Reliance Power commissions boiler at Sasan plant…

 

Reliance Power  has announced that the equipment for the third 660 MW unit at the 3,960 MW Sasan Ultra Mega Power Project in Madhya Pradesh has started functioning.

"The boiler, for its third 660 MW unit at the 3,960 MW Sasan Ultra Mega Power Project, has been commissioned," the company said in a statement. The first 660 MW unit of the Sasan UMPP had been commissioned in March 2013 while the second unit was synchronised to the grid in December 2013.

Meanwhile, coal production has already commenced from the 20 million tonnes per annum capacity Moher and Moher-Amlohri coal mines, allotted for the Sasan plant. Shares of the company were trading at Rs 67.50, up 1.43 per cent on the BSE. Reliance Power stock price On January 13, 2014, Reliance Power closed at Rs 67.35, up Rs 0.80, or 1.20 percent.

The 52-week high of the share was Rs 98.50 and the 52-week low was Rs 58.55. The company's trailing 12-month (TTM) EPS was at Rs 1.75 per share as per the quarter ended September 2013. The stock's price-to-earnings (P/E) ratio was 38.49. The latest book value of the company is Rs 59.98 per share. At current value, the price-to-book value of the company is 1.12.

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Reliance Power up 3% as CBI likely to close enquiry in Sasan project...

 

Shares of Reliance Power today rose by nearly 3 per cent on the possibility of CBI closing its preliminary enquiry to probe coal block allocation to a power project in Sasan in Madhya Pradesh run by Anil Ambani's firm.

Reacting to this, Reliance Power's scrip went up by 2.89 per cent to Rs 74.7 on the BSE.

On the NSE, the stock rose by 2.89 per cent to Rs 74.70. The CBI is of the view that the allocation is a policy decision vetted by group of ministers.

CBI sources said it has come to light that use of surplus coal from the Sasan UMPP was approved on two separate occasions by two EGoMs. They said since it was a policy decision, CBI was not likely to question it.

However, they added that any final decision has not been taken over the closure and any such decision can only be taken after taking into consideration the views of the Supreme Court.

The sources said they have informed the Supreme Court about the preliminary enquiry in their status report and agency would proceed according to further directions of the apex court.

After the registration of the preliminary enquiry, ADAG spokesperson had said in a statement that "we welcome the independent time-bound enquiries by the CBI, monitored by the Supreme Court, which will clearly establish our bonafides".

It will "once and for all prove beyond doubt that we have been the unfortunate victims of a mischievous campaign of calumny and vilification conducted at the behest of our unscrupulous corporate rivals over the past 5 years," the statement said.

The allocation of coal mines to the Sasan project was done to a 100 percent government-owned company in the year 2006 when Reliance Power had not even won the project, it said adding the government disinvested its shares to Reliance pursuant to a global tender in the year 2007.

The preliminary enquiry was registered on the directions of the Supreme Court that had asked the CBI to probe 14 issues including supply of low floor buses by Tata motors to Tamil Nadu government, grant of spectrum and alleged market manipulations and hammering of stocks by Unitech.

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R-Power starts generation from Sasan UMPP second unit...

 

Reliance Power today said it has started electricity generation from the second 660 MW unit of the 3,960 MW Sasan ultra mega power project in Madhya Pradesh.

With the commissioning of the Sasan UMPP second unit, the company's overall generation capacity has crossed 3,200 MW.

The second unit of the project has commenced power generation in shortest time of just about a month from boiler light up, Reliance Power said in a statement.

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R-Power may need to provide 1385 Ha Non-Forest Land in Liu of the land for Sasan Ultra Mega Power Project...

 

The controversial Reliance Power-owned Sasan Power Limited (SPL) in Madhya Pradesh (MP) may see more trouble as they may have to provide 1384.96 hectare of non-forest land, for which it was granted exemption following a certificate of non-availability of land issued by the then chief secretary of the state in 2009.

SPL will have to provide land as per the new Union ministry of environment and forest (MoEF) guidelines, said a senior officer in the state forest department wishing anonymity. "We have not received any official communication in this matter," he said.

State forest department has shot off a letter to MoEF seeking status of the guidelines. The ministry had promised for new guidelines after being pulled up by the CAG for extending "undue favours" to SPL. The letter was sent by the land records section of the forest department recently, said sources.

When contacted principal chief conservator of forest (PCCF) Anil Oberoi said that he is in Delhi and will discuss the matter with higher-ups in MoEF.

SPL, a special purpose vehicle created for development of Sasan Ultra Mega Power Project, was a wholly owned subsidiary of Power Finance Corporation (PFC). In August 2007 it was transferred to Reliance Power Limited.

In its recent report on Compensatory Afforestation in India, CAG said that SPL, according to guidelines and clarifications for diversion of forest lands for non-forest purpose under the Forest (Conservation) Act, 1980, had to provide equivalent area of 1384.96 hectare of non-forest land for the compensatory afforestation.

But, the former chief secretary had issued a certificate of non-availability of non-forest land in Sidhi district instead of a certificate of non-availability of non-forest land for the entire state.

"Based on this ineligible certificate issued by the chief secretary, the ministry 'exempted' Sasan Power Limited from providing non-forest land of 1384.96 hectare in case of Ultra Mega Power Project and for the coal mining project in violation of the Forest (Conservation) Act, 1980," reads the CAG report, which highlighted "deficiencies" in permitting diversion of forest land in the state.

"Not only did the ministry not exercise due diligence in ensuring compliance with conditions it also inexplicably overlooked the deficiencies in the certificate pointed out by a subordinate authority in the ministry while granting exemption in the instant case," CAG noted.

CAG mentioned, "The MoEF had insisted for compensatory afforestation over the non-forest land in latest project of the same company in nearby location in Madhya Pradesh, which clearly illustrates that in earlier two cases undue favour was extended to M/s Sasan Power Limited."

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Power Engineers’ Federation writes to CEA regarding poor performance of Sasan UMPP...

 

While Reliance Power Limited, a part of Anil Dhirubhai Ambani Group, recently achieved boiler light up for the second 660 MW unit at the 3,960 MW Sasan Ultra Mega Power Project, the All India Power Engineers Federation has written to the Central Electricity Authority demanding that a probe be conducted into the repeated tripping and shut down of the first 660 MW unit synchronized on March 9th this year.

The Sasan UMPP is the world’s largest integrated power plant and coal mining project with an estimated investment of over Rs. 23,000 crore. Coal production has already commenced from the 20 million tonnes per annum capacity Moher and Moher-Amlohri coal mines.

The achievement of boiler light up is considered a critical milestone in boiler commissioning activities for a unit.

According to the company, construction works at the remaining units are at an advanced stage and they would be commissioned over the next few months.

The AIPEF in its letter to the CEA said that the unit synchronized on March 9th and operating on scheduled mode since August 16th could achieve a Plant Load Factor of only 28 percent during the period August 16th to November 7th because of repeated tripping and shut down.

The power engineers’ representative body said that after synchronization on March 9th, the unit was put on trial run in the last week of the same month and achievement of parameters for commercial operation wrongly declared from March 31st. In the third performance test held in August, the unit could not run for 72 continuous hours above 95 percent but even then commercial operation was declared, the letter pointed out.

Secretary General of AIPEF Shailendra Dubey said that the poor performance of the unit was resulting in losses for the states assured of low cost and reliable power from the project. The share of Uttar Pradesh from the project is 12 percent and that of Madhya Pradesh, Punjab and Haryana stands at 37.5 percent, 15 percent and 11.25 percent respectively.

The Sasan UMPP has a levelized tariff of 119.6 paisa per unit whereas for the first two years, power is to be supplied at 70 paisa per unit.

Dubey said that on one hand Uttar Pradesh was purchasing power from Reliance’s Rosa power plant in Shahjahanpur at more than Rs. 5.50 per unit and on the other, the low cost power assured to the state from the company’s Sasan UMPP was not being supplied. He said that Uttar Pradesh Power Corporation Limited needed to take up the matter with the Centre and CEA and seek compensation from Reliance for the failure to supply low cost power from the Sasan UMPP.

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Reliance Power to start second unit of Sasan plant next month...

 

Reliance Power will commission the second 660 MW unit of its ultra mega power project at Sasan in Madhya Pradesh next month.

The second unit at the coal-fired plant will be tested this month and will become operational next month, a company executive told PTI.

The Sasan project is the first of three 4,000 mega watt plants that Reliance Power is building. The first 660 MW unit at Sasan was commissioned in March.

"Boiler light-up has been achieved for the second 660 MW unit at the Sasan UMPP," the company said today in a statement.

Coal production has started from the 20 million tonne per annum capacity Moher and Moher-Amlohri mines allotted to the power project, according to the statement.

Reliance Power is setting up UMPPs at Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand.

Two 600 MW units of the company's Rosa thermal power project are operational.

Reliance Power shares traded at Rs 75.45, up 1.14 per cent, in the afternoon on the BSE.

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Reliance Power - Boiler Lightup achieved for 2nd 660MW unit of 3960MW

 

Reliance Power's Sasan Ultra Mega Power Project has achieved boiler lightup for its second unit on 8th November 2013 after achieving for the first unit in Mar-2013.

Reliance Power Ltd has informed BSE regarding a Press Release dated November 08, 2013, titled "Boiler Lightup achieved for the Second 660MW unit of 3,960 MW Sasan Ultra Mega Power Plant".

Reliance Power announced that Boiler Light Up has been achived for the second 660 MW unit at the 3960 MW Sasan Ultra Mega Power Plant.

 

Excerpts from the Press Release of Reliance Power...

Reliance Power announced that Boiler Light Up has been achieved for the second 660 MW unit at the 3960 MW Sasan Ultra Mega Power Plant. This is a critical milestone of the boiler commissioning activities for the unit.

The first 660 MW unit of the Sasan UMPP has already been commissioned in March 2013. As announced earlier, coal production has already commenced from the 20 million tonees per capapcity Moher & Moher-Amlohri Coal mines. The Sasan Ultra Mega Power Project is the world's largest integrated power plant and coal mining project.

About Reliance Power

Reliance Power Limited, a part of Reliance Group, is India's leading private sector power genration company. Te company has the largest portfolio of the power projects in private secotr, based on coal, gas, hydro and renewable energy, with an operating portfolio of 2545 MW. The company has the largest captive coal reserves in the private secotr, estimated at more than two billion tonnes. Besides, the company is also developing coal mines in Indonesia and coal bed methan blocks in India.

 

Source: Moneycontrol & BSE

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Panel recommends green clearance to Sasan Power's coal block...

 

A high-level panel has recommended environment clearance to Chhatrasal coal mine in Madhya Pradesh alloted to Sasan Power Ltd, but with some conditions.

The Expert Appraisal Committee (EAC) of the Environment Ministry after deliberations recommended the project for environment clearance, but with certain conditions, according to an official document.

The riders includes submission of a report on corporate social responsibility (CSR) implementation and resettlement and rehabilitation (RR) done so far, taking requisite clearances from other appropriate agencies and implementation of assurances by the project proponent given during the public hearing.

The block having coal reserves of about 150 million tonnes was allocated to Sasan Power Ltd, a special purpose vehicle of Reliance Power which is executing the Sasan ultra mega power project. The mine has a peak-rated capacity of five million tonnes per annum.

The document further said the proposal was last considered in the EAC meeting held in 2010 and was recommended for environment clearances.

As per the Environment Ministry's Office Memorandum in 2011, wherein the competent authority has approved the grant of environmental clearance, the proponent will submit the stage-1 FC (Forest Clearance) within 12 months, which may be extended to 18 months in exceptional circumstances.

"The EC will be issued only after the Stage-1 FC submitted by the proponent....FC has been granted on November 23, 2012. Keeping the FC and these OMs(Office Memorandum) in view, the proposal was referred to the EAC for taking a view," the document said.

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RPower approaches CERC seeking increase in tariff for all of its UMPPs...

 

Reliance Power Limited  (R-Power) has approached the Central Electricity Regulatory Commission (CERC) to revise the tariff of all of its 3 Ultra Mega Power Projects in the country.

Tilaiya UMPP

According to the company, the cost of Rehabilitation & Resettlement (R&R) has been increased seven fold from Rs. 530 Crores to Rs. 3,500 Crores over the original pre-bid estimated. The increase in project cost has led most of the lenders to doubt the bankability of the Project.

• Due to this it has asked the CERC to revise the tariff of its Tilaiya UMPP (Jharkhand) to RS. 2.25 per unit which is more than 25% increase from the bid price of Rs. 1.77 per unit.

Sasan UMPP

R-Power has also sought compensation from the government for the falling rupee and cost escalation due to increase in taxes and input costs for its 4,000 MW Sasan UMPP at Madhya Pradesh

Krishnapatnam UMPP

• Krishnapatnam UMPP in Andhra Pradesh, which is based on imported coal, is facing regulatory issues over rise in coal prices and water costs.
• R-Power has sought a revision in tariff after Indonesia increased coal prices.

 

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More literature on this..

http://economictimes.indiatimes.com/news/news-by-industry/energy/power/anil-ambani-led-reliance-power-seeking-tariff-increase-for-all-umpps/articleshow/21644640.cms

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CERC asked Reliance power to quantify the financial impacts of rupee depreciation and change in inputs costs on the sasan umpp...

 

Central Electricity Regulatory Commission (CERC), has asked Reliance Power Ltd to submit a report on the financial impacts of weak rupee and escalation in cost of construction on the 4,000 MW Sasan Ultra Mega Power Project of the company.  

Earlier, Reliance Power Ltd, had submitted a petition to CERC seeking compensation under "Change in Law" clause.

RPower won the project in 2007 in a tariff based international competitive bidding after quoting the lowest levellised tariff of Rs. 1.19 per unit for 25 years.

However, after that the company had filed petitions with CERC seeking relief in terms of tariff increased considering " unprecedented, unforeseen and uncontrollable depreciation of the Indian rupee and Change in Law (mainly increase in taxes and input cost leading to an overall rise in construction cost of the plant) during the Construction period" 

As per the Power Purchase Agreement (PPA) between the developer of the project and procurer of electricity, the company can approach CERC for any "Change in Law" during the construction period and fluctuation in the value of the rupee.

CERC has asked the company to quantify the above and submit the details in terms of the overall financial impacts of these factors on the Project.

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Additional Reading...

http://economictimes.indiatimes.com/news/news-by-industry/energy/power/cerc-asks-reliance-power-to-submit-impact-of-weak-rupee-on-sasan-umpp/articleshow/21275797.cms

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States agree on draft terms on coal block allocation to PSUs…

State governments have agreed with the Centre on draft terms and conditions for allocation of coal blocks to public sector companies, sources said today.

"The chief secretaries of state governments have agreed to draft terms and conditions for allocation of coal blocks to government companies during a meeting organised by the Coal Ministry," a source in the know said.

The meeting came against the backdrop of a ministerial panel deciding not to review the earlier decision allowing Reliance Power to use excess coal from the Sasan Ultra Mega Power Plant (UMPP) mines for its another project.

The terms deliberated during the meeting, chaired by Coal Secretary Alok Perti, included ensuring utilisation of coal, the source added.

In February, the Coal Ministry had notified rules for allocation of coal blocks through competitive bidding process in order to bring transparency in allotment.

On allocation of blocks to government companies, it had said that the Centre will identify areas and fix a reserve price.

The Ministry had said it will circulate a list of areas containing coal for inviting application from eligible government companies for allocation of blocks to states and the Power Ministry.

Source: Economic Times

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EGoM suggest to formulate a policy on use of surplus coal by UMPPs; may cause RPower’s Tilaiya UMPP to wait for coal usage…

Power India found that the Empowered Group of Ministers (EGoM) in its meeting on April 27, has asked the Coal Ministry to formulate a policy for use of surplus or incremental coal available for Ultra Mega Power Projects (UMPPs).

Reliance Power will have to wait for a new coal surplus policy before it can use the surplus coal from its Tilaiya Ultra Mega Power Project. The Coal Ministry has been asked to formulate a policy for use of surplus or incremental coal available for ultra mega power projects (UMPPs).

 

 

The process of policy formation as suggested by the EGoM is as below:

• A committee of Secretaries will be asked to give its recommendation
• This will be followed by inter-ministerial discussions
• The Cabinet Committee of Economic Affairs (CCEA) will take a call after that.
• The new policy will be implemented prospectively

 

It is quite clear from the above process that the new policy process will not affect the permissions already give to Sasan & Chitrangi UMPPs of Reliance Power.

 

However, it will be applicable for the coal blocks allocated to the Tilaiya UMPP and hence, RPower will have to wait till the said Policy formation to use the coal of Tilaiya UMPP.

 

Some more Juice Picking

The EGoM had, in its meeting on August 14, 2008, decided to recommend to the Coal Ministry to allow use of incremental coal for other projects.Tata Power has taken issue against this approval. The matter is pending in the Supreme Court.

The Government is looking to set up 16 UMPPs in the country. Each of the projects is given fuel linkages, which means captive supply of coal. Of 16, three (Sasan in Madhya Pradesh, Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand) has been awarded to Reliance Power and one (Mundra in Gujarat) to Tata Power.

 

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More Literature on this topic:

• http://www.thehindubusinessline.com/companies/article3398159.ece
• http://www.metisbs.com/details/news/16678/use-of-surplus-coal-reliance-power-needs-to-wait-for-new-policy.html

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Coal Ministry issued show-cause notices to 10 power companies for delay in coal block development…

Power India found that Coal Ministry issued show-cause notices to 10 firms, including Reliance Power's Sasan, Tata Power, Hindalco and Grasim Industries asking reasons for delay in developing coal blocks and warned that the same may be cancelled if explanation is not given in 20 days.

 

As stated under the notice to Reliance Power’s Sasan Project by  Coal Ministry:

"You are called upon to show cause...as to why the delay in the development of the coal block(s) should not be held as violation of the terms and conditions of the allotment ... failing which...action as appropriate would be taken against your company(ies) for de-allocation...,"

Similar notices have been issued to other companies as well.

 

These firms were allocated blocks between 1999 and 2008 for development of captive mines for power generation. The projects for which the coal blocks were given, included 4,000 MW Sasan ultra mega plant in Madhya Pradesh. “

The show cause notices have also been sent to public sector Jharkhand State Mineral Development Corporation and Chhattisgarh Mineral Development Corporation. Besides MP, the blocks are located in Jharkhand and Chhattisgarh.

Notices would be sent to about 58 coal block holders, sources said. Of 218 blocks allocated 25 have been taken back by the government.

While the coal-mining for commercial sale is a monopoly of the PSU Coal India, firms in power, steel and cement were given the coal blocks for captive use on the first-come-first-serve (FCFS) basis.

But most of them could not develop the blocks for various reasons ranging from problems in environment clearances and difficulties in land acquisition.

Meanwhile, the FCFS policy has come in for a severe criticism by the Comptroller and Auditor General (CAG), which has reportedly estimated 'windfall gains' to private and public sector companies at Rs 10.67 lakh crore

 

 

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EGoM to discusse the coal diversion issue of RPower’s Sasan UMPP…

Power India found that an Empowered Group of Ministers (EGoM) is going to discuss today the issue of diversion, with government permission, of surplus coal by Reliance Power Ltd (R-Power), meant for its 4,000-Mw Ultra Mega Power Project (UMPP) at Sasan in Madhya Pradesh, to another project being developed by it, Chitrangi, in the same state.

 

A recent draft report of the Comptroller and Auditor General of India (CAG) had alleged the government's decision to allow the coal diversion had caused a Rs 15,849 crore financial benefit to the company, part of the Anil Dhirubhai Ambani Group.

 

In a letter to Prime Minister Manmohan Singh the same day, the CAG had downplayed the draft report, saying “The details being brought out were observations under discussion at a very preliminary stage and do not even constitute our pre-final draft and, hence, are exceedingly misleading.”

 

The EGoM, in its earlier meeting in December, had decided to seek legal opinion from Attorney General (AG) Goolam E Vahanavati on the matter. The AG had reportedly felt if the government wanted to revoke permission for the diversion, it would have to show the company violated the norms which allowed it to use incremental coal.

 

CAG’s audit report had said the government permission for R-Power to use excess coal from mines allotted for Sasan, subsequent to execution of contract agreements, vitiated the sanctity of the bidding process for the project.

 

R-Power had contested the allegation. “The government’s right to grant permission is built in to the coal block allocation letter of Sasan that were made available to all bidders prior to bid submission. Hence, there is no change in commercial conditions after award of UMPP. So, the issue of undue benefit does not arise at all,” it had said in a presentation made to the CAG this February.

 

The company also said there was a strong legal basis for the award of incremental coal, citing the Colliery Control Rules, 2004, empowering the government to provide approval for utilisation of surplus coal. An EGoM had in 2008 approved the diversion, subject to conditions. These included providing Sasan priority in use of coal from the allotted blocks — Moher, Moher Amlori Extn and Chhatrasal — and sale of power generated from surplus coal only through bidding.

 

The company also said there was no rationale behind CAG’s methodology for arriving at the ‘undue benefit’ figure of Rs 40,000 crore. CAG had quantified the difference between Reliance Power’s cost of production and notified sale price of Coal India, extending it over 28 years for arriving at the loss figure.

 

 

 

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