Upon request of lots of readers, Spark has initiated to provide its reader a weekly update on World’s largest Power Plants.
For that Spark started a series called, Spark’s Power House Series.
As a first article of the series, Spark will present the a summary slideshow giving overall information of world’s larges 25 power plants.
So, go ahead, see the article and wait for another…
Spark sensed that a power generation capacity of around 3400 MW (grid-interactive) and 130 MW (off-grid / captive) from various renewable energy sources, mainly wind, solar, biomass and small hydro, will be added in the country during the current financial year 2011-12.
Considering the historical trends, half of the capital investment would be towards
Additional investment of about Rs. 1,000 cr. is envisaged in deployment of decentralized renewable energy systems/ devices like biogas plants, solar water heating systems and SPV lighting systems in remote villages/ hamlets.
These include Generation Based Incentives (GBI) Scheme for wind power and solar power to attract private investment by Independent Power Producers and incentives like capital subsidy and concession on excise duty. The government has also created a contingency fund for solar power projects if state utilities fail to make payments.
In its approach paper to the Twelfth Five-Year Plan, the commission has sought a thorough review of the current approach to the environment-versus-development debate, clearly according top priority to the country's development agenda.
At the centre of the commission's critique is the 'go and no-go area' policy for coal blocks and the Comprehensive Environmental Pollution Index, or CEPI, norms adopted by the environment and forests ministry.
"Part of the reason for the shortfall in coal production is the implementation of tighter environment-related regulations, and problems in rehabilitation and resettlement and land acquisition," the document notes.
The commission had originally targeted coal production at 680 million tonnes during the ongoing 11th plan (2007-12), but scaled it down to 630 million tonnes during the mid-term appraisal in 2010. The target was further lowered to 554 million tonnes. Coal output expanded at 7% a year during 2004-05 to 2009-10, but stagnated in the previous fiscal. In the past five years, demand grew at an average 8% and is expected to continue at the same rate during the next plan.
Coal projects have struggled to get environment clearances since 2009, when the ministry's no-go classification disallowed mining in 203 coal blocks. According to a coal ministry's projection, the output from those 203 blocks, estimated at 660 million tonnes annually, could have been used to generate around 1.3 lakh megawatts of power a year.
"The environment ministry had adopted the policy of 'go, no-go'a¦ This would have severely impacted the ability to expand domestic production of coal," said a commission official. "The policy had to be reviewed and now some coal blocks have been cleared. This has to be continued to ensure coal availability.''
In January 2010, the environment ministry imposed a temporary ban on development works, including some coal mining projects in Jharkhand and Chattisgarh in industry clusters identified under CEPI norms. CEPI is an index of 88 industrial clusters across India, ranked according to their impact on environment and was developed to plan developmental projects in tandem with environmental protection.
The commission said the CEPI norms had prohibited mining in areas with high pollution index even if pollution was because of some other industry. "Coal being location specific, there is clearly a need for review of this (CEPI norms) approach," the paper notes. Currently the issue is under consideration of a group of ministers headed by
The commission estimates a significant rise in reliance on imported coal as it would not be possible to meet the increased demand from domestic sources. Coal imports are expected to rise to over 200 million tonnes from the current 90 million tonnes by the end of the 12th plan.
The increase in reliance on imports not only portends a significant increase of 30% to 50% in costs for power plants, it also necessitates expensive technological upgradation as the units are not designed to take more than 10-15% of imported coal at present.
Read here the full presentation of Planning Commission on subject mater…
Planning Commission on Twelth Five year plan
Spark learnt from the market sources that the Indian Government proposes to increase penalties on distribution utilities for overdrawing electricity from the grid, a move that is expected to raise demand and prices in the short-term open market and help merchant power plants run by private firms such as Adani Power, Lanco and Monnet Power.
This move may also be useful in preventing the grid collapse due to over drawl and force the utilities to shed load.
Power prices in the short-term market are closely linked to penalties imposed by the regulator. Distribution utilities prefer purchasing from the open market if charges for overdrawing from grid are high.
Power sector regulator
The penalties, called unscheduled interchange (UI) rates, are levied on state distribution utilities when they do not draw power as per agreed schedules. The power generators are also charged when they inject less or more power than their declared schedules.
"The commission is of the view that the utilities should plan for procurement of power on long-term, medium-term and short-term basis instead of resorting to overdrawal through unscheduled interchange," CERC said in its draft regulations.
A Maharashtra energy department official said the proposal was untimely as most distribution utilities are facing a severe cash crunch. An official in Andhra Pradesh Transmission Corporation said the utility was not in favour of the proposal that would force it to resort to load shedding as power would become costly.
The company's IPO received bids worth 2.2 crore equity shares till 1700 hrs, as against 75.62 lakh shares on offer, as per the data available with the National Stock Exchange.
The company has fixed an IPO price band of Rs 256-Rs 261 per equity share.
Air-conditioner generator manufacturer TD Power Systems aims to raise around Rs 227 crore through IPO for expansion and debt repayment.
The company proposes to utilise the proceeds of the issue mainly to finance the expansion of the existing manufacturing plant in Dabaspet, Bangalore and for the construction of a project office in Bangalore.
The net proceeds of the issue will also be utilised for repayment of debt, fund working capital requirements and for other general corporate purposes.
The company's clientele comprises companies operating in cement, steel, paper, chemical, metals, sugar co-generation, bio-mass power plants and hydro-electric power plants.
This move is intended to make REC trading attractive.
The CERC has reduced the forbearance price for non-solar REC to Rs 3.3 a unit (Rs 3,300/ MWh), while keeping the floor price at the current level of Rs 1.5 a unit (Rs 1,500/MWh).
For solar REC the forbearance price has been reduced to Rs 13.4 /unit (Rs 13,400/MWh) from Rs 17/unit (Rs 17,000/MWh) and floor price to Rs 9.3/unit (Rs 9,300/MWh) from Rs 12/unit (Rs 12,000/MWh).
But, the industry has been voicing its concern as they felt that downward price revision will jeopardise the flow of investments in green projects. The industry has been seeking that the price should be kept at the same level for the REC mechanism, which is still at a nascent stage to be stabilised.
The REC mechanism is meant to provide an additional stream of revenue for green energy project proponents.
The trading is confined to non-solar projects such as wind power, bio-mass and hydro-electric.
Most of the stakeholders felt that there is a need for longer term control period as RE project developers as well as lenders seek a long term visibility to make necessary decision for participating in the REC mechanism upon evaluating price risk and off take risk.
The complete order of CERC on REC Pricing is embedded below.
Order on Forbearnace & Floor Price 23-8-2011
Spark learnt that the Minister of New and Renewable Energy has informed that the Government is promoting wind power projects through private sector investment by providing fiscal and promotional incentives such as 80% accelerated depreciation, concessional import duty on certain components of wind electric generators and excise duty exemption to manufacturers.
He said a 10 years tax holiday on income generated from wind power projects is also available. The Minister added that loans for installing windmills are available from Indian Renewable Energy Development Agency (IREDA) and other Financial Institutions while technical support including wind resource assessment is provided by the Centre for Wind Energy Technology (C-WET), Chennai.
Dr.Farooq Abdullah said preferential tariff is also being provided in potential states. He said the Government has also announced a Generation Based Incentive (GBI) under which Rs. 0.50/unit generated from wind power projects is being provided to the projects which do not avail of accelerated depreciation benefit.
Spark found that New and Renewable Energy Minister Farooq Abdullah said in written reply to a Lok Sabha query that: “ Approximately Rs 4,900 crore has been received as FDI equity inflows in the renewable energy sector during the last three years and including the current year,"
The highest investment took place in 2009-10 when Rs 2,872 crore were received in FDI.
In the same context, Spark found that a recent Ernst and Young report has ranked India as the third-best investment destination in the world after China and the US.
The Minister said that several key initiatives taken in the recent past include the introduction of generation-based incentives scheme for wind power to promote projects and the launch of Jawaharlal Nehru National Solar Mission with 22,000 MW target for solar power by 2022.
Meanwhile, replying to another query, Abdullah said it is envisaged that a power generation capacity of around 3400 MW grid-interactive and 130 MW off-grid power will be produced from various renewable energy sources in the country during the current financial year 2011-12.
"The same would require capital investment of the order of around Rs 29,000 crore including Rs 14,500 crore in wind power, Rs 2,500 crore in small hydro power, Rs 3,000 crore in bio-power and Rs 9,000 crore in solar power," he said.
The Minister said an additional investment of about Rs 1,000 crore is envisaged in deployment of devices like biogas plants, solar water heating systems and SPV lighting systems in remote villages.
The move to amend the standard bid documents (SBD) for future UMPPs comes in the backdrop of a legal challenge by Tata Power Co. Ltd. It has appealed to the Supreme Court against a decision by a so-called empowered group of ministers (eGoM) in 2008, to allow the winning bidder, Reliance Power Ltd, to use excess coal from captive mines allotted to it for the 4,000 megawatts (MW) Sasan power project for another project it has. Earlier, the Delhi high court had upheld the government’s decision.
“This issue has been raised. Whenever coal reserves are worked out, they are estimated quantities. To assume that there will be a matching quantity is wrong. If it is more, then what is to be done with the coal? It can be used for other projects that have been awarded through the competitive bidding route. There have been discussions. In such a situation some decision should be taken,” said an official associated with the UMPP award process, who did not want to be identified. “Such a condition may be incorporated in the SBD in the next set of projects, which will be awarded after the ones in Chhattisgarh and Orissa,” the same official added.
“We are looking at it,” said a senior power ministry official, who also requested anonymity due to the sensitive nature of the issue.
To be sure, the eGoM had in November 2010, after the decision allowing usage of excess coal from the captive mines at the Sasan UMPP for another project, moved to make this the rule. Accordingly, it asked the coal ministry to issue necessary instructions after getting it legally vetted; however, this is yet to happen.
The UMPP programme has had its share of problems, weighed by ecological concerns and local resistance. Developers, procurers of power—the states —and bankers met on 19 July to discuss changes that need to be made in the SBD. Such a move will also generate greater developer interest in future UMPPs and also bring tariffs down.
“Any such move which enables availability of additional coal resources would certainly help the sector. It is only important that such conditions should be transparently known to every participating developer. Therefore, making resources available will definitely be a welcome move. Once the terms and conditions are transparent and it’s a fair play, the developers would consider such availability to generate extra power and sell at market rates, which is not part of bid quantity and, hence, developers may be in a position to reduce tariff for the bid quantity of power,” said a Tata Power spokesperson.
“Based on the eGoM decision, ministry of coal has granted its approval for utilizing the incremental coal from the captive coal mines allocated for Sasan in the other project of the company, with certain stipulations,” said a Reliance Power spokesperson.
Reliance Power has been the most successful company in terms of UMPPs. Of the four UMPPs awarded till date, it has been the successful bidder for coal pithead projects at Sasan and Tilaiya in Jharkhand, and the imported coal-based project at Krishnapatnam in Andhra Pradesh. The imported coal-based project at Mundra in Gujarat was won by Tata Power.
Expert opinion over the move was mixed.
“For a competitively bid coal mine or integrated coal mine and power project, it appears prudent to allow optimal utilization of coal, particularly in light of the growing gap in demand and supply of coal, as it will allow unlocking of value of scarce resources and may lead to further aggressive tariff bids,” said Dipesh Dipu, director of consulting, energy and resources, and mining at Deloitte Touche Tohmatsu India Pvt. Ltd.
However, Anish De, chief executive at Mercados EMI Asia, an energy consulting firm, argued: “It is a fairly difficult decision to take because it could result in inadequate supplies to the power projects in the latter part of their operating life. Since the reserves are not precisely known at the time of award of project, any decision in this regard will be based on imperfect information, which could later backfire.”
The government wants to set up 16 UMPPs to meet the needs of the world’s second fastest-growing major economy after China. India has a power generation capacity of 180,000MW and expects to add 62,374MW by 2012.
Shares of CIL have been doing well since the company was listed in November last year and has become the third most valued firm after Reliance Industries and ONGC. Apart from S&P CNX Nifty Index, there would be changes in CNX Nifty Junior Index, CNX 100 Index, S&P CNX 500 Index, CNX Midcap Index and sectoral indices among others.
The changes were announced on Thursday by India Index Services & Products (IISL), a joint venture between National Stock Exchange and Crisil for managing Nifty.
The decision to revise constituents of various NSE indices was taken by the Index Committee of the Exchange during its periodic review. Meanwhile, the BSE also announced launch of futures and options trading in CIL with effect from August 26.
BSE said in a circular that it had received approval from market regulator Sebi for introduction of F&O contract on CIL. Subsequently, F&O contracts of CIL would start trading on BSE with effect from August 26.
