Solar under JNNSM… on the way of 250 MW capacity in two months…

According to MNRE (Ministry of New and Renewable Energy), around 90 MW of solar power projects from first back of JNNSM (Jawaharlal Nehru National Solar Mission) Phase I are being commissioned in this month and remaining projects of 60 MW capacity would be commissioned by next month.

Spark learnt that with this commissioning, India will be having more than 250 MW operational solar power projects in next two months.

The first phase of the JNNSM aims to commission 1,000 mw of grid-connected solar power projects by 2013. As per the MNRE, all issues of financing and higher cost of raw material like solar panels and modules are being looked at, paving way for Indian banks to fund the projects. The banks and financial institutions are now more willing after the government convened a national level meeting of bankers a few months back.

According to NVVN (NTPC Vidyut Vyapar Nigam Limited), the power procurer under JNNSM, the domestic banks are now  participating to fund the projects. Most of the private companies like Mahindra’s and even smaller companies like Jakson Power are getting their funds from domestic banks.In the past, most solar power producers had to bank on foreign debt.
Farooq Abdullah, union minister for new and renewable energy, said on Monday in Mumbai that international banks globally have a plan to spend around $48 billion on energy excesses.

NTPC Vidyut Vyapar Nigam (NVVN), a subsidiary of National Thermal Power Corporation, the largest power producer in India, is handling the implementation of the first phase of the national solar mission.

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Power Trading update – 10th Jan 2012

Power Trading snapshots of two major exchanges  IEX (Indian Energy Exchange) and PXI (Power Exchange of India) for 10th January 2012. On IEX around 52544 Mn Units were sold as against demand of 68071 Mn Units. Similarly on PXI around 3461 Mn Units were sold as against demand of 4742 Mn Units. Detailed report of both the exchanges are depicted below:

 

 

 

Market Snapshot on IEX

Category	Purchase Bid (MWh)	Sell Bid (MWh)	Unconstrained MCV(MWh)	Constrained MCV (MWh)	Unconstrained MCP(Rs/MWh)
Total	68070.9	52544.5	37529.09	31219.87	-
Max	3926.7	3316.9	1961.2	1662.7	4588.85
Min	1994.4	1409	934.2	862	1769.15
Average	2836.29	2189.35	1563.71	1300.83	3411.71

Market Snapshot on PXI

Category	Purchase Bid (MWh)	Sell Bid (MWh)	Unconstrained MCV(MWh)	Constrained MCV (MWh)	Unconstrained MCP(Rs/MWh)
Total	4742.81	3461.39	1490.56	837.41	--
Max	247.72	272	117	63.56	7010
Min	170.51	64.81	4.81	4.81	2800
Average	197.62	144.22	62.11	34.89	3811.25

Legends:

• MCV : Market Clearance Volume
• MCP: Market Clearance Price

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IOC to drop Merchant Power plans…

On lines of Global Power Companies, various Indian companies are also loosing interest in the Indian Power Sector. The latest victim of this is the state-owned Indian Oil Corporation Limited (IOCL) which has dropped its plants to enter into the merchant power plant business. Merchant power is electricity that’s sold not to pre-identified customers under long-term agreements, but as a commodity at market price.

As part of its diversification drive, India’s largest refiner, which has a captive demand of 1,200 megawatts, wanted to enter the power business and use the pet coke from its refineries as fuel. Pet coke is a residue left after the refining of crude with a high calorific value and high in sulphur.Instead, it now plans to use the fuel for its chemical business.
The decline in merchant power prices has added to the growing woes of the Indian power sector. According to the India Energy Exchange (IEX), the monthly average merchant power tariffs are currently at around Rs3 per unit from a high of Rs10.78 per unit in April 2009.
According to the MD & CEO of IEX, “While there is competition on the supply side, there are no buyers competing to buy the power. This has led to power producers losing charm in the sector. The same might be the case with Indian Oil.”
State electricity boards (SEBs) across India are saddled with losses because of power theft, technical losses during transmission and distribution, and billing inefficiencies, and having failed to revise tariffs for many years, adding to the losses. The political compulsion of providing free power to farmers has also had an impact on SEBs.
The poor financial health is also on account of non-payment of subsidy amounts by state governments. The cumulative losses of the distribution utilities are around Rs75,000 crore, and if the present trend continues, projected losses in 2014-15 will be Rs1.16 trillion, according to a study conducted by energy consulting firm Mercados EMI Asia for the 13th Finance Commission.

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Global companies thinking on plugging out of Indian Power Sector due to fuel, land & tariff issues…

The numerous issues being faced by the Indian Power Sector such as fuel unavailability, tariff uncertainty and land acquisition delay etc, have jammed the sector, due to which various global power companies are currently holding their development and investment plants. According to the sources, such companies are considering opportunities in other less risky places such as Middle East and Vietnam.

 

According to the Financial Institutions and International Consultants, leading global companies & banks which were earlier actively involved in negotiating deals to enter in Indian Power Sector a year ago have currently developed cold feet - a move that will reduce the flow of technology and capital to the power sector where domestic banks are already reluctant to lend.

Spark learnt that at least half a dozen companies from countries such as USA, Japan & China are reviewing their plans of investment in Indian Power Sector.

CLP India, a subsidiary of the Hong Kong-based group with operations in Asia Pacific, Australia, Thailand, Taiwan and other countries, has long-term plans for the country but would expand in other markets if issues related to fuel, tariffs, power off take, land and regulatory clearances were not sorted out in few months.

Foreign presence in Indian power sector has been limited but was projected to grow as the market is vast and short-supplied and investors had anticipated a friendly policy regime. But even existing foreign companies such as CLP are worried while AES India, a unit of the global major AES, has already announced exit from most of its India operations.

 

India was marked in roadmaps of companies for high growth story. Some deals were at advanced stages. But with the adverse feedback on availability of coal, land and regulatory clearances, the overseas companies scaled back their India objectives. The companies have started looking beyond in Southeast Asian, Middle East and Africa.

 
According to the Experts, there will be a spurt in investments in Southeast Asia and Middle East that offer returns in the range of 10-12% as compared to about 16% in India. Several companies are opting for these markets.

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