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Infrastructure & PPPs in India - Q4 2022 Update - Power & Energy Transition

YOG INFRA Q4 2022 insights

INDIA is making significant headways in energy transition. Recent highlights include issuance of a sovereign green bond framework, development of green hydrogen & green ammonia projects, guidelines for auction of state-run transmission assets with an aim to strengthen the grid, and renewed activity in offshore wind sector. A favorable policy & regulatory framework is driving the change and we see this transition bring also reflected in business plan & future strategy of large Indian developers 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 second publication on a 2-part insight series on India.

 

October 2022

INDIA’S JAKSON GROUP PLANS USD 2.8 BN GREEN HYDROGEN PROJECT

Indian energy and infrastructure developer Jakson Group will invest approximately USD 2.8 Bn to set up a green hydrogen and ammonia production facility in the state of Rajasthan.

The company’s renewables transition platform, Jakson Green, will develop a plant with an annual capacity of 365,000 tons in Kota district, along with an integrated hybrid renewables complex, between 2023 and 2028. It expects to start with a 15,000-tons-per-annum green ammonia facility by 2025.


INDIAN STEEL MAJOR PARTNERS GREENKO FOR 1 GW RENEWABLES

India's Jindal Steel and Power (JSP) has partnered with renewables energy company Greenko Group to develop 1 GW of carbon-free energy for JSP's steel-making operations in India's state of Odisha. Greenko will assist JSP in the design and development of renewable energy as well as energy storage. The energy will meet the existing and incremental power demand of JSP’s facility in the Angul town of Odisha.

The development to provide 1 GW of green energy will require the construction of close to 3 GW of renewable energy projects to ensure continuous energy supply, the entire project will take between 4 to 5 years to complete.

While JSP will provide the initial equity to build and own the projects, Greenko will help to find other equity investors for the project. Greenko will offer energy storage capacity from its Off Stream Closed Loop Pumped Storage Project that is under development in Madhya Pradesh and Rajasthan.


INDIA’S TATA POWER TO EXPAND RENEWABLES PORTFOLIO IN RAJASTHAN

India’s Tata Power is looking to expand its renewables portfolio in the state of Rajasthan to 10 GW over the next 5 years. The company, part of conglomerate Tata Group, plans to develop up to 8 GW in utility scale and 1 GW in solar rooftop projects, and install 150,000 solar pumps. To date, Tata Power has commissioned 2 GW in Rajasthan. It also has 2.9 GW of solar energy capacity under construction, which will be completed in the next 12-24 months.

The company is exploring power distribution opportunities through the public-private partnership model in the state. It also plans to install 10,000 electric vehicle charging points.


INDIAN STATE AUTHORITY SEEKS 500 MW SOLAR SUPPLY

The Maharashtra State Electricity Board (MSEDCL) in India is seeking to purchase 500 MW of solar power to fulfill a central government mandate to procure a part of its requirements from renewables, and will contract supplies for a 25-year period.

Potential bidders can offer existing supplies from existing projects or set up a new one. In case of new development, the company will be responsible for its design and engineering, financing and construction. The MSEDCL will select the developer through a competitive bidding process. The minimum capacity at a single location is 25 MW.


INDIA ISSUES GUIDELINES FOR AUCTIONING TRANSMISSION ASSETS

India’s Ministry of Power has published guidelines for monetizing state-run transmission assets through an acquire, operate, maintain and transfer model, based on the public-private partnership (PPP) method.

The guidelines aim to:

  • Ensure efficient capital for new investment in the transmission sector through an upfront payment received from auctioning assets;

  • Provide a transparent procurement mechanism and framework for public authorities;

  • Ensure proper planning and project preparation to instill investor confidence; and

  • Capture best practices and models to optimize value.


INDIAN DATA CENTRE DEVELOPER TO BUILD 1 GW RENEWABLES PLANT

India-headquartered CtrlS Datacenters is planning to set up a renewables plant with a capacity of 1 GW. The Hyderabad-based company operates 1 Mn square feet of data centre space across 7 facilities in the cities of Hyderabad, Mumbai, Bengaluru and in Noida in the National Capital Region.

It plans to expand to 5 Mn square feet in the next few years. As and when required, they may also scale up the renewables generation. The company will incorporate rainwater harvesting, water conservation, recycling capabilities and e-waste management in upcoming development, with an aim to build environmentally friendly data centres.


INDIA'S JSW ENERGY TO DEVELOP 126 MW HYDRO PROJECT

Indian energy company JSW Energy will develop a 126 MW hydro power plant in Himachal Pradesh state. Its subsidiary JSW Neo Energy received a letter of intent from the state government, allotting the capacity to the company in the build, own, operate and transfer model. The Chhatru hydro plant will have an operational life of 40 years.

JSW Energy has a generation capacity of about 9.2 GW, of which 66% is from renewables. Of this, 1.75 MW is in the process of being acquired, while about 2.7 GW is either under construction or in the pipeline.


November 2022

INDIA CLEARS SOVEREIGN GREEN BONDS FRAMEWORK

The Indian government has finalized a framework for sovereign green bonds. Capital raised from potential global and domestic investors will be used in public sector projects aimed at reducing carbon intensity. The government has set up a working committee for approving key decisions relating to green bond issuances.

Ministry of Finance, as part of it’s borrowing plan for the second half of the fiscal year ending March 2023, targets to raise INR 160 Bn (USD 2 Bn) from green bonds.


SALE OF KKR'S INDIAN RENEWABLES TRUST LAUNCHED

Private equity investor Kohlberg Kravis Roberts & Co (KKR) has appointed JP Morgan to sell its Indian renewable energy-focused infrastructure investment trust (InvIT) Virescent Renewable Energy.

KKR, which set up Virescent in 2020, has launched the sale process. It is looking at a complete exit from Virescent. The prospective buyers could include large pension funds and strategic investors. Virescent was set up to acquire clean energy projects with long-term power purchase agreements with state and federal government counterparties across India.

Virescent is managed by Terra Asia Holdings II, an affiliate controlled by KKR's Asia-Pacific Infrastructure Fund. Virescent owns 14 operational solar power projects across 7 states, with a total capacity of about 500 MW. All the projects have 25-year power purchase agreements. The trust reported a consolidated revenue of INR 3.6 Bn (USD 45.3 Mn) and gross earnings of INR 2.6 Bn for the financial year through March 2022. It aims to scale up its portfolio to between 1.5 GW and 2 GW over the next 5 years through the acquisition of assets that provide long-term, predictable cash flows.


INDIA ISSUES DRAFT TENDER FOR 4 GW OFFSHORE WIND

India has issued its first draft tender for leasing sea-bed areas to develop 4 GW of wind power projects off the coast of Tamil Nādu state through international competitive bidding.

The energy generated will be consumed in the captive mode or sold to a third party through an open access framework or a merchant sale/power exchange. The tender covers grid connectivity, long-term open access, and access to the grid under the general network access framework.


KKR ANNOUNCES USD 400 Mn INVESTMENT IN INDIAN RENEWABLES COMPANY

Kohlberg Kravis Roberts & Co. has agreed to invest USD 400 Mn in Serentica Renewables, a decarbonization platform that offers complex clean energy solutions for hard-to-abate industries. This investment will allow Serentica Renewables to leap ahead in their vision of decarbonizing large energy intensive industries and help in reversing climate change.

Twinstar Overseas, a company in the Vedanta Group, announced the formation of Serentica Renewables, and a plan to develop 1.5 GW of hybrid wind and solar capacity in the states of Karnataka, Rajasthan and Maharashtra, where it has already acquired connection approvals.


PARTNERS GROUP TO INVEST USD 400 Mn IN INDIAN RENEWABLES

Partners Group has agreed to acquire a majority equity stake in Indian renewable energy company Sunsure Energy and invest up to USD 400 Mn for the latter's expansion. Sunsure, a clean energy developer focused on commercial and industrial customers in India, will use the equity commitments to grow its portfolio to 3 GW operational capacity.

Sunsure builds rooftop and offsite solar power projects for customers and third-party renewable power producers in India. Following the investment from Partners Group, Sunsure will transform into a next-generation independent power producer to build and own utility-scale solar, wind, solar-wind hybrid, and battery storage renewable energy projects.

Sunsure also plans to support customers to meet decarbonization and energy cost reduction targets by expanding the scope of existing client relationships to provide additional value-added services, such as energy-as-a-service and carbon credit management.


December 2022

INDIA TO INVEST USD 29.6 BN FOR POWER TRANSMISSION INFRA

The Indian government will invest INR 2.44 Trn (USD 29.6 Bn) to develop a transmission system for integrating more than 500 GW in renewable energy capacity by 2030. This includes the evacuation of 10 GW of offshore wind energy, overall plan also aims to install 51.5 GW of battery energy storage.

The planned transmission system will provide visibility to both renewable energy developers and transmission service providers about potential generation sites and investment opportunities. India's installed power capacity is 409 GW of which 42% is from non-fossil fuel sources.


OCIOR TO BUILD GREEN AMMONIA FACILITY IN INDIA’S ODISHA

Abu Dhabi-headquartered Ocior Energy will build a green ammonia plant that can produce 1 Mn tonnes (MMTPA) of the gas a year in India's Odisha state. Ocior, set up by a group including former executives at Indian renewables developer Azure Power, has signed a memorandum of understanding (MoU) with the government of Odisha for the ammonia facility.

The green ammonia facility is expected to cost INR 72 Bn (USD 879.4 Mn) and is expected to complete by 2030. Apart from developing ammonia - that can be converted to hydrogen used to generate clean energy - Ocior will also build a renewable energy project to power the ammonia facility in Odisha and elsewhere in India.

Ocior was set up in October 2022, to build, own and operate projects, including the renewable energy needed to generate environment-friendly fuels. The company aims to have a capacity of 4 GW of sustainable green hydrogen by 2030 spanning across four projects in India, the Middle East and North Africa.


MACQUARIE'S VIBRANT ENERGY TO BUILD 300 MW RENEWABLES FOR AMAZON

Macquarie-backed Indian renewable energy company Vibrant Energy will develop two wind-solar hybrid power projects with a combined capacity of 300 MW in the country for Amazon. The projects - which have among the largest hybrid corporate power purchase agreements (PPA) by a technology company in India - will be developed in the states of Madhya Pradesh and Karnataka.

They will each have a capacity of 150 MW. The details of the timeline for construction and commercial operation for the projects is not available. Amazon, the world's largest corporate power purchaser, is seeking to reach net-zero greenhouse gas emissions across its businesses by 2040. The company wants to power its operations globally with 100% renewable energy by 2025.


INDIA'S CLEANMAX TO DEVELOP HYBRID WIND-SOLAR FOR META

India's CleanMax Enviro Energy has partnered with global technology company Meta to develop renewables projects with a combined capacity of 33.8 MW in India. This includes up of 21.6 MW of wind and 12.2 MW of solar. Clean Max will own and operate the assets while Meta will purchase the environmental benefits, or carbon credits.

The projects will be set up in Karnataka and are scheduled to start operations by March 2023. They are part of a larger wind-solar hybrid farm being developed by CleanMax with a capacity ranging between 364 MW and 154 MW of wind and 210 MW of solar power.

CleanMax, which was established in 2011, installs solar projects on rooftops as well as offsite. It supplies electricity directly to customers through 15- to 25-year power purchase agreements. In India, it has a pipeline of wind-solar hybrid projects in the states of Karnataka, Gujarat and Maharashtra as well as operations in Dubai and Thailand. It owns 1 GW of installed capacity and is seeking to increase this to around 2 GW by 2025.

 

Projects Announced – Renewable Energy – Q4 2022 India



Projects Awarded – Renewable Energy – Q4 2022 India

Source: YOG INFRA analysis, Public available information

 

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