Tribunal to hear plea against nod to Jindal’s power plant…

The National Green Tribunal today agreed to hear a plea challenging the environmental clearance granted to Jindal Power Ltd on November 4, 2011, for increasing the capacity of its 1,200 MW coal-based thermal power plant in Raigarh district of Chhattisgarh to 2,400 MW.

 

The Tribunal, however, refused to entertain the plea assailing the Ministry of Environment and Forest’s (MoEF) decision to grant environment clearance on March 18, 2011, for the first phase of the project on the ground that it was time- barred.

 

A bench headed by Tribunal’s acting Chairperson A S Naidu sought replies from MoEF, Chhattisgarh Environment Conservation Board and Jindal Power Ltd on a plea filed by NGO, Mehnatkash Mazdoor Kishan Ekta Sangathan.

 

“The cause of action for challenging the order dated March 18, 2011, has became grossly barred by afflux of time and thus has attained finality,” the bench, also comprising Professor R Nagendran, said.

 

“We hold that this appeal shall be confined to environment clearance granted by the MoEF by order dated November 4, 2011,” it said while seeking replies on the same by May 10.

 

The MoEF had on March 18, 2011, granted environment clearance for establishing a 2400MW coal-based thermal power plant but due to non-availability of coal Jindal Power Ltd established a plant for 1200MW (2×600 MW) and commenced production.

 

Jindal Power Ltd, however, managed to import more coal and filed another application seeking clearance for additional 2×600 MW coal based thermal power plant.

 

Jindal’s application was allowed and the MoEF by order dated November 4, 2011, granted clearance for the same.

 

Both the clearances were assailed in the plea on which the Tribunal held that the March 18, 2011 clearance could not be heard due to lapse of time allowed for challenging the clearances and agreed to hear the plea against the November 4, 2011 clearance.

 

 

 

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Nuclear Energy to be counted as clean energy source according to Planning Commission…

Nuclear energy should be considered a clean energy source, Mr Montek Singh Ahluwalia, Deputy Chairman Planning Commission, said that at the end of the 23-Government Clean Energy Ministerial meeting that took place in London this week.

 

Mr Ahluwalia, who represented India at the third CEM conference, said that nuclear energy was “one part of a move towards a low carbon energy” future.

 

India is set to host the fourth CEM meeting in next April. The London meeting brought together representative of governments from across the world, including China, Brazil, Australia and the US, and is meant to be an annual forum for some of the world’s biggest emitters of greenhouse gases to work together on policies to increase their use of renewable energy.

 

Among the initiatives launched were a joint project by Italy and the US to provide off grid lighting to two million homes in India, as part of a global energy access partnership.

 

Speaking at a press conference, alongside the US Energy Secretary, Mr Steven Chu; the British Minister of Energy, Mr Edward Davy; and Mr Kandeh Yumkella, Director of the UN Industrial Development Organisation, Mr Ahluwalia warned that if the world continued to develop renewable energy at the rate it currently was, “we are not going to achieve what we need to achieve”.

 

ENERGY EFFICIENCY

He said that it was quite clear that India wanted to make “major improvements in energy efficiency and use and the cleanliness of the energy mix.” “The solution to climate change has to be a combination of improvement of energy use and improvements in emissions.” However, at the moment the switch to renewable energy was “not something that can be done without bearing the costs…the good news is that the additional cost is falling.”

 

Asked about to what extent India’s energy future would incorporate new, and controversial, technologies such as fracking, and how this would affect the future of renewables development, Mr Ahluwalia said that India didn’t currently have a programme for going into fracking “in a big way”. “We are watching experiences elsewhere.”

 

 

 

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Madurai Corporation to take green route for power generation…

Power India found that with the state reeling under a severe power crunch, the Madurai Corporation has started focusing on energy generation from alternate measures such as solar and bio-ethanol. During the council meeting held on Wednesday, a resolution was passed to call tenders from eligible companies to set up solar projects in the corporation under the Public Private Partnership (PPP).

 

The resolution stated that power supply for corporation needs like pumping stations and taxation centres had significantly gone up after the corporation limits were expanded from 72 wards to 100 wards. With growing energy requirements, the corporation has resolved to select eligible players for solar power projects. After getting government approval, they will go ahead with calling for the tenders through PPP.

 

A senior official from TANGEDCO said that the current demand of the city can be estimated to 160 MW to 180 MW per day for 4.16 lakh connections in the city. “The total demand can be estimated somewhere between 160 to 180 MW based on the power consumption. However, the supply will depend on the generation factors like power plants and southern grid. Hence, supply cannot be ascertained like the demand,” he said. City engineer, A Mathuram said that the corporation has proposed solar projects to meet the increased power needs on corporation facilities. “We will register in PPP cell with the government and call for the express of interest. The eligible players will then be shortlisted for the project,” he said.

 

Madurai Corporation also passed another important resolution on green energy to produce bio-ethanol and e-diesel by utilising the additional 250 tonnes of garbage generated from the newly annexed areas of the corporation. The resolution also included producing electricity from the bio-ethanol. Passing the resolution, mayor, Rajan Chellappa said that through JnNURM, the corporation had executed bio-compost plants to process 350 tonnes of garbage that was generated from the earlier 72 wards. With another 250 tonnes of garbage generated from newly annexed areas, the corporation will seek out eligible players to work on producing bio-ethanol and e-diesel from which electricity will be produced, he said. Commenting on the project, Mathuram said that producing bio-ethanol from garbage was a successful model abroad and the technology is a viable one.

 

Corporation sources said that these are big projects which will take considerable time to materialise but they will greatly aid to substantiate the power needs of the corporation.

 

 

 

 

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India invokes special powers under Electricity Act to enable open access…

The government has invoked special powers under the Electricity Act and directed the central and state regulators to implement a long-pending reform to allow industrial consumers to buy cheaper power from the open market.

 

The move will help 15,000 large consumers particularly the sick textile, cement and steel industrial units in states like Punjab and Tamil Nadu by ensuring regular supply of electricity at competitive rates and boost business of power bourses and 52 power traders including NTPC, PTC India, Tata Power, Reliance Infrastructure, Jindal Steel, Essar Power, JSW Energy, GMR Energy and Indiabulls.

 

Power secretary P Uma Shankar said the decision was taken because similar directives in the past were taken lightly by regulators. “The ministry has issued letters to regulators to prepare regulations in line with communications sent earlier,” he told ET.

 

“…the ministry of power, govt of India, in exercise of powers under section 107 of the Electricity Act 2003 hereby issues direction to the central commission to take all necessary steps, including framing of appropriate regulations to implement the provisions of open access…,” the power ministry said in a directive issued on Monday.

 

Section 107 authorises the government to issue final and binding policy directives to central electricity commission in public interest. Central Electricity Regulatory Commission chairperson Pramod Deo said regulations were already there for inter-state transfer of power.

 

Traders and large consumers lauded the move but said issues remained with state machinery that have been impeding implementation of the ‘open access’ reform, introduced in Electricity Act 2003 as a powerful tool to induce competition in power sector.

 

Open access refers to enabling buyers an option to choose source of electricity and giving them right on transmission and distribution system for transfer of power. Distribution companies that fear losing their high paying industrial consumers are impeding implementation of the reform despite directives from power and law ministries asking regulators and distribution companies to set free large industries consuming more than a megawatt of power.

 

Tariffs for industrial consumers in India are among highest in the world while supply to sectors like agriculture remains highly subsidised. Many states impose huge charges like cross subsidy, transmission, transmission losses, wheeling, wheeling losses charges on open access consumers to discourage industrial consumers buy from elsewhere. An IIT-Delhi study shows distribution companies will earn 10% more revenue if they prudently exclude a portion of large consumers.

 

NTPC Vidyut Vyapar Nigam, power-trading arm of the company, said it was a good beginning to ensure reliable power to industries provided they have the requisite infrastructure.

 

Country’s largest power trading platform India Energy Exchange’s managing director and chief executive officer Jayant Deo said it was a welcome move. Manikaran Power Ltd executive director Amit Ailawadi said, “The opinion is a welcome step but needs to be implemented properly at the distribution companies’ level which are opposing it tooth and nail.”

 

 

 

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Power Ministry asked PFC and REC to lend more to power projects…

The power ministry has written to the Cabinet Committee on Infrastructure to mandate a uniform 50% risk weight to bank loans for state-owned Power Finance Corporation (PFC) and Rural Electrification Corporation (REC), a move which could lead to banks doubling their exposure to these companies if it finds favour with the Reserve Bank of India (RBI).

The power ministry has proposed a uniform risk weight of 50% for these two infrastructure financing companies (IFCs).

 

At present, banks assign low risk weight only to top-rated IFCs, while others attract 100% risk weight. The proposal also seeks to raise the overall exposure limit of banks to PFC and REC to 25% of their capital funds. As per existing norms, bank exposure limit to non-banking finance companies in infrastructure is set at 20% of the total capital fund (capital and reserves).

 

Risk weight is the proportion of loans which is counted towards total assets against which banks have to maintain statutory reserves. A high risk weight discourages lending by increasing the capital requirement for lenders. Under current norms, banks are allowed to assign risk weight as per their own internal assessment.

 

“The note to CCI addresses the key issue of increasing funds for the power sector to narrow the widening energy deficit in the country. Once the committee takes a decision, it will be for the RBI to notify the new norms,” said a power ministry official asking not to be named.

 

In the proposal, the power ministry has said that banks could be advised to consider only 50% of their total funding to PFC and REC as power sector exposure while determining the industry exposure decided by each bank. This could be done by lowering the risk weight on loans extended these two IFCs. By doing so, banks could either double their exposure in PFC and REC or use the released capital to increase their overall funding to the power sector while staying within specified industry exposure norms.

 

“We attract 100% risk weight by banks and its lowering would definitely help to mobilise more funds for the sector,” said an REC official.

 

As per RBI data, public sector banks have a total exposure of over Rs 3 lakh crore to the power sector at the end of last financial year. The exposure of India’s largest bank State Bank of India to the sector is over Rs 32,000 crore. The demand for funds, however, is rising sharply with estimates suggesting the power sector may require over Rs 11 lakh crore during the 12th Plan period to commission projects crucial to bridge the country’s widening energy deficit.

 

“We feel that banks lending to IFCs like us should carry a lower risk weight as it qualifies as indirect risk for the lender with a portion of the risk being taken by specialised institutions like us. This would also help increase fund flows to the sector,” PFC chairman and managing director Satnam Singh said.

 

Under current norms, banks are allowed to assign risk weight as per their own internal assessment. “If the new norms are accepted, banks will be able to lend more and the interest rates may also go down,” said an official of a public sector bank.

 

India has a power generation capacity of about 200,000 MW and plans to add close to 100,000 MW during the 12th Plan period. For meeting this capacity addition huge fund is required. While power companies have bee given permission to raise money through ECB route to meet part of funding requirement, larger exposure of domestic banks is also considered important to boost the sector.

 

 

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Suzlon to raise $500 million through bond sale…

Power India found that Suzlon Energy Ltd. (SEL) plans to raise as much as $500 million, including through a bond sale, to meet debt payments in June, its finance chief said.

 

India’s biggest wind turbine maker began talks with “large, international banks” four weeks ago about selling high-yield bonds, Chief Financial Officer Kirti Vagadia said today in a phone interview.

 

“All our overseas subsidiaries are practically unleveraged,” said Vagadia, who replaced former CFO Robin Banerjee last month. “We want to raise funds against those international assets.”

 

Suzlon owns Hamburg-based Repower Systems SE. Re-balancing debt across the group would help reduce interest payments, Vagadia said. In June, $358 million in foreign-currency convertible bonds mature. Suzlon isn’t renegotiating those with bondholders, he said.

 

The Pune, India-based company expects to complete the fresh fund-raising and to sell “non-critical assets” to meet obligations by June, Vagadia said. It also expects to see strong cash flows by then as 65 percent of orders tend to come in the first half of the year, he said.

 

Vagadia, when asked, said selling Repower or listing a stake wasn’t an option.

 

“I’ve said we want to sell non-critical assets,” Vagadia said. “By definition, Repower is our most critical asset. I think that answers the question.”

 

Suzlon shares reversed some of its earlier losses before closing down 4.3 percent at 21.35 rupees.

 

Suzlon completed its buyout of Repower in October 2011 after gradually increasing its stake over four years. Re-listing it makes no sense at this point, Vagadia said.

 

 

 

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India and Brazil to drive the global wind energy capacity addition…

The global wind industry will install more than 46 gigawatt of new wind energy capacity in 2012 according to a five-year industry forecast published by the Global Wind Energy Council (GWEC).

 

By the end of 2016, total global wind power capacity will be just under 500 GW, with an annual market in that year of about 60 GW, the report said.

 

Overall, GWEC projects average annual market growth rates of about 8% for the next five years, but with a strong 2012 and a substantial dip in 2013. Total installation during 2012-2016 is expected to touch 255 GW, with cumulative market growth averaging just under 16%.

 

According to Steve Sawyer, GWEC Secretary General for the next five years, annual market growth will be driven primarily by India and Brazil, with significant contributions from new markets in Latin America, Africa and Asia.”

 

Asia will continue to be the world’s largest market with far more new installations than any other region, installing 118 GW between now and 2016, and surpassing Europe as the world leader in cumulative installed capacity sometime during 2013, ending the period with about 200 GW in total.

 

After nearly a decade of double and triple digit growth, the Chinese market has finally stabilised, and will remain roughly at current levels for the next few years.

 

Having achieved a 3 GW market for the first time in 2011, the annual market in India is expected to reach 5 GW by 2015.

 

Complete report can be downloaded from here.

 

 

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NTPC’s denial of CIL’s new fuel supply agreement may jeopardise the coal supply to power producers…

India's largest power sector company NTPC's denial to sign the newly formulated fuel supply agreement for new power plants is likley to jeopardise the government mandated plan to secure committed coal supply to power producers.

NTPC accounts for more than 35% of the quantity that CIL would have to supply under the new FSA. Of the 51 FSAs which six CIL subsidiaries (out of nine) would have to sign to supply an additional 70 million tonne to the new power plants to feed 28,000 MW of new generation, supplies to NTPC only would be 25 million tonne to its capacity addition during 2009-12.

But NTPC chairman Mr Arup Roychowdhury made clear that his company would not sign the new FSA since there was nothing of supply guarantee in it.

 

Although CIL's chairman Mr S Narsing Rao said his company is in talks with NTPC to resolve issue, the matter have become aggravated with NTPC now also denying to pay for coal on Gross Calorific Value based pricing. NTPC wants CIL to go back to the old regime of useful heat value based pricing.

Mr Roychowdhury said the company's requirement was not matching with the grades, which CIL has created under the GCV classification. He said that "The way CIL has created the new GCV grades are not beyond doubts. NTPC cannot pay for coal which didn't have quality assurance.”

 

The matter has already been referred to the power ministry to take it up with the coal ministry an official said.

 

 

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Fresh push to reforms soon, says R. Gopalan

While the government faces the music for going slow on reforms, away from the media glare, North Block is working on the blueprint for a fresh push to reforms.

Economic affairs secretary R Gopalan has spelt out the details of the blueprint and says that coal, power and petroleum sector reforms are on the fast track.

“In power we have to make sure that additional capacities are created, distribution losses are reduced, reforms in T&D are carried forward. So in each of these a number of steps are required to be taken. All the concerned ministries are on it currently, a coal EGOM is taking place shortly, a telecom EGOM is taking place shortly, we need to take decisions very quickly, so that we are able to improve the investment sentiment,'' Mr Gopalan said.

Reacting to the issues raised by ratings agency S&P, Mr. Gopalan also said that India needs to take steps to manage its subsidy bill, control its expenditure and achieve targeted revenue to keep the economy on track, adding that “it is not that S&P has to indicate that. We all know about it and we are determined to take these decisions”.

The empowered group of ministers on coal is considering steps that can be taken to boost production, so that all the power plants that have been commissioned can produce power at optimum levels. Power plants fired by coal have been facing acute shortage of fuel, sometimes managing with supplies that barely last a week.

On the issue of subsidies, particularly in the context of pricing of oil products, Mr Gopalan says, “These are all in the works, so that at an appropriate time the political executive will take a decision. We are determined if the fiscal deficit has to be maintained at 5.1 per cent, we would like to better it, but we have kept a reasonable target of 5.1 per cent.”

Speaking specifically about the timing of diesel deregulation, the economic affairs secretary said, ''The sooner we take the decision, the longer time we have got in the year to adjust. There are a number of alternatives, which are at various stages of consideration right now, so I would not like to divulge. How do we handle this as we go along, is an issue that we are looking at.”

Commenting further on the issue that oil companies have not raised prices since November last year, Mr Gopalan said, “It is up to the oil marketing companies to decide on prices. The government provides subsidies only for diesel, LPG and kerosene.'' That clears the air that the government will not make up for the losses of oil marketing companies after they have not raised prices of petrol in the last five months.

According to the assessment of the finance ministry, oil prices are likely to be rangebound over the next few months. On the lower side, crude oil prices could hover around $110-115/barrel, which will help the government in keeping its oil subsidy bill, which peaked at Rs 1.38 trillion last fiscal, under check.

The government is also preparing the ground for replying to the notice sent by Vodafone under the bilateral investment treaty with the Netherlands. The government has decided that tax arbitration is not provision under the India-Netherlands Bilateral Investment Promotion and Protection Treaty (BIPPA).

“This BIPPA does not cover tax disputes,” Mr Gopalan said, clarifying the government stand. A formal reply to this extent will be communicated to Vodafone shortly, he added.

 

 

 

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Rail wagons availability improved coal supply for thermal projects…

The coal shortage at a number of thermal plants in the country is likely to continue as Coal India Ltd. (CIL) envisaged growth is linked to increased availability of railway wagons.

The average growth in coal movement through rail has been only around 3% during the last 3 years whereas CIL has envisaged a growth of around 12.6% through rail to meet the target in current financial year. The daily rake requirement to meet the target will be 193 rakes against last year’s supply of 168 rakes.

As per Central Electricity Authority report the generation loss reported so far due to coal supply shortages during April’11-March’12 has also increased to 8.82 billion units from 7.0 billion units in the corresponding period last year. During the financial year 2011-12, capacity addition of 20501 MW was achieved out of which 19079 MW capacity addition by Coal/Lignite based plants. Many of the newly commissioned units, although were able to generate more, could not do so on account of various problems which include Coal shortages

The signing of coal supply agreements with various power producers whose units have been commissioned may not yield desired results.

Even CIL has reportedly refused to supply to power plants commissioned since December 2011. This includes a 300-Mw unit of Reliance Power’s Rosa power plant in UP and a 660-Mw plant of China Light & Power (CLP) at Jhajjar, Haryana.

CIL has already signed at least 10 of the 50-odd FSAs envisaged with power companies for plants commissioned between March 2009 and December 2011.Further the coal production increase has to match with the capacity addition. The import of coal with higher gross calorific value can be blended up with Indian coal to 15 % only . The increased coal racks movement in the country is very vital for proper coal stocks at thermal plants.

Even today there are 18 thermal plants in the country where is the coal stock is less than 4 days and comes under super critical category. There are at least two thermal plants namely Koderama and Durgapur steel where the coal supply to these plants is yet to be started.

Anapara C, Chhabra and Bokaro thermal plants have nil coal stock due to inadequate coal allocation. Jhajjar thermal plant has two days coal stock because of inadequate coal allocation. CIL’s targets have been fixed at 468.74 Million Tons (MT) and 474.70 MT respectively for production and coal off-take.

 

 

 

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Delhi Government’s Bawana plant in trouble…

The Bawana plant, one of the ambitious project of the Delhi government, may not start producing power anytime in the near future.

 

For, reports said Reliance Industries has expressed its helplessness to provide gas to Delhi to run the plant.

 

Delhi chief secretary Praveen Kumar Tripathi said the union ministry of petroleum and natural gas had recently allocated gas for Delhi’s Bawana plant. The plant was built at a cost of Rs 4,500 crore,

 

“We now have to sign an agreement with Reliance Industries for the supply of gas. If the company fails to abide by the central government’s order, we will take up the matter at the minister’s level,” Tripathi said.

 

Delhi currently produces 1200 MW electricity. It gets about 3,000 MW as its share produced at central government power generation plants.

 

 

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RPower’s Dahanu Solar Project started commercial operations with RInfra of Maharashtra…

Power India found that the 40 MW Solar PV Project of Reliance Power Limited (RPower) at Jaisalmer, Rajasthan has started commercial operations with Reliance Infrastructured Limited (RInfra) and providing electricity to households and business in Maharashtra.

 

Under the Power Purchase Agreement, the entire power generated by this plant would be supplied to Maharashtra.

The plant is located, 180 km in the West of Jodhpur, and has one of the highest levels of solar irradiation in the country.

As said by Mr. Michail Barrow, Director of Asian Development Bank (ADB)

"Reliance Power's Dahanu solar plant in Rajasthan has been connected with the national grid and started supplying power. "The 40-megawatt plant is expected to produce more than 60 million kilowatt hours of electricity a year, enough to light up more than 70,000 average Indian households, while avoiding more than 60,000 metric tons of harmful carbon dioxide emissions per year," he said.

The $ 147.5 million Dahanu plant, near the village of Dhursar in the Jaisalmer district, is one of the largest such units in the country.

ADB has provided $ 48 million loan for this project. It is also lending $ 103 million to Reliance Power to help build the Rajasthan Concentrating Solar Power Project, which will be located adjacent to the Dahanu plant.

 

The arid, barren landscape of this part of the state was found to be an ideal location for the 350-acre plant that comprises 500,000 solar panels. It has more than 500,000 ground-mounted photovoltaic thin-film modules, which were procured from First Solar.

Concentrating solar power and photovoltaic solar power are different methods of generating electricity from the energy of the sun. The Indian government is looking to develop both the methods.

The Dahanu plant is part of ADB's goal of developing, financing, or commissioning 3,000 MW of solar energy generation capacity in Asia by May 2013.

 

ADB's Asia Solar Energy Initiative is aimed at helping to ensure that the region's demand for energy is met in a way that is environmentally sustainable.

 

In addition to the two plants, ADB is supporting the development of a solar park in Charanka in Gujarat by financing a transmission line and substation to evacuate power.

 

The multilateral agency has also set up a financing facility to provide partial credit guarantees to lenders willing to fund solar power projects of up to 25 MW. That facility is designed to help reduce risk for the private sector, and to mobilise long-term funding for solar energy development.

 

 

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Suzlon bagged order for 50.4 MW wind project at Rajasthan from Eoxis Group…

Power India found that  Suzlon Energy Limited (Largest domestic wind turbine manufacturer) has bagged a contract for a 50.4 MW Wind Power Project in Rajasthan from Eoxis Group (UK based renewable energy developer).

 

The Eoxis Group is backed by Platina Energy Partners which is London based independent renewable energy investor.

It has invested in solar projects in Europe, and also recently completed its first 15 MW solar project in Gujarat.

 

This 50.4 MW order is the group’s first investment in the Indian wind energy sector, it added.

 

Power India further found that the project will be set up in Rajasthan and is scheduled to be commissioned by January, 2013. Suzlon will execute the contract under its end-to-end business model.

 

As said by Laurence Mulliez, CEO, Eoxis:

"We have a very strategic focus on the wind sector and, in particular, on India which is amongst the top five wind energy markets worldwide,"

"We are happy to partner with Eoxis in their maiden wind energy project in India, and look forward to building a strong long-term relationship," said Tulsi Tanti, Chairman of the Suzlon Group.

Shares of the Suzlon were trading at Rs 21.65, down 2.70 percent on the BSE.

 

 

 

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CIL refuses to supply power plants commissioned after December 2011…

Power India found that in a twist to the unending drama over coal supply, Coal India Ltd (CIL) has refused to supply to power plants commissioned since December 2011. The move is set to stall investment worth Rs 40,000 crore in new power capacity of 8,156 Mw. This includes a 300-Mw unit of Reliance Power’s Rosa power plant in UP and a 660-Mw plant of China Light & Power (CLP) at Jhajjar, Haryana.

 

The source of the current controversy is an April 19 circular issued by CIL’s subsidiary, Central Coalfields, for May. The circular stated the rake movement plan would be accepted only from plants that had signed fuel supply agreements (FSAs). This could bring power companies under pressure, as these are unwilling to sign FSAs in their current form, with a low-penalty level. Power companies give a rake movement plan to CIL, the coal ministry and the rail ministry a month before tying up necessary evacuation facilities for coal transport to plants

 

The circular has left power companies jittery, as these were hopeful of receiving coal under the existing memorandum of understanding (MoU) route until FSAs were signed. CIL’s fresh missive is despite Prime Minister Manmohan Singh’s diktat in February, followed by the President’s order in April, asking the company to meet at least 80 per cent of the coal supply to 50,000-Mw capacity plants to be commissioned up to 2015, including 26,000 Mw commissioned by December 2011.

 

“CIL’s insistence on accepting the rake movement plan only from plants with FSAs has stalled 8,156-Mw capacity projects. This is an operational issue, but shows Coal India’s attitude towards meeting the supply obligation. This has happened despite the power ministry’s assurance to us that supply would continue under the MoU route,” Ashok Khurana, director-general of the Association of Power Producers (APP).APP is an industry representative body of 22 major companies in the sector.

 

A Reliance Power spokesperson declined to comment on the matter.

 

Coal India would sign FSAs for 900 Mw of the total 1,200 Mw capacity of Reliance Power’s Rosa plant. The current controversy covers only a 300-Mw unit of the plant, commissioned after December 2011. CLP could not be contacted for comments.

 

Until March 2009, CIL supplied coal to power plants under FSAs with 90 per cent supply commitment. Since then, however, the world’s largest coal producer has been insisting on supplying coal under the MoU route, with only 50 per cent commitment and no legal obligation, as delayed clearances for new mines took a toll on production. When CIL decided to sign FSAs for projects commissioned till December 2011, after a Presidential directive, companies were assured by the power ministry that FSAs for projects completed by March 2012 would also be signed in due course. Meanwhile, supply to these plants would continue through the MoU route.

 

However, “apprehending CIL’s ingenuity in springing surprises”, APP took up the matter with the power ministry, expressing fear over the possibility of CIL refusing to supply coal. The power ministry had then assured the power industry that status quo would be maintained until FSAs were signed. “This circular, if not withdrawn immediately, would ground the entire 8,156 Mw capacity commissioned after 31 December 2011, adding to the power deficit and consumer woes. As the summer intensifies, the position is likely to worsen and, therefore, the capacity created should be utilised to the maximum,” Khurana said in an April 25 letter to Power Secretary P Uma Shankar, Coal Secretary Alok Perti and Shatrughna Singh, joint secretary to the prime minister.

 

Meanwhile, CIL has already signed at least 10 of the 50-odd FSAs envisaged with power companies for plants commissioned between March 2009 and December 2011.

 

 

 

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Jammu & Kashmir Government sets up 4 wind masts to assess wind energy potential in the state…

Power India found that the Jammu & Kashmir government has set up 6 wind monitoring stations (“Mast”) in the state to assess the potential for harnessing wind energy and developing wind projects in these areas of the state.

 

Earlier Power India has reported the J&K is planning to develop its first project at Reasi.

 

Further on that, the Jammu and Kashmir Energy Development Agency (JAKEDA) has installed six wind masts at six locations to carry out a preliminary study for wind power potential and feasibility.

The study will be conducted for two years. The masts were installed during 2011 at at Pir Ki Gali in Poonch district, Ladadhar-Patnitop in Ramban district, Gulmargh and Parishpora areas in Baramulla district, Sonamargh and Kangan-Mamar area in Ganderbal district.

The criteria for developing a wind farm is to first assess the wind potential and then take up the wind power projects, if the site is found feasible and approved by Centre for wind Energy Technology.

However, one Bidda site in Reasi district has been found feasible, with high wind potential, and the first wind power project in the state is expected there.

Wind masts were also installed at Ijara in Baramulla district and Bidda. At Bidda there is wind potential of about 336 watts/sq mt at 50 mts height, officials said.  Project of around 10 MWs could be developed.

Ijara site was not found feasible. For development of the Bidda site, draft MoU has been prepared and forwarded to NHPC for its acceptance as the location at which wind farm is to be developed is leased out to NHPC by the State Government.

In case of wind power projects, masts are installed in the first instance to measure the wind velocity for ascertaining the potential of the state. The measurements are taken initially for two years and if the site is found feasible then the study is extended for one one more year, they said.

 

 

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MNRE planning to re-introduce depreciation & generation incentives for wind energy…

Power India found that Ministry of New & Renewable Energy (MNRE) is planning to re-introduce incentives for the wind energy sector to allay fears that capacity addition could fall after the sops were withdrawn from April 1.

 

The Government of India (GoI), earlier,  rolled back two key incentives for the sector this year: accelerated depreciation and generation-based incentive. Industry players say the withdrawal of these sops will keep power producers at bay and could reduce annual capacity addition to less than 1,000 MW in 2012-13, against the target of 3,000 MW.

 

“We have requested the finance ministry again to reconsider introducing the incentives for the current financial year. They see the merit in our request and we have comfort that we should be able to reinstate it,” a senior ministry official said. Sources said there was consensus within the ministry for extension of the two incentives ahead of the Union Budget, but the government ended the tax break from March 31, much against the wishes of industry players. “We are working on the proposal and hope to put it before the cabinet for approval within two months,” the official added.

 

From April 1, new wind farms can only claim accelerated depreciation at 15% of the cost of the equipment, as against 80% earlier. Almost 70% of the 2,800 mw of new wind energy capacity added last year was set up under this incentive, while the remaining opted for generation-based incentive (GBI). Independent power producers, who set up units to sell electricity to state distribution companies, typically opt for generation-based incentives, which give them a benefit of Rs 0.50 for every unit of electricity.

 

Ramesh Kymal, Chairman and Managing Director of the Indian subsidiary of Spain’s Gamesa. Kymal who  also is the  Chairman of Indian Wind Turbine Manufacturers Association (IWTMA).

“The wind industry is facing several issues. Rolling back of accelerated depreciation would lead to a temporary dip in the market. We are also pushing for GBI, which would be key for long-term growth of independent power producers in the sector,”

 

Mr Chintan Shah, Head of strategic business development at Suzlon Energy, said,

“Components used in coal power plants can claim higher depreciation rates, while wind projects can now claim only 15%. This is quite skewed, given that the government wants to increase the capacity of renewable energy in the country.”

 

The wind energy industry, which is expected to add 15,000 mw in the next five years, thrived even as other sectors missed targets due to incentives such as generation-based incentives and accelerated depreciation. Their roll back has also triggered concerns that investors seeking tax breaks may migrate to other sectors such as solar power, which offer incentives.

 

“The roll back will put a break on capacity addition in the sector. But the impact would not be much if it is reinstated soon since most utilities and investors place orders for wind farms in the second half of the year,” said Hemal Zobalia, Partner, KPMG India.

 

 

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India boost the Solar Energy globally…

Power India found that according to a report published by NRDC and CEEW, India vide its ambitious National Solar Mission (NSM) layed down a foundation for the brighter future of sola energy globally.

 

As said by the Report:

From tentative beginnings, India’s solar energy market is picking up steam. From 17.8 megawatts (MW) in early 2010, cumulative installed capacity reached 506.9 MW at the end of March 2012. The Jawaharlal Nehru National Solar Mission (NSM or Mission), launched in 2010, has catalyzed much of this growth. Even with 300 sunny days a year in most regions, creating a new solar energy market in India is no easy task.

 

India’s ambitious national solar programme has catalysed rapid growth in the solar market driving solar energy prices low and demonstrating how government policy can stimulate clean energy markets, according to a new report.

 

In only two years, competitive bidding under India’s National Solar Mission drove prices for grid-connected solar energy to nearly the price of electricity from fossil fuels, said the report released here Wednesday by the Natural Resources Defence Council (NRDC) and the Council on Energy, Environment and Water (CEEW).

 

During that same period, cumulative installed solar capacity in India surged from 17.8 MW to over 500 MW, as discussed in “Laying the Foundation for a Bright Future: Assessing Progress Under Phase 1 of India’s National Solar Mission.”

 

“As the world’s second-fastest growing economy, India has sparked a powerful solar market in only two years,” said Anjali Jaiswal, senior attorney for the India Initiative of NRDC, a US headquartered international nonprofit environmental organization.

 

“While the National Solar Mission still faces significant hurdles, India has already made important strides to attract new domestic and international players into the market, and lower the price of solar energy faster than most anticipated.”

 

The report from NRDC and CEEW provides recommendations to aid the Indian government, private sector and other stakeholders in overcoming obstacles to achieving the Mission’s goal of 20 GW of installed solar capacity by 2022, equivalent in energy capacity to 40 mid-sized coal-fired power plants.

 

These include encouraging financing, boosting domestic manufacturing, and creating a conducive environment.

 

“As nations race to become clean energy leaders, governments around the world will be closely following the progress of India’s National Solar Mission,” said Dr. Arunabha Ghosh, CEO for the CEEW, an independent think-tank based in New Delhi.

 

The full report can be downloaded here.

 

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