February was a busy month for the domestic renewable sector, with many important events and announcements making the headlines.
There were several important announcements in the month, including the Union Budget, which grabbed the headlines. Here’s a recap of the important announcements and events that defined the month of February:
Amid the ongoing economic slowdown, the Union Budget 2020-21 tried to instill hope in the investors and taxpayers. The Finance Minister Nirmala Sitharaman presented the Union Budget 2020-21 in Parliament with a focus on three main points: Aspiration India, Economic Development for all, and Building a Caring Society. The finance minister announced that for the year 2020-21, ₹220 billion (~$3.08 billion) had been allocated for the power and renewable sectors.
The Budget failed to meet the expectations of the electric vehicle segment of the country. The segment’s stakeholders were expecting more measures from the government to promote electric mobility in cities. Despite the government’s constant stress on a cleaner and greener environment, the Union Budget had very little to put smiles on the faces of EV enthusiasts, and not many incentives were announced to drive the demand of EVs.
Gujarat’s Finance Minister Nitinbhai Patel presented the state budget for the financial year 2020-21, which included a ₹9.12 billion (~$127.19 million) provision for a subsidy for solar rooftop projects and a ₹1.25 billion (~$17.43 million) towards the KUSUM program. Of the ₹1.25 billion allocated to the Kisan Urja Suraksha Evan Utthan Mahabhiyan (KUSUM) program, ₹250 million (~$3.49 million) has been allotted to help the Gujarat Urja Vikas Nigam Limited (GUVNL) implement component-C of the program.
The month of February also saw a significant increase in the trade volume of both solar and non-solar renewable energy certificates in February. A cumulative sum of 1,299,737 solar RECs was traded on the Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL). Out of the total, 984,157 and 315,580 solar RECs were traded on the IEX and PXIL, respectively.
The month saw the Energy Efficiency Services Limited (EESL), a joint venture of public sector units under the Ministry of Power, announce that it has successfully installed one million smart meters across India under the Smart Meter National Program (SMNP). Speaking on occasion, the Union Power Minister, R.K. Singh, informed that electric vehicles deployed by EESL have already completed 20 million cumulative kilometers.
In February, the Andhra Pradesh government approved ₹29.84 billion (~$415.67 million) to distribution companies in the state towards the payment of 25% of their losses, allowing them to clear their power dues. This is good news for developers who are operating in the state and struggling financially. The allowance comes under the Ujwal DISCOM Assurance Yojana (UDAY) program, which aims to help the struggling state-run distribution companies by providing them the required financial assistance.
In another development, the Union Minister of Coal and Mines, Pralhad Joshi, recently announced India’s plans to stop the import of thermal coal from 2023-2024. Coal-based power makes up the largest share of power generation in India. However, considering that India has the fifth largest coal reserves in the world, stopping imports is not significant news on its own.
The National Institute of Wind Energy (NIWE) stated that the installable wind potential of the country is estimated to be at 695 GW at 120 meters above ground level. Out of the estimated figure, nearly 347 GW of wind projects can be installed on cultivable lands, followed by wastelands where 340 GW could be possible.
Also, the Ministry of new and Renewable Energy (MNRE) decided that strict action will be taken against those solar project developers that are using imported solar cells and modules to develop projects under the Domestic Content Requirement (DCR) category. In India, DCR category projects were introduced to provide a guaranteed market for local solar component manufacturers.
The month also saw Mahindra & Mahindra Limited announce that its subsidiary, Mahindra Renewables Private Limited, has agreed to sell its entire stake in three subsidiaries to CLP India Private Limited (CLP) for ~₹3.40 billion ($47.35 million). The three subsidiaries include Cleansolar Renewable Energy Private Limited (CREPL), Divine Solren Private Limited (DSPL), and Neo Solren Private Limited (NSPL).
The MNRE has opened an Industry and Investors’ Facilitation Centre, which would work as a focal point to provide all the information regarding programs and policies of the government and resolve issues related to renewable energy investors and industry.
The Andhra Pradesh High Court asked the state’s distribution companies including, Southern Power Distribution Company Limited (APSPDCL) and Eastern Power Distribution Company Limited (APEPDCL), to clear the dues of wind developers within two weeks. The dues currently amount to a whopping ₹1.7 billion (~$24.3 million). The high court asked the DISCOMs to reply to every petitioner in the case within two weeks.
The month also saw four leading solar developers in the state petition the Appellate Tribunal for Electricity (APTEL) against the Karnataka Electricity Regulatory Commission’s (KERC) order, which was issued in December 2019. The developers including, Amplus Solar, Fourth Partner Energy, ReNew Power, and Cleantech Solar, filed petitions separately, requesting the Commission to bring all the stakeholders on board before coming to any conclusion.
The MNRE issued a notification to set up 50 GW of ultra-mega renewable energy parks in Gujarat and Rajasthan. The ultra-mega parks with a capacity of 25 GW each will be located at Khavada in Gujarat and Jaisalmer district in Rajasthan. The land will be made available to the developers for setting up of solar, wind, and solar wind hybrid projects at these locations.
The month of February also saw the Andhra Pradesh government announce that it is planning to develop 10 GW of solar power projects as a permanent solution to supply free power to farmers in the state. Currently, the government incurs more than ₹100 billion (~$1.39 billion) to meet the agriculture subsidy, lift irrigation power charges, and aquaculture subsidy every year.
The Transmission Corporation of Andhra Pradesh (APTRANSCO) issued a notice to the Andhra Pradesh Electricity Regulatory Commission (APERC) seeking amendments to the existing regulations for forecasting, scheduling, and deviation settlement for variable renewable energy projects.
Also in February, Sterling and Wilson, a Shapoorji Pallonji Group company, released its consolidated and standalone financial results for the third quarter (Q3) and nine months ended on December 31, 2019. The revenue of the company for the nine months of the financial year (FY) 2019-20 stood at ₹35.150 billion (~$492.9 million), and the gross profit margin for the same period stood at 13.1% as compared to 9.3% for the nine months of FY19. The gross profit margin for Q3 FY20 was 7.8% as compared to 17.4% during the same period in FY19.
The Indian Oil Corporation Limited (IOCL) announced that it has partnered with Phinergy, an Israeli battery manufacturer, to produce metal-air batteries, which could potentially be used in electric vehicles (EVs). These batteries can be tailored for different needs like electric mobility and other stationery purposes.
The agreement will lead to the transfer of 2,148 MW (AC) of operating solar assets, which are currently owned by AGEL to the new joint venture company. AGEL will own the remaining 50% stake in the company.
The Department of Telecommunications issued directions to the telecom service providers to use of renewable energy solutions and energy-efficient technologies. The move could open up another segment of the market to solar, wind, and battery energy storage companies, along with reducing carbon emissions from diesel generators, which are predominantly used by telecom towers for backup power.
Adani Green, a part of the Adani Group, announced its financial results for the nine months and quarter ending December 31, 2019. The total revenue for the company from operations in the first nine months of the financial year stood at ₹18.53 billion (~$260.12 million), up by 35% on a year-on-year (YoY) basis.
Image credit: LONGi Solar
Rakesh is a staff reporter at Mercom India. Prior to joining Mercom, he worked in many roles as a business correspondent, assistant editor, senior content writer, and sub-editor with bcfocus.com, CIOReview/Silicon India, Verbinden Communication, and Bangalore Bias. Rakesh holds a Bachelor’s degree in English from Indira Gandhi National Open University (IGNOU).