" This blog is a integrated approach towards tracking the Indian power sector
which is evolving, having a great potential with prosperous future."



Monday, May 31, 2010

Govt receives Rs 15,200 crores in form of dividend from 34 PSUs.

Despite the global economic crisis, central PSUs declared hefty dividends in 2009-10. The 34 central PSUs that have declared dividends last fiscal contributed Rs 15,258 crore to the government kitty, an increase of 12.4% over the year 2008-09.
Out of 34 PSUs, 56% declared a higher dividend rate in 2009-10. This, according to Jagannadham Thunuguntla, equity head of SMC Capitals, is not surprising, given that PSUs had negotiated the global meltdown relatively safe last fiscal. “PSUs have been the cash cows for the government. They have handled the downturn fairly well”, he said. However, Thunuguntla said, the overall growth in dividend for the government was modest. “As the PSUs would be needing the funds for their expansion, the dividend payout has seen only a modest rise of 12.4%”, he said.
The promoters of three most valued undertakings—-oil exploration giant ONGC, electricity generator NTPC and oil refiner and marketer IOC—-received over a half of the dividends declared by the 34 PSUs.
The government holding in ONGC is 74.14%, while in NTPC, it is 84.5%. Its holding in IOC is also over 78%, and in Engineers India, 90.4%. Bhel and SAIL have government holdings of 67.72% and 85.82%, respectively.
A premier design & engineering consultancy company, Engineers India showed the highest increase of 860% in promoters’ dividend in 2009-10. From a dividend of Rs 32 crore during 2008-09, the payout to EIL promoters increased to Rs 304 crore during 2009-10.
Electrical engineering giant Bhel has also shown a significant increase in dividend payment during 2009-10. The government has received nearly Rs 629 crore as dividend last year, which was 24.6% more than the previous year’s. Steel giant SAIL also paid a hefty dividend of Rs 1,028 crore to the government kitty during 2009-10.
The top five PSUs according to dividend payment to government during 2009-10 are ONGC, NTPC, IOC, SAIL and NMDC. But in 2008-09, the top five were ONGC, NTPC, SAIL, GAIL(I) and NMDC. Four companies namely ONGC, NTPC, SAIL and NMDC are common in both the list of top five.
The business environment has been extremely favourable for PSU companies last year, with some of them recording substantially positive bottom line growth during 2009-10.

Indian Power sector losses Rs. 30000 crores($6 billions) a year,Solution Smart Grid

Indian Power companies are loosing Rs. around 30,000 Cr or $6 billion + a year due to Transmission and Distribution losses courtesy outdated network, power theft, and poor billing practices .
The per unit cost of electricity in India is highest in the world.
According to news the per unit cost has increase by 15.5% per unit, which has raised the cost to Rs.4.50 per unit for the year 2009-10, courtesy outdated grid. The mid-term review panel reviewed the performance of 20 major states; The total distribution expenses increased to Rs. 2.03 lakh crore and is likely to go up Rs. 2.25 lakh crore this year. Mid term review criticized the distribution utility for their poor power procurement planning.
Mid term review has suggested for improvement in customer service and management methods, but the real problems is the outdated grid, the government needs to focus efforts on developing Smart Grid infrastructure. Smart Grid will help reduce the transmission losses, it will help monitor the physical grid status in real time. Also the power theft can be completely eliminated using Smart Grid.

NTPC to invite fresh bids for Lata Tapovan hydro project

State-run NTPC is likely to invite fresh bids for the 171 MW Lata Tapovan Hydroelectric Project in Uttrakhand and may cancel the previous tender due to several problems, including high price quoted by firms. Company officials, however, declined to divulge details about the previous tender, but sources in the know indicated that there were several issues including high price.
The project is being developed by NTPC's 100 per cent subsidiary NTPC Hydro Ltd (NHL).
NHL has already sent its recommendation for floating fresh tender for Lata Tapovan Hydroelectric Project to NTPC board which is likely to approve this soon, they said. There were many loopholes in the previous tendering process as the lowest bid for equipment was over 40 per cent higher than estimated cost of tender (Rs 672.95 crore).
NTPC on behalf of NHL had invited bids for engineering, procurement and construction (EPC) package contract in two stages-- techno-commercial and price bids -- in November 2008.
The companies which submitted techno-commercial bids were Hindustan Construction Company (HCC), Gammon India, Patel Engineering, Larsen and Toubro and Soma Enterprise.
Of these, HCC and Patel Engineering met the requirements for qualifying the techno-commercial bid. HCC quoted Rs 951.87 crore as price for the EPC package for the project whereas Patel Engineering's bid was higher at Rs 1,061 crore. But no contract has been awarded to the winners in the previous tender, which was floated in November 2008.
NTPC is the largest power producer in the country with total installed capacity of over 31,000 MW. The company has planned set up 1,920 MW hydro power generation capacity including 800 MW Koldam Project in Himachal Pradesh, 600 MW Loharinag Pala project in Uttrakhand.

Let the Sun Empower India

The national debate on utilising solar energy for electric generation in India is a hot topic nowadays.Various issues raised by him are still under debate at many levels such as the government of India, state governments, solar power producers, potential investors, the central and state government energy departments.
The raging debate is not a solar energy for power. It is not on its technical aspects. It is not on bringing entrepreneurs to invest and make solar energy a viable replacement of conventional power generation . The debate is on tariff i.e., at what rate the solar power producer be allowed to sell the power generated. The debate is on — who will receive the power, whether it is NTPC Vidyut Vyapar Nigam or it is the state distribution companies or it is the private power trading companies.
The debate is also on who will decide the tariff whether it is the central electricity regulators or it is the state regulators or it is the power departments of states, who are the ultimate users of this electricity and will sign the power purchasing agreement (PPA) with the power produces or the power trading companies . During this debate the government declared an open access system for the sale of electricity by solar power producers .
This meant that any power producer installing its project in one state can sell the electricity generated by him in any other state. That is solar power producer producing power in Rajasthan can sell power to any other state say Haryana / Delhi/ Punjab/ Madhya Pradesh, etc. The tariff for such sales will be decided by the central electricity regulator.
Then after Copenhagen came the national action plan on climate change. In this draft there are talks of solar energy, its technical aspects, its commercial aspects , its advantages over the existing conventional generation, and its effect on environment. But what is missing is a clear guideline to the solar power producers and power purchasers.
Then came the solar mission. Again the picture was not made clear as to what does the government want to do to develop the solar power generation in India . Much expected incentive to developers is missing from the draft.
However, based on whatever guidelines were available today, the states have started accepting applications from small and big investors for installing solar power projects in their state. All over India more than 800 investors have applied for such projects — totalling to a staggering 8,000 mega watt of solar power inviting an investment of Rs 1,20,000 crore. They have deposited a hefty nonrefundable fee of Rs 25,000 per mega watt and gave a heavy bank guarantee also. All these applicants are serious about installing solar power projects and have invested heavily on selecting the technology supplier, arranging land and creating infrastructure at remote locations . It is to be seen as to what the government will do with these applications.
The question is — does the government have any ‘infrastructure' and ‘will' to consume this 8,000 mega watt within 18 months time frame fixed for the completion of the power project. If the answer to this is ‘yes' then what the government is waiting for, why is it not opening the floodgates and allow them to let the Sun empower the power-starved state. If the answer is a big ‘no' — it seems that the government is still not ready to utilise solar energy in large scale.
Governments have created many actors for developing the solar energy field. These are ministry of new and renewable energy, the central and state regulators, national solar mission guidelines , NTPC Vidyut Vyapar Nigam, state renewable energy department and big and small investors. As the saying goes — ‘too many cooks spoil the broth' — the whole plan of generation of solar energy has gone haywire. Till date not a single big solar plant has come up after clearing all the hurdles. If the policy remains confusing , the dream to harness Sun for power will remain a distant dream.
What is required is: let the solar energy field be declared open to all the investors (small or big); let them generate electricity from Sun for their state or for any other state under open access system; permit various trading companies to purchase the power from these investors directly; fix the tariff for each type of project — photovoltaic, thermal, thermal storage — fix it for 20 years as has been done for wind power; fix the tariff such that no other incentive from the government is desired by the solar power producers ; government should keep itself away from land dealings of these producers ; solar power producers should be encouraged, to make land owners profitsharing partners for life, in lieu of land they have sold to the power producers; India should emulate the Japanese model for use of renewable energy as a cottage industry to empower rural hamlet's instead of grid interactive power points; and keep the corruption away from this noble field of solar power.
The cost aspect of installing a solar power project is another important aspect for deciding the tariff. The investors have indicated a cost of Rs15-17 crore per mega watt for a solar power project. Today it is high because of the import of technology. But efforts by these investors to indigenise the technology and equipments have already started bringing results. Just think of the fillip to the industry and creation of jobs a plenty and let the Sun shine on Indian soil.
The steps taken so far to develop solar energy has sent the technical aspects and the technocrats view point on the subject into back seat. We know that the Sun and wind are the only future energy sources. We started with wood, then came the coal, then oil & natural gas, then nuclear fuel, all are on the verge of finishing. The Sun and wind will last forever. Let the technocrats harness this source for the benefit of future generation.
The grand old Sun is seeing and laughing at the chaos created in India on the harnessing of the solar energy. We need a Rajiv Gandhi who introduced computers in India in spite of all the opposition from all corners.

NBPPL hopes to bag Rs 6,500 crore projects this fiscal

NTPC-BHEL Power Projects Pvt Ltd (NBPPL) is hoping to bag contracts worth Rs 6,500 crore for executing thermal power projects in the next two months.
"We are trying, the Andhra Pradesh government has agreed to award a 600 MW thermal power project at Rayalseema in 1-2 months," NBPPL Chairman and Managing Director C P Singh told PTI in an interview. He said that the turnkey order is worth Rs 3,500 crore. The scope of work includes providing equipment, engineering, construction and civil works.
State-run power producer NTPC may also award a turnkey contract for its 500 MW thermal power station at Singrauli (Madhya Pradesh) to NBPPL.
"The order for the execution of NTPC's Singrauli power station is likely to come to us in 1-2 months," Singh said, adding that the contract is valued at Rs 3,000 crore. An investment of approximately Rs 6 crore is required for generating one megawatt of electricity.
NBPPL is a 50:50 joint venture firm between NTPC and power equipment maker BHEL. It was set up in April, 2008, for carrying out engineering, procurement and construction (EPC) contracts for power projects as well as manufacture and supply equipment in India and abroad. The administrative control of the joint venture firm lies with the Ministry of Heavy Industries and Public Enterprises.
At present, NBPPL is executing an order from ONGC Tripura Power Company Ltd for construction of 726 MW gas-based power station in Tripura. The first 363 MW unit of the project is expected to be commissioned by December, 2011, and the second unit by March, 2012.
The company would also do the civil works and supply Balance of Plant equipment (equipment other than boilers, turbines and generators) for a 100 MW Namrup gas-based power station in Assam.
The government plans to add over 78,000 MW power generation capacity during the current 11th Five-Year Plan (2007-12), therefore, there is a need to expand the domestic power equipment manufacturing capability, as also to strengthen related EPC activities.

Sunday, May 30, 2010

Detailed regionwise breakup of All India Installed Capacity



                     SOURTHEN REGION BREAKUP

                      NORTH-EASTERN REGION BREAKUP


Coal supply to power sector: Demand-supply mismatch likely during 2010-11 and 2011-12

A brief analysis of the Indian coal demand-supply scenario for the power sector reveals that production will fall well short of demand during the two fiscals of 2010-11 and 2011-12. While the domestic coal supply is estimated to lag behind demand by 52 million tonnes (MT) during 2010-11, the same gap is likely to widen to 103 MT, the next fiscal. Pertinently, the industry will demand around 440 MT of indigenous coal against the availability of 388 MT during the current fiscal, including 335 MT from Coal India Limited (CIL) sources and 32 MT and 21 MT, respectively, from Singereni Coalfields Limited (SCCL) and various captive coal blocks. Alongside, domestic coal production during 2011-12 is projected as 414 MT, while the industry would demand a quantity of 517 MT. During the fiscal, CIL is expected to supply 360 MT, while SCCL and captive coal mines would dispatch 32 MT and 22 MT, respectively.
In order to bridge the projected demand-supply gap, the power utilities are targeted to import 35 MT of coal during the current fiscal, in addition to 12 MT of coal that would be required to meet the fuel requirement of the power stations designed to run on imported coal. The requirement of imported-coal is expected to be higher during the next fiscal as 69 MT would be required to be ferried to India from other coal-rich countries so as to mitigate the shortage in domestic coal supplies. That apart, the imported-coal based power plants will necessitate 21 MT of coal import during 2011-12. However, the more-expensive option of coal imports will surely add to the worries of the power generating utilities, which are often found to be reluctant in effectuating these imports.

Power Grid's FY10 net profit surges by 21%

Power Grid Corporation of India Limited, a Navratna PSU and the Central Transmission Utility of the country, has reported a net profit of Rs2041 crore for the financial year 2009-10, a 21% rise as compared to the previous year’s profit of Rs1691 crore. The turnover of the company rose to Rs7,504 crore from Rs6,139 crore, up by 22%.
Power Grid operated around 75,289 ckt. kms. of transmission lines along with 124 sub-stations as on March 31, 2010. Average availability of transmission systems during the year 2009-10 was maintained at 99.77% with the use of state-of-the-art preventive maintenance techniques. Power Grid continues to wheel about 50% of total power generated in the country through its transmission network.

Saturday, May 29, 2010

R Power gets 433MW from R-Infra at Rs.1095 crores.

The Reliance-Anil Dhirubhai Ambani Group (R-Adag) has consolidated its entire power generation business under one roof. Reliance Infrastructure Ltd (R-Infra) has transferred 433MW of gas-based power generation assets to group company Reliance Power Ltd (R-Power) for Rs1,095 crore. At one stroke, this deal makes R-Power a company with an operating income and positions R-Infra as a focused utilities firm. R-Infra holds 45% equity stake in R-Power and is its largest shareholder.
Now, R-Power—at 35,000MW, has the largest development portfolio in the power sector, but wasn’t producing a single watt of electricity till last quarter—will have more than 1,000MW power generation capacity, with 433MW coming from the three newly-transferred plants and 600MW from its newly operationalized Rosa I plant in Uttar Pradesh.
Secondly, this transfer adds gas-fired power plants to its kitty right away, even as it struggles with land acquisition and feedstock issues for its 7480MW gas-based power plant in Dadri, Uttar Pradesh.

“The intent all along was to club power generating plants in one company. Moreover these plants were small earlier, now they have clear expansion plans,” said a senior R-Infra executive, who did not want to be named, and declined to specify the quantum of capacity expansion that was being planned. “Reliance Power has the resources and they will do it.”Sector analysts are saying there could be more benefits to this than merely stacking power generation assets in one firm within R-Adag.

Jagannadham Thunuguntla, head of equities at SMC Capitals Ltd in New Delhi, said that these assets may have been transferred into R-Power to enable the company to have greater cash flow from operations, since its power projects have long gestation periods and will not start before 2013-14.

“The interest of both the companies are aligned to the extent that Reliance Infrastructure holds majority stake in Reliance Power, and after the transfer of assets Reliance Infrastructure can concentrate more on its infrastructure business,” said Thunuguntla.

R-Adag and RIL are in talks to seal a gas supply renegotiation, in accordance with a Supreme Court verdict earlier this month that had ruled—ending four years of legal battles—that the two groups should renegotiate in keeping with government regulations.
A statement issued by the group on Friday stated that three power plants—a 220MW capacity at Samalkot (Andhra Pradesh), a 157MW one at Kochi (Kerala) and 48MW plant at Zuarinagar (Goa)—“has been agreed to be transferred by Reliance Infrastructure to Reliance Power to bring entire power generation portfolio under one roof”.
Both Andhra Pradesh and Kerala plants are in 15-year power purchase agreements with AP Transco and Kerala State Electricity Board, respectively, while Zuarinagar has been supplying power to the government of Goa as well as various industrial consumers.
The statement further states that the total transfer value of the three assets has been pegged at Rs1,095 crore, based on an “independent valuation” done be audit and consulting firm KPMG. The share capital of the subsidiary companies of R-Infra that hold these assets and the the power plants themselves would be transferred to R-Power after obtaining requisite approvals, it said.

By acquiring R-Infra’s power plants, R-Power’s immediate generation capacity would inch closer to that of its private sector competitor Essar Power’s gas-based power generation capacity of 1,220MW and would be one-fourth of the present gas-based power generation capacity of 3,995MW of state-run NTPC Ltd.

NTPC-BHEL JV mulls technology tie-up with global company

NTPC-BHEL Power Projects Ltd (NBBPL) today said it is exploring the possibility of a technology tie-up with a foreign player, which may be offered a minority stake in the company.
The move is aimed at bringing Indian power equipment manufacturing at par with international companies through the induction of modern technology."There is always a possibility of a third partner, whenever the need arises we would take a call. We are exploring the possibility for technological tie-up with a foreign company," NBPPL Chairman C P Singh told PTI in an interview.He said, "It (technology tie-up) may or may not be an equity partnership."
NTPC-BHEL Power Projects Private Ltd is a 50:50 JV firm formed between NTPC and BHEL on April 28, 2008, for carrying out Engineering, Procurement and Construction (EPC) contracts, besides the manufacture and supply of equipment for power plants."There is always a shortage of power equipment manufacturing units in the country," Singh said, adding that the JV would augment power generation capacity addition in the country.The company currently has an order book of about Rs 450 crore. It is targeting an order book of Rs 7,000 crore by the end of the current fiscal.
At present, NBPPL is working on the 100-MW Namrup Power Station in Assam and the 726-MW combined cycle power plant being set up by ONGC Tripura Power Corporation at Palatana, in Tripura.It will also take up execution of the 500-MW Singrauli thermal power plant and the 600-MW thermal power plant of Andhra Pradesh Power Generation Corporation Ltd (APGENCO) at Rayalseema.NBPPL falls under the administrative control of the Ministry of Heavy Industries and Public Industries.The Ministry of Power has set a target for adding 78,000 MW of power generation capacity during the current XI Five-Year Plan Period (2007-12). This is likely to translate into immense business opportunities for equipment-manufacturing companies like NBPPL.

National mission on clean power planned

A national technology mission initiative on `Clean Carbon technologies', which will focus on clean power generation is in the offing, according to the Principal Scientific Adviser to the Union Government, Dr R. Chidambaram.Three expert groups are preparing reports for the directions to be taken in the mission. "The Integrated Combined Cycle Coal gasification technology, underground coal gasification and building of supercritical thermal plants are some of the challenges ahead of us," Dr Chidambaram told  today.Aprototype, a 125 Mw combined cycle coal gasification plant has been set up at Vijayawada under a consortia including BHEL and APTransco.
Similarly, a 800 Mw supercritical thermal power plant needs to be put in place. BHEL, NTPC, IGCAR and a host of other institutes should be involved, Dr Chidambaram added.
The former Chairman, Atomic Energy Commission (AEC) said in addition to the successful initiative taken by the PSAs office for the automotive sector, the rural technologies focus was also making a good impact.
Under the initiative, voluntary organisations in rural areas are involved with the leadership of a scientist to take up problems in areas that can be solved using technology.
So far five RUTAGs (Rural Technology Action Group) have been started at five IITs. Plans are to expand them in the near future. Earlier, delivering the Dr A.V. Rama Rao Technology Award Lecture on `Fuzzy borders at the frontiers of science and technology' at the Indian Institute of Chemical Technology (IICT), Dr Chidambaram said "Leveraging international collaborations would be a sound approach for India to get the best advances in technology.""It is time that India got developed countries (which are in recession) to get addicted to collaborative research. We have already progressed in a collaborative effort with Germany's Fraunhoffer Institute in the automotive research area," he added.Similarly, in Canada there was interest in collaborating brain imaging for Alzheimer's with the National Brain Research Centre in New Delhi."Interestingly, we can now participate in research on equal strengths," the scientific adviser said.
Dr Chidambaram said the Rs 5,600 crore National Knowledge Network, which received cabinet approval in April, will interconnect all research institutes, higher education centres and scientific establishments in the country.

Friday, May 28, 2010

Power Grid norms to hit Chinese suppliers

State-run power transmission firm Power Grid Corp. of India Ltd (PGCIL) has made it mandatory for overseas equipment suppliers to have factories in India to participate in its tenders.The move, which rules out imports from China, may heighten Sino-Indian tensions over equipment supply.“Earlier, Chinese companies were dumping their equipment, be it transformers or reactors, here. In the absence of an after-sales service infrastructure, it is very risky. Our requirement is so huge. While their rates are very cheap, there is a quality concern,” chairman and managing director S.K. Chaturvedi said.“To overcome the concerns, we are insisting that they either form a joint venture or give an undertaking that within three years, the vendor will start manufacturing equipment in India,” he added.
The move will hurt China’s largest manufacturer of high-voltage transformers, Tebian Electric Apparatus Stock Co. Ltd (TBEA), which has been a major supplier of transformers and reactors to the Indian transmission sector.High-voltage transformers are used to pump up voltage or to bring it down for electricity transfer across long distances.“This (PGCIL’s move) will severely limit the (ability of) Chinese firms such as TBEA to bid for tenders in India unless they have a domestic manufacturing,” said Rupesh Sankhe, an equity research analyst at Angel Broking Ltd.Anticipating this problem, the Chinese firm was considering a partnership with India’s state-owned equipment manufacturer Bharat Heavy Electricals Ltd (Bhel), 
Around 60% of the investment for setting up transmission infrastructure goes towards equipment. PGCIL plans to float tenders valued at around Rs64,000 crore in 2010-11 for nine high-capacity corridors that will transmit power from new projects in Orissa, Sikkim, Jharkhand, Chhattisgarh, Madhya Pradesh, Andhra Pradesh and Tamil Nadu. It has a demand of around 350 transformers of 400kV and 765kV.Some other firms that supply equipment in the high-voltage segment are Siemens AG, ABB Ltd, Areva SA and Bhel.
India and China have been at odds over the supply of cheap Chinese equipment to Indian firms. In April, India stopped giving clearances to telecom equipment from China over security concerns.State-run NTPC Ltd, India’s largest power supplier, has already made domestic manufacturing a pre-qualification criteria for companies to bid for its equipment tenders.Chaturvedi said PGCIL took the decision on its own.
The move will ensure long-term supply of spares and cut down repair time, JM Financial Institutional Securities Pvt. Ltd said.But it will also lead to “higher competition in export markets and consolidation in India, especially by foreign companies like Hyundai, Korea and TBEA, China”.

Power sector clocks 25% higher investments

Thanks to a private sector surge, the power sector has seen nearly 25 per cent higher investment flows than envisaged.
In the first two years of the current Plan period, the sector, especially generation projects, saw investments of Rs 2.28 lakh crore against the projected Rs 1.84 lakh crore, according to preliminary estimates complied by the Planning Commission.         
“Investment inflows have been buoyant in the power sector, well beyond projections, mainly on account of private developers coming into the picture. The private sector's contribution to capacity addition has gone up from 8 per cent in 2007-08 to 25 per cent in 2008-09 and now to 45 per cent during 2009-10. A number of these projects has come up as unplanned capacities,” an official involved in tracking project schedules in the Central Electricity Authority said.
According to the Planning Commission data, the power sector, easily one of the laggards among key infrastructure areas, is projected to see the highest levels of investment inflows during the Eleventh Plan. The projected investment in the electricity sector, including renewables, is pegged at Rs 6.66 lakh crore during the Eleventh Plan period, against Rs 3.14 lakh crore in roads, Rs 2.58 lakh crore in telecommunications, Rs 2.62 lakh crore in Railways, Rs 2.53 lakh crore in irrigation, 87,995 crore in the ports sector, Rs 30,968 crore in airports and Rs 16,855 crore in the gas sector. The cumulative investments being targeted during the five-year period is Rs 20.56 crore.
During the Tenth Plan, about 25 per cent of the total investment in infrastructure came from the private sector. This is expected to rise to about 36 per cent, during the current Plan, with the power sector leading the charge.
In the power sector, private promoters are primarily eyeing coastal regions of Tamil Nadu, Karnataka, Andhra Pradesh and Orissa, which are close to industrial hubs, to set up merchant capacities. States such as Jharkhand, Chhattisgarh, Sikkim, Uttarakhand and Himachal Pradesh are also being targeted by developers.
In terms of capacities on the ground, private developers accounted for 45 per cent of the 9,585 MW of generation capacity added during the last fiscal. The private sector's contribution to capacity addition has shown a progressively improving trend during the first three years of the current Plan period, despite difficulties in getting site clearances, problems in open access, lower preference in allocation of fuel linkages, and impediments such as the need to furnish bank guarantees for getting transmission corridors built.

‘Open access’ tops my priority list, says new power secretary

P Uma Shankar, 56, is treading carefully as the Ministry of Power’s newest secretary. Three-weeks into his tenure, following HS Brahma’s 11-month term, Shankar has landed in a tenuous office which will be at the forefront of shaping and implementing the country’s power-sector policies through the 11th Five Year Plan until June 20, 2013. If completed, Shankar’s three-year-term would be the second-longest for a power secretary since India implemented its Electricity Act in 2003, putting him in position to be among the most influential power secretaries. Less than a month into his new job, Shankar spoke to Sabout the power sector’s short-term and long-term dilemmas. Excerpts:
You have been a part of the Centre’s power picture for some time now. Under your purview, what are the sector’s greatest challenges?
Of course, capacity addition is the first thing that comes to mind, and that’s nothing new. The problems and priorities of the sector and ministry were identified by the government well before I came here. But for a long time, I had heard about the problems from the sidelines. It is certainly different to be in the centre of it all.
Other goals and objectives?
I am receiving reports on APDRP, to reduce our transmission and distribution losses, as well as pushing our rural electrification targets which we hope to have in place in the next two years. Of course, open access has to be toward the top of our list.
The Plan panel recently held a dialogue on open access where states were also present. What were their complaints?
Yes, recently we sat down with the investors and discussed open access. The problems come down to convincing the stakeholders in way that persuades them to implement the policy so that all producers, one-mega watt and above, will be able to share their power. There is no single policy which will change the minds of those states which are not abiding. We must continue to talk and take steps forward.
What about the proposed import duty on power projects?
That meeting was postponed to a later date. All I will say is that the issues have been brought to the table and we know everyone's concerns. They will be discussed in an effort to ensure a level playing field while reaching the country’s targets.
Is it a good idea to ask foreign investors to have a financial foundation in India before allowing them to enter into agreements for supplying equipment or other goods and services?
Any company coming from the outside, in collaboration with an Indian entity over a period of time, will result in the transfer of technologies and skills we require. For this healthy collaboration to take place, this kind of policy could be a good idea.
Have you been in touch with your counterparts in coal, gas and environment and forests?
Yes, we have been in touch with some of them and meeting with the respective ministries. We have been in touch with coal and gas, as they are integral to the power sector's growth. But I am spending most of my time learning.

No immediate relief for Tata from HC in feud with Reliance

The Bombay High Court today granted no immediate relief to Tata Power, which has moved the court against Maharashtra government's directive that it supply 360 MW power to Reliance Infrastructure for distribution in Mumbai suburbs.
Tata contends that under Electricity Act government has no power to direct it to sell the power to a particular buyer, and the present order causes it loss of Rs 30 crore per month.Reliance Infra, which distributes power in the Mumbai suburbs, has said that consumers would face power cuts if Tata were to stop the supply.
Vacation bench of Justices S J Kathawala and R G Ketkar refused to stay the government's directive immediately, as Reliance and the Government sought time to file replies."Heavens will not fall in the meanwhile", the court said, adjourning hearing till June 7.
The dispute is about supply of 360 MW power by Tata to R-Infra.While Tata is not willing to supply more than 200 MW, the government, by its May 7 order, directed it to supply the full quantum of 360 MW."We can't supply power to our own customers (because of this order)," Tata's lawyer said.

Short-term transactions in electricity during March'10-I: 8.64% of generated electricity traded in short-term

Out of the total electricity generation of 70,099.55 million units (MU), excluding generation from renewable sources and captive power plants, in the country, a total of 6,058.85 MUs, or 8.64%, were transacted in the short-term, during the month of March 2010. Such transactions consist of 2,3197.11 MUs (4.56% of the total electricity generation) through bilateral mechanisms, that is through licensed traders, power exchanges and directly between the distribution companies, 2,229.62 MUs (3.18%) through unscheduled interchange (UI) and 632.12 MUs (0.90%) through the two power exchanges, namely Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL).
During the month, 22 regional entities, including power generating companies, like Damodar Valley Corporation (DVC), Jindal Power Limited, Lanco Kondapalli Power Private Limited, Lanco Amarkantak Power Limited and Adani Power Limited, were involved in the sale of electricity through various short-term transactions, while a total of 16 states made short-term purchases of power. Amongst the power selling entities, the western state of Gujarat emerged to have sold the highest quantum electricity-- 929.55 MUs-- followed by Chhattisgarh (578.23 MU), Jindal Power (451.55 MU), DVC (368.14 MU) and Delhi (307.08 MU), while the top five power purchasing entities in the month were Tamil Nadu (1,279.91 MU), Rajasthan (638.78 MU), Maharashtra (349.82 MU), Haryana (336.59 MU) and Uttar Pradesh (250.95 MU).

BHEL Q4 net zooms 42% to Rs 1,909 cr

State-run equipment maker, BHEL, today, reported a 41.71% surge in its audited net profit, which reached Rs 1,909.58 crore for the fourth quarter ended March 31, 2010, against a profit of Rs 1,347.47 crore recorded in the same period the previous fiscal. Total income of the PSU also rose to Rs 14,152.63 crore during this quarter, from Rs 11,047.24 crore. The company also notched up its highest-ever turnover, of Rs 4,3107.0 crore, for the fiscal ended March 31, 2010.
BHEL secured orders worth Rs 59,031 crore last fiscal. At the end of the year, total orders in hand, for execution in 2010-11 and beyond, stood at about Rs 1,43,800 crore. In its power sector business segment, BHEL secured orders worth Rs 41,976 crore during the year. The order-book for power equipment reflected a capacity of 16,489 MW. In the industry sector business segment, BHEL secured orders worth a record Rs 14,366 crore, implying a growth of 40% over the previous fiscal.
In 2009-10, BHEL commissioned power plants worth 6,583 MW of capacity, out of which 5,220 MW belong to various state-owned utilities, 634 MW to captive power producers, while the remaining 729 MW worth of units were commissioned overseas.

Thursday, May 27, 2010

NTPC's Jhajjar, Simhadri: BHEL agrees to prioritize execution

NTPC has managed to persuade BHEL to hasten equipment supplies to Unit-II of the 3x500 MW Indira Gandhi super thermal power project (IGSTPP), along with the second unit of 2x500 MW Simhadri super thermal power station (STPS), Phase-II, so as to commission them this fiscal. BHEL had, earlier, intended to commission the two projects only by next year. This recent consensus was reached during a recent meeting of the committee constituted by the Department of Heavy Industries (DHI) to finalize deadlines for various developmental activities at the power projects being executed by BHEL. Accordingly, IGSTPP and Simhadri STPS will now be synchronized by BHEL in January and February 2011, respectively.
 Pertinently, the IGSTPP, being developed by Aravali Power Company Private Limited, a joint venture between NTPC, Indraprastha Power Generation Company Limited (IPGCPL) and Haryana Power Generation Corporation Limited (HPGCL), was expected to meet a segment of the power needs of the impending Commonwealth Games in the capital. However, BHEL`s lapses with equipment supplies have rendered this a remote possibility. It is now hoped that at least the first unit of the project, which is now expected to be commissioned barely one month before the start of the games, can contribute in meeting the heightened power demand expected from October 2010 onwards. The project is located in the Jhajjar district of Haryana.
 On the other hand, NTPC`s efforts to beat the original deadline of May 2011 for the Simhadri-II project, located in the Vishakhapatnam district of Andhra Pradesh, and commission both 500 MW units by March of the same year are being stymied by the lackadaisical attitude of its contractors for the project-- while BHEL has been awarded the main plant package, Era Construction is responsible for the associated civil work.

Monday most power-ful day ever for Delhi

With the mercury on the rise, Delhiites turned on their power-guzzling cooling gadgets and consequently took the demand for electricity to the highest ever at 4581 MW on Monday.
Around 2.50 pm, as the temperature soared to 43.4 degrees Celsius, the peak demand for electric power went past the earlier headline number of 4408 MW — until then the highest ever, recorded on July 8 last year. In entire May last year the highest it peaked in was 4136 MW.

New power projects may get gas from RIL's KG basin

The empowered group of ministers on gas allocation will soon draw up a list of the next set of beneficiaries in the power sector to receive gas from Reliance Industries’ (RIL) KG basin. A senior government official told   that as opposed to the earlier policy of giving KG basin gas to only old projects that did not get enough gas, this time priority will be given to projects with fresh capacities and new ones that are in advanced stages of execution.
The biggest beneficiaries of the new decision will be NTPC, the state-run market leader in power generation — it has lined up 7,500 mw of expansion projects — and ADAG’s proposed gas-based power plant at Dadri. The Dadri project will, however, be eligible for the fuel only after the gas sale agreement with RIL is approved by the government in accordance with the Supreme Court verdict.
The decision will be based on a new gas linkage policy being finalised by the power ministry that will rate projects for fuel allocation on an order of priority and based on their level of preparedness, regulatory clearances and ability to execute projects on time, the official said requesting anonymity.
Once approved, the fresh allocation of gas would come as a boon for about 7,000 mw of projects proposed for the Eleventh Plan and another 20,000 mw proposed for the early part of the Twelfth Plan. “The details of linkage policy are being finalised after which we will put up the cases of companies fit for getting fuel allocation before the empowered EGoM,” said an official in the power ministry asking not to be identified.
In its last meeting, the EGoM has approved gas allocation only for existing and stranded gas-based power projects in the country. The new linkage system for gas would be similar to the one existing for the coal sector with first preference given to central and state projects and their expansion plans. Next in order will be other expansion power projects and where tariff approval has been taken followed by projects bid on tariff and captive projects.
Under the linkage system, preference would also be accorded to projects in advanced stage of getting various clearances and where the annual turnover is above a stipulated level and internal resource generation is healthy. Gas allocation would not be for full capacity and companies would have to make alternate arrangements for a portion of their need.
“There would also be a system bank guarantee, and companies failing to meet the milestones would not only lose this guarantee but their linkage would also be cancelled,” said the power ministry official.
The new linkage policy’s expected preference for central and state projects could see NTPC’s expansion projects of 1,000 mw each at Badarpur, Auraiya, Faridabad and Dadri getting some allocation of the KG gas. Besides, NTPC has sought gas for the 2,000 mw expansion project of Ratnagiri Gas and Power Pvt Ltd (RGPPL).
Besides, gas for new projects could also benefit APGenco’s 2,100 mw Karimnagar project, Haryana government’s 1,500 mw Faridabad project, Mahagenco’s 1,040 mw Uran expansion project. A few private sector projects in Maharashtra, Gujarat and Andhra Pradesh would also benefit.
RIL’s KG D-6 block is currently providing about 52 mmscmd of gas to customers in fertiliser, power and petrochemicals on a firm basis and another about 10 mmscmd gas on a fallback basis. The total approved production of the block is 80 mmscmd while different estimates suggest that the production could be scaled up to about 120 mmscmd. 

FDI in Power Sector: Singapore's Sembcorp to invest in Andhra power plant

Singapore-based energy and water company Sembcorp Industries Tuesday signed an agreement with an Indian firm for a joint venture to setup a 1320 MW Power plant in Andhra Pradesh.
Sembcorp Utilities, a wholly-owned subsidiary of Sembcorp, will hold 49 percent in the venture, Thermal Powertech Corporation India Limited. The remaining 51 percent will be held by Gayatri Energy Ventures Private Limited, a subsidiary of Gayatri Projects Limited.Sembcorp will invest Rs.1,100 crore in the Rs.6,869 crore supercritical technology-based plant at Krishnapatnam in coastal Nellore district.
The two companies signed the agreement in the presence of Power Minister Sushil Kumar Shinde and Andhra Pradesh Chief Minister K. Rosaiah.
Gayatri Projects Managing Director T.V. Sandeep Reddy said the first phase of 1,320 MW would be completed in 40 months while the work for the second phase of another 1,320 MW would begin in one year.He said the financial closure for the project was expected to be completed by mid-June. While Rs.5,151 crore of the project cost would be raised through debts, the remaining Rs.1718 crore will be in the form of equity.
Reddy said no decision had been taken to have Sembcorp as the partner for the second phase. The boards of the two companies will take a decision. The entire project of 2,640 MW is expected to be completed in five years.