Published on October 11th, 2019 | by Saurabh0
India x Cleantech — October 2019
October 11th, 2019 by Saurabh
Welcome to another issue of our new India x Cleantech series! On a monthly basis, we are pulling news from across clean technology sectors in India into a single, concise summary article about the country.
Climate Policy & Carbon Tax
The Indian government is working on a climate vulnerability map for the country in partnership with the Swiss Agency for Development and Cooperation. The map will allow government agencies and local authorities to identify states and districts most susceptible to climate change. A climate risk map already exists for the Himalayan states while the same is currently in the works for other Indian states.
Indian Prime Minister Narendra Modi announced the revised target for non-fossil generation capacity by 2030 — 450 gigawatts. India currently has a target to achieve 175 gigawatts installed capacity from renewable energy technologies, mostly led by solar and wind energy. India had earlier announced a plan to have 350 gigawatts of renewable energy capacity operational by 2030. The additional 100 gigawatts could come from nuclear and large hydro power technologies.
The south Indian state of Andhra Pradesh has issued one of the country’s largest tenders to procure electric buses following the central government sanctioning subsidies for around 5,600 at the national level. In August, the Indian government sanctioned at least $360 million to help states procure electric buses.
One of India’s leading electric cars manufacturer is reportedly working on a model to compete directly with the Hyundai Kona EV. The Mahindra XUV300 is expected to come with a 40kWh battery pack and 300 km per full charge range. The Hyundai Kona EV comes with a 39.2 kWh battery pack and rated range of 452 km. However, the Kona remains out of reach for most car buyers in India due to its high price (around $35,300). The Mahindra model is expected to be shorter than Kona, and much more affordable. LG Chem will to supply battery packs for XUV 300.
Amidst historical slowdown in sales of passenger cars in India, the government is reportedly planning to significantly curtail the number of electric cars it would procure. Energy Efficiency Services Limited (EESL), which had earlier planned to procure 10,000 electric cars for development in various states, is now likely to limit the procurement to just 3,000. It has already acquired 1,500 electric sedans from Mahindra & Mahindra and Tata Motors. The balance 1,500 shall be deployed in partnership with cab aggregators like Uber and Ola.
Toyota’s India venture is expected to delay the launch of plug-in hybrid and electric cars in the country following concerns of availability of charging infrastructure. Toyota Kirloskar had initially planned to launch hybrid and electric cars in 2020, but these plans have now been delayed until after 2020.
Perhaps buoyed by the leadership of its parent company Tata Motors Jaguar Land Rover is planning to launch six hybrid and electric cars in India over the next 12 to 18 months. Tata Motors, which acquired Jaguar Land Rover in 2008, is among the leading electric car manufacturers in India.
Despite its high price, Hyundai’s electric Kona has sold out for the year in India. The Korean company has reported around 300 bookings since the car’s launch in India in July of this year. The company had targeted 500 sales on an annual basis but achieved 300 in the first three months of launch. Currently, Kona is imported and partly assembled in India. However, the company plans to increase domestic sourcing in the future to reduce the high price.
India’s transportation minister has claimed that all buses in the country would switch to electric mobility or use alternate fuels in the next two years. Nitin Gadkari stated that buses would use bio-CNG, ethanol, and methanol as alternate fuels. Facing a historic slowdown in the transport sector, the government has been in an overdrive to assuage fears of a sudden and swift shift to electric vehicles.
One of India’s leading electric car manufacturers — Tata Motors — has announced the launch of its new electric powertrain technology. The company shall launch Ziptron-based cars early next year in an attempt to make early gains in the still-niche electric car market in the country.
Renewable Energy & Storage
India Adds 68% New Capacity In August From Wind And Solar
Around 68% of the new power capacity additions in India in August of this year were based on wind and solar power technology. Data released by multiple agencies of the government show that just over 1 gigawatt of power generation capacity was added in August, which includes 638 megawatts of solar and 64 megawatts of wind energy capacity. Only 332 megawatts of fossil fuel-based capacity was added in August. In July, India added 2.16 gigawatts of capacity, with the fossil fuel having a share of 61% and the rest coming from solar and wind.
Finland-based Fortum has announced plans to set up a total of 1.5 gigawatts solar power capacity in India over the next 5 years. The company should invest over $900 million in its Indian subsidiary to achieve this goal. The company also operates 700 megawatts of solar power capacity in India. Further, Fortum is looking to grab a share in India’s transportation sector, investing in a bio-ethanol refinery as well as EV charging infrastructure.
The Ministry of New and Renewable Energy has proposed to implement a new import duty on solar cells after the current safeguard duties expire. The proposed duties could come into force from April 2021. The customs duty will be first levied at 10% and will eventually be increased to 30% from 2023 onward. India currently levies a safeguards duty on solar cells imported from China and Malaysia. The duty, which many believe brought no benefits to the domestic manufacturers, is set to expire by March 2020.
One of India’s leading renewable energy companies has achieved a major milestone in the floating solar power market. Tata Power Solar has secured a tender to install 105 megawatts of floating solar power project in the southern state of Kerala. The tender was awarded by NTPC Limited, India’s largest power generation company. The project will be installed at a reservoir owned by NTPC.
CLP India, which recently entered the Indian wind energy auctions market, has announced a major milestone in the development of its 250 megawatt project. The company, through a previously signed agreement with another wind energy company, has initiated the process of site identification and other pre-construction activities. CLP India had won this project in the 8th national wind energy auction conducted by the Solar Energy Corporation of India.
Despite the slowdown in capacity additions over the last few quarters and a poor response to auctions, India was the third-largest solar power market in the world, in terms of capacity additions in the second quarter of this year. India added 1.4 gigawatts of solar power capacity in Q2 2019, which is the same as that in Q2 2018 but 36% lower than that in Q1 2019. China and the US led capacity additions globally.
A subsidiary of India’s largest privately owned integrated power company, Tata Power, has commissioned a 150 megawatt solar power project in the northwestern state of Rajasthan. The project was allocated to Tata Power Renewable Energy Limited through a competitive auction carried out by SECI. This is the company’s first project to be commissioned under SECI’s national-level auctions.
The Indian minister for shipping has announced potential plans to set up wind energy projects at some of the country’s major seaports. Two ports on the eastern coast and one on the western coast have so far been identified as potential sites for wind energy projects. Two of these ports are located in Gujarat and Tamil Nadu, which are well endowed with wind energy resources. However, one is located in Odisha, which has little to no operational wind energy projects. We covered a story in 2016 about the India government planning to set up solar power projects at 12 of the major seaports of the country.
India Ratings & Research, a Fitch Group company, has downgraded outlook for India’s solar power sector from “positive” to “stable.” The ratings agency reasoned that delayed payments from PPA partners of several projects is a primary concern. Additionally, attempts by a number of states to renegotiate tariffs is another major concern for developers.
Climate Finance & Banking
French utility Engie is looking to exit the Indian renewable energy business completely with the sale of 1.5 gigawatts of solar and wind energy capacity. The company is reportedly in talks with the Global Infrastructure Partners and Edelweiss. Engie currently has operational solar power capacity of 820 megawatts and wind energy capacity of 210 megawatts in India.
The planned solar power parks in Ladakh and Kargil in the state of Jammu and Kashmir have attracted the attention of Russian investors. The Indian government is looking to set up a 5 gigawatt solar park in Ladakh and a 2.5 gigawatt solar park in Kargil. Tenders for the same have already been issued. Indian and foreign project developers and other stakeholders have already visited the proposed sites for the solar parks. However, following environmental concerns the proposed location for the Ladakh project had to be changed, causing delays.
CLP India is aggressively looking to expand its solar power portfolio in India. Following acquisition of solar power projects from troubled wind energy developer Suzlon Energy, CLP is now looking to acquire a stake in the portfolio of a major solar power developer. Mahindra Susten, which predominately operates in the EPC space, is looking to offload some solar power assets and is currently in advanced negotiations with CLP India. The total portfolio of Mahindra Susten is estimated to be up to $420 million.
India’s commitment to renewable energy investment reached $90 billion, according to a recent report issued by the United Nations Environment Programme. The report compares the investment commitments made by various countries in the renewable energy sector between 2010 and H1 2019. China leads with a commitment of $758 billion, followed by the US at $356 billion with India at the sixth position.
Norwegian utility Statkraft has emerged as the leading potential buyers for the wind energy assets of Indian wind IPP Continuum Wind Energy. We had earlier covered a story listing Shell as another potential buyer. Continuum has attracted interest from several companies in the past. At one time SunEdison agreed to acquire the company. Morgan Stanley Infrastructure Partners is the majority stakeholder in Continuum, which has 700 megawatts of operational and 1.7 gigawatts of under-construction assets.
One of India’s leading wind energy companies, Suzlon Energy, has hit another roadblock in its efforts to overcome debt issues. For a second time Vestas Wind Systems has refused to go ahead with the acquisition proposal that would have resolved much of Suzlon’s debt problems. Suzlon Energy has a debt of around $1.2 billion and has already defaulted on interest payments of some of its bonds.
CO2 Footprint Update
India recently achieved the milestone of installing 10 million LED streetlights. The government aggressively pushed for widespread installation of these lights under the Street Lighting National Programme. The Ministry of Power estimates that installation of these LED streetlights saved 7 billion kilowatt-hours of electricity and almost 5 million tonnes of carbon dioxide emissions.
The local authorities of Pune, a city in the western state of Maharashtra, has entered a partnership with the Swiss Confederation’s 2000Watt Smart city association (2000WSCA) to develop a carbon-neutral smart township. As per the memorandum of understanding, the two agencies shall co-develop intellectual property for its implementation in other cities across Maharashtra. The township development is estimated to attract infrastructure investments worth $1 billion.
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