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2018-10-10 / HFE Team

The Solar way to power.

When the first hand-held, solar-powered calculators were introduced at the end of the 1970s, little did we realise that this technology would revolutionise the power sector in the twenty first century.

Solar is maturing fast as a mainstream energy source. In India, such a statement would have been nothing short of fiction some time ago.

In contrast, today India is home to the headquarters of the International Solar Alliance (ISA), which has 121 countries as its members. The first Assembly of the ISA is scheduled to take place from 3-5 October 2018 in Delhi, and will have attendees at the Ministerial level from 68 member nations. That should tell you something about the momentum solar has gathered in the country. ISA’s significance extends beyond India. Member Nations are witnessing a surge in investments and job creation in their economies thanks to this impetus behind solar. With an increased focus in R&D in renewables, it is becoming more efficient and affordable – an excellent yet equally necessary combination.

The recent past has been encouraging. As of August 2018, cumulative solar (grid connected) installations in India have surpassed 25 GW, with close to 5 GW being installed in the first half of this year alone. The near future is expected to witness an even greater thrust in growth as solar moves from vanilla grid connected projects to newer and more innovative forms of use.

In India, solar is firing on all cylinders or – one might say – making hay while the sun shines. India launched its first wind-solar hybrid plant in April 2018 to help optimise power generated from renewable energy sources, while record low tariffs are making rooftop solar a viable option. Commercial rooftop solar projects are also picking up pace in India, with overall rooftop solar projects now at 2.5 GW. India’s National Solar Mission (NSM) which was quite successful in driving the local PV market to attain third position globally last year, the nation is eyeing similar success in energy storage. The increasing adoption of lithium ion battery in the renewable power generation system, which enhances reliability and flexibility of the system, is likely to escalate the demand for energy storage solutions. By combining the above innovations we can reduce the intermittency of renewable power. For example, we are developing wind-solar hybrid plants with storage and working to optimise their Plant Load Factor (PLF).

With the government’s plan to electrify all of India’s villages, there is a huge potential to provide decentralised solar solutions in the remote corners of the country with shorter transmission lines. If the private sector is encouraged, results could be electrifying. Just as India has leapfrogged from limited landline connectivity straight into a mobile revolution in rural areas, it could see the same phenomenon with these decentralised microgrids.

ISA is an extremely noble idea whose time has come. The industry is both highly competitive and cooperative. The key to renewable energy future is greater collaboration. The exchange of knowledge and technology will enable greater inflow of capital and employment for all member nations involved and the prospective Member Nations of ISA. As we continue to find and explore synergies, our goal should be to power the entire world with renewable energy 24X7.


Contributed by

Rahul Munjal
Chairman & Managing Director, Hero Future Energies Ltd, India

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2016-05-16 / Webmaster

Investment in a sustainable lifestyle is the best investment for our future

Sustainability is at the core of modern living. A rising number of people are making a conscious effort to work towards a lifestyle that promotes a sustainable living architecture through various applications across all aspects – energy, housing, transportation, work etc. In the coming years, this approach is likely to strengthen with more green principles being applied to day-to-day living.

A few big cities have already set the ball rolling with the use of natural materials in the construction of buildings. High-rises contribute to about 30-40% of energy consumption in many Indian cities and about a fifth of the country’s annual greenhouse gas emissions.

Homes, like humans, need three basic elements of nature — wind, water and sun — to thrive. It is the method of harnessing them that separates a sustainable structure from an energy guzzling monster. Energy, water and waste management solutions are now a must in the new constructions.

Solar radiation is a critical and eminent green source of generating energy and it has gained considerable traction due to its aggressive promotion by the government. Among all clean technologies, focus on generating energy from solar is an important step to diversify the supply base to reach every household even in the remotest location and in the process reducing the dependency on coal-based units. India gets twice as much sunshine as many European countries making the use of solar power possible, but clean energy forms less than 1% to India’s energy mix. Declining costs of technology, storage devices and proactive encouragement from the government in the form of suitable policies are encouraging the growth of solar enegy usage. The micro-grid system, for instance, connects directly to smaller units of households, hamlets or villages and thus eliminates the need for a megawatt scale grid connectivity. The micro grid system involves almost no recurring cost after installation. The maintenance costs of rooftop solar systems are almost negligible when compared to conventional sources of energy. However, a harder push is needed from the government to achieve the target of 40 GW of rooftop installations by 2022.

Water — another natural resource – is paramount to survival. Right from from healthcare to socio-economic development, there is no substitute to water. India’s ground water supply water is rapidly dwindling; mismanagement of water resources, over-pumping and pollution are significant contributors. According to the UN Food and Agriculture Organisation (FAO), India’s per capita water storage capacity is 200 cubic metres, well below the world average of 900 cubic metres per capita. The irony is that India receives highest rainfall among comparable countries, yet continues to face drought conditions at an alarming rate. According to Ministry of Water Resources, 65% rainwater drains into the sea. We need to harnessing this through rainwater harvesting — a concept that is steadily gaining popularity in cities like Delhi, Mumbai, Bangalore and Jaipur. Bangalore has modified its building by-laws to make rainwater harvesting compulsory for buildings beyond a certain plinth area and on certain large plot.

Electric vehicles or hybrids are another medium that can contribute to energy conservation while also reducing pollution. Still at a nascent stage, the government is actively promoting their development and the manufacturing ecosystem. Switching to green vehicles will reduce the carbon footprint significantly, by cutting down dependence on oil and fossil fuels.

Sustainable living will only be successful when it is adopted right up to the grassroots level. It calls for a collaborative approach from all stakeholders – the government, administration, corporations, civil society and individuals. It’s time we realize that development is not all about consumption and investments but taking responsibility of our natural resources as well.

Taking sustainable living responsibly, we at Hero Future Energies did our bit to contribute towards clean energy. For World Environment Day, we did a plantation drive across 10 of our wind & solar sites. 2000 saplings were planted in total!

Addition to this, we leveraged our social media platforms by asking people to share a reason for why Hero Future Energies should plant a sapling on their behalf & in their name. All entries for this activity received an image that had a placard next to the sapling planted in their name.

We call it a little effort done on the sustainable grounds, while our dedicated contribution towards clean energy continues.



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2016-06-30 / Webmaster

For renewable energy to thrive, we need to think big

Renewable at the fore

Renewable energy is serious business and a gradual transformation to green energy is non-negotiable in order to avert an environmental catastrophe. World over, more and more people are accepting and adopting green energy alternatives into their daily routine. This has been ably supported by government agencies. Even though the levelized cost of generating clean energy is high as compared to conventional methods, the marginal cost of producing output through solar and wind is almost zero.

Germany, the undisputed leader

Today, several countries are proactively embracing the opportunity to switch to greener alternatives. Germany offers a great example in this context, replacing fossil fuels with wind and solar energy. Deriving around 27% of its power from renewables, the country has found significant support from public for its energiewende initiative – an aggressive transition with a goal to produce 80% of electricity from clean sources by 2050. Encouraging a culture to promote the growth of renewables, a collective desire to abandon nuclear power plants and regulations permitting citizens to profit from selling their energy to the grid are all efforts in creating the right ecosystem. Preferential access to renewables has resulted in wholesale power prices to slump.

China – the manufacturing hub for renewables

Not far away, China – the world’s workshop for wind and solar, invested $110.5 bn in clean energy in 2015, making it highest among all the countries, according to a study by Bloomberg New Energy Finance (BNEF). Among other factors, the government’s commitment to replace heavily polluting thermal power plants and a reduction in its feed-in tariff policy for onshore wind farms, contributed significantly to this tall order.

Progressive reforms in Japan & the USA

Likewise, Japan has also recently amended its feed in tariff (FIT) policy under Act on Special Measures for Renewable Energy, to expedite and promote the use of solar on a wider scale. The revised regulations come into force post April 2017, include a new certification system and a new tendering program for PV projects, making tariffs more competitive. An ambitious 80 GW of PV capacity has been approved, out of which 34 GW is already constructed. Industry veterans are optimistic about the future of solar in Japan and are hopeful that it will cross 100 GW by 2030.

In the US, California has passed a landmark climate bill SB 350, to implement clean energy on a larger scale over the next 15 years. The bill aims to build energy efficiency in the state by 50% by 2030.

India, fastly catching up

India’s leadership in establishing the International Solar Alliance (ISA) which was launched at the UN Climate Change Conference in Paris (COP 21), is a part of the government’s big bet on solar. The aim of the ISA is “to address the specific needs of the solar resource rich countries located between the Tropic of Cancer and the Tropic of Capricorn.”

The government’s commitment to the growth of renewable and its efforts have fructified, by attracting an 80% rise in solar power financing that now stands at $5.6 billion. India’s target of 175 GW of renewable energy generation by 2022, got off to a good start with nearly 12 GW likely to be installed by 2017. At the beginning of this year, the government asserted sanctioning of 30% capital subsidy for rooftop solar installations to residential, government, social and institutional segments, which is expected to support total rooftop capacity of 4,200 MW till this budget is exhausted.

The push for decentralized renewable solutions like mini grid, in additional to solar, is expected to generate 500 MW of power to supply energy to the farthest corner. However, the ultimate success of India’s big bet on solar will require focus on research, affordable project financing, and viable solar projects that will pass on the benefit to end consumers.

As we stand today, both solar and wind integration into the grid faces resistance from grid operators. However as our economy grows , grid size increases and new technologies related to scheduling and forecasting are in place, integration issues are likely to be resolved. Initiatives by the current ministry, like green corridor and emphasizing on improving the overall infrastructure is likely to smoothen the last tumbling block.

Energy surplus – not a figment anymore

Very recently, Germany experienced a phenomenon of energy surplus, wherein the output actually exceeded the national demand. This was possible due to higher contribution from renewable energy generating facilities. Similar feat was observed in Denmark last year.

As they say, the journey of a thousand miles begins with a single step. It’s early days yet for the renewable energy sector, but with the necessary action plans in place, can India become an energy surplus nation in near future, emulating on the lines of Germany?

Contributed by Rahul Munjal, Founder and Managing Director, Hero Future Energies

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2016-02-02 / Webmaster

Renewable energy – time to move from commitment to action

Economic growth and development are hugely dependent on the power sector, especially so for developing nations. The Indian power sector is transforming rapidly and is therefore altering the industry outlook, however, as a country we still have a long way to go to provide energy security to all our citizens. Renewable energy is non-negotiable for India and the government’s commitment to accelerate the growth of this sector is evident. But it will need to be a fine balancing act – as we need to develop enough to provide affordable energy to all our citizens.

In the backdrop of the Paris agreement, this commitment also brings with it a responsibility towards balancing growth and its implications on climate change as India now assumes a significant leadership role in managing international climate treaties. If the Paris Agreement brings forth ‘innovation’ and ‘commitments’, the time is now ripe to focus rigorously on the ‘deployment’ aspect in order to address the transition towards a low carbon future. It is also important that industry and corporate sector does their bit to enhance usage of renewables in their energy portfolio.

Government policies support growth

Deployment is primarily execution and implementation where government policies play an important role. This time around, the government is proactively taking steps to promote the judicious use of clean capacities at the ground level across spectrum of people. The recent approval of INR 50 billion to fund 30% capital subsidy for rooftop solar installations is a clear indication of the government’s intentions. The disbursement mechanism through Solar Energy Corporation of India (SECI), schemes run by state governments and subsidy disbursements through financial institutions will ensure that the benefits reaches the right target audience. Keeping commercial and industrial establishments out of the framework is particularly beneficial to the retail category.

Revival of distribution companies is imperative as the long term prospects of renewables are heavily dependent on their financial health. Traditionally discoms have been burdened with huge annual debt and the cumulative losses have impacted the offtake of power as cash strapped Discoms prefer “Power cuts to providing power”. The Ujwal Discom Assurance Yojna or UDAY attempts to address this issue to a great extent to ease the financial crunch faced by power distribution companies. Under this scheme, the state has the flexibility to take over the discom debt through loan, equity or grant on state balance sheets and thereby making states answerable and committed towards monitoring the health and performance of discoms in future to avoid another debt trap.

Need to augment T&D system

The Indian power sector in last 10 years has largely focused on augmenting generation capacities resulting in under investments in Transmission and Distribution (T&D). A major challenge is to move renewable power from generation sites to consumption sites, largely attributable to inadequacy of grids. The amount of electricity lost during transmission is still relatively high and needs concrete measures to arrest that. In order to improve the country’s power supply conditions, an investment of INR 3 lakh crore is expected over the next four years. This will helps strengthen the grid infrastructure at various time horizons and enlarge its outreach. Studies have proven that a 5 per cent saving in transmission losses translates into an additional 15,000 MW of power without any fresh investment.

India is progressing well along its ambitious renewable energy transmission network program” The Green Corridor”. Power Grid Corporation of India has operationalized the second phase of the green corridor program, and has allocated a transmission project in Andhra Pradesh, while completing the tendering process for projects in Madhya Pradesh and Karnataka.

Minigrids matter

Due to insufficient last mile connectivity a huge chunk of population has been left away from the grid so far. Mini-grid has been an innovative solution for these areas.
Encouraging minigrids / microgrids with solar integration could result in a remarkable shift in the mechanism to deliver uninterrupted access to unelectrified households in rural areas.

Clearly, there are several visible improvements on the regulatory side spawning positive development for the sector as a whole. A more collaborative approach of private players and regulators could provide further impetus to achieve the committed targets in a sustainable manner.

Contributed by Sunil Jain, CEO & ED, Hero Future Energies

This article was originally published at

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2017-05-02 / HFE Team

Epitomizing 'Brighter Future' with Solar Energy

Today, solar energy can provide a ray of the sunshine for the world to shift towards a sustainable and clean power source. Imagine the impact of an education institute following a sustainable lifestyle.

Firstly, not only as a user of clean energy but also as a platform where students get direct exposure to learning of its importance. Academics recommend undertaking renewable energy under the academic curriculum. Students get to experience direct impact of being a contributor in the green change but more importantly, they get to support such a necessary change.

Here’s a look at what makes solar energy in India a very viable source of energy, especially in a school setting!

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2018-03-23 / HFE Team

Green Jobs For A Green India

Increased greenhouse gas emissions, global warming, smog, ozone depletion, a decrease in the green belt across the globe and many other factors have necessitated the world to think of clean energy. With the rise of this awareness, green sector companies have seen growth across the globe. Once thought of as the primary answer to the globe’s renewable energy requirements, nuclear energy is now viewed unfavourably in comparison to solar and wind alternatives. An ideal example is that of Solar Chernobyl building a massive solar farm at the site of Ukraine’s 1986 nuclear disaster to provide renewable energy for those living nearby.

While the green push worldwide is evident, the need for the entire global community to come together to combat climate change remains just as prominent. The recently held Global RE-Invest also highlighted the importance of political commitment in driving the green energy revolution.

All this has led to larger manpower joining the green movement. Solar photovoltaic (PV) and wind industries are on a rising curve of being the largest employer today with India among the top six nations in terms of green energy job generation. As per the European Union, India has demonstrated a strong political engagement in climate change negotiations for the Paris Agreement. The EU is expected to further engage with India on energy security, efficiency, renewable energy sources (including solar and offshore wind, smart grids and off-grid systems), as well as on policies to develop an electricity system which can reliably integrate large shares of renewable energy.

India targets to add 175 GW of renewable energy by 2022 (100 GW from solar power, 60 GW from wind power, 10 GW from biomass power and 5 GW from small hydropower). A big credit of the strong progress it has made till date goes to the ever-expanding green workforce in India. Employment in solar PV increased by 36% in 2017 to reach 1,64,400 jobs. IRENA estimates put the total employment in the wind energy sector at 60,500. The job additions in the whole sector in 2016-17 alone stood at 4,32,000. The figures are a clear indicator of the employment potential of the sector. And given that renewable deployment is only going to increase, the sector will add a large quantity manpower in the near future. The next challenge, therefore, is to ensure that this need is answered qualitatively as well, in the form of skilled professionals.

Government is making efforts to cater to this requirement through Green Skill job council and is also pushing universities and institutes to design programs focusing on renewables. The government can inform about the need for renewables through school textbooks, universities can introduce many more short and long-term courses and the green sector companies can invest in both R&D and international collaboration. Plenty is being done to meet this world’s energy needs sustainably but plenty more can be done. Once this unexplored potential is tapped into, India will boast of a competent green workforce capable of leading us into a sustainable future smoothly and surely.


Contributed by Bhawna Kirpal Mital, GM – HR, Hero Future Energies

2016-10-05 / HFE Team

Re-Viewing Solar Cells

Solar basics
With each passing day, solar energy is flexing its muscle in the energy mix and empowering the world. This natural source of energy is lauded as an inexhaustible fuel source. A report from International Energy Agency (IEA) echoes that by the mid of this century, solar will be the largest source of energy globally. Wondering what is transpiring the success of this clean source? It’s the technology – the solar panel components or Photovoltaic (PV) cells, which convert radiance into electricity. Today, PV cells are recognized as a promising renewable energy development source and have gradually evolved from their use in small applications to large power generation source.

Deeper look into solar cells

Whenever we think of electricity generation, the most common visual that comes to our minds is that of large rotating parts. However, since past few decades, battery fundamentals have captured a pivotal position on this subject.

I am specifically indicating at solar cells. Earlier batteries were used for the purpose of energy storage. Silently these solar cells are replacing those fundamentals in terms of generation. PV solar cells are thin silicon slices which are utilized to convert sunlight into electricity. Solar cells combined into a group of arrays are called solar panels, which are utilized to set-up large solar plants for potential electricity generation.

Batteries are generally utilized as a secluded electricity source, which after consuming their entire charge become empty or powerless. To regain further supply of power (charge) it requires recharging through any charged carrying source.

Now think about a scenario, where a battery gets constantly and continuously charged through some kind of limitless natural source, then it is likely to become an endless electric supply source for mankind. The secret lies in the innovation of solar cells. During the decade of 1950, Bell Laboratories constructed the first solar cell which converted sunlight into electricity. Since then a lot of modifications and improvements in quality and efficiency have been done. Although the process of solar cell construction remains same.

Thanks to Scottish Scientist James Clerk who first in 1874, realized that Selenium was sensitive and had good conductivity in sunlight. This finding led him to investigate the reason behind this conductivity, whether it was heat or light. He placed the Selenium bar in a capillary glass tube filled with water, in a manner that heat gets absorbed by the water. He detected equal effects on conductivity when the Selenium bar was kept under the sun. He had conducted the initial tests which helped in comprehending the dynamics of electricity generation through sunlight. This was later ably corroborated by Albert Einstein in his study of ‘photovoltaic effects’. Einstein in his discovery of Photon clarifies that light comes with packets of energy i.e. bundles of electrons carrying huge amounts of energy, which can be absorbed and retained by metals like Selenium. As a result, charged Selenium rod if surrounded and infused with wires, produces electricity. This experiment became popular as a phenomenon of the Photovoltaic Effect. Post which, serious exercise started to capture sunlight as a useful natural source of electricity.

Next progress was made when few years’ later scientists at Bell Laboratories accidentally searched conductivity in silicon after infusing it with some impurities in the form of electrons, which was either in excess or deficient quantity. That phenomenon of the introduction of impurities transformed silicon from a poor to the preeminent conductor of electricity.

As part of the research, a piece of silicon rod containing a small concentration of gallium made silicons positively charged. When this rod was dipped into a hot lithium bath, the portion of silicon immersed became negatively charged. A permanent electrical field was developed, called p-n junction, where positive and negative silicones met. This p-n junction formed the heart of the transistor and solar cell, where all electronic activity occurs. This transformed the designing of Integrated Circuits (ICs). The solar cells work exactly in reverse order of p-n junction diode, when exposed to sunlight, it acts like a battery. But that was completely a different inner world, where the power fed externally and circuitry controls internally, was derived as per the design. Post successful progress, a different world was exposed in a reverse manner, with the thought that power produced from inside controls the external circuitry. Thus solar cells came into existence. Solar cells work exactly in a reverse manner of p-n junction diode when exposed to the sunlight. This acts like a battery.

For a continuous and reliable source of an electricity generator, this battery needs to carry firm amounts of power in fixed or linear variation in the open variable atmosphere. Secondly, it must be constantly charged for endless production. For this successful conversion of sunlight into electricity, the three basic requirements have been defined as: 1. Constant absorption of high energy Photons; 2. The process of separation of Electron/ Hole pairs; 3. Raise the Electrons to energy level for conduction.

What lies beneath the inscrutable glass surface?
The PV cell directly converts the energy in sunlight into electrical energy through the photovoltaic effect. The functioning of the technology and its parts are graphically described below:

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  • The glass is tempered and has a transparent layer, which protects the electronics and PV cell from environmental damage and facilitates passage of sunlight. The generation efficiency is highly influenced by the quality of glass, as it can prevent transmittance (reflection & refraction) and surface ionization.
  • The EVA is a transparent silicon rubber lining on both sides of PV cell, providing cushion and bonding to them with glass and a back sheet. The basic aim is to prevent the cell from direct atmospheric contact, by acting as a lamination on cells.
  • PV cell is the core electronic instrument where photovoltaic phenomenon occurs.
  • Front bus and back ribbons are the metal contacts which collect the charges in conduction region from n & p sides of the cells.
  • Back sheet finds similar utility as the glass. This peculiarity protects it from moist weather and allows a better dissipation of heat from the panel.

The process to extract more from each new iteration of the solar panels to improve efficiency is continuing. But are technological innovations, only solution to reduce solar costs and make it available at granular levels? Or will it take something more for a macro level of implementation?

Maintaining Efficiency: For the constructed plants the only way to maintain efficiency is the ‘CLEANING’. The continuous and qualitative cleaning is the most efficient way to generate more and designed power from solar farms. Generally, it was seen that carelessness in cutting vegetation or inefficient cleaning led to generation loss. As per my experience, recently I have observed that due to manual cleaning the Anti-reflective coating got damaged and affects its efficiency by 2-3%. Now we are seriously thinking about cleaning the panels through microfibers so that the anti-reflective coating can be protected for a lifetime. This problem is serious as the ARC cannot be done again in-situ. So lost generation cannot be regained for the future.

Design Efficiency: The present solar market is highly under pressure to develop low-cost solar panels with high efficiency. Some more efficient technologies are required to produce high-end solar cells. Another concern is ‘solar system with tracker’. The presently available technologies of trackers are massive and is inclusive of high cost of steel. Also, it was noticed that present tracker technologies are unable to handle the undulation largely if the panels are placed in a group. So light weight trackers with the ability to handle high undulated area is need of the industry.

Land Challenges: Other big challenge for solar projects is land. The significant cost of any solar project is land, the availability of large stretch is also a challenge for big MW size projects. Some kind of reflection technologies needs to come up, so that land requirement for construction of solar farms gets drastically reduced.

Although solar presently is facing constraints, largely because it’s in on expansion phase, but it is also evident that solar is the way forward to meet the electricity needs worldwide. With proper storage solution, the day is not far when solar will be considered the most prudent and dependable technology for fulfilling energy needs. A long way to go…


Contributed by Atul Raaizada, Vice President, Operation & Maintenance, Hero Future Energies

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2019-07-06 / HFE Team

The Sooner Our Solar Sector Stands On Its Own Feet, The Better

The signing of the Paris Accord was a monumental step in our planet’s fight against climate change. 175 countries coming together to make collective commitments and efforts towards a brighter future. The challenge is huge, it has become even bigger since, but thankfully, India has well-defined targets to aim for. Our commitments under the Paris Agreement include reducing greenhouse gas (GHG) emission intensity of GDP by 33-35%, 40% of total power generation capacity from renewable energy sources and increasing tree cover.

While tree cover is a separate story, the link between the energy sector and GHG emissions is well established. As per the ‘Biennial Update Report’ submitted by India to the UN in 2018, the energy sector accounts for 73% of our country’s total emissions. The need for increased capacity and usage of renewable energy is critical and to its credit, India has been active on that front. The target of 175 GW solar and wind energy by 2022 is well within reach and recently, the government announced its intention of taking it up to 500 GW by 2030.

Our population is growing at the fastest rate globally. Against earlier forecasts of our population doubling in the next 80 years, we are now expected to reach there in half the time. As India develops, our energy demand is only going to increase. As incomes rise, more people will adopt a better lifestyle with products like air conditioners. As per the World Economic Forum, the total stock of room ACs will reach over 1 billion by 2050 – a 40-fold growth from 2016. To run these, approximately 600 GW of new power generation capacity would be required. Naturally, the environment will bear the brunt of it, if renewables have a lower contribution to this power consumption. And this is just one such example!

Such a rapid increase in demand for resources also makes transitioning to a circular economy of paramount importance. India is estimated to generate 78 million tonnes of solar e-waste by 2050. Circular economy policies address waste, design, procurement, secondary use, plastics, ocean debris, recycling, waste management among others which is the need of the hour.

Electric vehicles are going to be one of the pivotal factors in meeting our targets for COP21. One of the drawbacks often raised regarding them is that although EVs themselves are environmentally friendly, they rely on power from the grid which in a country like India is predominantly thermal based thereby contributing to GHG emissions. India, thus, needs to not only ensure increasing EV penetration but also increase the share of renewable energy in powering EVs.

While both the intention and steps being taken by the government are increasing the momentum in this sector, but a long-term sustainable view of our development should be the driving factor in the promotion of renewables. 

India is the lowest cost producer of solar power globally. However, there are some drawbacks that need to be addressed, such as the sector being heavily reliant on government subsidies, investments into land availability and evacuation infrastructure for setting up solar plants are also quite large. As a result, the industry requires financial assistance. Rather than subsidies, this assistance needs to come in the form of budgetary allocations – which can be recovered as these then become self-sustainable projects.

Plenty of other steps can also be taken to strengthen the solar industry and making it self-sustainable. For instance, long-term visibility on GST for renewable energy projects – such as a blanket rate of 5% on all renewable energy products – will help reduce the uncertainty in the industry. Further, subsidizing domestic solar panel manufacturers and promoting technological developments to increase their competitiveness globally can propel the sector. The increased demand will necessitate R&D, which will lower the prices and thus overcome the need for subsidies.

The revenues generated through the clean energy cess under the National Clean Energy Fund need to be directed for their intended purpose and support renewable energy, EVs and Make in India for renewables. Strengthening the industry with such measures is essential because this is just the start for us. We carry a strong vision and achieving it will require comprehensive efforts, be it in implementation or regulations. Not just because we want to achieve our Paris Agreement commitments but because our future depends on it.

Contributed by: Mr. Sunil Jain, CEO, Hero Future Energies.

2019-05-30 / HFE Team

Exploring Renewable Consumption Obligation

The world has its limit. The countries have their targets. And the companies have their concerns. We are moving towards a cleaner future at an impressive speed indeed but given our situation, it’s still not fast enough. To speed this up even further, several governments across the world have introduced Carbon Tax. The results have not been particularly impressive, as the tax comes with both pros and cons. And thanks to its infancy in India, we have the option to consider other alternatives as well.

India is the world’s fastest-growing economy and this growth poses some challenges unique to our nation. For instance, the population curve is only going to go up and as lifestyles improve, so will the demand for power consuming devices. According to the World Economic Forum, the demand for air conditioners in India will grow 40-fold between 2016 and 2050. Coupled with the rise in EVs and power consumption, higher carbon emissions per capita are inevitable. A solution to that can be Renewable Consumption Obligation (RCO).

The carbon tax is a per-ton tax on a company’s carbon dioxide emissions that is levied by the government. The more pollution they create, the higher they pay. This acts as a huge incentive for companies to adopt renewables and save not only on power bills but on carbon tax as well. However, for MSEs, it can be a roadblock to growth as well. Shifting to renewables is often a large one-time investment – an investment small businesses may not have the resources to make. Caught between a high carbon tax and lack of resources, they might struggle.

A way around this problem is to impose a carbon tax as well as an RCO. Renewables supplying a certain percentage of power will lower the tax burden on MSEs. To aid them even further, we can follow the example of Sweden. One of the countries where Carbon Tax has aided the economy and lowered emissions, Sweden uses the revenue collected to lower other taxes – a model which can help our MSEs. Moreover, the country also had different tax slabs for different industries. These learnings can be vital for a nation like India, which is trying to be a startup hub.

While imposing a carbon tax is a challenge, so is adopting renewables. As we learn from RE100 companies, the lack of proper renewable infrastructure is a big challenge for companies trying to switch to clean energy. Secondly, flexible policy support is required so that both small and big industry players can adopt renewables. But there are starting points for companies willing to make the change. For instance, setting fact-based public targets and reporting on progress is necessary. One should also be prepared to innovate and collaborate with other companies.

The government has already taken some steps for promotions of EVs in India. Incentives like no road tax and registration cost under the second phase of FAME are commendable and similar incentives can be introduced for renewable adoption as well. These will act as an encouragement for companies to stand by their RCO and even aim for beyond. The added expense of the Carbon Tax will add another layer of motivation to shift to clean energy.

Our situation today demands all possible measures to be deployed and something as effective as Renewable Consumption Obligation needs to be weighed properly. If opted against, other incentives to encourage the shift to renewable energy need to be promoted even more heavily. If opted for, it needs to be accompanied by other valuable initiatives like the carbon tax, subsidies, and exemption from certain other taxes. The goal is to achieve our targets – if RCO is the way to go, let’s get started with it; if not, let’s find a better fit right away.

Contributed by Sunil Jain, CEO, Hero Future Energies



2017-07-26 / HFE Team

Develop Sustainable Power Infrastructure Through Energy Diversification


Why Renewables:

With India’s rising population and climate changes, resource availability is becoming a prime concern to achieve food, energy and water security.

Given that India is a net importer of oil & gas and 65 per cent of India’s total power production capacity is thermal power. In fact, 50 per cent of industrial water used in India is for energy production. Oil & gas is widely used in modern life. Be it fueling the transportation, running factories, producing electricity/ fuel for cooking or as a by-product for fertilizers in agriculture.

By 2050, India is expected to be the world’s most populous country with 1.7 billion people, and the world’s second largest economy with a GDP of $42 trillion (in PPP terms). It is estimated that India would require to increase its annual food production by 30 per cent, to 333 million tonnes. In addition, more than 880 GW of new power generation capacity would be required by 2040.

Thus a paradigm shift is needed to manage our natural resources better. Addressing the food, energy and water nexus is being considered increasingly important without compromising sustainability. 

India has ambitious plans for renewables, unfortunately it constitutes on a smaller chunk of the energy security pie, at present. To achieve 175 GW, Government is pushing for sustainable energy for all. The point is, when there is not enough energy for all, sustainable energy is a long shot. Access to clean power, green power is likely to open up newer avenues for sustainable economic growth.

Indian Economy Deconstructed:

It is apparent that the traditional approach of managing either food, energy or water components independently is not viable. A holistic approach would increase overall resource-use efficiency, and improve productivity.

Indian rural economy accounts for about 70% of employment and 50% of GDP with agriculture being the main driver. The main workforce is dependent on a single crop round the year resulting in their low incomes. This single crop phenomenon causes distress into the system in case it fails.

Adding to their irrigational woes, is vagaries of monsoon. While a good monsoon brings cheers to farmers, it is not the case always. A sustainable solution so that farmer has income for three crops in year will result in doubling income of farmers. Today’s biggest bottleneck of not having three crops / year is lack of adequate electricity, water and other employment opportunities for their extended family. To improve productivity in irrigation, affordable power is crucial. To run pump sets using diesel is an expensive proposition. The recent scheme of loan waivers by state is not contributing to a sustainable solution, it is becoming more of a political upmanship.

Given the unique sectoral challenges, FEW security must be deconstructed to find effective solution. Governance challenges are at the heart of this issue in every region.

Complex Governance Challenges:

The waiver of farmer loans in majority of the states, dramatic protests by Tamil Nadu farmers in Delhi and a warning from the RBI Governor against loan waivers — have once again questioned the outcome farm loan write-offs.

Will farm loan waivers impact rural credit culture? Are these used by politicians as bait to win elections? Will it affect the national balance sheet?

A 2014 World Bank study on the farm loan waiver announced in 2008 by the United Progressive Alliance government found that the scheme had no significant effect on productivity and investment in agriculture, and, in fact, worsened loan allocation in districts with greater exposure to the debt waiver.

Unless farmers are given the right incentives to shift to more sustainable farming options, Indian agriculture will not be able to overcome its current crisis.

The (Source: State Bank of India) report states that the total cost of farm loan waivers to states that have announced them adds up to INR 1.31 lakh crore. Of this, the largest (INR 36,359) is by Uttar Pradesh followed by Maharashtra (INR 30,500). Andhra Pradesh, Telangana and Punjab are the remaining three states.

A report by Kotak bank estimates that around INR 1.6 lakh crore of farm loans (0.9% of GDP) could come up for waiver. Consequently, slippages to consolidated fiscal in FY2018 is likely to be around 0.2-0.4% of GDP. The report says that the loan waivers could increase to INR 2.2 lakh crore if other prominent agricultural states Bihar, Haryana and West Bengal also opt for it.

On the other hand, intent of government with UDAY scheme was ‘carrot and stick’ way of cleaning up the books of electricity distribution companies. The power ministry is anchoring this reform, which will not only resolve the debt issues of these companies, but will also improve their efficiency in services and bill collection.

The state power distribution companies have started reporting handsome savings and improvements in operational efficiency after local authorities refinanced utility debt with over INR 1.6 trillion worth of state bonds under the debt restructuring-cum-turnaround scheme, the Ujjwal Discom Assurance Yojana (UDAY), rolled out more than a year back, according to a review by the Union power ministry.

Out of the INR 48,800 crore DISCOM debt, about INR 23,900 crore was repaid till the third quarter of FY17 under UDAY and another INR 9,000 crore was repaid by Tamil Nadu recently, resulting in 65% of DISCOM debt being repaid, the analysts wrote in the report (Source: Edelweiss Securities). Farm loan waivers will amount to 2 per cent of gross domestic product (GDP) ($40 billion, or Rs 2,57,000 crore ) by the 2019 polls, as other states are also likely to follow the BJP’s Maharashtra and UP governments, according to a Bank of America Merrill Lynch (BofA-ML) report.

Although according to finance ministry, states have to fund their own farm loan waivers that is scarcely possible. Even after waiver in states, their balance sheet is stretched. States want to support irrigation by offering affordable power. While savings in interest cost from the debt restructuring is evident, consolidating the turnaround will hinge on how utilities make sharp cuts in losses from transmission and theft and close the gap between their cost of supplying power and the revenue realised. The revenue gap of DISCOM will persist, as real cash on the table is not available. With thermal operating at 55% PLF, and more and more renewables being added to the grid, DISCOM need to pay the developers. Unfortunately states have not been paying wind projects for 4 – 6 months and solar projects for 2 months – 1 year.

The disaster of combination of farm loan waivers and UDAY scheme will virtually shut off capital for any other social schemes and sustainable development of human index in states. Often there are huge trade-offs between the short-term wins of individual stakeholders and long-term holistic solutions. At each level, governance affects the choice of policies and outcomes for addressing these formidable challenges.

Are we falling back into the trap where state agriculture waiver will undo the good work of UDAY? Will productivity factor in delay in payments in bidding? Will loan waiver directly or indirectly affect power sector in the country? What is the solution to a sustainable way forward in resolving water, agriculture and power cycle?

As We Move Forward:

Is oil & gas the answer or are there any other sustainable solutions? India has more than 19 million installed water pumps – 7 million are run by diesel generators while the rest are grid-connected. As a result, more than 4 billion litre of diesel and 85 million tons of coal are consumed per annum to support water pumping for irrigation. India’s geographical advantage makes solar-powered water pumps an excellent alternative to diesel powered pumps in particular. Studies estimate India’s potential for solar PV water pumps for irrigation to be 9 million to 70 million pump sets. As many as 62,000 solar water pumps have been installed so far in the country. Hence there is a huge potential of solar pump installation in the country.

If partially subsidized ‘Use and pay’ model is introduced by state government authorities at local level for solar powered water pumps, very soon agriculture loan waiver will be a thing of past.

Any free power, free water is never a solution. The Government may provide Direct Benefit Transfer (DBT) to eligible households who use electricity for irrigation purpose. The power subsidy may be directly transferred to eligible households.  As the household alleviates from the set criterion, subsidy can be waived off.

Government should rope in Private players who would work towards offering affordable power to rural population. Affordable power is sustainable only with storage.

Decentralized solar solutions like micro grids can be deployed to address the last mile access challenge in areas with population over a lakh.  Studies convey that an average Indian rural household (monthly net income of INR 4000 – 5000) is willing to spend INR 150 per month on electricity, provided he can avail it. With reducing costs and increasing efficiency of solar technologies, Solar based Mini and Micro grids are being perceived as a durable solution. Since there are no variable costs in these projects, it will go a long way. The economic power of farmers to double and it is likely to offer them diversification of income. Micro grids would not only in help in reduction of health hazards but also help in overall sustainable development of the nation as a whole. At the next level, solar powered water ATMs if installed, will result in providing clean water for villagers, contributing to a significant lifestyle improvement.

The new energy security is in electric vehicles. Done right, there can be synergy between EVs and the grid. EVs are efficient with regenerative braking capturing energy otherwise wasted. The cleaner vehicles can be compensated through reduced registration charges, or we can even aim for mandating EVs for taxis and selected (urban) public transport vehicles. Using conventional sources for charging EV is not desirable and have to be replaced by solar, wind, hydro and hybrid technologies. Innovation is already happening in these areas.

Other considerations are India’s crude oil import bill was USD 80.3 billion this fiscal, we have also imported 28.3 million tonnes of petroleum products worth USD 10 billion in FY16. The transport sector in India consumes about 16.9% (36.5 mtoe: million tonnes of oil equivalent) of total energy (217 mtoe in 2005-06). The resultant of rising population is increased consumption of electricity, as we are at the bottom of per capita consumption. With usage of sustainable sources of energy, the import bills are likely to crash by 20%.

While renewables is the key driver of energy and economics in India, one question still remains unanswered is how will the pressure of land requirement for energy sources vis a vis land requirement for food security be handled by the government.

Contributed by Sunil Jain, CEO, Hero Future Energies





2018-07-18 / HFE Team

Circular Economy for a Low Carbon Future


Global demand for energy is increasing rapidly, because of population and economic growth, especially in emerging market economies. The energy market itself has witnessed a shift more towards renewable energy sources, with the growing concern surrounding global warming and climate change leading to a drive towards a lower carbon future, changes in consumer behavior and technological innovation. Globally usage of renewable energy in 2017 was 12 percent, which is a percent more than its average in 2016, according to a report by Frankfurt School of Finance and Management and United Nations Environment Programme (UNEP). This amounts to 1.8 gigatonnes less carbon dioxide released into the atmosphere!

Over the last 40 years, as the population grew and more consumers entered the middle class, total demand for resources is expected to reach 130 billion tons by 2050, up from 50 billion in 2014. That’s an overuse of the Earth’s total capacity by more than 400%. The global energy demand for air conditioners is expected to triple by 2050. The global stock of air conditioners in buildings will grow to 5.6 billion by 2050, up from 1.6 billion today – which amounts to 10 new ACs sold every second for the next 30 years, according to IEA report. The biggest increase is happening in hot countries like India – where the share of AC in peak electricity load could reach 45 per cent in 2050, up from 10 per cent today without action.

As the demand for power is on the upward trend, annual extraction of materials has more than tripled. In mining industry, energy cost accounts for 10-11% of production cost, thus it is central for low carbon future. The contribution of diesel and electricity in cumulative energy cost is quite significant. Annual electricity consumption in open mines in India would be 54 lakh units, and the annual diesel consumption is 8364 kL/year. Renewable energy offers an attractive alternative for remote mines not connected to the electricity grid.

A fair share of developing countries which have the privilege of abundant natural resources like solar energy or wind energy or hydro energy, find renewables to be a cheaper investment option, shielded by price fluctuations. Countries like India, China and Brazil aim to use only renewable resources in their operations in the coming years. While countries are tapping the unconventional and natural resources, not all that looks sustainable stays that way at the end of its life cycle. While solar technologies enable us to generate enormous amounts of green energy, the components used for generating electricity are themselves not biodegradable. Hence, proper handling of components, after their useful life is over, becomes imperative. The environmental imperative to reduce CO2 emissions in the energy sector, should make it obligatory for government to earmark a new investment cycle.

  • While policy makers are focusing on ramping up solar power generation, how and when would we address the prospect of used panels inundating landfills and leaking toxic waste into the environment?
  • In the process of reducing carbon emissions through output efficiency e.g renewables, other optimal measures and usage new technology, what is the real energy offset?
  • Are we trying to make this earth hollow through mining, with an objective to reduce carbon footprints?

Resources are not infinite, now is the time to address the elephant in the room. There is only one planet to live, we need an ecosystem that offers long-term flexibility, generates business and economic opportunities, and provides environmental and societal benefits. We should aim at transitioning to a circular economy where economic activities build and rebuild overall system health across scales – for large and small businesses, for organisations and individuals, globally and locally.

The circular economy concept has deep-rooted origins, however its practical applications across economic scenario and industrial processes have gained momentum in recent past, led by thought-leaders and businesses. Circular economy policies are complex; covering issues such as waste, design, procurement, secondary use, plastics, ocean debris, recycling, waste management among others. The need of the hour is a unifying, multi-sector, international business voice to provide constructive guidance to the public sector on policy-setting to accelerate the circular economy.

As large-scale solar PV deployment has taken place only recently in India, major end-of-life PV waste volumes may not be expected until after 2030, after which significant amount of waste is expected to be generated. A 2016 report published by the International Renewable Energy Agency (IRENA) projects India as the producer of over 78 million tonnes of solar e-waste by 2050. India is talking of 100 GW of solar by 2022, which equates to 303030303.030303 panels!

India’s existing rules document—E-Waste Management Rules, 2016—clarifies on the roles and responsibilities of the key stakeholders involved in the e-waste value chain. This is the set of rules referred to in most of the solar power tenders for solar projects in India. However, it does not specifically mention about the issue of management of used components of solar power systems—it only addresses household electronics and not PV panels. The challenges faced by advanced nations like Japan or the US is similar to that of India, with no specific regulation for the solar waste generated in these countries, as PV panels are still not identified by the law for specific recycling and regulation. However, in the UK and Germany, its collection, treatment and recycling have been defined in Waste Electrical and Electronic Equipment (WEEE) Directive. Germany has also established a collective producer responsibility system for end-of-life management of business-to-consumer PV panels.

As the global installations of wind turbines increase, issues related to the decommissioning of wind turbines becomes increasingly important both for policy makers and industry. Industrial-scale wind turbines are largely recyclable and contain primarily steel and copper. These materials are widely recyclable but decommissioning wind farms might be more costly than the construction phase.

The recyclable components of the wind turbine, includes its foundation, tower, and components of the gearbox and generator. But the turbine blades which have been designed to be lighter, longer and more aerodynamic for better performance, are not well designed for durability and recyclability. Some of the blades of the largest new wind turbines are 288 feet long, creating a large-scale waste reduction issue. Unfortunately, blades made from reinforced composite glass or carbon material are difficult to recycle. Unlike other wind turbine components, they do not have good scrap value. Cables also play an important part in recycling plans for offshore wind farms. Site-appropriate solutions is likely to provide cost-competitive energy.

If renewable energy is to be a genuine environmental benefit to us, then we cannot let the waste to pile up. Recycling industry can create employment opportunities and apart from generating green energy, panels can be recycled for a different purpose. At the global level potential material influx can produce 2 billion new panels by 2050. In addition to creating direct economic benefits for businesses and households, following a circular economy development path would reduce negative externalities. For example, greenhouse gas (GHG) emissions could be 23% lower in 2030 and 44% lower in 2050 compared with the current development scenario, helping India deliver on its targets announced at the Paris agreement. Other externalities like congestion and pollution would fall significantly, providing health and economic benefits to Indian citizens.

For Indians reusing, re-purposing and recycling has been our second nature traditionally. In a world that is increasingly running out of natural resources, this thinking is an asset that must be leveraged by businesses, policymakers and citizens in an organized manner. Increasing circularity in the Indian economy, by optimizing utilization of materials, energy and innovative ideas ranging from India’s traditional knowledge to latest technologies will be very important to realize India’s sustainability goals over the next decades.

Having access to conventional, more expensive means of energy gives the developed countries an edge over the third world nations. With renewable energy coming into the picture, developing countries are becoming less dependent on the big economies. Choices made today will determine India’s mid- to long-term development, and India could help meet the needs of its growing population while avoiding getting locked into resource-ineffective infrastructure. As Indians, we believe in life after death, as stated by the law of Karma– what goes around comes back to us. Here we are talking of lifecycle of products. If we do not act now, karmas of this generation will haunt our future generation.

Contributed by Sunil Jain, CEO, Hero Future Energies, renewable arm of the Hero group.




2017-03-31 / HFE Team

Investors' Paradox - Life after bids


In February 2017, the Indian renewable energy sector witnessed a tectonic shift.  Historic 750 MW Rewa solar auction in Madhya Pradesh and first ever wind bidding by state-run Solar Energy Corp. of India (SECI) for 1000 MW changed the sector’s landscape completely. Though, the jury is still out whether the bids would attract or dissuade investors in the market.

  • How much aggression is sustainable- Is there light at the end of tunnel or we are in blind alley?
  • Renewable energy sector matures, on its track of being more acceptable to the stakeholders
  • Value discovery across sectoral to begin; inefficiencies to be weeded out

On one side, some market participants consider the bids were too aggressive, even going to the extent of calling it irrationally exuberant. Fears that it might deter investors, as the doubts of profitability or returns or sustainability in the long run, remain unaddressed.

On the other hand, contrary to the aforementioned, these bids have demonstrated renewable energy to be increasingly competitive, supplemented by green benefits additionality. The outcome of the bids have cleared all doubts about grid parity across levels, whether at generation or distribution level as well as commercial or  residential level. Keeping these in mind, concerns about the dispatch-ability or the Discom’s willingness to buy renewable energy should be over.

 I intend to agree with the latter as this augers so well for the sector.

 In spite of the aggressive assumptions of the bids, these bids have without a doubt taken the renewable sector up to a new level of maturity which has been long awaited. This development was needed to bring in some more serious and credible players to lead the sector. Marred by multiple layers of intermediation and price-linked or return- linked costing, sector was witnessing lot of inefficiencies which needed this kind of jolt to come out from it.

 Though the risk of some projects not seeing the light of the day cannot be undermined, overall sector participants are likely to be forced to rethink about the business.  Factor which would become increasingly critical are:

  • Cost efficiencies & value engineering
    • RE is likely to adopt the ‘EPC’ mode or the ‘auto’ mode. Developers would be needed to go deep-down the value chain, assess costing of each component on one hand and the cost of high quality sites on the other hand.
  • Optimization of resources including land
    • Minimizing the land area used per unit of output (Larger size modules etc.)
  • Deployment oflatest technology/engineering
    • Deployment of new age WTGs, more efficient modules, yield enhancement software/hardware – viz. trackers
  • Asset maintenance & extraction of better yields
    • Optimization of Uptime with improved equipment life with predictive & preventive maintenance practices, more use of analytics.
  • Economies of scale
    • Identify big scale projects at a single location
  • Incremental Innovations
    • Bring together contributions from each functional area & weed out inefficiencies to make better business models/structures

 Last but not the least is the fact that we just hope that not many market participants have taken speculative calls on equipment costing, forex, interest rates, as the same could not only result into creation of bad assets but earn a bad name for the sector in the country.

Contributed by Naveen Khandelwal, Head – Investment & Strategy, Hero Future Energies




2017-04-28 / HFE Team

GST Preparedness by HFE



The renewable energy sector presents a unique opportunity to meet climate goals while fueling economic growth, and hence, the need for scaling up renewables is now undisputed. But, with the implementation of a unified Goods and Services Tax (GST) regime, the power producers will be plagued by the policy change and regulatory bottlenecks. Within days of the Parliament passing the Constitution Amendment Bill for rolling out GST in India, HFE has started preparing for the impact.

The sector currently enjoys various fiscal incentives that will come to an end in the new GST regime. The indirect tax reform through GST could, therefore, hike renewable energy costs and pricing.

Main taxes to be subsumed for the Renewable Energy Sector

With India gearing up to introduce a comprehensive Indirect tax regime under GST, all existing Indirect taxes, barring a select few, would be subsumed into the new GST, especially for renewables.

  • Excise Duty
  • Service Tax
  • VAT/CST of all states
  • Additional custom duty and special additional custom duty
  • Entry tax
  • Purchase tax
  • Octroi

Taxes on sale of electricity have been proposed to be kept outside GST. In such case, the electricity generated by renewable sources would continue to be outside the GST regime.

Making Electricity Taxable as the Solution

Electricity is, at present, exempt from Excise duty and VAT. Only electricity duty is levied on its consumption by the States. Looking at the present scenario, keeping electricity out of the GST Law will increase the cost of generation and distribution of power, as credit for taxes paid on inputs used in these processes will be disallowed.

Thus, various taxes that are levied on goods and services procurement, on both Operation & Maintenance charges and Capital procurements, get rooted in the cost of the end product. Moreover, the advantage presently available to HFE, which is purchase of goods for the generation and distribution of power from other States at a concessional rate of tax (CST) of 2% shall no longer be available under the GST regime.

If electricity is taxable under GST, full credit would be available for the taxes paid on the inputs, which will significantly reduce the cost of power projects and consequently the cost of power generation and distribution. Thus, the lower costs will also benefit the downstream industries.

The Road Ahead For Power Producers

The Government has always strived to promote the renewable energy sector and accordingly, various exemptions have been provided to the sector. A few of these include:

Renewable Energy

  • Customs duty exemptions/concessions on import of goods
  • Excise duty exemptions/concessional rates procurement of goods to be used in production of renewable energy
  • Exemption/ concessional rate under various State VAT legislations on sale of goods to be used for generation of renewable energy


  • Exemption from BCD on solar panels, cells and modules. ACD and SAD provided to all items of machinery, transmission equipment, etc. used for setting up of solar power plant.
  • Excise duty exemption provided to all items of machinery, transmission equipment, auxiliary equipment etc. used for setting up of solar power plant.
  • Various states charge concessional rate of VAT @ 5% on renewable energy devices and spare parts/components. Certain states like Rajasthan provides exemption to solar energy equipment and plant and Machinery including parts thereof, used in generation of Electricity from Solar Energy or Wind Power Lower rate of VAT has been provided on inputs for bio-fuel sector in few States.


  • Concessional rate of BCD of 5% and exemption from ACD and SAD provided on import of various components used by a wind power plant like wind operated power plant
  • Excise duty exemption provided to specified goods/parts used for manufacture on products which may be used in a wind operated power plant

Solar power equipment enjoys zero customs duty, while a 5% duty is levied on importing wind energy equipment. Being on ‘zero’ custom status other duties like countervailing duty or special additional duty are also ‘zero’. And the renewable sector is also exempt from VAT and excise duty. But all this will change with the GST and tariffs will go up by at least 10%.

Preparedness for GST

HFE has made presentations before the government to work out a possible scenario of these impacts and keep renewable sector outside GST, and this matter will be looked into.

If the council considers renewable power as a “deemed export” or merely assign a “zero” GST rate on clean energy, it will allow HFE, including other power producers, to get a refund of all taxes previously paid on the raw materials and services. There is no excise duty on solar panels, but states levy 0-5% concessional VAT on them and there is a 2% central sales tax in case of inter-state supply.

In the longer run, GST would result in reduced costs of operations making the renewable energy sector more competitive. This anticipated simplification and ease of trade is also expected to bring in faster economic growth for the country. All said, the ground level reality is that India’s sustained economic growth continues to drive demand for power, being as one of the significant contributors to the country’s GDP, and with the Government’s focus on “Power for all”, the need to prepare, participate and contribute to its success, is the only way forward.

Contributed by Debnath Mukhopadhyay, Head Finance & Accounts, Hero Future Energies



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2016-04-28 / Webmaster

Wind vs solar energy – making the right choice


The choice between wind turbines or solar modules is never a choice of selecting a better technology at face value. Both come with their own strengths and weaknesses and both can be incredibly valuable. But choosing one, is a common question of contention among various stakeholders.

However, industry experts point out that currently, wind power generation is a step behind as developments in solar override developments in wind. Among other reasons, the delay in signing power purchase agreement and the new draft policy of re-powering the turbines below 1MW capacity, is keeping wind power developers in a dilemma. Close to 550 MW of wind generation capacity is lying idle in Maharashtra as the state has refused to sign power purchase agreement with the producers. Furthermore, the reduction of levelized tariff from 5.92 kwH to 4.78 kwH in the state of Madhya Pradesh for all the wind power projects commissioned this financial year, have made these projects unviable.

Adding to the industry woes, the new draft wind re-powering policy expects wind turbines below 1 MW of capacity to be replaced. However, the incentives offered on it are insufficient and the overall cost of re-powering is likely to be greater than the cost of setting up a green-field facility, including the cost of power substations.

Among the various schemes and incentives to promote the use of renewables in India, the government recently affirmed sanctioning of 30% capital subsidy for rooftop solar installations to residential, government, social and institutional segments. Commercial and industrial entities are excluded from this scheme, ensuring that the funds are made available to those who are genuine need of funds. The doubling of coal cess in the Union Budget 2016-17 is likely to amass INR 18000-20000 crore annually. Out of these, approximately INR 5000-8000 crore will be diverted to renewable sector, primarily solar, to fund the solar rooftop subsidies, depriving wind energy altogether.

A study by Bloomberg New Energy Finance echoed that the pace of investments of renewables in India soared to $10.9 billion in 2015 from an annual average of $8 billion over the preceding three years. Solar, leading the front, outperformed wind for the very first time in attracting capital.

Particulars Wind Solar
Total installed capacity (GW) March 2016 26.7 6.7
Target by 2022 (in GW) 60 100
Investments till 2015 (in $ billions) 4.1 5.6

*Source:-Ministry of New and Renewable Energy & Bloomberg Energy Finance

It’s time for us to refocus our efforts towards wind energy. A long term policy horizon across different states is the way forward. India already has an advantage in wind power and accounts for over 60% of the renewable energy capacity in the country. Cutting edge technology such as high capacity turbines and efficient windmill blades are all manufactured and developed indigenously. Extension of incentives like Generation Based Incentives and accelerated depreciation benefits beyond March 2017 would be a welcome step to add capacities in the wind energy sector.

Technologies such as wind and solar energy are heavily reliant on specific weather conditions. In such a situation, ‘hybrid’ offers a reasonable solution. A hybrid, in normal parlance, is a system paired with a smart grid, which effectively connects two or more forms of renewables together for a greater balance in energy supply. Countries such as Spain, Morocco, China and US have successfully implemented this notion.

In a hybrid set up, storage is vital as solar and wind energy balance each other. As renewable installed capacity grows, the grid may not be able to absorb all the power produced instantly and the need for storing the generated energy will become increasingly imperative. Storage could also be used as a spinning reserve to stabilize grid from the intermittent renewable energy. One concern for policy makers is that storage costs are high. At this moment, storage is at an inflection point seeking investments in research and development. The government must channelize its efforts under the storage mission in development rather than deployment. Furthermore, in a hybrid combination, transmission costs are optimized; a 1 MW of installed solar and wind power each at the same location can result in a third of savings.

There is a clear indication that hybrid could be one of key factor for future deployment. Remember, energy consumption can be reduced significantly through energy conservation and energy efficiency techniques, thereby having a direct bearing on emission reduction at lower cost. All of this is reason enough for us to collectively  work towards conservation.

Contributed by Sunil Jain, CEO & ED, Hero Future Energies




2016-06-08 / Webmaster

E-commerce and solar reflect parallel growth stories

The e-commerce trajectory

Until few years ago, the online marketplace was an unchartered territory for Indian consumers. When the journey began, the e-commerce sector was restrained by low internet penetration levels, lack of awareness and lack of development and confidence in the payment systems.

Today, that no longer holds true. Increasing internet and mobile penetration, growing acceptability of online payments and favorable demographics have provided the e-commerce sector in India a unique opportunity to fundamentally alter the way companies connect with their customers. Fuelled by the smartphone boom and expanding data connectivity, India is among the top Internet markets globally in terms of users. A study by Google points out that out of 350 million internet users in India, 152 million access internet through their handheld devices. India will be home to 500 million internet users by 2017, with 80% being mobile users. The battle for India’s e-commerce market therefore, goes way beyond retailing.

Solar on the same path

Let us now look at the growth of the solar market in India. Industry experts are drawing parallels between the rise of e-commerce and solar market in India, across the business lifecycle. In a way, they reflect similar attributes. When e-commerce entered the arena about 15 years ago, the sector was perceived as a bubble that would soon burst and investors were hesitant to invest in it. Consumer, too, feared buying from online retailers. In 2010, funds started pouring and that is when the industry gained momentum and over a period of time started scaling up. The growth was supported by consistent investments as well as reforms. Today, the sector is attracting more attention from indigenous participants. The battle is fierce with firms competing for higher gross merchandise value (GMV). With the government allowing 100% FDI in the marketplace model, international giants like Amazon have had the confidence to invest in India and we now see a definite and a capable ecosystem falling into place.

Similarly, the solar sector has practically taken of from scratch about a decade ago and is today driven by the decline in the cost of technology and a wider acceptance to tap the free resource before the fossil fuels are exhausted. From 2007 to 2009, the industry failed to attract significant investments. From 2010, there was a change and capital started to flow in. According to Bloomberg New Energy Finance study, in 2015 investments in solar reached $5.6 billion — the highest ever – primarily driven by large scale projects. The falling solar tariff, (lowest being 4.34 per unit) is a resultant effect of drop in capital costs. The price of solar modules have gone down by 15 – 20 % in the last year.  The increased spends by private players globally in R&D at the cell and panel level, is partly the reason of driving the tariff below INR 5. India too witnessed a growth of 9% and 7% in corporate and government R&D investments respectively from 2014 to 2015.

As the industry matures, we expect technology to drive the market, ensuring project profitability and to thrive and prosper in a favorable milieu. The initial target of 22 GW of installed solar power capacity is now revised to 100 GW by 2022 and we can envisage solar to drive the energy security issue at granular levels. This is probably the best time for the industry to focus on developing and nurturing this sector by creating a favorable environment for all the stakeholders.

The way we see it now, the solar market is treading the same path as the ecommerce sector when it took off. It is highly likely that, similar to the online model, solar will transpire to be an indispensable part of the daily life of the masses. Will it be able to sustain and scale new heights? Time will tell.

Contributed by Sunil Jain, CEO & ED, Hero Future Energies



2016-03-09 / Webmaster

Investing in maintenance is critical to safety


A stable and reliable electrical generating source serves as the backbone of operations across any facility or manufacturing plant. Similarly, a well-designed, professionally installed and effectively bonded earthing system is seminal for any plant location, to ensure that no one is exposed to the dangers of an electric shock. Though earthing occupies a very important position in the safety clause while awarding a contract, it seldom receives the attention it deserves. Earthing is often neglected, as there is no direct and immediate impact of earthing into electric systems. The impact is felt at a later stage when the system earth points get corroded due to prolonged use and no longer have the capacity to take the imbalance in the load.

Nature’s most precious gift to mankind is earth, which, by its inherent nature easily absorbs the electrons and improves the durability of the plant and machinery, in case of machine failures or contingencies. In technical terms, earth is a Natural Potential Zero – a point where electric charge becomes neutralized or sunk. It is therefore critical that during the design stage, adequate attention is given to earthing in order to safeguard the machinery and systems.

There are different types of earthing and that is dependent on the functionality of the equipment. During the construction phase, two surfaces that are not perfectly matched or welded as per the requirements can result in faulty earthing. This can have an adverse impact on the operational efficiency of the plant at a later stage. The solution is simple. Joints at the contact surface and moisture content are two major thrust factors responsible for providing appropriate earthing point. Perfect contact between two overlapping surfaces using a combination of joints, bolts and clamps can help solve 80 per cent of the problem arising during the construction phase, with proper laying of cables, strips, pits, base plate and electrode joints solving the remaining. Charging of the earth pit with water and salt is an effective solution during the maintenance phase. Both these techniques are inexpensive and are effective enough to improve the plant life.

A very popular non-conventional source of maintenance is the use of customized mineral salts in the bore along with electrode tube. Though this addresses the earthing needs by maintaining moisture content for a long time, the chemical reaction can lead to corrosion in electrodes, which needs to be replaced periodically.

Maintenance is essentially a relative function of time and cost and holds its own importance in the lifecycle of machinery. While there is enough awareness about the importance of maintenance, all of us in the business need to ask ourselves are we investing enough in this direction?

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Contributed by Mr. Atul Raaziada, Vice President, Operations and Maintenance, and Projects, Hero Future Energies

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