Dept Seeks Gridco Nod on Sterlite Energy for Vedanta…

 

The Energy Department has sought the views of Gridco, the power trading utility of the State, on the issue of granting permission to the Vedanta Aluminium and Power to use power from Sterlite Energy.

This is in response to Vedanta Group’s request to the State Government for using 600 MW power from Sterlite Energy (a subsidiary of Vedanta Group) to run its smelter plant at Jharsuguda.

Vedanta Aluminium Limited has set up a 1.1 million tonne per annum (mtpa) new aluminium smelter at Jharsuguda as Special Economic Zone (SEZ), is lying idle presently for want of power.

“We are providing 600 MW to Gridco for the last three years. Since Odisha is now power surplus State, we may be allowed to use this power for running the new smelter plant to full capacity,” said Vedanta Aluminium and Power business head SK Roongta in a recent letter to Chief Secretary JK Mohapatra.

The commissioning of the new smelter plant will generate substantial employment opportunity and additional revenue for the State Government, he said.

Sterlite Energy, an independent power producer (IPP), runs 2,400 MW (4x600 MW) thermal power station at Jharsuguda. One unit of the power station is dedicated to the State.

Stating that the new smelter has been put up as per the 2006 recommendation of the State Government pursuant to central SEZ Act, 2005,

the company had recently sought extension of SEZ benefits for its aluminium smelter project at Jharsuguda.

The company has requested exemptions which were taken into account at the time of setting up of SEZ plant such as exemption from state taxes including entry tax, VAT, electricity duty be made applicable from the date of recommendation for the SEZ.

The company has also requested the State Government to declare the plant in the SEZ as a deemed distribution licensee as per the provisions of the Electricity Act 2003 and referred the matter to the Odisha Electricity Regulatory Commission (OERC).

Chairman of the Vedanta Group Anil Agarwal met Chief Minister Naveen Patnaik on November 26 last year to discuss the issue along with the long term bauxite linkage to the company.

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Cos not having green nod to lose coal block; notice to 61 firms…

 

The government has decided to deallocate all the captive coal blocks which have not obtained environment and in-principle forest clearances and has issued show-cause notice to allocatees of 61 such mines.

The move comes in the backdrop of the Supreme Court posing some tough questions on allocation process for coal blocks and questioning the Centre over the functioning of the screening committee that made allotment recommendations.

“The following coal blocks will be deallocated… Coal blocks where environmental clearance and forest clearance stage-I (in-principle) have not been obtained,” S K Shahi, Director in the Coal Ministry, said in a letter to allocatees of 61 blocks.

Coal blocks, which are unexplored or partially explored at the time of allocation and where prospecting licence (PL) has not been obtained, will also be cancelled, it said.

The letter further added that in cases of coal blocks where PL has been issued but geological reports have not been prepared will also be cancelled.

Tata Steel, ArcelorMittal, Hindalco, Jindal Steel and Power, JSW Steel, Essar Power, Adani Power, Tata Power, GVK Power and Infrastructure, Ultratech Cement, Reliance Energy, Sterlite Energy and JP Associates are some of the allocatees who feature in the list of 61.

Some blocks, which are already under the scrutiny of CBI such as Mahan to Essar Power and Hindalco, Brinda Sasai and Meral to Abhijeet Infrastructure, Bander to AMR Iron and Steel, also figure in the list.

Fatehpur coal block, allocated to SKS Ispat & Power Ltd, the company allegedly linked to former Union Minister Subodh Kant Sahay, is also a part of the list.

The allocatees have been given time till February 5 to obtain the requisite clearances and produce proofs in support of approvals.

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Tax incentive window for GMR, JSPL, Sterlite power plants...

 

Power generators, like GMR, Essar Power, Jindal Steel and Power and Sterlite Energy, are likely to benefit from the relaxations in mega power policy announced yesterday.

A number of coal-fired power projects have been under stress to non-availability of fuel to reduction in off-take and lack of payments. “The move will help a lot of coal-based power projects,” said Umesh Agarwal, associate director of PriceWaterhouseCoopers.

The mega power status allows projects to claim tax benefits that will net 10% savings on carriage charge of the tariffs. The power policy, which was amended in 2009, covers coal-based power projects of 1000 megawatts and hydro power projects of 500 megawatts, above to claim tax benefits.

They can import equipment duty-free but to avail of the benefits they had to supply around 75% power that they produced through competitive bidding. However, projects based in states like Chattisgarh, Jharkhand, Madhya Pradesh and Orissa could not due to host state obligations.

Some states mandate these power projects to sell 35% of the power produced to the state-owned utilities at regulated tariffs. “The power producers will have to supply 30% power at  regulated rates and seven% at variable costs,” explained Debasish Mishra, senior director at Deloitte Touche Tohmatsu.

The latest relaxation allows 65% of power to be sold under competitive bidding.

“This dispensation would be one time and limited to 15 projects which are located in the states having mandatory host state power tie-up policy of power purchase agreements (PPAs) under regulated tariff,” said a press release by the government. 

“This is more of a move to align it to suit state regulations,” said Agarwal. Added to that, the Cabinet Committee on Economic Affairs (CCEA) also extended the the maximum time period to 60 months instead of 36 months from the date of import for provisional mega projects, for furnishing final mega certificates to tax authorities. This time extension will benefit 25 power projects, which would have a net capacity of around 30,000 megawatts.

The mega power policy was introduced in 1995 but benefits under it were available to only those generators who had either put up their power plants or had got provisional certificate by placing orders before July 2012.

No new projects will stand to benefit with the latest relaxation. “It will only benefit those projects which have received a provisional certificate already,” said Agarwal.

Source: Business Standard

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IPPs asked not to use PGCIL line for power supply to Odisha grid...

 

The Odisha government has directed the independent power producers (IPPs) to deliver its share of power at its own substations and transmission lines, instead of transmission network of Power Grid Corporation of India Ltd (PGCIL).

“Government is in the process of executing supplementary MoUs with the IPPs incorporating a provision to the effect that the IPPs shall deliver the state’s share of power at the designated substations of OPTCL, so that the interstate transmission charges payable to PGCIL can be avoided,” said a source in the Energy department.

As per existing practice, IPPs had plans to connect to PGCIL transmission system for sale of power throughout the country and would have used the same line to provide power to Odisha. But the state government’s new norm is likely to affect the business prospects of the private power producers to some extent, said experts.

“It is likely to affect the business margin of private producers as they will have less option to sell their power outside the state in case of fall in demand from the state. The state government at the same time must construct better evacuation system for availing such power,” said an official of Ind Bharat, an IPP.

The Odisha government has signed agreements with 29 private developers with combined generation capacity of 38,000 Mw power. As per the agreements, the IPPs have to sell 14 per cent of total generated power to the state network at a subsidized rate. The state government aims to get around 2000 Mw power from private power stations by 2015 and hence, has come up with large transmission network plan.

The Odisha Power Transmission Corporation Limited (OTPCL) is in the process of setting up three high capacity substations with an estimated investment of Rs 1000 crore for sale of surplus power.

The substations having 400/220/132 KV capacity would be constructed at Lapanga, Meramundali and Khuntuni. While work for construction of Lapnga substation has already started, land acquisition and other formalities are being chalked out for other two units.

“OPTCL has proposed 400/220 kv grid substations for drawal of state’s share of power from the proposed IPPs. In the event of availability of surplus power from the IPPs, it is planned to sale the Odisha share directly to CTU (central transmission utility) to which the IPPs are planning to connect,” said the Energy department source.

Currently two IPPs, Sterlite Energy and GMR Energy are operational in the state. Another two IPPs, Ind Bharat and Maa Durga Thermal Power are expected to start supplying power to the OPTCL grid in 2014-15.

Source: Business Standard

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Vedanta seeks nod to use IPP power for smelter...

 

Vedanta Aluminium Ltd (VAL), a unit of Anil Agarwal controlled Vedanta Resources, has sought the nod of the Odisha government for using 600 Mw power from Sterlite Energy (also a Vedanta Group firm) to run its smelter at Jharsuguda.

VAL’s 1.25 million tonne per annum (mtpa) aluminium smelter set up as a sector specific Special Economic Zone (SEZ) at Jharsuguda is lying idle presently for want of power. Sterlite Energy, an independent power producer (IPP), runs 2,400 Mw (4x600 Mw) coal-fired station at Burkhamunda near Jharsuguda.

“We have set up our aluminium smelter in Jharsuguda in line with the state’s SEZ policy 2003 and are awaiting approval. We will be very pleased if approval can be granted immediately. The company also requests the government to allow use of 600 Mw power plant to run our smelter for value addition which is lying idle,” Vedanta Resources chairman Anil Agarwal wrote to Odisha Chief Minister Naveen Patnaik. Agarwal said a quick decision by the government can help start operations of the smelter resulting in generation of economic activities, huge local employment and additional revenue creation for the state.

The company had recently sought extension of SEZ benefits for its aluminium smelter project at Jharsuguda.

VAL has already invested Rs 12,000 crore on the smelter complex. The commissioning of VAL’s multi-product SEZ at Jharsuguda has been delayed considerably due to non-finalisation of the state specific SEZ policy. Due to lack of the policy, various government departments were unable to extend the SEZ benefits. Commissioning of the SEZ facility promised to boost the local economy by generating business potential worth Rs 15,000 crore every year. Direct and indirect employment opportunities for nearly 12,000 persons are set to be created.

The facility is also expected to develop local infrastructure besides boosting numerous small scale enterprises. Since the Odisha government has granted its concurrence to grant the SEZ status to the smelter plant, VAL had pointed out earlier that the state SEZ policy should be applicable to the establishment. The company had also suggested that developing and setting up of downstream industries in the area adjoining to the smelter should be made mandatory.

Source: Business Standard

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PSERC passes on customs duty benefit of Rs.600 crore to consumer...

 

Punjab State Electricity Regulatory Commission (PSERC) has decide to pass on custom duty benefit of Rs. 600 crore availed by Sterlite Energy limited on account of grant of mega power project status to Talwandi Sabo thermal project be passed on to consumers.

PSERC in its order of December 27 on petition no. 41 directed the Sterlite Energy limited executing theTalwandi Sabo thermal project to render true and full account of benefits to PSPCL that ought to have accrued to it on account of grant of mega power status to project.

The Punjab consumer is going to benefit to the tune of Rs. 104 crore per annum for the next 25 years as the fixed charges of project will come down by 8 paise per unit. With a generation potential of the plant being 13000 million units, the Punjab consumer shall gain by Rs. 2600 crore over a period of next 25 years.

PSPCL has filed a petition before Commission seeking directions to Sterlite Energy limited on account of mega power status granted to 1980 MW Talwandi Sabo project and pass on all financial benefits claimed to PSPCL as per power purchase agreement.

PSPCL has claimed that the benefits of status were not applicable at the time of bidding in 2006 as per existing laws .In December 2009 Government of India revised the policy guidelines and modified the mega power policy. Talwandi Sabo thermal project was granted this status in August 2010.

Punjab Government issued the essentiality certificate to obtain necessary customs duty benefits and the company executing the project gave the undertaking and claimed all the benefits The company claimed that it is not liable to pass the benefits of new policy to PSPCL claiming that this was not a change of law. The benefits were granted to keep the power tariff low in the public interest.

Sterlite has been benefitted to the tune of Rs. 600 crore for duty draw back the non - payment of customs duties. As per article 13 of power purchase agreement the fixed charges of 135.4 paise per unit comes down by 8.064 paise per unit.
Similarly the Commission had granted a relief of Rs 74 crore per annum last November from power generated from Rajpura thermal plant on similar grounds thereby passing on a benefit of 8 paise per unit totaling to Rs.1850 crore to the consumers over next five years.
Round up of PSERC in 2013
Punjab consumer is going to gain about Rs. 300 crore during 2013-14 on as an impact of fuel audit conducted by PSERC for reducing the use of coal and other fuels at PSPCL thermal plants. This will reduce tariff by about 7.5 paise per unit.
Thus the vigilant eye of PSERC on private and PSPCL thermal plants is likely to reduce the electricity tariff by about 23.5 paise per unit during 2014-15, thus reducing the burden of 63 paise per unit proposed to be passed on to the consumer by PSPCL to 40 paise per unit.
According to In case PSERC applied the regulations strictly on PSPCL ‘s ARR petition in stringent manner ,there is a possibility of reducing the tariff during 2014-15 keeping in view the profit of PSPCL and PSTCL during 2012-13 and 2013-14 . These sources indicate that courtesy consistent tariff rises given by PSERC, the profits of PSPCL and PSTCL during last 2 years have crossed a figure of few hundred crore which the companies are hiding from the public to manage a rise in tariff during 2014-15.

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18 Independent Power Producers yet to move beyond land acquisition stage in Odisha...

 

As many as 18 out of 29 Independent Power Producers (IPPs) with whom the state government has singed MoU (memorandum of understanding) are yet to move beyond the land acquisition stage.

Together these IPPs envisage generation capacity of 33520 Mw of the total of 37540 Mw projected by the 29 MoU-signed IPPs.

The power projects yet to get over the land acquisition issues include those proposed by Nava Bharat Power Pvt Ltd (which is taken over by Essar power) with capacity of 1050 Mw, Bhushan Energy Ltd (2000 Mw) in Dhenkanal, CESC Ltd (1000 Mw), Astaranga Power Co Ltd (2640 Mw), Ind Barath Energy (Utkal) Ltd, Sahara India Power Corp Ltd (1320 Mw), JR Powergen Pvt Ltd (1980 Mw), NSL Odisha Power & Infra-tech Pvt Ltd (1320 Mw) etc.

Only two MoU-signed players- Sterlite Energy and GMR Kamalanga have started operations.

Sterlite Energy has commissioned its 2400 Mw coal-fired power plant at Burkhamunda near Jharsuguda.

GMR Energy which proposed 1400 Mw (4x350 Mw) power plant at Kamalanga in Dhenkanal district has operationalized its two unit of 350 Mw each.

Jindal India Thermal Power Ltd (JITPL) which proposed 1800 MW coal-based power plant at Deranga near Angul, hopes to commission its first 600 Mw unit by December 2013.

The other IPPs that are expected to go on stream by December end are Ind-Barath Energy (Utkal) Ltd (350 Mw of its 1360 Mw), Maa Durga Thermal Power Company Ltd (60 Mw).

Similarly, Monnet Power Company Ltd, a wholly owned subsidiary of Monnet Ispat & Energy Ltd, hopes to commission its 1050 Mw power plant in Odisha by March 2014. Lanco Badabandh Power Ltd targets to put on stream its power plant by 2014 end.

Two power companies-Chambal Infrastructure and Ventures Ltd (1200 Mw) and JSL energy Ltd (1320 Mw) have applied for change in the project locations.

The state government has signed MoUs with all these power companies between 2006 and 2011.

Of the total power produced by the IPPs, Odisha's share will be around 6200 Mw.

In the aluminium sector, Aditya Aluminum, which has proposed to set up 1.5 million tonne per annum alumina refinery, 0.36 mtpa aluminium plant and 900 Mw captive power plant with an investment of Rs 13804 crore is under construction. Similarly the RSB Metaltech Ltd, which signed a pact with the state government to set up 0.7 (mtpa) refineries, 0.175 mtpa aluminium plant and 450 Mw CPP with an investment of around Rs 6800 crore, is going through the land acquisition process.

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Nine cos submit preliminary bids for Odisha UMPP...

 

Nine companies including Tata Power and Adani Power have submitted preliminary bids for the 4,000 MW Odisha ultra mega power project.

 

"Nine participants -- NTPC, Tata Power, NHPC, Adani Power, JSW Energy, Jindal Steel and Power, Sterlite Infraventures, CLP India and Larsen and Toubro have submitted initial bids for the Odisha UMPP," said a source.

 

Power Finance Corporation, the nodal agency for UMPPs, invited preliminary bids in September.

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