Business
Draft open access norms can be a tailwind for new renewable projects
The Draft Electricity (promoting renewable energy through Green Energy Open Access) Rules, 2021, announced by the Ministry of Power, if implemented as it is, could improve the certainty of cash flows for new renewable energy projects coming up through this route, ratings agency Crisil has said in a report.
In India, power distribution happens through three modes – state distribution companies, captive sources and open access. Under the open access route, which had a total installed capacity of 11 GW as on March 31, 2021, renewable power producers sell electricity directly to commercial and industrial (C&I) consumers. These consumers pay open access charges to state distribution companies (discoms). Such open access projects are hobbled by state-level policy changes that make returns uncertain.
The draft rules aim to provide clarity on such open access charges – including, inter alia, cross-subsidy surcharge (to compensate discoms for loss of high paying C&I consumers), additional surcharge (to recover the fixed power purchase cost for stranded assets), and banking charges (for consuming energy on a later date) – and will help streamline the overall approval process to improve predictability of cash flows for renewable power producers, the report released last week said.
The ministry has sought feedback on the rules from stakeholders, including state regulatory bodies and discoms.
State regulators haven’t been fully backing open access projects fearing their discoms would lose high-tariff paying C&I customers. Consequently, they raise levy of cross-subsidy and additional surcharges, or change banking provisions by removing/lowering the banking period. Since renewable projects have a lifespan of 25 years, uncertainty around open access charges and tightened banking norms make project returns more vulnerable, thereby influencing the viability of these projects.
For instance, some of the key states having a majority share of open access capacities have levied cross-subsidy and additional surcharges of Rs 1.5-2.0 per unit – on average – in the past three fiscals. On the other hand, some states have either removed or lowered the banking period, which affords flexibility to developers (to bank their unsold power with discoms if the offtake of a C&I consumer is affected for a few days).
Ankit Hakhu, Director, CRISIL Ratings, said: “Every 10 paise increase in cross-subsidy and additional surcharges results in a 150 basis points (bps) reduction in returns for open access project developers. Reducing the banking period with state discoms increases the risk to the revenue of developers if the offtake by C&I consumers is affected for a few days.”
Open access projects also face hurdles related to timely approvals and states reneging on policy support. For instance, developers faced approval delays in Uttar Pradesh, Chhattisgarh and Maharashtra, while Karnataka, Haryana and Maharashtra have tried to change their policy support features.
The draft rules propose to address these issues. The document states that cross-subsidy surcharge should not be increased by more than 50 per cent for a 12-year period from the date of project commissioning. Also, any additional surcharge cannot be levied on these projects. This is to ensure predictability on open access charges and thus the cash flows of developers.
The draft rules also proposes to limit how much power can be banked with state discoms – up to 10 per cent of the annual consumption of the consumer. This will allow the C&I consumer to draw banked power from discoms later, thereby providing some stability to the cash flows of developers.
Further, a central nodal agency is to be set up to streamline the approval process. All open access applications have to be submitted on the agency’s portal and subsequently routed to the state nodal agency for approval. If approval is not granted within 15 days, the application will be deemed approved subject to the fulfilment of the technical requirement to ensure timely execution of these projects and minimise any risk of cost escalations.
On an average, cross-subsidy and additional surcharges form 65-70 per cent of total open access charges.
Business
‘Its Prime Real Estate’: Anand Mahindra Expresses Awe At Grandiose Of Brabus Big Boy 1200
In the City of Dreams that is Mumbai, one of the biggest ‘dreams’ of most who live in the metropolis is to find an abode, that they can call it their own. Real estate in Mumbai is known for its sky-high pricing, with figures of Rs 10-15 crore not surprising anyone.
The Motorhome
Space is a major issue in city, given the paucity of it, in a region that encompasses millions. However, what happens when the space is not only available but also mobile? That is precisely what a ‘motorhome’.
It may not been the most commonly seen or discussed avenue in this part of the world, but in other parts of the world, particularly in the US, an RV or recreational vehicle is the way of life, either by choice or by circumstance.
Mahindra Group chairman, Anand Mahindra recently reacted to one such motorhome. In a post on X, he shared a minute-long clipping of the Brabus Big Boy 1200. This is an uber-luxe, profligate motorhome manufactured by the German automobile company Brabus.
Mahindra, while reacting to the video of a person showing around the bus said, That’s not transport. It’s prime real estate.”
And one may arguably agree with Mahindra on this. The vehicle is extravagant and has a length of 12 meters or 39.4 ft and over 30 square meters or 320 sq ft. For context, the average size of homes in city of Mumbai hovers around 400-700 sq ft.
What Are The Features Of This Motorhome?
In addition, the vehicle also has two electrically extendable slide-outs on each side. These slide-outs can extend the bedroom and saloon to a width of 4.50 meters.
In addition, the motorhome also consists of a double bed measuring 160 x 200 centimeters.
A closet is integrated into the rear wall of the vehicle.
For amusement, the vehicle also has a desk and a 43-inch 4K television. Here one could watch TV programs that have been made available on the system play games on the integrated Playstation 5 system.
In addition, one can also connect to the internet through the Starlink system.
When it comes to the vehicle, it runs on a12.8-liter six-cylinder turbodiesel engine. This engine can deliver 390 kW / 530 hp and can generate a maximum torque of 2,600 Nm.
The vehicle is priced at around USD 1.5 million or a whopping Rs 12 crore.
Business
Maha will play key role in achieving India’s $5 trillion economy goal: Minister Tatkare
Nagpur, Dec 21: Representing Maharashtra in the pre-Union Budget meeting held in Jaisalmer, Minister Aditi Tatkare on Saturday assured that Maharashtra would play a pivotal role in India’s journey towards becoming a $5 trillion economy.
She emphasised the need for special financial assistance to the state in the upcoming Union Budget.
Minister Tatkare presented Maharashtra’s vision, highlighting its strategic role in realising the Prime Minister’s goal of a ‘Viksit Bharat’ by 2047.
Minister Tatkare outlined several critical issues and proposals for inclusion in the Union Budget. She urged the finance minister for central assistance for state Capital Investment by enhancing the allocation under the Scheme for Special Assistance to States for Capital Investment.
She emphasised the need for streamlining fund disbursement timelines to provide qualifying states with a minimum one-year utilisation window.
In the wake of rapid urbanisation, Minister Tatkare called for central support to tackle the challenges faced by the state.
“Maharashtra, with urbanisation expected to surpass 50 per cent in the upcoming census, faces challenges in resource mobilisation for urban local bodies (ULBs). The state government urges support for ULBs to access long-term loans for planned urban development and infrastructure enhancement,” she said.
Under the MukhyaMantri Saur Krushi Vahini Yojana 2.0, aimed at solarising agricultural feeders, Minister Tatkare sought increased targets and funding allocations for Maharashtra.
She requested expansion of Battery Energy Storage System (BESS) capacity from 500 MWh to 9,000 MWh to meet the state’s energy storage goals.
In order to further boost the modernisation of the home department, Minister Tatkare sought funds on a 60:40 basis, for projects such as digital forensic labs, mobile forensic vans, AMBIS systems, and the Cyber Security Project (Rs 837.86 crore).
She highlighted the need for funding major initiatives like Dial 112 emergency services integration and Maharashtra Police Station CCTV projects.
She urged financial support for faster case disposal through enhanced infrastructure for the judiciary.
She requested funding for constructing the Bombay High Court Complex in Bandra (East), estimated at Rs 3,750 crore.
Further, to push the implementation of the Mumbai Metropolitan Region (MMR) economic master plan, Minister Tatkare proposed a special package.
The master plan is aligning with NITI Aayog’s vision to transform MMR into a national growth hub by 2030.
According to NITI Aayog, the MMR has a potential to increase its GDP to $300 billion by 2030 from the present level of $140 billion.
The Centre’s public policy think tank has asked the Maharashtra government to concentrate on seven growth drivers and attract investment of $125-135 billion from the private sector to achieve the target.
In a bid to push the state government’s ambitious plan to make Maharashtra drought-free, the state government has sought central government support to include state-funded river-linking projects like Wainganga-Nalganga and Damanganga-Godavari under the National Interlinking of Rivers Scheme.
Further, the state government appealed to the Centre to ease revenue expenditure pressures to create fiscal space for capital projects and establish a ‘Kisan Vishesh Sahayata Nidhi’ to compensate farmers affected by trade policy interventions.
The state government also appealed for the enhancement of funding for ongoing schemes like the Jal Jeevan Mission and financial assistance for disaster-affected areas.
Minister Tatkare said the comprehensive representation highlighted Maharashtra’s ambitions and challenges, ensuring the state’s priorities were well-articulated for the Union Budget deliberations.
She reiterated Maharashtra’s commitment to becoming a cornerstone of India’s economic growth and development trajectory.
Business
Domestic stock markets to end 2024 on positive note, Nifty clocks 13 pc gain
New Delhi, Dec 21: Riding on resilient economic growth, the domestic stock markets are ending 2024 on a positive note, with Nifty registering a 13 per cent gain (year-to-date) — its ninth consecutive year of positive gains, a Motilal Oswal Wealth Management report said on Saturday.
The first half of the year saw robust corporate earnings, a surge in domestic flows, and a resilient macro landscape, driving the Nifty to an all-time high of 26,277 in September.
In fact, the markets navigated significant events, such several global geo-political issues, General Elections and Budget in India, and any dips were swiftly met with strong buying activity, the report mentioned.
“The year 2025 could unfold as a tale of two halves. The first half may continue to see market consolidation, while a recovery could take place in the second half,” it added.
In the last two months, the market has corrected 11 per cent from its all-time high, amid selling by foreign institutional investors (FIIs) due to a combination of domestic and global factors.
Going forward, the Indian markets are likely to face significant influences from a combination of global and domestic economic events.
The anticipated rate cut by the RBI in February, the ongoing trend of US rate cuts, and the expectations surrounding trade policy changes post Donald Trump taking over as US President in January will contribute to market volatility.
“Additionally, the Union Budget in February will offer important signals to the market. With a fragile global economic environment and mixed macroeconomic factors at home, the market is expected to remain in consolidation mode in the near term,” the report noted.
Earnings are expected to recover in H2 FY25, driven by increased rural spending, a buoyant wedding season, and pickup in government spending.
“We further expect earnings to gain momentum, delivering a 16 per cent CAGR over FY25-27E. We remain optimistic about the long-term trend, given the strength of corporate India’s balance sheets and the prospects for robust, profitable growth,” the report said.
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