In further signs of the staggering pace of transformation in global energy markets, Indian power behemoth Reliance Power, one of the three largest private power groups in that country, is urgently seeking to change the fundamentals of its business strategy.
A detailed analysis of public statements, annual reports and press reports relating to the company by Tim Buckley, Director of Energy Finance Studies at the Institute for Energy Economics and Financial Analysis (IEEFA)all point to a major strategic refocus away from thermal to renewable electricity generation by this Indian power conglomerate.
“In the last decade Reliance Power has received approval to build five of the world’s largest thermal power projects. It is telling that only one of these proposals has been commissioned, and even this one has been problematic. The other four are not even under construction,” he said.
“This is another massive participant in the Indian electricity sector who has clearly realised that their business strategy needs to fundamentally change to be consistent with the policy direction and efforts of the Indian Government to transform the country’s electricity sector.
“Such a shift by one of India’s largest private power groups appears another pivotal moment in India’s electricity sector transformation, a strategic plan that gathers pace with every day.
“Just last week one of these major projects, Reliance Power’s Sasan Project at Jharkhand, India sat at the centre of a flawed, leaked International Energy Agency (IEA) branded Coal Industry Advisory Board (CIAB) Report, which IEEFA described as an ‘embarrassing litany of errors and false assumptions, clearly written as a disinformation tools’. This IEA / CIAB report fails to mention Reliance Power recently tried to sell the project back to the Indian government.
“Sasan, one of only two 3,960 megawatt (MW) plants built under the prior Indian Government’s failed Ultra Mega Power Project (UMPP) program, has already sought a second tariff bailout to restore viability, despite only being commissioned in March 2015.” he said. Bullish forecasts for global thermal coal demand erroneously assume most of these 16 proposed UMPP are built.
Reliance Power is listed on the Bombay stock exchange and 75% owned by Anil Ambani, one of the wealthiest people in India. Reliance Power is one of the few private Indian power generation firms that has consistently remained profitable in recent years, having delivered an increasing profile of earnings before interest, tax and depreciation over the last four years as projects have been progressively brought online.
Notably, this has not been sufficient to allow Reliance Power to deliver for its shareholders – Reliance Power was listed in 2007/08 at Rs450/share (at the time the largest IPO in Indian history), and currently trades at Rs49/share, just a fraction of the original listing price.
“Reliance Power has delivered a three year return on equity averaging 5% p.a., less than half of its target rate. The current market capitalisation of US$2.1bn has declined by more than 30% over the last year, underperforming the Indian equity market by a similar 35%. Over the last five years, Reliance Power has underperformed the Indian market by 75%,” Mr Buckley said.
At its recent 2015 annual general meeting of shareholders, Reliance Power highlighted its new strategic growth plans entailed 6 gigawatt (GW) of solar and 5.2GW of hydro project developments in India. Reliance also has a potential US$3bn 3GW imported gas plant proposal for Bangladesh (this being an attempt to internationally relocate the half-built, stranded Samalkot gas-fired plant in Andhra Pradesh, India).
The company concluded by stating: “Reliance: Committed to becoming India’s largest integrated power generation and coal mining company with emphasis on clean and green power.”
The company’s 2014/15 annual report outlined its ‘quest to become one of India’s largest renewable energy companies.’
“In October 2015 it was reported that Reliance Power has appointed a new Chief Executive Officer, Shri N Venugopala Rao. Concurrent with this, media reports suggested Reliance Power was effectively ceasing almost its entire Indian thermal electricity capacity expansions to now pursue a rapid renewable energy expansion strategy.
“Companies open to the changes of a low carbon future are looking to the opportunities and strategically managing for potential stranded assets risks. Like ENEL Group’s announcement last month to invest €9bn in a 7GW global renewable energy program over 2015-2019, Reliance Power has demonstrated how quickly a leading power company can pivot, rather than blindly believing that the market in the years ahead will simply resemble the one from the years before.” Mr Buckley said.
“IEEFA applauds Reliance Power’s strategic shift towards a dramatically lower emissions intensive electricity profile. Accepting that the strategy of the last decade has failed to deliver for shareholders, Reliance Power is radically realigning its structure to match the vision that has been clearly and consistently articulated by Energy Minister Piyush Goyal,” Jai Sharda said.
7 New Technologies That Could Radically Change Our Energy Consumption
Most of our focus on technological development to lessen our environmental impact has been focused on cleaner, more efficient methods of generating electricity. The cost of solar energy production, for example, is slated to fall more than 75 percent between 2010 and 2020.
This is a massive step forward, and it’s good that engineers and researchers are working for even more advancements in this area. But what about technologies that reduce the amount of energy we demand in the first place?
Though it doesn’t get as much attention in the press, we’re making tremendous progress in this area, too.
New Technologies to Watch
These are some of the top emerging technologies that have the power to reduce our energy demands:
- Self-driving cars. Self-driving cars are still in development, but they’re already being hailed as potential ways to eliminate a number of problems on the road, including the epidemic of distracted driving ironically driven by other new technologies. However, even autonomous vehicle proponents often miss the tremendous energy savings that self-driving cars could have on the world. With a fleet of autonomous vehicles at our beck and call, consumers will spend less time driving themselves and more time carpooling, dramatically reducing overall fuel consumption once it’s fully adopted.
- Magnetocaloric tech. The magnetocaloric effect isn’t exactly new—it was actually discovered in 1881—but it’s only recently being studied and applied to commercial appliances. Essentially, this technology relies on changing magnetic fields to produce a cooling effect, which could be used in refrigerators and air conditioners to significantly reduce the amount of electricity required.
- New types of insulation. Insulation is the best asset we have to keep our homes thermoregulated; they keep cold or warm air in (depending on the season) and keep warm or cold air out (again, depending on the season). New insulation technology has the power to improve this efficiency many times over, decreasing our need for heating and cooling entirely. For example, some new automated sealing technologies can seal gaps between 0.5 inches wide and the width of a human hair.
- Better lights. Fluorescent bulbs were a dramatic improvement over incandescent bulbs, and LEDs were a dramatic improvement over fluorescent bulbs—but the improvements may not end there. Scientists are currently researching even better types of light bulbs, and more efficient applications of LEDs while they’re at it.
- Better heat pumps. Heat pumps are built to transfer heat from one location to another, and can be used to efficiently manage temperatures—keeping homes warm while requiring less energy expenditure. For example, some heat pumps are built for residential heating and cooling, while others are being used to make more efficient appliances, like dryers.
- The internet of things. The internet of things and “smart” devices is another development that can significantly reduce our energy demands. For example, “smart” windows may be able to respond dynamically to changing light conditions to heat or cool the house more efficiently, and “smart” refrigerators may be able to respond dynamically to new conditions. There are several reasons for this improvement. First, smart devices automate things, so it’s easier to control your energy consumption. Second, they track your consumption patterns, so it’s easier to conceptualize your impact. Third, they’re often designed with efficiency in mind from the beginning, reducing energy demands, even without the high-tech interfaces.
- Machine learning. Machine learning and artificial intelligence (AI) technologies have the power to improve almost every other item on this list. By studying consumer patterns and recommending new strategies, or automatically controlling certain features, machine learning algorithms have the power to fundamentally change how we use energy in our homes and businesses.
Making the Investment
All technologies need time, money, and consumer acceptance to be developed. Fortunately, a growing number of consumers are becoming enthusiastic about finding new ways to reduce their energy consumption and overall environmental impact. As long as we keep making the investment, our tools to create cleaner energy and demand less energy in the first place should have a massive positive effect on our environment—and even our daily lives.
Responsible Energy Investments Could Solve Retirement Funding Crisis
Retiring baby-boomers are facing a retirement cliff, at the same time as mother nature unleashes her fury with devastating storms tied to the impact of global warming. There could be a unique solution to the challenges associated with climate change – investments in clean energy from retirement funds.
Financial savings play a very important role in everyone’s life and one must start planning for it as soon as possible. It’s shocking how quickly seniors can burn through their nest egg – leaving many wondering, “How long your retirement savings will last?”
Let’s take a closer look at how seniors can take baby steps on the path to retiring with dignity, while helping to clean up our environment.
Tip #1: Focus & Determination
Like in other work, it is very important to focus and be determined. If retirement is around the corner, then make sure to start putting some money away for retirement. No one can ever achieve anything without dedication and focus – whether it’s saving the planet, or saving for retirement.
Tip #2: Minimize Spending
One of the most important things that you need to do is to minimize your expenditures. Reducing consumption is good for the planet too!
Tip #3: Visualize Your Goal
You can achieve more if you have a clearly defined goal in life. This about how your money can be used to better the planet – imagine cleaner air, water and a healthier environment to leave to your grandchildren.
Investing in Clean Energy
One of the hottest and most popular industries for investment today is the energy market – the trading of energy commodities. Clean energy commodities are traded alongside dirty energy supplies. You might be surprised to learn that clean energy is becoming much more competitive.
With green biz becoming more popular, it is quickly becoming a powerful tool for diversified retirement investing.
The Future of Green Biz
As far as the future is concerned, energy businesses are going to continue getting bigger and better. There are many leading energy companies in the market that already have very high stock prices, yet people are continuing to investing in them.
Green initiatives are impacting every industry. Go Green campaigns are a PR staple of every modern brand. For the energy-sector in the US, solar energy investments are considered to be the most accessible form of clean energy investment. Though investing in any energy business comes with some risks, the demand for energy isn’t going anywhere.
In conclusion, if you want to start saving for your retirement, then clean energy stocks and commodity trading are some of the best options for wallets and the planet. Investing in clean energy products, like solar power, is a more long-term investment. It’s quite stable and comes with a significant profit margin. And it’s amazing for the planet!
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