Narendra Modi’s electricity push fails to light rural India
Screams alerted Dadasaheb Vidhate to the fire trapping three of his children in the family’s thatched-roof hut in rural India. “Neighbours rushed to help douse the fire, but we couldn’t save anyone,” Vidhate, 45, said of the blaze four years ago, which he blames on an overturned kerosene lamp. “My children were burned alive before my eyes.” With no electricity, the one-room mud shelter on a farm 240 kilometers (150 miles) east of Mumbai had only the lamp for light — common in India, where power remains unaffordable, inadequate or simply non-existent for 240 million people. If their hut had been connected to the power grid, Vidhate believes it may never have caught fire, killing Aakash, 15, Manisha, 13, and 11-year-old Vikas, he said. When Prime Minister Narendra Modi pledged to bring reliable power to all citizens during the campaign that propelled him into office in 2014, the same year the World Bank pegged India as home to the world’s largest un-electrified population. While his government has made progress meeting its 2019 deadline, many families are still missing out, holding back some of India’s poorest, most-vulnerable citizens and preventing the country from achieving its development ambitions. In the year after Modi’s election, an audit identified 18,452 villages without electricity. Since then, that number has fallen by a third, leaving only 1 percent of the country’s total villages to be electrified, the data show. But a closer look at what constitutes “electrified” reveals how much further India has to go. About 250 kilometers east of New Delhi in the village of Fateh Nagla in Uttar Pradesh, India’s most-populated state and one of its poorest, the dairy shop runs on a combination of solar power and a led battery, while its three flour mills use diesel generators. In the afternoons, men wait their turn to charge their mobile phones off a wire rigged up to an electric water pump, according to village head Susheel Kumar. Though only 15 of its roughly 170 homes are connected to the power grid, the government lists Fateh Nagla as electrified, Kumar said. That’s because the village barely meets the central government’s definition: the basic infrastructure is in place; power is being supplied to schools, health centers and other public places; and at least 10 per cent of households are receiving electricity. In winter, when the sun sets at around 5:30 p.m., only a few solar-powered lights or kerosene lamps break the darkness. And even homes with a power connection are bereft of light as it switches on only after 10 p.m. and back off early in the morning, according to Kumar. That makes it difficult for children to do their homework, stunting education in a village where about 90 percent drop out of school by eighth grade, he said. Throughout Uttar Pradesh and neighboring Bihar — with combined populations approaching the size of the U.S.—fewer than half of rural households have power connections, according to data from the central government. But, by its definition of electrified, the same data as of Monday showed only 13 villages in Uttar Pradesh and 598 in Bihar lacked power. “The government’s definition of an electrified village doesn’t make sense,” said Aruna Kumarakandath, who leads renewable energy research at New Delhi-based Centre for Science and Environment, a non-profit public advocacy organization. “How can we say a village is electrified if 90 percent of homes don’t get power?” The power ministry’s top bureaucrat, Pradeep Kumar Pujari, sees building infrastructure to power villages as just the first step toward full electrification. “By creating the infrastructure, we are creating demand from rural households,” Pujari, the secretary of the ministry, said this week. “There are challenges involved in this and this will not happen overnight. But it will happen slowly.” Modi’s political fortunes ride on reaching his “power for all” goal, said Sandeep Shastri, a political scientist and pro-vice chancellor at Jain University in Bengaluru. “It addresses the under-privileged sections of society and defies accusations that his government works only for the rich,” Shastri said. “The success of the program can have a big, positive impact on Modi’s political fortunes, while a failure can boomerang badly and bolster allegations that this government’s promises are more of rhetoric and less of action.” Power shortages cost India the equivalent of about 7 per cent of gross domestic product, the World Bank said in 2010, when the country witnessed supply deficits of almost 15 per cent. The government said the gap narrowed to less than 1 per cent as of November, although that deficit only measures supplies to customers already connected to the grid. The power problems in India, which in 2012 suffered one of the worst blackouts in history and still has some 50 million rural households without electricity, are hardly about building more power plants or access to fuel. The country uses only half its generation capacity and its state-run coal miner is the world’s largest. Power plants, as well as installing poles and wires for distribution, is only a small part of the challenge ensuring reliable supply to poor households, said Ashwini Chitnis, a senior research associate at Prayas, a non-profit advocacy group that focuses on energy, health and education. “While efforts toward putting in place infrastructure for electrification are absolutely necessary, they are not sufficient,” Chitnis said. Some state-run power retailers consider supplying rural homes as an unattractive business proposition because of thin usage and below-cost tariffs, according to Dinesh Arora, chief executive officer at REC Power Distribution Co., a unit of state-run Rural Electrification Corp., which oversees the village electrification efforts. Power distributed to farmers and households under the poverty line is sold at below-market rates, the subsidies for which state governments are slow to repay. In addition, electricity retailers lose about one-quarter of the electricity they have for sale through technical and commercial losses—the industry term for power theft. A federal government-led program aims to lower that to an average of 15 percent by 2019 with technology that tracks theft and
Nawaz Sharif, World Bank CEO discuss Indus Waters, India’s power plants
World Bank Chief Executive Officer Kristalina Georgieva called on Prime Minister Nawaz Sharif in Islamabad on Thursday to discuss implementation of the Indus Waters Treaty and the dispute between Pakistan and India over the construction of two hydropower projects by New Delhi. India is constructing two hydropower projects on the Chenab river. Pakistan has objected to the construction of the 850 MW Ratle and 330 MW Kishanganga hydropower schemes, saying that both projects would have adverse impact on the flow of the Chenab and Neelum rivers. Prime Minister Nawaz Sharif expressed hope that the World Bank would take the lead in dispute resolution through the Court of Arbitration, a statement issued by the Prime Minister’s House said. Both countries initiated separate processes in the World Bank under the Indus Waters Treaty (IWT), with India requesting the organisation for appointment of a “Neutral Expert”, and Pakistan calling for the appointment of the chairman of the Court of Arbitration. The World Bank had, in December, announced a pause in arbitration between Islamabad and New Delhi on the two dams being constructed by India, calling on both countries “to consider alternative ways to resolve their disagreements”. Georgieva in a video statement shared by the Prime Minister’s Office said she was “very impressed by the positive change that has happened” in Pakistan since her last visit to the country in 2011. She was pleased with the visible improvement in Pakistan’s infrastructure. “The benefits of development are directed to those who need it the most,” she added. The WB’s investment — which can go up to $1.5 billion a year — has contributed to the economic prosperity and development of the country, Georgieva said. Matthew Stafford Authentic Jersey
Power generator NTPC Ltd raises 500 million euros via overseas bonds sale
NTPC, India’s biggest power producer, has raised 500 million euros through overseas bonds sale that perhaps may be the first longest tenor eurodenominated issuance by an Indian company. NTPC got bids for $2.4 billion, or nearly five times the targeted size, through euro-denominated bonds sale with 10-year maturity, the longest in the currency. Securities have been priced at 200 basis points over Euro Treasury. “The 10-year bond has been issued at a coupon of 2.75% with a yield of 2.814%,“ the company said in a statement. The proceeds of the bonds issue would be used for capex. This is the first ever 10-year Euro denominated bond ssuance by an Asian utility issuer and also the first ever 10-year EUR transaction by an Indian Issuer. NTPC said the issue saw participation from more than 125 investors from across the globe. This, it said, is the first “10-year EURO bond for BBBIssuer from Asia-ex Japan“ and the “longest tenor achieved by a BBBIssuer from Emerging Markets since 2005.“ Also, it is the first 10-year EURO bond by an Indian issuer, the statement said. Earl Thomas III Womens Jersey
1.28 million Renewable Energy Certificates traded in January, says IEX
Power exchange IEX today said that a total of 12.88 lakh renewable energy certificates (RECs) were traded in January. “A total of 12.88 lakh RECs were traded in the REC trading session held on January 25, 2017 at IEX,” it said in a statement. Power distribution companies as well as open access and captive consumers are under obligation to buy RECs from renewable energy producers under RPO mandated by central/state regulatory commissions. RECs are aimed at providing an easier avenue for various entities, including power distribution companies, to meet their green energy obligations. Two power exchanges — Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL), approved by the Central Electricity Regulatory Commission — hold auction of RECs on the last Wednesday of every month. “With trade of 12.48 lakh RECs, the market has set an all-time high record predominantly on purchase by discoms followed by Open Access Consumers and Captive Consumers,” the statement said. Since the beginning of this fiscal (April-January), IEX has traded about 31 lakh RECs. REC volume trade saw an increase of over 412 per cent over 2.51 lakh RECs traded in the previous month of the same fiscal. A total of 1,399 participants traded at IEX with 870 participants in non-solar segment and 529 participants in the solar segment. Overall, a total of 3,418 participants are registered in the REC segment at IEX. Of this, 864 are Eligible Entities (RE Generators) 2,535 are Obligated Entities (discoms, Open Access Consumers & Captive Generators) and 19 are registered as Voluntary Entities. IEX is country’s premier power trading platform. George Hill Authentic Jersey
Madhya Pradesh woos global investors with mega solar project
The world’s largest solar power plant, coming up in Madhya Pradesh, has caught the interest of clean energy companies from around the world. Twenty leading firms, including Italy’s Enel Green Power SpA, SoftBank-promoted SBG Cleantech Ltd, Canadian Solar Energy Holding, Singapore3 Pte Ltd and Green Infra Wind Power Project Ltd, promoted by Sembcorp Industries Ltd, have expressed interest. “The 20 firms will bid for three units of 250 megawatts (MW) each that make up the project in the second round of auctions to be held in about 10 days,” said a person with direct knowledge of the development, speaking on condition of anonymity. The first round of auctions was held earlier this month. The 750MW plant is being set up in Rewa district by Rewa Ultra Mega Power Ltd, a joint venture between Solar Energy Corporation of India Ltd and Madhya Pradesh Urja Vikas Nigam Ltd. In the second round, companies will compete on the tariff at which they can sell power. Shapoorji Pallonji Infrastructure Capital Co. Ltd, Torrent Power Ltd, Hero Future Energies Pvt. Ltd, ReNew Power Ventures Pvt. Ltd, Azure Power Global Ltd, Aditya Birla Renewables Ltd, Mahindra Renewables Pvt. Ltd and Orange Renewable Power Ltd are among the bidders. A spokesperson for Sembcorp India said renewable power projects in India that are large scale and offer adequate coverage of payment and development risks will be attractive for long-term investors. “India is one of Sembcorp’s key markets and an integral part of the company’s emerging market strategy. We are constantly on a lookout for suitable opportunities in the country. However as a policy, we do not comment on any specific opportunities,” the spokesperson said in response to an emailed query. India has over 8.5 gigawatts (GW) of solar power capacity and is targeting 100GW by 2022. Of this, 40GW will come from rooftop solar projects. With the renewable-power purchase obligations of power distribution utilities, falling prices of imported solar panels from China and concessional taxation on solar panels, the industry has been growing rapidly, resulting in falling tariffs and a boost for electrical equipment manufacturing and services. According to a report issued this month by clean energy research firm Mercom Capital Group, renewable energy project development has changed significantly over the last quarter largely due to Chinese module price declines. “The average selling prices of Chinese modules in India have declined about 10% since August and by about 30% over the last 12 months. This has provided a much-needed boost to developers which won projects at low bids and were struggling to make project economics work,” said the report. According to Ashish Khanna, executive director and chief executive of Tata Power Solar Systems Ltd, a stronger focus on solar panel and equipment manufacturing, better access to finance and streamlined import duties on panels and system components will go a long way in reaching the 100GW target. Tyler Higbee Authentic Jersey
Renewables to overtake India’s oil output in 2035: BP Energy Outlook
India’s demand for green energy is expected to grow by seven times in 2035, according to the latest BP Energy Outlook released on Wednesday. Accordingly, the share of renewable energy in the country’s fuel mix will increase from the present level of 2% to 8% in 2035. However, the green surge will be inadequate to meet India’s growing need for energy with the country’s demand growth expected to be more than double the non-OECD countries’ average of 52%. OECD countries refer to the 35 nations that are signatories to the Convention on the Organisation for Economic Cooperation and Development, or OECD, and mostly comprise mature economies. This comes in the backdrop of investors seeing enormous opportunity in India’s emerging green economy. India, the world’s third largest energy consuming economy after the US and China, plans to achieve 175 GW of renewable energy capacity by 2022 as part of its commitments to the United Nations Framework Convention on Climate Change adopted by 195 countries in Paris in December 2015. “The global energy landscape is changing. Traditional centers of demand are being overtaken by fast-growing emerging markets. The energy mix is shifting, driven by technological improvements and environmental concerns. More than ever, our industry needs to adapt to meet those changing energy needs,” said Bob Dudley, BP group chief executive in a statement. According to the report, an annual feature published by British energy firm BP Plc, the growth in India’s energy demand is expected to outpace the other so-called BRIC (Brazil, Russia, China, India) countries. India’s energy demand is expected to grow by 129%, while China and Brazil’s energy demand will grow by 47% and 41%, respectively. Russia’s energy demand is expected to grow by 2%. India’s energy consumption is expected to grow by 4.2% annually, faster than all major economies in the world. As a result, India’s share of global energy demand will increase to 9% by 2035, accounting for the second largest share among the BRIC countries with China at 26%, Russia at 4%, and Brazil at 2%. “Coal remains the dominant fuel produced in India with a 65% share of total production in 2035. Renewables overtakes oil as the second largest, increasing from 4% to 14% in 2035 as oil drops from 10% today to 3% by 2035,” the report said. In India, which is the biggest greenhouse gas emitter after the US and China, renewable energy currently accounts for 15%, or 45,917 MW, of the total installed capacity of 3,10,005 MW. According to the government, India has a renewable energy potential of around 900 GW from sources such as wind, solar, small hydro and bio energy. The National Democratic Alliance government’s focus on renewable energy stems from India’s energy import bill of around $150 billion, expected to reach $300 billion by 2030. India imports around 80% of its crude oil and 18% of its natural gas requirements. The government aims to effect a 10% cut in energy imports by 2022 and a 50% cut by 2030. India imported 202 million tonnes of oil in 2015-16. According to BP Energy Outlook’s prediction, India’s oil imports are expected to rise by 165%, followed by a 173% and 105% increase in gas and coal imports respectively. “Energy in transport grows by 5.8% per year and oil remains the dominant fuel source with a 93% market share in 2035,” the report added. D.J. Swearinger Womens Jersey
Union Budget 2017-18: Key budget expectations for the energy sector
India’s energy sector has witnessed rapid growth over the last one year fueled by interventional policies, reforms and investments. Various policy initiatives such as introduction of UDAY, amendments in National Electricity Act, new solar RPO target for states, bio fuel policy, small hydro policy, offshore wind policy, and new hydrocarbon policy have all contributed to creating an environment conducive to investments while, attracting many new investors and global power players to India. But, despite all these developments, there are still some long standing issues which need to be addressed and resolved at the earliest. There is a need for the government to come up with some more interventional policies to accelerate the growth momentum in the sector. Hence, the upcoming budget would be very crucial to the energy sector. Section 80 IA of the Income tax Act 1961 provides 10-year tax holidays to the infrastructure projects. Domestic energy sector has been availing tax holidays under this section in 2016-17. However, to ensure a sustained growth in the sector, extension of 80 IA tax holidays for at least two year period would be highly desirable. It is high time Government of India (GoI) makes efforts to resolve the stressed asset situation. A stressed asset revival fund empowered to perform capital as well as operational restructuring of stressed power plants is expected to be carved out from National Investment and Infrastructure Fund (NIIF). Hydro power plants which are best suited for meeting peaking power demand would require policy push from the government. This is important to ensure smooth integration of large amount of renewables to the grid. India has about 145 GW of hydropower potential, 70 per cent of this potential is yet to be tapped. Clean energy cess is levied at the rate of Rs 400 per tonne on production of coal. The government needs to make consistent efforts to utilize the funds earned from clean energy cess to create a viability gap funding mechanism which could be used to support new hydro installations. Hydro sector may also need a separate RPO obligation, some interest subventions; and may be some FIT support to get the sector revived. The basic objective of imposing “The Clean Energy Cess” was to support the development of renewable energy sector in the country. The cess was doubled to Rs 400 per tonne in the budget announcements in Feb 2016. But, now that there has been a drop in price of solar panels and other equipment which has led to a reduction in solar energy tariff to a level which is close to achieving grid parity. Hence, there is anticipation that with solar tariff being very close to achieving grid parity, this cess should now be rolled back to the pre-2016 budget levels, Rs 200 per tonne. With the implementation of Goods and Services Tax (GST), the tax benefits availed by the renewable energy sector are bound to disappear. This will raise cost of production of renewable based energy. To have as less of an impact as possible, Renewables (especially solar and wind) should be kept in the lowest tax bracket of GST. At present, Accelerated Depreciation (AD) available to the wind sector stands at 80 per cent. AD is one of the crucial financial incentives which has contributed to the renewable energy sector being recognized as a very attractive and lucrative sector in India. However, it would now be reduced from 80 per cent to 40 per cent starting April 2017. The government should take suitable measures to restrict or eliminate the rise of cost for developers. This is also critical to ensure envisaged wind capacity addition targets are met. Generation based incentive (GBI) for the past few years has been responsible for ensuring that the wind power projects remain attractive to the investors. However, GBI is supposed to lapse on 31 March 2017. Since, we are far from achieving our 2022 wind energy target, extending GBI by at least another 2 years is expected to maintain the growth momentum in the sector and to achieve 60 GW target by 2022. Government is yet to finalize the solar manufacturing policy. The said policy will accelerate growth of the sector by reducing cost of solar panels, other equipment, and overall solar tariff, and by developing a solar ecosystem in the country. This policy is also critical from the perspective of achieving 100 GW of installed solar energy target. There is a need to encourage storage solutions, off-grid solutions, mini grid financing through some guarantee funds and interest subventions. In the coal sector, so far it was only Coal India and its subsidiaries which were responsible for commercial mining and distribution of coal in India. However, in the current evolving business landscape, it is now becoming imperative for the government to open up commercial coal mining to the private players. Private sector participation will ensure that it brings with it not only new and advanced mining technology but also lead to increased operational efficiency and market driven coal pricing. However, mere opening of the sector will not be sufficient, it will call for the government to draw a clear cut roadmap to ensure the creation of a free coal market in the country. Realizing the importance of natural gas as fuel of the future, the Government should ensure that there is a significant increase in the consumption of natural gas in transport, industrial use, and in domestic households. In the absence of sufficient domestic production, the gas has to be imported in form of LNG. To promote consumption of LNG, import duty of LNG should be made at par with the import duty of crude petroleum, which is presently zero. Finally, exploration of oil and gas is a risky business and at times explorers find no oil or gas. Companies invest huge amount on exploration and on setting up exploration and production facilities. No production results in sunk cost for the companies and thus companies involved in this business require support from the government. Infrastructure status for
Investment Corp. of Dubai eyes India renewable energy investments
Dubai’s sovereign wealth fund, Investment Corp. of Dubai (ICD) through its subsidiary Dubal Holding Llc is scouting for investments in an Indian renewable energy platform. The sovereign wealth fund’s interest in the Indian renewable energy space comes in the backdrop of Prime Minister Narendra Modi’s pitch for investment in August last year during his visit to the United Arab Emirates (UAE), three people aware of the development said, requesting anonymity. “Dubal Holding is interested in investing in a renewable energy platform,” said one of the three people. India is the UAE’s second largest trading partner, with the two countries sharing a “comprehensive strategic partnership”. India, which requires large infrastructure investment has been trying to persuade the UAE’s $800 billion sovereign wealth fund to invest in the country. “The Indian clean energy space is where Dubal Holding’s interest is. It has been enthused by the success of Government of Singapore Investment Corp. (GIC) and Abu Dhabi Investment Authority (ADIA) in the sector,” said the second person among the three people cited above. Hyderabad-based Greenko Group, backed by Singapore’s GIC and ADIA, acquired SunEdison Inc.’s Indian assets for $392 million last year. Some of the other sovereign funds and government owned investment firms investing in India include Singapore’s Temasek Holdings (Pvt.) Ltd and Abu Dhabi’s Mubadala Development Co. Experts say an investment by ICD will be a ratification of India’s strategy on renewable energy sources. “If a foreign investment fund decides to invest in a country, it is a measure of confidence in the investment. This implies that it recognizes that India has resources to make renewable sources of energy viable, credible and sustainable,” said former power secretary Anil Razdan. India, the world’s third largest energy consuming economy after the US and China, has been seeking investments from West Asian economies which are its largest energy suppliers. UAE is India’s sixth largest supplier, accounting for around 8% of India’s crude oil imports. Queries sent to the ICD last week remained unanswered. “India’s energy security is going to define our energy mix. It is in India’s interest to enhance renewable energy not just for combating climate change but also for its own energy security. Getting out of feed-in tariff and into competitive bidding has strengthened the system. This is great for investors looking for transparent systems,” Piyush Goyal, minister for power, coal, mines and new and renewable energy, said in a statement issued by the Federation of Indian Chambers of Commerce and Industry (Ficci) on Tuesday. India plans to achieve 175 GW of renewable energy capacity by 2022 as part of its climate commitments. The country is the biggest greenhouse gas emitter after the US and China. Renewable energy currently accounts for 15%, or 45,917 MW, of the total installed capacity of 3,10,005 MW in India. “For new investments, the environment is a lot more exciting and attractive,” added Goyal in the Ficci statement. Goyal is leading an Indian delegation to the World Future Energy Summit in Abu Dhabi. According to a report last year by investment bank Ambit Corp. Finance and the UK’s City of London, global pension funds and sovereign wealth funds may invest up to $50 billion in India’s infrastructure sector over the next five years. Justin Pugh Womens Jersey
World Bank sanctions Rs 1,376 crore for Tripura power upgradation
The World Bank has sanctioned Rs 1,376 crore for complete upgradation and improvement of the power system network in the State, Power Minister Manik Dey said today. “The total project cost sanctioned by World Bank is Rs 1,376 crore and the project is divided into five phases. SPML Infra Ltd has got contract of the first phase. In the first phase, Rs 461 crore would be spent. Large number of 132 KV and 33 KV substations will be constructed and upgraded under the project,” Dey said. The Minister added that new 132 KV substations would be constructed at Belonia, Bagafa, Sabroom and Satchand in South Tripura district, Rabindranagar, Gokulnagar in Sipahijala district, Mohanpur in West district, Amarpur in Gomati district and Manu in Dhalai district. Matt Adams Jersey
FirstEnergy to sell four Pennsylvania gas generating plants to LS Power
FirstEnergy Corp said on Thursday it would sell four gas-generating plants in Pennsylvania and portion of a Virginia hydroelectric power station to a unit of LS Power Equity Partners III LP for about $925 million. The power stations, owned by FirstEnergy’s units, have a total capacity of 1,572 megawatts (MW). Akron, Ohio-based FirstEnergy’s move comes as it shifts its focus to more regulated markets by selling or deactivating assets in highly competitive and less regulated markets. FirstEnergy will own or control a total generating capacity of about 15,380 MW upon the closing of the deal. Carmelo Anthony Jersey