Tax incentive window for GMR, JSPL, Sterlite power plants...

 

Power generators, like GMR, Essar Power, Jindal Steel and Power and Sterlite Energy, are likely to benefit from the relaxations in mega power policy announced yesterday.

A number of coal-fired power projects have been under stress to non-availability of fuel to reduction in off-take and lack of payments. “The move will help a lot of coal-based power projects,” said Umesh Agarwal, associate director of PriceWaterhouseCoopers.

The mega power status allows projects to claim tax benefits that will net 10% savings on carriage charge of the tariffs. The power policy, which was amended in 2009, covers coal-based power projects of 1000 megawatts and hydro power projects of 500 megawatts, above to claim tax benefits.

They can import equipment duty-free but to avail of the benefits they had to supply around 75% power that they produced through competitive bidding. However, projects based in states like Chattisgarh, Jharkhand, Madhya Pradesh and Orissa could not due to host state obligations.

Some states mandate these power projects to sell 35% of the power produced to the state-owned utilities at regulated tariffs. “The power producers will have to supply 30% power at  regulated rates and seven% at variable costs,” explained Debasish Mishra, senior director at Deloitte Touche Tohmatsu.

The latest relaxation allows 65% of power to be sold under competitive bidding.

“This dispensation would be one time and limited to 15 projects which are located in the states having mandatory host state power tie-up policy of power purchase agreements (PPAs) under regulated tariff,” said a press release by the government. 

“This is more of a move to align it to suit state regulations,” said Agarwal. Added to that, the Cabinet Committee on Economic Affairs (CCEA) also extended the the maximum time period to 60 months instead of 36 months from the date of import for provisional mega projects, for furnishing final mega certificates to tax authorities. This time extension will benefit 25 power projects, which would have a net capacity of around 30,000 megawatts.

The mega power policy was introduced in 1995 but benefits under it were available to only those generators who had either put up their power plants or had got provisional certificate by placing orders before July 2012.

No new projects will stand to benefit with the latest relaxation. “It will only benefit those projects which have received a provisional certificate already,” said Agarwal.

Source: Business Standard

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Lanco says it got favourable APTEL ruling in Amarkantak issue...

 

Lanco Infratech's received a favourable verdict on its year-long dispute with Haryana Power Generation Corporation (HPGCL) over the second unit of its Amarkantak power plant.

“As per the Appellate Tribunal for Electricity’ (APTEL) order, Amarkantak Unit 2 shall be paid regulated tariff based on the actual capital cost of the project. This would result in sustainable and profitable operation of the project at full capacity,” said Lanco, in a press release today. The exact tariff for the power plant, is yet to be known as the order has not been made public.

The 300 megawatt second unit which was commissioned, could not start generating due to the dispute, can now start generation. The power generator's power purchase agreement with Power Trading Corporation (PTC) to supply to HPGCL, was terminated. This was over the non-compliance of certain PPA covenants.

The receivables from this unit have been pegged at Rs 195 crore, by the end of the second quarter. The first unit of coal-based Amarkantak power, which is located in Chhattisgarh, has been generating power and earning revenues, unlike the second unit. 

Lanco's Rs 7,700 crore debt recast was approved by its lenders, last month. Amongst other developments, Lanco said that it has two cases pending verdicts with APTEL and that they were expecting favourable judgments.

“Once tariff orders are passed, we will take around six months for payments to be cleared. We expect the payments to come over time and not immediately,” said Adi Babu, the chief financial officer of Lanco, told Business Standard in an interview after its debt recast was approved.

The release of payments from its power plants is one of the positive developments that the company had expected after its corporate debt restructuring (CDR) package was approved by the lenders. As its payments from Karnataka state utility as well as that of Haryana is cleared, the company expects its business to start turnaround by March.

Source: Business Standard

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Goa's power scenario gets a boost after decrease in losses...

 

Constant check on electricity pilferage and upgradation of infrastructure in the state has helped Goa to drastically reduce its power losses, government said today.

The measures have helped the Goa government to drastically reduce its power losses since last year at 11 per cent compared to the national average of 35 per cent, State Power Minister Milind Naik claimed.

The upgradation of infrastructure and constant check on the electricity pilferage has helped the department to curb power losses making Goa one of the best managed state in terms of electricity, Naik said.

Our electricity tariffs are already low compared to all other states in the country, he said, adding that check on the pilferage is helping the department to manage its resources better.

Goa is charging Re 1.20 per unit for the initial 60 units followed by Re 1.60 per unit till 250 units.

Naik said that state government has taken upgradation work of more than Rs 350 crore for the current financial year fixing majority of the issues faced by the department.

He said that the coastal belt, which is abuzz with tourists, was facing a major load shedding during peak hours. But now it has been now spared from the trouble after laying of two new 33 KV underground feeders.

Areas like Candolim, Calangute, Siquerim and Arpora were also getting affected with the power disruption.

Also, various other works are at different stages, and their completion would improve the power scenario in the state, he said.

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Inadequate transmission network troubles power producers in Chhattisgarh...

 

Power project developers in Chhattisgarh fear lower profits because of a lack of adequate transmission network that limits their ability to sell surplus electricity out of the state.

Besides state utilities, private power producers such as KSK Energy, Jindal Steel & Power, RKM Powergen and Bhaskar Group are commissioning new projects in Chhattisgarh which will more than double the state's electricity generation capacity in the next couple of years from close to 9,500 mw now. Transmission network in the state, however, is not expanding at the same pace.

"We will soon face a situation where evacuating electricity out of the state will be a challenge as the state commissions more generation capacities," said Shivraj Singh, chairman of state-owned Chhattisgarh State Power Holding Company. "Today, state utilities are selling 400 mw of power to other states and this will ramp up to 900 mw soon. There will be challenges as private producers too add generation capacities."

According to him, Power Grid Corporation was to provide grid connectivity to power projects based in the state. "I am not sure about the status of transmission network projects initiated by Power Grid Corporation. Power producers will not be able to attract good tariff in the absence of adequate evacuation capacities," he said.

By March 2014, Chhattisgarh will add 3,200 mw, which will increase the state's total generation capacity to more than 12,500 mw, but the capacity of transmission networks in the state by then will be just about 9,000 mw. It is projected to have 21,500 mw of generation capacity by March 2015. The lack of adequate transmission network is already hurting the state's ability to sell power on the spot market to outside consumers. According to power-trading platform Indian Energy Exchange, Chhattisgarh witnessed power price going down to Rs 2.30 a unit in November from Rs 2.41 in October.

Commenting on the progress of transmission network, a top Power Grid Corporation official, requesting anonymity, said the company will be able to commission projects if it gets timely environmental clearances and land-usage permission. "We are not responsible for factors beyond our control."

The official said the company's projects in the state are "more or less" progressing as per schedule.

Jindal Steel & Power, which operates the country's first mega power project in the private sector near Raigarh in Chhattisgarh, is already facing limitations in selling power to other states. It is in the process of ramping up its generation capacity from 1,000 mw to 3,400 mw.

"There are new power-transmission lines under construction, which shall provide additional capacity of around 8,500 mw progressively by June 2015. It means Chhattisgarh will have transmission capacity of 16,500-17,500 mw against installed capacity of 21,500 mw in next two years," said a top executive at one of the private sector power producers in the state.

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Karnataka Government to provide 50 per cent subsidy to farms for solar fencing...

 

The government will provide 50 per cent subsidy to farmers to put up solar fences on their farms, said Minister for Forests B. Ramanath Rai on Thursday, as an obstacle against entry of wild animals and to reduce man-animal conflict

During his visit to the Karnataka Pradesh Congress Committee (KPCC) office here, the Minister told presspersons that the department had put up elephant-proof trenches and installed solar-powered fences around some stretches of the reserve forests and national parks. “This is part of the Karnataka Sustainable Forest Management and Bio-diversity Conservation Programme. However, if farmers want to get solar fences installed by private companies, we will grant them 50 per cent subsidy,” he said.

The Minister said his department was not against development. However, only such projects that will directly benefit people will be permitted. People who submit applications for land in deemed and reserve forests should keep in mind the various rules governing forests in the State.

The Minister said the process of resolving the confusion over the C and D categories of land (degraded forest land) had commenced. “According to the law, there is no provision to regularise encroachments on forest land after April 27, 1978. However, we have received over one lakh applications seeking regularisation of land. A Cabinet subcommittee has been formed to study the issue and take a decision,” he said.

Posts to be filled
He said 700 posts in the department would be filled shortly. “The department is also encouraging farmers to grow sandalwood. We are giving away saplings at Re. 1 and Rs. 2 each to farmers. These farmers will also get an incentive of Rs. 10, Rs. 15 and Rs. 20 for each sapling annually, in the first, second and third year respectively, to ensure its growth,” the Minister said.

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Wind mill investments fall in Tamil Nadu...

 

Tamil Nadu, which has the highest installed wind energy capacity in the country, does not seem to be an attractive destination for new investments in wind mill installations this year (2013-2014).

Investments in additional wind mill installations in the State were for 113 MW between April and December 2013 as against 165 MW in 2012-2013 and over 1,000 MW in 2011-2012. States such as Maharashtra, Gujarat, Andhra Pradesh and Rajasthan have higher number of new installations this year.

According to K. Kasthoorirangaian, chairman of the Indian Wind Power Association, there might not be any significant investment during the next three months of the financial year (January to March, 2014) in the State. Till 2012, Tamil Nadu was leading in attracting new investments.

Installations declined during the last two years (2012-2013 and 2013-2014) as investors have lost confidence, he says.

Last year, arrears to be paid to the wind mill owners for energy supplied to the grid were pending for several months. Though it was cleared this year, evacuation dropped.

“We lost 40 per cent energy during the windy season this year compared to last year because of fall in evacuation,” he says. Despite availability of wind and grid connectivity between May and September (wind season in the State), evacuation decreased from June to August, 2013 compared to the same period the previous year.

Earlier, industries in other States used to invest in the wind energy sector in Tamil Nadu. This year, even the industries here have moved out to other States. If the new installations across the country were for about 1,000 MW, nearly 700 MW will be by the industries here and these are in other States. In Maharashtra, the investors get Rs. 5.80 for a unit of wind energy supplied to the grid as against Rs. 3.51 a unit in Tamil Nadu, he says.

The State has installed wind energy capacity of more than 7,100 MW. The State Government envisages additional installation of 5,000 MW during the XII Plan period.

The challenges faced by the sector now need to be addressed for installations to gain momentum in the State again, he said.

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Australia seeks to export SolarGen technology to India....

 

Australia is exploring the opportunities of exporting SolarGen technology which it feels has potential applications in Indian industry. Some of the sectors identified are petrochemicals, fertilisers and transportation.

Developed by Australian scientists the technology can provide a sustainable and cost effective alternative for the production of hydrogen, which in turn will help these industries, says Jim Hinkley, of the Commonwealth Scientific and Industrial Research Organisation (CSIRO).

In India recently, Hinkley told that, “There is a particularly strong potential to roll out the technology in Gujarat and Rajasthan because both states have excellent solar resources and natural gas infrastructure, as well as being major industrial users of hydrogen”.

The technology facilitates concentrating the sun's rays to drive a reaction between water and natural gas which stores solar energy in the form of chemical bonds. The resulting fuel has a higher energy yield than natural gas. The SolarGas can then be used to produce high-efficiency electricity in a gas engine or turbine, he explained.

According to CSIRO by using Sun’s rays for heat, in combination with new catalysts, SolarGas uses upto 50 per cent less fossil fuel and higher percentage of water as well.

A study has also found that the technology developed by the CSIRO could help India’s efforts towards achieving energy security. Some of the benefits include improved energy and food security by reducing natural gas consumption; new jobs created through local manufacturing and operation of the technology; the potential to produce solar liquid fuels for transport.

The study was funded by the Australian Government and undertaken by CSIRO in collaboration with the Solar Energy Corporation of India. It has also developed a concept design for a pilot scale SolarGas facility and identified numerous potential host sites suitable for such a pilot project.

Energy and energy security are critical issues for Australia and India, and we have much to offer each other by sharing our renewable technology expertise and technology, said Australia’s High Commissioner to India Patrick Suckling while launching the study recently.

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Vestas grabs contract from Powerica for 52MW wind projects in Gujarat...

 

Vestas is to supply Powerica with 51.8MW for two onshore wind projects in India.

The contract covers the delivery, installation and commissioning of 26 turbines to the Jangi and Charbara projects in Gujarat.

The first 21.8MW is expected to go live in July of this year, followed by a further 30MW in March 2015.

The hardware payload is split between 25 2MW V100s and a single V100 1.8MW model.

Powerica chairman Naresh Oberoi said: “We are the best in our business and hence it is natural for us to be associated with the best in the wind industry too.

“Vestas is a good partner to work with and the experience is more than excellent.”

Vestas acting president for Asia Pacific and China Danny Nielsen said: “We are glad that our customers in India see Vestas as a trusted partner.

“With more than 30 years of experience pioneering the wind industry, we are confident we will provide maximised performance and return on investment to Powerica.”

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Environmental panel clears Simang I and II hydel projects in Arunachal Pradesh...

 

A key environmental panel has recommended clearance for two hydel power projects in the Siang river valley in Arunachal Pradesh.

The two projects—Simang I and II totalling 133 MW—are located on the Simang, the right bank tributary of the Siang River. Projects in the Siang river basin are viewed as strategically important on account of the border with China. Adishankar Power Pvt Ltd is the project developer.

The Expert Appraisal Committee on River Valley and Hydroelectric Power Projects decided to recommend to the environment ministry that the two projects be cleared subject to requisite clearances from the National Wildlife Board, since Simang II is 6.4 km away from the Mouling National Park.

The panel has asked the developer to revise the cost estimate of implementing the environmental management plan, as it found the figures submitted by it to be on the lower side. It has also suggested that environmental flows of the river should be in line with the recommendations of the Siang Basin study report for winter or lean, monsoon and non-lean and non-monsoon seasons. As of now, the Simang I and II hydro-power projects are the only projects on this river.

The total land requirement for Simang I is 54.58 hectare, of which 32.74 hectare is forestland. The 18-metre barrage will result in a submergence of 15.5 hectare.

Simang II, on the other hand, requires about 46.14 hectare of land, of which 26.75 hectare is forestland. The 18-metre barrage will result in a submergence of 10.57 hectare of land.

Projects in the Siang river basin are seen as strategically important. The Yarlung Tsangpo is known as the Siang after it enters India in Arunachal Pradesh. This is what gives the Siang basin its strategic significance from an international point of view.

The government considers developing the Siang basin important as it will not only help India counter Chinese build-up in the area but also strengthen its negotiating position with China.

India and China have no water agreements. As a result, there is no structured international convention under which India can appeal should its lower riparian rights be affected by the power projects on the Tsangpo.

In this context, developing the Siang basin provides India the best safeguard. As early as August 2010, the then environment minister Jairam Ramesh had written to Prime Minister Manmohan Singh saying the environment ministry would ensure expeditious forest and environment clearances for all projects on river Siang without ignoring ecological concerns.

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Bihar government not for power tariff reduction...

 

Amid demands in several states for power tariff reduction on the lines of AAP government's move to reduce tariff in Delhi, Bihar government today refused to toe the line, saying the rate was already low and much below the purchase price in the state.

"The power tariff is already very low in Bihar at Rs 2-2.25 per unit for urban consumers and much below the purchase price of the commodity," state Electricity Minister Bijendra Yadav told reporters in reply to a question.

"The electricity charge is not at all costly in Bihar in comparison to other states," he said when reporters insisted on his response.

In any case, Bihar has only 11 per cent urban areas and the rest rural, the minister said referring to the power tariff reduction demand gaining currency in big cities following the popular decision taken by the Arvind Kejriwal government in Delhi yesterday.

In reply to another question, Yadav said Chief Minister Nitish Kumar had, during the Independence Day speech last year, promised to improve power situation in Bihar failing which, he had said he would not seek votes from the people in the 2015 assembly polls.

"All that the Chief Minister had said then was that he will not go to the people to seek votes in case he failed to improve power scenario in Bihar by 2015. He had not promised to provide power to all households," he said.

With the power situation improving and its availability expected to increase to at around 3000 MW by 2014, besides improvement in distribution and transmission infrastructure, the Chief Minister, he said, would not have to apologise to the people.

"Instead he will be in a position to seek their votes for another term in office in 2015 assembly polls," Yadav said.

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Rajasthan Government to ensure 24-hour power supply this year...

 

The Rajasthan government today said that 24-hour power supply would be ensured for all in the state this year, as promised in the BJP's election manifesto, a minister said.

Once the state achieves self-reliance in electricity generation, power would be supplied for all for 24 hours during this year, Rajasthan Energy Minister Gajendra Khimsar said.

To achieve this target power generation and transmission systems would be strengthened by reducing Theft and Distribution Losses (T&DL), which is about 20% now, Khimsar said while addressing villagers at Lohawat in Jodhpur district.

Recalling Chief Minister Vasundhara Raje's commitment to the people, he said electricity would be supplied not only to urban population but also in villages right up to "dhani", and this would achieved this year, according to an official release issued here.

Source: Business Standard

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‘Grid integration may help check 2012-like power outages’...

 

Tuesday’s linking of the southern power grid to the national grid will reduce the possibility of the recurrence of the massive power outage in India a year and half ago, and also improve the quality of power in the country.

The July 30-31, 2012 outage had crippled northern and North-eastern States for several hours and more than 50 crore people went without power. This was the largest power outage in India’s history, and exposed the country’s infrastructural weaknesses.

“Now that all the five regional grids are interlinked, chances for such blackouts are very low,” M. Muhammedali Rawther, Member, Electrical Generation, Kerala State Electricity Board, told Business Line.

“The load flow will be smoother and overdrawal of power by individual States from the national grid can be controlled better.” It was the overdrawal by certain States in the peak of summer that had led to the crash of the national grid and the two-day outage in 2012.

The southern power grid was synchronised with the national power transmission network on the New Year’s Eve, thus facilitating seamless flow of power across the five regional grids.

Rawther pointed out that the national grid would now operate on a single frequency.

“The load flow will be smoother, power supply will be more reliable and there will be fewer voltage fluctuations,” he said. “The overall quality of power will improve.” Load control would be more efficient and easier.

“The technicians at the national load dispatch station in New Delhi can now control load anywhere in the country.”

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Cabinet approves Power System Development Fund....

 

The government approved the proposal of the Ministry of Power for operationalisation of the Power System Development Fund.

"Power System Development Fund (PSDF) will be utilised for creating necessary transmission systems of strategic importance based on operational feedback by Load Dispatch Centers for relieving congestion in Inter-State Transmission Systems," Finance Minister P Chidambaram told reporters here after the Cabinet meeting.

The fund will also be utilised towards installation of shunt capacitors, series compensators and other reactive energy generators for improvement of voltage profile in the grid.

Installation of standard and special protection schemes, pilot and demonstrative projects, and for setting right discrepancies identified in protection audits on regional basis.

Renovation and Modernisation (R&M) of transmission and distribution systems for relieving congestion and any other scheme or project in furtherance of the above objectives, such as, conducting technical studies and capacity building, etc.

PSDF will be operationalised within three months, he said.

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DoT asks PricewaterhouseCoopers to chart carbon credit policy for telecom firms...

 

The telecom department has asked PricewaterhouseCoopers (PwC) to evolve a carbon credit policy for mobile phone companies in addition to evaluating the technocommercial feasibility of powering 3.5 lakh telecom towers with green or "renewable" energy.

PwC India will suggest by end of February how telcos can check diesel dependence and reduce carbon footprint and also earn carbon credits by feeding clean energy into the national grid in the next six years.

The matter was recently discussed at a meeting where senior telecom department (DoT) officials and representatives of the consulting major, mobile operators, tower companies and the ministry of new & renewable energy (MNRE) were present.

"The government wants telecom companies to ensure a substantial chunk of power consumed by telecom towers in rural and urban areas is fed back into the national grid in the form of renewable energy by 2020," said a senior executive of a leading tower company who was present in the meeting.

"PwC has been asked to assess carbon footprint reduction targets mandated by DoT and also evolve a carbon credit policy in line with carbon credit norms and international best practices in the telecom sector," the official added.

A key issue would be evolving a mechanism for telcos to earn carbon credit certificates after carbon reduction targets have been met. But the consultant has sought more time from DoT, given the complexity of the task. "PwC has indicated it will submit its final report by end-February 2014, instead of the original January 15 deadline, owing to the complexity of data and analysis involved," says a DoT.

The DoT note also reveals that PwC has managed to collect only 60 per cent of the tower data relating to renewable energy deployments so far. It is yet to receive the requisite tower data from public sector telcos like Bharat Sanchar Nigam Ltd, the note shows.

Last September, PwC's Indian arm was engaged by the telecom industry in consultation with DoT to examine the feasibility of powering mobile towers with alternative energy sources such as solar, wind, biomass or fuel cells, and also whether there is a case for viability gap funding.

India's green policy requires telcos to migrate 50 per cent of all towers in rural areas and 20 per cent in urban areas to hybrid power by 2015. By 2020, operators will need to run 75 per cent and 33 per cent of cell towers in rural and urban zones, respectively, on hybrid supplies.

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