Two former Ostro executives to set up clean energy firm
NEW DELHI: Ranjit Gupta and Murali Subramanian, the former head honchos of global private equity firm Actis Llp’s Ostro Energy Pvt. Ltd, are in talks with Singapore’s state investment firm Temasek Holdings Pte. and Swedish private-equity firm EQT Partners to raise around $500 million to set up a green energy platform in India.
Gupta and Subramanian were former chief executive officer (CEO) and chief operating officer (COO) of Ostro Energy, respectively. Their next innings in the Indian clean energy space follows the acquisition of Ostro Energy by ReNew Power Ventures at an enterprise value of $1.5 billion, in India’s largest renewable energy deal last April. Factors such as size, quality and age of the Ostro Energy assets were key attractions for ReNew Power.
“They (Gupta and Subramanian) are in talks with Temasek and EQT. Temasek is expected to make the substantive part of the investment. It will be similar to what Actis did with Ostro,” said one person aware of the development, requesting anonymity.
Another person, who also did not want to be named, said: “There have been preliminary talks. Nothing has been finalized.”
Backed by Actis, Gupta and Subramanian spearheaded the growth of Ostro Energy through a prudent renewable energy auction strategy, entailing an equity investment of $280 million and a debt of about $900 million. It helped Ostro Energy leapfrog from a 50 megawatt (MW) project in Rajasthan to 1.1 gigawatts (GW) when it was sold.
Mint had reported on 12 July that Temasek’s investment strategy in India was to sharpen focus on areas such as platform investments to tap specific opportunities. With a $235-billion portfolio, Temasek has significant exposure to Singapore and Asia. EQT Partners has so far raised around €61 billion through 29 funds. It has around €40 billion under management and portfolio companies in Europe, Asia and the US.
Subramanian and a spokesperson for EQT Partners declined to comment. Gupta could not be immediately reached for comment.
In an emailed response, a Temasek spokesperson said: “As a matter of policy, we decline to comment on market speculations and rumours.”
Last year, Temasek had agreed to invest $400 million in the National Investment and Infrastructure Fund (NIIF), a fund set up by the government of India to boost infrastructure financing in the country. Its India portfolio stands at around $10 billion, with an average annual investment of $1 billion. The Singapore firm has bought stakes in AU Small Finance Bank Ltd, Adani Ports and Special Economic Zones Ltd and payments technology firm Pine Labs. It has also invested in technology companies such as CarTrade and PolicyBazaar.
There has been growing interest in India’s clean energy space. ExxonMobil Corp., the world’s most valuable energy company, for instance, plans to form a partnership with state-owned GAIL (India) Ltd to set up a green energy platform in India. Malaysia’s state-run oil and gas company, Petroliam Nasional Bhd, or Petronas, has also acquired Amplus Energy Solutions Pvt. Ltd, one of India’s largest rooftop solar power producers.
India has been working on the largest clean energy programme and has an installed renewable energy capacity of 74.79GW. Of this, solar and wind power account for 25.21GW and 35.14GW, respectively. With competitive solar bids and India’s wind energy sector having transitioned from a feed-in tariff regime, which ensures a fixed price for wind power producers, to tariff-based competitive auctions, obtaining finance at the lowest cost has become key.
Japan’s Orix to buy out IL&FS group’s wind assets
Mumbai: Japan’s Orix Corp., which owns a 49% stake in each of the seven operating wind power plants of debt-laden IL&FS group, has expressed its intent to buy out the remaining 51% stake held by IL&FS Wind Energy Ltd (Iwel).
Orix will exercise its right under the terms of an existing pact with IL&FS (Infrastructure Leasing & Financial Services Ltd) wherein Orix can match the price offered by the highest bidder to buy Iwel’s stake in the wind power plants, IL&FS said in a release.
In April, state-run gas utility GAIL (India) Ltd had offered to pay ₹4,800 crore (as enterprise valuation) for the 874-megawatt (MW) wind portfolio, subject to Orix agreeing to the sale. Orix, however, has now decided to buy out the remaining 51% stake by matching GAIL’s offer.
The sale process to Orix is expected to be completed by June, subject to necessary approvals, according to the statement.
The IL&FS group had amassed a debt of more than ₹99,358 crore as of September 2018. Its default on debt payments caused a liquidity crisis in non-banking financial companies in India.
The completion of sale of special purpose vehicles to Orix will be subject to satisfaction of all compliances and approvals required under applicable laws—including approval of justice (retd.) D.K. Jain and the National Company Law Tribunal—in accordance with the proposed resolution framework, IL&FS said.
The sale proceeds, as and when realized by Iwel, shall be held in trust for distribution to the relevant stakeholders.
Another 104MW of under-construction wind power project, a solar power portfolio of 300MW and renewable energy EPC (engineering, procurement, construction) business will not be part of the deal. A spokesperson for IL&FS had said earlier that a separate sale process is on for the residual renewable energy businesses.
The government had in October 2018 replaced IL&FS’s previous management with an Uday Kotak-led board to oversee the company’s resolution process. IL&FS is implementing various asset monetization programmes to raise funds and repay debt.
The sale process for assets in areas such as education, funds, domestic roads, thermal power, water infrastructure, technology and key international assets is currently underway and binding financial bids are expected for these companies/businesses in stages by July 2019, the statement said.
World Bank offers Dominica $27 million for geo-energy
(MENAFN – Caribbean News Now) ROSEAU, Dominica – Dominica reached a new milestone in its feat to become ‘the world’s first climate-resilient nation,’ when prime minister Roosevelt Skerrit and the World Bank regional director Tahseen Khan signed a financing agreement earlier this month worth US$27 million.
The World Bank funding, along with sponsorship from the citizenship by investment programme (CBI), Dominica Housing and others, will go towards developing a 7MW geothermal plant on the island.
This will help Dominica diversify its energy mix, increasing its renewable energy share from an already impressive 25 percent to 51 percent. The next steps include selecting contractors, acquiring land and other activities which the government will undertake in the following weeks to see this commitment delivered efficiently.
‘The signing of this agreement is another milestone in our quest to develop the geothermal potential of Dominica,’ Skerrit explained, as he stressed the need to reduce reliance on fossil fuels.
Khan noted that exporting clean energy from Dominica could also serve as a tool to diversify the economy: ‘this is a very important milestone for pursuing the agenda of [the] renewable and demonstrable commitment of Dominica’s goal of becoming climate-resilient.’
Bill calls for New York State to achieve fossil-fuel-energy by 2030
State Sen. Jen Metzger has put forward a bill known as the Freedom From Fossil Fuels Act that would end the development of new fossil-fuel infrastructure in New York state and set a course for New York to shift to a clean energy economy. Nily Rozic is the Assembly co-sponsor.
“The urgency of climate change requires a rapid transition to clean energy,” said Metzger during a press conference. “We cannot achieve that transition, or the economic benefits to New York that it promises, if we continue to invest in new fossil-fuel infrastructure and extend our dependence on fracked gas and oil from out of state.”
The Rosendale Democrat’s bill would require the State Energy Planning Board to develop a master plan for achieving fossil-fuel-free energy by 2030 if possible, and no later than 2040.
“Fossil fuels are killing our planet, and New York State must end the development of new fossil fuel infrastructure and proactively shift to clean energy,” said state Sen. Pete Harckham, a co-sponsor. “This legislation will set the state on the right path to help mitigate the effects of climate change, and to ensure that our economy is based on clean, renewable sources.”
“Our ability to innovate and find ways to conserve will make shifting from fossil fuels less difficult than what’s being asserted by the well-compensated fossil-fuel lobbyists,” said New Paltz Village Mayor Tim Rogers.
Scenic Hudson public policy director Andy Bicking said the bill provided a framework for incorporating land-use planning into a statewide strategy. It proposes expanding the number of regional councils to nine, helping incorporate measures specific to each region into the state energy plan. It also expands the makeup of the state’s energy planning board to include more interest groups.
“Ocean acidification, rising water temperatures and sea level rise threaten the Hudson River and the communities alongside it. New York has a historic opportunity to show global leadership and pass ambitious climate legislation as senator Metzger has proposed,” said Jeremy Cherson, legislative advocacy manager for Riverkeeper.
Kathleen Nolan of the Concerned Health Professionals of New York and an Ulster County legislator, also spoke.
Metzger was optimistic. “With sensible energy planning, we will transform our economy and create good-paying, local clean-energy jobs in the Hudson Valley and Catskills, and across the state,” she concluded.
Metzger represents the 42nd State Senate District, which includes Sullivan County and parts of Delaware, Orange and Ulster counties. She chairs the agriculture committee and sits on a committee dealing with health and energy issues.
Residents join hands to push sustainable and renewable energy use
WRIGHTSVILLE BEACH,NC (WWAY) — Oil spills in the Gulf of Mexico, near Santa Barbara, California and Alaska has some local residents on edge as oil drilling interests look to starting programs on the East Coast.
People are the world joined hands in solidarity for protecting oceans at noon on Saturday. Each year, communities come together to spread awareness of the troubles of offshore drilling.
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Oceana Senior Campaign Organizer Randy Sturgill says if drilling occurs it could have long lasting impacts at our beautiful beaches.
“The coast is just not set up [with] infrastructure for oil, but, if they drill, they will spill,” Sturgill said.
For just 15 minutes, 11 events were held across North Carolina Saturday related to protecting land and water from fossil fuel processes. As a solution, “Hands Across the Sand” encourages people to use renewable energy sources to reduce pollution and dependence on fossil fuels.
The Role of Natural Gas in the Shift to Green Energy
Fossil fuel is a term used to describe a group of energy sources that were formed when ancient plants and organisms (fossils) were exposed to intense heat and pressure over millions of years. Fossil fuels are the world’s dominant energy source, making up 82% of the global energy supply. They continue to power various industries, most notably the electric power, transportation, and the production of consumer products such as paints, detergents, plastics, cosmetics, and some medicines. Considering their massive benefits and uses, fossil fuels have the highest consumption rate in today’s world.
In the Philippines, fossil fuels power 72 percent of our total electricity requirement.
Why is there, then, an urgent and loud global call to abandon fossil fuels and to shift to renewable sources of energy?
The answer is quite simple, really. Fossil fuels largely contribute to global warming and accelerated climate change.
Burning fossil fuels releases a large amount of carbon dioxide into the air. In fact, in 2016 alone, 9.9 billion tons of carbon dioxide was pumped into the atmosphere. According to James Hansen, former Director of NASA’s Goddard Institute for Space Studies, “You can’t simply burn all the known fuel fossil reserves in the ground without making a different planet.”
The presence of high levels of carbon dioxide in the atmosphere results in global warming which, in effect, leads to rapid climate change that induces adverse conditions such as rise in sea levels, extreme weather disturbances, melting of polar ice, ocean acidification, destruction of biodiversity, among others.
Aerial photo taken on Nov. 9, 2013, and released by the Philippine Air Force, shows the aftermath of the massive storm surge caused by Typhoon Haiyan, in the city of Tacloban, central Philippines. (AP Photo/Philippines Air Force)
Like other developing countries, the Philippines plays a minor role in total global carbon emissions, yet suffers an inordinately major cost. As early as 2009, the World Bank warned that the Philippines, being situated in the Pacific Typhoon Belt, topped the list of countries most vulnerable to climate change. (Super Typhoon Haiyan, the deadliest Philippine storm ever recorded and one of the most powerful typhoons in world history, could attest to that.)
We are virtually on the brink of a climate inferno, and if we do not address the problems posed by fossil fuels fast, we will be completely scorched.
Is total shift to Renewable Energy (RE) possible?
To reduce carbon emissions and to mitigate the catastrophic effects of climate change, many countries have set a timeline to shut down their fossil fuel power plants, most particularly their coal plants. Germany, one of the top 10 countries in global coal consumption, just recently came out with a proposal on how its country is going to completely end coal-fired power by 2038.
The Philippines, as a tropical archipelago, has the potential to generate a lot of energy from RE sources. We have Hydroelectric power from moving water, Geothermal power from the heat beneath the Earth’s surface, Solar power from solar energy, Wind power from moving air, and Biomass energy from natural resources like bagasse, rice husks, and coconut husks.
According to the Department of Energy, “the available renewable energy sources and their energy potentials are wind power estimated at 76,000 megawatts (MW), hydropower at 10,500 MW, geothermal at 1,200 MW, ocean energy at 170,000 MW, biomass (bagasse) at 236 MW, solar energy at an average of 5 kilowatt-hour (kWh) per square meter per day, as well as the vast untapped potential of micro-hydro power.”
However, there are many challenges that need to be overcome before a complete shift to RE in the Philippines is realized. True, it is clean, sustainable and with minimal (for Geo, Hydro, Biomass) to no fuel cost (Solar, Wind), but its technology is relatively new and may thus be costly and it is also intermittent – at least until the concern of how it can be efficiently stored is properly addressed. Experts say that renewable energy isn’t ready to stand on its own yet. So, while the world is refining the RE technology, we need to find the perfect energy mix that can supply our energy demands while minimizing impact on the environment.
Natural Gas, as the cleanest of the so-called “fossil fuels,” is the perfect complement to Renewable Energy
Natural gas may fall under the encompassing title of Fossil Fuels but, compared with the others, it is much cleaner and is, thus, more environment-friendly. It emits 60% less carbon dioxide, almost 100% less sulfur dioxide, and up to 80% less nitrogen oxide compared to coal plants. Burning natural gas has no harmful by-products such as ash, sludge, or particulate matter. Natural gas plants are also more affordable to construct and operate compared with coal plants, helping make the electricity they produce competitively with that of coal. Natural gas is also efficient, which means that less fuel is needed to generate the same amount of electricity. This helps allow gas plants to generate electricity at affordable costs and with less emissions. Finally, it is fast and reliable. Natural gas plants can start up much faster –up to 500 times– than other fossil fuel plants and can perfectly complement the intermittency of renewable energy.
Energy sources like solar and wind are intermittent as it fluctuates with weather and the daily cycle, causing disruption in electricity generation. Installing more flexible natural gas plants which can turn on and off and adjust to the needs of the grid, can fill in quickly whenever renewable generation slips.
Indeed, because it is clean, affordable, reliable and flexible, natural gas can provide immense help in the transition towards a 100% renewable energy future.
With a total of 4 natural gas power plants, First Gen Corporation is a pioneer and leader in the natural gas industry. It is the only power-generating company of its size that does not have coal power in its portfolio. It is the supplier of 1/5 of the Philippine’s power demand, producing 3,492 megawatts of clean and low-carbon energy.
In 2018, First Gen natural gas power plants helped avoid emissions of about 8 million tons of carbon dioxide into the atmosphere. That is equivalent to removing about 1.7 million passenger vehicles, recycling 2.8 million tons of waste, or planting around 132 million trees over 10 years.
First Gen Corporation has all their natural gas-fired power plants in its Clean Energy Complex in Batangas City: the 1000-MW Sta. Rita, 500-MW San Lorenzo, 414-MW San Gabriel, and 97-MW Avion. Sta. Rita and San Lorenzo helped kick-start the industry by being part of the pioneering capacity that enabled Malampaya; San Gabriel is the most efficient gas plant in South East Asia providing cost-efficient energy to the grid; and Avion is a peaking plant, able to generate full capacity in as little as 12 minutes and provide energy when it is needed the most, with little to no delay.
Aside from these plants, First Gen’s clean energy platform under its subsidiary, Energy Development Corporation, includes renewable energy plants such as 1,179-MW Geothermal, 10-MW Solar, 150-MW Wind, and 134-MW Hydro.
First Gen was recognized in 2017 by ADEC Innovations as the “Green Company of the Year,” as the company aims to head towards 100% renewable energy, with its gas portfolio playing a key role in supporting the RE future.