India is expected to play a greater role in Asia’s economic order, according to 95% of executives in our survey. In this feature, Sourav Mallik, Joint Managing Director at Kotak Investment Banking, discusses India’s business and regulatory environment and how to effectively invest in the country’s growth.
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Energy, Mining and Infrastructure INDUSTRY INSIGHTS: POWERING THE FUTURE
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EMI corporations should regularly ask where their offerings fit in the regional and global energy mix, and where there is more robust policy support. Policy uncertainty is one of the more challenging strategy variables. Then it becomes a matter of assessing the value of their portfolios and plotting a direction to steer investments.

Given falling costs and improving performance, traditional energy players should prepare for a market swing towards renewables. The tipping point may be indeterminate, so timing may be the most challenging variable. Few Asian countries have consistent or supportive renewable energy policies despite growing awareness and interest, though Malaysia and Taiwan bear promise.
ENERGY PLAYERS THAT FIND POLICY SUPPORT IN THE CHANGING ENERGY MIX WILL STAY RELEVANT
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The hidden value behind disruption in EMI lies in opportunities for electricity system flexibility. When new technology is adopted and throws things out of balance, corporations should recognize that this represents an opportunity for a market for demand-side and supply-side flexible responses. Such responses could include battery storage and ancillary service revenue streams. Industry players can also leverage disruptive technologies for more subtle applications in asset management and efficiency. Advanced metering technologies offer options to electrify emerging markets while reducing non-technical losses, with ways to use information to optimize maintenance, enhance service and improve revenue collection. In the Philippines, Meralco is transforming its network into a smarter grid via Advanced Metering Infrastructure (AMI) and other technologies.
TECH DISRUPTION WILL OFFER OPPORTUNITIES FOR ELECTRICITY SYSTEM FLEXIBILITY
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Industry stakeholders need to think about what potential regulatory change and technological inflection mean for the value in existing or legacy assets in terms of stranded cost exposure. Power purchase agreements (PPAs) offer some protection, but as legacy generation assets reach the end of their PPAs, investors should consider whether they need to be decommissioned or if they can be re-contracted. Investors buying assets that face post-PPA regulatory exposure must factor that into their bid price. They should also consider whether regulatory change has transitional safeguards for stranded cost recovery, and whether the change is likely to trigger unintended consequences, such as a degradation of the security of supply.
ENERGY PLAYERS WHO PLAN FOR CHANGE WILL LOWER STRANDED COST EXPOSURE FOR LEGACY ASSETS
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