Winds of Change: Issue 1
For the inaugural edition, we take stock of the generated renewable energy in July; the government’s efforts to help developers; check on the monsoon; and see a man about a quarterly report.
Welcome to Winds of Change, a weekly newsletter that collates my work as I chase the winds that bring us the monsoon and drive our turbines.
What better way to kick things off in the first edition of WoC than to take a look at the present state of renewable energy generation in the country. According to a notification released by the Central Energy Agency (CEA), RE generation has fallen 24% year-on-year for the month of July. Wind power took the worst hit, falling over 42%.
This is a worrying trend for the country, as the monsoon months of June to September generate 85% of the annual wind energy output, due to high speeds of the monsoon winds. Industry insiders told my colleague Sarita Singh and me that 2020 has seen unusually low wind speeds, and that the government has begun conducting an inquiry into the issue.
There are two more months of the monsoon season left, but experts are optimistic that the numbers should look better by then.
Read: Wind generation falls over 40% in July; initial assessment blames low wind speed [Paywall]
Staying on the topic of clean energy, the ministry of new and renewable energy (MNRE) extended the deadlines for ongoing projects by five months. This comes as a huge relief to developers, who had made numerous representations to the ministry to allow for an extension above the original 68-day period, plus an additional grace period of 30 days. The first extension was of only 30 days, issued back in April.
The MNRE has been exceptionally busy for the past half-year. Shortly after the lockdown was imposed, it included renewable energy plants as part of the "essential" list and granted them the must-run status to continue functioning. After the border skirmishes with China escalated, union power and renewable energy minister RK Singh said that the government will impose a basic customs duty on Chinese solar imports, which make up 80% of the total solar equipment India imports. The BCD was expected to start from August 1, but has not been issued as of yet due to issues between the MNRE and the Nirmala Sitharaman-led Ministry of Finance.
The basic customs duty is expected in the coming week, but nothing concrete has been announced yet.
Moving on to the monsoon- if you're reading this from either Bombay or Delhi, chances are you've observed a particularly wet week accompanied by strong gusts and intermittent lightning.
The southwest monsoon has been in an active phase over west India for the last month or so, especially the Konkan coast. However, north India has seen a worrying deficit compound ever since the season officially started over the Indian subcontinent on June 1. Currently, rainfall in the northwest India subdivision, which includes important agricultural states such as Uttar Pradesh, Punjab, Haryana, along with the Delhi-NCR region, is 18% below normal. However, monsoon winds are blowing towards this region and will bring plenty of rainfall for the coming two weeks at least, per the national forecaster.
A good monsoon season would result in a bumper kharif crop, which in turn, would boost the agricultural sector's output. Agriculture is perhaps the only beacon of hope left this year, as all other sectors have taken a beating due to COVID-19, while the GDP figures and estimates plummeted to record lows.
Read: Monsoon bounces back with 45% more rains; cheers up oilseed and coarse grain farmers
It's August, which means quarterly results!
Although it has taken me well over a year to comprehend a financial report (and in turn, understand terms such as EBITDA and EPS), I am happy to present my first copy on this topic: the Q2 results of Hitachi ABB. The joint venture was formed in July and would focus on electric mobility, as its India MD told me. COVID-19 induced lockdowns caused their factories to be shut for over a month, which reflected in their earnings report: year-on-year revenues dropped 42%, while profits plummeted by 82%. But the company remains optimistic about their future- as should others; and more importantly, as should you. The pandemic will get over one day.
It will, right?
Read: Hitachi ABB Q2 results: Profit margins fall 82%; revenues down 42%
That's all for this week's issue. Thank you for reading! I hope you learnt something new. Please feel free to reply to me about any errors or typos you spotted, any clarifications, and most importantly, any feedback. Till next Sunday!