Indian government to invest USD 50 billion in power transmission projects

PTI reported that with an ambitious target to give 24X7 electricity to all, the government is eyeing INR 300,000 crore worth investments in power transmission and distribution business, as it gears up to free the sector from a gridlock of fuel scarcity, regulatory clogs and other issues.

Leading from the front, Mr Piyush Goyal, Power Minister of India, is confident that the results would start showing in the new year and a right foundation has been laid to 'power up' the power sector since a new government took over in May this year. The ray of hope for 2015 follows a year mostly marked with the drying up of investments, fuel supply bottlenecks and the gnawing transmission problems.

Mr Goyal said that "We are planning investments of INR 3 lakh crore in the T&D sector and have already started the Deen Dayal Grameen Jyoti Yojana and Integrated Power Development Scheme, with all this I think we will be able to reach the length and breadth of the country and enhance the T&D network and make sure everybody gets adequate power."

Waste-to-energy plants in all districts, says Narayana

Municipal Administration Minister P. Narayana (third from left), Irrigation Minister D. Umamaheswara Rao (second from left), Vijayawada MP Kesineni Srinivas (Nani) and Vijayawada East MLA Gadde Rammohan Rao (extreme left) at the foundation laying ceremony for 10 MLD STP in Vijaywada on Friday. Photo: Ch. Vijaya Bhaskar

The State government is focusing on utilisation of alternate source of energy in a big way. Towards this, efforts are on to establish one waste to energy plant in each district, besides installation of LED streetlights in municipalities and corporations in the State.

To begin with, LED streetlights would be installed in Vijayawada, Tirupati and Nellore by February next year. This would be followed by installation of similar streetlights in municipalities and corporations by June, said Municipal Administration Minister P. Narayana here on Friday.

Already, 85,000 LED streetlights have been installed in Visakhapatnam and the rest 10,000 would be installed very soon.

On the waste-to-energy plants, the Minister said Chief Minister N. Chandrababu Naidu had specifically instructed him and a few senior authorities to study the feasibility of taking up such projects in the State during a recent tour to Japan and Singapore.

It is not just about generating power, such projects also aid in recycling of paper, rubber and other materials dumped in the garbage as there will be provision for segregation and putting the waste materials to good use, he said while addressing at the foundation stone laying ceremony for a 10 MLD sewerage treatment plant at Autonagar.

The Chief Minister is very particular about provision of basic amenities such as drinking water, power to residents. Vijayawada gets 158 MLD of drinking water everyday, of these 130 MLD is surface water from river Krishna and the rest is drawn from borewells. But there are complaints of drainage water getting mixed with bore water from residents.

To address this, a detailed project report is being prepared to supply additional 48 MLD from river Krishna to Vijayawada. The government is committed in completing this project at the earliest and ensure quality drinking water to the city, he added.

Irrigation Minister D. Umamaheswara Rao said the city was under Capital Regional Development Authority (CRDA) and this would pave way for more development of the city. He said Republic Day celebrations would be celebrated in the city and measures would be taken to establish an NTR Canteen in Autonagar.

CRDA regulations
Mr. Narayana said the rules and regulations under CRDA would be framed in a week or 10 days. Special care would be taken to address the concerns of all sections, especially farmers and tenant farmers while preparing the rules.

Government to auction 100 coal blocks by end of fiscal, hopes to steady coal sector

                     
   
NEW DELHI: The government will auction 100 coal blocks by the end of the current fiscal, seeking to put an end to the disruption in the sector after the Supreme Court cancelled more than 200 allocations.

The auction process will begin immediately with the coal ordinance being re-promulgated. The government resorted to this as the legislation didn't get parliamentary approval.



"Coal bill was passed by the Lok Sabha, but debate on it was not allowed in the Rajya Sabha... With the re-promulgation the unfinished process of allocation of coal blocks will resume again," finance minister Arun Jaitley said at a press conference after the Cabinet meeting.

The first set of 41 coal blocks will be auctioned in the second half of February, followed by 32 and 27 in two more batches, respectively, by March 31. The government aims to sign agreements with the allottees of the first-phase auction on March 23.
Initially, the government had wanted to auction 42 blocks but one of these is in the so-called 'no go' area, leaving only 41. The government will follow reverse-bidding process for power producers to keep electricity tariffs low while steel and cement firms will have to participate in forward-bidding. The eauction will be managed by the online platform created by the state-controlled MSTC.

Coal secretary Anil Swarup said tender documents would be released on January 27 and the blocks (including 17 to be allocated to state PSUs) will be auctioned during February 14-22.

He stated that out of 24 mines proposed for the auction, seven are for the power sector, 16 for other end-use plants of iron and steel, cement and captive power projects and one coking coal mine for the steel sector.
The auction process starts on Thursday. "For the unregulated sector, floor price will be determined for each mine depending on its net present value.

But under no conditions will this price be less than Rs 150. In case of the reverse auction, that is in the regulated sector, since we are not determining a price there will be a reserve price of Rs 100 per tonne," Swarup said.

Net present value of the mine will be based on the grade of coal and prices Coal India charges. A committee headed by former Central Vigilance Commissioner Pratyush Sinha is working on the valuation of each mine.

"Total payment to the states in 30 years would be around Rs 3.5 lakh crore for 30 years for 204 blocks that have been cancelled by the Supreme Court. In addition to this, an equal amount will also flow to the states by way of royalty. So all the coalbearing states stand to benefit to the tune around about Rs 7 lakh crore over 30 years," said Swarup.

He added that these are initial estimates and the amount may go well beyond this if there is an increase in coal extraction. The key beneficiaries will be West Bengal, Odisha, Jharkhand and Chattisgarh.

Commenting on the methodologies, Swarup said: "Of these 63 blocks that are going to the power sector, 28 will be auctioned, 35 will be allocated to state entities.


The Act provides for auction to private companies and allocation to government companies."

For the mines where earlier allottees have invested in creating infrastructure, Swarup clarified that each tender document will specify what will be the amount of compensation that will have to be paid to the original allottee by the new allottee.

The auction process will comprise 'techno-commercial bids' for qualification and 'financial bids' for selection. Only 50% of the qualified bidders from the technical stage will be allowed to participate in the e-auction process. Mines set aside for iron and steel, cement and captive power producers (CPPs) will be auctioned through an 'ascending forward auction'.

Coal Sector Seeks Image Makeover In 2015

In an urgent need for its image makeover, the scam-tainted coal sector will require mammoth efforts in 2015 from the government and the corporates, after a year full of adversities and stuck projects undermined investments totalling billions of dollars.

The least glamorous among all raw materials, coal turned out to be a pricey affair in 2014, but a silver lining appears on the horizon with the courts and the government stepping in to overhaul the entire process of mine allocations.

In a historic judgement, the Supreme Court this year cancelled 204 mines alloted since 1993, while terming those allocations as flawed. Those affected by the decision include biggies like Jindal Steel, Essar Power, GVK and JSW Steel.

Among these, billionaire Naveen Jindal-led Jindal Steel and Power Ltd (JSPL) had to shelve a $10-billion coal-to-diesel project, while casualties continue to pile up from the controversy and the alleged scam in this sector, which has come to be known as 'Coalgate'.

The companies that had got these mines claim to have invested close to Rs 300,000 crore in the coalblocks and further Rs 400,000 crore for their end-use plants.

Making a hue and cry over the issue, the companies said such mass-cancellation of mines would hamper supply of this core fuel for the power sector in a country that is targeting to take electricity to every home in next few years, while adversely impacting the investment sentiments in a big way.

The government watchdog CAG had earlier estimated a Rs 1.86 lakh crore presumptive loss to the exchequer on account of allotment of 57 coal blocks without competitive bidding.

Soon after the court order, the government came out with an Ordinance to conduct fresh allocations of the affected coal blocks through a "transparent" e-auction, but the bill continues to hang in balance and a re-promulgation might be required soon as a permanent law remains elusive.

The Left parties and several trade unions have opposed the e-auction of coal blocks and the enabling provision in the Ordinance that allows commercial mining by private firms and have sought its reversal, while warning of a nationwide strike if the Centre went ahead with the changes.

Allaying concerns that the move would pave the way for de-nationalisation or privatisation of the coal sector, Coal Minister Piyush Goyal has said that the government was in fact strengthening the PSU major Coal India Limited.

Beyond the coalblock controversy, the new government, headed by Prime Minister Narendra Modi, has announced an ambitious target of doubling the coal behemoth CIL's output to about one billion tonnes by 2019.

Coal India, which accounts for over 80 per cent of the domestic coal production, has incidentally been headless for almost six months and has been facing production constraints and labour union related problems on a regular basis.

The new government has also given charge of both coal and power ministries to Goyal, a move seen as being aimed at avoiding conflicts between these two ministries.

Gearing up for a fresh allocation of the blocks cancelled by the Supreme Court, the government has meanwhile decided to auction 65 mines to private players while 36 other blocks will be directly allotted to state-owned companies.

Of the 101 blocks to be alloted and auctioned in the first lot, 63 mines would be given to the power sector, while the rest would be for sectors like steel and cement.

Out of these, government is targeting a revenue of Rs 1.47 lakh crore from the allotment and auction of 92 coal blocks.

2015 will be a major game changer year for the power sector

The Coal Controller's office tucked inside a British Raj era building at 1 Council House Street in Kolkata would surely be busy this New Year. The office that received a communique from the ministry mid-December have been directed to start collecting penalties on coal extracted till date right away from the owners of the de-allocated mines.

"The progress of collection may be informed by first week of January," the letter addressed to coal controller Amrit Acharya said, referring to the decision of the Supreme Court that imposed the "additional levy".

That penalty which needs to be paid up works out to about Rs 997 crore for a modest power player like CESC to about Rs 1,793 crore for bigger corporate entities that have already expressed their inability to pay up on the coals used. Private sector power producers surely won't be celebrating this New Year in a grand way.

A few blocks north of Council House Street, R Mohan Das, human resource director at Coal India has been busy meeting union leaders to keep them from going into a week-long strike in protest against government's disinvestment plan, which is reportedly been deferred due to stock market volatilities.

The strike, slated for January 6, could derail the world's largest coal miner's plan to produce 507 million tonnes, not to speak of a minor embarrassment to the power minister, Piyush Goyal, who promises Coal India output to double to 1 billion tonnes by 2019.

But there's hope. A 10-minute drive from Coal India's head office through Council House street southward, SK Tripathi, head of public sector MSTC Ltd, is fine tuning the e-auction platform that would go live soon. He is pre-occupied testing systems through mock deals and ensuring the IT systems have no glitches before actually undertaking the mammoth and unprecedented effort to auction off most of the 204 mines, de-allocated earlier by the Supreme Court, beginning in March 2015.

The Year 2015 would be like no other for the power sector.

"The biggest game changer for the power sector in 2015 will be the coal block auction," says Ashok Khurana, director general of Association of Power Producers. The private sector is reasonably happy with how the guidelines and modalities for the e-auction are shaping up though there were heartburns over the de-allocation suffered due to the policy action of the government and the penalty imposed by the apex court. Some had gone to the Supreme Court with review petitions, all of which were rejected.

But most power producers have taken all it in their stride.

"While a review as well as interim petitions were filed, we are reasonably satisfied with how the e-auction is shaping up and plan to participate to get back the mines that we have lost," said Sandeep Jajodia, chairman and managing director of Monnet Ispat and Power. Even as promoters of coal-fired power plants are eagerly awaiting the auction, the gas-based units too want a major push from the government that would help restart their stranded units due to lack of domestic availability of gas and high prices of imports.

Ideas like gas-pooling, spinning reserve and taking recourse to clean energy fund are being brainstormed jointly by the power and natural gas ministries.

"We expect the issues confronting the gas-based power sector getting resolved to a large extent in the next 5-6 months unlocking about 10,000 mega-watt of idle power capacities," said Sambitosh Mohapatra, partner, power and utilities, PricewaterhouseCoopers.

Execution of the e-auction of mines, finding solution to the woes of gas-based plants and likely resolution of compensatory tariff for power plants based on imported coal are some of the things which will give the power sector a new beginning in 2015, believes Sambitosh. "We would see most of the pieces of the jigsaw puzzle being put in place during the year," he said.

Bill to amend Electricity Act tabled in Lok Sabha

New Delhi: Within days of cabinet approval, the government Friday tabled in the Lok Sabha amendments to the Electricity Act, 2003, designed to bring in the much needed second phase of reforms in the power sector.

The Electricity (Amendment) Bill, 2014 will promote competition, efficiency, and improvement in the supply of electricity in the country resulting in capacity addition and benefit to the consumers, Power Minister Piyush Goyal said while introducing the bill in the Lok Sabha.

The salient changes proposed are aimed at enhancing grid safety, unbundling the distribution sector, promoting renewable energy and tariff rationalization, the minister said.

Within a given area, multiple distribution companies would be licensed to operate and offer power to consumers.

"To achieve efficiency and for giving choice to consumers through competition, concept of multiple supply licensees is proposed by segregating the carriage from content in the distribution sector, while continuing with the carriage (distribution network) as a regulated activity," the power minister said.

While there will be a government distributor to ensure that power is provided to financially weaker sections, competition and a private sector role is proposed through these changes.

Regarding grid security, the amendments envisage stiff enhanced penalties for violating directions of the state and regional load despatch centres.

The enquiry committee set up following the July 2012 grid collapse recommended putting in place zero tolerance systems for breaking grid discipline by overdrawing power.

To boost the renewable energy sector, the government proposes to bring in amendments to the act introducing stricter penalties for failing to meet renewable purchase obligation (RPO) targets.

Under the RPO system, the state power distribution companies have to mandatorily purchase electricity generated through renewable energy sources during the year.

The proposed changes will also introduce the renewable generation obligation (RGO), which will make it compulsory for thermal power producers to generate electricity through renewables.

On rationalising tariffs, the bill envisages timely filing of tariff petitions by utilities and their disposal by the concerned regulator.

5 reasons to be bullish on the power sector

Along with approving an ambitious 20,000 MW target for renewable power generation, the cabinet cleared amendments to the Electricity Act last week. 

While the government has been trying to draw attention to the size of renewable energy projects that would make India become a global leader in solar generation, analysts are more upbeat over the amendments in the Electricity Act.

A JM Financial report on the amendments says that the proposals, if passed, are structurally positive for the sector with key beneficiaries being consumers, power traders and renewable energy players.

Following are five reasons why the amendments to the Electricity Act will be a positive for the sector.

1) Grid Security: Distribution companies have been known to cause grid collapses by overdrawing power. 

According to the amendments in the new electricity act, penalty for violating grid security measures have been proposed to be increased by hundred times.

 This, JM Financial says, will act as a huge deterrent for over drawing power. The move will result in better planning by distribution companies which will increase volume of power trading companies.

2) Rationalisation of tariff: One of the main reasons that distribution companies are in losses is on account of irrational tariff structure, which is driven more by politics than economics. Presently, the central government’s tariff policy is seen as a benchmark but state regulators usually come up with their own tariffs. As per the new amendments, greater stress will be on regulators to follow tariff policy while fixing tariff and ensuring that distribution companies do not face revenue shortfall. 

As per the regulatory formula, fuel cost and purchase cost adjustments in tariff will be allowed more than once a year. Regulators now have the power to determine tariff even under back-to-back arrangements involving an electricity trader and a supplier.

3) Separation of supplier and distributor: Consumers will now be able to select the company from whom they would like to purchase power.

 A big relief for the distribution sector is the separation of the content and carriage businesses. Building infrastructure for power supply and the supply of power will be two different business entities. Besides, any power supplier can use the infrastructure. This step would make the sector more competitive and allow power generation companies to reduce their cost by not worrying about distribution.

4) Performance Evaluation: According to the amendment, regional commissions will be set up with a regional High Court or Appellate Tribunal for Electricity (APTEL) Judge as the Chairman. The Judge will have powers to review the regulatory commissions and remove members in case of non-performance.

5) Promotion of renewable energy: An enabling resolution has been introduced for National Renewable Energy Policy which is likely to introduce an obligation on New Thermal Power plants to produce renewable power. Such renewable power will be made cheaper by excluding them from cross subsidy and open access charges.

According to JM Financial, there is a visible push to strengthen and monitor regulators in order to ensure that distribution companies stay healthy. The amendments will be diluting the hold of state governments on tariff hikes and misuse of free movement of electricity across states.

Comment:

Its a good news for power sector.This amendments will increase the competition in power sector.For the next five years power sector will add huge investments from many new players.

Government to sets up POSOCO for reforms in power sector

Thrust on bringing in further reforms in the power sector at the Central level.

The government has decided to set up of Power System Operation Corporation (POSOCO) as an Independent Government Company. In the process, the institutional framework for an independent, secure and reliable power system operation entity, at the national level has been put in place as mandated under the Electricity Act 2003. POSOCO operates the National Load Despatch Centre (NLDC) and Regional Load Despatch Centres (RLDCs) which are also responsible for operating the vibrant electricity market working in the country. POSOCO is also designated as the nodal agency for major reforms in the power sector such as the Renewable Energy Certificate (REC) Mechanism, transmission pricing, short term open access in transmission, Deviation Settlement Mechanism, Power System Development Fund (PSDF), etc.

The need for independent Government Company in light of the introduction of competition as per Electricity Act 2003, which resulted in tremendous growth in the Indian power sector by the private sector participation in generation, transmission, distribution and trading. With transmission coming under competition and multiple transmission licensees operating, need was felt to ensure the independence and neutrality of the system operation function. The Enquiry Committee set up following the July 2012 grid disturbances, has recommended inter alia putting in place zero tolerance systems including setting up of an Independent System Operator.

It has been decided to establish POSOCO as a wholly owned Government of India Company under Ministry of Power thereby giving a big thrust to bringing in further reforms in the power sector at the Central level. The decision also creates an example for implementing similar reforms at the State level to ensure independent system operation by the State Load Despatch Centers (SLDCs).

The strengthening of the institutional mechanism of System Operation would help bring in innovation in the power sector as the RLDCs/NLDC operated by POSOCO by achieving economy and efficiency in the power system operation and facilitating implementation of various Government of India policies for Power Sector as well as provide feedback to the policymakers, regulators and planners.

Indian power sector unable to use full capacity due to choked transmission

Economic Times reported that the power sector is unable to use at least 10% of its capacity due to the choked transmission network in the country, hurting projects of TATA Power, Essar Power, Jindal Power, JSW Energy, CLP, DB Power, MB Power, Emco Energy, GMR and Adhunik Power.

As per report, inadequate transmission has kept about 25,000 MW of generation capacity idle, making the problem comparable to the issue of acute fuel scarcity that has hit about 30,000 MW of new capacity. In addition to the inadequate capacity, regulatory authorities impose strict restrictions on the utilisation of existing networks and keep a large amount of transmission capacity idle as a safeguard against grid collapse.

Mr Rajesh Mediratta, director of business development at Indian Energy Exchange, said that “They said that new transmission capacity in key corridors is scheduled to come up after 4 years, making the outlook grim for many plants. Transmission problems are also hurting power trading. The impact of transmission congestion on the power exchanges has been increasing with each passing year impacting both the volumes as well as the prices. The volume lost is slated to increase further unless adequate measures are adopted to augment transmission capacity in the regions having congested transmission corridors. Constraints in the regional transmission system in south further added to the problem and increased the power deficit there. Last month, no power could be imported into the southern region throughout the month either through the eastern or western corridor due to congestion.”

Mr Ashok Khurana, director general of the Association of Power Producers, said that restrictions on capacity utilisation of transmission corridors often prevent generation companies from supplying power even after signing long term power supply agreements. Mr Khurana said that “There were many cases where power producers are unable to sell electricity in short term markets due to congestions and restrictions. Transmission bottlenecks prevent the supply of power to deficit regions in summer and monsoon seasons, when demand peaks. Projects of TATA Power, Essar Power, Jindal Power, JSW Energy, CLP, DB Power, MB Power, Emco Energy, GMR and Adhunik Power are facing transmission constraints.”

At least half a dozen transmission projects of various companies including Power Grid Corporation, Reliance Infra and Sterlite Grid with investments of over INR 7,000 crore are held up or delayed due to the slow speed of official clearances.

Sorry folks..I was not able to post due to some technical issues..For information related to power sector news check powerganga.blogspot.in daily...

Turkey rolls out red carpet for Indian power producers

Mumbai: With Turkey aiming for mega 125-GW installed power capacity by 2023, private firms like Tata Power, Lanco, GMR and Essar as also state-run NTPC are mulling investments in that nation, according to Turkish investment support and promotion agency.

As of 2012, the installed capacity in Turkey, which is a European Union member despite being an Asian country, was 57,058 MW. It plans to increase the capacity to 1,25,000 MW by 2023 and is expecting domestic companies to contribute significantly in achieving the target.

"There is immense scope in the power sector in Turkey, which is emerging as an investment hub especially in the power sector. Countries like Russia, Austria, China, France, Sweden, Germany and even the US are investing heavily in Turkey now.

"India, which has so far no presence there is now seriously considering Turkey as an investment destination," Sanjeev Kathpalia, senior advisor with the Investment Support and Promotion Agency, under the office of the Turkish prime minister, told PTI in an interaction here.

He said so far India has no presence in his country, but now many private and public sector firms are keenly looking at investing in Turkey.

"Companies like Tata Power, Lanco, GMR, Essar, Reliance in the private sector and NTPC in the public sector are keen to invest. We are in talks with these companies and we may see some positive activity in this direction in the next six months," Kathpalia said.

An investment of nearly USD 100 billion is expected to come in the sector in the next 10 years and India is expected to contribute nearly 15 per cent of the total investment.

He further said apart from the scope Turkey offers in the power generation sector, its geographical position makes it a transit country in the field of energy.

"Turkey's geographical position to the regions of Europe, the Balkans, the Aegean, the Black Sea, the Caucus-Khazar Basin, Central Asia, the East Mediterranean Sea and the Middle East makes it an energy corridor for transporting power resources from the Middle East and the Khazar regions to Europe," Kathpalia said.

He further said his country's strategic position is also critical for export and import of electricity through Turkey enabled energy integration with Europe.

"Indian companies can sell power generated in Turkey on merchant tariff basis outside. Besides, Turkey also offers various incentives to developers who use locally sourced equipment," Kathpalia added.

Next-Gen power distribution era to emerge with new Electricity Act

The amendment to the Electricity Act is likely to change the business dynamics for the power distribution companies. Touted as the next generation reforms in the power sector, it would not only give the choice of supplier in the hands of small consumers but also allow discoms to procure power from their own renewable energy plants to meetRenewable Purchase Obligation (RPO).

The Union Cabinet on Wednesday cleared the changes in the Act. Union power minister Piyush Goyal earlier this week said the Bill for amendment would be tabled in Parliament next week.

Aimed at creating a competitive market for retail buyers, open access would now allow consumers of less than 1 mw to choose their supplier. Under the Electricity Act 2003, consumers with more than 1 mw demand can change their distribution company.

Besides, power generators, too, would be allowed to sell surplus power outside a state. “Opening up the sector would make sure that the supply of power is in line with the market realities,” said an executive in one of the distribution companies. Currently, state governments can appeal to the regulator to stop such a sale in "extraordinary circumstances".

Distribution companies in other states are unable to freely procure such power. "We end up scheduling costly power which has pushed us to the wall. Banks have also withdrawn any support from the discoms,” said a senior executive of Delhi-based private power distribution utility. The distribution industry owes Rs 13,000 crore as dues to the generators.

A major breather for the distribution sector is also the separation of content and carriage business. This entails that building infrastructure for power supply and the supply of power would be two different business entities. Besides, any power supplier could use the infrastructure.

The Bill has also an important insertion imposing ‘duty to connect, supply to request’, wherein last-mile supply would be done keeping in mind the economics and viability. “In most of the developed markets, the carriage business is controlled by the regulator and content i.e. power supply is market driven within a price band,” said the executive. With separate business, the onus of the development of the network would rest with the carriage provider.

Discoms from across the country have written to the ministry of power seeking clear demarcation of duties and responsibilities for content and carriage.

The cash crunched discoms have always cited their financially stressed state as the reason for not complying with the renewable purchase obligation (RPO), have now been asked to generate renewable power to meet their targets. The Act proposes a National Renewable Energy Policy and a new ‘Renewable Generation Obligation (RGO)’.

A discom head said that the sentiment among the Indian consumer is that power should be cheap. “All consumers think they are burdened with costly power whereas the discoms struggle with recovering their cost. In a situation like this, unbundled distribution sector helps all,” said the executive.

Power tariff not to rise with law on coal auctions: Goyal

The new law on coal block allocation will not lead to higher electricity tariff for consumers, Power and Coal Minister Piyush Goyal assured the Lok Sabha Friday, following which the lower house passed the Coal Mines (Special Provisions) Bill, 2014, which sets the norms for the auction of 204 mining blocks cancelled by the Supreme Court in September.

The bill, which seeks to replace an earlier ordinance issued in the wake of the apex court order, was introduced by Power Minister Piyush Goyal two days ago, with opposition members charging during the debate that it was seeking to de-nationalise the coal sector by reversing a decision of the 1970s.

"Power tariff will not go up. Power sector is a regulated sector. Reverse bidding auction will happen, prices will fall," he said replying to a debate on the bill.

The minister said the step was taken primarily to address the requirement of the Supreme Court and to avoid a major crisis in electricity generation in the country due to a shortage of coal, and to protect the interests of millions of workers.

"After e-auction of coal is introduced, it will bring down electricity prices. It will give more power purchasing capacity to the consumers," he said.

Opposition members, notably Jyotiraditya Scindia of the Congress -- a former union power minister himself -- and Kalyan Banerjee of the Trinamool Congress, wanted the bill to be sent to the relevant standing committee of the parliament for proper scrutiny.

Both members said neither the ordinance issued by the government nor the passage of the bill to replace it were required to auction 74 of the coal blocks that were ordered by the top court to be cancelled. These are now proposed to be re-auctioned or allocated in the first phase.

"This is a wonderful opportunity to recast the coal sector. It is being wasted," said Scindia, calling for the restructuring of the state-run Coal India, which accounts for around 80 percent of India's production.

But Goyal countered saying the bill aims to rationalise and set the proper norms in place for mining operations, consumption and sale of coal in the country.

"We have to fulfill the end-users requirements first. We have to think about the people who buy coal for domestic use for a high cost. We have to bring down the prices," he said.

Coal Secretary Anil Swarup had told reporters here last week that the bidding process for what he termed will be a historic auction of coal blocks would get underway Dec 22, with the release of tender documents.

The central government will auction or allot 18 more coal blocks with a total capacity of about 120 million tonnes, in addition to the 74 blocks already in the first lot, to meet the growing needs of the power sector.

"When we analysed the number of coal blocks for auction, we discovered that sufficient number of coal blocks weren't available for the power sector. Hence we scouted for more, which are better in terms of readiness. So those 18 blocks have also been included."

Of the 92 mines to be allotted and auctioned in the first lot, 57 would be given to the power sector, and the remaining would be for other industries like steel and cement. Further, out of 57 blocks for the power sector, 23 will be considered for the states.

‘Solar power may compete with coal-generated power soon’

Solar power will become an attractive option for consumers to buy after five years due to reduction in prices provided the government offers adequate fiscal incentives and streamlines policies relating to the the electricity market, says Tobias F Engelmeier, managing director, Bridge to India, a consultancy that provides market intelligence and other services to solar sector companies.

Since the launch of the national solar mission in 2010, generation costs for solar projects have fallen 60% to 6.5-7 a unit.

If this rate of price drop continues, solar power may soon compete with coal-generated power, which costs R5-6 a unit.

Encouraged by the dramatic fall in solar generation costs, the Centre has scaled up its initial solar generation target of 20 GW by 2022 to 100 GW, prompting global players to raise their bets on the Indian solar market. As of now, India has installed 3,000 MW solar generation capacity.



Of the 100 gw capacity addition envisaged by 2022, first 60 gw will be added through large-sized projects, of 200-1,000 MW each, over the next five years. After that, 40 GW capacity will be added with the help of smaller ( in kilowatt size), distribution generation projects.

Engelmeier told FE: “While the large projects, which are expected to help in reducing generation costs for the industry, will need fiscal incentives, electricity from smaller projects that are envisaged to come later will be competitive in the market without any subsidy.”

According to him, land acquisition,transmission and financing are the three key problematic areas for the solar power sector where the government needs to look into.

Engelmeier said that the government’s decision of not imposing dumping duty on solar equipment has added to the positive sentiments.

For power, 2014 is the best of times, the worst of times

Fossil-based generation peaked in 2013 and will decline from now on

The power sector is changing the world, but not enough to keep the world unchanged.
The studies confirm that we have enough economically viable technology, and still enough time, to solve some of the world’s most serious problems. However, time is running out if we continue our subsidised self-destruction for much longer, while denying 1.3 billion of our fellow citizens access to electricity and 2.7 billion people access to clean cooking equipment.
We have the means and solutions to act but we fail to apply them. Therefore, the next generation may look back on 2014 and conclude that it was the best of times, it was the worst of times.
For electricity, times are good and will become better, the reports agree. It is the fastest growing energy source and it will continue to be for the coming decades. The future looks particularly good for renewables, not least for PV and wind power. Fossil fuel-based electricity peaked in 2013 and will continue its decline.
“The power sector is undergoing one of the most profound transformations since its birth in the late 19th century,” according to IEA’s World Energy Outlook.
“Renewables are expected to go from strength to strength, and it is incredible that we can now see a point where they become the world’s number one source of electricity generation,” IEA executive director Maria van der Hoeven says.
“It is no longer a matter of whether but of when a systematic switch to renewable energy takes place,” IRENA director general, Adnan Amin, writes in his foreword to IRENA’s REthinking Energy.
Total investment in (non-large hydro) renewable electricity has increased from $55bn in 2004 to $214bn in 2013. PV made up 24% of total global investments in new capacity, hydro accounted for 20% and wind power 15%. 19% of investments went to coal and 12% to gas last year, according to World Energy Outlook. Around 70% of global investments went to non-hydro renewables in the OECD. In the non-OECD countries, the share was 27%.
Wind turbine costs are down 30% since 2008 and onshore wind electricity cost has fallen by 18% since 2009, “making it the cheapest source of new electricity in a wide and growing range of markets,” according to REthinking Energy, which concludes that “renewable energy is often competitive with fossil fuel power at utility scale, and is generally cheaper in decentralised settings”.
While the recent performance of renewable electricity is remarkable, power generation as a whole has not become cleaner. Today, electricity accounts for more than 40% of man-made CO2 emissions. REthinking Energy points out that the average emissions intensity has only been marginally improved in the past 20 years – from 586 g/kWh in 1990 to 565 g/kWh in 2010.
This will change, but not enough unless we act. Emission intensity reaches 498 g/kWh by 2030 if current policies and plans are carried out – a reduction of 12% compared to now, says IRENA.
However, a doubling of the share of renewables compared to today, coupled with energy efficiency measures, could reduce intensity by 40% to 349 g/kWh in 2030, enough to avert disastrous climate change. More importantly, “the good news is that the technology is sufficiently mature, and the economics sufficiently favourable, that the solution is entirely within countries’ grasp,” according to REthinking Energy.
The world already produced twice as much renewable electricity (4,808 TWh) as nuclear power (2,461 TWh) in 2012. Looking ahead, renewable electricity production triples between now and 2040, increasing more than coal and gas combined.
Renewable energy capacity additions exceed those of fossil fuel and nuclear, combined – both in terms of net and gross additions. Already this year, the world will produce more renewable power than gas-generated electricity and by the 2035 renewables will replace coal as the world’s largest power source, says the IEA.
A staggering $12 trillion will be invested in new power plants between 2014 and 2040. Renewables will account for $7.4 trillion (61%), $3.2 trillion will be invested in fossil fuel and $1.5 trillion in nuclear power plants. The dominance of renewables is quite remarkable, given that this is a ‘business-as-usual’ scenario.
While renewables in general, and PV and wind power in particular, are clearly now established and have bright futures, the same cannot be said about the condition of our globe and many of its inhabitants, unless progress is accelerated soon.
Even with the projected dramatic changes, the transformation of our rigid energy system is simply happening too slowly, IRENA’s analysis shows.
Enforcing current national plans only result in an increase in the share of renewable energy from 18% in 2010 to 21% in 2030. A doubling to 36% (including 44% renewable electricity) is needed to keep global warming below 2 degree Celsius. “While impressive, business-as-usual renewables expansion will deliver neither the economic nor environmental outcomes needed for sustainable development,” says IRENA.
Despite improved carbon intensities, actual emissions from the power sector will be 16% higher in 2040 than today and total emissions will increase by 20%, consistent with a global temperature rise of 3.6 °C, according to the World Energy Outlook.
Cumulatively, we have emitted about 500 Gt of carbon. If we want to stay on the good side of 2°C, we cannot emit more than another 1,000 Gt from 2014 and onwards. On current trends, the world will exceed that budget in 2040, according to the World Energy Outlook.
The dramatic changes we will see in the world’s power markets will not be enough to keep climate change under control, to avoid massive degradation of the Earth’s environment or to meet the world’s development and energy access goals.
The two reports tell a tale of a strange species. We know that CO2 is bad for our planet, our environment and our health, and we choose to subsidise its use. We know that we can provide access to basic electricity and clean cooking for all and thereby save millions of lives annually by investing an average of $60bn per year. We choose not to, and spend $550bn on subsidising fossil fuels instead – each year.
We have discovered a great natural product – hydrocarbons – which we will need forever to produce essential high value-added products such as detergents, fertilizers, medicines, paints, plastics, synthetic fibres, and rubber.
Still, we choose to waste them in inefficient power plants that make two thirds of their energy content vanish into thin, but gradually warmer, air. And we choose to waste most of those scarce hydrocarbons in combustion engines that only return a fraction of their energy content in the form of usable energy, despite having developed, decades ago, electric engines that are 2-3 times more efficient.
Charles Dickens wrote his opening sentence to A Tale of Two Cities in 1859:
It was the best of times, it was the worst of times; it was the age of wisdom, it was the age of foolishness; it was the epoch of belief, it was the epoch of incredulity; it was the season of Light it was the season of Darkness; it was the spring of hope, it was the winter of despair; we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way.
Judge for yourself, to which extent these words apply to our world of 2014.

Chhattisgarh receives three national awards for excellent work in power sector

Chhattisgarh was awarded with three national awards for excellent work in power sector. Chief Minister Dr Raman Singh congratulated the Principal Secretary of energy department Aman Kumar Singh and all the officials and employees of the department for this important achievement.

Chhattisgarh has received the first prize in power sector for excellent work in investment and developing infrastructures, while the Principal Secretary of State Energy Department Aman Kumar Singh received the prize of country’s best bureaucrat for doing excellent work in power sector. The prizes were awarded in a programme organised by a prestigious magazine of power sector ‘Inertia’ in New Delhi on Friday night. The residential commissioner of Chhattisgarh BV Uma Devi received these prizes.

The second prize Pradeep Pimple Grass Root Innovation Award was given to Chhattisgarh government’s public sector unit Akshya Urja Vikas Nigam Abhikaran (CREDA) for making water filtration technique plant with the use of solar energy. This award was received by superintending engineer RK Shankar on behalf of CREDA.

It is to be noted that under the leadership of Dr Raman Singh, various appreciable works have been done in the field of power production and distribution in Chhattisgarh state. Chhattisgarh has become first power-cut free state in the country since 2008.

Chhattisgarh received the other prize by the jury in power sector for surplus production, progressing to achieve the target of 70,0000 megawatt power production till the end of 12th Five Year Plan and availability of electricity in 97 percent rural area of the state. State energy department has received the investment proposals of Rs 92 lakh crore. The T & D deficit has been brought down from 26.72 percent of 19.79 percent.

Battle of storms-2 : Wind energy sector an overview

Wind energy was one of the earliest renewable energy to come up in India .It started in early 1990’s in southern most state of India in Tamilnadu. From there it went on to increase its portfolio and later spread in Maharashtra and Gujarat. It not only attracted many investors because of its accelerated depreciation but also made textile giant manufacturer Tulasi Tanti to start a wind firm Suzlon ,which is now the fifth largest supplier of wind turbine in the world.

Vestas played an important role in supplying wind turbines in 1990’s and very few players were there in the market including suzlon which was founded in 1995.There were more investors attracted in building new wind farms because of its accelerated depreciation from which they earned more profits. Wind farms were success and there was nothing to pull its growth as Energy hungry India was planning to utilize its wind potential. State governments were supportive as it not only satisfied the energy needs but also created many jobs.

In 2000’s it reached the peak with India becoming the 5th largest wind power capacity in the world and by 2006 Indian wind turbine supplier Suzlon captured 7.7% of the market share in global wind turbine sales.

Glory days were then hit by recession and there were also many problems wind farms were facing regarding the maintenance. Wind power moved from a fringe source of power to one of the world’s fastest-growing sources of new electricity, scrutiny did increase along with that. The short-term outlook for renewable energy, especially wind power, was clouded by the credit crunch and the economic slowdown, turbine makers’ woes only fueled the flames.

Suzlon were hit badly due to recession and had severe cash flow problems which also made them to shut down their plant in Pondicherry and its losses piled up to 11000 crores. Suzlon got plenty of attention for its turbine troubles and it suffered from turbine breakdowns, cracked blades, and turbine underperformance that drove customers to cancel orders but it wasn’t entirely the only one . All turbine makers have at one time or another have wrestled with technical glitches in the complex machines.

Suzlon’s market share then decreased in India from 58% to 35% with new firms entering and capturing the market.Spanish wind turbine makers Gamesa was one of them which captured 10%.

Another big shock faced by wind turbine makers was the cancellation of accelerated depreciation(AD) and generation based incentives(GBI) in 2012.With the removal of the benefits, the wind sector in 2012-2013 saw investments falling to Rs.10,200 crores while in the preceding year, it was close to 19,000 crores.

The government change at the centre brought back the accelerated depreciation and GBI which made the wind farms to launch new plans and products . Gamesa inaugurated a new production facility at Chennai for its G114-2MW turbine last week. Suzlon launched world’s largest 120 m wind turbine this month, Tata power renewable energy announced that it is on talks to invest in wind firms soon. In addition to all these there are 3 new states identified on the India’s wind energy map .With all the above news its time to say that the wind firms is all set for the battle . For now let us gear up and watch the battle of storms which was not look like the 1990’s which looker more like monopolist market. The battle is getting more hotter ,stronger and windier.

India’s renewable energy share is increasing everyday with solar parks booming and WtE(waste to energy ) peeping up , wind energy sounds like the old war horse .Which would lead the battle in the renewable energy portfolio? Only time will tell.


Source:

indianrenewable.blogspot.in
Avinash Sridharan

How are Supercritical Boilers different from Subcritical Boilers?

Supercritical power plants were in service from the late fifties. But the technology did not really take off due to problems of reliability especially from the metallurgical aspect.

The single most important factor that determines the use of higher and higher pressure and temperatures are the availability of materials to withstand these conditions.

 Increases in operating pressure and temperatures have to go hand in hand with developments in metallurgy.

With more than 600 units in service the reliability issue seems to be resolved. Supercritical units are the standard for future power plants in many countries including China.

What are the key differences between the subcritical units and the Supercritical units?

Efficiency

The main advantage and the reason for a higher pressure operation is the increase in the thermodynamic efficiency of the Rankine cycle.

Large Subcritical thermal power plants with 170 bar and 540 / 540 ° C (SH / RH) operate at an efficiency of 38 %. Supercritical units operating at 250 bar and 600/615 ° C can have efficiencies in the range of 42 %.

Ultra supercritical units at 300 bar and 615 / 630 °C will still increase the efficiency up to 44 %.Increase in efficiency directly lead to reductions in unit cost of power and CO2 emissions.

Operational Flexibility

Most of the Supercritical units use the once through technology. This is ideal for sliding pressure operation which has much more flexibility in load changes and controlling the power grid.

However this also requires more sensitive and quick responding control systems.

Evaporation End Point
In subcritical units the drum acts as a fixed evaporation end point. The furnace water walls act as the evaporator. Not so in the case of a supercritical unit. The evaporation end point can occur in various levels of the furnace depending on the boiler load. The percentage of Superheat in supercritical units is higher than subcritical units. Because of this the furnace tubes act more as superheaters than waterwalls. This necessitates the use of higher grade of materials like alloy steels in the furnace.

Heat transfer Area

Higher steam temperatures in supercritical units results in a lesser differential temperature for heat transfer. Because of this heat transfer areas required are higher than subcritical units.
Higher Superheat steam temperatures entering the HP turbine also mean higher reheater inlet temperatures which again results in a higher heat transfer areas.

Water chemistry

In supercritical units the water entering the boiler has to be of extremely high levels of purity. Supercritical boilers do not have a steam drum that separates the steam and the water. If the entering water quality is not good, carry over of impurities can result in turbine blade deposits.

Materials

Supercritical power plants use special high grade materials for the boiler tubes. The turbine blades are also of improved design and materials. In fact, the very increase in higher pressure and temperature designs are dependendent on the development of newer and newer alloys and tube materials.

The aim of the industry is to achieve power plant efficiencies in the range of 50 %.

Obama plan to 'Power Africa' gets off to a dim start

Barack Obama last year told a cheering crowd in Cape Town that a $7 billion plan to "Power Africa" would double electricity output on the world's poorest continent and bring "light where currently there is darkness".

A year later, the U.S. president's flagship project for Africa has already achieved 25 percent of its goal to deliver 10,000 megawatts of electricity and bring light to 20 million households and businesses, according to its annual report.

But the five-year plan has not yet delivered the power.

Power Africa has not measured its progress by counting actual megawatts added to the grid but promises of additional power made in deals it says it helped negotiate, according to sources inside the project and documents seen by Reuters.

Some projects facilitated by Power Africa -- a program operated by the U.S. aid agency USAID -- were under way years before the scheme's inception, others are still in the planning stage.

It is unclear how much of the $7 billion Obama pledged has actually been spent or if a further $20 billion in private sector investment commitments will materialize.

"Saying you've met targets on projects that might never happen or taking the credit for projects that have been worked on for years makes me uncomfortable," a source working on Power Africa told Reuters. "It's misleading."

Obama's pledge to double power generation in Africa within five years looked highly ambitious from the start. Per capita electricity output in Sub-Saharan Africa has been flat for three decades because most promised power plants never get built.

"We're dealing with megawatts on paper, rather than on the grid," a second source working on the project said.

"Is that really what Obama promised?"

The first African-American U.S. president, the son of a Kenyan father, Obama has often been criticized for a lukewarm engagement in Africa, consisting more of words than deeds.

"WE'RE LIKE A PHARMACIST"

The 48 countries of Sub-Saharan Africa, with a combined population of 800 million, produce roughly the same amount of power as Spain, a country of just 46 million. This constrains Africa's growth and keeps hundreds of millions in poverty.

Power Africa coordinator Andrew Herscowitz told Reuters there had been some confusion about the role of the program. He said it was always intended to "expedite transactions", facilitating private investment rather than handing out aid.

Herscowitz said Power Africa was there to help the private sector deliver electricity and it had already negotiated commitments from companies worth $20 billion, although he did not know how much of this money had been spent.

"We’re like a pharmacist, where people come to us, we reach out to people and figure out what is needed," he said.

"In some projects we may have a lot of involvement and in some we have very little involvement."

Foreign companies sign billions of dollars of agreements with African governments to build infrastructure every year, although a large number never get built.

In April 2011, the U.S. Millennium Challenge Corp., a government aid agency involved in Power Africa, signed a $350 million deal to "revitalize" Malawi's power sector.

More than three years on, 1.7 percent of that money has been spent, according to the programmer's website, which gives no detail on progress on the ground.

Memoranda of understanding Power Africa signed this year with its six focus countries -- Tanzania, Nigeria, Kenya, Ethiopia, Liberia and Ghana -- contain less than $100 million of financial commitments targeted at specific countries, most of which is for consultants.

U.S. consultancy Tetra Tech won a $64 million contract and former British Prime Minister Tony Blair's Africa Governance Initiative was given a $3 million deal.

As with many African aid projects, rights groups have criticized Power Africa as mostly being a vehicle to subsidize U.S. companies.

Documents show $5 billion out of the $7 billion pledged is for loans for U.S. exports from the government's Export-Import Bank (EXIM) and Overseas Private Investment Corp. (OPIC).

TURN ON THE LIGHTS

"It’s absolutely not true. Power Africa is an opportunity to turn on the lights for millions of Africans by taking investment from all over the world," Herscowitz said.

Herscowitz rejected suggestions Power Africa merely tapped into existing projects, highlighting a 5 megawatt "NextGen" solar project in Tanzania and a 30 megawatt biomass scheme in Kenya which he said "didn't exist before Power Africa".

The NextGen project website, however, says a power purchase agreement for the solar project was signed in January 2013, six months before Power Africa was launched.

It is by no means guaranteed that the Power Africa program, which has an initial five-year mandate, will continue or be seen as a priority when Obama's final term ends in two years, U.S. government sources told Reuters.

In addition, the investment banks EXIM and OPIC are fighting for their survival in Congress, where Obama's Democratic Party was severely weakened in mid-term elections this month.

In a change of tack, the U.S. government said this month it wants to partner with China on improving power in Africa.Meanwhile, corruption in the countries that Power Africa operates in remains a problem.

Nigeria's state oil company was accused last year by the then central bank governor of withholding $20 billion in oil funds due to the government, while Tanzania's parliament is currently reviewing a report on graft in its energy sector.

Steps soon to help coal, natural gas-based power plants: Piyush Goyal

NEW DELHI: The government will shortly take steps to address all fiscal and fuel hurdles faced by coal and natural gas based power plants so that people get affordable and uninterrupted supply, Power, Coal and Renewable Energy Minister Piyush Goyal told reporters in a hurriedly called news conference late on Wednesday which was also attended by Petroleum Minister Dharmendra Pradhan.

"The government will look at all possible options to provide fuel to power projects with an aim to keep tariff low for the utilities and end users," said Goyal. He said banks are on board to discuss the possibilities of relaxing lending norms to power sector.

"We are in discussions with banks to extend the term of payment for power plants to prevent them from turning non performing assets," said Goyal. The ministers held meetings with stakeholders in the power sector, who are facing an acute fuel shortage and are under pressure from banks to repay loans. "Today's meeting was a precursor to final decisions which will be taken very fast," he said.

The government has already announced plan to auction coal blocks and hopes to double the country's coal output to meet the fuel shortage. Thousands of megawatts of new power generation capacity is idling or operating at suboptimal capacity because Coal India, the state monopoly, could not keep pace with rising demand.

Goyal stated that the government will try to increase domestic gas and coal output for power projects. "We have looked at all possible options to address the problems of gas-based power projects. We have already initiated the coal block auction process and are looking at natural gas-based plants to utilise stranded capacity with an aim to keep the tariff low," Goyal said.

The power sector is also waiting for a financial package as companies are unable to repay loans because they don't get fuel to operate their plants. In some cases, plant construction could not be completed because banks are reluctant to lend to power projects. A panel of experts has recommended a series of measures to help the sector. The government is working on big-ticket financial reforms for about 1,30,000 mw thermal and hydropower power plants worth over Rs 6,00,000 crore that are hit by severe funds crunch while continuing to face cost and time overruns.

Coal block cancellation: Public sector banks may lose Rs. 96,000 crore

Public sector banks may take a hit of Rs 96,484 crore due to cancellation of coal blocks to power projects, Minister of State for Finance Jayant Sinha said on Tuesday.

The Supreme Court had in September cancelled allocation of 204 coal mines since 1993 to power plants and other user industries after finding their allotment irregular.

Banks have extended credit to power plants built based on coal supply from some of the mines cancelled by the apex court.

“The impact of cancellation of coal block allotment on public sector banks due to likely stoppage of production of power plants is estimated at Rs 96,484 crore,” Sinha said in a written reply to a question in the Rajya Sabha.

He, however, did not say if all the Rs 96,484 crore loan by banks to the projects may turn into bad debt if mining is stopped.

The Supreme Court had allowed companies to continue mining till March 31 in blocks where coal production had already started.

“As per the information collected from public sector banks, the exposure of all PSBs to the power sector is Rs 5,82,469 crore,” Sinha said.

The government had last month promulgated an Ordinance for auctioning the 204 coal blocks whose allocation was cancelled by the Supreme Court. In that Ordinance, a provision was added for allowing commercial mining of coal by private companies.

The first lot of 74 mines will be auctioned to specific end-users in early February.

Discussion

Whether auction of coal mines is good for future...

Adani buys Avantha plant, becomes largest private power utility

The Adani Group on Monday announced the acquisition of Avantha Power's Korba West power project in Chhattisgarh, in a deal estimated at Rs 4,200 crore. The project comprises 600 Mw of operating power plant and the planned addition of a 600-Mw unit. The group said in a statement issued from Ahmedabad that this acquisition had made Adani Power the largest private power utility in India, with an installed capacity of 11,040 Mw.

The deal, coming within days of State Bank of India's in-principle approval for a $1-billion loan to Adani's Australian coal mine project, gives the group a big push in the power business.


                                         

This is another big acquisition for the group in the power industry after it took over a 1,200-Mw plant from Lanco Infratech in August in a deal valued at Rs 6,000 crore.

Monday's deal would allow the Avantha group to reduce debt incurred for financing power projects, an industry source said. The group had borrowed from private equity firm Kohlberg Kravis Roberts, mutual funds and other lenders and has been under pressure to retire debt as its power projects are behind schedule. A planned initial public offering did not materialise, "hence the stake sale", the source added.

The Adanis did not reveal the size of the deal or how it would be funded, but the Avantha group said the Korba West Power Company was valued in excess of Rs 4,200 crore.

"This is time for consolidation in the power sector and Adani Power has taken the lead in acquiring assets that are a strategic fit to group businesses and potentially at the lowest end of the cost curve," Adani Group Chairman Gautam Adani said in a statement.

"This acquisition consolidates our pan-Indian presence and reaffirms our belief in the reforms processes under way in the power and coal mining sectors. This acquisition expands our footprint in the coal mining belt and we are bullish about expanding our presence further. We are committed to achieving our target of 20,000 Mw by 2020," Adani added.

He said Adani Power would endeavour to expand the capacity of the Korba unit expeditiously, leveraging its project execution capabilities.

"This recent acquisition is a precursor to many the industry is likely to see in the near future, with one or two project companies exiting the space and emergence of seven or eight large utilities on global lines," said EY Vice-President Rupesh Agarwal.

"The interesting aspect will be to see how these larger independent power producers are able to finance such acquisitions against the backdrop of continuing sector challenges, leveraged balance sheets and exposure of Indian lenders to the power sector," he added.

The Avantha group was to commission two phases of 600 Mw each of the Korba project by the second quarter of 2013-14. It has commissioned only one so far. Also, 1,200 Mw of the group's Jhabua power plant, which was to become operational by the fourth quarter of 2013-14, is under implementation.

The Avantha group had plans to build a 1,320-Mw thermal power plant in Gujarat and a memorandum of understanding was signed with the state government in 2009. The group's website offers no details on the status of the Gujarat project. A spokesperson for the Avantha group did not respond to a query seeking details of its projects.

Discussion

Whether Adani should concenterate on distribution sector... 

Waste wood to energy plant bags £110m

A facility that converts wood waste into energy in Merseyside has bagged funding worth £110 million.

The UK Green Investment Bank will provide £16.9 million of loans and a further £13.2 equity investment via its Foresight-managed fund, UK Waste Resources & Energy Investments (UKWREI), in which it is the cornerstone investor.

The rest of the £42.1 million is being provided by GCP Infrastructure Investors.

The plant will process 146,000 tonnes of Grade B-C recovered wood every year and provide 20.2MW of power capacity to the grid as well as 7.8MW of thermal energy to an adjacent wood drying facility.

Business Secretary Vince Cable said: “This investment in one of the largest green power plants in the UK will create more than 200 local jobs, cut greenhouse gas emissions and generate enough renewable energy to power 35,000 homes a year.

“The project would not have happened without the Green Investment Bank – it is at the heart of our industrial strategy, improving energy efficiency through innovation and creating sustainable jobs and growth.”The facility, expected to come online by December 2016, is being developed by Danish company Burmeister & Wain Scandinavian Contractor A/S while the wood is sourced by Stobart Biomass Products.

Discussion-

Whether India can have waste wood to energy plant...What is the feasibility of this plant in India?

Cabinet approves 3 major power projects

New Delhi: The Union cabinet Thursday approved three major projects for the power sector, the power ministry said in a statement here. The projects are the Deen Dayal Upadhyaya Gram Jyoti Yojana, Integrated Power Development Scheme and the North Eastern Region Power System Improvement Project. 

The North Eastern Region Power System Improvement Project aims to strengthen the intra-state transmission and distribution system at a projected cost of Rs. 5,111 crore, including a capacity-building expenditure of Rs. 89 crore, the statement said. The scheme is to be implemented with World Bank assistance, it added.

 The Integrated Power Development Scheme is designed for urban areas and entails an expenditure of Rs. 32,612 crore. The earlier scheme, known as the Restructured Accelerated Power Development and Reforms for 12th and 13th Plans will get subsumed in this new scheme, the statement said. 

The Deen Dayal Upadhyaya Gram Jyoti Yojana is targeted at the rural areas. The scheme entails a total investment of Rs. 43,033 crore, while for 2014-15, the government has allocated Rs. 500 crore. "The programme requires budgetary support of Rs. 33,453 crore from the government over the entire implementation period, the statement said. The cabinet had earlier approved Rs. 39,275 crore for the scheme, which includes budgetary support of Rs. 35,447 crore under the earlier Rajiv Gandhi Gram Vidyutikaran Yojana. This outlay will be carried forward to the new scheme, in addition to the outlay of Rs. 43,033 crore.

Go Beyond Power Politics

India is structurally short of electricity. Power pricing is fundamentally disconnected, with retail tariffs significantly lower than the cost of production. Electricity losses, due to theft and illegal connections, account for more than 25% of power generated in India. Massive state electricity board bailouts have resulted in higher losses, mostly borne by public sector banks.

The government seeks to change this situation dramatically by easing the rules for power plant construction, arranging fuel supplies and reforming the way electricity is distributed and paid for. It seeks to construct a new bargain — regular electricity supplies for higher prices, with pilfering deterred by fines. State governments, long used to providing free electricity as a sop, will now have to consider the financial viability of their private and public generators and distributors.

There remain many pitfalls. Full power availability needs to consider the needs of the rural poor particularly in electricity pricing. Combating power pilferage and a tradition of politically-motivated free power will require changing social attitudes. A belief in markets, instead of deficits, needs to be fostered.

Coal is India’s short-term play for energy security, filling the gap until gas and renewables scale up. With marginal steps taken to build high-margin coal beneficiation plants (lowering ash content) and the utilisation of e-auction for high-margin coal sales, double-digit coal production growth will be hard to achieve. Coal India is too big to fail. It must be broken up into its constituent parts.

Consider Singareni Collieries, India’s second-largest coal producer. State ownership, as opposed to federal ownership, has helped it gain permissions and clearances quickly. Its local workforce has embraced mechanisation and an operational focus on growth. Coal India’s regional presence in Jharkhand, Orissa and West Bengal is hampered by state resistance to connecting railway lines and land acquisition. Far better to give states a stake in Coal India’s growth through outright ownership or equity stakes.

India’s electricity consumers are fed up of high price rises and cannot, in such middling economic circumstances, put up with continuing rises. No one doubts that coal should reflect the cost of production and pollution, with price escalation made over the coming years to shift power generation towards renewables and natural gas. But increased government royalties on production should be used to subsidise the price increase.

Unit electricity tariffs for industrial and corporate consumers are typically 30% lower than the cost of generation, excluding pilferage and political giveaways. Such tariffs should be rationalised, with firms graded according to their paying capacity. Dynamic pricing should be introduced, with industries and commercial institutions rightly facing market prices.

The reform plans seek to restructure state electricity boards (SEBs) with the right incentives. The power sector has over Rs 5 lakh crore in outstanding debt, which rises by Rs 60,000 crore annually. The previous bailout plan has failed. With low tariff increases, high pilferage rates, higher electricity purchase costs and crippling debt, SEBs are due for another bailout.

The State Electricity Distribution Responsibility Bill, mandated for adoption to enforce fiscal discipline, remains in abeyance. A comprehensive programme to address operational productivity, manpower skills, fiscal responsibility and state proclivity for election-related electricity giveaways is needed. The distribution should be opened up further to the private sector, with smart grid applications and billing systems encouraged.

Solar and off-grid power are increasingly being encouraged through fiscal incentives. The Renewable Purchase Obligation (RPO) remains key. By forcing large consumers and electricity boards to purchase renewable power, this mechanism creates a ready initial market for the renewables sector. Enforcement remains patchy. In 2013-14, not a single major state met its RPO targets. Any financial restructuring of SEBs and utilities must be conditioned on compliance with strictlydefined RPO targets. The clean energy cess, collected by Coal India, should be utilised for renewable investments.

Private investors are being encouraged to invest across the electricity value chain. Open access provision would allow major power consumers to choose among competing power companies over a common transmission and distribution grid. Power trading would lead to cheaper electricity and minimise disruption. Greater investments in transmission networks and a rationalisation of differential open access tariff structures across states would encourage this shift. With the government taking steps to address these concerns, regular 24-hour electricity may no longer be just a dream.

JSW to buy 300 mw Baspa and 1,091mw Karcham Wangtoo hydro projects for Rs. 9,700 crore

Sajjan Jindal-controlled JSW Energy on 16-11-2014 agreed to acquire two hydropower projects from Jaiprakash Power Ventures for Rs. 9,700 crore, making it one of the largest deals in the power sector.

The transaction will include a court-monitored transfer of the assets of the two projects – 300 mw Baspa and 1,091mw Karcham Wangtoo in Himachal Pradesh – into a special purpose company, which will be acquired by JSW Energy.

"This is an attractive deal for our shareholders. It is expected to be earnings accretive. Our strategy is to increase capacity manifold and create synergies through a mix of organic and inorganic opportunities," said JSW Energy chairman Sajjan Jindal.

The deal signifies the hectic activity seen recently in the Indian power sector where large conglomerates have rushed to acquire troubled assets from promoters after the latter were unable to service loans taken when interest rates were high. Jaiprakash is one of several Indian power and infrastructure companies weighed down by debts and weak profitability and the deal will help the company retire its mounting debt.

JSW Energy initiated acquisition talks after Jaiprakash failed to conclude a similar transaction with the Anil Ambani-led Reliance Power and with Abu Dhabi National Energy Co. Jaiprakash's talks with the two companies had failed due to differences over valuations.

JSW Energy has a current installed capacity of 3,140 MW. Post-acquisition, the aggregate installed power generation capacity of JSW Energy will enhance to 4,531 mw.

"The acquisition will yield immediate cash flow and is expected to enhance JSW Energy's consolidated profitability and create significant synergies," JSW said. In 2013-14, the Karcham project earned a revenue of Rs. 1,242 crore while the Baspa project Rs. 320 crore, it added. Axis Capital and SBI Capital Markets acted as financial advisors for the transaction.

JSW has a net worth of Rs. 7,000 crore and an operating profit of Rs. 3,500 crore. Current outstanding debt is about Rs. 9,000 crore.

"The funding pattern will be finalised in the next couple of days. This transaction also improves our portfolio of electricity buyers. Since the Jaiprakash project sells 85% of its power through long term PPAs (power purchase agreements), it improves our share of total PPAs to 65% compared to the current 55%," said JSW Energy CEO Sanjay Sagar.

10 largest power stations of the world

1-Three Georges Dam: When it comes to installed capacity, it is the world’s largest power station. It spans the Yangtze River by the town of Sandouping, located in Yiling District, Yichang, Hubei province, China.

2-Itaipu Dam: The Itaipu Dam spans across Parana River, which is located on the border of Paraguay and Brazil. When it comes annual energy generation, it is the largest hydroelectric facility.

3-Xiluodu Dam: The Xiluodu Dam is an arch dam on the Jinsha River, i.e. the upper course of the Yangtze River in China. The dam contains several spillways to include seven surface outlets, eight mid-level orifices and four spillway tunnels

4-Guri Dam: The Guri Dam is a concrete gravity and embankment dam in Bolívar State, Venezuela on the Caroni River. It finds a place among the most powerful hydroelectric power stations.

5-Tucurui Dam: The Tucurui Dam is a concrete gravity dam on the Tocantins River located on the Tucurui County in the State of Para, Brazil. It is the first large-scale hydroelectric project in the Brazilian Amazon rainforest.

6-Kashiwazaki Nuclear Power Plant: The plant is owned and operated by The Tokyo Electric Power Company(TEPCO).It is a large, modern (housing the world’s first ABWR) nuclear power plant on a 4.2-square-kilometer (1,038 acres) site including land in the towns of Kashiwazaki and Kariwa in Niigata Prefecture, Japan on the coast of the Sea of Japan, from where it gets cooling water.

7-Grand Coulee: Grand Coulee is a gravity dam on the Columbia River in the U.S state of Washington built to produce hydroelectric power and provide irrigation. It is the largest electric power-producing facility in the United States.

8-Longtan Dam: Longtan Dam is a large roller-compacted concrete (RCC) gravity dam on the Hongshui River in Tian’e County of the Guangxi Zhuang Autonomous Region, China, a tributary of the Xi River and the Pearl River.

9-Sayano-Shushenskaya Dam: The Sayano–Shushenskaya Dam is located on the Yenisei River, near Sayanogorsk in Khakassia, Russia. When it comes to average power generation, it is the sixth-largest hydroelectric plant in the world and the largest in Russia.

10-Bruce Nuclear Generating Station: Bruce Nuclear Generating Station is a Canadian nuclear power station located on the eastern shore of Lake Huron, in the communities of Inverhuron and Tiverton, Ontario. It occupies 932 ha (2300 acres) of land.