Nod to 4000 MW Banka Ultra Mega Power Project in Bihar…

 

The Centre has cleared the proposal for a 4,000MW ultra mega-power project (UMPP) in Banka, a project designed to take care of Bihar’s energy requirements by the end of this decade.

The project is expected to be commissioned by 2019-20. The state would get 2,000MW from the plant as the Centre has allocated 50 per cent share from the plant to itself.

“We received a letter today (Wednesday) from the ministry of power giving its nod to set up a ultra mega-power project at Banka. We are happy that the Centre has acceded to our long-pending demand as the state would get 2,000MW power from this plant,” energy minister Bijendra Prasad Yadav told The Telegraph.

Any power project with an installed capacity to generate 4,000MW or more is deemed as an ultra mega-power project.

The state government had, on November 23, 2013, written to the power ministry seeking early approval of the project.

The state government said it would press the Centre to provide coal linkage to the project at the earliest.

“The state government is responsible for providing land and water for the project. We have made that available and accordingly informed the ministry of power. Now, the Centre has to provide coal linkage to the plant,” Yadav said.

Bihar at present gets around 1,500-1,600MW against the total scheduled allocation of around 2,000MW from the central sector.

The state also purchases 400MW from the open market besides getting 110MW from its own source from Muzaffarpur Thermal Power Station. The state government has set a target of providing at least 3,000MW in the coming summer and 4,000 MW by the end of the year.

The central decision on power comes close on the heels of the cabinet clearance to two railway projects in Bihar — at Madhepura and Marhowra — that had been gathering dust for a long time.

Central Electricity Authority (CEA), a nodal agency under the ministry of power which advises the government on energy issues, had in March 2013 approved the setting up of the ultra mega-power project at Kakwara in Banka district.

A team from CEA and Power Finance Corporation (PFC), along with state government officials, visited two sites to assess the project’s feasibility.

The team went to Kakwara in Banka and Rajauli in Nawada. The Kakwara site, about 260km from Patna, prima facie, appeared to be suitable for setting up the project, sources said, adding that there are no environmental issues related to it.

The project would require 2,500 acres of land and 120 cusecs of water.

Sources said the site at Kakwara in Banka fulfils all parameters such as easy availability of land, water and coal linkage. They said coal for the project could be transported easily by rail from neighbouring Jharkhand.

The site is also 65km away from Sultanganj from where the plant could draw 120 cusecs of water from the Ganga for power generation.

The clearance of the project is a big boost to the Nitish Kumar government which claims to have drastically improved the power situation in the state.

Source

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FinMin rejects power ministry's plan to make gas projects viable through subsidy…

 

The finance ministry has rejected a proposal by its power counterpart for making stranded gas-based projects viable through subsidizing high cost imported fuel.

“We had proposed subsidizing the high cost of imported Re-gasified Liquefied Natural Gas (R-LNG) through pooling. The finance ministry has turned down the proposal last week,” power secretary P K Sinha told reporters at the sidelines of the ministry’s media interaction. The ministry is now reworking the proposal.

Speaking at the event, power minister Jyotiraditya Scindia said the government is mulling seeking a relief mechanism for the gas-projects which have been stranded for want of lack of availability and high cost of fuel.

He added that power generated using costly imported Re-gasified Liquefied Natural Gas (RLNG) will not get scheduled as the output prices are regulated. “Power sector will not be able to bear a gas cost of more than $5 per million metric british thermal units (mmbtu).”

Power projects are facing an acute gas shortage owing to dwindling output from Reliance Industries’ KG-D6 block off Andhra coast. The government has notified an increase in prices under a formula that will push up gas prices from the current $4.2 per mmbtu to $8.4 an mmbtu.

The new price regime will kick in from April 1 and be applicable for five years. Every quarter, prices will be reviewed and adjusted, depending on how global prices move. Scindia said the sector will get additional gas of around 8.9 mmscmd over the next three years helping ease the crunch.

Source

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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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Inter-State power transmission needs closer attention: Power Ministry

 

As all the regional grids in the country have been synchronised, now inter-State transmission needs attention, said Devendra Chaudhry, Additional Secretary in the Union Ministry of Power.

Speaking at the Elecrama meet, the mega conference of power distributors in Bangalore, Chaudhry said likeminded States need to invest in and share power resources.

“From this month, 2,000 MW flow into the southern grid is happening. This needs to be judiciously used as inter-State transmission is crucial,” he added.

Rural market

Electrical and electronics manufacturers should explore untapped rural market and also aggressively target the industry, he said.

“In the last three decades, penetration of rural consumption has not increased significantly. It is only around 15 per cent. Industrial consumption has not increased either,” said Chaudhry.

Giving reasons, he said, “Farmers do not have power in the fields; increase in overall consumption will be possible if we energise pump sets.”

The industry needs to take note of Union government’s initiatives for power sector. We are adding one lakh circuit kilometres of distribution, 2.8 MUA transmission lines, said Chaudhry.

Talking about coal linkage, he said, “About 60,000 MW coal linkage has been tied up and we expect significant amount of power will be generated in both 12th and 13th plan.”

Gas shortage

“Gas is not there for power generation. We need to import. We are experiencing 75 to 80 per cent shortfall due to failure of KGD,” he said.

There has been lot of positives in renewable. States like Karnataka, Tamil Nadu, and Karnataka have taken the lead. The Centre has taken up $8-billion programme for power evacuation. Also €1 billion grant and assistance from the German Government and private lender KFW will have huge impact on the country, said Chaudhry.

Karnataka scene

Chief Minister Siddaramaiah said on the occasion that the State would become a power-surplus State by 2017, thus ending the electricity shortage in the State.

“The State government has initiated several power projects to the tune of 18,000 MW across Karnataka, both in the conventional and non-conventional sectors, and they are at different states of implementation. Karnataka will, in all probability, be a power surplus State by 2017,” he said.

“As the Indian electrical equipment industry has matured over the years, India is becoming a major sourcing destination for the global players. That is why we are showcasing global competitiveness of Indian products and the capability to develop world class engineering products at competitive costs,” Raj Eswaran, President, the Indian Electrical and Electronics Manufacturers’ Association (IEEMA).

“With good demand for products at competitive costs, we the industry is targeting $25 billion in global trade in the next 10 years from current $1 billion levels. I am confident that at Elecrama 2014 there will be many deals to boost exports of Indian products,” said Sanjeev Sardana, Chairman, Elecrama 2014.

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Power Minister on Rs 95K cr of SEB loans restructured...

 

About Rs 95,000 crore worth of bonds have been issued towards debt restructuring of struggling power distribution companies, Power Minister Jyotiraditya Scindia said.  

The minister, speaking with CNBC-TV18 on a host of issues relating to the power sector, discussed the recently-concluded financial restructuring package (FRP) for four states -- Haryana, Rajasthan, Uttar Pradesh and Tamil Nadu -- that took place.

“We mandated through the FRP that every year, there should be a tariff-setting mechanism in place,” he said.   Several state discoms have been under acute financial distress and reached out to the power ministry to help restructure their loans.  

Scindia said that further restructuring was on the cards for Jharkhand, Andhra Pradesh and Bihar. “The cabinet has approved it. The states now need to speak to their bankers. We have also got a transitional financing mechanism at sub-9 percent [rate] already in place for them,” he said.  

The minister also made light of the Arvind Kejriwal-led Delhi’s government’s recent decision to provide a 50 percent power subsidy to consumers and allayed concerns that it would weigh on discoms’ financial health.   “As long the state exchequer pays the subsidy amount to the discom, they won’t be worse off,” he said, adding that state governments were vested with the power to provide subsidies as they wanted to.

Source

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India Hopes to Power Up on Better Energy Policies in 2014: WSJ Article

 

India aims to do more in 2014 to battle the bottlenecks in energy supplies which are contributing to the country’s painful economic slowdown.

New Delhi plans to auctions oil, gas and coal blocks, free diesel prices from government controls and promote alternative energy in hopes of invigorating the energy sector in 2014.

The energy-starved nation wants to cut down its dependence on energy imports by half in the next six years by attracting new investments in the sector. India now imports around three-fourths of its energy needs.

“We can’t really afford the imported energy,” said Oil minister M. Veerappa Moily. “So we have to attract more investments in the oil and gas sector and for that the policies have to be investor friendly.”

India plans to sell rights for about 86 oil and gas blocks in auctions expected in January. If all the blocks go under the hammer as expected, it would be the biggest ever bidding round.

It remains to be seen whether big international firms will step forward to bid for the blocks. Many private companies have avoided recent auctions, citing heavy regulations and a lack of clarity on pricing.

The south Asian nation is also planning to free up some fuel prices. Mr. Moily said he expects diesel prices to be completely free of government controls in 2014.

Currently diesel prices are regulated by the government while regular gasoline prices were freed to move with the market in 2010.

“We believe that market forces need to be allowed to have proper inter-play,” said R.S. Butola, chairman of state-run Indian Oil Corp., India’s largest fuel retailer

The coal industry could also get a boost in 2014. India’s government has been unable to approve big coal projects as it has been grappling with the investigation of a multi-billion-dollar scandal in which lucrative coal-mining licenses were allegedly handed out at throw-away prices.

India plans to start issuing new mining rights through auction next year. The scandal forced the Prime Minister Manmohan Singh’s government to clear the way for the auctions, which are expected in March.

Even though India is home to world’s fourth largest coal reserves, it is facing a severe shortage of the fuel, which powers most of its power plants.

India is also expected to push for growth in solar, nuclear and other alternative energy sources in 2014.

It is expected to award contracts for building new solar projects in the coming months. It is also expecting to seal reactor supply deals with companies from Russia and France to boost its nuclear energy program.

To be sure, pessimists warn that the government has repeatedly failed to deliver on past promises for this highly-regulated, highly-political sector. With India headed towards national elections, scheduled to happen before the end of May, it will be particularly difficult to push through unpopular reforms.

Source

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2014 wishlist: More power to electricity as India records surplus...

 

India became power surplus in the first quarter of 2014-15, heralding a new phase in its infrastructure development story.

According to data compiled by the Central Electricity Authority, total power availability was about a per cent more than the total demand from industrial, commercial and household sectors. This was a dramatic improvement over the average three per cent power deficit recorded in 2013-14.

Power ministry officials admitted that the improvement on the power availability front was expected because in the past few years the country has been witnessing an annual power capacity addition of more than 20,000 Mw. But they were surprised by the dramatic recovery which occurred in spite of a sharp uptick in economic growth in the same period.

Many states like West Bengal have, in the past, seen an improvement in power availability as a result of industrial stagnation. With lower demand for power from industries, such states have often seen an improvement in power availability or a drop in power deficit. However, in the first quarter of 2014-15, power became surplus in spite of an economic growth rate of seven per cent, which was possible largely because of a spike in the manufacturing sector’s performance.

Another reason that contributed to surplus power availability was the pace of tariff increases in the power distribution sector that saw a sharp reduction in subsidies, an improvement in the health of power utilities and a surge in fresh investments in the power sector.

All these developments, power sector experts said, would help sustain the healthy power availability situation reached in the first quarter of the current year.

Source: Business Standard

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Power Min Cabinet note on 'carriage and content' by month-end...

 

The Ministry of Power will float a Cabinet note on the proposal of disintegrating power supply and distribution network for providing electricity to consumers, in a month's time.
    
This proposal -- carriage and content -- has been in the works for the past one year and may fructify by the end of the current financial year (2013-14), sources said.
    
"The deliberations on the carriage and content model are on and by this month-end we will be ready with the note," a Power Ministry official said.
    
This move is aimed at reducing losses of discoms.
    
As per the proposed model, there will be a separate power supplier and separate electricity distributor or distributors.
    
The power network would be owned by one company while the suppliers of electricity could be more than one.
    
"The power supplier will not manage the distribution network, it will be managed by another firm which will disseminate electricity to the end consumer," the official said.
   
The model is based on the existing system in the United Kingdom, which has separate suppliers and electricity network providers.
   
At present, power distribution companies (discoms) supply as well as manage network that provides electricity for residential as well as commercial purposes.
    
The government has also launched the scheme -- financial restructuring package -- to bailout the distressed power distribution utilities .
    
The accumulated losses of state power distribution companies were estimated at about Rs 1.9 lakh crore as on March 31, 2011 and Rs 2.46 lakh crore as on March 31, 2012.
    
As per the scheme, 50 percent of the outstanding short term liabilities of the discoms, upto March 31, 2012, will be taken over by State Governments.
    
This shall be converted into bonds to be issued by discoms to participating lenders, duly backed by State Governments guarantee.
    
The scheme is under implementation in Tamil Nadu, Rajasthan, Uttar Pradesh, Haryana and Himachal Pradesh.

Source: Business Standard

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Clearances of Odisha power project coal blocks may be de-linked: Report

 

The government may de-link forest clearance of coal blocks for 4,000-MW Odisha ultra-mega power project (UMPP) with the environmental clearance accorded to the entire plant, so that delay in development of mines does not affect the construction of the thermal station, according to a source close to the development.

This development comes after the Coal Ministry last week issued show-cause notice to Power Finance Corporation seeking explanation for delay in commencement of production from the allocated mines.

"MoEF (Ministry of Environment and Forests) is likely to de-link forest clearance of coal blocks for 4,000 MW Odisha UMPP with the environmental clearance accorded to the entire plant so that delay in development of mines does not affect the construction of the thermal station," the source said.

The Coal Ministry has also said that if these firms fail to give reasons for the delays it would be presumed that it has no explanation to offer and appropriate action will be taken against the company.

As many as nine companies have qualified the first bidding round for the Odisha UMPP and are likely to participate in the second and final round also.

NTPC, Tata Power, NHPC, Adani Power, JSW Energy, Jindal Power, an arm of Jindal Steel & Power, Sterlite

Infraventures, CLP India and Larsen & Toubro had submitted applications for the Odisha project.

Odisha UMPP is a pit-head power project. Based on domestic coal, to be sourced from allocated captive coal blocks, it is expected to cost around Rs. 25,000 crore.

Source

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Year end review of Indian Power Sector for the year 2013 by Power Ministry...

 

Power Ministry has done an year end analysis of the progress made by the Indian Power Sector during the year 2013.

The same has been depicted below:

 

 

Major Achievements:

• Power generation capacity addition exceeds target in 2012-13
• Highest ever power generation capacity added in a year
• RGGVY reforms undertaken to benefit the poor
• Financial Restructuring Plan to strengthen the State- owned DISCOMs
• Grid security and grid discipline becomes priority
• Two more UMPPs reach bidding stage under revised bidding norms
• 6.5 million tons of oil equivalents saved in the PAT scheme within a year of its launch

Power is imperative to the overall development of a nation. Be it faring well on the healthcare index or ensuring that every child goes to school, availability of electricity is closely linked to these as well as other indicators of progress. Managing energy resources well not only ensures economic progress but also social development.
 
The year 2013 saw several important decisions and critical steps  being taken to speed up the languishing power projects, remove bottlenecks, and interact closely with all stakeholders whether state governments, ministries, or the private sector to make power generation a seamless process.
 
Installed Capacity/Capacity Addition and Power Generation:

The total installed capacity of the power sector stood at 2,29,252 MW by 31st October 2013 with the private sector contributing a significant 72,927 MW and including 12% from Renewable sources. The power sector saw a total capacity addition of 20,622.8 MW during 2012-13 which is the highest record of capacity addition in a year so far with a little less than half of it coming from the private sector and also exceeded the target of 17956 MW  for the year 2012-13. For the year 2013-14 a capacity addition target of 18,432 MW including 2000 MW of nuclear power has been set, with the highest contribution of 7859 MW expected from the private sector. A capacity addition of 7,008 MW has already been achieved till 10.12.2013.

24th May, 2013 was a historic day in for power generation in India with the highest ever generation of 128 GW in a day.

Power generation in India is still heavily reliant on coal and gas with thermal accounting for more than 80% of annual power generation. State owned NTPC emerged as the largest power producer in the country accounting for more than 28% of power produced in the country in 2012-13.

The total power generation of 912 Billion Units in 2012-13 from conventional sources fell only marginally short of the target. The power generation target for 2013-14 is 975 BU out of which 562 BU was already achieved by 31st October, 2013.

Power Supply position in the country has improved during the current year (2013-14). The energy and peak shortages in the country have reduced from 8.6% & 9.0% during April-2012 - Nov, 2012 to 4.5% & 4.2% respectively, during April- Nov, 2013.

Transmission

Inspite of bottlenecks , it was possible to add 17107 ckm of transmission lines during the year 2012-13 and it is proposed to lay 18674 ckm of transmission lines during 2013-14, out of which  7620 ckm is already achieved till November 2013.   Number of substations targeted for the period are 35363 MVA and achieved upto Nov 2013 are 26180 MVA. Purnea- Bihar Sharief transmission line which was commissioned this year  became the  first transmission line in the private sector .

Work is now on on transmission voltages of -+800kV HVDC & 1200kV 1200kV UHVAC after  Conserving Right-of-Way (RoW), minimizing impact on natural resources, coordinated development of cost effective transmission corridor, flexibility in upgradation of transfer capacity of lines matching with power transfer requirement became  major areas of concern in development of transmission network in the country.

The southern grid connectivity got fast-tracked in the current year and 60 per cent of the work got completed with the establishment of 315 towers.  The grid connectivity is likely to be completed by January, 2014.

R-APDRP (Restructured-Accelerated Power Development and Reforms Programme)

Under R-APDRP, government gives financial assistance for setting up automated systems of energy data collection and energy accounting and incentives by way of grants for reducing AT & C losses. Projects worth Rs. 37,189.82 cr are now under implementation.

RGGVY (Rajiv Gandhi Grameen Vidyutikaran Yojana)

The government has been able to surpass the targets set for the RGGVY under the Bharat Nirman programme. Since its inception, electrification works in 1.08 (96%) lakh un-electrified villages, 3.03 lakh (79%) partially electrified villages have been completed and free electricity connections to 2.13 crore (77%) BPL households have been released under RGGVY as on 15.11.2013. Reforms introduced in RGGVY this year are meant to ensure energisation of villages as compared to mere electrification.  Now, villages with just 100 people will also get access to electricity while there has been an increase in prescribed load for a BPL household to 250 watts (up from 40 watts)  and for an APL household to 500 watts (up from 250 watts).

Financial Restructuring of State DISCOMs

To rescue the state owned DISCOMs from their financial difficulties, the scheme of Financial Restructuring Plan was notified this year. The scheme provides for various measures to ensure financial and operational discipline for the state owned DISCOMs and support from the GOI in the form of Transitional Finance Mechanism.  The scheme has been successfully implemented in Tamil Nadu, UP, Rajasthan and Haryana. FRPs have also been finalised for states of Bihar, Jharkhand and Andhra Pradesh.
Rationalisation of tariffs has already been carried out by 24 SERCs/JERCs.
 
Grid Security & Grid Discipline

Managing the world’s third largest power transmission system grid is an increasingly complex task. India faced major grid failures in July 2012. To ensure grid security, islanding scheme for Delhi has been completed while that for UP, Punjab and Haryana under finalisation. Unscheduled drawals were strictly controlled during the peak season this year. Discoms were asked to ensure compliance within +/- 150 MW or 12% of their schedules irrespective of frequency. Feeder transmission lines were identified for disconnection in case of violation of overdrawal limits.  Installation of Syncro Phasor Management Units for real time network management at a cost of Rs 655 cr was also approved.
 
Further, the establishment of Power System Operation Corporation (POSOCO) as an independent wholly owned Government of India Company, under the administrative control of Ministry of Power, is under consideration of the Government of India.
 
Smart Grid

14 Smart Grid Pilot projects identified in 2012 were approved for 50% funding by Government of India in July 2013.

The Smart Grid Vision and Road map document for India was released during Power Minister’s Conference on 10th Sep’13. Activities for planning the launch of National Smart Grid Mission have been initiated.
 
Emphasis on clearances & removing bottlenecks

Large number of power projects have been held up for want of environment and forest and other clearances and due to fuel supply bottlenecks especially with regard to coal and gas. This year the emphasis has been to follow up on these aspects with a sense of extreme urgency. As a result, as many as nine important hydro electric projects received environmental, forest and wildlife clearances this year including Teesta- IV in Sikkim, Kol Dam in HP, Tawang-II in Arunachal Pradesh, Loktak in Manipur among others.
 
With the concerted efforts made by MOP, Power Unities have already signed fuel supply agreements for 157 Units totalling around 71,000 MW upto 27.11.2013 out of a total of 78,000MW.
 
To ensure good quality coal to power producers, the Ministry of Power (MoP) had taken up with Ministry of Coal (MoC) for introduction Third Party Sampling in supply of coal.  Coal India Ltd. has appointed an agency for Third Party Sampling.  Third Party Sampling became operational from October onwards.
 
Pass Through Mechanism was also introduced in the current year to allow power producers of competitively bid power projects to pass on the hike in fuel cost like imported coal into the tariff. Hike in fuel costs affect the viability of power projects whose tariff is not charged on cost plus basis.

Due to shortfall in production of domestic coal by 75 MT, Power Utilities have been advised to import 50 MT of imported coal as per the equivalent Gross Calorific Value (GCV) of the imported coal.
 
In a major victory for the power sector, the government decided that the total domestic gas supply to fertilizer sector be capped at their present level of 31.5 MMSCMD and all additional domestic gas from the year 2013-14, 2014-15 and 2015-16 will be allotted to power sector to help improve generation.
 
Ultra Mega Power Projects

The revised Standard Bidding Documents for Ultra Mega Power Projects (UMPPs) were introduced this year which include several features that are designed to boost investors’ confidence. On the basis of these revised Bidding Documents, two UMPPs have been brought to bidding stage ie  Odisha and Cheyyur (Tamil Nadu) UMPPs . These UMPPs will provide an investment opportunity of over Rs.40000 crore to private sector both domestic and overseas and would lead to a capacity addition of about 8000 MW.

4 UMPPs have so far been transferred to the selected developer namely (i) Mundra in Gujarat, (ii) Sasan in Madhya Pradesh, (iii) Krishnapatnam in Andhra Pradesh and (iv) Tilaiya in Jharkhand.All the five Units (5X 800 MW) of Mundra has been commissioned.
Sasan first Unit (1X 660 MW) commissioned in May, 2013.
 
Several other UMPPs are in the pipeline ie (i) Nayunipalli in Andhra Pradesh, (ii) Husainabad in Jharkhand, (iii) Bijoypatna in Bhadrak district for coastal location and Narla & Kasinga in Kalahandi district for inland location in Odisha, (iv) UMPP in Bihar and (v) sites in Tamil Nadu and Gujarat for second UMPPs (Site yet to be finalized).
 
Special Focus on Jammu & Kashmir and North-Easter Region (NER)

24 hours power supply was assured to distant Leh and Kargil areas by the full commissioning of the Nimu Bazgo and Chutak Hydro Projects in J&K this year. The Transmission line from Srinagar to Leh was approved which will provide the much needed electricity to the Ladakh region. In J & K, 14 projects (3 projects in 10th Plan and 11 projects in 11th Plan) have been sanctioned under RGGVY. Cumulatively, as on 15.11.2013, the electrification works in 192 UE villages and 3,018 PE villages have been completed and free electricity connections to 64,255 BPL households have been released.

Adequate funding will be made available to Arunachal Pradesh for their sub-transmission projects. The Northeast Agra link to transmit clean energy from the North-Eastern and Eastern region of India to the city of Agra across a distance of 1,728 kilometers has already been inaugurated. Foundation stone was laid for Bishwanath-Chairyali (6000 MW)  HVDC link for evacuation of power from Hydro projects in NER. Due to constant pursuance with DONER, EGOM has been set up for resolving issued concerning clearances and infrastructure requirements for Hydro Projects in the North-East.

Efforts on war footing being made for speedy clearances to hydro electric power projects in the J & K and NER like  Dibang Central (3000 MW) by NHPC in Arunachal Pradesh, Tipaimukh Central (1500 MW) by NHPC in Manipur, Pakal Dul (1000 MW) under Joint Venture in J&K, Subansiri in Assam among others.
 
Energy Efficiency & Energy Saving

The Perform, Achieve and Trade (PAT) scheme under the National Mission for Enhanced Energy Efficiency (NMEEE) has already helped to save 6.5 million tons of oil equivalent within a year of its launch last year.
 
Various Energy Efficiency Policies of Government of India have resulted in an Avoided Generation Capacity to the tune of 10,836 MW during 11th plan period.
 
The participating units of 2013 National Energy Conservations Awards programme have achieved an annual monetary savings of Rs. 4141 Crores. These units have also saved energy equivalent to the energy generated from a 711 MW Thermal Power Station.
 
It has been mandatory from this year onwards that all ministries/departments while procuring appliances will ensure that they show the threshold BEE star rating carried against them. This scheme of public procurement of energy efficient appliances will help to save 15-20% energy use of these offices equivalent to avoided installation of a 250 MW capacity thermal power plant.
 
Institutional Mechanism to address problems faced by the power sector

For the first time, two conferences of state power Ministers and Secretaries were held in a year. Also for the first time two meetings were held with heads of CERC/SERCs this year. Advisory group of industrialists, consultants and economists has been set up to come up with joint solutions to problems facing the power sector. The group meets very frequently. Frequent meetings of Parliament Consultative Committee are being held on critical issues facing the power sector.

In a nutshell this has been an action packed year for the power sector wherein all the stakeholders worked with a determination to take this sector to a new high.

Source: Power Ministry

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Government working on policy to fast-track clearances for the power projects...

 

The power and environment ministries are working together on a policy to fast-track project clearances by which clearances would be considered as deemed in case central and state governments failed to clear them within a specific deadline.

"The power and environment ministries are working together for a policy to allow clearances within a time period. A lot of time is now being consumed on environment and forestry clearances at state and centre levels for power projects. Now, if you won't get those clearances within a timeline, the clearances would be considered as deemed and the company can start its work, Power Minister Jyotiraditya Scindia said here Saturday at an interactive session during the 86th Annual General Meeting of the Federation of Indian Chambers of Commerce and Industry.

The Cabinet Committee on Investments (CCI) has put in motion a process to bring 255 stalled projects involving an investment of Rs 10 lakh crore for speedy clearance. On Friday it queried the power ministry regarding land acquisition for ultra mega power projects (UMPP).

Scindia also said the power ministry will circulate two cabinet notes within a month proposing changes in the Tariff Policy and Electricity Act 2003.

There would be two separate cabinet notes and I am speaking to various stakeholders and it is set to come up within a month's time," Scindia said.

The various stakeholders in this case are the Central Electricity Authority (CEA), Central Electricity Regulatory Commission (CERC), principal secretaries of all state governments and the power generation, transmission and distribution utilities. -

Source

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Power ministry to move Cabinet for amending Electricity Act...

 

The power ministry is likely to approach the Cabinet within a month on the issue of amending the Electricity Act 2003.
    
"We have received feedback from all the stakeholders, we will compile all the suggestions, analyse it and then send it to the Cabinet for approval," a Power Ministry official said, adding that this process will take about a month.
    
He declined however to elaborate upon the changes that the government intends make to the Act.
    
Stakeholders who have submitted feedback on the topic include Central Electricity Authority (CEA)), Central Electricity Regulatory Commission (CERC), Principal Secretaries of all the state governments and chairpersons of power generation, transmission and distribution utilities.
    
The government-appointed committee, chaired by power ministry Jyotiraditya Scindia, during its meeting in June this year, had deliberated on amendments to the Electricity Act.
   
According to various sources in the ministry, one of the suggestions made by the committee is to have a formula which would ensure that variation in fuel and power purchase cost is recovered by the power generating firms.
    
The advisory group was set up against the backdrop of multiple problems, including acute fuel shortages, hurting power generation in the country.
    
Members of the group include Tata Group chairman Cyrus Mistry, Reliance Group chairman Anil Ambani, SBI Chairman Pratip Chowdhary and ICICI Bank Managing Director Chanda Kochhar.

Source

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Power ministry floats draft cabinet note on mega power policy...

 

The ministry of power has circulated a draft note for cabinet committee on economic affairs (CCEA) for certain amendments in the mega power policy, power minister Jyotiraditya Scindia said in the Lok Sabha.

“Details will be finalized once the comments of the concerned ministries are received and considered,” Scindia said in a written reply.

Thermal power projects of 1,000 megawatts (MW) or more, or a hydel power plant of 500MW or more, will be eligible for the benefit under the mega power policy.

It aims at providing impetus to development of large sized power projects and derive benefit from the economies of scale. These guidelines were last modified in 2006.

Scindia also said the government has decided that fuel supply agreements (FSAs) will be signed for the plants commissioned after March 2009 and scheduled to be commissioned by March 2015 totalling 78,000MW.

So far, of the 172 FSAs as many as 157 pacts have been signed between power producers and Coal India Ltd.

Signing of FSAs will ensure availability of fuel to the power plants which will boost power generation in the coming years, he said.

The government has taken several initiatives to enhance private participation and boosting power generation in the country including structural reforms for state electricity boards, formation of central and state regulatory commissions and formulation of national grid, Scindia added.

The government has also recognized power trading as a distinct activity.

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PowerMin's meeting today to discuss amendments to tariff policy...

 

The power ministry, which has released draft amendments to the National Tariff Policy to further promote competition and reduction in distribution losses, would be meeting on Friday to discuss the amendments with key stakeholders.

The ministry has proposed competitive bidding process and power purchase agreements for the renewable energy sector, stable renewable power obligation regime to promote renewable energy sources, cuts in cross subsidies and encouragement of open access. Further, the ministry has proposed that consumers below the poverty line with a consumption of 30 units per month would continue to receive special support through cross subsidy without re-examination of the provision after five years.

The ministry has proposed a road map of reduction of cross subsidies to be specified by state electricity regulatory commissions (SERCs) in line with the spirit of the Electricity Act, 2003. SERCs may calculate cross subsidy surcharge based on the estimation that the distribution company will avoid purchase of the quantum of power for which open access has been sought. This can be adopted in areas where there are no power shortages. For the hydro sector, the ministry has proposed that the graded reduction in percentage of allowable merchant sales will be limited to delays attributable to the developer. This is in view of the time and cost over runs involved due to the reasons which are beyond the control of the developers.

R V Shahi,  former power secretary told Business Standard: “Since the last seven years, the tariff policy has been implemented. However, based on that experience, a review is needed in respect of cross subsidy surcharge which has been responsible to some extent in delaying the open access for power supply, hydro power tariff, tariff for renewable sources of energy and costly power purchases by distribution companies.”

Ajoy Mehta, managing director, Maharashtra Electricity Distribution Company (MahaVitaran), said most distribution companies are in financial stress which is slowing the growth of the power sector in the country. “The proposed amendments are welcome as they should provide the right environment for growth with financial stability.”

Jayant Deo, founder member, Maharashtra Electricity Regulatory Commission, said the proposed amendments will help in the development of a competitive power market. The formula for arriving at cross subsidy surcharge and tariff deregulation of open access consumer category would help consumers at large.

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Govt Sitting on Over Rs 4 lakh-cr Power Projects...

 

At a time when the UPA government is desperately looking for investments to bring the economy back on the growth trajectory, the same government is sitting on approvals for as many as 70 power projects (both in public as well as private sector) entailing a total estimated investment of `4,43,458.39 crore.

Most of the power projects, according to the Ministry of Power (MoP), are getting delayed for want of different clearances from the Ministry of Environment and Forests (MoEF) or allocation of mines and fuel linkages.

“Necessary clearance, be it environment or forest or costal, should be granted before the project takes off as is the practice in developed nations. Timely approvals prevent project delays and cost overruns,” a sector expert said requesting anonymity.

The MoP note lists six projects worth `39,009 crore (see map), which include Sagar Super Thermal Project (1980 MW) to be built by Universal Crescent (P) Ltd in West Bengal. It is yet to get environmental as well as Costal Regulation Zone (CRZ) clearances. MoEF in its response said, “In view of the observation of the Expert Appraisal Committee (Thermal) that the site is not suitable for a power plant, grant of CRZ clearance has not been considered.” The MoP has, however, asked MoEF to expedite the matter.

Similarly, the Raj West 1080 (8x135) MW plant to come up in Barmer district of Rajasthan is also delayed as the mining linkages are yet to be granted. Here, all eight units have been commissioned. But the private developer is wwaiting fuel linkages besides green clearances.

Similarly, SKS Power and Generation Chhattisgarh, a 1200MW (4x300) coal-based power plant at Raigarh district in Chhattisgarh, is getting delayed as the state government is yet to provide the necessary licences for coal mining.

“The issue has been taken up by MoP with the Chhattisgarh government on 26.09.2013 and 18.10.2013. Comments from the state government are awaited,” the MoP said in the note to CCI. MoP has asked the CCI to take up the matter with the Chhattisgarh government.

The 1050 MW (2x525) plant being commissioned by Hinduja National Power Corporation at Visakhapatnam is also stuck for want of CRZ clearance. MoP has asked CCI to direct MoEF to grant the CRZ clearance to the project, which is likely to be commissioned next year, at the earliest.

The Machhakata Coal Project in Odisha being developed jointly by the Maharashtra State Power Generation Company and the Gujarat State Electricity Board is facing a series of issues, including land acquisition.

The MoP has asked the Odisha government to facilitate land acquisition, approval for mining lease, forest and environment clearance. The ministry has also urged the state government to quell the resistance by local residents.

The 1000 MW coal-based power plant, Meenakshi Energy (P) Ltd, in Nellore district of Andhra Pradesh is also awaiting necessary clearances. Phase 1 of the project is operational, while the 700 MW phase II is yet to be commissioned.

The project got environmental clearance in July which has now expired; the developers are waiting for its renewal. The MoP has asked CCI to direct MoEF to grant an extension to the project immediately.

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Large Power Generating companies breathe easy as government plans loan recast...

 

A big relief is on the cards for power companies such as Tata Power, Adani Power, Reliance Power and Essar Power whose plants are in trouble, and their lenders who are worried about loans worth Rs 2 lakh crore to the sector. The government is working out a plan to restructure the loans, extend repayment deadlines by three years and waive penalties, officials said.

The private sector, which has invested heavily in recent years and accelerated capacity addition, is struggling with fuel scarcity and distribution bottlenecks. Large capacities of plants based on coal or gas are stranded because of fuel scarcity while many are facing delays in clearances.

The proposal aims to help plants with 65,000-70000 mw capacity that have suffered in the last four years due to reasons like shortage of fuel, lack of regulatory clearances and rupee depreciation. The rejig was necessary to prevent the loans from becoming non performing assets (NPAs) till the plants generate regular cash flow, officials said.

Power minister Jyotiraditya Scindia is likely to meet finance minister P Chidambaram next week to discuss the proposal. "Private power generating companies have come under severe stress over the past four years due to conditions outside their control. Domestic coal and gas shortage, price volatility in imported coal, weak distribution utilities, problems in land acquisition and regulatory clearances, higher interest burden and forex exposure have adversely affected thermal plants. There is a need to restructure loans of these companies to prevent the plants from becoming NPAs," the official said.

The proposal includes shifting commissioning deadlines of projects, particularly gas-based plants, whose debt has already been restructured. Power secretary PK Sinha confirmed the development. "We are working one such proposal along with banks, the finance ministry and other ministries," he told ET.

Thermal plants in the country have been operating at record low level at about 63%. Gas-based power plants are running at less than 25% capacity and around 8,000 mw is idling for want of gas allocation.

Sinha, however, said the country's power deficit has come down to record 3.5% in October as against 8.9% in the same month previous year. He said this was because of improved hydropower generation, less demand due to favourable weather conditions, high capacity addition and policy initiatives taken by the government.

Over the past few months, the government has taken many decisions in favour of power companies like directing Coal India to supply coal to power firms for 20 year, and passing cost of imported coal to consumers, approving compensatory tariff to Tata Power and Adani Power and bailing out state distribution companies.

The measures are expected to benefit power companies in the next 18-20 months.

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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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Defense Ministry issues circular for submission of application for Defense Clearance for power projects through nodal Ministries...

 

Ministry of Defense (MoD) has issued a circular regarding submission of applications for Defense Clearance for the Power Projects (Hydel, Thermal, Wind & Gas) by both private and PSUs  through nodal Ministries only rather than the direct submission to MoD.

 

As stated by MoD under the circular, majority of the applications for defense clearance are submitted to MoD by the companies directly without keeping the nodal Ministries i.e Power Ministry and MNRE in the picture.

Hence, it has been decided that MoD will now accept the applications for grant/renewal for defense clearance for construction of Power Projects (Hydel, Thermal, Solar, Wind & Gas) through nodal Ministries only in order to verify the credentials/bonafied of the projects and the developers/proponents.

Thus, the Nodal Ministries have been requested to advise all the stakeholders accordingly.

While forwarding the applications for defense clearance, nodal Ministries should ensure that 11 sets of complete application are forwarded to MoD.

Besides, for Hydro Projects, companies may be advised to furnish details of likely areas getting submerged due to the proposed project, number of roads/infrastructure getting affected and plans for reconstruction affected roads and other infrastructure.

The aforesaid circular can be downloaded from this link.

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Power Ministry seeks to amend National Tariff Policy; timelines extended till 6th Dec for comments submission...

 

Power Ministry is seeking to amend the National Tariff Policy to facilitates accommodation of provisions related to current developments in Open Access, Renewable Energy, Hydro Projects etc and issued draft amendments for the same on 26th September.

Earlier the last date for submission of comments from Stake Holders was till 21st October however the same has been extended till 6th December now.

The major changes proposed by MoP are as follows:

• Re-examination clause of the cross subsidy support provision for the Below Poverty Line consumers have been removed.
• Obligation for specifying the road map for reduction of Cross Subsidies have been directed to SERCs.
• Charges on account of outages by Generator should be mutually decided in case of Open Access rather than by the Commissions.
• Competitive Bidding Provisions rather than the current Preferential Tariff Provision have been specified for the long terms purchase from Renewable Energy sources by Discoms.
• Lon germ trajectory for RPO to be specified by the States.
• Provision for the the graded reduction in % of allowable merchant sales attributable to the developer shall be introduced in case of Hydro Projects.

Complete list of amendments along with Justifications can be viewed and downloaded from here.

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FOR bats for wide consultations before separation of content and carriage in power distribution...

 

Power Ministry's for separation of "carriage and content" in distribution has received support from the Forum of Regulators (FOR) which is a representative body of central state electricity regulators. Ministry's move to amend the Electricity Act, 2003 is aimed at the introduction of competition in retail electricity supply.

The ministry proposal is based on the Central Electricity Authority's recommendation in the recent report that the distribution system may be separated from supply of electricity with two separate licensees to two separate legal entities.

However, FOR at its recent meeting held on November 18 opined that electricity being a concurrent subject, such a model should be implemented after wide consultation with stake holders including state Governments, state utilities, consumers, NGOs.  Besides, smaller States, especially, the hilly states may need separate treatment and the model may need to be modified accordingly. FOR also suggested that the consumers should not be burdened with dealing with two licensees separately.

As per the proposed amendment, the distribution licensee will have an obligation to provide connection on demand to any consumer in its area of distribution. Further the incumbent supply licensee will have universal supply obligation to serve all the consumers in its area of supply. The subsequent supply licensee will have to have service obligation to supply on demand to all consumers of the specified voltage level for which supply licensee has been granted to it. The existing intra-state traders will be treated as deemed supply licensees with service obligation to supply on demand to all consumers of specified voltage level.

However, FOR has suggested that the subsequent supply licences should be granted for the entire area co-terminus with the incumbent supply licensee, with the obligation to supply electricity to all the consumers in its area of supply.

RP Singh, former chairman, PowerGrid Corporation told Business Standard ''The electricity sector will become viable through commercialization of the distribution sector which can only be feasible if content is separated from the carrier whereby the distribution network be assigned to a licensee on similar lines as the central transmission utility and state transmission utility have been assigned for the development of transmission network. The content (sale of power) be opened to competition may be at the taluka and district levels while in the towns and cities there could be multiple players. The present form of privatization of distribution replaces the government monopoly by a private monopoly which would focus on maximizing the profit.''

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