Recent Media Coverage

2019-11-15 / HFE

Strategic investment of US$150 million funding growth portfolio for HFE

Hero Future Energies (“HFE” or the “Company”), the leading clean-tech company, announces a US$150 million strategic investment to fund the expansion of its renewable energy portfolio, including in selected international geographies

  • US$150 million strategic investment by Abu Dhabi Future Energy Company (“Masdar”), a global leader in renewable energy projects, sustainable real estate, sustainable mobility and waste to energy
  • Second strategic investment in HFE since 2017, following initial US$125 million made by International Finance Corporation (IFC), part of the World Bank

Consolidated press coverage 

https://www.cityam.com/heros-green-energy-arm-relocates-to-london-after-150m-investment/

https://timesofindia.indiatimes.com/business/india-business/hero-future-energies-get-usd-150-mn-strategic-investment-from-masdar/articleshow/72007029.cms

HFE Investment Media Coverage - 11.15.2019

2019-11-11 / HFE

Unanswered questions on India's EV strategy: Rahul Munjal, Chairman & MD, Hero Future Energies

https://energy.economictimes.indiatimes.com/news/power/unanswered-questions-on-indias-ev-strategy-rahul-munjal-chairman-md-hero-future-energies/71738053

2019-11-11 / HFE

Solar tenders and reverse auctions in India - the way forward: Sunil Jain, CEO, Hero Future Energies

https://energy.economictimes.indiatimes.com/news/renewable/solar-tenders-and-reverse-auctions-in-india-the-way-forward-sunil-jain-ceo-hero-future-energies/69883713

 

2018-06-27 / HFE Team

Hero Future Energies goes global, to enter renewable market in 7 countries

Hero Future Energies, the clean energy arm of the Hero Group, is expanding its presence in seven countries including South East Asia and Africa which are opening up their renewable energy market. HFE plans to add one Gw of solar and wind power projects every year, of which 20 per cent of the capacity would come from its international projects.

HFE is the first Indian independent renewable power producer to expand its business in other countries.

https://www.business-standard.com/article/companies/hero-future-energies-goes-global-to-enter-renewable-market-in-7-countries-118062500975_1.html

2018-04-30 / HFE Team

India's first Wind - Solar Hybrid plant by HFE

Chairman and Managing Director Rahul Munjal inaugurated  India’s first large-scale solar and wind energy hybrid project in the state of Karnataka in the month of April 2018.

https://www.pv-tech.org/editors-blog/hero-launches-indias-first-solar-wind-hybrid-project

2018-02-25 / Webmaster

Pre Union Budget 2018 Expectations

Hero Future Energies Chairman and CEO’s Pre Union Budget Coverage.

 

Hero Future Energies NDTV – Rahul Munjal

Hero Future Energies Zee Business – Sunil Jain

2018-02-25 / Webmaster

Post Union Budget 2018 Reactions

Post Budget 2018 Coverage of Chairman Rahul Munjal and CEO Sunil Jain.

 

India Today Post Budget – Rahul Munjal

NDTV Post Budget Coverage – Sunil Jain

2017-11-01 / Webmaster

SBI sanctions ? 2,317 crore for financing solar power projects

State Bank of India on Monday announced sanction of credit facilities amounting to ?2,317 crore to corporates for financing Grid Connected Rooftop Solar projects under an SBI-World Bank programme.

This funding will create solar power capacity aggregating 575 MW.

India’s largest bank sanctioned loans to JSW Energy, Hinduja Renewables, Tata Renewable Energy, Adani Group, Azure Power, Cleantech Solar and Hero Solar Energy.

SBI Chairman Rajnish Kumar said players in the renewable energy space can avail loans for establishing grid connected rooftop solar projects at the bank’s marginal cost of funds based lending rate plus 15 basis points.

The bank currently has a renewable energy loans portfolio of ?12,000 crore with nearly nil non-performing assets (NPAs), he added.

Kumar said care will be taken to extend loans only to those renewable energy projects that are viable.

Read Full Article at : http://www.thehindubusinessline.com/money-and-banking/sbi-sanctions-2317-crore-for-financing-solar-power-projects/article9932710.ece

2017-10-25 / Webmaster

Wind power is now cheaper than coal-based electricity in India – but the industry is worried

After a steep fall in solar power prices in India, it is now the turn of wind energy.

During an auction conducted last week by the state-run Solar Energy Corporation of India for 1,000 megawatts of wind power installations, tariffs fell to a new low of Rs 2.64 per unit, down 24% from even the previous low of Rs 3.46. The prices are now competitive with the solar energy segment which hit a record-low of Rs 2.44 per unit in May, also during auctions conducted by Solar Energy Corporation of India. Renewable energy in India is now cheaper than coal-based power, which costs around Rs 3.20 per unit.

Earlier this year, the Narendra Modi government had amended the method to determine wind energy tariffs, allowing the market to fix prices rather than having a regulator do it. This new system has led to a slide inprices. “The main reason is simply increased competition,” renewable energy consultancy Bridge to India said in a note referring to the price wars.

This tariff crash comes at a time when India’s wind energy sector is already in the doldrums.

Following the introduction of the new tariff-determination system, the central and state governments – at least until last week – hadn’t conducted any wind farm auctions, leaving companies without a pipeline of projects to work on. Energy distribution firms have also wanted to pull out of previously-signed power purchase agreements, instead pressuring power firms to sell at the newly-discovered low rates for renewable energy. As a result, the sector has seen a sharp fall in new capacity additions in 2017 compared to the previous year.

The slowdown has also driven down wind turbine costs and lowered the expectations of return on investments, resulting in tariff reduction, Sunil Jain, CEO of Hero Future Energies, told Quartz. Based in New Delhi, Jain’s wind farm company has around 500 MW of installed capacity. The availability of more efficient and advanced wind turbines has also helped, Jain added.

While falling tariffs make renewable power more attractive to consumers, it creates risks for investors and lenders, Bridge to India said. Energy distribution companies, which have already signed power purchase agreements at higher rates, will also take a hit. “We believe that the new wind tariffs are too aggressive,” Bridge to India said.

Read Full article at: https://scroll.in/article/853874/wind-power-is-now-cheaper-than-coal-based-electricity-in-india-but-the-industry-is-worried

2017-10-25 / Webmaster

Hero Group set to buy wind energy assets of Bhilwara

The Hero Group is close to acquiring almost the entire wind energy portfolio of the LNJ Bhilwara Group, helping the buyer emerge as one of the biggest players in the rapidly growing sector that has seen large M&A deals in recent months.

The acquisition, on the verge of being finalised, follows several deals since last year in the sector, involving the Tatas, Sun Edison, CLP Holdings and other companies. Several Indian and foreign groups including the Adanis and Softbank are also considering opportunities in the sector, which has expanded rapidly as companies have bid aggressively with razor-thin margins to grab auctioned projects by offering rockbottom tariffs. 

Hero Future Energies (HFE) will acquire the portfolio of Bhilwara Energy Ltd (BEL) in an allcash deal, sources close to the development said. The size of deal is not yet known as some details remain to be worked out. It is acquiring 83.5 MW of wind projects out of BEL’s total of 103.5 MW across two states – a 49.5 MW project in Satara, a 14 MW one in Bhendewade, both Maharashtra, and a 20 MW project in Jaisalmer, Rajasthan.

This will take the Hero Group’s total portfolio to around 1200 MW, half of it in wind and the rest in solar energy, making it one of the largest renewable energy companies in the country.

2017-10-25 / Webmaster

India’s solar anti-dumping saga: The industry anticipates

India’s solar sector is on tenterhooks at the moment as it awaits the results of an anti-dumping investigation into solar cell imports from China, Taiwan and Malaysia. When the inquiry was first announced, many brushed off the threat, believing that India’s 100GW by 2022 solar target was far too precious for the Central government to consider a move that could in any way hinder its progress. However, at Renewable Energy India Expo near Delhi last week, many of the developers, manufacturers or EPC firms that spoke to PV Tech were confident that some form of trade barrier would be brought in. Top level representatives from the likes of Vikram Solar, Gensol, Sterling & Wilson, Hero Future Energies and many more were all anticipating the government to rule in favour of duties, but the actual outcome of course remains highly uncertain. An executive of one Indian manufacturer even told PV Tech that he was 99.9% sure duties would come, but admitted that experience tells him anything could happen. Another developer remarked: “Everybody knows it’s coming. There are certain numbers which are floating around, but nobody knows the real number and if anybody claims to know the number they are just fooling themselves.”

Jasmeet Khurana, associate director, consulting, Bridge to India, said: “Up until a few weeks ago, it seemed that Indian government was fairly convinced about imposing anti-dumping duties. However, there have been several changes recently. Both the Minister for Power and Minister for Commerce have been changed. This is causing delays and the market is hoping for a rethink from the government.”

2017-10-25 / Webmaster

The world's largest two-wheeler manufacturer is prepping for a new ride in renewable energy space

It is almost ironical that on one hand the Munjal family, with Hero MotoCorp, is the largest two-wheeler manufacturer in the world and on the other it wants to be the biggest player in the renewable energy market in the country.

Incorporated in October 2012, the Hero Group’s Future Energies (HFE) – spear led by the third generation of the Munjal family – is generating and distributing renewable sources of energy, thus creating an alternative for the harmful fossil fuel economy.

“We are exploring options in other parts of the world, we intend to globally grow both in solar and wind. Our expansion plans in storage space are also shaping up satisfactorily,” says Rahul, who was the recipient of the Renewable Energy Leader and Entrepreneur of the Year-2015 by World CSR Congress. “The growing competition in the sector is not a limiting factor but rather a growing opportunity for sectoral growth,” he adds.

Full Story at: https://economictimes.indiatimes.com/small-biz/startups/the-worlds-largest-two-wheeler-manufacturer-is-prepping-for-a-new-ride-in-renewable-energy-space-hero-future-energies/articleshow/60253648.cms

2017-09-08 / HFE Team

Sliding tariffs mean more power, but is the trend sustainable?

A number of strong factors are boosting the growth of solar and wind power in India, but doubts persist over viability

 

In 2013, Rahul Munjal, chairman and MD of Hero Future Energies, part of the Hero Group, was talking to the India team of one of the largest consulting firms in the world to give them a mandate. The energy vertical of this firm, which Munjal doesn’t name, had all its leaders focussed on conventional energy. This April, Munjal was talking to the same firm again, when he learnt that their energy vertical now has more partners looking at renewable energy (RE) than thermal power.

“This is the kind of paradigm shift that has taken place in India’s energy sector,” says Munjal. “Renewables are now the preferred source of power in India, not just due to issues of morality and ethics, but because it is economically viable.” FY2016-17 has seen the addition of a record amount—more than 11 GW (1 GW equals 1,000 MW)—of RE capacity, mostly in the solar (5,526 MW) and wind power (5,400 MW) sectors; it has, for the first time, caught up with thermal power capacity added during the same period.

This is a long way from a decade ago when RE technology was expensive and tariffs high—Rs17 per kWh (kilowatt hour), compared to Rs3-4 for thermal power. “There was criticism that RE wasn’t a business to be done and there was doubt about whether India will even reach the earlier RE target of 20 GW that it had set for itself,” says Inderpreet Wadhwa, CEO of Azure Power, an India-focussed clean energy firm.

But, over the last few years, a concerted governmental push to promote clean energy, access to advanced and cheap technology (such as solar photovoltaic cells from China), and the availability of global equity funding have made RE a sunrise sector. In 2009-10, the government’s target of installing 20 GW by 2022 had appeared impossible. Compared to that, the present government, in 2015, revised the target to 175 GW by 2022. Consequently, the sector has received investments of $14 billion (debt and equity) in 2016-17, double of what it had received in the previous fiscal.

mg_96513_energy_mix_280x210.jpg

Sunny Side
Since 2010, the cost of Chinese photovoltaic cells (PVCs) have fallen by around 80 percent. China, the world’s largest market for solar panels, has a production capacity of 90 GW, says Sumant Sinha, chairman and CEO of ReNew Power Ventures. But the actual global offtake is only 60 to 65 GW, due to a slowdown in RE capacity addition in China and Japan. The excess capacity is expected to keep PVC prices down. This will benefit India.

Anil Sardana, managing director and CEO of Tata Power says falling cost of PVCs and other expenses of setting up a plant, and the cost of capital, which has become cheaper, “make a good case for tariffs to be low”. That the rupee has been appreciating against the dollar also makes it cheaper to import equipment. Sinha says the total capital cost of developing 1 MW of solar energy has fallen by as much as 20 percent in the past five years to around Rs4 crore.

Since 2010, solar power tariffs have fallen by more than 75 percent. In 2017, tariffs for projects awarded through a reverse bidding process by state and central governments have touched a new low twice: In February, the tariff for a 750 MW project in Rewa, Madhya Pradesh, fell to Rs3.30 per kWh (levelised for 25 years); in April, a 250 MW project in Kadapa, Andhra Pradesh, saw tariff fall to Rs3.15 per unit; in May, the lowest bid at an auction to develop 250 MW at the Adani Renewable Energy Park in Bhadla, Rajasthan, was of Rs2.71. These prices have given solar power grid-parity with thermal, making it attractive for state electricity distribution companies (discoms).

mg_96515_energy_grid_280x210.jpg

Wind energy prices, too, have fallen since 2010. In February, projects totalling 1 GW were tendered at a tariff of Rs3.40 per kWh. What’s interesting is that this decline is for capacity to be commissioned after FY18, when the projects will not enjoy government sops like generation-based incentives, and accelerated depreciation at the rate of 80 percent in the first year (revised guidelines allow for 40 percent). Sinha says the unit economics of wind energy have improved with new technology enabling greater plant load factor (PLF) even at sites with low wind intensity.

It isn’t only global investors who are eyeing India’s clean energy sector; domestic companies are also taking note. Highlighting this is Tata Power’s acquisition of Welspun Energy’s clean energy capacity of 1,140 MW, last June, for Rs10,000 crore. Sardana says Tata Power’s portfolio of solar assets was “insignificant” and it would take long years for it to reach the acquired numbers organically. “The role of thermal power is to meet base-load requirements, whereas RE meets the variability above base load,” he says. “Considering that demand increase has been subdued compared to supply-side growth, thermal capacity utilisation has been adversely impacted. It is unlikely that any new thermal capacity would be added in the next few years beyond what’s in the making already.”

Flip Side
But the question is: While declining tariffs are good, at what point do they become unviable? “We aren’t confident that the current low levels [of tariff] are sustainable, given the cost of debt, even though such cost has come down in recent times,” says Ankur Ambika Sahu, co-head of Goldman Sachs’ merchant banking division in Asia Pacific. Goldman Sachs is a majority stakeholder in ReNew, and Sahu its nominee director on ReNew’s board. Such low tariffs may not continue to attract capital either. “There is bound to be a process of rationalisation when bids don’t see new capital coming in,” he adds.

Tulsi Tanti, chairman and managing director of Suzlon Energy, makers of wind turbines and a wind energy turnkey company, says that while costs and tariffs have fallen, so have margins. Earlier, expectations of internal rate of return (IRR) was high due to higher risk; developers would chase an IRR of 16 to 18 percent. But now, with lower risks, developers are content with 14 to 15 percent, even 13 percent. “This is the minimum level that has to be maintained, otherwise the volume of investments will be impacted,” he says.

mg_96517_investment_in_clean_energy_280x210.jpg

But there are indications that IRR is slipping further. A report by credit rating agency ICRA says a project with a levelised tariff of Rs3.15 per kWh can earn an IRR of less than 10 percent, based on an assumed capital cost of Rs4.5 crore per MW and a PLF of 21 percent. “The viability of such tariff for project developers from a credit perspective will be critically dependent on the availability of long tenure debt [18 to 20 years post project completion] at a cost-competitive rate, the ability to keep the cost of PV modules within budgeted levels, and execute projects in a time-bound manner,” writes Sabyasachi Majumdar, senior vice president and group head, ICRA, in the report.

One of the reasons for falling tariffs is the lack of adequate projects coming up for bidding, due to a subdued demand for RE power and an abundance of coal. State discoms are also waiting for RE tariffs to stabilise, since no one wants to overpay. Discoms are also not penalised for not meeting their renewable purchase obligations. (States and union territories, collectively, fall short of their cumulative 2016-17 target by 39 percent, or close to 6,900 MW.)

Discoms also do not pay producers on time. A report by Mercom Capital Group, a clean energy market intelligence firm, estimates that discoms in Tamil Nadu, Andhra Pradesh, Rajasthan, Madhya Pradesh and Telangana have delayed payments by three to four months.

“There are a lot of underlying issues that the government needs to address, like discom financials, transmission and evacuation issues, on-time payments and payment guarantees,” says Raj Prabhu, CEO of Mercom Capital.

“Limited capacity drives fierce competition, and India is one of the best RE markets that global capital is chasing,” says Wadhwa. “So, there is some irrational exuberance.”

mg_96519_renewable_energy_280x210.jpg

The Future
Although India added more than 11 GW of RE in 2016-17, it was behind the government target of 17 GW; while additions in wind energy exceeded the target, solar power fell short because of delays in awarding and execution of projects.

As on March 31, the installed capacity for solar and wind energy is close to 60 GW; this means another 100 GW needs to be added over the next six years, at an average of 17 GW a year. ICRA estimates solar energy addition to increase to around 7.5 GW in FY2018, sustained by the momentum of projects already in the pipeline; 40 percent of the 100 GW-target is expected to be met by rooftop solar projects. According to a report by Bridge to India, an RE consulting firm, the cumulative installation of rooftop solar in India is about 1,247 MW, as on December 31, 2016. The report estimates that 11.9 GW of rooftop capacity will be added by 2021.

The industry expects FY18 to be a lull year for wind power, with growth picking up in 2018-19. The uncertainty caused by the shift from feed-in tariffs to reverse auctions has delayed projects being tendered. Tanti, however, believes that 5 GW can be added this fiscal if more projects are announced and awarded soon.

The current pace of capacity addition will be insufficient to meet the 2022 target. At the moment, the industry is expecting the government to make a dash closer to the finishing line, and is pinning its hopes on a proactive power minister, Piyush Goyal, to channelise the tailwinds.

(This story appears in the 09 June, 2017 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)

Original text from here – http://www.forbesindia.com/article/renewable-energy-special/sliding-tariffs-mean-more-power-but-is-the-trend-sustainable/47069/1

2017-05-31 / HFE Team

Hero Group To Set Up Solar-Powered Charging Stations For Electric Vehicles

Hero Group To Set Up Solar-Powered Charging Stations For Electric Vehicles

Solar-powered charging station in Toronto Canada. (Photo Credit: Sass Peress, Renewz Sustainable Solutions Inc.)

Hero Future Energies (HFE), a renewable energy producer backed by the Munjal family is set to enter the electric vehicle (EV) charging sector in India. Chief executive officer Sunil Jain said that the company plans to enter into the battery storage business to set up charging stations across the country.

This move coincides with a proposal from the Department of Heavy Industries (DHI) to set up standard specifications for EVs and charging infrastructure under the name ‘Bharat Charger’.

Technology is changing very fast. We are looking at solar charging stations.

Hero Future Energies CEO Sunil Jain

HFE said that their plan was to charge batteries and replace drained batteries in vehicles after a trip was completed.

At the same time, Pawan Munjal-promoted Hero Motocorp, which acquired a 30 per cent stake in Bengaluru-based electric scooter manufacturer Ather Energy, plans to enter the charging sector, reportsLivemint.

The government is planning to have its EV policy in place by the end of 2017, and further set the taxation rates for EVs at 12 per cent as opposed to 28 per cent for petrol and diesel vehicles in the upcoming Goods and Services Tax (GST) bill.

Original text here – https://swarajyamag.com/insta/hero-group-to-set-up-solar-powered-charging-stations-for-electric-vehicles

2017-05-31 / HFE Team

Urban Reality: Is India's solar story really shining?

Watch experts share their views on whether India’s solar story is really shining and whether sunny days are ahead for solar power in India.

Watch the interview of Vinay Rustagi, Managing Director, Bridge to India, Ivan Saha, CTO and President, Vikram Solar, Sunil Jain CEO, Hero Future Energies and Kanika Chawla, Sr. Programme Lead, Council on Energy, Environment and Water with Manisha Natarajan on CNBC-TV18, in which they shared their views on whether India’s solar story is really shining and whether sunny days are ahead for solar power in India.

Link to the Video – http://www.moneycontrol.com/neusiness/economy/urban-reality-is-indias-solar-story-really-shining-2283461.html

2017-05-31 / HFE Team

GST may push up cost of solar power projects

The goods and services tax may increase solar energy project costs by 12%-18% and generation costs by 40-50 paise per unit, some industry leaders said, although the government said the new taxation regime won’t have much of an impact on them.

However, officials said even if costs increase, it won’t affect project economics because the additional charges can be passed on to customers. “Following GST, solar projects will be about 18% costlier on an average, while cost of generation would go up by around 20%. We have estimated the incidence of GST to be around 23%-25% on various inputs for the segment,” said Ratul Puri, chairman, Hindustan Power Projects.

 

“It would require project developers to go back to banks for additional funding for projects under construction. It might require a minimum of three months to get additional funding, thus delaying projects.” Power, coal, renewable energy and mines minister Piyush Goyal had said earlier the GST rates would not have much impact on his sectors.

Sunil Jain, CEO at Hero Future Energies, said solar modules, which weren’t taxed earlier, will have an 18% levy, while inverters – a major component in solar projects used to convert direct current into alternating current – would now be taxed at 28% instead of zero. Taxes on cement and other materials have been increased, he added.

“Our calculation suggests that project costs would go up by at least 16% on an average, since electricity has been excluded from GST and thus would not qualify for input tax credit. This translates into a 40-50 paise per unit rise in generation costs,” he said. “The new regime will result in an increase of 18% in module cost, about 12% in inverter cost and 3% in all service costs – increasing overall project cost by about 12%,” said Vinay Rustagi, managing director, Bridge to India, a consulting firm. “New rates would hit more than 10 GW of ongoing utility scale projects and pose a threat to their viability.”
 
Ashvini Kumar, managing director of Solar Energy Corporation of India, the company that arranges solar project auctions on behalf of governments, doesn’t anticipate any stumbling blocks. “Almost all power purchase agreements include a clause that allows hikes or declines in power generation costs as a resultofchangein laws – GST in this case – to be passed on to consumers,” Kumar said. “The math behind tariffs quoted by developers in successive auctions thus remains intact since they would be able to pass this on.”

 

 

2017-05-31 / HFE Team

E-vehicles race: Hero Future Energies to set up solar charging stations

Sunil Jain, Chief Executive Officer of Hero Future Energies, told Livemint that the company plans to charge batteries and then provide them to vehicles which arrive with drained batteries.

E-vehicles race: Hero Future Energies to set up solar charging stations

Moneycontrol News

Hero Future Energies, a company promoted by the Munjal family, is preparing to make an entry into the battery storage business and set up charging stations to take advantage of the growing electric vehicle (EV) market in India, according to a report in Livemint.

Sunil Jain, Chief Executive Officer of Hero Future Energies, was quoted as saying that the company plans to charge batteries and then provide them to vehicles which arrive with drained batteries.

“Technology is changing very fast. We are looking at solar charging stations,” Jain was quoted as saying.

The company’s plan comes at a time when Department of Heavy Industries (DHI) has reported to a government committee on EVs with its specifications for charging stations.

Hero Future Energies, which aims to be present across the solar energy value chain and expand into Africa and India, is planning to set up a 100 megawatts capacity large grid-connected solar plant in South-East Asia.

Apart from storage, the firm is also setting up solar roof-top projects. The plan is to enter the integration business of batteries and to manufacture them in the long run. However, the company does not plan to manufacture cells.

As a measure to keep a check on the ever growing privately-owned petrol and diesel fueled vehicles, the government think-tank NITI Aayog has already recommended fiscal incentives to electric vehicle manufacturers.

It also plans to put in place an EV policy by the end of the year. With the GST tax rate set at 12 percent for electric vehicles, compared to 28 percent plus cess for petrol and diesel cars and hybrid vehicles, the government has made its intentions clear on promoting electric vehicles.

 
Original text here – http://www.moneycontrol.com/news/business/companies/e-vehicles-race-hero-future-energies-to-set-up-solar-charging-stations-2291769.html
 

 

2017-05-31 / HFE Team

Hero Future Energies to set up solar charging stations for electric vehicles

Hero Future Energies to also enter battery storage business in a bid to tap India’s emerging electric vehicles market.

 
Hero Future Energies CEO Sunil Jain. The firm’s plan to set up solar charging stations comes at a time when the ‘Bharat Charger’ specifications for electric vehicles are being firmed up. Photo: Pradeep Gaur/Mint

Hero Future Energies CEO Sunil Jain. The firm’s plan to set up solar charging stations comes at a time when the ‘Bharat Charger’ specifications for electric vehicles are being firmed up. Photo: Pradeep Gaur/Mint

New Delhi: Hero Future Energies Pvt. Ltd, a company promoted by the Munjal family, plans to enter the battery storage business and set up charging stations to tap India’s emerging electric vehicles (EV) market, chief executive officer Sunil Jain said.

The plan comes at a time when the ‘Bharat Charger’ specifications for electric vehicles are being firmed up. The department of heavy industries (DHI) has submitted its report on these specifications for charging stations to a government committee on EVs.

“Technology is changing very fast. We are looking at solar charging stations,” Jain said in an interview.

The plan involves charging batteries and then providing them to vehicles with drained batteries after they complete a trip.

Interestingly, Ather Energy, backed by India’s largest two-wheeler company Hero MotoCorp Ltd, also plans to enter the charging infrastructure business in India. Pawan Munjal-promoted Hero MotoCorp in October 2016 picked up a 26-30% stake in the Bengaluru-based electric scooter maker Ather Energy.

India’s EV push has attracted many companies. India’s first multi-modal electric vehicle project was inaugurated last week in Nagpur along with an electric charging station by cab aggregator Ola.

“The specs for Bharat Charger are being done. There is a lot of interest,” said a person involved with the government’s EV plan, requesting anonymity.

Queries emailed to the spokespersons of the ministries of heavy industry, road transport and highways and new and renewable energy remained unanswered.

India has ambitious plans for a mass shift to electric transport by 2030 so that all vehicles on Indian roads by then—both personal and commercial—are powered by electricity.

Hero Future Energies, which is planning to put up one large grid-connected solar plant of up to 100 megawatts capacity in South-East Asia, apart from expanding in Africa and India, plans to be present across the solar energy value chain.

The firm is setting up solar roof-top pilot projects along with storage. The idea is to get into businesses such as integration of batteries and manufacturing them in the long run. However, there is no plan to manufacture cells.

“After 2020, the battery price is going to become one-third of what it is today,” Jain said.

With storage being the next frontier for India’s clean energy push, the batteries in EVs offer a potential solution. India’s EV programme would help with grid balancing, besides complementing the government’s push for solar power, which is generated during the day and can be stored in EV batteries.

The government plans to put an electric vehicle policy in place by the end of this year. Its intent was articulated by the goods and services tax (GST) Council, which has set a 12% tax rate for electric vehicles, compared with 28% plus cess for petrol and diesel cars and hybrid vehicles.

The government think tank NITI Aayog has recommended fiscal incentives to electric vehicle manufacturers and discouraging privately-owned petrol- and diesel-fuelled vehicles.

The EV plan has also found its fair share of naysayers including the country’s largest car maker Maruti Suzuki India Ltd.

It will be impossible for the auto industry to shift to electric vehicles immediately, Maruti Suzuki CEO Kenichi Ayukawa said earlier this month, in the context of the government’s plan to have an electric vehicle policy in place by December.

Original text from here – http://www.livemint.com/Industry/2k3Fldo3gIAtiFczpEYA5N/Hero-Future-Energies-to-set-up-solar-charging-stations-for-e.html

2017-05-31 / HFE Team

Sumant Sinha, Rahul Munjal emerge as poster boys of India's renewable energy sector

Through their ambition, backed by entrepreneurial acumen, both have demonstrated that caring for the environment can be good business.

 
 
Sumant Sinha, chairman and CEO of ReNew Power Venture
Image: Amit Verma
 
This is a tale of two entrepreneurs. Though they took different paths to get there, both of them have emerged as the most recognisable faces of entrepreneurship in the Indian renewable energy sector.

One is the son of India’s former finance minister; the other is the scion of a respected business group renowned for the motorcycles they make. One cut his teeth in the financial world as an investment banker in the US and UK; the other started his entrepreneurial career through a chain of payment collection centres in the pre-digital wallets era. One of them first thought about his present venture when he was the chief financial officer of another company; the other was passionate about his current line of work from his boarding school days.

Traversing on different paths, Sumant Sinha, chairman and chief executive officer of ReNew Power Ventures, and Rahul Munjal, chairman and managing director of Hero Future Energies (HFE), found common ground in their belief that doing well by the environment can also mean doing well by shareholders.

ReNew is India’s largest independent renewable power producer with an installed capacity of 2 GW (1 GW is equal to 1,000 MW) as on March 31 and Sinha says his company plans to add another 1 GW in 2017-18 across wind and solar power. It was the first independent power company in India to reach the 1 GW milestone, which it did in FY16.

Hero Future Energies is rapidly getting to where ReNew was a year ago. The power producer has a current installed capacity of over 500 MW. It is working towards getting to the 1 GW milestone by August; and by 2020, HFE intends to have a 2.5 GW capacity.

Sinha and Munjal, both based in the National Capital Region, exemplify the potential of India’s renewable energy sector that has allowed new entrepreneurs to dream big and create large-scale clean energy assets.

 
Original text here – http://www.forbesindia.com/article/renewable-energy-special/sumant-sinha-rahul-munjal-emerge-as-poster-boys-of-indias-renewable-energy-sector/47101/1
 

 

2017-05-31 / HFE Team

Sliding tariffs mean more power, but is the trend sustainable?

In 2013, Rahul Munjal, chairmanand MD of Hero Future Energies, part of the Hero Group, was talking to the India team of one of the largest consulting firms in the world to give them a mandate. The energy vertical of this firm, which Munjal doesn’t name, had all its leaders focussed on conventional energy. This April, Munjal was talking to the same firm again, when helearnt that their energy vertical now has more partners looking at renewable energy (RE) than thermal power.

 

“This is the kind of paradigm shift that has taken place in India’s energy sector,” says Munjal. “Renewables are now the preferred source of power in India, not just due to issues of morality and ethics, but because it is economically viable.” FY2016-17 has seen the addition of a record amount—more than 11 GW (1 GW equals 1,000 MW)—of RE capacity, mostly in the solar (5,526 MW) and wind power (5,400 MW) sectors; it has, for the first time, caught up with thermal power capacity added during the same period.

This is a long way from a decade ago when RE technology was expensive and tariffs high—Rs17 per kWh (kilowatt hour), compared to Rs3-4 for thermal power. “There was criticism that RE wasn’t a business to be done and there was doubt about whether India will even reach the earlier RE target of 20 GW that it had set for itself,” says Inderpreet Wadhwa, CEO of Azure Power, an India-focussed clean energy firm.

But, over the last few years, a concerted governmental push to promote clean energy, access to advanced and cheap technology (such as solar photovoltaic cells from China), and the availability of global equity funding have made RE a sunrise sector. In 2009-10, the government’s target of installing 20 GW by 2022 had appeared impossible. Compared to that, the present government, in 2015, revised the target to 175 GW by 2022. Consequently, the sector has received investments of $14 billion (debt and equity) in 2016-17, double of what it had received in the previous fiscal.

mg_96513_energy_mix_280x210.jpg

Sunny Side
Since 2010, the cost of Chinese photovoltaic cells (PVCs) have fallen by around 80 percent. China, the world’s largest market for solar panels, has a production capacity of 90 GW, says Sumant Sinha, chairman and CEO of ReNew Power Ventures. But the actual global offtake is only 60 to 65 GW, due to a slowdown in RE capacity addition in China and Japan. The excess capacity is expected to keep PVC prices down. This will benefit India.

Anil Sardana, managing director and CEO of Tata Power says falling cost of PVCs and other expenses of setting up a plant, and the cost of capital, which has become cheaper, “make a good case for tariffs to be low”. That the rupee has been appreciating against the dollar also makes it cheaper to import equipment. Sinha says the total capital cost of developing 1 MW of solar energy has fallen by as much as 20 percent in the past five years to around Rs4 crore.

Since 2010, solar power tariffs have fallen by more than 75 percent. In 2017, tariffs for projects awarded through a reverse bidding process by state and central governments have touched a new low twice: In February, the tariff for a 750 MW project in Rewa, Madhya Pradesh, fell to Rs3.30 per kWh (levelised for 25 years); in April, a 250 MW project in Kadapa, Andhra Pradesh, saw tariff fall to Rs3.15 per unit; in May, the lowest bid at an auction to develop 250 MW at the Adani Renewable Energy Park in Bhadla, Rajasthan, was of Rs2.71. These prices have given solar power grid-parity with thermal, making it attractive for state electricity distribution companies (discoms).

mg_96515_energy_grid_280x210.jpg

Wind energy prices, too, have fallen since 2010. In February, projects totalling 1 GW were tendered at a tariff of Rs3.40 per kWh. What’s interesting is that this decline is for capacity to be commissioned after FY18, when the projects will not enjoy government sops like generation-based incentives, and accelerated depreciation at the rate of 80 percent in the first year (revised guidelines allow for 40 percent). Sinha says the unit economics of wind energy have improved with new technology enabling greater plant load factor (PLF) even at sites with low wind intensity.

It isn’t only global investors who are eyeing India’s clean energy sector; domestic companies are also taking note. Highlighting this is Tata Power’s acquisition of Welspun Energy’s clean energy capacity of 1,140 MW, last June, for Rs10,000 crore. Sardana says Tata Power’s portfolio of solar assets was “insignificant” and it would take long years for it to reach the acquired numbers organically. “The role of thermal power is to meet base-load requirements, whereas RE meets the variability above base load,” he says. “Considering that demand increase has been subdued compared to supply-side growth, thermal capacity utilisation has been adversely impacted. It is unlikely that any new thermal capacity would be added in the next few years beyond what’s in the making already.”

Flip Side
But the question is: While declining tariffs are good, at what point do they become unviable? “We aren’t confident that the current low levels [of tariff] are sustainable, given the cost of debt, even though such cost has come down in recent times,” says Ankur Ambika Sahu, co-head of Goldman Sachs’ merchant banking division in Asia Pacific. Goldman Sachs is a majority stakeholder in ReNew, and Sahu its nominee director on ReNew’s board. Such low tariffs may not continue to attract capital either. “There is bound to be a process of rationalisation when bids don’t see new capital coming in,” he adds.

Tulsi Tanti, chairman and managing director of Suzlon Energy, makers of wind turbines and a wind energy turnkey company, says that while costs and tariffs have fallen, so have margins. Earlier, expectations of internal rate of return (IRR) was high due to higher risk; developers would chase an IRR of 16 to 18 percent. But now, with lower risks, developers are content with 14 to 15 percent, even 13 percent. “This is the minimum level that has to be maintained, otherwise the volume of investments will be impacted,” he says.

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But there are indications that IRR is slipping further. A report by credit rating agency ICRA says a project with a levelised tariff of Rs3.15 per kWh can earn an IRR of less than 10 percent, based on an assumed capital cost of Rs4.5 crore per MW and a PLF of 21 percent. “The viability of such tariff for project developers from a credit perspective will be critically dependent on the availability of long tenure debt [18 to 20 years post project completion] at a cost-competitive rate, the ability to keep the cost of PV modules within budgeted levels, and execute projects in a time-bound manner,” writes Sabyasachi Majumdar, senior vice president and group head, ICRA, in the report.

One of the reasons for falling tariffs is the lack of adequate projects coming up for bidding, due to a subdued demand for RE power and an abundance of coal. State discoms are also waiting for RE tariffs to stabilise, since no one wants to overpay. Discoms are also not penalised for not meeting their renewable purchase obligations. (States and union territories, collectively, fall short of their cumulative 2016-17 target by 39 percent, or close to 6,900 MW.)

Discoms also do not pay producers on time. A report by Mercom Capital Group, a clean energy market intelligence firm, estimates that discoms in Tamil Nadu, Andhra Pradesh, Rajasthan, Madhya Pradesh and Telangana have delayed payments by three to four months.

“There are a lot of underlying issues that the government needs to address, like discom financials, transmission and evacuation issues, on-time payments and payment guarantees,” says Raj Prabhu, CEO of Mercom Capital.

“Limited capacity drives fierce competition, and India is one of the best RE markets that global capital is chasing,” says Wadhwa. “So, there is some irrational exuberance.”

mg_96519_renewable_energy_280x210.jpg

The Future
Although India added more than 11 GW of RE in 2016-17, it was behind the government target of 17 GW; while additions in wind energy exceeded the target, solar power fell short because of delays in awarding and execution of projects.

As on March 31, the installed capacity for solar and wind energy is close to 60 GW; this means another 100 GW needs to be added over the next six years, at an average of 17 GW a year. ICRA estimates solar energy addition to increase to around 7.5 GW in FY2018, sustained by the momentum of projects already in the pipeline; 40 percent of the 100 GW-target is expected to be met by rooftop solar projects. According to a report by Bridge to India, an RE consulting firm, the cumulative installation of rooftop solar in India is about 1,247 MW, as on December 31, 2016. The report estimates that 11.9 GW of rooftop capacity will be added by 2021.

The industry expects FY18 to be a lull year for wind power, with growth picking up in 2018-19. The uncertainty caused by the shift from feed-in tariffs to reverse auctions has delayed projects being tendered. Tanti, however, believes that 5 GW can be added this fiscal if more projects are announced and awarded soon.

The current pace of capacity addition will be insufficient to meet the 2022 target. At the moment, the industry is expecting the government to make a dash closer to the finishing line, and is pinning its hopes on a proactive power minister, Piyush Goyal, to channelise the tailwinds.

(This story appears in the 09 June, 2017 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)

 

 

Original text here – http://www.forbesindia.com/article/renewable-energy-special/sliding-tariffs-mean-more-power-but-is-the-trend-sustainable/47069/1

2016-02-25 / Webmaster

Urgent need of capital flow for development RE infrastructure

sunil-jain

The massive requirement of capital flow to develop renewable energy infrastructure, needs persistent support from GoI. There should be continuation of GBI for wind at least for the next three years.

If GST gets implemented, renewable energy is likely to turn expensive, expected solution is to move renewable energy from exempt category taxation to zero taxation.

REITs and Infrastructure Investment Trusts (InVITs) are aimed at attracting funds in a transparent manner into the real estate and infrastructure sectors. Rationalization on policy front to check tax leakage from investing in InVITS will make it far more viable and attractive. Currently apprehension of investors is a hindrance from listing it on Indian bourses.

Mr Sunil Jain, CEO, Hero Future Energies

Read More at: http://www.energynext.in/pre-budget-expectations-2016-17/

2016-02-17 / Webmaster

Budget expectations from Hero Future Energies

Hero Future Energies’ MD & CEO shares their Budget expectations from Modi government on areas like Policy, Energy Storage, Renewable Hybrids, Tax etc

The budget wish list of Mr. Rahul Munjal , MD Hero Future Energies:

  • Policy clarity on continuance of GBI incentives beyond 2017 (till 2022) should be announced
  • National Clean Energy Fund should be utilized effectively for intended purpose, especially to drive innovation in the areas of Energy Storage, Renewable Hybrids, Smart metering, building of the green corridor etc
  • Strict Enforcement of Renewable Purchase Obligations (RPO) through penalties, and/or rewarding conforming states (such as priority funding through Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY), Integrated Power Development Scheme (IPDS), Power Sector Development Fund (PSDF)
  • Supporting policies to encourage setting up of Hybrid Power infrastructure (by creating a tax exemption framework and/or allowing banks to provide loans at subsidized interest rate). This would also solve a lot of issues related to land acquisition.
  • Construction activities involved in the installation of wind/solar power projects, O&M work to be exempted from Service Tax (to be included as part Infrastructure).
  • While including RE under Priority sector lending was a good start, the limit of Rs 150 million needs to be increased upto minimum of Rs 5 billion to make an effective impact in the capital intensive industry.
  • Govt should announce easy retail lending facility to individuals interested in setting up rooftop systems on their roofs through Commercial Banks comparable to getting a consumer loan
  • Domestic content requirement in grid-connected solar bids need to be discontinued as the focus should be on promoting a vibrant and internationally cost competitive solar module manufacturing industry.
  • Govt could help the solar module manufacturers bring their costs down and match their prices with international module manufacturers through incentives like:
    • Creating common infrastructure for Integrated Solar Manufacturing hubs and/or
    • Exempting raw materials utilised for manufacturing components/ parts of solar power generating equipment and/or
    • Exempting domestically manufactured Solar PV cells /modules, Solar SPV systems from VAT / CST )
  • Tax holiday on Renewable power generation to be extended for a period of 5 years in one go. Benefit of the same should also be given for MAT computations.
  • In order to achieve the 175 GW of installed RE capacity targets by 2022, massive funds would need to be raised by RE developers therefore it would be desirable that RE cos. be given greater flexibility to alter corporate structure. Govt. must consider exempting Capital Gain tax on transfer of capital assets to related parties in RE cos.
  • In order to ensure adequate availability of skilled labour in Renewable Energy market, budgetary support/financial incentives should be provided to organisations involved in skill development activity in the RE space

The budget wish list of Mr. Sunil Jain, CEO, Hero Future Energies:

  • The massive requirement of capital flow to develop renewable energy infrastructure, needs persistent support from GoI
  • There should be continuation of GBI for wind at least for the next three years
  • If GST gets implemented, renewable energy is likely to turn expensive, expected solution is to move renewable energy from exempt category taxation to zero taxation
  • REITs and Infrastructure Investment Trusts (InVITs) are aimed at attracting funds in a transparent manner into the real estate and infrastructure sectors. Rationalization on policy front to check tax leakage from investing in InVITS will make it far more viable and attractive. Currently apprehension of investors is a hindrance from listing it on Indian bourses.

Read more at: http://www.moneycontrol.com/news/sme/budget-expectationshero-future-energies_5521381.html?utm_source=ref_article

 

 

2016-02-05 / Webmaster

Hero Future raises Rs.300 cr. through climate bond sale

Hero Future Energies, a Hero Group firm that focuses on solar and wind projects, has raised about Rs.300 crore by issuing certified climate bonds for expanding its wind power business. “This is one of the most cost-effective ways of raising capital now. These are basically zero-coupon bonds and you get a reasonable tenure. Since these bonds are certified for use of proceeds for green energy projects, you get lot of investors who are willing to invest in such instruments,” Sunil Jain, CEO of Hero Future Energies, told The Hindu.

“We are expanding our wind power business in Andhra Pradesh, Madhya Pradesh and Rajasthan.

“In AP, we are doing a 240 MW single site project. By the end of May 2016, we will have about 600 MW of wind projects.Also, we will have pipeline of another 800 MW,” said Mr.Jain

Hero Future Energies said it was the first Indian company to issue climate bond certified by the Climate Bonds Initiative Standards Board, an international, investor-focused not-for-profit organisation

“Debt financing through alternative financing products such as bonds have seen reasonable success as they also attract alternative investors, including those who are looking to invest in green projects or emerging markets, etc. However, the debt raising capacity is still linked to near-term performance, assets available as collaterals, etc,” Sai Venkateshwaran, Partner and Head, Accounting Advisory Services, KPMG in India told The Hindu.

Read More: http://www.thehindu.com/business/hero-future-raises-rs300-cr-through-climate-bond-sale/article8194270.ece

2016-02-04 / Webmaster

Hero Future Energies issues first certified climate bonds in India

NEW DELHI: Hero Future Energies, a renewable energy venture of Hero Group today announced the issuance of India’s first certified climate bonds for expansion of its wind portfolio, through its wind holding entity.

The entity, Hero Wind Energy Pvt Ltd, has secured a funding of Rs 300 crore through issuance of rated and secured non-convertible debentures.

“The proceeds from the fund raised will be invested in realizing our goal of 2.5 GW over the next few years. In January 2016, SEBI (Securities and Exchange Board of India) has also approved norms for issuance and listing of green bonds, such certifications bring transparency and will help meet the huge financing requirements worth $2.5 trillion for climate change actions in India by 2030”
Sunil Jain, Chief Executive Officer, Hero Future Energies said.

Jain further said such competitively priced instruments are the way forward in reducing cost of financing and thereby cost of energy in India

Climate bonds are green bonds which require mandatory independent third party verification to provide additional assurance to investors about the climate benefit of their investments. The Climate Bonds Initiative, which is an international, investor-focused not-for-profit organisation, issues this certification.

“Achieving GOI’s goal of 175 GW of renewables by 2022 requires a multipronged approach, including innovative financing, newer structures and attracting global investors. As the certified green bond market scales up in India, it is likely to open up new avenues in renewable energy financing,” Rahul Munjal, Managing Director, Hero Future Energies said.

Read more at: http://energy.economictimes.indiatimes.com/news/renewable/hero-future-energies-issues-first-certified-climate-bonds-in-india/50851000


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