Research on India_Energy and Utilities Sector in India Monthly Update_April 2012

Energy and Utilities Sector in India

Monthly Update

April 2012

Top Story

India wants a full membership in global nonproliferation of regimes India made an appeal for a full membership in global non‐proliferation of regimes. India's wants to join the four top non‐proliferation regimes ‐ Nuclear Suppliers Group (NSG), Missile Technology Control regime (MTCR), Australia Group and Wassenaar Arrangement. The campaign had started out in November 2010, but hasn’t been uccessful so far. India has placed 12 of the 14 nuclear reactors under international ssafeguards. This ensures India is well within the deadline for compliance with its separation plan. This attempt of India might face several roadblocks as India is yet to sign the NPT agreement. News Update

General India one of the top performing clean energy economies In 2011, Indian economy had received funds of the tune of INR 510 bn in the clean energy segment. India has registered fifth highest five‐year rate of investment growth and eighth highest in installed renewable energy capacity. Solar energy alone has received investments worth INR 210 bn. India is trying to achieve a goal of 20 GW of olar power by 2020. As of now India has 22.4 GW of installed clean energy enerating capacity. sg JV between Odisha and GAIL to be finalized soon The joint venture (JV) between the Odisha government and GAIL India Ltd for INR 50 bn natural gas pipeline is set to be finalized soon. The Surat‐Paradip pipeline will cover a distance of 400 km in Orissa. Additionally, the 1,100‐km Kakinada‐Howrah pipeline which is under construction is set to cover 434 km in the state. The state overnment is likely to make the use of CNG mandatory after setting up of CNG tations. gs Reliance, BP start to market imported LNG As RIL is facing shortfall in gas production from the KG‐D6 field, they are venturing to market imported natural gas. India Gas Solutions, the equal joint venture between RIL and British Petroleum will shortly bring in liquefied natural gas through the terminals of Shell India and Petronet LNG. India Gas Solutions is an entity independent of RIL and BP. The absence of new gas finds and declining production from the KG‐D6 field have made the business of importing gas attractive for industry players. BP India feels

Energy and Utilities – Monthly Update

that the demand for fuel is increasing in an exponential way and in future natural gas is going to be the preferred choice as it is a clean fuel. New association to be formed for the wind power developers Wind power developers have come together to form an association called Wind IPPs Association. The players feel that their issues are quite different and hence they need a new body to address their problems. The wind sector has seen investment worth NR 1 bn in last year alone. Players like Independent Power Producers Green Infra, enew Power and Mytra Energy were present at the convention IR Largest solar park in Asia inaugurated in Gujarat SunEdison‐one of the largest solar energy services provider in the world has announced the activation of a 25 Megawatt (MW) solar photovoltaic (PV) power at Charanka village in Patan district, Gujarat, India. This project was completed in 4 months ‐ consists of more than 89,000 solar PV modules. With the completion of this plant, SunEdison has now activated a total of 45MW as part of the Gujarat Solar Program. This facility is expected to produce more than 40 mn KW hours of clean olar energy in the first year of operation alone. The solar park has the capacity to roduce 200 MW of solar power sp Azure Power to set up roof top solar power project Azure Power, an independent power producer in the solar energy sector wants to develop a rooftop project in the Gujarat. The company would set up a 2.5 MW plant at an investment of INR 250 mn. This initiative would be the first project of its kind in India wherein the energy from an aggregated rooftop portfolio would be sold to one off‐taker. The project will also be attractive for rooftop owners through a revenue sharing arrangement for 25 years. In this way cities can become energy generators and power companies selling in cities can meet their renewable purchase obligations. The model would demonstrate aggregation of 60‐plus rooftops under a single project. he concept has the potential to tap into 1,000 MW of rooftop solar power across ier‐I and II cities. TT Mandi Gobindgarh switches to natural gas Mandi Gobindgarh in Punjab has become the first industrial city in Punjab to switch to piped natural gas in place of coal and furnace oil. This move was extremely important as the pollution level of the town is very high. This was possible because of the initiative of GAIL and the Punjab Pollution Control Board who had been trying to build consensus in the township to switch to the use of PNG. The city has approximately 500 industrial units. PNG is supplied only through GAIL. The industrialists are pprehensive that natural gas will increase the cost of production and they are orried whether the workers can adapt to the new technology.

aw


Suzlon Energy to sell its wind farms Wind turbine manufacturer Suzlon has decided to sell a part of its wind‐farm assets for INR 2 bn. Majority of its assets are located in the states of Tamil Nadu. This is a part of the strategy employed by Suzlon so as to raise funds for certain non core ssets. It would also help them to pay off certain debt payments. The deals are likely o get over by mid May, 2012. at Lack of skilled manpower hits the natural gas sector The liquefied natural gas sector in India is facing an acute shortage of trained manpower. This problem is even more aggravating as India wants to increase re‐gasification capacity to meet surging domestic demand for the natural gas. Finding experienced hands is proving to be a challenge for most operators as no domestic institute imparts training for LNG operations. This makes them dependent on etrochemical companies, refineries and fertilizer firms for their requirement of rained manpower. pt Oil India in talks to acquire more oil assets Oil India Ltd (OIL) is in talks to buy a stake in Chesapeake Energy Corp's Mississippi Lime unconventional oil assets in Oklahoma. The CEO of the company is in talks to with the OIL management. Chesapeake Energy is a Fortune 500 company and is the second largest producer of natural gas and 12th largest producer of liquid hydrocarbons in the USA. OIL is planning to explore oil and gas opportunities in America in tie up with US companies. News Update

Regulatory Government may re-introduce sops for wind energy sector The renewable energy ministry is planning to re‐introduce incentives for the wind energy sector. Earlier the government had taken away the accelerated depreciation and generation‐based incentive. The industry fears that such moves could reduce the capacity addition in this sector. The roll back has also triggered concerns that nvestors seeking tax breaks may migrate to other sectors such as solar power, which ffer incentives. io


News Update

Expansion Plans BHEL to enter into wind energy Bharat Heavy Electricals Ltd (BHEL) is planning to enter the wind power generation equipment manufacturing segment, This is an attempt by the company to generate newer streams of revenue. They are also planning to tie‐up with a suitable company n the renewable energy space. However, the exact business model hasn’t been inalized yet. if CLP Power India to invest in wind energy CLP Power India, a wholly‐owned subsidiary of Hong Kong‐based CLP Holdings Ltd is planning to invest INR 18 bn in India. This would help to add over 200 MW of wind energy in the fiscal year 2012‐13. The company has already invested INR 125 bn in India through its various projects in wind power in states like Maharashtra, Gujarat, arnataka etc. The company is also evaluating options to set up a solar power plant in ajasthan. KR New project for Suzlon in South Africa Suzlon has been selected as a preferred supplier by Cennergi, South Africa for a 138 MW power project. Cennergi is an equal joint venture between South Africa`s Exxaro Resources and the Tata Power Company. Cennergi has chosen to use 66 of Suzlon`s S97‐2.1 MW turbines for the project. Suzlon will deliver the turbines under a full EPC engineering, procurement and construction) agreement. Apart from providing clean nd green energy this project will also create jobs. (a HHV Solar Technologies develops ‘Solarator’ HHV Solar Technologies Ltd has developed a portable solar photovoltaic power generator with 600 watt capacity especially for emergency use in remote locations. This portable solar generator weighs weighing 415 kg, can be air‐lifted or transported to remote locations or disaster areas for emergency deployment. This is particularly suitable for a country like India which gets solar energy for nearly 10 months in a year. This product can be used by infrastructure firms at project sites where there is o conventional power supply through the grid. During transport, the modules are olded compactly and unfolded at the location use to catch the sun's rays. nf Nalco to set up a new nuclear power plant with NPCIL Nalco is looking to set up another nuclear power plant in collaboration with Nuclear Power Corporation of India Ltd (NPCIL). 49% of the stake would be with Nalco and 51% of the stake would be with NPCIL. For this project Nalco would be investing INR 17 bn. Venturing into the nuclear power sector is part of Nalco's growth plans, under which it aims to become a diversified metals, mining and power producing company. Estimated annual turnover of the company would be INR 250 bn by 2020. They are


aAlso venturing into wind power project by investing INR 2.74 bn in a wind project in ndhra Pradesh Solar thermal power plant to be set up in Gurgaon A new solar thermal power plant ‐ which will work on the steam‐and‐turbine principle as opposed to utilizing costly solar photo‐voltaic cells ‐ is being set up in Gurgaon. This plant utilizes the thermal principle. Sunlight will be useful to generate heat. Using this heat high‐pressure steam will be generated which will then be directed to a turbine generator, which in turn gives electricity. This project is being et up experimentally in joint collaboration by IIT Bombay and Solar Energy centre. he plant is expected to go trial runs by first week of May 2012. sT Areva and Reliance to set up solar power plant Areva Solar has been awarded a contract by Reliance Power to build a 250 MW of concentrated solar power installation. This will be the largest solar power installation in Asia. This project would be helpful in avoiding of approximately 5,57,000 tons of carbon‐di‐oxide emissions per year compared to a similar sized coal fired power lant. Areva will build two 125 MW CSP plants using its compact linear fresnel eflector technology. The first phase is likely to get operational by May 2013 pr Miasole expanding in Indian solar market MiaSole, the leading manufacturer of copper indium gallium selenide (CIGS) thin‐film photovoltaic solar panels continues to expand in the Indian markets. MiaSole has 8 MW of solar projects in India completed or under construction, including a 2MW utility scale solar development project in Gujarat. This project in Gujarat is financially upported by the Export‐Import Bank of sP

the United States. Recently, it also appointed reetha Nair as their new country manager. Largest solar park in Asia inaugurated in Gujarat SunEdison‐one of the largest solar energy services provider in the world has announced the activation of a 25 Megawatt (MW) solar photovoltaic (PV) power at Charanka village in Patan district, Gujarat, India. This project was completed in 4 months ‐ consists of more than 89,000 solar PV modules. With the completion of this plant, SunEdison has now activated a total of 45MW as part of the Gujarat Solar Program. This facility is expected to produce more than 40 mn KW hours of clean olar energy in the first year of operation alone. The solar park has the capacity to roduce 200 MW of solar power sp Jammu and Kashmir to have its first wind farm Jammu and Kashmir will have its first wind power project in a site in Reasi's mountainous district. Feasibility tests and wind potential measurement was done previously. They found wind potential of about 336 watts/square metre at 50 metres by height. The project has a capacity to produce 10 MW of power in its first stage.


Industry Expert Speak Solar thermal plant equipments to be free of import duty – Pranab Mukherjee, Finance Minister "In order to fully realize our potential in the realm of solar energy, solar thermal projects need encouragement, I propose to fully exempt plant and equipment, etc. for the initial setting up of such projects from special countervailing duties.” Transaction Detail (February – April 2012)

Date Buyer Target Deal Size (INR mn) % stake Deal Status

Type of Transaction

25th April 2012

IFC Inox Group 2000 NA Not

Complete Private Equity

20th March 2012

IFC Nereus India Alternative Energy Fund

1000 NA Not

Complete Private Equity

2 7th Feb2012

Tecpro Systems Ltd.

EverSun Energy Pvt Ltd.

NA NA Completed M&A

Energy Efficiency Forum Date: 22‐23rd August 2012 City: Hyderabad

Associated Chambers of Commerce and (ASSOCHAM)

Organizer: TheIndustry of India Website: http: http://www.greenbusinesscentre.com/site/ciigbc/viewevent.jsp?eventid=324496&event=dd

Events Calendar


Annual Financial Results – Revenue (INR mn)

Company FY '08 FY '09 FY '10 FY '11

Bharat Petroleum Corp. Ltd. 1,112,431.1

1,365,571.2

1,238,167.2

1,536,449.7

GAIL India Ltd.

188,379.1

247,818.0

270,353.0

351,066.5

Gujarat Gas Co. Ltd. 13,012.5

14,196.7

18,493.3 N.A.

IKF Technologies

1,791.907 1,853.626 2,101.123 2,398.877

Indian Oil Corporation Ltd

2,280,113.6

2,862,330.2

2, 502,393.3

3,082,561.7

Indraprastha Gas Ltd. 7,059.80 8,527.70 10,781.20 17,440.70

Oil and Natural Gas Corp. Ltd.

75,173.9 9

1,052,756.6

1,026,655.8 1,201,955.1

Oil India Ltd.

62,773.0

72,308.0

79,335.3

83,668.6

Petronet LNG Ltd.

65,553.1

84,287.0

106,490.9

131,972.9

Praj Industries Ltd 7,380.1 9,542.2 7,344.4 6,649.3

Suzlon Energy Ltd. 136,794.3

260,817.0

206,196.6

178,791.3

Tata Power Co. Ltd

108,908.6

180,613.2

189,765.2

194,418.5 Annual Financial Results – Net Income (INR mn) Companies FY '08 FY '09 FY '10 FY '11

Bharat Petroleum Corp. Ltd. 17,695.50 6,337.60 16,323.60 16,349.60GAIL India Ltd. 27,829.0 28,263.5 33,278.3 40,20 9.7

Gujarat Gas Co. Ltd. 1,606.5 1,741.7 2,577.5 NA

IKF Technologies 184.141 283.532 354.144 434.885

Indian Oil Corporation Ltd 79,127.4 25,994.0 1 07,131.9 78,307.2


Oil and Natural Gas Corp. Ltd.

198,722.6

197,953.4

194,035.3

224,559.3 Oil India Ltd. 17,796.0 21,616.8 26,104.4 28,837.3

Petronet LNG Ltd. 4,746.5 5,184.4 4,045.0 6,196.2

Praj Industries Ltd 1,529.3 1,211.9 1,195.9 577.5 Suzlon Energy Ltd. 10,301.0 2,364.8 (9,825.6) (13,239.7)

Tata Power Co. Ltd 10,550.7 12,187.4 19,668.4 20,596.0


Quarterly Financial Results – Revenue (INR mn)

Company JanMar 2011 AprJun 2011 JulSep 2011 Oct Dec 2011

Bharat Petroleum Corp. Ltd. N.A. 461,396.10 N.A. 588,467.90

GAIL India Ltd. N.A.

88,673.8

N.A.

112,5 97.8

Gujarat Gas Co. Ltd.

5,203.0

5,766.3

6,435.1 N.A.

IKF Technologies 598. 481 720.802 N.A. 341.816

Indian Oil Corporation Ltd N.A.

930,836.6

N.A. N.A.


Oil and Natural Gas Corp. Ltd. N.A.

164,019.2

N.A.

185,171.3

Oil India Ltd.

22,355.3

22,878.0

N.A.

25,897.9

Petronet LNG Ltd. 39,859.7 46,233.1 53,668.7 63,302.6

Praj Industries Ltd N.A. 1,647.1 2,289.0 2,192.5

Suzlon Energy Ltd.

72,760.2

43,260.0

50,711.0

49,857.9

Tata Power Co. Ltd 50,794.8 58,048.2 62,483.3 66,458.7

Quarterly Financial Results – Net Income (INR mn)

Companies JanMar 2011 AprJun 2011 JulSep 2011 OctDec 2011

Bharat Petroleum Corp. Ltd. N.A. (25,618.9) N.A.

31,396.0

GAIL India Ltd. N.A. 9,846.7 N.A. 10,91 4.2

Gujarat Gas Co. Ltd. 720.8 962.8 804.7 N.A.

IKF Technologies 99. 096 143.813 N.A. 37. 182

Indian Oil Corporation Ltd N.A.

(37,1 87.0) N.A. N.A.

Indraprastha Gas Ltd. 691.6 800.7 772.2 691.5

Oil and Natural Gas Corp. Ltd. N.A. 40,949.0 N.A. 67,414.1


Oil India Ltd. 7,333.0 8,496.1 N.A. 10,139.8

Petronet LNG Ltd. 2,06 2.8 2,567.1 2,603.3 2,953.8

Praj Industries Ltd N.A. 136.7 205.3 215.0

Suzlon Energy Ltd. 2,110.4 601.2 480.0 (2,864.6)

Tata Power Co. Ltd 6,330.2 4,304.4 (11,873.2) 2,979.5

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Research on India_Energy and Utilities Sector in India Monthly Update_April 2012