Recent 4 GW Project Win Is Value Accretive
Industry and Regulatory Update
Industry Update
Continued robust demand for new renewable energy in India
despite the short-term blip in demand related to COVID-19,
17GWs of Tenders were released in the past quarter. There are
~40GWs of renewable energy auctions expected over the
medium term.
Regulatory Update
In light of the COVID disruption, renewable energy is deemed an
essential service. MNRE reiterated “must run status" for renewable
energy and the Ministry of Power sent a directive that renewable
energy generation should be paid within 45 days of the presentation
of the bill. Priority payment. Submission of invoices by email now
allowed.
More auctions focused on higher capacity factor (hybrid),
peaking supply and "Round the Clock" (RTC) - DISCOMS want
flatter supply of power or on demand power for grid reliability
and are willing to pay a premium.
May bid for new tenders due to delay in 2 GW green-shoe LOA
- Will only win if returns meet minimum thresholds and are
above our cost of capital. No change to equity needs. Given
evolution of demand, we are also considering new technology
driven tenders like Hybrid, Storage based, and RTC.
MNRE confirmed a blanket extension for solar projects for the
duration of COVID Lockdown + 30 days for normalization. Additional
extensions for supply chain disruption can also be applied for.
―
The most recent
Basic Custom Duty (BCD) Implementation
proposal is for BCD to be implemented in April 2021 with a 10% duty
on Modules and the rate ramps up 10% annually to 30% from 2023
onward. The current Safe Guard Duty is set to expire on July 29,
2020 and extension is being examined. We expect recovery of Safe
Guard Duty and BCD as our PPAs are protected from changes in
law.
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