CmY Consultants and Beyond C announce India green finance partnership with the British High Commission India
London – February 8, 2016 – UK-based finance and sustainability consultancies CmY and Beyond C have partnered with the British High Commission to help the Indian Government reach its goal of attracting $300bn in green energy investment by 2022. The project will further solidify the UK’s position as the global leader in green finance, and support the international climate agenda.
The UK and Indian governments’ recent joint statement recognises the need for “large scale, low cost, long term finance to deliver India’s renewable energy ambitions.” It also acknowledged the role that the City of London could play in leveraging international capital, including through the City’s recently launched Green Finance Initiative. This project will help support the need for investment by showcasing India’s clean energy opportunities to influential UK investors, differentiating renewables from other investments and connecting developers in India with the right investors in the City of London. It will also outline actions that the UK government can take to deploy returnable capital and overcome barriers to investment in green energy.
“This project will further strengthen the well-established working relationship between the UK and Indian governments, and pave the way for UK investors to take advantage of the incredible green energy opportunity in India,” said Charles Yates, MD of CmY Consultants. “By linking finance from the City of London with clean energy developers in India, CmY and DFID will be supporting both countries’ climate change agendas while further cementing the UK’s position as the global hub for green energy finance.”
India’s Minister for New and Renewable Energy launched plans a year ago to provide electricity 24 hours a day for all Indians by 2019, partly from green power. Almost 300m Indians currently lack basic access to electricity.
“This project puts UK aid money towards improving the lives of low-income Indians, helping to build renewables and improve access to energy,” said Beyond C Director Jeffrey Beyer. “It also boosts Britain’s green energy industry by opening up opportunities to export technology and expertise, and benefits the City of London by connecting pools of capital with profitable clean energy projects.”
A key part of this assignment is engaging with the City of London to increase understanding of the investment opportunities in India and to identify policy initiatives to encourage that investment. There will be a conference in London in March this year detailing the investment opportunity and how best to structure an investment in India. Speakers at the conference will include senior representatives of the British and Indian governments, foreign investors in India and advisors with experience structuring successful Indian investments. To register your interest, please visit www.cleanenergy.london or email firstname.lastname@example.org.
Building Offshore Wind In Indian Waters
The Indian government has plans to radically increase renewable energy generation in India and is actively seeking foreign help to do this.
The government has set a target of more than doubling the existing 21GW of wind generation to 45GW by 2020, and foreign investment is critical to funding the new renewable energy projects and supporting grid infrastructure, with an estimated value of $300bn.
As well as investment opportunities for developers and financial institutions, there are opportunities to follow clients into India and provide professional services such as due diligence, bid support and project management.
And the Government’s plan also involves kickstarting the development of offshore wind farms in Indian waters.
The Indian government sees offshore wind as part of a mixed-generation strategy, which will help to provide clean power independent of imported fuel such as coal; and to connect 300 million people that do not currently have electricity. Part of the appeal of moving offshore is that it can avoid the land issues that have plagued some onshore wind projects; and that it will generate power close to major demand centres.
Other attractions of offshore wind include higher load factors than onshore wind, and an opportunity to develop new technology and a local supply chain. However, there are major challenges for offshore wind, which include affordability and the availability of transmission to take the power to market.
This ambitious programme is an opportunity for those working in the sector in the European Union. For instance, the EU and UK are supporting actions to unlock India’s offshore sector, including funding resource mapping, policy guidance and capacity-building measures.
The Indian government and the European Union are collaborating through the Fowind (Facilitating Offshore Wind in India) project to provide technical and economic analysis of the potential for offshore.
As a result of this Government decision, it seems likely that the offshore programme will be accelerated with a pilot offshore wind project in the next few years. This pilot is likely to be in either Tamil Nadu or Gujarat which both have long coastlines, shallow water and relatively strong wind. A UK consulting team is building on best practice to frame commercial and technical aspects of the pilot.
While the Indian government, supported by a number of Indian states, is the prime mover behind this initiative there is also interest from the private sector. In particular Suzlon, the largest turbine manufacturer in India, is keen to develop a 300MW project off the coast of Gujarat and to sell the power to the well-run local state power company.
There are significant challenges to be overcome. These include developing an appropriate regulatory structure; an accurate, comprehensive and integrated assessment of the wind resource, sea bed, wildlife, and appropriate ports; and other uses of the marine resource. Even so, this vital government initiative is being strongly promoted by Prime Minister Narendra Modi.
Modi is putting in place policies that should lead to significant developments in offshore wind in India. The country will gain from the rapid development of turbine technology in established markets, which is reducing the cost of energy from offshore wind. If offshore wind experts want to benefit from growth in this new market, they should get involved now.
Charles is a member of the UK team working with the Indian government to progress the pilot offshore wind project.
Shocks to the Energy Markets
The aim of the blog is to ferment a discussion about the dramatic changes to the Energy Markets and the implications for investors, consumers and renewable projects.
Contracts for Difference (CfDs) are the most important part of Electricity Market Reform (EMR), the biggest change to the UK electricity markets since privatisation in 1990 and they are happening now. The CfD allocation process is well underway and an appeal against National Grid's non-qualification decision mean that the auction has been delayed and opens on 18 February 2015, closes on 24 February and the results will be announced on 18 March. The auction is subject to the Levy Control Framework which caps renewable subsidies at £4.3 billion in 2015/16 rising to £7.6 billion in 2020/21.
The CfD is starting against the background of other major shocks to the energy markets which include:
•The Capacity Market auction is complete and Government has procured 49.26GW of capacity (58% of current UK generating capacity) at a clearing price of £19.40kW. This will cost a total of £0.96 billion, which works out at around £11 for the average household. The first payments will be made in 2018/19
•The Energy Market Investigation which could fundamentally change the structure of the energy markets is underway and is expected to run till the end of 2015
•For technologies other than solar, the CfD and Renewables Obligation (RO) will run in parallel until 31 March 2017. Many smaller developers have decided to stick with the subsidy they know, the RO, and put off adapting their business to the CfD
•There is a major dash for the RO by solar projects which are rushing to be operational by 31 March 2015 to receive the subsidy
•The general election on 7 May in which energy costs and security will be an issue and which could lead to significant changes such as Labour’s promised freeze on electricity and gas prices for 20 months
•The EU and UK Governments are actively encouraging electricity interconnectors such as the UK-Norway link to help integrating European markets, increasing energy security, and reducing the price and operational impact of the intermittency of the bulk of renewable generation.