Anna shock for NTPC…

NTPC’s Farakka power project today hit the Anna hurdle as the company had to cancel the commercial production of its new Unit-VI set up at a cost of Rs 2,570 crore.

Finance minister Pranab Mukherjee and power minister Sushil Kumar Shinde were supposed to flag off the 500MW unit but they could not come because of an extended session in Parliament today on the Anna impasse.

Till late on Saturday evening, all parties were trying to find a way out of the Lokpal jigsaw.

NTPC officials will take a decision on when to start the production within 15 days.

The delay in starting the unit, from which Bengal will be getting 147MW, may affect power supply in the state. Two other eastern states — Bihar and Jharkhand — will get 50.5MW and 32.5MW, respectively.

“We had initially demanded that 500MW should be available to us for merchant trading. But we were not allowed. As of now, 75MW from the new unit will remain unallocated,” said S.P. Singh, director (HR), NTPC.

The new unit will raise Farakka power station’s capacity to 2,100MW from 1,600MW.

NTPC also hopes that from 2013 there will be no drop in power generation from Farakka because of low availability of water from the Ganges during summer.

“The water shortage was acute in 2001-02. Then we thought of having a river-bed pump house project to ensure sufficient water supply for the lean period,” said U.P. Pani, executive director, (eastern region 1), NTPC.

The new unit, however, has its dedicated cooling system and will not be affected by the availability of water from the feeder canal.

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UP signs 600 MW PPA with Gujarat & Adani Power…

 According to reports the Uttar Pradesh Government has entered into a year-long power purchase agreement (PPA) with the Gujarat government and a private utility Adani Power for 600 MW of electricity.

The UP Government’s move of one year PPA seems for political gains as state elections are to be held next year, but it has also helped narrow the demand-supply gap.

 

As per a report of the Central Electricity Authority

, the state received 6,028 MW of power in June against a requirement of 6,564 MW.

 
The PPA comes at a time when Gujarat is facing a problem of plenty in terms of signing the PPA for its own consumption (Read Here). There are few takers for its 3,000 MW of surplus power, which is set to double in the coming months as private power producers add capacity.

Adani Power's average realization dipped to as low as 2.82 a unit in the first quarter of the current fiscal, as against 3.36 in the corresponding quarter of the previous fiscal. Under the PPA, it will get 4.70 for every unit sold, including transmission charges.

 
Uttar Pradesh, on the other hand, is one of the largest buyers of power in bilateral trade and power exchanges. According to the data published by the Power Exchanges (Indian Energy Exchange and Power Exchange of India), it also pays one of the highest tariffs in the country to procure it. In May, the state accounted for 20% of bilateral power trade, against only 3.8% in 2010 and 5.5% in 2009.

This politics-power nexus may prove to be a bonanza for voters, some of whom may be reluctant to pay a higher price for electricity, but it has its down side: It hampers effective check on power theft and slows down privatization of power distribution. This explains why Gujarat-based Torrent Power will have to wait longer to take over Kanpur's electricity distribution network.

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World’s Largest Power Plants, Spark’s Power Houses Series – Part – 1…

Upon request of lots of readers, Spark has initiated to provide its reader a weekly update on World’s largest Power Plants.

For that Spark started a series called, Spark’s Power House Series.

As a first article of the series, Spark will present the a summary slideshow giving overall information of world’s larges 25 power plants.

So, go ahead, see the article and wait for another…

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India to add 3,500 MW of renewable power during the current fiscal…

India will be adding about 3,500 MW of renewable power during the current fiscal. which would entail a capital investment of about 29,000 crore, Renewable Energy Minister Farooq Abdullah said on Thursday.

Spark sensed that a power generation capacity of around 3400 MW (grid-interactive) and 130 MW (off-grid / captive) from various renewable energy sources, mainly wind, solar, biomass and small hydro, will be added in the country during the current financial year 2011-12.

Considering the historical trends, half of the capital investment would be towards

wind energy, investments in solar power are expected to be about Rs 9,000 crore. Other renewable sources like small hydro power and bio-power would have investments of about Rs 3,000 crore and Rs 2,500 respectively.

Additional investment of about Rs. 1,000 cr. is envisaged in deployment of decentralized renewable energy systems/ devices like biogas plants, solar water heating systems and SPV lighting systems in remote villages/ hamlets.

These include Generation Based Incentives (GBI) Scheme for wind power and solar power to attract private investment by Independent Power Producers and incentives like capital subsidy and concession on excise duty. The government has also created a contingency fund for solar power projects if state utilities fail to make payments.

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Planning Commission’s views on coal shortfall…

The Planning Commission has sounded the alarm over falling coal supplies, saying that special consideration should be made for projects in environmentally sensitive areas.

In its approach paper to the Twelfth Five-Year Plan, the commission has sought a thorough review of the current approach to the environment-versus-development debate, clearly according top priority to the country's development agenda.

 
At the centre of the commission's critique is the 'go and no-go area' policy for coal blocks and the Comprehensive Environmental Pollution Index, or CEPI, norms adopted by the environment and forests ministry.

"Part of the reason for the shortfall in coal production is the implementation of tighter environment-related regulations, and problems in rehabilitation and resettlement and land acquisition," the document notes.

The commission had originally targeted coal production at 680 million tonnes during the ongoing 11th plan (2007-12), but scaled it down to 630 million tonnes during the mid-term appraisal in 2010. The target was further lowered to 554 million tonnes. Coal output expanded at 7% a year during 2004-05 to 2009-10, but stagnated in the previous fiscal. In the past five years, demand grew at an average 8% and is expected to continue at the same rate during the next plan.

Coal projects have struggled to get environment clearances since 2009, when the ministry's no-go classification disallowed mining in 203 coal blocks. According to a coal ministry's projection, the output from those 203 blocks, estimated at 660 million tonnes annually, could have been used to generate around 1.3 lakh megawatts of power a year.

"The environment ministry had adopted the policy of 'go, no-go'a¦ This would have severely impacted the ability to expand domestic production of coal," said a commission official. "The policy had to be reviewed and now some coal blocks have been cleared. This has to be continued to ensure coal availability.''

In January 2010, the environment ministry imposed a temporary ban on development works, including some coal mining projects in Jharkhand and Chattisgarh in industry clusters identified under CEPI norms. CEPI is an index of 88 industrial clusters across India, ranked according to their impact on environment and was developed to plan developmental projects in tandem with environmental protection.

The commission said the CEPI norms had prohibited mining in areas with high pollution index even if pollution was because of some other industry. "Coal being location specific, there is clearly a need for review of this (CEPI norms) approach," the paper notes. Currently the issue is under consideration of a group of ministers headed by

Finance Minister Pranab Mukherjee.

The commission estimates a significant rise in reliance on imported coal as it would not be possible to meet the increased demand from domestic sources. Coal imports are expected to rise to over 200 million tonnes from the current 90 million tonnes by the end of the 12th plan.

The increase in reliance on imports not only portends a significant increase of 30% to 50% in costs for power plants, it also necessitates expensive technological upgradation as the units are not designed to take more than 10-15% of imported coal at present.

Read here the full presentation of Planning Commission on subject mater…

Planning Commission on Twelth Five year plan

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Discoms to pay higher penalty for over drawl…

Spark learnt from the market sources that  the Indian Government proposes to increase penalties on distribution utilities for overdrawing electricity from the grid, a move that is expected to raise demand and prices in the short-term open market and help merchant power plants run by private firms such as Adani Power, Lanco and Monnet Power.
This  move may also be useful in preventing the grid collapse due to over drawl and force the utilities to shed load.

Power prices in the short-term market are closely linked to penalties imposed by the regulator. Distribution utilities prefer purchasing from the open market if charges for overdrawing from grid are high.

Power sector regulator

Central Electricity Regulatory Commission (CERC) has proposed to levy penalties on distribution utilities if grid frequency falls below 49.5 Hz against the earlier limit of 49.2 Hz. Grid frequency falls when demand is greater than generation.

 
The penalties, called unscheduled interchange (UI) rates, are levied on state distribution utilities when they do not draw power as per agreed schedules. The power generators are also charged when they inject less or more power than their declared schedules.

 
"The commission is of the view that the utilities should plan for procurement of power on long-term, medium-term and short-term basis instead of resorting to overdrawal through unscheduled interchange," CERC said in its draft regulations.

A Maharashtra energy department official said the proposal was untimely as most distribution utilities are facing a severe cash crunch. An official in Andhra Pradesh Transmission Corporation said the utility was not in favour of the proposal that would force it to resort to load shedding as power would become costly.

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TD Power IPO over subscribed 2.92 times…

The initial public offer (IPO) of TD Power Systems was over subscribed 2.92 times on the last day of the issue on Friday.
The company's IPO received bids worth 2.2 crore equity shares till 1700 hrs, as against 75.62 lakh shares on offer, as per the data available with the National Stock Exchange.
The company has fixed an IPO price band of Rs 256-Rs 261 per equity share.

Air-conditioner generator manufacturer TD Power Systems aims to raise around Rs 227 crore through IPO for expansion and debt repayment.

The company proposes to utilise the proceeds of the issue mainly to finance the expansion of the existing manufacturing plant in Dabaspet, Bangalore and for the construction of a project office in Bangalore.

The net proceeds of the issue will also be utilised for repayment of debt, fund working capital requirements and for other general corporate purposes.

The company's clientele comprises companies operating in cement, steel, paper, chemical, metals, sugar co-generation, bio-mass power plants and hydro-electric power plants.

Enam Securities is the global coordinator and book running lead manager for the Issue. Antique Capital Markets and Equirus Capital are the book running lead managers for the issue.

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Indian Renewable Energy Certificate (REC) prices to be cut by 15-30%…

According to reports, the Central Electricity Regulatory Commission has suggested a 15 to 30 per cent cut in prices for renewable energy certificates (RECs) effective April 2012 for five years.

This move is intended to make REC trading attractive.

The CERC has reduced the forbearance price for non-solar REC to Rs 3.3 a unit (Rs 3,300/ MWh), while keeping the floor price at the current level of Rs 1.5 a unit (Rs 1,500/MWh).

For solar REC the forbearance price has been reduced to Rs 13.4 /unit (Rs 13,400/MWh) from Rs 17/unit (Rs 17,000/MWh) and floor price to Rs 9.3/unit (Rs 9,300/MWh) from Rs 12/unit (Rs 12,000/MWh).

But, the industry has been voicing its concern as they felt that downward price revision will jeopardise the flow of investments in green projects. The industry has been seeking that the price should be kept at the same level for the REC mechanism, which is still at a nascent stage to be stabilised.

The REC mechanism is meant to provide an additional stream of revenue for green energy project proponents.

The trading is confined to non-solar projects such as wind power, bio-mass and hydro-electric.

Most of the stakeholders felt that there is a need for longer term control period as RE project developers as well as lenders seek a long term visibility to make necessary decision for participating in the REC mechanism upon evaluating price risk and off take risk.

The complete order of CERC on REC Pricing is embedded below.

 

 

Order on Forbearnace & Floor Price 23-8-2011

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Update on Wind Power in India…

A wind power capacity of 565 MW has been installed in the country in the current year (upto July, 2011) with private sector investment of around Rs. 3,400 crore.

Spark learnt that the Minister of New and Renewable Energy has informed that the Government is promoting wind power projects through private sector investment by providing fiscal and promotional incentives such as 80% accelerated depreciation, concessional import duty on certain components of wind electric generators and excise duty exemption to manufacturers.

He said a 10 years tax holiday on income generated from wind power projects is also available. The Minister added that loans for installing windmills are available from Indian Renewable Energy Development Agency (IREDA) and other Financial Institutions while technical support including wind resource assessment is provided by the Centre for Wind Energy Technology (C-WET), Chennai.

Dr.Farooq Abdullah said preferential tariff is also being provided in potential states. He said the Government has also announced a Generation Based Incentive (GBI) under which Rs. 0.50/unit generated from wind power projects is being provided to the projects which do not avail of accelerated depreciation benefit.

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FDI worth over Rs. 4000 crore in renewable energy sector…

India has received Rs 4,900 crore in the last three years as Foreign Direct Investment (FDI) in the renewable energy sector, Lok Sabha was informed on Friday.
Spark found that New and Renewable Energy Minister Farooq Abdullah said in written reply to a Lok Sabha query that: “ Approximately Rs 4,900 crore has been received as FDI equity inflows in the renewable energy sector during the last three years and including the current year,"

The highest investment took place in 2009-10 when Rs 2,872 crore were received in FDI.

In the same context, Spark found that a recent Ernst and Young report has ranked India as the third-best investment destination in the world after China and the US.

The Minister said that several key initiatives taken in the recent past include the introduction of generation-based incentives scheme for wind power to promote projects and the launch of Jawaharlal Nehru National Solar Mission with 22,000 MW target for solar power by 2022.

 
Meanwhile, replying to another query, Abdullah said it is envisaged that a power generation capacity of around 3400 MW grid-interactive and 130 MW off-grid power will be produced from various renewable energy sources in the country during the current financial year 2011-12.

"The same would require capital investment of the order of around Rs 29,000 crore including Rs 14,500 crore in wind power, Rs 2,500 crore in small hydro power, Rs 3,000 crore in bio-power and Rs 9,000 crore in solar power," he said.

 
The Minister said an additional investment of about Rs 1,000 crore is envisaged in deployment of devices like biogas plants, solar water heating systems and SPV lighting systems in remote villages.

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