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Powerinfo Weekly

Powerinfo Weekly Volume 1(9); 3 July – 9 July 2015
Powerinfo Weekly Volume 1(9); 3 July – 9 July 2015

Volume 1(9); 3 July – 9 July 2015

Powerinfo Weekly Volume 1(9); 3 July – 9 July 2015
Powerinfo Weekly Volume 1(9); 3 July – 9 July 2015
Powerinfo Weekly Volume 1(9); 3 July – 9 July 2015 The Economic Times Magazine; July 5,
Powerinfo Weekly Volume 1(9); 3 July – 9 July 2015 The Economic Times Magazine; July 5,

The Economic Times Magazine; July 5, 2015

PMO takes charge to revive investment cycle VIKAS DHOOT & SUGATA GHOSH New Delhi/Mumbai: Principal Secretary at the Prime Minister's Office (PMO) met bankers, project promoters, top ministry officials and chief secretaries of states to resolve hurdles delaying investments across sectors The PMO has taken charge of reviving the investment cycle and unravelling banks' chronic non- performing assets on account of investment plans worth lakhs of crores of rupees that have got entangled in red tape over the past few years. Over the past three days, Principal Secretary in the PMO Nripendra Misra has held hectic, virtually daylong parleys to arrive at a swift resolution of the hurdles delaying big-ticket investments across sectors. Stuck projects of companies like Tata Power, Avantha, Lanco, GMR and Essar Power, among others, were discussed. “Decision on as many as 22 projects were taken,” a person aware of the development, said. “There is a realisation at the highest level that the investment climate is still tepid and not much is moving on the ground in terms of developers commissioning fresh capacities or launching greenfield and brownfield projects,” said a top government official, adding that job creation would also remain subdued unless these projects are unshackled. The

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PMO is mining through the 410-odd stalled investment projects worth 19.5 lakh crore that have ‘sought and await’ an intervention from the project monitoring group in the cabinet secretariat. The group was set up by the UPA government in July 2013 to help negotiate hurdles holding up large investments. Officials from this group were present at these meetings. “This is a very focused and meaningful exercise where decisions are being taken with a clear roadmap outlined for each stalled project to be operationalised. When an issue is beyond the realm of possible solutions, it's being ruled out straight away rather than let it linger in sus-pense,“ said another official, who at tended one of these meetings in the PMO this week. While state chief secretaries and line ministries like power, railways and finance have been asked to expedite clearances and other issues in their domains that have been scuttling specific projects, in a few cases, promoters have also been asked to bring more funds on to the table to make the project viable rather than expect banks and financiers to take haircuts alone. “There are projects where developers have put up little equity and have left banks in the lurch citing lack of clearances, though in reality, their real concern is poor market condition and leveraged balance-sheets,” said an official. The Economic Times; July 9, 2015 (Edited)

Fin Min to bail out stalled power projects, frail SEBs

Govt seeks to revive investment, lower NPAs

SUBHASH NARAYAN & MUKESH JAGOTA New Delhi: The finance ministry is looking to bail out the power sector by helping projects that are stuck for want of funds and offering a new restructuring window to the state electricity boards that have piled up losses to the tune of 2,00,000 crore. The ministry has called a meeting of power sector representatives,

bankers, RBI officials and other government departments to revive power projects that are held up either due to

financial stress or other reasons. This is part of efforts to get the investment cycle moving again. Also, the government fears that delays in power projects can turn bank exposure into non-performing assets (NPAs). Late last month, the finance ministry held

a similar meeting for steel projects

following a warning from RBI that steel firms might add to the banks’ bad loan burden. The government will also discuss a new and focused restructuring plan for SEBs, whose financial constraints have been weighing on deliverables such as tariff fixing and improvement of the distribution infrastructure. “The power sector is a cause of concern for banks due to their high exposure to the sector. The ministry would look at those projects where problems can be resolved easily so that they could go on stream soon,” a senior govern-ment

official said. The total exposure of banks

to the power sector stands at 6,00,000

crore or about 9-10% of total advances. But the sector already has a whopping 16% share in total stressed advances of

banks.

At a time when gross NPAs of banks have

risen to 4.3% of total advances in FY15 from 3.9% in the previous financial year as per RBI data, any addition to distressed

assets could be a destabilising factor for the entire industry. An even bigger concern for banks is with respect of the SEBs. The public sector lenders’ total exposure to the SEBs now stands at 3.4%

of total loans, or roughly 1,60,000

crore, out of which around 72,000 crore, or 46%, has already been restructured. The restructuring done in 2012 allowed a 3-year moratorium for the principal amount. If the power utilities now fail to pay the principal and/or interest by June 30 (90 days from the end of moratorium), these will turn into NPAs.

“The finance ministry should get RBI on board to allow restructuring of loans to power projects that are delayed for no fault of project proponents, without categorising these as stressed assets, as that would attract stiffer provisioning norms. The current situation could dissuade banks from extending the term of any loan,” said an official with a private sector power project developer. Government estimates show power projects of about 60,000 MW are either stranded or facing delays due to lack of statutory clearances. Out of this capacity, about 15,000 MW are gas-based plants stranded due to fuel shortage. A host of other thermal power plants have missed commercial operation dates due to delay in getting fuel linkages. These projects now need support from banks to get their debt restructured. But banks are wary of doing this, as higher provisioning would weaken their financial health. RBI has warned of a possible spike in bad loans in the sector. The heavily-indebted companies have been hit by slowing demand for power from states that prefer load shedding over buying additional power for their indebted SEBs. Finance minister Arun Jaitley had last month indicated that the government would identify sectors and specific projects that could be revived without putting stress on the banks. “The financial services secretary, and if necessary at my level, will be calling a meeting of the representatives of state governments, those projects and the departments concerned over the next few days and try to resolve the issues,” Jaitley had said. Financial Chronicle; July 8, 2015 (Edited)

Govt devising contingency plan for power supply

Plan includes deferment of planned shutdown of plants in northern region, diversion of gas from west to north

UTPAL BHASKAR New Delhi: The government is working on a plan to mitigate the impact of a deficient monsoon on electricity supply,

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particularly in states such as Delhi, Punjab, Rajasthan and UP. The government believes that while western, eastern, north-eastern and southern regions will be able to manage the supply position during the monsoon months, the northern region, comprising states such as Haryana, HP, J&K, Uttarakhand, and Chhattisgarh are likely to be affected by rainfall deficit. As part of the exercise, the planned shutdown of thermal power units has been postponed and the government has decided to optimally utilize gas and liquid-fuelled pro-jects, divert gas from the western region to the northern region and expedite revival of projects currently under reserve shutdown. Even planned shutdown of ONGC’s Mumbai offshore gas platform during July, which may impact 3 power projects totalling 1,912 MW, is being explored to be rescheduled. “The government is seized of the situation. With the rainfall improving, there shouldn’t be any problem,” said a senior government official. In its second-stage monsoon forecast in June, the India Meteorological Department predicted that monthly rain- fall over the country as a whole is likely to be 92% of its average during July and 90% of its average during August, both with a model error of ±9%. This amount of rainfall will qualify as below-normal. But better-than-expected rainfall in June led to improvement in reservoir levels. Of India’s installed power generation capacity of 272,503MW, hydropower projects account for 41,632.43MW. The northern states, with a power generation capacity of 71,383.40MW, had a peak shortage of 4.5% in May. In the northern region, 5 thermal projects with a combined 1,555 MW capacity have deferred maintenance activity. Also, if required, another 530 MW can be shifted to the post-monsoon period. In addition, the power flow from the western region to the northern region through 765 kV D/C Gwalior-Agra line has been approved - resulting in an additional supply of 300 MW from the current levels

of 1,250 MW. On 11 August 2014 around 30,000 MW of capacity was lying idle because of breakdowns and maintenance work on power plants. LiveMint; July 8, 2015 (Edited)

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Power generation: More is not merrier

Power cos are still reeling under subdued demand and regulatory hurdles.

SHREYA JAI New Delhi: The major issues which plague the Indian power sector are fuel availability, regulatory hurdles, demand- supply mismatch, financing and legal tussles. While the UPA government pushed for mega power projects, the NDA government has taken steps to facilitate fuel supply to them. This has shown quick results with power gen- eration increasing by 5.5% in May 2015. The 12th Plan period (2012-2017) has been a record-breaking year with thermal capacity touching 20,830 MW in 2014-15 - which is the highest capacity addition ever in the history of Indian power sector. During the first 3 years of the 12th Plan period, the private sector contributed 63% to the total thermal power capacity addition of 57,719 MW. Most of it is owing to CIL’s increase in production, international coal prices coming down, ass-ured future supply with coal block re- auctions and clarity on gas supply mechanism. Compared to last year, the share of long- term purchases has risen to 90.5% in FY15 from 89% in FY14. “The sector is confident of a long-term growth trajectory. It’s the short-term purchase of power, which is under pressure,” said Rajesh K. Mediratta, director (business develop-ment), India Energy Exchange. According to latest data, in 2014-15, 3.1 BU of electricity were lost on power trading platforms. This is where all the big talk about massive capacity addition fails. Subdued demand from financially

trading platforms. This is where all the big talk about massive capacity addition fails. Subdued demand

sick power distribution companies are hurting supply. “Focus on long-pending issues of fuel availability and supply logistics might be yielding immediate results. But, on power distribution side, major intervention has not commenced. The financial restructuring plan (FRP) for improving the health of state distribution utilities has not taken off and cost recovery remains an issue. Regulatory assets compound the problem and private participation has been minimal,” said Sambitosh Mahapatra, Partner - power and utilities, PwC. There are also projects totalling 20,000 MW under liti-gation of which cost pass through is the most contested issue. Noted power companies continue to reel under regulatory issues, including state- owned NTPC. The thermal power giant saw its net profit declining to 10,291 crore during 2014-15 from 10,975 crore in past year. The company has on several instances mentioned that the stringent tariff regulations are hurting its profits. The provisions of ‘Tariff Regulations for the period 2014-2019’ by CERC led to reduction in power sale tariff which NTPC has contested in court. The other legal hurdle hurting growth of power generators is compensatory tariff or pass thorough of increased cost of fuel on the power price. The 2-year old case of Adani Power and Tata Power’s UMPP - both in Mundra and running on imported coal is back to square one with Appellate Tribunal of Electricity investigating the matter again. IPPs based on imported coal still don’t have any cushion in their PPAs for fluctuating exchange rate and coal prices in the global market as there is no steady regulation on the same. Adani Power which mostly sources imported coal wit-nessed its consolidated net loss for 2014-15 increasing to 816 crore against 290 crore in 2013-14. It is the largest private power producer in the country with 10,440 MW of installed capacity. The company in its last statement said a lot is riding on the availability of domestic coal and regulatory clearances.

ICRA in its latest report on the power sector said the power generators would continue to reel under domestic coal deficit. “This would lead to dependence on costlier imports, leading to under- recovery in energy charge. CERC also is yet to issue any final order for rate com- pensation request for impact due to Rupee depre-ciation,” said ICRA. Meanwhile with cooling of inter-national coal prices last year, Tata Power’s consolidated operating profit for the fourth quarter 2014-15 was 28% higher at 1,408 crore against 1,097 crore. The 13th Plan period pipeline for thermal power projects is empty, with none of the major infrastructure firms investing in new projects. With the other parts of the supply chain beleaguered, the excitement around power generation is short lived, warn power sector executives. The demand for power from states is subdued and distribution companies are still awaiting turnaround with 2 lakh crore of losses mounting annually. “Fuel availability and generation numbers do not portray the right picture and turnaround in the power sector is still some way off. In a leaking bucket, whatever goes in doesn’t matter, it still doesn’t hold up. The political will to reform distribution sector is still missing across states,” said Mahapatra. Business Standard; July 9, 2015 (Edited)

Now & then: Plug Into power reforms JAIDEEP MISHRA Of the several issues current today, the power sector seems the least problematic. Output is rather buoyant, pan-India: the power ministry website mentions, in block letters, not just the highest-ever increase in generation capacity, but also that for transmission lines, and ditto for substations installed. And the Narendra Modi govern-ment promises `power for all' in the foreseeable future. Yet, the fact is that SEBs, which distribute the bulk of power nationally, are horrendously in the red, with cumu-lative losses put at well over 2,00,000 crore

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(up-to-date figures are apparently unavailable). And unless the cripp-ling finances of the utilities improve, the Centre's bright plans like `Make in India' and `Digital India' would dim. The entire economy would be adversely affected if we tamely plod along with power utilities terribly in the red. Already, the experts opine that the smart reduction lately in fuel shortages in power plants is more because state utilities are too broke to step-up power. Since the 1990s, most states have hived off their SEBs into separate units for power generation, transmission and distribution. There have been some reform initiatives, with select states seemingly reducing huge losses in power distribution. The Centre pitched in as well, offering incentives to restructure dues and securitise out-standings. The Electricity Act (EA), 2003, was seen as path breaking. Things seemed hunky-dory, for a while. There's certainly been huge capacity addition in the past decade, particularly by power producers. Yet, there's been a sorry relapse. Revenue losses in power distribution have now risen by leaps and bounds. Reportedly, all state distri-bution utilities are now severely affected. The situation has gotten bad to worse, thanks to reckless populism and giveaways in the form of unbudgeted power subsidies (read, nil or virtually nil tariffs) and plain theft. Now, power is in the concurrent list of the Constitution, with both the Union and the states having a say. However, central rules, norms and laws must prevail and the Centre needs to be much more focused than hitherto on purposefully reforming moribund finances of state power utilities, and sooner rather than later. A strong political initiative is surely warranted. State power utilities need to levy reasonable tariffs and generate adequate returns for plough-back and improved infra-structure. The law does mandate independent tariff-setting, but there have been instances galore when state regulators have simply preferred not to revise tariffs year after year, no doubt to

go out of their way to please the powers that be. But we just cannot carry on with such a state of affairs. We need transparency in power, one of the most capital-intensive sectors. The EA, 2003, does require `proper accounting and audit in the generation, transmission and distribution or trading of electricity,' as per Section 55(2). Note also that as per Section 74, power utilities are required to furnish to the central regulator `statistics, returns or other information relating to generation, transmission, distribution, trading and use of electricity as it may require and at such times and in such form and manner as may be specified'. The Centre needs to invoke the provision to make it com-pulsory for utilities to duly publish quarterly accounts. There is also a sound case for a suitable price index for the power sector, so that state regulators do not gloss over tariff revision. Instead, the estimated power infla-tion less an annual efficiency-improvement requirement needs to be duly factored into tariffs. Concurrently, given widespread energy poverty, states need to envisage limi-ted subventions, which would need to be budgeted and provided for, to encourage minimal power consumption levels. The point is to clean up balance- sheets of power utilities going forward, and drive home the political mess-age that sound utility finances are for the greater good. Abroad, in mature markets, utilities are a stable asset class and given our lowly per- capita power consumption levels and huge upside potential, improved state power finances can also provide pensions for all, sustainably. Hence the pressing need for multiyear reform of state utilities, so that they are in a better position to innovate and step-up power. Rooftop solar power and solar-powered pump sets are slated to be increasingly cost-effective going forward and with sound balance-sheets, power utilities would be better able to leverage techno-logical changes to boost supply. There is scope to rev up efficiency

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improvement; key in attractive bottom lines. The Economic Times; July 8, 2015 (Edited) CEA reorganisation begins SHREYA JAI New Delhi: CEA announced its reorganisation in an office order on June 30 for "creation of new divisions and restructuring of the existing formation". The authority is statutory body under the ministry of power and was constituted by the Electricity Act. It has 15 major fun- ctions specified in the Act ranging from data collection to setting of standards. It also investigates any major mishap, including grid failure. The CEA will now shift focus to renewable energy, T&D, and new policies. The new divisions introduced in the office of the chair-person are co-ordination of internal and external affairs, IT and HRD. The new tasks assigned to the planning wing are integrated resource planning, fuel management, power data management, power survey and load fore- casting, renewable energy development, thermal project planning and R&D. The existing wings - thermal, hydro, power systems, grid operation and distribution, and economic and commercial, have been expanded. Chief engineers have been given extra charge of power data management, power survey and load forecasting, UMPPs, hydro project appraisal, and thermal projects planning and development. CEA officials said the reorganisation preceded a road map for the govern-ment's '24X7 power for all' initiative and the 19th Electric Power Survey to forecast electricity demand. The authority is grappling with a staff crunch and lack of talent and technical expertise. A committee headed by Railway Minister Suresh Prabhu had in a report high-lighted the problems of CEA and suggested remedial measures. The officials said some junior posts such as deputy director had been abolished and member-level staff had been given additional tasks. "This has been done to prevent any financial burden. It has also

brought relief to those waiting for promotion," an official said. The CEA promoted 46 subordinate engineers to chief engineers last December. The member (planning) holds additional charge as chairperson. Business Standard; July 5, 2015 (Edited)

Power capacity touches 16,000 MW in Chhattisgarh Raipur: “In FY 2014-15, the power production capacity in the state touched 16,000 MW with the contribution of both public and private sector power plants,” Chha-ttisgarh Energy Department principal secretary Aman Kumar Singh said. The Economic Times; July 7, 2015 (Edited)

Kumar Singh said. The Economic Times; July 7, 2015 (Edited) The Financial Express; July 8, 2015
Kumar Singh said. The Economic Times; July 7, 2015 (Edited) The Financial Express; July 8, 2015

The Financial Express; July 8, 2015 Thermal power generation dips marginally in June OUR BUREAU New Delhi: Thermal power generation fell marginally in June despite continued momentum in CIL’s production. During the month, thermal power plants in the country generated about 0.4% less power at 72,804.74 MU as against 73,134.59 MU in the same month last year, according to CEA data. The units were operating at an average PLF of 59.43% as against 66.31% in the same month last year. The overall power generation in the country, at 88,542.35 MU, was almost the same as in June last year (88,265.17 MU). Specifically, generation by coal-based power plants remained flat at around

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66,209.48 MU in June 2015. While power generation from coal-fired power plants remained flat, availability of the fuel increased sharply. During the month, CIL produced 12.4% more coal as compared to last year at 38.83 MT. Increased coal production meant only 13 of the 100 coal- based power plants had less than 7 days of coal stocks. All these are non-pithead power plants. The Hindu Business Line; July 7, 2015 (Edited)

States unwilling to sign agreements with coal-based power plants

AMAN MALIK New Delhi: Even as the government is reviving stranded gas-based power plants, significant coal-based capacity is idling simply because states are unwilling to sign long-term PPAs. Data available as of

of

March show that coal-based power capacity to the tune of about 15,000 MW is lying unused. In addition to this, no PPAs have yet been signed for plants, which will come on stream by 2017, with capacity of around 5,000 MW. Reluct-ance of debt-laden state dis-coms seems to be the main reason for low off- take. Industry officials say that UP was the last state to sign a PPA in 2014. Rajasthan, which had signed a PPA in 2013, is now looking to scrap a part of that. AP, Telangana and Kerala are looking to purchase more power, but have not actually signed any agreements. “Some of the things are in a regulatory haze, people don’t want to take a decision at this point of time,” said Dipesh Dipu, energy expert at Jenissi Management Consultant. He adds that a lack of clarity on the fate of UMPPs has further held states back from signing PPAs. “Telangana and AP don’t know if they should consider the Krishna-patnam UMPP gone and terminated or if they

the Krishna-patnam UMPP gone and terminated or if they end 7 should wait for longer,” he

end

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should wait for longer,” he said. Out of 16 proposed UMPPs, only 2 have actually taken off. Recently, Reliance Power walked out of a proposed project at Tilaiya in Jharkhand citing delays related to land acquisition. Another reason cited is that states are looking to meet some additional demand from alternative sources such as solar. “This is some kind of an artificial comfort,” said an industry official. The Hindustan Times, July 7, 2015 (Edited)

Demand for power projects could revive in 2017: Ravi Arya, Hindustan Power SUMIT JHA Hindustan Power Projects Pvt Ltd (HPPPL), formerly Moser Baer Projects, forayed into coal-based thermal power projects over 3 years ago, on the back of a MoU with the MP government to develop 2,520 MW capacity. It commissioned the first 1,200 MW plant in Annupur, MP, recently. HPPPL’s Ravi Arya, president- thermal, discusses the power sector scenario in India, with all its problems and promise. Excerpts:

Could you find buyers for the power you produce? Our project was based on a MoU with the host state, which requires us to sell 35% of all commissioned capa-city to it. So far, that translated into 420 MW. We sell nearly 60 MW of this at a constant cost comprising only energy charge as per the agreement, while the rest of the capacity has been contracted at tariff determined by the state regulator. We also managed to tie up 361 MW with the UP government in 2012 but have not been able to start supply due to congestion in the west-north trans-mission corridor. In June, we have qualified to be a power supplier to AP for a contracted capacity of 374 MW, which leaves us with only 45 MW to spare. What problems do you face in supplying power to UP? The 400KV transmission line between Gwalior (western region) and Jaipur

(northern region) that was supposed to have been ready by March 2014 got stuck because of lack of right of way as the line passes through areas with wildlife. The issue was taken to the National Green Tri-bunal. The delay seems to be over. We hope to have the corridor available by the end of August. Although the PPA was for supplying power from October 2016, we could start earlier as the UP government agrees to it. The non- availability of line has disrupted supply of power from the surplus western region to the starved northern region. Lack of PPAs has been a constant complaint from the power developers, but discoms blame high tariff for not buying power. What is the nature of your PPA with UP? Originally, UP had invited bids for 6,000 MW in 2012 but could only close the deal for 2,175 MW in the next 2 years. Our pact is at a levelised tariff (over 25 years) of 5.74/unit. Even though the tariff seems high, at the bus bar the state will only pay 4/unit in the first year. The tariff for the subsequent years will be determined by the escalation formula that takes coal prices and wholesale price inflation into account. So the levellised tariff is not the actual tariff but just a mathematical model developed for comparison among bidders. For instance, coal esca-lation has been a constant in the last 2 years. Hence the tariff for next 2 years would not be substantially different from the first year. It’s a complicated metric and a cause for confusion even among veterans in the sector. When would work start on your next two 660 MW units? The preliminary work has been completed. But for a project that has a debt-equity mix of 75:25, we would need the lenders’ approval. The lenders will fund us only if we have secured fuel supply for the next phase. We have been holding back on the recently held coal block auction as we didn’t need mines that were near production. We would bid for mines in the next phase, as those mines would take nearly 3 years to start produc-

tion, perfectly syncing with completion of new units. Is securing coal supply easier than finding power buyers? Over the last year some long standing issues in coal supply seems to be clearing up. It needs a lot more work still. As far as PPAs go, the industry has suffered a drought in the last 2 years but there are signs of it changing. The recently announced PPAs for AP was much needed and UP may also announce fresh bidding for the remaining capacity it originally wanted to buy. This would mean that by the end of this year there could be 3,800 MW of contracts to buy power up for grabs. Does that mean demand is back in the sector? Power is perhaps the most cyclical element of the infra-structure sector and although these PPAs bring much respite, the real demand has still not been created. In my view, action is likely to return by 2017. The reason for this is that no investment is being made in capacity addition, as the industry focuses on revival of stuck or non-viable projects. However, as the economy grows and demand inches up, these projects, which are under construction or just being commissioned, would be better placed to take advantage of it. Do you see uncertainty reversing anytime soon? While demand is sure to return sooner than later, uncer-tainty of the business may not only linger but could get even worse. The coal transportation problem is likely to get worse with time. We do not have enough railway lines to supply coal to plant locations and although work has started on those lines, it is unlikely to be fast enough. Land acquisition problems could hamper infrastructure building, leading to a spike in the cost of coal supply over long distances. Our plants are coal pithead plants that places us only 260 km away from the coal source. The flip side of being close to coal source is that we are some distance away from load centres. Congestion in trans-mission has been bothering us. But power sector eco-

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nomics says reliance on transmission is far less risky than relying on coal supply over long distances. Transmission lines once built would last through the plant lifetime, but coal supply with constrained transportation could be more complex and costly. The Financial Express; July 8, 2015 (Edited)

State government moves HC against stay on Udangudi project tender

Says validity of project expired on March 31 and bids of Indo-Chinese consortium and BHEL lapsed

DENNIS S. JESUDASAN Chennai: The State government has filed an appeal in the Madras High Court against the interim stay order on the tender proceedings for the 2x660 MW Udangudi power project, contending that the single judge had “no juris-diction to step into the shoes of the TANGEDCO Board and decide if administrative and policy decisions made to scrap the tender accorded with his own views.” In a writ appeal, the government said the validity of the project had expired on March 31, 2015 itself. Therefore, the bids of both the Indo-Chinese Consortium (petitioner) and BHEL had lapsed and become invalid as per Rule 26(3) of the TN Tender Transparency Rules, 2000. A mere invi- tation to offer can never, under any circumstances, be construed as an assurance that the offer (the bid) made by the tenderer would be accepted, regardless of its flaws. It would be unprecedented for courts to direct the TANGEDCO Board to enter into a contract on the strength of the bid, and a defective bid at that. Bids submitted by prospective contractors were merely offers, which may or may not be accepted by the authority. Until offers are accepted, no obligation arises to bind either party. One of the main grounds for the judge to stay the tender process was that the consultant hired by the Board had not recommended the rejection of the bids, but only observed that both the bids

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suffered from deficiencies. The consultant’s report was merely to assist the Board in evaluating the bids. It was not binding. The Board can independently take action based on the consultant’s report, which clearly said that both bids suffered from deficiencies, the government argued. As for the other ground that the delay was causing cost overrun, the government said it as “misconceived”. All that the judge could examine was the competence of the Board to scrap the tender and call for a fresh one. There was no finding whatsoever in the impugned order that the Board was incompetent or was barred by law from doing so, the government stated. The judge failed to note the extraordinary defects found in the Indo-Chinese Consortium’s bid. The petitioner had submitted an incomplete price bid, which rendered it completely impossible to award the contract, the govern-ment clarified. Based on the grounds, the government asked the High Court to set aside the single judge’s order. The Hindu; July 8, 2015 (Edited)

NTPC to finalise price bids for Pudimadaka plant SANTOSH PATNAIK Pudimadaka (Visakhapatnam District):

NTPC, will shortly finalise price bids on turnkey basis for steam and turbine generators for the 4,000 MW UMPP being set up about 60 km from Visakhapatnam. The authorities have already opened the technical bids and an exercise is on to finalise the price bids for the turnkey package. NTPC has already paid the amount and acquired 700 acres for the project. Process is on to pay 400 crore more by this month end to take possession of the remaining 500 acres from the AP Industrial Infrastructure Corporation. NTPC-Pudimadaka project Group General Manager P.S. Radhakrishnan said that they had completed EIA study by Vimta Labs of Hyderabad. All other critical studies, inclu-ding bathymetric study, are at various stages of comple-

tion. Packages are being finalised on turnkey basis for Turbo Generator Island, Steam Generator Island, coal, ash and water systems. The plant, which will have 4x 1,000 MW units will involve an investment of 20,000 crore to 24,000 crore. Radhakrishnan said that they would ensure 100% ash utilisation by installing super critical technologies. The plant will have a 275 metre-high chimney with direct sea-water cooling facility. Accor- dingly, the boilers will be designed. Coal will be sourced 100% from abroad. It will need 7 lakh cubic metres per hour. IIT- Madras has been engaged to conduct the relevant study. Though NTPC had set a timeline of 52 months for the project, efforts would be made to commission the plant in 42 months, Radhakrishnan said. The Hindu; July 8, 2015 (Edited)

Neyveli Power Station-II completes operation SPECIAL CORRESPONDENT Neyveli: The 2x250 MW Unit-I of Neyveli Thermal Power Station-II expansion has completed its continuous opera-tion for 72 hours and qualified for Commercial Operation (COD). With this, the power generating capacity of NLC has expanded from 3,490 MW to 3,740 MW. NLC is setting up a 2x250 MW Thermal Power Station at Neyveli as part of its Thermal Power Station-II Expansion. Recently, Unit-I (500 MW) of NTPL Thermal Power Sta-tion, implemented through a JV Company, NLC Tamil Nadu Power Limited (NTPL) incorporated by NLC (89%) and TANGEDCO (11%) had attained COD on June 6.Unit-II of this Thermal Power Station had COD Declaration on April 21. Pre- commissioning activities in Unit-II are near-ing completion. This unit would also be ready for commercial operation this month. The Hindu; July 5, 2015 (Edited)

SCCL

completed STAFF REPORTER

boiler

light-up

for

unit

I

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Hyderabad: The boiler light-up of unit I of the Singareni Thermal Power Station at Jaipur, Adilabad was successfully completed, C&MD N. Sridhar, said. He informed that unit II will have its boiler light-up in August this year. Synchronisation is scheduled for unit I in November and for unit II in March, 2016. The Hindu; July 5, 2015 (Edited)

‘Allow UMPP bid winners to mortgage land, coal blocks’

Panel also suggested that developers be allowed to pass on fuel cost to consumers

SARITA SINGH New Delhi: Companies winning bids for UMPPs will be allowed to mortgage land and coal blocks attached to them if the government accepts recommendations of an expert panel. The panel, tasked to review the standard bid documents for 4,000 MW and above projects, has also proposed that developers be allowed to pass on the fuel cost to consumers. The power ministry had consti-tuted the panel under former central vigilance commi- ssioner Pratyush Sinha after all the qualified private deve-lopers withdrew from the final round of bidding for 2 proposed UMPPs in TN and Odisha, citing difficulty in securing bank finance due to flaws in the bidding norms. “It has recommended to the power ministry to invite fuel cost from bidders for the first year while from the second year onwards, it will increase as per a CERC formula,” a government official said. “The fixed cost will be quoted for 25 years,” he added. The official said the panel has acceded to most demands of private companies, inclu-ding re- introduction of the design-build-operate model for bidding of such projects in place of the existing design-build-operate- transfer model, which has been opposed by private developers. The panel has also recommended creating 2 special purpose vehicles (SPV) for each proposed UMPP. While one SPV will own land and captive coal blocks, the other will own the rest of the infrastructure. The panel has also

suggested allowing the developers to pass through the cost incurred on R&R (resettlement and rehabilitation). The government had to scrap bidding for the two 4,000 MW UMPPs - in Cheyyur in TN and Bedhabahal in Odisha - after qualified private developers such as Tata Power, Adani Power, Jindal Power, CLP India, GMR Energy and Sterlite Energy withdrew from the final round of auction. In its report given 10 days ago, the panel has also proposed restricting the role of the independent engi-neer, who was given the power to “interfere” in the earlier bid documents. An executive with PFC said fresh bidding for the 2 UMPPs is expected to start in the next 3 months as the government has begun final deliberations on the bidding documents. The Economic Times; July 6, 2015 (Edited)

documents. The Economic Times; July 6, 2015 (Edited) NTPC-Simhadri to add 1,600 MW capacity Ch R.S.
documents. The Economic Times; July 6, 2015 (Edited) NTPC-Simhadri to add 1,600 MW capacity Ch R.S.

NTPC-Simhadri to add 1,600 MW capacity Ch R.S. SARMA Visakhapatnam: The NTPC-Simhadri thermal power unit at Parawada in Visakhapatnam district plans to expand its capacity from 2,000 MW to 3,600 MW. According to AK Samanta, GM, there are plans to add 2 more units of 800 MW each. “We have adequate support from the authori-ties. We wish to acquire land in the adjoining area,” he said. The company would need 800 acres for the project which will involve an investment of 5-6 crore per megawatt. It will be developed with ultra super critical technology with higher efficiency and less coal consum-ption and emissions compared to existing technologies followed at various power plants. He said NTPC is also in talks with the Visakhapatnam steel plant, for a JV to set up a 2x250 MW power plant on the land belonging to the latter in the city at Ukkunagaram. Samanta said NTPC- Simhadri has also decided to set up 20 MW solar energy power plant within the compound. Under CSR, the company had already distributed 48 solar pump sets to social welfare and other residential hostels

with net metering facility. At present, NTPC-Simhadri generates power at 82% PLF. The Hindu Business Line; July 7, 2015 (Edited)

at 82% PLF. The Hindu Business Line; July 7, 2015 (Edited) GVK Power's Goindwal project cost
at 82% PLF. The Hindu Business Line; July 7, 2015 (Edited) GVK Power's Goindwal project cost

GVK Power's Goindwal project cost shoots up to Rs 4,573 cr PRESS TRUST OF INDIA New Delhi: GVK Power in a BSE filing said the cost of its 540 MW Goindwal Sahib thermal power project in Punjab’s Tarn Taran district is now estimated at 4,573 crore, sharply higher than the earlier estimate of 3,200 crore. The cost escalation means a higher debt load for the company. GVK Power (Goindwal Sahib) had com-pleted the financial tie-up and arranged 2,400 crore as loan for the power project in the beginning of 2010. Then, the total cost of the project was estimated at 3,200 crore, of which 800 crore was equity and the rest debt. IDBI Bank had syndicated the debt, apart from being one of the lenders in the consortium of bankers. Financial Chronicle; July 3, 2015 (Edited)

Why not sell coal from 2 Chhattisgarh mines to JPL PRESS TRUST OF INDIA New Delhi: Delhi High Court suggested to CIL to sell to Jindal Power Ltd (JPL) the coal it has started to mine from 2 Chhattisgarh mines if it did not have the space to store the mineral. A bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva gave the suggestion after CIL moved an application seeking permission to sell the coal it started to mine from Gare Palma IV/2 and IV/3 mines after recei-ving environmental clearance. It moved the application as the high court on May 27 had kept in abeyance a CIL letter cancelling e-auction in which JPL had won 49,000 metric tonnes of coal to be mined from the 2 mines. CIL put before the bench 3 options - selling the coal by way of a fresh e- auction, selling it to those companies with

11

whom the public sector unit has a fuel supply agreement or sale to NTPC - and asked the court which method it should go for. The counsel for CIL told the court that the problem was that after it had received environ-mental clearance, it had commenced mining. Now the mineral was accumulating at the site with no space to store it. It also sought clarity on whether the court’s May 27 order would prohibit it from selling the coal it was mining. The court, however, only suggested that CIL can sell the coal it was mining to JPL or hold a fresh e-auction in which the power company can participate and did not pass any order. It listed the matter for further hearing on July 7. CIL’s application was filed in the main petition of JPL which has challenged a May 16 letter by which the PSU claimed the e-auction was cancelled. The Pioneer; July 2, 2015 (Edited)

Coal-starved

plants

get

e-auction

breather

For bidding by power plants with PPAs, it would be CIL price plus 20%, with no PPAs it would be plus 40%

SUMIT MOITRA Kolkata: Profits of CIL are set to get a boost with the government deciding to raise e-auction quantity by crea-ting separate windows for stressed power companies without coal blocks or linkages. “There are many power plants which are stressed and are starved of coal. For those who don’t have linkage we are forming 2 e-auction windows, one for those who have PPAs and another for those without PPAs,” minister Piyush Goyal said. “Initially in both windows we would start with 5 MT each, and then expand it, looking at the response we get from the first exercise,” the minister said. This 10 MT could be over and above the normal e-auction volume as CIL is now producing enough coal. “We have now surplus power. Where there are transmission capabilities, we would provide as much coal as needed. Enough coal is available with power plants. So there is no risk of

12

any power plants having shortage,” Goyal said. CIL normally sells around 10% of its output through e-auction at prices which are at a steep premium over linkage prices. Higher e-auction volumes always go to boost the miner’s bottom line. During early days of 2015, e-auction prices were reportedly 65% over notified or linkage prices. For those having PPAs, bidding would start at CIL price plus 20% as floor price. Those who don’t have PPAs or only have short-term agreement, bidding would start at CIL price plus 40%

premium. “Both of these would be transparent processes through which everybody who doesn’t have coal would have equal opportunity,” the minister said. This would however be a temporary solution till April by when the government is expected to come out with

a framework which would be a permanent

solution. The stalled initiative to set up

large sized power plants would soon get a boost with the Pratyush Sinha committee recently submitting its report on bid documents for UMPPs. “Final consultation and final deliberation is going on and would be finalised very soon after which we would restart the process of bidding for UMPPs,” Goyal said. DNA; July 4, 2015 (Edited)

Aggressive coal bidding may hurt projects totaling 6,000 MW, says Icra

RACHITA PRASAD Mumbai: Power sector now stares at higher risk of signi-ficant under-recovery and concerns on viability of pro-jects after the companies bid for coal aggressively, Icra said. The rating agency said in a report that the recent bid for coal blocks that were earlier de-allocated saw nega- tive price bids ranging from 300-1,100

a tonne by winners, which `could translate

into under-recovery. 1.20 per unit of 40 paise for projects totaling 6,000 MW, creating concerns over viability. Icra said that the sector's credit profile continues to be weighed by issues such as falling thermal PLF, increasing coal import

dependence and domestic gas deficit that

may continue in FY15, uncertainty on implementation of tariff compensation, significant cost over-run in projects, aggressive bidding seen in auction of coal blocks and rising subsidy and weak cost coverage ratio for discoms. The report said that almost 35,000 MW of projects have seen cost overrun of 35% due to delays in land acqui-sition, lack of fuel and other problems. “On the positive, we do see some movement. A lot of generation capacity has come up stream and we expect some more to start generation. We are seeing some improvement in coal availability although the coal auction is yet to give results. CIL’s incremental output going ahead would be better than past and there has been softening of international coal prices,” said Sabyasachi Majumdar, senior VP and co-head corporate sector ratings at Icra. “But we still see a lot of concerns on the distribution side as many discoms in some of the more challenged states remain in precarious condition which impacts their ability to buy power,” Majumdar said. “The subsidy scheme to encourage the utilization of stranded gas based projects allowing R-LNG to initiate interim measure, and however, its viability is dependent upon prevailing R-LNG price exchange rate and availability of moratorium period on debt servicing,” Icra said. The report noted that there was a sharp decline in thermal PLF from 75% in FY 2011 to 65% in FY 2015. The Economic Times; July 8, 2015 (Edited)

Group company rules for coal auctions to be tightened AMAN MALIK New Delhi: With the intent to try and prevent any chance of cartelisation or collusion among bidders during the forthcoming round of captive coal block auctions in August, the government is mulling tightening the definition of what constitutes a group company. A person aware of the matter said that the government is contem-plating making the

13

definition “more stringent” than the present one, which has been taken from the foreign direct investment (FDI) policy. This person said that the government is looking at defining a group company on the basis of “ownership” and “control”. This internal discussion comes following rejection by the government of bids for 4 blocks for which Jindal Steel and Power Ltd (JSPL) and Bharat Aluminium Co (Balco) had emerged as the successful bidders. Following this, both companies had moved the Delhi high court challenging the rejection of their bids. The court later said it had found “no evidence” of collusion in at least 3 of the 4 cases. To be sure, this is as yet a matter of debate within the government and no final call has been taken. “There are a number of aspects you continue to discuss, some of them fructify, some don’t,” another person aware of the discussions said. According to a press note on FDI, 2 or more entities are considered “group companies” if they can, directly or indirectly, exercise 26% or more of voting rights in each other, or if they can appoint more than half the directors on each other’s boards. Already, the government has said that multiple bids from one company for a particular block will be treated as one bid. For the purposes of auction, the government already defines an “associate company” on the basis of control of at least 20% of share The Hindustan Times, July 5, 2015 (Edited)

'Orissa Government scuttled coal block project' EXPRESS NEWS SERVICE Thiruvananthapuram: The Baitarani coal block project had failed to take off as Orissa had shown scant interest in co- operating with Kerala, Power Minister Aryadan Mohammed told the Assembly. The New Indian Express; July 8, 2015

Coal

overdrive

India

goes

on

a

production

to fuel economy PROBAL BASAK Kolkata: “Recover the coal sector for me, the entire economy will rebound.” This was PM Narendra Modi’s first message to Union Coal Secretary Anil Swarup last October after appointing him as an OSD in the ministry. Recalling the conversation, Swarup now believes, with the successful auctioning of coal blocks to captive miners and state-owned CIL recording double-digit production growth, he and the CIL management are on course to deliver on the PM’s mission.

management are on course to deliver on the PM’s mission. Core sector data for the month

Core sector data for the month of May shows the coal sector was one of the best performing sectors, with 7.8% growth on a year-on-year (Y-o-Y) basis. The growth engine for the sector is CIL, which accounts for India’s 80% coal output. CIL’s production data shows that its production is growing for quite some time (see chart) and since April, it has been recording double-digit production growth. In the month of May 2015, CIL produced 40.97 MT, registering a growth of 11.8% and in June, it registered 12% growth output. Although the Modi government’s ambitious target for CIL to achieve the 1 BT production target by 2019-20 might be a long way off, both the coal ministry and CIL mana-gement say the company is on the right track. While operational success has contributed to recent growth, CIL is banking on easing of land acquisition and environ-mental hurdles to meet the target in the long term.

14

Consider this: Coal India’s output from 2010-11 to 2013-14 grew from 431 MT to 462 MT, adding only 31 MT in the last 4 years. On the other hand, CIL output in 2014-15 reached 494 MT, recording a growth of 33 MT in a single year. Coal India has begun 2015-16 on a strong note registering a 12% growth output at 121.33 MT in the first quarter and meeting 99% of the target. Small wonder the Union Coal Minister Piyush Goyal is ecstatic. “It is the same Coal India, the same executives and the same workmen. We have just ensured better management of operational affairs, showed the right intention and always believed in our potential,” Goyal said. The fact that coal ministry is keeping close tabs on the daily operational details of CIL, was evident when Goyal speaking on the subject on July 3 in Kolkata, checked the message on his phone to tell the audience that CIL loaded 206 rakes on July 2. “I get daily updates on my phone,” he noted. On the ground, CIL officials say, minor operational bottlenecks in terms of labour, law and order issues, have eased in the past 1 year because of better coordination with state governments and local administration in major mining states. On its turnaround strategy, Swarup said he and CIL C&MD Sutirtha Bhattacharya have divided the job between them. “I have told him to take care of digging in the mines and I am there to coordinate with state governments and negotiate with them if there are any issues. And almost every week, I meet chief secretaries of some mining state or the other,” he said. Also, according to him, the recent auctioning of coal blocks, which were de-allocated by the Supreme Court, has indirectly helped in a way. As the entire proceeds of coal block auctions would go to respective states where the blocks are situated. It has brought the states and the Centre closer, easing operational bottlenecks for CIL in mining states. But better management of affairs and coordination of states in operational

matters will not help CIL to fulfil the dream of producing I BT by 2019. “1 BT is not a target enforced from the top. Rather, it’s a bottom-to-top calculation. We asked all subsidiaries what they could produce by 2019-20. We have chalked out a plan for 925 MT by 2019-20. I think, we can reach 1 billion, too,” Swarup said. The man to deliver on the promise is Bhattacharya. “The key issues that the coal miner is basically relying on, are timely completion of 3 critical railway lines, land acquisition and green clearances,” Bhattacharya said. There has been significant progress as CIL has already acquired 2,000 hectares and received 41 environmental and forest clearances in the past 8 months. It has chalked out mine-wise plans to meet the 925 MT production target by 2019-20. Chhattisgarh-based South Eastern Coalfields and Odisha-based Mahanadi Coalfields will account for half the targeted output. Both subsidiaries have received green clearances for 5 blocks each in 2014-15 and many more are expecting clearances this year. There are technolo-gical challenges, especially for underground mines. CIL is banking on a public-private partnership model. Engaging private contractors for mining is already operational in CIL under a Mine Developers and Operators (MDOs) model but CIL is now looking to expand this. “Awarding contracts to operators in the past few years under MDO model were on piecemeal, not on turnkey basis. Here, the miner would be handed over the mines for a much longer period and it would be awarded on a turnkey basis - from production to transport till the loading point,” an official explained. And even if the target is achieved, coal evacuation would be a major issue for CIL. The govern-ment is working on 3 major new railway lines in Jhar-khand, Chhattisgarh and Odisha that have the potential to evacuate 200-300 MT once ready by July 2018. Business Standard; July 7, 2015 (Edited)

Huge eastern arms’ contribution in CIL 12% growth PRESS TRUST OF INDIA New Delhi: CIL’s Jharkhand-based arm, Central Coalfields Ltd (CCL), has topped among 8 subsidiaries by surpassing output target with production of 12.59 MT in the first 3 months of the current fiscal. CCL not only achieved 120% of the 10.50 MT target set for April-June quarter but also registered a record 26.6% over the corresponding period in the previous fiscal, CIL said. CCL during the last fiscal had become the first subsidiary of CIL to achieve its pro-duction target as well as growth in raw coal output by registering unprecedented growth of 11.2% in raw coal output. Its coal production had stagnated at around 48 MT for 4 consecutive financial years from 2009-10 to 2012-13 due to "acute shortage" of land but in 2014-15 it notched 55.64 MT production against 55 MT target on account of various expansion and other initiatives, as per its C&MD Gopal Singh. Another arm Eastern Coalfields Ltd (ECL) too surpassed the production target during April-June 2015 and recor-ded an output of 9.12 MT against 8.998 MT target. Two other arms - Mahanadi Coalfields Ltd (MCL) and NCL (Northern Coalfields Ltd) too registered impressive shows by achieving 99% production of the targeted quantity at 31.07 MT and 18.26 MT, respectively during the period. MCL recorded a 13.3% growth in production over the same period in previous fiscal, while NCL output was higher by 18.2%. South Eastern Coalfields Ltd (SECL) and Bharat Coking Coal Ltd (BCCL) achieved 95% each of the target recording 31.16 MT and 8.81 MT of production, 13.2% and 3% growth in output in April-June period compared with a year ago period. Western Coalfields Ltd (WCL) achieved 90% of the target by producing 10.26 MT during the period. However, the worst performance was shown by North East Coalfields (NEC) which could achieve only 27% per cent of the target by producing 0.07 MT of coal.

15

CIL which accounts for over 80% of the domestic coal production has 8 subsidiaries - ECL (West Bengal), BCCL

(Jharkhand), CCL (Jharkhand), SECL (Chhattisgarh), WCL (Maharashtra), NCL (Madhya Pradesh), MCL (Odisha) and NEC (North East). The Centre has announced plans to boost CIL’s annual production to the level of 1 BT by 2019 to

The share of underground coal mining in India has slumped from 16.3% to 8.8% in the last decade

GAURAV MISHRA New Delhi: The government is considering a push for underground mining to extract deep-seated coal in a bid to boost coal production, but is facing

meet

growing fuel demand. However, the

challenges of resources and lack of

company has successively missed its output targets. The Statesman; July 6, 2015 (Edited)

machinery. “There’s a definite thrust towards it. We are trying to understand it,” coal secretary Anil Swarup said. India

CCL to start new projects for coal mining in Jharkhand

 

has set itself an ambi-tious target of increasing coal production from 565.77 MT in 2013-14 to 1.5 BT by 2020 to

PRESS TRUST OF INDIA Ranchi: “We will start mining of coal over

reduce dependence on imports. The most prevalent method of coal mining in India

a

stretch of 34,000 acres of land in

is opencast or surface mining, used for

Jharkhand and land authentication process is on,” said CCL’s C&MD Gopal Singh. Singh (who will take charge as NMDC’s MD next January). He told that progress of land authentication work was

extracting coal deposits at shallow depths. It’s a more efficient process than underground mining, the latter needing high technical expertise and greater investments. The share of underground

monitored by Jharkhand CM Raghuvar

coal mining in India has slumped from

 

Das

and Chief Secretary Rajiv Gauba.

16.3% to 8.8% in the last decade.

“We are also holding camps in villages to authenticcate the land,” he said, adding that the new mining project will begin in

“The primary reason is rise in production from opencast mines, which is increasing at a greater rate than under-ground

CCL

command area of the state, he said.

mines. Some potential underground mines

Besides, the unit will recruit 17,000 people

have also been converted to opencast

in

the next 2 years, Singh said, claiming

mines,” said S.K. Dubey, technical

that

around 1.70 lakh people in and

secretary at the Central Mine Planning

around the proposed projects will indirectly benefit following their

and Design Institute (CMPDI), the consulting arm of CIL. The most efficient

implementation.

 

way to carry out underground mining is

The

C&MD said 2 of its projects in

to extract long panels of coal with use of

Madadh Amrapali, touted to be one of

massive shearers and a roof support

Asia’s largest projects, have even featured

system through longwall mining. A

in

the PM’s Pragati portal. CCL has been

typical longwall machine moves along the

emer-ging as the best coal company of the country, he added. Asked the reason behind CCL’s whopping growth, Singh said it was because of good co-ordination among all stakeholders, including government agencies, contact-ors, employees etc.

coalface cutting coal slices while the roof is allowed to collapse. This mining technique hasn’t been successful in India because, Dubey said, “We don’t have large areas of continuous coal deposits underground. This makes esti-mation and implementation of mining

The Financial Express; July 5, 2015 (Edited)

very difficult. We had very ambitious projects in the 1970s and 1980s, which were unsuccessful due to these conditions.

Underground

coal

mining

plan

hits

In China or the US, large deposits of coal

hurdles

 

seam are available free from geo-mining

16

disturbance, which makes longwall mining feasible.” In India, Singareni Collieries Co Ltd (SCCL) has the highest share of underground mining production. According to an SCCL official, the company has been sourcing machinery required for longwall mining from Caterpillar Inc., since last year. “Technology needs to be upgraded. For long-wall mining, our plan for the future is to get mines enlar-ged by merging 2 mines or opening a new large mine where longwall mining is possible,” said Swarup. One of the ways that can boost underground mining is through a continuous miner. It requires less investment and can work in difficult conditions, even in the absence of a long stretch of continuous deposition. “Continuous miners have already been deployed at many mines and it has shown great potential,” said Dubey. Productivity in a mine is measured through output (in tonnes) per man-shift (OMS). The OMS for underground mines of CIL in 2013-14 was 0.76. The corresponding figure for opencast mines was 12.31. “There are restric-tions in underground mining. Coal can only be extracted by haulage or conveyor belts. It has to travel a long distance and therefore the efficiency is low,” said the SCCL official. There is, however, one important factor which strengthens the case for underground mining. The use of explosives in opencast mining affects the vege-tation, soil and wildlife around the mine. “Environ-mentally, underground mining is much better than opencast because it doesn’t immediately affect the natural habitat,” said Swarup. “Hopefully the proportion (of underground mining) would go up a bit in the sense of our understanding of new technology and opening of larger mines where new technology could be deployed,” said Swarup. LiveMint; July 4, 2015 (Edited)

Coal India to return 75% of Mozambique blocks

DEBJOY SENGUPTA Kolkata: CIL will relinquish 75% of the area in the 2 coal blocks it had acquired in Mozambique about 6 years ago. The move follows the local government's decision to double charges of holding the blocks, which have so far not yielded any coal worth the effort. “At a board meet- ing last week, it was decided that Coal India Africana Ltd, will just about keep 54 sq km of the 205 sq km blocks that it had earlier acquired,” a senior coal sector official said. “The decision was taken following completion of a near 3-year exploration programme.” About 6 years ago, Coal India had won a 5-year licence for exploration and development of A1 and A2 blocks in Mozambique's north-western province of Tete. The blocks were unexplored and it was upon CIL to explore and ascertain the quality of coal there. Following the acquisition, CIL set up Coal India Africana for carrying out the exploration at the 2 blocks. When CIL acquired the blocks, the authorities in Mozam-bique had indicated that the 205 sq km area holds a mix of premium and normal variety of coal, and reserves could be around 1 BT. “We were told that 20% of the deposits in these blocks are expected to be of superior variety, good enough to be used in steel making, while the remaining was expected to be thermal used as fuel in power plants. It seemed a viable option at that time,” said the official said. The Economic Times; July 7, 2015 (Edited)

17

official said. The Economic Times; July 7, 2015 (Edited) 17 ONGC to cut gas production by

ONGC to cut gas production by 40% PRESS TRUST OF INDIA New Delhi: ONGC will cut gas production from its biggest fields in the Arabian Sea by about 40% as it carries out repair work on a pipeline that carries the gas to shore. ONGC produces 33 mmscmd of natural gas from the Bassein

field in the western offshore. The gas is

carried to shore by 2 under-sea pipelines,

a 42-inch line and a 32-inch line. The

company plans to carry out repair work

on the pipeline that carries natural gas from the Bassein field to Hazira, from July

7 to 27. “The repair work was to last 24

days but we have squeezed it in less than

3 weeks,” a top official said. “The repair

work is to tentatively start from July 7

but could be pushed back to July 8 or 9.” This would lead to stoppage of production

at some wells. “The output will fall by 13-

14 mmscmd during the shutdown period,” he said. GAIL India Ltd, which sells gas produced from the ONGC fields to customers, has been intimated of the shutdown. GAIL will supply LNG purchased from spot market to fertiliser plants that will be deprived of ONGC gas. “Power plants have said that they are not in such a dire need and they can manage without ONGC supplies. They do not want GAIL to give them LNG procured from Qatar on long- term contract as it costs most. Fertiliser plants want GAIL to supply LNG from the spot market which is 40% cheaper than Qatar gas,” the official said. While domestic gas is priced at USD 4.66 per mmBtu, LNG in the spot market is available at USD 7-8 per mmBtu. LNG from Qatar on a long-term contract costs almost USD 13.

The Financial Express; July 3, 2015 (Edited)

Canada LNG import on menu OUR SPECIAL CORRESPONDENT New Delhi: India is exploring the possibility of importing LNG and crude oil from Canada as the country looks to reduce its dependence on West Asia. "Canada could potentially supply a significant amount of the 44 billion cubic metres of natural gas that India is forecast to import annually by 2025," the petroleum ministry said. Oil minister Dharmendra Pradhan met Canadian minister for natural resources Greg Rickford at the second India-Canada Ministerial Energy Dialogue in Calgary

to enhance energy co-operation between the two countries. "Our energy cooperation is steadily growing but the potential is much higher. Let's convert the potential into reality," Pradhan said. IOC has already picked up a 10% stake in an integrated LNG project called Pacific NorthWest LNG proposed at Lelu Island in British Columbia. Real estate firm Hiranandani Group has also announced plans to develop a 4.5 MTPA LNG export terminal in Melford, Nova Scotia, at an estimated cost of $ 3.3 billion by 2020. The Telegraph; July 8, 2015 (Edited)

Hurdle to Bengal gas project R. SURYAMURTHY New Delhi: A major industrial project in investment- star-ved WB is facing roadblocks prior to its implementation. The proposed natural gas pipeline from Bengal's Contai to Dattapulia and Paradip (Odisha), planned by H- Energy Pvt Ltd, a subsidiary of the Hiranandani Group, seems to have run into rough weather with stiff opposition from state-owned gas transporter GAIL, refiner Indian Oil and Adani Enterprises. H- Energy is setting up a floating sto-rage regasification unit (FSRU) on the sea near Digha with capacity to convert 6 MPTA of imported LNG to natural gas. The LNG terminal is expected to be commissioned in 2018-19 at a cost of around 2,400 crore, while the pipeline requires 2,700- crore investment, both for the sub-sea and onshore components put together. The company has submitted an expression of interest to the Petroleum and Natural Gas Regulatory Board (PNGRB) to lay the pipeline from Contai (East Midnapore) to Dattapulia (Nadia) and Paradip. The oil regulator has sought the views of the industry players on the issue, resulting in objections from GAIL, IOC and Adani. The Statesman; July 6, 2015 (Edited)

18

RLNG pipeline project gets on fast track

GAIL

to

resume

outstanding

pipe-

laying work

S. ANANDAN

Kochi: With the State getting its act together to fast-track the 504-km R-LNG pipeline project through its northern districts, which had been slowed down due to opposition from locals and subsequent withdrawal of contractors, GAIL is gearing up to resume outstanding pipe-laying work in a month’s time. Sources said that unfinished work along a total distance of 31-km - in areas in Ernakulam, Thrissur, Palakkad and Kasaragod districts - would recommence in the first week of August. “The plan is to concurrently lay pipes along the entire stretch by the end of the year so as to finish the job by mid-2016. “A safety audit by international agencies will be carried out before commissioning the line,” said the source. GAIL’s roadmap now suggests that it is planning to complete the work in 15 months - earmarking 12 months for construction and the rest for safety audit. The Hindu; July 5, 2015 (Edited)

MHI bags IOC contract for 2 LNG storage tanks at Ennore

The high-capacity LNG storage tanks will have a capacity to hold 180,000 cubic meters of gas each

PRESS TRUST OF INDIA New Delhi: Indian Oil Corp (IOC), the nation’s largest fuel retailer, has awarded a contract to build 2 football stadium- sized LNG storage tanks at its upcoming Ennore LNG import terminal in TN to Mitsubishi Heavy Industries Pvt Ltd (MHI) of Japan. “The LNG tanks will be the main facility at the first LNG receiving terminal to be cons-tructed on India’s east coast,” MHI said. This is also the first LNG storage tank order that MHI has received from India. “Construction of the tanks is slated to begin in July; completion is scheduled for the spring of 2018,” MHI said. The high-capacity LNG storage tanks will have a capacity to hold 180,000 cubic meters of gas each and will be installed at a LNG terminal that IOC will build near Ennore port, about 25 kms north of Chennai on the Bay of Bengal. LNG

imported to the terminal will be supplied as feedstock to fertiliser plants, and to utility company power generation plants for use as an alternative fuel. “The terminal will initially have the capacity to handle 5 MMTPA, expanding to 15 MMTPA in the future,” the statement said. IOC plans to build a terminal to import gas turned into liquid at -160 degrees Celsius in ships at Ennore at a cost of 5,150 crore by 2019. Ennore will be the third LNG terminal on the east coast with GAIL building a facility at Kakinada in AP and Petronet LNG Ltd proposing a 5 MPTA facility at Gangavaram in AP. India currently has four LNG import terminals, all on the west coast - Dahej and Hazira in Gujarat, Dabhol in Maharashtra and Kochi in Kerala. LiveMint; July 6, 2015 (Edited)

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and Kochi in Kerala. LiveMint; July 6, 2015 (Edited) 19 L&T delivers indigenously designed reactor for

L&T delivers indigenously designed reactor for nuclear plant OUR BUREAU Mumbai: L&T Heavy Engineering has delivered its first indigenously designed pressurised heavy water reactor for the nuclear plant being developed by NPCIL in Gujarat. The first of the 2 nuclear 700 MWe steam generators was delivered at the Kakrapar plant on June 16 and another will be dispatched on Saturday. Each steam generator weighs about 215 tonnes and is made of special low alloy quenched and tempered steel with nickel- iron-chromium alloy tubes and stainless steel internals. M.V. Kotwal, President (Heavy Engineering), L&T, said the completion of the steam generator is a major milestone towards ‘Make in India’ vision of the government. The 3D multi-phase thermal hydraulic analysis and safety analysis including accidental conditions were designed in- house by L&T. The nickel-iron-chromium alloy U-Tubes were manufactured as a joint effort with Nuclear Fuel Complex, Hyderabad. L&T Special Steel and Heavy

Forgings, a 65000 sq. meter integrated facility at Hazira, will supply forgings for future nuclear power plant projects. LTSSHF is a JV between L&T and NPCIL. The Hindu Business Line; July 3, 2015 (Edited)

Kalpakkam breeder reactor to go on stream T.S. SUBRAMANIAN Chennai: The 500-MWe prototype Fast Breeder Reactor at Kalpakkam is getting ready to be commissioned in September. When the reactor goes critical, it will signal India’s triumphant entry into the second stage of its 3-stage nuclear power programme. The PFBR will use plutonium-uranium oxide as fuel and 1,750 tonnes of liquid sodium as coolant. “We are committed to making PFBR attain criticality in September,” said P. Chellapandi, C&MD, Bharatiya Nabikhiya Vidyut Nigam Ltd, a public sector undertaking of the DAE, tasked with building breeder reactors. “We are awaiting clearance from AERB for sodium charging, fuel loading, reactor criticality and then stepping up power generation,” Chellapandi said. The Hindu; July 8, 2015 (Edited)

India, Kazakhstan ink deals on uranium supply, defence

Kazakhstan signs contract to supply 5,000 tonnes of uranium to India during 2015-19

DIPANJAN ROY CHAUDHURY Astana, Kazakhstan: India and Kazakhstan inked a deal for a renewed long-term supply of natural uranium, and a wide- ranging defence cooperation pact besides a railway cooperation agreement to boost connectivity to realise full economic potential. Kazakhstan, a leading uranium producer globally , will supply 5,000 tonnes of uranium to India during 2015- 19, its President Nursultan Nazarbayev announced following his talks with Narendra Modi. Kazakhstan will emerge as the biggest source of uranium for India besides Canada and Australia. This is the

second such agreement between Astana and Delhi since 2009. Kazakhstan's uranium firm KazAtomProm supplied 600 MT of uranium ore concentrate in 2010- 11, 350 MT in 2011-12, 402.5 MT in 2012-13 and 460 MT in 2013-14. The five-year contract to supply uranium ended last year. “Kazaksthan was one of the first countries with which we launched civil nuclear cooperation through a uranium purchase contract. We are pleased to have a much larger second contract now,” Modi said in his joint presser with Kazakh President indicating nuclear cooperation is a key pillar of partnership. The Economic Times; July 9; 2015 (Edited)

‘Drop power plant move’

Agitation planned during PM’s visit to Visakhapatnam

STAFF REPORTER Srikakulam: The CPI (M) demanded that the proposal for a nuclear power plant at Kovvada in the Ranasthalam area of Srikakulam district should be withdrawn imme-diately as the AERB has not given a site clearance certificate either to the State government or NPCIL. The party released a copy of the letter purportedly written by the AERB stating that a lot of mandated conditions need to be met before finalising the site. The party’s State secretariat member Ch. Narasinga Rao and other leaders said the State government had no business to begin land acquisition without first obtaining a site clearance certificate from AERB. The Hindu; July 3, 2015 (Edited)

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certificate from AERB. The Hindu; July 3, 2015 (Edited) 20 NHPC lines up 15-yr NCD to

NHPC lines up 15-yr NCD to raise ₹₹₹₹ 1,475 cr RAVI RANJAN PRASAD New Delhi: NHPC will be launching secured non-convertible bonds with 15 year tenure which has been given AAA rating by India Ratings and Research. NHPC is planning to raise 1,475 crore

by issuing these bonds with a green shoe option of 1,275 crore. Government of India owns 85.96% stake in the company. India Ratings and Research has assigned NHPC’s 14.75 billion (including a green shoe option) of 12.75billion secured non-convertible taxable bonds a long-term rating of 'IND AAA’ with a Stable Outlook, India Ratings said in note. “NHPC proposes to raise the bonds with a tenor of 15 year including a 3-year moratorium period. The bonds will be repaid in 12 annual equal repayments beginning from the fourth year of issuance and up to the 15th year,” India Ratings said. “The funds raised through this issue are likely to be used by the company for meeting capital expenditure requirements of ongoing projects and recoupment of expenditure already incurred.” “The coupon rate for the bonds will be announced at the time of the launch and will be spread over the 10-year Government Securities yield,” said Rakesh Valecha Senior Director, India Ratings and Research. NHPC in FY14, it had revenue of 7,250 crore and in FY13 of 6,240 crore. It is operating 18 hydro power plants with a capacity of 4,857 MW on multiple rivers and selling to multiple parties. As India’s largest hydro power generating company, it contributes 12% to all-India hydro capacity at a standalone level. “NHPC’s 4 under-construction projects of 3,290 MW capacity with an estimated capital outlay of 23,000 crore are facing execution delays,” India Ratings said. “The projects could see an increase in costs if execution timelines are further extended. Moreover, the capital cost estimates of 2 projects facing execution delays (TLDP-IV and Subansari Lower) have been estimated at July 2010 and December 2010 price levels, while actual capital costs would have increased,” India Ratings said. Financial Chronicle; July 8, 2015 (Edited)

Ratings said. Financial Chronicle; July 8, 2015 (Edited) U’khand rains make UP power plants trip 21

U’khand rains make UP power plants trip

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TIMES NEWS NETWORK Lucknow: After causing a flood-like situation in parts of UP, heavy rains in Uttarakhand have come to spell trouble for UP's ailing power sector as well. As many as 4 units, each of 100 MW, at Vishnuprayag hydroelectric project, which provides 88% power to UP, have tripped following heavy siltation in water channels of the power plant located on Alaknanada River. The problem in the power plant, located in Chamoli district of Uttarakhand, about 15 km downstream of the Badrinath shrine, has led to immediate shortfall of around 300 MW in the UP state grid. Owned by the JP group and commissioned in 2006, these have been facing problems during monsoon. According to Northern Load Dispatch Centre (NRLDC), the problem has been prevailing since June 26 when heavy rains were reported in upper reaches of the hill state. There is no confirmation as to when the four units of the power plant would resume functioning. Officials in UPPCL, however, said that they were in touch with the Uttarakhand government for early resumption of the power supply from the project. The tripping has, in fact, immediately contributed to nearly one-third of the total shortfall between power demand and supply. According to UPPCL data, as against a total restricted power demand of more than 13500 MW, the supply is to the tune of around 12400 MW, leaving a gap of over 1000 MW according to data, made up partially for the loss of power from Vishnuprayag by resorting to overdraw of around 250 MW from the Central quota. Sources said that the energy department asked UP Rajya Vidyut Utpadan Nigam to step up efficiency of state-owned power plants, which otherwise wheeled out just around 3000 MW. Private power plants like Rosa and Bajaj were providing 815 MW and 354 MW respectively. A major chunk of power supply was provided by the Central pool: around 6400 MW. UP was also getting just above 600 MW through bilateral and power banking.

The

(Edited)

Times

of

India;

July

5,

2015

NHPC to develop hydroelectric projects in Darjeeling PRESS TRUST OF INDIA New Delhi: NHPC said it will set up 4 hydroelectric projects with a total generation capacity of 293 MW in the Teesta Basin of Darjeeling. In a BSE filing, NHPC said: "An agreement has been signed on July 3, 2015 for the development of 4 hydroelectric projects of total esti-mated capacity of 293 MW, in Teesta Basin, amongst WB government, WB State Electricity Distribution Company and NHPC." The 4 projects are:

Teesta Low Dam-V, Teesta low dam I&II combined, Teesta Intermediate Stage and Rammam Stage-I, located in Darjeeling District, it added. These projects shall be developed on build, own, operate and maintain basis by NHPC, the filing said. Financial Chronicle; July 6, 2015 (Edited)

Not quite in full flow

India's water security would be nothing more than a term if the problems plaguing the Himalayan rivers are not immediately addressed

For most pilgrims on their way to Kedarnath, Srinagar in the Garhwal region of Uttarakhand is just a town they might stop at for a cup of tea or snack. Almost equidistant from Haridwar and Kedarnath, there is nothing that marks it out. But all you need to do is stop your car just outside Srinagar before you enter it from Haridwar, step off the road and take a few steps toward the Alaknanda river. Almost immediately, scars of the floods in Uttara-khand would be visible to everyone, over 2 years after the disaster. The SSB auditorium, damaged then, still stands askew with its dome - a not so insignificant reminder of the havoc the river wrought between June 15 and 18 in 2013. As if that were not enough, what used to be a park till June 14 now has mounds of muck the river brought, which

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gives one the feeling of impending construction activity. Vijaylaxmi Raturi, a lawyer who stays across the road, says most of the muck is debris from GVK Power & Infrastructure's 330 MW hydel power project a few kilo-metres upstream, which was under construction then. “It had rained as heavily before as well but there was never any muck,” says Raturi. The Alaknanda meets the Bhagi-rathi downstream at Devprayag to form the Ganga.

In a 2014 report by a committee set up by

MoEF, which said hydel projects in Uttarakhand - home to the contro-versial Tehri dam - aggravated the June 2013 disaster, there were conflicting views on the impact of the Srinagar project. According to environmental activists and scien-tists, dams along with pollution and climate change are among the biggest threats facing Himalayan rivers like the Brahmaputra, the Indus and the Ganga. These have a direct bearing on India's water security because Hima-layan rivers account for nearly two-thirds of India's national river flows, and 43% of India's population depends on just the Ganga for their water needs.

population depends on just the Ganga for their water needs. India has 4,857 large dams (more

India has 4,857 large dams (more than 15

m in height or 10-15 m if it fulfils some

other conditions) in operation and 314 under construction. While 9 out of 10 dams in India have irrigation as their main purpose, in the Hima-layan region, these account for 70% of hydel power potential. India, China, Nepal and Bhutan are in a race to build dams for hydro power. Dams are increasingly becoming a source of geopolitical tension between coun-tries, especially India and China over

the Brahmaputra, which originates in Tibet. Science magazine says India has plans for 292 dams in the Himalayas to double hydel power by 2030 and that region could have one of the highest dam densities in the world. Large hydro power projects (more than 25 MW) account for 15% of India's installed power capacity of 2,72,503 MW, but it has identified hydel capacity to be developed which is two-and-a-half times the existing capacity, the highest of which is in Arunachal Pradesh, followed by Uttarakhand, J&K, HP and Sikkim. The GVK project, which changed hands a few times since the 1980s before being acquired by the company in 2005, has faced opposition from locals (it was commissioned in March). Bharat Jhunjhunwala, an activist and a former professor at IIM, Bengaluru, contested in the High Court of Uttarakhand in 2009 that the original capacity appro-ved for the project was only 200 MW and that the environmental clearance given had lapsed. The Supreme Court in 2013 gave the project a go ahead. Locals say that ever since the project started operating, there has been severe water scarcity. A GVK spokes-person says since it is a run-of-the-river project, “the flow in the river after the powerhouse is the same as the inflows before the dam.” He adds that to meet water requirements of the stretch between the dam and the powerhouse, there are minimum environmental flows of 5 cubic metres per second, which includes public water supply requirements, as approved by MoEF. Environ-mental flows, which refer to the quantity, quality and timing of water flows required for a river to perform its ecological functions, has gained credence. In the Indian context, given rivers' religious significance some people have even added the socio-cultural dimension to environ-mental flows. Ashok Khurana, director general, Asso-ciation of Power Producers, says there should be an objective scientific assessment of hydro projects in the Himalayas. “No one wants to defile the environment. Every project

will have an impact, but there are mitigating measures. We first need to find out how much hydel power can be developed in a sustainable manner in the Himalayas,” he adds. While those critical of large dams in India cite the US' policy to decommission some large dams, Kameswara Rao, partner, energy and utilities, PwC, believes there is more to it: “Canada has continued to invest in hydel [power] and the US imports hydro power from Canada. European countries like Norway, Sweden and Switzerland continue to depend on hydro power.” One of the proposed ways to regulate development along rivers is cumulative impact assessment which, in case of a hydel project, does not look only at the impact of that project which is what environment impact assessment (EIA) does, but also impact on the river of all the other hydel projects and other developmental activities like roads and irrigation projects in the region, the people living there and biodiversity. “We need a river basin approach to rivers, similar to the landscape approach we have for forest and wildlife conservation,” says VB Mathur, director of Dehradun-based Wildlife Institute of India. Jhunjhunwala, who fought an unsuccessful legal battle against the Srinagar project, says while he is not opposed to hydel power, a part of the river should be allowed to flow uninterrupted at all times, unlike now when some-times the entire flow of the river is halted. Adds Himan-shu Thakkar of the South Asia Network on Dams, Rivers and People, “We have accepted we need to save tigers, but we have no law to save rivers. India's long-pending plan to link 37 rivers has been criticised on the grounds that it could do irreversible damage to rivers.” The Economic Times Magazine; July 5, 2015 (Edited)

India, Russia sign MoU for funding of hydro generation projects AJAY KAUL, PRESS TRUST OF INDIA

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Ufa: Russia’s Direct Investment Fund (RDIF) signed a MoU with India’s Infrastructure Development Finance Co (IDFC) for funding of hydro-generation projects. RDIF Director General Kirill Dmitriev told the BRICS Business Council meeting in Ufa that his company signed a MoU with its partners in BRICS member-states to work with sovereign funds, with the BRICS Bank and invest in the equity of infrastructure projects in these countries. “We have signed an MoU with 5 funds from our 5 countries: the Russian Direct Investment Fund, the Silk Road Fund from China, IDFC from India, the Development Bank of South Africa and the Brazil BTG Pactual fund,” he said. “With the IDFC in India, we discussed projects in hydro-generation where Russia has a lot of expertise,” Russian news agency Tass quoted him as saying. “The BRICS Bank will be doing a lot of debt providing, while the IFI (Infrastructure Fund Initiative) will be investing in equity,” Dmitriev said. LiveMint; July 8, 2015

China offers USD 50 bln for hydroelectric projects in Pakistan PRESS TRUST OF INDIA Islamabad: China's state-run power company, Three Gorges Corporation (CTG), is keen to participate in a financing consortium to fund up to USD 50 billion of hydroelectric power projects in Pakistan. CTG expressed interest in financing projects in Pakistan in conjunction with International Finance Corporation, the Express Tribune reported. CTG owns and operates the world's biggest Three Gorges Dam, having a capacity of 22,500 MW, which is equal to Pakistan’s total installed capacity of 23,500 MW. Pakistan has a potential of producing up to 60,000 MW of hydroelectric power, of which 40,000 MW is located in a region called the Indus Cascade, which begins in Skardu in Gilgit-Baltistan and runs through to Tarbela, the site of Pakistan’s biggest dam, in Khyber-Pakhtunkhwa. The

biggest project the government has already identified and begun preliminary work on is the Diamer Bhasha dam, which would require USD 15 billion to construct and would have a capacity of 4,500 MW. Financial Chronicle; July 3, 2015 (Edited)

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of 4,500 MW. Financial Chronicle; July 3, 2015 (Edited) 24 Renewable Energy Ministry wants one Act

Renewable Energy Ministry wants one Act for all green energy policies

Says it will lead to better implementation; but move could spark turf war with Power Ministry

DEBABRATA DAS & RICHA MISHRA New Delhi: The Ministry for New & Renewable Energy (MNRE) proposes to put in place an Act that would bring under one roof various policies that govern this sector. Till now, renewable energy sector has been policy driven and there is no separate law governing implementation norms. “What we are working on right now is an Act. Most of the countries which have large investments in renewable energy have an Act that defines quality standards of equipment as well as address manufac- turing, standardisation and certification issues. The Act will also provide a definite framework for the tariff structure,” Upendra Tripathy, Secretary, MNRE, said. MNRE plans to put out the draft for the ‘Renewable Energy Act’ in the next 3 months. But, formulating an Act may not be easy, as Piyush Goyal’s two ministries - Power and New & Renewable Energy - could get into a turf war. A senior official associated with the process said, “The Act, when in place, would be able to govern only off-grid projects as the grid connected ones could come under the purview of the Electricity Act - implemented by the Power Ministry. Whether the Power Ministry would like to let go of its domain is the question.”

The government, anyway, is proposing changes to the Electricity Act that brings in a Renewable Generation Obligation to ensure thermal power generators have at least 10% of their generation capacity from renewable energy sources. Then there is the issue of tariff. Renew-able energy developers, particularly solar power produ-cers have flagged off

problems in finding buyers for the power they generate, as it is expensive. The solution for this again lies in the Electricity Act. “To address this issue, we are strengthening the RPO. Once the RPO goes up after the Electricity Act is amended States will have to buy more power and that is the time we need to produce additional electricity from renewable sources. Solar parks are also being set up in various parts of the country according to RPO requirements

of States,” Tripathy said.

The Hindu Business Line; July 2, 2015

(Edited) Wind power mission on anvil to achieve 60,000 MW by ‘22

Policy note envisages ₹₹₹₹ 10,00,000 cr outlay, fiscal sops

SUBHASH NARAYAN The government proposes to launch a national wind mission (NWM) on the lines of the ongoing solar mission as part its drive to achieve exponential growth. The main objective of this initiative would be to make India a global leader in wind power, by creating conditions conducive for its diffusion across the country in a time-bound manner. The cabinet note on the new policy is already in final stages and would come up for approval shortly. NWM will set a target of raising wind power generation to 60,000 MW by 2022 with an investment of 10,00,000 crore.

It will aim to add further capacity through

a mix of fiscal incentives to encourage

adoption of new tech-nologies and flow of global investments. “We intend to launch NWM before the end of this financial year,” a government official said. The need for a long-term and stable policy framework covering all key aspects such as land allocation, tariff fixation,

incentives, manufacturing policy, planning for transmission infrastructure and managing intermittency (in supply) is the key driver for this exercise, the official said. As a first step towards bringing the wind sector under mission mode, the government will soon announce a national offshore wind energy policy to tap the country’s maritime regions, which have vast potential. Areas that have good wind energy potential are likely to be declared as exclusive zones. The plan being finalised by MNRE also includes additional sops for wind projects over and above the incentives available under accelerated depreciation and generation-based incentive scheme. Such sops could be in the form of fiscal incentives such as exemption from service tax for conducting wind resource assessment, EIA, oceano-graphic study, utilisation of survey vessels and installation of vessels. Tax exemption could also be considered for inter-state sale of renewable energy and for setting up transmission infrastructure to evacuate this power. In addition, the sunset period of 10-year holiday scheme may be extended for the entire period of the scheme up to 2022. The tax holiday benefit under section 80- IA of the income-tax act ends on March 31, 2017, making any power project that starts operating after that date ineligible for the sop. The incentive scheme allows a developer to claim deduction of up to 100% of profit for any 10 consecutive years out of the first 15 years from the commissioning of a project. MNRE estimates peg the country’s current wind power generation capacity at 23,444 MW as of March 31 and solar power capacity at 3,743.97 MW, while grid connected renewable energy capacity stood at 35,776.96 MW. India’s potential for wind energy is enormous. One estimate pegged it at 4,000 GW while another GIS-based study suggested that country has potential to produce 5,00,000 MW of offshore wind capacity. Financial Chronicle; July 8, 2015 (Edited)

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Clean Energy Fund to give cheaper loans

M. RAMESH

Chennai: The Indian renewable energy industry has for long sought cheaper finance from the National Clean Energy Fund (NCEF), and now it looks like its wish will be granted. The Renewable Energy Act, which in the works, is likely to mandate that 50% of the balance in NCEF will go to funding renewable energy projects, according to GM Pillai, a member of a 6-member sub-committee that drafted the law. The draft is currently under consi-deration MNRE. Pillai, who is also the Director-General of the World Institute of Sustainable Energy, said so at a conference on Green Energy. NCEF has a corpus of over 17,000 crore, from coal cess - a 200 levy on every tonne of coal mined in India or imported. The Technical Committee on Renewable Energy Law, set up by MNRE, has recommended that NCEF should be used to subsidise loans to renewable energy projects so that the industry gets funds for interest rates of “at least 9%,” Pillai said. Speaking at the conference organised by CII, Pillai also appealed to various State electricity regulatory commissions to take note that O&M costs of wind farms were too high. Manufacturers of wind turbines also undertake O&M for a fee. Pillai said that O&M charges were fixed without any transparency. He wanted O&M fees to be based on power generation or the revenues of the wind farm. Today, the fees are fixed on capital expenditure basis.

The Hindu Business Line; July 3, 2015 (Edited)

REC tweaks norms to

lend to renewable energy projects

M. RAMESH

Chennai: REC has tweaked its lending norms to suit wind and solar projects, the company’s Executive Director, Ashok

Awasthi, said. “We have significantly changed our guidelines for lending to

26

renewable energy sector,” Awasthi said at a CII organised conference on Green Energy. He mentioned 4 broad changes in REC’s lending norms for renewable energy projects. First, the moratorium period has been increased from ‘6 months from the commercial date of operation’ of the project, to 1 year from COD. Second, the requirement for collateral security has been removed. Third, the repay-ment period for loans can now be up to 15 years. Finally, the debt-equity ratio has been made more liberal - renewable energy projects need only 25% capital to be eligible for REC loans and in certain cases, REC wouldn’t mind a mix of 80:20, Awasthi said. He said that REC’s tweaking of lending norms would set a precedent in the industry and other financial institutions would follow suit. REC, he said, has a line of credit from the German fin-ancial institution, KfW, of € 100 million, to lend to renewable energy projects in India. He confirmed that the company is also considering a tax-free infrastructure bond issue in India. REC is particularly keen on renewable energy projects because, at present, there are not many other lending opportunities. There are not many con-ventional power projects. Funding for rural transmission infrastructure would be predominantly from the government’s Deen Dayal Upadhyaya Gram Jyoti Yojana. The Hindu Business Line; July 3, 2015 (Edited)

State signs renewable energy pact The Centre for Study of Science, Technology and Policy has entered into a 5-year agreement with BESCOM and Karnataka Renewable Energy Development. Two studies proposed for are: Roadmap for 6 GW solar and 10 GW wind power and development of rooftop PV power. The Economic Times; July 8, 2015 (Edited)

3 Kolkata institutes tie up for solar energy research

RITWIK MUKHERJEE Kolkata: Three of Kolkata’s premier institutes of techn-ology and management have joined hands to encourage, promote and conduct collaborative research and development activities on efficient solar cells develop-ment using state-of–the-art laboratory facilities. The Indian Institute of Engineering Science & Technology, Shibpur (IIEST), Centre of Excellence for Green Energy & Sensor System (CEGESS) and Heritage Institute of Technology, Kolkata (HITK), have also lined up plans to introduce specialised M.Tech course on ‘renewable energy’ at HITK. A MoU to this effect was signed. “This MoU and subsequent association will facilitate joint training and research activities by students and faculty members. The joint collaborative research projects, publications in journals, R&D activities on various types of solar cells such as organic and inorganic solar cells are significant components of this association,” P.K. Agarwal, CEO, Heritage Group, said. The Modi government has set an ambitious target of 100 GW of installed solar energy by 2022. Industry officials think it may remain a pipe dream unless the industry and the government address the crucial issue of shortage of efficient human resources. Different studies in this regard suggest that India will require nearly 1 million full time efficient manpower to put up and manage this solar capacity. Financial Chronicle; July 7, 2015 (Edited)

3,500 MW rooftop solar target for TN by 2022 G. JAGANNATH Chennai: MNRE has unveiled an ambitious plan to achieve 40,000 MW rooftop solar installation by 2022 and has released “tentative” year-by-year breakdown of capacity addition for all the states including 3,500 MW target for TN. In a letter to all secretaries of state and group heads of state renewable energy agencies, MNRE joint secretary Tarun Kapoor outlined the plan for ‘Grid

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Connected Rooftop and Small Solar Power Plants Programme’ which aims to promote installation of grid connected solar rooftop systems in residential, industrial, commercial and institutional sectors in the country. Urban local bodies have been urged to frame bylaws for installation of rooftop solar panels compulsory in buildings. The state-wise target has been arrived by considering each state’s power consumption and consequent requirement to meet corresponding RPOs. TN with a target of 3,500 MW stands third following Maharashtra (4,700 MW) and Uttar Pradesh (4,300 MW). For promoting grid connected solar rooftops with net metering in government buildings, Kapoor said the power ministry is implementing an Integrated Power Develop-ment Scheme (IPDP). MNRE is also seeking funds from international financing agencies including World Bank, KfW, ADB. The rooftop solar target fixed by MNRE is a tentative one. MNRE’s July 7 meeting of energy secre-taries in New Delhi on solar rooftop PV projects will throw up more details, a TN government official said.TN is one of the leading states in promoting solar rooftop. “Under the TN Solar Energy Policy, the government envisages adding 350 MW through solar rooftop including 50 MW of domestic rooftop,” the official said. Deccan Chronicle; July 7, 2015 (Edited)

Small can be big in renewable energy S. SHYAMALA While renewable energy industry at large talks about large projects, clean energy experts say the real opportunity lies in smaller ones, especially those in the domestic segment. They say India stands to benefit by going for hybrid installations, for example, using small wind and solar systems at homes. “By effectively com-bining small wind and solar units at homes, we can meet the rural power demand and create a lot of jobs,” said S Gomathinayagam, director general, National Institute of Wind

Energy. “We are familiar with solar panels for domestic use but have not yet exploited small wind units. While solar units can be used to generate power during the day, wind systems can help at night,” he said. Gomathinayagam said wind is not like solar energy in terms of usage. While the latter is just plug and play, wind systems need people with necessary skills to install, operate and maintain, which can create jobs in rural areas, he said. Hybrid generation is the way forward for both large and small projects, says Chintan Shah, president and head of strategic business development at Suzlon Energy. For individual units, the grid has to be (powered) up for more than 75% of the

India to kick off solar programme

New Delhi: India will open its solar- expansion programme this month by offering 2,100 crore ($330 million) to set up projects across 5 states. State-run Solar Energy Corp. of India will invite bids for a total of 3 GW of capacity in Gujarat, MP, UP, Karnataka and TN, MD Ashvini Kumar said. All will be tendered by March. Solar Energy Corp. will tender 700 MW in Gujarat, 750 MW in MP, 370 MW in UP and 500 MW each in Karnataka and TN, Kumar said. India aims to set up 25 solar parks by 2019, accounting for a fifth of the 100 GW target. The government has ear-marked 4,050 crore of funding support. So far 15 states have proposed 20 solar parks. LiveMint; July 6, 2015 (Edited)

time to get an output of 25%. By combining various green energy systems, the output of the grid can be increased to at least 40-45 %, thereby increasing efficiency, he said. The same principle applies to domestic systems as well. Rajesh Lakhoni, energy secretary to the government of TN, wondered why renewable energy companies are not advertising domestic solar panels like other white goods. “Domestic systems aren’t marketed enough to create awareness. They should send out the message about usages and benefits that people can derive by setting up domestic units,” he said. Lakhoni says TN gives up to 20,000 as subsidy on domestic solar panels, which nor-mally cost over 40,000. Users get the subsidy immediately after installing the units at home. By using solar power for air- conditioners alone, one can save at least 10,000 a year on energy bills, he said. Financial Chronicle; July 2, 2015 (Edited)

this month with $330 million aid

India’s $100 bn solar energy push to be driven by foreign companies as locals take backseat REUTERS New Delhi: India’s $100 billion push into solar energy over the next decade will be driven by foreign players as uncompetitive local manufacturers fall by the wayside, no longer protected by government restrictions. The money pouring into India’s solar industry is likely to be soaked up by foreign- organised projects such as one run by China’s Trina Solar. Last week, Softbank became the latest foreign player to enter India’s solar market, leading an investment of up to $20 billion. The Japanese firm said it would consider making solar panels locally, but with Taiwan’s Foxconn rather than a local manufacturer. Many Indian solar panel producers have benefited over the past 6 months from a surge in demand for panels not yet fulfilled by foreign companies. But their small scale and outdated technology will quickly make itself felt when global

Solar Energy Corp. to invite bids for a total of 3 GW of capacity in Gujarat, MP, UP, Karnataka and TN

players arrive. “The smaller manufacturers of India, especially cell manufacturers, will be adversely hit

ANINDYA

UPADHYAY,

because they are unable to compete both

BLOOMBERG

on technology and even on price

28

structures,” said Jasmeet Khurana at Bridge To India. India’s solar panel makers can no longer turn to the Indian government for help. The government is more concerned about creating jobs quickly and ensuring plentiful power supply. India, in contrast to Chinese and German efforts to protect local producers, has scrapped most restrictions on where equipment that turns sun-shine into energy is bought. Last year, it dropped an anti-dumping duty on panel import. Foreign players making panels in India are expected to compete with local manufacturers to fulfil so-called domestic content requirements for government projects. Trina has unveil-ed plans for a $500 million plant and US-based SunEdison is investing up to $4 billion in a manufacturing facility. Both are tying up with Indian firms to build the plants. Solar targets India said it expects peak power demand to double over the next 5 years from around 140,000 MW today. To help meet that demand,

from around 140,000 MW today. To help meet that demand, 100,000 MW of new capacity is

100,000

MW

of

new capacity is to come from solar panels, and of that it wants at least 8,000 MW to come from locally-made cells. Foreign players manufacturing in India will probably win the bulk of those orders. Indian rivals like Indosolar and Moser Baer produce panels, but they cost 8-10% more than foreign producers, Khurana said. It is not yet clear which foreign firms will emerge winners, with most of the facilities years away from being built and big tenders for huge solar parks touted by the government still to be awarded. But those who can quickly build scale will be the most able to compete on cost. “The lowest cost in manufacturing will only come from scale and integrated facilities,” said Sujoy Ghosh, India Country Head at First Solar. First Solar is to build 5,000 MW of solar power before 2020, but will rely on imported panels for

now because it is cheaper to buy component parts internationally where they are more readily available. As for some of India’s small panel makers, they are looking to complement the efforts of foreign players instead of trying to derail them. Maharishi Solar, a small Delhi- based manufacturer, is looking to tie up with a foreign company, said the company’s head Ajay Prakash Shrivastava. It stopped producing solar panels a few years back as it could not compete with foreign manufacturers, primarily Chinese. Shrivastava said import panels are as much as 45% cheaper thanks to subsidies in their home countries and lower borrowing costs. “Indian manufactu-rers do have a disadvantage,” he said. “We are trying to find a partner who can bring in the latest technology.” The Financial Express; July 2, 2015 (Edited)

Solar energy gets a new shine in India

SBG Cleantech plans to invest $20 billion over 10 years, even as doubts persist over the viability of solar power

JYOTI MUKUL New Delhi: A billion dollars in renewable energy is huge but when SoftBank of Japan announced investment of $20 billion in India's renewable energy space, albeit over 10 years, the sector already appears lit up. "Son Masayoshi (Chair- man of SoftBank) does nothing small," Bharti Enterprises Chairman Sunil Mittal said at the announcement of the investment through a three-way partner- ship between SoftBank, Bharti Enterprises and Foxconn last month. SBG Cleantech, which will be majority owned by SoftBank, has taken alternative energy to a whole new plane. India is planning to add 100 GW of solar power capacity by 2022, of which SBG Cleantech is looking at a 20% share. This is the biggest ever investment plan in solar energy in India. The venture aims to set up solar power parks in India. The solar panels will be imported initially; subsequently, they could be manufactured in the country. At the announcement of the venture, Son said

29

the commitment was in response to Prime Minister Narendra Modi's call to invest in the sector.

For SoftBank, though, the entry is more than just answering Modi's call for investment. In October 2011, it had established SB Energy Corp to set up renewable energy capacity in Japan. It has been involved in construction of mega solar power plants at Kyoto and Shintomura, Gunma Prefecture. SoftBank has some 20 wind and solar power projects across Japan with capacity of around 392 MW. Son's plan for India was followed by a similar ann-ouncement of building a 51.4 hectare solar park in Japan's Kagoshima region. But, as Son put it, India offers better scope for solar power. "Each project in Japan is small because the size of land is small. But I have enough experience to expand here, especially because India has 2 times more sunshine than Japan. Second, the cost of construction in India is half of that in Japan. Twice the sunshine and half the cost mean 4 times more efficiency to create solar energy park in India." Business Standard; July 8, 2015 (Edited) Sun shines on India’s energy sector

Billionaires are moving in. It is no longer a subsidy hungry club of well- meaning activists

no longer a subsidy hungry club of well- meaning activists 30 The (Edited) Economic Times; July

30

longer a subsidy hungry club of well- meaning activists 30 The (Edited) Economic Times; July 7,

The

(Edited)

Economic

Times;

July

7,

2015

Poor financial health, laxity of discoms may hit solar goal VIKAS SRIVASTAV While the government is aiming for an ambitious target of 100 GW solar capacity by 2022, industry watchers say it would be a Herculean task to achieve that goal if states fail to implement renewable purchase obligations (RPOs) strictly and on a priority basis. The national tariff policy (NTP) has proposed an increase in the obligatory RPO to 8% by 2019 while state discoms continue to maintain it at

less than 3% on an average thanks mainly to their poor financial health. The national average of RPOs stands 0.65% to 2% when the obligatory purchase should be pegged at 3%, said Sabyasachi Majumdar, senior VP, Icra. This has led to lower volume of renewable energy certificates (RECs) in last 2 years. State discoms will have to start taking RPOs seriously and state regulatory authorities would have to hold discoms responsible and penalise them for failing to do so if the nation has to meet the target of 100,000 MW solar capacity by 2022. “If the solar RPO is in line with the recommendations of NTP at 3%, the incremental solar capacity requirement by financial year 2022 would be 27,000 MW,” Majumdar said. However, in the amendments proposed to the NTP, the solar RPO target is sought to be raised to 8% by 2019. “Even under conservative estimates, the incremental solar capacity requirement would be quite significant at about 19,400 MW by 2022,” he said. A senior official from Lanco Solar said that it was states’ obligation to enforce these norms, but it would be difficult for discoms to achieve it given their poor financial health. “The government has to now initiate renewable genera-tion obligation (RGOs), where even thermal projects will have to include 10% of capacity from renewable capa-cities such as solar and wind, which the discoms will purchase anyway,” the Lanco official said. TC Arora, MD of Accuenergy, said it might be difficult for India to achieve the 100,000 MW solar capacity target by 2022, something like 40,000-50,000 MW should be achievable given the emphasis by the states and the Centre. “If states are unable to achieve 3% RPO, it would be unwise to expect 8% by 2019. Anything above 50,000 MW of solar capacity would be a bonus,” he said. The appellate tribunal on electricity (APTEL) recently said “SERCs shall give directions as per the RPO regulations and since the regulations recognise the REC mechanism as a valid instrument to fulfil the RPO, the carry forward or review

should be allowed strictly keeping in view the availability of REC. Also, in case of default in fulfilling of RPO by the obligated entity, the penal provision as provided for in the regulations should be exercised.” Icra said the APTEL order is a positive for the renewable energy sector. Strict implementation of RPO regulations by SERCs in their respective states would be crucial for ensuring timely RPO compliance. The Supreme Court’s recent directive to uphold Rajasthan SERC’s authority to enforce RPO regulations on captive power plants and open access consumers would enable SERCs to enforce RPO compliance regulations more effectively on open access and captive consumers across the states, which is a positive for the sector. Renewable capacity now stands at 35,800 MW and has grown around 16% since 2009. Financial Chronicle; July 8, 2015 (Edited)

TN to get 1,000 MW more solar power this month

By this year end, government expects to get 2,000 MW of solar power: Minister

SANGEETHA KANDAVEL Chennai: TN’s ambitious plan to tap solar energy to narrow the power deficit in will get a boost with the government set to finalise deals assuring 1,000 MW solar energy by the end of this month. Speaking at a CII conference, Electricity Minister Natham R. Viswanthan said that already deals for 1,000 MW were on (including the proposed 700 MW solar plant by Adani Group). Agreements for another 1,000 MW would be signed by July-end. By the end of this year the government expects to get 2,000 MW of solar power, he said. The State had set a target of 3,000 MW of solar power generation by 2015. At present, the installed capacity is 149 MW. TN was a pioneer in the new and renewable energy sector with an installed capacity of 8,482 MW, which accounted for 35% of the sector in the country. The State’s Energy secretary, Rajesh Lakhoni,

31

suggested that every person who purchases a new air-conditioner buy 1 kW solar panel. Explaining the statistics behind the idea, he said, “TN offers 20,000 subsidy per kW of solar roof top installation in addition to the 30% Central subsidy. With an investment of about 60,000 on solar power, a household could save up to 10,000 per annum on power bill. It makes a lot of economic sense.”

CII suggestions

CII gave 7 suggestions to the industry to unleash the full potential of the sector like stricter enforcement of RPOs across all

States, either through amendment of Electricity Act or Indian Penal Code with penalty for non-com-pliance. Extension of accelerated depreciation to all renewable energy systems, allocation of funds to renew-able energy projects from the National Clean Energy Fund and single window system for statutory and environ- mental clearances were the other recommendations. It also advocated deemed industry status and deemed open access permission for renewable energy projects in all States and power evacuation and grid integration allowing wind power generators in TN to feed power into the grid. “Simplification of land acquisition and conver-sion norms by providing deemed non-agricultural permi-ssion for land for renewable energy projects will also help this sector,” said Ramesh Kymal, Chairman, Renewable Energy Council, CII-Godrej Green Business Centre. The Hindu; July 3, 2015 (Edited)

Adani Group signs MoU with TN

for ₹₹₹₹ 4,536 crore solar park

T.E. NARASIMHAN Chennai: The Adani Group signed a MoU with the TN government to set up a 4,536 crore solar park in the state. The development comes in the backdrop of the state’s decision to buy 2000 MW of solar power by the end of this calendar year. The Gautam Adani-led group will set up a 648 MW solar power generation capacity in Ramanathapuram district. Construction is expected to commence in August and

32

the unit is scheduled to be operational before February or March next year. TANGEDCO will purchase the project’s entire output at 7.01 a unit for the next 25 years. Adani has approached DIPP) for clearance through 3 different companies - Ramnad Renewable Energy, Kamuthi Solar Power, and Ramnad Solar Power. About 70% of the investment will be met through internal accruals, while the balance will be funded through debt and from institutional investors. Business Standard; July 4, 2015 (Edited)

EVKS seeks white paper on Adani deal TNCC president EVKS Elangovan demanded AIADMK to come out with a white paper on the MoU signed with the Adani group on solar power. “The agreement has raised many doubts. The details of acquisition of 5,000 acres for Adani group has been kept secret,” he said. The Times of India; July 6, 2015 (Edited) Gamesa forays into solar power, to set up 10 MW project in TN D. GOVARDAN Gamesa India, the wholly owned subsidiary of Spanish wind turbine major Gamesa, a leading player in the Indian wind energy market having installed up to 1,850 MW of wind power across the country, is now foraying into solar power projects. The company announced that it will offer solar EPC solutions for megawatt scale solar PV projects, besides roof-top PV projects and rural/micro grid pro-jects. To start with, the company has bagged 3 solar power project orders to the tune of 10 MW from its existing wind energy customers in Tirupur textile cluster. These projects will be implemented by September. “Today, Gamesa is India’s leading wind energy player with a 32% market share. We are strong in EPC and have a good brand image. What India looking for is a good EPC contractor in solar. Our rich experience in wind energy and our EPC capability will help us achieve scale in

solar power too,” Ramesh Kymal, CMD, Gamesa India, said. He said, there are lot of synergies between wind and solar power. Gamesa has helped setting up 1,850 MW of wind power capacity across specific wind zones. “In all those regions, solar power too can be generated, either by deftly utilizing lands on which wind mills have come up or acquiring contiguous land nearby for setting up solar projects. The generated power can be evacuated through sub- stations, already erected for the wind power projects, to the grid,” he pointed out. Gamesa, which has established manufacturing plants for the wind turbines, blades and related accessories near Chennai and Halol in Gujarat, feels some of these capabilities could be utilized for solar power project equipment, while the solar PV panels would be sourced from overseas. The company intends to invest an additional 700-800 crore over the next 4-5 years in scaling up these capabilities. Financial Chronicle; July 8, 2015 (Edited)

Hareon Solar to make first India

investment The manufacturer will team with ReNew Power Ventures to develop a 72 MW project in AP

ANINDYA UPADHYAY, BLOOMBERG New Delhi: Hareon Solar Technology Co., a Chinese solar-panel maker, will invest in India for the first time. The manufacturer will team with ReNew Power Ventures Pvt Ltd, an independent power producer backed by Gold-man Sachs Group Inc., to develop a 72 MW project in AP, the companies said. Hareon Solar will supply about 234,000 solar modules starting next month. The planned plant in Kurnool district, slated to power more than 30,000 homes and save at least 115,000 tons of carbon dioxide a year, is due for completion by December. “This is the first actual Chinese investment into India,” ReNew Power CEO Sumant Sinha said.

33

The project will cost an estimated 470 crore. Hareon Solar, based in Jiangyin in Jiangsu province, has an annual production capacity of about 1,600 MW of solar cells, the building blocks of PV, and about 1,200 MW of modules. The Kurnool plant will be ready to start next March. It will add to ReNew Power’s 1,000 MW of clean- energy projects, of which 600 MW are commissioned. LiveMint; July 7, 2015 (Edited) Sterling & Wilson commissions 30 MW solar PV plant for SunEdison in MP V. RISHI KUMAR Hyderabad: Sterling & Wilson (S&W) has commissioned Sun-Edison’s 30 MW Solar PV Power Plant in Sitamau in Mandsaur district in MP. This is part of the 50 MW solar plant inaugurated by SunEdison. The solar PV plant set up by S&W has deployed the tracker system technology for SunEdison. SunEdison was awarded the contract under Phase 2 Batch 1 of the Jawaharlal Nehru National Solar Mission under the Domestic Content Requirement (DCR) Category. Bikesh Ogra, President, S&W’s Electrical & Solar Business said, “We have not only completed this project efficiently but have also created value for our client by installing the tracker system technology on a highly uneven surface, and in doing so have managed to be the first in setting up Asia’s largest tracker system for SunEdison.” S&W is one of India’s leading Solar EPC players with over 350 MW of solar projects on the ground. It is implementing a number of projects in various parts of the country, including AP and Telangana. The 30 MW Solar PV power plant uses the single axis tracker system. The plant was completed within 3 months from signing of the contract. The Hindu Business Line; July 3, 2015 (Edited)

2 solar power projects inaugurated in Mansa HT CORRESPONDENT

Mansa: Mansa, with 64 MW installed capacity of solar power, has emerged as the torchbearer of solar energy in the state. Besides this, Moserbaer has also taken 150 acres of land on lease here for setting up a 34 MW solar power project. Punjab new and renewable energy minis- ter Bikram Singh Majithia, along with Balwinder Singh Bhunder, MP, inaugurated 2 solar power projects of 2.10 MW and 1 MW capacities set up by Alianz Eco Power Ltd and Nextgen Solux Power Pvt Ltd at the cost of 15.50 crore and 8 crore, respectively. Speaking on the occasion, Majithia said that the humble beginning made 3 years ago in renewable energy sector has now become a movement as solar power generation has now touched 215 MW from just 9 MW with an investment of more than 1,500 crore. As many as 23 ground-mounted solar projects of 229 MW capacity (1,600 crore) and 4 solar rooftop projects of 65 MW (300 crore) are under implementation. Majithia pointed out that Mansa has emerged as number 1 district of the state on solar power front as 4 such projects having joint power generation capacity of 61 MW had been running successfully. Majithia said that the state was taking the concept of clean and green living to every house by encouraging people to produce their own power through rooftop projects and a unique net metering policy 2014 has been notified. With concerted efforts of state government the IDBI bank has launched a new scheme “Surya Shakti” for financing such projects. Majithia said that it was high time for financial institutions to come forward with liberal credit policies required for RE projects. He said PEDA has recently got expressions of Interest for 1,200 MW against the initial estimates of 500 MW. He said that now two bids of 500 MW each for farmers and renowned companies are being floated and he was confident that these initiatives would change the future power scenario and solar power would become cheaper than thermal power. He said that the government was

also emphasising on biomass energy with dual aim of enhancing farmer income from agri-waste on one hand and saving the environment thereby promoting clean and green energy in the state. He welcomed NRIs for opting for solar power and informed that till date NRIs have invested 245 crore in 5 projects having joint power generation capacity of 45 MW. The Hindustan Times; July 9, 2015 (Edited)

Agni: Triggering development of NE Powering the NE region, Agni Power & Electronics Pvt Ltd, an ISO 9001:2008 certified power company, has desi-gned, installed and commissioned 1500 kWp of SPVP system in Mizoram, 700 kWp alone in Mizoram Univer-sity. 540 rural information kiosks were set up for ICT- enabled government service delivery to villagers, emp-owering people at the grassroots. Under Aizwal Solar City initiative, Agni installed 98 solar generators of 35 kWp. The Telegraph; July 6, 2015 (Edited)

SunSource Energy keen on residential rooftop segment

In talks with welfare associations to sign PPAs

DEBABRATA DAS New Delhi: SunSource Energy, solar power developers with expertise in rooftop installations for commercial and industrial establishments, is in talks with resident welfare associations to sign PPAs. “Today, most of the RWAs are sourcing power and distributing it locally. RWAs are becoming like mini-discoms,” Kushagra Nandan, COO, SunSource Energy, said. Adarsh Das, CEO, SunSource, added, “As developers it simplifies things for us. Instead of talking to multiple people, we can deal with just one legal entity like an RWA. However, for projects to materialise, it will take another 6-7 months.” Nandan and Das admitted that residential rooftop segment is a difficult market to crack as residential tariffs are still lower. Both expect residential rooftop solar

34

projects to come into the mainstream only after 3-4 years. “Unless residential tariffs cross 6-7 a unit, rooftop solar projects will be very tough to implement,” said Nandan. SunSource Energy has focussed on commercial and industrial rooftop projects. They pointed out 2 advantages of this model. “Purely from an economic standpoint, the blended cost of power (diesel generators and grid-connected power supply) turns out to be 9-10 a unit. With solar, we can give them a 10- 15% discount,” said Nandan. Net- metering policies where distribution utilities purchase power generated from rooftop solar projects, were expected to facilitate more such installations. However, unwillingness on the part distribution utilities is causing delays in imple-mentation of net-metering. The Hindu Business Line; July 3, 2015 (Edited)

Solar power projects in Telangana jack up land prices Hyderabad: The Telangana government’s plan to gen-erate 2,000 MW of solar power has resulted in prices of non- agricultural land rising, particularly in Nalgonda and Mahbubnagar districts. Solar projects require huge parcels of land, typically 5 acres to generate 1 MW, pushing up demand for land. According to sources in the Southern Discom, private parties have been inquiring about availability and value of lands in almost 8 districts where they intend to set up solar power farms, prompting landowners to increase prices. If the land is near a sub-station, the price skyrockets, according to power officials. The discom has laid down a condition that the solar power farm should be in the vicinity of sub-stations so that grid connectivity is easy. As per authoritative sources, in Nalgonda district, land once used as dump yard is now being sold for 5-7 lakh per acre. The prices are more or less same in Warangal and Nizamabad as well. In Ranga Reddy, where availability of land is an issue, the going price is over

35

12 lakh per acre even in remote areas of Vikarabad. Though the govern-ment wanted to generate only 2,000 MW, it has received applications for 6,500 MW. The deadline for submission of bids was extended for fourth time to 5 pm on July

10.

Deccan Chronicle; July 6; 2015

(Edited)

SunEdison looking to buy IL&FS’ wind assets M. RAMESH Chennai: SunEdison is in talks with IL&FS Energy Develop-ment Company to take over the latter’s wind assets. Sources on both sides of the deal have confirmed the talks, but said that no decision has been taken as yet. The American company, which is the largest foreign investor in the Indian solar energy space, was in the news recently, when it announced its takeover of 400-odd MW of wind capacity of the Mumbai-based Continuum Wind Energy. IL&FS Energy has about 800 MW of wind assets and SunEdison is keen on buying it, a source in IL&FS Energy said. SunEdison’s interest in those wind assets has come at a time when IL&FS Energy has been trying to put its assets in a ‘Business Trust’ and divest via a listing in Singapore. (Business Trusts are unincorporated ‘SPVs’ that own operating, income generating assets.) SunEdison has declared its intention to grow in the Indian renewable energy sector in a big way - in February, it said it would build 25,000 MW of wind and solar assets by 2022. The company has also tied-up with the Adani Group to set up a manufacturing unit that will produce solar modules right from the basic raw materials, silicon. Industry experts note that M&A activity is picking up in the wind energy sector, with a lot of assets changing hands. In April, Rajalakshmi Renewables, part of a group predominantly into education, bought 63 MW of wind assets from Ashok Leyland, for 174 crore. The Hindu Business Line; July 3, 2015 (Edited)

Telangana to use city waste to produce electricity Hyderabad: The state government plans to utilise 4,000 metric tonnes of waste generated in the city every day to produce power. The Swachh Hyderabad team visited the RDF power plant in Bibinagar mandal of Nalgonda district and discussed with the management measures to generate electricity using garbage. The Bibinagar plant can produce 12 MW power by using 1 metric ton of garbage. The team will decide whether to upgrade the Bibinagar plant’s capacity or build 4 new plants around the city to use garbage. The team had recently visited a similar plant in New Delhi where power is generated out of the city’s waste. Telangana to use city waste to produce electricity Deccan Chronicle; July 5, 2015 (Edited)

produce electricity Deccan Chronicle; July 5, 2015 (Edited) Arvind Kejriwal led govt appointed panel recommends removal

Arvind Kejriwal led govt appointed panel recommends removal of DERC members PRESS TRUST OF INDIA New Delhi: In a major move, a high- powered Arvind Kejriwal led Delhi government committee has reco- mmended removal of chairman and 2 members of Delhi’s quasi-judicial power regulator DERC, holding that they totally failed to protect the interests of consumers. The 1-member committee of former DERC chief Berjinder Singh was tasked by AAP government to bring out a white paper on the capital’s power sector. In its report, the committee observed that when the power tariff should have been slashed between 2011 and 2013, DERC hiked it several times overlooking consumers’ interest. Alleging “serious omissions” on DERC’s part, the commi-ttee called for “action for removal of the chairman and members who were parties to the tariff orders passed during 2011 to 2013.

36

Interestingly, under Singh’s chair- manship, DERC in May 2010 had proposed to cut power tariff by 23% citing healthy financial condition of private power distribution companies but the move was stalled by then Congress government exercising a special power under the Delhi Electricity Act. Although DERC was strongly arguing for a cut in tariff, the 3-member regu-lator, following Singh’s retirement and appointment of 2 new members, effected a series of hikes. Since 2011, DERC is being headed by P.D. Sudhakar, a former Special Secretary in the Ministry of Corporate Affairs. The other members of the DERC are J.P. Singh, a former Health Secretary in Delhi government, and B.P. Singh, a former NTPC director. Sudhakar and the 2 other DERC members chose not to react to Singh’s report. The report said before ordering “hefty” increases in power tariff and creating large regulatory assets, DERC did not even verify genuineness of short-term power purchase by discoms at rates higher than market prices. “There should have been a case for reduction in electri-city tariff during the years 2011 to 2013,” said the report which will soon be discussed by the Delhi cabinet. The report said following numerous billing-related com-plaints, the Delhi government had asked DERC whether the billing software of discoms was checked but it refused to reply arguing that it was “quasi-judicial” body and will not follow such directives. The Financial Express; July 4, 2015 (Edited)

Delhi’s power regulator questions findings of expert panel PRESS TRUST OF INDIA New Delhi: DERC has defended a series of tariff hikes in the last 4 years, virtually questioning an AAP government appointed panel, which recommended disbanding of the quasi-judicial body for failing to protect the interest of consumers. DERC Chairman P.D. Sudhakar said the regulator increased tariff after considering rise in power

purchase cost of 3 private distribution companies which buy 95-98% of the electricity as per long-term PPAs. “The PPAs were finalised by erstwhile Delhi Vidyut Board (DVB) and all 3 discoms buy 95-98% of the power as per provi- sions of these pacts,” Sudhakar said. Sudhakar said the power purchase pacts were signed by DVB for 25-35 years with discoms. The DVB, which used to supply electricity in Delhi, was disbanded in 2002 as part of reforms in the power sector. Last week, the high-powered committee headed by former DERC chief Berjinder Singh, tasked by the AAP government to bring out a white paper on the capital’s power sector, accused the regulator of failing to verify genuineness of short-term power purchase by the discoms. In its report, the committee said when the power tariff should have been slashed between 2011 and 2013, DERC hiked it several times, overlooking consu-mers’ interest. Interestingly, under Singh’s chairmanship, the DERC in May 2010 had proposed to cut power tariff by 23%, citing healthy financial condition of the private power distribution companies but the move was stalled by the then Congress government. Sudhakar said he was yet to examine the Singh commi-ttee report but asserted that short-term power purchase cost of discoms is minuscule, indicating that the commi-ttee’s observation was not based on facts. According to official figures, around 80-90% of total revenue of discoms goes into purchasing power from central and state government-owned entities through long term PPAs at rates determined by central and state regulators. The committee, appointed in March, recommended removal of Sudhakar and 2 other members. Sources said the Delhi government has the authority to remove the DERC chairman and other members. Sudhakar’s 5-year term will end next year. Asked whether DERC was going ahead with announcing power tariff either in July or August, Sudhakar said the Commission is yet to take a final decision.

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On June 12, the DERC had hiked tariff by

upto 6% as it restored a surcharge to compensate private distribution

companies for rise in power purchase cost. The AAP government strongly criticised the DERC for the hike and said it was exploring legal option against the decision. The Delhi government had asked DERC not to hike tariff till CAG submits its report on discom finances. Power tariff was a major issue for AAP during the Delhi polls. The Kejriwal government had in February announ-ced

a 50% subsidy on monthly power

consumption of up to 400 units till the government receives the CAG report on financial condition of the discoms. In its first stint, the AAP government had ordered a CAG audit of all the 3 discoms, claiming they have been misleading the govern-ment and the DERC about their financial position. The city has seen a series of power tariff hikes in the past 2 years. The tariff was hiked by 22% in 2011 followed by 5% rise in February 2012. The tariff was increased

by up to 2% in May 2012 and again by

26% for domestic consumers in July 2012. It was hiked by up to 3% in February 2013 and again by 5% in August 2013. It was increased by up to 7% in November last year. The cost of buying power has increased primarily on account of an increase in the input prices of raw material like coal and gas, officials said.

The Financial Express; July 5, 2015 (Edited) DERC’s penalty scheme gets a cold response

Implementing penalty on discoms for unscheduled power cuts is going to take longer

STAFF REPORTER New Delhi: DERC has extended the last

of

date

comments/objections on the draft Delhi Electricity Supply Code and Performance Standards (Second Amendment) Regulations, 2015 till July 13. The earlier deadline expired, but the Commission said they had extended it after receiving

requests from consumers and

for

sub-mission

stakeholders. Sources, however, said the regulator has received a very cold response from the public. “Only 4 or 5 comments have been submitted till now,” informed an official. Last week, DERC came out with a draft notify-cation for amending the penalty clause in the Delhi Electricity Supply Code and Performance Standard regulations, a day after the State government asked the regulator to start penalising power companies for unscheduled outages. The penalty amount ranges between 25 and 100 per hour for failure to act against complaints related to outages. The Hindu; July 3, 2015 (Edited)

Power regulators in tussle over Electricity Act Bh. RMAKRISHNA Hyderabad: The electricity regulatory commissions at the Centre and in AP and TS are locked in a tussle over guide-lines stipulated in the Electricity Act to address disputes between states. CERC says that it alone can take up issues on a power plant supplying power to more than one state. The TS and AP ERCs insist that they can resolve the issues that emanate within their states. After the CERC directive in a case related to GMR Vemagiri, the TS and AP ERCs have filed petitions in the High Court challenging the order. They fear that they may lose their power to address issues and they may be confined to ratification of tariff orders. There were 86 cases before APERC at the time of bifurcation. Since there was no clarity, the AP and TS ERCs have taken up those that have a bearing on their states individually. AP says it should try all the 86 cases. TS opposes this, stating that it has equal powers as an independent state. GMR Vemagiri, one of the first generation gas-based units, has sought the intervention of CERC on a complaint that it suffered losses and both the Telugu states have to pay for it. GMR entered into PPA with the erstwhile AP State Electricity Board on March 31, 1997 according to which the project cost was to

38

be recovered through guaranteed operation of the plant at 80% PLF. The energy charge was linked to the specified station heat rate and the same was passed through to the discoms. GMR stated that after passing of the AP Reorganisation Act, the Vemagiri unit had become an inter-state generating station. Hence, any dispute on tariff for a generating station having a composite scheme for generation and sale of electricity in more than one state has to be decided by Central commission under Section 79(1)(f) of the 2003 Act. This was accepted by CERC which asked both AP and Telangana utilities to file their responses. But AP contends that GMR Vemagiri is located in the state and, as per the Reorganisation Act, it alone can decide on the compensation issue. Telangana says as per the PPA, power is supplied to Telangana also and it can also have a say in the dispute. Since the PPAs were scrapped, there is no way that Telangana could intervene, according to AP. On the other hand, CERC said that since GMR Vemagiri supplies power to both AP and Telangana, any dispute shall be dealt only by CERC and not the ERCs of two the states. Deccan Chronicle; July 7, 2015 (Edited)

CERC ruling: Hydro electricity from Narmada set to get costlier

SSNNL accounts to be audited

PREMAL BALAN Ahmedabad: Hydro power generated by Sardar Sarovar Narmada Nigam Ltd (SSNNL) in Kevadia is set to get costlier. Not only that, all accounts related to power sale by SSNNL will be scrutinized by an independent regulator. Capping a 10-year-old dispute, CERC will now decide the tariff for electricity generated by 2 hydro power stations. Ruling that SSNNL is a power-generating company, CERC also directed that “the costs, charges, expenses and accounts of SSNNL be scrutinized by an independent regulator to examine if actual expenses

incurred are passed on to consumers and tariff determined on prudence check.” Currently, SSNNL is not accountable to any regulatory authority. The 1,450 MW hydro power generated from the River Bed Power House (RBPH) and Canal Head Power House (CHPH) on the Narmada Dam is being distributed between 3 states - MP, Maharashtra and Gujarat in the ratio of 57:27:16. The order, passed last week, further said that SSNNL cannot be conceived as an agent or a trustee of states. MP and Maharashtra are partners in the Sardar Sarovar Project. SSNNL was also directed to make appropriate applications before CERC for approval of tariff of its generating stations and transmission lines in accordance with CERC (terms and conditions of tariff) regulations, 2014 for the period 2014-19. The issue whether SSNNL comes under purview of CERC or not was taken up by the regulator on suo moto basis in 2012. All 3 states were opposed to SSNNL being brought under CERC’s jurisdiction on the ground that there was no sale of power involved. The electricity was only distributed as per an agreement between the states. SSNNL had argued that it was not a power generating company, but merely an operating agent to deliver electricity at a particular point to MP and Maharashtra. Hence CERC had no power to exercise regulatory power under the Electricity Act, 2003. CERC observed that power generated was evacuated by SSNNL to power discoms of respective states at a provi-sional tariff ranging from 2-2.05 per unit. This power was in turn being sold by discoms as per their respective PPAs. Based on this, CERC concluded that SSNNL was a power generating company that sells power in more than one state and thereby falls within its jurisdiction. The Times of India; July 6, 2015 (Edited)

NTPC, PTC India allowed dollar- linked tariffs for new solar projects

39

DEBABRATA DAS & RICHA MISHRA New Delhi: The Centre has allowed

NTPC and PTC India to charge dollar- linked tariffs for their new solar projects. Minister of New and Renewable Energy Piyush Goyal had taken a decision on this recently. “We have asked NTPC and PTC

to go for dollar-linked tariffs for 1,000

MW each on a pilot basis. If successful they can go up to 10,000 MW each with the same tariff mechanism,” MNRE Secretary Upendra Tripathy, said. The idea of developers getting dollar-linked tariffs from distribution utilities has been mooted to get grid parity for solar power. Distribution utilities are expected to quote tariffs in dollar-linked rates for 25- year contracts. Currently, solar power is sold at around 6-7 a unit, coal-based power is sold at 3-4 a unit and gas at around 4-7 a unit. Dollar-linked tariffs can bring down solar power costs to below 4-5 a unit, according to industry officials. However, the model could require ‘hedging cost’ to cover rupee depreciation against the dollar. Modalities are yet to be firmed up.

The Hindu Business Line; July 6, 2015 (Edited)

Regulator’s order on purchasing power may weigh on Mahagenco

MERC has asked Mahavitaran to buy power where generation cost is not more than ₹₹₹₹ 2.53 per unit. Mahagenco averages around ₹₹₹₹ 4.25

MAKARAND GADGIL

A recent MERC directive asking state-

owned discom Mahavitaran Ltd to try and limit the cost of its electricity purchases will bring relief to consumers but also lead to shutdown of a quarter of the generation capacity of Maharashtra’s state-owned power generation company. On 26 June, MERC issued its tariff order for 2015-16 for Mahavitaran. The order noted that Mahavitaran should buy power where generation cost is not more than 2.53 per unit. If it has to purchase costlier power, it should strictly adhere to the merit order dispatch code. The merit

order dispatch code states that power must be purchased in order of generation cost. “MERC’s order is a major victory for electricity consumers across the state as consumers were unnecessarily bur-dened with high-cost power of Mahagenco,” said Pratap Hogade, president of Maharashtra Power Consumers Association. The average cost of power purchased by Mahavitaran from central government companies such as NTPC and IPPs is around 3.25 per unit, while Mahagenco’s average cost is higher at around 4.25 per unit. This takes Mahavitaran’s average power purchase cost to 3.75, Hogade pointed out. One major reason behind the high cost of Mahagenco’s power is the delay in executing new projects undertaken since 2004. While IPPs, on an average, have completed power projects in 3-4 years, it takes Mahagenco 5-7 years to complete its projects. It is also operating at PLF which pushes up the unit cost. The PLF for NTPC is more than 85%, while Mahagenco’s average PLF is at about

60%.

“MERC’s order is a welcome move because Mahavitaran during the last financial year sold 16% of power it purchased by incurring losses in the open market,” said Ashok Pendse, designated consumer representative with MERC. “So, even if Mahagenco’s plants remain shut and Mahavitaran has to pay fixed cost to the generation utility, consumers will benefit because then they won’t have to bear the burden of variable cost,” he added. In the case of thermal power, 60- 70% of per unit cost is fixed cost and the rest is variable cost. Mahagenco MD Bipin Shrimali, however, dismissed fears of Mahagenco’s plants remaining shut. “I think fears of our plants remaining shut down are exaggerated. The country’s economy is growing. We need power from all available sources,” Shrimali said, adding that Mahagenco has taken a number of measures to reduce the cost of power, including improving O&M practices.

this “

30 paisa per unit in our tariff proposal for financial year 2015-16 to MERC. Thanks

to various measures we are taking, we are confident we will manage to reduce our per unit cost by 30-40 paisa more,” Shrimali added. LiveMint; July 6, 2015 (Edited)

helped us to propose reduction of

Discom to cut rural power theft TIMES NEWS NETWORK Gurgaon: HERC has directed Dakshin Haryana Bijli Vitran Nigam (DHBVN) to bring down power theft in rural areas of the state by half. HERC has set March 2016 as the deadline for achieving this target, failing which officials’ in-charge of individual feeders would be penalized. HERC has also ordered DHBVN to bring down transformer damage rates by half, from the existing 10% to 5%, and submit a report on it by November. The directive is aimed at ensuring uninterrupted supply in rural Haryana, HERC officials said. “Rural areas witness frequent power cuts on account of line losses. Power theft is above 50% in rural areas. It will be a herculean task to bring it down,” said DHBVN's chief general manager (commercial) J.B. Mudgil. “We have informed officials across all operation circles that junior engineers and SDOs responsible for individual feeders to personally ensure that transmission losses are brought down. If they are unable to bring down the losses by half, the circle office will decide how much fine is to be levied on them,” he added. The Times of India; July 6, 2015 (Edited)

UPERC raps PCL for failure to check line losses TIMES NEWS NETWORK Lucknow: UPERC has decided to hold officials of the UP Power Corporation (UPPCL) personally responsible for not being able to check instances of power theft and high line losses. The commission slapped notices on MD of Madhyanchal Electricity Distribution Company and chief engineers of Lucknow, Bareilly and

40

Faizabad zones which have been registering high AT&C losses. The officials have been summoned by the commission to appear in person before it on July 21. Bareilly and Shahjahanpur registered line losses of around 40% in 2014-15, while Faizabad zone had line losses to the tune of 37%. The Lucknow zone under Luck- now Electricity Supply Administration (Lesa) too wit-nessed a high AT&C losses of over 38%. The commission said reduction in AT&C losses has not been satisfactory in the said zones necessitating action against officials under section 142 of the state electricity act. It may be recalled that based on the performance in reduction of AT&C losses, UPERC had reduced the burden of regulatory surcharge on consumers through its order on April 22. In favour of waiver UPERC suggested that the UP government waive off electricity duty levied on consumers. While 5% duty is levied on urban domestic consumers, it rises to 7.5% on rural metered consumers. In case of unmetered rural consumers, the state government charges electricity duty of 20%. The suggestion came on a petition filed by UP Rajya Vidyut Upbhogta Parishad. Its President A.K. Verma had cited how in various states, the state government does not charge any electricity duty on consumers. The Times of India; July 3, 2015 (Edited)

Cut in power bills of small, medium industries in offing PIONEER NEW SERVICE Ludhiana: The Punjab Government is considering to provide relief in electricity charges to small and medium industries. Besides, re-launching the one-time settlement (OTS) scheme for the benefit of remaining borrowers is also on its agenda. The information was shared by Industries and Commerce Minister Madan Mohan Mittal with industrialists. The Pioneer; July 4, 2015 (Edited)

SC stays CERC order asking FTIL to transfer IEX shares INDU BHAN New Delhi: The Supreme Court stayed the CERC order that asked Financial Technologies India Ltd (FTIL) to transfer its entire shareholding in India Energy Exchange (IEX) to a separate trust demat account created by the electricity bourse. A bench headed by Justice Ranjan Gogoi, while staying a June 26 order, also asked the commission to respond to FTIL’s application plea. CERC had given FTIL time till July 2 to transfer its shares in IEX, which is the country’s leading power exchange with more than 95% of the market share, to an IEX-owned trust demat account and exit the exchange by July 20. The Financial Express; July 3, 2015 (Edited)

SEB losses widen to ₹₹₹₹ 3 lakh cr: Icra
SEB losses widen to ₹₹₹₹ 3 lakh cr: Icra

Debt-laden SEBs' accumulated losses widened by 58% fe BUREAU

Debt-laden state electricity boards’ (SEBs) accumulated losses have widened by 58% to a whopping 3 lakh crore in the 2 years to March 31, 2014, Icra said in a report. The government had designed a financial restructuring plan (FRP) in FY 13 for these entities when their accumulated losses stood at 1.9 lakh crore. SEBs/discoms in UP, TN, Rajasthan, Haryana, Bihar, Jharkhand, AP and Telangana that accounted for over 70% of the losses then, signed up for the FRP in September 2012. The continuing rise in SEB losses is primarily due to their failure in implementing timely tariff revisions, although this is mandated under FRP. For the current fiscal, the ERCs of 20 states have issued tariff orders but states that are part of FRP have suffered delays of 6-11 months in tariff determination, Icra said. It added that the tariff orders for FY 16 were also pending in states such as TN and Rajasthan among others.

41

“The extent of average tariff hike based on tariff orders issued by SERCs across these states (part of FRP) continues to remain limited at 5%, as against 9% and 7% for the previous 2 fiscal years respectively,” Icra said. Inadequate and delayed tariff revision have also resulted in ballooning of the regulatory assets, estimated at 84,000 crore, for discoms in 3 states mainly (Rajasthan, TN and UP), Icra added. The Financial Express; July 8, 2015 (Edited)

No bailout for discoms: Goyal OUR BUREAU Kolkata: Power Minister Piyush Goyal ruled out any bail-out for discoms which have run up huge debts. “I am considering a high level committee comprising all stakeholders to take up issues with the discoms on a case by case basis. There will be no bailout of discoms. The Centre will be handholding them to recovery,” Goyal said. The Hindu Business Line; July 3, 2015 (Edited)

Fixing discom finances

Instead of bailouts for state-owned discoms, power retail must be run on commercial principles

R.N. NAYAK The power sector has come a long way since Indepen-dence, from 1,300 MW to over 2,70,000 MW in genera-tion capacity and from 2,700 km of 132 kV to more than 7,00,000 km transmission lines up to 1,200 kV level and from 3,000 villages/towns to nearly 5,72,000 electrified today. Commendable progress has been made after the enactment of the Electricity Act 2003 for reforms and restructuring to bring competition and efficiency, including a vibrant electricity market. The new govern-ment has taken a large number of initiatives to resolve pending issues pertaining to coal, gas, nuclear and renewable energy. These are the issues that need to be addressed fast:

*Running discoms on commercial principles: It has been reported that the

42

average gap between the cost of purchase of power and the tariff charged by discom is about 82 paise, resulting in losses of about 86,000 crore per annum. The cumulative losses today stand at about 3 lakh crore. The health of the discoms is the most important issue that needs fixing. One way could be that the Union government’s grants, under distribution sche-mes, be injected as equity and thus the government becomes a part of the management of discoms, for a short while albeit. As soon as they become commercially viable, the equity of the Union government can be either transferred to states at zero cost or disinvested. This will also facilitate the discoms to raise capital by 4-5 times. Further, a direct benefits transfer scheme, as is being done for LPG, wherein the discom shall bill the consumer on the basis of actual rates and the subsidy is passed on to the consumer directly through her bank account, needs to be introduced. The possibility of a holding com-pany on a regional basis, i.e, covering more than 1 state, through a SPV of the central and state governments, can also be explored. *Institution building: Discom management should be at arms-length from the government. It is important for them to recruit young and talented professionals and blend them with experienced professionals for experi-ence sharing and increase their focus on HRD. *Integration of new technology: The reliance on new technology should be stepped up so that the distribution segment is steered towards viability and the efficiency and power quality of distribution systems improves. Outstanding payment-linked load- shedding needs to be introduced, just as there is cessation of services in the telecom sector for non-payment of bills or expiry of bal-ance. For example, consumers who have arrears could be made the first segment to experience such load-shedding, followed by those who have made partial payment. Curtailment can also be prioritised, first for power

circuit loads and then for lighting loads. This will encourage timely payments by consumers and also higher satisfaction. Low-cost smart meters can be used for this purpose. It is important to understand that generation addition should be coupled with energy efficiency and demand-response mechanisms to meet the energy requirement of the country. *Strong regulatory mechanism: Our country has esta-blished a very effective regulatory mechanism through the CERC, JERCs, SRCs. The need of the hour is for the regulators to be proactive and ensure the operation of discoms on commercial principles. The author is C&MD, Power Grid Corporation of India. Business Standard; July 9, 2015 (Editd)

States, discoms, lenders discuss ways to cut distribution losses fe BUREAU Amid growing concern over effectiveness of the FRP designed to help cut the losses of discoms, the Union power ministry held the first meeting of a committee that comprises states, private distribution companies and state-run lenders on the issue. The committee has been tasked to prepare a report on ‘financial viability and restructuring of discoms’. The FRP was approved by the previous UPA government in October, 2012 after accumulated losses of discoms exceeded 2 lakh crore and threatened to hurt the banking system. “It was an introductory meeting with the new secretary in the power ministry. However, we did discuss issues of improving operational efficiency and bridging the gap between aggregate revenue requirement (ARR) and average cost of supply (ACS) of the discoms,” a government official said after the meeting. He added that the prima facie, the FRP hadn’t yielded desired results. States like UP and Rajasthan, signatories to the FRP, have had problems paring their debt and cutting operational losses. UP had expressed its displeasure over the FRP saying that the 3-year moratorium

43

on interest was too short a duration to bring about any change. Rajasthan recently announced that it was looking for a second round of restructuring, having already recast its short-term liabilities under the FRP in 2013. “The committee has an eclectic mix including states that have done well on the distribution front. The goal of the committee will be use the available expertise and bring out a plan to make FRP result oriented,” the official added. The committee was chaired by power secretary Pradeep Kumar Pujari along with representation from central government-run organisations PFC and REC. Secretary in the department of financial services is also a part of the panel. Among states invited to be part of the committee are Bihar, Assam, Gujarat, UP, Rajasthan and AP. The body also includes private distribution firms as special invitees - Tata Power Delhi Distribution Ltd and Calcutta Electricity Supply Corp. The Financial Express; July 4, 2015 (Edited)

Volume of power traded in spot market falls 15% fe BUREAU New Delhi: The volume of electricity traded in the power spot market fell by 15% to 2.4 BU in June compared with May due to low demand from distribution utilities, IEX said. The market clearing price for June remained nearly flat at 2.56/unit, down 2% from May. The average clearing price - bid prices discovered after accounting for transmission congestion - varied between 2.18-3 per unit except in the northern region, where it rose by over 40% to 3.18 per unit compared with a month ago. The Financial Express; July 4, 2015 (Edited)

Revenue model for energy

Expert team presents scheme details before holding company

SANJEEV KUMAR VERMA

Patna: Bihar is mulling over adopting the Maharashtra model of power supply to ensure consumers who regu-larly pay their bills enjoy quality energy. The model of revenue-linked supply scheme entails more power to consumers who pay their bills regularly and also don't indulge in power theft. It also aims to economise the functioning of the power companies in the state. At present, against its average annual expense of about 8,100 crore, the Bihar State Power (Holding) Company generates a revenue of about 5,100 crore per annum and has to depend on government assistance of about 3,000 crore to meet its expenses. Power pilferage from illegal hooking is a major problem in the state, including Patna, and the power holding com-pany and its undertakings frequently take steps to counter it. For instance, last year, Patna Electric Supply Undertaking laid aerial bunched cables to check power theft. The Maharashtra model could be a saviour for the loss-making power company for it ensures the best feeders for areas with the most revenue collection. A 3- member team of experts from Maharashtra visited the state this week and made a detailed presentation on the revenue-linked supply scheme to the field officials of the power company. "Apart from briefing participants about the technical aspects of the scheme, the team also briefed us on how they have different categories of feeders on the basis of percentage of revenue collection in an area using which power shedding is decided," a senior official of Bihar State Power Distribution Company Ltd, who was present during the presentation, said. In the Maharashtra model, the best- performing feeders are kept in the category, which have a revenue loss of less than 20% against the input cost for power supply. The worst ones are in those where revenue loss is more than 60% of the input cost for supplying power. "In case of load shedding, power is first cut in more loss-making feeders so that the maximum revenue from the available power can be generated. It also

encourages consumers to pay regularly," said the distribution com-pany official. Power is supplied to consumers through feeders with which distribution transformers remain connected. In Bihar, there are 2,200 feeders through which the power distribution companies supply 2,500 MW-2,700MW among about 6 million consumers. Following the presentation on July 2, team members met senior officials of the power company to brief them about the different aspects of the revenue-linked supply scheme. Sharing details about the initiative taken so far by the power company in Bihar for generating the necessary data before shifting to the revenue-linked supply scheme, a senior official of the company said a pilot project to generate power supply and revenue data has been launched in Chhapra, Siwan, Purnea, Katihar, Darbhanga, Bhojpur and Patna (rural) divisions. The official, however, made it clear that any final decision to adopt the Maharashtra model in the state

would be taken only after a detailed study

of the ground realities and how could it be

made more consumer-friendly. The Statesman; July 6, 2015 (Edited)

State hits new power guzzling high B. SIVAKUMAR, TIMES NEWS NETWORK Chennai: TN hit an all-time high in power consumption at 298.914 MU over a period of 24 hours. Officials said the spurt in demand for power corresponded with a rise in temperature, with various sections of consumers’ contri-buting to a steep increase in electricity use. Domestic

consumers, especially in the districts, accounted for a large part in the spike in consumption on July 2. Industries and other commercial consumers drew more power, too, but power managers in the state were able to meet the demand with an increase in supply. The state set its previous record for power consumption of 271.043 MU on March 22 last year.

A senior TNEB official said total demand

in the state is around 13,000 MW but consumption hit 298 MU units on July 2

44

as

domestic consumers and industries led

“We have shown our will to surrender

UP not utilising full power quota from

an

incre-ase in drawing of power from the

2,255 MW and by doing this we will be

grid. "With the rainfall receding and the weather growing hot, domestic and industrial consumption peaked. Farmers too contribute to the rise in consumption because they receive power for 20 hours a day through three phase supply." With the consumption rising, Tangedco

able to reduce the price of electricity. At present we are buying electricity at 5-8 from NTPC but we can buy it half the price. Industries in Delhi are paying as high as 10 per unit. “Reason for selling expensive power to Delhi is still not clear. Previous government made long term

can hope to earn extra revenue. An increase in tariff did not reflect in a rise in the power utility's revenue till last year because lack of power supply ensured that overall consumption did not increase. "All thermal units as well as wind power generation are now being used in the grid and there is unlikely to be any shortage even if the demand crosses 14,000MW," the senior official said.

PPA with Central govern-ment which is not logical,” Jain said. Jain confirmed that there will be no shortage of electricity if Delhi surrenders their share of electricity. Financial Chronicle; July 8, 2015 (Edited)

Centre

A

CII official said industries earlier used

HT CORRESPONDENT Lucknow: In a sharp contrast to earlier

Energy wing pulled up

generators during days when demand peaked. "But more and more indus-tries are now using power from the grid as it is available without any outage," he said. "This will help companies, especially smaller firms, to save money,” he added.

years, UPPCL these days is frequently surrendering a part of the electricity quota available from the Centre on the plea of the same not being required. Earlier, the state has always accused the Centre of not providing it the full

The Times of India; July 4, 2015 (Edited)

electricity share due to it. “But, this time the Centre is providing around 5000 MW

Delhi proposes to surrender 2,255 MW of electricity PRESS TRUST OF INDIA New Delhi: In order to reduce the power rate in the city, Delhi government has proposed to surrender 2,255 MW electricity it buys at a high rate from central public sector undertakings (CPSUs). According to a senior government official, the average power purchase cost of Delhi is high in comparison to other states, resulting in the levy of higher electricity tariff. “We have requested Central government that electricity in Delhi is being given at a very high price. So we want to surrender power we get from CPSUs. “For example NTPC supplies power to other states but rate for Delhi is almost double. We (Delhi) are buying electricity at 5-8 from CPSUs,” Delhi power minister Satyendra Jain said when he went to meet Union power minister Piyush Goyal.

to UPPCL every day year unlike last year when it was only 3000-3500 MW,” said sources. Sources said the state’s own in- house power production was also more this year. “When the demand is low, we often surrender some amount of power available from the Centre,” said an official, adding “for example, on Monday also we surrendered 800 MW of power to the Centre.” This has, however, raised a question over UPPCL’s wisdom for its surrendering cheaper power and buying expensive one from the private power plants. “As per the merit order put in place by the UPERC, UPPCL is supposed to buy the cheaper power first,” UP Rajya Vidyut Upbhokta Parishad president A.K. Verma said. The Hindustan Times; July 8, 2015 (Edited)

on farm power in Telangana B.H. RAMAKRISHNA

45

Hyderabad: The Telangana finance department has asked the energy department why its subsidy should not be cut down, as its supply to the agriculture sector would have been lower in the Rabi season. According to the TSERC, the total subsidy promised for 2015-16 was 4,227 crore. The government agreed to release 354 crore every month as subsidy. Now, the finance department has pointed out that paddy cultivation was substantially lower in the Rabi season due to lack of ground water. The sowing of all crops including paddy was nearly 32% less compared to the previous year. The state government had campaigned intensively to dissuade farmers from sowing paddy as the ground water levels were totally depleted. Farmers largely complied, and paddy output fell by 32%. Consequently, power supply to agricultural pumpsets was reduced from 7 hours to 6, and in some areas to 5.5 hours. The finance department is now pointing out that if sowing was reduced and so was power supply, the amount that was spent on free power to the agriculture sector should also come down. It has become a habit for discoms to show in their ARR that its losses were mainly due to free supply of power to over 23 lakh agricultural pumpsets. Both discoms together claim a loss of over 2500 crore. But experts say the consumption estimates are faulty. The finance department’s query in effect questions the basic estimation methodology. It is for power utilities as well as the energy department to explain, sources said. Deccan Chronicle; July 6, 2015 (Edited)

MPs take CESC officials to task for not utilising ₹₹₹₹ 100 cr Central grant H.S. NARASIMHA KUMAR Mysuru: MPs R. Dhurvanarayan and Pratap Simha have taken strong exception to non-utilisation of 100 crore Central grants under the Restructured Accelerated Power Development Reforms Programme by Chamundeshwari

46

Electricity Supply Co Ltd (CESC). The funds sanctioned 3 years ago had not yet been utilised, they said at the district vigilance committee meeting. Laying of under-ground cables, strengthening of network and minimising distribution loss were some of the works to be taken under the grants. They questioned the authorities of the electricity supply company why they had not made use of the grants. Muniraju, Chief Engineer (Electricity) of CESC, speaking on behalf of the CESC chairperson who was at Belagavi attending the Assembly session, said that CESC had appointed an agency to take up the work but it had not been executed so fresh tenders would be called. Mr. Dhruvanarayan said that the funds had been released about three-and-a-half- years ago. If CESCOM wanted to upgrade the power distribution system, the funds could have been utilised. He added that CESC should address issues such as unscheduled load shedding particularly in rural areas and drop in voltages in Mysore district. The Hindu; July 5, 2015 (Edited)

Government didn’t hike power tariff:

Milind TIMES NEWS NETWORK Margao: Power minister Milind Naik refuted allegations that the state government was responsible for the steep hike in the power tariffs. Naik told that it was the joint electricity regulatory commission that had stipulated the hike in the tariffs and that the government had no control over the body. Replying to a query about delay in issuing of power bills, Naik clarified that almost 95% of the power bills had now been cleared and were being delivered by Goa Electronics Ltd to the consumers monthly. When brought to his attention that power department personnel do not promptly respond to telephone calls made by residents to sub-stations complaining about power interruptions, Naik said, "We have set up the 24X7 complaint facility '1912' wherein the public can call and register their complaints that will be

promptly be attended. The public will not have to call the landline of the concerned sub-station to make their complaints." Regarding non-functioning street lights on bridges and the high-mast lamps in the coastal areas, besides those at Navelim and Margao, the power minister said that this was the responsibility of the tourism department. In view of staff shortage, Naik cleared the request for additional 60- 70 junior engineers in the power department as well as the request for equipment. The Times of India; July 5, 2015 (Edited)

Palamu, Santhal Pargana to get 24X7 power by year end: CM PIONEER NEWS SERVICE Ranchi: CM Raghubar Das assured the power-starved people of Palamu and Garhwa region that they would get 24X7 electricity by the end of the year, while residents of Santhal Pargana will get regular electricity supply by the end of July, 2015. Das said that the government will ensure 24X7 electricity supply to the whole state because one can neither dream of Make in India nor Digital India programme without power. The Pioneer; July 4, 2015 (Edited)

‘No new electric line for hill areas’ TIMES NEWS NETWORK Guwahati: To stop further encroachment of hills surroundding the city, the Kamrup (Metro) district administration asked Assam Power Distribution Corp Ltd (APDCL) to refrain from sanctioning new electricity cone-ctions in the hill area. Unscientific earth-cutting and filling in the hills have destabilized natural earth slopes, blocked natural drains, triggered severe landslides and artificial floods and caused waterlogging during monsoon. "Hill-cutting degrades the environment and ecological bala-nce. So, I have asked APDCL not to provide new electric connection in the hill areas," said DC M. Angamuthu. The applicants now have to obtain a NoC from the district disaster management

47

authority (DDMA). This direction is issued according to provisions of Sections 30.2 (III) (V), (XX), (XXIII) of the Disaster Management Act, 2005. There are around 70,000 families residing in the hills, according to a 2011 survey by an NGO. "Most families have encroached on the hills in the last 5 years or so. The speed with which they get electricity connection is surprising," said an environment activist. The Times of India; July 5, 2015 (Edited)

AP domestic lighting scheme:

Bids to be opened by July 15 OUR BUREAU Hyderabad: The bids for the second phase of Domestic Efficient Lighting Programme (DELP) in AP will be opened before July 15, thereby facilitating the project imple-mentation. Phase one of DELP covering 4 pilot districts in AP has been completed wherein 56.5 lakh LED bulbs were distributed. The second phase will significantly broaden the scope of the project. With the cost of LED bulbs drastically coming down from 320 per unit in a scheme taken up earlier to about 80 now, this is likely to boost the energy conservation drive wherein it is proposed to replace incandescent bulbs with LED lights. According to Energy Secretary Ajay Jain, several global institutions like KFW have agreed in principle to provide a load of up to 1,500 crore to Energy Efficiency Services Limited (EESL), a Central Government enterprise, for taking up energy efficiency measures in the country. AP is likely to be a major beneficiary of this loan as it takes up the second phase. EESL is planning to invest about 5,000 crore over the next 5 years in energy conservation and energy efficiency drive in the country. The State expects to secure funding from this corpus. With AP taking up the issue of energy efficiency on a mission mode, the successful imple- mentation of phase one of the DELP is likely to come up for consideration for discussion in the Centre as this could

serve as a model project, according to State Energy Conservation Mission. The Hindu Business Line; July 7, 2015

Brighter homes at just Rs 10

State power firm to ink deal with central JV for pocket- friendly LED bulbs in capital, elsewhere

RUDRA BISWAS Ranchi: Jharkhand Bijli Vitaran Nigam Limited (JBVNL) has decided to make LED bulbs, which cost nothing less than 450 in the market, available at a pocket- friendly rate of 10 to every household in the 6 districts of Ranchi, East Singhbhum, Dhanbad, Bokaro, Deoghar and Hazaribagh by the end of next month. Under this easy and unique conservation scheme, which is borrowed from the Centre's domestic efficient lighting programme, every home in these 6 districts will be given 37-watt LED bulbs in exchange for 3 incandescent or CFL bulbs and an upfront payment of 30. “The 10-for-one bulbs will not just save energy, but also cut down electricity bills every month," said Rahul Purwar, MD of JBVNL. The Telegraph; July 6, 2015 (Edited)

German team pats discom SPECIAL CORRESPONDENT Visakhapatnam: Officials of KfW Development Bank of Germany have appreciated APEPDCL for the steps taken on energy conservation. The team met C&MD Revu Mutyala Raju and enquired about the distribution of LED lamps by EESL under its finance in select districts of APEPDCL, their working and energy savings. CGM B. Ramesh Prasad explained the distribution of LED lamps to consumers in APEPDCL jurisdiction. He also spoke of the achievement of distribution of solar-powered pump sets under subsidy basis to farmers and its contribution to energy conservation. The Hindu; July 5, 2015 (Edited)

District Electricity Committee holds first meet STAFF REPORTER

48

Hyderabad: The newly constituted District Electricity Committee for Hyderabad district conducted its first meeting where committee members complained about inadequate response from field staff following power cuts. The committee was constituted under the Centre’s Deendhayal Upadhyaya Gram Jyoth Yojana to oversee the status of power project implementation and identify avenues for new projects as required by the district. In Hyderabad, the committee was constituted under the chairmanship of Hyderabad MP Asaduddin Owaisi. The Hyderabad Collector is the convener. The Hindu; July 5, 2015 (Edited)

Collector is the convener. The Hindu; July 5, 2015 (Edited) Govt flips the switch to 20-year

Govt flips the switch to 20-year power plan SHREYA JAI New Delhi: Shifting focus to power transmission, the Narendra Modi government would soon launch a 20-year plan for the sector to keep pace with growing generation and its poll promise of '24x7 power for all'. The plan, titled 'Perspective Transmission Plan for 20 Years' is being circulated to all states and sector stakeholders for their feedback. The total investment envisaged is 2.6 lakh crore during the 13th Plan. According to the current draft, 1.6 lakh crore investment in transmission would come from states and the balance 1 lakh crore from PGCIL. Power ministry officials, however, said the project allot-ment would undergo changes, with PGCIL having overcapacity projects and the government pushing for more private investment in the sector. Also, the Green Corridor project, which entails an alternate transmission network for renewable energy, is being revised, keeping up with the plan to add 1,75,000 MW renewable power. Transmission projects, totalling 1 lakh crore, would be outbid in the coming six months through a tariff-based competitive bidding (TBCB), Minister for Coal, Power

and Renewable Energy Piyush Goyal, said recently. The expected transmission network by the end of the 12th Plan period in 2017 will be 3,60,000 circuit kilometres (Ckm) though the current status is 37,140 Ckm. The final draft of the transmission plan would be ready by September and projects would be bid accordingly. The plan was prepared last year by the CEA along with POSOCO and PGCIL. The government is planning to increase the size of projects and the scope of work in transmission to prevent network congestion. Interstate lines, with a capacity of around 56,000 MW, are being planned to be built by end of the 13th Plan. The focus would be on new technology such as HVDC and the load forecast would be improved. "The 5-year planning for transmission led to congestion and confusion in the supply network. States were not on board with no forecast of load; demand and transmission were not planned in tandem with power generation as the latter was de-licensed," said a senior power ministry official. The ministry is also working on the plan of a general network access (GNA) for power transmission. "This is in line with massive growth of power generation and transmission falling back. But for any plan around transmission, states need to be on board. We are discussing the plan threadbare with the states," said a government official. GNA is a kind of transmission network planning. It aims at developing transmission system such that available power can be transmitted smoothly. It would not be necessary to know in advance the destination of supply for a power generation plant. CERC, in its latest report on congestion in the power supply, had also advocated the same. "One of the reasons for this constraint has also been the fact that while in the last 10 years, private sector capacity addition has led to their share in the total generation capacity rising to 35%, ahead of central sector generation capacity, private sector constitutes hardly 3% of the total capacity in transmission.

Business Standard; July 7, 2015 (Edited) India in talks with ADB, World Bank for $2 bn loan for PGCIL UTPAL BHASKAR The World Bank (WB) and the Asian Development Bank (ADB) are in talks with the Indian government for providing a loan of around $2 billion to PGCIL. In addition, the transmission utility is also evaluating the prospects of raising $500 million through global rupee- denominated bonds. The loan from WB and ADB, if it comes through, will boost India’s green energy efforts and enable PGCIL to set up transmission corridors for evacuating solar and wind power. LiveMint; July 3, 2015 (Edited)

PGCIL approves plan for energy corridors New Delhi: PGCIL said its board has approved 2,247.37 crore investment plan for the third part of the inter-state electricity transmission project. The Economic Times; July 7, 2015 (Edited)

49

power

corridors

PGCIL plans to construct transmission links for 10,000MW solar capacity

UTPAL BHASKAR New Delhi: Faced with an ambitious green energy target of 175,000 MW by 2022, India has started work to set up transmission corridors to supply green power across the national grid. PGCIL plans to construct transmission links for 10,000 MW solar capacity that may involve an investment of about 9,000 crore. Of the total 100,000 MW solar power capacity planned, 20,000 MW will come from solar parks and 40,000 MW each from roof-top and distributed generation projects. The government plans to set up 25 such solar parks. India has around 300 days of sunshine per year. “Given the nature of solar power, setting up the transmission system is a challenge.

India

starts

work

on

green

PGCIL plans to build the inter-state transmission system for nine such solar parks,” said a government official. Stability of the power grid will be important in the transmission of green energy as it will have to factor in the variation in solar and wind energy generated. A grid collapse would mean states that draw power from a particular network face a blackout. In 2012, such a grid failure in India led to the largest known outage in world history, affecting 620 million people. On 31 July 2012, the northern grid collapsed, and on 1 August, the northern, eastern and north-eastern grids failed. PGCIL operates around 113,587 circuit km of trans-mission lines and plans to spend 1 trillion to increase India’s inter-regional power transfer capacity from 46,450 MW to 72,250 MW by 2017. The capital expen-diture planned by PGCIL for the current year is 32,500 crore. An earlier target to install 20,000MW of solar energy capacity by 2022 was raised fivefold to 100,000 MW. “Getting this quantum of solar and wind power on the grid would require forecasting the generation and setting up of renewable energy management centres in the states and at the levels of state load dispatch centres, regional load dispatch centres and national load dispatch centre,” said another PGCIL executive. The transmission corridors planned by PGCIL are in addition to the green energy corridors project under Indo- German Bilateral Development Cooperation Progra-mme for which German development bank KfW has decided to provide up to €1 billion (around 7,030 crore) as concessional loans. A PGCIL spokesperson confirmed the development and said, “The transmission of different stages are being finalized.” The emphasis on solar and wind power is also expected to strengthen India’s standing at global climate change negotiations that culminate in a summit in Paris in December. LiveMint; July 7, 2015 (Edited)

Sector majors shy away from bidding for transmission projects SHREYA JAI New Delhi: Three companies pulled out of auction for the 400-crore Maheshwaram power transmission project. This is the second time in a week that transmission companies did not bid for projects despite qualifying. The qualified bidders for the Maheshwaram project were state-owned PGCIL, Essel Infra, Sterlite Grid, Kalpataru Transmission, CLP India and a consortium of Tata Power and Tata Realty. Of these, only Sterlite, Power Grid and Kalpataru bid. L&T pulled out of auctions for the 823 crore Chhattisgarh A, 1,976 crore Chhattisgarh B and 863 crore Sipat transmission projects. European major Isolux also did not bid for 2 of 3 projects. Jindal Power, too, had qualified for 2 projects but did not bid for either.

had qualified for 2 projects but did not bid for either. The winners of the Chhatisgarh

The winners of the Chhatisgarh A and B projects are likely to be named by PFC next Tuesday. The investment expec-ted on these 4 lines is 4,000 crore. This was the first tranche of projects to go under the hammer after Power Minister Piyush Goyal said the government would increase transmission capacity to fulfill the NDA’s promise of universal, uninterrupted electricity. This was also the second major investment sought from the private sector after bidding for 2 UMPPs failed last year. “Stalled projects are still a major contributor to delayed revenue and lower profitability for Indian companies. Most industrial capacities are underutilised due to lack of demand,” said Rathin Basu, country president, Alstom India & South Asia. Business Standard; July 4, 2015 (Edited)

50

L&T wins ₹₹₹₹ 1,885 cr worth contracts in June PRESS TRUST OF INDIA New Delhi: L&T said its construction arm has won 1,885 crore worth contracts in June in the domestic and international markets. “The Power Transmission and Distribution Business of L&T Construction has won orders worth 1,885 crore in the domestic and international markets in June 2015,” the infrastructure major said. On the domestic front, a major EPC order was received from Odisha Power Transmission Corporation Ltd, it said. The project involves installing various 33/11 kV air insulated substations and associated lines with complete facilities for the Phase II of Odisha Distribution System Stren- gthening Projects. All major international orders were received from the Middle East, the company said. The Financial Express; July 2, 2015 (Edited)

24 new grid substations in the offing

Question hour in Legislative Assembly

Itanagar: Twenty four more new grid sub-stations and 1917 km of grid lines are coming up under the compre-hensive scheme of transmission being implemented by PGCIL. This was informed in the Legislative Assembly today. While responding to the star question from MLA Tumke Bagra, Power Minister Tanga Byaling informed the house that the Govt had issued order on March 17 last with a sole purpose of placing officers for O&M of the State Grid Systems and grid sub-stations, which are located at Daporijo, Aalo, Pasighat, Deomali, Itanagar, Naharlagun, Bhalukpong and Khuppi. The Assam Tribune; July 8, 2015 (Edited)

Land shortage for sub-stations hits supply J. DEEPTI NANDAN REDDY Hyderabad: Non-availability of government land is beco-ming a major

51

impediment for power utilities to set up new sub-stations. More than 70 sub- stations are pending due to scarcity of land in Hyderabad and surrounding areas. There are about 38 lakh electricity connections in Greater Hyderabad limits and about 50 MU of power is being consumed on an average per month. To cater to this demand there are about 220, 33/11 KV sub-stations in operation. Considering the present load and growth in future demand, at least 100 new sub- stations are needed in the Greater Hyderabad limits, opines an official from Telangana Southern Power Distribution Company Ltd (TSPDCL). TSPDCL has decided to construct new sub-stations in Hyderabad and sent a representation to Hyderabad district authorities to provide land. To do away with practical difficulties and delays, TSPDCL has put the onus of acquiring land on the district administration. The New Indian Express; July 9, 2015 (Edited)

India to export 500 Mw power to Bangladesh through SAARC Grid soon:

POSOCO BS REPORTER New Delhi: India’s grid manager POSOCO is confident the country would begin to export an additional power to an extent of 500 MW to Bangladesh as soon as the work on SAARC grid is accomplished in the next one year. “We could also draw considerably higher volumes of hydropower from nations such as Bhutan and Nepal,” said V.K. Agrawal, executive director, National Load Despatch Centre at POSOCO. The Indian government finalised a consensus over inter-country grid connecting the SAARC countries, which was pending for 4 years, in a meeting held with represent-tatives in the annual SAARC energy ministers meeting in Delhi in October 2014. “In view of the deepening and thickening bilateral relations between India and Bangladesh following conclusion of the recent summit level talks between prime ministers of the

2 countries, a decision has been taken to supply additional 500 MW of gas-fed electricity to Bangladesh,” said Agrawal. India is already exporting 500 MW of power to Bangladesh. Agarwal said the government has recently concluded that another 500 MW power supply be restored to Bangladesh with completion of SAARC grid, which is likely to take a year. The SAARC grid, which would connect India with its neighboring countries with cross-border transmission network, is currently in the evolution phase. India-Bhutan, India-Nepal and India- Bangladesh grids are interconnected and cross-border trade in bilateral mode is already taking place. India-Sri-Lanka asynchronous interconnection is under process. With regard to India-Pakistan, a suitable cross-border link is being considered. Business Standard; July 9, 2015 (Edited)

being considered. Business Standard; July 9, 2015 (Edited) AP woos Honda to set up a plant,

AP woos Honda to set up a plant, Toshiba to work on energy sector

Chandrababu Naidu touring Japan

OUR BUREAU Hyderabad, July 8: AP CM N. Chandrababu Naidu invited Japanese corporations such as Toshiba, Honda and JGC to set up their manufacturing units in the State and also share their expertise in infrastructure development. On his third day tour of Japan, Naidu and his delegation signed a MoU with NEC and also secured commitment from some of the Japanese corporations such as JRC for projects in the State. The CM invited Shinji Aoyama, COO of Honda Motor to set up a plant in AP. JGC Corp expressed interest in setting up a refinery, cracker unit and petrochemical corridor in AP. At a meeting with Sumitomo Mitsui Banking Corporation (SMBC), Senior Advisor Fumio Hoshi informed the CM that Japan Research Institute (JRI) is

52

ready to conduct feasibility study on eco- city and transportation systems in AP. Japan Research Institute is a subsidiary of SMBC. Toshiba has indicated its interest to work in optimising power management and to partner in energy research and the proposed Energy University. Toshio Masaki, Deputy President of Toshiba, was asked to take up a pilot project in Vizag

on the lines of Fuji Electric in Vijayawada.

A MoU was signed between AP

Technology Services Ltd and National Electronics Corp (NEC). The Hindu Business Line; July 9, 2015

Andhra inks MoUs with Japan’s Mizuho Bank B. KRISHNA MOHAN

AP has inked MoUs with Mizuho Bank,

where the latter will facilitate investments from Japanese companies in AP. Mizuho,

the second largest bank in Japan, intends

to facilitate investment activities in India

and Japan. Sunrise AP, an AP government

organisation and Mizuho will reach out to companies in Japan that are interested in pursuing business opportunities in India. AP CM N. Chandrababu Naidu met

Mizuho Bank managing executive officer and head of international banking unit, Tatsufumi Sakai. Naidu asked Mizuho Bank to set up its India headquarters in Amaravati. Soft Bank founder and CEO Masayoshi Son, who had met Naidu at Hyderabad

last month, said it was ready to set up a 20

GW solar power plant in AP. It would manufacture solar panels under the ‘make in India’ initiative in AP. Soft Bank would

sponsor scholarships to select students willing to specialise in solar power engineering. Son said he would make a donation in his personal capacity to the proposed ‘Renewable Energy University’ in AP. Naidu also met officials of the ministry of economy, trade and industry (METI), which evinced interest in equity participation in capital development and management. It offered financial assistance for AP’s metro rail project if

participation in capital development and management. It offered financial assistance for AP’s metro rail project if

there was a request from the government of India. METI officials said it would seek the participation of New Energy and Industrial Technology Development Organisation's (NEDO), which will present a feasibility report and assist Sumitomo Corporation in the Srikakulam’s power project. Naidu emphasised on a task force to institutionalise the relationship with Japan. Naidu has also asked Bank of Tokyo Mitsubishi UFJ to set up foreign exchange operations in Amaravati. Financial Chronicle; July 8, 2015 (Edited)

in Amaravati. Financial Chronicle; July 8, 2015 (Edited) Toshiba accounting errors may be over $800 mn

Toshiba accounting errors may be over $800 mn REUTERS Tokyo: Toshiba Corporation may need to mark down past earnings by over 100 billion yen ($814 million), more than double earlier estimates, after an ongoing investigation into past accounting practices found more irregularities, a source familiar with the matter said. The Nikkei busi-ness daily reported earlier the newly discovered errors, related to computer parts procurement, could see an earnings mark down of around 150 billion yen. Company officials were not immediately available for comment. The industrial conglomerate has not been able to close its books for the year that ended in March while a third-party committee reviews its past bookkeeping practices in a probe prompted by regulators. It has also skipped its year-end dividend to shareholders. The investigation had previously found inappropriate bookkeeping in areas such as highway electronic toll collection systems, power meters and semiconductors likely led to profits being overstated by nearly 55 billion yen in recent years. The company has said irregularities found so far included not booking appropriate losses and expenses, as well as underestimating material costs. The

53

investigation is expected to conclude in mid-July. Shares of Toshiba, whose businesses range from laptop computers to nuclear power plants, have fallen 17% since the company disclosed the internal investigation in early April. The current accounting investigation is Toshiba’s second in less than 2 years. In October 2013, it ann-ounced that it found its medical subsidiary, Toshiba Medi-cal information Systems, had overstated results for several years. Previous accounting investigations in Japan have included camera and medical equipment maker Olympus Corp’s 13-year cover-up of $1.7 billion in losses. The Financial Express; July 5, 2015 (Edited)

Infra companies face tough time as cash flow dries up BS REPORTER Mumbai: UBS has flagged the falling financial metrics of Jaypee, Essar, GMR,

GVK, Lanco and Abhijeet business groups and said banks had increased their exposure to them despite a deterioration in their cash flow and ability to service debt over the last few years.

A UBS report said 15-20% of the

companies analysed were categorised as

having non-performing loans or had their debt restructured. “Total loan approvals have increased by 85% since 2011-12 for

the banks under our coverage, including

non-fund based exposure. While the strong growth could be partly driven by disbursements to already approved loans, banks also seem to be supporting some accounts, leading to a stretched working

capital cycle,” the report pointed out. The 6 groups identified by UBS as having stressed loans have already taken steps to reduce their debt. While Jaypee sold its cement and power plants, Essar sold its slurry pipeline and oxygen plant apart from converting local loans to dollar- denominated ones. Essar Steel plans to

sell

assets worth 12,000 crore in 2015-

16.

GMR Infrastructure is talking to its

banks to take advantage of the 5/25

scheme to restructure its debt. The GVK group has put plans to develop an expensive coal mine in Australia in deep freeze while Lanco sold its Udupi power plant to the Adani group for 6,000 crore. The 5/25 scheme increases the tenure of a loan to 25 years with an option to refinance the loan in 5 years. UBS said these groups would have to sell more assets to support their interest and principal repayments. A slow-ing economy, ambitious projects, and land acquisition delays are the main reasons why many projects of these groups failed to take off or are stuck midway. On GMR Infrastructure, UBS said the company’s console-dated debt had increased from 21,200 crore in 2010-11 to 46,000 crore in first half of 2014-15, and its debt-equity ratio had climbed from 1.9 to 5.5. Its interest coverage ratio is low at 0.7. ICICI Bank and Yes Bank have increased their exposure to the group since 2011-12. UBS said the consolidated debt of GVK Power and Infrastructure had increased from 5,500 crore in 2010-11 to 22,300 crore by 2014-15, its debt-equity ratio from 1.5 to 10.7, and as a result its interest coverage ratio was low at 0.6. UBS analysed data for 17 companies in the GVK group, with a total exposure of 11,800 crore, and said Axis Bank and Infrastructure Development Finance had the highest exposures to the group. On Lanco, UBS said its total consolidated debt increased from 16,700 crore in 2010-11 to 38,000 crore in the first 9 months of 2014-15, and its debt-equity ratio had risen from 3.3 to 14.1 to over the period. Its cash interest coverage ratio is also low at 0.8. But with the sale of its Udupi plant, Lanco will be able to reduce its debt to around 32,000 crore. UBS analysed data for 8 com-panies in the Lanco group with a total exposure of 26,100 crore and found Punjab National Bank, ICICI Bank and REC had the highest exposures. UBS also analysed 11 Essar group companies, excluding Essar Oil and Essar Power (Salaya), and said ICICI Bank, SBI

54

and Punjab National Bank had large exposures. The total debt of the group is 93,600 crore, up from 75,800 crore a year ago. A senior Essar executive said the group had taken steps to cut its debt, including a plan to sell a 49% stake in Essar Oil and its ports. On Jaypee, UBS said ICICI Bank, SBI, Axis Bank and Yes Bank had increased their loan approvals by 250% in the last 3 years even as the group’s debt rose to an alarming 96,200 crore. The group sold its power plants to the JSW Group for 12,000 crore in 2014-15 and its cement units in Gujarat and MP to Ultratech. UBS said it analysed data of the banks’ filings with the Registrar of Companies. But it said these documents might not accurately represent the actual loan exposure of banks to companies as they do not capture partial repayments or undisbursed money and include non-fund based facilities. UBS adjusted the data for repayments wherever information was available. Business Standard; July 9, 2015 (Edited)

was available. Business Standard; July 9, 2015 (Edited) Lanco mulls selling power business stake BLOOMBERG New

Lanco mulls selling power business stake BLOOMBERG

New Delhi: Lanco

is

considering selling

its

generation

business to cut debt amid 4

selling its generation business to cut debt amid 4 Infratech, part of straight years of losses.

Infratech,

part

of

straight

years

of

losses.

The

company expects to raise 4,000 crore ($630 million) in 2-3 years by either taking the unit public or roping in a strategic partner, said T. Adi Babu, COO, finance. Lanco will also sell its Australian coal mine and its toll-road business in India when it gets an acceptable price, he said. Lanco, whose debt currently stands at about 37,000 crore, has remained unprofitable for the past 4 years, weighed down by interest costs. Reviving the

company's finances will depend on how soon PM Modi's government restarts power, road and other public works projects halted by land acquisitions and environ-mental delays to fulfill pledges that helped him win elections. "We'd like to capitalise on the power business when all our under-construction projects are ready," Babu said. "We also

hope by that time coal availability for our plants will improve and demand for power would have picked up." Lanco has a generation capacity of 3,450 MW, with 4,636 MW under construction, according to a June presentation. The company, based in Gurgaon, raised 6,300 crore in April by selling a 1,200 MW power plant

to Adani Power. Lanco shares rose 1.2%

to 4.10 at the close in Mumbai, their first increase in seven trading days. The

stock has declined 32 % this year, compared with a 2.2% gain in the benchmark S&P BSE Sensex.

A 50% decline in the price of coal since

Lanco bought the Australian mine in December 2010 has rendered the asset unviable. Located at Collie in Western Australia, Griffin Coal Mining has reserves of 1.1 billion metric tonne. While Lanco has deferred an expansion plan at the mine, it is maintaining production to meet contractual obligations to customers, Babu said. "There are buyers for the roads business and the Australian coal mine, but the prices being offered are too low," he said. "The price being offered for the roads business is 100 crore, while the book value is 750 crore." Lanco is also approaching lenders to refinance debt on some operational power plants and is counting on lower borrowing costs to shore up its finances. The company's borrowing costs rose almost 11% in the year ended March, dragging down earnings. Even after 3 reductions, India's key rate at 7.25 % is among the highest in Asia.

Business Standard; July 4, 2015 (Edited) Reliance Power gets 5/25 relief for 2 thermal projects

Group seeking loan refinance for Sasan UMPP as well

PRANAV NAMBIAR & PALLAVI AIL Mumbai: Reliance Power has refinanced 2 thermal power projects - Butibori and Rosa - under the RBI’s 5/25 scheme with additional loans of about 3,500 crore provided by SBI, Axis Bank, Vijaya Bank and Bank of Maharashtra. Documents show the 600 MW Butibori project in Maharashtra got an additional 2,000 crore from these lenders, while the 1,200 MW Rosa project in UP secured refinance of 1,500 crore from SBI. Banks had recently refinanced another ADAG group company, Reliance Infrastructure, for its Mumbai metro rail project. A senior official in Reliance Infrastructure confirmed that the company is also looking to refinance loans to its 3,960 MW UMPP located in Sasan, MP. “If we don’t get the loan refinanced, we will need to make high returns in the first 10 years to be able to pay off the loan and that is not possible as these projects have long gestation periods,” the official said. The Sasan UMPP was executed at a cost of 27,000 crore with the last unit of the plant commissioned almost a year before its projected zero date. Reliance Power is estimated to have incurred a capex of 3,500 crore in FY15, with net debt rising to 28,749 crore from 27,200 crore a year earlier. Analysts have drawn attention to the sharp increase in receivables at 2,900 crore, the equivalent of 5 months of sales. The com-pany reported revenues of 7,202 crore, up 30% over the previous year, and a net profit of 1,028 crore. Revenues from the Butibori project were estimated at 1,754 crore in FY15 while profit was pegged at 266 crore. Outstanding debt at the end of March 2015 was 2,943 crore. The unit operated at a PLF of 81.3%. The Rosa plant was developed in 2 stages at an investment of 6,100 crore. Emkay Research notes the project reported a net profit of 571 crore in FY15 on revenues of 4,616 crore. At the end of March

55

2015, the outstanding debt amounted to 3,500 crore. The Financial Express; July 3, 2015 (Edited)

Packed with power

JSW Energy improved its interest coverage to 2.7 times in 2014-15 from 2.2 times in 2013-14

MAULIK MADHU The stock of power producer JSW Energy has gained 16% since our buy recommendation in November. Investors can still consider buying the stock, which is reasonably priced. At 95, it discounts its trailing 12-month earnings by 12 times, lower than its 5-year average valuation of 17 times. The stock offers potential for further upside. One, the company is expanding its generation capacity. Next, unlike many other private power producers, JSW Energy has a strong balance sheet with manageable debt levels. JSW Energy operates a thermal power generation capa-city of 3,140 MW, comprising plants at Ratnagiri in Maharashtra, Barmer in Rajasthan and Vijayanagar in Karnataka. It is now set to expand capacity and diversify into hydro power too. In November 2014, it signed an agreement with Jaiprakash Power Ventures to acquire the company’s 2 operational hydroelectric power projects - the 300 MW Baspa II and the 1,091 MW Karcham Wangtoo in HP - for a base enterprise value of 9,700 crore. While the acquisition, which is expected to be completed in 2015-16 does not appear cheap, the final purchase price is negotiable and could be lower. Apart from this, JSW Energy is also setting up the 240 MW Kutehr hydroelectric project, for which land acquisition is underway. JSW Energy sells power both under long- term PPAs and in the merchant market. The latter exposes it to tariff volatility and buyer uncertainty. But the share of merchant sales has been declining consistently over the past few years - from 64% of the company’s power sales in 2011-12, it has fallen to 44% now. The

56

rest comes from sales made under long- term agreements that provide greater revenue certainty. The precarious financial position of state distribution utilities, however, remains a concern. Impacted by weak demand from distribution utilities, JSW Energy had reported a fall in sales revenue in 2013-14. Higher power sales the next year, however, helped the company grow revenues 7.7 %. JSW Energy seems to be well placed on the fuel front too. It runs its Barmer plant on lignite from the Kapurdi mines operated by Barmer Lignite Mining Company (BLMC), its JV with the Rajasthan government. During 2014-15, JSW Energy reported a year-on-year 19 % increase in power production from its 3 plants to 20,307 MW. Greater availability of lignite, thanks to the government’s approval for expansion of capacity of the Kapurdi mines, helped. The plant, which accounts for a third of JSW Energy’s operational capacity, saw its PLF go up from 68% in 2013-14 to 78% last fiscal. This could go up further once the BLMC-run Jalipa mines turn operational in 2015-16. JSW Energy has also benefitted from the significant cool-off in international coal prices. Its plants at Vijayanagar and Ratnagiri run on imported coal. With the downtrend in global coal prices unlikely to reverse soon, it should remain in a sweet spot. In 2014-15, JSW Energy’s net profit rose 79% year-on-year to 1,350 crore. Its operating profit increased 12% to 3,854 crore. Higher power sales (despite lower realisations) and cheaper coal improved operational profitability. Lower exceptional loss, primarily due to the company’s move towards complete hedging of its foreign currency exposure to buyers’ credit, boosted net profit. Also, JSW Energy’s healthy balance sheet has improved. Its consolidated debt-to-equity ratio came down to 1.1 times as on March 2015 from 1.4 times a year ago. The Hindu Business Line; July 6, 2015 (Edited)

Govt to sell stake in Oil India, NTPC, 3 other PSUs PRESS TRUST OF INDIA New Delhi: The government will sell a minority stake in NTPC, Oil India and 3 other PSUs as part of its disinvest-ment drive. The Department of Disinvestment today sought bids to appoint legal advisors for sale of stake in 5 PSUs through an offer for sale (OFS), besides a follow on offer of the CPSE Exchange Traded Fund. At current market prices, the stake sale in the 5 PSUs could fetch the exchequer around 11,500 crore. The disinvestment department plans to sell 15% stake in Hindustan Copper Ltd, 10% each in Oil India and Engineers India and 5% each in NTPC and Bharat Electronics Ltd. For the current fiscal, the government has set a target of raising 69,500 crore through disinvestment. Of this, 41,000 crore would come from sale of minority stake and 28,500 crore from strategic stake sale. Financial Chronicle; July 3, 2015 (Edited)

RBI restricts foreign investors to buy shares in Petronet LNG PRESS TRUST OF INDIA Mumbai: The RBI said foreign investors can pick up fresh stake in Petronet LNG only after taking prior approval as overseas shareholding has reached permissible limit in the company. The foreign shareholding through Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs) in Petronet LNG Ltd has reached the trigger limit, RBI said in a notification today. For the quarter ended June 30, foreign shareholding in the company was at 22.80%. Financial Chronicle; July 3, 2015 (Edited)

Suzlon arm Senvion, ENERTRAG in pact for 27 turbines in France Senvion SE, an arm of Suzlon Group, signed a contract with European renewable energy company ENERTAG for the supply and installation of 27 wind

57

turbines with a total rated output of 54.45 MW from 4 wind farms in France. Senvion will also be in charge of full maintenance of the wind farm for 15 years. DNA; July 4, 2015 (Edited)

Warburg Pincus in talks to Buy 25% in L&T Fin

Deal size likely to be about ₹₹₹₹ . 3,500 cr; move seen as PE fund's plan to create financial services portfolio in India

DEVINA SENGUPTA & BAIJU KALESH Mumbai: American private equity fund Warburg Pincus is in talks to purchase at least one-fourth of financial services firm L&T Finance Holdings, people familiar with the development said. “Both Warburg Pincus and L&T Finance, which have agreed to a deal up to 25% stake, are now negotiating on the price,” one said. The move is seen as a part of Warburg Pincus' plan to create a financial services portfolio in India. L&T Finance, owned by India's largest engineering and constructions firm L&T, has pitched for a deal price of 83 per share, the sources said. The PE fund has yet to respond to this offer. The offer price translates to a deal size of 3,574 crore. The Economic Times; July 7, 2015 (Edited)

Singareni to start drilling at Bayyaram RAVI RANJAN PRASAD Singareni Collieries will undertake exploration drilling at Bayyaram in Khammam district. The extracted ore will be made available to the company that comes forward to set up a steel factory here. The drilling of holes is part of the exercise to make a preliminary report for making the quality and quantity assessment of iron ore. This also marks SCCL’s diversification into mining of iron ore and other minerals. This apart, power generation - thermal, wind and solar - explosive manufacturing, coal washing, processing of over burden, underground coal gasification, surface coal gasification

and coal bed methane are the other diversification activities for Singareni. Financial Chronicle; July 7, 2015 (Edited)

Suzlon Energy set to win back 50% mkt share in wind power biz

Potential turnaround story where it has been a market leader due strong EPC and O&M capability

NOMURA Suzlon Energy (SUEL) is a potential turnaround story in the emerging wind power sector, where it has traditionally been a market leader due to its strong end-to-end EPC and O&M capability. From a position of strength, SUEL has gone through multiple crises over the past 5 years including debt default. However, it has since taken corrective steps to substantially repair its balance sheet by selling off its German offshore wind arm, Senvion (formerly REpower), for € 1 billion and issuing fresh equity worth 1,800 crore to Dilip Shanghvi & Associates (DSA) – a promoter for Sun Pharma. After the financial restructuring and Senvion sell-off, SUEL is now an India pure play set to refocus on new order wins and execution, and well placed to win back 50% market share in the domestic wind equipment market. Re-introduction of wind power incentives and supportive policy aimed at meeting the government’s ambitious wind energy target of 60 GW should help to drive demand for wind equipment. The Financial Express; July 9, 2015 (Edited)

Like CIL, PSUs can deliver on par with TCS, Infy: Min Better vision and leadership can help state-owned firms to perform on par with top private players like Infosys, Wipro and TCS as has happened with CIL which registered 12% spurt in output, coal minister Piyush Goyal said. The Hindustan Times; July 9, 2015 (Edited)

Goyal said. The Hindustan Times; July 9, 2015 (Edited) Census reveals grim picture of Bharat One

Census reveals grim picture of Bharat

One out of 3 families landless; less than 5% rural households pay IT

OUR BUREAU New Delhi: Reiterating the lopsided India story, the Socio Economic and Caste Census of rural areas revealed that 1 out of 3 families is landless, less than 5% of the rural households pay income tax, but over 68% have mobile phones. The result of the first such Census in independent India - the last one was conducted in 1932 - did not include caste-specific data despite the title saying so. “I am sure that with the enormity of schemes and the reach that all governments have, this document will form the basis of helping us to target groups to support in terms of policy planning,” said Finance Minister Arun Jaitley, while releasing the report in the presence of Rural Develop-ment Minister Chaudhry Birender Singh. The paperless Census was carried out in all 640 districts of the country with the help of a handheld device. It said that of the total 24.39 crore households in the country, 17.91 crore are in rural areas. Of the rural households, 18.46% belong to a Scheduled Caste and 10.97% to a Schedule Tribe while 68.5 % belong to ‘other categories’. Interestingly, over 36.5 lakh families (a little over 2%) belong to no caste or tribe category. Five States with a high percentage of rural SC households are Punjab, WB, TN, HP and UP. On sources of income, the Census says 5% of the households draw government salaries, over 3.57% relied on the private sector, and little over 1% of households on public sector enterprises. However, the bad news is that over 6.85 crore households (38.27%) hold no land, deriving a major part of their income from casual manual labour. Also, the number of households with destitutes or those living on alms is over 6.68 lakh; as many as 4.08 lakh households rely on rag-picking.

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While for almost two-thirds of the rural households the top earning member got less than 5,000 a month, in over 1.48 crore (8.29%) households, the top earner brought home more than 10,000 a month. The Census also gave a glimpse of the rural market, with 1 out of every 5 families owning a motorised vehicle (two/three/ four-wheeler or a fishing boat). On the use of the report, Jaitley said it will help assess “who are the ones who have qualitatively moved up in terms of quality of life and who are the ones in terms of geographical regions, social groupings which need to be targeted.” Rural Development Minister Birender Singh said: “The data are an opportunity to make evidence-based selection, prioritisation and targeting of benefit- ciaries in different programmes.” The Rural Development Ministry has decided to use SECC data in all programmes. The Hindu Business Line; July 4, 2015 (Edited)

Power research unit given land ASHISH ROY, TIMES NEWS NETWORK Nagpur: The city need not lose the branch of Central Power Research Institute (CPRI). The state government has finally given land to it at Wardha Road. A full- fledged thermal research unit of CPRI, having its head office in Bengaluru, used to function near Koradi until 2009 when Mahagenco acquired the land for its Koradi expansion project. Since then, it has been just existing with a skeletal staff in a Mahagenco residential quarter. Sources in power sector said that CPRI bosses had almost planned to shift the Nagpur unit to Vadodara when the state government issued the government resolution for the 49.08 hectare land at Dhuti on Wardha Road. The Congress- NCP government had not shown any initiative in retaining the unit here. The CPRI bosses had tried hard to get alternate land but they were only made to run from pillar to post. After some months, they had given up.

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CPRI's Nagpur unit had 4 laboratories, which used to carry out a number of studies on thermal power generation. Quality of raw coal as well as washed coal was tested here. Research was carried out to improve washing of coal. UN had given grant to the Nagpur unit to study coal burning in depth. The erstwhile MSEB had funded the construction of an alumina extraction plant. Coal fly-ash contains 26% alumina. Aluminium is extracted from it. The land has been given on lease for 30 years at a nominal annual rent of 1. The lease will be renewed at the request of CPRI. CPRI will have to start construction within 3 years of getting possession of land. The institute will have to give permanent 20% concession in training engineers of state government- run power companies. The Times of India; July 3, 2015 (Edited)

Adani hires lobbyists to push Oz mine project

Consultants with strong political ties in Australia and ex-govt executives have been roped in, say media reports

RACHITA PRASAD Mumbai: The Adani Group has reportedly hired “influen-tial figures” from both sides of the political spectrum in Australia to convince the government of the benefits its $7 billion Carmichael mine project and secure necessary approvals. According to Australia's The Sydney Morning Herald, working for Adani are several staffers, lobbyists and consultants with strong ties to Labor, Liberal and National parties. The report said Adani has hired people who have previously worked in Queensland government in areas with oversight of elements of the project. The Sydney Morning Herald report said Adani's key lobbying firm is Next Level Strategic Services, led by David Moore and Cameron Milner. Moore was the chief of staff for former deputy premier Jeff Seeney when he was opposition leader for the Liberal National Party of Queensland, and was a chief of staff during the Howard

government for MP Mal Brough. Seeney and his former department of State Development, Infrastructure and Planning were under scanner after documents showed that they went ahead with a proposal to assist Adani with financing for a rail line to coal terminals at Abbot Point. The report lists former government executives been hired by Adani. ET could not reach Adani's officials in Australia for an immediate response. The Economic Times; July 4, 2015 (Edited)

Govt: No wrongdoing in land allotment to Essar Power TIMES NEWS NETWORK Gandhinagar: Strongly rejecting Congress' allegations of state government's “collusion“ with Essar Power Gujarat Ltd (EGPL) for “forcibly“ acquiring farmland near Vadinar, the revenue ministry said that “certain individuals“ are unnecessarily trying to rake up controversy and stall the coal corridor project. In a statement, the revenue department said that out of the total 23,81,138 sq m required for the coal corridor, EGPL had legally purchased 20,90,567 sq m (87.79%) from the farmers. The company has acquired 1,66,126 sq m as per land acquisition rules and the government has allot ted 1,24,445 sq m for which EGPL has paid the full amount. Giving details, the revenue department said that the company required 238.11 hectare land of which they purchased 209.05 ha from the farmers and acquired 16.61 as per land acquisition rules. EGPL also paid the government 17.18 crore for 12.44 ha land that was allotted to the company. EGPL got the possession of this land on May 15. EPGL is building a nearly 12 km coal corridor to reduce the transportation cost of fuel. Presently, imported coal is transported from Bedi port, 45 km away, by dumpers to the power plant. The Times of India; July 6, 2015 (Edited)

Coal scam: Plea for probe into ‘hawala transactions’ and diversion of coal fe BUREAU New Delhi: The Supreme Court sought responses from CBI and the Enforcement Directorate as to whether it should investigate alleged diversion of coal from captive coal blocks allotted to Reliance ADAG’s Sasan UMPP in MP and also probe the Aditya Birla Group’s alleged hawala transactions that cropped up during coal scam investigations. A special bench headed by Justice Madan B. Lokur, which is monitoring the probe in the coal allocation scam, issued notice to the CBI and ED on both. The Financial Express; July 7, 2015 (Edited)

Coal scam: Court allows CBI's plea to place fresh documents PRESS TRUST OF INDIA New Delhi: A special court has allowed a plea filed by CBI seeking its permission to place on record some fresh documents and adding names of 6 more witnesses in a coal block allocation case involving Delhi- based Rathi Steel and Power Limited (RSPL) and its 3 officials. The agency had moved an application before Special CBI Judge Bharat Parashar. While allowing CBI’s plea, the judge said, “At the outset, I may state that undoubtedly while filing the charge sheet CBI ought to have been careful in placing on record all the relevant and relied upon documents and for also mentioning the names of all witnesses in the list of witnesses.” The court had earlier put on trial RSPL and its three top officials - MD Pradeep Rathi, CEO Udit Rathi and AGM Kushal Aggarwal - for alleged offences of cheating and criminal conspiracy. The case pertains to alleged irregularities in allocation of Kesla North coal block in Chhattisgarh to RSPL. Business Standard; July 5, 2015 (Edited)

Coal scam: CBI wonders at CoalMin, DoPT queries PRESS TRUST OF INDIA

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New Delhi: CBI told a special court that it was “beyond comprehension” as to why the coal ministry or department of

CBI raid on NTPC’s Barh unit premises

raids. CBI sources said owner/s of one or two firms opened several firms in different names but were being operated by the

personnel and training were seeking

same

owner/s.

documents from them on the sanction

The Times of India; July 2, 2015

issue in coal scam cases which “may tilt

(Edited)

the balance in favour of the accused”. Noting that it has already provided all relevant records, CBI said they have received a letter on June 11 from DoPT

'CM, Electricity Minister differed on solar project' EXPRESS NEWS SERVICE

with reference to 5 cases in which

Kochi: C.L. Anto, a confidant of former

documents were sent to them in

CM

K. Karuna-karan, said there were

pursuance to the court's directions for considering according of sanction to try 2 retired public servants, K.S. Kropha and K.C. Samria, for their alleged roles in coal scam cases. The court was hearing a coal scam case

differences of opinion between CM Oommen Chandy and Minister Aryadan Muhammad over implementation of the Solar project in the State. He made the statement while deposing before the Justice G Sivarajan Commission inquiring

involving Nagpur- based Grace Industries (GIL) and others. The court had earlier directed central bureau of investigation to place records of the case before the competent authority so that they could consider according sanction to prosecute Kropha, former joint secretary in coal

the solar scam case. According to Anto, Aryadan wanted to implement the solar project through ANERT and its associated com-panies. Meanwhile, CM Chandy brought C-DIT into the picture, allegedly for assisting Saritha and Biju Radha-krishnan, the key accused in the

ministry, and Vishwas Sawakhande, then

solar

scam case.

director of directorate of geology and

Anto

alleged that the solar project, which

mining in Maharashtra government, for alleged offences under the Prevention of Corruption Act. Financial Chronicle; July 9, 2015 (Edited)

GYAN PRAKASH, TIMES NEWS NETWORK Patna: The Delhi unit of CBI along with vigilance officials of NTPC conducted a joint raid on the premises of NTPC's unit at Barh in Patna district following complaints of large-scale corruption and cartelization in award of con-tracts at more than twice the estimated cost. As a result, the same set of firms is allegedly bagging most contracts. It has also been alleged there were certain serious and glaring violation of norms in issuance of

was his brainchild, was hijacked by Planning Board vice-chairman Chandhrashekar and Local Self Governance Secretary R.K. Singh. “When I came to know about it, I wrote a letter to CM Chandy seeking action against the officials. But, no action was taken,” Anto said. Anto further alleged that the CM and his allies also tried to delay registration of the societies. Though he challenged it in the High Court and secured a favourable verdict, the government filed an appeal against the

ruling, allegedly for helping Saritha and her fraud company. The ministers who extended support to Saritha feared that if Anto’s company got registration, it would become eligible to become the implementation agency for the solar project in Kerala. “There were attempts

tenders and execution of contracts by the

from

the part of the politicians to create

NTPC officials. The raiding team reportedly seized several documents for

differences among members of the societies, which turned futile,” he added.

scrutiny. It is learnt that the CBI personnel are likely to carry out more

The New Indian Express; July 8, 2015 (Edited)

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HPSEB staff to oppose power bill STAFF CORRESPONDENT Shimla: The Himachal Pradesh State Electricity Board Employees Union will support the National Coordination Committee of Electricity Employees and Engineers one-day all-India strike against the Electricity (Amendment) Bill 2014. The union termed the proposed bill anti- people. It decided to hold protests and rallies on July 21-23, when the Electricity (Amendment) Bill 2014 will come up or discussion in Parliament. Hira Lal, general secretary, said the Bill aimed at further splitting power discoms into carriage and content (electricity supply business) to enable profit mongers to enter the supply business in the urban and revenue potential areas without any invest-ment. The Bill would open up the electricity distribution sector for cherry picking by suppliers, forcing the poor and low-end consumers to pay more, he said. The Hindu; July 6, 2015 (Edited)

56 KSEB staff died in electrical mishaps since 2011 EXPRESS NEWS SERVICE Thiruvananthapuram: As many as 56 employees of the Kerala State Electricity Board had been killed in electrical mishaps since 2011, according to the statistics presented in the Assembly. A majority of the victims - 33 - were linemen, while 15 were electricity workers, Electricity Minister Aryadan Mohammed said. The New Indian Express; July 8, 2015 (Edited) UPPCL may press ‘revert’ button on engineers HT CORRESPONDENT Lucknow: UPPCL has started gearing up to revert or demote to their original posts around four dozen engineers posted in the corporation and its discoms who had got out-of-turn promotion availing the benefit of ‘consequential seniority’ under the reservation in promotion policy. These engineers, who belonged to scheduled castes, superseded their seniors belonging

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to the general and the backward caste categories during the Mayawati regime. The current move follows the state cabinet authorising the irrigation department on Tuesday to demote the scheduled caste staff who had been promoted by virtue of consequential seniority which the Supreme Court had held unconstitutional in 2012. The Hindustan Times; July 9, 2015 (Edited) JSPL, villagers to settle land issue mutually EXPRESS NEWS SERVICE Angul: The expansion of Jindal Steel and Power Ltd (JSPL), which has been hit by land hurdle, is likely to start soon if all things go well. At a meeting attended by Collector S.R. Jadhav, it was decided that JSPL officials and represent-tatives of land oustees will mutually resolve the issue of ex gratia for land acquired for the expansion. MP N. Pradhan, Chhendipada MLA S.K. Behera, Angul SP R. Pandit and LAOs attended the meeting along with representtatives of JSPL and PAFs. The meeting was conducted as per decision of Sixth Rehabili-tation and Periphery Development Advisory Committee (RPDAC). It was decided that JSPL should invite representatives of Birankeswar Shilpanchal Khyatigrasta Prajasangha and Maa Kaluni Prajasangha and resolve issues. Though IDCO has already acquired land after paying compensation to land losers and later legally handed it over to JSPL, villagers have been obstructing the project for nearly 5 years for higher compensation. Since com-pensation including ex gratia has been paid in full, it will be beyond scope of law to pay additional compensation, JSPL said. However, since the demand for payment of additional ex gratia will be decided mutually, it will be second such compensation. JSPL has built a 2-MTPA steel plant and 810-MW captive power plant as part of its 24,000 crore 6- MTPA integrated steel project. The New Indian Express; July 7, 2015 (Edited)