ADB plans to fund Delhi Discom’s capital expenditure...

 

Offering a breather to Anil Ambani-owned BSES Rajdhani Power Ltd (BRPL), the Asian Development Bank’s Private Sector Operations Department (PSOD) plans to extend a loan of $80 million to the company, one of the distribution utilities for the Indian capital.

The loan will be used to fund BRPL’s capital investments, which had been impacted after domestic financial institutions expressed their reluctance to increase exposure to the utility.

“It is not a sovereign restructuring but private sector financing to be done by PSOD. It will provide a breather to BSES, which has been unable to raise funds elsewhere,” said a person aware of the development requesting anonymity.

The offer comes in the backdrop of losses and under-recoveries eroding the balance sheet of distribution utilities, resulting in their net worth turning negative.

At the same time, the electricity regulator has turned down a proposal to increase tariffs even as the Aam Aadmi Party (AAP), which has formed the new state government in Delhi, has promised to halve tariffs.

A BSES spokesperson declined comment. The ADB’s India Resident Mission, in an emailed response, confirmed the development and said, “ADB Private Sector Operations Department envisages a loan of USD 80 million in relation to future capital expenditure to BRPL only.”
“The loan has been approved by ADB board,” the email added.

BSES operates in an area of 950 sq. km with a customer base of 3.3 million through BRPL and BSES Yamuna Power Ltd (BYPL). Of these BRPL distributes power to 1.82 million customers spread over 750 sq. km in south and west Delhi.

PSOD provides assistance for projects without sovereign guarantees. These projects can be private entities, state-owned enterprises and municipalities. It also provides commercial co-financing with focus on infrastructure and capital markets or financial sectors.

According to ADB’s loan report and recommendation, “The proposed ADB assistance will provide much needed funding to BRPL for system improvement. BRPL’s existing, mainly public sector owned lenders have limited appetite for further lending to the sector given their overall power sector exposure limits.”

Also, the loan will help in the financing of BRPL’s capital expenditure over the next two years.
“Successful implementation of the project will rehabilitate and/or augment approximately 486 distribution transformers, 266 kilometers (km) of 11 kilovolt (kV) distribution lines, and 16km of extra high voltage lines. It will add 123 new substations, 285 new distribution transformers, 221km of new 11kV distribution lines, and 21km of new extra high voltage lines as well as additional equipment to improve the automated system for billing and settlements,” the report added.

Delhi’s power purchase cost has spiked since 2009 with the distribution utilities incurring losses in power trading. It is estimated that the utilities suffered a loss of Rs.900 crore in 2011-12 due to inaccuracies in demand forecasting and fall in rate of sale of power in the short-term market nationally. Delhi’s power demand is around 5,000 megawatts (MW).

According to PricewaterhouseCoopers, “Higher losses and under-recoveries have eroded the balance sheet of the Discoms; the Discoms had negative net worth in all three years from FY11 to FY13 in spite of equity infusion in BYPL and BRPL in FY12 and in TPDDL in FY13.”
TPDDL is short for Tata Power Delhi Distribution Ltd.

After becoming Delhi’s chief minister, AAP leader Arvind Kejriwal, in a major bureaucratic reshuffle, removed power secretary R.K. Verma and brought in Puneet Kumar Goel in his place.

In addition, Goel also holds the position of chairman and managing director of Delhi Power Co. Ltd and chairman of Indraprastha Power Generation Co. Ltd and Pragati Power Corp. Ltd. Kejriwal has alleged that Delhi residents have been paying twice what they should be for electricity.

ADB plans to maintain its lending levels to India at around $2 billion annually over the next three years. Takehiko Nakao, president of the bank at the time of ADB’s board of governors meeting in May, said though equity investment is an option, the risks need to be assessed before taking a decision.

In its report titled Energy Outlook for Asia and the Pacific released in October, ADB said that India’s energy sector will need $2.3 trillion in investments by 2035, accounting for the maximum investment requirement in South Asia.

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SNDL to augment Nagpur power network to reduce faults...

 

Power franchisee SNDL has undertaken a Rs 30 crore project to augment its power network so that the number of people affected by a breakdown reduces. The work is expected to be over in two months.

SNDL chief Sonal Khurana said that at present, the low tension (LT) cables that supplied power to consumers were quite long and if one of them developed a fault, a lot of consumers were affected. "We will reduce the length of these cables by laying new ones, thus bifurcating the network. Now, if the existing cable develops a fault, those supplied by the new one would not face a blackout," he explained.

SNDL will lay 69 km of LT cable and install 261 transformers on the new as well as existing supply cables. "This project will have another advantage. Many supply cables and transformers are overloaded and the consumers face low voltage problem. The incidence of breakdowns is also more. Reducing the number of consumers supplied by the existing cables and its transformers will reduce the load on them improving their performance," he said.

The company has already added two 10 MVA 33/11 KV voltage transformers in its substations at Vinkar Sutgirni and Kamptee Road. After Essel Utilities took over SNDL from Spanco in September 2012, it has invested Rs 80 crore on network upgrade. However, of the Rs 100 crore for 2013-14, works worth only Rs 22 crore have been completed. With only three months left, there is not much of a chance that this target would be met.

According to SNDL data, a total of 66,730 new service connections were provided after the franchisee took over. The number of connections in 2011-12 was about 24,400. Next year, the franchisee provided over 26,600 connections and this year it has provided around 15,700 connections so far.

If the monthwise distribution loss is considered, it has decreased significantly. The loss for June 2011 was 24.52%. In June 2012, it came down to 20.35%, and this June it reduced sharply to 10.41%. In October 2011, the loss was 30.55%, next October it came down to 27.58%, and this year it was 19.51%.

If the power data of the franchisee area is examined, you will find that input energy has not increased much. This shows that less energy is being wasted in power infrastructure and the same quantum of power is meeting the needs of the consumers.

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Noida to get 20 substations...

 

The Uttar Pradesh Power Corporation Limited (UPPCL) will commission around 20 33/11kV substations across Noida during 2014 to ensure equitable distribution of electricity to different sectors. These substations will be constructed by Noida Authority and later handed over to UPPCL.

Power officials said these 20 substations form part of a network designed for transmission and distribution of electricity in Noida through a number of power houses of varying capacities. Other than these substations, two substations of 400kV each and one of 765kV have been approved. These projects too are in different stages of work.

Corporation officials said work is also set to commence on four 220kV substations in Noida. "The smaller-capacity substations will help enable distribution of electricity within a sector or a cluster of sectors. Existing small capacity substations will not be enough to handle the load once more power is brought into the city by the larger substations," said a senior power corporation official.

At present, Noida gets electricity through a single 400kV substation in Pali.

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Need Rs 1.6k cr power subsidy for Mumbai to do a Delhi...

 

If Mumbai is to replicate the Delhi model of a 50% power tariff cut for the majority of residential consumers, it would require an annual subsidy of at least Rs 1,600 crore, experts say.

Of the city's 41 lakh power consumers, 27 lakh are residential subscribers with under 400 units of use-the category for which rates have been halved in Delhi.

Though power experts and distribution companies are sceptical about tariffs being slashed in Mumbai in the near future, Congress MP Sanjay Nirupam has demanded subsidised power, specially for slum dwellers. "If Delhi can announce a cut in power tariff for the general public, why can't Mumbai follow suit?" he asked. Seeking a 50% price cut for residential consumers in the island city and the suburbs, he wrote to chief minister Prithviraj Chavan on Wednesday.

"I have also demanded that whatever subsidy is announced, it should reach the common man; power discoms should not get any benefit from it. Also, there should be an inquiry into the cost structure and pricing mechanism adopted by the discoms," Nirupam said.

A source from the government's energy department doubted the possibility of power tariff being slashed for domestic consumers in Mumbai in the near future. "The structure and functioning of discoms is totally different in the two cities. In Delhi, the government has stakes in the three discoms. In Maharashtra, it will be difficult for even MSEDCL to introduce a subsidy in a metro city, not to speak of private operators," the source said.

"Also, the government cannot lower tariffs in the guise of public interest, thereby discriminating against consumers of other commodities. Neither can it ignore residential consumers in other districts," said a consumer rights activist.

Former BEST committee member Ravi Raja said the undertaking, which supplies 980 MW of power daily to 10 lakh consumers from Colaba to Mahim-Sion, does not need to depend on the state government and can seek a subsidy from its parent body, the BMC. "If there is political will, the BMC can give a subsidy to the ailing BEST and provide relief to at least 7 lakh domestic consumers by bringing down tariff in the island city," he said. BMC sources said the civic body has already planned a subsidy of Rs 350 crore for BEST's transport division and has no plans to give a subsidy to the power wing.

Power expert Ashok Pendse, who represents consumer groups at MERC hearings, said it was "practically impossible" for the state government to give subsidies to discoms. "First, the state does not have any stake in private players like Tata Power and RInfra. Second, there is no legal provision that allows the government to announce a reduction in tariff. It has to be done by the regulatory body, which in our case is the Maharashtra Electricity Regulatory Commission."

He said that to reduce tariff for residential consumers, one needs cross subsidization. "Will MERC increase industrial and commercial tariff to subsidize residential consumers in Mumbai?"

Chief minister Prithviraj Chavan said his government set up a high-level committee headed by industries minister Narayan Rane to take stock of the power situation, and it has submitted its report. "We are processing the recommendations. We will place the report before the cabinet as early as possible," Chavan told TOI on Wednesday.

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DRI, ED set to probe Adani Group for allegedly over-valuing power equipment imports...

 

The oilseeds-to-ports Adani Group has come under the scanner of India's revenue intelligence agency as well as the Enforcement Directorate.

The Mumbai unit of the Directorate of Revenue Intelligence (DRI) has formally opened a case for alleged 'over-valuation' of capital equipment for power projects against the Gujarat-based group, widely regarded as close to Narendra Modi, BJP's prime ministerial candidate.

The agency is "investigating gross overvaluation of import of equipment and machinery by various entities of Adani Group from a UAE-based intermediary", according to an internal DRI report compiled in December.

"An amount of Rs 2,322.75 crore has been siphoned off abroad by Adani Group by resorting to over-valuation of imports in the name of various group firms," the report says.

"The companies being investigated for over-valuation of imports are PMC Projects (India), Adani Enterprises Limited, Adani Renewable Energy, Adani Hazira Port Pvt Ltd, Adani International Container Terminal Pvt Ltd and Adani Vizag Coal Terminal Pvt ltd," says the report.

The Directorate of Revenue Intelligence has summoned Vinod Shantilal Adani as well two Dubai-based individuals, Mitesh Dani and Jatin Shah.

"The Adani Group and its firms have not declared the correct value of imports and a show-cause notice is being issued under Sections 111 and 113 of the Customs Act, 1962. All top officials, including the Adanis themselves, will be questioned," said a top DRI officer.

The Adani Group declined to respond to a detailed questionnaire. But a person close to the business house claimed it was the victim of a "witch-hunt" being conducted by the Congress-led UPA government against businessmen seen as close to Modi. "We are facing extraordinary harassment. Old cases are being opened up and notices are being sent on a daily basis. In the DRI matter, no formal notice has come so far," said the person close to the group. In November 2013, the Central Board of Excise & Customs (CBEC) had reminded the Directorate General of Foreign Trade, part of the commerce ministry, to cancel import duty benefits issued to the Adani Group in 2004.

These benefits — essentially the right to import at concessional rates — were issued under the Target Plus Scheme, an export incentive which has since been discontinued. The person close to the Adani Group referred to CBEC's reminder as an example of old cases being revived.A number of DRI officials strongly defended their investigation, claiming to have unearthed substantial evidence of what they referred to as "money-laundering" by way of over-valuation of imports.

They conceded, however, that the probe was being monitored at senior levels of the government. In July 2013, CBEC, under the finance ministry, had rejected a proposal from Adani Ports and Special Economic Zone Limited to install container scanners at its own cost for conducting customs operations at Mundra Port, India's largest private port which is promoted by the Adani Group.

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Power trading set to get a boost as India gets a national grid...

 

In what may give a big boost to power trading business in the country, India has finally connected the southern region with rest of the country for unhindered electricity flow, achieving the goal of a national grid after a long wait.

“The central transmission utility, Power Grid, has successfully commissioned the Raichur-Solapur 765-KV single-circuit transmission line on Tuesday evening, interconnecting the southern grid synchronously with the rest of the national power grid –- a move that would facilitate bulk transfer of power across regional boundaries. With this, the mission of ‘One Nation – One Grid – One Frequency’ has been successfully accomplished,” the power ministry said on Wednesday.

The national grid will help southern states, especially Andhra Pradesh, Tamil Nadu and Kerala, which are facing huge shortages, lift surplus power from other regions. In the absence of a national grid, these states were paying exorbitantly high prices for buying electricity from the open market because of uncertainty about power evacuation due to congestion in the transmission network.

The Indian power system is operating through five regional grids and a Pan-India synchronous grid was envisaged for optimal utilisation of the generation resources in the country. Till now, four regional grids -- northern, eastern, western and north-eastern -- were connected synchronously and the southern region was connected to the other four grids via HVDC links.

“The 208-circuit-km-long transmission line and 765- and 400-KV substations at Raichur and Sholapur have been commissioned five months ahead of the contracted schedule. The project has been completed at the cost of Rs 815 crore, Power Grid said.

"Synchronous integration of the southern grid with the rest will not only augment the inter-regional power transfer capacity of the southern region, but also relieve congestion seen in a few transmission corridors. This will be a boost for growth of the country," Power Grid added.

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Commission reviews all the eight missions under the NAPCC...

 

A committee set up under the principal secretary to the prime minister is trying to streamline all the eight missions under the National Action Plan on Climate Change (NAPCC).

The eight missions under the NAPCC include the national solar mission, the national mission for enhanced energy efficiency, national mission on sustainable habitat, national water mission, national mission for sustaining the Himalayan ecosystem, national mission for a green India, national mission for sustainable agriculture, and national mission on strategic knowledge for climate change.

The committee headed by Pulok Chatterjee, principal secretary to Prime Minister Manmohan Singh, will meet in January, said a senior environment ministry official. The panel’s terms of reference include reviewing the missions and trying to work out a synergy between them.

Ministries dealing with the environment, water resources, urban development, agriculture, power, and new and renewable energy are the nodal agencies for the missions.

“We will be monitoring the progress of all the missions on a quarterly basis and bring out all the key action points for all of them,” said the official quoted above on condition of anonymity.
The NAPCC, prepared in 2008, was intended to serve as a road map on how India plans to combat climate change, uniting it with the country’s development concerns and the need to sustain economic growth.

Because multiple ministries and agencies are involved in the planning and implementation of these missions, it is important for them to have a common format on the basis of which the progress of the missions can be reported and reviewed, said the official cited above.

“The members of the committee include the secretaries of all these ministries in addition to representatives from the Planning Commission and the finance ministry,” the official said.

The official said that it was important for all the missions to have short-term goals on a quarterly basis. “They have to list their top priorities. We have told them to achieve the maximum of their goals in the next 2-3 years. There will be a final review in 2017 for all of them,” the official said.

The committee has advised all the ministries to synergize the missions with the existing schemes. “We have told green India mission to sync with Mahatma Gandhi Rural Employment Guarantee Act (MNREGA),” the official cited above said.

Under the sustainable habitat mission, the urban development ministry has plans to construct metro trains in some cities. “They are also improving solid waste management and have issued advisories on energy efficient buildings,” the official said.

Bureau of energy efficiency (BEE) under the power ministry is the nodal agency for implementing the national mission on energy efficiency. Ajay Mathur, director general, BEE, said that the key is to see what the impact of these missions is.

“Our quantitative reporting will start only September next year as that is when our schemes will start playing out. For this quarterly review, we will only be saying whether our schemes are on track or not,” said Mathur.

Prodipto Ghosh, a member of the Prime Minister’s council on climate change, said the review showed the government’s seriousness in implementing the NAPCC.

“The review will then be presented to the Prime Minister’s council on climate change which is headed by the Prime Minister and he can take stock of it,” said Ghosh.

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

 

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

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

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

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

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

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

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

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

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

Source: Business Standard

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CCI may consider land compensation exemption for RPower plant...

 

The Cabinet Committee on Investment may decide tomorrow whether Reliance Power's ultra mega power project at Tilaiya in Jharkhand should be exempted from providing non-forest land to compensate for the loss of forest land to be acquired for the project.

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

"This issue is expected to be taken up in tomorrow's CCI meeting," sources said.

Reliance Power has won contracts to set up two other ultra mega power projects (UMPPs) - at Sasan in Madhya Pradesh and at Krishnapatnam in Andhra Pradesh.

A UMPP is coal-based power plant with a capacity of about 4,000 MW built at an approximate cost of Rs 20,000 crore.

Source: Business Standard

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Indian power system becomes one of the largest operating synchronous grids in the world...

 

The Southern Grid has been synchronously connected to the rest of the Grid in the country. With this, the mission of  ‘One Nation – One Grid – One Frequency’ has been successfully accomplished. 

The southern grid connectivity was achieved on the evening of  December 31, 2013 through commissioning of Raichur-Solapur 765 kV single circuit transmission line by Power Grid Corporation of India Limited, the Central Transmission Utility of the country, interconnecting the Southern grid synchronously with the  rest of the national power grid facilitating bulk transfer of power across regional boundaries.

This line of 208 circuit kilometers (ckm) and 765/400 kV substations at Raichur and Sholapur has been commissioned five months ahead of its contractual schedule i.e. 31st May, 2014  at a cost of approximately Rs.815 crores. 

With this interconnection, Indian power system has entered into a new era and become one of the largest operating synchronous grids in the world with about 232GW of installed power generation capacity.   Synchronous integration of Southern Grid with rest of the national power Grid shall not only augment the inter-regional power transfer capacity of Southern region but also relieve the congestion being experienced in few transmission corridors. This will be a great boost for further economic growth of the country.

It is likely to take a few months before power flow over this line is stabilized.   Indian Power System is operating through five Regional Grids and a Pan India synchronous grid was envisaged for optimal utilization of the generation resources in the country.

Till now, four regional grids namely Northern, Eastern, Western and North-eastern regions (NEW grid) were connected synchronously and Southern Region (SR) was connected to this NEW grid through HVDC links. Synchronous interconnection of SR with NEW grid was envisaged through high capacity 765 kV Raichur – Sholapur lines, as an ultimate step towards establishment of an “All India Synchronous National Grid” facilitating bulk transfer of power across regional boundaries.

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