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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