YOG INFRA Q2 2024 insights
INDIA has attracted a lot of interest and investments on its clean energy transition journey - across the value chain of renewable energy projects. Singnificant investments are planned over the next 5 years, with a majority of project developments are being done by Indian developers who now are raising significant capital from international capital markets and investors. The financing needs are also being met through various innovative modalities - including use of green bonds, large-scale refinancings and blended finance mechanisms.
Read more about key developments in Infrastructure and PPPs in India in power & clean energy transition sector our latest insight.
This is first publication on a 2-part insight series on India.
April 2024
JAPANESE INVESTORS INVEST IN I-SQUARED’S INDIA CITY GAS PLATFORM
Osaka Gas, Sumitomo Corporation and Japan Overseas Infrastructure Investment Corporation (JOIN) are investing USD 370 Mn for a minority stake in I Squared Capital’s India city gas distribution platform.
The consortium of Japanese investors will become strategic minority shareholders in Natural Gas Transition Platform, a Singapore-based holding company with investments in Indian city gas distribution networks that develop and operate compressed natural gas (CNG) stations. The platform operates CNG stations for vehicles, pipe natural gas to homes and distributes piped natural gas as well as liquefied natural gas to industrial and commercial customers.
Natural Gas Transition Platform has active investments in last-mile city gas distribution businesses, including THINK Gas and AG&P Pratham. India aims to boost the share of natural gas from nearly 7% currently to 15% of the primary energy mix by 2030. The additional capital provided will be used to support the energy transition in India through the expansion of last-mile city gas distribution infrastructure.
Natural gas is a transitional energy source that will play an important role in global decarbonization, substituting for more polluting fuels such as diesel and coal, while at the same time supporting India’s urbanisation and industrialisation with stable and affordable energy.
INDIA’S ADANI GREEN ENERGY UNVEILS USD 27.6 BN EXPANSION PLAN
Adani Green Energy, part of Indian conglomerate Adani Group, has announced a significant investment plan totalling INR 2.3 Trn (USD 27.6 Bn) to expand its green energy production. The investment will be phased until 2030 to enhance the company’s solar and wind power generation capacity.
Adani plans to invest INR 1.5 Trn (USD 18 Bn) in solar and wind power generation at Khavda, Gujarat, India to increase its capacity to 30GW from the current 2GW. Adani Green Energy plans to invest a further INR 500 Bn (USD 5.9 Bn) in similar renewable projects across the country.
The investments are part of the company’s broader strategy to reach an operating portfolio of 45GW by 2030, a significant increase from its current capacity of 10.9GW. Adani Green’s current portfolio includes 7.3GW of solar, 1.4GW of wind and 2.1GW of wind-solar hybrid capacity.
The expansion efforts will be supported by Adani New Industries (ANIL), which aims to triple the photovoltaic cell and module production capacity at its Mundra factory in Gujarat. ANIL will invest INR 300 Bn (USD 3.59 Bn) to increase the factory’s capacity from 4GW to 10GW by the financial year 2026 to 2027.
SCALING UP TRANSMISSION, HYDRO POLICY IN POWER MINISTRY'S 100-DAY PLAN
The Power Ministry under the new government aims to prioritize several key initiatives in its first 100 days. These include enhancing transmission infrastructure, finalizing a comprehensive hydro policy, facilitating viability gap funding for battery storage systems, and boosting pumped hydro storage projects.
The government revealed that the ministry's immediate focus would be on approving additional capacity for transmission lines to strengthen the national grid. This move is crucial to effectively evacuate the incremental power generated from increasing renewable energy capacity, a cornerstone of India's energy strategy. The ministry is also advancing stakeholder consultations to shape the country’s hydro policy and plans to provide a significant boost to pumped hydro storage projects. These projects, which are essential for energy storage and grid stability, may benefit from concessional climate finance options such as sovereign green bonds.
Additionally, the government is preparing to issue tenders for viability gap funding aimed at supporting 500-1,000 MWh battery energy storage system projects. This initiative underscores the administration's commitment to accelerating the adoption of energy storage technologies crucial for managing intermittent renewable energy sources. Moreover, efforts are underway to introduce a scheme specifically for northeastern states, enabling them to participate in pumped storage hydro projects based on a first-come, first-served basis, aimed at bolstering regional energy security and infrastructure development.
TATA POWER SOLAR SYSTEMS PARTNERS WITH INDIAN BANK TO PROMOTE RESIDENTIAL SOLAR ADOPTION
Tata Power Solar Systems Limited (TPSSL), a prominent solar company in India and a wholly-owned subsidiary of Tata Power Renewable Energy Limited (TPREL), has announced a strategic collaboration with Indian Bank, a leading public sector bank in India. The partnership aims to boost the adoption of solar rooftop systems among residential consumers by providing financing solutions under the Pradhan Mantri Surya Ghar Muft Bijli Yojana scheme.
Under this collaboration, residential consumers can avail of loans up to INR 2 lakh (USD 2,395) at an annual interest rate of 7%, in compliance with government regulations. The financing solutions aim to facilitate installations up to 3 KW under the scheme, with a nominal margin money requirement of 10% and collateral-free financing, making it easier for homeowners to embark on their solar journey. Additionally, repayment tenures extend up to 10 years, offering flexibility and convenience.
For installations ranging from 3 to 10 KW, TPSSL and Indian Bank offer tailored financing solutions with loans up to INR 6 lakh (USD 7,185), a margin money requirement of 20%, and competitive interest rates ranging from 8.4% to 10.8% per annum. The collaboration between TPSSL and Indian Bank aims to make solar solutions more accessible and affordable for a broader spectrum of stakeholders, thereby contributing to the widespread adoption of solar energy.
ADANI GREEN ENERGY BECOMES INDIA'S FIRST COMPANY WITH 10,000 MW RENEWABLE ENERGY CAPACITY
Adani Green Energy Ltd (AGEL) became the first company in the country to cross the 10,000 megawatts (MW) mark of the operational portfolio, comprising 7,393 MW solar, 1,401 MW wind, and 2,140 MW wind-solar hybrid capacity. AGEL is India's largest renewable energy company. It is working on a larger goal of reaching 45,000 GW of renewable energy capacity by 2030.
The firm is building the world's largest renewable energy plant in Khavda — a 30,000 MW project. Built across 538 square km, the project is almost as large as Mumbai city. AGEL has operationalized 2000 MW cumulative solar capacity—over 6 percent of the planned 30,000 MW – within 12 months of commencing work on the site.
Adani’s 10,000 MW portfolio represents the largest greenfield expansion in India’s renewable energy sector and represents around 11% of India’s installed utility-scale solar and wind capacity, contributing over 15 % of India’s utility-scale solar installations.
May 2024
SIEMENS TO DEMERGE ENERGY ARM INTO SEPARATE ENTITY
Siemens Limited has announced its intention to demerge its energy business Siemens Energy India into a separate listed entity, to focus on core businesses that meet the demands of shareholders at its German parent, Siemens AG.
Siemens Energy sold an 18 % stake in the Indian entity to Siemens AG for approximately EUR 2.1 BN (USD 2.27 Bn) facilitating the demerger. The German engineering group had previously spun off and listed Siemens Energy in 2020. Post-demerger, Siemens will refocus on technology-driven development in infrastructure and industry segments, while the power generation segments, including renewable energy, will transition to Siemens Energy India. Further, the shareholders of Siemens will receive one share of Siemens Energy India for each share held. The demerger is aimed at enabling both entities to pursue specific strategies and make independent decisions on capital allocation. This move coincides with India’s expectations for rapid growth in power generation, with fiscal 2025 projected to witness the fastest pace of expansion since 2011-2012.
NAYARA ENERGY TO SET UP TWO ETHANOL PLANTS IN INDIA
Indian private-sector refiner Nayara Energy plans to invest INR 6 Bn (USD 71.9 Mn) to set up two Indian ethanol plants, each with a production capacity of 200 kilolitre (kl)/d. Nayara has already identified and purchased land in south India's Naidupeta town, Andhra Pradesh state and central India's Balaghat city, Madhya Pradesh state for the proposed plants. The plants will be commissioned by 2026 and will use broken rice and maize as feedstock.
The company aims to gradually increase the number of plants to five, with a combined ethanol production capacity of around 1,000 kl/d. The establishment of ethanol facilities will significantly enhance Nayara Energy's ethanol supply reliability, playing a crucial role in meeting the Indian government's 20% blending target by the end of fiscal year 2025-2026. India achieved 12% ethanol blending with petrol during November 2023 to March 2024.
Nayara Energy is also considering a significant expansion of its 400,000 b/d Vadinar refinery and proposed doubling primary capacity to 800,000 b/d. The Vadinar expansion project would essentially mean building a new refinery at the existing site. Russian state-controlled Rosneft has a 49% shareholding in Nayara.
RENEW SIGNS 2.2 GW PPAS, EXPAND PORTFOLIO TO 15.6 GW
ReNew has signed five Power Purchase Agreements (PPAs) totalling approximately 2.2GW of renewable energy capacity, expanding its fully contracted renewable energy portfolio to 15.6 GW. ReNew has also received Letters of Award for an additional 5.8 GW of renewable energy capacity. The five PPAs include:
Three (3) solar agreements totaling 800 MW with NTPC Limited, Damodar Valley Corporation, and Solar Energy Corporation of India Limited at a weighted average tariff of ₹2.59 per (USD 0.03) kWh.
1 GW Firm and Dispatchable Renewable Energy (FDRE) PPA was signed with SJVN Limited at a tariff of ₹4.39 (USD 0.05) per kWh.
438 MW PPA with a large multinational commercial and industrial customer.
Combined, these PPAs will involve the development of 1,500 MW of solar and 688 MW of wind projects and are expected to be commissioned over the next 24 months. The company's expansion comes as India targets achieving 500 GW of non-fossil fuel energy capacity and reducing projected carbon emissions by one billion tonnes by 2030.
RENEWABLE ENERGY ACCOUNTED FOR 71% OF INDIA'S NEW POWER GENERATION IN FY24
In India during FY 23-24, renewable energy contributed more than 70% of the 26 GW (Gigawatt) of new power generated in the country. India's total installed energy capacity has reached 442 GW, with renewable energy comprising approximately 33% (144 GW) and hydro contributing 11% (47 GW). The share of Coal in India's total installed capacity fell below 50% for the first time.
Solar energy, including both grid-scale and rooftop installations, continued to dominate India's renewable energy capacity addition, constituting approximately 81% (15 GW) of the total renewable energy addition in FY24. The wind capacity addition nearly doubled, reaching 3.3 GW compared to 2.3 GW in FY23. Additionally, nuclear capacity (1.4 GW) was added for the first time since FY17.
In line with India's ambitious renewable energy targets, renewable energy auctions soared to a record high, reaching approximately 41 GW of auctioned capacity in FY24. Furthermore, the report highlighted the conclusion of eight auctions with energy storage components, indicating a growing shift towards innovative power procurement formats. Around 95% of India's targeted 50 GW annual renewable energy bidding trajectory was met in FY24. Bids of 47.5 GW that were issued are approximately three times the renewable energy capacity that has been added annually in recent years. A rise in peak power demand, reaching a new high of 240 GW in FY24. Factors contributing to this included a fast-growing economy and weather anomalies such as lower-than-expected rainfall and above-normal temperatures. In renewable energy, FY24 saw several policy moves to shift gears beyond utility-scale renewable energy. For instance, PM Surya Ghar: Muft Bijli Yojana was introduced to increase rooftop solar installation in the residential segment, which could result in the addition of 30 GW.
June 2024
MAHINDRA GROUP TO INVEST USD 150 MN FOR RENEWABLE ENERGY PROJECTS IN INDIA
The Mahindra Group plans to invest USD 144 Mn to establish solar and wind energy projects in India. Mahindra Susten, the group's renewable energy unit, will develop the projects, which will have a hybrid capacity of 150 MW. This initiative is part of a strategic partnership with the Ontario Teachers' Pension Plan Board, one of Canada's largest pension funds.
In addition to the initial investment, Mahindra & Mahindra will acquire a 26% stake in Gelos Solren, its solar power generating unit, for USD 4.8 Mn. This acquisition brings the combined investment to nearly USD 150 Mn. This investment comes at a crucial time for India, the world's third-largest greenhouse gas emitter, as it strives to boost its non-fossil capacity, including solar and wind energy, to 500 gigawatts (GW) by 2030.
The Mahindra Group's investment aligns with its aim to adopt 100% renewable energy by 2030. According to its 2022–23 annual report, wind power was used for nearly two-thirds of Mahindra & Mahindra's power needs.
EASTERN INDIAN RAILWAY INVITES BIDS FOR 1 MW ROOFTOP SOLAR SYSTEMS
The Samastipur division of the Eastern Railway has issued a request for qualification to empanel state-wise developers for implementing 1 MW grid-connected rooftop solar systems. The rooftop solar systems will be installed at various locations/stations/depots at service buildings. The scope of the work covers the design, procurement, erection (including civil and structural works), installation, testing, and or viability gap funding from the Ministry of New and Renewable Energy or the Railways. The rooftop solar systems will have net-metering arrangements.
One state-wise agency for each solar capacity and range will be selected. The capacities are 10 to 100 kW and 100 kW to 500 kW. The empanelment, which will be for a year from the letter of award, can be extended by a year.
Bidders should have installed a minimum aggregate of 50 kW of grid-connected/off-grid solar rooftop projects as developers or in the EPC mode. They should have supplied, installed, and commissioned a minimum aggregate of 100 kW of grid-connected/off-grid solar rooftop projects as developers or in the EPC mode in the residential, social, industrial, commercial, or government sectors.
The cost of the bid document is INR 34,810 (USD 417.13), inclusive of GST. Bidders must pay an earnest money deposit of INR 1.07 million (USD 20,372 )/MW. Micro & Small Enterprises seeking exemption from both fees must submit the Udyog Aadhar certificate. Bidders must furnish a performance security of INR 1.6 million (USD 19,174)/MW within 30 days of signing the PPA.
The aggregate turnover of the bidders during the last three financial years and the current financial year should not be less than INR 10 Mn (USD 119,835) per MW. Bidders must have a positive net worth in the last three financial years. The bidder’s parent company will also be considered if it holds a minimum 26% share in the bidding company.
JUNIPER GREEN ENERGY SECURES RENEWABLE PPAs IN GUJARAT AND RAJASTHAN
Juniper Green Energy has signed two separate power purchase agreements for renewable energy projects in Gujarat and Rajasthan. It has secured an agreement with Gujarat Urja Vikas Nigam Limited (GUVNL) under wind phase VI for a standalone 90 MW wind project in Gujarat.
The project is expected to generate nearly 293 million units (MUs) of electricity annually, offsetting approximately 2,66,002 tonnes of CO2 emissions. The electricity generated is estimated to electrify 56,539 households in Gujarat.
The company has signed another PPA (Power Purchase Agreement) with the Solar Energy Corporation of India (SECI) under hybrid tranche VII for the development of a 150 MW wind-solar hybrid power project in Gujarat and Rajasthan. The project is aimed to generate about 477 MU of electricity annually, offsetting 445,796 tonnes of CO2 emissions each year and support the electrification of around 95,079 households.
The project is aimed to generate about 477 MU of electricity annually, offsetting 445,796 tonnes of CO2 emissions each year, and support the electrification of around 95,079 households. Juniper Green Energy is an independent renewable energy power producer and operator of solar, wind, and hybrid power projects with significant experience in conceptualizing, building, and developing renewable energy assets.
AVAADA SIGNS GREEN AMMONIA OFFTAKE MOU WITH MYSORE AMMONIA
Avaada Group, a renewable energy leader in India, signed a deal with Mysore Ammonia to supply green ammonia, a clean energy source. This partnership aims to deliver 100,000 metric tons of green ammonia annually. Mysore Ammonia's strong supply chain will help distribute this green fuel to various industries.
This collaboration marks a significant step towards sustainable energy in India. Avaada, through its subsidiary Avaada Green Fuels, is committed to advancing green ammonia production to help industries reduce their carbon footprint. Previously, Avaada announced plans to build a green hydrogen and ammonia facility in Odisha. This MoU further strengthens Avaada's position as a frontrunner in clean energy solutions.
Avaada Group operates across multiple renewable energy sectors, including solar power generation, green fuel development, and energy storage. It aims to achieve an 11 GWp renewable energy generation capacity by 2026.
SJVN (SATLUJ JAL VIDYUT NIGAM) DECLARES WINNERS OF ITS 1,500 MW WIN SOLAR HYBRID AUCTION)
Results for SJVN Green Energy Limited’s auction to develop 1,500 MW of inter-state transmission system (ISTS) connected wind-solar hybrid power projects have been announced. The tender was issued in February 2024. The projects will be set up in India. The companies have won the following capacities by quoting INR 3.41 per kWh each-
Ganeko Solar (Solarpack) – 300 MW
AmpIn Energy Transition– 150 MW
Juniper Green Energy – 150 MW
Datta Power Infra – 70 MW
Inaayu Renewables (EverGreen Power) – 60 MW
Avaada Energy and JSW Energy have won 470 MW and 300 MW, respectively, by quoting INR 3.42 per kWh. The company will enter into a 25-year power purchase agreement with the developers. To minimize technological uncertainties and guarantee the timely commissioning of projects, only commercially proven and operational technologies are allowed for implementation. Furthermore, SJVN has mandated the use of indigenously manufactured solar modules listed in list-I of the Approved List of Models and Manufacturers. Additionally, under the tender, only type-certified wind-turbine models issued by the Ministry of New and Renewable Energy, listed in Revised list of Models and Manufacturers will be allowed.
MACQUARIE AND EDF DISCUSS INDIA SMART METER INVESTMENT
Macquarie Asset Management (MAM) is discussing a potential partnership with French multinational utility Électricité de France (EDF) to set up an electricity smart metering business in India. MAM, which has also been in discussions with local smart meter companies for a tie-up, plans to set up the platform with EDF to install, operate and maintain smart meters. EDF's move to partner MAM comes about a year after its discussions with Canadian pension fund OMERS Infrastructure fell through. The two planned about USD 300 Mn for a smart meter platform targeting investments in India.
EDF, majority-owned by the French government, is currently working on a project to install, operate, and maintain five million meters, covered by an eight-year concession in Bihar state. It has been bidding for central and state government tenders, including in the capital city New Delhi.
The company, which has developed technology for a pre-paid metering system, aims to grow by also acquiring smart meter concessions. There has been increased interest in India's smart meters segment with global institutional investors and utilities looking to invest and acquire concessions. Last year, Singapore sovereign wealth fund GIC and Jaipur-based Genus Power Infrastructures announced India’s largest transaction in the smart metering segment, agreeing to set up a USD 2 Bn platform.
The country's Revamped Distribution Sector Scheme (RDSS), with an outlay of about USD 37 Bn, aims for the adoption of smart meters by power distribution companies. India has so far installed more than 5.5 Mn smart meters and is targeting to install 250 Mn by 2025.
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