india re ceo survey 2018 - kwatt solutions...this is the third year of our ceo survey. and the...
TRANSCRIPT
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INDIA RE CEO SURVEY 2018
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Disclaimer
© BRIDGE TO INDIA, 2018
MarketIntelligenceUp-to-date information
Industry network
360 degree view
Strategy ConsultingBusiness strategy Market environment Strategic alliances
TransactionAdvisoryFinancial advisory
Fund raising, M&A
Due diligence
Our services
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1© BRIDGE TO INDIA, 2018
This is the third year of our CEO survey. And the survey is bigger than ever - we have got 44 responses covering full range of private sector stakeholders from India as well as abroad.
Introduction
Project developers
Equipment manufacturers
EPC contractors
Financiers
Some company names are shown more than once in this table depending on range of their business activitiesFor multinational companies, the survey has been completed by respective heads of Indianbusiness units.
Notes:1.
2.
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© BRIDGE TO INDIA, 2018
The survey participants are highly diversified by business profile and geography.
Respondents across the value chain
Respondents from across the globeThis year’s survey has an almost equal level of participation from Indianand international players. Among the international players, we saw a greaterparticipation from German, Chinese and US companies.
45%55%
International
India
35% 36%
4%
25%
EPC
Financiers
Equipmentmanufacturers
Projectdevelopers
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Key findings
Industry outlook
Balanced Extremelyoptimistic
3%Very optimistic
15%Optimistic52%27%
Not optimistic3%
Bidding environment
Integrated manufacturingcapacity of modules by 2022
Ranking of states
Top 3 states forutility scaleRE projects
Top 3 states foropen accessRE projects
Top 3 states forrooftop solarprojects
AndhraPradesh
MadhyaPradesh
Gujarat
AndhraPradesh
TamilNadu
Karnataka
Madhyapradesh
HaryanaMaharashtra
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< 50 GW18%
75 - 100 GW14%
>100 GW7%
50 - 75 GW61%
< 8 GW21%
10 - 14 GW24%
>14 GW17%
8 - 10 GW38%
© BRIDGE TO INDIA, 2018
Even with the threat of duties, falling tariffs, weak power demand and various policy challenges, bulk of respondents are optimistic about the industry and its growth prospects.
60% of respondents expect total rooftop solar capacity to be less than 10 GW by March 2022.
Market growthIndustry outlook
Sentiment regarding total solar power capacity addition by March 2022 is in line with previous year. Most respondents believe that India will achieve total solar capacity of 50-75 GW by 2022, a little over 60% of the Government of India’s target.
Solar capacity by March 2022
Rooftop solar capacity by March 2022
CEO Survey2017
20x GW10%
> 80 GW16%
10 - 15 GW22%
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CEO Survey2017
Balanced
27%
15%
3%
3%
Optimistic
Extremely optimistic
Not optimistic 52%
Very optimistic
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< 50 GW42%
> 60 GW13%
50 - 60 GW45%
< 6 GW39%
> 10 GW19%
6 - 10 GW42%
None28%
3 - 6 GW27%
> 6 GW12%
1 - 3 GW33%
< 3 GW14%
5 - 10 GW36%
>10 GW14%
3 - 5 GW36%
6© BRIDGE TO INDIA, 2018
Wind power has undergone a compete paradigm shift in the last year by moving from feed-in-tariffs to auctions. Despite the resulting disruption, 58% of the industry believes that India would achieve a total capacity of over 50 GW byMarch 2022.
Open access prospects seem largely unchanged from last year. Most respondents feel that India will add about 6-10 GW of open access power by March 2022.
Open access RE capacity by March 2022
Wind power capacity by March 2022
Notwithstanding the ongoing safeguard duty investigation and the government’s Make in India push, the industry is pessimistic about module manufacturing prospects in India. 61% of the respondents believe that India will have less than 3 GW of integrated manufacturing capacity by March 2022.
Integrated solar module manufacturing capacity by March 2022
Outlook for individual business growth seems a little muted in comparison to last year. Most industry players believe that their business shall grow by 3-5x by 2022.
Business growth by March 2022
CEO Survey2017
CEO Survey2017
3x-5x48%
>3x19%
5x-10x16%
>10x16%
3-5x40%
5-10x16%
>10x5%
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Storage has been talked about as a vital component of clean energy grid, but it is yet to find acceptance in India. The industry feels that high cost, lack of awareness and enabling policy environment (in that order) are restricting the growth of this market.
Storage market challenges
7© BRIDGE TO INDIA, 2018
Not surprisingly, more than 70% of respondents feel that the current bidding environment is irrationally aggressive, a view maintained by BRIDGE TO INDIA for some time now. Tariffs ought to move up particularly in view of the increasing tender issuance, but it remains to be seen if DISCOMs are willing to accept that.
Challenges in utility scale renewable energy market
The response on variousoperational challenges paints a bleak picture. All factors are assessed as challenging/ very challenging. The three biggest concerns are safeguard dutythreat, poor policy environmentand weak financial condition of DISCOMs.
3%
27%70%Irrationallyaggressive
Balanced
Fairlyaggressive
Challenges facing the sectorCurrent bidding environment
Lack of techo-commercialunderstanding
33%
Lack of enablingpolicy environment
32%
High Cost35%
Very challenging Not challenging Very challenging
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Gujarat (followed by Madhya Paradesh and Andhra Pradesh)tops ratings for the mostfavourable state for policyframework (clarity and visibility), land acquisition, transmission capacity, permits and approval process. The three worst stateson these combined parametersare Maharashtra, Tamil Naduand Haryana.
Karnataka is understandably the overwhelming favourite for open access projects because of its very attractive policy and ease of getting approvals. It is followedby Andhra Pradesh and Tamil Nadu. The bottom three states are Rajasthan, Maharashtra and Gujarat.
Attractiveness for open access RE projects
Madhya Pradesh, Maharashtra and Haryana are the most preferred states for rooftop solar. Less enthusiasm for Tamil Nadu, Punjab and Uttar Pradesh.
Attractiveness for rooftop solar projects
State rankingsEase of doing business for utility scale projects
Andh
ra P
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Kar
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Mad
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Para
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Mah
aras
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Guj
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Har
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Punj
ab
Raj
asta
han
Tela
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a
Tam
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Utt
ar P
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sh
Very poor
Fair
Very good
Guj
arat
Andh
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Kar
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Mad
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Para
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Mah
aras
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Har
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Punj
ab
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Tela
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Tam
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Utt
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Very poor
Fair
Very good
Guj
arat
Andh
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sh
Kar
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ka
Punj
ab
Raj
asta
han
Tela
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Mad
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Para
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Mah
aras
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Har
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Tam
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Utt
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Very poor
Fair
Very good
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