The Ministry Of New And Renewable Energy (MNRE) Has Suggested The States To Waive Off Certain Cess And Taxes To The Developers Of Small Hydro Power (SHP) Projects (less Than 25 MW Capacity) For Six Years

Jul 23, 2018
Source Power Weekly Newsletter

The Ministry of New and Renewable Energy (MNRE) has suggested the states to waive off certain cess and taxes to the developers of small hydro power (SHP) projects (less than 25 MW capacity) for six years from the start of commercial operations. The ministry has also suggested to exempt SHPs from the provision of free power asked by some state governments. The move is intended to boost SHP capacity addition which is crucial to meet the renewable energy target of 175 GW by 2022. Of this, 10 GW is expected from SHP while the rest includes100 GW of solar, 60 GW of wind, and 5 GW of biomass.

As per the Load Generation Balance Report (LGBR) recently released by the Central Electricity Authority (CEA), the country is expected to witness a peak surplus of 2.5 per cent and energy surplus of 4.6 per cent during 2018-19. Against a total peak demand of about 180.7 GW, the availability is expected at 185 GW and against an energy demand of 1,337 BUs, the availability is expected at 1,398.7 BUs. Further, surplus energy to the tune of 1.9 per cent, 14.8 per cent and 22.9 per cent is anticipated in the western, northern, and north-eastern regions respectively. Meanwhile, eastern and southern regions are expected to face a shortage of 4.2 per cent and 0.7 per cent respectively.

The central government has notified a reduction in the applicable rate of the goods and services tax (GST) on lithium-ion (Li-ion) batteries from 28 per cent to 18 per cent. The reduction in the GST rate is likely to encourage the expansion of electric vehicles across the country. It is also expected to benefit the renewable energy segment.

State Sector

The Odisha High Court has put a stay on the imposition of safeguard duty on imported solar panels until August 20, 2018. The Directorate General of Trade and Restrictions recently recommended imposition of safeguard duty on solar panels and modules imported from China and Malaysia. However, the state high court has passed a stay order following a petition by Acme Solar Holdings against the same.

The Himachal Pradesh government has decided to allot the 449 MW Duggar hydroelectric project to NHPC Limited on a build, own, operate and transfer basis for a period of 70 years. Upon completion, the project will revert to the state government.

The Delhi government has approved a new solar scheme, ‘Mukhyamantri Kisan Aaye Badhotri Solar Yojana’ for farmers in Delhi. As per the scheme, maximum of a one-third surface area of the agricultural land can be used for installation of solar panels so that the agricultural activity is not affected. Further, the minimum height for solar panels installation has been fixed at 3.5 meters. Under the scheme, the Delhi government departments will purchase electricity at Rs 4 per unit from entities participating in the scheme. The scheme is scheduled to start in nine months and so far, five solar companies have expressed interest in the same.

Private Sector

The Delhi High Court has asked the central government to expeditiously decide on the release of Reliance Power Limited’s bank guarantee worth Rs 2.08 billion in respect of the Tilaiya ultra mega power project (UMPP). The central government stated that the issue of non-development of the captive block attached with the UMPP in Jharkhand and concerns over the settlement between RPower and Jharkhand Urja Vikas Nigam Limited have led to a delay in the release of bank guarantee. The court has asked the government to file an affidavit indicating its stand on RPower’s bank guarantee within three weeks and asked RPower to extend the guarantee for two months.

Projects and Ventures

German multinational conglomerate, Thyssenkrupp has secured a contract worth $115 million from Doosan Power Systems India (DPSI) to supply material handling plants for two thermal power projects (TPP) in Uttar Pradesh. The order involves engineering, delivery, and installation of two complete coal handling systems, including associated structural and electrical works. The systems will be part of Obra-C TPP and Jawaharpur TPP, which have a capacity of 1,320 MW each and are being developed by Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited.

Financials

Bharat Heavy Electricals Limited (BHEL) has recorded total revenue of Rs 57.90 billion in the quarter ended June 30, 2018, an 8 per cent increase over Rs 53.55 billion recorded in the corresponding quarter of the previous year. The company’s net profit stood at Rs 1.56 billion for the quarter ended June 2016, an staggering increase of 93 per cent over Rs 810 million during the same period last year. Further, BHEL’s order booking increased by 2.5 times to Rs 43.71 billion, compared to Rs 17.44 billion in the corresponding quarter last year.

The Tata Power Company Limited has recorded a consolidated total revenue of Rs 71.39 billion for the quarter ended June 30, 2018, an increase of 16 per cent over Rs 61.66 billion in the corresponding quarter of the previous year. The company’s net profit for the quarter stood at Rs 17.35 billion, registering an exceptional growth of 328 per cent over Rs 4.06 billion recorded for April-June period in 2017 owing to realisation of a one-time gain on the sale of certain investments.

JSW Energy Limited has recorded a consolidated total revenue of Rs 24.28 billion for the quarter ended June 30, 2018 marking an increase of 4 per cent over Rs 23.34 billion total income recorded for the corresponding period last year. The company’s net profit for the quarter stood at Rs 2.29 billion as against Rs 2.17 billion last year, reporting an increase of almost 6 per cent.

CESC Limited has recorded a total income of Rs 21.79 billion for the quarter ended June 30, 2018 marking a decrease of 2 per cent over Rs 22.24 billion total income recorded for the corresponding period last year. The company’s net profit for the quarter stood at Rs 1.82 billion as against Rs 1.78 billion last year, reporting an increase of 4 per cent.

Debt and Equity

The central government is reportedly planning to sell its stake of 73.67 per cent in NHPC to NTPC Limited at an estimated value of Rs 182 billion, at the current prices. The proposed deal is in line with the government’s plan to consolidate state-run energy companies to scale their operations and boost revenue collections. Currently, the talks are at an initial stage and the deal is likely to be concluded in 2019-20.

The central government is reportedly planning to sell its stake of 73.67 per cent in NHPC to NTPC Limited at an estimated value of Rs 182 billion, at the current prices. The proposed deal is in line with the government’s plan to consolidate state-run energy companies to scale their operations and boost revenue collections. Currently, the talks are at an initial stage and the deal is likely to be concluded in 2019-20.

ReNew Power Limited has received the approval of the Securities and Exchange Board of India (SEBI) to float an initial public offering (IPO). ReNew Power will issue fresh shares worth Rs 26 billion in the offering that will also see existing investors cumulatively sell 94.37 million shares. Global Environment Fund will sell 2.4 million shares, Green Rock Energy will sell 12.17 million shares, and GS Wyvern Holdings will off-load 79.78 million shares. Proceeds of the issue will be utilised to fund acquisitions and other strategic initiatives, redemption of certain debentures issued by the company and its subsidiaries.

Shapoorji Pallonji Group is reportedly in discussion with investment banks for a share sale of its solar engineering, procurement and construction (EPC) business. The conglomerate is targeting a valuation of around $3.5-4 billion for the business, which is housed under Sterling and Wilson Private Limited and generates 80 per cent of its revenue from overseas. The group is also reportedly considering raising funds from the private market for the solar EPC business.

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