Wind Developers demands better grid before following to CERC's forecasting regulations...

 

Wind power producers who were recently directed by the Central Electricity Regulatory Authority (CERC) to give day-ahead forecast for power generation have asked the Power Ministry to first resolve the issue of grid stability and build required transmission infrastructure for evacuation of wind power.

The Central Electricity Regulatory Commission has recently issued regulations to wind power producers to issue day-ahead forecast for wind power generation. There is penal action amounting to at least 15% of the revenues in case of incorrect predictions.

However, large nos of wind power producers have opposed the move.

Companies like, ReNew Wind Power and Tata Power have requested to the power ministry to develop better grid infrastructure and suggested that scheduling and forecasting mechanism should be instituted at a consolidated SLDC (State Loading Dispatch Centre) level instead of the level of the substation.

Independent Power Producer's Association of India has already filed for an injunction in the Delhi High Court against this decision. Indian Wind Power Association has also written to the CERC to postpone this decision, as wind farms are unable to proceed with forecasting and scheduling of wind power.

 

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http://economictimes.indiatimes.com/news/news-by-industry/energy/power/wind-power-producers-want-government-action-before-following-cerc-order/articleshow/21666642.cms

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KSERC receives award for "Transparency & Fostering Competition" by IPPAI...

 

During the event organized by the Independent Power Producer's Association of Indian (IPPAI), the Kerala State Electricity Regulatory Commission (KSERC) has received an award for "Transparency & Fostering Competition" in recognizance of its measures to strengthen & regulate the power sector.

 

IPPAI has organized a national level meeting of regulators and policy makers in Goa on 3rd August 13 and had instituted around 13 awards for recognizing the efforts for promotion of clean and efficient power generation by both private and government corporations.

As said by the former chairman of Central Electricity Regulatory Commission, there are several issues plaguing Indian Power Sector coupled with corruption and inefficiency problems over fuel production and the awards are aiming to incentivize progress and good work in the Indian Power Sector.

The Jury, comprised former secretary, Ministry of Power, member secretary of the National Manufacturing Competitiveness Council and former secretary of Ministry of New & Renewable Energy.

The Jury has selected Kerala State Electricity Regulatory Commission for the special award after evaluating the relative performances of all state electricity regulatory committee.

To combat severe power shortage, innovative concepts like recovery of marginal cost of power from extravagant consumers, higher rate for high-end domestic consumers and 'Time of Day' tariff for domestic sector were introduced for the first time in the country in Kerala. This along with effective control and admonitions on the Kerala State Electricity Board has forced it to streamline unregulated power purchase and enter in to prudent contracts to avoid power shortages in the future.

In addition, the KSERC has rationalized tariffs after a gap of 10 years and prescribed preferential tariffs for green and renewable sources like wind energy and small hydro projects.

 

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http://timesofindia.indiatimes.com/city/goa/Kerala-power-commission-wins-award/articleshow/21588451.cms

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CIL released draft FSA, biased against power developers as per IPPAI…

Power India found that, Coal India Ltd (CIL) have released the draft of Fuel Supply Agreement (FSA) which proposed to be entered with the power producers.

 

As captured by Power India earlier, the penalty provisions for not honouring the FSA have been kept at abnormally low levels; further the CIL has refused to take any responsibility of supplying imported coal in case of lace of response from global suppliers to its tenders.

 

As captured in the Force Majeure Clause:

While imported coal will be supplied only on the basis of firm agreements with such overseas suppliers, failure to supply imported coal due to “global shortage, or delays caused by the supplier or no response to enquiries (by CIL) for supply of coal or logistics constraints in transportation of coal”

The detailed force majeure provisions also include failure of CIL's contractors to deploy equipment and machines.

The company has also declined to take the risk of procedural delays that include delay on the part of the Union or State Government for granting due mining licences or permits, delay in environment and forest clearances and land acquisition.

The power producers are asked to pay six per cent of the annual contracted quantity (ACQ) requirement as interest-free security deposit. Assuming that the total minimum requirement of the FSAs to be signed immediately is 69 million tonnes, the total security deposits amount to a little over Rs 400 crore.

As said by Dr. Ashok Khurana, Director-General of Associated Power producers.

“This FSA is heavily biased against the power sector developers,”

The body of private sector power producers have sought Prime Minister's appointment to push their case forward.

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Power producers to meet PMO on low penalty level in CIL’s guaranteed FSAs…

We have posted a news that Coal India Limited  (CIL) has agreed to sign the guaranteed FSAs with the power producers however with the lowest penalty level. (See the post here).

With the current level of penalty, CIL would have to pay only Rs. 77 lacs annually if it fails to supply the guaranteed quantity of coal.

Private Power Producers, miffed at the CIL Board’s decision, are again planning to approach Prime Minister’s Office (PMO).

 

The events are happened in the below order.

• After last month’s presidential directive to the world’s largest coal producer, its board on Monday agreed to sign new FSAs with power companies at an 80 per cent commitment level.
• However, the board not only set a penalty level of a mere 0.01 per cent (one-hundredth) the value of the shortage below 80 per cent, it also wants the penalty to come into effect only after three years of signing FSAs. “If we keep the average price of coal for the power sector at about Rs 1,100 per tonne, the penalty we are going to pay after three years would be around Rs 1.1 lakh per million tonne. This shows the penalty clause of 0.01 per cent will not have any effect at all to the company’s profits,” a senior CIL executive admitted, on condition of anonymity.
• The maximum fine CIL would have to pay if it failed to meet the promised 70 mt of additional coal, according tot the FSAs, would be about Rs 77 lakh.
• Considering CIL had a turnover of about Rs 50,200 crore in 2010-11, the penalty would hold little meaning.
• According to a board member, in the seven-hour meeting yesterday, the main point of contention was the penalty clause. “Independent directors were not even ready to give a penalty clause. Finally, we decided to keep it at the least possible level,” he said.
• At present, penalty is paid by the coal supplier at 10 per cent (one-tenth) of the value of shortage below the committed quantity. The domestic industry has termed the board’s decision on low penalty level “irresponsible behaviour” and “a mockery of assured supply”.

Power producers are understandably complaining. “We feel the presidential directive has not been followed in spirit and intent.

So, the coal ministry should act suo motu (on its own) to address the concern. And, if it does not, we will take up the matter with the prime minister again,” according to Mr. Ashok Khurana, director-general of the Association of Power Producers. He, however, added any decision on FSAs would be taken by companies individually.

“Our allocation to the power sector would cross the 400-mt mark this year, compared with the current 383 mt. During the first two years, allocation won’t be a problem for us, as there would be no shortfall. So, even if imports take place, these would begin from the third year,” according to a  senior CIL executive.

 

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