China, India lead Asia-Pacific energy M&A deals in 2016
The Asia-Pacific witnessed a record year in terms of mergers and acquisitions in the energy space, with 198 transactions valued at USD 77.6 billion in 2016 and the second-largest year-end total going to India. However, the Asia-Pacific energy M&A logged a 33 per cent drop in value terms year-on-year while the number of deals (196) were similar to 2015, the report titled Volatility and opportunity: Energy M&A in Asia-Pacific by law firm Eversheds in collaboration with deal tracking firm Mergermarket. Market-wise, China maintained its top spot in 2016, accounting for 36 per cent of deals and 31 per cent of value. India had the second-largest year-end totals, accounting for 18 per cent of deals and 22 per cent of value, followed by Australia with corresponding figures of 11 per cent and 20 per cent, the report added. The Indian government has established clean energy targets such as 175 gw of renewable energy, or 15 per cent of total capacity, by 2022, of which 100 gw is expected to come from solar power. “This has also helped provide a focus for a strong flow of renewable deals, continuing a trend that started in 2015 when the largest power sector deals were largely renewable deals,” the report said. Meanwhile, renewable energy transactions accounted for over half of Asia-Pacific energy M&A deals in 2016. Regarding the current geo-political and economic trends shaping Asia-Pacific’s traditional and alternative energy markets, Eversheds Partner (corporate) Charles Butcher said “small producers lacking financial resources have been hardest hit by the oil crisis”. Butcher further said smaller cap deals are likely to continue in the short term as smaller players engage in distressed sales, merge to survive, or deleverage through asset divestment. “We expect that a number of energy majors will continue to exploit current assets while maintaining their balancesheets,” Butcher added. Jarred Tinordi Womens Jersey
Uday has improved payment situation: Tata Power MD Anil Sardana
Tata Power managing director Anil Sardana says Uday, the scheme for revival of state-run distribution companies, has helped discoms and improved payments but the biggest challenge for the sector continues to be the offtake of power. Discoms are still reluctant to buy power, he tells ET. Edited excerpts: Uday scheme has completed more than a year. What is your assessment of its impact? For people like us, what matters is that the state discoms should be in a better position to pay off dues, buy more power and invest on network. As of now, payment issues are getting resolved. But there is no visibility of power offtake improving yet. Moving the losses of the discom to the government’s balance sheet has helped them get more loans from the bank but, ultimately, they need to ensure they stop making losses and the bucket stops leaking. The last report shows some states have improved, but many states may not have improved and that means the bucket will keep leaking. Is there any movement on states buying more power and signing new power purchase agreements? The central government cannot penetrate that part. The discoms backed by regulators have to decide how much is the demand and how much of it has to be sourced in the short-term market, medium term or long term. If short-term rates are so low, regulators may ask to source from there. We hear discoms are reluctant to sign long-term PPAs (power purchase agreements) but there is no way to validate that as government data does not show much shortfall between peak requirement to the peak supply. One continues to hear though from people that in this city or that there are shortfall and hinterland continues to face power cut. But there is no data to validate load-shedding is happening. People assume that power cuts for two hours or four hours is a way of life. Diesel generator set consumption is still high. Tata Power had ambitious targets to begin with but, like its peers, the problems in the power sector impacted capacity growth. Has acquisition of Welspun’s renewable assets made up for the loss of momentum initially? The scale which we had initially targeted, we made up for that. And, if the order for Mundra ultra mega power project, which should come within a month’s time from the Supreme Court, is favourable, then each one of our asset would be performing well at an operational level. We have turned around Maithon and our solar projects. We have no asset in our stable which isn’t stable. Will the order on compensatory tariff for Mundra UMPP change your strategy of going slow on thermal projects? Our stakeholders are not asking us to go slow due to Mundra. We have decided on our own to conserve and maintain our debtequity ratio. As a management decision, we don’t want to unleash capacity addition without it being contracted or without that being backed with fuel supply agreement for long term. Would you add renewable energy capacity? That will also be determined on power offtake. On the surface, there is no problem of offtake or payment but, when you do the due diligence on the procurers, then you find that both could be challenging. For solar power, we have internally done rating profile of states and will pursue opportunities only in those states which have good rating.
Half of Mumbai’s electricity can be generated by solar power: Report
Mumbai and its suburbs have potential to harness solar power to generate as much as half the electricity consumed through rooftop solar photovoltaic installations, a report based on a first of its kind of study in the country has suggested. Mumbai’s need of electricity is typically around 3 GW and out of this roof-top solar installations can make around 1.72 GW of energy, the joint study- ‘Estimating the Rooftop Solar Potential of Greater Mumbai’ -carried out by five organisations National Centre for Photovoltaic Research and Education (NCPRE), Centre for Urban Science and Engineering (C-USE) at IIT Bombay, Institute of Electrical and Electronics Engineers (IEEE), Bombay Chapter, the Observer Research Foundation (ORF) and Bridge to India has shown. “The National Solar Mission of the Government of India envisages an ambitious target of 100 GW of solar energy to be installed in the country by 2022. Of this 100 GW, it is planned that 40 GW would come up on rooftops across the country. The report published on Monday is a step in realising this target,” said secretary of the Ministry of New and Renewable Energy (MNRE) Rajeev Kapoor, as he released the report. “Problem of rooftop power generation in India is not that of technology. It is about inertia of the companies operating in the field. Hence, this report would help not only the government, but the private sector as well and has a potential to be used as a ‘ready reckoner’ for solar capacity,” he added. While measuring solar power potential of Mumbai, a newer, easier method to measure the potential too was evolved, which can be used to measure solar power potential of other cities. The team employed a variety of inputs and techniques, include GIS mapping of all structures in Mumbai, ward-by-ward division, existing land use (ELU) maps of BMC and 3D mapping to discount areas covered by shadowing. The computer-based analysis was supported and verified by site visits to some locations and discounting of ‘weak’ structures which would not support solar panels. The study also revealed that Mumbai makes an ideal city for rooftop power generation as the city’s power demand peaks during the afternoon when the solar power potential is maximum. Clay Buchholz Authentic Jersey
How Narendra Modi government got it right on wind power; prices set to tumble
Solar power tariffs came down to roughly a third in the last five years thanks to price discovery through the competitive bidding route. Wind power prices, after remaining rather stable through these years, appears to be on the solar sector’s heels now. Buoyed by the Centre’s award of 1,000 mega watt (MW) wind projects through competitive bidding that reduced tariff by 19% from the bottom of the current feed-in-tariffs range, the Rajasthan government is set to invite bids for 500 MW wind power capacity in the next couple of months, a person close to the development told FE. The capacity could be used for sales to other states as well. The trend is likely to be followed by other states as well in the future. Industry watchers expects that states like Maharashtra, Gujarat and Madhya Pradesh might be the first lot to follow suit. Currently, wind power tariffs are determined by State Regulatory Commissions through the feed-in tariff method, where the state regulatory commission, in consultation with the other stakeholders, arrives at a tariff for one year. The Modi government is now looking at competitive bidding route to discover the market rates for wind power projects across various states. The prevailing feed-in tariffs are in the range of R4.25-4.8/unit across various states in India; in the recently concluded competitive bidding conducted by the Centre in Tamil Nadu, tariffs dropped to R3.46/unit. In comparison, 25-year levelised tariffs for solar projects came down from Rs 12.2/unit in 2010 to Rs 3.3/unit (Rs 2.97 for the first year) in the case of Rewa solar park in Madhya Pradesh in February, 2017. A senior Rajasthan Renewable Energy Corporation official told FE: “We have decided that we will invite tenders for the wind projects as against the feed-in tariffs mechanism.” “Besides, there are some 100 MW of wind power projects that are in various stages of commissioning in Rajasthan. We want to put these projects also under bidding route,” the official added. Companies had erected turbines in advance expecting feed-in tariffs. The state’s decision to adopt the bidding route could hurt the turbine manufacturers. As a step to prepare themselves before awarding the inter-state or intra-state projects, states along with Power Grid Corporation of India are setting-up infrastructure to evacuate the wind and solar power generated within the states. “The country has the technical know-how, manufacturing base, generators, all we need is a strong policy towards acquisition of land for wind projects, and safer and faster evacuation of wind power across states, so that total generation from wind sector does not fall below the 5,525 MW achieved in FY17,” the official quoted above said. Domata Peko Womens Jersey
NTPC may pitch in to solve power crisis
A proposal on generating 175 MW of solar power at the NTPC Kayamkulam unit will be discussed by the Kerala State Electricity Board (KSEB) with the officials of the Central-public sector unit this week. The NTPC had submitted the proposal to the KSEB last month. A key issue pertaining to scarcity of power in the State can be resolved if the talks succeed. Speculations on the future of the Central PSU at Kayamkulam could also be set at rest if the project materialises, sources in the industry said. The NTPC has demonstrated its capability to produce solar power on the premises of the thermal power plant at Kayamkulam. A floating solar power plant of 100 kWp, the largest of its kind in the country, was commissioned last month. Apart from the floating solar plant, the public sector company is producing power from rooftop solar project there. The cost of solar power generation has come down drastically on account of modern technology. The rates of solar power generated at the Kayamkulam unit could be competitive, said NTPC unit General Manager Kunal Gupta. The rates could be around Rs. 3.50 per unit. The KSEB had avoided NTPC Kayamkulam for its daily power needs due to higher production cost owing to the high prices of the feedstock naphtha. With the solar power rates reaching a competitive level, the prospects are considered bright for signing a power purchase agreement between the KSEB and the NTPC. The NTPC offer for producing 175 MW could be considered a viable alternative to the proposal on the Athirappilly hydel project, mired in controversy. Antonio Gates Womens Jersey
Indian, Bangladeshi companies ink pacts worth over $9 bn
Companies from India and Bangladesh today signed pacts worth over $9 billion here aimed at deepening partnership in sectors like power and oil and gas. Among the MoUs signed in the presence of visiting Prime Minister Sheikh Hasina is a facility agreement between Bangladesh India Friendship Power Company (BIFPCL) and Exim Bank of India for debt financing for construction of 1,320 mw Maitree Power Project in Rampal in Bangladesh ($1.6 bn). The MoUs include an implementation and power purchase agreement between Reliance Power and the Ministry of Power, Energy and Mineral Resources for the first phase (718 mw) of the 3,000 mw power project at Meghnaghat, entailing $1 billion (out of a total proposed investment of $3 billion). HomeEconomy Indian, Bangladeshi companies ink pacts worth over $9 bn Indian, Bangladeshi companies ink pacts worth over $9 bn Companies from India and Bangladesh today signed pacts worth over $9 billion here aimed at deepening partnership in sectors like power and oil and gas. By: PTI | New Delhi | Published: April 10, 2017 2:34 PM 61 SHARES Facebook Twitter Google Plus Bangladeshi PM Sheikh Hasina and Prime Minister Narendra Modi (Source: PMO/Twitter) Companies from India and Bangladesh today signed pacts worth over $9 billion here aimed at deepening partnership in sectors like power and oil and gas. Among the MoUs signed in the presence of visiting Prime Minister Sheikh Hasina is a facility agreement between Bangladesh India Friendship Power Company (BIFPCL) and Exim Bank of India for debt financing for construction of 1,320 mw Maitree Power Project in Rampal in Bangladesh ($1.6 bn). The MoUs include an implementation and power purchase agreement between Reliance Power and the Ministry of Power, Energy and Mineral Resources for the first phase (718 mw) of the 3,000 mw power project at Meghnaghat, entailing $1 billion (out of a total proposed investment of $3 billion). Watch this also: The agreement between NTPC Vidyut Vyapar Nigam (NVVN) and Bangladesh Power Development Board for supply of power from Nepal envisaged an investment of $3.15 billion. The event also saw signing of pact between Adani Power (Jharkhand) and the Bangladesh Power Development Board entailing an investment of $2 billion and a power purchase agreement between Adani Power (Jharkhand) and Power Grid Company of Bangladesh. Besides, the MoUs signed include those on LNG terminal use between Petronet LNG, India and Bangladesh Oil, Gas and Mineral Corporation (Petrobangla), among others. The MoU-signing ceremony was organised by CII. Fozzy Whittaker Authentic Jersey
2016 a Record Year for Renewables, Latest IRENA Data Reveals
Global renewable energy generation capacity increased by 161 gigawatts (GW) in 2016, making the strongest year ever for new capacity additions, according to data released today by the International Renewable Energy Agency (IRENA). Renewable Energy Capacity Statistics 2017, estimates that by the end of last year the world’s renewable generation capacity reached 2,006 GW, with solar energy showing particularly strong growth. “We are witnessing an energy transformation taking hold around the world, and this is reflected in another year of record breaking additions in new renewable energy capacity,” said IRENA Director-General Adnan Z. Amin. “This growth in deployment emphasizes the increasingly strong business case for renewables which also have multiple socio-economic benefits in terms of fueling economic growth, creating jobs and improving human welfare and the environment. But accelerating this momentum will require additional investment in order to move decisively towards decarbonising the energy sector and meet climate objectives. This new data is an encouraging sign that though there is much yet to do, we are on the right path,” Mr. Amin added. IRENA’s new data shows that last year’s additions grew the world’s renewable energy capacity by 8.7 per cent, with a record 71 GW of new solar energy leading the growth. 2016 marked the first time since 2013 that solar growth outpaced wind energy, which increased by 51 GW, while hydropower and bioenergy capacities increased 30 GW and 9 GW respectively —the best ever year for growth in bioenergy capacity. Geothermal energy capacity increased by just under 1 GW. Asia accounted for 58 per cent of new renewable additions in 2016, according to the data, giving it a total of 812 GW or roughly 41 per cent of the global capacity. Asia was also the fastest growing region, with a 13.1 per cent increase in renewable capacity. Africa installed 4.1 GW of new capacity in 2016, twice as much as 2015. This year’s edition of Renewable Energy Capacity Statistics contains for the first time data specifically for off-grid renewables. IRENA shows that off-grid renewable electricity capacity reached 2,800 megawatts (MW) at the end of 2016. Roughly 40 per cent of off-grid electricity was provided by solar energy and 10 per cent from hydropower. The majority of the remainder came from bioenergy. It is estimated that globally as many as 60 million households, or 300 million people, are served with and benefit from off-grid renewable electricity. Highlights by technology: Hydropower: In 2016, about half of new hydro capacity was installed in Brazil and China (14.6 GW in total). Other countries with major hydro expansion (over 1 GW) included: Canada; Ecuador; Ethiopia and India. Wind energy: Almost three-quarters of new wind energy capacity was installed last year in just four countries: China (+19 GW); USA (+9 GW); Germany (+5 GW); and India (+4 GW). Brazil continued to show strong growth, with an increase of 2 GW in 2016. Bioenergy: The majority of bioenergy capacity expansion occurred in Asia last year (+5.9 GW) and Asia is fast approaching Europe in terms of its share of global bioenergy capacity (32 per cent compared to 34 per cent in Europe). Europe (+1.3 GW) and South America (+0.9 GW) were the other two regions where bioenergy capacity expanded significantly. Solar energy: Asia saw the most growth in solar capacity last year, with capacity of 139 GW (+50 GW). Almost half of all new solar capacity was installed in China in 2016 (+34 GW). Other countries with significant expansion included: USA (+11 GW); Japan (+8 GW) and India (+4 GW). Capacity in Europe expanded by 5 GW to reach 104 GW, with most expansion occurring in Germany and the UK. Geothermal energy: Geothermal power capacity increased by 780 MW in 2016, with expansions in Kenya (+485 MW), Turkey (+150 MW), Indonesia (+95 MW) and Italy (+55 MW). Renewable Energy Capacity Statistics 2017 offers the most comprehensive, up-to-date and accessible figures on renewable energy capacity statistics. It includes figures from 2000 to 2016, and contains data from more than 200 countries and territories. Tobias Rieder Authentic Jersey
IREDA finances Rs 10,000 crore green projects during 2016-17
The Indian Renewable Energy Development Agency increased its financing of green energy projects considerably in 2016-17, crossing the milestone of Rs 10,000 crore in a single year for the first time. IREDA provided loans of Rs 10,200 crore through 2016-17 for 112 clean energy projects across solar, wind, small hydro and biogas. “In the coming year, we plan to do Rs 12,500-13,000 crore,” said KS Popli, chairman and managing director. It nearly doubled its support for solar projects to Rs 4785.87 crore in 2016-17 from Rs 2684.68 crore in 2015-16, but its financing of wind projects dropped slightly to Rs 2511.69 crore from Rs 2735.51crore. The company, currently an NBFC under the Ministry of New and Renewable Energy, with mini navratna status, also hopes to come out with an initial public offering later this year for which cabinet approval has been sought. “We plan to sell around 13 crore shares divesting 15% of our stake,” said Popli. The share price and amount to be raised have not yet been decided, but Popli expected shares to sell at a premium of Rs 40-50 a share following the listing. IREDA has also initiated the process of converting from an NBFC to a green bank. “In effect, we are already a green bank, but some more formalities have to be gone through before our name can be changed appropriately,” he said. “We are working on the process.” The falling tariffs of solar and wind power, thanks to the auction process initiated by the government, may please discoms and consumers, but financiers of renewable energy projects such as IREDA may have reasons to worry as their borrowers’ margins get squeezed. “Some people do feel that project viability may be affected by the dropping tariffs,” said Popli. “But I expect developers to take due care and get the right price for their power. My discussions with them suggest they have factored in everything. Besides, the advantage with low tariffs is that electricity boards will be more inclined to sign contracts for renewable energy which gives financiers like us comfort that repayments will be made.” Is it possible to make financing for renewable energy cheaper? “At present, loans are being provided at 10-10.5% by most banks and financial institutions,” said Popli, adding, “We have to come up with innovative solutions if we want to lower them further.” Vin Baker Womens Jersey
R-Power to seal Bangla project today
Anil Ambani’s Reliance Power (R-Power) will on Monday seal the power purchase agreement (PPA) with Bangladesh Power Development Board (BPDB) to get the $1-billion first phase of its proposed power project and liquid gas import terminal in Bangladesh off the ground in less than two years of signing the MoU. The PPA marks a major power stroke by the Indian private sector on the sidelines of Bangladeshi Prime Minister Sheikh Hasina’s visit, indicating that bilateral ties have come of age under her commitment and PM Narendra Modi’s stewardship of India’s relationship with its neighbours. Indeed, it was during Modi’s June 2015 visit to Bangladesh that R-Power and BPDB had signed the MoU for the three-phase project, altogether worth $3 billion. The $1-billion investment in the first phase of 750MW alone will be the largest by an Indian private sector company. For Bangladesh, it will mark the single-largest FDI. The power plant will be set up in Narayanganj district’s Meghnaghat area, around 40km southeast of Dhaka, and the floating gas import terminal at Kutubdia island in Chittagong. BPDB has provided land for the power station. A parallel deal is in the works, wherein R-Power will source gas but PetroBangla will use the full capacity of the import terminal and sell fuel to the power plant and other industries. Bangladesh has a demand of nearly 8,000-9,000MW but produces about 7,000MW. A major chunk of power stations run on fuel oil or diesel, resulting in a tariff of 15-16 cents a unit. Industry analysts said given the current economics of liquid gas price, power from R-Power’s project could be 15-20% cheaper. Reliance Power plans to move equipment it had imported from US gear-maker GE for a 2,400 mw plant proposed at Samalkot in Andhra Pradesh. Sources said these equipment still remain unpacked and carry guarantee from suppliers. The project was built around the promise of gas from Reliance Industries Ltd’s KG-D6 discovery off the Andhra coast but scrapped after output fell to a tenth of the target. By 2021, demand for electricity in Bangladesh is expected to touch 24,000 mw and 40,000 mw by 2030. The Bangladesh Vision 2010 document envisages developing 10,000 mw generation capacity. The Tata group had proposed $3 billion investment to build a coal-fired power station in Bangladesh some 7-8 years ago but scrapped the project citing inordinate delays by the government. Since then, government-to-government deals have dominated power ties between India and Bangladesh. India supplies some 600 mw through West Bengal and Tripura and is examining the possibility of ramping up wheeling capacity to 1,000 mw. Besides, NTPC and BPDB are jointly building a $1.2 billion coal-fired power plant. William Karlsson Authentic Jersey
Surplus power generation capacity, enough coal likely to beat summer heat
The summer of 2017 may not prove as uncomfortable for electricity consumers across India as the season in previous years, thanks to surplus power generation capacity, adequate coal stocks and improved purchasing ability of distribution companies. Barring pockets in certain states such as Uttar Pradesh, Punjab and Jammu & Kashmir which lack inter-state transmission connectivity, consumers in most other regions are likely to have sufficient electricity access. Generators are looking forward to better utilisation of power plants, resulting in better revenues, as the Meteorological Department has predicted a warmer summer this year. Power prices in the spot market touched Rs 3 per unit in the last week of March, following a sudden spurt in temperatures due to heat wave conditions in most parts of the country. The prices have now been settled at about Rs 2.85 per unit with increased supply from underutilised projects, but rates for southern states have risen to Rs 3.65 per unit. A senior official in the Central Electricity Authority said states such as Bihar, Telangana, Chhattisgarh and Punjab have made affordable short-term power arrangements for the summer season at an average tariff of Rs 3.5 per unit. Haryana, Arunachal Pradesh, Rajasthan, Gujarat, Maharashtra, Andhra Pradesh, Telangana and Tamil Nadu are among the states that often buy electricity from power exchanges. After many years, Uttar Pradesh has tied up short-term power for April and May, and has for the first time begun buying electricity from the spot markets, said the official, speaking on condition of anonymity. ICRA Ratings’ sector head Girishkumar Kadam said, “The debt refinancing under Uday scheme is resulting in an improvement in the liquidity profile of the discoms in these states and is likely to improve the ability of the discoms to buy power and pay power generators in a timely manner.” Power producers expect better utilisation or plant load factors this summer, said Ashok Khurana, director general of the Association of Power Producers. CEA data shows that plant load factor at thermal plants was 67% in April 2016, 62% in May and 54% in June. “The demand is likely to pick up substantially this summer. A 10-15% growth in peak demand led by air cooling based on weather predictions is expected,” said a Mumbai-based analyst, who did not wish to be identified. There is adequate power to meet demand and enough coal to produce power, Khurana said, while pointing out that much depends on the financial condition of the states and their intention to buy power. The last mile transmission connectivity in some states may, however, prove a constraint in some states such as Bihar and Uttar Pradesh. Twenty seven states and a union territory, representing 97% of discom debt have joined the Centre’s Ujwal Discom Assurance Yojana (Uday) launched in November 2015. Rural Electrification Corporation CEO Ritu Maheshwari said the states have derived benefits of Rs 11,900 crore in the nine months since joining the scheme while revenue gap of the discoms in 16 early states has fallen 49 paise from 61 paise and the power technical losses have reduced to 22.5% from 24%. Owing to the forecast of above normal temperatures, the power ministry expects power demand in northern region to peak to 56 GW between April and September. Electricity demand in the southern region has already peaked to 42 GW while in the western region it has touched 50 GW. The peak demand across the country during the summer is expected to be 165 GW compared to 140 GW at present. Michael Frolik Womens Jersey