German energy utility Uniper and India Power form 50:50 joint venture in power plant service

Chandigarh, September 1, 2016: India Power Corporation Limited ("IPCL"), a Kanoria Foundation entity, and Germany-based Uniper have entered into an agreement to set up a 50:50 service company joint venture ("JV"), "India Uniper Power Services". This company will offer a broad range of flexible and customised services to customers in the Indian power business that can choose from full-service arrangements or select only individual services. These would include plant operations and maintenance, asset monitoring software and analytical tools, flexibilisation of units, lifecycle extension, supply and integration of pollution control equipment and systems, etc.

Uniper, an international energy company that offers a broad range of services with a focus on power generation and global commodity trading, and IPCL (India Power Corporation Ltd.), a leading power utility of India, have joined together to form a strategic partnership for developing and servicing the power sector in India.

Commenting on this JV, Hemant Kanoria, Chairman of IPCL, said: "The joint venture will combine strengths of strong partners with complementary scope and portfolio. Uniper's experience of owning and managing a portfolio of about 40 GW in various countries will allow India Uniper Power Services to adopt best practices and make thermal power plants more competitive. IPCL's expertise and knowledge of the local market will help the company become a key player in the thermal generation sector and focus on improving the efficiency of power plants in India."

Klaus Schäfer, CEO of Uniper, added: “Europe has faced many of the challenges that India can expect to see in the years to come. Renewables-build out will impact the operating regime of conventional power plants with a need for an increased plant flexibility. In addition, a tightened environmental policy will require upgrades and new power plant emission control processes. Uniper has gained substantial experience in all these areas within its own fleet over many decades.”

The Indian power sector continues to be dependent on coal-based and gas-based generation with close to 70% of total installed capacity being from these sources. There have been large investments in establishing additional power generating assets in the country, especially in the last decade, many of which need dedicated operations, maintenance and process support for enhancement of efficiency and optimisation of cost.

Going forward, a substantial portion of India's energy portfolio is expected to remain coal based given the large coal reserves and the low cost of thermal generation. At the same time, renewable energy sources are also expected to see substantial capacity addition. This would require a paradigm shift in the operating processes of thermal generation plants, with greater focus on efficiency and flexibility.

In view of the above, the JV sees a huge potential in the Indian power business at present and in the foreseeable future. With the current and expected changes in the power sector there is a huge potential to offer services to existing and newly built power plants to help them improve their operations and be ready for market and regulatory changes as the power market rapidly evolves in terms of emission standards, flexibility and efficiency.