Energy
April 11, 2011
Solar Power in India is increasing at a rapid pace and will become one of the biggest energy industries in the next decade as falling costs of solar energy and India's rising demand makes it a perfect match.Solar Companies in India are constanly growing by the day as firms rush in to take advantage of the vast investment and profit potential in India's Solar Energy Market.BHEL which is India’s largest Capitals Good Company has big solar ambitions.BHEL has strong capabilities in the field of making electricity generating equipment.Extending these capabilities in the field of solar power generation is a natural extension.It is following the JV route with various other Public Sector Undertakings (PSUs) like HPCL,BEL and IOC to build power plants and solar equipment factories in the country.Most of these JVs have been dormant till now but the JV with BEL is now looking to move on.The JV is scouting for sites to build a 250 MW integrated c-Si Solar Factory which will also have India's first polysilicon and wafer manufacturing operations.Note India has a large capacity of solar cells and modules but does not have a commercial solar wafer or poly plant which are essential raw materials for making Solar Panels.Till now Solar Panels in India are made from imported Solar Wafers from companies like LDK,GCL,REC,Solarworld and others.There are a few private companies who are looking to set up upstream manufacturing in solar as well.Note there are other Indian government owned PSUs which too are looking to enter Solar Energy Industry as well
April 11, 2011
A number of Agricultural Companies and Green Utilities are focusing on setting up biomass plants in different places in India.Note Biomass Energy accounts for almost 20-30% of the Energy Requirements of the country and is the main source of energy for most of the rural communities for cooking and heating.Biomass Energy is best suited where Crop and Animal Residue are cheaply available.Most of India's Biomass Power Plants have been built by companies involved in agri industries particularly sugar.Now Rice Companies are finding Biomass Energy perfect for their needs as they generate huge amounts of waste Rice Husk which can be used to generate electricity for their inhouse needs as well as for sale to the power grid.Note on top of this,Rice Biomass Electricity is also eligible for Subsidies from the State Governments.Haryana is seeing a surge in Rice based Electricity Plants with 16 MW installed already.Note Haryana is one of the top agri states in India alongwith Punjab and provides a lot of potential.Note a number of Rice Companies such as Lakshmi Energy and Foods have made Biomass Electricity a key part of their growth strategies even changing their names.Here are a couple of Rice Companies with aggressive Biomass Electricity Plans.
April 8, 2011
Wind Power Plants has seen a phenomenal growth of around 33% CAGR in the last 5 years and the total capacity at end of 2010 was 11800 MW with most of the capacity installed in the state of Tamil Nadu which is the largest state in terms of Alternative Energy Capacity in India.GWEC has set an ambitious target of 65 GW for Wind Energy in India by 2020 which means an addition of 5 GW each year which seems too high given the wind power potential in India is only around 65 GW.However using low wind speed sites may increase the potential besides the use of offshore wind power in India.A number of Wind Turbine Manufactures in India have set up facilities attracted by the domestic market with Suzlon being the biggest Wind Company in India.
The Indian Wind Energy already has the 5th largest installed capacity in the world and is set to grow at a rapid pace driven by investments from the private sector attracted by the generous wind subsidies from the state and central government in India.Most of the Installed Wind Capacity in India is located in the southern and industrial states of the country.The other states like UP,Bihar lacks sufficient Wind Energy Capacity despite having high power tariffs and substantial electricity deficits.It can be said that Wind Power in India is being developed only in the progressive states like Gujarat,Maharashtra and others.To continue to grow at the same rate,the industry needs to diversify geographically but that would need the backward state governments to pull up their socks.
April 7, 2011
India launched its Solar Mission by the name of Jawaharlal Nehru National Solar Mission (JNNSM) with a lofty target of 20 GW by 2022.The Solar Mission has been divided into 3 phases and promotes solar energy installation,solar industry,solar heaters and off grid solar.Note the Solar Mission provides subsidies and incentives to promote the use of Solar Energy from the Central Government.Different States such as Gujarat have enacted laws to support solar energy on their own which is seperate from the Federal Target for Solar Power.I think the 20 GW target for 2022 is very low and will be easily exceeded but that is a separate discussion.The Solar Mission is not a rigid document but is a work in motion as the second and third phases will be implemented taking in the feedback and success of the first phase of the Solar Mission which has already announced the Solar Project Winners.
April 7, 2011
Solar Industry is a fast growing exciting industry with its inevitable growth pangs as well.The first phase of India's Federal Policy has seen many hurdles and its success is in doubt,on the other hand Gujarat has managed to attract investment and power plants through a forward looking subsidy.States like Uttar Pradesh,Delhi,Maharashtra are also tentatively coming up with their own incentive policies.The Industry will see many ups and downs before it becomes a major billion dollar industry.Note Solar Power Industry has become the fastest growing in USA where it doubled last year and looks set to double this year again.The Nuclear Accident in Japan has given fresh energy to Solar Power with China set to double its target to 10 GW by 2015.
April 6, 2011
Solar Energy in India represents one of the best Energy opportunities in the 21st Century.However the growth at least in the initial stages will be geographically unequal.This is due to the fact that Solar Power requires strong government support and subsidies currently.The Indian Federal Government has already given it a strong push targeting 1000 MW by 2013 and 20 GW by 2022 under the JNSSM.While the Subsidy Program is facing some initial hurdles due to debt financing and aggressive project bidding,individual States are forging ahead to push Solar Energy on their own.Gujarat has been a trailblazer in this regard with The State has already recieved proposals for setting up around 365 MW of Solar Power.Gujarat through its own RPS and Feed in Tariff incentives is targeting 1000 MW by 2013.Rajasthan too is trying to exploit is massive solar insolation potential but its state policies have little clarity or direction yet.The state has signed around 1524 MW of Solar Project with 49 Developers.The Solar Policy Draft Proposal is mostly vague with a target of 10-12 GW in 10-12 years with around 500 MW in the next 2-3 years.Rajasthan is set to see massive solar installation despite its government's vagueness from the Federal JNNSM subsidy.Other states in India like UP,Delhiand Maharashtra have recently started making some moves but remains to be seen how good they are at implementing.While the UP solar subsidy is clearly quite ridiculous,Delhi seems to be on the way to implementing a smart policy of promoting small roof top solar residential installations.
April 4, 2011
Increasing Oil Prices is the biggest Achilles Heel of the Indian Economy heavily dependent on imported oil products.The government will have to either raise the prices leading to adding fire to the already high inflation or compensate the badly bleeding half privatized Oil Companies like IOC,BPCL and HPCL.These companies generally make massive losses despite having private investors apart from the government.Compensating these losses would lead to a higher fiscal deficit which would add to the inflation pressures anyway.Note a recent survey revealed that the Indian Middle Class has cut its expenditure on shopping,eating out and entertainment by a whopping 65% due to the high inflation.However the Indian Stock Market has seemingly discounted all these factors going up by 10% in 10 days on the back of a global rally.Bernanke Fueled Cheap Money is Circulating Hungrily across the Globe and currently India seems to be the fashion trend of the month.Note these hot money flows can reverse equally quickly leading to a sharp market crash just like the Jan-Feb one as fundamentals hardly support this kind of rally.With government intervention and distortions becoming the overriding factor in the stock markets,Free Markets and Fundamentals have taken a backseat.
April 4, 2011
Smart Grid as a Clean Technology Industry is gaining traction in the West and countries like China,South Korea .Smart Grid has become important to increase energy […]
April 1, 2011
One of the major reasons for the Chinese success in the export markets in Asia and Africa have been the massive vendor financing done by state owned Chinese banks.Large orders have been won by Chinese companies like Dongfang Electric and Huawei as Chinese Banks financed the multi billion Indian orders by cheap loans.Note in large project finance cases cheap loans can make a huge difference in project returns and can be the clincher in choosing the equipment supplier.The US Exim Bank too seems to be pulling up its socks in helping American companies win large equipment orders through vendor financing.Note the US Exim Bank had got involved in a huge controversy when it agreed to finance a utlra mega power plant based on coal energy by Reliance Power in India.Despite protests by environmentalists,Exim Bank had gone ahead in financing as it would lead to jobs in America.Note USA is one of the biggest laggards in climate change and the government does not really care much out there.
March 31, 2011
India's Green Companies are seeing tremendous growth backed by the nation's massive energy demand increase.The 8% Plus Economic Growth coupled with the already massive electricity deficit which makes brownouts of 8 hours a day normal in many places in the country provides the macro background underpinning the growth.India's Green Industry is still in a nascent state compared to the massive solar and wind industries in countries like China and Germany.However attracted by the massive potential a number of companies small and large have entered the fray.Most of India's large energy groups,utilities have already established a small presence or are in process of doing so.While Wind Energy is the largest Renewable Energy Industry in India after HydroElectricity,Geothermal Energy is non-existent without a single large commercial plant.Biomass Energy is quite well developed and Solar Energy is the fastest growing Green Industry.Here is a comprehensive list of the Green Companies in India operating in the different Alternative Energy Sectors.
March 19, 2011
India's ambitious nuclear energy plan to add around 2G of Nuclear Plant Capacity is running into more and more hurdles each day.Nuclear Energy in India got a boost when India and USA signed a 123 agreeement which removed India's pariah position in the International Nuclear Community allowing transfer of nuclear equipment and material.However the Japanese Nuclear Disaster has thrown a spanner into the works.The Jaitapur Nuclear Power Plant in Maharashtra was already seeing huge protests from local villages and political parties.The news of the Nuclear Radiation from the Fukushima plant has added fuel to the Nuclear Fire it seems.Note only have the Jaitapur protests become more stringent but another planned plant in Kovvadu village in the south eastern state of Andhra Pradesh has run into trouble.Villagers from all 150 villages took out a rally demanding withdrawal of the proposed nuclear power plant in the wake of ongoing nuclear crisis in Japan.I had earlier written that the Biggest Fallout Effect of the Japanese Nuclear Accident would be the Not in My Backyard (NIMBY) opposition of all existing and proposed Nuclear Energy Reactors globally and this is exactly what is happening.
March 19, 2011
Coal Mines in Indonesia,Australia,Africa and North America are selling like hot cakes as Indian,Chinese companies as well as mining conglomerates like Rio Tinto,Vale,BHP Billiton fight to secure raw materials.Note India and China are consuming huge amounts of coal to power their thermal plants.While China consumes a monstrous 3 billion tons,Indian demand is rising at more than 10% a year though on a smaller base.Coal is the cheapest form of power despite its polluting and health hazardous affect.Though Coal Plants in Developed countries are becoming much more expensive to build due to taxes and opposition by environmental groups,there is no stopping their furious growth in countries like China and India.Though India too faces some environmental opposition,massive ultra mega power plants with capacity of 4000 MW are getting built by new Indian private utilities
March 19, 2011
India's Economy is being hampered in its growth trajectory by lack of infrastructure which is leading to supply side problems.India suffers woefully from a lack of roads,electricity,ports etc. and almost a trillion dollars is going to be spent in the next few years as demand outstrips supply.India's Machinery and Capital Goods Industry is set to capitalize on this strong growth and is already seeing massive orders which are 2-3 years worth of their annual revenue.While the stock valuations of the capital goods equipment manufacturers has come down a bit from the heavy days of 2008,they are still quite high reflecting the strong growth potential.India's Engineering Industry is also composed of a number of smaller manufacturers that export light engineering equipment worth several billion dollars mostly to developing countries.India's Machinery Sector is composed of a mix of government owned and private companies as well as the giant capital goods MCN conglomerates like Areva and others.Here is a list of the major Indian equipment manufacturers.
March 16, 2011
PTC India Financial Services has substantial advantages of growth,a good business model in India's booming Energy Sector.However the valuation of the company has been kept too high for essentially what is a financial intermediary.The growth of the company has been compensated by the high valuation making it not such a good buy especially in the context of the current stock market and economic conditions.It might be better to look at cheaper alternatives in the Indian Infra Sector.
March 15, 2011
The backlash against the new and existing Nuclear Power Plants has started in different places around the world despite defiant expressions by Nuclear Plant Owners and Operators.While China and Italian utility Enel have said that they will go ahead with their billion dollar investment plans,Switzerland and Germany have put nuclear plant extensions on hold.Note Germany had extended the life of Nuclear Plants in the country by 10 years after extensive lobbying by the Nuclear Industry.This had led to huge protests from the Opposition Greens but the government had gone ahead in order to reduce Power Costs.However Merkel has been forced to eat humble pie and has said that a 3 month review will be done to check the safety of the Nuclear Reactors.Switzerland has also come out and put the plans for new Nuclear Reactors on Freeze.
March 14, 2011
India's Biomass Electricity Capacity at 2 GW (including cogeneration) is around 4% of the world's total Biomass Power Capacity of around 50 GW.US is the leader in Biomass Capacity with around 20% of the world's biomass potential.India has set ambitious plans for expanding the biomass power capacity in the next 10 years.India's Ministry of Renewable Energy has set a very high target of multiplying the power capacity by 10 times in the next 10 years.India's Total Biomass Potential with existing Technology is around 25 GW of which around 8% has been realized till date.India produce s 500 million tonnes of biomass per year, 120-150 million tonnes is surplus
March 13, 2011
The Tsunami Nuclear Energy Disaster which is unfolding in Japan highlights that Nuclear Energy can cause some very serious damage though the safety of the nuclear reactors are highly touted in the media by the Nuclear Energy Industry.These Nuclear Plants in Japan are quite old but so are most of the Nuclear Energy facilities in the West.Most of these Nuclear Plants are susceptible to serious natural disasters like earthquakes and tsunamis.In case of a nuclear meltdown the radiation from the Nuclear Plants can not only cause more deaths and injuries from natural causes but also make the area around the Nuclear Plant uninhabitable for hundreds of years.India and China are on a major Nuclear Energy Building Spree even though their nuclear plants have faced minor accidents in recent years.With this Nuclear Disaster,the protests in the se countries are set to grow with NIMBY becoming the biggest hurdle.Already protests are being held in Jaitapur in Maharashtra over damage to the ecology,expect the Japan's nuclear reactor incident to basically kill this Areva-NPCIL plant.Nuclear plants in the US and Europe are already facing huge cost and time overruns.This new problem should cause those projects to also die off.
March 10, 2011
India had set up around 500 MW of Biomass Capacity by 2007 and has increased it by almost 150 MW since then to reach around 1 GW capacity today.Most of Indias' Biomass Electricity is being generated in Andhra Pradesh,Maharashtra,Tamil Nadu,Karnataka and Rajasthan.A lot of new capacity is being built in Punjab and Chattisgarh as well.India with a total biomass capacity of around 1 GW is planning to increase it by 10 times to 10 GW by 2020 by setting up a number of 1-2 MW biomass plants around the country.Around 400-600 acres of land are required to support 1 Mw of Biomass Capacity and 200-300 acres using energy intensive crops.This is much more than what is required for even thin film solar energy which is around 10 acres.The large land requirements make Biomass Energy Scalding a difficult proposition,however it has a great use in niche applications where there is a large amount of crop and animal residue/waste
Biomass Energy is clearly seeing a massive investment of private capital by a number of Green Energy companies.A number of these companies are backed by Private Equity Players.Almost all Sugar Companies in the country co-generate biomass power at their sugar plants.The size of the segment is quite large and has not been listed here.In India 3 types of companies are focused on biomass electricity - Sugar Companies,Rice Companies and Green Energy Utilities.The first 2 categories will be successful as their cost of feedstock is essentially zero while the the success of the third kind will depend on the management and execution.
March 10, 2011
Interest in India's Renewable Sector is growing by the day with massive potential in Wind,Solar,Biomass and Nuclear Energy.Renewable Energy in India is going to more than quadruple in capacity over the next decade providing amply growth and profit opportunities.Foreign and domestic makers are already making a beeline to the Indian market to get a first mover advantage.Here are some of the main news in the Green Industry Space in India
March 7, 2011
CLP India which is a subsidiary of Hong Kong-listed Power Company CLP is one of the largest private power generation companies in India The company is the biggest wind farm operator in India with around 450 MW of capacity which it plans to raise by another 50% to around 640 MW.Two New Wind Farms will be built in Jaisalmer in Rajasthan and Andhra Pradhesh.The company will use i WTG supplier Enercon with whom it has long relationship.Note India has seen a sharp jump in Wind Energy growth in 2010 due to state and federal subsidies.With Wind Power forming almost 70% of India's current Renewable Energy Capacity,around 1.5-2 GW of new Wind Capacity will be built each year.CLP plans to add around 200-300 MW every year to keep up its pole position.
March 7, 2011
Coal Demand in India is surging as the power companies set up thermal power plants at an astounding rate to triple the power capacity over the next decade.Soaring Coal Prices have already made the Global Electricity Prices shoot up and its probably going to increase more in the coming decade.China is the world's largest producer and consumer of coal accounting almost for the 50% of the world's output at 3 Billion Tons.India is far behind at 400 million tons but will fast catch up given the prodigious rate of power plant building that is happening.The Environment is probably going for a toss as India has allowed "No-Go" Forested Areas to be mined.This plus China and India are importing more and more coal from Australia,South Africa and the USA.The recent looking in Australia saw coal prices shoot up alarmingly.Coal India the world's largest coal producing company recently increased the coal price from its shockingly low price leading cement makers and utilities to raise prices more than 5-10%.While its strange for a green blog to recommend coal stocks,the opportunity does exist over the next 10 years till renewable energy comes to grid parity and policymakers don't come to their senses.Here is a list of coal stocks/companies in India .Note there are not many major private coal companies as in the early 1970s, all privately owned coal producing companies were nationalized under the Coal Mines (Nationalisation) Act.
March 6, 2011
India has around 300,000 Telecom Towers around the country , a large portion of which is not connected to the electricity grid.Another large portion does not have access to reliable electricity implying they have to install backup power systems in order to run without interruptions.Diesel Generators have been the choice of telecom operators despite their high carbon imprint.This is because of the ease of buying and installing diesel generators as well as the lower fuel costs as the government in India heavily subsidizes diesel.Note India's Fossil Fuel Subsidies have led to hundreds of distortions in the economy.Corruption,Pilfering,Adulteration is carried out on a large scale due to government subsidies.In fact a senior government official was burnt alive by the Kerosene Mafia a direct outcome of this subsidy policy.But that is a separate issue.
March 6, 2011
India has been trying to build tidal power plants in order to take advantage of around 8 GW of potential tidal wave power capacity potential in India.Note Gujarat has been at the forefront of these efforts with most of the tidal power capacity Gulf of Cambay and Gulf of Kutch.While there have been reports of the go-ahead for these tidal energy plants,nothing concrete has come out of it .Note Tidal Energy is in a very immature stage compared to other forms of Renewable Energy like Solar,Wind and Biomass Energy.Tidal Energy like Wave Energy is still in the demo stage even in developed countries of the West where technology innovation is much higher.
March 4, 2011
The Indian Government’s launch of the ambitious Jawaharlal Nehru National Solar Mission(JNNSM) was done with much fanfare with a target of reaching 20 GW of Solar Capacity by 2022 under 3 phases from the 81 MW currently.While the government had the best intentions and had laid down a well defined 10 year plan with subsidy support for both Solar Thermal and Solar PV Technology,it has already run into problems.Due to high interest the government went in for bidding of projects which led to irrationally low bidding from unknown firms.This has put the entire exercise in question with the the biggest private utility saying JNNSM is a failure.Without extensions of deadlines it looks highly unlikely whether the 37 winners will actually put up the plants.
March 3, 2011
German Development Bank Kfw which is owned by the German government is planning to invest 800 million Euros in Indian Renewable Energy Sector.Note Kfw is one of the biggest funding institutions in Germany for renewable energy projects giving concessional interest rates.The Bank will use its extensive expertise in the alternative energy and energy efficiency areas to extend its business in India as well.Renewable Energy in India is expected to see a massive expansion in the next decade and will require massive amounts of debt and equity.Kfw alongwith other developmental institutions like ADB and World Bank have a big role to play.Note Debt is quite expensive in India and these institutions provide loans at a much cheaper rate making renewable energy projects viable.ADB has already formed a JV with NTPC and is looking to rescue JNNSM as well.IFC is funding numerous clean projects in India following its developmental mandate as well.
March 3, 2011
India may uses the planned $500 million to $1 Billion in Coal Taxes it expects to generate every year to build transmission lines for renewable energy.Note one of the main impediments for renewable energy is the lack of transmission capability on part of utilities to move clean energy from remote areas to urban demand centres.USA faces an acute problem in this regard and faces a massive debate on how to fund the power grid from windy areas to cities.India too faces a problem in this regard as renewable energy plants mainly wind and solar are to built in remote locations.Note India's Power Grid is very inadequate as large parts of the country lack electricity due to lack of distribution networks.
March 3, 2011
India is set to see a massive growth in solar energy in the next decade with the 81 MW of Solar Capacity expected to reach at least 20000 MW by 2022 if not more.India's JNNSM Policy and push for renewable energy by states like Gujarat,Maharashtra and Rajasthan should see massive investments in solar PV installation.While there are already solar cell and panel production,India lacks a strong base for manufacture of solar inverters which can cost upto 10% of the total cost of a solar project.
March 3, 2011
Alternative Energy in India saw significant growth in 2010 with the last 9 months of the year seeing capacity additions of 1800 MW which is almost 10% of the total installed capacity of 18500 MW.The growth in renewable energy was led by Wind Energy which forms almost 70% of the total renewable energy capacity in the country at around 13500 MW.The strong incentives given by both state and central government has led to the sharp growth of wind energy.Note Wind Energy is quite close to Gas based electricity price.India Needs at least 68 GW of Renewable Energy Capacity by 2020 to meet its RPS target of 15% set by CERC (note this is capacity only not hours of electricity).
March 3, 2011
Juwi,the German Renewable Energy EPC Company is setting up base in India following on the footsteps of other major Europeans companies Scott and Abengoa.Juwi is one of the largest solar EPC companies in the world with 800 million Euros in Revenues in 2010 and with operations in 15 countries.Note India's solar energy opportunity is one of the biggest in the 21st century and the number of solar companies has exploded.Other International Solar EPC Companies and Solar System Integrators like SunEdison have made major commitments to the Indian market.Juwi is looking at both setting up turnkey plants as well as O&M.Indian domestic companies suffer from a lack of experience in the solar development sector and entry of international companies should help disseminate best practices in solar project development and execution.
March 2, 2011
India's Electricity is set to see a huge boom as the 8-9% economic growth rates require massive amounts of energy.India is planning to nearly treble its electricity capacity to almost 450 GW by 2020 from around 160 GW now which means a yearly addition of nearly 23 GW in the next decade.Currently India’s Electricity comes mostly from Coal and Hydro Based Energy.Almost 50% of Energy Requirements and 53% of the Electricity is generated from Coal.Despite Coal being the the Dirtiest Form of Energy,India has got little choice in the matter.Most of India’s upcoming Electricity Plants are based on Coal.Hydro Energy is generated mostly from India’s Northern Himalayan States.Renewable Energy forms only 7.7% of the Capacity with around 11 GW of the 16 GW from Wind Energy.Nuclear Energy is around 3% of the total capacity at around 4.5 GW.Here are the list of the major power utilities in the country which is currently dominated by the state run PSUs.However the next decade should see the rise of private electricity companies.