It was a challenging year for most power companies, especially the past six months, as they battled the impact of Covid-19. Despite these challenges, they were able to achieve several critical milestones. On the generation front, a number of thermal, hydro and renewable energy projects were commissioned by leading public and private sector players. On the renewable energy front, new tenders saw significant traction while domestic and foreign investors explored emerging opportunities in areas such as floating solar, round-the-clock power and manufacturing. Several equipment contracts were awarded for installing air quality control systems for thermal power plants. In the distribution segment, the key highlights were the award of new DF contracts as well as the signing of new MoUs in the areas of smart metering, blockchain trading and electric vehicles (EVs). For transmission, major players won bids for transmission line projects through the tariff-based competitive bidding (TBCB) route. The power sector witnessed further consolidation with increased merger and acquisition (M&A) activity, not only among domestic players but also international players.
Power Line presents a round-up of the key developments in the power sector during 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. Other public gencos including Gujarat State Electricity Corporation Limited (GSECL), NLC India and TS Genco also commissioned key projects. In the hydropower segment, capacities were added by NHPC Limited, North Eastern Electric Power Corporation Limited (NEEPCO) as well as Tata Power in India and abroad. Renewable majors such as Sembcorp, ReNew Power and Adani Green Energy strengthened their portfolios.
- In July 2020, NTPC Limited’s 1,600 MW Lara super thermal power station (STPS) in Chhattisgarh became fully operational with the commissioning of Unit 2 of 800 MW capacity. Other projects commissioned in the past year include Units 1 and 2 (660 MW each) of the Khargone STPS in Madhya Pradesh, which is the country’s first ultra supercritical facility set up on a complete engineering, procurement and construction (EPC) basis; a 250 MW unit of the Barauni thermal power station (TPS) in Bihar; the first 800 MW unit of the 1,600 MW Darlipali STPS in Odisha; and a 660 MW unit of the Tanda TPS in Uttar Pradesh.
- In July 2020, the 750 MW solar project set up at Rewa, Madhya Pradesh, was inaugurated by the prime minister. Mahindra Renewables, ACME Solar Holdings and Solengeri Power have set up projects in the solar park. Powergrid has developed a 220/400 kV interstate transmission system (ISTS) under the Green Energy Corridors project to facilitate the evacuation of power from the project site.
- In July 2020, Sembcorp Energy India Limited (SEIL) became the first independent power producer (IPP) to commission all its projects in the first three wind auctions held by the Solar Energy Corporation of India (SECI), by commissioning a combined capacity of 800 MW. The three latest projects of Sembcorp have a capacity of 250 MW, 250 MW and 300 MW respectively. The first one is based in Thoothukudi in Tamil Nadu, while the other two are in Bhuj, Gujarat. This takes Sembcorp’s total installed capacity to 1,730 MW.
- In June 2020, TS Genco commissioned the first 270 MW unit of the 1,080 MW Bhadradri coal-based thermal power project (TPP) in Kothagudem, Telangana. The project was executed by Bharat Heavy Electricals Limited (BHEL). This is the second unit to be commissioned as part of the MoU between TS Genco and BHEL for the construction of new TPPs totalling 6,000 MW in the state.
- In April 2020, Tata Power Company Limited’s joint venture (JV) with Norway’s Clean Energy Invest and the International Financial Corporation (IFC) started commercial operations of the 178 MW Shuakhevi hydropower project in Georgia. The JV, Adjaristsqali Georgia LLC, has set up one of the largest projects in Georgia at an overall cost of about $500 million.
- In February 2020, NEEPCO commissioned two 150 MW units of the 600 MW Kameng hydroelectric project (HEP) in West Kameng district of Arunachal Pradesh. This is the largest unit rating (150 MW) for hydropower generating sets in the state. BHEL executed the project.
- In February 2020, French electric utility, Engie fully commissioned its 250 MW Kadapa solar power project in Andhra Pradesh. Engine was awarded the Kadapa solar power project in April 2017. The company signed a 25-year PPA with NTPC for this in March 2018.
- In January 2020, Karnataka Solar Park Development Corporation Limited, a JV between SECI and Karnataka Renewable Energy Development Limited, operationalised the 2,050 MW Pavagada solar park in Tumakuru district, Karnataka. The solar park is divided into eight blocks of 250 MW with dedicated high voltage supply lines, pooling stations, and a pooling substation for evacuation. Some of the key developers with projects in the park are Tata Power (400 MW), ReNew Power (350 MW), Fortum Solar (350 MW) and Avaada Energy (300 MW).
- In December 2019, NLC India Limited commissioned the 500 MW Unit 1 of the 1,000 MW New Neyveli lignite-based TPS in Cuddalore district of Tamil Nadu. This is the first time in the country that a thermal unit with capacity over 250 MW based on lignite as fuel has been commissioned. The order for a boiler, turbine and generator (BTG) package was placed on BHEL.
- In December 2019, the first renovated 60 MW unit of NHPC’s 180 MW Baira Siul hydroelectric project in Chamba district, Himachal Pradesh, was commissioned. Baira Siul is NHPC’s first hydropower station to have been taken up for comprehensive renovation and modernisation (R&M) by BHEL.
- In December 2019, Adani Green Energy Limited (AGEL) commissioned a 75 MW wind power project in Gujarat. The project has a PPA with the Maharashtra state discom at Rs 2.85 per kWh for a period of 25 years. In October 2019, it commissioned a 50 MW wind power project in Kutch, Gujarat. The company has a 25-year PPA with SECI.
- In October 2019, GSECL commissioned an 800 MW supercritical thermal power unit at the Wanakbori expansion project in Kheda, Gujarat. The equipment supplier for the project is BHEL, which had earlier set up seven units of 210 MW capacity each at the Wanakbori project.
- In October 2019, ReNew Power Ventures commissioned a 250 MW solar photovoltaic (PV) power plant in Bikaner, Rajasthan. The plant is the second largest solar farm of ReNew Power with the first being in Maharashtra. Power from the Bikaner plant would be supplied at Rs 2.72 per unit to Maharashtra.
Key projects commissioned – Transmission and distribution
T&D majors including Powergrid, Karnataka Power Transmission Corporation Limited (KPTCL), Jharkhand Urja Sancharan Nigam Limited (JUSNL), and Tamil Nadu Transmission Corporation Limited (TANTRANSCO) have commissioned several key projects in the past year.
- In September 2020, Powergrid commissioned Pole 1 of the Raigarh-Pugalur HVDC transmission system, which comprises the 800 kV Raigarh HVDC terminal station (Chhattisgarh) and the Pugalur HVDC terminal station (Tamil Nadu) along with a 1,765 km long ±800 kV HVDC line from Raigarh to Pugalur and two HVAC lines in Tamil Nadu. The 1,500 MW capacity transmission project will evacuate bulk power generated by IPPs in Chhattisgarh. Earlier, in February 2020, Powergrid through its wholly owned subsidiary Power Grid Southern Interconnector Transmission System Limited successfully commissioned the “Strengthening of Transmission System beyond Vemagiri project, which involved construction of the 765 kV Vemagiri II-Chilakaluripeta DC line, 400 kV Chilakaluripeta–Narasaraopeta (quad) DC line, 400 kV Cuddapah-Madhugiri (quad) double-circuit line, 400 kV Srikakulam pooling station-Garividi (quad) DC line with an 80 MVAr switchable line reactor at the Garividi end, and a 765/400 kV substation.
- In August 2020, JUSNL commissioned five substations at Bhagodih (Garhwa district), Jasidih (Deoghar district), and Giridih, Saria and Jamua (Giridih district), along with the 220 kV Dumka-Godda double-circuit power line. Together, the construction of the substations and the transmission line entailed a cost of Rs 6.16 billion.
- In June 2020, KPTCL commissioned the 110 kV Madavu substation located in Madavu village of Dakshin Kannad district in Karnataka, which is a vital component of the 20 km long, 110 kV Madavu-Sullia transmission line project.
- In May 2020, TANTRANSCO commissioned a 77.31 km transmission line from the new 230 kV substation at Neyveli to Kadalangudy. The total cost of the project is Rs 1,008.2 million. This is the second 230 kV circuit from Neyveli to the delta area.
- In May 2020, Sterlite Power commissioned the 765 kV Khandwa substation in Madhya Pradesh, which is part of the Khargone Transmission Limited project. The substation will help in stepping down high voltage power from the 1,320 MW Khargone thermal power plant.
- In January 2020, Alipurduar Transmission Limited, a wholly owned subsidiary of Kalpataru Power Transmission Limited, connected the Alipurduar-Siliguri line with interconnection facilities of the grid. In March 2019, Alipurduar Transmission had commissioned the Kishanganj-Darbhanga line. With this interconnection of the Alipurduar-Siliguri line, the project has reached full commissioning.
- In November 2019, GE T&D India Limited achieved a new milestone in its Champa-Kurukshetra ultra-high voltage direct current (UHVDC) project by successfully energising the third of four poles planned for the project. This adds an additional 1,500 MW of capacity to the 1,305 km link, which is now transmitting 4,500 MW.
Several key tenders for transmission line projects, distribution licences, renewable energy projects and EV charging stations were secured by power majors in both domestic and international bids.
- In August 2020, in NTPC Limited’s auction for 1.2 GW of ISTS-connected solar projects, a total of 1,170 MW of capacity was awarded. O2 Power, Azure Power and Tata Power secured 400 MW, 300 MW and 370 MW, respectively, at a tariff of Rs 2.43 per kWh, the second lowest tariff for solar power till date. Amp Energy secured 100 MW at Rs 2.44 per kWh.
- In August 2020, Vena Energy Renewables and JSW Solar emerged as the lowest bidders in the 2.5 GW wind auction conducted by SECI. The two players won 160 MW and 810 MW capacities at a tariff of Rs 2.99 per unit and Rs 3.00 per unit respectively. The tender was for 2,500 MW of capacity but only 970 MW was awarded.
- In August 2020, Vena Energy and Tata Power emerged as the lowest bidders in another solar auction, conducted by Gujarat Urja Vikas Nigam Limited (GUVNL) for the Dholera Solar Park (Phase IX) for 700 MW of capacity. Both quoted the lowest tariff of Rs 2.78 per unit and won 100 MW each. Other winners included ReNew Power, which secured 200 MW at Rs 2.79 per unit; SVJN Limited, which won 100 MW at Rs 2.80 per unit; and TEQ Power Private Limited, which secured 200 MW at Rs 2.81 per unit. Earlier, in March 2020, GUVNL awarded 350 MW of solar capacity in the auction for 500 MW of grid-connected solar projects (Phase VIII) to Vena Energy (40 MW at Rs 2.61 per unit), Juniper Energy (190 MW at Rs 2.63 per unit) and Tata Power (120 MW at Rs 2.64 per unit).
- In July 2020, Azure Power received the letter of award (LoA) for a 2,000 MW ISTS solar power project from SECI after exercising the greenshoe option as part of an earlier 2,000 MW win. Under this greenshoe LoA, Azure will supply power for 25 years at a tariff of Rs 2.92 per kWh. The project also comes with a 500 MW cell and module manufacturing capacity requirement and Azure Power intends to partner with a domestic manufacturer for this.
- In June 2020, Tata Power Renewable Energy Limited (TPREL) received an LoA from GUVNL to develop a 120 MW solar project. The project is expected to generate about 300 MUs of energy per year, which will be supplied to GUVNL under a 25-year PPA. The company won the project in a bid announced by GUVNL under Phase VIII in February 2020. In a separate development, TPREL secured a contract from Maharashtra State Electricity Distribution Company Limited (MSEDCL) for developing a 100 MW solar project in Maharashtra. The energy will be supplied to MSEDCL under a 25-year PPA. Both the projects are required to be commissioned within 18 months from the date of execution of the PPA.
- In June 2020, NTPC Limited secured a project management consultancy contract for a 500 MW solar power park in Mali. Of this, 450 MW will be connected to Mali’s national power grid. The company had earlier won a similar contract for a 285 MW solar project in Togo.
- In June 2020, Avaada Energy secured an LoA for setting up a 350 MW solar PV plant in Maharashtra from MSEDCL. The project is expected to be commissioned by January 2022 and would generate around 525 MUs annually.
- In June 2020, Feedback Energy Distribution Company Limited (FEDCO), a 100 per cent subsidiary of Feedback Infra, won an input-based distribution franchise contract from Tripura State Electricity Corporation Limited for four electrical divisions (Ambassa, Manu, Mohanpur and Sabroom). As part of the franchise agreement, FEDCO will be involved in the implementation of advanced technologies to provide better services and to increase operational efficiency in these divisions.
- In June 2020, AGEL secured a project from SECI for setting up an 8 GW solar power plant and 2 GW of solar cell and module manufacturing capacity over the next five years. The project, claimed to be the largest of its type, will entail an investment of $6 billion. Based on the award agreement, the first 2 GW of generation capacity will come online by 2022 and the subsequent 6 GW capacity will be added in 2 GW annual increments through 2025. Azure Power, which had also participated in the tender invited by SECI for this project, has received approval for building a 1 GW solar manufacturing facility and a 4 GW linked solar power plant after exercising the greenshoe option.
- In May 2020, ReNew Power won India’s first e-reverse auction for 400 MW renewable energy with round-the-clock supply by quoting the lowest tariff of Rs 2.90 per unit. The company quoted a 3 per cent annual escalation for the first 15 years of the 25-year term of the PPA. Under the terms of agreement, 80 per cent capacity utilisation annually and 70 per cent plant load factor (PLF) will have to be maintained every month throughout the tenor of the PPA.
- In April 2020, Tata Power Solar received an LoA from NTPC Limited for setting up a 300 MW grid-connected solar PV project at an all-inclusive price of Rs 17.3 billion. The company secured the project under the Central Public Sector Undertaking (CPSU) II tender linked with the domestic content requirement provision. In the same tender, Vikram Solar Limited secured a 300 MW solar plant project for Rs 17.50 billion. The solar plant will be spread across 1,500 acres of land in Rajasthan. Tendered under the DCR category, the project is expected to take 18 months to complete.
- In April 2020, NHPC Limited concluded the 2 GW ISTS-connected solar project auction. The winners include SoftBank, Axis Energy, O2 Power and EDEN, which quoted the lowest L1 tariff of Rs 2.55 per kWh, and were awarded 600 MW, 400 MW, 380 MW and 300 MW respectively. Avaada Renewables, which had placed bids for 600 MW, was awarded 320 MW at a tariff of Rs 2.56 per kWh.
- In February 2020, the Greenko Group and ReNew Power Limited emerged as successful bidders in SECI’s 1,200 MW renewable-cum-energy storage tender with guaranteed peak power supply. SECI issued the tender in August 2019 and it was oversubscribed by 420 MW. While Greenko was awarded 900 MW at a peak power tariff rate of Rs 6.12 per kWh, ReNew Power won the remaining 300 MW at Rs 6.85 per kWh.
- In January 2020, NTPC Limited concluded the auction process for 1,000 MW of solar projects under the develop- build-demonstrate-transfer (DBDT) programme. Of the offered capacity, 560 MW was awarded to Tata Power Solar (300 MW), Jakson Limited (110 MW) and L&T Limited (150 MW) as the tender was undersubscribed. Tata Power Solar was the lowest bidder with an EPC quote of Rs 19.2 million, followed by Jakson with an EPC quote of Rs 19.96 million for 110 MW of capacity.
- In December 2019, Powergrid secured two intra-state transmission projects in Uttar Pradesh under the TBCB process conducted by PFC Consulting Limited. The first project entails the construction of 765/400/220 kV gas-insulated switchgear (GIS) substations and transmission lines in Meerut and Rampur, while the second entails the construction of 400/220/132 kV GIS substations and transmission lines at Sindhauli and Sambhal.
- In December 2019, Tata Power secured the distribution licence of the Central Electricity Supply Utility of Odisha (CESU) for Rs 1.75 billion. The deal values CESU at Rs 3.5 billion. CESU serves five electrical circles including Bhubaneswar Electrical Circles I and II, Cuttack, Paradip and Dhenkanal. The licence has been given for a period of 25 years.
- In November 2019, Energy Efficiency Services Limited (EESL), Rajasthan Electronics & Instruments Limited (REIL), NTPC Limited and Powergrid emerged as successful bidders for setting up charging stations under the second phase of the FAME II scheme. REIL emerged as the qualified bidder for setting up about 1,000 charging stations in 50 cities. EESL will set up 600 charging stations in about a dozen cities, NTPC will set up 200 charging stations and Powergrid will install about 10 charging stations.
Key equipment contracts – Generation
In the power generation segment, a number of equipment contracts were awarded to BHEL, L&T Power, Thermax and GE for installing emission control equipment for thermal power plants and installing main plan equipment from public sector gencos.
- In August 2020, Siemens Gamesa received an order from AGEL for the latter’s Fatehgarh wind power project in Rajasthan to install 215, SG 2.2-122 wind turbines, totalling 473 MW in capacity, to be manufactured at its facilities in India. The project is expected to be commissioned by September 2021.
- In August 2020, Andritz received a contract from JSW Energy (Kutehr) Limited to supply the electromechanical equipment for the 240 MW Kutehr hydroelectric plant located in Himachal Pradesh. Earlier, in June 2020, Andritz secured a Euro 50 million order from Chenab Valley Power Projects to supply the electromechanical equipment for the 624 MW Kiru hydropower plant in Jammu & Kashmir.
- In August 2020, BHEL signed a contract agreement with The Energy and Resources Institute (TERI) for setting up a cumulative 410 kWh battery energy storage system (BESS) in the National Capital Territory of Delhi. Earlier, in February 2020, BHEL secured an order for the electromechanical works for the 40 MW Rahughat hydroelectric project in Myagdi, Nepal, from Raghuganga Hydropower Limited. Also, in November 2019, BHEL secured an order worth Rs 2 billion for the renovation, modernisation and uprating of four units of the 144 MW Chilla HEP from Uttarakhand Jal Vidyut Nigam Limited. Prior to this, in October 2019, BHEL secured an order worth Rs 16 billion for setting up two generating units of 660 MW each from THDC India Limited for the 1,320 MW Khurja super thermal power project in Uttar Pradesh.
- In July 2020, GE Power secured multiple contracts for a combined value of Rs 8.5 billion to supply air quality control system solutions. These were awarded by NTPC (for the Feroze Gandhi Unchahar thermal power project of 1,050 MW capacity), Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (for De-Nox solutions for the Harduaganj, Parichha and Anpara plants) and Hindalco Industries Limited (for a semi-dry flue gas desulphurisation (FGD) system for its aditya aluminium plant in Odisha).
- In March 2020, Lanco Teesta Hydro Power Limited, a wholly owned subsidiary of NHPC Limited, awarded the civil works package for the 500 MW Teesta III HEP in Sikkim to Gammon Engineers and Contractors Limited for Rs 12.48 billion. The package included works for an underground powerhouse and transformer cavern, part of headrace tunnel (HRT) I and HRT II, surge shafts, pressure shafts and adits, tailrace tunnel and other associated structures.
- In February 2020, BGR Energy Systems secured an order worth Rs 4,491.9 million from Nuclear Power Corporation Limited for supply, testing and delivery of the control and instrumentation package for the Kudankulam nuclear power plant’s Units 3 and 4 with a completion period of 50 months. BGR also secured an order worth Rs 1,241.3 million from JUSNL for the supply, installation, testing, and commissioning of substations at Sundarnagar, Sarath and Chattarpur on a turnkey basis, with a completion period of two years.
- In December 2019, Thermax Limited secured an order worth Rs 4.31 billion from a public-private JV company to set up two FGD systems for a 1,050 MW thermal power plant in Jharkhand. The scope of work includes design, engineering, manufacturing, civil work, construction and commissioning of FGD systems.
- In September 2019, L&T-MHPS Boilers Private Limited secured an order worth Rs 25 billion-Rs 50 billion from THDC for the 1,320 MW Khurja super thermal power project in Bulandshahar, Uttar Pradesh. The order includes design, engineering, manufacture, supply, erection and commissioning of steam generator and associated packages, including site levelling.
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), GE T&D, and Hitachi ABB Power Grids.
- In August 2020, L&T’s T&D business won an order from Powergrid to establish transmission links for strengthening of a 400 kV system in the eastern region. In April 2020, L&T Construction’s power T&D business secured an order to strengthen the urban HT distribution network in Chennai with the addition of ring main units and feeder remote terminal units on a turnkey basis, an order for supplying and installing medium voltage capacitor banks with related accessories to different discoms in Uttar Pradesh and an order to modernise the power distribution network in a subdivision of the Bengaluru Metropolitan Area, Karnataka. In March 2020, it secured a turnkey order for the design, supply, installation and commissioning of transmission infrastructure for the 800 MW Rupsha power plant and an order to design and construct a 50 MW solar PV plant in Tamil Nadu. In December 2019, it won a contract to provide off-grid DC solar PV water pumping systems with stand-alone lighting systems for farmers in Aurangabad, Nashik and Pune in Maharashtra. In October 2019, L&T won contracts for a 400 kV overhead transmission line in Zambezia province in Mozambique, a 220 kV project in the UAE and an order for modernising the electrical distribution network in several sectors of the Gurugram smart city.
- In July 2020, Hitachi ABB Power Grids India secured an order worth Rs 1.2 billion for railway electrification from electriclocomotive manufacturer Chittaranjan Locomotive Works. In April 2020, Hitachi ABB Power Grids secured an order worth Rs 1.65 billion from Indian Oil Corporation Limited (IOCL) to ensure reliable grid connection at its Barauni refinery in Bihar. ABB Power Grids will deliver its 220/33 kV GIS substation, which will assimilate power from Bihar State Power Transmission Corporation Limited and IOCL’s captive generation plants and deliver it with efficiency to the Barauni refinery.
- In May 2020, KEC’s T&D business and SAE Towers secured orders of Rs 9.17 billion for T&D projects in India, Bangladesh, Africa and the Americas, while the civil business secured orders of Rs 1.76 billion for industrial civil works for an FGD project while the cables business secured orders of Rs 1.1 billion for various cabling projects. In December 2019, KEC won an order for a 765 kV GIS substation from Powergrid and for a 400 kV transmission line and a 400 kV GIS substation from Tamil Nadu Transmission Corporation Limited. Also, in December 2019, KEC International received two orders of Rs 3.91 billion for the construction of 400 kV transmission lines in Nepal. In November 2019, KEC International secured orders from Powergrid, Tamil Nadu Transmission Corporation and Karnataka Power Transmission Corporation with an aggregate value of Rs 8.85 billion for its T&D business.
- In April 2020, Sterlite Power awarded contracts to GE T&D India Limited, Unitech Power Transmission Limited (UPTL), Tata Projects Limited (TPL), and Associate Power Structures Private Limited (APSPL) to develop the Lakadia-Vadodara transmission project. The project involves the laying of a 765 kV double-circuit transmission line connecting the 765/400 kV Lakadia substation to the Vadodara substation in Gujarat. GE will design, construct, test, and commission a 765 kV GIS substation at Vadodara and 765 kV air-insulated substation at Lakadia in Gujarat. The other partners, TPL, APSPL and UPTL, will provide EPC services related to the supply, erection, testing, and commissioning of 343 km of transmission lines for the project.
- In February 2020, GE T&D India Limited secured a contract from Powergrid for constructing 765 kV GIS substation bays at Phagi in Jaipur, Rajasthan. In January 2020, GE T&D secured a supervisory control and data acquisition and advanced distribution management solution project from the Jammu & Kashmir Power Development Department for distribution operations in Jammu and Srinagar. The order, worth about Rs 1.73 billion, was won through a competitive bidding process and includes a five-year maintenance services contract.
- In December 2019, KPTL secured orders worth about Rs 9.79 billion in the T&D segment and for railway electrification and gauge conversion. The company’s international subsidiary has also secured new T&D projects in Europe.
- In August 2020, the Ministry of Coal (MoC) approved Coal India Limited’s (CIL) plan to supply 100 per cent of the normative requirement to thermal power units. The MoC has recommended increasing the annual contracted quantity (ACQ) of coal to 100 per cent of the normative requirement of a non-coastal plant, from the earlier 90 per cent. For coastal plants, the ACQ has been increased to 70 per cent.
- In January 2020, the MoC deallocated the Bankhui captive coal block in Odisha allotted to PFCCL for the proposed 4,000 MW Sakhigopal ultra mega power project (UMPP) in the state. The MoC had allocated the coal block for the UMPP in 2010, but the project failed to take off and the coal block remained undeveloped.
- In September 2019, Adani Power Maharashtra Limited was allowed compensation by the Maharashtra Electricity Regulatory Commission on account of non-availability of coal from the Lohara coal block. The compensation was granted for a 1,320 MW PPA, dated September 8, 2008, signed with MSEDCL for its Tiroda thermal power plant in the state.
- In September 2019, the Appellate Tribunal for Electricity allowed Adani Power Rajasthan Limited’s claim of compensation due to the shortage of linkage coal in respect of its 1,200 MW PPA with Rajasthan’s discoms. It allowed compensation for the domestic coal shortfall arising from a change in law pertaining to the New Coal Distribution Policy, 2007 and the Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India (SHAKTI).
EV and charging infrastructure
The EV segment witnessed an upswing in activity. Power majors such as EESL and NTPC, besides several private players, announced plans to scale up charging infrastructure.
- In February 2020, EESL floated a fresh tender to procure 1,000 EVs from automobile manufacturers in an effort to create an entirely electric fleet by 2030. The tender came three years after the 10,000 EV tender the company had floated in 2017. EESL sought bids for two different categories: one, for 750 four-wheel sedans with standard three-year warranties and comprehensive annual maintenance costs (AMC) for three years, and two, for 250 four-wheel sedans with standard six-year warranties and comprehensive AMC for six years. EESL also signed several key MoUs over the year. In July 2020, it signed an agreement with the New Okhla Industrial Development Authority (NOIDA) to facilitate the creation of an infrastructural ecosystem to accelerate e-mobility. Further, in January 2020, it signed an MoU with BHEL to set up a public charging infrastructure network for electric mobility on various highways across the country. In December 2019, EESL signed an MoU with Hindustan Petroleum Corporation Limited for the setting up of public charging infrastructure. In October 2019, it signed a 10-year MoU with Bharat Sanchar Nigam Limited (Punjab telecom circle) to install 100 public charging stations in Punjab.
- In June 2020, Kerala State Electricity Board Limited shortlisted eight companies (consortiums) for the setting up of EV charging stations at select locations in the state. These included Tata Power Company Limited, EXICOM Private Limited, Okaya Power and Delta Electronics.
- In April 2020, Fourth Partner Energy partnered with Lithium Urban Technologies to set up solar-powered EV charging infrastructure across the country under a JV, Shuchi Anant Virya. The JV has unveiled its charging facilities in Gurugram and Pune.
- In April 2020, Hitachi ABB Power Grids completed the acquisition of a majority stake in Chargedot Shanghai New Energy Technology Company Limited. Chargedot is a leading player in supplying AC and DC charging stations in China. Meanwhile, in July 2020, Hitachi ABB Power Grids launched Grid-eMotion Fleet, a grid-to-plug EV charging system for public transport and commercial operators.
- In March 2020, Tata Power Company entered into a partnership with Jaguar Land Rover (JLR) India for end-to-end EV charging solutions. As a part of the association, Tata Power will provide charging solutions for JLR across its retail network of 27 outlets in 24 cities, as well as at customers’ residences and offices. It will be responsible for providing a range of AC and DC chargers, from 7 kW to 50 kW capacity.
- In March 2020, NTPC Vidyut Vyapar Nigam Limited (NVVNL) signed an agreement with the Directorate of Transport of the Andaman & Nicobar Islands for the deployment of electric buses in the union territory. Under the agreement, the company will provide a complete transport solution, including 20 air-conditioned electric buses. NVVNL and the Andaman administration will collaborate to set up public charging infrastructure.
- In March 2020, the Urban Transport Directorate (UTD) in Lucknow placed an order with BHEL for the supply of electric buses along with charging infrastructure in Gorakhpur, Uttar Pradesh. These low-floor, disabled-friendly electric buses will be deployed by UTD at Gorakhpur airport.
- In February 2020, EV Motors India Private Limited signed an agreement with BSES Yamuna Power Limited (BYPL) for the setting up of EV charging stations at select locations in Delhi. The two companies will work together to create, operate and maintain charging infrastructure using an innovative cloud-based integrated software platform.
- In January 2020, Ashok Leyland and ABB Power Products and Systems India Limited signed an MoU for a partnership in the public e-mobility space, with the goal of expanding electric bus transportation systems in India. The partners will develop a pilot electric bus based on ABB’s flash-charge technology, TOSA, which tops up a battery in seconds as passengers get on and off the bus.
- In November 2019, BSES’s discoms signed an MoU with Ola Electric Mobility for the setting up of battery swapping stations in Delhi. As part of the agreement, Ola Electric will manage and operate these stations through a cloud-based software system, while BSES will facilitate identification of strategic locations for the stations depending on the optimum usage and potential of EVs in the area. In February 2020, BYPL signed an MoU with Elektromobilitat India Private Limited for the setting up of EV charging stations in east and central Delhi, with the charging infrastructure to be managed by an advanced cloud-based system.
Over the year, several decisions were taken on different PPAs. While some PPAs were approved, others were terminated, and some others underwent amendments.
- In July 2020, Torrent Power received approval from the Gujarat Electricity Regulatory Commission for a short-term PPA for sourcing power from Adani Enterprises Limited at Rs 3.58 per unit for the period July 1, 2020 to June 29, 2021. The power procured will be used to cater to the demands of the Ahmedabad, Gandhinagar and Surat licence areas.
- In July 2020, the Gujarat government decided to reverse its 2018 decision to amend the PPAs it had signed with three producers – Tata Power, Adani Power and Essar Power – to raise tariffs in order to offset the rising cost of imported coal. Now, after taking into account the fall in global coal prices, the state will revise the terms and conditions of the PPAs in new supplementary agreements, wherein the tariff calculation will be done on the basis of fresh parameters, on a case-by-case basis. In December 2018, the Gujarat government had passed a general resolution to allow the three gencos to sign supplementary PPAs with the state to facilitate the pass-through of future fuel price escalation, as per the Supreme Court’s October 2018 ruling that allowed compensatory tariff relief for firms citing “change in law”.
- In May 2020, ACME Solar decided to cancel its PPA with SECI to supply solar power at Rs 2.44 per unit, the lowest tariff discovered in auctions so far, citing force majeure. In 2018, the firm had won a 600 MW solar project at Fatehgarh, Rajasthan, at a historic low rate of Rs 2.44 per unit. It has now sought termination of the agreement owing to status quo orders by the Rajasthan High Court qua the land on which the Fatehgarh substation was to be constructed; the outbreak of Covid-19 and its adverse impact on the manufacturing facilities of suppliers since December 2019, including lockdowns in China and India; and delay in the commissioning of associated transmission network elements by other transmission service providers.
- In May 2020, Adani Power Limited secured approval from the Madhya Pradesh Electricity Regulatory Commission for a long-term PPA with Madhya Pradesh Power Management Company Limited (MPPMCL). The commission has approved the sale of 1,230 MW of electricity from Adani Power’s upcoming 1,320 Pench supercritical TPP to MPPMCL under a 25-year long-term contract. The project is being developed by Adani Power’s subsidiary, Pench Thermal Energy (MP) Limited.
- In April 2020, the Madhya Pradesh government terminated the PPA of the 400 MW Maheshwar hydel power project, promoted by Shree Maheshwar Hydel Power Corporation Limited, after nearly 25 years of signing the agreement. Violation of PPA terms has been cited as the reason for the termination. Construction at the project site has been stalled since 2011 owing to the developer facing a funding crunch and issues with the resettlement and rehabilitation of local communities. The project was approved in 1996 and was originally scheduled to be commissioned in 2001-02, but none of the units has been commissioned so far.
Mergers and acquisitions
The sector witnessed several M&A deals during the past year, including consolidation moves, project takeovers and other corporate deals involving power majors such as the India Grid Trust (IndiGrid), Adani Power Limited and Renascent Power Ventures.
- In September 2020, the RattanIndia Group sold its solar plants, aggregating a combined capacity of 306 MW, to Global Infrastructure Partners (GIP) for about Rs 16.7 billion. This capacity comprises ground-mounted solar assets of 297 MW in Karnataka (Pavagada), Maharashtra (Katol), Rajasthan (Bhadla) and Uttar Pradesh (Allahabad and Bareilly), and 9 MW of rooftop solar projects across 10 cities.
- In August 2020, Sterlite Power sold its 14.7 per cent stake in IndiGrid for Rs 8.4 billion, at a unit price of Rs 98, to institutional and high net worth individual investors. In another development, in June 2020, the company acquired Vapi II North Lakhimpur Transmission Limited from PFC Consulting Limited. Through this SPV, the company will execute a large ISTS project – Western Region Strengthening Scheme XIX and North Eastern Region Strengthening Scheme IX – which it won through the TBCB process. Meanwhile, in April 2020, Sterlite Power concluded the sale of three assets in Brazil – Arcoverde, Novo Estado and Pampa – worth BRL 566 million. Earlier, in December 2019, the company had acquired the Lakadia-Vadodara Transmission Project from PFCCL. The project, secured through the TBCB process, involves the laying of 350 km of 765 kV double-circuit transmission lines connecting the 765/400 kV Lakadia substation to the Vadodara substation in Gujarat.
- In August 2020, Ayana Renewable Power Private Limited acquired 100 per cent equity stake in two solar PV plants with a total capacity of 40 MW, developed by First Solar. Power from the plants, located in Karnataka, will be supplied to Chamundeshwari Electricity Supply Corporation Limited and Gulbarga Electricity Supply Company Limited under 25-year PPA contracts.
- In August 2020, IndiGrid completed the acquisition of Gurgaon Palwal Transmission Limited from Sterlite Power at an enterprise value of Rs 10.8 billion. Earlier, in May 2020, IndiGrid had signed an agreement to acquire Jhajjar KT Transco’s transmission assets in Haryana for Rs 3.1 billion from Kalpataru Power Transmission Limited and Techno Electric & Engineering Company Limited.
- In June 2020, Adani Power Limited signed a definitive agreement to acquire a 49 per cent stake in Odisha Power Generation Corporation (OPGC) from the AES Corporation, a US-based global energy company, for $135 million. Adani Power will acquire a total of 8.9 million equity shares in OPGC, representing 49 per cent of OPGC’s total issued, paid-up and subscribed equity share capital. The remaining 51 per cent stake in OPGC is owned by the Odisha government.
- In June 2020, Adani Transmission Limited (ATL) completed the acquisition of an SPV, Kharghar-Vikhroli Transmission Private Limited, incorporated by Maharashtra State Electricity Transmission Company Limited. ATL will build, own, operate and maintain the Kharghar-Vikhroli transmission project in Maharashtra for a period of 35 years. The project entails the setting up of 34 km of 400 kV and 220 kV transmission lines along with a 1,500 MVA 400 kV GIS substation at Vikhroli in Mumbai. Meanwhile, in October 2019, ATL signed a share purchase agreement and completed the acquisition of WRSS XXI (A) Transco Limited, secured under the TBCB.
- In May 2020, Tata Power International Pte Limited (TPIPL), a wholly owned subsidiary of Tata Power Company Limited, acquired a 10 per cent equity stake in Adjaristqali Netherlands B.V. (ABV) from IFC, for a deal value of $150,000. The agreement was signed among TPIPL, ABV, and IFC. Post this acquisition, Tata Power, through TPIPL, holds a 50 per cent stake in ABV. In April 2020, Tata Power concluded the sale of its entire 50 per cent stake in its South African JV Cennergi (Pty) Limited to Exxaro Resources Limited for around Rs 6.59 billion. Cennergi was a 50:50 JV between Exxaro, a leading South African coal producer, and Khopoli Investments Limited, a wholly owned subsidiary of Tata Power. Exxaro will now have 100 per cent ownership of Cennergi.
- In April 2020, investment firm KKR signed a definitive agreement with Shapoorji Pallonji Infrastructure Capital to acquire its five solar energy assets, totalling 317 MWp, for a total consideration of Rs 15.54 billion. Of the 317 MWp solar portfolio, 169 MWp of assets are in Maharashtra, while 148 MWp of assets are located in Tamil Nadu.
- In April 2020, Hitachi Limited’s acquisition of an 80.1 per cent stake in ABB Management Holding AG received the approval of the Competition Commission of India (CCI). In December 2018, the ABB Group had stated that Japan-based Hitachi would buy an 80.1 per cent stake in its power grid arm, in a deal that valued its grid business at $11 billion.
- In March 2020, the CCI approved the acquisition of a 35 per cent equity stake in Teesta Urja Limited (TUL) by Greenko Mauritius, a wholly owned subsidiary of Mauritius-based Greenko Energy Holdings. The Sikkim government holds a 60 per cent stake in TUL, while 40 per cent is held by Singapore-based Asian Genco Pte Limited.
- In February 2020, the Qatar Investment Authority (QIA) completed the acquisition of a 25.1 per cent stake in Adani Electricity Mumbai Limited (AEML), along with an investment in shareholder subordinated debt in the company. QIA’s total investment in AEML is about Rs 32.2 billion, which includes an equity consideration of Rs 12.1 billion and a shareholder subordinated debt of approximately Rs 20.1 billion.
- In February 2020, the CCI gave its approval to the acquisition of the central government’s entire stake in THDC India and NEEPCO by NTPC Limited. As part of the transactions, NTPC will acquire 100 per cent of the issued and paid-up share capital of NEEPCO and 74.5 per cent stake in THDC India. The remaining 25.5 per cent stake in THDC India is held by the Uttar Pradesh government.
- In February 2020, KEC International Limited acquired a transmission tower manufacturing facility in Dubai, with a capacity of 50,000 tonnes per year, for Rs 1 billion, in an auction sale conducted by the Emirates Auction Authority. This unit was previously owned by Gulf Jyoti International LLC Dubai, a JV between Jyoti Structures, which is currently undergoing insolvency proceedings in India, and the Gulf Investment Corporation of Kuwait.
- In December 2019, Sembcorp Industries announced that its wholly owned subsidiary Sembcorp Utilities has entered into a non-binding term sheet with its local Indian partner, Gayatri Energy Ventures Pte Limited, to acquire the remaining 5.95 per cent stake in SEIL for Rs 4.06 billion. Following the completion of the proposed acquisition, Sembcorp will become the sole owner of SEIL.
- In December 2019, Renascent Power Ventures Private Limited completed the acquisition of a 75 per cent stake in Prayagraj Power Generation Company Limited (PPGCL), a subsidiary of Jaiprakash Power Ventures Limited. Renascent Power will also take over Rs 60 billion of the company’s debt. In November 2018, Renascent Power 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.
- In December 2019, the Essel Group signed an agreement to sell its 480 MW under-construction solar energy portfolio to AGEL. Earlier, in August 2019, the company had sold 205 MW of its operational solar energy portfolio to the Adani Group for Rs 13 billion.
- In October 2019, IL&FS completed the sale of its wind energy assets to Japan-based Orix Corporation for Rs 49 billion. IL&FS also sold a 51 per cent stake in seven SPVs under its wind energy assets portfolio to Orix Corporation.
- In October 2019, Industrial Energy Limited, a JV between Tata Power and Tata Steel Limited (TSL), signed asset purchase agreements with TSL for the acquisition of a 120 MW captive gas-based power plant (CPP2) and a 40 MW diesel generating station (DGS) at Kalinganagar in Odisha from TSL. At present, the CPP2 is under construction and will be operational by 2021-22, while the DGS is already operational. The combined value of the transactions is about Rs 9.2 billion.
MoUs and JVs
Some of the key MoUs signed and JV companies formed in the past year are as follows:
- In September 2020, a Rs 20 billion JV was floated by the government for providing a common back-end infrastructure facility to discoms for faster roll-out of smart electricity meters in the country. The JV will have four promoters: NTPC Limited, REC Limited, Powergrid and the Power Finance Corporation (PFC). The boards of PFC and REC have approved an equity investment of Rs 1.5 billion each in the JV for the CBIF. The boards of NTPC and Powergrid are yet to approve the equity investments in the JV.
- In August 2020, NTPC Limited signed an MoU with L&T Hydrocarbon Engineering to build a carbon dioxide-to-methanol demonstration plant in an NTPC power station. The plant will comprise three subunits for carbon dioxide capture from flue gas, hydrogen production by electrolysis of water and catalytic conversion of carbon dioxide and hydrogen to methanol.
- In July 2020, NHPC Limited signed an MoU with Green Energy Development Corporation of Odisha Limited to form a JV for the development of floating solar power projects in the state, with an initial capacity of 500 MW. In June 2020, NHPC Limited and Nepal’s Hydropower Investment and Development Company Limited signed an MoU to jointly develop hydropower projects in Nepal. To this end, both organisations had shared LoIs in November 2019. Meanwhile, in March 2020, NHPC Limited signed an MoU with Cement Corporation of India Limited to explore the possibility of meeting the cement requirement of its 2,880 MW Dibang multipurpose Project in Arunachal Pradesh.
- In July 2020, CIL and NLC India Limited announced plans to jointly develop solar power assets of 3,000 MW, with a likely investment of around Rs 120 billion. CIL and NLC India will form a JV to develop 5,000 MW of solar and thermal power assets across the country. A solar JV is reportedly already in the process of formation, with an initial capital outlay of Rs 1 million.
- In May 2020, NTPC Limited and Oil and Natural Gas Corporation Limited signed an MoU to set up a JV company for renewable energy projects. The MoU will enable both companies to achieve their respective targets in the renewable energy business.
- In April 2020, French energy major Total formed a JV with AGEL. Total invested Rs 37.07 billion for a 50 per cent partnership with AGEL in the JV. The JV will own and operate solar projects with a total capacity of 2,148 MW across 11 states in India. With this milestone, AGEL aims to become the largest solar player in the world by 2025, and the largest renewable player in the world by 2030.
- In January 2020, Powergrid signed an MoU with Rewa Ultra Mega Solar Limited (RUMSL) to provide project management consultancy services for the setting up of solar power evacuation infrastructure. RUMSL will develop the 550 MW Agar Solar Park, the 500 MW Neemuch Solar Park, and the 450 MW Shajapur Solar Park.
- In November 2019, BSES Rajdhani Power Limited (BRPL) partnered with Power Ledger, a blockchain-based tech start-up headquartered in Australia, to launch trials for a peer-to-peer energy trading platform in Delhi. The platform will allow residents with rooftop solar installations to sell excess energy to their neighbours instead of letting it flow back to the power grid. The trial will comprise 5-6 MW of existing solar infrastructure and will be conducted in Dwarka, Delhi.
- In November 2019, FEDCO signed an MoU with Australia-based Village Energy to install smart meters and undertake demand-side management measures for better consumer service in rural areas under FEDCO’s ambit.
- In November 2019, Siemens signed two MoUs with NTPC and TERI pertaining to decarbonisation. The MoU with NTPC is for reducing the industrial and commercial carbon footprint and bringing down the dependence on hydrocarbons in India. The MoU with TERI is for enabling energy transitions across the electricity, transport and industrial sectors.
- In September 2019, the Himachal Pradesh government signed two agreements for the setting up of solar power plants aggregating 250 MW of capacity. The first agreement was signed with ReNew Power for setting up a 150 MW solar plant at an investment of Rs 6 billion, and the second with CSE Development (India) Private Limited for a 100 MW plant.
Some of the key project-related developments over the past year are as follows:
- In August 2020, EESL cancelled a Rs 5 billion smart metering contract awarded to Indonesia-based PT Hexing as it failed to comply with the local content norms. This tender, for the procurement of 2 million smart meters, had been won by PT Hexing under global bidding about two years ago.
- In July 2020, the National Green Tribunal directed NTPC’s Vindhyachal STPS in Singrauli, Madhya Pradesh, to pay an interim compensation of Rs 100 million for breach of its fly ash dyke, as over 3.5 million metric tonnes of fly ash got into the Govind Vallabh Pant Sagar/ Rihand reservoir.
- In June 2020, the Uttar Pradesh government approved the setting up of a 600 MW ultra mega renewable energy power park by a JV of the Uttar Pradesh, Non-Conventional Energy Development Agency (UPNEDA) and THDC India Limited, with an investment of Rs 24 billion. The authorised share capital of the JV will be Rs 500 million, of which THDC India will hold 74 per cent equity and UPNEDA 26 per cent.
- In May 2020, the Ministry of Environment, Forest and Climate Change’s Forest Advisory Committee deferred its decision on the 3,097 MW Etalin hydropower project in the Dibang valley, Arunachal Pradesh. The project, proposed to be developed by Etalin Hydro Electric Power Company Limited, a JV of Hydro Power Development Corporation of Arunachal Pradesh Limited and Jindal Power Limited, has been delayed for over six years as it requires diverting 1,165 hectares of forest land.
- In March 2020, GSECL completed the pilot operation of the 500 MW unit of its Ukai coal-based power project at 40 per cent of its capacity during a low-load test run. The test run was conducted as part of a pilot implemented under the United States Agency for International Development’s Greening the Grid: Renewable Integration and Sustainable Energy initiative, in partnership with GSECL and BHEL, the original equipment manufacturer.
- In January 2020, the Odisha government approved NTPC Limited’s plan to expand the Talcher TPS at an investment of Rs 76.98 billion. The expansion project involves the setting up of two supercritical units of 660 MW each on the existing premises of the 460 MW Talcher TPS in Angul district, Odisha.
- In December 2019, Reliance Infrastructure Limited (RInfra) won an arbitration award of Rs 12.5 billion against the Damodar Valley Corporation (DVC). RInfra was the electrical and civil contractor of DVC’s 1,200 MW Raghunathpur coal-based power project in West Bengal, with a contract value of Rs 37.5 billion.
- In May 2020, RInfra appointed KPMG to find buyers for its 51 per cent stake each in BRPL and BYPL. The two power distribution businesses cater to around 4.4 million customers in the national capital. RInfra’s plan to sell these businesses follows the sale of its Mumbai city power distribution business to ATL for Rs 188 billion in August 2018.
- In September 2020, NTPC Limited received the approval of NITI Aayog and the Department of Investment and Public Asset Management to set up a wholly owned company for its renewable energy business. NTPC targets to generate nearly 30 per cent, or 39 GW, of its overall power capacity from renewable energy sources by 2032.
- In July 2020, Adani Power received shareholder approval for its Rs 32.64 billion delisting proposal. In June 2020, the company issued a notice for voluntary delisting of its equity shares from the BSE and the NSE. The promoter group collectively holds 74.97 per cent of the paid-up equity share capital, while public shareholders hold the remaining 25.03 per cent.
- In June 2020, the Suzlon Group completed its debt restructuring by reducing its term debt substantially, with an interest rate of 9 per cent per annum, repayable over 10 years starting July 1, 2020. The balance debt of the secured consortium lenders has been replaced by a 0.01 per cent optionally convertible debenture of the company and 0.0001 per cent compulsorily convertible preference shares of its subsidiary, redeemable or convertible in 20 years.
- In December 2019, JSW Energy Limited entered into an agreement with Jaiprakash Power Ventures Limited (JPVL) to restructure the principal outstanding amount of Rs 7.52 billion owed by JPVL. Under the agreement, an amount of Rs 3.52 billion will be converted into equity shares of JPVL at a par value of Rs 10 each. Of the balance outstanding principal amount of Rs 4 billion, Rs 2.8 billion will be written off and Rs 1.2 billion will continue as debt, to be paid by JPVL to JSW Energy.
- In August 2020, the Indian Energy Exchange received approval from the CERC, vide an order dated August 17, 2020, to launch the green term-ahead market on its platform. The market will offer trade in four types of green term-ahead contracts – green intra-day contracts, day-ahead contingency contracts, daily contracts and weekly contracts.
- In August 2020, JSW Energy Limited called off its proposed deal to acquire GMR Kamalanga Energy Limited’s 1,050 MW operational coal-based power plant in Odisha, owing to Covid-19-related uncertainty. The termination will add no cost to either of the parties. In February 2020, JSW Energy had said it would acquire the project for Rs 53.21 billion, but this was put on hold in May 2020 and subsequently cancelled. n
Akanksha Chandrakar and Nikita Gupta