Featured Articles...

August 26, 2011

India targets over 50,000 Mw of Nuclear Power by 2030…

India plans to import light water reactors from Russia, US and France to boost its nuclear energy generating capacity to 50,000-60,000 Mw by 2030, said former Atomic Energy Commission (AEC) chairman M R Srinivasan.

Delivering the first Homi Sethna Memorial Lecture on ‘Future of Nuclear Power after Fukushima’, the nuclear scientist said  the country would need around 1,300 Gw of electricity by 2052.

Forty per cent of this requirement is expected to come from coal-based plants, 40 per cent from nuclear facilities and 20 per cent from renewable sources like solar or wind, he said.The present power generating capacity of India’s 20 nuclear units is small, most of them having a capacity of up to 220 Mw. The indigenously designed Tarapur 3&4 are the largest with a capacity of 540 Mw, he said. In a couple of months, the first 1,000 MW nuclear plant, built with Russian help, will start at Kundankulam, Tamil Nadu.

In last one year, the country has started construction of four indigenously-designed reactors of 700 Mw each — two each at Kakrapar, Gujarat, and Rawatbhata, Rajasthan. There are plans to have similar reactors in Madhya Pradesh, Haryana, and possibly even at Kaiga, Karnataka, Srinivasan said.

‘China has the biggest nuclear plant construction programme at present,’ Srinivasan said. ‘While they will review their safety practices after the Japanese experience, they will probably continue to develop nuclear power in a big way.’

Since availability of electricity is a serious constraint for both industry and agriculture, India will build 800 Mw supercritical coal-fired units for many more years. ‘But if we have to cut down carbon emissions, we must build a significant nuclear capacity,’ he said.

India is currently producing a small quantity of enriched uranium. ‘We expect to be in a position to build a commercial uranium enrichment plant between 2020 and 2030,’ Srinivasan said. Explaining the slow-paced nuclear power development in India, Srinivasan said the country had limited uranium. ‘Not only is the quantity small, the ore concentration is low, making extraction more costly here,’ he said.

Read More...

Suzlon arm REpower gets 50 MW wind turbine order in Canada…

image According to reports, Suzlon Energy‘s German unit REpower Systems has won a contract from WindWorks Power Corp to deliver 25 wind turbines for five projects in Ontario, Canada.

The wind farms will generate total output of over 50 mega watt, as per the Suzlon’s statement on Thursday.

The turbines are scheduled to be delivered in the spring of 2013 and put into operation in summer of 2013, it said.

Andreas Nauen, REpower’s CEO said the company has now been able to conclude contracts for total of eight wind farms in Ontario.

Just last month REpower had announced plans to deliver 15 turbines for projects run by WindWorks in Ontario, the company said.

Read More...

Guidelines for bidding of 350 MW Solar PV projects under Indian Solar Mission released…

image

 The guidelines for bidding of 350 MW of Solar PV projects under National Solar Mission in India has been released.

Some of the key highlights of the guidelines for developers:

Capacity

  • The capacity announced tentatively is up to 350 MW and the capacity available will be disclosed at the time of short-listing.
  • The Project capacity shall be at least 5 MW + 5% in case of Solar PV Projects and the maximum capacity of the Project shall be up to 20 MW± 5%. The plant capacity shall remain in multiples of 5 MW.
  • The total capacity of Solar PV Projects to be allocated to a Company including its Parent, Affiliate or Ultimate Parent-or any Group Company shall be limited to 50 MW.
  • The Company, including its Parent, Affiliate or Ultimate Parent-or any Group Company may submit application for a maximum of three projects at different locations subject to a maximum aggregate capacity of 50 MW.

Net Worth

  • Net Worth of the company should be equal to or greater than the value calculated at the rate of Rs 3 Crore or equivalent US$ per MW of the project capacity upto 20 MW.
  • For every MW additional capacity, beyond 20 MW, additional net worth of Rs. 2 Crore would need to be demonstrated.
  • The computation of Net Worth shall be based on unconsolidated audited annual accounts of the company.

Shareholding Pattern

  • The Company developing the project shall provide the information about the Promoters and their shareholding in the company to NVVN indicating the controlling shareholding before signing of the PPA with NVVN.
  • No change in the shareholding in the Company developing the Project shall be permitted from the date of submitting the RfS till the execution of the PPA.
  • However, this condition will not be applicable if a listed company is developing the Project.
  • After execution of PPA, the controlling shareholding (controlling shareholding shall mean more than 50% of the voting rights) in the Company developing the project shall be maintained for a period of (1) one year after commencement of supply of power. Thereafter, any change can be undertaken under intimation to NVVN.

Financial Closure

  • The Project Developer shall report Financing Arrangements within 210 days from the date of signing Power Purchase Agreement.
  • Developer would furnish within the aforesaid period the necessary documents to establish that the required land for project development is in clear possession of the Project Developer (minimum 2ha per MW) and the requisite technical criterion have been fulfilled.
  • The Project Developer would also need to specify their plan for meeting the requirement for domestic content.
  • In case of delay in achieving above condition as may be applicable, NVVN shall encash performance Bank Guarantees and shall remove the project from the list of the selected projects.

Part Commissioning

  • Part commissioning of the Project shall be accepted by NVVN subject to the condition that the minimum capacity for acceptance of part commissioning shall be 5 MW and in multiples thereof.
  • The PPA will remain in force for a period of 25 years from the date of acceptance of respective part commissioning of the project.

Domestic Content Requirement

  • The US has been making a lot of noise about the domestic content requirement and we have documented that in detail in our numerous essays including most recently last month when a  US trade official who asked not to be named told an Indian news paper that the United States Trade Representative’s office has recently submitted comments to the government of India expressing its concerns about the “trade-restrictive domestic content mandates”.
  • However for the mission, it was mandatory for Projects based on crystalline silicon technology to use the modules manufactured in India in the first batch. For Solar PV Projects to be selected in second batch during FY 2011-12, it will be mandatory for all the Projects to use cells and modules manufactured in India. PV Modules made from thin film technologies or concentrator PV cells may be sourced from any country, provided the technical qualification criterion is fully met.
  • Commenting on the guidelines, Madhavan Nampoothiri, Principal consultant Solar of EAI told Spark, “Bidders are likely to resort to more scientific due – diligence before offering the discounts. Serious players are expected to come in with scientific tools and techniques to determine the right tariff that can win in the bidding process.”
  • “ We now have limited field data also available that needs to be factored into the discounts in bids,” he added.
  • Consulting companies like EAI have developed their niche in renewable energy and are well qualified to provide such sophisticated bid advisory services that goes beyond regular financial or project analysis.
  • Developers can download the complete set of documents for bids using the following links…
Read More...

Monthly Report on Indian Power Sector – July 2011

Spark has uploaded the Monthly update of July 2011 on Indian Power Sector by CEA for the Power Professionals.

The report is embedded below. Currently it is not in downloadable format. To download the same kindly contact Spark.

Monthly report on Indian Power Sector by CEA
Read More...

GVK Power to buy Australian Coal Mines for $2.2 billion…

image GVK Power & Infrastructure has reached a deal to buy two coal mines in Australia, taking a heavy bet which has the potential to put an enormous strain on its finances.

Spark heard on the street that the GVK Power & Infrastructure,  Hyderabad based company is planning to buy coal mines of Australia based firm Hancock Prospecting. The deal will cost around $2.2 billion (about Rs 9,900 crore) and will include mines and the transport infrastructure which will be needed to move the coal at least 500 km to a port.

This move of GVK will assist the company for steady and secure access to the fuel for all its future planes in power sector and will be beneficial for the company as in India the fuel supply gets crimped by environmental holdups and troubles in the Maoist dominated coal producing states.

The deal will give GVK steady and secure access to the fuel for its plans in the power sector as supply in India gets crimped by environmental holdups and troubles in the Maoist-dominated coal-producing areas.

The cost of Coal Mines Alpha coal and Kevins’s corner will be around $1.3 billion and the associated losgistics will be around $900 million.

 

GVK has tied up with ICICI Bank, Standard Chartered Bank and Axis Bank for funding the transaction with Ernst & Young as an advisory.


Hancock is run by Gina Rinehart, Australia's richest woman. The Hancock sale was initiated through an auction in which the bidders included GMR Infrastructure, JSW Energy and Essel Mining of the Aditya Birla Group.

GVK, which operates the Bangalore and Hyderabad airports, three gas-based power projects and the Jaipur-Kishangarh expressway, ended the 2010-11 financial year in March with sales of 1,900 crore and net profit of 155 crore. Its share price has fallen by more than two-thirds in the last 52 weeks, valuing the company at 2,600 crore. On Thursday, the GVK stock fell 4.6% to 16.60.

The company, which has debt of about 5,500 crore, is building a 540 MW coal-fired power station in Punjab.

The two coal mines that GVK will buy have combined reserves of 7.6 billion tonnes and are located in the Galilee Basin in Queensland province. They can produce 30 million tonnes of coal annually over a life of 30 years.

The deal, when it is signed, will be the third major acquisition by an Indian company of Australian coal mines as local firms venture overseas to overcome supply problems at home.

Adani Enterprises paid about 12,000 crore to Linc Energy and Lanco Infratech agreed to buy the holdings of Griffin Coal earlier this year for nearly 3,500 crore. India is likely to import nearly 100 million tonnes of coal this year.

 
The power sector is one of the largest consumers of the fuel, accounting for 71% of demand, which is met through linkages with state-run Coal India and Singareni Collieries.

Read More...

August 25, 2011

Tata Power to invest Rs 1,000 Cr to lay cables in Mumbai…

image Tata Power, India's largest private power generation company is planning to lay its own distribution cable network in the Mumbai with the investment of  around Rs 1,000 crore over the next three years.

Currently, Tata Power serves around 8 lakh consumers using the distribution netwok of BEST and Reliance Infrastructure. For this, Tata Power is charged wheeling charges by Reliance Infrastructure and BEST which it has to recover from its consumers.

 

Earlier, Tata Power was not allowed to lay parallel network in the Distribution area of Reliance Infrastructure, however after the Supreme Court order they are allowed for the same. Tata Power has put up a proposal to the MERC for laying down the network.

Meanwhile, Spark found that in a recent order of the MERC, the regulator had granted Reliance Infrastructure the license to distribute electricity in the suburbs for 25 years as the company's license was expiring on August 15.

The MERC had rejected the proposals of four other bidders, including Torrent Power, Lanco Infrastructure, MSEDCL and Indiabulls, saying they did not have their own networks in place and in "public interest" it granted Reliance Infrastructure the license.

Read More...

Spark’s Update on Reliance Power…

image Reliance Power is in a better position than peers to generate cheaper power, because of high captive coal reserves, lesser logistics expense due to proximity of mines to plants and low-cost debt financing.

  • The company has one of the highest captive coal reserves - 65 million tonne at peak production - most of which has got environment clearances.
  • Most power plants are close to captive mines, thus lowering cost of logistics.
  • Also, the company has raised debt at a much lower rate than industry average.

These factors would enable Reliance Power to produce power at cheaper rates, lowering offtake risk from financially weak state electricity boards.

 
The company, which has 600 MW operational power plant at Rosa in UP, is operating at a high capacity utilization when peers are struggling due to lack of fuel supply and buyers.
For the quarter ended June, Reliance Power, a part of the ADAG, reported a 15% rise in sales, 28% in operating profit and 51% in net profit. Plant load factor, or capacity utilisation, was 91% and plant availability factor, or plants available for production, was 94%, much higher than industry average.


The company is also in a better position with regards to its Indonesian coal mines. Due to Indonesia's tax levy, coal-linked projects of companies such as Reliance Power (Krishnapattam project), Tata Power,

Adani Power would become less profitable. As the Krishnapattam project is in early stages, Reliance Power has stalled all its construction activity for which it will have to pay a penalty of 300 crore, which is less than 2% of the total project cost. If the company doesn't go ahead with this project, it would still be able to sell coal from its Indonesian mines, which is very unlikely for others as they are in advanced stage of project development. Indonesia is among India's largest coal suppliers.

Timely commissioning of its upcoming projects can rerate the stock. The company aims to expand capacity to 5,000 MW by December, 2012 from 600 MW and its plans are on track. At the current market price of 84, Reliance Power's scrip trades at a valuation little higher than its peers and this premium is justified.

Stock prices of Reliance Power on August 25, 2011. (Courtesy Economictimes.com)

 

BSE
82.75
-00.78%
-00.65
Vol:501252 shares traded
NSE
82.80
-00.48%
-00.40
Vol:1567353 shares traded
 
 
 
 
 
 
 
 
Read More...

Jharkhand State PCB shuts 22 mines of Coal India…

image

According to news, The Jharkhand State Pollution Control Board has ordered shutting down 22 open-cast mines of Coal India world’s largest miner.

A subsdiary of Coal India, called Bharat Coking Coal Ltd (BCCL), is having around 22 open cast mines in Jharia in Dhanbad District, Jharkhand. The output of these mines account for a 20% of output of Bharat Coking.

Spark learnt that on August 24, the Jharkhand State Pollution Control Board has order to shut down these mines and ordered the company to get mandatory clearances from the Union ministry of forests and environment.

 

As per some unofficial sources, Coal India reportedly failed to respond to a show-cause notice issued to it by the Jharkhand body.

Spark estimates that the closure of 22 out of Bharat Coking’s 103 mines can bring down production by about 35,000-40,000 tonne a day.

Out of Coal India’s 2010-11 production of 424.50 million tonne, Bharat Coking contributed 29.29 million tonne, the only subsidiary among its eight arms to exceed target.

 

Read More...

Essar Power to terminate 800 MW PPA with GUVNL…

image Spark learnt from the reports that the Essar Power Limited has issued one week notice for terminating its PPA singed with GUVNL for supplying 800 MW of Power for next 25 years.

Essar Power has earlier signed a PPA with Gujarat Government for supplying 800 MW for Power for next 25 years at the tariff of Rs. 2.80 per unit. However, it seems that currently Essar Power does not want to continue with the arrangement and has issued a one week termination notice to GUVNL.

 

As per the Essar Power statement,  "This (PPA termination) decision follows the failure by GUVNL to satisfy certain conditions under the PPA within the required timescale."

However, as per the Spark’s analysis, the increasing imported coal prices have made many power projects (including Essar’s) unviable. Essar Power is commissioning 1320 MW of imported coal based project at Salaya in Saurashtra region of Gujarat.

Meanwhile, Essar Power stated that the company remains committed to the Salaya power project and will be reviewing its options with regard to power sales. Proposed project is currently scheduled to commission in Q1 2014.

 

Read More...

Adani Power to raise $1.8b abroad by September…

image According to the Market Buzz, Gujarat based Power major Adani Power is on the verge of raising foreign currency funds of USD 1.8 Billions (Rs. 8232 Crs) by September 2011 .  

This move of Adani Power is quite significant considering the present time when most firms in India face difficulties in raising funds abroad due to unfavorable economic conditions and tight liquidity. Further, the move to take loans from abroad comes at a time when Indian banks have reached the limit of exposure to power sector debt and are wary of the credit risk involved in power projects that use imported coal, besides a fall in merchant power tariffs that could upset revenue and profit projections of power producers.

As per the sources, the loan of around USD $800 million (Rs 3,658.70 crore) has been raised at interest rate of 350-360 basis points above Libor.

 

Spark believes that the funds would be used to finance the Mun­dra Power Project and part-finance the Adani Power’s Maharashtra project where the company is implementing a 1,980 mw thermal power project in Tiroda.

The 4,620 mw project in Mundra is on track and the company has already commissioned 2,640 megawatts, including four units of 330 mw each and two units of 660 mw each with supercritical technology. The remaining 1,980 mw is under construction and is expected to be operational by the end of this financial year. The company also plans to synchronise two more units of 660 mw each, based on supercritical technology, at Tiroda this year.

According to Spark, Adani Power is comfortably placed of achieving about 6,000 mw operational capacity in 2011-12 out of the total planned capacity of 16,500 mw that is under development across Gujarat and Maharashtra.

Read More...