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Friday, December 31, 2010

Impending tariff-based bidding regime likely to trip MoU states such as Chhattisgarh, Orissa, Arunachal Pradesh

The impending tariff-based bidding regime may not benefit states such as Chhattisgarh, Orissa, Arunachal Pradesh, which have tied up concessional power from private developers under the memorandum of understanding (MoU) route. These states will be left with no option but to surrender power allocations secured under preferential arrangements with developers after January 5, as under tariff-based bidding, states will lose the tariff incentive to hold surplus power for sale.
The power ministry is expected to introduce tariff-based bidding on January 6. Thereafter, states would be required to meet their entire power requirement through competitive bidding route only.
Resource-rich states tied up a significant quantum of cheaper power from private projects under the MoU route. For example, Chhattisgarh has tied up 6,300 mw power from private projects being set up in the state at variable costs. Similar is the case with Orissa and Arunachal Pradesh. The idea behind these MoUs is..to get a larger share of power with the states by promising various incentives and government support.
However, under tariff-based bidding, states who have not yet signed power purchase agreements (PPAs) for power supply tied up will now have to agree to pay tariff arrived at after the bidding process.
“States would benefit from a bidding regime as it produces competitive tariffs. A case in point is ultra-mega power projects scheme. But in those very few cases where states have tied up cheaper power from private projects as a compensation mechanism under state policy for helping projects get clearances, they will lose,” Kuljit Singh, partner, infrastructure practice, Ernst and Young (E&Y), said.
It is not just resource-rich states which have tied up concessional power from private projects. Even resource-poor ones like ]Uttar Pradesh and Punjab have secured cheaper power supply from private projects in return for their support to these..projects. However, concessional power supply tied up by resource-rich states such as Chhattisgarh, Orissa and Arunachal Pradesh from private projects is far higher than their projected electricity demand. The CERC apprehends that these states would sell the surplus power to the free power market through traders within their boundary and benefit at the expense of other states. Chhattisgarh and Orissa are rich in coal deposits while AP accounts for a big chunk of the country's hydro-generation potential. The CERC had recently written to the Centre, drawing its attention to the serious implications of these states seeking concessional power, given the quantum of their generation potential. A switchover from cost-plus to bidding norms for the determination of tariffs for power projects is envisaged in the Electricity Act, 2003. The original schedule was January 6, 2006. However, the Centre extended the deadline for five years to provide more time to public sector.

4000 MW Orissa ultra mega power project likely to be cleared soon by the Ministry of Environment and Forests

The 4,000 MW ultra mega power project in Orissa which has been delayed over environment clearances is likely to be cleared soon by the Ministry of Environment and Forests. "In the next 2-3 days we would be able to finalise the modalities (of the Orissa UMPP)...we are trying to sort it out soon," Power Secretary P Uma Shankar said. 
The deadline for submitting the initials bids for the Bedabahal project in Orissa is January 30, 2011. If the necessary environment and forest clearance is granted, the bids would be closed in time. 
"We are hopeful that it (Orissa UMPP) would come on time," Shankar said. 
The project was allocated three coal blocks -- Meenakshi, Meenakshi B and Dipside of Meenakshi. Environment Ministry is likely to allow the power producer to extract coal from these mines with some amendment though. 
"A bit of modification of the Meenakshi B and some part of Dipside of Meenakshi may be done," he said adding the Environment Ministry is of the view that as much as forest area should be saved. The invitation of preliminary bids for these projects have been delayed four times in the past due to environment hurdles. 
Ministry of Environment and Forests had put the three coal blocks allotted to the project in the "no-go" area, which means mining cannot take place in these areas as it may cause damage to the environment. 
this  had resulted in delaying the bidding process of the project as the developers were shying away from investing in the projects which were not given all the requisite clearances. 
The government has so far allotted four such projects of which three -- Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh) and Tilaiya (Jharkhand) -- have been bagged by Reliance Power and the one at Mundra in Gujarat by Tata Power. Power Ministry plans to add 1,00,000 MW of electricity in the XIIth Plan Period (2012-17), a major chunk of this target coming from these projects.

5 NTPC projects bag safety awards by The Institution of Engineers - Talcher, Ramagundam , Simhadri, Kayamkulam and Dadri

Five of NTPC Ltd's power stations — Talcher, Ramagundam , Simhadri, Kayamkulam and Dadri — have been awarded for “safety innovations” by The Institution of Engineers. The awards were received by Mr S.P. Singh, NTPC's Director (HR) from Mr Rakesh Mehta Delhi's Chief Secretary. Senior officials of NTPC projects were also present on the occasion, a company statement said.“NTPC's Safety Policy has clear commitment for making all-out effort to ensure prevention of accident. To comply with all the safety requirements, qualified Safety Officers have been appointed by NTPC, in all its units generating electricity or under construction,” the statement said. afety months are organised by NTPC involving each worker, wherein activities such as safety related competitions including safety elocution, painting, quiz are conducted, it said. 

Power-starved Bihar set to receive an additional 2960 MW electricity from NTPC's new plants in eastern states

With its power consumption even much less than Gurgaon, a satellite city of Delhi, power-starved Bihar is set to receive an additional 2960 MW electricity from NTPC's new plants in eastern states.
Bihar, which completely depends on supply from the NTPC for power distribution, is presently drawing 1309 MW from the country's largest power producer.After completion of nine upcoming NTPC projects in the eastern states likely in the next five years,Bihar would receive another 2960 MW of electricity, sources in the Power ministry said here.
The projects in the pipeline are Barh Stage-I & II, Darlipali, Gajmara, Talchar stage III, Farakka stage III, Railway Nabinagar, Nabinagar and MTPS stage II.The total installed capacity of these future projects would be 14,890 MW out of which allocation for Bihar would be 2960 MW, the sources added. giving details, the sources said out of the total installed capacity of 1980 at Nabinagar, Bihar will get 1374 MW of electricity. "Allocation letter has already been issued by the ministry of Power for the same," the sources added.
Likewise, from 3200 MW Darlipali, Bihar will derive 300 MW and from Barh Stage-I 273 MW, Barh Stage-II 175 MW and Talchar Stage-III 124 MW, the sources said.
The additional power allocation would come as a boon for the eastern state which is languishing at the bottom in terms of consumption of power in the country.Bihar's power generation capacity is 80 MW from its two power units -- Barauni Thermal Power Station and Muzaffarpur Thermal Power Station.    
The state, which consumes around 700 to 850 MW daily, completely depends on supply from NTPC for power distribution.    Only about 50 per cent of Bihar's 38,475 villages are electrified, though it does not necessarily mean they receive power.  The per capita annual electricity consumption in Bihar is about 75 Kwh (Kilowatt per hour) as compared to all India average of 600 KWH and 895 KWH of Punjab.  Gurgaon's per capita electricity consumption is about 1265 Kwh.

Thursday, December 30, 2010

NTPC, Bhel joint venture seeks tech, equity partners

NTPC BHEL Power Projects Pvt. Ltd (NBPPL), an equal joint venture between state-run companies NTPC Ltd and Bharat Heavy Electricals Ltd (Bhel), is scouting for a technology and an equity partner.
The company plans to set up a manufacturing facility for balance of plant (BOP) equipment by 2011-12 and power generation equipment with a yearly capacity of 5,000MW by 2014-15. BOP equipment comprises coal and ash handling plants and cooling towers among others, and excludes main power plant equipment such as boilers, turbines and generators. The joint venture partners are open to diluting their stakes to 26% each for the project, which will require an investment of around '6,000 crore and provide direct employment to around 6,000 people.
"We are looking for a technology as well as an equity partner for the project," said a senior official in the department of heavy industry on condition of anonymity. "There will be a licensing agreement to import technology."
NBPPL has been set up to bolster power generation equipment production in the country. It will also handle engineering, procurement and construction contracts.
India, which has a limited number of BOP equipment vendors, will again fall short of its power capacity addition target on account of equipment supply delays and other reasons in the current five-year plan (2007-12), exacerbating an energy deficit that's seen as a bottleneck for economic growth.
"We have appointed SBI Caps as a consultant to look for an equity partner," the official said. "But before that, they (NTPC and BHEL) need to give us a concept of the project."
C.P. Singh, chairman and managing director of NBPPL, confirmed that the company was "looking for technology partners for various systems and products". He did not comment on the company seeking an equity partnership.
India has a power generation capacity of 167,317MW. Even as the target of adding 78,577MW in the 11th Plan period has been revised to 62,374MW, total capacity added till date is 29,361MW.
Projects are faltering because of reasons as varied as shortage of power generation equipment, delayed investment decisions, contractual problems, resistance to land acquisition, delays in environmental and forest clearances, geological issues and natural calamities.
"Under phase one of NBPPL, we are looking at tying up technology transfers for balance of plant equipment such as coal handling and ash handling packages. In the second phase we will be seeking technology partners for turbine and generators. Post that we will be seeking equity partnerships, the plans for which are in early stages," said a senior NTPC executive who did not want to be identified.
The joint venture has already acquired 750 acres from the Andhra Pradesh government at the project site at Mannavaram. The foundation stone for the manufacturing facility was laid by Prime Minister Manmohan Singh in September. The joint venture will also work as an engineering, procurement and construction company for setting up power projects.
"Coal handling and ash handling are the two biggest packages for the BOP equipment. At an appropriate time, a strategic investor will be brought in. It could be anybody who can raise both debt and equity," said a senior Bhel executive who also requested anonymity.
Bhel has a near-monopoly in the domestic power generation equipment space, with 60% market share. Out of the total orders placed for power generation equipment in the 11th Plan, orders for 42,431.58MW have been placed with Bhel, the country's largest power equipment maker, which has an annual capacity of 15,000MW.

Power sector to lead infra investments in 12th Plan

Robust and consistent investments in the power sector are expected to guide the target of $1 trillion (Rs 45 lakh crore) investment in infrastructure set out by the Planning Commission for the 12th Plan (2012-17).
“It is an ambitious target but is achievable. Power sector investments will guide the entire target. The total investment in the power sector itself, including generation work in progress, will be around $300 billion (Rs 13.5 lakh crore),” said Commission member B K Chaturvedi in an interview to Business Standard.
The Commission estimates India will see capacity addition of around 100,000 Mw during the period, with every Mw added costing at least Rs 5 crore. Capacity addition will, thus, result in investment of at least $100 billion. Chaturvedi says a similar investment of around $100 billion is expected in distribution and transmission during the next plan period. And, that overall investment, including generation work in progress currently, will come to $300 bn, which is 30 per cent of the overall target.
Investments in other sectors expected to contribute significantly to the target are in roads, irrigation, airports and railways. The railways are expected to have huge investments due to the ongoing freight corridor projects.In the 11th Plan period (2007-12), the Commission had estimated an investment of $147.8 bn in the power sector. It revised this marginally downwards to $146.05 bn in the mid-term appraisal. Even as investments in the sector have broadly kept pace with the set target, in capacity addition the sector is likely to see a 26.2 per cent drop to an addition of only 62,374 Mw by the end of the Plan period (March 2012), as against an original target of 78,700 Mw.
“We have lacked in capacity addition and it is expected to pick up in the 12th Plan,” added Chaturvedi.
Similarly, in the roads sector, investments fell short of the original target in the 11th Plan due to shortfall in the award of projects by the National Highways Authority of India (NHAI) during these first three years of the Plan. With the ministry of road transport and highways aiming to achieve a completion rate of 20 km of highways per day, the major build up of expenditure as a result of the acceleration is expected to be during the 12th Plan.The Commission had set the overall investment target in infrastructure in the 11th Plan at around nine per cent of the Gross Domestic Product, at $514 bn as compared to $218 bn during the 10th plan (2002-07). It estimated the private sector’s contribution in overall infrastructure investment would be 30 per cent.The investment in infrastructure during the 11th Plan has reached 7.18 per cent of GDP and is expected to reach 8.37 per cent by 2011-12. In the 12th Plan, the Commission expects infrastructure investment to constitute around 10 per cent of GDP, if the Indian economy grows at an average annual growth rate of nine per cent.

PGCIL plans to seek $2 billion loan from ADB, World Bank

State-run transmission utility Power Grid Corp. of India Ltd (PGCIL) plans to seek a $1 billion (Rs.4,510 crore) loan each from the Asian Development Bank (ADB) and the World Bank.This is the first time PGCIL is seeking a loan from an international lender such as ADB without a guarantee from the government.
“We are seeking these loans as we have a huge capital expenditure programme for the 12th Plan period (2012-17). We have been advised by the government to seek non-sovereign loans on the strength of our balance sheet...we are in talks with ADB for availing some part of the loan without sovereign guarantee,” said PGCIL chairman and managing director S.K. Chaturvedi.
Of the $1 billion sought from ADB, around $250 million is expected to be availed as a non-sovereign loan.
PGCIL posted a profit of Rs.2,041 crore on revenue of Rs.7,504 crore in 2009-10. As on 31 March, it had Rs.34,417 crore of debt on its balance sheet.
PGCIL wants to secure loans from lenders such as the ADB and the World Bank because of the low rate of interest they charge and the long repayment tenure they offer.ADB loans typically have a 25-year tenure and a five-year moratorium. World Bank loans are for 30 years and come with a four-year moratorium.
“While we are waiting for the exact terms such as the repayment period, interest rates for the ADB loan, things are at a very premature stage for the World Bank loan,” said J. Sridharan, director of finance at PGCIL.A World Bank spokesperson said in an email there was “no proposal for a loan to Powergrid under discussion”.An ADB spokesperson confirmed the development.
“ADB is in discussion with Power Grid for extending loans. One loan under the sovereign lending program of ADB with a government guarantee, and another non-sovereign loan without a sovereign guarantee, are being discussed...,” the spokesperson said in an email. “The discussions are in a very preliminary stage. No agreements have been reached so far.”PGCIL already has in place approved loans worth $3.67 billion and $1.5 billion from the World Bank and ADB, respectively.PGCIL has estimated capital expenditure requirements of Rs.1 trillion in the 12th Plan period. For PGCIL, 30% of capital expenditure in any Plan period comes from internal accruals and the balance from loans.Of the loan amount, around 40% is borrowed from the domestic market and the rest from international lenders.
“The sovereign loan will be offered at ADB’s standard terms for Libor-based loans, which comprises a fixed spread over the relevant benchmark cost base rate, and a commitment fee of 15 basis points per annum on the undisbursed loan balances, after 60 days of loan signing,” the ADB spokesperson said. “The non-sovereign loan will be priced on a case-to-case basis, depending upon mutual agreement between ADB and Powergrid.”
Libor, or the London inter-bank offer rate, is the rate at which most creditworthy international banks dealing in euro-dollars charge each other for large loans. A basis point is a hundredth of a percentage point.The World Bank has been associated with the Indian power industry for long. Over the past decade, it has provided support to Union government entities for generation, transmission and renewable energy investments, as well as to state electricity boards for investments associated with sectoral reform.
PGCIL operates around 74,000 circuit km of transmission lines and 124 sub-stations. India has an inter-regional power transfer capacity of 20,800MW and PGCIL plans to increase it to 37,000MW by 2012. This will require strengthening regional grids and building more inter-regional links.

India plans underwater power line to Sri Lanka

India’s first undersea power transmission project with Sri Lanka is likely to be implemented by 2014. The Power Grid Corporation, India’s largest electricity transmission firm, which will execute the project, will give the detailed project report (DPR) to the Centre within a month.“It is upon the ministry then to put the plan on fast track,” said a top PowerGrid official. The 250-300 km power link, including submarine cables over a stretch of over 50 km, will be jointly implemented by PowerGrid and Ceylon Electricity Board (CEB). The project is expects to start by 2014.
CEB, too, seemed optimistic about the date of the project. “If everything goes well, the project will take off. But I am not sure about the timing, since we have to wait for a feasibility report. On the basis of the report, we will fine-tune the plan,” said Vidya Amarapala, CEB Chairman.
“The estimated cost of this venture will be Rs 3,000-4,000 crore and is likely to transmit about 1,000 Mw by the end of 12th Five Year Plan period,” the Power Grid official said. The possible spot for this linkage is between Rameswaram in Tamil Nadu and Talaimannar in Sri Lanka. “The final decision on exact route will be taken by the two governments,” he added.
CEB is the largest electricity company in the island nation, with an installed capacity of 2,684 Mw, of which approximately 1,290 Mw is of thermal energy, and 1,207 Mw of hydroelectricity. India’s largest power producer, NTPC, too, has plans to foray into Sri Lanka by setting up a 500-Mw plant in association with CEB. This project, too, is in the final stages of clearance by the central government.
“It will be a direct link. There are similar grid connectivities in other parts of the world like the United Kingdom to Europe, the United States to Canada and East Europe to European grid. The technology for submarine transmission will be the same as these countries are using now,” Amarapala said.
“PowerGrid already has some overseas projects going on. While the Bhutan project is operational, a linkage with Bangladesh is under construction. But the Sri Lanka venture is important as it is an underwater linkage,” the PowerGrid official said.
However, experts are skeptical. “For the power industry, this will not have any impact other than just a bilateral confidence-building measure. The technology should be of global standard as an underwater line needs higher expertise compared to in-land power linkage and it will be a challenge for both the countries. If works out, it may help us in transmitting the power produced by NTPC plant in Sri Lanka,” said Rupesh Sankhe, a research analyst with Angel Broking.
“This might also be a strategic measure to counter the growing Chinese presence in Indian ocean. I don’t think a project in Sri Lanka would be financially viable, as it is not a favourite destination for private investors,” Sankhe said.
The CEB, however, has a different take on this. “CEB expects this bilateral project to be beneficial for both countries. We want it to be balanced marriage,” Amarapala said.

Wednesday, December 29, 2010

NTPC and PowerGrid on signing spree for new projects - Power PSUs race to beat Jan 5 phase-out of bidding via MoU route

State-owned NTPC Ltd and Power Grid Corporation (PGCIL) — two of the country's largest power utilities — have more or less insulated themselves against private sector competition for new projects, at least for a better part of the next 10 years.
With the impending January 5 cut-off for a phase-out of the MoU (memorandum of understanding) route for bagging generation projects, NTPC, which has a capacity of 33,000 MW currently, has already signed pacts with distribution utilities across the country for supplying a total of 85,000 MW of power in the coming years.
Of this, deals for well over 20,000 MW were signed in just two months — November and December — industry sources said. This ensures that the company is booked for well beyond 2017, by when the power major is targeting a capacity of 75,000 MW on the ground.
With the new bidding regime set to apply to the transmission sector as well, PowerGrid is pushing to sign pacts with private developers before the January 5 deadline. The utility has also been working on signing transmission agreements for the two Ultra Mega Power Projects (UMPPs) that are slated to come up in Orissa and Chhattisgarh, even though both projects are still to get environmental clearances.
Earlier this year, PowerGrid had signed up long-term transmission pacts for nine proposed high-capacity transmission corridors for wheeling power from a set of private projects coming up in the eastern and southern States. The move, entailing investments of about Rs 58,000 crore, has ensured that PowerGrid's order book position is more than comfortable for the next several years.
Both NTPC and PowerGrid have been apprehensive about the transition to the new regime, where utilities have to shift to a tariff-based competitive bidding norm for bagging projects. This is especially in light of aggressive bidding by private players in a handfull of projects that have been handed out so far.
“The aggressive signing of pacts in the last two months means that NTPC should be secure till 2020, even if it does not bag a single project under the new competitive bidding format,” a Government official involved in the exercise said.
While for NTPC, the hurry to sign up power purchase agreements makes perfect commercial sense, analysts said that it was baffling that the state-owned distribution utilities were willing to reciprocate in equal measure. This is despite the proposed tariff-based bidding format promising better electricity tariffs for the consumers.
Under the new tariff-based competitive bidding regime, the developer that offers the lowest average electricity prices gets to set up the project. The move, which is expected to drive down electricity tariffs (or the cost per unit of power) at the consumer level and make the award of projects more transparent, effectively disallows developers of both generation and transmission projects to enter into MoUs with the distribution utilities for selling electricity post January 5.

Private players to power 12th Plan capacity addition - Will account for 62 percent of 75,000 MW slated to come up

Amid an impending transition to a new competitive bidding regime for future generation projects, private sector developers are slated to corner a bulk of the power projects on the anvil.
A strategy plan submitted by the Power Ministry to the Cabinet Secretariat forecasts that the private sector will account for 62 per cent of the 75,000 MW capacity slated to come up during the coming Five- Year Plan period (2012-17), a big jump from the 20 per cent factored in for the current Plan period ending March 2012.
The total capacity addition requirement for the Twelfth Five-Year Plan is pegged at 88,000 MW, which includes 13,000 MW from renewable energy sources. Of the 75,000 MW slated to come up through conventional energy sources (coal, gas and large hydro projects) in the coming Plan period, the private sector is expected to be the biggest contributor with 46,500 MW.
“The increase in private sector participation from the current planned level of approximately 19 per cent to 62 per cent is a highlight of the next Plan (Twelfth Plan) in terms of generation,” the Power Ministry's strategy document states.Utilities in the State and Central sector are expected to account for 20 per cent (15,000 MW) and 18 per cent (13,500 MW) of the capacity addition envisaged during the Twelfth Plan period.
Advantage pvt players
According to experts, the transition to a new regime for the award of power projects from January next year makes the private sector players clear favourites to bag the new projects that are slated to be announced by various distribution utilities.
Besides, a large number of private projects are already in the pipeline, where construction activity is in various stages. Most of these are likely to come up as merchant projects, with plans to offload electricity in the spot market (either on the two operational power exchanges or sales through power traders).
Government firms, both in the State-sector as well as Central Sector utilities such as NTPC Ltd and Neyveli Lignite Corporation, have been finding it difficult to compete against aggressive private players to bag projects under the competitive bidding route, where the developer promising to offer the lowest tariff from a proposed project gets to set it up.The Government has set January 5 as the cut-off date for power projects to shift to a tariff-based competitive bidding regime, effectively disallowing future generation and transmission projects to enter into power purchase agreements based on the current regulator-determined tariffs.
The private sector has shown a progressively improving trend in the commissioning of new projects during the first three years of the current Plan period.According to Government data, of the 9,263-MW commissioned in 2007-08, the private sector accounted for only about eight per cent.This improved to 25 per cent in 2008-09 (883 MW out of the 3,454 MW commissioned that year) and to 45 per cent during 2009-10 (4,313 MW out of the 9,585 MW commissioned).

Supercritical tech set to be made mandatory for coal power plants

The government may soon make it mandatory for power companies to switch to energy-efficient supercritical technology for their upcoming coal-fired power projects as it looks at playing a major role in global efforts to fight climate change by cutting down emission of greenhouse gases. The coal-based power projects have been identified as major contributor to environmental pollution. They contribute over 65% of the country's total installed power generation capacity at present.Coal-fired power plants based on supercritical technology are less polluting than conventional plants. The energy efficiency of these plants is 45% against 30-32% for conventional plants.
"Indian power sector is predominantly based on coal and this will remain there for a long time in the new projects. Keeping this in mind, the government has already started several initiative to reduce emission from coal-based projects. Mandatory use of supercritical technology will be step in this direction," said an official in power ministry in the know of the development.It is expected that the government may announce a new policy soon for mandatory use of supercritical technology based power projects. As adoption of new technology for all projects is a time-consuming process, the government wants this to start from the 13th Five-Year plan period starting from 2017.
Equipment for a large portion of capacity for the 12 th Plan (2012-17) has already been ordered and it is feared that any new regulation for these projects may impact the capacity addition programme. "We expect that even in the 12th plan half of the capacity addition (of the total 100,000 MW) is based on supercritical technology," said the power ministry official.
The country's largest power producer, NTPC, has already adopted supercritical technology in a big way. Its first project based on this technology may get partially commissioned next month with the start of 660 mw unit at Sipat. In the 12th Plan, close to 90% of NTPC's capacity is expected to be based on supercritical technology. A few private sector power projects have also ordered these equipment or 11th Plan projects."While the technology will definitely contribute towards improving the efficiency of coal-fired projects and reduce their emission levels, mandatory rules may impact small power projects as supercritical technology is available in large unit sizes of 660 MW and above," said an industry expert.
"The government is not in favour of small coal- based power projects and will discourage such projects," said a official of the Planning Commission. He said incentive schemes like including use of supercritical technology for giving mega power policy benefits could be used to promote its use. Under the mega power policy thermal units of 1,000 MW and get complete waiver from import duty on equipment purchase, income tax incentives and deemed export benefits.
The biggest bottleneck to large-scale introduction of supercritical technology comes from the shortage of manufacturing capacity for such high-end equipment. Only Bhel has recently started to manufacture supercritical equipment. Private sector major L&T is expected to start manufacturing it shortly. Other companies like Alstom-Bharat Forge, Toshiba-JSW and Italian company Ansaldo Caldie have shown interest is setting up domestic manufacturing of supercritical equipment.
Earlier, the Planning Commission had also suggested induction of supercritical to help overcome the shortage of coal being faced by several thermal power plants.In 2009-10, the country is expected to import 29 million tonne (mt) coal for power plants. This would increase to 50 mt by 2011-12 and 120 mt in the subsequent year.The commission has said that coal is not available for 28,000 MW of linkages granted in November 2008. Moreover 1,00,000 MW applications are pending for linkages with the power ministry.
Keeping the projected pollution in mind, the government is also thinking of introducing ultra supercritical technology and power projects based on integrated gassification combined cycle (IGCC) or clean coal technology.A pilot project on IGCC technology is already in works in the country. The country is also working to increase the share of renewable power in the total power basket and increase generation from nuclear fuel.

Unit VII of NTPC's Korba project in Chhattisgarh achieves full capacity

The Unit VII (500 MW) of NTPC's Korba project in Chhattisgarh achieved full load on Sunday, according to an NTPC release. The full capacity thus was achieved within a record one-month time from the date of synchronisation. The unit was synchronised with the grid on November 25. Mr S.K. Roy, General Manager, NTPC Korba, Mr S K Pattanayak, General Manager (CMG), Mr G J Deshpande, Executive Director (OS), and other senior officials were present on this occasion. Mr Arup Roy Choudhury, Chairman and Managing Director, NTPC, congratulated Team Korba on achieving this milestone. The Korba project has three units of 200 MW each in Stage I and another three units of 500 MW each in Stage II.

Maoists cause derailment of a rake disrupting transportation of coal to Bihar's Kahalgaon based NTPC plant

Maoist ultras removed fish-plates from track causing derailment of a rake in Jharkhand's Godda district early today, disrupting transportation of coal to Bihar's Kahalgaon based NTPC plant.
NTPC sources said the Maoists unbolted fish-plates near Dehri and six empty wagons and an engine, meant for carrying coal from Lalmatia to the plant, got derailed.
The disruption in supply of coal to the plant might affect production of energy at the plant, the sources said.The ultras left behind leaflets at the site claiming responsibility for removal of the fish plates, they said.Senior officials of NTPC, railways, CISF, and the district administration rushed to the spot and necessary action was being taken for clearing the tracks for resumption of transportation of coal to the plant.

NTPC lands deal for J'khand plant - Will takeover 3,000-odd acres of vacant land from Patratu Thermal Power Station

NTPC will takeover 3,000-odd acres of vacant land from Patratu Thermal Power Station (PTPS) in Jharkhand to set up 1320 mw of thermal power generation capacity at an investment of Rs 6,600 crore. 

A memorandum of understading between NTPC and Jharkhand State Electricity Board (JSEB), the holding company for PTPS, will be signed by December 31, a top NTPC official said. 
Earlier, NTPC wanted to take over the entire power station along with the land and existing thermal generation units from JSEB. The initial plan included floating a JV in which NTPC would hold 75% while JSEB the rest 25%. This proposed JV would have taken over PTPS, scrapped the existing plants there, and built new units. 
"This plan has now been replaced with a new one, where the vacant land at PTPS will be transferred to NTPC on which the new generation units will be built through a JV. NTPC will take a 74% stake in the proposed company while JSEB will hold 26% in lieu of land at PTPS, which will be transferred to the venture," the NTPC official said. 
He added: "NTPC had earlier helped JSEB in renovation and modernisation of the PTPS plant. However, it did not help much as generation dwindled. Subsequently, JSEB wanted to strike a deal with NTPC for jointly running the plant. But the power major did not agree to the proposal and wanted to take over the plant but employees of the plant did not agree to the proposal." 
During May last year, a team of professionals visited the Patratu site for a feasibility study that included all aspects of the plant including land availability, water and coal. 
At present, PTPS has 10 units with a total capacity of 840mw. Units 1 to 6, set up by Czech firm Skoda in collaboration with erstwhile USSR, are more than 36 years old. The remaining four units were built by Bhel 20 years ago. The station generates between 40mw and 120mw. Plant load factor is less than 10%.

Tuesday, December 28, 2010

Generation begins at Adani's 660 mw Mundra plant

Adani Power Ltd (APL), the power company operated by Adani Enterprise Ltd, on Thursday announced that it has synchronised country's first supercritical unit of 660 MW power plant at Mundra, taking its coal power generation capacity to 1,980 MW at the plant. 
With latest addition APL becomes the third largest private power generating company in India. Adani Group was recently in the news for receiving show cause notice from Ministry of Environment & Forests (MoEF) for destruction of mangroves at Mundra Port and Special Economic Zone (MPSEZ) site in Kutch. 
It also faced protests against its Tiroda thermal power plant in Maharashtra for violation of environmental norms. However, Adani Group chairman Gautam Adani refused to talk about the show cause notice while addressing the media. 
He, however, said the (Mundra power) project displays Adani Group's commitment to growth via clean energy initiative. "It is the first super-critical technology based project in the world to be certified for carbon credit under United Nations Framework on Climate Change (UNFCC)," he added. 
APL is setting up 4,620 MW coal fired power plant at Mundra in Kutch district of Gujarat, consisting of four units of 330 MW and five units of 660 MW. The 660 MW units are based on energy efficient and environment friendly super critical technology. 
The supercritical power plants operate at higher temperatures and pressures and are 25% more efficient then conventional sub-critical power plants. The use of supercritical technology also leads to over 20% reduction in CO2 emission.

APL synchronises country's first supercritical power plant

Adani Enterprise Ltd-run Adani Power Ltd (APL) on Thursday announced that it has synchronised country's first supercritical unit of 660 MW power plant, taking its coal power generation capacity to 1980 MW. 
"It is a matter of great pride for me that we have synchronised country's first 660 MW super critical unit at Mundra yesterday evening," Gautam Adani, chairman of the group told mediapersons here. 
"We have achieved, the synchronisation of the unit in 36 months, which is fastest by any power generator despite the fact that earthquake in China had affected our supplier badly," Adani said. 
APL is setting up 4620 MW coal fired power plant at Mundra in Kutch district of Gujarat, consisting of four units of 330 MW and five units of 660 MW. 
"This 660 MW unit is the world's first supercritical technology based project to be certified for carbon credit under United Nation's framework on Climate Change," Adani said. 
The company said that supercritical power plants operate at higher temperatures and pressures and are 25 per cent more efficient then conventional sub-critical power plants. The use of supercritical technology also leads to over 20 per cent reduction in CO2 emission. 
Adani however refused to reply to a question on Union Environment Ministry notice to the company regarding environmental violations for its Mundra Port and Special Economic Zone (MPSEZ).

NHPC to ramp up generation capacity to 5,322 MW by March, 2012

National Hydroelectric Power Corporation (NHPC) is set to ramp up its power generation capacity in the country to 5,322 MW by the end of the 11th Five-Year Plan in March, 2012. NHPC had lined up 10 projects with a cumulative generation capacity of 4,502 MW in different parts of the country for completion by the end of the 11th Plan (2007-12), Chairman-cum-Managing Director S K Garg said. 
Garg, who was here on a one-day visit, said the projects entailed a cumulative investment of Rs 21,600 crore and the necessary arrangements have been made for flow of funds. 
Out of these projects, the 231-MW Stage-III Chamera project on the river Ravi is slated for completion by mid-2011. The Rs 1,405 crore project would generate 1,108.17 million units of electricity per annum at a 90 per cent plant load factor. 
What is more, the corporation has already commissioned its 280-MW Dhauliganga hydroelectric project in Uttarakhand , the 390-MW Dulhasti hydroelectric project and 120-MW Sewa-II hydroelectric project in J&K, the 520-MW Omkareshwar hydroelectric project in Madhya Pradesh and the 510-MW Teesta hydroelectric project in Sikkim . 
The corporation produced a record 16,960 million units of electricity during the year 2009-10 and also made a foray into the business of thermal and wind power through joint ventures with various state governments, Garg added. 
The net profit of the corporation has increased four-fold from Rs 510 crore in 2002-03 to Rs 2,090 crore in 2009-10, the CMD claimed. 
NHPC was listed on the NSE and BSE from September, 2009, after its successful initial public officer (IPO) issue raked in Rs 6,000 crore.

Teesta-III HEP in Sikkim: TUL on track for ahead-of-schedule commissioning

Teesta Urja Limited is seemingly on track to achieve the accelerated commissioning of schedule of March 2012 for commissioning all the six 200 MW units of the 1,200 MW Teesta Hydro Electric Project (HEP) Stage-III, in the North Sikkim district of Sikkim. 
  • While as per the original schedule, only the first three units were slated to be commissioned in the 2011-12 fiscal, leaving the remaining units for 2012-13,  the optimistic project developer is entertaining high hopes of putting the entire project on the bus bar within the 11th Plan. 
  • Importantly, around 11.3 km of head race tunnel (HRT) excavation  work has already been wrapped up, out of the total 13.816 km. Besides, 94% tail race tunnel (TRT) excavation is completed, while excavation of diversion tunnel, flushing tunnel heading and all the access tunnels have also been completed.
  • The 1,200 MW HEP involves construction of a 60 m high Concrete Faced Rockfill Dam (CFRD), near the village Chungthang, 400 m downstream of the confluence of the rivers Lachen Chu and Lachung Chu, and a 13.32 km long horse-shoe shaped HRT, with a diameter of 7.5 m for discharge of 175 cumecs of water. The project would include an underground power house for housing six shaft pelton wheel turbines of 200 MW capacity, each. The project, upon completion, is expected to generate 5,183 Giga-watt hour (GWh) of energy per year, assuming 90% performance levels. The project cost is estimated to be around Rs 5,705.55 crore.
  • TUL, a special-purpose-vehicle (SPV) floated for implementation of the HEP, was awarded the project, on a build-own-operate-transfer (BOOT) basis, by the Government of Sikkim, which holds 26% of the equity of the company. TUL would be responsible for operating and maintaining the project for a period of 35 years subsequent to commissioning.

CLP India signs $288-mn fin agreement for its Jhajjar plant

CLP India today said it has entered into an agreement with a host of foreign banks for financing USD 288-million to set up a 1,320 MW (2x660 MW) power project at Jhajjar in Haryana. The Hong Kong-listed company has inked an agreement with Bank of Tokyo-Mitsubishi UFJ , China Development Bank Corporation , Export-Import Bank of China, Hong Kong And Shanghai Banking Corporation and Standard Chartered Bank to set-up the coal-fired power generation project in India. 
Installed with supercritical technology, the project will be the largest-of-its-kind in CLP's generation portfolio in the Asia-Pacific and one of India's first supercritical power plants. The consortium of five lenders will provide around USD 288-million in financing, CLP said in a statement. 
"This marks a landmark project for India, involving overseas investment in the power industry from banks based out of Japan and China. The total investment in the Jhajjar project, including the financing of the first phase project, amounts up to approximately USD 1.3-billion,” it said. 
The first unit is scheduled to be commissioned by December 2011 and the second unit by May 2012. Once completed, the project is expected to significantly improve the power situation in Haryana, with 90 per cent of the electricity output dedicated to the state and the remaining 10 per cent to Delhi, the company said.

Monday, December 27, 2010

Coal India plans to import about 250 million tonnes over the next 10 years to meet the country's growing requirement

Coal India plans to import about 250 million tonnes (mt) over the next 10 years to meet the country's growing requirement.“We have short-listed about 21 global companies to import some 250 mt over the next 10 years as part of the long-term-off take deals,” Mr Partha Bhattacharyya, Chairman, Coal India, told reporters on the sidelines of an event on mine safety.
However, Mr Bhattacharyya declined to disclose the pricing details. As part of the long-term off-take deals, Coal India expects to start imports from next fiscal. Shares of Coal India ended marginally lower on BSE at Rs 312.50 on Thursday.Mr Bhattacharyya said environmental issues such as a ban on mining in critically polluted areas would impact the company's targeted output in the current fiscal.
The Environment Ministry had imposed a temporary moratorium on development projects in some 43 industrial clusters, which were found to be critically polluted. Such a ban was based on the Comprehensive Environmental Pollution Index (CEPI), which mapped the pollution levels in industrial clusters. Some 17 mines of Coal India including that of Chandrapur and Korba were part of the identified critically polluted sectors.
“CEPI was supposed to be reviewed in October, but it has been extended till March. This would impact our output by 16 mt,” Mr Bhattacharyya said. Coal India had set a production target of 460 mt for the current fiscal. Coal India expects the shortfall to increase to 39 mt in 2011-12, if the moratorium continued beyond March 31, 2011.

Power Grid Corp of India to shortly sign memoranda of understanding with Kenyan and Nigerian governments

As part of India’s growing engagement with Africa, state-run utility Power Grid Corp. of India Ltd (PGCIL) will shortly sign memoranda of understanding (MoUs) with the Kenyan and Nigerian governments.PGCIL will sign a pact with the Kenyan government in January for consulting and development of the country’s power transmission network, said S.K. Chaturvedi, chairman and managing director, PGCIL. The scope of work will include an assessment of Kenya’s grid-for-grid strengthening.
PGCIL will sign a similar MoU with Nigeria. It was invited by the African nation to re-submit proposals to obtain a management contract for the Transmission Company of Nigeria.The utility had submitted a proposal two years ago, but the Nigerian government didn’t take a decision then.
Mint had reported PGCIL’s plans on 25 October.
In another development, PGCIL is ready to sign a memorandum of association for setting up a transmission link for power from Myanmar’s 1,200MW Tamanthi hydroelectric power plant and the 642MW Shwezaye project that India proposes to set up in that country.
“The survey has been done and we are ready. It (has) now to be decided whether the project cost will be borne through a loan or a grant,” Chaturvedi said.
The initiative is a part of the Indian government’s exercise to improve diplomatic and economic ties with Myanmar, which has rich deposits of natural gas. Myanmar has natural gas reserves of 89.722 trillion cu. ft (tcf), of which 18.012 tcf is to be proven recoverable, or gas that can be easily extracted and tapped.
These projects are on the Chindwin river, the largest tributary of the Irrawaddy, Myanmar’s key commercial waterway. A transmission link with Myanmar would also help towards a power interlink of countries of the South Asian Association for Regional Cooperation (Saarc), which groups India, Pakistan, Nepal, Bhutan, Myanmar, Bangladesh, Sri Lanka, Afghanistan and the Maldives.The Saarc grid envisages meeting electricity demands and boosting economic and political ties in the region.
PGCIL’s overseas plans are a part of its strategy to expand overseas operations, as a planned separation of key power management functions will leave it with the task of setting up transmission links. But it has not been able to make much headway.
PGCIL’s last big play overseas was linked to its plans to acquire the Philippines’ power transmission network—National Transmission Corp.—in association with a local company. The company later abandoned this plan as one of its financial partners dropped out; the project was later awarded to a Chinese consortium.

Uttar Pradesh all set to ride the power wave in the next few years - Government plans to add 20,000 MW by 12th Plan period

Uttar Pradesh is all set to ride the power wave in the next few years. The Mayawati government has been able to achieve a complete turnaround for the sickly power sector in the state. Thanks to a multi-pronged strategy of launching a much-criticised MoU signing blitzkrieg, with both the private and state sectors and through the competitive bidding process and even through procurement of power, the state government has signed contracts for capacity addition of almost 20,000 mw power in the current year.
The use of this combination is part of the state government’s plan to achieve 25,000 mw power by the end of the 12th plan period. So, from the present shortfall of roughly 2000-2500 mw daily, where most of the districts go without power for around 6-12 hours, UP is preparing to become a power surplus state with 24 hours electricity.
In fact, in order to beat the recent Group of Minister’s (GoM) decision to completely shift to the tariff-based competitive bidding regime instead of the MoU route by January 5, 2011, the state government is in the final stages of tying up the agreements for a couple of more MoUs with some big names in the power sector. While there are many who think that the MoU signing spree is a stunt for garnering political dividend for Mayawati in the forthcoming 2012 elections, it is a fact that by a deft combination of some out-of-box ideas with the private developers as well as with government agencies such as NTPC and Neyvelli Lignite, the present Uttar Pradesh government has been able to get what the state lacked the most and which had slowly started eating into its growth plans.
In fact, many are of the view that even if the state is able to see an addition of 5,000 mw power during the current Plan and another 20,000 mw by the 12th Plan, it will be no less an achievement given the fact that there has been almost no capacity addition in the last two decades.
Speaking to FE, the chairman of Uttar Pradesh Power Corporation Limited (UPPCL), Navneet Sehgal said, “Since electricity is critical for not only setting up industries but also for developing infrastructure, agricultural growth as well as for other social indicators, UP has embarked upon a plan to generate power so as to match the national figures in a time-bound manner.

Power Finance Corporation's follow on public offer likely to hit the market next fiscal: Minister of State for Power

State-run Power Finance Corporation (PFC)'s follow-on public offer (FPO) is likely to hit the market next fiscal, Union Minister of State for Power, Bharat Solanki said today. "The necessary procedure for disinvestment in PFC is underway and we expect the FPO to come out some time in the next fiscal," Solanki told PTI on the sidelines of an event here. 

The Power Ministry has proposed a disinvestment of five per cent of the Centre's stake in the public sector finance institution, as well as the issue of 15 per cent fresh equity, through the FPO route. 
"The decision on the FPO will be taken, taking into consideration the market situation and its favourability. If the market situation is favourble, we can expect the FPO to come out anytime in the next fiscal," he added. 
The Corporation, which is engaged in funding power generation, transmission and distribution projects across the country, plans to use the funds raised from the FPO to finance both existing loans, as well as future lending activities. 
At present, the government holds a 89.78 per cent stake in the firm. It had divested a 10 per cent stake through an initial public offer in 2007. 
The government, which hopes to raise Rs 40,000-crore through its disinvestment programme this fiscal, has already mopped-up over Rs 20,000-crore through disinvestments in Coal India Limited, Satluj Jal Vidyut Nigam, Engineers India, Power Grid Corporation and MOIL .

Gas prices: GAIL refutes ministry's claims about unnecessarily high transportation tariffs

Responding to queries made by the petroleum ministry regarding why GAIL's transportation tariff as a percentage of base gas price was as high as 68%, the country's premiere gas distributor said that transportation costs were much lower, in the range of 9-15% of the base price for gas.8The maximum average transportation tariff -- determined by last zone tariff -- charged by GAIL for each category of gas is Rs 1,100 per mscm (million standard cubic meters). 8The following are the prices of the different categories of gas, along with the corresponding percentages of transportation tariff with respect to base prices:
--APM and KG-D6 gas: Base price - Rs 7,428 per mscm; Percentage of tariff in total price - 14.8%

--PMT (Panna-Mukta-Tapti) gas: Base price - Rs 10,134 per mscm; Percentage of tariff in total price - 10.85%
--RLNG: Base price - Rs 12,120 per mscm; Percentage of tariff in total price - 9.07%8Citing the above data, GAIL has bolstered its argument that the tariff component of total gas price is never as high as 68%, as suggested by the ministry.8However, the distributor pointed out that due to PNGRB's zonal tariff system, customers receiving RIL's KG-D6 gas in the Northern region were paying tariffs to both RGTIL (Reliance's infrastructure wing) and GAIL for transporting gas through their respective pipelines. This resulted in the tariff component working out to around 25-30% of total gas price.8Pertinently, as reported in this website on December 21, 2010, the PNGRB has already rejected GAIL's appeal for implementing a postalised or network based tariff which could reduce the cascading effect of zonal tariffs. The regulator said that this proposal was out of tune with the present system of tariff regulations.