KARNATAKA’S DISCOMS CANCEL PPAS AFTER UP AND AP

After the UPERC cancelled PPAs with Bajaj Power owned units (as reported by TOI), BESCOM (Karnataka based DISCOM) cancelled its PPA signed before 31st March of a 75.6 MW wind power plant. The state’s energy department had already issued a letter to the DISCOMs to not sign anymore PPAs  as the state has sufficient wind projects to fulfill its RPO compliance. More such cancellations from the DISCOMs are expected. The industries which are more affected by this cancellation are Gamesha, Suzlon, Inox Wind, Sembcorp Green Infra and Mytrah.

 

This is going to be a very discouraging development for the wind industry since a number of PPAs were signed at a higher price which is no longer being accepted by the DISCOMs. A similar development was also covered on our blog.

 

The article can be accessed here.

 

Policy for Repowering of the Wind Power Projects

The Ministry of New & Renewable Energy in consultation with various stakeholders including the Industry and States had come up with the Draft Policy for Repowering of the Wind Power Projects in the month of March this year. After 4 months the Policy has been finalised with an objective to promote optimum utilization of wind energy resources by creating facilitative framework for repowering. Some of the key pints of the policy are mentioned below:

  • All the wind turbine generators with the capacity of 1MW or below would be eligible for repowering.
  • The Policy offers incentives in form of an additional interest rate rebate of 0.25% over existing rebate available to the new wind projects by IREDA.
  • Secondly through benefits like Accelerated Depreciation or GBI that would be made available to the repowering project.
  • The power generated corresponding to average of last three years’ generation prior to repowering would continue to be procured on the terms of existing PPA.
  • Augmentation of transmission system from pooling station onwards to be carried out by the respective STU.
  • During the period of execution of repowering, wind turbines would be exempted from not honoring the PPA for the non-availability
  •  Similarly, in case of repowering by captive user they will to be allowed to purchase power from grid during the period of execution of repowering.

The Policy can be accessed here.

 

 

 

India generated 33029.39 MU Wind Power & 7447.92 MU Solar Power Generated during Year 2015-16

The Minister of State for Power, Coal, New & Renewable Energy and Mines Shri Piyush Goyal informed that the generation of electricity from wind and solar sources in the country stood at 33,029.39 million units and 7,447.92 million units, respectively, during 2015-16.

Quoting the figures received from the Central Electricity Authority (CEA), the minister said during the last two years, i.e., 2014-15 and 2015-16, the country added a total of 5,735 MW of wind power capacity and 4,131 MW of solar power capacity.

It was also told that a capacity addition target of 4,000 MW and 12,000 MW has been proposed for generation of electricity from wind and solar energy, respectively, during 2016-17 and a total of 315 MW have been installed under Solar Roof top Scheme. Power generated from these projects is being used for both domestic and captive use, the minister informed.

Goyal stated that tenders for 20,766 MW solar power projects have been issued. He also said that the wind power projects are mainly developed by private sector under various modes, including PPA, REC, captive use, third party sale etc, adding that the centre has not undertaken construction of wind energy project.

  • The ministry is implementing several schemes to promote generation of solar and wind energy. These include: Development of solar parks and ultra mega solar power projects
  • Development of solar PV power plants on canal banks / canal tops
  • Setting up of 300 MW grid connected solar PV power projects by defense establishments under ministry of defense and Para military forces with viability gap funding (VGF) under Batch-IV of Phase-II/III of Jawaharlal Nehru National Solar Mission (JNNSM)
  • Setting up 1,000 MW grid-connected solar PV power projects by CPSUs with VGF under Batch-V of Phase-II of JNNSM
  • Setting up of 15,000 MW grid-connected solar PV power projects under Batch II of Phase II of National Solar Mission (by NTPC/NVVN)
  • Setting up of 2000 MW grid-connected solar power projects with VGF through Solar Energy Corporation of India (SECI) and generation based incentive scheme for promotion of wind power.

The press release can be accessed here.

 

 

 

India’s Energy Mix to Have 40% Renewable Sources by 2030

The Renewable energy holds a share of 12% in the current energy mix of India. As a part of its contribution under the Paris Climate Change Agreement, India sets target of achieving at least 40% of India’s total power capacity from renewable sources by 2030.

If the National Democratic Alliance approves the proposal then India would be looking to building a total of 350 GW of solar and wind power by 2030. This ambitious target will help India offer a 35% reduction in the greenhouse gas emission intensity of its economy below 2005 levels by 2030.

The above update has been taken from Business Standard’s article published on 22nd September, 2015 which can be accessed here.

TN lifts ban on inter state open access

According to an article in Times of India (refer), Tamil Nadu has allowed consumers and generators in the state to procure and sell power from/to outside states.

The directive comes in continuation to commitment given by Hon’ble CM of TN –  that there would be no scheduled power cuts in the state and also grated “must-run” status to all windmills.

A statement from Raj Bhawan reads –

“In exercise of the powers conferred by sub-section (1) of Section 11 of the Electricity Act, 2003 (Central Act 36 of 2003), the Governor of Tamil Nadu hereby rescinds the Energy Department Notification No. II(2)/EGY/104(c)/2009, published at page 1 of Part II—Section 2 of the Tamil Nadu Government Gazette, Extraordinary, dated the February 17, 2009,”

Following this directive it can be expected that power business in Tamil Nadu becomes more competitive with time.

Wind producers in TN favouring power forecasting & scheduling

As per an article in The Hindu, Tamil Nadu a leader in wind power generation (installed capacity of around 7200 MW) in the country has, off late, been disappointing its wind power producers. TN’s state distribution company (TANGEDCO) has been shying away from purchasing power generated from these generators owing to poor evacuation facility and a “Banking” clause which empowers generators to claim the power previously injected into the grid.

Wind power producers have been making huge losses as TANGEDCO continues to discard the power that is being generated from these wind machines. But a positive side as a consequence of this, seems to be tilting in favour of forecasting & scheduling. Hon’ble CERC had recently barred all commercial settlements envisaged under the RRF mechanism.

Wind power producers (in same article) are betting on forecasting & scheduling to serve as a saviour for them. They say that an estimated declaration of power to be injected, beforehand, is expected to address most issues of TANGEDCO.

More on RRF mechanism can be learned by visiting the following links –

Link 1

Link 2

Link 3

75% local content in JNNSM 2nd Phase – MNRE

Against the backdrop of the recent episode in which the United States dragged India in World Trade Organization (WTO) for local content requirement in JNNSM Ist phase, the ministry of new and renewable energy has come out with a bold step to incorporate 75 % local content in phase 2 of its solar scheme. Mr. Farooq Abdullah said – “We want to encourage domestic industry also. The bidding would start in the coming month”, giving signs that India is still keen in developing local green manufacturing market and expecting that WTO will turn US’s allegation in its favor.

Another important statement given with respect to the fledgling wind energy market in India was to reinstate the withdrawn accelerated depreciation mechanism. Hon’ble minister was spotted saying that the proposal for reinstatement would be taken up to the cabinet and the same will be pushed. He also asserted that MNRE has taken cognizance of the predicament of investments in wind energy and how the same is affecting the small and medium scale enterprises, which house a high capacity of captive wind power in the nation. Our blog-post on petition filed by IWPA recently can be assessed here.

Relevant media articles –

The Hindu 

EFY Times

Wind majors selling assets to avert indebtedness

Wind power majors of the likes of Suzlon, DLF etc. are now looking for buyers who can buy their wind portfolios which will provide an opportunity for the former to raise capital and abrogate a situation of indebtedness.  Regulatory failure has left operating a wind farm a costly affair. On the other hand, the buyers are usually cash rich companies planning an expansion of  their green portfolios. For these buyers, owning an operating farm poses less risk and higher returns in terms of already established performance.

According to a study by Bloomberg, DLF (a property developer company) agreed to sell 217 MWs of projects for 5.23 billion rupees. Ushdev Power Holdings Limited has plans to boost its wing generation capacity and is in talks with Suzlon Energy Limited to acquire 400 MWs over the next 15 months. A detailed article by Bloomberg, can be assessed by clicking here.

In the past few days there have been various petitions filed by wind bodies like IWPA requesting to reinstate the accelerated depreciation scheme (Click Here). WEGs are looking for an urgent regulatory push from the government to regain the sector’s sheen.

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