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Rising Electricity tariffs in India Electricity tariffs in India are increasing rapidly, where both the quality and quantity of power is quite bad. We had talked about how the solar electricity prices are already cheaper for industrial consumers in Maharashtra. Cheap power in India subsidized by state and central government, have led to a large [...]

Eastern region of India is a land of huge potential which is endowed with rich minerals, forests, productive and fertile soil along with rich cultural heritage. The available resources along with the man power help the eastern region become the key growth engines. The states have immense potential for growth and large-scale production. Export of [...]

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However India’s biggest capital good equipment company BHEL owned by the government is plannning a $500 million investment to build a solar cell factory in at Sakoli which is part Union heavy industries minister Praful Patel’s constituency Bhandara.Talk about how dumb you can get. BHEL hardly has too much expertise in the solar panel industry and with solar cells in massive oversupply,it is almost sure to lose money. However that is how things work with Indian government companies where investment is made at the whims of ministers rather than rationality and business sense.BHEL is currently trading at one of the lowest valuations in its 10 year history and its not a big wonder why. The company has benefited in the past as did other machinery and engineering companies from an infrastructure invesment boom. However those glory days are over for the company as it faces competition from the Chinese companies and decreasing orders flow. Praful Patel the minister has already spent a few years in the airline ministry presiding over the conversion of the state owned carrier Air India ino a basket case. Now its the turn of BHEL to be turned into a basket case as well.

power projects.See below for the problems besetting India’s thermal power project developers.Note wind and solar power projects are seeing more interent from debt syndication lenders like IDFC,IL&FS because of 2 reasons

a) Strong support from state and federal governments which are going all out to support Renewable Energy through tax breaks,feed in tariffs,capital subsidy

b) Secure Power Purchase Agreements (PPA) by NVVN at even higher prices for green energy

c) No problems of fuel supply availability that plagues the coal and gas power plants in India

d) Lesser Environmental issues that beset the Coal Power and Nuclear Power Plants in India with local agitations

e) Land Acquisitions problems are also lower as solar and wind power plants don’t require prime land