The power sector witnessed an uptick in corporate activity in the past year. In the generation segment, while conventional capacity commissioning was tepid with only central and state public majors adding new projects, significant renewable capacity was added by private players thanks to competitive bidding. Another major highlight of the year was the power purchase agreements (PPAs) signed under the Pilot Schemes I and II to alleviate the stress in the sector. There was also an upswing in merger and acquisition (M&A) deals as a few foreign investors showed interest in the assets on the block.
Important transmission and distribution (T&D) projects related to grid modernisation, rural electrification and metering were secured by power majors in domestic and international bids during the year. Bids were won in solar and wind energy auctions as well. On the equipment side, a number of large ticket contracts were secured in the emission control technology segment by equipment majors. Meanwhile, there were some exciting developments in the electric vehicle (EV) segment.
Power Line presents an annual review of the key developments relating to power sector majors in the past 12 months…
Key projects commissioned – Generation
During the past 12 months, capacity addition in the thermal power segment was led by NTPC Limited. In the private sector, however, thermal capacity addition remained slow with only one project commissioned by Essar Power. Meanwhile, renewable majors, including Sembcorp and ReNew Power, added significant capacities during the year.
- During the past year, NTPC commissioned several projects – the second 660 MW unit of the 1,320 MW Solapur super thermal power station (STPS) in Maharashtra (March 2019), the first 800 MW unit of the 1,600 MW Gadarwara super thermal power project (STPP) in Madhya Pradesh (April 2019), the first 660 MW unit of the 1,320 MW Meja Thermal Power Station (TPS) Stage-I in Uttar Pradesh (May 2019), a 660 MW unit of the 1,980 MW Nabinagar STPP in Aurangabad district of Bihar (July 2019), and the country’s first ultra-supercritical unit of 660 MW at Khargaon in Madhya Pradesh (August 2019). In February 2019, Bharatiya Rail Bijlee Company Limited, a joint venture (JV) of NTPC Limited and Indian Railways, commissioned the third 250 MW unit of its 1,000 MW Nabinagar thermal power project (TPP) at Aurangabad in Bihar. The first two units of the coal-based power plant are already under commercial operation.
- In September 2019, Tata Power Renewable Energy Limited commissioned a 150 MW solar PV power project at Pokharan in Rajasthan. The sale of power from this plant has been tied up under a 25-year PPA with Maharashtra State Electricity Distribution Company Limited.
- In August 2019, the Sembcorp Group commissioned 200 MW of wind power projects in Bhuj, Gujarat. These projects were secured in the auction conducted by the Solar Energy Corporation of India (SECI) under SECI Tranche II and Tranche III. Earlier, in June 2019, it had commissioned the 414 MW Unit 4 of the Sirajganj combined-cycle gas turbine plant in Bangladesh, the country’s first public-private partnership power plant backed by foreign investment.
- In May 2019, Azure Power Limited commissioned a 150 MW solar power plant in Rajasthan. This is part of the 200 MW capacity allocated to Azure Power under SECI’s 250 MW tender for grid-connected solar photovoltaic (PV) projects to be developed at the Bhadla Solar Park Phase III. As per the agreement, the company will supply power to SECI at a tariff of Rs 2.48 per kWh for 25 years.
- In April 2019, ReNew Power commissioned the 300 MW Pavagada Solar Park in Tumkur, Karnataka, which is the company’s largest solar project till date. Earlier, in September 2018, the company commissioned the 126 MW Phase I of its 250 MW wind project in Kutch district, Gujarat. This was a part of India’s first wind power reverse auction concluded by SECI in February 2017 under the 1,000 MW auction.
- In February 2019, Vikram Solar commissioned a 200 MW solar power project for the Andhra Pradesh Power Generation Corporation. In September 2018, it also commissioned a 10 MW solar power plant for the Oil and Natural Gas Corporation in Gujarat.
- In January 2019, Bharat Heavy Electricals Limited (BHEL) commissioned an 800 MW supercritical unit at the Kothagudem TPS of the Telangana State Power Generation Corporation within a record time of 46 months. In August 2019, it commissioned the 116 MW Unit 5 of Kaleshwaram Lift Irrigation Scheme (7×116 MW) Package-6 in Telangana. BHEL commissioned four units of the same project in April and May 2019. In November 2018, it commissioned the fourth 30 MW unit of Telangana State Power Generation Corporation Limited’s 120 MW Pulichintala hydropower plant in Suryapet. Another highlight was the commissioning of overseas projects including the 720 MW Mangdechhu hydroelectric project (HEP) for Druk, Green Power Corporation Limited at Thimphu, Bhutan (August 2019) and the first 84 MW unit of the 336 MW Chhukha HEP in Bhutan (June 2019).
- In October 2018, Essar Power completed its Rs 800 billion capex programme with the commissioning of the second 600 MW unit of the 1,200 MW Mahan coal-based power plant in Madhya Pradesh. Equipment for the second unit has been supplied by China-based Harbin Electric and designed to perform at optimum efficiency using domestic coal sourced from pithead mines in the region.
- In October 2018, SoftBank, Acme Solar and Avada Energy commissioned 360 MW, 200 MW and 60 MW of solar capacity respectively at the Bhadla Solar Park. The Bhadla Solar Park has a total capacity of 2,245 MW. The project commissioned by Acme Solar is spread across 1,000 acres and has a capacity utilisation factor of 30 per cent. It entailed an investment of Rs 9.8 billion.
Key projects commissioned – Transmission and distribution
T&D majors including Power Grid Corporation of India Limited (Powergrid), Adani Transmission, Sterlite Power and BSES commissioned several key projects in the past year. Meanwhile, equipment majors such as Siemens and General Electric (GE) undertook grid strengthening and modernisation projects.
- In June 2019, Inox Wind Limited commissioned common power evacuation facilities at Dayapar in Bhuj, Gujarat. The facilities consisted of a 220 kV substation, a 220 kV double circuit transmission line and associated infrastructure. Together they are capable of supporting over 600 MW of power evacuation.
- In March 2019, BSES Yamuna Power Limited (BYPL) commissioned four solar microgrids as part of a pilot project. The microgrids will combine rooftop solar with lithium-ion-based battery energy storage systems. At present, four such microgrids have been set up at BYPL offices in east Delhi, with installed rooftop solar plants ranging from 5 kW to 7 kW, and energy battery storage between 7 kWh and 10 kWh.
- In January 2019, Adani Transmission Limited (ATL) commissioned a 132 kV grid substation and associated transmission lines based on the build-own-operate-maintain (BOOM) model through its subsidiary, Thar Power Transmission Service Limited, which was acquired by ATL from Rajasthan Rajya Vidyut Prasaran Nigam Limited in March 2017. In February 2019, it commissioned a project through Hadoti Power Transmission Service Limited, which was also acquired from the Rajasthan transco. In March 2019, the company commissioned the Sipat STPS in Chhattisgarh through Sipat Transmission Limited and the Additional System Strengthening Scheme through Raipur-Rajnandgaon-Warora Transmission Limited for Chhattisgarh independent power producers in the Chhattisgarh and Maharashtra regions.
- In January 2019, Powergrid and Jammu and Kashmir Power Development Department test-charged the 220 kV Alusteng-Dras-Kargil-Khalsti-Leh transmission line along with 220/66 kV substations at Dras, Kargil, Khalsti and Leh. The line is expected to connect Ladakh to the national grid.
- In December 2018, GE Power’s grid solutions business completed a 400/200 kV gas insulated switchgear (GIS) substation at Magam village in the Baramulla block of north Kashmir. The project is a part of the Northern Region Strengthening Scheme (NRSS)-29, which was awarded to Sterlite Power.
- In October 2018, Sterlite Power commissioned the Northern Region Strengthening Scheme 29 (NRSS-29, connecting the northern grid to Jammu & Kashmir. The NRSS-29, with a project cost of Rs 30 billion, is capable of delivering an additional 1,000 MW to the valley of Kashmir through a 414 km transmission line. In May 2019, the company commissioned its first power transmission project under the Arcoverde project in Brazil, 28 months ahead of schedule, at a project cost of BRL 164 million (over Rs 2.8 billion).
- In September 2018, Siemens commissioned the second block of the high voltage direct current (HVDC) back-to-back link in Bheramara, Bangladesh, to connect electricity supply networks in India and Bangladesh. The first block has been in operation since 2013 and offers a transmission capacity of up to 500 MW. The commissioning of the second block will ensure a total supply of up to 1,000 MW.
Several key transmission line and renewable projects were secured by power majors in both domestic and international bids.
- In September 2019, Powergrid secured an interstate transmission project under the TBCB route. The project entails setting up of a transmission system with LTA applications under the Rajasthan SEZ Part-B on a BOOM basis. The transmission system comprises a 765 kV double circuit line and associated bays to be established in Rajasthan. In August 2019, Powergrid secured two contracts under tariff-based competitive bidding (TBCB) for the construction of a 765/400 kV GIS substation and 765 kV transmission lines on a BOOM basis, to provide connectivity to renewable energy projects at Bhuj-II (2,000 MW) in Gujarat. The company will also develop transmission systems associated with long-term access (LTA) from the Rajasthan Solar Energy Zone (SEZ) Part C on a BOOM basis.
- In September 2019, Tata Power Solar won the bid for a 105 MWp floating solar energy project in Kerala. The project will be set up on NTPC’s reservoir at Kayamkulam in Alappuzha district, and will be commissioned within 21 months.
- In August 2019, Adani Transmission Limited (ATL) received letters of intent for two transmission projects under TBCB. These are the Bikaner–Khetri transmission project to be established in Rajasthan on a BOOM basis with 480 ckt. km of 765 kV lines, and the Western Region Strengthening Scheme (WRSS) XXI (A) Transco Limited project to be established on a BOOM basis for 35 years with around 272 ckt. km of 765 kV lines and 3,000 MVA of transformation capacity.
- Sterlite Power secured interstate transmission system (ISTS) projects worth over Rs 30 billion under TBCB in August 2019. These include the Udupi-Kasargode project, which will decongest the ISTS corridor and facilitate power flow between Karnataka and Kerala. The other is the Lakadia-Vadodara (WRSS 21-Part B) project in Gujarat under the Green Energy Corridors project. This entails laying of 325 km of 765 kV transmission line from the 765/400 kV Lakadia substation to Vadodara in Gujarat. Earlier, in January 2019, Sterlite secured a contract for transmission capacity augmentation in seven districts of West Bengal. On the international front, the company signed an agreement worth Rs 13.94 billion in April 2019 for the Pampa transmission project in Rio Grande do Sul, Brazil. The project entails the construction of three energy transmission lines totalling 316 km, and is expected to be completed by March 2023. In December 2018, Sterlite secured another $600 million transmission project in Brazil by emerging as a winner for Lot 13 in the auction conducted by Brazil’s electric energy regulator ANEEL.
- In December 2018, NTPC Limited won 85 MW of solar capacity in a reverse auction held by the Uttar Pradesh government at a levellised tariff of Rs 3.02 per unit for a period of 25 years. It had bid for the capacity under the 550 MW tender floated by the Uttar Pradesh New and Renewable Energy Development Agency for grid-connected solar projects. In May 2019, NTPC secured 100 MW of solar capacity under SECI’s 250 MW grid-connected solar projects tender for the Dondaicha Solar Park, Maharashtra.
- In December 2018, SB Energy secured 250 MW of solar power capacity under the 700 MW Gujarat solar tender by quoting the lowest tariff of Rs 2.84 per unit. In the same month, SB Energy won 450 MW at Rs 2.67 per unit in SECI’s wind-solar hybrid auction.
- In December 2018, Adani Green Energy won 390 MW of the 1,200 MW capacity put on sale in the first wind-solar hybrid auction conducted by SECI. Adani Green Energy quoted a tariff of Rs 2.69 per unit.
- In December 2018, the Shapoorji Pallonji Group won the country’s first large-scale floating solar project with 50 MW of capacity in SECI’s reverse auction at a tariff of Rs 3.29 per unit. The project will be located on the Rihand dam along the Uttar Pradesh-Madhya Pradesh border.
- In November 2018, ReNew Power secured a tender launched by the Greater Visakhapatnam Municipal Corporation (GVMC) for developing a 3 MW floating solar PV project at the Meghadrigedda reservoir in Visakhapatnam, Andhra Pradesh.
- In November 2019, Azure Power won a 300 MW solar power project in an auction conducted by NTPC. Under the project, Azure Power will provide power from the project at a tariff of Rs 2.59 per unit for 25 years.
Key equipment contracts – Generation
In the generation segment, a series of equipment contracts were awarded, particularly in the emission control technology segment, to BHEL, L&T Power and GE, among other equipment majors.
- In September 2019, L&T-MHPS Boilers Private Limited (LMB) secured an order of Rs 25 billion-50 billion from THDC Limited for the 1,320 MW Khurja STPP in Bulandshahar, Uttar Pradesh. The order includes the design, engineering, manufacture, supply, erection and commissioning of a steam generator and associated packages, including site levelling. LMB is currently executing nine units of steam generator packages aggregating 5,940 MW in India.
- In September 2019, BHEL secured an order worth Rs 4.5 billion from NTPC-SAIL Power Company, a JV of NTPC and Steel Authority of India Limited, for the supply and installation of emission control equipment at the Bhilai expansion power project in Chhattisgarh. The order involves the supply and installation of a flue gas desulphurisation (FGD) system. Earlier in August 2019, BHEL secured two orders for emission control equipment worth Rs 25 billion from NTPC for the 2,600 MW Korba STPS Stages I, II and III in Chhattisgarh and the 2,100 MW Ramagundam STPS Stages I and II in Telangana. Earlier, in October 2018, BHEL had secured four orders worth Rs 29 billion from NTPC for the control of SOx emissions at the 1,980 MW North Karanpura TPP in Jharkhand, the 1,000 MW Mouda Stage I TPP in Maharashtra, the 1,980 MW Barh Stage I TPP and the 1,320 MW Barh Stage II TPP in Bihar. In June 2019, it secured an order for emission control equipment worth Rs 8.4 billion from Nabinagar Power Generating Company Limited, an NTPC subsidiary. In the renewables space, it secured a significant order valued at Rs 1 billion in July 2019 from NTPC for setting up a 25 MW floating solar PV power project in Simhadri, Andhra Pradesh. In June 2019, it won an order worth Rs 4.4 billion for the erection of two turbine generator units of 1,000 MWe each at the Kudankulam Nuclear Power Project (Units 3 and 4) in Tamil Nadu.
- In August 2019, Siemens Gamesa secured its first order in India from Alfanar Global Development for the supply of 206 units of the SG 2.2-122 wind turbines for two wind farms, totalling 453 MW. In February 2019, it secured an order from ReNew Power to supply wind turbines for two projects aggregating 567 MW in Gujarat and Karnataka. Earlier, in November 2018, it received an order for two wind projects totalling 176.8 MW in Gujarat and Maharashtra.
- In July 2019, Larsen & Toubro’s (L&T) power business secured orders from the Damodar Valley Corporation to install FGD systems in three of its power plants aggregating 3,200 MW, the Durgapur Steel TPS (1,000 MW), the Mejia TPS (1,000 MW) and the Raghunathpur TPS (1,200 MW) in West Bengal. In August 2019, it won an engineering, procurement and construction (EPC) order from NTPC to set up an FGD system at the Vindhyachal STPS Stage I (1,260 MW) and Stage II (1,000 MW), in Madhya Pradesh.
- In July 2019, GE Power India Limited secured three contracts from NTPC Limited to supply and install wet flue FGD systems at the Indira Gandhi STPP (1,500 MW) for a combined value of Rs 23.11 billion (awarded by Aravali Power Company Private Limited, an NTPC subsidiary), the Simhadri STPS Stage I (1,000 MW) and Stage II (1,000 MW), and the Sipat STPS Stage I (1,980 MW). In April 2019, it won an order worth Rs 1,420 million from NTPC Limited for the supply and installation of low NOx combustion systems for 10 GW of thermal power plant capacity across India. In November 2018, GE Power India Limited secured four contracts worth Rs 17.83 billion from NTPC for the supply of emission control equipment for the Solapur STPP (1,320 MW), the Tanda STPP Stage II (1,320 MW), the Feroze Gandhi Unchahar TPP (500 MW) and the Meja TPP (1,320 MW).
- In July 2019, Power Mech Projects secured a Rs 2.85 billion contract for civil, structural and architectural works for the main plant area at the 660 MW Bhusawal TPS in Maharashtra for around Rs 2.85 billion and a Rs 1.26 billion contract for a project at Vijaynagar, Karnataka. Earlier, in December 2018, the company won orders worth Rs 1.36 billion for structural and architectural works at Unit 1 of the 1,600 MW Uppur supercritical TPP in Ramanathapuram, Tamil Nadu, and a Rs 1.09 billion order for the operations and maintenance of the 1,600 MW coal-based Yeramarus TPS at Raichur in Karnataka.
- In April 2019, Tata Projects Limited secured an order worth $321 million from Nuclear Power Corporation of India Limited for implementing civil works for Units 1 and 2 under the 1,400 MW Gorakhpur Haryana Anu Vidyut Pariyojana. The scope of work includes the construction of the main plant buildings and structures. This is Tata Projects’ third contract in the nuclear sector.
- In December 2018, GE Renewable Energy won a contract from ReNew Power for the supply and installation of wind turbines for the 300 MW Gadhsisa wind farm in Gujarat.
- In December 2018, the Suzlon Group secured an order from Atria Power for the development of a 50.4 MW wind power project in Tuticorin, Tamil Nadu. Suzlon will install 12 units of S111-140m and 12 units of the S120-140m wind turbine generators with a rated capacity of 2.1 MW each as well as a hybrid lattice tubular tower. The project will be commissioned in two phases by 2019-20.
Key equipment contracts – Transmission and distribution
Several T&D equipment contracts were awarded in the past year to key industry players including L&T, KEC International, Kalpataru Power Transmission Limited (KPTL) and GE T&D.
- In September 2019, GE T&D India Limited secured an order worth Rs 900 million for grid upgradation from WBSETCL. GE T&D won the order under a competitive bidding process. It entails the construction of three new 132/33 kV GIS substations in Ramnagar, Manbazaar and Birlapur. In March 2019, GE T&D India Limited secured a turnkey order worth Rs 1.62 billion from Powergrid for evacuating 2,500 MW of wind power in Gujarat through the green energy corridor. The order entails extending an existing 765 kV air-insulated switchgear (AIS) substation and setting up a new 400/220 kV GIS substation in Bhuj, and extending an existing 400 kV GIS substation at Tirunelveli. In March 2019, GE T&D also secured an order worth Rs 1.5 billion from Rajasthan Rajya Vidyut Prasaran Nigam Limited to execute a grid modernisation project.
- In July 2019, Hartek Power Private Limited secured an order to set up a 220/33 kV substation in Jodhpur, Rajasthan, on an EPC basis for evacuation of 130 MW of solar power. Earlier, in December 2018, Hartek secured an order from Powergrid for augmenting an extra high voltage 400 kV substation project, located in Ballia and Sohawal in Uttar Pradesh, Kankroli in Rajasthan and Abdullapur in Haryana.
- In April 2019, Powergrid selected Siemens to refurbish the 500 MW Vindhyachal HVDC back-to-back system in Madhya Pradesh. The system was put into operation in 1989 to interconnect the asynchronous 400 kV alternating current networks of the northern and western regions.
- In March 2019, KPTL won new orders worth Rs 12.88 billion (Rs 7.71 billion order for T&D in international markets). In October 2018, KPTL secured two orders worth Rs 11.45 billion. These include an order worth Rs 6.44 billion for the design, supply and construction of 500 kV transmission lines in the Commonwealth of Independent States, and 230 kV transmission lines in Africa, and a Rs 5.01 million order from Rail Vikas Nigam Limited for railway infrastructure development.
- In February 2019, BHEL secured a Rs 3 billion order from the Central Organisation for Railway Electrification for the electrification of 440 track km of railway lines for the Birlanagar-Etawah, Bhandai-Udi and Farrukhabad-Shikohabad (including Mainpuri-Etawah) sections of North Central Railway.
- In February 2019, KEC International secured an order for a transmission line package from Powergrid’s subsidiary under the TBCB route. It also received orders for the construction of transmission lines and AIS substations from Bihar State Power Transmission Company Limited. In addition, KEC’s railway business secured an order for overhead electrification works and associated civil works in western India. Earlier, in December 2018, KEC received orders from Powergrid for the diversion of various transmission lines, as well as from West Bengal State Electricity Transmission Company Limited for the supply and construction of 220 kV lines. In October 2018, KEC secured a contract from Powergrid for executing a 132 kV transmission line package and associated substations in the north-eastern region.
- In January 2019, L&T Construction secured orders for a rural electrification project in West Bengal under the Deendayal Upadhyaya Gram Jyoti Yojana. In September 2018, L&T’s construction arm secured orders worth Rs 16.33 billion for the supply of the main plant electrical package for Units 3 and 4 of the Kudankulam Nuclear Power Project in Tamil Nadu, a 400/220 kV GIS substation in Andhra Pradesh and a 230 kV GIS substation in Tamil Nadu. In October 2018, it secured multiple orders in the domestic and international markets for the implementation of a high voltage distribution system in the semi urban and rural areas of Kharagpur and Midnapur in West Bengal as well as construction orders worth Rs 18.81 billion for 22 132/11 kV substations in Kuwait.
- In October 2018, Genus Power Infrastructures secured an order worth Rs 3.12 billion from a state-owned utility for the implementation of advanced metering infrastructure (AMI), including the supply of 0.43 million smart meters. Reportedly, this is the single largest order for AMI directly finalised by any state utility in the country.
One of the major developments related to fuel supply was NTPC’s entry into the commercial mining space through a new subsidiary.
- In September 2019, the Appellate Tribunal of Electricity (APTEL) allowed Adani Power Rajasthan Limited’s claim of compensation due to the shortage of linkage coal in respect of a 1,200 MW PPA signed with Rajasthan discoms. APTEL allowed the compensation for domestic coal shortfall arising from change in law in line with the New Coal Distribution Policy, 2007, and the Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India policy of the Government of India (SHAKTI). APTEL has granted a carrying cost for the change in law.
- In August 2019, NTPC set up a separate coal mining subsidiary, NTPC Mining Limited, marking its foray into commercial coal mining. In July 2019, NTPC terminated the mine development and operation contracts awarded to BGR Mining & Infra Limited for the Chatti-Bariatu coal mine in Jharkhand and the Talaipalli coal mine in Chhattisgarh over allegations of corruption against the company. In a separate development, a fresh coal linkage of 2.8 million tonnes per annum (mtpa) for 500 MW of capacity was recommended by the Ministry of Coal’s (MoC) standing linkage committee for NTPC’s 720 MW Barauni thermal power plant in Bihar.
- In August 2019, the joint allocation of 396.1 million tonnes (mt) of reserves from the Kudanali-Luburi coal block in the Talcher coalfields in Odisha to NTPC Limited and Jammu & Kashmir State Power Development Corporation was cancelled by the central government. The block was allotted for developing the 1,320 MW Bilhaur thermal power plant in Uttar Pradesh, but now the project is being developed as a solar plant and therefore the companies sought to surrender the coal block.
- In April 2019, the MoC issued notices to Essar Power Limited and GMR Energy Limited to confiscate their bank guarantees worth up to Rs 9 billion, following a judgment by the Delhi High Court that rejected the companies’ petition to surrender their coal blocks. The two companies had submitted these bank guarantees for these coal blocks at an auction held in 2015-16.
- In April 2019, Coal India Limited (CIL) selected Projects and Development India Limited to provide engineering services for setting up a Rs 45 billion coal-based methanol plant in West Bengal, with a methanol production capacity of up to 0.67 mtpa.
- In October 2018, the Korea Western Power Company (Kowepo), Korea’s state power utility, began arbitration proceedings against the Indian government for not honouring the fuel supply commitment for its 388 MW gas-based power plant in Maharashtra. The project is operated by Pioneer Gas Power Limited, in which Kowepo has a 40 per cent stake. The company sought the resolution of issues surrounding its project in six months, or a compensation of $400 million for its loss.
Electric vehicle and charging infrastructure developments
The EV segment witnessed an upswing in activity. Power majors such as NTPC, Tata Power, and Energy Efficiency Services Limited (EESL) announced their plans of scaling up charging stations.
- In August 2019, Tata Power partnered with Tata Motors to set up around 300 EV charging stations by the end of 2019-20. In April 2019, Tata Power and Indraprastha Gas Limited signed an MoU to set up EV charging stations, battery swapping stations and rooftop solar power plants. Also, in September 2018, Tata Power signed an MoU with Hindustan Petroleum Corporation Limited for setting up commercial-scale EV charging stations at the latter’s retail outlets across the country.
- In August 2019, EESL signed a 10-year MoU with Apollo Hospitals Enterprises to install public EV charging stations at its hospitals across the country. In June 2019, EESL signed an MoU with the Ahmedabad Municipal Corporation to build 100 EV charging stations over the next 10 years. In July 2019, it signed an MoU with the New Okhla Industrial Development Authority to promote EVs and install around 100 charging stations. In January 2019, EESL and the New Delhi Municipal Council (NDMC) signed an MoU to install public e-charging stations in the NDMC area. In the same month, the Ministry of Finance signed an agreement with EESL for the deployment of 15 EVs.
- In March 2019, NTPC Limited invited bids for setting up charging stations for EVs including buses and four-wheelers on a turnkey basis. In January 2019, the Goa government signed an agreement with NTPC for assistance in procuring 100 electric buses and setting up charging stations. In November 2018, NTPC signed MoUs with vehicle aggregators Ola, Lithium, Shuttl, Bikxie, Bounce, Electrie and Zoom Car for the development and utilisation of public charging infrastructure in the cities of Jabalpur, Navi Mumbai and Bhopal.
- In March 2019, BHEL installed the first solar EV charging station on the Delhi-Chandigarh highway. BHEL also developed a central monitoring system for EV chargers with a user-friendly mobile application.
- In February 2019, BSES Rajdhani Power Limited partnered with EVI Technologies to set up around 3,000 EV charging stations in Delhi, at an investment of Rs 15,000-Rs 20,000 per station. In June 2019, BRPL commissioned the Blue Smart Charger, a smart EV charging station in South Extension Part II, Delhi, in association with Gensol Charge Private Limited and Techperspect.
- In November 2018, Fortum India announced to set up 720 facilities for EV charging by 2020-21 across seven cities in India. The company plans to deploy 200 EV charging points by the end of 2019 and 500 charging points in the next two years.
A major highlight during the year was the PPAs signed under the Pilot Schemes I and II aimed at alleviating the stress in the sector due to lack of demand from discoms.
- In November 2018, PTC signed PPAs with four state distribution companies under the Pilot Power Procurement Scheme I. The PPAs were signed with the Bihar (200 MW), West Bengal (200 MW), Telangana (550 MW) and Tamil Nadu (550 MW) discoms. The discoms have signed power agreements with RKM Powergen (550 MW), Jhabua Power (100 MW), MB Power (Madhya Pradesh) Limited (175 MW), SKS Power Generation (Chhattisgarh) Limited (300 MW), Jindal India Thermal Power (125 MW), IL&FS Tamil Nadu Power Company (550 MW), and Jaypee Power Ventures (100 MW), among others. On the international front, PTC India Limited signed a PPA with DGPC in August 2019 for the purchase of surplus power from the 720 MW Mangdechhu HEP in Bhutan for 35 years. The electricity generated from the project will be supplied to Assam, Bihar, Odisha and West Bengal. In October 2018, PTC India Limited signed a $1.8 billion deal with the Bangladesh Power Development Board for the supply of 200 MW of power.
- Recently, in September 2019, letters of award were issued to four power producers under Pilot Scheme II. These are Jindal Power (315 MW), Raigarh Energy Generation Limited (295 MW), JSW Energy (290 MW) and Essar Power Madhya Pradesh Limited (100 MW). The developers will sign PPAs with NHPC Limited, which was appointed as the aggregator for Pilot Scheme II, subject to requisite approvals from the respective state power regulators.
- In July 2019, the Supreme Court allowed Adani Power Mundra Limited (APML) to terminate its PPA with Gujarat Urja Vikas Nigam Limited (GUVNL) due to the non-supply of coal from the Naini block of the Gujarat Mineral Development Corporation. The court also allowed APML to seek a compensatory rate from the Central Electricity Regulatory Commission (CERC) for the electricity it had supplied to Gujarat from its Korba power project in Chhattisgarh.
- In May 2019, the Gujarat Electricity Regulatory Commission approved the PPAs for 500 MW of grid-connected solar PV projects auctioned by GUVNL. Engie had emerged as the lowest bidder quoting a tariff of Rs 2.65 per kWh for 200 MW of capacity. Gujarat Industries Power Company Limited bid Rs 2.68 per kWh to set up 100 MW of solar capacity while Gujarat State Electricity Corporation Limited bid Rs 2.68 per kWh to set up 100 MW of solar capacity. Tata Power bid Rs 2.70 per kWh to develop 200 MW, but was awarded 100 MW. The solar PV projects will be developed under Phase III of the Raghanesda Solar Park.
- In October 2018, the high-powered committee appointed by the Gujarat government in July 2018, recommended a revision in the tariff structure of the PPAs for Adani Power’s 4,620 MW Mundra TPP, Tata Power’s 4,000 MW Mundra ultra mega power project (UMPP) and Essar Power’s 1,200 MW Salaya TPP. The committee recommended passing on the fuel cost to the consumers prospectively and extending the term of the PPAs by 10 years. In line with these recommendations, the CERC, in April 2019, approved Adani Power’s revised PPA for 2,000 MW of capacity at the Mundra TPP with a higher tariff.
Mergers and acquisitions
The sector witnessed several M&A deals during the past year. The key deals were signed by PFC (acquisition of REC), CLP (acquiring Kalpataru’s assets), Renascent Power Ventures (acquisition of Prayagraj Power Generation) and Hitachi (acquisition of ABB’s power grid division), among others.
- In September 2019, the Competition Commission of India (CCI) approved Schneider Electric’s acquisition of L&T’s electrical and automation (E&A) business in a Rs 140 billion deal. In May 2018, L&T had signed a definitive pact to sell its E&A business for an all-cash consideration as part of its long-term strategy to exit its non-core activities.
- In July 2019, KPTL entered into a binding agreement with CLP India Private Limited to sell its stake in three power transmission assets for an enterprise value of Rs 32.75 billion. These assets are Kalpataru Satpura Transco Private Limited (KSTPL), Alipurduar Transmission Limited and Kohima Mariani Transmission Limited (KMTL). In March 2019, KPTL signed a definitive agreement to acquire an 85 per cent stake in Swedish firm Linjemontage i Grastorp AB at an enterprise value of $24 million (Rs 1.65 billion).
- In April 2019, Unitech Limited sold its power transmission business Unitech Power Transmission Limited (UUPTL) to Sterling and Wilson Private Limited for an undisclosed amount. After the completion of the transaction, UPTL will become a wholly owned subsidiary of Sterling and Wilson, which is promoted by the Shapoorji Pallonji Group.
- In March 2019, Power Finance Corporation Limited (PFC) signed a share purchase agreement to acquire the entire 52.63 per cent stake of the central government in REC Limited for a cash purchase consideration of Rs 139.50 per share with a total acquisition cost of about Rs 145 billion. With this landmark deal, PFC is now a promoter and holding company of REC Limited.
- In March 2019, Suzlon Energy Limited completed the sale of two of its subsidiaries to CLP Wind Farms (India) Limited. Suzlon also sold the remaining stake in its subsidiaries S.E Solar Limited and Gale Solar Farms Limited for a consideration of Rs 765.5 million and Rs 225.4 million respectively.
- In February 2019, Adani Transmission acquired KEC Bikaner Sikar Transmission Private Limited at an enterprise value of Rs 2.27 billion. Following this acquisition, Adani Transmission owns around 13,450 ckt. km of power transmission lines.
- In January 2019, the CCI approved Renascent Power Ventures’ acquisition of a 75 per cent stake in Prayagraj Power Generation Company Limited (PPGCL). This included equity shares and optionally convertible redeemable preference shares of PPGCL. Renascent Power Ventures had signed a share purchase agreement with a consortium of lenders led by the State Bank of India to acquire a 75.01 per cent stake in PPGCL, which owns and operates a 1,980 MW supercritical power plant in Uttar Pradesh.
- In December 2018, Japanese conglomerate Hitachi Limited agreed to acquire an 80.1 per cent stake in ABB’s power grid division at an enterprise value of about $6.4 billion. This includes net debt of $11 billion. ABB will keep the remaining 19.9 per cent stake, while it plans to return the proceeds worth $7.8 billion to investors through a buyback or other measures.
- In November 2018, Singapore-based Agritrade Resources acquired SKS Power Generation (Chhattisgarh) Limited in a one-time settlement of Rs 21.70 billion with its lenders. This was the first one-time settlement resolution of a power asset post the RBI’s circular released in February 2018.
- In November 2018, French multinational energy firm ENGIE acquired a 90 per cent stake in Simpa Energy India Private Limited, a leading rural rooftop solar provider.
MoUs and JVs
Some of the key MoUs signed and JV companies formed in the past year are as follows:
- In September 2019, Reliance Power Limited (RPower) signed a partnership agreement with Japanese utility JERA Co Inc. for implementing a 750 MW combined cycle power project (CCPP) in Bangladesh. RPower will hold a 51 per cent stake in the JV company while JERA will hold 49 per cent. The transaction will result in a debt reduction of Rs 8.35 billion ($116 million) for RPower, which is payable to the US-Exim Bank. The project will be developed on a build-own-operate model and is expected to entail an investment of $750 million. RPower will relocate one module of its CCPP at Samalkot in Andhra Pradesh for the project. The former is stranded due to non-availability of natural gas. The PPA and land lease agreement have also been signed with the Bangladesh Power Development Board while the gas supply agreement has been signed with Titas Gas, a subsidiary of Petrobangla.
- In September 2019, Tata Power Delhi Distribution Limited (Tata Power-DDL) signed an MoU with Havells India to ensure the safety of users against the hazards of electrical leakage. Under the MoU, Havells will provide its circuit protection devices and electrical leakage circuit breaker across all 12 Tata Power-DDL customer care centres. Earlier, in August 2019, Tata Power-DDL signed an MoU with the International Finance Corporation to assess the energy storage capacity requirement of the company’s 2,000 MW distribution system. In March 2019, Tata Power-DDL collaborated with Enedis, Schneider Electric, Odite and VaasaETT to implement a smart grid demonstration project. In October 2018, it signed an MoU with the Green Business Certification Institute to promote the uptake of smart grids and sustainable power systems in India, Asia, Africa and the Middle East.
- In September 2019, NTPC Limited signed an MoU with the Himachal Pradesh government to set up two hydroelectric projects (HEPs) totalling 520 MW in the state. The Seli & Miyar HEPs are located in Chenab Basin, in Lahaul and Spiti district. The While Seli HEP (400 MW) is a run-of-the-river project with pondage scheme while the Miyar HEP (120 MW) is a run-of-the-river project without a pondage scheme. Earlier in July 2019, NTPC signed an MoU with BHEL to set up an 800 MW technology demonstration plant based on advanced ultra supercritical technology in Sipat, Chhattisgarh. The project will help reduce carbon dioxide emissions by about 20 per cent as compared to conventional subcritical technology. In March 2019, NTPC signed an MoU with East Central Railways for the transportation of fly ash under Indian Railways’ Special Freight Train Operator scheme. In November 2018, NTPC entered into a Rs 100 billion agreement with Indian Railways for the transportation of coal from mines to power plants up to 2019-20. NTPC will make an advance payment in three installments while Indian Railways is offering NTPC fixed prices for the rest of 2018-19 and 2019-20 and a preferential allotment of rakes.
- In August 2019, EESL signed an MoU with the Department of Urban Development and Municipal Affairs, West Bengal, to install 156,000 smart LED streetlights. In April 2019, EESL collaborated with EDF International Networks (EDF IN) to roll out 5 million smart meters in Bihar and Andhra Pradesh by 2020. Also, in November 2018, EESL signed an MoU with the Maharashtra government to implement gas-based trigeneration projects with a total capacity of 7 MW at select government facilities in the state.
- In July 2019, SJVN Limited signed an MoU with BHEL for jointly pursuing commercial solar power projects through participation in tariff/viability gap funding based competitive bidding. In June 2019, SJVN signed an MoU with North Eastern Electric Power Corporation Limited for jointly exploring power projects in India and abroad.
- In June 2019, Powergrid signed an agreement with NTPC to form a JV company, National Distribution Company, with 50:50 equity participation. The JV will be responsible for the distribution of electricity in India and related activities. Meanwhile, Powergrid signed an MoU with the Energy Management Centre, Kerala, to support initiatives associated with energy efficiency in power distribution and process industries, and demand-side management programmes, for the overall improvement of the power scenario in Kerala.
- In June 2019, BYPL partnered with TERI, Panasonic India, and the Council on Energy, Environment and Water to launch three initiatives with the potential to save around 380 MUs of electricity and reduce 0.26 mt of carbon emissions annually.
- In May 2019, BHEL signed an MoU with the Automotive Research Association of India, an autonomous body affiliated to the Ministry of Heavy Industries and Public Enterprises, for cooperation on e-mobility projects. In April 2019, BHEL signed an memorandum of agreement (MoA) with GAIL India Limited for the development of solar power projects. As per the agreement, GAIL will be the project developer and BHEL will act as the EPC and project management contractor.
- In March 2019, Thyssenkrupp Industries India signed an exclusive licence agreement with Denmark-based Babcock & Wilcox Vølund A/S for biomass boiler technology, which provides a sustainable solution to pollution caused by crop burning by utilising the crop waste for clean energy generation.
- In February 2019, NLC India Limited and NHPC Limited signed an MoU for power trading by offering surplus power available in the northern and northeastern regions to bulk consumers in the southern region at an affordable tariff.
- In November 2018, the Essel Group signed a pact with SB Energy, the domestic arm of the Japan-based SoftBank Group, to jointly develop a 500 MW solar park in the country. The project will be developed by Essel Infraprojects and will enable the SoftBank Group to expand its portfolio in the country.
- In October 2018, CIL signed an MoU with NLC India Limited to form a 50:50 JV company for setting up solar power projects aggregating 3,000 MW and TPPs totalling 2,000 MW. The timeline for the completion of solar power projects is 15 months and for TPPs it is 60 months.
- In September 2018, French electric utility ENGIE and STOA, a French infrastructure and power equity investor, collaborated to set up a wind energy platform in India with a goal of setting up over 2 GW of capacity over the next five years.
- In September 2019, Tata Power Company decommissioned the 500 MW Unit 6 of its Trombay thermal power plant in Mumbai owing to the high cost of generation and the inability to get a PPA after the earlier one expired in March 2018. The Trombay unit has an installed generation capacity of 1,580 MW, which supplies electricity to the majority of consumers, both bulk and retail, in Mumbai.
- In July 2019, the Cabinet Committee on Economic Affairs (CCEA) approved NHPC Limited’s 2,880 MW Dibang multipurpose project in Arunachal Pradesh. The CCEA approved the expenditure on preinvestment activities and various clearances for the project at Rs 16 billion. The estimated cost of the project is Rs 280.80 billion including interest during construction and financing charges of Rs 39.75 billion at the June 2018 price level. Once completed, this will be the largest HEP in the country. In August 2019, NHPC signed an MoA with the Assam government for the Lower Subansiri project. The National Green Tribunal had given a go-ahead to the project in July 2019 and NHPC is expected to begin construction of the plant by October 2019.
- In June 2019, Power Finance Corporation Consulting Limited invited bids to appoint a technical consultant for the 4,000 MW UMPP in Deoghar, Jharkhand to conduct the site feasibility study, and obtain environmental and forest clearances for the proposed power plant. The timeline for the proposed technical studies and clearances is 390 days from the date of award.
- In December 2018, NLC India Limited retired the 100 MW unit of the TPS-I in Tamil Nadu as part of its planned phase-out process. The station’s generating capacity stands reduced to 500 MW now. A new plant, Neyveli New Thermal Power Project of capacity 1,000 MW (2×500 MW) is under implementation as the replacement plant for TPS-1 and is currently in its final stages of completion.
- In October 2018, JSW Energy Limited announced plans to revive the 240 MW Kutehr hydro power project in Chamba district of Himachal Pradesh which was conceived in 2007, however, was put on hold due to the absence of long-term PPAs. The company has now bid to supply 240 MW of the 500 MW for which bids were called by the Haryana government.
- In October 2018, NTPC Limited and National Aluminium Company Limited decided to cancel the development of the proposed 2,400 MW (three units of 800 MW each) Gajamara thermal power project in Odisha owing to land acquisition challenges and coal linkage issues.
- In September 2018, the Ministry of Environment, Forest and Climate Change accorded environmental clearance to NTPC Limited for the 1,320 MW Talcher Expansion TPP in Angul district of Odisha. The proposed project entailing an investment of Rs 77.32 billion is expected to be commissioned by 2022. Further, in October 2018, NTPC closed down its 705 MW Badarpur coal-based plant after it was identified as one of the largest contributors to air pollution in Delhi by the Environment Pollution (Prevention and Control) Authority (EPCA). In the last few years, only units IV and V of 210 MW had been operational as the older ones were decommissioned due to high pollution levels.
- In September 2019, private equity company KKR India acquired nearly 10 per cent stake in CG Power and Industrial Solutions for over Rs 0.89 billion by invoking the pledge on shares provided as collateral for credit facilities extended to a promoter firm of CG Power.
- In October 2018, NTPC announced that its 51:49 JV with Bharat Forge Limited, BF-NTPC Energy Systems, has initiated a voluntary liquidation process under the Insolvency and Bankruptcy Code, since it had not commenced any business activity. The JV was incorporated in June 2008 for manufacturing, buying and selling equipment relating to the power sector.
- In October 2018, CESC Limited announced its demerger into three entities, with the power and retail businesses getting separate identities while IT and FMCG divisions along with the Quest Mall in Kolkata together formed the third unit. The power generation and distribution business continues to be known as CESC while the retail business is named New Retail. The third unit is called Venture Companies.
• In August 2018, GE Power India Limited shut down its Maneja manufacturing plant for hydropower equipment in Vadodara, Gujarat, owing to tough market conditions.