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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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.

Source

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Telcos may seek PwC help meet DoT’s green target...

 

The telecom industry is set to broaden the mandate of PricewaterhouseCoopers and ask it to recommend ways to help operators reduce carbon emissions, and not just examine the feasibility and need for viability gap funding of powering 3.5 lakh mobile towers with alternative energy.

The industry is likely to urge PwC's Indian arm to suggest steps to help operators meet the telecom department's "gogreen" targets set in January 2012. "PwC India's terms of reference is likely to be broadened by seeking its suggestions on reducing carbon emissions," said a senior executive representing Tower & Infrastructure Providers Association (Taipa), the industry body for telecom tower companies.

"Apart from examining initiatives undertaken by telcos, PwC India may be asked to examine the viability of alternate technologies like batteries as a cost-effective tool for reducing carbon emissions," the official added. At present, DoT and the ministry for new & renewable energy do not regard batteries as a green energy source as they are storage devices.

PwC India may also be asked to also assess whether India's green telecom policy is aligned with global standards on containing carbon emissions as specified by Geneva-based International Telecom Union (ITU).

India's go-green laws require mobile phone companies to migrate 50% of all cell towers in rural areas and 20% in urban areas to hybrid power by 2015. Hybrid power has been defined as a mix of grid supplies and renewable energy based on solar, wind, biomass or fuel cells.

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West Bengal Govt prepared final draft for policy on development of renewable sources of energy…

Power India found that finally West Bengal Government has prepared a final draft after 10 months.

 

At a time when the entire world is focusing on non-conventional or renewable sources of energy, it took the eco-friendly Bengal government 10 months to prepare a final draft. Now after years of neglect, the Mamata Banerjee Government has now finally prepared a draft policy on renewable energy policy. The draft was submitted that was sent to the state power minister Manish Gupta last week.

 

Power India found that the draft was prepared by an expert committee that included S P Gon Chaudhuri, the former advisor to the state government’s power department. While PricewaterhouseCoopers acted as a consultant, it was funded by the Department for International Development (DFID) and PricewaterhouseCoopers was the consultant for it. An expert committee was formed that included S.P Gon Chaudhuri, the former advisor to the state government’s power department. However, the state government made a delay of more than 10 months to finalize the draft.

 

Bengal, which could have flourished as a renewable energy hub in the past few years, suffered a setback due to the nonchalance on part of both the Left Front government and the present one. The dilly-dallying tactics by the previous and the present state government have driven out many prospective companies who had evinced interest in setting up solar power plants in the state.

 

The Bengal government had earlier lost quite a few projects with an investment of over Rs 500 crore as the state did not have any renewable energy policy in place. The list of companies, which could not do project in the state are – a US-based company Astonfield Renewable Resources, Videocon, Reliance Power and a Germany-based company. All these firms had approached the state government back in 2009 but as the government did not have a proper policy in place, it lost quite a few projects worth about Rs 500 crore. The investments would had crossed Rs 500 crore.

 

Astonfield had planned to taken up a 10-acre plot in Bankura to for set up a 5 MW solar power project on a 10-acre plot in Bankura, while Videocon had planned a 10 MW solar power plant spreading over some 100 acres at Raghunathpur in Purulia which had a capital outlay of about Rs 200 crore at that time.

Though the price of MW renewable energy per unit has come down now, the now. The Videocon project had now could hav e attracted an investment of about Rs 100 crore.

 

As said by Mr. SP Gon Chaudhuri:

“More than Rs 500 crore of investments were lost only because the state did not have any policy on renewable energy and no separate tariff for developing solar energy. At present, one megawatt of solar power plant costs around Rs 8 crore.”

 

After the new government came to power, it constituted a separate department for non-conventional energy. But after a few months of operation, the department was merged with the power department.

 

Also, due to lack of separate tariff for West Bengal and the eastern region of the country, solar power projects are not very competitive in the state.

 

Bengal has thus been losing out in the competitive bidding with states like Gujarat and Rajasthan., as solar radiation is lower in the state from states like Rajasthan and Gujarat and Bengal have been losing out to these states in competitive bidding.

 

 

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