Thursday 26 February 2015

Recharging the power sector



It is apparent that India can achieve neither fiscal stability nor energy security unless it reduces its dependence on imports.


India’s honeymoon with low oil prices could be nearing its end. Prices have already climbed from a low of $45 to $60 per barrel—should the recovery continue, oil may surge all the way back to over $100.

So far, soft oil prices have helped India tame inflation and drag CPI down to below 5%, other than narrowing its trade deficits despite the dwindling exports. But all that could change quickly if the spurt in oil prices continues. This is because 35% of India’s energy needs are met by oil and gas and these two fuels alone account for over 40% of its total import bill.

It is apparent that India can achieve neither fiscal stability nor energy security unless it reduces its dependence on imports. The obvious way to do that is to turbo-charge the development of locally-available energy resources, both fossil fuels and renewables.

Although the Modi government has taken some steps to kick-start India’s floundering power sector, there is still a long way to go. And the signals must start showing right now, with the forthcoming budget. Here is a top-ten ‘must-do’ list for the government.

Revive hydro

This sector has suffered from years of neglect owing largely to policy inertia. As a result, our installed capacity for hydro power is 40,000 MW as against a total potential of 150,000 MW. The history of India’s hydro sector is marked by a trail of projects that never took off or are stalled. Since hydro is extremely capital-intensive, it is important for the government to take the lead and invest in large projects and open the way for the private/PPP sector to develop relatively smaller projects through enabling policies and a transparent process.

Go for coal gasification

The government must give a strong policy impetus to the exploration and production of coal-bed methane. We must pursue both surface and under-the-ground modes for gasification of coal. Coal mines need to be allocated exclusively for the production of gas much like China has with impressive results.

Waste energy management


Special incentives, including liberal financing, needs to be offered to encourage companies to harness this emerging source of energy—an approach that will serve both the Make-in-India and Swachh Bharat objectives

Privatise distribution

Since distribution is critical for the well-being of the energy sector and its sustainable growth into the future the government must set up a time-bound plan for transferring the ownership/management of power distribution to private/PPP entities.

Modernise distribution


Inefficiency and transmission losses have driven India’s power sector to the brink of financial sickness. Revival will entail both standardisation and a large dose of automation.

Expedite PPAs for sale

After the coal mine allocation issue is done and dusted, the government must ensure that long- and medium-term PPAs are quickly signed; otherwise, power companies could collapse under the weight of huge underutilised capacities.

Bail out stalled projects

The government should set up an empowered committee to take the steps necessary to re-start the development of stalled power projects including, if necessary, their acquisition by NTPC or private companies.

Lower debt-equity barrier

Given that power and energy projects require massive amounts of investment this needs to be done to ensure that competent private sector investors are able to entry the fray.

Coal-based power plants typically operate at a Plant Load Factor (PLF) of 85%. The relative figures for wind and solar projects are 25% and 15%, respectively. Therefore, at least for the foreseeable future, renewables can be expected only to compliment, not substitute, coal-based power generation.

So far, India has achieved a total capacity of just 250,000 MW as against an anticipated demand of about 800,000 MW over the next 15 years. Government policies must recognise that expansion at this humongous scale cannot be achieved by the public sector alone and will require active participation of private and PPP players. It must, therefore, build on its promising start and accelerate the whole process of renewal and revival. The budget will give vital cues on how the new government means to navigate the sector at a time when it is marooned in a sea of doubt.

Comment:

On Saturday the finance minister Mr.Arun Jaitley will present the budget.In my point of view,the main focus of the budget will be on Infrastructure.Recharging the power sector is the most prominent 
point to develop the economy of India.In India,Power sector is not performing as per the capability,
The installed capacity is still around 2,54,000 MW.The Indian economy is growing at a rapid rate.To match up with the economy,the power sector should also grow at rapid rate.The main hurdle in power sector is the land acquisition.So,government should expedite on giving land to the power sector projects.
In case of renewable energy,India has much wider scope in solar projects.The solar rooftop project can be game changer of the Indian Power sector.So,lets hope for the best for upcoming budget on 28th february.

Wednesday 25 February 2015

White Paper on power sector to be brought out


Delhi's chief minister Arvind Kejriwal.

A White Paper on the power sector will be brought out by the Delhi government to make people aware of the current situation, chief minister Arvind Kejriwal said on Tuesday.

He said, through the White Paper, the government wants to inform people on the sector’s position and from where it started the work. People can compare the progress made by AAP government, looking at the White after the end of five years.

The White Paper will also cover the time frame of last 15 years when the Congress was in power, during which the sector saw privatisation.

“The Congress was in power for 15 years. This was the same time when there was privatisation in the power sector.

Since the time privatisation was done, many incidents took place. It is important to keep these facts before the people of Delhi so that they know what is the power situation in the national capital.

“The government will soon bring a White Paper on the power sector. We will tell the people from where we started and what we would have done by the end of five years,” Mr. Kejriwal said.

He was giving his concluding remarks on the Lt. Govenor’s address to the first session of the Sixth Assembly.

AAP has already said that it will emphasis on audits of the power dicoms after it comes to power. It is also looking for power generation at cheaper rates and for that purpose, it has requested the Centre for a coal block.

“We wish to tell the people on what were the terms and conditions when privatisation was started. We also wish to tell people from where we started when we came to power and what we would have done by the end of five years,” Deputy Chief Manish Sisodia later told reporters.


Comment:

The concept of bringing white paper in power sector is a good decision by Delhi government.
This will give knowledge to public about the power scenario of Delhi.
Arvind kejriwal chief minister of delhi already emphasized on audits of the power discoms. As we know that the situation of BSES is in bleak.So,to improve the situation of power sector in Delhi ,AAP government should come up with proper strategies.

  

Tuesday 17 February 2015

Coal auction to benefit poor states: Coal Secretary




New Delhi: With aggressive bidding for coal blocks likely to continue on the fourth day, the government on February 17 said that poor states would benefit from the auction. "Coal block auction gets underway on the fourth day," Coal Secretary Anil Swarup said in a tweet. He further tweeted, "windfall in offing. Poor states to reap harvest of coal block auctions."

The mines on sale on February 17 are Amelia (North) mine in Madhya Pradesh (power sector), Ardhagram mine in West Bengal and Chotia mine in Chhattisgarh — non-power sector. The 10 companies in the race for Amelia (North) mine are Adani Power, Bharat Aluminium Co Ltd (Balco), Essar Power M P Ltd, GMR Chhattisgarh Energy Ltd, GVK Power Goindwal Sahib Ltd, Jaiprakash Power Ventures, Jindal Power Ltd, JSW Energy Ltd, RattanIndia Power Ltd, Reliance Geothermal Power Pvt Ltd.

The five companies vying for Ardhagram coal mine are Easternrange Coal Mining Pvt Ltd, Monnet Ispat and Energy Ltd, OCL Iron & Steel Ltd, SS Natural Resources Pvt Ltd and Visa Steel Ltd. The technically qualified bidders for Chotia mines are Balco, Godawari Power & Ispat Ltd, Hindalco Industries, Prakash Industries, Rungta Mines and Ultratech Cement Ltd.

Amelia (North) mine has extractable reserves of 70.28 MT, Ardhagram has extractable reserves of 19.29 MT, Chotia mine has extractable reserves of 13.57 MT. On February 16, Jai Prakash Associates, Durgapur Projects and B S Ispat — had bagged one mine each, even as the government said that it expects more aggressive bidding for blocks as the mines were already producing.

After the Supreme Court cancelled allocation of 204 mines in September, the government decided to auction the blocks. It has put 19 blocks on sale in the first tranche. The last day for the auction of first lot of mine is February 22.

Comment:

In my point of view the statement given by the coal secretary is not convincing.For example recently Hindalco won Kathautia mine in Jharkhand by offering Rs 2,860 per tonne of coal. It means around RS 3 per kg,so we can estimate that the cost of electricity generated will increase thus companies will pass this cost to the end consumer.However it is still not clear that Hindalco will use it for steel or power.

Tuesday 3 February 2015

Adani Power to bid for all six coal blocks reserved for the power sector: Sources


(Adani Power is in race for…)

 Adani Power is in race for all six coal blocks reserved for the power sector in the upcoming auction of 23 operational mines, while Jindal Steel & Power is eyeing four, people with knowledge of the matter said.

Hyderabad-based Madhucon Group's subsidiary, Simhapuri Energy, is expected to be a surprise bidder and may vie for all the coal blocks earmarked for the captive use of power producers.


The Tokisud North block that earlier belonged to GVK Power is expected to attract the highest number of bids. More than a dozen companies including Adani Power, Essar Power, GMR Energy, Jindal Power, Lanco Infratech, Sesa Sterlite, Tata Power and West Bengal Power Development Corp are likely to submit bids for this block that lies in the South Karnapura coalfields in Jharkhand, a coal ministry official said.

The block with 2.32 million tonnes of annual coal production capacity has rail connectivity within 2.5 kilometres.

Gare Palma IV/2 and IV/3 in Chhattisgarh, previously owned by Jindal Steel & Power, is also being eyed by close to a dozen companies. Besides Adani and Simhapuri, they include GMR Energy, Jindal Power, Lanco Infratech, Reliance Power, DB Power, Sesa Sterlite and KSK Energy.

The block has a capacity to produce 6.25 million tonnes a year, but the nearest rail head is about 55 km away.



Some eight companies are expected to bid for the Amelia North block in Madhya Pradesh that earlier belonged to Madhya Pradesh State Mining Corp. The potential bidders include Essar Power, GVK Power, Jindal Power and Lanco Infratech.

About half a dozen companies including Adani Power, DB Power, Jindal Power and Sesa Sterlite are said to be in race for Talabira-I in Odisha that was earlier owned by Hindalco. Sarisatolli and Trans Damodar in West Bengal are also expected to have attracted about half a dozen companies.

Power firms have to bid lower than the price arrived after the technical stage. The last date for bid submission is February 3 while the price bidding starts February 14. The final price will be the cost of coal that the winner can pass on to electricity consumers.

Comment:

Coal block auction is the first step to improve the fuel supply issues in power sector. Many steel companies are also competing with the power companies to acquire the coal blocks.In my view the competition in South Karnapura coalfields (Jharkhand) will be worth watching.

Pros and Cons for coal block auction:

As per my view the advantage of inviting private sector in coal block auction is efficient use of coal blocks.At present Coal India is not working efficiently,so due to this fuel supply issues will get its solution.

The disadvantage is the increase in cost of coal.Suppose if Tata power will not be able to acquire any coal block,then Tata power have to buy coal from other private sectors at high price.

But there are many pros than cons in coal auction.So lets pray for best so that efficiency in the Indian power sector will improve.


Sunday 1 February 2015

Chandigarh invites private players in solar power sector

Officials inspect a 210-kWp rooftop solar power plant in Chandigarh on Wednesday.— Photo: Akhilesh Kumar
Officials inspect a 210-kWp rooftop solar power plant in Chandigarh on Wednesday.— Photo: Akhilesh Kumar



Declared a Model Solar City in 2013, Chandigarh on Wednesday moved a step closer towards accomplishing the goal of using solar energy for powering its growth when a 210 kWp Grid-tied Rooftop Solar Photovoltaic Power Plant was inaugurated at the postgraduate government college.

Speaking at the inauguration Kirronn Kher, MP, said the Narendra Modi government has set an ambitious target of installing Rooftop Solar Power Plants for generating 1 lakh MW in the next five years. “Though it is a huge task, our government is committed in achieving it by providing various incentives and inviting private sector investment in this solar sector,” she said.

The Centre was also planning to develop Chandigarh as one of the smart city of the country and would thus strive to improve its footprint in the field of renewable energy, she said.

The project inaugurated on Wednesday was executed by Chandigarh Renewal Energy, Science and Technology Promotion Society through a Delhi-based contracting firm at a cost of Rs. 2.27 crore and the plant was designed to generate around 2.72 lakh units of electricity per year.

Talking to The Hindu , Vijay Dev, Adviser to Administrator of Chandigarh, said through the State intervention so far solar power plant of 5 MW have been set up. “We are ranked the number one city in the country in State intervention models and our immediate goal is to set up solar plants to generate another 5 MW soon.”

Mr. Dev said the major emphasis now was on roping in the private sector in solar power generation. “In the private intervention area, Chandigarh ranks third in the country. But with a new power purchase price of Rs. 9.43 per unit having been determined, there would be greater incentive for the private players to get into solar power generation. An awareness and motivation campaign would also be launched to elicit their support.”

It was in 2009 that the proposal to make Chandigarh a model solar city was initiated by The Energy Resources Institute (TERI) which also prepared a detailed project report and a master plan for it.

To exploit solar power to the hilt, TERI had proposed setting up of 10 MW solar PV roof top power plants; a 25 MW solar PV power plant in Patiyala ki Rao area of Chandigarh; solar PV plants in municipal landfill site, gardens, lake areas and car parking sheds; and installation of solar PV based LED street lights. It also recommended use of solar energy for powering water heaters in residential and commercial buildings to reduce the energy needs by 20 per cent.

To showcase advantage of rooftop solar PV system it was recommended to first implement the demonstration projects in government offices and institutions buildings like Model Central Jail, Town Hall, General Hospital, and UT Municipal Corporation Building.

While the project has been slow to take off, parts of it have been implemented. These include the rooftop Solar Photovoltaic Power Plants at Paryavaran Bhawan and at the Model Jail.