Government looking at ways to reduce smart grid tech costs…

 

Various options are being studied to reduce the cost of smart grid technologies, which will help in bringing down overall transmission and distribution losses in the power sector, a Planning Commission member said today.

Smart grid technologies would help in ensuring efficient power system and pilot projects in this regard have already been identified by the government.

Planning Commission Member B K Chaturvedi said that an exercise is underway to reduce the cost of smart grid technologies.

High capital and operating costs are among the major challenges in implementing smart grid technologies in the power sector.

"There is an eminent need to develop smart meters to meet the challenges of power theft," Chaturvedi said and added that the losses related to transmission and distribution of electricity should be reduced.

He was speaking at a conference on smart grids organised by industry body PHD Chamber of Commerce and Industry here.

Fourteen smart grid pilot projects have been shortlisted by the Power Ministry for funding.

Going by estimates, India's Aggregate Technical and Commercial (AT&C) losses are more than 20 per cent, among one of the highest in the world.

Source

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Plan panel drafting model accord for Coal India...

 

In a move to increase domestic coal production, the Planning Commission is preparing a model concession agreement for state miner Coal India (CIL) to engage mine developer cum operators (MDOs), the coal ministry said Thursday.

"The Planning Commission in consultation with all the stakeholders, including Ministry of Coal and Coal India Ltd., is in the process of finalising a model concession agreement for engagement of MDOs in CIL," Minister of State for Coal Pratik Prakashbapu Patil said in a written reply to parliament.

A committee was set up under the coal secretary with representatives from the Planning Commission and ministries of finance, labour and law to recommend a framework for public-private partnership (PPP) with Coal India, the minister said.

"The committee deliberated on the various models, including engaging MDOs," Patil said.

Under the MDO model, a coal block owner contracts with a third party for the mining operations, including land acquisition and resettlement and rehabilitation of people displaced.

The minister also said no allocations were made to private companies during 2012, as well as in 2013.

As against the 2013-14 production target from allocated captive coal blocks of 46.15 million tonnes, the production achieved up to October is 21.74 MT - 13.645 MT for private companies and 8.095 MT for government companies, Patil said.

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Power Ministry for safeguards in captive coal banking...

 

The power ministry has told the Planning Commission that the proposed system of coal banking should not lead to profiteering among the coal block holders. The ministry has also called for the setting up of an empowered committee to decide on the transfer prices of surplus coal from one project to another.

The Commission is actively exploring the possibility of introducing the system of coal banking. A proposal to this effect was presented to the Plan panel by the Association of Power Producers (APP), a representative body of private power developers.

The APP proposal recommends that Coal India should act as a banker to store the surplus produce from at least 25 captive mines and return the fuel to the block holders once their projects go on stream.

Coal India, however, has refused to be a party to the proposed mechanism saying it cannot give assurances on returning the fuel given the growing demand for it.

After Coal India's refusal, the Commission has decided to allow cashless transfer of coal from one project to another for a maximum period of three years, and its equivalent return subsequently.

But the power ministry has cautioned that the block holder supplying coal should not unduly financially benefit from the banking process.

"There needs to be a balance between the need to appropriately incentivise surplus coal and the need to prevent undue enrichment. The transfer price of surplus coal should be decided by an empowered committee of the coal ministry," the power ministry wrote in a letter to the Commission on November 18.

The BK Chaturvedi committee on coal banking has finalised its report and would likely submit it next week.

The power ministry argued that the captive block owners cannot be allowed to operate under this dispensation for a long period as it would defeat the basic objective of allocating a block for an end-use project.

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India says domestic plant operators can limit global nuclear suppliers' liability...

 

To allay global nuclear suppliers' fears about India's nuclear liability laws that have deterred potential investors, the country is now telling the world's nuclear industry that the domestic plant operator can limit the amount as well as duration of the liability that accrues to foreign suppliers.

Planning Commission deputy chairman Montek Singh Ahluwalia, a close associate of Prime Minister Manmohan Singh, conveyed this interpretation of the 2010 nuclear liability law in a meeting with Canada' industry leaders late last month.

The Congress-led United Progressive Alliance had worked overtime in its first innings to secure a new nuclear cooperation regime after decades of global isolation, but it has been unable to jumpstart its massive nuclear power agenda as vendors from around the world have stopped in their tracks over what they have labelled as unviable liability laws.

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Coal India should adopt pooling formula… says Mr. Ahluwalia..

According to the Deputy Chairman of Montek Singh Ahluwalia, the Coal India should adopt a pooling formula on prices by combining the prices of imported and domestic coal to offset the impact of high import costs.

 

As said by him,

"As the import will get expensive, I suggest Coal India should adopt a 'coal pooling formula', which will propose to calculate pricing of

the material by mixing the imported and domestic coal," 

 

He further  added that the state-owned coal utility needs to step up the supplies to power producers and should go for imports, in case of shortfall in domestic production.

 

 

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More on this…

• http://timesofindia.indiatimes.com/business/india-business/CIL-should-adopt-coal-pooling-pricing-formula-Montek-Singh-Ahluwalia/articleshow/13955028.cms

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Power Capacity Addition target fixed at 85,000 MW for the 12th plan period…

As informed by Mr. K. C. Venugopal, Minister of State for Power, the power capacity addition target during the 12th plan (2012-17) has been fixed as 85,000 MW.

 

According to him work on around 75,000 MW projects are already under going out of these massive power capacity addition target of 85,000 MW.

 

 

This capacity addition will meet the project power demand of 1354.87 Billion units by 2017 which has been estimated by the 18th Electric Power Survey (EPS) report.

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Working Group on Power set the capacity addition requirement for 12th Plan at 75,785 MW…

Power India found that according to the report by “Woking Group on Power” capacity addition requirement during the 12th plan is around 75,785 MW.

 

 

 

 

 

The Sector wise and fuel wise break up of 12th Plan capacity addition program as per the report of the Working Group on Power is as under:

 

	Hydro	Thermal	Nuclear	Total
Central	5632	11426	2800	19858
State	1456	12340	0	13796
Private	2116	40015	0	42131
Total	9204	63781	2800	75785

(In MW)

As per the 18th Electric Power Survey Report, Peak Demand of 199,540 MW and Energy Requirement of 1,354,874 BU has been estimated at the end of Twelfth Five Year Plan i.e 2016-17.

At the end of 11th Five year Plan i.e 2011-12 the country was facing Peak Shortage of 13815 MW (10.6 %) & Energy Shortage of 79313 MU (8.5 %)

 

Several measures have been initiated by the Government to accelerate the pace of power generation capacity addition. These are as follows:

• Augmentation of manufacturing capacity of BHEL from 10,000 MW in December, 2007 to 20,000 MW by 2012.
• Formation of several new joint ventures to manufacture super-critical boilers and turbine-generators for thermal power plants.
• Periodic review of issues related to supply of power equipment from BHEL by a group under the chairmanship of Secretary (Heavy Industry).
• Sensitization of stake holders to enlarge the vendor base to meet Balance of Plants requirements.
• Rigorous monitoring of projects at different levels including by Ministry of Power, Central Electricity Authority, Power Projects Monitoring Panel and Advisory Group under the chairmanship of Minister of Power.
• Introduction of web-based monitoring system

 

 

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More Literature on this topic:

• http://planningcommission.nic.in/aboutus/committee/wrkgrp12/wg_power1904.pdf
• http://www.steelguru.com/indian_news/Power_capacity_addition_in_Twelfth_Five_Year_Plan_in_India/263320.html

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Planning Commission and Power Ministry on 12th Power Capacity Addition targets…

Power India found that the Planning Commission and Power Ministry officials are going to meet tomorrow to narrow the gap differences of likely power capacity addition  and to finalize the 12th Plan targets for the capacity addition in the Power Sector.

As posted by us earlier, Power Ministry expects that at max 76,000 MW of capacity addition can be done during the 12th Plan, whilst the Planning Commissions says the same should be over 90,000 MW.

The meeting is expected to be chaired by Planning Commission Member B K Chaturvedi.

The Power Ministry has pitched for capacity addition target of about 76,000 MW in the 12th Plan, considering the backdrop of acute fuel shortages impacting electricity generation.

Further as per the data provided by CEA, capacity addition during 11th Plan was only 55,000 MW against the reduced target of 62,000 MW. (which earlier targeted at 79,000 MW)

As expected by the Power Sector professionals, Thermal projects are expected to account for more than 50,000 MW of capacity addition and out of that around 50% will come from super critical capacity (Unit capacity > 660 MW).

This is envisaged by the current capacity construction going in the country which is having around 35,290 MW under construction super critical projects.

On the estimated fund requirement side; the same is expected to be around Rs 13,72,580 Crores for the power sector out of which the power generation segment will need around Rs. 6,38,000 Crores and power distribution segment will need around Rs. 3,06,235 Crores.

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More on this topic…

• http://economictimes.indiatimes.com/news/economy/policy/planning-commission-power-ministry-to-finalise-capacity-addition-targets-for-power-sector/articleshow/13048006.cms
• http://www.livemint.com/2012/02/06233912/Government-may-lower-power-gen.html
• http://www.indianpowersphere.com/2012/01/mop-forwards-12th-plan-capacity.html

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Funding including Private Equity funds are shying away from Indian Power Sector due to the prevailing uncertainties in the sector…

Private Equity funding in the Indian Power Sector is drying up fast due to the prevailing uncertainty over reforms in the sector. 

 

As captured by Power India; Indian Power Sector during the 12th plan will need around 13.72 Crores to add 76,000 MW of Capacity.

We believe that funding so much amount of the money to the cash hungry power sector is a very tough task; considering that one in every three thermal power plants in the country is operating on a critically low supply of coal and the government has not been able to solve the problem.

As said by Siddharth Shah of Nishith Desai Associates,

“Most investors have gone into a-wait and-watch mode because this is a sector which requires larger-ticket size deals. Investor appetite is beginning to fade with so much of uncertainty and this is obviously impacting the sector.”

We further found that  various Private Equity funds which normally seeking to fund the big ticket projects such as power project are also currently shying away from these investments. Whatever deals are happening; size of them are also getting contracted.

 

As captured by Money Control the four deals this year have ranged from USD 5 million to USD 30 million. Investors are losing interest in the power sector as capital has become more expensive for power projects. Even public sector power projects are losing their sheen.

However as a little ray of hope; not all PE Players are diffident.

SM Sundaram, partner & CFO, Barring Pvt Eq Partners India, says,

“These are not things in which you can get in and out. Forget about a few quarters or years. If you are a long term player, there are opportunities out there.”

Nevertheless, experts say the only way these power companies will prove good investments is if their problems regarding fuel supply and land acquisition are ironed out, and their main customers – the state electricity boards – become financially solvent soon

 

 

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More Literature on this topic:

• http://www.moneycontrol.com/video/cnbc-tv18-comments/pe-interestpower-sector-fizzlespolicy-uncertainty_700099.html

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Nuclear Energy to be counted as clean energy source according to Planning Commission…

Nuclear energy should be considered a clean energy source, Mr Montek Singh Ahluwalia, Deputy Chairman Planning Commission, said that at the end of the 23-Government Clean Energy Ministerial meeting that took place in London this week.

 

Mr Ahluwalia, who represented India at the third CEM conference, said that nuclear energy was “one part of a move towards a low carbon energy” future.

 

India is set to host the fourth CEM meeting in next April. The London meeting brought together representative of governments from across the world, including China, Brazil, Australia and the US, and is meant to be an annual forum for some of the world’s biggest emitters of greenhouse gases to work together on policies to increase their use of renewable energy.

 

Among the initiatives launched were a joint project by Italy and the US to provide off grid lighting to two million homes in India, as part of a global energy access partnership.

 

Speaking at a press conference, alongside the US Energy Secretary, Mr Steven Chu; the British Minister of Energy, Mr Edward Davy; and Mr Kandeh Yumkella, Director of the UN Industrial Development Organisation, Mr Ahluwalia warned that if the world continued to develop renewable energy at the rate it currently was, “we are not going to achieve what we need to achieve”.

 

ENERGY EFFICIENCY

He said that it was quite clear that India wanted to make “major improvements in energy efficiency and use and the cleanliness of the energy mix.” “The solution to climate change has to be a combination of improvement of energy use and improvements in emissions.” However, at the moment the switch to renewable energy was “not something that can be done without bearing the costs…the good news is that the additional cost is falling.”

 

Asked about to what extent India’s energy future would incorporate new, and controversial, technologies such as fracking, and how this would affect the future of renewables development, Mr Ahluwalia said that India didn’t currently have a programme for going into fracking “in a big way”. “We are watching experiences elsewhere.”

 

 

 

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Planning Commission to increase the MoP’s target to 1,00,000 MW…

Recently Ministry of Power (MoP) has proposed to add around 76,000 MW of power generation capacity during the 12th five year plan (2012-17).

The proposal came at the time when the whole power sector struggles with the acute fuel shortage (coal, gas etc)

However, we found that the Planning Commission is unwilling to agree with the MoP’s proposal and want to significantly increase the same.

According to Mr. B. K. Chaturvedi, Planning Commission Member (Energy)

"According to the Approach to the 12th Five-Year Plan, the commission is eyeing a power capacity creation of about 1,00,000 MW in the five years.  ... If there is a shortfall, let there be a shortfall but we cannot keep the targets in a manner that we don't meet the requirements of the economy, The Power Ministry has proposed adding 76,000 MW during the 12th Plan, stating that there is scarcity of coal to meet the needs of thermal power plants which are the major source of electricity.Coal availability, if to that extent does not get sorted out, we would try to see what we can import and ultimately try to meet those targets”

As per the Commission's estimates, the country's energy supply needs to grow at 6.5 per cent annually if the nation wants to achieve annual economic growth of 9 per cent during the Plan period.

The Power Ministry had set a target of adding 78,577 MW of generation capacity for the 11th Plan (2007-12), but the target was revised down to 62,000 MW during the mid-term review. Finally, 53,000 MW generation capacity was added by the end of the Plan period.

 

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MoP forwards 12th Plan capacity addition proposal to Planning Commission…

According to Sources, Ministry of Power (MoP) has set a target of capacity additions to the tune of 76,000 MW during the 12th Five Year Plan (FY 2012 – 17) and 93,000 MW during 13th Five-Year Plan (2017-22). However, Spark found that, the Planning Commission is mulling to fix the target of about 1,00,000 MW of capacity addition in the Power Sector.

MoP have sent its proposal for addition of 76,000 MW of power capacity in the 12th Five-Year Plan to the Planning Commission for the approval, even as the sector battles acute fuel shortages and environmental issues. However, Planning Commission member BK Chaturvedi had earlier said the Planning Commission may fix a target for about 1,00,000 MW of capacity addition in the power sector.
During this period, an investment of about Rs6 lakh crore is expected in power generation projects.
Power projects being executed by state-owned hydro-power generation company NHPC, which were scheduled for commissioning during the current Plan, would now start electricity generation in the 12th Plan.
NHPC’s 2,000-MW Subansiri project in Assam and 3,000-MW Dibang project in Arunachal Pradesh are still awaiting environment clearances.
The country’s largest power producer, NTPC, which had set itself a mammoth target of becoming a 75,000 MW company by 2017, is also believed to have brought down this target to 70,000 MW because of scarcity of gas.

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Planning Commission’s views on coal shortfall…

The Planning Commission has sounded the alarm over falling coal supplies, saying that special consideration should be made for projects in environmentally sensitive areas.

In its approach paper to the Twelfth Five-Year Plan, the commission has sought a thorough review of the current approach to the environment-versus-development debate, clearly according top priority to the country's development agenda.

 
At the centre of the commission's critique is the 'go and no-go area' policy for coal blocks and the Comprehensive Environmental Pollution Index, or CEPI, norms adopted by the environment and forests ministry.

"Part of the reason for the shortfall in coal production is the implementation of tighter environment-related regulations, and problems in rehabilitation and resettlement and land acquisition," the document notes.

The commission had originally targeted coal production at 680 million tonnes during the ongoing 11th plan (2007-12), but scaled it down to 630 million tonnes during the mid-term appraisal in 2010. The target was further lowered to 554 million tonnes. Coal output expanded at 7% a year during 2004-05 to 2009-10, but stagnated in the previous fiscal. In the past five years, demand grew at an average 8% and is expected to continue at the same rate during the next plan.

Coal projects have struggled to get environment clearances since 2009, when the ministry's no-go classification disallowed mining in 203 coal blocks. According to a coal ministry's projection, the output from those 203 blocks, estimated at 660 million tonnes annually, could have been used to generate around 1.3 lakh megawatts of power a year.

"The environment ministry had adopted the policy of 'go, no-go'a¦ This would have severely impacted the ability to expand domestic production of coal," said a commission official. "The policy had to be reviewed and now some coal blocks have been cleared. This has to be continued to ensure coal availability.''

In January 2010, the environment ministry imposed a temporary ban on development works, including some coal mining projects in Jharkhand and Chattisgarh in industry clusters identified under CEPI norms. CEPI is an index of 88 industrial clusters across India, ranked according to their impact on environment and was developed to plan developmental projects in tandem with environmental protection.

The commission said the CEPI norms had prohibited mining in areas with high pollution index even if pollution was because of some other industry. "Coal being location specific, there is clearly a need for review of this (CEPI norms) approach," the paper notes. Currently the issue is under consideration of a group of ministers headed by

Finance Minister Pranab Mukherjee.

The commission estimates a significant rise in reliance on imported coal as it would not be possible to meet the increased demand from domestic sources. Coal imports are expected to rise to over 200 million tonnes from the current 90 million tonnes by the end of the 12th plan.

The increase in reliance on imports not only portends a significant increase of 30% to 50% in costs for power plants, it also necessitates expensive technological upgradation as the units are not designed to take more than 10-15% of imported coal at present.

Read here the full presentation of Planning Commission on subject mater…

Planning Commission on Twelth Five year plan

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