MSEDCL blames MERC, activists for high electricity tariff...

 

Under attack from all quarters over high power tariff in the state, MSEDCL officials have blamed consumer activists and Maharashtra Electricity Regulatory Commission (MERC) for the recent steep tariff hike. Senior officials also ask that why these activists don't evaluate the performance of private companies like Tata Power and Reliance.

"MSEDCL had to recover some dues from consumers from 2009-10 onwards. However, MERC did not allow us to do so until this September. Naturally, when an accumulated account is to be recovered in six months, the surcharge will be higher," a senior official said.

The official further said that MSEDCL had done a lot of capital expenditure in the last two years to improve the power infrastructure. "We have to recover this cost from consumers. Under pressure from consumer activists, MERC did not allow us to recover it on time. Now it has told us to recover expenses of two years in six months," he told TOI.

Another official launched a direct attack on the consumer activists. "The rates approved by MERC for wind energy are the highest in the country. MERC is promoting wind energy suo motu. Why have these activists never raised this issue? MSEDCL had repeatedly told the Commission that this costly power would only burden common consumers," he said.

The official further said that MERC's consumer representatives never targeted Reliance for its high industrial power tariff. "Reliance does not have agricultural consumers. Still its tariff is Rs 9.12 per unit while that of MSEDCL is Rs 8.22 per unit and that too for six months. They were also silent during the Tata Power asset valuation controversy. Why do they target only government companies," he asked.

MSEDCL has also contended that while comparing its power tariff with that of Gujarat, the consumer activists forget that subsidy to powerlooms in Gujarat is very low. "The consumer activists want low cross subsidy for industries, low tariff for farmers and powerlooms and other consumers. We don't have a magic wand. If industrial tariff reduces, that of others will increase. Open access will hit poor and middle class consumers. This is the harsh reality and consumer activists must accept it," he stressed.

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Mundra UMPP shut down until Nov 24 due to major fire...

 

Tata Power's arm Coastal Gujarat Power Limited run 4,000 MW Mundra ultra mega power project (UMPP 800x 5) has been shut down since November 14 due after a major fire broke at the site.

The company has already communicated to the western region load dispatch centre (WRLDC) and power drawing states Gujarat, Maharashtra, Harayana, Rajasthan and Punjab that the generation will be restored from November 24 as the repair and restoration work was underway.

The plant will be light up from November 24 while the actual power supply is expected to begin from early morning of November 25.
 
The company is expected to incur a generation loss of 912 million worth Rs 206 crore due to the closure of the plant.  The financial loss is estimated at the levelised tariff of Rs 2.26 per unit. This is the first fire broke at the site after Mundra UMPP was fully operational with five generating units on July 30, 2012.
 
WRLDC officer, who did not want to be identified, told  ''As per our record and the company's communication, the fire broke at 4.30 am on November 14 when the Mundra plant was generating 3,040 MW from four units. Unit no 2 was under shut down for the inspection of generator and transformer. In stages, the plant was ultimately stopped the total generation from 3 pm on the same day. The company has cited fire and the subsequent damage to the conveyor belt as leading cause for the stoppage of generation and the closure of plant.'' 
 
The company spokesman said "Coastal Gujarat Power Limited (CGPL) would like to inform that generation from the UMPP has been temporarily shut down due to a technical incident. At this stage immense importance is placed on measures to deal with this incident and the conveyor repair work is in progress. All efforts are being made to expedite the matter. The generation is expected to start from November 24 onwards progressively. Full restoration of the station is likely by December 3. CGPL would like to reiterate its commitment towards safety in and around the UMPP while ensuring reliable power to all its buyers".
 
According to the official, of the 912 million units, Gujarat, which has 47.5% share in the drawal of power from Mundra UMPP, will have generation loss 433 million units followed by Maharashtra (20% share) 180 million units, Punjab (15% share) 114 million units, Harayana (10% share) 91 million units and Rajasthan (10% share). This apart, the loss of coal due to burning and damage to various equipment and also due to repair and restoration expenses will further increase.

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Waaree Energies plans 6-fold rise in sales; to invest Rs 450 crore...

 

Solar energy solutions provider Waaree Energies, which will be investing Rs 450 crore to up its module capacity, is eyeing over six-fold increase in its revenues to over Rs 2,000 crore in the next three years as the demand for solar projects leapfrogs.

The proposed Rs 450 crore investment over the next six months will double the company's solar module capacity to 500 mw, a top company official said.

The city-based Waaree group manufactures solar PV modules apart from providing turn-key EPC solutions. Waaree Energies, set up in 2007, had clocked Rs 310 crore revenue in FY13.

"There is a huge growth potential in the solar sector. The national solar mission will provide us huge opportunity as we are one of the larger EPC players," Waaree group chairman and managing director Hitesh Doshi told PTI.

"Considering the large potential, we expect to grow more than six times to almost Rs 2,000 crore in the next three years. We have so far executed over 100 mw of solar EPC contracts and have an order book of around Rs 3,000 crore, which gives us a clear visibility for the coming years," he said.

The company has a 250 mw modules manufacturing facility in Surat and plans to expand it to 500 mw soon. Waaree also exports these modules to the US, Middle East, Australia, Europe and Asia.

"We will be investing around Rs 450 crore over the next six months to increase our capacity to 500 mw. This expansion will be funded through internal accruals," Doshi said.

The company also offers a wide range of products and services such as solar rooftop solutions, solar street and home lighting solutions, solar water pumps and water heating solutions and solar portable kits.

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Clean energy still a far cry for small firms in Tamil Nadu...

 

Small enterprises should look at climate change as a business opportunity. Growing uptake of solar power and wind energy in Tamil Nadu should be seen by fledgling entrepreneurs as new avenues opened by the shift to clean energy, said K. Gopalakrishnan, President, Tamil Nadu Small and Tiny Industries Association.

“The role of small industry in solar power is negligible. They are mostly into automobile component manufacturing, plastics, electrical items, manufacture of transformers, and textile.”

He was speaking at an event to discuss the impact of climate change from an SME perspective, here yesterday.

“The foot valves used in water pumps in irrigation are seen to be key components in water and energy conservation. This can be new business for small firms.”

Energy-saving motors to run powerlooms in the textile industry, Light Tubes, which direct sunlight into the inner chambers of a building – much-sought in the hotel industry – and low-cost solar panels could be new avenues for business.

Incapacity to make the large investments is a major hurdle for small enterprises to take to solar energy. The lack of proper Government policy incentivising small firms into renewable energy is another dampener, according to Gopalakrishnan.

Energy audit as a service to manufacturing companies is another growing segment, said R. Vijayalakshmi, Additional Director, Tanstia-Fnf Service Centre, a joint venture between Tanstia and Friedrich Naumann Stiftung Foundation, Germany, to support small enterprises in the State. “In another two years, there will demand for company who conduct energy audits.”

Behaviour of corporates

Callous attitude of large corporations could deter small companies in taking to renewable power. “With a global wrangle on over which country should cut down how much on carbon emissions, there is much uncertainty among small firms whether clean energy is the way forward,” said Arivudai Nambi, Director, Climate Change Programme, M.S. Swaminathan Research Foundation.

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Industry users unite against high power tariff in Maharashtra...

 

High-tension industry consumers in Maharashtra with a monthly consumption of 100,000 units are up in arms against the high power tariff in the state. Industry bodies have argued that tariff charged by state-run Maharashtra State Electricity Distribution Company (MahaVitaran) is higher by Rs 2 to 2.50 per unit compared to other states.

As per the latest statistics available with the Maharashtra Electricity Regulatory Commission, Maharashtra tops the list with the per unit tariff of Rs 8.82 followed by Delhi (Rs 6.64),Tamil Nadu (Rs 6.04), Jharkhand (Rs 5.82), Karnataka (Rs 5.56), Chhattisgarh (Rs 5.46), Odisha (Rs 4.95).

Of MahaVitaran's 22.1 million consumers, 312,000 are from industry and of these 12,000 are high-tension users. MahaVitaran mobilizes nearly Rs 10,000 crore annually from these high tension consumers to cross-subsidize agricultural users in particular. MahaVitaran has sought from the state government Rs 3,800 crore of the total dues worth Rs 8,000 crore from farmers.

R B Goenka, chairman, energy cell of Vidarbha Industries Association told Business Standard, "In current scenario, the tariff has increased to un-sustainable limits. It will become difficult for industries to use such high cost energy for running their Industries and will have to close down because power in neighboring states is much cheaper. Industries in Maharashtra cannot compete with industries in neighboring states."

MahaVitaran official said the discom is giving a rebate of Rs 2.50 per unit during night for industry consumers. However, industry bodies have argued that despite this concession tariff continues to be the highest.

Meanwhile, the state government has taken a serious note and formed a cabinet sub committee led by industries minister and former chief minister Narayan Rane to suggest ways to lower the industry tariff.

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Power from private plants to cost more in Punjab...

 

Punjab may be declared power surplus after commissioning of two thermal units in the private sector in the near future but the electricity tariff is going to increase.

Owing to less allotment of indigenous coal, the private power plants will import it from abroad and will pass on the extra cost to the consumers. The power with the imported coal (35% of the total) will cost 35 paise per unit more to consumers.

As per the Punjab State Power Corporation Limited (PSPCL) analysis, in case of use of imported coal with landed cost of around Rs. 10,000 per metric tonne, the price per unit may increase to around Rs. 3.96 as the imported coal with Indian coal is to be blended in ratio of 30:70 resulting in a net increase of about 35 paise per unit in energy charges.

PSPCL has prepared itself to file the Annual Revenue Requirement (ARR) petition before the power regulator.

Appellete Tribunal of Electricity (APTEL), as per an earlier decision, has already allowed that private power plants can charge the state governments for the extra expenditure on imported coal.

In view of that, Larsen & Toubro, the firm executing the Rajpura thermal plant, had sought the approval of the Punjab State Electricity Regulatory Commission (PSERC) for procurement of coal from alternative sources (imported coal) and passing through the landed cost of such coal in tariff under the power purchase agreement through a petition.

As disclosed by a senior PSPCL official, L&T in their petition to PSERC has submitted that the lowest price quoted by a consortium for importing coal was Rs. 10,000 per metric tonne. PSPCL had attended the tender opening, as per the officer. The petition also sought passing on of the cost of washing of coal and transportation cost of coal from Sirhind to the site of the plant as the railway line to the plant is still incomplete.

PSERC did not admit the petition and said that L&T is yet to negotiate the price of coal with the tender company for further reducing it and has observed that on the remaining two issues, L&T will have to go as per PPA. The Commission has directed PSPCL to remain associated with L&T in process of negotiations for importing coal to get lower prices.
 

Power plant           Tariff (Rs/unit) with 100%    Tariff with 35%
                                    indigenous coal               imported coal

Talwandi Sabo                3.62                                     3.96       
Rajpura                          3.37                                      3.69   
Goindwal                       3.63                                     4.05

 

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Singapore’s Equis Funds raises investment in Dans Energy to $64M...

 

Hydreq Pte Ltd, an arm of Singapore-based energy and infrastructure investor Equis Funds Group (Equis), has invested Rs 120 crore ($18.96 million) more in Dans Energy Consulting Pvt Ltd.

It was the first of its kind PE investment by an overseas fund in the hydro power sector in India. With this, the total investment by Equis in DANS will be Rs 400 crore ($64 million).

Equis earlier invested in two other tranches in Dans in August 2012 and March 2013.

HSA Advocates and Rajah and Tann LLP advised Equis on this deal.

Founded in 2006 by chairman and managing director T Nagendra Rao, Dans Group provides research and consulting solutions to independent power producers. Rao has over 10 years of his 30 years of professional experience in the power sector.

Dans also provides assistance to hydro power project developers in India for activities related to development of hydro electric projects. Its services include technical consultancy, government liaison and statutory approvals, financial advisory, operational assistance, etc.

Dans has several projects under construction in Sikkim on a build, own, operate and transfer (BOOT) basis. It holds a large portfolio of hydro projects and is a developing run of river 193 MW hydro power platform in northern India, of which one project of 96 MW is about to complete.

Equis has been set up by former Asian Development Bank and Macquarie executives to tap investment opportunities in energy and infrastructure sectors across Asia. The firm closed Equis Asia Fund I at $647 million last year, exceeding the firm’s $500 million fundraising target.

Rajpal Chaudhary, former executive director and co-founder of the property management firm Assetz Property Services, is one of the founding partners of Equis and leads its Indian operations. The firm is led by David Russell, a former senior MD at Macquarie Group who led Asian private equity and Greater China. Equis is based in Singapore, with its regional offices located in Delhi, Hong Kong and Chengdu.

The overseas fund invests in a variety of sectors, including renewable and conventional power generation, energy transmission and distribution, energy and agricultural storage and handling, waste and water treatment, and energy, agricultural and general transportation and logistics.

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NTPC’s Chhatti Bariatu coal block will last 40 years...

 

NTPC’s Chhatti-Bariatu South Coal block is spread over 750 ha land and has net geological reserves of 358.35 MT with total mineable reserves of 262.42 MT.

NTPC hopes to mine the field for 40 years with annual production of 7 MTPA of coal.

The coal block for which NTPC has presented mining plan recently is located in North Karanpura coalfield in Hazaribagh district of Jharkhand.

The coal block will also need additional land for diversion of power line, road, etc to the south of the block.

NTPC plans to spend an estimated amount of about Rs. 120 crore on abandonment activities that will include dump management, rehabilitation/plantation, top soil management, reclamation of quarry and various other activities.

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Lack of clearances, stranded projects and helpless power ministry...

 

If the number of power projects getting stranded due to lack of clearances is any indication, the Union Power Ministry is slowly but surely becoming powerless much to the chagrin of project developers. With its intervention with other ministries and the state governments having no impact, the Power Ministry has now approached the Cabinet Committee on Investment (CCI) for supporting in expediting clearances in respect of some power projects. Indeed the amount at stake is too huge (approximately Rs. 40,000 crore) to be ignored.

 

Some of the power projects facing delay due to lack of clearances are listed below:

Meenakshi Energy’s 1,000 MW Nellore power project:
While getting environment clearance (EC) is a mammoth task, Meenakshi Energy has committed a blunder by allowing it to expire. EC granted for the second phase of Meenakshi Energy’s 1,000 MW thermal power project located in Nellore district of Andhra Pradesh expired on July 1, 2013. While Expert Appraisal Committee (EAC) has recommended extension of validity period of the EC in its meeting held on May 20, 2013, formal letter if consent from the MoEF is awaited. The Ministry of Power is knocking at the doors of CCI to seek its support to secure the extension. Meenakshi Energy’s first phase of the project with a capacity of 300 MW is already under operation.

Sagar supercritical thermal project:
Universal Crescent Power Private Limited who is implementing 1,980 MW imported coal fired power plant at an estimated cost of Rs. 8,600 crore has completed the land acquisition process and has signed Fuel Supply Agreement as well as PPA (Power Purchase Agreement). However, the company is unable to cross the last hurdle, that is, the EC and Coastal Regulation Zone (CRZ) Clearance. Sagar Supercritical Thermal Project at Nayachar Island, in District Purba Medinipur, West Bengal is in a spot as the Expert Appraisal Committee (EAC) feels that the site selected for the project is ecologically fragile and sensitive. EAC in its meeting held September, 19 felt further deliberation is needed to accept the suitability of the site for setting up the project. Ministry of Power has reportedly approached the CCI to take up the matter with the MoEF.

Machhakata-Mahanadi coal block:
Machhakata-Mahanadi Coal Block, allotted in 2006 for captive mining to MAHAGENCO and Gujarat State Electricity Corporation Limited (GSECL), has been delayed due to a slew of pending clearances from the Odisha government. Mahaguj Collieries Ltd is the joint venture formed between Mahagenco and GSECL to mine and share the production in 60:40 ratio. Mahagenco was supposed to use the coal from the block for generating power from Parli (250 MW), Chandrapur (1000MW), Koradi (1980 MW), Bhusawal (660 MW) and Dhopave (1980 MW) whereas GSECL will use it for Wanakbori (800 MW), Ukai (500 MW), Dholera (1600 MW) and Sinor (1600 MW). MCL is also planning 2,500 MW (10X250MW) thermal power project based on wastes from coal washeries.

The Odisha government is demanding 25% free power from thermal power plants and 33% from plants generating power from rejects of washed coal. In fact, the Odisha government has restricted land acquisition outside coal block area for supporting infrastructure and over burden dumping which is adversely impacting Mine Plan for development of the coal block. Also there is strong resistance from local residents to part with their land. Development of mining block has made no progress so far as the Odisha government has not yet issued Mining Lease and Environment and Forest clearances are also pending. Even land acquisition has not made any progress. Repeated requests from the Power Ministry have had little impact on the state government which has forced the former to approach CCI for intervention.

Hinduja National Power Corporation’s 1050 MW Vishakhapatnam thermal power project:
Foundation stone for 2×525 MW Vishakhapatnam thermal power project by Hinduja National Power Corporation Limited was laid in 1994 and PPA was also signed in the same year but the project is yet to see the completion till date. The project has crossed all the hurdles but one, that is, Coastal Regulation Zone (CRZ) clearance. According MoEF the state government has not yet submitted report regarding alleged violation of the CRZ by the developer. Rs. 5,545 crore project for which FSA has already been signed is likely to be commissioned in March 2014. But the CRZ clearance is pending with the MoEF for a long time and now the Ministry of Power has sought the direction of the CCI in the matter.

1,080 MW Rajwest pithead thermal power project:
For the 1,080 MW Rajwest Pithead Thermal Power Project in Rajasthan the main hurdle is in the form of enhancement of capacity of linked mines. The Rajwest 1,080 MW pithead TPP has been allocated two lignite mines, Kapurdi and Jalipa, of which Kapurdi mine is currently operational at 3 MTPA. This capacity, however, is sufficient to run the plant only upto October, 2013. Thus there is an urgent need to get the mine plan and mine closure plan approved. Ministry of Power wants the CCI to seek Ministry of Coal’s intervention and get the approval without further delay.

Also the mining project need environment clearance as the capacity expansion is more than 25%. Though the EAC has cleared the project, Ministry of Power wants CCI to intervene with the MoEF to expedite the matter. In case of Jalipa mine, land acquisition issues are holding back the project. Also transfer of mining lease from Rajasthan State Mines and Minerals to Barmer Lignite Mining Company Limited yet to take place.

Fatehpur coal block:
In case of SKS Power Generation Chhattisgarh Limited’s 1, 200 MW project, issue of Prospecting License (PL) is pending for Fatehpur Coal Block at Chhattisgarh state government level. The state government reportedly has demanded firm coordinates while the company had sent approximate coordinates from CMPDI (Central Mine Planning and Design Institute). Ministry of power has approached the CCI to take up the matter with the state government to expedite the issue of PL.

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Tamil Nadu Electricity Commission issued order on net metering for the rooftop solar projects...

 

TN Electricity Regulatory Com­mission has issued its order on ‘net metering’ with regard to the state’s solar energy policy 2012, paving the way for the installation of grid connected rooftop solar photo voltaic (SPV) plants. However, the pending court cases could prevent the enforcement of the order.
 
The commission’s order came in the wake of the state government issuing guidelines for availing its subsidy of Rs 20,000 for one-kilowatt rooftop SPV plants. Domestic consumers who want rooftop solar SPV plants could either opt for capital subsidy or generation-based incentive (GBI).
 
The commission, in its order on Wednesday for LT connectivity and net metering, said that both the existing and new solar rooftop and solar systems, which comply with this order, are eligible for net metering.
 
“Two meters have to be installed by the solar power generator, one for measuring solar power generation (SPG) and the other for import-export measurement, the order said.  Inte­re­stingly, the order has made the installation of the SPG meter optional for those not availing of the GBI. The second meter is a bi-directional one, which would replace the existing consumer meter.
 
To ensure grid stability, the TNERC has fixed a cap on grid penetration for the PV system. The order said that   any bat­tery backup must be restricted to the consumer’s network and battery po­wer had to be prevented from  ext­ending to grid in case of power failure.

The order can be downloaded from here.

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