CERC issues approach paper to determine tariff regulations for the control period 2014 - 19...

 

Central Electricity Regulatory Commission has issued an approach paper for studying and determining various terms and conditions for the tariff regulations for the control period of 2014 to 2019.

CERC will also appoint and engage a consultant to better understand the current scenario and to determine the trends in the Indian power sector.

The study, to frame 'Tariff Regulations for control period 2014-19', comes against the backdrop of multiple woes in the power sector especially rising dependence on imported coal which would push the electricity prices higher.

Factors including return on investment made by power producers, fuel issues, operational norms and various orders passed by authorities including CERC and Appellate Tribunal for Electricity (APTEL) would be taken into consideration.

As per the draft paper uploaded by CERC on its website...

"Considering the developments in the sector during the current tariff period, current and perceived challenges in the power sector and need for market development, it has been felt to give a fresh look into the basis and assumptions to be considered while framing the fresh terms and conditions of tariff for control period 2014-19,"

In recent times, many power producers have faced hurdles related to increasing tariffs, especially in the case of projects utilizing costlier imported coal.

Meanwhile, the consultant to be appointed by the CERC, would have the mandate to undertake comparative studies, collate information collected from the stakeholders and providing assistance in framing the new tariff regulations.

Among others, the consultant would carry out an analysis of "fuel stock being maintained by existing generating stations to take a view - in regard to benchmarking of fuel stock for the purpose of working capital", according to a CERC document.

Also, an analysis of the debt market would be done for the purpose of deciding approach for return on investment taking into consideration domestic market.

_________________________________________________________________________________________________________________________________________

Additional Reading...

• http://www.cercind.gov.in/2013/draft_reg/FO_AP_2013.pdf
• http://www.cercind.gov.in/2013/tender/TOR19.pdf
• http://economictimes.indiatimes.com/news/news-by-industry/energy/power/cerc-to-start-work-soon-on-framing-new-power-tariff-norms/articleshow/21308263.cms

_________________________________________________________________________________________________________________________________________

Read More...

250 MW solar projects awarded to 26 players by punjab government

 

Government of Punjab has awarded Solar Projects to 26 private players for 250 MW capacity which will be having investment requirement of around Rs. 2,500 to 3,000 Crorers. 

 

Some of the players to whom the projects awarded are Lanco Solar Energy, Punj Lloyd Infrastructure, Moser Baer Clean Energy, Essel Infra Projects, Asopus Infrastructure (an India Bulls company), Welspun Solar, Azure Urja etc.

 

These Projects are awarded in two categories (i) Category I having project capacity of 1 to 4 MW (ii) Category II having project capacity of 5 to 30 MW. Under Category 1, 50 MW capacity has been awarded to 18 companies and Under Category II, 200 MW capacity has been awarded to 11 companies.

Complete list of all the selected bidders are depicted below:

250 MW Solar Projects under Solar RfP
Developer's Name	Project	Capacity (MW)	Tariff (Rs./Unit)
Category II: 5 to 30 MW
Azure Urja Pvt Ltd	Project - 1	15	7.67
Azure Urja Pvt Ltd	Project - 2	15	7.97
Solairedirect Energy India Private Ltd		20	7.99
Welspun Solar Punjab Pvt. Ltd.	Project - 1	20	8.33
Welspun Solar Punjab Pvt. Ltd.	Project - 2	10	8.42
Punj Lloyd Infrastructure Ltd		20	8.49
Moserbaer Clean Energy Limited	Project - 1	15	8.52
Moserbaer Clean Energy Limited	Project - 2	15	8.63
Asopus Infrastructure Limited	Project - 1	10	8.58
Asopus Infrastructure Limited	Project - 2	20	8.66
Essel Infraprojects Ltd	Project - 1	10	8.65
Essel Infraprojects Ltd	Project - 2	20	8.70
Lanco Solar Energy Private Limited		10	8.74
Total		200	8.41
Category I: 1 to 4 MW
WAA Solar Pvt. Ltd	Project - 1	2	7.20
WAA Solar Pvt. Ltd	Project - 2	2	7.47
T R Energy & Agro Private Limited		2	7.75
International Switchgears Pvt. Ltd		1	7.75
Aditya Meda Sales Ltd.		4	7.85
Shan Solar Pvt. Ltd		1	7.89
Supreme Infrastructure India Ltd		4	8.25
Azure Urja Pvt. Ltd		4	8.28
SAR Capital Pvt. Ltd		4	8.29
Focal Energy Wind India Pvt. Ltd		4	8.30
Atma Powers Private Limited		2	8.41
Allianz Group LLC		2	8.45
Nexgen Solex Pvt. Ltd		1	8.45
I K Energy Pvt. Ltd		1	8.48
Asopus Infrastructure Limited		4	8.49
Abundant Ventures LLC		2	8.55
Welspun Solar Punjab Pvt. Ltd		2	8.56
Mokia Green Energy Pvt. Ltd		4	8.59
Earth Solar Pvt. Ltd		4	8.70
Josan Foods Private Limited		1	8.71
Total		51	8.22

 

___________________________________________________________________________________________________________________________________________

Additional Reading...

http://economictimes.indiatimes.com/news/news-by-industry/energy/power/250-mw-solar-power-projects-awarded-to-26-private-players/articleshow/21281755.cms

http://www.eai.in/360/news/pages/10360

___________________________________________________________________________________________________________________________________________

Read More...

bhel received orders for 20 mw solar projects from ntpc

 

NTPC awarded contracts for executing two Solar Power Projects worth Rs. 132 Crores to BHEL.

The projects  will be having capacity of 10 MW each and  are proposed to be set in Uttar Pradesh at Unchahar and in Odisha at Talcher.

Scope of work for the BHEL will be to design, manufacture, supply, install, commission and operate & maintain the projects.

According to the sources the projects will be using Mono Crystalline modules (C-Si PV) which are manufactured at the BHEL's plant at Bengaluru.

 

_________________________________________________________________________________________________________________________________________

Additional Reading...

http://economictimes.indiatimes.com/news/news-by-industry/indl-goods/svs/engineering/bhel-bags-2-contracts-from-ntpc-for-setting-up-solar-plants/articleshow/21268887.cms

_________________________________________________________________________________________________________________________________________

Read More...

India and nigeria signed deal for solar power plants

 

India and Nigeria have signed an agreement to locate sites for solar power plants in Niger state, the first of a series of power plant deals which would provide additional energy for African country's national grid.

The agreement was signed between Nigeria's permanent secretary in the Ministry of Power Godknows Igali and the secretary to the Government of India, Sutanu Behuria.

With this agreement, Bharat Heavy Electricals will begin preliminary studies ahead of siting independent solar-powered plants in selected locations in Niger, a Nigerian newspaper, Daily Trust reported.

"Nigeria's power sector will remain open to investment with the hope of unbundling the sector's potential," Igali said after the signing.

Behuria expressed India's interest in the provision of funds in various forms for the development of Nigeria's power sector.

 

Source

Read More...

RBI to allow treating the loans to the new umpps as secured debt...

 

Reserve Bank of India, has decided to allow the loans to the new Ultra Mega Power Projects (UMPPs) to be considered as secured debt even though the land and other plant assets will be owned by Distribution Utilities not the wining bidder.

As large nos of banks/financial institutions has raised concerns saying loans to the proposed UMPPs would be riskier in the absence of ownership by the borrower.

As per the newly proposed bidding guidelines by Ministry of Power, UMPPs and other such location specific plants will be owned by Distribution Utilities and the bidders will act as contractors for construction the project and operating them for 30 years.

However, the Bidder and Distribution Utilities can jointly mortgage the site and the plant with the banks during the tenure of the loan and post that the same will be transferred to the Distribution Utility for a cost.

Further, the guidelines also sought to make the norms stringent by barring all non-core sector companies from participating in the bidding. Also the Bidder cannot offload more than 51% equity in the project till commissioning of the project against the earlier mandate of 26%.

As per the proposal, bidders with required technical expertise will be asked to submit a fixed charge for the initial year unlike the earlier process of submitting levellised tariff for 25 years. The actual tariff payable to the concessionaire will be revised annually based on a pre-determined index. Fuel cost of the power projects will be passed on to the consumers.

The norms, known as standard bidding documents, will be taken to the cabinet committee on economic affairs for approval and a note has been circulated for consultation. Once approved, the norms will pave way for auction of two ultra mega power projects in Bedhabahal and Surguja in Chhattisgarh that have been put on hold.

The government has so far awarded three ultra mega power projects to Reliance Power and one to Tata Power. Sites for 10 more such projects have been identified in Tamil Nadu, Karnataka,Orissa, Andhra Pradesh, Gujarat, Bihar, Jharkhand and Maharashtra.

 

___________________________________________________________________________________________________________________________________________

Additional Reading...

http://articles.economictimes.indiatimes.com/2013-07-22/news/40727729_1_power-projects-umpps-distribution-utilities

___________________________________________________________________________________________________________________________________________

Read More...

CERC asked Reliance power to quantify the financial impacts of rupee depreciation and change in inputs costs on the sasan umpp...

 

Central Electricity Regulatory Commission (CERC), has asked Reliance Power Ltd to submit a report on the financial impacts of weak rupee and escalation in cost of construction on the 4,000 MW Sasan Ultra Mega Power Project of the company.  

Earlier, Reliance Power Ltd, had submitted a petition to CERC seeking compensation under "Change in Law" clause.

RPower won the project in 2007 in a tariff based international competitive bidding after quoting the lowest levellised tariff of Rs. 1.19 per unit for 25 years.

However, after that the company had filed petitions with CERC seeking relief in terms of tariff increased considering " unprecedented, unforeseen and uncontrollable depreciation of the Indian rupee and Change in Law (mainly increase in taxes and input cost leading to an overall rise in construction cost of the plant) during the Construction period" 

As per the Power Purchase Agreement (PPA) between the developer of the project and procurer of electricity, the company can approach CERC for any "Change in Law" during the construction period and fluctuation in the value of the rupee.

CERC has asked the company to quantify the above and submit the details in terms of the overall financial impacts of these factors on the Project.

___________________________________________________________________________________________________________________________________________

Additional Reading...

http://economictimes.indiatimes.com/news/news-by-industry/energy/power/cerc-asks-reliance-power-to-submit-impact-of-weak-rupee-on-sasan-umpp/articleshow/21275797.cms

___________________________________________________________________________________________________________________________________________

Read More...

Moody's confirms Baa2 corporate family & Baa3 issuer ratings for CR Power...

 

Moody's Investors Service has confirmed the Baa2 corporate family rating, the Baa3 issuer rating, as well as the debt ratings of China Resources Power Holdings Company Limited (CR Power). It also confirmed the Ba2 rating of the perpetual subordinated capital securities issued by China Resources Power East Foundation Co Ltd, which are guaranteed by CR Power.

Moody's has also removed these CR Power ratings from watchlist for possible upgrade and changed their rating outlook to stable.

These rating actions are the result of the cancellation of the planned merger between CR Gas and CR Power owing to a lack of sufficient support during a shareholder vote that took place on 22 July 2013.

RATINGS RATIONALE

Moody's placed the ratings of CR Power on review for upgrade on 13 May 2013 after announcement of the proposed merger because, if successful, it would lead to higher expected support for CR Power from its parent company and synergies in utilities operations combining power generation and gas distribution.

"As the merger will not proceed, we have changed the ratings outlook to stable," says Ivan Chung, a Moody's Vice President and Senior Credit Officer.

The stable outlook reflects Moody's expectation that CR Power will maintain its financial discipline as it continues to expand, as well as its strong access to bank funding to support growth.

Pressure for a ratings upgrade will be limited in the near team, given the lack of automatic cost-pass through in coal-fired generation. Upgrade rating pressure could emerge over time if there is improvement in regulated environment for coal-fired generation or if CR Power: (1) meets its business expansion plan; (2) stabilizes its fuel costs by securing substantial ownership in coal supply; (3) is able to improve its financial profile such that FFO/interest exceeds 4x-5x, Debt/Capitalization falls below 40%-50%, and RCF/Debt exceeds 15%-20% on a sustainable basis.

The rating could be downgraded if CR Power: (1) fails to meet its business plan and generate sufficient returns on its new capital expenditures and investments; (2) takes on aggressive debt-funded expansion projects or acquisitions; (3) suffers a decline in profitability, such that its EBITDA margin falls below 20%; or (4) suffers a material impact operationally due to environmental concerns or new regulatory measures.

Such deterioration in CR Power's fundamentals is expected to be accompanied by weakening credit metrics - FFO/interest below 2.5x, Debt/Capitalization above 60%-65%, and RCF/Debt below 10%.

Furthermore, a material deterioration in the credit profile of the parent or evidence of weakness in its support for CR Power will pressure the rating.

The principal methodology used in rating CR Gas and CR Power was "Regulated Electric and Gas Utilities," published in August 2009. Please refer to the Credit Policy page on www.moodys.com for a copy of this methodology.

CR Power is an independent power producer which invests in, develops, owns and operates power plants in China. It began constructing its first power plant in 1994 and was listed on the Hong Kong Exchange in November 2003. Its 63.51% shareholder, China Resources (Holdings) Co Ltd (unrated), is a major Chinese conglomerate, ultimately owned by China's State Council. As of 31 December 2012, CR Power had 64 power plants in commercial operation, with a total attributable installed capacity of 25,271 megawatts. About 92.2% of its attributed installed capacity is coal fired. The remainder is powered by wind, water and gas.

 

___________________________________________________________________________________________________________________________________________

Additional Reading...

http://www.indiainfoline.com/Markets/News/Moodys-confirms-CR-Powers-Baa2Baa3-ratings/5736976245

___________________________________________________________________________________________________________________________________________

Read More...