to be looked upon.

Major Policy Drivers & Initiatives taken by Government in Rooftop Segment : A massive Grid Connected Solar Rooftop Programme launched with 40 GW target. State Electricity Regulatory Commissions of 20+ States/UTs notified regula-

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Targets Capacity in MW


Sector FOCUS Various Incentives & Key Drivers to Boost Rooftop Solar Sector in India Subsidy /Incentives

Central Financial Assistance (CFA) - Some states do provide state subsidy in addition to the CFA by centre. This makes rooftop even more attractive

tions for net-metering/feed-in-tariff mechanism. n A total sanction of 1300 million dollars has been received from World Bank, KFW, ADB and NDB through which the SBI, PNB, Canara Bank and IREDA will be in the position to fund at the rate of less than 10%. n Ministry has tied up with ISRO for Geo tagging of all the Rooftop plants using ISRO’s VEDAS Portal. n To promote rooftop solar, Rs.50 billion (~$734.37 million) has been approved for implementation of grid-connected rooftops systems up to 2019-20. n The World Bank approved a grant of $22.93 million (~Rs.1.55 billion) to enhance installed capacity of grid-connected solar rooftop and strengthen the capacity of relevant institutions for widespread installation across India. n To provide necessary financing for development of rooftop solar projects, the Government of India and the Overseas Private Investment Corporation (OPIC), the U.S. government’s development finance institution, launched the US-India Clean Energy Finance (USICEF) Facility Initiative with $20 million (~Rs.1.36 billion) in June 2016. n In the special category states

Applicable to

Details • Upto 30% of project costs or benchmark costs whichever is lower for general category states

Residential, Social, Institutional & Captive Projects

• Upto70% of project costs or benchmark costs whichever is lower for Special Category states / Islands

Government

NO CFA

Private, C&I sector

NO CFA

Accelerated Depreciation

Developers, Commercial & Industries

40% of Project Cost from April 2017

Bank Loans

Residential

Public sector banks to encourage consumers to include rooftop solar when applying for home loans

Net Metering Policies

Residential, Commercial & Industrial users

About 20+ States/UTs notified regulations for net-metering/feed-in-tariff mechanism.

and union territories of Sikkim, Jammu & Kashmir, Himachal Pradesh, Uttarakhand, Lakshadweep and North Eastern states, central financial assistance (CFA) is provided for up to 70 percent of solar project costs. For general category states, CFA provided is 30 percent. n Through soft loans and tax credits, the government is trying to boost growth in the sector, stated an MNRE official. The UDAY program (Ujwal DISCOM Assurance Yojana) has covered over 90 percent of DISCOM debt so DISCOMs will be more willing to invest in net-metering systems and the solar rooftop sector, added the MNRE official. Of all the incentives available for the Rooftop Segment in India the major ones are CFA benefits for the residential consumers & Accelerated Depreciation benefits for the Commercial & Industrial consumers coupled with the Net-Metering Policies.

So in short does Rooftop Solar makes any Financial Sense? On Viability : If you are paying more than Rs. 6 per Unit on your utility bill

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currently then what are you waiting for – Just go for solar rooftop power plant for your roof ! It definitelymakes sense compared to any investment tool you come across !

On Subsidy : One should not depend

on the subsidy to establish the viability of your solar system. Yes it helps a bit but your focus should be more on electricity savings, annual rise of your utility bills, regular power cuts & generating clean energy ! Very sooner the subsidies are going to stop as it happened in the solar water heaters arena.

For commercial & Industrial users :

Already getting a solar system on your roof is very much viable even now and the benefits of accelerated depreciation (even though reduced to 40% now) still establishes much more viability of the same. All you big shots out there, you guys know very well what I mean !

Key Challenges : Well the biggest challenge is mainly in terms of lack of awareness among consumers along with… n Lack of consistent policy support from the states – Almost all the solar companies operating in rooftop segment have faced this &

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Sector FOCUS knows this better. n There is also a lack of awareness pertaining to the economic and environmental benefits of rooftop solar PV among the population, and a lack of access to loans without collateral. n Currently with over 20+ states have some or other form of solar net-metering policy, yet very few states have demonstrated implementing hurdle fee net-metering rooftop solar systems.A lack of working net-metering policies and their implementation is a major hurdle for the sector. n Many states which are ex-

People are less aware of government policies and the available incentives.

Way Forward: The real beauty & advantages of solar lies in distributed market i.e. individuals opting for rooftop solar installations as energy is consumed at the same point where it is generated and no additional requirements of land coupling with benefits of no transmission & distribution losses benefiting both generators and utilities. Moreover electricity is now the basic elementary need for people and so as Mahatma Gandhi believed “That

l If higher renewable purchase obligations are set for rooftop solar, it will push the sector in a positive way. l The stringent implementation of policies & regulations should be stressed upon. Merely announcing rooftop policies are not going to help in order to achieve rooftop targets set forth. l One approach could be to provide generation-based incentives for end-users including household segments which can drive growth of rooftop without putting additional burdens on distribution and transmission infrastructure, while at the same time achieving targets for renewable energy installations. l Many state electricity agencies and DISCOMs do not have strict timelines or monitoring of timelines to install net meters once the application have been submitted and if they do, they aren’t strictly enforced. This leads to a lot of back and forth and eventual discouragement for solar rooftop adopters.

tremely suitable for implementing solar net-metering schemes are not approving or supporting solar rooftop deployment under the Opex / RESCO / BOO / BOOT model. n While government (both central & state) are announcing ambitious policies & targets for rooftop solar, yet very little attention is given to successfully implementing & enforcing the targets. n Securing project financing has been a challenge as banks are not sure whether rooftop solar is financially viable at current quoted low rates. n In a developing country, affordability in residential sector is much lower than in developed countries.

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the all the means of production of the elementary necessaries of life should remain in the control of the masses” – Electricity is one of them and should be in peoples control !Hence Rooftop Solar. Some major points the government should focus in order to boost rooftop solar segment in India should be : l The government should help by setting up consumer awareness and guidance centers to educate on the placement and functioning of meters, processes for metering and interconnection with the grid as well as maintenance, stated another developer. l The government should facilitate easy financing in the sector.

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For solar rooftop to grow, policies have to be made keeping in mind the dissimilarities between rooftop solar and utility-scale solar. Government policies should encourage power generation through rooftop systems at the point of consumption rather than only providing capital subsidies. At the same time the Indian states will have to implement policy changes through nodal agencies to achieve rooftop targets. All states will have to show a conscious effort; for this to happen MNRE must facilitate ease of constructing and commissioning rooftop systems. Well despite all odds the rooftop solar sector is showing signs of growth though not as projected &at the same time if some of these challenges are taken care of in near future then times then India will undoubtedly not only meet the rooftop solar targets of 40 GW by 2022 but may well exceed it ! n


Sector FOCUS

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Sector FOCUS

Solar PV Sector India

Key Challenges Faced

Though Solar PV sector may seem attractive and financially viable, there is a flurry of problems faced by different players in this field – especially the developers of the solar power projects. These problems - if not addressed - could deter the growth over the coming years.....

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he central government has embarked upon an ambitious target of setting up 100 GW of solar power capacity by 2022. Though the government had fairly thought of encouraging the solar manufacturing industry alongside, however, due to dumping of cells and modules at lower cost the domestic manufacturing sector has not been able to keep pace with the sector growth. The Solar Manufacturers Association demanded anti-dumping duties in 2012 which was imposed by the Ministry of Commerce. But this move did very little to protect the indigenous manufacturers. Therefore once again they called for action against those countries which dump cheap solar cells in 2015. But this time, the anti-dumping duties were not hiked as the capacity of domestic solar cell manufacturing companies is insufficient for meeting the government’s ambitious target.

Issues & Challenges India’s demand for renewable energy is expected to grow seven times by 2035, according to the lat-


Sector FOCUS est edition of BP Energy Outlook. This means the share of renewable energy in the country’s fuel mix will increase from 2% to 8% by 2035. No doubt the solar power sector will play a leading role in meeting these expectations.

Commercial banks constitute a major source for financing infrastructure projects including renewable energy systems in India. But as compared to other developed nations these Indian national banks provide debt at a much higher rate.

Currently, the Indian solar power sector has seen its installed capacity cross 12 GW as on 31 March 2017 placing India in race of joining the ranks of nations such as China, the US and Japan in terms of capacity. The solar sector in India is moving at a fast pace and has drawn massive interest from global investors, buoyed by the promise of strong returns.

Though the ministry of new and renewable energy along with ministry of finance have come up with some innovative financing measures to promote these capital-intensive renewable energy projects such as clean energy fund, generation based incentive linked loan repayment and green bonds etc. However, there is need for a more focused push towards establishing a proper financing mechanism to keep pace with the growth rate at which India wishes to add solar power to its energy basket.

It has also given rise to new entrants and speedy expansion by existing firms, many of whom have been bidding for projects at aggressive tariffs in reverse auctions. As a result, India’s solar energy tariffs have fallen from Rs15 about five years ago to below Rs5 per unit in 2015 and to a levelized tariff of about Rs. 3.30 per unit in a February reverse auction. Though they may seem attractive and financially viable, there is a flurry of problems faced by different players in this field – especially the developers of the solar power projects. Some of the biggest problems faced by

Land Availability Challenges Solar power plants require huge parcels of land for example a 1 MW of solar power plant requires somewhere about 5 acres of land and sometimes more depending on the type of the PV technology used. Fortunately, India has an abundance of two most critical elements for solar power - land and sunshine. However, finding a suitable land which must be non-agricultural and unused land with good solar irradiance is challenging. Also the land must be free of undulations and trees.

There is need for a more focused push towards establishing a proper financing mechanism to keep pace with the growth rate at which India wishes to add solar power to its energy basket.... developers in the industry right now are discussed below.

Lack of Proper Financing Mechanism No doubt the Renewable Energy Projects are capital intensive projects and one of the biggest problems faced by the solar power sector is arranging finance for the projects.

Arranging for a suitable land is one of the biggest problems not just faced by developers but also by EPC companies. Even if suitable land is identified, its acquisition becomes a daunting task, as the land is generally segmented and records might not be properly available. After purchasing of land, finding skilled and un-skilled labourers is net task. To tackle the issue MNRE envisaged setting up of solar parks of capacities of more than 500 MW, leaving the re-

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sponsibility of land identification and acquisition on states. However, the experience with the idea says that the issue stills pertains. One such project, an Ultra Mega Solar Power Project of 4000MW capacity in Rajasthan was stalled after it was found that 40% of the land allotted was part of a lake which would get submerged when the water level rises during monsoon. That could have also result in a major ecological issue, as that lake is the second largest breeding ground for flamingoes in India.

Evacuation Challenges The power industry is either forgetting or ignoring one important link of the value chain; which is power transmission. The two major risks when it comes to evacuation of solar energy are ‘Cost’&‘Time’. A 500 MW solar park generates about 30% of the energy as compared to an equivalent thermal power plant. However the required investment in transmission is equal in both cases. This signifies that it costs three times as much to transport a unit of solar energy, as compared to a unit of thermal energy. Thus, in order to compensate for the increased transmission cost, solar energy will need to be about a cent (Rs 0.65 / kWh) cheaper than thermal energy (at the bus bar). However the greater risk lies in “Execution Time” of Transmission infrastructure. For example the government had more than 5 years to build a transmission systems for a thermal power plant, and due to coal shortage in many power plants, they were able to buy another year or two of construction time. Yet, the systems couldn’t be built on time due to rightsof-way and forest-clearance issues. Now imagine a scenario where 10GW of solar plants can get created in a matter of 90-120 days! Today, the speed at which gigawattscale generation capacity can be created is unprecedented in the history of energy, primarily due to the modular nature of these plants. Each

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Transmission lines need to be built in 12-14 months, as compared to the current norm of 30-40 months. For this, the government will need to invite the private and public sectors to leverage technology and mechanized construction. .... time a GW of generation capacity is added to the grid, one needs to invest in upstream and downstream transmission systems. However, the schedules for transmission projects are usually measured in years or quarters, certainly not in days! The average time taken to build Extra High Voltage (EHV) transmission systems in India is about four and a half years. The mismatch between Time to Market (TTM) for solar, and TTM of its corresponding evacuation lines is, in my view, the single biggest risk, facing the ambitious solar mission. Utility sub-station and evacuation systems must be properly set-up for transmitting the electricity generated in the power plant. Power grid

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must be in the proximity of the site. Many regions in some states donâ&#x20AC;&#x2122;t have required power grid. Even when the grid is accessible, it is responsible for very high Aggregate Technical and Commercial losses. The government must install and maintain world-class grid for transmission of energy with lesser losses.

Conclusion: In order to address this discrepancy, the government has already taken a few significant steps. Innovative use of land and water bodies by making some minor changes to the design can go a long way. For smaller power demands the most attractive and the best option is rooftop solar plants at household and office level. In this regards, central as well as many states have gone for installing rooftop solar on government owned buildings. On the other hand, to reduce the project

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duration of transmission projects, the forest and environmental clearances have been decentralized and the government has also reduced the project award time from 250 days to 145 days. Commissioning of lines before the scheduled date of commissioning is permissible under current norms. New guidelines for right-of-way compensation have been issued, linking it to prevailing land prices. These measures can dramatically reduce the time taken to execute projects. However this is not enough. Transmission lines need to be built in 12-14 months, as compared to the current norm of 30-40 months. For this, the government will need to invite the private and public sectors to leverage technology and mechanized construction. Perhaps, the government can announce larger bonus clauses for early commissioning. Or transmission developers could be chosen not on the basis of lowest tariff, but on the basis of the shortest completion time. Once we overcome all these problems, nobody can stop India from achieving its 100 GW solar power production by 2022 target. n


RelyOn Solar Pvt. Ltd. Solar PV Expert

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Industry Insight

Solar-EPc

Industry & Challenges in India

I

ndia with its 175000MW of renewable energy target by 2022 is aiming big. Out of 175GW capacity solar power has a majority of capacity i.e. 100GW which is approx. 58%. With the falling rates of solar modules and solar power tariffs solar Industry is looking a promising sector from investorâ&#x20AC;&#x2122;s perspective also. At the policy level also more than 10 states have already released state solar policies after MNRE released the model solar policy framework. Solar policies of most of the states have encouraged and incentivised the the development of solar power plants be it ground mounted Solar PV or Rooftop.

EPC in Solar Power A solar EPC is a company that does the Engineering design (E), Procurement (P) and Construction (C) for a solar PV power plant. Typically, a solar EPC does a

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turnkey construction of the entire solar PV power plant, from design to commissioning. A good EPC de-risks for the developer/promoter the technical design, delivery and operation aspects of a solar power project. In India, solar PV is in a nascent stage of development with significant uncertainties in all aspects. At the same time, optimal design and implementation of power plants can significantly increase productivity and hence the Returns on Investments (RoI) of the plant. Such optimization requires significant skills and expertise which is brought together by an EPC; hence his role is critical to the success of solar PV power plants It should be noted that many traditional construction/ electrical companies might also claim to be good EPCs. However, at the core, installing a solar power plant is primarily about electrical and construction activity and there are a number of nuances and subtleties at each

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Industry Insight

In India, solar PV is in a nascent stage of development with significant uncertainties in all aspects. At the same time, optimal design and implementation of power plants can significantly increase productivity and hence the Returns on Investments (RoI) of the plant. Such optimization requires significant skills and expertise which is brought together by an EPC that plays a critical to the success of solar PV power plants...... to $3 billion in annual sector revenues by 2017, thanks to a wide client base of utilities, small independents, and niche players. The EPC market will remain fragmented. With project sizes typically ranging from 10 to 25 MW, small and medium-sized players will have few constraints competing against larger national and international ones.

stage of the power plant that are specific to solar PV. Unless the power plant is optimized at each of these stages, output will not be maximized.

Market Overview: Overall, the developer market will likely deliver more than $2 billion in annual revenues for solar power generators by 2016. The small size of project awards combined with capital constraints means that capacity will be spread across ISPPs. In other words, there will be several small and medium-sized players but no clear market leaders. Standalone EPC players will cater to ISPPs and corporations. The above scenario will increase demand for engineering, procurement, and construction (EPC) players, as developers opt to outsource turnkey projects due to a lack of internal expertise. EPC players can look forward

Scale-driven procurement efficiencies will diminish as rapidly declining costs and improving technology options inhibit the long-term framework agreements that characterize conventional-energy procurement structures. Based on technology evolved from semi-conductors over a period of time, the Solar PV Plant is simple in terms of construction as it largely involves erection of stationary equipment. This has allowed new and overseas developers to enter into the Indian solar market without much trouble. The key difference the international EPCs bring to the table vis-a-vis the pure Indian EPCs such as L&T is the number of solar power plants that they have already executed in other parts of the world, especially Europe. This prior experience provides them a temporary advantage over the indigenous EPCs, in that they are at a higher point in the solar power plant learning curve. This helps them design power plants that are of higher quality, resulting in higher outputs for its entire lifetime.

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Leading Players: According to solar consultancy firm ‘Bridge to India – Solar Map 2016’ around 52.5 per cent of the solar PV market had been catered by the EPC contractors while the rest 47.5 have been in the hands of the developers who went for self EPC. The top ten players who were able

others who had the market share of below 1 per cent during the period.

Key Challenges However, it needs to be said, that though PV (Photovoltaic) power plants are not as complex as some of the other conventional or renewable technologies, COST and TIME pressures make the solar PV EPC (Engineering Procurement and Construction) a challenging task.

PV power plants are not as complex as some of the other conventional or renewable technologies, however-COST and TIME pressures make the solar PV EPC a challenging task... to make their mark in the market during the period of one year were – Mahindra Susten, Sterling & Wilson, L&T, Tata Power Solar, Games Solar, BHEL, Waaree, Ujas, Rays Power Infra and Jakson having a market share ranging from 1 to 10 per cent during the period.

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Being an EPC contractor in India can be tricky as one has to deal with numerous stakeholders like ministries and departments, statutory and local bodies, clients and internal teams, vendors and subcontractors while constructing the power plant and, at the same time, maintain project profitability. Foremost challenges for an EPC are:

Other prominent EPC players present in the market are KEC International, Hrsha Abakus, Vivaan Solar, Photon Solar, Belectric, Bosch, Enrich, Rays Experts, Emmvee, Vikram Solar, Cirius and Swelect among

l Land acquisition : Land acquisition is one of the most challenging tasks in the whole project and generally comes under the scope of developer. But, sometimes as it calls for a specialized skill set, this additional responsibility is passed into the

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EPC Contractor’s scope, especially in the case of short term power developers where the developer does not possess either land selection know-how or the experience of acquiring large tracts of land for such purposes. The key challenge lies in giving due consideration to the parameters like a good land parcel in the vicinity of the pooling substation, topography, soil geology, soil characteristics and land shape. While bringing all the stakeholders to an agreement on finalization of the land agreement and completion of land transfer formalities is also a daunting task. l Engineering : Though the solar plant physically begins to take shape at site, a comprehensive plan of realization is conceptualized at the design desk by engineers using inputs such as solar resource availability, geotechnical reports and ambient conditions which charts stage wise development. A strong engineering arm is critical to the EPC success as it enables optimization of plant design to improve operating margins. Every project is unique and to a certain extent requires new think-


Industry Insight the exponential growth of solar installations, vendor capacities have remained limited. If the vendors are not managed well, time pressure gets translated into higher premiums. Also, due to a high import portion of the project cost, an EPC gets exposed to exchange rate risks l Site operations : Site operations are multifaceted wherein the project manager needs to sometimes look into all at once like a team leader, a manager, a planner, a negotiator, a safety custodian, a quality custodian and a mentor.

ing and fresh approaches, both at engineering and operational fronts. Given the time constraint, an established in-house design team quickly provides solutions to an envisaged or existing problem, thus saving valuable time and cost. However, the engineering teams may also face other issues such as irregular land shape, highly corrosive soil type, and dusty environment while designing a solar PV power plant with assured generation. l Supply chain : A key responsibility of SCM (Supply Chain Management) team is to provide all the materials and equipment to the operations team as per the desired quality and specifications within the set timeframe. However, a developing trend in the solar industry is the finalization of an EPC contractor at the very end of the allocated project duration. This puts undue burden on the EPC contractor for ordering and supply of long lead items and completing the project within a reduced time frame. In addition, vendor management and development also form vital focus areas for SCM. Compared to

The challenge in solar EPC is not that of critical design, high precision or high degree of complication but timely completion as the project schedule is highly overlapping while the execution is driven by a lean team. Thus when doing a fast track project with 100 per cent commitment and compliance to established procedures and protocols such as following SOPâ&#x20AC;&#x2122;s, checklists, inspection reports and daily work logs and reporting formats call for a focused and professional team effort. In addition to this, complete attention to safety and quality at every step ensures delivery of a world class asset that will perform for 25 years.

and calls for having several rounds of discussions to finalize the sequence of activities for meeting the needs of all the stakeholders.

Conclusion: Thus the role of an EPC is not only doing a turnkey job for implementing the solar PV power plant. This starts from design of the power plant layout, selection and procurement of the inverters, panels and other components (the procurement is usually done in conjunction with the developerâ&#x20AC;&#x2122;s opinions), and finally constructing both the DC and AC side of the power plant, until the stage when the power plant starts generating power. More importantly, solar PV power plants must be looked upon as national assets and the quality value of these plants must be such that they perform for more than 25 years. Unfortunately utility scale PV

The current system focuses only on low tariff and cost and there is no incentive for a developer or an EPC contractor for providing a good quality asset...

l Liaising : Liaising involves dealing with multiple stakeholders, officials and departments across locations. The challenge here is to effectively interface with all the external agencies to meet the timelines of the project. This involves deputation of a dedicated team with the required skill sets to pursue the person or the process to get things done quickly. Very often there are no set processes as networking is official centric www.vision-media.co.in

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is not a time tested technology in India and hence there has been no benchmarking of project quality. The current system focuses only on low tariff and cost and there is no incentive for a developer or an EPC contractor for providing a good quality asset. Hence a good parameter to distinguish between a good EPC Contractor from others is that a professional EPC player will not compromise on guidelines and processes and will ensure that the quality of asset remains intact and design and deliver a power plant that is of higher quality, resulting in higher outputs for its entire lifetime.n

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Industry Interview

“Rays Power Infra introduces co – development model which is plug and play model....

Rays Power Infra is one of India’s largest Solar EPC player. It is also the recipent of “Most Promising Brand in Power and Energy” by the World Consulting and Research Corporation, London. Ketan Mehta, Chief Executive Officer - Rays Power Infra, in an interaction with Power Insight,

shared his views on Indian Solar EPC Industry while throwing light on its performance, growth opportunities and prevailing trends. Excerpts. .

Ketan Mehta Chief Executive Officer

Rays Power Infra

How do you look at the market and growth of Solar EPC business in India in recent years? Could you throw some light on key trends? Solar EPC business grown exponentially not only in ground mounted but also in rooftop segment. More than 15 GW tender announced in last year doubling the prior year’s solar panel installation, the total solar installation growth is projected to be over 1 million dollars which is a positive sign for solar EPC business. Briefly tell us about company and its journey since inception? Could you share with us some of your key achievements on the way? We have executed projects of 400 MW Renewables through Third party EPC contracts, and have seen our revenue grow 55x in the last 5 years.Our current turnover is 400+ Cr. Our revenue consists of both recurring and non-recurring, depending on the type of execution and the asset ownership model.

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While our execution experience in 6 years of operations speaks volumes of the kind of trust clients place in our services, we have also been lauded by industry consultants and researchers. We were voted India’s Third Largest Solar EPC Player in December 2015 - by Bridge to India – a leading consulting and knowledge service provider in the Indian Cleantech market. We have also been awarded the “Most Promising Brand in Power and Energy” by the World Consulting and Research Corporation, London – for having tangibly contributed to the nation’s economy and infrastructure building and for having shown enough promise to be considered as the next set of game changers in their respective industries. A key measurement metric in that award was customer loyalty – 7 of our 23 utility scale customers have placed multiple repeat orders - to a point that our customers

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Industry Interview remained fiercely loyal and also advocated our products and services to other potential clients. One of our fastest commissioned project has also been one of our biggest – 72 MWp at Roorkee-one of the largest solar PV projects in the state of Uttarakhand, with a constraint to commission the project in 4 months as against 9 months required for such a project. Land levelling was a big challenge in this project as the land was highly uneven which prevented module mounting structures from being installed in an uniform manner and was resulting in requirement of greater land. To address the gap in delivery schedule, the Company redrew the execution strategy along with that of manpower deployment schedule and most of its senior project managers were stationed at the project site to keep a close eye on pace and quantum of work being done at any point of time. Under the guidance of its department heads, the team commissioned the project in a time of just 120 days. What are some of the unique services offered by your company in this space that gives you an edge over your competitors. Rays Power Infra is the only company amongst the top 3 solar co-developers in India that offers an investment opportunity to take an equity exposure in the lucrative and high growth Indian solar market through a platform with extensive development experience and track record Tell us about your other business models in solar power space? What kind opportunities do you see in rooftop segment? How are you planning to tap on the same? Rays Power Infra introduces co – development model which is plug and play model. We shall be coming up with the concept of Solar Portable Products / Consumer Durable Products (CDP) wherein our goal shall be lighting millions of households across Rural India. Keeping in view of the customer convenience and quality the products are on the concept of Off-Grid System and are reliable, user-friendly & cost effective. Introduced Solar Rooftops System which can be installed on residential, commercial and industrial rooftops without any hassle or major changes and can be directly plugged into the existing meters of the rooftop owner. The rooftop owner on the one hand is contributing in energy conservation whereas on the other hand is saving a lot in electricity bills by using solar power instead of electricity from DISCOM. Our goal is to have these systems arrive at the customer’s doorstep like any consumer good would, and to have rapid plant execution on their rooftops within 7 days of order placement. These fixtures would be 100% portable for future also - the system moves with the customer – wherever they go.

What doyou say on funding for solar project - one of the core area of concern for the industry? How do you assist your clients in this area? Funding for solar power projects follows the pattern same as conventional power sector funding of 70-80% debt along with 20-30% promotor’s contribution or equity funding. The area of concern for lenders is power off-take arrangements and constant revenue for debt recovery. These concerns on lenders are mitigated through long term power purchase agreements by SPD with state distribution utilities. Further, SECI bids, which is centrally promoted government organization helps giving comfort to lender concerns. However, within OPEX business model for Solar Rooftop business, we provide upfront assistance in setting up the solar rooftop asset and the client pays back through monthly instalments over a period of 10-12 years. GST is round the corner, what affect do you see on Indian solar power business landscape – once it is implemented? In your view, who will be affected most in the solar power value chain with the implementation of GST? Could you throw some light on the industry’s requisitions form the government in this regard? Currently different tax rates are applicable depending upon the nature of procurement. GST aim to provide a single rate for goods and services. The select committee has recommended that GST rate should not exceed 20%. A rate of 20% is substantially higher than the current rate on procurement of goods and services which increases the EPC cost. Local value added tax (VAT) and other levies such as excise, entry tax and Octroi on solar modules and the complete system, together at around 5% in most states because of many exemptions, would again be replaced by a combined GST of 17-20% this will increase the EPC cost and effect the Solar Power Developer. Under prevailing scenario, how do you see the Indian solar power sector evolving ahead and what are your future plans? India is all set to become the fourth largest solar market globally in 2016 behind only China, USA and Japan with 5.4 GW of expected capacity addition in the year. The Indian solar market is growing exponentially with key policy changes being introduced and 25 GW of projects under different stages of development. 35 new tenders with a cumulative capacity of 15.5 GW have been announced in the last year. An additional 5 GW of new tenders are awaiting release in the coming months. n

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Industry Insight

Wind Power Sector India

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Industry Insight

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t the Paris Climate Summit, India promised to achieve 175GW of renewable energy capacity by 2022. This includes 60 GW from wind power, 100 GW from solar power, 10 GW from biomass and 5 GW from small hydro projects. It also promised to achieve 40 per cent of its electricity generation capacity from non-fossil fuel based energy resources by 2030.

as developers rushed to avail the generation-based incentive (GBI) benefits, which were in force until the end of the month. The ‘generationbased incentive’, a scheme which paid wind power companies 50 paise for every kWhr they produced, subject to certain caps. Also, the tax-saving ‘accelerated depreciation’ benefit, which engendered the industry in the late ‘80s, is now halved. So, it is a mixed bag for the wind industry.

In India, which is the biggest greenhouse gas emitter after the US and China, renewable energy currently accounts for about 16 per cent of the total installed capacity of 315,426 MW. Of about 50,018 MW of installed renewable power across the country, over 60 per cent share is of wind power.

However, despite the expiry of the GBI scheme, installations for the financial year 2017-18 are expected to exceed 5 GW, considering the size of the pipeline and the additional 1 GW of capacity that was awarded through auctions in March. All this can be attributed to certain policy initiatives in the wind energy sector taken by the Ministry of New and Renewable Energy (MNRE) during 2016-17, including introduction of bidding, re¬powering policy, draft wind¬-solar hybrid policy and new guidelines for development of wind power projects.

Overview & Growth India, with 32,280 MW, has the fourth biggest capacity in the world, after China, the U.S. and Germany. The national target is 60 GW by 2022. Wind accounts for 10 per cent of India’s total power capacity of 3.2 lakh MW; and 4 per cent in terms of electricity produced. The wind power sector in India has seen a noteworthy growth during the past couple of years. A total of 5,400 MW of new wind capacity was installed in India over the last financial year, ending 31 March 2017, according to the ministry of renewable energy. It beat the country’s previous one-year record of 3,423 MW, set in 2015-16, by over 57 per cent. Cumulative capacity across India now stands at 31,117 MW. Andhra Pradesh, a relatively late entrant to wind power, installed 2,190 MW, followed by Gujurat with 1,275MW, and Karnataka with 882MW. Other states adding wind power were: Madhya Pradesh (357MW), Rajasthan (288MW), Tamil Nadu (262MW), Maharashtra (118MW), Telangana (23MW), and Kerala (8MW). Nearly two-fifths of the year’s new capacity was added in March alone

by law to buy a portion of their needs from wind and solar sources. The move will certainly help expands the market for wind power companies. The 1,000 MW capacity auction of February took place under such an arrangement. Solar Energy Corp. of India (SECI) the country’s implementing agency for renewable targets conducted Asia’s first onshore wind auction in February 2017, which received bids to supply wind power for Rs. 3.46 rupees (5 U.S. cents) a kilowatt-hour, much lower than feed-in tariffs of Rs. 4 to 5 prevailing across India’s most windy states. The government plans to offer deals covering almost 4 GW of wind capacity in the current fiscal year

The government thinks that 5 GW to 6GW of wind capacity can be added every fiscal, which could help companies to reach the government’s goal over the next four years...

Another encouraging sign for wind development in India is that states such as Jammu and Kashmir, and Himachal Pradesh have taken concrete steps to set-up their first projects.

Under the Hammer The Indian wind industry which has come a long way since it saw its first installation in the country around three decades ago. For many years, it was focused only in Tamil Nadu, the windiest state. In the last decade or so, it spread to eight other States that have any wind potential — the remaining southern states, M.P., Maharashtra, Gujarat and Rajasthan. To make wind power reach other states with less or no wind power potential, the centre decided to buy electricity from wind power producers and sell it to electricity supply companies in other states, which are bound

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ending March 2018 in addition to 750 megawatts of solar capacity it plans to tender in a month’s time or so. In this regard the ministry of new and renewable energy has written to all states to indicate their requirement for green power to consolidate demand, as more tenders would be brought out. According to Ashvini Kumar, managing director at SECI, the government thinks that 5 GW to 6GW of wind capacity can be added every fiscal, which could help companies to reach the government’s goal over the next four years.

Resultant Tariffs Trends: Till now the wind power prices are fixed by the various state electricity regulatory commissions. In February, when the country saw its first-ever auctions of wind power capacity, the price at which windmill owners would sell electricity to companies that

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Industry Insight supply power to consumers fell to a record low of Rs. 3.46 a kWhr.

auctions and reluctant to stick with deals done under the old system.

As, SECI already has planned to offer 750 megawatts of solar projects next month in the sunny state of Rajasthan, it anticipates that contest will bring record-low bids. The auction structure forces companies to compete for contracts to sell power from renewable energy plants, encouraging them to reduce prices.

Gujarat, a windy state in India’s west and also Modi’s home state, has refused to sign power purchase agreements for 230 megawatts (MW) of capacity and is now asking project developers to match auction rates, according to D.V. Giri, secretary general of the Indian Wind Turbine Manufacturers Association.

Ashvini Kumar, managing director at SECI believes that the trend in the market should continue where tariffs in the upcoming project could go below the 3-rupees mark, as he feels, that the market hasn’t yet bottomed out.

On the same line, the state utility in Andhra Pradesh, which added the most capacity out of India’s windiest states this year, has asked the power regulator to terminate continuing higher feed-in tariffs into April 2017, the next financial year, instead of its end date of fiscal 2022.

Hard hit of the hammer Until recently, states in India have bought wind energy through feed-in tariffs offering long-term contracts to power producers. The government is shifting toward auctions to buy electricity from wind, phasing out feed-in tariffs that guarantee a fixed price to producers for their power. The tariff quoted under February bidding of Rs. 3.46 a kWhr is much lower than feed-in tariffs of Rs. 4 to 5 prevailing across India’s most windy states. Now, following the Centre’s example, all states are eager to match the lower costs achieved in the

The state utilities are seeking to contain their own costs. They want to both keep a lid on prices and limit the amount of higher-cost renewable power they’re buying. Thus, during the policy transition phase there exists a dual payment system. If the states are reluctant to stick with the deals under the old system, the developers locked into higher feed-in tariffs may run into difficulty because their equipment and finance costs are predicated on the tariff. The two systems are a problem and the result is threatening the economic viability of work by developers

as more projects will fall into disarray without a uniform policy setting out how the industry gets paid. As a result, any question about the system being upended early would prompt developers to halt work.

Way forward: There are certain key issues and challenges that need to be addressed in order to look for a smooth growth of the sector and achievement of 60 GW of wind power by 2022. India’s green-power ambitions have been at risk from loss-making staterun power retailers that aren’t able to buy enough power and have run behind on payments. Recurring payment delays by Indian electricity retailers are piling on costs to operators as delay of 6-12 months is common which tacks on about 8 percent of additional costs, according to industry experts. The prevailing scenario has led to several domestic and overseas clean-energy companies, racking up deficits of several hundred million dollars. Experts believe that timely payments to investors backing green power will help bring prices lower. On the other hand, wind auctions are a positive step in the right direction and have been welcomed by the industry. The government has taken a positive measure where the industry has a guarantee backed by the states, SECI, and the Reserve Bank of India, which is the national central bank. This agreement has been executed with 23 states, and SECI expects the remaining to come on board soon. However, it is unmerited on the part of utilities to abruptly stop signing power purchase agreements without issuing any new guidelines. The current prevailing duel systems of payment that is also making utilities reluctant on keep up with the old deal will have further implications for projects that would add hundreds of megawatts in wind capacity. India is currently racing to double its wind capacity to 60 GW by 2022 and may be affected by the policy uncertainty. n

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INTERNATIONAL CONFERENCE & EXHIBITION

25 - 27 APRIL 2017 THE ASHOK, NEW DELHI

WIND POWER FOREVER

WIND:

Destination India

Member of:

Exhibition Partner:

Organised by:

Platinum Sponsor:

Supporters: Associate Sponsor:

Conference Partner:

Silver Sponsors:

Gold Sponsors:

Bronze Sponsors:

Media Partners:

PR Partner:

Social Media Partner:

Contact us Indian Wind Turbine Manufacturers Association New #11, Ground Floor, Karpagam Garden, 1st Main Road, Adyar, Chennai 600020 INDIA. Tel.: 91 (44) 43015773 E-mail.: info@windergy.in Website: www.indianwindpower.com

IWTMA: Gayathri Manoj E: gayathri@indianwindpower.com T: +91-44-43015773

GWEC: Carolyn Gill E: carolyn.gill@gwec.net

For Exhibition: Nazeeba Zarin E: nazeeba@pdatradefairs.com M: +91-9886126824

www.vision-media.co.in

Jeevan Shenoy E: jeevan@pdatradefairs.com M: +91-8884460157

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For Conference: Gautam Menon E: conference@windergy.in M: +91-9731261053

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Power@WindergyIndia Insight | Februaryfacebook.com/windergy.india - March 2017 |


Communication Features

Tata Power touches over 5 lakh lives through various CSR initiatives The 5 thrust areas for development includes Education, Health, Livelihood, Social Capital and Nurturing Sustainability..

T

ata Power, India’s largest integrated power company, has always undertaken various initiatives with an aim to improve the quality of life, and ensure holistic development of its surrounding communities. The company has proudly carried its CSR legacy towards ‘Sustained Inclusiveness’ and being a ‘neighbour of choice’. Reinforcing its commitment towards nation building, Tata Power has successfully touched over half a million lives through the CSR initiativesdesigned to promote Education, Health, Livelihood, Social Capital and Nurturing Sustainability. The Tata Power Community Development Trust acts as development vehicle for driving these initiatives. Tata Power has undertaken activities in the five major thrust areas, which includes:Augmenting Primary Education System with emphasis on girl child education (VIDYA) Through VIDYA, Tata Power enhanced the access to education for community childrenand increased their attendance rate, thus eliminating school dropouts through various interventions. The Education Excellence program awarded scholarships for students. It spearheaded

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More than 80,000 people benefitted through this program.

an innovative learning concept – Bala, aimed at creating child friendly, learning and fun based physical environment in school infrastructure. The educational initiativeshave impacted over 210000students across various regions. Building and Strengthening Healthcare Facilities (AROGYA) including safe drinking water (SWATCH JAL) In the healthcare area, the company started curative healthcare serviceswhich treated more than 80,000 patients at mobile health vans. Through awareness sessions, it reached out to more than 60000 people. More than 50,000 patients were treated through the Lifeline express facility. Nurturing Sustainability for Inclusive Growth (AKSHAY) The intervention was aimed at bringing people and nature together to work in harmony towards the socio-economic development of the communities. Tata Power’s Model Village initiative started in line with the nation’s vision on developing model villages to build a stronger India, implemented its first phase across10 select vilPower Insight

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lages. Around 310 households in 5 villages were provided three 5 MW LED lights on unique “pre-paid” model. The program also helped youth rediscover their full potential through Sports Coaching classes. Enhancing Programs on Livelihood (SAMRIDDHI) & Employability (DAKSH)

Speaking about the achievement, Mr. Ashok Sethi, COO & ED, Tata Power, said, “We, at Tata Power have always believed that companies must give back to the society on a sustainable basis. CSR is an integral part of Tata business philosophy and Tata Power has always remained aligned to it. The programs are created keeping in mind the holistic growth of the community and nation. As a part of collective responsibility towards nation building, Tata Power will continue to engage with key stakeholders including community to sustain the desired outcomes in the long run.”

Building Social Capital and Infrastructure (SANRACHNA)

Tata Power Group companies’ CSR spend in FY’16 stood at Rs. 47.02 crores. The year 2016 also marked the commencement of four state-ofthe-art Tata Power Skill Development Institutes in Gujarat, Maharashtra and Jharkhand wherein more than 17000 work days were generated through 16 different vocational courses.

This program created social infrastructure that aided in creating opportunities for development and upliftment of communities.

In FY16, Tata Power was ranked 2nd in CSR by Economic Times and IIM Udaipur Survey for CSR initiatives in 2014-15. n

The initiative created spaces where the communities can save, build assets, adopt new livelihoods, and see new opportunities for themselves and their families. It provided livelihood for people through agricultural practices and employability for youth and women.

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Communication Features Adani Group becomes member of Global Energy Interconnection Development and Cooperation Organization (GEIDCO)

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dani Group, a global integrated infrastructure conglomerate has joined Global Energy Interconnection Development and Cooperation Organization (GEIDCO) as a member. GEIDCO is a non-governmental, non-profit international organization of internationally renowned firms, associations, institutions and individuals who

are dedicated to promoting the sustainable development of energy worldwide. The purpose of GEIDCO is to promote the establishment of a Global Energy Interconnection system, to meet the global demand for electricity in a clean and green way, to implement the United Nations “Sustainable Energy for All” and climate change initiatives, and to serve the sustainable development

of humanity. It has identified three focus areas for the development of Global Energy Interconnection. These areas are Smart Grid, UHV Grid and Clean Energy. Adani Group is the first Indian conglomerate to join GEIDCO. This demonstrated the Group’s commitment towards the sustainable development of energy worldwide. The Group’s transmission busi-

ness and renewable energy business will significantly contribute towards the purpose of GEIDCO. Adani Transmission Ltd. is the largest power transmission company operating in the private sector in India and owns, operate and maintain around 5,450 Ckt Kms of transmission lines ranging from 400 KV to 765 KV, with a total transformation capacity of around 14,000 MVA. n

NTL Lemnis Introduces Pharox ‘Helio Plus’ Street Light

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says Mr. Arun Gupta, MD, NTL Group.

TL Lemnis, the leading LED Lighting solutions company, has added another innovative product Pharox “Helio Plus” to its product portfolio. The Pharox Helio Plus is a range of Street lights has a unique modular arrangement, that is as yet unavailable in the category. Pharox Helio Plus range showcases a high performance, energy efficient LED light for road lighting applications. With the option of customizing the wattages to achieve the desired lux levels and specially designed optics, with highest quality lens for desired coverage, this product can be used in Public Areas, Parking Lots & Highway Lighting Applications. The high power factor and an exceptionally high efficacy of >100

Pharox Helio Plus is available in various lens options to cater to the requirement of various spread patterns and has a wide sustainable voltage range of 140-300v.

lm/W makes it a one stop solution in street lighting applications.

The other features of the product include:

“NTL Lemnis has been an innovation oriented company and Pharox Helios Plus offers yet another innovative first in the category. This unique modular arrangement available in the outdoor application category is leading due to cost benefits and design flexibility. Our products are also synonymous with quality and reliability”,

Efficacy: ≥ 100lm/W CCT: 5700K CRI: >70 IP Rating: IP 65 (Provides better dust and water protection, maintains the higher light output for longer period) Power Factor: >0.95 Voltage Range: 140-300V Surge Protection: 5kV THD: <10%

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Power Insight

The product range is specially provided with Over Voltage Protection, Thermal Protection and Short Circuit Protection. It has been designed with an extruded aluminium heat sink for better thermal management. Pharox Helio Plus Range is available in 40W, 80W, 120W and 160W at MRP Rs. 5,200/-, Rs. 10,400, Rs. 15,600 & Rs. 20,800 respectively. NTL Lemnis products are available across the country through specially appointed institutional sales persons and distributors across the country. n

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Communication Features

Adani Power’s Mundra TPP creates a new national record by running continuously for 600 days Unit 4 at Mundra TPP creates a national record by running continuously for 600 days surpassing NTPC’s 559 days previous record. It generated 4142.56MUs (million units) of electricity during these 600 days

A

ing many such accomplishments in the coming future.” said Mr. Gautam Adani, Chairman, Adani Group.

dani Power Limited, part of the Adani Group, a globally integrated infrastructure player, today, said that a 330 megawatt (MW) unit 4 at 4,620 MW Mundra thermal power plant has created a national record by running continuously for 600 days and generated 4142.56MUs (million units) of electricity. According to industry data, a unit at NTPC Ltd’s Vindhyachal power plant ran for 559 days previously. “This is a very proud and momentous occasion for everyone at Adani Power. The continuous operations of the thermal unit without any interruption for such a long time is a huge feat considering the complexity of technol-

ogy and scale of operations involved in it. This goes out to reflect our commitment towards nation building by providing quality uninterrupted power supply. Given the performance track record, we are confident of achiev-

“A comprehensive Operational Excellence and Maintenance Program has been institutionalized at all our plants to improve availability and reliability of the units and this has resulted in the uninterrupted operation of Unit 4 for 600 days. Strict adherence to Standard Operating Procedures, systematic skill development of operations team through training, knowledge sharing and implementation of best in class maintenance processes and technology were the key factors which have resulted in this achievement,” said Mr. Vneet Jaain, CEO, Adani Power. n

KPTL received new orders of RS 1,200 crore

K

alpataru Power Transmission Limited (KPTL), a leading global EPC player in the power & infrastructure contracting sector has secured new orders/ notification of award of Rs 1,200 crores. The details are as follows: n Transmission line turnkey project by Transmission Corporation of Telangana Limited (TSTRANSCO), Hyderabad of Rs 402 crores n Railway infrastructure construction project in Hyderabad (Telangana) for Railways Vikas Nigam Limited (RVNL) of Rs 464 crores. The project is awarded to a JV consortium of KPTL, JMC and STS. n Transmission line turnkey project in Abu Dhabi of Rs 336 crores.

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Commenting on the new order announcements, Mr. Manish Mohnot, Managing Director & CEO, KPTL said “We continued our thrust on profitable growth with orders across all business segments. Our current |

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order book provides good visibility of achieving 15-20% growth in next year. We continue to build our portfolio of projects in railways EPC sector, which will be a key growth driver going forward”. n


Communication Features

CG announces sale of B2B Automation business to Alfanar

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vantha Group Company, CG Power and Industrial Solutions Limited (Formerly Crompton Greaves Limited) announces the sale of its B2B Automation business to Alfanar (the Buyer) for an enterprise value of 120 million Euros. The transfer of the business is effective from March 6, 2017 (CET). The sale of the Automation business includes ZIV Aplicaciones y Tecnologia, S.L. (Spain), its subsidiaries along with the related Automation businesses in UK, Ireland, France and India (ZIV). Upon completion of the Sale, ZIV Automation India Ltd, the wholly owned subsidiary owning the India Automation Business will cease to be a subsidiary of the Company and will be a wholly owned subsidiary of ZIV Aplicaciones y Tecnologia, S.L, Spain. Headquartered in Riyadh, Saudi

neering services. Alfanar operates in construction and manufacturing businesses, design & development centers with a number of facilities in the Middle East, Asia and Europe.

Arabia, with 22,000+ employees and USD 2.5 billion turnover, Alfanar is a major player in the electrical manufacturing business, including the manufacturing of electrical construction products as well as related engi-

Commenting on the deal, Avantha Group Company CG’s CEO & Managing Director, Mr. K. N. Neelkant said, “It was our attempt to find the right partner for ZIV and Alfanar is well positioned to support ZIV in its next phase of growth and technological development. For CG, this significant strategic action is intended to meet our objective of debt reduction, strengthening our balance sheet and building a financially stronger Company. The divestment is also a step towards our strategy to focus on our core products and markets that provide a significant growth opportunity with improved profitability”. n

H.B. Fuller completes first phase of USD 20 million investment and expands capabilities in Pune, India

H

.B. Fuller has officially opened its new Pune, India, business office and a new R&D centre in its Shirwal, India manufacturing facility. The facilities were inaugurated by Jim Owens, president and chief executive officer, on 18 and 19March, 2017, thus, marking the conclusion of its first phase of investment of USD 20 million in India. This expansion strengthens H.B. Fuller’s commitment to customers in India and the neighboring areas. H.B. Fuller has had a local presence in India since 2011 through its 24,000-metric-tons-per-annum manufacturing facility in Shirwal, India, located 65 kilometers from Pune. Through the addition of its new

business office in Pune, as well as its new state-of-the-art R&D centre, the company will be able to help its customers solve problems, and create new solutions, more rapidly than ever before. “We are pleased to be expanding our footprint in India. We are optimistic about the new opportunities our new business office and R&D centre will provide us – and our customers. By having a state-of-the-art facility and adhesive experts on the ground in India, we will help accelerate innovation in the region and help drive customer performance,” said Owens. Says Kamal Johari, managing director of Nobel Hygiene, “We’re really looking forward to leveraging H.B. Fuller’s new R&D capabilities in India. www.vision-media.co.in

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Having the strength of this leading global adhesives provider in our local community will be a key competitive advantage for our company.” The new Pune, India business office houses 50 employees in customer support and administrative roles, and offers a modern atmosphere to encourage innovative thinking and to host customer meetings. Spanning 5,000 sq. ft. of the Shirwal manufacturing facility, the new R&D centre features dedicated areas to conduct experiments, run demonstrations and train customers on its hot melt, water-based, anaerobic and cyanoacrylate technologies. Its close proximity to the production floor also increases collaboration between the company’s R&D and operations teams. n

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Events Diary Up Coming Events Mark your diaries with important dates of up-coming industry events taking place in India over the coming months....

Date

Event / Exhibition / Conference

Venue

Organiser

7 to 8, April 2017

RenewX

Hitex, Hydreabad

UBM India

25 to 27, April 2017

WIndergy India 2017

The Ashoka New Delhi

IWTMA

26 to 27, April 2017

India’s Renewable Energy Congress

Shangri-La - Eros Hotel, New Delh

Green Power

10 to 12, May 2017

2nd Solar India Expo

Pragati Maidan, New Delhi

Exhibitions India Group

17 to 19, May 2017

Power Gen India & Central Asia

Pragati Maidan, New Delhi

Inter Ads

21 - 22, June 2017

India Solar Week 2017

Holiday Inn, New Delhi

Solar Quater

Power Insight April - May 2017 Issue

Editorial Attraction: n n n n n

Thermal Power Sector - India Electrical Insulator - Industry Insight Solar PV - Mounting Solutions Rural Electrification Review - Indian Power Sector 2016-17

We are pleased to invite authored articles from “Industry Captains and Thought Leaders”.

Contact Persons

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Navin Singh I Head PR & Marketing I +91 -7303355982 I marketing@vision-media.co.in K Geetha I Regional Manager PR & Marketing I +91 - 9321055982 I geetha@vision-media.co.in

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E copy feb mar 2017 power insight  

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