Madhya Pradesh Pollution Control Board asks Essar to shut down Singrauli plant...

 

Essar Energy’s Mahan-I 600MW coal-fired power plant in Singrauli district has been ordered to stop all operations by the Madhya Pradesh Pollution Control Board (MPPCB).

During the monsoons in September last, MPPCB’s regional office in Singrauli reported that large quantities of fly ash — an effluent discharged during the combustion of coal — was flowing from the plant into the Garha stream and surrounding areas. In reply to a notice sent to Essars’s local subsidiary — Essar Power MP Limited — the company said that a new ash dyke to store the ash was under construction and that illegal discharge of ash outside the factory had taken place due to unexpectedly heavy rainfall.

Not satisfied with their response, the MPPCB ordered it to stop all operations on January 13. The company has also been asked to build a permanent ash dyke, install a continuous ambient air monitoring station, a sewage treatment plant and a tree plantation. Only on completion of these works can the company apply for permission to restart operations.

Essar has two 600MW power plants in Mahan. While Mahan-I started Commercial Operations in April, 2013, Mahan-II is under construction. Both plants intend to draw coal from the Mahan coal block, which has proven reserves of 150 tonnes of coal, where mining has not yet started as clearances have not yet been granted.

The forest in Mahan is home to 14,000 people, including Agria, Kol, Khairwar, Gond and Panika tribes. Objections were raised by the Union Ministries of Environment and Forests and the Ministry of Tribal Affairs over endangering biodiversity and violation of forest rights

Despite this, the Rs. 6,500 crore joint venture of Essar and Hindalco to mine in Mahan was granted clearance due to “huge exposure to nationalised banks.”

Greenpeace’s Media Officer in Singrauli, Avinash Chanchal told that the factory continues to violate rules. “Their ash dyke is just across the road from a settlement. It poisons the water table and pollutes the air causing lung problems.”

Greenpeace and the Mahan Sangharsh Samiti hoisted a banner over Essar’s offices in Mumbai last week which read “We Kill Forests.”

Essar House Limited filed a defamation suit against the activists on Monday. While company sources said it is for Rs. 500 crore, Greenpeace said it was a Rs. 1,000 crore suit.

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18 Independent Power Producers yet to move beyond land acquisition stage in Odisha...

 

As many as 18 out of 29 Independent Power Producers (IPPs) with whom the state government has singed MoU (memorandum of understanding) are yet to move beyond the land acquisition stage.

Together these IPPs envisage generation capacity of 33520 Mw of the total of 37540 Mw projected by the 29 MoU-signed IPPs.

The power projects yet to get over the land acquisition issues include those proposed by Nava Bharat Power Pvt Ltd (which is taken over by Essar power) with capacity of 1050 Mw, Bhushan Energy Ltd (2000 Mw) in Dhenkanal, CESC Ltd (1000 Mw), Astaranga Power Co Ltd (2640 Mw), Ind Barath Energy (Utkal) Ltd, Sahara India Power Corp Ltd (1320 Mw), JR Powergen Pvt Ltd (1980 Mw), NSL Odisha Power & Infra-tech Pvt Ltd (1320 Mw) etc.

Only two MoU-signed players- Sterlite Energy and GMR Kamalanga have started operations.

Sterlite Energy has commissioned its 2400 Mw coal-fired power plant at Burkhamunda near Jharsuguda.

GMR Energy which proposed 1400 Mw (4x350 Mw) power plant at Kamalanga in Dhenkanal district has operationalized its two unit of 350 Mw each.

Jindal India Thermal Power Ltd (JITPL) which proposed 1800 MW coal-based power plant at Deranga near Angul, hopes to commission its first 600 Mw unit by December 2013.

The other IPPs that are expected to go on stream by December end are Ind-Barath Energy (Utkal) Ltd (350 Mw of its 1360 Mw), Maa Durga Thermal Power Company Ltd (60 Mw).

Similarly, Monnet Power Company Ltd, a wholly owned subsidiary of Monnet Ispat & Energy Ltd, hopes to commission its 1050 Mw power plant in Odisha by March 2014. Lanco Badabandh Power Ltd targets to put on stream its power plant by 2014 end.

Two power companies-Chambal Infrastructure and Ventures Ltd (1200 Mw) and JSL energy Ltd (1320 Mw) have applied for change in the project locations.

The state government has signed MoUs with all these power companies between 2006 and 2011.

Of the total power produced by the IPPs, Odisha's share will be around 6200 Mw.

In the aluminium sector, Aditya Aluminum, which has proposed to set up 1.5 million tonne per annum alumina refinery, 0.36 mtpa aluminium plant and 900 Mw captive power plant with an investment of Rs 13804 crore is under construction. Similarly the RSB Metaltech Ltd, which signed a pact with the state government to set up 0.7 (mtpa) refineries, 0.175 mtpa aluminium plant and 450 Mw CPP with an investment of around Rs 6800 crore, is going through the land acquisition process.

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Essar Power's over Rs 11,000 cr investment awaits mining approvals...

 

Within a month after the Comptroller & Auditor general (CAG) tabled the coal block allocation report in Parliament in August last year, the Central Bureau of Investigation filed a first information report (FIR) against Hyderabad-based Navabharat Power Private Limited for the coal block allotted to it in Odisha in January 2008. And this dragged billionaire Ruia brothers promoted Essar Power into the controversy as it had acquired  Navabharat for Rs 230 crore in two tranches in July 2010 and April 2011.

Navabharat Power is a 1,050 MW coal-fuelled power plant being set up in Dhenkanal district in Orissa. The project includes the allocation of 17.39% share of the Rampia coal block that has 112 million metric tonnes of reserves.
 
The CBI in its FIR has alleged that Nav Bharat misrepresented the facts to get the coal block and later made about Rs 200 crore profit by selling it to Essar Power. The CBI questioned promoters and directors of Navabharat, Y Harish Chandra Prasad and P Trivikarma Prasad. It also quizzed Essar Group director Vikash Saraf in this context.
 
The CBI alleged that Navabharat would not have had the requisite net worth for the proposed plant for which the block was allotted to it. Essar Group denied allegations of making Nav Bharat its front for getting the coal blocks allotted. Even the CBI in its FIR has not named Essar as an accused.
 
Following the acquisition, Essar Power has invested more than Rs 500 crore in developing the project and has also achieved financial closure. But no debt has been drawn so far. 
 
Currently the project is awaiting revalidation of various regulatory clearances including environment clearance, water approval, etc. Implementation of the project is linked to mining and regulatory approval revalidation, which is pending for a long time.
 
Apart from Navabharat, Essar Power has been under the scanner of CAG for the blocks allotted to it for Mahan and Tori projects. Essar Power M.P is setting up 1200 MW power plant at Singrauli in Madhya Pradesh (MP).  The first unit of 600MW of Mahan (I) power project in MP was commissioned in Dec 2012. The second unit of 600 MW is at an advanced stage of progress and it will be completed in 2014. The plant is suffering due to lack of mining approval for Mahan Coal Block, which is the captive mine for Mahan Power station.
 
“The delay in mining approvals has resulted in delay in disbursement of project funding and resultant cost overruns which are putting a severe strain on the company’s balance sheet,” said a company spokesperson giving status of the project.
 
Essar Power (M.P) is continuing to make good progress towards Stage 2 forest clearance for the block.  Essar Power (M.P) has also applied for an allocation of coal under Coal India’s tapering coal linkage system in order to provide Mahan with sufficient coal to cover the period until the coal mine gets forest clearance stage 2 and mine is operational. Currently the plant is being operated utilizing coal from the e-auction market in India.
 
The Mahan project had achieved financial closure and significant part of the debt for Mahan has already been drawn by Essar Power M.P Ltd. Till date Rs 7,000 crs has been invested in Mahan by Essar Power M.P including debt and equity.
 
Similarly, Essar Power Jharkhand is setting up 1,800 MW power plant at Latehar in Jharkhand.  The project is called Tori project. Over the past few years land acquisition has progressed, equipment ordered and construction and erection commenced with over Rs 3,500 crore invested towards these activities. However progress has been slow and completion has been delayed with 2 coal mines allocated for these projects –Chakla & Ashok Karkatta   still awaiting regulatory approvals like environment clearances and forest clearances.
 
The Tori project had achieved financial closure and some of the debt for Tori has already been drawn by Essar Power Jharkhand.  Till date over Rs 3,500 crs invested in Tori including debt and equity. This takes Essar Power’s over Rs 11,000 crore investment await regulatory approvals for mining to get the due returns on investment.

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Essar withdraws the application for grant of distribution license in gurgaon...

 

Essar Projects, the group company of Essar, has withdrawn its application from Haryana Electricity Regulatory Commission for grant of power distribution license in Gurgaon's Municipal Corporation area.

Essar Projects had earlier sought license to distribute power in municipal area of Gurgaon in Haryana as the second energy supplier in the district and had filed the application as per the provision laid under section 14 read with section 15 of Electricity Act, in the month of March this year.

If the license had been granted to Essar Projects, it would have been the second distribution license holder after state-owned Dakshin Haryana Bijli Vitran Nigam (DHBVN) for supplying power to energy consumers within municipal limits of Gurgaon.

Gurgaon circle is a very potential area in terms of revenue generation and consumer load. DHBVN generates almost 50 per cent of its revenue from Gurgaon circle only out of its total five circles. Gurgoan has power consumer base of 3.60 lakh with average power load of 700-800 MW.

Pegging the capital outlay on this project at Rs 1,519 crore, the company in its application had said that it would set up its own distribution network for supplying power to the consumers.

The company had kept the cost of power from own generation and purchase at Rs 5.19 per unit with hike of 3-4 per cent per annum.

The Electricity Act, 2003 provides for second power distribution license provided, the company has its own power distribution related infrastructure.

 

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More literature on this...

http://economictimes.indiatimes.com/news/news-by-industry/energy/power/essar-withdraws-application-for-distribution-licence-in-gurgaon/articleshow/24547414.cmsc

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Noida Power Company signed a PPA for 240 MW with Essar Energy…

Power India found that with Noida Power Company Ltd (NPCL) entering into a Power Purchase Agreement (PPA) with Essar Energy for 240 MW Power, bring some relief to the Noida residents.

 

Under the said agreement, which was signed for a period of 25 years, Essar will supply power to NPCL from its under construction 600 MW Tori – II  Coal based thermal Power Project in Jharkhand from April 2014.

 

The agreement was signed between NPCL and Essar Power Jharkhand Limited, a subsidiary of Essar Energy, following a competitive bidding process.

At present, aggregate power demand in Greater Noida is around 180 MW, but is expected to rise sharply in the next few years due to increasing population.

 

NPCL informed that the 'delivered levelised tariff', at which power would be purchased from Essar, is so far the highest long-term tariff achieved through competitive bidding in India.

 

Power consumers would be at lesser risks of being subjected to higher tariffs over the years, because the unit cost price of electricity for NPCL would remain stable over a 25-year period.

At present, NPCL purchases power from Uttar Pradesh Power Company Limited (UPPCL) apart from other power generators in Gujarat, West Bengal and Jammu & Kashmir.

The UP Power Transmission Company is at present working to upgrade the 132-KV substation in RC Greens in Greater Noida to increase its capacity to 220 KV.

"Low transmission capacity at the disposal of NPCL, which has been the major bottleneck in ensuring unhindered power supply, would be mitigated once this up gradation work is completed in the next few months. This coupled with adequate power at our disposal would ensure 24X7 electricity supply in Greater Noida," as said by NPCL official.

 

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More Literature on this topic:

• http://timesofindia.indiatimes.com/city/noida/New-agreement-gives-boost-to-power-supply/articleshow/13088352.cms

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Essar to sell 120 MW power from Vadinar Project in open market…

Power India found that Essar is planning to sell around 120 MWs of power from its Vadinar Thermal Project in open market instead of entering into any offtake agreement. We believe that coal price volatility and the overall pligh of the power sector are pushing Essar to take the safer route even though it will fetch less money.

 

According to sources, Essar may be planning to put a tariff rate of Rs 4 per unit for the 120 megawatt power and may currently sell it in the day-ahead market. The move is basically to ensure the sustainability of the project, and yet not fall prey to the volatility that is rattling the sector.

Sources further said that looking at the erratic price movement of imported coal, selling power in the open market stands as a better option than getting into a contractual obligation. They explain that such contractual obligation can weigh the company down if fuel price shoots up.

However, sources also said that this will be a short term arrangement. Depending on demand, the company may increase the tariff rate to Rs 5 per unit over time. But in the long run, Essar is interested in signing 25-year power purchase agreements with interested off takers.

Considering the current market situation, experts believe that no power plant can be sustained on a captive basis. They say that to maintain 80% to 85% plant load factor and to make profit, the company has to resort to merchant selling.

The channel has also learnt that while this project will be fuelled with imported coal only, Essar may source some from its own mines and buy the remaining from the open market.
But then is tariff rate of Rs 4 per unit viable enough? Sources said that Essar finds the decided tariff rate to be good enough for the time being because currently spot prices of imported coal have come down by $10-15.

However, with an eye on volatility, the company has kept an option open to increase price as per requirement. Experts on their part feel this tariff rate will hold water in the short term, as long as imported coal prices stay where they are.

 

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Essar expects big play in power plants with Foster Wheeler tech…

With a technology-transfer agreement with the US power major Foster Wheeler under its belt, Essar Projects expects a large play in India in what is touted as the ‘future technology for India's power sector'.

The technical agreement is for thermal power boilers of the ‘circulating fluidised combustion bed' type. CFBC is said to be the future of India's power sector. It is impossible to give up coal-based plants altogether, given the preponderance of coal in India's power sector.

And if coal has to be used, it had better be through CFBC route, says Dr Arjun Bharatan, Senior Vice-President, Plant Technologies Group, Essar Projects Ltd.

Eco-friendly

CFBC boilers are environment-friendly because they do not let out harmful gases. Harmful substances such as sulphur are mixed with limestone and removed. But the attractiveness of CFBC boilers today is more due to their ability to handle any kind of fuel. This is a big advantage because, for example, when coal prices are high, it is possible to use a blend of coal and some other low cost fuel such as lignite.

The CFBC boilers cost about 10 per cent more, but their fuel flexibility is a big advantage, says Mr William Rajkumar, Vice President – Stem Generators, Plant Technologies Group, Essar Projects.

Fuel flexibility

If India adds 75,000 MW of thermal power capacity, it would need 3 billion tonnes of coal. Flexibility to mix or switch fuels, depending upon their market prices, is said to be a huge advantage.

With Foster Wheeler's backing, Essar Projects offers high a combination of CFBC and supercritical boilers.

In India, the biggest operating CFBC boilers are of 135 MW (though Neyveli Lignite Corporation is close to commissioning a 250 MW plant). The biggest operating CFBC-supercritical plant is the one that was set up by Foster Wheeler at Lagisza in Poland. But the Samcheok Green Power plant of the Korean Southern Power Company, is putting up four units of 550 MW each.

These CFBC-supercritical plants, expected to begin generation in 2015, are also of Foster Wheeler technology.

Under the technology licence, Essar is obliged to buy the pressure parts from Foster Wheeler for the first three projects. Foster Wheeler is likely to supply the components from its plant in China.

For the subsequent projects, Essar is free to buy from any of the Foster Wheeler-approved vendors.

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