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Infrastructure & PPPs in India - Q1 2022 Update - Power & Energy Transition

YOG INFRA Q1 2022 insights

INDIA is the most active Asian market for clean energy transition. While renewable energy developments have made marked and notable change in the power generation mix of the country, we see multiple initiatives and steps by private players and government agencies in areas of large-scale battery manufacturing, electric vehicles (EV) and green hydrogen.

Read more about key developments in Infrastructure and PPPs in India in power & energy transition sector our latest insight.

This is first publication on a 2-part insight series on India.

 

January 2022

INDIA OUTLINES USD 2 BN SMART CITY PPP OPPORTUNITIES

India’s Smart Cities Mission – an infrastructure development programme covering 100 cities – needs an additional INR 15 Bn (USD 2 Bn) in private investments.

The programme, which will run through 2023, has about 160 projects across segments such as waste management and sewerage, water supply, social infrastructure, renewable power, street lighting and urban mobility, among others.

Chief executives of the smart city initiatives at ten cities – Ranchi, Nashik, Nagpur, Srinagar, Pune, Gwalior, Imphal, Bilaspur, Shivamogga and Warangal – showcased PPP opportunities to investors. The segments included multi-level smart parking, solar power, urban mobility, multi-modal transport and educational hubs and marketplace development.

Projects in these segments are in advanced stages of preparation and authorities will start to call for bids within the next three months and some projects are already in the procurement stage and can be viewed online.


US' FLUENCE SETS UP INDIA ENERGY STORAGE JV

Virginia-based energy storage company Fluence has set up an equal joint venture with Goldman Sachs-backed Indian renewables developer ReNew Power for battery energy storage in India.

The platform's first project will be a 150 MWh storage system for a 300 MW peak power plant in Karnataka state. The new company will be managed by an independent team and board and will start operations in the second half of this year.

The venture aims to introduce new technology to India and the company sees energy storage as a key enabler for India’s climate goal of 450 GW of renewable capacity addition by 2030.


SEMBCORP SIGNS 625 MW THERMAL PPA IN INDIA

Singapore-headquartered Sembcorp Industries has signed a power purchase agreement (PPA) to supply 625 MW of power from a coal-based power plant in the Indian state of Andhra Pradesh to the state's power distribution companies.

The power plant will supply power to the utilities for 12 years from 2023 and the capacity is part of Sembcorp's 2.6 GW supercritical coal-based power plant located in the Nellore district of Andhra Pradesh.

With the current PPA, the thermal power plant has tied 77% of its total capacity. The remaining 23% is sold by the plant in the open market on a short term basis while a small portion is used by the power plant. A longer duration PPA for the power plant is set to bring certainty for the generator as well as power purchasers amid uncertainty of coal prices.


INDIA TWEAKS NORMS FOR EV CHARGING INFRASTRUCTURE

India's Ministry of Power 14 January 2022 unveiled revised norms to support the creation of electric vehicle charging infrastructure.

Some of the main points in the amended guidelines include making government land available for a decade on a revenue sharing basis, doing away with licensing requirements for setting up charging stations as well as allowing sourcing of electricity under open access rules.


INDIA'S RELIANCE TO INVEST USD 81 BN IN GUJARAT GREEN ENERGY

India's Reliance Industries (RIL) has committed an investment of INR 6 Trn (USD 81.19 Bn) for green energy and other projects in the state of Gujarat.

Of the total, it is looking to invest INR 5 Trn over the next 10 to 15 years to set up 100 GW of renewable energy generating facilities across Kutch, Banaskantha and Dholera and to develop a green hydrogen eco-system.

RIL will invest INR 600 Bn in setting up manufacturing facilities for solar modules, electrolyzers, batteries and fuel cells.


INDIA’S RELIANCE UNIT INVESTS IN EV TECH FIRM

India’s Reliance New Energy (RNEL) has invested INR 501.6 mn (USD 6.69 Mn) in Bangalore-based electric vehicle technology and solutions firm Altigreen Propulsion Labs (Altigreen).

RNEL, a wholly owned subsidiary of diversified group Reliance Industries, will subscribe to 34,000 compulsorily convertible preference shares of the target company.

The transaction is expected to be completed before March 2022.


INDIA’S HERO MOTOCORP AND BHARAT PETROLEUM IN EV TIE-UP

India’s Hero MotoCorp (Hero) and state-run oil marketing company Bharat Petroleum (BPCL) have entered into a partnership to develop charging infrastructure for two-wheeled electric vehicles (EVs) across the country.

In the first phase, charging stations will be set up in nine cities, starting with Delhi and Bengaluru.

Vehicle manufacturer Hero will begin the development of infrastructure in the two cities. Each station will feature multiple charging points, including direct current and alternating current chargers. User charging will be controlled by a Hero mobile app and follow a cashless transaction model.

The partners may subsequently broaden their collaboration to develop more synergies within the EV ecosystem and adjacent business verticals.


INDIA'S TATA POWER PLANS EV CHARGING STATIONS IN GURUGRAM

India's Tata Power has partnered with Enviro, a facility management wing of real estate developer Vatika Group, to install 59 electric vehicle (EV) charging points across the city of Gurugram in the state of Haryana.

The chargers will be installed at 18 locations across the properties of Vatika Group in Gurugram and the chargers will be made available as public charging stations and semi-public, based on the nature of the premises.

Tata Power already has partnerships with Apollo Tyres, HPCL, TVS Motors, amã Stays & Trails, Lodha Group and others to set up and enhance EV charging infrastructure.


TATA POWER TO DEVELOP MUMBAI METROPOLITAN REGION EV INFRASTRUCTURE

India’s Tata Power is collaborating with the Rustomjee Group to provide end-to-end electric vehicle (EV) charging solutions across the latter's residential and commercial projects in the Mumbai Metropolitan Region (MMR).

EV owners will have access to charging facilities along with maintenance support. The Rustomjee Group is a real estate developer.

Tata Power, through its EZ Charge offering, has set up more than 100 charging points in Mumbai and over 1,300 charging points across the country.


HERO FUTURE ENERGIES AND OHMIUM SIGN GREEN HYDROGEN PARTNERSHIP

Indian renewable power developer Hero Future Energies (HFE) and US-headquartered Ohmium International have teamed up to develop and construct 1 GW of green hydrogen production plants across India, the UK, and Europe.

Abu Dhabi sovereign fund Masdar-backed HFE will build, operate and own the plants which it will power with clean energy. Ohmium will be responsible for their design, construction, and operations and maintenance.


February 2022

INDIA'S SIFY DATA CENTERS TO INVEST IN 200 MW RENEWABLES

Chennai-headquartered Sify Data Centers has partnered with renewables platform Vibrant Energy for more than 200 MW of green projects to power its data centers in India.

Vibrant has signed power purchase agreements with Sify for a total 231 MW of solar and wind energy capacity. Projects of about 67 MW are complete so far.

The partnership between the two companies is a captive power purchase model where the projects will be set up by Vibrant Energy through a combination of debt and equity in the ratio of about 2:1 and Sify will hold about 26% equity.


ADANI AND BALLARD EXPLORE FUEL CELL PARTNERSHIP IN INDIA

Indian diversified business group Adani and Canada’s Ballard Power Systems will explore options to manufacture hydrogen fuel cells.

The parties have signed a non-binding memorandum of understanding to evaluate joint investment for the commercialization of the cells in mobility and industrial applications in India.

The evaluation will be anchored by Adani New Industries, a recently launched subsidiary of Adani Enterprises, focused on the generation of green hydrogen.


TATA POWER AND RWE AGREE INDIAN OFFSHORE WIND PARTNERSHIP

India’s Tata Power and German utility RWE Group have teamed up to explore the potential for developing offshore wind projects in the south Asian country. Tata Power Renewable Energy and RWE Renewables signed an agreement to conduct technical and commercial site assessments.

The two partners are also looking to evaluate the offshore wind supply chain and supporting infrastructure in India, such as ports and grid connections, to identify the development potential.

The tie-up will contribute to the government's goal of achieving 30 GW of offshore wind installations by 2030.


INDIA’S GREENKO AND AYANA ESTABLISH CLEAN ENERGY STORAGE PARTNERSHIP

India’s Greenko Group and Ayana Renewable Power have entered into an arrangement to store 6 GWh of power in hydro pump units.

The two independent power producers will offer industrial entities and distribution companies round-the-clock green energy of up to 1 GW and the first tranche of the total capacity would be from its 1.5 GWh project being developed at Pinnapuram in the state of Andhra Pradesh.


MARCH 2022

UK'S BII INVESTS USD 89 MN IN INDIA RENEWABLES

UK-based development financier British International Investment (BII) - formerly known as the CDC Group - will invest USD 89 Mn in the Indian renewable energy sector.

The investment includes INR 3.5 Bn (USD 47 Mn) as a follow on commitment to Indian solar power developer Fourth Partner Energy and INR 3.15 Bn debt finance for an Indian solar project, Thar Surya 1, owned by Italy's Enel.

Fourth Partner will use the money to finance about 294 MW of greenfield power projects for the commercial and industrial customers across Asia. The projects are located in India, Sri-Lanka, Bangladesh, Indonesia and Vietnam.

The solar developer is looking to grow its renewables portfolio to 3 GW by 2025 from 850 MW now.

BII's INR3.15 Bn debt investment in Enel's Thar Surya 1 will finance the development of a 300 MW solar power project in the state of Rajasthan. The project is estimated to cost a total of USD 200 Mn.


INDIA'S STERLITE WINS SECOND POWER TRANSMISSION PROJECT IN J&K

India's Sterlite Power has won the right to build, own, operate and maintain a transmission system project at Kishtwar in Jammu & Kashmir for 35 years.

The project comprises a 400/132kV GIS substation at Kishtwar and 400 KV Line in Line out (LILO) of approximately 10 route kms of the Kishenpur-Dulhasti transmission line at Kishtwar substation. The transmission system will be used to evacuate 1,000 MW of power from the Pakaldul hydro electric project (HEP) in Chenab Valley to the Kishtwar substation.

The establishment of a common pooling station at Kishtwar by LILO of one circuit of the Kishenpur-Dulhasti line will also provide connectivity to upcoming HEP projects at Kiru (624 MW) and Kwar (540 MW) in the region.


INDIA SELECTS FOUR COMPANIES FOR BATTERY MANUFACTURING INCENTIVES

The Indian government has selected four companies to receive incentives as part of a INR 181 Bn (USD 2.37 Bn) scheme to boost the domestic production of advanced chemistry cell battery storage.

The successful bidders are Reliance New Energy Solar, Ola Electric Mobility Private, Hyundai Global Motors and Rajesh Exports.

The allotment has been made for a total battery capacity of 50 GWh. The companies will have to set up manufacturing facilities within two years, following which they will receive incentives over five years on the sale of locally manufactured batteries.


ADANI POWER EXPLORES CO-FIRING MODIFICATION FOR MUNDRA ASSET

India’s Adani Power has signed a memorandum of understanding with Japanese companies IHI and Kowa over de-carbonization of its coal-fired assets.

The signatories will conduct technical and economic feasibility studies for a modification to achieve a 20% liquid ammonia co-firing ratio and thereafter up to 100% mono-firing at the Adani Power Mundra Coal Fired Power Plant.

Co-firing, the combustion of two different fuels, is aimed at increasing efficiency, and reduces greenhouse gas emissions.


ARCELORMITTAL PARTNERS GREENKO FOR 975 MW INDIA RENEWABLES PROJECT

UK-based steel and mining company ArcelorMittal has partnered with Indian renewable power producer Greenko Group to develop a round-the-clock renewable power project with a capacity of 975 MW in the state of Andhra Pradesh.

The project, which will be a hybrid solar and wind power development, is estimated to cost USD 600Mn and will be owned and financed by ArcelorMittal while Greenko will develop and operate the renewable power facility.

ArcelorMittal’s India joint venture, ArcelorMittal Nippon Steel India (AM/NS India), will purchase 250 MW of electricity annually from the renewable project through a 25-year power purchase agreement. This will be more than 20% of the overall electricity requirement of AM/NS India’s Hazira steel plant to come from renewable sources.

To deliver 250 MW electricity capacity annually in a round-the-clock power project, there is a need to set up a project with 975 MW capacity. The project will use Greenko’s hydro pumped storage project to supply continuous power. The project is expected to be commissioned by mid-2024.


TECHNIP ENERGIES AND GREENKO EXPLORE INDIA GREEN HYDROGEN PARTNERSHIP

France-headquartered Technip Energies will explore green hydrogen project development opportunities in India in partnership with local independent power producer Greenko.

The companies have signed a memorandum of understanding to examine build-own-operate collaborations - in which Greenko will be the operator and owner of the asset and Technip Energies will provide engineering services, integration and EP/EPC support - for pilot and commercial scale projects.


SOLAR PARTS MAKER SEEKS USD 131 MN FOR INDIA FACILITY

Indian solar cell and modules maker Jupiter International is in discussions with domestic and international banks to raise around INR 10 Bn (USD 131 Mn) in a combination of debt and equity for a greenfield facility in India.

The project, with a capacity to manufacture 2 GW integrated solar cells and modules, will raise about INR 5 Bn as debt and the other half as equity. Its total cost is estimated at INR 12 Bn.

The company hopes to tie up financing in the next six to eight months and complete development and construction by the end of 2023 and discussions are ongoing with various state governments to decide on the location of the project, likely to be along the coastline.


SAUDI DEVELOPER SECURES FINANCING FOR INDIA WIND PROJECT

Saudi Arabia's Alfanar has reached financial close for a 300 MW wind power plant in India's Gujarat state.

Mumbai-based L&T Finance provided a senior debt facility of INR 16.3 Bn (USD 217 Mn) for the project, that is being developed in Kutch district. Construction started late 2021 and the company expects commercial operations will start by December 2022. This is its second wind power project in India.

Government-owned Solar Energy Corporation of India (SECI) awarded the project to Alfanar in 2018. It was the fifth tranche of a 1.2 GW auction.


INDIA'S GREENKO OFFERS PUMPED HYDRO STORAGE TO ADANI

India's Greenko Group has agreed a partnership with conglomerate Adani Group for standalone hydro energy storage capacity. Greenko will provide stable and dispatchable renewable energy including round-the-clock supply of up to 1 GW to one of Adani's proposed industrial complexes.

The renewables company has offered 6 GWh of hydro storage capacity from its proprietary off-stream closed-loop pumped storage project currently under development in the states of Madhya Pradesh and Rajasthan.


INDIA'S JSW SIGNS PPA FOR 240 MW HYDRO POWER

India's JSW Energy has signed a 35-year power purchase agreement (PPA) with Haryana Power Purchase Centre (HPPC) for the supply of 240 MW hydro power for its under-construction project.

JSW, via wholly owned step-down subsidiary JSW Energy Kutehr, is currently constructing the 240 MW hydro-electric plant located in Kutehr, in Chamba district of Himachal Pradesh. The project is expected to be commissioned by September 2024. HPPC will purchase the power on behalf of Uttar Haryana Bijli Vitran Nigam and Dakshin Haryana Bijli Vitran Nigam.


ADANI GREEN TO SET UP 150 MW SOLAR PLANT

Indian renewables developer Adani Green Energy Ltd. (AGEL) has won a contract to set up a 150 MW solar project in the state of Punjab.

Government-run Punjab State Power Corporation floated a tender to procure 250 MW of energy from ground mounted-grid connected plants. The 25-year contract has a fixed tariff of INR 2.34 (USD 3 Cents)/kWh.


TATA JV WINS BID FOR STRESSED TRANSMISSION NETWORK

Resurgent Power Ventures will acquire the beleaguered South East UP Power Transmission Company (SEUPTCL) for a total enterprise value of more than INR 60 Bn (USD 786 Mn).

The Singapore-based acquiror, 26% held by India’s Tata Power, will finance the transaction through a combination of equity and debt. ICICI and a group of international investors own the remainder of Resurgent Power.

The transaction is part of a stressed asset resolution process initiated through competitive bidding.

SEUPTCL was incorporated as a special purpose vehicle to implement and operate an electricity transmission network in the state of Uttar Pradesh for 35 years under a public-private partnership model.

 

List of key transactions - Power & Renewable Energy - India


Source: Inframation, YOG INFRA analysis

 

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