NTPC threatens cutting off Delhi’s power supply

News:

State-owned power generator NTPC Ltd has threatened to cut off the national capital’s power supply over alleged non-payment of dues by Anil Dhirubhai Ambani Group (ADAG)-owned power distribution companies BSES Rajdhani (BRPL) and BSES Yamuna (BYPL).

“In case, overdue payments are not immediately forthcoming, NTPC may be constrained to consider all options, including regulation of power supply, in the coming period,” the country’s largest electricity producer said. It added continued non-payments by Delhi Discoms would make it very difficult for NTPC to keep maintaining its reliable supplies in the ensuing peak summer season where the demand of Delhi is supposed to peak at 6,600 Megawatt as per DISCOM estimates.

When asked for comment, a BSES spokesperson said the two discoms are under huge financial stress due to non-liquidation of regulatory assets which are over Rs 16,000 crore as on March 2016. As compared to this, total overdues payable by BYPL to APCPL (a Joint Venture of NTPC, Delhi government and Haryana) is around Rs 239 crore, and this power is already being regulated for the last few months.

“BSES discoms are in regular touch with APCPL to get the regulation lifted, as also making concerted efforts to address the situation and clear pending dues in a just and equitable manner,” the BSES spokesperson said.

He added the payment of dues to power utilities by BSES discoms is sub judice in the Supreme Court and the judgement in the matter is reserved since February 2015. “We are awaiting the Supreme Court judgement, which will clear the path for recovery or liquidation of regulatory assets. Consumers will continue to get reliable power supply,” he said.

NTPC is the major supplier of power to the National Capital Territory (NCT) of Delhi which has a total allocation of 3,930 Mw from NTPC including 693 Mw from APCPL Jhajjar . Of this allocation, more than 2,000 Mw is allocated to the two BSES Discoms. NTPC supplies electricity worth around Rs 300 Crore to the BSES discoms every month.

As per the terms of the Power Purchase Agreement (PPA) between NTPC and BSES discoms, the payments of energy bills are to be made within a calendar month. NTPC, however, alleges the two discoms (particularly BYPL) are not making these payments as per the agreed provisions of the Power Purchase Agreement.

“It may be recalled that for a similar situation, NTPC had issued a notice for regulation of power to these discoms in May 2016. Subsequently, after discussions with the discoms and assurance of liquidation of outstanding dues by this financial year, NTPC had kept this regulation notice in abeyance. However, despite a lapse of almost 10 months, there is an outstanding amount of Rs 239 crore overdue for payment from BYPL,” NTPC said.

The company claims that fuel alone accounts for around 70 per cent of its generation cost and that has already been paid to fuel suppliers like Coal India (CIL). NTPC had issued a similar threat in May last year saying it would have to suspend supplies for the BSES discoms if they fail to cough up Rs 1,300 dues. The generator had then issued notices to the discoms on non-payment of dues.

My View:

Most of the Private DISCOM's situation in India is in dismal state. In this case according to PPA the payment must be settled within a month,but due to financial problem of BSES they are not able to pay the dues. Companies like BSES should analyse first the situation then they should finalize the power purchase agreement with any Generators.

States free to give coal to efficient private power producers

News:


The power ministry on Tuesday framed rules giving state governments the freedom to get power generated by the most efficient private companies in the state using the coal allocated to states by miners under a new system that replaces the earlier rigid allocation of coal to individual state-owned plants.

The rules framed in line with the cabinet decision of 4 May last year rationalising coal allocation, to allow states to invite power tariff bids from independent power producers at which they are willing to sell power using the coal that the state is willing to assign to them.

The landed cost of power from the private generation company including transmission charges has to be less than the variable generation cost of power from the state power generation unit, which the private player is seeking to replace, according to the rules released by the power ministry. Power tariff has two components—a fixed cost of the power plant and the variable or the energy cost.

The private power producer has to assess transmission infrastructure availability before making the bid. The state will check with the ministry of railways before assigning coal to the winning bidder whether transportation of the fuel to the private player’s plant was feasible.

The easing of the coal allocation rules is part of the government’s efforts to reduce power generation cost by utilising the fuel at the most efficient plant and enable distribution companies to buy more power.

On 21 December, coal and power minister Piyush Goyal had said that he had cleared the plan to allow state-owned and private companies to swap their allocations of coal so that power plants can source the fuel from the closest available location and improve power generation efficiency. The minister had also said then that eventually he would like such swap of coal to be allowed across sectors of the industry such as power, steel or cement.




My View:


The initiative by Government is quite good which will help to reduce the cost of electricity. But to come under the policy the rules are quite tough as stated in news. There should be some flexibility to private generation companies. 

Progress of green energy corridor very different on paper and on ground: Mercom Capital

My View:

The Government should take necessary step to promote green corridor. It will help to reduce transmission losses and improve the quality of power if renewable power travels through green corridor. There are various Power transmission companies which will be interested to invest in green corridor if the tenders come out in faster pace and the policies become more business friendly.


News:
The critical green energy corridor, which is important to evacuate renewable energy, is still far from reality and solar power project developers believe the current grid infrastructure is inadequate to handle the increased capacity, solar sector research firm Mercom Capital today said in a report.

“For a project that has already had its share of delays and is being touted as the cure-all for grid issues, the renewable energy sector is skeptical if it will get done in time to make an impact,” Mercom said.

The solar power sector is expected to add close to 9 Gigawatt capacity in 2017 as against 4 GW added in 2016 and this more than double capacity addition would require a better transmission infrastructure.

“The infrastructural development under the green energy corridor is slow; it is not at par with the pace of tenders coming out. Over the next three quarters, solar projects of approximately 9 GW are expected to be commissioned, but the grid is not ready to handle the power produced. The progress of green energy corridor on paper and on the ground is very different,” the report said.

Mercom said the government should provide compensation for projects on standby after they have been commissioned or developers will pay the price.

The project is under implementation in Andhra Pradesh, Gujarat, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, and Tamil Nadu. Once complete, the green energy corridor is expected to facilitate evacuation from solar parks and large-scale grid-connected solar and wind projects.

The report further said solar project developers across the country are struggling with evacuation and transmission issues which account for huge losses and contributes to increased project costs.




“Developers are concerned about solar park integration into the grid as the evacuation system and infrastructure is not yet ready. Due to inadequate transmission lines and grid infrastructure, planning for the next batch of auctions has yet to begin and developers don’t know where these projects will be located,” the report said.

It added that according to some developers, tenders are released in some states without consulting the state electricity regulatory commissions. When power purchase agreements go to regulatory commissions for approval they are getting held up because the SERC is citing a lack of transmission infrastructure.

The Power Grid Corporation of India is developing the inter-state transmission corridor and the state transmission utilities are responsible for setting up and strengthening the intra-state transmission infrastructure. The MNRE will be providing 40 per cent of project costs in the form of a grant. The PGCIL has estimated that the cost to develop the corridor comes to Rs 380 billion.

The green energy corridor is expected to boost the inter-state sale of renewable energy, and coupled with the waiver of Inter State Transmission System charges, renewable energy costs are forecast to come down enough to help states fulfill their renewable purchase obligations and meet energy demand.

The corridor is expected to address certain limitations of renewable energy like intermittency and variation in power quality. Under the project, renewable energy management centres are being set up to predict renewable power generation and demand. These centres will also be interconnected with load dispatch centers to gather real-time information, as well as monitor and control capacity addition, according to CEA.

The GEC is also expected to address the curtailment of renewable energy in the future, Mercom Capital said.

RInfra exits IEX, sells 4% stake for Rs 103 cr to an FPI

My View:

IEX being No. 1 power exchange in India provides competitive price of electricity. Rinfra sold it's stake in IEX by 10 times higher than the purchase price. IEX has evolved the Power Market and now contributes almost 9%. Rinfra on other side sold its stake to reduce its debt burden.




News:
Reliance Infrastructure has sold its entire 4.12 % stake in India Energy Exchange (IEX) for Rs 103 crore, about 10 times higher than the purchase value, to a foreign portfolio investor, sources said.

IEX is the country's largest power exchange. This comes after Jindal Steel & Power sold 4.12 % in IEX to Motilal Oswal PE in March and global investment firm Bessemer selling its stake in two separate deals, to TVS Capital and the Dalmia group.

IEX has nine % of the total power market and R-Infra was a primary investor. It bought the 4.12 % stake in 2007 for Rs 1.25 crore.

It had said discussions were in an advanced stage to monetise its entire road portfolio.

The company is reportedly in talks with Canada-based Brookfield Asset Management to sell its entire portfolio in that segment. This is part of the company's strategy to restructure its heavy debt by exiting from capital-intensive businesses.

R-Infra is also present across the value chain of power businesses i.e. generation, transmission, distribution and power trading. It also provides engineering, procurement and construction services for developing power and road projects.

It reported a 33.8 % rise in consolidated net profit at Rs 570 crore for the quarter ended September, from one of Rs 426 crore in the same period a year before.

The company is targeting projects worth Rs 2 lakh crore planned by the government across infra segments, it had earlier said.

R-Infra's Mumbai Metro (Rail) earned a revenue of Rs 61 crore in the September quarter, an increase of 13 % over the same period a year before.

Haryana discom reports Rs201 crore profit in first half of 2016

My View:

It can be said that this is the result which Power ministry was expecting from UDAY scheme. Dakshin Haryana Bijli Vitaran Nigam Ltd has done significant work to come out of loss making DISCOM to profitable DISCOM. However the Uttar Haryana Bijli Vitaran Nigam Ltd has been incurring losses. Lets see whether the states which have accepted UDAY can bring some good news like this in future.




News:

One of the two state-owned power distribution companies in Haryana, Dakshin Haryana Bijli Vitaran Nigam Ltd, has become the first power utility to turn around under rescue scheme Ujjwal Discom Assurance Yojna (UDAY), rolled out in November 2015, raising hopes that fortunes of the entire electricity value chain including of coal mining and power generation will benefit from better electricity demand in coming days.

An analysis of the financial health of the utility released by the power ministry on Thursday said the company has reported “remarkable achievement of turnaround” from a loss of Rs479 crore in 2015-16 to a profit of Rs201.35 crore in the first half of 2016-17.

Turnaround of distressed state power distribution firms is crucial for the health of other segments of the electricity value chain which depends on power offtake. Better power demand from distribution firms will help generation companies, especially thermal power plants, to step up their capacity utilisation which is currently at about 60%. Coal demand, too has been sluggish in the past as loss making distribution firms were not able to cater to the actual energy demand.

Monthly coal production recovered from a contraction and grew for the first time in three months in November, indicating improving power demand during winter.

As per data from state-owned monopoly Coal India Ltd (CIL), monthly production grew 5.3% to 50 million tonnes in November from a year ago, after a bearish trend in mining since August when output had shrunk by 10%.

The power ministry analysis said that the Haryana utility still has to improve upon its performance in meeting the target of lowering losses on account of billing inefficiency and power theft.

The UDAY scheme rolled out last November gave performance and efficiency improvement targets to loss making utilities in order to narrow their gap between cost of power supply and the price realised from consumers. Their accumulated debt up to September 2015 was allowed to be taken over by respective state governments to make available low cost credit.

Haryana’s second distribution firm, Uttar Haryana Bijli Vitaran Nigam Ltd, however, continued to make losses in the first half of this year. It reported a loss of Rs1,233 crore in the first half against the loss of Rs336 crore in the full year of 2015-16, said the analysis.

Demonetisation is a positive event for power sector: Mercom Capital

My View:

Demonetisation is helping a lot to power distribution companies as the unpaid bills are getting paid at faster pace.

Also by increase in liquidity of banks will help to reduce the lending rates to the power sector. With these Demonetisation it will improve the situation in sector by more foreign investment.

News:

Demonetisation has turned out to be a positive event for the power sector with distribution companies recovering pending power bills from their customers, Mercom Capital Group said today.

Quoting a number of discoms and government officials on the issue, the consulting firm also said that the power sector could also benefit from relaxed lending and lower rates, among other things.

"Demonetisation has been chaotic and changing the way the Indian economy functions...banks suddenly flush with funds, all of which could relax lending to the power sector and potentially bring down interest rates," it said.

The government has mandated that the old notes of Rs 500 and Rs 1,000 denominations can be used to pay pending utility bills which will help discoms due to their huge backlog of unpaid bills.

Discoms are expecting a substantial influx of payments prior to the December 31 deadline after which these currency notes will become invalid. For cash-strapped discoms this is unexpected good news, it said.

It quoted an official at Maharashtra State Electricity Distribution Company Ltd as saying, "since the announcement of demonetisation, discoms in the state have seen payments of old bills cross Rs 1 billion ($ 14.74 million) within a week. The signs are positive as this will financially empower the discoms".

Due to the amnesty of taxes and penalties provided to black money holders (unaccounted currency), the government will have a huge influx of money that can to be allocated for infrastructural development and funding new projects, stated an official at Transmission Corporation of Telangana Ltd (TCTL), it said.

"India is largely a cash economy so in the short-term demonetisation is going to hurt installations as small developers will find it tough to pay for land acquisition, but in the long-term it will be beneficial as dicoms will get paid, lending rates will fall and foreign investment will increase in the face of a falling rupee and rising dollar," Mercom said quoting an official at the Ministry of New and Renewable Energy.

An official at Bihar State Power Holding Co Ltd informed the consultant that there are many ambitious projects like the Green Energy Transmission Corridor that require large investments and with consumers repaying pending bills and government taxing defaulters, nodal agencies foresee better fund allotment from the government.

It said officials at Jharkhand Renewable Energy Development Agency, Odisha Power Transmission Corp Ltd (OPTCL) and Power Management Company, Madhya Pradesh, all concurred due to demonetisation, peace is being restored in regions like Jammu & Kashmir and Jharkhand, Madhya Pradesh, Odisha, Andhra Pradesh [insurgency belt] as insurgents find it hard to fund their operations.

This will uplift the morale of developers in these regions and installations will pick up.

Tamil Nadu Generation and Distribution Corporation received tepid response for its 500 MW tender due to demonetisation, but it was an exception said an official at MNRE.

An official at Uttar Pradesh Power Transmission Corporation (UPTCL) stated that the state has been a classic example for unpaid electricity bills. Now the Discoms can get some relief with consumers using their stashed cash to pay pending bills as well as advance payment for future month's electricity bills in some cases.

A slew of government funded projects and subsidies are expected as cash deposits increase in banks, an official at the Rajasthan Renewable Energy Corporation said.

Demonetisation, Mercom said, is turning out to be an overall positive event for the renewable sector as well.

"This combined with the rapid decline in solar component costs is making a lot of low questionable bids feasible. However, we have to wait and see how government agencies handle the situation - especially payment issues - going forward," Mercom Capital Group CEO Raj Prabhu said.

Around 25,000 Megawatt of thermal power capacity running without long term pacts

My View:

The Discom's are preferring to buy cheaper power from exchanges or with short term bilateral contract. It is really hurting the generators as they are not able to get assurance related to power purchase. It would create problems in generation segment.
















News:

Thermal power projects of more than 25,000 Megawatt (MW) capacity are operating without long term power purchase agreements (LTPPA's) with state owned discoms, according to ICRA.

State owned discoms have created a trend over the past two to three years, of buying power from trading markets for a cheaper price when compared to signing fixed rate PPA's with thermal power plants, the reaserch agency added in its recent report.

This decision by state owned distributors has given them the freedom to buy power at cheaper rates from exchanges and also create a highly competitive bidding environment to lower tariffs even further.

Discoms are expected to sign LTPPA's in the future, with the implementation of UDAY across the country and improvement of discoms financial health.

Only four states namely Andhra Pradesh, Kerala, Telangana and Uttar Pradesh have invited bids to sign long term PPAs for an aggregate bid capacity of 7.5 GW.

Out of these, PPAs have been signed with utilities in Kerala (865 MW) and Telangana (500 MW) while discoms in Andhra Pradesh (2,400 MW) and Uttar Pradesh (3,800 MW) are yet to sign the PPAs, ICRA added in its report.

The 25 GW in the private IPP segment remains exposed to price and volume risks in the short term trading market, given the absence of LT PPA bids. This, in turn, has also impacted the ability of such IPPs to secure cheaper source of domestic coal under the fuel supply agreements with Coal India Limited (CIL) and its subsidiaries, given that the availability of such coal to IPPs is subject to tie-up of their capacity under long-term PPAs.

Uttar Pradesh Power Corporation Limited (UPPCL) in its recent tender for supply of 3,800 MW under design, build, finance, own and operate (DBFOO – case I) route over a period 15 years, has received bids in range of Rs 3.9 - 5.5 per nit from IPPs, according to industry sources. UPPCL has received bids totaling 6,652 MW from 18 power companies against requirement of 3,800 MW for supply starting from October 2016.

The power requirement was divided into three parts, based on fuel source, with 2,800 MW based on domestic coal linkage, 500 MW based on imported coal and 500 MW based on captive coal mine.

The lowest tariff quoted for supply using domestic linkage coal is at Rs 3.94 per unit, using coal from captive mines stood at Rs. 3.95 per unit and using imported coal stood at Rs. 4.06 per unit.

These tariffs are lower than the L1 tariff discovered through case-I bidding by the discoms of Andhra Pradesh at Rs 4.27 per unit and Kerala at Rs 4.29 per unit in the recent past, signifying increasing competition amongst thermal IPPs to secure long-term PPAs.

The heightened competition can be partly attributed to the high off-take risks for the power generation segment, wherein recently commissioned and under-construction capacity of about 24-25 GW in the private IPP segment does not have long term PPAs.

This is on account of the weak financial profile of the state owned discoms, which has constrained signing of long-term PPAs by the discoms. Also, the upward trend in quoted tariffs by IPPs since 2012 also led to slow progress in signing of long term PPAs by discoms.

Discoms have been reluctant to sign long-term PPAs at the higher tariffs offered by developers, despite the continuing power shortages in some states. Instead, discoms in a few states are more inclined to procure power on a short / medium term basis.

 

Spot power price at Indian energy exchange hits 6-month high in Oct at Rs 2.46

My View:

The price is quite competitive in IEX. The MCP of 2.46 and ACP of about 2.75 is quite cheaper. If I will compare with renewable energy pricing, still there is quite huge gap. The open access regulation must also be strengthen in few state to develop power market in full fledged way. IEX being India's no. 1 Power Exchange is facilitating and bringing competitiveness in Power Sector. 










 


News:

The average spot power price at the Indian Energy Exchange touched a six-month high of Rs 2.46 in October due to higher demand, particularly from industrial units and southern states.

"The spot price of electricity has been on a slightly higher side in October also due to high demand, particularly from industrial units and southern states," an IEX official told .

The average power price was recorded at Rs 2.91 per unit in April this year. It was on the lower side thereafter at Rs 2.32, Rs 2.31, Rs 2.16 and Rs 2.17 in May, June, July and August, respectively.

It picked up again to Rs 2.43 per unit in September this year. The spot power price was the highest in six months at Rs 2.46 per unit in October.

"October saw attractive and competitive price in IEX Spot Power Market with average Market Clearing Price (MCP) at Rs 2.46 per unit, 19 per cent less than MCP of Rs 3.03 per unit in the same month last year. The average Area Clearing Prices (ACP) ranged from Rs 2.40 to Rs 2.75 per unit across regions," IEX said in statement.

The market remained liquid with average daily sell bids of 235 MUs (million units) and purchase bids of 139 MUs. During October this year, 3,609 MUs were traded which on a daily average basis is 116 MUs, about 10 per cent increase over 105 MUs traded in the same month last year, it said.

The open access consumers (industrial units) accounted for almost 60 per cent of the cleared volume, mainly due to competitive price.

However, the congestion on the inter-state transmission network increased, affecting import of power in the Southern and Northern regions.

About 3.6 MUs were lost on a daily average basis. The Southern corridor was congested about 42 per cent of the time and the congestion was mainly due to increase in demand for power in South.

Congestion in the Northern corridor was experienced for about 16 per cent of the time during the month, it said, adding that the Term-Ahead Market remained vibrant and over 93 MUs were traded -- about 220 per cent increase over 29 MUs traded last month -- owing to increase in demand due to the festive season.

Uniform rate prevailed for three days October 7, 8 and 9 -- in line with the One Nation, One Grid and One Price motto of the Government.

Inox Wind bags 40 MW power project from Malpani Group

My View:

Inox wind is continuously getting the projects which is good for the firm. It will help the company to get more amount of projects. Wind Power as a segment is facing slowdown in recent years. Lets hope the policies and regulation help the sector to have faster pace. The target by the government is 60 GW by 2022 in India.

News:

Noida based Inox Wind today announced it has won repeat orders for two 20 MW wind power projects in Gujarat.

Inox Wind will provide end-to-end solutions from development and construction to commissioning as part of the turnkey project for Malpani Group, according to the company statement sent to Bombay Stock Exchange (BSE) .

"Inox Wind Ltd has bagged repeat orders from D J Malpani for two wind power projects of 20 MW each in the state of Gujarat. The two orders are scheduled to be commissioned by March 2017," added the company statement.

Inox has also been contracted to undertake operations and maintenance services of the projects for a multi-year period, post commissioning.

The orders involves supply and installation of 20 units of Inox Wind's 113 meter rotor diameter Wind Turbine Generator.

Malpani Group is a diversified business house with presence in renewable energy, FMCG products and real estate.

 

About NLDC

The main functions assigned to NLDC are:

• Supervision over the Regional Load Despatch Centres.

• Scheduling and dispatch of electricity over the inter-regional links in accordance with grid standards specified by the authority and grid code specified by Central Commission in coordination with Regional Load Despatch Centres.

• Coordination with Regional Load Despatch Centres for achieving maximum economy and efficiency in the operation of National Grid.

• Monitoring of operations and grid security of the National Grid.

• Supervision and control over the inter-regional links as may be required for ensuring stability of the power system under its control.

• Coordination with Regional Power Committees for regional outage schedule in the national perspective to ensure optimal utilization of power resources.

• Coordination with Regional Load Despatch Centres for the energy accounting of inter-regional exchange of power.

• Coordination for restoration of synchronous operation of national grid with Regional Load Despatch Centres.

• Coordination for trans-national exchange of power.

• Providing Operational feedback for national grid planning to the Authority and Central Transmission Utility. 

• Levy and collection of such fee and charges from the generating companies or licensees involved in the power system, as may be specified by the Central Commission.

• Dissemination of information relating to operations of transmission system in accordance with directions or regulations issued by Central Government from time to time.

Wind turbines firm Senvion says big merger deal not in prospect

German wind turbines maker Senvion is not expecting to be part of any large-scale consolidation within the industry, preferring to focus on internal growth and possibly some further small acquisitions, its chief executive said on Wednesday.

Some 84 percent of Senvion's sales come from onshore wind turbines. It is also the world's third-largest maker of offshore wind turbines, behind Siemens and MHI Vestas, a joint venture between Japan's Mitsubishi Heavy Industries and Denmark's Vestas.

Aiming to cut costs by increasing global scale, Senvion's local rival Nordex earlier this year took over the wind turbines business of Spain's Acciona, while Siemens and Gamesa are forging the industry's largest player.

"Big tie-ups need to pay off. At the moment, I don't see any product offering that would cause us to take such a step," Juergen Geissinger, Senvion's chief executive since last December, told Reuters at a wind power industry conference.

"Smaller acquisitions, like the one we recently did in India, are always on our mind though."

Senvion, which listed its shares in March, last month announced the purchase of the Indian wind power business Kenersys India Private Ltd, including a production facility of about 250 megawatts (MW), to take it into one of the industry's most promising markets.

"The Indian market has an annual volume of 4-5 gigawatts (GW). That makes it bigger than Germany," said Geissinger, who was chief executive of German car parts maker Schaeffler until 2013.

He said Senvion also hoped to benefit from an expected surge in orders in the United States in the fourth quarter, as wind farm developers seek to take advantage of key tax credits before they are phased out next year.

Senvion already has 1 GW of installed capacity in the United States but no local production. "Whether we will set up local production obviously depends on order backlog. That starts to make sense from about 1 GW."

Geissinger also reaffirmed Senvion's forecast for sales this year of 2.25-2.3 billion euros ($2.52-2.57 billion) and an adjusted margin on earnings before interest, tax, depreciation and amortisation of about 9.5 percent.


My View:
Senvion being one of the top company in wind sector. They are not planning now to be more agressive in acquisition. I think they are learning from big firm like sunedision which failed miserably. Wind segment in India is now at backfoot as the new story is now solar. However still in renewable energy in India,the wind power sttill holds first place.

Solar projects in Maharashtra receive Rs 4.42 per unit bid

The proposed 450 mw grid connected solar projects in Maharashtra under National Solar Mission has received lowest bid of Rs 4.42 per unit and nine other companies submitted bids of Rs 4.43 per unit.

Lowest bidder was Vijaya Printing Press Pvt Ltd which offered to build a 10 mw solar plant at a tariff of Rs 4.42 per unit. This was followed by Solar Edge Power and Energy Pvt Ltd (130 mw). Others were Light Source Renewable Energy Holdings, Neel Metal Products Ltd (100 mw) and Canadian Solar Energy Holding (80 mw).

Jasmeet Khurana, Associate Director Consulting said: "The Maharashtra bid goes to show that new investor interest exists even at current tariff levels. UK based Lightsource and China based Canadian Solar are known to have been looking at opportunities in India. They have finally taken a plunge. Due to a big swell in new allocations over the past 6-8 months, many of the prominent developers are reaching investment and operational limits. This should open up avenues for new developers and investors waiting on the sidelines."

This was under Part-B of the National Solar Mission Phase-II which Solar Energy Corporation of India (SECI) is implementing along with a large number of schemes under the National Solar Mission (JNNSM) including this one in Maharashtra.

This projects are also eligible for viability gap funding (VGF) although the lowest bid of Rs 4.42 did not ask for any such funding while the rest opted for viability funding of Rs 1.46 lakh per megawatt on the lower side to Rs 2.48 lakh megawatt on the higher side. VGF support is a Government Grant that is provided by SECI upon successful commissioning of the plant.

Under these schemes, solar power projects are set up by private developers on Build-Own-Operate (BOO) basis, either in government designated solar power parks or in any other location of the developer's choice. Power purchase agreements (PPA) are signed with SECI for 25 years.

However, Khurnana said that the underlying off-taker in the case of this bid (Maharashtra) is more bankable that some of the other SECI bids (in other states) and that does have an impact on risk perception and tariffs.

"This is aided by a rapid reduction in equipment costs due to the ongoing global supply glut. Maharashtra has the highest power consumption amongst all states in the country but it lags far behind many states in terms of adoption of solar power. The state will need to play an important role in future growth of the utility scale solar market in the country," he said.

My View:

The main factor is bankability of offtaker. If the offtaker is in good position, so investor will also be happy to bid for the projects. PPA of 25 years period is quite huge in perspective of solar power.

Nearly half the country’s coal fired power capacity remains unutilised this monsoon season

Nearly half the country's coal fired power capacity have remained unutilised this monsoon season as hydel plants generated close to 22,000 mw of cheap power every day in the last one month.

At this level of capacity utilisation, new thermal power plants can hardly recover their interest cost needed to service bank debts, while older ones struggle to make profits. "If capacity utilisation of plants fall further, power generators may be forced to back down a large number of units and a lot more power stations may come up for sale under stressed asset category," said a senior analyst who requested not to be named.

According to analysts, 70% of most thermal power projects' costs are financed through long-term loans. As a result, interest cost components are one of the largest expenditures in any power stations' books.

During the planning phase project developers assume that the plant can run at least at 75% capacity utilisation and provide for decent returns. However, if utilisation dwindles to around 50% plants are in for trouble. Expenditures far outstrip income at this level.

Data released by the government shows thermal power plants totaling 87,000 megawatts in Western India ran at 49% of their full capacity in July. Nationally, 46% of 211 gigawatt of coal-fueled power plants' capacities remained unutilised during the month.

Between July this year and last, South India's total installed capacity increased nearly 21% to 42,000 megawatt, but capacity utilisation fell 11% during the same period to 65% last month.

With a decent monsoon leading to hydel plants generating and injecting close to 22,000 mw of cheap power every day demand for coal fueled electricity has declined. Also, power demand has not been growing at the pace it was anticipated, leading to a mismatch between demand growth and capacity addition.

My View:

The coal fired plant will surely work with more efficiency in winter and summer session. However they can also try and sell in power exchanges. With cheap hydro and increasing renewable energy is possessing threat to thermal power plants.

India to get cross-border electricity trade policy soon

India has taken the lead in integrating the electricity grids of countries in South Asia, as in the case of European and South African nations.


The government is finalising a draft cross-border electricity trade policy to enable Indian producers seamlessly exchange power with neighbouring nations.

Once finalised, it will be sent to the Union Cabinet for approval.

The move follows a meeting of Saarc energy ministers in September 2014 that decided to set up a cross-border transmission interconnection for the member countries.

As per the draft policy, Indian developers of overseas projects will require a one-time single-window clearance for trade of electricity between Saarc nations, sources said. "The policy will immediately enable domestic firms in setting up power plants in Nepal and Bhutan to sell electricity in India.

Likewise, it will enable export of excess power from India," a senior government official said. Power plants of Tata Power, GMR Energy and Satluj Jal Vidyut Nigam totaling 5,000 mw are under construction in neighbouring countries.

India expects to be power surplus this year. The policy will help Indian power plants sell excess generation to other Saarc nations. It will enable the Ministry of Power to allow spot trade of electricity when it deems fit. But cross-border spot trade will have to wait as the buyers and sellers are not known.

As per the policy, the countries will set up enabling power transmission lines within their borders, while the common infrastructure will be set up in joint ventures. Companies getting into bilateral power contracts will have to lay dedicated lines by themselves.

My View:

Cross Border trading surely a great step towards improving the scenario of power sector in south asian countries. It will help the surplus countries like Bhutan to sell electricity at competitive price and the deficit countries like Bangladesh to buy. This will also help the indian generators who installed there power plants in neighbouring countries. Lets hope the dream of cross border trading become reality in coming days.

Puducherry to derive Rs 378 crore net benefit through UDAY

The union territory of Puducherry has signed a memorandum of understanding with the centre under Ujwal DISCOM Assurance Yojana for operational turnaround of the union territory's electricity department.

"An overall net benefit of approximately Rs 378 crore would accrue to Puducherry by opting to participate in UDAY, by way of cheaper funds, reduction in AT&C and transmission losses and interventions in energy efficiency during turnaround," the power ministry said in a statement.

With this a total of 16 states and union territories have joined the scheme with the combined debt of around Rs 2.51 lakh crore that would be restructured till 30th September, 2015.

UDAY will help Puducherry improve its electricity department's operational efficiency. It will be achieved through compulsory metering of distribution transformers, consumer indexing and geographical image satellite mapping for losses, modernisation and upgradation of transformers, meters, introduction of smart metering for high-end consumers and feeder audit.

Aggregate technical and commercial (AT&C) losses and transmission losses would be brought down, besides eliminating the gap between cost of power supply and realisation to 12% and 0.95% respectively. Reduction is losses are likely to bring additional revenue of around Rs 165 crore during the period of turnaround.

While efforts will be made by the electricity department of Puducherry to improve operational efficiency, and thereby reduce cost of power supply, the centre will also provide incentives for improving power infrastructure for further lowering cost of power.

Puducherry shall also be supported through additional coal at notified prices, low cost power from NTPC and other CPSUs. Other benefits such as coal swapping, coal rationalization, correction in coal grade slippage, availability of 100% washed coal would help the state further reduce cost of power. Puducherry is expected to gain around Rs 135 crore due to these coal reforms.

Demand side interventions in UDAY such as usage of energy-efficient LED bulbs, agricultural pumps, fans & air-conditioners and efficient industrial equipment would help in reducing peak load, flatten load curve and thus help in reducing energy consumption in Puducherry. The gain is expected to be around Rs 72 crore.

Further, with improved efficiency, the electricity department would be in a better position to borrow funds at cheaper rates for power infrastructure development and improvement.

Reduced levels of transmission and AT&C losses would mean lesser cost per unit of electricity to consumers. Further, an operationally healthy electricity department would be in a position to supply more power. The scheme would allow speedy availability of power to around 7948 households in union territory that are still without power.


Experts Comment:


UDAY is helping Distribution company as a whole to reduce there debt and improve efficiency. The main reason of increasing loss by discom is inadequate metering,improper collection efficiency,high transmission losses and the list goes on. Thus the effect of UDAY will be seen after 3-4 years in Indian Power Sector. Let's hope for best such that it can help distribution companies to grow at faster pace.

Rajasthan is most attractive solar project destination in India, proves NTPC auction

Rajasthan confirmed its position as the most attractive solar project destination in the country with the latest NTPC auction in the desert state, which saw the winning bids falling to Rs 4.35-4.36 per kwH.


Of the 130 MW on offer, 50 MW was won by Shapoorji Pallonji Infrastructure Capital and 60 MW by Mahindra Susten, both offering to sell electricity produced from their projects at an identical Rs 4.35 per kwH. The remaining 20 MW was won by Prayatna Developers of the Adani Group at Rs 4.36 per kwH.

In these reverse auctions, the developer that offers to sell electricity at the lowest price wins. The latest wining prices are just a shade over the lowest ever offered by a solar project developer in India — that, too, in Rajasthan. Fortum Finnsurya bid Rs 4.34 per kwH to win a 70 MW project at the last NTPC auction in Rajasthan in January.

In that auction, however, land for the project was ensured at the Bhadla Solar Park in Jodhpur district, which has the highest solar radiation in the country. In the current case, no land is being provided. Developers will have to locate and develop the land themselves — a condition which may have contributed to keeping the tariff marginally higher.

Solar tariffs fell steeply in 2015, but appeared to have bottomed out after the Bhadla Solar Park auction. In at least five auctions since then — in Maharashtra, Gujarat, Uttar Pradesh, Andhra Pradesh and Chhattisgarh — the winning tariff remained stuck at the reserve price of Rs 4.43 per kwH (barring one bid of Rs 4.41 per kwH in Maharashtra). In other auctions, the price was higher.

Fears were expressed that aggressive bidding had pushed solar tariffs too low and a correction was likely.


Expert's View:


It is obvious that Rajasthan has been one of the most attractive for solar project due to its high solar irradiance and barren lands. With such tariff of solar power, I can assume that within 5 years down the line solar power would become most cheapest power source in India. However there are some concerns regarding investmnet but it will be overcome with proper policies.

SunEdison likely sell Andhra wind power plant to Sitec RE

 Renewable energy giant SunEdison, which filed for protection from creditors in the US in late April, is close to an agreement with domestic wind energy major Sitec RE to sell a 24 Mw wind power plant in Andhra Pradesh. This is the first asset sale by SunEdison in India since the bankruptcy threat arose.

"The details are being worked out and the deal will probably be closed in a week or ten days," said CD Singh, chief operating officer at Sitec RE, confirming the deal.

While Singh was unwilling to discuss the details, a person close to the matter revealed the location and size of the plant being sold. Financial terms weren't available.

SunEdison Asia-Pacific President Pashupathy Gopalan didn't respond to phone calls, text messages and an email.

The project has room for another 50 Mw and is likely to be expanded by Sitec RE, said the person who spoke to ET.

SunEdison had begun searching for buyers or investors in its Indian projects even before the bankruptcy crisis, brought on mainly because of its ambitious growth efforts through debt-funded acquisitions.

Apart from this Andhra Pradesh plant, SunEdison owns wind assets of another 101.6 Mw, which it acquired in May 2015 from Spanish renewable energy player Fersa Energia Renovables for $39.2 million. This consists of three wind farms, of capacities 31.2 Mw, 50.4 Mw and 20 Mw, the first two in Rajasthan and the third in Karnataka.

The bulk of SunEdison's India portfolio is solar. It has 410 Mw of commissioned solar power and another 1,000 Mw under construction across several states. The company has been trying to find buyers or investors for its solar projects, too, but without success so far. Talks have been held with ReNew Power, Adani Green Energy and other leading developers.

Sitec RE, a purely wind-energy company, is part of the Sitec Group, an engineering services company set up by Malvinder Singh.

Experts Comment:

Sun Edision is likely to move out from India which will affect the growth of renewable energy in India. Other renewable energy companies should learn from such mistakes by one of the premiere company in solar segment.

Presently the companies bid aggressively which affects the viability of the project.

The companies should lo0ok for funding before taking up the project.

Power transmission losses rise in Tamil Nadu

The Tamil Nadu Electricity Board's (TNEB) transmission and distribution losses have gone northward over the past four years, a reply to an RTI query revealed.

The unwelcome losses have taken place even as the demand for power in the state has hit an all-time high of 15,000MW.

In response to an RTI filed by OnlineRTI.com, TNEB said it lost 17,538.83 million units (MU) in 2011-12 and 20,966.74MU in 2014-15. The transmission losses were mainly on account of leaks and inefficient transmission and distribution of power.

Though TNEB has one of the lowest transmission losses in the country it still loses crores of rupees in the process. According to the RTI reply, the board lost a total of 79,037.76MU of power in transmission since 2011.

TNEB's debt by the 2015-16 fiscal was around Rs 80,000 crore. A TNEB official said transmission losses are minimal when compared to total power generated.

"For instance, TNEB's energy generation has increased from 75,818MU in 2011-12 to 94,128 MU in 2014-15 so there has definitely been a rise in transmission losses compared to the previous years, which is not unusual," he said.

The RTI reply, however, said there is a shortfall between energy generated and energy sold by TNEB. This is probably because more than 20 lakh farm power connections across the state do not have meters and there are innumerable instances of power theft by households, commercial establishments and political parties.

Another TNEB official said the board has added more substations to reduce transmission losses.

"We are also strengthening distribution lines and replacement of defective meters," he said. "To reduce the transmission losses, we have commissioned 252 substations across the state since 2011."

There are more than 1,300 substations across the state and in Chennai there 50-plus. Officials say space constraints do not allow them to set up additional substations in the city. A 230KV substation, for instance, requires a 10-acre site, an 110KV substation, a 5-acre site, and a 33 KV substation, a 2-acre site.

S Gandhi, of the Power Engineers Society of TN, says national average of transmission and distribution losses in the country is 26%. "Developed countries have reduced losses to less than 10%. TNEB has not done much to reduce the transmission and distribution losses."

Experts Comment:

As we know that TN is still not involved in UDAY scheme.The govt.of TN should take steps to reduce such losses. The discom of TN has huge debt which should be minimized.

Delhi's power demand rises to 6044 MW, a new record

Delhi's power demand today broke all previous records, breaching the 6,000 MW mark for the first time, even as residents across several areas of the megapolis sweated out owing to outages in the midst of a tormenting heat wave.

The State Load Despatch Centre recorded the maximum power load of 6,044 MW at 3.36 PM, earlier at 2.34 PM the electricity demand peaked at 6,011 MW. As compared to last year, the rise totals to an increase of over 20 per cent.

The previous record was logged on July 11, 2014 when consumption had touched 5,925 MW. Authorities urged residents to stop using non-important power guzzling appliances during peak hours.

The state-run Delhi Transco Limited (DTL) said demand of power has gone unpredictably high in the last few days and stated that non payment of dues by BRPL and BYPL was hampering operations and maintenance activities.

People took to social media in venting out their frustration as various areas of the city, especially its western, northern and eastern parts, suffered power cuts ranging from one to five hours.

Due to a snag with DTL's Bamnauli-Pappakalan 220 KV transmission line for a couple of hours, power supply in parts of West Delhi, including Dwarka and Uttam Nagar was impacted, power officials said.

Although DTL put the onus on the discoms saying it is getting its legitimate dues (over Rs 2,000 crores) which have been duly approved by Delhi Electricity Regulatory Commission.

The other areas that suffered outages include Khajuri Khas, Sangam Vihar, Najafgarh and Nizamuddin among others.

"I am at Dwarka where there is a 2 hour power cut daily. Sir please save us from power cuts every night. Power is a basic requirement," Shashwat Sharma, a Dwarka resident tweeted tagging Chief Minister Arvind Kejriwal.

Akhil Saroch, a resident of South Delhi's Dakshinpuri said there was a blackout for around three hours.

Officials said that the demand may go up further in July when coolers will be rendered ineffective in the wake of rising humidity levels and air-conditioners will be switched on across houses and establishments.

"Another important point for outages is that due to extreme heat and power demand round the clock for the past few days, electricity network is not getting sufficient time to cool down. This can stress the network and at times, increase faults," a discom official said.

Experts Comment:

This is the situation of capital of India. The debt of BSES and rising heat are the main reason of such outages.

The Government should plan in such a way that in future such condition doesn't arise.

DISCOM’s in India

Distribution is a critical link in power sector. The distribution segment of India is in bleak condition. There is a huge pile of losses in this segment. Mostly in India there are majorly state discoms. Private discoms are still meager in number as compare with public discoms. The main reason of discoms inefficiency is high AT&C losses. In India there are approximately 23.5% of AT&C losses. The gap between cost of supply and the revenue is increasing i.e. cost is higher than revenue .AT&C losses is increasing due to many technical and commercial reasons.

In technical part, there are not much of investments in replacing old conductors, distribution transformers, etc. Commercial losses are due to unmetering, power theft, etc. Power theft is a big issue in power sector. To curb this issue government initiated many programs but it was not successful in many parts of India. So, the issue is big but it can be solved. Distribution franchisee is one of the solutions for improving the situation. 

Distribution franchisee is a PPP(Public private partnership) model. In this distribution licensee will give part of its work to any private firm to improve the efficiency of the area. There are different models of distribution franchisee in which Input based franchisee model is quite common. The ideal example of distribution franchisee is Bhiwandi in Maharasthra. In Bhiwandi the AT&C losses were about 60% before giving it to Torrent Power Limited( Distribution Franchisee).

After 3 years of completion of TPL in bhiwandi the losses came below 20%. In India 250 towns are selected for Distribution franchisee. However there are some failures like Nagpur where the franchisee was not able to pay the money to distribution licensee. Recently amendments in electricity act 2003 came into talk which is still under progress. In amendments there is a talk about segregation of carriage and content in distribution. If this amendment will pass, there will be a carriage part which is natural monopoly and content part in which lot of competition will come. Due to this factor competition will arise and efficiency of distribution segment will increase. 

IT is playing pivotal role in distribution segment. Call centers, smart meters, SCADA are some of the initiatives which are playing major role. There are many private distribution licensees such as reliance Infra, Tata taking part in major cities of India. NDPL in Delhi proved that private licensee can also gain profit in distribution segment. It’s a saying that “Nothing Is Impossible”. There are many success stories from which each and every distribution licensee should take lessons. Innovative ideas in distribution segment can add helping hand to the cash starved utilities. I read one article in which it was written that distribution sector in India is like a leaking bucket. Government should concentrate more on distribution sector. The allocation of funds to distribution sector is quite less as compare to generation and transmission sector. In 2015-16 budget, government thought of adding 175 GW of renewable energy, 5 UMPP’s. In my point of view if you have to improve the power scenario of India then first agenda/target should be on distribution segment.

If you have any innovative ideas / suggestion please comment below.