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Infrastructure & PPPs in India - Q1 2024 Update - Renewables & Clean Energy Transition

YOG INFRA Q1 2024 insights

INDIA is seeing notable developments in development of clean energy transition projects - battery storage and green hydrogen & green ammonia. We see large investments by local and international players across the value-chain of this clean energy transition journey. The financing needs for such transformation needs to by beyond commercial banks, and there is a role for climate funds to tackle the financing gap in the country.

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.

 

January 2024

DENMARK AND INDIA FORM GREEN FUELS ALLIANCE

Denmark has announced its Green Fuels Alliance India (GFAI) initiative to boost collaborative efforts between the two countries in the sustainable energy solutions sector and advance their joint global goal towards carbon neutrality. The new alliance is a strategic initiative poised to play a pivotal role in advancing the green fuels sector, including green hydrogen, by fostering innovation, collaboration, and partnerships between Danish industries and their counterparts in India.

GFAI's primary objective is to promote sustainable energy growth in India by establishing an ecosystem that encourages collaboration among businesses, government entities, research institutions, and financial stakeholders from both the Indian and Danish sectors.

Nine pioneering Danish organisations have already committed to the GFAI initiative as founding members, including:

  1. Maersk

  2. Topsoe

  3. Umwelt Energy

  4. Mash Makes

  5. European Sustainable Solutions

  6. Novozymes

  7. Danfoss

  8. Brdr. Christensen

  9. Hydrogen Denmark  

The GFAI advisory board members include India Hydrogen Alliance, Energy Consortium at the Indian Institute of Technology Madras, the Danish Energy Agency and State of Green.

 

ENVISION ENERGY FORMS GREEN HYDROGEN PARTNERSHIP IN INDIA

Envision Energy International, and AM Green, a hydrogen and green ammonia venture wholly owned and controlled by the founders of Greenko Group, signed a Memorandum of Understanding (MOU) to partner in the manufacture of wind turbines for AM Green's clean energy projects in India and to collaborate on green hydrogen projects.

AM Green and Envision will harness complementary capabilities to manufacture, supply and service wind turbines in India specific to AM Green's wind turbine requirements in the country. AM Green, through its customers, will look to commit to offtake of at least 2 GW of capacity per year over the next 3 years. The wind turbines will supply energy to produce renewable green molecules.

The partnership is part of AM Green's larger efforts to advance the development of a secure supply chain for high-quality, cost-effective wind turbines in India. Through such partnerships, AM Green aims to achieve the most economically efficient 24x7 power supply for its green molecule plants across India. AM Green and Envision will also work jointly in development of green hydrogen projects and develop net zero industrial parks.

 

INDIAN STATE ENTERPRISE FORMS BIOGAS JV

State-run utility GAIL (India) and Bengaluru-headquartered ethanol producer TruAlt Bioenergy (TruAlt) will set up a joint venture to develop 10 compressed biogas (CBG) plants with an investment of approximately USD 72 Mn. GAIL and TruAlt will own 49% and 51%, respectively, of Leafinti Bioenergy, the JV which is currently TruAlt’s subsidiary. It owns and operates India’s second CBG unit.

The investment will be funded through a combination of debt and equity, subject to due diligence results and requisite approvals. The JV will process more than 600 Mn kg of organic waste to produce over 33 Mn kg of CBG, nearly 20 Mn kg of solid fermented organic manure and over 30 Mn kg of liquid fermented organic manure every year. Each unit will have a daily capacity of 10,000 kg. 

 

RENEW SIGNS A CONTRACT TO SELL 300 MV SOLAR PROJECT

RENEW signed a Share Purchase Agreement with India Grid Trust to sell a 300 MW solar project in Rajasthan – ReNew Solar Urja Private Limited - for a total enterprise value of USD 199 Mn. The transaction is expected to close in accordance with PPA conditions.

After the transfer of the outstanding debt to the buyer, the transaction will result in a cash inflow of approximately $82 million, including change-in-law proceeds for ReNew.

The project, ReNew Solar Urja, was commissioned in December 2021. It has a 25-year power purchase agreement withstate-run Solar Energy Corporation of India at a fixed tariff of INR 2.71 (USD 3 cents) per unit.


February 2024

CROWN LNG TO INVEST USD 1 BN IN INDIA TERMINAL

Crown LNG will invest more than USD 1 Bn in an Indian liquefied natural gas import terminal that it aims to open in 2028. Indian gas demand is strong and likely to keep growing, but it is currently limited by the need for affordable supplies. LNG is likely to become cheaper due to increases in global capacity through the end of the decade. Indian Government has set a goal of raising the share of gas in India’s energy mix to 15% by 2030 from 6%, which has led to a frenzy of investments in infrastructure.

6 out of the 7 operational LNG import terminals currently running at less than half of their capacity, however, casting doubts on the viability of future projects.

Crown’s planned 7.2 Mn tons LNG import terminal, to be built in Kakinada in the state of Andhra Pradesh, will be India’s second largest, according to government data. The firm is set to go public in the US via a merger with publicly traded Catcha Investment Corp., which will help it raise funds for its anchor project in Kakinada. India’s LNG demand will hit 72.9 Mn tons a year by the 2030 from an estimated 20.2 Mn tons in year 2023.

 

INDIA TO INVEST USD 67 BN IN ENERGY SUPPLY INDUSTRY BY 2030

India is planning to invest USD 67 Bn in its energy industry, including natural gas and refineries in the next 6 years. A significant share of the government’s INR 11.11 Trn (USD 133 Bn) outlay on infrastructure included in the interim federal budget announced in Feb-2024 will be allocated to energy. India is ramping up energy supply as it expands roads, rail lines, airports and waterways. The country’s refining capacity is targeted to grow to 450 million tonnes per annum (mtpa) by 2030 from 254 mtpa currently.

India's robust economic growth, surpassing 7.5% in the first 6 months of the financial year, is driving an exponential rise in energy needs. India is the third-largest consumer of energy, oil, and LPG globally, the fourth-largest LNG importer and refiner, and the fourth-largest automobile market.

 

INDIAN CITY SEEKS EOIS FOR MIXED WASTE PROCESSING PPP

The Lucknow Municipal Corporation in India’s Uttar Pradesh state called for expressions of interest (EOI) for a project to develop a mixed waste processing plant. The contract for the 2000 tonnes per day (tpd) plant will be awarded in the design, build, finance, own, operate and transfer (DBFOT) model. The project involves building a waste-to-energy and leachate treatment plants, bio-methanisation, composting, sanitary landfill and other related facilities.

 

INDIA SEEKS USD 26 BN PRIVATE INVESTMENT IN NUCLEAR POWER

India is planning to attract around USD 26 Bn in investments in the country’s nuclear energy sector from the private sector to augment power generation from sources that do not emit carbon dioxide. This is the first time the Indian government will pursue private investment in nuclear power generation, which accounts for less than 2 % of the total electricity generated in the country.

The government is holding talks with key private players - including Adani Power, Reliance Industries, Tata Power, and Vedanta - to draw investments of close to INR 440 Bn (USD 5.30 Bn) from each. The government is looking to develop 11 GW of nuclear capacity by 2040. The country is targeting to increase the share of non-fossil fuels in its installed power generation capacity to 50 % by 2030 from the current 42%.

 

ONGC AND NTPC GREEN ENERGY AGREE OFFSHORE WIND TIE-UP

The ONGC and NTPC signed a joint venture agreement to develop renewable projects focusing on offshore wind. The companies will also jointly evaluate potential opportunities in storage, e-mobility, carbon credits, green credits and green hydrogen and its derivatives such as green ammonia and green methanol.

ONGC had earlier inked a Memorandum of Understanding (MoU) with NGEL in September 2023 to advance its renewable energy goals in alignment with the energy transition. The primary focus of the MoU was to assess feasibility and establish renewable energy projects across various sectors.

 

March 2024

KARNATAKA PLANS UNDERGROUND SUBSTATION IN PPP MODE TO AUGMENT TRANSMISSION NETWORK 

The Government of Karnataka, India is planning to upgrade its existing Air Insulated Substations (AIS) to Gas Insulated Substations (GIS) through Public Private Partnership (PPP) model. Underground substations already exist in other countries, but this will be the first in India.

Under the project,  the land will lease out above the substation for 35 years to the private party who can set up real estate assets. While the ownership of the land and the substation will lie with the government agency i.e., Karnataka Power Transmission Company Limited (KPTCL), the Operations and Maintenance (O&M) of the substation and the real estate development will be borne by the private developer. Upon completion of the lease tenure, the real estate will be transferred to KPTCL. 

 

ADANI GREEN UNVEILS AMBITIOUS 45 GW RENEWABLE ENERGY PUSH IN INDIA BY 2030.

Adani Green Energy Ltd is set to make a substantial investment of approximately of INR 2 Lakh crore (USD 24 Bn) by 2030 to enhance its renewable energy capacities. The company aims to increase its total renewable energy portfolio to about 45 GW BY 2030 from the current 10.9 GW.

The major expansion is planned at Khavda in Gujarat’s Kutch district, where the city will be boosted to 30 GW from the existing 2GW.  As per public information, INR 50,000 crore (USD 6.02 Bn) of the overall investment plan is set aside for capacity larger than Khavda.

 

INDIA'S FIRST BATTERY STORAGE GIGAFACTORY TARGETS 2024 OPERATIONS

GoodEnough Energy targets to start operations at India’ first battery energy storage gigafactory in the northern region of Jammu and Kashmir in Q4-2024. The facility will help industry in cutting more than 5 Mn tons of carbon emissions in a year. India has set a 2070 goal for becoming net zero. Battery energy storage projects are critical to India's ambitious plan to expand its renewable energy capacity to 500 GW by 2030, from 178 GW at present. 

The government is offering incentives worth USD 452 Mn to promote battery storage initiatives , facilitating the storage and utilization of energy from various renewable sources like solar and wind.

 

GAIL TARGETS TO COMMISSION INDIA'S FIRST GREEN HYDROGEN PROJECT IN 2024

GAIL is preparing to commission the country’s first green hydrogen project at GAIL's Vijaipur complex in Madhya Pradesh in Q2-2024. The project comprises a 10-megawatt proton exchange membrane electrolyser imported from Canada for the production of green hydrogen.

The unit is expected to produce about 4.3 metric tons of hydrogen per day, with a purity of about 99.99 per cent by volume, and would use renewable power. India aims to reach 5 Mm tons of annual green hydrogen production capacity by 2030.

 

ABOUT YOG INFRA

Our objective is to drive economic growth and make positive social impact through sustainable infrastructure development. ​YOG INFRA is an infrastructure focused financial advisory firm. We work with Developers and Development Finance Institutions (DFIs) and help them make informed investment decisions across infrastructure development lifecycle. With our offices in Singapore, India and UAE we work on projects globally, and the team brings strong experience in supporting development of infrastructure projects.

For more information about us, our service offerings and team, please visit www.yoginfra.com Contact us at info@yoginfra.com ©2024 YOG INFRA. All rights reserved. #infrastructure #update #PPP #india


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