APEPDCL registers lowest transmission loss in country

The Andhra Pradesh Eastern Power Distribution Company Ltd (APEPDCL) — operating in the three north-coastal districts of Visakhapatnam, Vizianagaram and Srikakulam besides East Godavari — has registered the lowest power transmission and distribution losses in the country, at 8.4 per cent, as against the country's average of 30 per cent, according to Mr H.Y. Dora, Director, Operations.

Mr Dora was speaking at a seminar on energy efficiency organised by the Confederation of Indian Industry and the Bureau of Energy Efficiency here on Friday.He said the APEPDCL was taking steps to improve energy conservation and efficiency and to educate the general public.It had distributed six lakh CFL lamps in Visakhapatnam district and had taken up a pilot project in East Godavari district to replace agricultural pump-sets and pipes to improve energy efficiency.

Stress on efficiencyHe said there was a huge demand-supply gap in the power sector and adding capacity would only solve part of the problem as it could never match a rise in demand.Therefore, energy conservation and efficiency should be stressed.Mr Rajeev Kumar Yadav, the project economist of the Bureau of Energy Efficiency, outlined the steps being taken to promote awareness about energy efficiency and to reduce the energy intensity of the Indian economy.Small and Medium EnterprisesHe urged the small and medium enterprises in particular to focus on the aspect.The use of obsolete technologies and low energy productivity were the main problems of the SME sector in India.The lack of common infrastructure and institutional finance were compounding the problem.

Energy efficient steps

He said the Bureau of Energy Efficiency had identified 30 clusters of SMEs in different sectors to promote energy efficiency in the country.In Andhra Pradesh too the programme was being implemented in the two Godavari districts (refractory cluster), Bhimavaram in West Godavari (ice-making) and Warangal (rice milling).The bureau was helping units in these clusters implement energy-efficient steps and arrange institutional finance for the purpose.Capt. Sriram Ravichander, the Chairman of the Vizag zone of the CII, said the industry should focus on the vital aspect.

India set to miss power capacity addition target

Projects are faltering because of reasons as varied as shortage of power generation equipment, delayed investment decisions, contractual problems, resistance to land acquisition, delays in environmental and forest clearances, geological issues and natural calamities.

India will again fall short of its power capacity addition target on account of equipment supply delays and other reasons, exacerbating an energy deficit that's seen as a key bottleneck in efforts to sustain and boost economic growth. The government had set a target of adding 20,359MW of power generation capacity this fiscal, but scaled it down to 18,600MW. The country has commissioned a capacity of 7,059MW so far in the current fiscal. In 2009-10, India added a capacity of 9,585MW as against a target of 14,500MW. Projects are faltering because of reasons as varied as shortage of power generation equipment, delayed investment decisions, contractual problems, resistance to land acquisition, delays in environmental and forest clearances, geological issues and natural calamities. This will aggravate the current 12% peak-hour power shortage. "Apart from the usual problems like delays in equipment supplies, we also had the misfortune of natural calamities as in the case of floods that damaged the commissioning of the first unit of Tehri Hydro Development Corp. Ltd's 400MW Koteshwar power project," said a top power ministry official, who did not want to be named. While the plan was to commission the project's first unit in December for which an investment of Rs2,100 crore has already been made, the project was flooded and the power house damaged. At least 65 people died in Uttarakhand after heavy monsoon rain triggered landslides and flooding in September. Even as the target of adding 78,577MW in the 11th Plan period (2007-2012) was revised to 62,374MW, total capacity added till date is 29,000MW. The government is trying to find solace in the fact that the capacity added so far in the period exceeds the entire capacity addition in the 10th Plan. According to the information reviewed by Mint, the government now plans to expedite the boiler light-up of projects of utilities such as Damodar Valley Corp., Neyveli Lignite Corp. Ltd and those in the state and private sector during the year to help it achieve the target. Mint had reported on 28 August 2007 that India will miss its target of adding 78,577MW of capacity in the five years to March 2012 substantially. "We expect to achieve a capacity addition of at least 15,000MW in the current fiscal and the overall capacity addition of around 55,000MW in the current plan," said the power ministry official cited above. In the five years to 2007, the country added 20,950MW of capacity, against a target of 41,110MW. In the 9th Plan (1997-2002), against a target of 40,000MW, only 19,000MW was achieved.

Coal deficit for power sector to double by March 2012

The government today said that coal deficit being faced by power utilities is expected to double to 104 million tonnes in the next fiscal, because of rapid increase in demand from the sector.

"For the year 2010-11, coal requirement for power utilities is estimated to be 440 million tonnes (MT) wherein the availability from Coal India (CIL) and other sources is expected to touch 388 MT," Coal Minister Sriprakash Jaiswal said."Similarly... A shortfall of 104 MT of coal has been projected for the year 2011-12," in the wake of growing power demand he said in a statement delivered at the 3rd India Coal Summit here, organised by ICC.

Jaiswal said the deficit was being met through coal imports, which are rising fast, already contributing to over 10 per cent of the consumption.He said steps were on to augment coal production in the country, and projected a demand of 2,500 MT by 2031-32.

"...To reduce our foreign dependence and to bridge the ever increasing gap between requirement and indigenous availability, the government has enhanced its investment from Rs 260 crore in 2009-10 to Rs 400 crore in 2010-11 for infrastructure development."

Moreover, CIL and Singareni Collieries have proposed investments of Rs 3,800 crore and Rs 1,335 crore respectively to augment production this fiscal, he said, adding "as a result of investment made in previous years, an additional production of 38.83 MT is expected in 2010-11".

The Coal Ministry has approved for grant of coal linkage to five super critical thermal power projects of NTPC and DVC the projects in Uttar Pradesh, Bihar, West Bengal and Maharashtra, would add up to a power capacity of 7,260 Mw and will supply power to the National Grid, he said.

Of the total installed power capacity of 159,398 Mw in India, almost 50 per cent is based on coal. Moreover, in the 11th Five Year Plan (2007-12), of the 78,700 Mw capacity planned, 50,570 Mw has been proposed to be coal-based.

Industries such as steel, cement, fertilisers and chemicals are major sectors of coal consumption.

Jaiswal said it has been estimated that coal will continue to have a share of 51 per cent in electricity generation by 2031-32 and 47 per share in total primary commercial Energy Supply.

Coal contributes to more than 70 per cent of power generation, and 35 per cent of commercial energy source.Globally, the Indian coal industry is the fourth largest in terms of reserves at 267 billion tonnes, and third largest in terms of overall production of around 550 million tonnes per annum.

Best financial performance award for NTPC

Mr Arup Roy Choudhury, Chairman and Managing Director, NTPC Ltd, received the ‘PSU Excellence Award 2010' in the Best Financial Performance category on Wednesday. Mr Vilasrao Deshmukh, Union Minister of Heavy Industries and Public Enterprises, presented the award at an event held here. The PSU Excellence Awards were organised under the aegis of the Department of Public Enterprises, Indian Chamber of Commerce and Deloitte, an NTPC statement said.

RPower to double capacity of Rosa plant to 2,400 mw

In an interesting development in Uttar Pradesh's power sector, the Anil Dhirubhai Ambani Group company, Reliance Power, has decided to enhance the capacity of its Rosa Thermal power plant in Shahjehanpur from the present 1,200 mw to 2,400 mw at an additional investment of Rs 6,000crore. This was announced by group chairman Anil Ambani on his first tour of the plant in Shahjehanpur here on Wednesday. This would not only rev up the company's presence in the state's power sector but also help a power starved state like UP in fulfilling its dream of becoming power surplus within the next few years.

According to reports from Shahjehanpur, Anil Ambani took a chopper ride from Bareilly for a whistle stop tour of the plant. After a two hour inspection of the plant, he was satisfied with the pace of the work and announced that the capacity of the plant will be doubled.It may be mentioned that the first phase (600 mw) of the Rs 6000 crore Rosa power project got commissioned four months before schedule in December 2009 and the second phase is likely to go full steam in March 2012.According to reports, since the company already has the land and water linkages in place, the expansion work will be done simultaneously with the ongoing project.

NTPC secures $300 mn loan from Singapore bank

Country's largest power producer NTPC has tied up with a Singapore-based bank for a USD 300 million loan for funding its financial plans in this fiscal, a senior company official said on Wednesday.

"It is USD 300 million loan with a Singapore bank—I cannot tell you the name right now-- for funding our project in the current financial year," NTPC Director Finance AK Singhal said.

The loan is for seven-year period, Singhal added."We need to seek Reserve Bank approval for this loan and after that we would immediately start drawing," he said.Singhal also noted that the company was already committed for Rs 26,000 crore worth of loan from the domestic banks which, it has not drawn yet.

NTPC plans to place orders for generators worth at least $7.2 billion by March 31 as it accelerates capacity addition to help reduce blackouts

NTPC Ltd., India’s biggest power producer, plans to place orders for generators worth at least 328.5 billion rupees ($7.2 billion) by March 31 as it accelerates capacity addition to help reduce blackouts.The utility will buy nine generators of 660 megawatts each and the same number of 800-megawatt units, Chairman Arup Roy Choudhury said in an interview at his office in New Delhi Nov. 26. The equipment cost per megawatt is 25 million to 30 million rupees, he said.NTPC, which failed to meet its capacity addition target in the year ended March 31, aims to speed up construction of plants to meet demand in Asia’s second-fastest growing major economy. Capacity addition will more than double to 3,150 megawatts this year, with another 5,500 megawatts to follow in the year ending March 2012, Choudhury said.“One of the biggest concerns for NTPC has been the execution of projects,” said Harshad Shukla, an analyst at KR Choksey Shares & Securities Pvt., who has a one-year price target of 233 rupees on the stock. With the orders, “NTPC’s project execution is expected to move up,” he said.NTPC and its ventures have plants that can generate 32,694 megawatts, according to the company’s website. The utility is targeting 75,000 megawatts by March 2017.

Local Units

NTPC shares gained 1.4 percent, the most since Oct. 25, to 179.40 rupees in Mumbai trading. The stock has declined 24 percent this year compared with a 11 percent gain in the benchmarkSensitive Index.Companies that win bids to supply the equipment will need to set up local manufacturing units to avoid delays, Choudhury said. Delivery of generators must start within 16 months from the time the orders are placed, he said.NTPC may form a partnership with Nuclear Power Corp. of India to build a plant in Haryana state in the north of the country, Choudhury said. The generator may take a 49 percent stake in the venture.India is seeking investments from domestic and overseas companies to increase generation capacity after the government pledged to provide electricity to households nationwide by 2012. The country’s installed capacity was 167,278 megawatts at the end of October and the government is targeting an increase to 200,000 megawatts in two years to sustain economic growth of 8 percent, according to the power ministry.India’s economy grew at 8.8 percent in the three months ended June 30, the fastest pace in more than two years.

NTPC seeks land for medical college in state

National Thermal Power Corporation Ltd (NTPC), India's largest power generation utility, has sought 15 acres of land from the Orissa government to set up a medical college. The company also intends to set up a power engineering institute in the state.

The locations and other specifics of these two institutes are yet to be finalized."NTPC has sought 15 acres of land for setting up a medical college in the state. It has also evinced interest in setting up a power engineering institute. The company has written to us, requesting for land allotment and we will hold an inter-departmental meeting soon to decide on the site for the medical college and the power engineering institute. The details of the medical college are yet to be finalized but as per the norms of Medical Council of India, they have to start with a 300-bed facility”, an official source told Business Standard.

NTPC which had proposed to set up two super thermal power plants to be set up at Gajamara in Dhenkanal district and Darlipalli in Sundergarh district and also add 1320 Mw to its thermal power station at Talcher, was keen to sign a Power Purchase Agreement (PPA) with the state owned Grid Corporation of Orissa (Gridco).

The PPA was to be signed between NTPC and Gridco for a period of 25 years. NTPC is setting up a 3200 Mw power plant at Gajamara and 4800 Mw power plant at Darlipalli.

One of the conditions set by the state government for signing of the PPA was the setting up of a medical college and a power engineering institute. The second condition was allocation of 50 per cent power for the state from the two proposed super thermal power stations."NTPC has claimed that it has got the approval of the Centre for allocation of 50 per cent of power for the host state. We have asked the company to produce a copy of the letter of approval of the Centre”, the source added.

The proposed super thermal power projects of NTPC at Gajamara and Darlipalli were scheduled to be operational by 2016-17. The Gajamara project needed 2900 acres of land and NTPC claimed to have conducted the gram sabha for this project in March this year.

MoP against continuation of cost-plus tariff regime for HEPs

Breaking rank with the Central Electricity Authority (CEA), the Ministry of Power (MoP) has been revealed to be against the continuation of the cost-plus tariff regime for the hydropower sector beyond January 2011. The MoP has questioned the arguments put forward by those favoring the extension of cost-plus tariffs. 

• The ministry has pointed out that had HEPs been unviable in the free market, as claimed by the IPPs, the private companies would not have been paying substantial upfront premiums to grab such projects from avaricious state governments.
• Interestingly, the ministry has put forward this line of reasoning, despite the fact that, both, the CEA and the ministry's Task Force on hydro project development have already recommended that the cost-plus tariff regime be extended for the entire hydro sector for another five years, till January 2016. 
• As per the National Tariff Policy, 2006, competitive bidding is supposed to replace the existing MoU regimen by January 2011, unless the apex regulatory authority deems the country not ready for such a transition.
• The private players are now expected to issue a riposte to the point raised by the power ministry.

Possibility of gas availability beyond projections for the period 2010-16: Petroleum ministry posits an optimistic outlook

The petroleum ministry already has in place projections for gas availability for the period 2010-16. After due deliberations with major PSU companies, on the possibility of gas availability beyond these projections, the petroleum ministry has arrived at the conclusion that the gas availability scenario is likely to improve substantially in the future on the back of enhanced availability of indigenous natural gas. The ministry, however, has not been able to provide definitive numbers and timeframe regarding such availability.

• The projections for the period 2010-16 suggest that the availability of natural gas is expected to increase from 142.81 MMSCMD in 2010-11 to 201.72 MMSCMD in 2015-16. A closer look at the figures indicate that a significant increase of around 9 MMSCMD of gas from ONGC's new marginal fields is likely to be witnessed in the year 2011-12. Another 28 MMSCMD of gas is expected to be added in the year 2012-13 due to increase in KG-D6 production from the present 60 MMSCMD to 80 MMSCMD and a further increase of 8 MMSCMD from Gujarat State Petroleum Corporation's (GSPC) Deendayal West block. However, no expectation of substantial increase in production is suggested beyond 2012-13 till 2015-16.
• Some of the major oil and gas companies have also given positive indications regarding future gas availability beyond the projections. ONGC has indicated that it's peak production is likely to reach 25 MMSCMD from each of its NELP fields in Krishna Godavari and Mahanadi basins. RIL has also suggested that it's peak production from the presently producing KG-D6 block, other projects in KG-D6, NEC 25 and CYD 5 is expected to add upto 115 MMSCMD by 2016. GSPC expects peak production of around 8 MMSCMD from its discoveries.
• On the flip side, the ministry has also commented that the contracted 234 NELP blocks and the 26 coal bed methane (CBM) blocks would not be able to produce gas in the same quantum as is produced by the prolific KG-D6 block.   
• To provide a more clear picture of the gas availability scenario in the country, the Directorate General of Hydrocarbons (DGH) has laid down technical benchmarks for finalizing the gas production profile.

Kolodyne-II HEP: NTPC expects TEC in mid-January 2011

State-run NTPC is hopeful of obtaining the techno-economic clearance (TEC) for its 4x115 MW Kolodyne hydroelectric project (HEP) Stage-II in Mizoram from the Central Electricity Authority (CEA) by mid-January next year. 

• Reportedly, the power firm is already finalizing the cost estimates for the project, and will submit the same to the CEA soon.
• Following the grant of TEC, NTPC will start the pre-award engineering process, and intends to issue the tenders for award of various packages in about six months time. 
• NTPC bagged this project from the Mizoram government in December 2008, when it signed a memorandum of agreement with the state government to set-up the project on build-own-operate-maintain basis. 
• Kolodyne-II HEP is a storage-cum-diversion type development, proposed to be located on the river Kolodyne, in the Saiha district of Mizoram. The dam site is located on NH-54, at a distance of 323 km from the state capital of Aizwal and 505 km from Silchar in Southern Assam. 
• The project envisages construction of a 109-m high concrete dam to divert the river water, by means of a 2.95 km long head-race-tunnel (HRT) to a surface power house, for power generation. The power house has been proposed to be constructed on the right bank of Kolodyne river. 

Supply of APM gas to non-APM customers: Latest prices

The petroleum ministry has informed the national upstream oil companies, namely ONGC, OIL and GAIL, of a revision in the non-APM price of natural gas produced from their fields in nominated blocks. It may be noted that as per the government's directives, while the national oil companies receive a price of $4.2 per MMBTU for selling APM gas to non-APM customers, such customers would be paying different prices as per their region and the price difference would go to Gas Pool Account. The following are the prices to be paid by non-APM customers for receiving APM gas: 

• $5.25 per MMBTU: Western and northern zone. This will include the states of Maharashtra, Gujarat and other states covered by GAIL's Hazira-Vijaipur-Jagdishpur (HVJ) and Dahej-Vijaipur pipeline (DVPL), such as Rajasthan, Madhya Pradesh, Uttar Pradesh, Haryana and Delhi
• $5 per MMBTU: Rajasthan, South Gujarat and isolated customers in Gujarat which are getting gas from identified onshore fields 
• $4.75 per MMBTU: Southern Zone- Cauvery basin
• $4.5 per MMBTU: Southern Zone- Krishna Godavari basin
• $4.2 per MMBTU: North-East region

SC judgment on RNRL vs RIL-I: Law ministry declines to revisit issue of NTPC's rights

The Ministry of Law and Justice (MLJ) has refused to consider a request from the Ministry of Petroleum and Natural Gas (MoPNG), which has asked for legal opinion on how to best handle the issue of gas supplies to NTPC, in light of the Supreme Court judgment in the case involving Reliance Natural Resources Limited and Reliance Industries.

• The MLJ has claimed that the subject has already been examined by the Lieutenant Solicitor General of India, with respect to a similar request made earlier by the Ministry of Power (MoP).
• The second-highest ranking law officer of India had opined that the apex court's ruling clearly called for the protection of NTPC's rights, and had distinguished between the power major and RNRL. Thus, the EGoM should effect the supply of 12 MMSCMD of gas, at a price discovered through the open tender.
• The law ministry claims that its position on the issue has not changed, and no further clarification would be offered.

SC judgment on RNRL vs RIL-II: Is it really a level playing field between PSUs and private sector?

Reliance Industries Limited and NTPC are at loggerheads over a contract for the supply of 12 MMSCMD of natural gas from RIL’s KG D-6 block to the Kawas and Gandhar expansion power projects in Gujarat, at $ 2.34 per MMBTU.

• This price was discovered over the course of a global tender floated by the power major, wherein RIL emerged victorious.
• RIL has not yet commenced supplies to the two power plants due to certain issues pertaining to risk factors and compensation therefore. On this, NTPC approached the Bombay High Court in 2005, pleading for the judiciary's intervention. 
• Meanwhile, the Anil Ambani-led Reliance Natural Resources Limited (RNRL) filed a suit against RIL, in 2006, calling for the enforcement of a family contract, which stipulated supply of gas from RIL to RNRL at $2.34 per unit, as well. RIL, however, wanted to supply the gas at $4.2/unit, subject to revision after five years.
• The Supreme Court of India gave its verdict on the RIL vs RNRL case on May 7, 2010, wherein the overriding powers granted to the union government for the regulation of natural gas were upheld. As such, the family agreement was cited as subservient to the Government's policies and legislation on gas pricing, granting a victory to RIL.
• While NTPC's plea is still sub-judice, the apex court clearly freed the EGoM to use its own judgment and allocate gas to NTPC at the competitively obtained price or any other price found suitable, a stand clarified by the Ministry of Law and Justice. 
• Given these circumstances, NTPC might actually receive supplies at a price of $ 2.34, which would give it a huge leg up over other power producers of the country, if it manages to iron out the dispute over sharing of liabilities with RIL. If this materializes, the government's claim to be giving a level playing field to all players, private or public, will turn out to be a hogwash.

Tata Power's Mundra UMPP might miss accelerated schedule

The first unit of the 4000 MW Mundra UMPP, being developed by Coastal Gujarat Power Limited (CGPL), a subsidiary of Tata Power, may belie the power developer's claims of commencing commercial operations ahead of schedule.

• As per the latest status report on the project, released by the Central Electricity Authority (CEA), the schedule for boiler-related activities of the unit has been pushed back by a month or so. The company now expects to conclude the boiler light up and steam blow-off by January and February 2011, respectively. 
• Further, erection of boiler, although nearing completion, has seen no progress over the last one month. 
• On a brighter note, the developer has completed the erection of main frame structures for Unit IV and V. Oil flushing for Unit I and TG erection for Unit II is expected to commence by the end of this month. In addition, stator erection and rotor insertion for the second unit have been completed. 
• Tata Power bagged the Mundra project in 2007 through the international competitive bidding route. The project entails an investment of over Rs 17,000 crore, funded via a debt and equity ratio of 75:25.

Scanty progress on Krishnapatnam UMPP-land acquisition

The critical land acquisition process at Reliance Power Limited`s (RPL) 4000 MW Krishanpatnam UMPP, being developed by Coastal Andhra Power Limited (CAPL), a wholly owned subsidiary, is progressing only at a snail`s pace.

• Notably, during the course of one month from October to November 2010, the project has seen almost no movement on this front. As a result, about 100 acres of land still remains to be acquired by the company. 
• Meanwhile, works pertaining to studies and investigation, engineering, pre-award works, financing are proceeding apace.
• The UMPP was originally planned to sea light of day by September 2013, when the first 800 MW unit was expected to be operational. As things stand now, the project is likely to be fully commissioned by February 2015.

Land requirement for Sasan UMPP revised upwards

Sasan Power Limited (SPL), a subsidiary of the Anil Ambani-led Reliance Power, has revised the land requirement for its 3,960 MW Sasan UMPP, located in Madhya Pradesh, from the original 3,488 acres, to 3,730.36 acres.

• This is mainly on account of the corridor for intake water channel and coal transport conduit, which now will require 237.70 acres and 198.68 acres, respectively, against the previous 48.85 acres and 144.21 acres. 
• So far, SPL has acquired 2790.89 acres of land, representing 74.7% of the new requirements. Further, 1,879.47 acres of land within this is available with the developer for the construction of the main plant, against the estimated requirement of 2,034.21 acres.
• Likewise, around 473.20 acres of land has been acquired, out of the 811.4 acres needed, for the construction of the ash pond; while around 429.31 acres, out of the 448.37 acres required for the residential colony, have been acquired by SPL.

Competitive tariff bidding for thermal projects from 2011

Come 2011, all thermal power projects and transmission systems will be awarded on competitive tariff bidding and trading in renewable energy certificate (REC) is set to start, India's power sector regulator said on Sunday. 
"The ministry of power has agreed to the suggestion of competitive bidding for all thermal power projects to be set up in the country after January 2011 onwards. This will be applicable for all projects whose power purchase agreement (PPA) would be signed from next January onwards," Central Electricity Regulatory Commission (CERC) chairman Pramod Deo said. 
Speaking to reporters on the sidelines of the All India Conference of Chairmen of Central and State Electricity Regulatory Commissions here, he said: "Public sector utilities like NTPC (National Thermal Power Corporation) have completed their PPA for their projects. The ministry of power has said it will not extend the deadline." 
Deo said the process of trading in RECs will start in two months as registration has commenced with the Power System Operation Corporation Ltd (POSOCO). "The volume of RECs that would come up for trading is not possible to estimate," he added. The REC is classified into two categories - solar and non-solar - and will be issued to renewable energy generators. Power distribution and captive power companies can buy RECs to meet their green power norms. 
On the issue of payment of transmission charges by Nuclear Power Corporation of India Ltd (NPCIL) for its Kudankulam power plant with effect from 2009 onwards when the plant is yet to start power generation, Deo said: "The same principle will be followed in the future. Where ever the transmission infrastructure is ready to evacuate power, the power generating company will have to pay the charges."