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					</table><p>Credit rating agency <a href="https://www.icra.in/" target="_blank" rel="noopener">ICRA</a> has projected that green power will account for approximately 40-42% of the total power mix of major cement companies in India by March 2025, a significant increase from around 35% as of March 2023.</p>
<p>ICRA anticipates that the proportion of blended cement in the portfolios of major cement companies will rise to 80-82% in the medium term, up from 77-79% in fiscal year 2023. Moreover, these companies are actively increasing the utilization of Portland Slag Cement (PSC) within their blended cement offerings. PSC manufacturing involves a lower clinker factor due to the higher use of slag, resulting in reduced emissions.</p>
<p>According to Anupama Reddy, Vice President and Co-group Head at ICRA, key cement industry players in the country have set ambitious goals to reduce their emissions by 15-17% over the next 8-10 years. They aim to achieve this by increasing the utilization of blended cement, which relies on less clinker and, consequently, less fuel. They also plan to boost the use of green power, which includes solar, wind, and waste heat recovery system (WHRS) capacities.</p>
<p>&#8216;The major cement companies are expected to invest approximately ₹55 billion (~$660.2 million) in green power infrastructure for the planned addition of 537 MW in the next two years. This estimate is based on an installation cost of ₹120 -130 million (~$1.4-1.5 million)/ MW for WHRS and ₹40-45 million (~$480,166-528,183) for solar projects. These investments are projected to result in annual savings of ₹20 billion (~$240 million) in power costs for these companies once their planned green power capacities become fully operational,” she said.</p>
<p>The growing emphasis on green power is expected to diminish the cement industry&#8217;s reliance on expensive thermal power and grid electricity, leading to cost reductions and a smaller carbon footprint.</p>
<p>Anupama Reddy highlighted the benefits of green power, saying, &#8216;Assuming a thermal power cost at ₹6.5 (~$0.078)/kWh, WHRS power cost at ₹0.75 (~$0.009)/ kWh, and solar power cost at ₹4.5 (~$0.054)/KWh, a 25% replacement of thermal power consumption with green power could yield cost savings of approximately 15-18% and improve operating margins by 140-160 basis points for cement companies, all while contributing to a reduced carbon footprint.'&#8221;</p>
<p>The cement industry is known to consume high levels of energy and ranks among the largest coal consumers, second only to sectors like iron, steel, and thermal power. Historically, cement companies have drawn electricity from the state grid and relied on coal-based captive thermal power plants. Cement manufacturing processes entail significant coal usage during clinker production, leading to greenhouse gas emissions that harm the environment.</p>
<p>The extent of emissions is influenced by various factors, including the clinker factor, power consumption per tonne of cement, the thermal substitution rate, and the incorporation of green power in a company&#8217;s energy mix.</p>
<p>According to Masdar, decarbonization budgets for hard-to-abate sectors like cement are a <a href="https://www.mercomindia.com/hard-to-abate-sectors-to-support-decarbonization/" target="_blank" rel="noopener">significant</a> concern, with less than a third of executives from these industries saying they have adequate budgets to finance their decarbonization efforts.</p>
<p>BloombergNEF report said investments in the low-carbon energy transition <a href="https://mercomindia.com/low-carbon-energy-investment-exceeds-1-trillion/" target="_blank" rel="noopener">accounted</a> for a record-breaking $1.1 trillion in 2022 and had reached parity with capital deployed for fossil fuel supply.</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/arjun-joshi/" class="vcard author" rel="author"><span class="fn">Arjun Joshi</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Arjun-Joshi-1.png" width="50" /></p>
<p><strong style="text-decoration: underline">Arjun Joshi,</strong> Staff reporter at Mercom India<br />
<a href="https://mercomindia.com/author/arjun-joshi/" target="_blank" rel="noopener">More articles from Arjun Joshi.</a></p>
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<p><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Arjun-Joshi-1.png" width="86" height="102" /><a href="https://mercomindia.com/author/arjun-joshi/" target="_blank" rel="noopener"><strong style="color: #00b451">Arjun Joshi</strong> </a>is a staff reporter at Mercom India. Before joining Mercom, he worked as a technical writer for enterprise resource software companies based in India and abroad. He holds a bachelor’s degree in Journalism, Psychology, and Optional English from Garden City University, Bangalore. <a href="https://mercomindia.com/author/arjun-joshi" target="_blank" rel="noopener">More articles from Arjun Joshi.</a></p>
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Green Power to Account for 42% of Cement Companies’ Power Mix by 2025: ICRA

<p>The overall subsidy dependence of power distribution companies (DISCOMs) is estimated to increase by 7-8 percent to Rs.810 billion (~$12.53 billion) in the current financial year. The overall subsidy requirement is further estimated to constitute around 17-18 percent of the revenue requirement approved/estimated for the utilities for FY2018, according to a report by India Credit Rating Agency (ICRA).</p>
<p>The increase in the subsidy requirement is due to the subsidy and concessional tariff announcements in states during the pre-election period and continuation of subsidized nature of power tariff by state governments for certain consumer categories, even in case of upward revision in tariff by State Electricity Regulatory Commissions (SERCs). The report also stated that in case programs like Direct Benefit Transfer (DBT), which is being proposed in Bihar, were to be implemented, the direct subsidy dependence on the state government would reduce for the DISCOMs. Timeliness and adequacy of subsidy support from the respective state governments assumes critical significance from the DISCOMs’ liquidity perspective.</p>
<p>The increase in subsidy burden depends on the estimated higher level of consumption by the subsidized consumer categories. The dependence on subsidy support for DISCOMs in states such as Andhra Pradesh, Bihar, Gujarat, Karnataka, Haryana, Rajasthan, Tamil Nadu, and Telangana continues to be significant, ranging between 11-29 percent of the overall revenue requirement across the states.</p>
<p>In the past too, due to political considerations the DISCOMs in some states were forced to provide either subsidized or free power and this led to the financial downfall of DISCOMs. In the past government officials have told Mercom, “that even when they do not want to, due to political will they provide cheap power at a loss to the utilities.”</p>
<p>Mercom <a href="https://mercomindia.com/mercom-exclusive-payment-delays-increasing-risk-project-costs-solar-wind-projects-many-states/" target="_blank" rel="noopener noreferrer">previously reported</a>, an official at South Bihar Power Distribution Company Limited said, in Bihar we have to provide subsidized electricity to farmers due to politicians, and this ties our hands in terms of payments. An official at Jharkhand Urja Vitran Nigam Limited had told Mercom that politics plays a huge role in a state like Jharkhand where utilities have to let off dues or provide subsidies when asked.</p>
<p>Image Credit: By Leonardo.stabile, via Wikimedia Commons</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/raj/" class="vcard author" rel="author"><span class="fn">Raj Prabhu</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Raj-New-200X200-1.jpg" width="50" /></p>
<p><strong style="text-decoration: underline">Raj Prabhu,</strong> Staff reporter at Mercom India<br />
<a href="https://mercomindia.com/author/raj/" target="_blank" rel="noopener">More articles from Raj Prabhu.</a></p>
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<img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Raj-New-200X200-1.jpg" alt="Raj" /><a href="https://mercomindia.com/author/raj/" target="_blank" rel="noopener"><strong style="color: #00b451">Raj Prabhu</strong></a> is a recognized thought leader in clean energy markets where his work has influenced policies worldwide. He has a deep understanding of regulatory policy and clean energy markets and his market and opinion pieces are regularly published on both MercomIndia.com and other leading publications globally. Raj is also a regular speaker and presenter on clean energy policy and finance topics at conferences worldwide. Raj attended the KLE College of Science in Bangalore, India for physics and chemistry, and holds a Bachelor of Science Degree in Hotel and Institutional Management from Johnson and Wales University, Rhode Island. <a href="https://mercomindia.com/author/raj/">More articles from Raj Prabhu.</a></div>
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Political Considerations at Play as ‘DISCOM’s Subsidy Dependence up by 7-8 Percent

<p>According to the “Integrated Rating for State Power Distribution Utilities” conducted by the Ministry of Power, the four Gujarat state power distribution utilities (DISCOMs) have emerged as top performers for the fifth year in a row. Tripura has replaced Meghalaya at the bottom of rating table.</p>
<p>Out of the 41 DISCOMs rated; five received a rating of A+ (up from three), six were rated A (no change), eight utilities were rated B+ (down from 10), 10 received a rating of B (up from eight), five utilities received C+ rating (down from eight) and seven DISCOMs were rated C (up from five).</p>
<p>Of the five DISCOMs that received A+ rating, four are from Gujarat and one is from Uttarakhand. The bottom rung is dominated by Meghalaya, Uttar Pradesh, Tripura, Manipur, and Jharkhand DISCOMs.</p>
<p>The Ministry of Power formulated an Integrated Rating Methodology in July 2012 for evaluating performance of State Power Distribution utilities on a range of operational, financial, regulatory and reform parameters. The rating covers 41 state distribution utilities spread across 22 states. The Investment Information and Credit Rating Agency (ICRA) and Credit Analysis and Research (CARE) are the designated credit rating agencies.</p>
<p>The evaluation parameters cover current levels of performance as well as relative improvement from year to year. The operational and reform parameters include AT&amp;C losses, efficiency of power purchase cost, customer interface and carry weightage of 47 percent. The financial parameters include cost coverage ratio, payables, receivables, timely submission of audited accounts carrying weightage of 33 percent. External parameters relating to regulatory environment, State Government subsidy support, carry assigned weightage of 20 percent.</p>
<p>(More to follow… <a href="http://bit.ly/mercomutil" target="_blank" rel="noopener noreferrer">http://bit.ly/mercomutil</a>)</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/priya-sanjay/" class="vcard author" rel="author"><span class="fn">Priya Sanjay</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Priya-Sanjay-Managing-Director-Mercom-India-1.jpg" width="50" /></p>
<p><strong style="text-decoration: underline">Priya Sanjay,</strong> Staff reporter at Mercom India<br />
<a href="https://mercomindia.com/author/priya-sanjay/" target="_blank" rel="noopener">More articles from Priya Sanjay.</a></p>
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<p><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2022/04/Priya-Sanjay-Managing-Director-Mercom-India-1.jpg" alt="Wendy Prabhu" />Priya currently serves as the Publisher for MercomIndia.com. With more than a decade of experience working in corporate communications, research, and policy, Priya has deep roots in the Indian energy markets and is regularly in touch with policy makers and industry leaders. Priya received her bachelor’s degree from Vidya Vardhaka College of Arts in Bangalore, India for Political Science and Economics and completed her MBA from Bangalore University. <a href="https://mercomindia.com/author/priya-sanjay/">More articles from Priya Sanjay.</a></div>
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Power DISCOM Ratings – Gujarat Top, Tripura Last

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