BF Utilities Ltd Management Discussions.

Wind Power : International Scenario

2015 was an unprecedented year for the wind industry as annual installations crossed the 60 GW mark for the first time in history, and more than 63 GW of new wind power capacity was brought on line. The last record was set in 2014 when over 51.7 GW of new capacity was installed globally. In 2015 total investments in the clean energy sector reached a record USD 329 billion (EUR 296.6 billion). 2015 figures were up 4% from 2014s investment of USD 316 billion (EUR 238.1 billion) and beating the previous record set in 2011. The new global total for wind power at the end of 2015 was 432.9 GW, representing cumulative market growth of more than 17%. This growth was powered by an astonishing new installations figure of 30,753 MW in China; the global wind power industry installed 63,467 MW in 2015, representing annual market growth of 22%. In early 2015, expectations for growth in the wind power market were not excessive, as continued economic slowdown in Europe and some emerging markets, and the political uncertainty in the US, made it complex to make projections for 2015, China, the largest overall market for wind power since 2009, retained the top spot in 2015. Installations in Asia again led global markets, with Europe in the second spot, and North America closing the gap with Europe, in third place.

Wind Power : Domestic Scenario

Indias new wind energy installations totaled 2,623 MW in 2015, for a total of 25,088 MW. This kept the Indian wind power market for 2015 at #5 globally. The total grid connected renewable energy installations in the country reached approximately 39,411 MW

The Indian government has committed to a target of 175 GW of renewables by 2022, including 100 GW of solar capacity and 60 GW of cumulative wind power capacity. The government has also indicated its support for rapidly growing the power sector, renewables being a core part of this strategy

KEY BARRIERS TO WIND ENERGY DEVELOPMENT The high cost of finance remains a challenge. High interest rates (11 to 13%) and limited availability of debt financing are challenges for developers as well as OEMs in the country. Despite the high cost of funds, last year India saw over USD 10 billion [EUR 9.9 billion] worth of investments in the renewables sector. Most of the state level power sector utilities in India also suffer from poor financial health and are unable to comply with RPOs and so are unwilling to purchase wind power.

Companys Performance :

This accounting year being a broken period of 6 months, performance is not comparable. The operations, continued to disturbances during the period due to problem at the service provider.

The Company has received open access permission and credit notes pertaining to the power generation during April 1, 2014 to March 31, 2015 after the decision of MERC in case no.9 of 2015.

The adjustments in the billing by the billing section of MSEDCL is awaited.