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."

States cannot block access of power from grid, says Central Electricity Regulatory Commission

 Power sector regulator Central Electricity Regulatory Commission (CERC) today warned states including, Tamil Nadu and West Bengal, that investments in the sector could be hit if they continue to block electricity supply to the National Power Grid."States like Tamil Nadu, Kerala, Karnataka and West Bengal have blocked access to the grid under the Section 11 of the Electricity Act 2003. You (states) cannot do that...", CERC Chairman Pramod Deo told reporters here.

Certain states have blocked supply access to the grid, which runs against the spirit of Section 11 of the Electricity Act 2003, he said.

Some of the states had blocked access citing power shortage in their respective territories.

"In Karnataka, the High Court passed that order and we have challenged it in the Supreme Court. The Central Government had also joined in this.. Even Tamil Nadu under Sec 11 has blocked access and the reason given by the government is shortage," Deo, who was here to participate in All India Conference of Chairmen of Central and State Electricity Regulatory Commissions, said.

This kind of action by states would result in decreased investments, he said.

"If state governments have a contract or Power Purchase Agreements (PPA), they cannot break it. But if they do not have a contract, they can supply for anyone...," he said.

Deo also opined that each State should study availability of power. "You cannot say Chennai will get 24 hours power supply and a village outside Chennai will have it only for four hours. First you should study how much electricity is available".

He pointed out that it was the duty of the regulatory commission and distribution company to study the availability of power and said only Maharastra is currently following it.

On the Renewable Energy Certificate Regulation, he said it would be implemented by January 2011 and the new PPA signed later would adhere to it.

"If you had already signed a PPA, then they will still be governed by gross and returns. But those PPAs signed after January 2011 would follow the new norms," he said.

However, he clarified that the volume of REC that would come up for trading cannot be estimated.

In January 2010, CERC notified a regulation on Renewable Energy Certificate in fulfillment of its mandate to promote renewable energy sources and development of electricity market.

The framework of REC is expected to push renewable energy capacity addition in the country.

Market-makers needed to promote trading in renewable energy - Need to develop a mechanism to bring in market-makers, aggregators and financiers

In order to promote trading of renewable energy (RE) through certification process, there is a need to develop a mechanism to bring in market-makers, aggregators and financiers for providing liquidity to green-energy generators to motivate them to sell more renewable energy certificates (RECs) by undertaking new projects, a senior bank official said. 
"For the success of REC, there is a need to develop a mechanism to bring in market-makers, aggregators and people who can provide liquidity to generators of green power to finance their projects to sell RECs to distribution companies," Yes Bank Managing Director (Sustainable Investment Banking), Vivek Mehra said. 
Banks, however, are cautious about funding generators for RECs, he said. 
"The REC market is very young and bankers are being very cautious. But the other market players can play an important role in providing liquidity to the REC sellers," Mehra said. 
Central Electricity Regulatory Commission (CERC) has designated National Load Despatch Centre (NLDC) as the central agency to issue RECs to generators who can sell them to states deficient in green energy utilities.

47 MoUs inked to produce 58,000 MW power in next 5 yrs: MP CM

With a view to emerge as a major power hub in the country and to supply 24-hours electricity to the people of the state, Madhya Pradesh has inked 47 MOUs to produce 58,000 MW of power in next few years. 

"Though power generation in the state has doubled in the last seven years, the demand too has increased from 4652 MW in 2002-03 to 7786 MW in 2010-11 and to bridge this gap and emerge as a power hub in the country, the state has inked 47 MOUs to produce 58,000 MW of power in next few years," Madhya Pradesh Chief Minister , Shivraj Singh Chouhan told PTI. Chouhan, who is the first non-Congress Chief Minister to complete five years in power on November 29, said that at present 13 power projects are being constructed and in the next three years 5000 MW of additional power will be generated in the state. "By the year 2013, Madhya Pradesh would supply 24-hours power to the people in the state," he claimed. Referring to the state's industrialisation, he said due to the special efforts being made by the state government, production has started in various units which were set up with an investment of nearly Rs 6500 crore. 

"In this financial year, upto March 2011, units with an investment of nearly Rs 40,000 crore will start production in the state," Chouhan said adding earlier the state was known as a BIMARU state, but now it has become a developing state. 

He also informed that a 70-point roadmap of the state's development was charted out by the BJP government and the same was presented in the State Assembly during its special session. 

On the issue of condition of roads in the state, he said that the condition of state highways is quite good, while the situation of National Highways which comes under the purview of the Central government are not good as they are not being maintained in a proper manner. "The Union Surface Transport Minister, Kamal Nath has assured us to improve the condition of National Highways by February 2011," Chouhan said. 

To a question on corruption in the state, he admitted that it has amalgamated not only in the system in the entire country, but also become a practise. It cannot be curbed just like this and therefore, the state has introduced 'e-tendering and e-payment' facility in the state and the same was effective in curbing the menace. 

When asked on alleged step-motherly treatment being meted out to the state on the issue of allocation of coal and other central schemes, Chouhan said, "Despite having coal mines in the state, the Centre is advising us to import coal for our power plants in the state." Similarly, Andhra Pradesh gets eight times more funds than Madhya Pradesh under Indira Awas Yojna and also the state was not being allocated adequate foodgrain for the people. 

He said that he doesn't want any confrontation with the Centre on the issue in the federal structure and had met Prime Minister and other central ministers on the issue many times. "If this situation persists and people of the state continues to suffer, then he will also not sit quietly and would seek permission of the party leadership for holding a fast on the issue," Chouhan added.

India ranks sixth in nuclear power generation

India ranked sixth in the world's elite nuclear club, with its 20th nuclear-powered reactor at Kaiga in Karnataka achieving criticality Saturday, a senior official said. 
"India is elevated to the sixth rank in an elite club of nations, after the US, France, Japan, Russia and Korea to have 20 or more nuclear reactors in operation," Kaiga generating station director J.P. Gupta said in a statement. 
In nuclear terms, criticality signifies the start of self-sustaining nuclear fission chain reaction in the reactor core, which leads to power generation. "The fourth unit will be synchronised to the southern grid in a fortnight after mandatory tests and supplied proportionately to Karnataka, Kerala, Andhra Pradesh, Tamil Nadu and Pudducherry from January 1," Gupta told IANS later from Kaiga, about 500 km from here. 
As part of the state-run Nuclear Power Corporation of India Ltd (NPCIL), all the four 220 MW units of Kaiga located in the coastal Uttara Kannada district are indigenous pressurised heavy water reactors fuelled with the uranium sourced from domestic mines. "Karnataka's share of the power will be 27 percent and the distribution utilities will be charged at Rs.3 per unit," Gupta said. 
Kaiga's fourth unit is the third reactor to become operational after the fifth and sixth units of the Rajasthan Atomic Power Station (RAPS) this fiscal (2010-11), increasing the nuclear-installed capacity to 4,780 MW from 4,560 MW," Gupta said. Two light water reactors of 1,000 MW each at Kudankulam in southern Tamil Nadu and a 500 MW prototype fast breeder reactor at Kalpakkam near Chennai are at advanced stages of completion. "In addition, four indigenously designed 700 MW pressurised heavy water reactors, including two at Kakrapar in Gujarat and Rawatbhata in Rajasthan are under construction," NPCIL said in the statement. 
The installed nuclear power capacity in the country will increase to 7,280 MW in 2012 and to 10,080 MW by 2017. 
"Our target is to reach 20,000 MW by 2020 in the medium term and 63,000 MW by 2032 in the long term, with 700 MW from pressurised heavy water reactors and 1,000 MW from light water reactors," the statement added.

Jaitapur nuclear project gets conditional eco clearance - 10,000 MW unit to bring in investment of over Rs 1 lakh crore

The Union Ministry of Environment and Forest on Sunday gave a conditional environmental clearance to the 10,000 MW Jaitapur nuclear plant in Maharashtra. The project will come up in phases over the next 15 years and will bring in an investment of more than Rs 1 lakh crore in the region.Nuclear Power Corporation of India Ltd (NPCIL) will have to abide by 35 environmental conditions in which top priority has been given to preserving the marine biodiversity of the sea near the plant.

Phase I

The first phase is expected to be completed within the next five years and the remaining phases by 2020. French nuclear giant, Areva, will provide six European pressurised reactors. These third generation reactors are designed with very advance safety features. An agreement between Areva and NPCIL is likely to be signed next month during the French President, Mr Nicholas Sarkozy's state visit to India. The Union Minister for Environment and Forests, Mr Jairman Ramesh, addressing the media, said that the clearance to the project has been given considering major issues such as national economic growth, diversification of fuel mix for power generation in the country, strategic diplomacy and environmental concerns, he said.

ecologically-sensitive

Jaitapur plant, located at Ratnagiri, is part of the ecologically-sensitive Western Ghats region, he said. The only forest cover in Maharashtra is in this region and in the Vidarbha. Therefore, the Ministry had to strike a balance between development and environment while sanctioning the project, he said. Mr Ramesh said his Ministry had given the environmental clearance to the Jaitapur project in 80 days from the day NPCIL submitted the final environment assessment report. The Navi Mumbai airport clearance took 115 days from the time City and Industrial Development Corporation of Maharashtra submitted its assessment report, he said.

“I am not anti-development; environment clearance is given to about 95 per cent of the projects which come to my Ministry while 85 per cent get forest clearance,” he said.

Mr Ramesh said although the project has got the environment clearance, if it (the project) undergoes some changes in terms of design and technology while getting approval from the Atomic Energy Regulatory Board and if those changes have a significant impact on the environment, then the project will have to be referred back to the Ministry for environment clearance, he said.

4 'Commonwealth Games' projects yet to be commissioned

Even as the much-vaunted Commonwealth Games, 2010, have come and gone, four projects deemed critical to the games' success are yet to see the light of day, even now. These are:

Koderma TPP (2x500 MW): The project, being developed by Damodar Valley Corporation (DVC), initially faced delays in land acquisition, along with law and order problems. It is still suffering due to the slow pace of supply and erection of some boiler equipment, turbine generator materials and the raw water system. 

Mejja TPS Phase-II (2x500 MW): The first unit of this DVC led project was commissioned in September 2010, however, the second unit is facing difficulties with regards to delays with the critical coal handling plant.

Durgapur Steel TPP (2x500 MW): Myriad issues have come in the way of this project being commissioned by DVC. These range from initial delay in land filling and site leveling to hurdles in land acquisition. In addition, law and order problems, delay in supply and erection of boiler and TG materials have added to the developer's problems at the project. 

Pragati-III CCP (6x250 MW): Being developed by Pragati Power Corporation Limited (PPCL), this project is hampered due to the slow progress on civil works and supply of equipment by BHEL.  

Mechanism on anvil to free coal blocks from no-go list

At a time when many coal blocks have come under a ‘no-go’ restriction, the government plans to tweak the approach adopted for calculating the green cover of a block-bearing region to dilute the average affected forest land.

While this measure would not reduce the impact of mining on the environment, it will help free around 25 per cent area from the no-go list.The mechanism, if adopted, could come as some relief for around two dozen companies, including NTPC, Coal India, Hindalco, Essar Power and Adani, whose coal blocks have come under the no-go shadow.

“The suggestion came up during the course of discussions on this matter in one of the meetings held in the Prime Minister’s Office (PMO). The idea is to bring down the area covered under no-go regions,” said a senior official from the Planning Commission.

So far, the environment ministry’s approach has been to classify all those areas as “no go” which have at least 30 per cent gross forest cover (GFC) and at least 10 per cent weighted forest cover (WFC). According to the proposal, the methodology adopted for classifying the no-go areas would be tweaked to bring down the average forest density of a block-bearing region below the threshold of 30 per cent GFC. This is achieved by clubbing moderately dense areas with adjoining low-density areas. This automatically leads to exclusion of such areas from the no-go list.

Explaining the proposed mechanism, the official said if a dense no-go area with 40 per cent GFC is clubbed with an adjoining “not-so-dense” area with, say, 10 per cent GFC, the average GFC of the two areas taken together works out to 25 per cent, which is less than 30 per cent GFC threshold. This region would, thus, be freed.

“The mechanism will allow the government to free at least a fourth of the blocks currently held up owing to the no-go criterion,” the official said. Asked whether the new scheme would work, as the overall area covered under mining operations would not undergo any change, the official said, “At least some blocks would be freed from the so-called no-go list.”

The environment ministry’s categorisation specifies regions where coal mining can be permitted only after stringent forest clearances are obtained. Though this is only indicative in nature, it has worried power project developers, as several existing and upcoming mines now fall in areas barred for mining.

The no-go criterion covers nine coalfields including Singrauli, North Karanpura, Ib Valley, Mand-Raigarh, Talcher, Sohagpur, Wardha Valley, Hasdeo-Arand and West Bokaro. While Hasdeo-Arand in Chhattisgarh is totally under the no-go area, the share of no-go is 60 per cent in Mand-Raigarh, 44 per cent in Singrauli and 35 per cent in IB Valley. Overall, 203 coal blocks with reserves of over 600 million tonnes and linked power projects of over 50,000 Mw capacity have been stuck due to the criterion.

Earlier this year, PMO had undertaken joint meetings with the officials of the coal and environment ministries as the environment ministry had put almost half the regions in the nine coalfields in the no-go zone. A high-level committee under Planning Commission member B K Chaturvedi is currently trying to work out a mechanism to provide preference to companies developing the threatened projects during coal block allocation. “The Planning Commission’s view is that the criteria of 30 per cent GFC and 10 per cent WFC is not a viable and realistic proposition because the overall forest cover of India is itself 30 per cent,” the official said.

The Commission has been pitching for replacing the environment ministry’s controversial classification with a system of identifying dense and non-dense forest areas separately and not allowing any mining activity in dense areas, or allowing only underground mining at best.

The commission has also conveyed to the government its stand that even in non-dense areas mining should be carried out in phases to ensure that at any given point of time mining activity is not carried out in more than 20 per cent of the overall forested area.

The official also said that as discussions on the matter were progressing, the environment ministry was also “gradually coming to the ground that more areas need to be freed up for developmental activity”.

States seeking power at concessional rates from private developers as a condition for support on linkage, land acquisition and eco clearance

In what may put upward pressure on electricity tariff in the country and pose regulatory challenges, states are increasingly demanding power at concessional rates from private developers as a condition for support on fuel linkage, land acquisition, water supply tie-up and environmental clearance.The Central Electricity Regulatory Commission (CERC) has recently written to the central government, drawing its attention to the issue.

Implications of Chhattisgarh and Orissa (which are rich in coal) and Arunachal Pradesh (which accounts for a significant chunk of the country's hydropower generation potential) seeking concessional power are quite serious, given the quantum of their generation potential.These states have already tied up much more power than their projected demand. Chhattisgarh has applied for long-term open access for sale of 6,300 mw cheaper power tied up as home state share from private projects coming up there. Similar is the case with Orissa.

Meanwhile, Arunachal Pradesh is not satisfied with the provision for 13% free power from hydel projects as home state share and is demanding additional free power to allocate projects.These states are likely to sell surplus power to traders within their borders, who will sell it in the open market. Since such transactions amount to intra-state sale of power, they fall outside the jurisdiction of the central electricity regulatory commission (CERC).The CERC's concern is that this could lead to domination of power market by resource-rich states, making the job of regulating power market almost impossible.

"We have advised the central government that this issue (states putting condition of electricity sale at variable cost of generation to them for lending support to private projects) needs to be addressed," CERC chairman Pramod Deo told FE. Resource-poor states like Uttar Pradesh and Pubjab too have started putting up similar conditions.

The state electricity regulatory commissions are required to comply with the Electricity Act, 2003 and policies and regulations that might be issued under the Act. Since concessional sale of electricity to home states is not allowed under the Act, state regulators might face a serious dilemma while fixing tariffs for such power projects.The Electricity Act had envisaged switchover to mandatory bidding for procuring power by distribution companies from January 2006. However, the Centre extended the deadline to January 6, 2011 following a CERC recommendation. But now, there is little possibility of extending it further, with the CERC favouring adherence to the schedule.

A CERC study suggests that electricity tariff for power projects implemented through competitive tariff bidding route is lower compared to those developed under a cost-plus system. That means consumers would benefit in case tariff bidding regime is made mandatory. But the issue of tariff determination for these projects might pose a serious challenge in implementing the competitive regime.

India to start power trade with Sri Lanka by 2014

The two countries are likely to sign an MoU for the Rs 2,500-crore project.The government’s initiative to have trading of electricity with Sri Lanka is likely to bear fruit by mid-2014, with the commissioning of a high capacity power transmission link between the two countries. Power Grid Corporation of India (PGCIL), the country’s largest electricity transmission utility and the implementing agency for the project from the Indian side, is likely to sign a memorandum of understanding (MoU) for developing the Rs 2,500-crore project with the neighbouring country by next month.The 285-kilometre India-Sri Lanka power link, which includes submarine cables over 50 km, will enable the two countries to trade their surplus power with each other, thereby offering a cheaper option to bridge their power generation deficits and also manage peak demand. “We are going to sign the MoU with the Sri Lankan side for the project in December. After this, it will take us six months to start work on the development of the project. We will complete the project within three years,” Power Grid Chairman and Managing Director S K Chaturvedi told Business Standard.

While India generally reels under an overall 12 per cent peak power deficit currently, minute electricity surplus in eastern and southern grids become available seasonally. “With the commissioning of the Krishnapatnam Ultra Mega Power Project (UMPP) in Andhra Pradesh, tradeble surplus would become available,” Chaturvedi said.

UMPPs are large-sized projects being developed by the private sector. The Krishnapatnam UMPP is being developed by Anil Dhirubhai Ambani-owned Reliance Power and is likely to be commissioned by 2015. The link will help Sri Lanka reduce its use of expensive fuels and import cheaper power from India’s surplus. For India, the link will help open a new market for its projected surplus of power.

The subsea line would initially have a capacity of transmitting 500 Mw, according to Power Grid’s feasibility report. “Later, the power flow could be ramped up to 1,000 Mw, beginning 2016, when the power generation capacities in the two countries improve, with surplus availability especially in the Indian southern grid,” Chaturvedi said.The completion of the proposed undersea transmission link, however, would also depend on the commissioning of NTPC’s 500 Mw imported coal-based power project being planned to be set up at Trincomalee in Sri Lanka. The undersea project would be useful in evacuation of power from the plant.

“The transmission project is linked to the Trincomalee plant. It takes at least four-five years to set up a coal-based project, while my project takes only three years for completion,” Chaturvedi said. While the work on NTPC’s project has not begun, an official from NTPC said the construction work would begin as soon as all the necessary approvals were obtained.Powergrid and Ceylon Electricity Board (CEB), the largest electricity company of Sri Lanka, will lay down cables under the Gulf of Mannar between Rameswaram in Tamil Nadu and Talaimannar in Sri Lanka.

Globally, transnational undersea power transmission lines have been laid so far only between theUK and the France for transferring 2,000 Mw of electricity. The Philippines plans to set up similar transmission links to connect its islands through the undersea electricity network.

RGTIL likely to go slow on its upcoming pipeline projects

Recent trends indicate that Reliance Gas Transportation Infrastructure Ltd (RGTIL) will go slow on its upcoming pipeline projects. The private major has already stated that, for now, it will only undertake pre-project activities for its pipelines such as seeking all statutory clearances. It plans to begin the next phase of pipeline construction activities only from October, 2011. RGTIL is of the view that it in the current Gas Utilisation Policy framework, there will not be enough gas available for supply to customers through its proposed pipelines. Hence, it has decided to go slow. 

  The following information pertains to the current status of RGTIL`s pipelines:

Kakinada- Hyderabad-Uran- Ahmedabad Pipeline: The 1,385 km long pipeline is already completed and is currently in operation. 

Kakinada-Haldia Pipeline: The 928 km long pipeline is scheduled to be completed by June 30, 2013. The states to be covered by this pipeline include Orissa (Bhadrak, Baleshwar and Mayurbhanj) and West Bengal (East Medinipur, West Medinipur, Howrah and Hugli). The expression of interest (EOI) for the pipeline was issued on February 19, 2007 after which RGTIL submitted the bank guarantee.

Kakinada-Chennai Pipeline: The 577 kms long pipeline is scheduled to be completed by September 30, 2012. The states to be covered by this pipeline include Andhra Pradesh (Krishna, Guntur, Prakasam, Nellore  and Chittoor) and Tamil Nadu (Thiruvallur and Chennai). The EOI for the pipeline was issued on July 2006, after which RGTIL submitted the bank guarantee.

Chennai-Bangalore-Mangalore Pipeline:The 538 km long pipeline is scheduled to be completed by August 31, 2012. The states to be covered by this pipeline include Tamil  Nadu (Thiruvallur,  Vellore,  Krishnagiri) and   Andhra Pradesh (Chittoor) and Karnataka (Kolar) and Bangalore (Rural Bangalore, Tumkur and Mandya).

Chennai-Tuticorin Pipeline:This 585 Km long pipeline is scheduled to be completed by August 31, 2011. The state to be covered by this pipeline includes only Tamil  Nadu (Thiruvallur,  Vellore, Kanchipuram, Tiruvannamalai,  Vilupuram, Salem,  Namakkal,  Karur, Dindigul,  Virudunagar,  Tuticorin, Tirunalveli,  Ramanathapuram, Erode, Coimbatore,  Dharmapur and Sivagana).  

Signed agreement with Guj govt for 2000 MW: Adani Power

In an interview with CNBC-TV18, Ravi Sharma, CEO of Adani Power said the he has signed an agreement with the Gujarat government for 2,000 MW. He added that the company has synchronized another unit of 330 megawatt (MW).

Q: Tell us now how much do you think you would be able to generate by year-end?

A: Today early in the morning, we have synchronized another unit of 330 megawatt (MW). We have earlier been operating 990 MW, so together now we have 1,320 MW, which is now commissioned. We will start operating from this unit in full load in few weeks of time.

Today we have commissioned the fourth unit, this is the last sub-critical unit which we have of 330 MW. Going forward, all our units are super-critical in nature and they would be 660 MW.

Q: For these critical units of 660 MW, could you provide us a timeline or a schedule on how they will be commissioning because you have laid out a target of reaching a total capacity of 6,600 MW by FY12, can you help us with the schedule and how they will be coming onstream?

A: The first 660 MW supercritical unit and we hope that it is the first one in India will be commissioned in the month of December. Going forward from there, we would be commissioning a unit of 660 MW practically every quarter.

Q: How is it in terms of share between power project agreements, long-term PPAs and merchant sales, this 1,320 that is already onstream?

A: We have already signed agreement with Gujarat government for 2,000 MW and most of this power which is being generated is going to them. Some part of it is being traded in the market and that depends on month to month. But mostly to give you a bigger figure, 85% of it is more or less contracted.

Q: What would be the margins therefore on that contracted part?

A: It will be very difficult for me to give you margins on a per contract basis but last months when we have declared our quarterly results, the EBITDA margin you very well know what it was.

Q: In the quarter which is currently on, you will have the full benefit of Q3 being operational and in the coming quarter you would have all the four units would be fully operational, what is your estimate of the total units that you would be selling?

A: Let me say it differently. The last month when we had all the units operational, we have clicked a PLF of 91.5%. Now the fourth unit which hs just been commissioned, it will take few weeks before it will come on full load. So the actual impact of all these four units in totality will be seen in the Q4.

Q: Are you tied up in terms of fuel for this additional unit that went onstream today?

A: Yes, we have not only tied up for this unit but we have tied up for all the nine units, which are going to be in Mundra because in addition to these four units, we have a plan for 5 supercritical units in Mundra taking a capacity of 4,620 MW and we have completely tied up the fuel for that.

Q: There is a lot of talk about you going in for some fund raising, is there anything in terms of plans?

A: It depends, three projects of ours - we have done the financial closure, we will talk about the other projects which are in Bhadreshwar or in Dahej and in Chhindwara in coming months.

Q: How have the merchant power rates been in this quarter?

A: If you see the last quarter, last quarter was a monsoon quarter where the demand is not as such and there is a fall in demand. So ofcourse the merchant power rates have come down but I feel that going forward they will strengthen.

NTPC starts 500 MW Korba unit

NTPC has synchronised the 500-MW seventh unit of the Korba super thermal power station in Chhattisgarh with the grid on Thursday, a company statement said. The Korba project already has three units of 200 MW each in its first stage and another three units of 500 MW each in its second stage. NTPC's current capacity stands at 32,690 MW. 

NTPC to invite bids for generation parts ahead of fuel tie-up

State-run power generator NTPC proposes to invite tenders forpower generation equipment for all its upcoming gas-based projects that will have a capacity of 10,000 mw, without waiting for assured supply of fuel, to put pressure on the government to allocate natural gas for its stranded plants. The department of public enterprise (DPE) forbids state firms, such as NTPC, from ordering equipment and starting construction beforesecuring fuel for the projects. This has put the power major at a disadvantage via-a-vis private sector firms that place orders and start work on plants even before securing any gas linkage. NTPC would place orders as soon as the government allocates gas.

NTPC signs JV with ADB, Kyuden for 500 Mw of renewable energy

State-run power company NTPC has set up a joint venture with the Asian Development Bank and Japan’s Kyuden International Corporation to develop renewable energy projects with a capacity of 500 Mw over the next three years.NTPC will have 50 per cent stake in the JV, while ADB and Kyuden International will contribute 25 per cent each towards the equity share capital of the company, the power company said in a statement. The initial authorised share capital will be Rs 6.5 crore and the paid-up share capital Rs 1 crore.NTPC and its partners’ company will develop wind power and small hydro- electric power projects. It may also enter other areas of renewable power generation. There is scope under the agreement for the JV to develop projects outside India, it added.

NTPC has set a target for developing at least 1,000 Mw of renewable energy capacity, based on solar, wind, geo-thermal and small hydro sources. The company’s board has already approved a proposal to establish 301 Mw of solar power generation capacity.Currently, NTPC has an installed capacity of 32,694 Mw, operating 28 power stations.

RIL, NTPC may settle gas supply dispute out of court

India’s most valuable company Reliance Industries (RIL) and Asia’s largest power producerNTPC may settle their five-year-old legal battle over a contract to supply natural gas from RIL’s field in the Krishna-Godavari basin to the state-owned power utility. 

NTPC took RIL to the Bombay High Court in 2005, complaining that RIL was not honouring a contract to sell 12 million standard cubic metres a day (mmscmd) of gas to its Kawas and Gandhar expansion projects in Gujarat for 17 years at $2.34 per unit. 

RIL contended the contract was not concluded. Industry sources and government officials with direct knowledge of the matter confirmed the willingness of both firms to settle the issue out of court. 

“There is some thinking in favour of an out-of-court settlement,” said a Union minister, who did not want to be quoted because of the sensitivity of the matter. 

While the two parties were locked in a court battle, the government finalised a gas allocation policy and fixed 

the price for RIL’s KG Basin gas at $4.20 per unit, which is higher than what NTPC was trying to enforce. 

An NTPC board member, who requested anonymity, said the company, facing a scarcity of gas, was willing to pay even $4.20 per unit to get the fuel to commission the Kawas and Gandhar expansion projects to add 2,600 MW to its capacity by 2012. The oil ministry maintains that the government-approved price of $4.2 per unit would be applicable to all buyers, including NTPC. RIL had not taken its formal approval to supply gas to NTPC at $2.34 per unit, an oil ministry official said. 

RIL’s KG-D6 gas price was derived on the basis of a government-approved formula on September 12, 2007, for five years. At current global crude oil prices, the price of KG-D6 gas is $4.20 per unit. 

A spokesperson of RIL declined to comment, saying the matter was subjudice. In reply to ET’s email query on making any formal move for truce, RIL’s spokesperson said: “NTPC has not approached the government for an out-of-court settlement in regard to its case over KG D-6 gas supply.” 

A former chairman of NTPC, who was involved in the disputed gas deal and court case, said: “NTPC itself can’t take a decision for an out-of-court settlement. Yes, the power ministry can do so through a directive (to NTPC).” NTPC is already buying 2.3 mmscmd gas from RIL’s KG-D6 basin for its other plants. It has a fair chance of getting priority fuel allocation for Kawas and Gandhar projects, according to various government undertakings in the past. The government determines consumers of gas according to sectoral priority determined by an Empowered Group of Ministers (EGoM).