Kerala Cabinet okays Solar Energy Policy...

 

The Kerala Cabinet has approved a Solar Energy Policy that seeks to raise installed capacity of the solar sector to 500 MW by 2017 and 1,500 MW by 2030. The mission is to contribute to long-term energy security of the State well as ecological security by reduction in carbon emissions.

Chief Minister Oommen Chandy told newspersons here that the draft policy had been posted on the website of the Agency for Non-Conventional Energy and Rural Technology.

Comments received from stakeholders, including the general public, have been incorporated to the final document.

Land suitable for development of solar installations in the possession of either Government or private individuals will be identified, as per the original draft.

Such identified lands shall be offered to developers for grid connected solar installations.

Lease rentals fixed by revenue department shall be payable to the land owner. Only lands which do not have an immediate productive use shall be thus identified.

FEED-IN TARIFF

In the case of offsite commercial installations, the State Electricity Regulatory Commission will notify the normative feed-in tariff of solar power for procurement by State power utility.

Feed-in tariff refers to payments made out to ordinary energy users for renewable electricity generated by them.

Net metering shall be applicable for all agencies that consume grid power and have installed solar installations with some form of Government subsidy.

Special feed-in tariff will be made applicable for consumers with monthly consumption of 30 units and below.

For off grid systems, the policy seeks to ensure bank finance at attractive rates and provide generation-based incentives. Existing capital subsidies shall be restructured appropriately.

GENERATION FACILITIES

For grid connected systems, the Government would initiate a programme by which all public buildings are provided with generation facilities using appropriate technology options.

The policy urges all concerned to make use of the rooftop and premises to install solar plants to match maximum demand within a period of two years.

Grid connected systems will be promoted for domestic consumers in a phased manner after formulating grid connection standards for LT distribution.

In this regard cluster-wise installations will be given suitable incentives on a conditional basis for adopting solar installations.

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MahaVitaran can scrap Mundra project PPA citing unviability...

 

Maharashtra cabinet on Wednesday gave its approval to the state-run Maharashtra State Electricity Distribution Company (MahaVitaran) to repudiate its power purchase agreement (PPA) with Coastal Gujarat Power Ltd (CGPL), an arm of Tata Power if the power drawal from Mundra ultra mega power project (UMPP) becomes unviable at any point of time. The repudiation will be  done without any compensation to CGPL.
 
The MahaVitaran can explore this option after the Mundra UMPP tariff is revised following the Central Electricity Regulatory Commission's (CERC) approval to the compensatory tariff as suggested by the Deepak Parikh Committee. It has  recommended compensatory tariff of 56 paise per unit. The tariff will be adjusted for profits that Tata Power earns from its coal mines in Indonesia.
 
State cabinet also cleared MahaVitaran's plea allowing it to file its affidavit before CERC which is currently hearing the case in this regard. The cabinet asked MahaVitaran to strongly put up its case before CERC even renegotiate its PPA before resorting to the repudiation on the grounds of unviability.
 
A senior minister told Business Standard ''If the tariff becomes unviable, Maha Vitaran can repudiate its 25 year long PPA with CGPL for the purchase of 800 MW. MahaVitaran today informed the cabient that it will have to bear an additional burden of Rs 300 crore annually if the compensatory tariff of 56 paise is accepted."
 
As reported by BS in October, MahaVitaran has argued that CGPL should cut the return on equity (ROE) in a bid to give relief ultimately to its consumers.  ''CGPL is earning a ROE  of 35 paise a unit. Besides, MahaVitaran wants that the lenders of CGPL should also agree to reducing the interest rate and that the relief be passed on to procurers,'' the minister informed.

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Lack of financing for new power projects a big concern: KPMG

 

The absence of funds for new power projects is an area of big concern and should be dealt with seriously, according to a report.

"A big concern today is a lack of financing available for new projects. The 13th plan (2017-22) requires Rs 1.27 lakh crore of private sector equity and the project pipeline looks weak, and if we don't correct the situation immediately, we will be back into a cycle of high deficits," consultancy firm KPMG said in a report.

There is a strong imperative to bring in strategic and financial investors, it said.

The lack of funds and the poor pipeline are due to the current stalemate on various projects. Power projects face delays in land acquisition and environmental approvals and issues related to allocation of coal and passing on costs of importing the fuel.

"Over 33,000 MW of projects are operating below 60 per cent plant load factor, mainly due to fuel issues," according to the report. "This could pose a risk to over Rs 1 lakh crore of bank loans, which could turn into NPAs (non-performing assets)."

Delays in environment and forest approvals are taking a huge toll on projects. Clearances are pending for about 1,03,000 MW of power projects and 726 million tons per annum of mining capacity, it said.

Each day of delay for 100 million tons per annum of coal production costs the nation Rs 42 crore and USD 17 million in foreign exchange due to imports, according to the report.

KPMG also said that there is need to rope in global participation in underground coal mining, which is currently less than 10 per cent of India's coal production.

"Bring in international participation in underground mining and operational excellence initiatives in mining companies," the report said.

Underground miniing needs to be given a fillip as it is needed for long-term coal security, it said.

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Good FII response to Coal India, IOC stake sale, say bankers...

 

The Indian government’s disinvestment drive is set to get a boost with at least three big ticket divestments lining up in the next few weeks. Bankers say they have received good response to the road shows held abroad for Coal India, Indian Oil and PowerGrid.

Of this, Coal India will be the first to hit the market with a 5% dilution of Indian government’s 90% stake in the company.  PowerGrid’s Rs 7,500 crore stake sale will take place by the first week of December while Indian Oil disinvestment will take place by mid-December. The final call on the pricing and timing will be taken by the government.

In his budget announced in February this year, the finance minister P Chidambaram had set an ambitious target of Rs 55,000 crore by selling part of government’s stake in public sector units. But till date, the target is far from being met due to volatility in the Indian currency. Bankers hired by Indian government are now meeting investors across the world to gauge their mood and sell the shares.

“We have received very positive response from investors abroad and there is a demand for Coal India and Indian Oil paper,” said a banker close to the development. Not only the shares of these companies have gone down substantially, a weak rupee will help foreign investors to buy shares in these companies, bankers say.

The road shows were held in Singapore, Hong Kong, UK and Germany. “As long as the government leaves something on the table for the investors, they will be keen to invest,” said the banker. “All meeting halls were full of investors abroad thus showing that there is a demand for the company’s shares.

Investors are also enthused by the fact that Coal India shares which closed at Rs 272 on the Bombay Stock Exchange on Wednesday – are down 5% in the last one month. The stock is down 23% since January this year even as the BSE Sensex was up 7% during the same period.

A 5% stake sale will help the government to raise close to Rs 8,600 crore.  Bankers say typically shares of a company slated for disinvestment falls sharply as investors try to take advantage of a discount which the government offers before the offer opens.

The road shows for Indian Oil to sell 10% of Government stake is also on overseas with the government planning to raise close to Rs 4,900 crore as of today’s closing of Rs 201 a share.

Up for sale
Company	Stake (in %)	Stake value
IOC	10%	Rs 4,900 cr
Coal India	5%	Rs 8,600 cr
PowerGrid	17%	Rs 7,500 cr*
Hindustan Zinc	29.5%	Rs 21,600 cr
* includes fresh issue of shares

“Both Coal India and Indian Oil are large cap names and their fundamentals are strong. Hence, it will not be a problem selling the issue, “a banker said. IOC is also down 25.5% since January this year and FIIs are keen to invest in the company, bankers said.
The follow-on offer of Power Grid Corporation will open in the first week of December to raise close to Rs 7500 crore. The government will disinvest 4% of its 68% stake. It will also issue fresh equity of 13% of existing capital.  Powergrid is also down 19% since January this year.

Bankers say the government’s stand on selling its residual share in Hindustan Zinc and Balco worth Rs 24,000 crore is important as it will help it to meet its divestment target. But the controversy over mines ministry’s objection that HZL sale can take place only after the approval of the Parliament is delaying the process. The access to cash worth Rs 21,000 crore in HZL’s balance sheet is an important reason why Vedanta is keen to buy government’s stake in the company.

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BHEL says Slackness in large infra projects pose challenges...

 

State-owned BHEL, which is focusing on a multi-pronged strategy to boost business, has said slackness in large infrastructure projects and stagnation in domestic power sector are posing challenges.

Bharat Heavy Electricals Ltd (BHEL), a USD 9 billion engineering and manufacturing enterprise, is grappling with tough business environment including sluggishness in the power sector.

According to a presentation made at a conference this month, BHEL said it is "facing challenges from several fronts" such as slackness in large infrastructure projects, stagnation in domestic power sector, slowing Indian economy and rising competition.

Besides, the company listed disturbances in target export markets, uncertainties in global economy and skill deficit, among others, as challenges for its business.

Cheaper imports of equipment, especially from China, has been negatively impacting BHEL's business.

Reflecting tough conditions, the company saw its net profit in the first six months of current financial year decline to Rs 921 crore. During this period, the firm received orders worth Rs 4,470 crore.

The total order book stood at Rs 1,02,380 crore at the end of September 2013. Despite multiple challenges, BHEL said, there are "huge market opportunities" in Indian power sector.

BHEL has a manufacturing capacity of about 20,000 MW.

The company is focusing on a six-point agenda to realise its strategic targets by 2017. As part of that plan, BHEL will focus on capability, accelerated project execution, product cost competitiveness, diversification, engineering and technology, and people development.

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Tata Power commissions additional transmission line in Maharashtra...

 

Tata Power, country's largest private power utility today said it has commissioned additional transmission lines in Maharashtra.

Tata Power announced the commissioning of additional transmission lines in Maharashtra between Kalwa and Salsette, the company said in a statement.

The transmission line will relieve critical loading of the Kalwa-Salsette lines and will enhance transmission for bringing power from outside to Mumbai city, it said.

The unavailability of natural gas to power plants has forced Tata Power's Trombay thermal plant to be underutilized or remain out since July 19, 2013.

This acute shortage of up to 500 MW capacity generation from Trombay for Mumbai city, has made it necessary for power to be imported from outside the city, the statement added.

To reduce the critical loading of these lines, Tata Power had put up a proposal to Maharashtra State Load Despatch Centre (SLDC) and State Transmission Utility (STU) for augmenting transmission lines between Kalwa and Salsette.

As a first phase additional interconnecting line has been commissioned as a short term measure which has also increased the load carrying capacity and paves way for further planned augmentation, it added.

"Tata Power will continue to make all efforts that the Mumbai consumers are not adversely affected due to the acute shortage of natural gas to Trombay," Ashok Sethi, Chief (Operations) Tata Power said in the statement.

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Indian solar market: Forecasting a better 2014 after a lackluster year...

 

According to sources around 420 mw of projects missing commissioning dates and with this India is not likely to register any significant year-over-year installation growth for 2013, even as global solar market is forecasted to grow 20%.

It has been a quiet year for the Indian solar sector, with installations at 900 mw so far this year and final numbers forecasted to be similar to last year.

The guidelines and requests for selection have finally been published for Phase II Batch I, for 750 MW of PV projects. Unfortunately, India has decided to include domestic content requirements for half (375 MW) of PV projects, which may be enough to cause a trade dispute but not enough to help domestic manufacturers. It is an unnecessary risk that raises uncertainty with minimal reward.

According to the proposed time line, these 750 MW of JNNSM Phase II projects will not be commissioned until at least May 2015. Therefore, projects under Indian state schemes are where the action will be in 2014.

The challenges faced by the Indian economy this year also affected solar industry. This year the market has seen high inflation, a 8 % rise in module prices and a 15% rupee depreciation, all of which contributed to overall project costs. At the same time, reverse auctions in India continue to defy odds and go in the opposite direction with record low bidding, especially in states that have an L1 type bidding mechanism (lowest bid must be matched by all) in place. Current economic conditions, sollar irradiance and off-taker creditworthiness do not look to be reflected in these bids. With bids fluctuating almost 50 % over the year when comparing state-to-state, it is imperative to have deep insight and market intelligence to be successful in this environment.

India is entering election season with state elections in Chhattisgarh, Madhya Pradesh, Mizoram, Rajasthan and Delhi due next month. According to the guidelines by the Election Commission of India, non-agricultural land transactions cannot be approved by the government during election season without the approval of the Chief Electoral Officer. This will delay any solar projects that are in the middle of land acquisitions by a few months.

With some states yet to sign PPAs and upcoming state and general elections, our preliminary estimates are tentatively at 1,750 MW of solar installations in India for 2014. Although the projected installation growth looks impressive, it includes 420 MW of CSP projects that did not get installed in 2013.

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CIL invites applications from entities for coal import...

 

State-owned Coal India Ltd (CIL) has invited applications from interested state entities for importing coal that would be supplied to power plants.

"(CIL invites) NIT (Notice Inviting Tender) for selection of agency from government department or government owned company or public sector entity for supply of imported coal to purchaser (power producers) at delivery point (power plant end)," the company said on its website.

The company further said that the agency will supply coal to various power plant across the country till March 2015.

"The successful bidder shall procure imported coal through tendering for the quantity required for each quarter separately," CIL said.

CIL Chairman and Managing Director S Narsing Rao had recently said that the company may import five to six million tonnes in the current financial year.

"May  be five-six million tonnes. We don't want to rule out the option. Some eligible people may come up in December and say that we want coal. It may not happen at all as it did not happen last year or it has not happened until now," Rao had said.

Coal India (CIL), the world's largest coal miner, had said in September that it is likely to import 15 million tonnes of coal for power utilities as part of meeting the fuel supply agreement (FSA) commitment.

"We have received interest for 15 million tonnes from IPPs (independent power producers) and state owned entities," CIL Director (Marketing) B K Saxena had told shareholders at the AGM.

According to the new FSA, Coal India will supply 65% of the contracted amount from domestic sources and another 15% through imports with pass-on pricing model.

Pass-on in other words would mean CIL will charge buyers imported coal at landed cost plus a service charge.

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GMR’s 1370 MW Raikheda thermal power project nearing completion but awaiting coal linkage yet...

 

GMR Chhattisgarh Energy Pvt Ltd’s (GCEPL) 2X685 MW Raikheda thermal power project in Raigarh district in Chhattisgarh is nearing completion but the company has not yet received coal linkage for the project.

According to GCEPL the project is 85% complete and in all probability it will be operational by April 2014. GCEPL has spent nearly over 95% of the total estimated cost of Rs. 8,290 crore for the project so far.

GCEPL has now approached the Ministry of Coal seeking its help for coal allocation and enter into FSA with Coal India Ltd at the earliest.

It may be remembered here that the Cabinet Committee had approved on June 21, 2013 that the coal may be supplied to power plants that do not have any fuel linkage but are likely to be commissioned by March 31, 2015, having long term PPAs and a high Bank exposure.

Accordingly, GCEPL has requested MoC to take up the matter with CCEA for considering the plant under the stated category and to enter into FSAs similar to other power projects.

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US-based EnerSys acquires remaining 49.5% stake in Energy Leader Batteries...

 

EnerSys, an international player in stored energy solutions for industrial applications, has acquired the remaining shares in the Indian joint venture company Energy Leader Batteries India Pvt Ltd for an undisclosed amount, the company said in a release.

Energy Leader Batteries is a manufacturer of a range of industrial batteries serving both reserve power and motive power customers in India. Incorporated in 2007, Hyderabad-based Energy Leader Batteries India manufactures valve-regulated-lead acid batteries for industrial applications. It markets its products under the brand name 'Energy Leader'.

Last March, EnerSys had acquired 50.5 per cent stake in the firm. The minority partner in Energy Leader Batteries India had the option to require the redemption of the shares owned by them, which if exercised, would have make EnerSys the sole owner of these entities.

"This transaction, in addition to our recently completed transactions, meaningfully expands the addressable markets for our products in South Asia," said John D. Craig, chairman, president and chief executive officer of EnerSys.

"The continued rapid growth of the Indian markets provides exciting opportunities for EnerSys. Our joint venture provided a solid platform to establish our business in India, and the completion of the acquisition of the remaining ownership interest provides us the opportunity to accelerate our regional growth strategy," said Mark Tough, president of EnerSys Asia.

Akasam Consulting Pvt Ltd acted as the sole advisor for Energy Leader Batteries.

EnerSys manufactures and distributes reserve power and motive power batteries, chargers, power equipment, and battery accessories to customers worldwide. The company also provides aftermarket and customer support services to its customers from over 100 countries through its sales and manufacturing locations around the world.

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New order on reporting nuclear incidents for Nuclear Energy Operators issued by AERB...

 

Amid debate over safety of nuclear installations, a new order has been issued to operators to report "extraordinary nuclear events", including radiation and leakage of radioactive material, to the atomic regulator within 24 hours of the incident.

Seeking to remove any confusion, the order makes it clear that the reporting of the extraordinary nuclear events will be in addition to, "and in no way in derogation of the existing regulatory mechanism" of reporting of events to the regulator.

According to a latest order of the Atomic Energy Regulatory Board (AERB), operator of the nuclear installation will report extraordinary nuclear event (ENE) either in the installation or during transportation of radioactive material to the regulator within 24 hours of the occurrence.

The AERB order also stipulates that a detailed report of the nuclear incident should be conveyed to the regulator within 10 days.

The order has been issued under various provisions of the Civil Liability for Nuclear Damage Act, 2010 and Civil Liability for Nuclear Damage rules, 2011.

The ENEs described in the order include any incident resulting in stack release of radioactivity 500 times or more of the annual release limit prescribed in technical specifications for operation of the plant.

The operator will also have to inform about incidents where in one or more person off site (away from the facility) "were, could have been, or might be" exposed to radiation or to radioactive material.

Also, any incident which leads to injury or death of a person off site due to exposure to ionizing radiation emanating from a nuclear installation will also have to reported.

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ICRA reaffirms ratings for bank facilities of Alstom Bharat Forge Power Limited...

 

ICRA has reaffirmed the long-term rating outstanding on Rs. 1350 crore long term loans of Alstom Bharat Forge Power Limited (ABFPL) at [ICRA]BBB+ (pronounced ICRA triple B plus). ICRA has also reaffirmed the short-term rating outstanding on Rs. 1890 Crores non-fund based limits of ABFPL at[ICRA]A2+ (pronounced ICRA A two plus)). The outlook on the long term rating is stable.

The aforementioned ratings were placed under rating watch with developing implication which has been removed.

The rating reaffirmation factors in the comfort from technical, managerial and financial support available from both the sponsors i.e. Bharat Forge Limited (BFL) rated by ICRA at [ICRA]AA-/[ICRA]A1+ and Alstom Power Holdings SA (100% subsidiary of Alstom SA). ABFPL is expected to benefit immensely from technical competence of Alstom in the power equipment's space and BFL’s established presence within India. The ratings also factor in the satisfactory long-term demand prospects for super-critical technology based power generation units given in huge demand-supply mismatch in the domestic power sector notwithstanding the short-term concerns impacting the power sector. Moreover, ABFPL has a current order book for supplying five supercritical STG (Steam Turbine Generator) to NTPC, which lends some visibility to company’s revenues in the short to medium term.

The ratings are however constrained by the in delays in project completion due to shifting its project to a new location and the associated project execution risks. Moreover, ratings factor in high level of competitive pressures in the super-critical STG industry from both indigenous manufacturers (setting up large capacities in JV’s with foreign players) and relatively cheaper imports from China. Ratings also factor in coal shortages, regulatory issues and uncertain financing scenario from banks in the power sector which can delay the capacity addition in the power sector and adversely affect the order book and revenue booking in the near-term. ICRA also takes into account weakening credit profile of Alstom SA, ultimate holding company of Alstom Power Holdings which has 51% shareholding in ABFPL, as reflected by ratings downgrade from Baa2(negative) to Baa3 (Stable) by Moody’s.

The removal of ratings watch factors in the finalization of company’s plans of shifting its manufacturing facility to Sanand, Gujarat and completion of land acquisition for the project after High Court of Gujarat had instructed ABFPL to cease all construction activities in Adani Port Special Economic Zone (APSEZ) until the SEZ obtains the Environmental Clearance from MoEF (Ministry of Environment and Forests), GoI.

Project Profile
The company is setting up the project to manufacture turbine generators in both the super-critical and sub-critical range of (300 MW - 800 MW) rating. The annual capacity of the project is 5000 MW and the project (with estimated initial cost to the tune of Rs. 1950 crore) will be funded in a debt to equity ratio of 70:30. The equity contribution will be in the ratio of 51:49 by Alstom Power Holdings SA and BFL. The company has incurred a capital expenditure of ~Rs. 279 crore till date. In May 2012, High Court issued an order which has prohibited any construction at company’s premises within Mundra SEZ due to absence of environmental clearance with the SEZ. The company had stopped construction at its premises subsequent to the High Court ruling and has decided to shift its manufacturing unit to Sanand, Gujarat.

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Report: Large Scale Grid Integration of Renewable Energy Sources - Way Forward

 

A detailed report on the recommended methodology for the effective integration of Renewable Energy Projects with the Grid has been published by Central Electricity Authority.

 

Summary of the same is depicted below.

 

Renewable generation from wind and solar has increased substantially during past few years and forms a significance proportion of the total generation in the grid. This renewable generation is concentrated in a few states, to the extent that it cannot be called marginal generation and serious thought needs to be given to balance the variability of such generation. There is an ambitious programme for increase of such Renewable Generation and therefore, it is imperative to work out a way forward for facilitating large scale integration of such variable Renewable Energy Sources (RES), keeping in view the security of the grid.

Moreover, as we move towards a tighter frequency band, it becomes even more challenging to balance this variable RES.
Generation from RE Sources depends on nature, i.e. wind velocity and sunshine. The variability of RES power can be addressed through improved forecasting techniques, which are still evolving. When the percentage of RES becomes significant, special attention needs to be paid to accurately forecast their output.

India is a country of continental size and this is helpful in balancing the variable output of renewable energy sources located in few states by integrating them into all India grid. The inter state and inter regional transmission infrastructure is already being developed and it is expected that all the five electrical regions of India would be synchronously connected in 2014. However, new transmission corridors would be required for evacuating green energy from states such as Tamil Nadu, Gujarat, Rajasthan and J & K (Ladakh). It has now been recognised by the transmission planners that in view of the short gestation period of RE plants, the transmission has to lead generation and would require upfront investment. Such transmission corridors required in the next five year time span have already been firmed up through the established process of coordinated transmission planning and their implementation is being taken up progressively.

The Report has been prepared by CEA on the basis of detailed discussions and inputs furnished by Gujarat, Rajasthan and Tamil Nadu.

The summary of way forward as recommended in the report is presented below:

• In order to deal with variability of renewable generation forecasts are crucial for resource adequacy during operation and grid security.
• Each state should assess its balancing capacity and enter into RE purchase obligation accordingly. Based on the status of measures available with the state, they should assess their present capacity to balance the combined variability of load & RE generation
• The respective buyer State of RE power shall be responsible for maintaining its load-generation balance taking into account the revised forecasts of their RE portfolios. In order to save time in revision of schedules, the SLDCs/RLDC/NLDC, as the case may be, would suo-motu revise the RE schedule of a state based on inputs from the host REMC/SLDC. In this manner the responsibility of RE balancing would be shared by all the RE purchasing states.
• The present power exchange provides only one opportunity for buying and selling on day ahead basis. Real time markets (i.e the opportunity to buy and sell power about two hours ahead) should be started to provide a platform for selling surplus power or buying power when in deficit. 10 -15 % merchant capacity in generating plants as per the National Electricity Policy may be useful for providing liquidity in the electricity market.
• Technical and regulatory measures to enhance the flexibility of conventional generation to increase the balancing capacity of the grid.
• Establishment of Renewable Energy Management centers (REMC) equipped with advanced forecasting tools, smart dispatching solutions, real time monitoring of RE generation, closely coordinating with SLDC/RLDC should be provided.
• Wind farms may also be set up through competitive bidding in order to reduce tariff.
• It is necessary that healthiness of grid protection schemes through regular monitoring and updating is ensured.
• International cooperation for developing REMCs in the RE rich states, balancing capabilities using indigenous sources of conventional power, optimum development of enabling transmission infrastructure and capacity building of grid operators has become necessary at this stage of RE development.

 

Complete report is embedded below:

 

The same can be downloaded from this link.

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Around 55,000 MW capacity projects are on anvil in Tamil Nadu...

 

Massive expansion of thermal generation capacity to the tune of over 55,000 mw is on the anvil in Tamil Nadu.

Though power cuts in the state are not uncommon, they come at a time when the demand for power is abysmally low; this shows the extent of the power crisis. Failure to augment capacity of thermal power stations in the state in the last decade has led to the present power crisis.

Over 80 per cent of the proposed projects are to be set up in the three districts of Tuticorin, Nagapattinam and Cuddalore, raising environmental concerns. Tuticorin will have the highest concentration of thermal power plants with a capacity of 20,800 mw with Nagapattinam and Cuddalore with 11,800 mw and 8,600 mw, according to the union ministry of environment and forest data.

The proposed gas and coal based thermal power projects are in various stages of implementation.

The total installed electricity generation capacity in the state is around 18,515 mw including 8150 mw from thermal power plants and 8,000 mw from renewable energy sources.

New power projects account for more than seven times the existing installed thermal capacity of 8150 mw.

According to MoEF statistics, 29,921 mw projects have got environment clearance (EC) while 25,000 mw projects await EC, or have terms of reference (TOR) or are awaiting TOR.

While the state and central sectors have a large share in the existing thermal power stations with about 85 per cent, the proportion of  private sector plants has increased to a whopping 75 per cent.

A senior Tamil Nadu Generation and Dis­tribution Corpora­tion official said that capacity addition and new power projects of the state and the central governments would directly improve the power situation.

“Projects like the NLC-TNEB joint venture project in Tuticorin, Udangudi, Uppur and the Cheyyur ultra mega power project will be commissioned by 2018-19,” the official said, pointing out that the coming up of new state and central projects besides long term power purchase would make the state a power surplus one by the end of next year.

As regards merchant power projects, the official said that they need not get any license from Tangedco under the Electricity Act 2003. The 2003 act enables merchant power plants to generate and sell their power at their will, the official said, adding they do not have any details on private power projects coming up in the state.

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SAIL seeks change in thermal coal mine allocation rule to PSUs...

 

Anticipating its captive power needs to nearly double in 2-3 years, SAIL wants existing rules for thermal coal block allocation to be amended so as to make government firms without power purchase agreements eligible.

The country's largest steel maker now requires around 1,000 MW power to fire its five integrated steel plants. This will go up to 1,850 MW in the next 2-3 years with the ongoing Rs 70,000 crore modernisation and expansion programme.

Already saddled with 75 percent imports of its coking coal needs, SAIL has flagged the issue to Steel Ministry for soliciting Coal Ministry for allotment of thermal coal mine to the state-run steel maker.

"Intervention of Ministry of Steel is requested for amending in Rule 12 of part-II of Gazette Notification dated December 27, 2012 of Ministry of Coal on auction of coal by competitive bidding," SAIL said.

As per the existing policy, there is no provision for thermal coal allocation for government companies for their captive power plants.

The current policy only allows thermal coal blocks to be allocated for government companies having power purchase agreements with the state utilities prior to January 5, 2011.

"With the increase in the hot metal capacity with the investment of more than Rs 70,000 crore, the power requirement of SAIL is expected to increase to 1,850 MW from the present level of about 1,000 MW in the next two-three years," the PSU said.

SAIL currently has around 14 million tonnes per annum hot metal producing capacity. This will go up to 24 mtpa by the end of next calendar year with the completion of the ongoing expansion.

"The help of the Ministry of Steel is required for taking up the matter with Ministry of Coal for allotment of thermal coal blocks in favour of SAIL being the leading steel maker in the country," SAIL said.

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Gundia Hydel Project in Karnataka faces obstacles due to the recent reports on western Ghats conservation...

 

The proposal to set up Gundia hydel power project of 200 MW capacity faces a bleak future with the Karnataka State Pollution Control Board (KSPCB) incorporating Dr K Kasturirangan Committee’s report on Western Ghats conservation retrospectively from April 17 this year.

The fate of former chief minister D V Sadananda Gowda’s proposed tyre manufacturing plant at Sullia also hangs in balance.

Based on the circular from the Ministry of Environment and Forest (MoEF), the KSPCB demarcated 17 villages, including 11 naxal-affected villages in Belthangady taluk, 11 villages in Puttur taluk and 17 villages in Sullia taluk as Ecologically Sensitive Areas (ESA).

Under the ‘no-tolerance’ policy, industries in red category (100 such red industries have been identified by the Central Pollution Control Board and KSPCB) will not be allowed in these 45 ESAs. “With power generation plants and bio-mass power plants above 25 MW capacity being grouped in red category, it is curtains down on the Gundia power project that has a  capacity of 200 MW,” sources in the regional KSPCB told.

However, eight hydel power plants operating in the Western Ghats, with each unit’s capacity being less than 25 MW, face no threat of eviction as they are listed in the green category by the MoEF.

“If Gowda’s proposed tyre manufacturing factory uses coal-fired boiler, then it cannot be permitted in ESA,” KSPCB officials said.

The regional KSPCB in Mangalore, barring one instance, has not received any applications from entrepreneurs to set up red category industries in ESA.

In one instance, a rubber recycling factory in Nelyadi was relocated to Golithattu, following protests by locals. With Golithattu in Puttur taluk being identified as an ESA, officials have sought clarification from the KSPCB chairman.  Sources said the Board was likely to issue permission for the factory as the unit was listed in orange category.

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Bhushan Steel's 256 MW thermal plant in Orissa was set without pollution control board permission...

 

The Orissa State Pollution Control Board (OSPCB) has said the Bhushan Steel Limited (BSL) set up a 256 MW power plant on its premises without its permission. During an inspection on Monday, an OSPCB team found BSL was running the plant "clandestinely".

The pollution watchdog said the board had on May 6 rejected BSL's application to establish the power plant near blast furnace-II, where the explosion took place. "We found BSL was producing power by running one of the three boilers of the power plant. The power plant was set up to support blast furnace-II. It had installed two more boilers, but was not running them," a senior scientist of OSPCB said.

"We will not only serve closure notice to the power plant, but will also seal its cold rolling mill. The blast furnace-II was meant for expansion of integrated steel plant from 3.1 mtpa to 5.6 mtpa. This will also have to be stopped," another official said.

In September, the board had served closure notice to the 300 MW Bhushan Energy Limited (BEL) for violating air and water pollution control norms. "BEL and BSL have been served closure notices on six occasions in the last two years," another official of the board said.

A workman was burnt to death in an explosion during commissioning of a slag granulation plant (SGP) in blast furnace-II of the factory around 9.30 am on Wednesday. Earlier, the board had revealed that although BSL had obtained permission for installing blast furnace-II, it never got consent for starting operation, which is mandatory.

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Coal block allocations to 11 companies including tata, jindal & Monet ispat may be revoked...

 

Nearly a dozen companies including Tata Sons, Jindal Steel & Power, Birla Corp and Monnet Ispat & Energy are likely to lose captive coal mining licences for delaying development of the blocks.

An inter-ministerial group has recommended revoking the licences of 11 mines with over 4.5 billion tonnes of reserves in states of Odisha, Chhattisgarh, Jharkhand, Madhya Pradesh and Maharashtra.

"The panel has recommended de-allocating three coal blocks of Jindal Steel & Power and two coal blocks of Monnet Ispat for unsatisfactory progress. Two big blocks allocated to Jindal Steel & Power and Tata Sons for country's pilot coal-to-liquid (CTL) projects are also proposed to be de-allocated since the companies have not done any work on the blocks," a senior official in the coal ministry said.

Strategic Energy Technology Systems — a consortium of Tata Sons and Sasol Synfuels International (Proprietary) of South Africa — was awarded North of Arkhapal block for CTL project. Jindal Steel & Power was awarded Ramchandi Promotional block for another such project. Each project entails an investment of aboutRs 45,000 crore.

The panel made its recommendations after it reviewed 30 blocks and heard the companies' explanations for delayed development. "During their presentations most companies blamed the central and state authorities for non-cooperation. We are, however, in favour of cancelling the licences as under the law companies are solely responsible for developing the blocks," the official said Other companies that are set to lose mines are Rungta Mines, Dalmia Cement, Sunflag Iron & Steel, Topworth Steel and Maharashtra State Mining Corp, he said.

The panel, headed by coal additional secretary A K Dubey, has also recommended imposition or deduction of bank guarantees on companies like NTPCBSE 0.45 %, Steel Authority of India and Tenughat Vidyut Nigam. No action has been recommended against three other coal blocks — Mandakini A belonging to Tata PowerBSE 1.65 %, Jindal Photo, Monnet Ispat & Energy; Mandla North of Jaiprakash Associates and Sondiha of Chhattisgarh Mineral Development Corp.

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IL&FS's 3,600 MW Thermal project in Tamil Nadu delayed...

 

The 3,600-megawatt thermal power project of Infrastructure Leasing and Financial Services' power arm in Tamil Nadu, a hugely power-starved state, has been delayed by a year-and-a-half on execution issues, forcing a sharp escalation in cost and a ratings downgrade.

One half of phase one of the project - constituting 600 MW split into two units - was supposed to have come up by now. This is now pushed back to early 2015, said a report by rating agency Icra. Likewise, the second half was supposed to come up by May 2014. This has also been delayed, by a year. However, Hari Sankaran, vice-chairman and managing director, IL&FS, told the two units would be up by December 2014 and February 2015, respectively. "The project has witnessed delays primarily on account of suspension of site works because of the order by National Green Tribunal in June 2012," he said in an email.

As per the order, the scope of the project was changed and additional equipment such as flue gas desulphurisation unit, which removes harmful sulphur-dioxide gases, had to be installed. This, he said, resulted in the extension of the overall project time.

Also, as a result, the project cost is expected to increase 40%, he said. The cost of power evacuation infrastructure and forex fluctuations also contributed to the increase in cost. It was toward this project that IL&FS, and its power arm IL&FS Energy Development Company, had created a special purpose vehicle called IL&FS Tamil Nadu Power Company. IcraBSE 1.23 % has downgraded its long-term rating onRs 4,460-crore term loans to triple B- from triple B, as a result of the cost overruns.

Icra said, "The total cost over-run is estimated at about Rs 3,200 crore, for which the funding tie up is yet to take place." Sankaran said there would be no implication from the downgrade. He said, "Rating of investment grade is acceptable to banks. BBB- instruments with this rating are considered to have moderate degree of safety regarding timely servicing of financial obligations. Such instruments carry moderate credit risk."

The initial cost for the first phase was supposed to be about Rs 6,300 crore, aboutRs 1,900 crore of those coming in from equity. Now, it is estimated at about Rs 9,500 crore. The delay could hurt Tamil Nadu, which faces a peak power deficit of nearly 4,000 MW. The wind season had eased its burden significantly in recent months. But the end of the wind season has brought in the power cuts again. This is especially so, as the company had planned to sell 85% of the project capacity on a long-term  basis to discoms in the Southern region

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