GVK seeks MoEF nod to use HSD for gas-based power project…

 

With gas supplies from KG-Basin coming to a standstill, Gautami Power Ltd, a GVK group company has sought permit from the Ministry of Environment and Forests (MoEF) to use High Speed Diesel (HSD) instead of natural gas at its plant in East Godavari district of Andhra Pradesh.

This comes after a committee under the MoEF opined that usage of HSD for power generation will not be as eco-friendly as natural gas and directed the company to obtain views of Ministries of Power, Petroleum and Natural Gas on the issue.

"The Committee deliberated on the proposal and noted that the quantity of HSD to be utilised for power generation is quite substantial. The usage of HSD in such quantities will not be as eco-friendly as natural gas.

The Committee therefore desired that the PP shall obtain the views/comments of Ministry of Power and Ministry of Petroleum & Natural Gas on the use of HSD for the project before taking a decision," the Expert Appraisal Committee (EAC) under the MoEf said in its meeting last month.

It was also noted that Government is subsidising HSD for certain specific-end users only such as for transportation, the EAC further said. The gas-based power project has natural gas allocation of 1.96 MMSCMD by MoPNG from KG Basin for operating the plant on full capacity.

As the gas supplies for the project have come down due to reduction in gas production in the KG D6 fields, it is requested to amend the environment clearance for using HSD (green diesel) with sulphur content not exceeding 0.05 percent as an alternate fuel instead of emergency fuel. The plant operated on full generation for the years 2009, 2010 and 2011 using gas supplied from KG D6 gas fields. However, since October 2011, the total gas supply from KG D6 has been reducing from the original level of 60 MMSCMD to less than 15 MMSCMD and supply to power sector was stopped since March 2013.

As per the existing policy of the Government, power generation using indigenously sourced HSD is allowed.

The Ministry of Power and MoPNG has already accorded NOC for HSD as fuel for GVK's Jegurupadu Phase II Power Project (220 MW) in East Godavari district last year. Many gas-based power plants including that of GVK's are sitting idle due to non-availability of gas.

GVK Power stock price

On January 15, 2014, GVK Power & Infrastructure closed at Rs 10.20, down Rs 0.23, or 2.21 percent. The 52-week high of the share was Rs 15.36 and the 52-week low was Rs 5.52. The latest book value of the company is Rs 15.84 per share. At current value, the price-to-book value of the company was 0.64.

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Reliance Power's Jharkhand UMPP proposal gets CCI nod…

 

Cabinet Committee on Investment has cleared Reliance Power's Tilaiya ultra mega power project in Jharkhand, sources said.

RPower, according to them, may not have to provide non-forest land to compensate for the loss of forest land acquired for the proposed plant.

Sources said the company's 4,000 MW Tilaiya plant is now expected to be treated on a par with the other public sector projects and therefore would be exempted from providing compensatory afforestation for the loss of forest land.

At present, only central government or public sector undertakings have exemption from the obligation to provide non-forest land.

Tilaiya power plant is to be executed by a Special Purpose Vehicle (SPV), Jharkhand Integrated Power Ltd, which was handed over to Reliance Power in January 2009 by Power Finance Corporation -- the nodal agency for UMPPs.

Tilaiya would be the fourth UMPP to be awarded to a developer. Earlier, two UMPPs bagged by Reliance Power are those of Sasan (Madhya Pradesh) and Krishnapatnam (Andhra Pradesh). Tata Power is operating the Mundra UMPP in Gujarat.

UMPP is a big-size coal-based power plant with at least 4,000 MW capacity and is built at an approximate cost of Rs 25,000 crore.

CCI, headed by Prime Minister Manmohan Singh, aims to fast-track major projects and help boost investor sentiment.

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Government eases environment clearance norms for coal mines...

 

The government has eased environmental clearance norms for expanding coal mines, which will help state-run Coal India boost output by a record 30-40 million tonnes in the new financial year and ease the crippling fuel scarcity in the power sector.

The ministry, which has taken a pro-industry stance since Veerappa Moily took charge, has ruled that mines with an annual capacity of up to 8 million tonnes can expand capacity by up to 50% without holding public hearings. This exemption will apply to one-time capacity expansion in projects that do not involve land beyond the existing lease area. Several mining projects have been stalled because of the earlier provision that required public hearings if the capacity was being expanded by 25%.

The decision is a big boost for Coal India, which has been under enormous pressure to boost output as large power generation capacity is idling or underutilised because private investment led to record capacity addition in the last fiscal year while coal output stagnated.

Coal India produced about 450 million tonnes last fiscal. It has 400 mines with annual production of less than 8 million tonnes. "We are easily looking at an increase of 30-40 million tonnes increase in production in the next financial year ... the increase could be even more, but, at this stage we will study the possibility of increasing production by 50% for all mines in this category. This order will give a boost to production teams at every mine as they can increase production by 1 to 1.5 million tonnes without additional hearing," said Coal India Limited Director N Kumar.

Tuesday's order increases the ambit of an expansion that has been in place since December 2012. Former environment minister Jayanthi Natarajan had exempted existing coal mines with plans to increase production by as much as a quarter of the current permissible production levels from holding public hearings as part of the environment clearance process.

The decision to further relax the clearance process for expansion projects comes at the behest of the coal ministry, which argued that the December 2012 exemption norms were unfavourable for smaller coal mining projects. For mines with lower permissible annual production levels, a 25% capacity increase worked out to a negligible increase. Therefore, were unable to avail of the exemption from holding public hearings for getting the clearance.

Moily's latest industry-friendly move comes at a time when the environment ministry has been under attack, particularly from infrastructure ministries, for delays in clearing projects. The coal ministry has consistently maintained that these delays were primarily responsible for lower coal production. However, some experts say delays in environmental clearance is only part of the reason for Coal India's failure to meet annual production targets. Lower coal production adversely affected power, steel and other industry projects, all of which a section of the government and industry claimed was derailing India's growth. The coal ministry, in particular, has since 2009 been demanding a more liberal and pro-growth environmental regulatory framework.

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UP govt pulls plug on Dopaha power project after Centre’s green snub...

 

The Uttar Pradesh government has finally pulled the plug on its 1,980 mw coal-fired Dopaha power project in Sonebhadra after failing to get a green nod and land for the plan. The state has been trying to kick-start the project for four years.

The 3x660 mw supercritical plant needed 1,475 acres land, approximately 9.7 million tonne per annum coal and 60 cusecs of water.

But ever since its inception in 2009 by the then Mayawati government, the project has faced hurdles in getting land and environmental clearances. The decision to shelve the project was taken Thursday evening by an energy task force (ETF) headed by the chief secretary.

An official of the state power department said the government thought it was better to bury the project because there was no hope of either getting the land or the green nod from the Centre.

The state government had been trying to get the environmental clearance since 2010. The Centre had denied the clearance on the ground that the nearby Singrauli area was under observation because of pollution from the production of 10,000 mw of power in the area. The UP government tried to reason with the environment and forest ministry, saying Dopaha, in Sonebhadra, is 30 km away from the Singauli area and will in no way add to the pollution of the area.

According to the environmental ministry, a study carried out by the Centre at Singrauli warned that these power plants could cause irreparable damage to the environment of the area. Accepting the preliminary findings of the study, the environment ministry said that no power plant should come up in the notified (Singrauli) area till a Central team completes its study on the environmental hazards of these power plants.

The state government, on its part, contested the view and said that the Centre was building up a flimsy ground to deny it the right to set up a power plant near a mine-rich area.

Singrauli, which is fast emerging as an energy hub of India, houses a total installed capacity of approximately 10,000 mw. This is more than 10% of total installed capacity of the entire country.
A major chunk of the power produced at the pit-heads of Singrauli goes to the central and private sectors, including NTPC’s Vindhyachal project (3260 mw), Shaktinagar project (2000 mw) and Rihand Super Thermal Power project (2000 mw) in Rihandnagar. Also, Sasan Power Limited is setting up a 4000-mw ultra-mega power project at Singrauli.

The MP government, too, has set up its own power projects here.

“Uttar Pradesh has only Anpara A, B and D and Obra thermal Power Station near the mines. For a power-starved state like UP, not being able to set up even one plant at Sonebhadra would mean taking the project to a faraway place. This will force additional cartage and result in expensive power for people,” an official of the UP Power Corporation said.

"To nip our proposal was uncalled for...it is likely to jeopardize the development of the power sector in UP.”

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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.

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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. -

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NHPC seeks PM cell help to fast-track Rs 7,500-crore Arunachal plan...

 

The National Hydroelectric Power Corporation has sought the assistance of the project monitoring group under the cabinet secretariat to fast-track the Rs 7,500-crore Tawang-II project in Arunachal Pradesh.

In February, India hastened plans to construct 2,500 MW of hydro projects, including one in Tawang and another in Teestha in Sikkim after China announced three more dams on their part of the Brahmaputra river. Though the NHPC's 800 MW Tawang II project has been cleared for stage I green clearance from the forest advisory committee (FAC) in February.

In the absence of a formal letter from the environment ministry endorsing the clearance, the project remains stuck. It is learnt that the file (for stage I clearance) is with the office of the environment minister for approval since April 18.

In it application filed to the PMG, NHPC sought faster clearances from various ministries for the 800 megawatt project as work could be started."The project would require 83 months for completion after investment approval by the government," it said.

The Tawang project got environment nod earlier and is awaiting a formal approval for diversion of 116.62 hectare of forest land.

Once this is in place, the company would also have to spell out rehabilitation and resettlement plan for the locals who would be displaced when the dam comes up at Tawang Chu river, a tributary of the Brahmaputra.

"We are facing several delays on our projects in the Northeast. Faster clearances would go a long way in not only helping NHPC grow but also provide the country a reliable source of cheap power," NHPC director finance ABL Srivastava told.

Chief ministers of Northeastern states have been urging the Centre to expedite various projects as part of efforts to speed up development in the region. The power ministry has already taken up with environment ministry a number of projects stalled in the Northeast.

Of the 100-odd projects planned in Arunachal Pradesh, 13 are planned in Tawang alone, which is also the birthplace of sixth Dalai Lama. However, projects coming up in Tawang are mired with controversies as China claims the region as a southern extension of Tibet.

Also, the Monpa tribe in Tawang have opposed the hydroelectric project as it might affect some of the Buddhist sacred sites.

Indian authorities are aware of the fact that building more dams in Brahmaputra ahead of China will put New Delhi in a strategically important position.

Tawang-II project has been proposed on river Tawangchu, in the downstream of Tawang-I hydroelectric project.

The project envisages construction of four units of 200 MW each and expects to generate 3622 million units at 90% PLF. The total cost for the project has been estimated at Rs 6112.30 crore at the May 2010 price-level.

Apart from Tawang II, forest clearance is pending for 600 MW Tawang-I hydroelectric project of the company in Arunachal Pradesh.

This is delayed pending a cumulative biodiversity study of the Tawang basin by the Arunachal government and Northeastern Hill University.

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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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MoEF gives nod to GSECL’s Rs 4,100 Cr Wanakbori unit...

 

The Gujarat State Electricity Corporation Ltd (GSECL) has received environmental clearance from the Ministry of Environment and Forests to set up a 800 MW power unit at a cost of over Rs 4,100 crore. However, the ministry has directed GSECL to phase out and dismantle "old and inefficient" units at its Wanakbori, Ukai and Gandhinagar stations.

This 800 MW power generation unit will be the biggest in the existing coal-based Wanakbori Thermal Power Station of GSECL in Kheda district, which currently has seven units of 210 MW each.

While granting the clearance recently, MoEF has laid down certain "specific conditions" for GSECL. "Old and inefficient units, which have outlived the plant life, Unit 1, 2 and 3 of 210 MW each at Wanakbori and 120 MW units at Gandhinagar and Ukai, shall be phased out and dismantled within the next three years or before commissioning of the Wanakbori unit, whichever is earlier," the ministry stated while giving clearance on December 2.

"Life Cycle Assessment of old units — 4 to 7 of 210 MW each at Wanakbori — shall be carried out either by Central Electricity Authority or any other competent agency and vetted by CEA. In case the units are found fit for efficient operation after proposed overhauling, the ESPs (Electrostatic Precipitators) shall be replaced or retrofitted so that particulate emission does not exceed 50 mg/Nm3," it added.

The MoEF has also asked GSECL to conduct a long term study on radioactivity and heavy metals content on coal that will be used. "A mechanism for an in-built continuous monitoring for radioactivity and heavy metals in coal and fly ash shall be put in place," it said. The coal requirement of 4.17 MTPA (million tonnes per annum) for this unit will be obtained from Maccha Kata Captive Mine in Talcher, Orissa.

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Ten hydel projects of 8,531 MW awaiting various clearances...

 

Ten hydro-electric projects (HEPs) of NHPC Ltd with an aggregate installed capacity of 8531 MW, which have been concurred by Central Electricity authority (CEA), are awaiting various other clearances such as Environment & Forest clearance.

Three of these projects are in Uttarakhand, 3 in Arunachal Pradesh, 2 in Manipur, and 1 each in Sikkim and J&K.

These include 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 among others.

The projects would contribute up to 32.1 Billion Units of electricity per annum which would help to meet the power demand in the country. The Ministry of Power has highlighted need for quick clearances with respective Ministries particularly the Ministry of Environment & Forests.

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Indian Power Sector on the path of revival...

 

The declining health of Indian Power Sector over the last couple of years has started to show signs of recovery with improvement in overall electricity generation and reduction of peak deficits in the preceding months.

Though the balance sheets of the companies are still a cause for worry, the shift in policies and regulatory measures would turn out to be a boon for the sector, believe experts.

The Central Electricity Authority (CEA) data reveals that the power sector, which was burdened with higher imported coal prices, lower plant load factor (PLF) and non-availability of fuel (coal and gas), has seen improvement in the months of September, October and November. The overall electricity generation improved by 5.8 per cent to 7,720 crore units year on year (y-o-y) during November. Higher production from the thermal power plants and improved generations from the hydro power plants are believed to be major contributors to the growth. The PLF has also improved during the period to 65 per cent compared with 62 per cent in the same period last year. However, there are still issues of availability of fuel for the commissioned capacities, which once resolved would further help improve the PLFs in coming months.

Experts also believe that Coal India, India’s major coal producer, is likely to come close to its target production of 492 million tonne for this financial year. The company in the last eight months has fallen short by 15 million tonnes from its target largely due to mining strike and monsoon. However, it is expected to grow by 8 per cent in the remaining four months to achieve around 482 million tonnes of production, which would give enough confidence to companies having fuel supply agreements with CIL.

Besides, the clearances that have started to come for projects mired in issues related to go–and– no-go-area, environment and land acquisition related concerns are good indications for the industry.

Rupesh Sankhe, senior analyst with Karvy Stock Broking says the project clearances for around Rs 90,000 crore worth projects held up due to various regulatory and environment related issues would help in reviving the stuck capital expenditure into the sector. Moreover, the financial health of State Electricity Boards (SEBs) that are beginning to show improvement after the restructuring and the tariff hikes — in around 21 states — are very good indicators that things are shaping up for better,” Sankhe added.

It is a general perception that companies would continue to generate higher electricity in the coming months to elections and SEBs would continue to buy with elections round the corner. SEBs may even buy in the spot market to provide round the clock supply. This would help companies to source imported coal even if it is priced little higher since the merchant rates are much better at present.

The drop in international prices of coal of various gross calorific values (GCV) has also helped Indian companies to tie the supply side concerns in the last few months. According to experts, the landed price of coal, excluding the rail freight, has dropped to $40-$65 per tonne depending on the GCVs. It has led companies to import higher GCV coals in recent times rather than buy similar variety coal from CIL, which are comparatively priced higher. Indian companies use a blend of Indian and international coals to cut on costs.

The recent steps by government to improve the overall capacity and ensure availability of coal to the power producers are also seen as steps to propel the industry out of woods. Government recently launched two new ultra mega power projects in Bedabahal in Odisha and Cheyyur in Tamil Nadu. Although the progress on earlier four UMPPs is not encouraging with only two UMPPs operational and unresolved issues on tariff affecting the bottom line of one of the companies.Tata Power is still battling for higher compensatory tariff on account of higher imported fuel cost.

In order to resolve the existing shortage of fuel, government is also planning to invite bids from private sector companies for the development of coal mines on public private partnership basis to ensure there are multiple producers of coal to meet the growing demand. India at present has a shortage of 200 million tones of coal that is largely met through expensive imports. In 2012-13, total demand for coal was around 773 million tonne while domestic supply was only 567 million tonne.

Like crude oil, imported coal puts heavy pressure on maintaining the current account deficits at manageable levels. A nine-member committee at the prime ministers office has recently decided to cut the import of coal to cut the current account deficit. It would also mean higher production within the country to address the domestic issues.

All put together, we can see some improvements in the sector provided the basic issues are resolved in time-bound manner. The issues of availability of coal, meeting peak shortages, regular tariff hikes to meet the increasing cost of the SEBs and improvement in generation capacities across the thermal, hydro, renewables and nuclear segments are a must. The participation of the private sector is urgently required not just in production of electricity, but also in the production of vast available resources like coal to meet the demand.

A report by Motilal Oswal Securities on Power sector states that the sector has begun to witness several initiatives by authorities to address concerns on SEBs, fuel supply pacts and PPAs. It would, however, take a while before clarity on several issues emerges. In this environment, power companies "continue to prefer CPSUs, which are relatively better positioned on these fronts”, according to the report.

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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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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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Five Hydro Power Projects being developed by NHPC are facing cost over-runs due to pending clearances...

 

Five power projects of National Hydroelectric Power Corporation (NHPC) are facing cost over-runs due to delays in receiving environment and other regulatory clearances.
 
"Project cost of five of our projects has gone up tremendously and all this is due to environment hurdles, local opposition and contractual issues," an official from the state-run company told PTI on Tuesday.
 
The expenditure on the projects - Teesta Low Dam IV (West Bengal), Subansiri Lower (Assam), Parbati II (Himachal Pradesh), Nimmo Bazgo and Uri II (Jammu & Kashmir) - in various stages of construction, has exceeded the amount that was initially sanctioned.
 
These projects have a combined capacity of 3,345 MW.
 
"In some cases like Subansiri (2,000 MW), the cost of the project may be nearly doubled by the time it is commissioned," the official said.
 
The original sanctioned cost of the plant was Rs 6,285.33 crore, which was revised to Rs 10,667.09 crore.
 
At present, the cost is likely to touch Rs 12,000 crore, the official added.
 
The Subansiri Lower project has been stalled since December 2011, after the local people raised issues related to its safety and downstream impact.
 
"We are hopeful that the construction work on the project would start again next month."
 
The original cost of the state-run company's Parbati II (800 MW) project in Himachal Pradesh, which is marred by contractual issues, was Rs 3,919.59 crore and the revised expenditure stands at Rs 5,365.70 crore.
 
Work on the Parbati project was stalled due to differences with the civil contractor. At present, the project is under execution.
 
The cost of the company's two hydroelectric plants in J&K - Uri II (240 MW) and Nimmo Bazgo (45 MW) - has been revised from Rs 1,724.79 crore and Rs 611.01 crore to Rs 2,080.82 crore and Rs 936.10 crore, respectively.
 
NHPC's Teesta Low Dam Project IV (160 MW) in West Bengal was sanctioned an amount of Rs 1,061.38 crore which got revised to Rs 1,501.75 crore.
 
At present, NHPC generates 5,702 MW of electricity from 17 hydroelectric stations in the country. It is also constructing 4,095 MW worth of projects.

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Cheyyur Ultra mega power project (UMPP) trips over environmental clearance...

 

The government's attempt at reviving investor interest in its flagship Ultra Mega Power Projects (UMPP) scheme after a four-year lull is headed south - quite literally. One of the two such newly-announced projects in Cheyyur village, 96 kilometre south of Chennai in Tamil Nadu, has been engulfed in a controversy spanning economic, social and ecological domains.

With the National Green Tribunal last month restraining the authorities from awarding the Rs 24,200 crore project, the future hints at a long-drawn battle between the protesting local inhabitants and the project proponent, Power Finance Corporation (PFC), which arranges clearances before such projects are bid out to companies.

The preliminary work on the Cheyyur UMPP began in 2006 with teams from the Central Electricity Authority, the power ministry's technical and planning wing, conducting site visits in Cheyyur, one of the four sites identified in the state for a UMPP project. A Special Purpose Vehicle called the Coastal Tamil Nadu Power Ltd was incorporated by PFC for obtaining pre-bid clearances in 2007. The environment ministry issued the terms of references for the Environment Impact Assessment (EIA) study for the main plant and a proposed adjoining captive port for coal imports in 2009 and 2010 followed by public hearings. The ministry's Environmental Appraisal Committee (EAC) gave its go-ahead, based on the EIA report, in May this year. PFC called for bids in September. However, the green tribunal stayed the award of project in October, and is currently hearing the parties.

Conflicting reports
The National Green Tribunal order came in response to a petition filed by the locals challenging the grant of environmental clearance for the project, alleging large-scale violation of norms. The petitioner, representing largely the fishermen community, claims that the green clearance was based on false information contained in the EIA report. Several facts and information in the report do not match ground reality, he says, including the site selection process, land requirement for the project, type of land appropriated, estimate of ecological resources in the area and livelihood loss for the local community. To further expose the alleged rot, NGO Community Environmental Monitoring (CEM) came up with a report titled "Science, Non-Science and the Dubious Role of 'Experts' in Environmental Due Diligence: A Case Study of Cheyyur UMPP". The report is a scathing indictment of how rules were allegedly bent and facts overlooked to grant clearance for the project. "The Cheyyur case exposes how the procedures under the EIA Notification of 2006 are rendered meaningless by corrupt consultants, uncaring project proponents, intellectually dishonest experts and crony regulators," the report claims.

The allegations are serious. But are they valid? Email queries to the ministry of environment and forest (MoEF), the power ministry and PFC remained unanswered. However, a PFC official said the bidding process was on as the NGT order has only restrained the final award and not the bidding process.

"We are confident we are on a strong footing. We will not award the project as directed by NGT until the final hearing is over," he said.

Business Standard has reviewed the main plant's EIA report, comprehensive EIA assessment of the captive port as well as minutes of the meetings of the EAC, apart from the petitions filed by locals.

EIA for the captive port - for which National Institute of Ocean Technology was the consultant - judges the project proposal on ecological parameters and gives a thumbs-up to the project on most counts. "The evaluation ... concluded that the project is not sited in an ecologically sensitive area," the EIA states. At another place, it notes that there are no mangroves, coral reefs or critical habitats in the area of the project or its vicinity. The reality, however, say the protester and the CEM, is different. The area has tidal mudflats, seagrass beds, mangroves and sand dunes, all of which are "ecologically sensitive" under the Coastal Regulation Zone Notification of 2011.

A seagrass, Halophila ovalis, and mangroves such as Avicennia marina and Rhizophora sp are well-documented in the Yedaiyanthittu estuary, one of the two estuaries close to the project site. "Both Rhizophora and Avicennia are ecologically and economically important as they contain bio-active compounds. They also provide crucial breeding grounds for aquatic animals," says Delhi University Professor Deenabandhu Sahoo, who has 20 years of research experience in marine biosystems. He adds that heat discharged from coastal power plants will destroy marine ecology as the government normally does not take recourse to artificial reef construction to help attract new flora and fauna in the event of such damage.

The minutes of the EAC meeting of May 2013, which recommended clearance for the project, states that the number of migratory birds in the Cheyyur lagoon is negligible. However, CEM insists about consistent visits by birds, including threatened migratory waterfowl, at the Cheyyur lagoon over the past decade (1, 491 in 2008 and 22,016 in 2009). In fact, the Yedainthittu-Kalvelli Tank Complex, south of the project site, is a declared International Bird Area.

Project site relocated?
Another serious allegation being levelled against the project proposal is that the site where the plant is going to come up was never visited or considered by the Central Electricity Authority team. "The power plant and ash pond of the current site are 1 km and 6 km away from the originally visited site. The original site was in Cheyyur village of Cheyyur taluk while the current site is in Vedal village of Cheyyur taluk," the CEM report states.

The EIA report for the project states seven reasons why Cheyyur was considered as the most suitable of the four sites identified for the power plant, the biggest being "minimum use of agricultural land". However, EAC noted in its meeting on 22 April 2013, that "land requirement will be 416.45 ha, out of which 342.62 ha are agriculture land, 9.83 ha are forest land and 64 ha are Poromboke and barren government land." Therefore, the EAC's own observation places the proportion of agricultural land for the project at over 82 per cent of the total land area. So, how did EAC fail to find fault with the site despite this discrepancy and gave its go-ahead for the project?

Another alleged discrepancy lies in the captive port EIA, which says that the shoreline at Panaiyur village which will house the port is stable, even as a study by the environment ministry's National Centre for Sustainable Coastal Management identifies the coast as "moderately eroding".

So, what went wrong when the authorities decided on the environmental go-ahead for the project? According to Shweta Narayan, CEM co-ordinator and the author of its report on Cheyyur, the project proponents have misinformed the MoEF and provided false data and documents. "They have hidden critical information that would have certainly influenced decision makers. The decision makers themselves are at fault as they have accepted all this false data and information without verification," Narayan says. She claims that EAC members did not do basic due diligence regarding the facts presented to them. "It is clear in the minutes of EAC Thermal's meetings in April 2013 that severe lacunae were pointed out in the project proponent's information. But, in May 2013, without discussing any of the previous issues raised, they recommended clearance."

The ambitious UMPP scheme could hold the key to the revival of the project activity in a sluggish economy. But this seems to have run into problems even before the project could take off. With Cheyyur's fishing community not willing to relent, the stakeholders are now keenly awaiting National Green Tribunal's next hearing in the case on 17 December.

THE PROJECT

• 4,000 Megawatt UMPP; first with a captive port
• Rs 24,200 crore estimated investment
• art of a scheme where the Centre puts on the block large clearance-ready projects
• Location near Cheyyur village, Kancheepuram district, Tamil Nadu

Timeline

• Dec 2006: CEA, PFC and state officials conduct site visits
• Jan 2007: PFC incorporates special purpose vehicle Coastal Tamil Nadu Power
• Sep 2007: TN energy minister gives approval to plant site
• 2009 & 2010: MoEF issues Terms of Reference for EIA for main plant and captive port
• July 2010: Public hearing for plant site starts
• Dec 2011: Public hearing for captive jetty, port and coal stocking yard begins
• Aug 2012: EAC approves plant
• Nov 2012: MoEF gives Coastal Regulation Zone clearance
• May 2013: EAC gives thermal approval
• Sep 2013: RFQ issued by PFC inviting bids

The problem

• Severe protest by locals and NGO Community Environmental Monitoring against the proposed main plant and captive port
• Protesters allege EAC approval was based on false and misplaced information in EIA report
• Petition filed by local fishermen allege the project would destroy livelihoods. National Green Tribunal stays bidding process

 

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Gundia Hydel Project in Karnataka faces obstacles due to the recent reports on western Ghats conservation...

 

The proposal to set up Gundia hydel power project of 200 MW capacity faces a bleak future with the Karnataka State Pollution Control Board (KSPCB) incorporating Dr K Kasturirangan Committee’s report on Western Ghats conservation retrospectively from April 17 this year.

The fate of former chief minister D V Sadananda Gowda’s proposed tyre manufacturing plant at Sullia also hangs in balance.

Based on the circular from the Ministry of Environment and Forest (MoEF), the KSPCB demarcated 17 villages, including 11 naxal-affected villages in Belthangady taluk, 11 villages in Puttur taluk and 17 villages in Sullia taluk as Ecologically Sensitive Areas (ESA).

Under the ‘no-tolerance’ policy, industries in red category (100 such red industries have been identified by the Central Pollution Control Board and KSPCB) will not be allowed in these 45 ESAs. “With power generation plants and bio-mass power plants above 25 MW capacity being grouped in red category, it is curtains down on the Gundia power project that has a  capacity of 200 MW,” sources in the regional KSPCB told.

However, eight hydel power plants operating in the Western Ghats, with each unit’s capacity being less than 25 MW, face no threat of eviction as they are listed in the green category by the MoEF.

“If Gowda’s proposed tyre manufacturing factory uses coal-fired boiler, then it cannot be permitted in ESA,” KSPCB officials said.

The regional KSPCB in Mangalore, barring one instance, has not received any applications from entrepreneurs to set up red category industries in ESA.

In one instance, a rubber recycling factory in Nelyadi was relocated to Golithattu, following protests by locals. With Golithattu in Puttur taluk being identified as an ESA, officials have sought clarification from the KSPCB chairman.  Sources said the Board was likely to issue permission for the factory as the unit was listed in orange category.

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Bhushan Steel's 256 MW thermal plant in Orissa was set without pollution control board permission...

 

The Orissa State Pollution Control Board (OSPCB) has said the Bhushan Steel Limited (BSL) set up a 256 MW power plant on its premises without its permission. During an inspection on Monday, an OSPCB team found BSL was running the plant "clandestinely".

The pollution watchdog said the board had on May 6 rejected BSL's application to establish the power plant near blast furnace-II, where the explosion took place. "We found BSL was producing power by running one of the three boilers of the power plant. The power plant was set up to support blast furnace-II. It had installed two more boilers, but was not running them," a senior scientist of OSPCB said.

"We will not only serve closure notice to the power plant, but will also seal its cold rolling mill. The blast furnace-II was meant for expansion of integrated steel plant from 3.1 mtpa to 5.6 mtpa. This will also have to be stopped," another official said.

In September, the board had served closure notice to the 300 MW Bhushan Energy Limited (BEL) for violating air and water pollution control norms. "BEL and BSL have been served closure notices on six occasions in the last two years," another official of the board said.

A workman was burnt to death in an explosion during commissioning of a slag granulation plant (SGP) in blast furnace-II of the factory around 9.30 am on Wednesday. Earlier, the board had revealed that although BSL had obtained permission for installing blast furnace-II, it never got consent for starting operation, which is mandatory.

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Lack of clearances, stranded projects and helpless power ministry...

 

If the number of power projects getting stranded due to lack of clearances is any indication, the Union Power Ministry is slowly but surely becoming powerless much to the chagrin of project developers. With its intervention with other ministries and the state governments having no impact, the Power Ministry has now approached the Cabinet Committee on Investment (CCI) for supporting in expediting clearances in respect of some power projects. Indeed the amount at stake is too huge (approximately Rs. 40,000 crore) to be ignored.

 

Some of the power projects facing delay due to lack of clearances are listed below:

Meenakshi Energy’s 1,000 MW Nellore power project:
While getting environment clearance (EC) is a mammoth task, Meenakshi Energy has committed a blunder by allowing it to expire. EC granted for the second phase of Meenakshi Energy’s 1,000 MW thermal power project located in Nellore district of Andhra Pradesh expired on July 1, 2013. While Expert Appraisal Committee (EAC) has recommended extension of validity period of the EC in its meeting held on May 20, 2013, formal letter if consent from the MoEF is awaited. The Ministry of Power is knocking at the doors of CCI to seek its support to secure the extension. Meenakshi Energy’s first phase of the project with a capacity of 300 MW is already under operation.

Sagar supercritical thermal project:
Universal Crescent Power Private Limited who is implementing 1,980 MW imported coal fired power plant at an estimated cost of Rs. 8,600 crore has completed the land acquisition process and has signed Fuel Supply Agreement as well as PPA (Power Purchase Agreement). However, the company is unable to cross the last hurdle, that is, the EC and Coastal Regulation Zone (CRZ) Clearance. Sagar Supercritical Thermal Project at Nayachar Island, in District Purba Medinipur, West Bengal is in a spot as the Expert Appraisal Committee (EAC) feels that the site selected for the project is ecologically fragile and sensitive. EAC in its meeting held September, 19 felt further deliberation is needed to accept the suitability of the site for setting up the project. Ministry of Power has reportedly approached the CCI to take up the matter with the MoEF.

Machhakata-Mahanadi coal block:
Machhakata-Mahanadi Coal Block, allotted in 2006 for captive mining to MAHAGENCO and Gujarat State Electricity Corporation Limited (GSECL), has been delayed due to a slew of pending clearances from the Odisha government. Mahaguj Collieries Ltd is the joint venture formed between Mahagenco and GSECL to mine and share the production in 60:40 ratio. Mahagenco was supposed to use the coal from the block for generating power from Parli (250 MW), Chandrapur (1000MW), Koradi (1980 MW), Bhusawal (660 MW) and Dhopave (1980 MW) whereas GSECL will use it for Wanakbori (800 MW), Ukai (500 MW), Dholera (1600 MW) and Sinor (1600 MW). MCL is also planning 2,500 MW (10X250MW) thermal power project based on wastes from coal washeries.

The Odisha government is demanding 25% free power from thermal power plants and 33% from plants generating power from rejects of washed coal. In fact, the Odisha government has restricted land acquisition outside coal block area for supporting infrastructure and over burden dumping which is adversely impacting Mine Plan for development of the coal block. Also there is strong resistance from local residents to part with their land. Development of mining block has made no progress so far as the Odisha government has not yet issued Mining Lease and Environment and Forest clearances are also pending. Even land acquisition has not made any progress. Repeated requests from the Power Ministry have had little impact on the state government which has forced the former to approach CCI for intervention.

Hinduja National Power Corporation’s 1050 MW Vishakhapatnam thermal power project:
Foundation stone for 2×525 MW Vishakhapatnam thermal power project by Hinduja National Power Corporation Limited was laid in 1994 and PPA was also signed in the same year but the project is yet to see the completion till date. The project has crossed all the hurdles but one, that is, Coastal Regulation Zone (CRZ) clearance. According MoEF the state government has not yet submitted report regarding alleged violation of the CRZ by the developer. Rs. 5,545 crore project for which FSA has already been signed is likely to be commissioned in March 2014. But the CRZ clearance is pending with the MoEF for a long time and now the Ministry of Power has sought the direction of the CCI in the matter.

1,080 MW Rajwest pithead thermal power project:
For the 1,080 MW Rajwest Pithead Thermal Power Project in Rajasthan the main hurdle is in the form of enhancement of capacity of linked mines. The Rajwest 1,080 MW pithead TPP has been allocated two lignite mines, Kapurdi and Jalipa, of which Kapurdi mine is currently operational at 3 MTPA. This capacity, however, is sufficient to run the plant only upto October, 2013. Thus there is an urgent need to get the mine plan and mine closure plan approved. Ministry of Power wants the CCI to seek Ministry of Coal’s intervention and get the approval without further delay.

Also the mining project need environment clearance as the capacity expansion is more than 25%. Though the EAC has cleared the project, Ministry of Power wants CCI to intervene with the MoEF to expedite the matter. In case of Jalipa mine, land acquisition issues are holding back the project. Also transfer of mining lease from Rajasthan State Mines and Minerals to Barmer Lignite Mining Company Limited yet to take place.

Fatehpur coal block:
In case of SKS Power Generation Chhattisgarh Limited’s 1, 200 MW project, issue of Prospecting License (PL) is pending for Fatehpur Coal Block at Chhattisgarh state government level. The state government reportedly has demanded firm coordinates while the company had sent approximate coordinates from CMPDI (Central Mine Planning and Design Institute). Ministry of power has approached the CCI to take up the matter with the state government to expedite the issue of PL.

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Environment ministry has clear Himachal Pradesh’s proposal on clean development lead the state to move closer to World Bank’s loan of Rs. 1000 Crs…

Power India found that MoEF has cleared the Himachal Pradesh Government’s proposal for environmentally sound and carbon-smart growth in key economic sectors including tourism and hydro-power which facilitated the state government to move a step closer for getting Rs. 1,000 Crs Development Policy Loan (DPL) from World Bank.

 

Ministry of Environment and Forests (MoEF) had initially raised objection regarding issues related to low carbon development initiatives, which was aimed at reducing Greenhouse Gases (GHG) emissions, it finally gave a green signal to the Ministry of Economic Affairs to begin tripartite negotiations with World Bank and Himachal Pradesh.

 

The loan is a first of its kind foreign assistance for environmentally sound and carbon-smart growth in key economic sectors including tourism and hydro-power.

 

Mr. Sudripto Roy, the Additional Chief Secretary (Forest & Environment) ha said:

“This is a positive development for Himachal Pradesh. We have provided a revised proposal to the MoEF. The negotiations on availing at least the first instalment of the loan can begin next month”

 

The World Bank team, which had visited the state in January 2012, and held discussions with secretary-level officers of all the departments, had agreed in principal to sanction the loan.

 

Some of the sectors taken up under the major policy matrix for green initiatives include hydro-power development, direct cash benefits to project affected families in hydro sector, low carbon rural development, tourism growth, agriculture and horticulture development, environment protection and adaptation to climate changes.

 

After having already taken a lead in the environment protection measures, Himachal Pradesh has set a target to become the country’s first carbon neutral state by 2020. The loan will enable sustainable management of natural resources and heritage with a focus on forests, wildlife, wetlands, livestock, mining, fisheries, waste disposal and architecture. Last year, the state had signed a pact with WB to generate carbon credits of Rs 20 crore for 20 years from Mid-Himlayan ‘bio carbon projects’ in 10 districts.

 

 

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13 Projects of Coal India awaits environment clearances…

Thirteen coal mining projects of Coal India Ltd are pending with the environment and forests ministry for approval, Environment and Forests Minister Jayanthi Natarajan told parliament Tuesday.

 
"These projects have not been accorded environmental clearance as on date, due to non-submission of complete information," Natarajan said in a written reply to a question in the Rajya Sabha.

She said the ministry has asked Coal India to provide adequate information on critical environmental parameters so that the clearance would be given the project.

The 13 projects that are awaiting environmental clearance include six new projects and six projects for expansion.

"They are awaiting environmental clearance for varying durations, under the Environmental Impact Assessment (EIA) notification 2006," she said.

Environmental impact assessment notification 2006 provides for a time limit of 105 days for taking a decision after receipt of complete information from the project's proponents.

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