Essar expects big play in power plants with Foster Wheeler tech…

With a technology-transfer agreement with the US power major Foster Wheeler under its belt, Essar Projects expects a large play in India in what is touted as the ‘future technology for India's power sector'.

The technical agreement is for thermal power boilers of the ‘circulating fluidised combustion bed' type. CFBC is said to be the future of India's power sector. It is impossible to give up coal-based plants altogether, given the preponderance of coal in India's power sector.

And if coal has to be used, it had better be through CFBC route, says Dr Arjun Bharatan, Senior Vice-President, Plant Technologies Group, Essar Projects Ltd.

Eco-friendly

CFBC boilers are environment-friendly because they do not let out harmful gases. Harmful substances such as sulphur are mixed with limestone and removed. But the attractiveness of CFBC boilers today is more due to their ability to handle any kind of fuel. This is a big advantage because, for example, when coal prices are high, it is possible to use a blend of coal and some other low cost fuel such as lignite.

The CFBC boilers cost about 10 per cent more, but their fuel flexibility is a big advantage, says Mr William Rajkumar, Vice President – Stem Generators, Plant Technologies Group, Essar Projects.

Fuel flexibility

If India adds 75,000 MW of thermal power capacity, it would need 3 billion tonnes of coal. Flexibility to mix or switch fuels, depending upon their market prices, is said to be a huge advantage.

With Foster Wheeler's backing, Essar Projects offers high a combination of CFBC and supercritical boilers.

In India, the biggest operating CFBC boilers are of 135 MW (though Neyveli Lignite Corporation is close to commissioning a 250 MW plant). The biggest operating CFBC-supercritical plant is the one that was set up by Foster Wheeler at Lagisza in Poland. But the Samcheok Green Power plant of the Korean Southern Power Company, is putting up four units of 550 MW each.

These CFBC-supercritical plants, expected to begin generation in 2015, are also of Foster Wheeler technology.

Under the technology licence, Essar is obliged to buy the pressure parts from Foster Wheeler for the first three projects. Foster Wheeler is likely to supply the components from its plant in China.

For the subsequent projects, Essar is free to buy from any of the Foster Wheeler-approved vendors.

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GERC ropes in GEDA to monitor RPO and issue RECs…

The Gujarat Electricity Regulatory Commission (GERC) has directed the power bodies to take preventive actions to minimize the accidents. The regulator suggested electricity distribution companies to focus on safety and form safety cells to give immediate attention to the same. According to the GERC directive, power bodies of the state will form a committee to monitor accidents in electricity distribution companies.

Ninth meeting of the Co-ordination Forum, consisting of stakeholders of state's power sector, was held on Wednesday in Ahmedabad. Among other crucial decisions, the commission designated Gujarat Energy Development Agency (GEDA) as a state nodal agency to function in accordance with the provision of the Central Electricity Regulatory Commission Regulations' terms and conditions for recognition and issuance of Renewable Energy Certificate for Renewable Energy Generation.

GEDA is also asked to monitor the renewable power purchase obligation on regular basis and submit the report to the Commission quarterly basis. GERC circulated proposed guideline for signing of power purchase agreement for power projects and renewable energy projects and sought the views from the participants. GERC also discussed the paper on proposed solar tariff for the new control period 2012-15, assessed the impact of the last tariff orders of electricity distribution companies and reviewed their standard performance.

The committee for safety, to be chaired my the managing director of Gujarat State Electricity Corporation (GSEC), will consist members from four state owned electricity distribution companies, three private sector power ventures and Kandla Port Trust. The committee will analyse the accident data of past five years on quarterly basis and the report will be submitted in the next co-ordination meeting.

Meanwhile, a committee constituted by the commission submitted and discussed the report on 'Issues of Right Way, safety and coordination amongst the various service providers for creation and maintenance of infrastructure'.

The participants, representing different power companies, also discussed the status of transmission projects associated with generating stations and renewable source projects including proposed Solar Park of the government of Gujarat, read the media statement from the regulator. GERC members, chief electrical inspector, representatives from power bodies and affiliated state agency attended the meeting.

During the meeting, apex state power utility Gujarat Urja Vikas Nigam Limited, GSEC and GEDA officials made a presentation on power sector scenario in Gujarat.

Ninth meeting of the Co-ordination Forum, consisting of stakeholders of state's power sector, was held on Wednesday in Ahmedabad. Among other crucial decisions, the commission designated Gujarat Energy Development Agency (GEDA) as a state nodal agency to function in accordance with the provision of the Central Electricity Regulatory Commission Regulations' terms and conditions for recognition and issuance of Renewable Energy Certificate for Renewable Energy Generation.

GEDA is also asked to monitor the renewable power purchase obligation on regular basis and submit the report to the Commission quarterly basis. GERC circulated proposed guideline for signing of power purchase agreement for power projects and renewable energy projects and sought the views from the participants. GERC also discussed the paper on proposed solar tariff for the new control period 2012-15, assessed the impact of the last tariff orders of electricity distribution companies and reviewed their standard performance.

The committee for safety, to be chaired my the managing director of Gujarat State Electricity Corporation (GSEC), will consist members from four state owned electricity distribution companies, three private sector power ventures and Kandla Port Trust. The committee will analyze the accident data of past five years on quarterly basis and the report will be submitted in the next co-ordination meeting.

Meanwhile, a committee constituted by the commission submitted and discussed the report on 'Issues of Right Way, safety and coordination amongst the various service providers for creation and maintenance of infrastructure'.

The participants, representing different power companies, also discussed the status of transmission projects associated with generating stations and renewable source projects including proposed Solar Park of the government of Gujarat, read the media statement from the regulator. GERC members, chief electrical inspector, representatives from power bodies and affiliated state agency attended the meeting.

During the meeting, apex state power utility Gujarat Urja Vikas Nigam Limited, GSEC and GEDA officials made a presentation on power sector scenario in Gujarat.

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AP power sector gets Rs 1,604 cr from Centre…

The Andhra Pradesh government has directed all the distribution companies (discoms) to bring down aggregate technical and commercial losses to below 15 per cent in major towns in the state.

To achieve this target, the discoms have been asked by the state energy department to fully gear up for the implementation of the Re-structured Accelerated Power Development and Reforms Programme (R-APDRP) meant for this purpose, within the schedule period.

Dinesh Kumar, principal secretary (energy), who reviewed the progress and performance of APEPDCL on Saturday, said that the Centre had sanctioned Rs 1,604 crore under Part-A and Part-B of the R-APDRP scheme to achieve the target.

With the investment of Rs1,604 crore the state government is expected to take up construction of numerous new substations, laying of new lines, renovation of old substations and lines, replacement of old electro-mechanical meters with high quality static meters, providing automatic meter reading instruments to the meters near distribution transformers (DTRs) and high-tension services, apart from establishment of a data centre, a disaster recovery data centre and a centralised customer care centre in the discom headquarter, a release said.

The state government has requested the power ministry to extend the scheme even to towns with population of 10,000 instead of the Centre’s criteria of 30,000 under Part-A of R-APDRP.

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China Light Power project likely to be operational by 2012…

The 1320 MW (2X 660 MW) coal based super critical thermal power project of China Light and Power India at Jhajjar in Haryana is expected to be operational between January and March 2012.

According to sources, headquartered in Hong Kong, China Light and Power is one of the largest power companies in Asia Pacific with interest in over 50 generation, transmission and distribution assets in Hong Kong China, the Philippines, Australia and others.

According to Kolkata headquartered power sector EPC contractor Techno Electric & Engineering Company Ltd the commissioning of the transmission line from Jhajjar to consumption centres at Rohtak and Sonepat will be over in December. The transmission project is set up by KT Transco Pvt Ltd an SPV created by Techno (49%) and Kalpataru Power Transmission Ltd (51%).

The INR 450 crore transmission project generated an EPC business of INR 210 crore to Techno. This is above the INR 54 crore annuity income expected for operating the transmission line for 25 years against an equity contribution of INR 38 crore.

As per Mr PP Gupta MD of Techno, “We are expecting the construction of the first 660 MW unit of CLP to be over soon after the commissioning of the transmission line.”

The INR 700 crore EPC major has recently forayed into wind power generation and completed commissioning of 104 MW capacity in Tamil Nadu through its subsidiary Simran Wind Project.

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Power cuts in all sectors…

Continuous dry spell and delayed Kharif season has forced the energy sector to continue power cuts on almost all sectors of the society _ domestic, agricultural and industrial _ to manage the gap between supply and demand. At present, the power shortfall stood at around 25 mu (million units) per day.Keeping in view the forthcoming Rabi season, the Kiran Kumar Reddy government has already placed orders with power exchanges and central generating stations to purchase up to 1,200 MW of power per day between January and May 2012 to avert power crisis during Rabi. As on date, about 700 MW of power per day is being purchased at an average price of ` 4.50 per unit to meet the demand.According to APTransco chairman and managing director Ajay Jain, the state is experiencing power shortage of about 1,000 MW (about 25 mu) each day.

The Bhoopalapalli power plant (Kakatiya thermal power unit) of 500 MW capacity, has stopped functioning since October 7. Reduction in gas allocation by RIL has resulted in shortage of 250 MW of power and NTPC Simhadri plant is generating 650 MW as against its full capacity of 1,000 MW.

On the other hand, the hydel generation stood at zero level due to nil inflows into the Srisailam and Nagarjunasagar reservoirs. Depletion of ground water and continuous dry spell (drought conditions) since August have resulted in an increase in the power demand to protect standing crops.

Delayed Kharif due to delay in seed sowings has also shown its impact on the power demand. At present, the power sector is able to supply up to 225 mu per day as against the demand of around 250 mu.Ajay Jain is hopeful of a fall in the demand for power by January 2012 due to the end of the Kharif season.

The overall power demand is expected to come down during winter. At present, the shortage of power of about 25 mu per day is being managed by imposing power cuts on the domestic sector _ for two hours in Hyderabad, four hours in district headquarters, six hours in municipalities and towns and eight hours in mandals. Besides, the oneday power holiday for industries is being continued in addition to oneday weekly off by industrial units.

Steps have been taken to ensure seven hours of power supply to the agricultural sector to protect the standing crops. And then, unscheduled power cuts depend on grid frequency.

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Power sector requires 6.6 lacs manpower…

India''s power sector, which has embarked on ambitious capacity addition plans, is projected to require more than 6.6 lakh additional manpower during the 12th Five-Year Plan (2012-17).

Grappling with severe power shortages, the country expects to see the addition of about 1,00,000 MW of generation capacity during the 12th Plan, even as many existing projects are running behind schedule due to various factors, including fuel supply issues.

"The proposed capacity addition during the 12th Plan is about 1,00,000 MW. This capacity addition and associated T&D network is likely to lead to the additional requirement of around 6.6 lakh manpower," according to a parliamentary panel.
The total projected requirement includes engineers, supervisors, skilled and semi-skilled workers, among others, for construction, as well as operation and maintenance activities.

In its recent report, the Parliamentary Standing Committee on Energy said operations and maintenance activities alone would require about 6.12 lakh people during the 2012-17 period.

During the same period, the manpower requirement on the construction side is estimated at around 49,000 people.
About 59,000 engineers would be needed for construction, as well as operation and maintenance activities, in the power sector.
As per the report, there would be a requirement of 93,000 skilled workers and 1,00,000 semi-skilled people during the 12th Five-Year Plan.

The power sector is already facing talent crunch, which has also resulted in rising attrition.

In the current Five-Year Plan, ending March, 2012, the manpower requirement is pegged at 10,00,000 people. This is based on the capacity addition target of nearly 78,000 MW.

Total capacity addition in the 11th Five-Year Plan (2007-12) is estimated at a little over 52,000 MW, much lower than the revised target of 62,000 MW.

A National Training Policy (NTP) has been formulated for the power sector that highlights the need to plan for training as an integrated Human Resources Development activity, the panel said.
Going by estimates, the power sector is expected to see investments worth USD 300-400 billion in the 12th Five-Year Plan.

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Sunny days may be under cloud for all solar power cos in Gujarat…

Not all the companies, which are busy setting up their solar power projects in Gujarat, would be able to make hay when the sun shines. Many of them may not be able to avail Rs 15 per unit procurement tariff fixed by Gujarat government as the tariff is applicable to those units that get commissioned before December 2011.

This could be gauged from the fact that Gujarat has so far seen commissioning of only 11 Mw of solar power capacity by three entities, while 87 national and international companies have entered into power purchase agreement (PPAs) with the state government for supply of 961.5 Mw.

As part of solar power generation policy announced in 2009, Gujarat Electricity Regulatory Commission (GERC) had fixed a tariff of Rs 15 per unit for procurement of power from solar photovoltaic power projects and Rs 11 per unit for solar thermal power plants.

These tariffs were for initial 12 years and were applicable to the new solar power projects to be commissioned in the state by December 31, 2011.

According to Gujarat Energy Development Authority (GEDA), as many as 87 companies have signed PPAs with Gujarat Urja Vikas Nigam Ltd (GUVNL), a state-run electricity company, for a supply of 961.5 Mw.

"Of the total PPAs signed so far, majority of companies had expressed their intention of commissioning their projects before December 31, 2011 to avail Rs 15 per unit tariff. However, only three plants having cumulative generation capacity of 11 Mw have been commissioned as on date. With four months left for the deadline to end, another 200 Mw capacity is likely to be commissioned before December 2011", said a source in the state government.

Solar power plants so far commissioned in the state include those of Lanco (5 Mw) and Azure Power (5 Mw)

"If a company has committed to start its project before December 2011 and if it fails to honour the deadline, such companies may have to face penalty because they have entered into power purchase agreements," said officials of Gujarat Electricity Regulatory Commission (GERC), the state regulator.

Earlier, the state energy secretary, D J Pandian had also expressed his doubts about commissioning of the entire capacity by the set deadline.

However, Pandian had also made it clear that the state would be able to see commissioning of about a third of the capacities i.e. around 300 Mw of solar power generation by the end of December.

Now as only four months left for the deadline to come to an end, the companies making every effort to get projects commissioned before December. But it is believed that many of the companies, which have signed the PPAs have so far not received financial closure for their projects.

"It is very difficult to predict how much of solar power capacity will come up by December 2011 as many companies are at various stages of completion. But considering the current pace of execution, we can hope for about 200 Mw of capacities to get operational by December 2011," said K S Popli, director, Indian Renewable Energy Development Agency Limited (IREDA).

Industry insiders maintained that the availability of finances for projects has been a major road-block for the companies to faster implement the projects.

"Two out of three companies have not been able to achieve financial closure for their projects. Post December, it would be even more difficult for them to raise funds as the tariff would be less than Rs 15 per unit, making it less profitable for the companies," said a Mumbai-based solar power consultant.

While a large number of projects still struggling to get their project started, the industry is looking for some extension in the deadline by the government.

According to industry insiders, failing to meet the deadline of commissioning, the companies would be liable to be face penalty. "In case of non-completion of projects by December, the companies may terminate the PPAs and face monetary penalty," informed an industry expert.

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Indian Government proposes pool of domestic & imported gas for power projects…

The Indian Government proposes to supply gas for all gas based power projects under current five year plan by creating a pool of domestic gas and imported re-gasified Liquefied Natural Gas (R-LNG).

The proposed mechanism will not only ensure that gas is available to meet around 80% of the requirement of these power plants, but also provide fuel to them at competitive rates as pooling will help moderate R-LNG price.

Average domestic gas price is around $4.2 per million British Thermal unit (mmBtu), R-LNG costs over $15 per mmBtu. There are 10 power projects with a total capacity of 7,919 MW scheduled for commissioning by March-end 2012, but availability of gas to them is uncertain as production from country's biggest reserve, Reliance Industries' D6 block in Krishna Godavari basin has fallen sharply.

The government’s move will benefit Reliance Power’s 2,400 MW Samalkot project, RVK Energy’s 436 MW gas project, Panduranga Energy Systems’ 100 MW project, Torrent Power’s 1200 MW DGEN project and GSPC’s 700 MW Pipavav Power, among others.

 
On Friday, Prime Minister Manmohan Singh expressed concern over the sluggish pace of commissioning power projects at a review meeting of various ministries, directing that fuel-related issues be resolved at the earliest. At present, domestic gas is allocated only to existing power projects stranded due to gas shortage and a small quantity is given to new projects commissioned in 2009-10.

Projects under implementation and development have not been allocated fuel. According to the proposal being considered by the government, pooling may be done by combining gas and RLNG in a 3:1 ratio to meet 80% of the requirement of power plants. Pooling will bring down the cost of fuel to the power plants to $7-8 per mmBtu.

“This is a welcome move as it will allow us to get fuel at competitive rates and help us keep power tariff low. It will also end uncertainty and protect thousands of crores of project investments,” said an official of a leading private sector power company, asking not to be named.

For the proposed gas pool, government is considering to tap gas produced by state-owned ONGC and Oil India from the nominated fields. A portion of gas going from these fields to non-priority sectors such as petrochemicals and steel will be diverted for use by priority sectors such as power and fertilizer.

Of the 55 million metric standard cubic metres a day (mmscmd) gas produced by the two state-run companies from nominated blocks, the government will be able to free up about 10-15 mmscmd gas for use by new power plants. This will enable these power projects to get gas to run plants at close to 60% of their rated capacity. The balance will come from imported LNG.

The oil ministry has already directed RIL to meet the natural gas requirement of priority sectors first before giving the clean fuel to others from its KG D6 block. KG production has dipped below 45 mmscmd against an expected production of 80 mmscmd, leading to less-than agreed gas availability for all existing gas projects. Now, the power sector gets about 25 mmscmd and the fertiliser sector gets about 15 mmscmd of gas from nominated fields at an administered price of $4.2 million metric British thermal units. What remains of the 55 mmscmd APM gas goes mainly to consumers having allocations less than 0.05 mmscmd. A few buyers covered under certain court orders also get APM gas.

Gas allocation for these new projects could give a fresh lease of life for the capacity addition programme of the government which is is already far short of the 11th Plan target. In the current Plan, government planned to add 62,000 MW of new generation capacity but the Plan is expected to end with just about 45,000 MW. Gas for new projects could add another 8,000 MW of generation capacity.

Gujarat State Energy Generation’s 350 MW project at Hazira, Pragati Power Corporation’s 1,000 MW Bawana power project, Lanco’s 740 MW Kondapalli Phase III, GMR’s Vemagiri expansion project, Uttarakhand’s Kashipur project are also expected to benefit from gas pooling.

In May, the petroleum ministry passed an order order asking RIL to fully meet the contracted gas supply to priority sectors like fertilizer, LPG, power and city gas distribution in spite of the fall in gas production from the D6 field. Considering the shortfall in output, the ministry allowed RIL to make pro rata cuts in supply only in the case of remaining sectors like steel and petrochemical producers and refineries.

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Power Exchange India conducts sixth REC trading session…

Power Exchange India Limited (PXIL) has conducted its Renewable Energy Certificate (REC) trading session for the month of July on 27th July, 2011. Several members including obligated entities like the distribution licensees, captive power plants and open access users participated in this session.

The total orders received for Non-Solar Certificates were 24,566 comprising 14,766 buy bids and 9,800 sell bids. From the total bids received for the trade, 3,900 certificates were cleared today. REC market on the Exchanges has witnessed growing interest over the past few months. The total orders received for Non-Solar category by PXIL have increased from 598 Certificates in March ‘11 to 24,566 Certificates in this session.

Central Electricity Regulatory Commission (CERC) had come up with REC mechanism to incentivize the RE generators through a market based mechanism of trading and promoting newer investments into the sector. While the primary goal of the RECs is to address the needs of the compliance market, it also serves as a useful tool for meeting the ‘green electricity’ needs of the voluntary market. Companies have started purchasing RECs as part of their corporate social responsibility.

Trading in RECs which started with a slow response has gained momentum within a few months. PXIL, in its endeavor to offer easy access, transparent and fully electronic market place, had developed a robust and user friendly platform to trade on RECs. PXIL had launched its platform in March 30, 2011 to facilitate trade of these certificates and captured 70% of the market share in the first trade itself. Obligated entities like the distribution licensees, captive power plants, open access users and voluntary buyers participated in the bid for the RECs.

Power Exchange India Limited (PXIL) is India’s first institutionally promoted Power Exchange that provides innovative and credible solutions to transform the Indian Power Markets. It is joint venture of National Stock Exchange (NSE) and National Commodity & Derivatives Exchange (NCDEX). PXIL’s unique combination of local insights and global perspectives helps its stakeholders to make better informed business and investment decisions. The Exchange is currently operating a Day Ahead, Week Ahead and a Contingency Market as well.

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NTPC to stop supplying BSES; Delhi may have blackout…

India’s largest power producer National Thermal Power Corporation (NTPC) has issued a notice to  two private sector distribution utilities of Delhi, BSES Rajdhani and BSES Yamuna (Subsidiaries of Reliance Infrastructure Limited) for the money due by them to NTPC and threatened to cut off supply of electricity to them. This may result in Blackout in Delhi.

Currently, NTPC is supplying around 2050 MW of electricity (more than 68% of total requirement) to BSES utilities.

However, according to Spark’s market analysis both the BSES utilities have not cleared the due of Rs. 814 Crs for the energy supplied during the month of July 2011. As per the Power Purchase Agreement (PPA) signed with NTPC, NTPC could realize only Rs. 334 Crs through letter of credit (LC). Further NTPC has supplied electricity worth of Rs. 425 Crs during August. Hence, the combined outstanding amounts due by BSES utilities are more than Rs. 900 Crs.

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