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



Saturday, January 29, 2011

NTPC-NPCIL joint venture incorporated

A joint venture firm between NTPC Ltd and Nuclear Power Corporation of India Ltd has been incorporated on Thursday under ‘Anushakti Vidhyut Nigam Ltd'. The venture is slated to commence operations with the execution of a 700-MWe indigenous pressurised heavy water reactor-based project shortly.
NPCIL will hold 51 per cent of the equity share capital, with NTPC having the balance 49 per cent, NTPC said in a statement. The firm has been formed for development of nuclear power projects in the country within the framework of Atomic Energy Act, 1962, the statement said.

CERC revises fixed charges for NTPC's Anta, Kawas power stations

Following a petition from NTPC, the Central Electricity Regulatory Commission (CERC) has revised the fixed annual tariff for the utility's 419.33 MW Anta Gas Power Station (GPS) Stage-I, for the period April 1, 2004 through March 31, 2009.

  • This revision was required on account of additional capital expenditure incurred by the power major during the year 2008-09 and a revisit of capital expenses made over 2004-08. 
  • Accordingly, the revised annual fixed charges for the project stand at Rs 85.87 crore (2004-05), Rs 87.29 crore (2005-06), Rs 91.04 crore (2006-07), Rs 97.80 crore (2007-08) and Rs 104.52 crore (2008-09), respectively.
  • Similarly, the Commission has modified the fixed charges for NTPC's 656.20 MW Kawas GPS for the 2004-09 period due to additional capital expenditure incurred during the years 2004-05, 2005-06, 2006-07 and 2007-08. 
  • The revised fixed charges for these years have been worked out to be Rs 287.29  crore (2004-05), Rs 242.16 crore ( 2005-06), Rs 244.61 crore (2006-07), Rs 247.22 crore (2007-08) and Rs 253.11 crore (2008-09).
  • While a total of 14 northern-region beneficiaries of Anta GPS will bear the difference between the previously stipulated charges and those now approved by CERC for the power station, in three equal monthly installments, seven western-region beneficiaries of Kawas GPS will have to share the changes to the power station's fixed charges.

Reliance Power to increase capacity of its mega projects by 50%

Reliance Power, the flagship company of the Anil Ambani group , plans to expand four large coal-fired power projects by 50% to generate an additional 8,000 MW of power, which may be sold at more attractive merchant rates, company sources said.
The company will scale up three ultra mega power projects of 4,000 MW each at Sasan, Krishnapatnam, and Tilaiya. Similarly, it will expand the Chitrangi plant in Madhya Pradesh, for which Reliance Power plans to use coal from mines dedicated to the Sasan project.
The company has already applied for environment clearance for additional 1980 MW in Sasan and plans to seek approvals for the rest.
A company spokesman said Reliance Power would seize opportunities to maximise value from its existing resources, but he declined comment of specific expansion plans. "It is our constant endeavour to optimise the utilisation of our existing resources like land, water and fuel linkages across all our projects to create and enhance the value for our stakeholders," the spokesman said.
In the Chitrangi project, Reliance Power has tied up power purchase agreements (PPAs) for 1,241 MW out of its 4,000 MW capacity. The balance as well as the planned additional capacity of 2,000 MW each at Chitrangi and the three UMPPs would be available for sale at market-driven price, which analysts say are more than double the rates agreed in the PPAs.
Another official of Reliance Power said that since these projects have all approval and basic infrastructure, such as land, is already in place, it would be much easier to increase generation in the shortest period. "Had we started for a fresh projects with similar size, it would have taken much longer time," he said.
The company aims to commission the first unit of 660 MW in Sasan in November 2012 and one new unit every subsequent quarter. The entire project of 6,000 MW in Sasan will be fully commissioned by December 2014. Similarly, the first unit of 660 MW in Krishnapatnam will be commissioned in September 2013 and it will be fully commissioned by December 2015.
As per the new plan, each of these four power projects (three UMPPs and Chitrangi) will have nine turbines of 660 MW each, the official said.
In November 2010, the company placed orders worth $8.2 billion with Shanghai Electric Corporation for buying 42 super critical turbine of 660 MW each, each turbine costing around $200 million. Of this, 36 turbine will be installed in these four projects.

NTPC to offer 20% to QIA in energy JV

The country’s largest power producer NTPC is set to offer 20% stake in its renewable energy joint venture with ADB and Kyuden International Corporation (Kyushu) to Qatar Investment Authority (QIA) as part of its strategy to get secured supply of gas for its fuel-starved power stations. The equity deal is expected to help NTPC clinch a long-term fuel supply deal, reducing its reliance on costly imported LNG secured through commercial deals.
The latest proposal from QIA is in addition to interest shown by the Qatari entity to pick up equity in two other NTPC projects — Kayamkulam in Kerala and Ratnagiri Gas and Power in Maharashtra. NTPC has offered upto 20% stake in these two projects with a rider that the Qatari side also give it long term gas linkages. The deal is still being negotiated. “QIA has offered to pick 20% stake in the renewable energy joint venture company where NTPC is the majority stake holder. We are trying to use this investment to build fuel security for power PSUs gas based plants,” said a government official privy to the development.
Last year, NTPC, Asian Development Bank and Kyushu signed a joint venture agreement to form a JV company to develop projects and establish over a period of three years, a portfolio of about 500 mw of renewable power generation in India. As per the terms of the agreement, while NTPC will hold 50% in the JV, the two other partners will contribute 25% equity each to the new entity. GE and Brookfield, which had earlier decided to participate in the JV, withdrew their candidature in late 2009 have in the wake of the worldwide financial meltdown.
It is expected that QIA will pick up 10% equity held by NTPC and 5% each by other two partners ADB and Kyushu. The total investment in this is still being finalised by the company, said a power ministry official but added that the JV has been proposed to be set up with initial authorised share capital of Rs 6.5 crore and a paid-up share capital of Rs 1 crore. “While the proposal is being considered, it is expected to take some for conclusion as NTPC wants to link investment with gas deal which the other side is reluctant to commit at this juncture,” said the official.
For NTPC, getting firm gas supply is critical to operationalise its over 7500 MW of gas based capacity proposed for 12th Plan. With erratic supply of gas from Reliance Industries KG D6 block, NTPC is looking at options beyond domestic sources to meet fuel requirements for its gas-based projects.While company is buying expensive LNG from Qatar and also making spot purchases, a long term gas supply deal is expected to work to its advantage.

Thursday, January 27, 2011

India's first 800-MW coal-fired Advanced Ultra Supercritical power plant will be operational by 2017

 India's first 800 MW coal-fired Advanced Ultra Supercritical (AUSC) power plant will be operational by 2017 which will help reduce operational costs and emit less carbon dioxide than existing similar units. 
The AUSC will have five per cent more efficiency than the existing thermal plants and help in 12 per cent savings in coal thus reducing the overall amount of carbon dioxide emission, Dr S C Chetal, Director, Reactor Engineering Group of IGCAR and a distinguished scientist told PTI. 
A joint effort of Indira Gandhi Centre for Atomic Research (IGCAR), Bharat Heavy Electricals Limited (BHEL) and National Thermal Power Corporation(NTPC), the Advanced Ultra Supercritical power plant will be the first such indigenous plant, he said. "At present there is no AUSC plant operating in the world and we will back the first indigenous AUSC with strong R and D with IGCAR's expertise in design, materials and manufacturing technologies of the fast breeder reactor," Chetal said. 
Presentation of the project has already been made to Prime Minister Manmohan Singh and "we are waiting for the approval for R and D funds which is expected to come soon," he said. 
Of the total cost of Rs 7000 crore of the project, Rs 2,500 crore will be spent on research and development and public sector units, sources said. IGCAR, BHEL and NTPC signed an MoU for AUSC system in August last year. 
The advanced ultra super-critical boilers, to be designed and developed by IGCAR, will be able to operate at a pressure of 300 kg per sq cm and 700 degree centigrade temperature, Chetal said. 
This kind of very high temperature and pressure will improve the steam cycle efficiency, which in turn means that for a given electrical output there will be less consumption of fuel (coal) and less release of carbon dioxide, he said. 
After developing this technology, India will be one of the leaders in the world in terms of thermal power plant technologies, the scientist said. "Once we are able to built and operate the AUSC, it is possible to decrease the cost of the coal fired supercritical thermal plants in the country," he said.

Indonesia offers sops to ADAG for coal mining

Indonesia will provide fiscal incentives and support in land acquisition for Anil Dhirubhai Ambani group's $4.5-billion investment in coal mines and related infrastructure that will deliver 50 million tonnes of coal a year.
Indonesian President Susilo Bambang Yudhoyono, currently on a three-day state visit to India , is scheduled to meet Anil Ambani on Tuesday to lend his support for the biggest FDI proposal in southeast Asia's largest economy, people involved in the development said.
The company will sign MoUs with provincial authorities of Indonesia to facilitate the projects that also include a 2,000 MW power plant. The agreements would speed up various approvals and acquisition of land for the 200-km railway line and port that will help ship coal for Reliance Power's Krishnapatnam ultra mega power project in Andhra Pradesh. Industry sources said that at current prices, coal costs would be a third less than imported fuel.
With reserves of 2 billion tonnes of coal, the mines in Sumatra will initially start producing at the rate of 7-8 million tonnes a year and in another year and a half, annual output would rise to 25 million tonnes. The project, along with the power plant involves an investment of $3.5 billion. Another project at Jambi will deliver an equivalent amount of coal but the planned investment is lower as the project does not include a power station. The output from the projects can help generate 12,000 MW of power.
Considering the importance of the project to the local economy, the provincial governments of Indonesia have are supporting the projects and will sing MoUs to support the investment. The MoUs would provide for long-term fiscal incentives, a single-window mechanism for all issues in the implementation of the project, facilitating various fiscal incentives and tax exemptions to the project, and help in issuance of all statutory clearances, permits, licences, including environment licenses and forestry permits necessary for the project.
Reliance Power is a leading private sector power generation company. It is implementing power projects with aggregate capacity of over 37,000 MW and has large captive coal reserves.

Govt may delay bids for UMPP for 7th time

The power ministry is likely the seventh time the to delay for the seventh time the invitation of initial bids for a 4,000MW ultramega power project (UMPP) in Orissa to 30 March, as it is yet to receive forest clearance for the coal blocks from the ministry of environment and forests.
“We have moved the application to postpone the last date for submission of RFQs (requests for qualification) for the Bedabahal UMPP in Orissa, as forest clearance is taking time,“a power ministry official said

Mahagenco to pay market price for gas supplies to 1220 MW Uran Expansion

Given the stagnant production from Reliance Industries` KG-D6 basin, the Ministry of Petroleum and Natural gas (MoPNG) has asked Mahagenco to look for alternatives, like tie ups with GAIL, to source fuel for its 1220 MW Uran Gas Turbine Power Station.
  • Notably, the Empowered Group of Ministers (EGoM), appointed to make allocations from the KG-D6, has thrown up its hands on supplies to power stations that are to be commissioned beyond 2009-10. 8However, citing the existence of sufficient LNG capacity with GAIL, the ministry has claimed that work on the Uran project can commence if a mutually satisfactory agreement between Mahagenco and GAIL can be reached. 
  • Pertinently, Mahagenco had sought priority in recommendations for natural gas allocation from the Ministry of Power (MoP) in view of the ever increasing power demand in the state of Maharashtra. Accordingly, it had requested MoP to ask the Ministry of Petroleum and Natural Gas (MoPNG) to allocate 5.4 mmscmd of natural gas to the company from the KG-D6 basin.

Centre mulls financial help for pvt role in power distribution

To attract private sector participation in power distribution across the country, the Union power ministry is formulating a plan for providing financial incentives for engaging private companies in distribution.
“The idea is to provide financial support to the distribution companies on the lines of the viability gap funding (VGF) scheme available in other infrastructure sectors,” a senior power ministry official involved in the process told Business Standard.
He added that the ministry was discussing a composite scheme in which it would suggest to distribution companies one or more ways for involving private companies for becoming eligible to avail of the benefits. The Centre was developing a template for improving power distribution, said the official. In a way, this would be an extension of the VGF scheme to power distribution for private sector participation.
After concretisation, the ministry will send the scheme to the Planning Commission and the finance ministry for approval.
The three modes for involving private companies in distribution are: outright privatisation as in the case of Delhi; an input franchisee model like Bhiwandi, Agra and Kanpur and a public-private partnership (PPP) model in which instead of complete privatisation the private company would handle the identified area for a specified period under set parameters of operation.
The official said the ministry might ultimately decide to select either one of these modes or leave it on the distribution companies to select from the three.
He added that in the PPP model, currently under discussion, financial support would be available and the specified area would be given to the private partner for a specified period during which it would hold a licence to operate without being the owner.
The private partner will make the necessary capital investments and will have to fulfil set standards in terms of collection efficiency, system efficiency, loss reduction and customer satisfaction.
“It is expected that with the help of the financial support scheme, many private sector companies could be attracted to the power distribution,” said the official.In another reform measure, the ministry is also working on an open access in distribution.

Wednesday, January 26, 2011

Larsen & Toubro carves out 9 business verticals - Power, hydrocarbons and infrastructure among the key verticals

Larsen & Toubro has carved nine of its businesses into separate independent verticals to be manned by business heads with exclusive boards to support them. Power, hydrocarbons and infrastructure are among the key verticals.
The strategic initiative had been drawn up with a long-term plan in place to keep pace with a growing economy as well as factor in the stupendous growth L&T has achieved in the last five years.
Gross revenues from FY05 to FY10 have risen three-fold from Rs 15,300 crore to Rs 46,900 crore with market cap sailing over Rs 120,000 crore as of December 31, 2010. The criteria for creating the ICs, through agglomeration of several units, were on the basis of their ability to scale Rs 5,000-crore revenues in the near term.The business heads of these entities will continue to report to the Chairman and Managing Director. The board of each of them, in addition to an L&T board member, will have a chairman, three representatives each of the company and non-executive directors.
“It is to make decision making closer to the businesses, besides decentralisation of power and autonomy to meet the requirements of the industry,” said Mr J. P. Nayak, President and Board Member, L&T.However, the reorganisation of the business structure will not have any legal standing as none of the companies will be registered.The business heads will report to the Chairman of L&T and its board will continue to reign supreme.
Mr Nayak said the new structure would enable greater empowerment and autonomy while ensuring accountability and transparency, in turn resulting in higher growth. It will also help develop a deeper leadership pipeline and attract lateral talent.Synergies will continue to be derived across businesses through key accounting management and shared revenues. Importantly, it would lead to higher value creation for all stakeholders.
On listing, Mr Nayak said the logical progression for the entities would be to become subsidiaries first to move forward.He said L&T would continue to be a hybrid holding company with five subsidiaries. The restructuring will not have any impact on reporting the financials.

Power capacity addition target may be revised downward again - Law and order issues, delay in equipment supply cited as key reasons

Law and order issues, technical glitches and equipment supply delays may force the Government to scale down the power generation capacity addition target for the XIth Five-Year Plan once again to 55,000 MW from 62,000 MW earlier.“I think 62,000 MW looks unlikely... Maybe we can do about 55,000 MW,” a Power Ministry official said.
“There are law and order problems in Jammu and Kashmir, West Bengal and northeastern states... We are facing such problems at our Uri and Teesta hydro-electric projects,” the official said, adding that certain thermal power projects in Uttar Pradesh are experiencing technical problems related to the equipment.
State-owned NHPC is constructing the Uri (Jammu and Kashmir) and Teesta (West Bengal) projects, which are running behind schedule.“Equipment at some thermal power projects in UP are facing problems... Chimneys are not functioning properly,” the official said.
Delay in the supply of equipment for plants is also posing a problem. “As far as main plant equipment (boilers, turbines and generators) is concerned... there is no problem, but for the balance of plant equipment, i.e., for coal-handling, ash-handling pl ants, they take time.”
At the start of the XIth Five-Year Plan Period (2007-12), the Government had set a target for adding 78,577 MW of power.
However, this was later revised downward to 62,000 MW by the Planning Commission, citing reasons such as the slow progress in ordering of equipment, resulting in cascading delays in the supply of these items.The Government has so far only been able to add over 23,000 MW of electricity during the XIth Plan, thereby making it an uphill task to reach 78,577 MW, or even the 62,000 MW capacity addition target in the terminal year of the current Plan period.Meanwhile, the Power Ministry has set a target for 1,00,000 MW of power capacity addition in the upcoming XIIth Plan (2012-17). — PTI

India will be able to add around 100,000 MW of power generation capacity in the next Plan, says Power Minister

The government plans to add 30% more power generation capacity during the 12th Plan (2012-17) with tighter monitoring of thermal power projects and participation from private sector players.“We will be able to add around 100,000mw of power generation capacity in the next Plan as against the target of 78,000mw in 11th (ongoing) Plan,” Union minister of power Sushil Kumar Shinde said at an event organised by the Dainik Bhaskar group.
The government has so far added 34,000mw of power generation capacity in the first four years of the 11th Plan. Another 20,000mw is likely to come up over the remaining period of the Plan.Also, private sector players like Jindal Power, Lanco and Monnet Ispat are adding captive power capacity of around 15,000mw in the current Plan.
India has a power generation capacity of 153,000mw and has set a target of adding 78,000mw by 2012.“For the next Plan, we have started construction on 65,000mw capacity already to ensure that we will be able to meet our ambitious target without any difficulty,” the minister said.On the issue of environment clearance for the power projects, Shinde expressed concern as a lot of hydro power projects had to be either delayed or cancelled for lack of clearance from the ministry of environment and forests (MoEF).Shinde also touched upon NTPC’s 600mw Loharinag Pala project, which “had to be called off due to religious issues despite getting all the environment clearances.”
NTPC had spent around Rs650 crore on the project before it was called off by a group of ministers.The power ministry has written to the Cabinet seeking a refund of the investments to the PSU.Environment clearance has emerged as a major hurdle for a number of upcoming power projects in the country, posing a challenge to achievement of the 12th Plan target.The power ministry is trying to convince MoEF for clearing two of its ultra mega power projects in Chhattisgarh and Orissa.Shinde also spoke on the increased competition in the power equipment sector due to setting up of new joint venture companies.

Jaiprakash Power Ventures to commission first unit of its 1,000 MW hydroelectric power project in Himachal Pradesh in March

Jaiprakash Power Ventures Limited will commission the first unit of its 1,000 mw hydroelectric power project in Himachal Pradesh in March, six months ahead of schedule. 
The first unit of the Rs 7,000-crore Karcham-Wangtoo hydro project, the biggest hydropower plant to be commissioned in the current five-year plan, will start generating 250 mw of electricity by March, and the other three would start functioning by June, Suren Jain, managing director of the company said. 
Early commissioning of the project would help the company make use of the summer and monsoon period, when higher flow of water boosts hydroelectric generation, company officials said. This will be the third hydroelectric project of Jaiprakash Power Ventures, part of the Jaypee Group . 
It had earlier built 300 MW Baspa project in Himachal Pradesh and 400MW Vishnuprayag project in Uttarakhand. Jaiprakash Power Ventures has tied up with Power Trading Corporation of India to sell 80% of the electricity produced at the Karcham-Wangtoo project. 
Jain said the project would generate 3.5 million carbon credits every year. 
"We are getting a 25% return on equity on a sustainable basis,” Jain said. After having established a presence in the hydropower sector the company has initiated its entry into thermal power generation, power transmission and also forayed into wind power. 
The company plans to spend about Rs 45,000 crore by 2015 on various power projects including hydropower and thermal electricity, Mr Jain said. He said the company had adequate funds for its ongoing projects this year but it may raise up to Rs 2,500 crore after March 2012 for its expansion plans. The company aims to produce 13,720MW of electricity by 2019 through a mix of hydro and thermal projects. It plans to set up four thermal plants, two each in Uttar Pradesh and Madhya Pradesh by 2015. These plants will together generate 6,120 mw of power using super-critical technology.

Tuesday, January 25, 2011

MoEF okays construction of Mauda, Dhuvaran Expansion projects

The Ministry of Environment and Forests (MoEF) has accorded environmental clearance to NTPC's 2x660 MW supercritical technology based Mauda Stage-II TPP in the Nagpur district of Maharashtra. This project is an expansion of the under-construction 2x500 MW Stage-I TPP.
  • The land requirement for both the plant is about 1,800 acres, out of which about 828 acres of land is partly single and partly double crop agricultural land.
  • Again, the water requirement for the poroposed plant will be 40 cusecs, which will be met from hosikurd Dam on Wainganga / Kanhnan river at a distance 24 kms from the site. 
  • Besides, a total of 7.85 MTPA of indigenous coal will be required to operate the proposed plant at 90% plant load factor, which will be supplied from Mahanadi Coalfields Limited. 
  •  Total cost of the project is pegged at Rs 6,745.29 crore.
  • Alongside, the ministry has cleared Gujarat State Electricity Corporation Limited`s (GSECL) 395 MW Expansion to the existing 106.617 MW and 112.45 MW  gas-based generating units of Dhuvaran TPP in Anand district of Gujarat.
  • The land requirement for the expansion unit will be 30 acres, which is available within the existing premise. 
  • The water requirement is pegged at 13.8 MLD, which will be obtained from Mahi Canal and Reservoir at Kanbha village via the existing pipeline.
  • Further, GSECL plans to meet gas requirement of 1.8 MMSCMD for the plant from GAIL/Gujarat State Petroleum Corporation Limited (GSPCL).
  • The cost of the project is estimated to be Rs 1,433.85 crore.

NTPC to allocate 50% of 14 upcoming plants to home states

Subsequent to Cabinet approval, allowing 50% of power generated by CPSU stations to be reserved for home states, the Ministry of Power (MoP) has now officially accepted NTPC`s incremental power allocation demands for the home states of 14 upcoming power ventures. 
  • Accordingly, while half of the share of these power plants will be kept aside for their respective home states, other regional constituents will have right to 35% of power, leaving the balance 15% to remain unallocated at the disposal of the Union Government.
  • This new power allocation matrix will apply to these projects-- the 2,640 MW Gadarwara, 4,000 MW Lara, 1,320 MW Talcher Expansion, 4,000 MW Kudgi, 3,200 MW Darlipalli and Gajmara, 2,640 MW Gidderbaha, 1,600 MW Katwa, 1,980 MW Dhuvran, 1,320 MW Khargone, 4,000 MW Pudimadka, 1,320 MW Bilhaur and 500 MW Kathua TPPs.
  • In case of NTPC`s 3,960 MW Barethi project in the Bundelkhand region, the home state`s share will go to Madhya Pradesh, while Uttar Pradesh will be entitled to the entire 35% share remaining for regional beneficiaries.
  • NTPC has been long petitioning the ministry to be allowed to deviate from the existing Gadgil formula to ensure the support of the home states, which often shy away in providing the crucial land, water and other clearances for the power projects.
  • As per the Gadgil formula, out of the total generation from a particular central government-run power station, the home state share was limited to 10% as a preferential allocation, 75% was allocated to all the beneficiary states according to their energy needs and Central Plan Allocation, and 15% was kept unallocated at the disposal of the Central Government. 

MoP's future strategies-I: 75 GW capacity addition, 27,350 MW inter-regional transmission in 12th Plan

The Ministry of Power (MoP) has envisaged a target of fresh power generation capacity worth 75,000 MW during the 12th Plan, comprised of coal, gas, hydel and nuclear capacities worth 48,050 MW, 13,000 MW, 10,150 MW and 3,800 MW, respectively.
  • Besides, the ministry aims to put in place an inter-regional transmission capacity of 27,350 MW by 2016-17. The ministry`s year-wise capacity addition goals for generation, transmission and distribution sectors of electricity for the forthcoming 12th Plan has been flagged below:
  •  Generation capacity addition plan
  •  15,000 MW in each year.
  •  Transmission capacity addition plan
  • Total 90,000 Ckm lines to be laid with a target of 18,000 Ckm in each year;
  • 5,470 MW inter-regional transmission capacity to be added in each of the five years.
  • 1,54,000 MVA sub-station capacity: 26,000 (12-13); 28,000 (13-14), 32,000 (14-15), 33,000 (15-16), 35,000 (16-17).
  •  Distribution capacity addition plan 
  •  Distribution transformers:1,40,000 MVA; Step-down transformers: 1,16,000 MVA.
  •  Click on Reports to download the power ministry`s presentation to Ad-hoc Task Force on RFD.

Rly plans coal corridors to ensure timely supplies to power projects

The Indian Railways will put coal movement on its priority list to ensure timely supply of the fuel to power stations , a senior official said. For this, the Railways has rationalized its freight scheme by specifying dedicated routes linking coal producing areas with power stations. The revised freight scheme, which comes into effect on Monday, has included most coal routes under the priority scheme.
"The idea is to ensure smooth passage of freight to aid its timely supply," the official said. Priority goods are not diverted unless necessary for operational requirements, ensuring their delivery on time. The list of the new routes identified for priority movement include coal loading from Northern Coalfields Ltd in Singrauli, Madhya Pradesh, all coal traffic from Pathardih in Jharkhand, coal traffic in eastern and central zones through Mughalsarai up to Mathura in Uttar Pradesh, coal traffic from western railway catering to Allahabad division of the north central railway.
The prioritization of these routes is in addition to the routes already on the priority list, such as Panem in Jharkhand and Korea-Rewa fields of Bilaspur division in Chhatisgarh. A recent order to general managers in-charge of operations and commercial asks them to ensure that freight movement on the specified routes is not unnecessarily delayed. It also asks them to ensure that rakes are not diverted for reasons other than operational convenience.
Independent experts and coal users, however, are not enthused by the move. "While there is an agreement at the strategic level to introduce schemes on improving operations, they are short of empowering people who are at the level of implementation," said Vishwas Udgirkar, senior director at Deloitte in India.
An official with a state-run power company said rationalization in itself does not mean timely delivery of freight. "Rationalisation is basically for the purpose of streamlining route for calculation of freights, which does not necessarily mean reduction of freights or the time," the official said, requesting anonymity.
Even the Comptroller and Auditor General questioned the effectiveness of the rationalization scheme in a recent report. The Railways has reportedly run a loss in the first nine months of the current fiscal.

Bulk of the transporter's revenues come from freight, but passenger traffic uses up most of its resources. The Railway's ambitious plan to have dedicated freight corridors has also not made much progress. On Friday, union minister for railways Mamata Banerjee told general managers of all zonal units to improve freight loading and movement of goods trains.

Monday, January 24, 2011

NTPC set to have regional office in Raipur

National Thermal Power Corporation (NTPC) has cleared the deck for setting up a new regional office in Raipur.Senior officials of the company informed the state government that the process had started and the new regional office would be set up soon in Raipur, a top official with the state's energy department said.The new regional office, which would be headed by a regional executive director, would be known as NTPC's Western region-II. According to company officials, this would be the eighth region of NTPC in the country. Besides Chhattisgarh, Madhya Pradesh would be in its jurisdiction.

The proposal was in the pipeline after Chairman-cum-Managing Director of NTPC Arup Roy Choudhury gave his consent to set up new regional office in Raipur during a meeting with Chhattisgarh Chief Minister Raman Singh in October last year. The state government had agreed to provide land in the Naya Raipur area the proposed new capital of Chhattisgarh.
The state energy department officials quoting the NTPC management said that a set-up of 50 employees had been approved for the regional office.
Secretary with state's energy department Aman Singh said that the new regional office would help expedite NTPC's projects in the state and also in the neighbouring state of Madhya Pradesh. The new office would also help in the smooth operation of company's existing projects.
NTPC, the largest power producing company, is developing a coal mine in Raigarh district besides a proposed 4000-Mw power project near Lara in the same district of Chhattisgarh. In Madhya Pradesh, the company had announced to come up with two power projects.
The 2600-Mw Korba power project in Chhattisgarh produces power at the cheapest rate. The NTPC is coming up with 2960-Mw power project in Sipat of Bilaspur district in the state. The two units of 500-Mw each had already started production while the three units of 660-Mw each were under construction.

R-Power to save Rs 65 billion by Sasan project overseas loans - Ties fresh offshore loans from Chinese banks on low interest rates

Anil Ambani-led Reliance Power will save about Rs. 6,500 crore in interest costs on funding its Sasan power project, as it has tied up fresh offshore loans from Chinese banks on low interest rates. The estimated interest cost savings through the offshore loans amounting to $1.1 billion (over Rs. 5,000 crore) is even higher than R-Power’s total equity contribution for the ultra-mega power project (UMPP), sources said.
The company’s 4,000 MW project has received final commitments for this loan from Chinese banks, subsequent to which the interest outflow for the project will reduce by over Rs. 6,500 crore, they added. The fresh funding has reduced the total interest cost for the project from Rs. 6,175 crore, in the initial financing arrangement, to Rs. 9,666 crore
after the closure of offshore loans at low interest rates, the sources said.
When contacted, an R-Power spokesperson declined to give details, but said ”it is our constant endeavour to optimise the financing of our projects to increase the value to our shareholders.”
The company had tied up initial financing, predominantly in rupee loans, for the project in April 2009 with local banks and financial institutions, led by public sector giant SBI. The final approval for the fresh term loan facilities totalling $1,114 million was given by Bank of China (BOC), China Development Bank (CDB) and The Export Import Bank of China (C-EXIM) (along with Standard Chartered Bank) during the India visit of Chinese Premier Wen Jiabao in December 2010.
This funding for the Sasan UMPP followed the Exim Bank of the US providing final approval in November 2010 for a $917 million loan guarantee to the same project. The off-shore lenders traditionally do not have appetite for long maturity loans, making these loans unattractive for infrastructure projects. However, R-Power has managed loans with a maturity period of as long as 15 years. Besides, the banks did not ask for bank guarantees or sponsors’ support and relied only on the projected cash flows of the project for amortisation of their loans, the sources said.
Offshore loans have helped R-Power to diversify its sources of financing and reduce dependence on the domestic commercial banks and financial institutions. The estimated project cost of about $ 4.3 billion of the project in Sasan, Madhya Pradesh, is being financed by equity contribution of $1.2 billion and term loans of $3.1 billion.

GE to manufacture advance turbines for a power plant in Samalkot, Andhra Pradesh - Will create some 1600 jobs: Obama

US-based General Electric (GE) factory's India unit would manufacture advance turbines for a power plant in Samalkot, Andhra Pradesh, that would create some 1600 jobs, US President Barack Obama has said. Obama, who yesterday travelled to Schenectady in New York to visit the GE factory, said the GE deal was a result of his successful India visit in November last year. 
"Part of the reason I wanted to come to this plant is because this plant is what that (India) trip was all about," he said at the factory. 
During Obama's trip to India, the US businesses were able to reach an agreement to export USD 10 billion in goods and services to India, which is estimated to create some 50,000 jobs in the United States. 
"As part of the deal we struck in India, GE is going to sell advanced turbines -- the ones you guys make -- to generate power at a plant in Samalkot, India," Obama said. 
He told the audience that he is sure that most of them might not have heard the name of this Indian town, which is now creating jobs for them. 
"Most of you hadn't heard of Samalkot," he said. "But now you need to know about it, because you're going to be selling to Samalkot, India," he said. 
"And that new business halfway around the world is going to help support more than 1,200 manufacturing jobs and more than 400 engineering jobs right here in this community -- because of that sale," Obama said. 
"So it's a perfect example of why promoting exports is so important. That's why I've set a goal of doubling American exports within five years. And we're on track to do it. We're already up 18 per cent and we're just going to keep on going, because we're going to sell more and more stuff all around the world," he said. 
Obama noted that "when a company sells products overseas, it leads to hiring on our shores. The deal in Samalkot means jobs in Schenectady. That's how we accelerate growth. That's how we create opportunities for our people." 
"This is how we go from an economy that was powered by what we borrow and what we consume -- that's what happened over the last 10 years. What was driving our economy was we were spending a lot on credit cards. Everybody was borrowing a lot. The Chinese were selling a lot to us," he said.

Samalkot expansion project to generate by 2011 end - Mr. Anil Ambani reviews progress of 2,400-MW project

Mr Anil D. Ambani, Chairman of ADAG, today visited the Samalkot power project site in Andhra Pradesh and reviewed the progress of the Rs 10,000-crore, 2,400-MW expansion project.
According to sources, the project will start generating power by the end of this year and contribute towards meeting the growing requirement of power in the State.
GE contract
The company has entered into contracts worth $750 million including with General Electric for supply of six gas turbines, three steam turbines and long-term services arrangement for the project.
In addition to the supply of equipment, GE has entered into a deal to service the unit for 15 years. The contract with GE is supported by finance from US Exim Bank.
According to the company, the US President, Mr Barack Obama, during his visit to the GE factory, mentioned about the GE deal with Reliance Power for the 2,400 MW Samalkot expansion project.
He also mentioned how this project would help generate about 1,600 jobs.

MoP's future strategies-II: 12th Plan funds requirements pegged at Rs 10.5 trillion

As per the estimates of the Ministry of Power (MoP), the realization of its capacity addition targets for the 12th Plan will require an investment worth Rs 1,050,000 crore over 2012-17. The fund requirement matrix for generation, transmission and distribution sectors for the five years of the forthcoming plan is as follows:
          Total investment
  •  During 2012-15: Rs 2,20,000 crore in each year; Investment over 2015-17: Rs 2,05,000 crore.
  • Generation
  •  Rs 4,25,000 crore over 2012-17, with Rs 85,000 crore in each year.
  •  Transmission
  •  Rs 1,75,000 crore over 2012-17, with Rs 35,000 crore in each year.
  • 8Distribution
  • Total: Rs 4,50,000 crore
  • Rs 1,00,000 crore over 2012-14; Rs 80,000 crore in 2014-15; Rs 85,000 crore over 2015-17

Sunday, January 23, 2011

S Korean firm plans Rs 1k-cr boiler facility in Haryana

South Korean power equipment maker Doosan Heavy Industries & Construction Ltd will invest Rs 1,000 crore for setting a boiler manufacturing plant in India, power minister Sushilkumar Shinde said on Thursday.‘‘Doosan has purchased land in the Haryana and started work on setting up a boiler manufacturing plant,’’ the power minister said.
‘‘This facility would produce equipment to aid generation of around 3,000 mw every year,’’ he said, adding that the new manufacturing facility will be useful as India is aiming to scale up its power equipment manufacturing capacity to over 30,000 mw per annum.
Shinde said that with the ramping up of domestic power equipment manufacturing, India would soon be an exporting country. On new power generation capacity, he said, ‘‘We have added 9,785 mw so far during this fiscal and in the remaining period of over two months in 2010-11, 5,000-6,000 mw would be added.’’

Revolutionary changes ahead for coal reforms: Jaiswal

On a day he was promoted to the Cabinet rank, Union Coal Minister Sriprakash Jaiswal today promised bringing about revolutionary changes in his ministry aimed at fast-tracking the coal reforms process.This includes setting up a coal regulator and kick-starting the process of competitive bidding of coal blocks.
"The coal regulator Bill will be introduced in the Budget Session. This will bring about revolutionary changes. Also, the guidelines for competitive bidding will be finalised within a month. My leadership has expressed confidence in my performance and has elevated me. I will ensure performing better,&" Jaiswal said.
His "blueprint&" for coal sector reforms include setting up an independent regulator, along with the opening of mining to the private sector, among others.
Independent regulation of the sector is considered important for fixing formulae for price revision for long-term fuel supply agreements, ensuring competitiveness of e-auction of coal, fixing trading margins and increasing transparency in allocation of the available reserves.
Jaiswal also said the Bill would be considered by a standing committee before it was introduced in the budget session, which begins on February 21. "Also, the process for competitive bidding of blocks will begin by April this year,&" he said. Competitive bidding will replace the current practice of allocating blocks to the private sector for notified captive use based on recommendations of an inter-ministerial committee. The new system is expected to induce "transparency and objectivity&" in the overall coal block allocation process.
The proposal of auctioning of coal blocks was mooted for the first time two years ago. Parliament approved the crucial amendment in the Mines and Minerals (Development and Regulation) Act, 1957, in the Monsoon Session last year. The Bill is awaiting Presidential assent.
Jaiswal said the current financial year's production target of 461 million tonnes (mt) by state-owned Coal India could be missed, owing to the environment ministry's No-Go policy which bars mining in densely forested coal-bearing areas. The Union Cabinet had last week decided to set up a Group of Ministers to suggest a solution.
"The prime minister understands the seriousness of the issue and has requested serious discussions on the matter so that the possible shortfall in coal production due to this can be avoided,&" the minister said.
The gap between the demand and supply of coal by the end of the current Plan period is likely to go up to 83 mt as against a demand of 713 mt.Jaiswal ruled out any immediate increase in coal prices but said prices would be revised once the wage revision, due in July this year, took place.

Indian power firms seek funding from China to fuel expansion

China Development Bank has lent more than $120 billion for the nation’s projects abroad
The country’s power developers are seeking financing from China to fuel expansion as rupee interest rates soar and local banks say they can’t keep up with demand to fund about $45 billion ( Rs2 trillion) of equipment orders from China needed by 2017.
Lanco Infratech Ltd, based in Hyderabad, Adani Power Ltd, SRM Energy Ltd and Moser Baer Projects Pvt. Ltd have said they’re talking to China’s export banks for loans, after billionaire Anil Ambani’s Reliance Power Ltd borrowed $1.1 billion from China Development Bank Corp. in December.
Utilities are turning to China as they buy boilers and turbines to help meet India’s 100,000 MW capacity-addition target in the five years ending March 2017. India’s National Stock Exchange three-month interbank offered rate of 9.16% compares with 4.68% for Shanghai’s interbank offered rate, Shibor. Average yields for top-rated five-year Indian corporate bonds have risen to 9.13% from 8.94% on 31 December, according to the Fixed Income Money Market and Derivatives Association of India.
Every power company buying Chinese equipment is looking into borrowing from them as well, L.R. Shrivastav, chief executive officer of New Delhi-based Moser Baer Power, said by telephone on Wednesday. “The equipment companies are facilitating our relationship with banks and if they offer a lower lending rate, we will take it, otherwise we will get a loan at home.”
India needs more power stations to reduce blackouts and drive its economy, which Prime Minister Manmohan Singh aims to expand by 10% a year. India will miss capacity targets through 2012 because there aren’t enough established equipment makers, power minister Sushil Kumar Shinde told reporters in New Delhi on 19 December.
SBI Capital Markets Ltd, a unit of the nation’s largest lender, the State Bank of India, lent $10 billion to power projects in 2010 and loan rates to private utilities ranged from 8 to 11%, according to senior vice-president Rajat Misra.
“If foreign banks came, it would be a relief to Indian banks which are trying to fund infrastructure projects,” Misra said in an interview in New Delhi on Wednesday. “We can’t fund everything.”
Reliance Power, which has ordered $10 billion of coal-fired generators from Shanghai Electric Group Co. Ltd for Indian plants, took the loan from China Development Bank after signing a $12 billion financing agreement with Chinese lenders.
China Development Bank has lent more than $120 billion for the nation’s projects abroad, and while terms aren’t disclosed for its loans, it sold five-year bonds at a 3.31% coupon 14 January, China clearinghouse data show.
“Such loans may boost India’s capacity and help Chinese power-equipment makers, which are hunting contracts abroad to offset slowing orders at home,” according to Shubhranshu Patnaik, a senior director at Deloitte and Touche LLP in New Delhi.
Elsewhere in Indian markets, government bond yields held near the highest in almost a year before the central bank reviews policy rates next week. The yield on the most-traded 8.08% bond due August 2022 was little changed at 8.23%, according to the central bank’s trading system.
The rupee fell, approaching its lowest level in seven weeks. The currency retreated 0.3% to 45.59 per dollar on Thursday. The currency has lost 2% this month, the worst performer among the most-traded Asian currencies.
India’s food inflation slowed for a second week after the government raided traders to stop hoarding of farm goods and banned onion exports. An index measuring agricultural wholesale prices rose 15.52% in the week ended 8 January from a year earlier, the commerce ministry said in New Delhi on Thursday. The gauge gained 16.91% the previous week.
The cost of protecting the debt of government-owned State Bank of India, which some investors perceive as a proxy for the nation, has risen 24 basis points, or 0.24 percentage point, this year to 184, according to CMA prices.
Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to debt agreements. A basis point equals $1,000 annually on a contract protecting $10 million of debt. Indian syndicated loans almost doubled last year to $88.4 billion and reached $4 billion so far this month, data compiled by Bloomberg show.
Indian utilities have agreed to orders and memorandums of understanding with Chinese power companies for a total of about $45 billion of equipment, according to estimates by Deloitte and Touche’s Patnaik.Chinese companies signed $16 billion of deals with Indian businesses during Premier Wen Jiabao’s visit to India last month.

Discoms directed to invite bids for short term buying

Power distribution companies will no longer be able to buy power even on short term basis without inviting bids. The Delhi Electricity Regulatory Commission (DERC) has directed the three discoms — the NDPL, BRPL and BYPL -- to follow the competitive bidding process for making even short term power purchases.
The move is aimed at bringing in transparency, for ensure economy and also to put an end to the practise of buying expensive power on short term basis.
Streamlining the process of short term buying and selling, the DERC wants the discoms to prepare an annual power procurement plan indicating month-wise power requirements and sources from where the power is proposed to be secured . This plan will then have to be placed before the Delhi Power Procurement Group (DPPG). These projections may be revised or modified after approval of DPPG.
In a directive to the discoms the DERC has mentioned that they will have to undertake power procurement or sale during the financial year in accordance with the power procurement plan for year. If they need to procure power in short term as per procurement plan or there has been a shortfall , or failure in the supply of electricity from any approved source of supply during the year or there is surplus power available with the discoms, the licensee can enter into a short-term arrangement or agreement for procurement of power or sale of power through a transparent process of open tendering and competitive bidding in accordance with the guidelines.
The power distribution companies will have to upload the requirement of power availability and the surplus that they have for the year on its website. The discoms have been asked to publish advertisements in at least two leading newspapers once in a year for information of bidders, to see website regularly on the last day of every month for quantum available for sale and purchase of power along with the general terms and conditions for bidding as accepted by DPPG.
The DPPG has also been mandated to examine any procurement following completion of the procurement process. The DPPG may also examine any case before the Licensee commits itself for procurement of power from the successful bidder.
In case of an emergency caused by the failure of transmission lines or an outage of a generator which necessitates emergency procurement of power, the discoms have been asked to carry out emergency purchases through the power exchange only. Similarly the power exchange will have top be used for the sale of surplus power. 

Saturday, January 22, 2011

NTPC offers mining contract to Thesis - Mining operation at Pakri Barwadih Coal Mining project in Barkagaon Block of Hazaribagh District

NTPC has been awarded a mining contract to Australian firm Theiss India , mining operation at Pakri Barwadih Coal Mining project in Barkagaon Block of Hazaribagh District, a senior company official said here today. 

"The duration of the present contract will be for little over 22 years," the official told PTI requesting not to be quoted. 
The decision, he added, comes in the wake of the NTPC recently getting three coal blocks to feed thermal power 
The Australian Company was asked to ensure quality and quantity of the coal to be mined, he said adding it would produce 15 million tonnes of coal from Pakri Barwadih coal mining project alone. NTPC have also been awarded two more coal blocks at Chatti Bariatu and Keredari in Keredari Block of the district for which the production would start after finalisation of work contract, he said. 
Meanwhile, N N Misra, Director(Operation) NTPC Ltd along with S N Goel Executive Director (Fuel and Security) yesterday visited the coal mining project at Pakri Barwadih coal mining project. They also met Hazaribagh Deputy Commissioner Ravindra Kumar Agarwal and discussed on expediting land acquisition process of the three coal mining projects at Pakri Barwadih, Chatti Bariatu and Keredari Mishra, according to official sources. 

Short-term transactions of electricity for Nov'10-I: 9% of generated electricity traded in short-term

According to a report prepared by the Market Monitoring Cell (MMC) of the Central Electricity Regulatory Commission (CERC) for the month of November 2010, out of the total 62,583.80 million units (MU) of energy generated, excluding generation from renewable sources and captive power plants, a total of  5,640.41 MUs, or 9.01%, were transacted in the short-term. 
  • Such transactions consist of 2,744.97 MUs (4.39%) of the total electricity generation through bilateral mechanisms-- that is through licensed traders, term-ahead contracts on power exchanges and directly between the distribution companies-- 1,953.60 MUs (3.12%) through unscheduled interchange (UI) and 941.84 MUs (1.50%) through the two power exchanges, namely Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL).
  • Both the exchanges faced congestion during the month. Around 5.4% of actual volume of electricity transacted in IEX and 51.7% of cleared volume in PXIL could not be cleared due to congestion during the month.
  • In IEX, congestion occurred about 47.50% of the hourly time blocks, whereas PXIL experienced congestion in 55.83% of the hourly time blocks.
  • Significantly, during the month, 19 regional entities were involved in the sale of electricity through various short-term transactions, while a total of 22 states made short-term purchases of power.
  • The top five sellers of short-term electricity during the month were Chhattisgarh (512 MUs), Jindal Power (480.42 MUs), Andhra Pradesh (468.55 MUs), West Bengal (327.55 MUs) and Lanco Amarkantak Power Private Limited (277.60 MUs), while the top five purchasing entities were Tamil Nadu (1,074.77 MUs), Rajasthan (424.34 MUs), Maharashtra (374.75 MUs), Madhya Pradesh (269.57 MUs) and Karnataka (168.93 MUs). 

Short-term transactions of electricity for Nov'10-II: Power traders continue to charge higher prices

 In line with the trend observed for the last six months, the power traders in the country traded power at price bands higher than those of other mechanisms in November 2010, as well. The weighted average price of electricity transacted through trading licensees during the month was Rs 3.91/kWh, whereas the same for Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL) were Rs 2.04/kWh and Rs 2.65/kWh, respectively.
 8The average price of electricity transacted through unscheduled interchange (UI) was Rs1.79/ kWh in the North-East-West (NEW) Grid and Rs 2.46/kWh in the Southern Region (SR) Grid.
 8The minimum and maximum prices of electricity available with power traders were Rs 2.39/kWh and Rs 5.89/kWh, respectively. 
 8In comparison, the minimum price of electricity transacted through IEX and PXIL was Rs 1/kWh, while the maximum prices were Rs 3.90/kWh for IEX, and Rs 6.51/kWh for PXIL. 
 8The minimum price for UI transactions was Rs 0.00/kWh across the Grids, while the maximum prices were Rs 8.26/kWh and Rs 17.46/kWh, respectively, in the NEW and SR Grids.

Friday, January 21, 2011

Private hydro power cos set to be brought under tariff-based bidding

The power ministry has proposed a key change in the national tariff policy that would make it mandatory for private players to participate in bidding for the allocation of hydro power projects. The move is aimed at creating a level playing field between private and public sector companies and keeping in check electricity tariff by restraining private players from offering upfront premium to state governments to bag projects.
The policy change, part of a Cabinet note being finalised by the ministry, would introduce a transparent system of bidding for projects. It is also expected to alter the valuation of a host of private sector companies such as GMR, GVK, Jindal Power, Jaiprakash Hydro. Some of these players have bagged projects from state governments offering better financial terms than envisaged under the national hydro policy.
Tariff-based bidding has become mandatory in the power sector from January 6 this year but private players are still exempted from bidding for hydro projects. Although public sector companies such as NHPC, THDC, SJVNL have been given partial reprieve by the Central Electricity Regulatory Commission (CERC), the Cabinet approval to the new policy will give a definite time frame within which these companies will need to gear up for a competitive environment.
At present, hydro projects are offered to companies under a memorandum of understanding (MoU) route. Under this, companies are expected to offer host states some free power and sign power purchase agreement with other beneficiary states. Under the new hydro policy, projects are also allowed to sell up to 40% of their capacity under the merchant route in the market.
“The extension of deadline for tariff-based bidding for hydro projects will be a good development. It is very difficult to assess the time and cost of hydro projects as there are a lot of uncertainties during the project stage,” NHPC chairman ABL Srivastava said.
“It (tariff bidding) will bring a lot of transparency in the whole process. Hydro sector which has been lagging behind will get a boost,” PwC principal consultant Charudutta Palekar said. In the process of finalising the new policy, the Centre will also initiate dialogue with state governments to take them on board on the new policy. Support of the states is essential to start the process of tariff-based bidding in the hydro sector. In the past, state governments have been found to be the biggest hurdle to disturb the level playing filed between public and private sector companies in the hydro sector. Some states also offered projects where DPRs were prepared by public sector companies to a private sector entity offering better financial terms.
“We plan to make bidding mandatory for hydro projects from Jan 6, 2016,” an official in the power ministry told FE.
The changes while preparing grounder for a competitive environment in the hydro sector is expected to adversely impact future prospects of companies like Reliance Power, Lanco, LNG Bhilwara and Jaiprakash Hydro that have bagged several projects in Arunachal Pradesh, Himachal and Uttarakahand by offering upfront premium and additional free power to the state governments. Hydro PSUs are not allowed to pay upfront premium for the allocation of projects. As a result, they have lost many projects to private players. States have been allocating projects on the basis of upfront premium as they want to optimise their revenues from water resources. The country currently produces about 37,367-mw hydro power out of total installed capacity of 1,69,749 mw. While there is enormous potential for hydro generation, environment and displacement issues along with land acquisition have created hurdles. While the private sector has envisaged capacity addition in this sector, it is still dominated by PSUs such as NHPC.