Azure Power Investor Presentation
Industry and Regulatory Update
Azure Power
Industry Update
India's power supply remains in a deficit at 0.3% for the first half of
FY'21.
Continued strong growth opportunities despite COVID19. During
the quarter, 2.89 GWs of tenders were released and 2.19 GWs of
capacity was auctioned.
Increasing pressure on DISCOMS to sign Power Supply
Agreements (PSAs) with intermediary procurers such as SECI as
many DISCOMs are short of meeting their RPOS and recent
proposed changes in the Electricity Act would stiffen penalties for
not meeting RPO requirements.
Indian Energy Exchange (IEX) launched pan-India Green Term
Ahead Market (GTAM) in electricity in August 2020. This trading
will facilitate price discovery on a continuous basis and can be
used to satisfy Renewable Purchase Obligations (RPO)
Regulatory Update
Basic Custom Duty (BCD) – The current expectation is that a 10 -
20% BCD will be imposed, which will be in addition to the SGD,
although there has not been a final decision. Safe Guard Duty and
BCD are pass through as per our PPAs.
The Ministry of Power (MOP) has issued draft standard bidding
documents to select bidders for acquiring a majority stake in
distribution licensees for the distribution and retail sale of
electricity. This will help get private players in the distribution
business to revive DISCOMS.
Numerous positive changes proposed to be included in Electricity
Act and Electricity Rules including expediting recovery of change
in law events, enshrinement that renewable capacity are “must
run", new rules on curtailment, establishment of the Electricity
Contract Enforcement Authority focused on contractual disputes,
strengthening of payment security mechanisms, requirements to
adopt tariffs within certain time limits, and an increase in penalties
and enforcement of Renewable Purchase Obligations (RPOs).
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