Power News Letter – 24th June 09
| Finance |
| · Power Finance Corporation (PFC) said on Tuesday (June 23) it will raise Rs 23,000 crore by the end of this fiscal for financing various power projects. “We will raise Rs 23,000 crore this fiscal. The fund-raising will be through a combination of bonds and structured deals,” the Chairman and Managing Director, Mr Satnam Singh, said.The state-owned company is also looking at disbursing funds worth Rs 23,000 crore during the current financial year, Mr Singh said. He also said the Request for Qualification for three new Ultra Mega Power Projects in the States of Tamil Nadu, Orissa and Chhattisgarh would be invited over the next three months. PFC had reported a 64 per cent jump in consolidated net profit for the year ended March 31, 2009 at Rs 1,979.69 crore. The company’s total income rose to Rs 6,572.02 crore for the fiscal ended March 2009, up from Rs 5,029.27 crore in the previous year. |
| · Power transmission company Power Grid Corporation on Tuesday (June 23) said it is planning to raise Rs 3,000 crore by the end of this fiscal or early next year through a Follow-on Public Offer (FPO). “We will try to come up with the FPO and we hope to raise Rs 3,000 crore, the company will infuse 15 per cent fresh equity with this FPO,'' company's CMD Mr S K Chaturvedi said. Earlier this month, Power Grid Corporation of India (PGCIL) reported a 16.71 per cent rise in its net profit at Rs 1,690.61 crore for the year ended March 31, 2009, against Rs 1,448.47 crore last year. Total revenue from operations rose to Rs 6,675.85 crore for the year ended March, 2009, from Rs 4,702.47 crore last year. |
| General |
| · Orissa, reeling under acute shortage of power, has got temporary relief with the state owned generator National Thermal Power Corporation (NTPC) agreeing to supply additional 300 Mw to the state. Out of the promised quantity, 100 Mw is expected to flow into the state grid tonight.The Union power minister Sisil Kumar Sindhe had instructed NTPC to provide 300 Mw to Orissa from the 15 percent un-allocated share of the eastern zone pool. The arrangement will remain effective till 4 July. The minister’s instruction follows the discussion with him by the state energy minister Atanu Sabyasachi and the senior officials of the state energy department in New Delhi yesterday. Starting with 100 Mw tonight, the supply from NTPC will be stepped up to 300 Mw by tomorrow. However, the State Load Despatch Centre (SLDC) had not received the promised power till late in the evening.Sources said, the total hydro electricity generation in the state was 340 Mw on Tuesday (June 23) against the installed capacity of 2085 Mw. Similarly, thermal power availability from the state’s own power plants was 530 Mw against the total installed capacity of 880 Mw. The drawal from the central pool was about 900 Mw, with the overdrawal being about 100 Mw. Since the price of the overdrawn power depends on the frequency, the state has to pay a hefty amount for this power. At times, it even costs more than Rs 10 per unit, sources said. · With the average demand being 2900 Mw in peak hours and 2300Mw in non-peak hours, the state is experiencing a deficit of about 300 Mw to 400 Mw every day. To tide over the situation, power distribution companies are resorting to rotational load shedding. Today, the availability of power in the state was 2117 Mw with the demand being a little higher. “The situation is expected to improve after we get 300 Mw from NTPC,” senior official of the state energy department said.It may be noted, the Captive Generating Plants (CGPs) have been injecting about 380 Mw to the state grid. This includes 120 Mw by the Jindal Stainless Ltd (JSL), 105 Mw by Nalco and 40 Mw by Vedanta Aluminium Ltd (VAL). Sources said, the water levels in all the reservoirs of the state have gone down below the minimum draw down level (MDDL), severely impacting the hydro power generation. Facing acute shortage of power, the Orissa government has already directed the State Load Despatch Centre (SLDC) to effect 50 percent load restriction on industrial users. |
| · India expects to add more than 14,000 megawatts of capacity by the end of March 2010, the power secretary said on Tuesday (June 23). "We need to do tremendous (work) to achieve the planned target. In 100 days, we have a plan to add 5,600 MW by August, H.S. Brahma said. "We have to do... more than 14,000 MW within this fiscal," he said. |
| · The Centre is targeting the commissioning of a power capacity addition of over 5,500 MW in its 100-day plan. “We have set a target of 5,653 MW capacity addition in the first 100 days of this Government, and have already achieved 2,300 MW... We hope to achieve the target,” the Power Minister, Mr Sushilkumar Shinde, said.The Power Ministry is targeting a cumulative capacity addition of 78,700 MW during the Eleventh Plan period (2007-12). “With proper planning and time-bound implementation, we can achieve the target… The task before us is difficult since the Eleventh Plan target of capacity addition is more than three times the actual capacity addition during the Tenth Plan (2002-07),” Mr Shinde said while addressing a meeting of State Power Ministers on Tuesday (June 23).The meeting was convened by the Power Ministry to discuss issues related to the progress on the capacity addition programme for the current Plan period. Besides, action on various flagship schemes, including the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) and the Accelerated Power Development and Reforms Programme (APDRP), were also discussed. “We are particularly concerned about high aggregate technical and commercial (AT&C) losses, commercial viability and financial health of distribution utilities… The utilities have to augment their anti-theft measures for reducing these losses,” Mr Shinde added.Delegates including the power ministers and power secretaries of various States and Union Territories and representatives of Central and State power utilities participated in the meeting. The day-long discussions were divided into two sessions. The first session focussed on generation and open access, while the second covered rural electrification and APDRP. · Speaking at the event, Planning Commission member, Mr B. K. Chaturvedi, said the power sector was in dire need of skilled personnel. “There is a shortage of skilled manpower in the sector, it (power sector) needs large amount of skilled personnel,” Mr Chaturvedi. So far, 38 Industrial Training Institutes (ITIs) have been adopted in 20 States and the process of adoption of 13 ITIs is underway. |
| · The delay in monsoon has not spared the problem-ridden power sector across the country. Apart from the rise in mismatch between the demand and supply, the sector has witnessed a sharp rise in the price of power. The price per unit, which had dipped to as low as 13 paise a fortnight ago at the Indian Energy Exchange (IEX) and Power Exchange India (PXI) following showers in some areas, has increased to a record Rs 12 per unit as of Tuesday (June 23), while the minimum price is at Rs 9.50. · Besides, the burgeoning demand for power has also forced states like Uttar Pradesh, Karnataka and Tamil Nadu to resort to overdrawal of power. According to power ministry data, the frequency is hovering around 49.17 Hz and 49.2 Hz. States are overdrawing power—49.17 Hz at Rs 10.35 per unit—under the unscheduled interchange (UI) mechanism. However, these states will be liable for a disciplinary action, according to the recent directives from the Central Electricity Regulatory Commission. · Power ministry sources said, “The prolonged dry spell across the country, delays in the onset of monsoon mainly due to cyclone ‘Aila’, which hit West Bengal and other states, have actually increased the demand for power. Generally during this period power demand falls, due to relief in weather conditions following the monsoon. However, the situation is quite grim as the demand is rapidly increasing, against the restricted power supply. The prices have risen sharply and will continue till the monsoon sets in.” Sources said for states in the South, comprising Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Pondycheri, 543.29 million units of energy is currently met, against the energy requirement of 578.24 million units. Thus, there is an energy deficiency of 34.95 million units. Prithviraj Chavan, minister of state in the PMO, said, “The development of monsoon is being regularly monitored by the Prime Minister’s Office and also by the abinet Secretariat. The government is expected to provide details in this regard in next two days.” |
| · India's power deficit could widen in coming months because of a delayed monsoon, Rakesh Nath, chairman of the country's Central Electricity Authority, said on Tuesday (June 23). "In summer, demand for power usually goes up," he said on the sidelines of an industry conference. "Our current deficit is around 10 percent, according to last month figures," Nath said. |
| Kerala Government sanctions 14.5 lakh new electricity connections in the past three years |
| · The State Government has sanctioned 14.5 lakh new electricity connections in the past three years. High-tension 11 KV lines in the State have been extended to 6,379 km and low-tension lines over 22,215 km and 8,309 transformers have been installed during the period. |
| Conference of Power Ministers: Several steps suggested for achieving the capacity addition targets |
| · Following are the highlights of the Power Ministers' Conference convened by Shri Sushil Kumar Shinde, Minister for Power in New Delhi today. Sh. Shinde emphasized the following points in his inaugural address. o Target of 5653 MW capacity addition has been set in the first 100 days of this Government, out of which 2319 MW has already been achieved. o Target of 14,507 MW has been fixed for the year 2009-10 and of 78,700 MW for the XI Five Year Plan, out of which 15036 MW has already been commissioned. o A Special Advisory Group (SAG) on generation under Chairmanship of Minister of Power consisting of Experts, retired Secretaries to the Government of India, one nominee each from FICCI, CII and BHEL will be set up to expedite completion of the ongoing capacity addition projects on war footing. o An initiative has been taken by the Ministry of Power to create job opportunities for youth at project sites. So far, 38 ITIs have been adopted in 20 States/UTs. Another 13 ITIs are in the process of being taken over in 10 States. o CPSUs will be providing 100 days training to develop Master Trainers for effective dissemination of knowledge and skills. o Online short circuit testing facility for Transformers upto 315 MVA will be set up through a joint venture company comprising of four CPSUs, namely, NTPC, NHPC, PGCIL and DVC. o States assured of the Centre's cooperation in resolving issues pertaining to generation, transmission, distribution and rural electrification. o Plan to hold the next Conference of State Power Ministers in December this year to take stock of the progress achieved. o Regular meetings of Standing Committee of Power Ministers will be held henceforth. · Power Ministers of States raised the following issues o Make additional power available out of unallocated quota and UMPPs. o Make available coal linkages o Timely environment and forest clearances for Power Projects. · For achieving the Capacity Addition targets, it was resolved to: o Place pending orders for BOPs for 11th Plan Projects by 31st July, 2009. o Signing of Fuel Supply Agreement with Coal companies by 30th June, 2009. o Initiation of Import of Coal by 31st July, 2009 by States who have not taken action so far. o Formation of JVs for coal block development by 31st August, 2009. o Withdrawal of condition for 5% charge on profit of Generation Companies for local area development. o Initiation of Case 1 bidding by States anticipating shortages at the end of 11th Plan. o Designation of Nodal agency for Integrated Planning - by 31st July, 2009. State Transco could be designated as the Nodal Agency. · To expedite the implementation of RGGVY, it was resolved to: o Operationalize District Level Committees and to hold their monthly meetings to resolve local issues; o Completion of balance awards by July '09; o Finalize and release BPL lists by July '09 for all districts; o Allotment of substation land for projects by Aug. '09; o Approve revised estimates by States within 1 month of submission by implementing agencies; o Energize completed villages within 15 days of completion of works; o Notify RE Plans by Aug '09 · To expedite the implementation of APDRP it was resolved to: o Appoint IT Consultants by 31.07.09; o Sign Quadripartite Agreement by 15.07.09; o Obtain the approval for entire eligible towns in the state under Part-A by Aug-09; o Establish base line for AT&C loss of the project area through ring fencing by October-09; o Appoint IT Implementing Agencies within 3 months of project approval; |
| [Source : Infraline News Team] |
| · In the confluence of the Ministers of Power today in New Delhi, Mr Kapil Mohan, Director, MoP, cited the following reasons for delays and difficulties being faced in execution of generation projects during the XI Plan: o Delay in placement of orders - mainly Civil Works & BOPs o Delay and non-sequential supply of material for Main Plant and Balance of Plants (BoP). o Shortage of skilled manpower for erection and commissioning. o Contractual dispute between project developer and contractor and their sub-vendors/sub-contractors. o Inadequate deployment of construction machinery. o Shortage of fuel (Gas & Nuclear). o Land Acquisition. o Delay in erection of infrastructure facilities like reliable construction power supply & roads at project sites. · Mr Mohan said that MoP will ensure that all pending orders for BOP for projects benefitting XI Plan would be placed by July 31, 2009. He also said that signing of FSA will happen by June 30, 2009. Additionally, he said that initiation for case I bidding by states anticipating power shoratges by the end of XI Plan would also happen. Source : Infraline News Team |
| Conference of Power Ministers: DDG Guidelines to meet energy needs in remote areas |
| · The Ministry of Power has attempted to develop a framework for operationalising Decentralized Distributed Generation (DDG) projects through which the DDG and renewable project developers will get a boost. This will ensure that energy needs of remote village and hamlets are met through scaleable, replicable and technologically and financially efficient models. Developers could be State agencies, private sector developers, NGOs and other institutions. The potential energy developers are encouraged to apply for setting up DDG projects on a transparent and technically and economically efficient basis. · The Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY), a Flagship scheme of Government aims to electrify 1.15 lakh villages and provides free electrification to 2.34 crores BPL households in the country. 62,000 villages have been electrified and 60 lakh BPL households have been given free connections so far. · The Rajiv Gandhi Grameen Vidyutikaran Yojana has set aside Rs.540 crores subsidy for electrification of hamlets and habitations which are not being covered under the scheme on account of their remote locations through Decentralized Distributed Generation (DDG) scheme - a sub component of RGGVY. DDG aims at utilizing suitable technologies which are locally available for generation of electricity and distributing the same in the nearby hamlets / habitations. · By nature, such projects rely more on small hydro and renewables. Though there have been some attempts at meeting the energy needs of villages through renewables in the past, the same have not been scaled up to operate at a larger scale by proving technical and economical viability of the implementation models. Ministry of Power has come out with transparent set of guidelines, standardised format for preparation of DDG projects and guidelines for procurement of goods and services for implementation for rural electrification projects under DDG. · The scheme aims at identifying such developers, who will be able to meet the village / hamlet electricity requirements on a sustainable basis for a period of 5 years and the selection of the developers will be on basis of least viability gap funding. The details of the scheme and all other relevant documents are available at website http://rggvy.gov.in, andhttp://www.powermin.nic.in. |
| Director, MoP brings out the issues and challenges in implementing RGGVY |
| [Source : Infraline News Team] |
| · Mr Kapil Mohan, Director, MoP, while addressing the Conference of Power Ministers said that during the implementation of RGGVY projects, some bottlenecks are being faced, which resulted in comparatively slow progress of the projects. These are: i. Delay in awards of contracts by states- 28 projects are yet to be awarded ii. Delays in land acquisition for 33/11KV sub-stations iii. Delay in finalization of BPL lists iv. Non-availability of adequate sub-transmission system (Bihar, Jharkhand, Orissa) v. Delay in energization of electrified villages (Bihar, U.P., Jharkhand, M.P., Orissa etc.) vi. Delay in forest clearance in Jharkhand and Uttarakhand. vii. Delay in issue of Panchayat certificates for village electrification as per revised definition. viii. Delays in taking over of physical assets (created under RGGVY) by state utilities where CPSUs are involved ix. Delay in processing of revised cost estimates of CPSUs by State Utilities and State Governments. x. Delay in establishment of franchisee resulting in theft of material, electricity and non-recovery of dues xi. Non-convening of State Level Committee meetings by States - The Ministry of Power had advised Chief Secretaries of States to constitute a State Level Committee under their chairmanship for resolving interdepartmental issues. However, only few States have done so. The States, which are holding frequent meetings, have shown better progress. Source : Infraline News Team |
| · Ministry of Power has prepared CD and booklets to give district-wise details of villages where electrification works are proposed to be taken up under the Rajiv Gandhi Grameen Vidyutikaran Yojana, RGGVY. The booklets give details of electrification works at All India, state and district levels. The district level booklet gives names of the villages (with census code for easy identification), where the electrification works under RGGVY are being undertaken. These booklets will be distributed among elected representatives and other stakeholders. At present the CD and booklets have been prepared which give details up to the district level. The village wise details at present have been provided for one district in each state. The village wise details for rest of the country will be available very shortly. The CD and booklets were released today at the Conference of Power Ministers of States and UTs in New Delhi. It is expected that this initiative will bring about transparency and accountability in implementation of the scheme. · The Government has launched (RGGVY) as one of its flagship programme in March 2005 with an objective to electrify over one lakh un-electrified villages and to provide free electricity connections to 2.34 crore rural BPL households. The scheme provides 90% capital subsidy from Government of India for the projects. The total sanctioned outlay for the scheme is Rs.33,000 crore. So far 62,000 villages, 60 lakh BPL households have been electrified. · Rural Electrification Corporation is the nodal agency for implementation of the scheme. Services of power sector CPSUs namely Powergrid, NTPC, NHPC and DVC have been provided to the State Power Utilities for better implementation of the projects. · For effective implementation of the projects, the Ministry has adopted turnkey mode of implementation, three-tier quality monitoring mechanism and mile stone based project monitoring. The states have been asked to provide minimum 6 to 8 hours of electricity to the villages electrified under the scheme. It has also been made mandatory to establish franchisees in the RGGVY electrified villages for effective electricity distribution management. · Under the scheme, the Ministry has also undertaken training of C & D employees of the State Power Utilities and franchisees. It is targeted to impart training to 75,000 employees and 40,000 franchisees during the XI Plan. During 2009-10, 2500 employees and 5000 franchisees are planned to be trained. The training will be imparted through reputed private institutes. · The details of the scheme and the physical and financial progress is regularly updated on website www.rggvy.gov.in |
| · Emphasizing the important role to be played by the State Governments and industry in turning around the Power Sector, Union Power Minister Shri Sushil Kumar Shinde today urged them to help create a robust competitive environment crucial for the sustainable development. Delivering the inaugural address at the Conference of Power Ministers' of all States and UTs in New Delhi this morning, he said that the future vision and approach for strengthening the power sector depends upon continuation of the reform and restructuring process with a view to improve financial health of utilities. · Terming power as an essential input for sustaining an annual growth rate of 8-10%, the Power Minister said that quality power supply to farmers, industries, households and other consumers at reasonable prices is one of the main priorities of the Government. He said that his ministry has taken several initiatives to fulfill the mission of providing power to all by 2012. · About 200 delegates including Lt. Governor, Andaman & Nicobar Islands , Chief Minister of Puducherry, Power Ministers and Power Secretaries of various states, and the representatives of Central and State Power utilities attended the meeting convened by the Ministry of Power to discuss critical issues related to Generation, Transmission, Distribution and Rural Electrification. Minister of State for Coal, Shri Sriprakash Jaiswal and Minister of State for Environment & Forests, Shri Jairam Ramesh and Minister of State in the PMO, Shri Prithviraj Chavan and Member, Planning Commission, Shri B.K. Chaturvedi also participated. · Observing that the capacity addition target of 78,700 MW for the 11th Plan is more than three times the actual capacity addition during the 10th plan, Shri Shinde expressed confidence that the same will be achieved by adopting a systematic approach and with the help of the States and the industry. · Announcing that out of 5653 MW capacity addition target in the first 100 days of the Government, 2319 MW has already been achieved, the Minister sought cooperation from the concerned States in achieving timely completion of balance projects. · The Minister announced that under his chairmanship, a Special Advisory Group (SAG) on generation will be set up shortly to expedite completion of the ongoing capacity addition projects on a war footing. The Group will consist of Experts, retired Secretaries to the Government of India, and one nominee each from FICCI, CII and BHEL. The Central Electricity Authority (CEA) and Power Project Monitoring Panel (PPMP) would identify bottlenecks in timely completion of the ongoing projects and apprise the advisory group of the progress. Based on these reports, the Group will meet periodically to review the progress, make field visits if necessary and advise the Ministry for remedial action. · Shri Shinde also pointed out that Open Access which allows generating stations to enter the market and sell power directly to high tension consumers, has been permitted in most of the States mainly for captive generation. He said that some State Governments decision to restrict the sale of surplus power within the State only is against the spirit of Electricity Act, 2003. Warning that it would also adversely affect the projected capacity addition in the 11th Five Year Plan by the private sector he called for all necessary steps to operationalize open access by implementing various measures laid down in the Electricity Act, 2003, National Electricity Policy and the Tariff Policy. · Shri Shinde called upon all power utilities to work hard and come up with long term business plans with a clear cut road map of loss reduction and reliability improvement and appealed to his colleagues from the States to take advantage of the Restructured Accelerated Power Development and Reform Programme (R-APDRP) to revitalize the ailing distribution sector. · Terming rural electrification as an important instrument to bring about inclusive growth, the Minister informed that so far about 62,000 villages have been electrified and about sixty lakhs BPL households have been given free electricity connections under the Rajiv Gandhi Grameen Vidyutikaran Yojana, RGGVY. · Shri Shinde also announced that testing facilities are being augmented with online short circuit testing of Transformers upto 315 MVA as against the available facilities for testing transformers upto 90 MVA. A joint venture company comprising of four CPSUs, namely, NTPC, NHPC, PGCIL and DVC has been set up for the purpose. · The Minister said that to overcome the problem of shortage of highly skilled manpower for the power sector and the shortcomings in the skill set of ITI trained skilled workers, an initiative has been taken by the CPSUs, in line with the scheme of the Ministry of Labour, to upgrade ITIs in different locations in the country through public private partnerships. The CPSUs of the Ministry will be providing 100 days training to evolve Master Trainers for effective dissemination of knowledge and skills. · On the occasion, the Union Power Minister released comprehensive guidelines for implementation of Decentralized Distributed Generation (DDG) for electrification of remote and far-flung villages. Minister of State for Power, Shri Bharatsinh Solanki, released a CD and booklets which give district-wise information of villages where electrification works are proposed to be undertaken under RGGVY. These booklets will be widely distributed amongst the elected members and public for dissemination of information. · In his address, Shri Solanki also called for a sincere and concerted effort by all the States and the stakeholders in the power industry for the development of the sector. He expressed hope that today's meeting, would have a close review on the capacity addition under construction so as to ensure that like X Plan there is no slippage and the planned capacity addition is attained during the XI Plan. · Member, Planning Commission, Shri B.K. Chaturvedi also addressed the gathering and called upon all utilities to address critical issues in order to improve the power scenario. · Secretary, Ministry of Power, Shri HS Brahma delivered the welcome address. |
| Policy/Regulations |
| · Prime Minister Manmohan Singh’s stress on fixing India’s long-standing power sector woes was evident on Tuesday (June 23) when power minister Sushilkumar Shinde held a day-long meeting with state power ministers in the capital. Apart from top officials from power PSUs, Central Electricity Authority, Planning Commission and heavy industries ministry, minister of state for coal Sriprakash Jaiswal, environment and forest minister Jairam Ramesh and minister of state in the Prime Minister’s Office Prithviraj Chavan were also present—underlining the UPA’s plan to scale up capacities in the power sector with a holistic and concerted effort. · “When I took over as power minister again, I took a review meeting and found that somewhere, we are lagging behind. That’s why this meeting has been called—to deliver the desired results to the country and the Prime minister,” Shinde said after inaugurating the meeting. · The 11th Plan envisages expanding power generation capacity by 78,577 mw by March 2012. But in the Plan period’s first two years, capacity addition has been 15,036 mw. This is double the capacity added during the entire 10th Plan period, but as Planning Commission member BK Chaturvedi pointed out, that’s ‘no consolation.’ In its second innings, the UPA has set itself a 100-day target of adding 5,653 mw of power capacity and over 14,500 mw by the end of 2009-10. “Out of this, 2,319 mw has already been achieved and I am confident that we will not just achieve the target, but cross it by around 300 mw,” Shinde said. · Shinde urged state ministers to follow the Open Access norms in letter and spirit as power capacity addition in the private sector are dependent on it. “Open Access allows generation stations to enter the market and sell power directly to high consumption customers. But some state regulators have fixed high surcharge fees on them, some have fixed the rates power producers can charge. Some independent power producers have told us that states have restricted sales to customers within the state,” Shinde lamented and asked states to review this. · Companies implementing power projects have been asked to place orders for necessary balance-of-plant (BoP) equipment by July 31, 2009. According to the Central Electricity Authority, companies placed orders for 80% of the required BoP equipment by the end of May 26, 2009. For secured fuel supply, the government also asked electricity producers to sign fuel supply agreements with coal companies by the end of this month, and states to initiate steps to import coal by July end. It also asked the companies to form joint ventures by August 31 for timely development of coal blocks so that enough fossil fuel couldbe mined for use in thermal power generation. |
| Projects/Project Finance |
| · The Union government has finally approved the 4,000 Mw Ultra Mega Power Project (UMPP) for Chhattisgarh that had drilled into deep controversy propelling the Centre to reject the proposal earlier. The Centre had earlier selected Chhattisgarh as one of the fives states for setting up UMPP. The state government selected a site in Sarguja district. But the demand of the state government to get 50 per cent of power at invariable cost from the project hit the blockade.In August last year, the ministry of power reportedly rejected the site in Sarguja district proposed by the Chhattisgarh government for the project. A huge forest land coming under the project site was cited as one of the reasons for rejecting the proposal of the state government. Chhattisgarh Chief Minister Dr Raman Singh met the Union Power Minister, Sushilkumar Shinde in New Delhi and discussed about the project. “After initial discussion, Shinde immediately gave his consent to go ahead with the project and asked the officials to start the work,” a senior state government official said.The Rs 20,000 crore UMPP is likely to come up near Lara village of Raigarh district, the official said. The project would be executed by the National Thermal Power Corporation (NTPC). The senior officials of the company would be visiting Chhattisgarh soon to complete the other formalities, the official added. The Chhattisgarh government assured the Centre that it would extend all cooperation in setting up the 4,000 Mw power plant in the state. |
| What Went Before ... |
| Haryana to double capacity of Yamunanagar power plant : 6/24/2009 |
| Conference of Power Ministers: Several steps suggested for achieving the capacity addition targets : 6/23/2009 |
| Highlights of Power sector performance during XI Plan : 6/18/2009 |
| · State-run power major NTPC Ltd said on Tuesday (June 23) it hopes to sign a gas purchase agreement shortly with Reliance Industries Ltd (RIL) for supplies to its gas-based power plants, excepting the Kawas and Gandhar expansion units. NTPC is open to buying RIL’s KG basin gas at $4.2 per million metric British thermal unit (mmBtu). “We will do that (sign the Gas Sale and Purchase Agreement) without prejudice to our court (case with RIL) on Kawas, Gandhar,” the Chairman and Managing Director, Mr R.S. Sharma, said at the sidelines of an industry event. NTPC and RIL are currently locked in a legal dispute over implementation of a gas supply agreement between them in 2005, under which Reliance was to supply 12 mmscmd (million metric standard cubic metres a day) at $2.34/mmBtu for the Kawas and Gandhar projects in Gujarat. Mr Sharma said the government had allocated 2.67 mmscmd for projects of NTPC, other than the two projects for which the legal battle between NTPC and RIL was going on. |
| · State-owned utility National Thermal Power Corporation (NTPC) and the largest coal producer Coal India are in advanced stages of acquiring mining assets in Mozambique, Indonesia and Australia, as the new government firms up plans to meet the growing energy demand. · While NTPC is focussing on Mozambique and Indonesia, Coal India is all set to sign a joint venture agreement with the Mozambique government and has also shortlisted mining firms in Australia and Indonesia, according to top executives from the two companies. Coal India chairman Partha S Bhattacharyya said: “We hope to finalise our overseas expansion deals in Mozambique, Australia and Indonesia in the next three months. Coal India, which produced over 400 million tonne of coal in the previous fiscal, plans to raise its output to 520 million tonne by 2012 and 664 million tonne in the next five years. Its output past year accounted for 85% of the nation’s production. · “From overseas assets, we aim to add 50 million tonne per annum by 2020,” added Mr Bhattacharyya. In order to meet the country’s growing energy demands, NTPC and Coal India (CIL) have been trying to acquire overseas mining assets. Coal India’s overseas venture arm Coal Videsh and its joint venture unit International Coal Ventures are used for the purpose of acquisitions abroad. · International Coal Ventures is a special purpose vehicle (SPV) created by Coal India, SAIL, NTPC, National Mineral Development Corp and others to scout for coal assets abroad. Coal India and SAIL are major stake holders in the SPV. According to NTPC chairman RS Sharma, “We will finalise merchant bankers for our proposed acquisitions next month.” NTPC has identified two mining assets in Indonesia and two in Mozambique for which due diligence process is in progress. The public sector utility would require about 150 million tonne of coal for its power units, which is mainly supplied by CIL. · Coal India is progressing fast also. “We have received the drafts of contract and the JV agreement from the Mozambique government,” said Mr Bhattacharyya. “We’ll go ahead after examining these documents,” he added. The company’s ventures in Australia and Indonesia are in advanced stages, he said, adding that the company has shortlisted few mining firms in both the countries.” · India’s largest coal producer has also been granted two exploratory coal mining blocks in Mozambique, with reserves of 1 billion tonne. “This project would require a joint investment of around Rs 2,000 crore per 10 million tonne exploration over five years. In this, CIL’s investment share would be in accordance with the nature of JV — it could be in order of 3:1 or 1:1,” said Mr Bhattacharyya. · Further, the coal ministry has proposals to raise the overseas investment limit of CIL beyond Rs 1,000 crore for asset acquisition. The proposal would be soon placed before the cabinet committee, minister of state for coal Sriprakash Jaiswal has said. Being a navratna company, which has to be listed by October 2011, it could invest Rs 1,000 crore for overseas assets. |
| What Went Before ... |
| Fuel Supply Agreement For Ramagundam Stage I&II (2100 MW) : 6/10/2009 |
| · Haryana is all set to double the capacity of the 600-mw Deen Bandhu Chhotu Ram thermal power station (DCRTPS) at Yamunanagar by adding either two more units of 250/300 mw or one 660 mw unit based on supercritical technology. Speaking at the power ministers' conference organised at New Delhi, Haryana power and public health engineering minister Randeep Singh Surjewala said being an extension project, most of the infrastructure facilities -- railway siding, raw water reservoir, land, etc, could be shared on the existing premises of DCRTPS. · The cost of setting up additional units by the Haryana Power Generation Corporation Ltd (HPGCL) would be around Rs 2,200 to Rs 2,600 crore. He said expansion of DCRTPS would go a long way in minimising the gap between demand and supply and making Haryana self-reliant in power. Surjewala said since Haryana was contributing significantly to the Central foodgrain pool, an additional share in the ultra mega power projects (UMPP), unallocated power and Central sector projects needs to be given to Haryana. · He also requested help in establishment of a 1500-mw gas-based generation plant in Faridabad. He said the Centre needs to amend its gas allocation policy so that greenfield gas-based generation projects like the one at Faridabad could come up in the country. He also requested the Centre to expedite the decision regarding establishment of the 2800-mw nuclear power plant in Fatehabad. Speaking about implementation of the Rajiv Gandhi Gramin Viyutikaran Yojna, he said schemes for all the 11 districts under UHBVNL and the seven districts for DHBVNL had been sanctioned for Rs 197.39 crore. |
| · KEC International, a global leader in the power transmission EPC business and an RPG group company, has bagged three orders totaling to Rs 110 crore. One of the orders is in Peru, in the South American continent and two in Chhattisgarh. The company has successfully re-entered the South American continent after a decade by bagging a tower supply order from Peru worth Rs 33 crore. In Chhattisgarh, the company has bagged two orders worth Rs 77 crore turnkey transmission line order from the Chhattisgarh State Electricity Board. The scope of first order, worth Rs 42 crore, involves supply of line materials and construction of 220 kV DCDS Transmission Line from proposed 220 kV Substation Churi (Korba) to 220 kV Substation Bilaspur (Mopka) on turnkey basis. The total length of the line is 90 kms. The duration of the project is 19 months. The scope of the second order, worth Rs 25 crore, involves supply of line materials and supply and erection of construction of LILO of 400 kV S/C Korba - Bhilai (Khedamara) Line to 400 kV S/S Raipur (Raita) on turnkey basis. The total length of the line is 25 kms. The duration of the project is 8 months. |
| Tariffs |
| · NHPC, whose IPO is expected to hit the market by August, has received a major set back as the Central Electricity Regulatory Commission (CERC) has dismissed its petition seeking relaxation under the CERC’s tariff regulations. The NHPC had pleaded that relaxation and re-fixation of the normative annual plant availability factor was necessary to avoid hardship and financial losses. CERC's judgement is crucial as the NHPC is engaged in the capacity addition of 5,322mw by the end of 11th plan. Besides, it has identified hydro projects with a generation capacity of 14,786mw that are under the stages of survey and investigation. · The NHPC had sought relaxation for Dulhasti (390mw), Chamera stage II (300mw), Salal (690mw), Uri (480mw) and Tanakpur (120mw) generation stations. It had also pleaded relaxation by 5% in the normative annual plant availability factor during the first year of commercial operation at all its generating stations. The company had sought relaxation of timelines specified in the tariff regulations for completion of hydro power projects to enable it to claim an additional 0.5% of return on equity when delay in completion is not attributable to the generating company. It had filed its application under the regulation 44 of the tariff regulations. · The CERC has observed that, “The power relaxation cannot be exercised in a manner so as to nullify the relevant provisions of the tariff regulations and render them otiose or completely redundant. There cannot be any omnibus relaxation in the manner sought by the NHPC. Thus, the present application for relaxation is beyond the scope of the regulation 44 of the tariff regulations.” · Moreover, the CERC has opined that even though the NHPC had termed the application for relaxation, it was a plea for review and modification of the tariff regulations in disguise. “The tariff regulations having been notified by the CERC in exercise of its legislative powers conferred under the Electricity Act, 2003, have become part of the statute and partake the characters of legislation. The Clause (f) of sub section (1) of section 94 of the Electricity Act, 2003, undeniably confers powers of review on the CERC on same basis as vested in a civil court under the Code of Civil Procedure. The application is not maintainable and is hereby dismissed,” the CERC ruled. |
| Fuel Issues |
| · A tonne of coal is the same as another tonne of coal, you might think. But power major NTPC Ltd is finding that this year’s coal is not yielding as much energy to generate electricity as last year’s did or as that of the year before. So the utility needs to burn more and more coal to produce a unit of electricity.In 2008-09, NTPC, the nation’s largest electricity producer with 79 coal-fired units across the country, managed to increase its electricity output by 3.7 per cent over the previous year, but had to consume 5.4 per cent more coal than it did previously. It was not an anomaly. In 2007-08, it increased electricity output by 8.2 per cent, but coal burn was up 9.2 per cent. The situation was better the previous year (2006-07), where electricity output was up nearly 11 per cent against an incremental coal consumption of around 8 per cent.NTPC officials concede that that a steady decline in domestic coal quality has been among the key factors responsible for the mismatch in incremental coal consumption and power generation. “Power stations are designed for a particular coal quality range for optimum plant efficiency. The key areas of concern include high levels of ash in coal, which goes up to 45 per cent in case of domestic coal, and also inconsistency in coal quality, both chemical and physical. Presence of mineral matter in coal has a detrimental impact - wear and tear of coal and ash flow paths, combustion chambers, mills, crushers etc. High ash also impacts the plants thermal efficiency,” an NTPC official said.According to Coal Ministry officials, Indian coal has always had a problem on account of high ash content. “Besides the inherent ash problem, there is dilution in the quality of coal due to the over-reliance of open cast mining over underground mining in recent years,” a Coal Ministry official said. Stones and other inert material happen to get scooped up along with the coal. While in 1970-71, open cast mining constituted only 20 per cent of production, at present about 85 per cent of coal is produced through this mining method, due to which the quality of coal - in terms of gross calorific value - has been steadily deteriorating.According to Power Ministry estimates, during the early 1960s, the calorific value of domestic coal was around 5,900 kilocalories per kilogram (KCals/Kg). By the 1970s, this had gone down to around 5,250 KCals/Kg, which dipped further to around 4,200 KCals/Kg in the Eighties. This came down to around 4,000 KCals/Kg in the Nineties then to the current levels of around 3,500 KCals/Kg. Imported coal from countries such as Indonesia, Australia and South Africa, in comparison, has an average calorific value of around 6,500 KCals/Kg. |
| · The power ministry has made it clear that it will not intervene in the ongoing legal dispute between NTPC and RIL over the gas pricing. While, NTPC on Tuesday (June 23) said it has not received any directions from the power ministry on signing of gas sale purchase agreement (GSPA) with RIL. Besides, NTPC reiterated that until RIL discusses issues raised by it on marketing margin and take or pay, NTPC will not sign GSPA which has been circulated by RIL. · Further, NTPC also said there was no question of it agreeing for a price of $4.20 per million British thermal unit (mmbtu) for KG-D6 gas supply for its power projects other than Kawas and Gandhar. Power minister Sushilkumar Shinde said, “There is no question of the ministry's intervention in the NTPC-RIL matter which is subjudiced. NTPC is a corporation and the ministry can at best give suggestions. I will not comment on this issue till the court decides it.” · When questioned that only NTPC has yet to sign GSPA with RIL for the supply of around 2.8 mmscmd of KG-D6 gas, Shinde refused to comment. Interestingly, NTPC sources, which desired to be anonymous said RIL has not yet shown any desire to discuss various issues raised by NTPC pertaining to GSPA. “It is quite ironical that RIL wants to sign GSPA without discussion. What RIL says is right but what NTPC argues is wrong. NTPC has not yet agreed to sign GSPA until all issues are resolved. Besides, the power ministry has not given any instruction to NTPC for signing GSPA with RIL,” sources said. · Meanwhile, NTPC will file its say on the minutes of September 2007 of empowered group of ministers (eGoM) on KG-D6 gas pricing. NTPC has been asked by the Bombay High Court to make its submission in this regard as the court has slated next hearing on July 8 on RIL-NTPC dispute. According to the eGoM minutes, a gas price of $4.20 per mmbtu will be at delivery point, which translates into a price of Rs172.20 per mmbtu at the prevailing Indian rupee-US dollar exchange rate. The approved price is 8.32% lower than the price proposed by the contractors. |
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