Development Watch – Week #4 December ’23
Development News
Growth in Wind, Solar and Batteries sectors
In 2023, global renewable energy witnessed remarkable growth, with solar energy setting records in China, Europe and the US. Wind energy has added capacity to power 80 million homes, while batteries are driving a surge in electric vehicles. These trends reflect climate action, economic advantages and sustainable technology advancements. Clean energy is now the least expensive. Nations have also adopted policies that support renewables, while some have cited energy security concerns, as per IEA. In the US, California continues to have most solar energy, followed by Texas, Florida, North Carolina and Arizona.
IEA is also working to cut renewable energy costs in developing worlds. World governments have agreed to triple renewable energy generation capacity by 2030. The transition is happening away from fossil fuels at the COP28 United Nations climate conference in Dubai. However, no mechanism was agreed to finance the transition to clean energy in developing countries. Clean energy investments in emerging and developing countries have been flat since 2015. Whereas globally it almost doubled, with most of the growth coming form China and advanced economies.
L&T wins power & water systems orders in Saudi Arabia
The construction arm of Larsen & Toubro has been chosen as turnkey engineering, procurement and construction contractor. They are to establish various systems related to renewable energy generation and utilities for Amaala project in the Red Sea region of Saudi Arabia. The project awarded to L&T will have an optimized off-grid renewable energy system comprising 250 MWp Solar PV plant. It will also have a 700 MWh battery energy storage system. Amaala is an ultra-luxury destination set in Prince MBS Natural Reserve along Saudi Arabia’s NW coast. The consortium of UAE’s clean energy powerhouse, Masdar and French Electricity utility EDF has signed the concession agreement for the fully integrated utility project with the developers of Amaala. L&T has entered into an EPC agreement with the sponsors, viz. EDF and Masdar. Amaala project spans 4,155 sq km and features pristine landscape and diverse natural ecosystems, coupled with unique and intriguing heritage and local culture.
Office Leasing in India touches record high
In a recent report by real estate advisory firm Savills India, it has been revealed that office space demand in India’s 6 major cities has reached a new all time high in 2023. The report states that a total of 62.3 million sq ft of office space was absorbed, marking a significant 12% increase compared to the previous year. According to the findings, 3 cities emerged as top performers, namely Bengaluru, Delhi-NCR, and Mumbai. These cities collectively accounted for nearly 60% gross leasing activity in 2023. Chennai and Mumbai saw an all-time high gross leasing activity in 2023.
India’s first undersea bullet train tunnel by NHSRCL
The Indian PM and his Japanese counterpart had launched the Bullet Train project in Ahmedabad on September 14, 2017. Once operational, it will cover the 508-km route in 3-3.5 hours. The commencement work for India’s first 7-km undersea rail passage, and completion of a mountain tunnel running up to 350 metres in just 10 months were among the milestones achieved for Ahmedabad-Mumbai bullet train project during 2023. National High Speed Rail Corporation (NHSRCL) is the project implementing authority. According to NHSRCL, the undersea route at Thane creek is part of a 21-km long tunnel between BKC in Mumbai and Shilphata in Thane district.
NIIF to invest Rs. 675 Crores in Andhra Int’l Airport
National Investment and Infrastructure Fund (NIIF) is planning to invest up to Rs. 675 Crores on the upcoming greenfield international airport at Bhogapuram in Andhra Pradesh. This is being developed by the GMR group. This is NIIF’s 2nd airport investment, after the GMR Goa International Airport Ltd, which operates Manohar International Airport in Goa. GMR Airports Ltd. (GAL) and NIIF have entered into binding agreements for NIIF to invest up to Rs. 6.75 billion (Rs. 675 Crores) in GMR Vishakhapatnam Int’l Airport Ltd. The transaction envisages a primary investment by NIIF in form of Compulsory Convertible Debentures (CCDs) to be issued by GVIAL. In another news, UNESCO has recognized Terminal 2 at Bengaluru Kempegowda Airport as one of world’s most beautiful airports. T2 can accommodate 25 million passengers per annum in phase 1.
Red Sea attacks threaten global trade
About 65% of India’s crude oil imports in FY-2023 worth $105 billion, likely passed through the Suez Canal. Over 300 vessels have opted for a 6,000 nautical mile diversion around the Cape of Good Hope between December 19 and 22. Consequently, transit durations, shipping costs, and insurance premiums have risen. This poses a potential disruption to global production timelines. The disruptions have been caused by Houthi assaults in the Red Sea. At least 10 of the world’s biggest shippers and one oil supermajor have decided to avoid the canal. It is a passageway for more than 20,000 ships a year. This accounts for 12% of global trade, 9% of oil demand, 6% of LNG imports and 30% of container shipments.
Great Nicobar may soon get an International Container Terminal
The government is working on ways to electrify the proposed development of Great Nicobar Island as international container terminal and trans-shipment port through green energy and gas-based power. India plans to develop the proposed port at Galathea Bay in Great Nicobar Island (about 520 km from Port Blair) of Andaman and Nicobar Islands as an international terminal and port. For this, the island is likely to be connected with green power and gas-based electricity. The feasibility study for finding the right mix and total capacity required is going on, based on current and anticipated demand. Solar power alone will not be a viable option because it needs to be backed up with a base load. The plan for Holistic Development of Great Nicobar Island also includes a greenfield international airport and township and area development. An investment of Rs. 72,000 Crores is proposed to be invested in integrated development facilities in the project.
Road construction projects worth Rs. 65,000 Crores in Delhi
Union Minister has announced that work on an expressway connecting Delhi’s Akshardham temple to Dehradun has started. Once it is completed, it will only take 2 hours to reach Dehradun from Delhi and 1-1/2 hours to reach Haridwar. Rs. 65,000 Crores worth of works are going on in Delhi and adjoining areas. A peripheral road around Delhi is also ongoing. The Ministry has also signed MoU with IIT Roorkee, IIT BHU, IIT Madras and JNTU, Anantpur to appoint Chair professors in these institutes for expert advice on technical matters as well as practical field problems in highways construction. The Chair Professor will act as a strategic advisor to the Ministry in new areas relevant to road transport and highways. They will be expected to provide technical guidance to MoRTH in areas related to ‘traffic and highway engineering’, research schemes and any other issues related to highway projects.
Local Feedback
LocalFeedback.org aims to track and document actionable parameters that help improve urban and rural infrastructure. The founder, Susmita, has juggled diverse roles in real estate, project budgeting, valuation and execution on construction sites. Having traveled to more than 20 countries, she has worked across 4 regions in India. Her areas of interest include sustainable buildings, electric mobility and urban development. She visited top-ranking cities on livability indices and has presented published papers at international conferences.