Monthly Archives: November 2010

Bilateral agreements on power signed with 4 countries

The Government today informed the Rajya Sabha that the country had signed bilateral agreements with Bangladesh, Bhutan, Sri Lanka and Canada for cooperation in power sector during 2009-2011, but said no power project was set up involving foreign countries.

Answering questions on power generation projects involving foreign countries, Minister for Power Sushil Kumar Shinde said in a written reply that the terms of reference of the agreements were to broadly to enhance co-operation in generation, transmission, distribution of power, energy efficiency and development of renewable energy, mutually benefitting the countries involved.

These agreements, he said were likely to contribute to power sector in India in terms of capacity building, improvement in generation, distribution and transmission of power, developing robust energy market and energy security.

To a question, the Minister said the gross energy generation during April-October 2010 was 3,74,229 million units through thermal units followed by hydro generation 76,077 MU. The nuclear sector generated 13,167 MU of power. Imports from Bhutan was to the extent of 4,848 MU.

Among the steps taken to step up power generation in the country to meet the rising demand, the Minister said that the Government had launched a Hydro Power Policy in 2008 to boost the hydro power development in the country. Pre-Feasibility Reports of 162 hydro-power schemes aggregating 50,000 MW was prepared by the Central Electricity Authority.

The Power Ministry was allowing development of Ultra Mega Power Projects of 4000 MW each to reap benefits of economies of scale and there had been bulk ordering of 11 units of 660 MW each with super-critical technology with mandatory phased indigenous manufacturing programme was planned to promite indigenous anufacturing. The country was also allocating gas from KG basin for gas based power units.

Source – UNI

FDI in renewable energy growing rapidly: govt

The government today said Foreign Direct Investment (FDI) in renewable energy sector has shown an upward trend and investment in the sector in 2009-10 has been very attractive.

“The FDI in renewable sector has been growing rapidly. During 2006-07, 2007-08, 2008-09 and 2009-10, the investment to the sector was $2.11 million, $43.15 million, $85.27 million and $497.91 million respectively,New and Renewable Minister Farooq Abdullah told Rajya Sabha in a written reply.

“The investment in 2009-10 has been very attractive,” he said.

Wind energy is the fastest growing renewable energy sector and the FDI inflow in the sector has been increasing over the years, the minister said.

On whether the government proposes to modify the policy regarding foreign investment in the wind energy sector, Abdullah said his ministry has already announced a Generation Based Incentives (GBI) scheme for grid connected wind power projects with the objective of broadening the investors’ base by attracting FDI and independent power producers.

Source – Business Standard

Jaitapur N-power unit gets green nod

The Union ministry of environment and forests (MoEF) has given environment clearance to the controversial Jaitapur nuclear power project slated to come up in Madban village (Ratnagiri district) along the Konkan coast. This is the second major project, after the Navi Mumbai airport, to be cleared by minister Jairam Ramesh in a week.

The 9,900-Mw (nearly double that of India’s existing nuclear power capacity) Jaitapur nuclear power plant, the country’s largest, will be set up in collaboration with the French firm Areva. The final contracts are scheduled to be signed in the first half of 2011. The project has elicited a huge outcry, with mass protests by local fishermen and environmentalists who fear that it will not only destroy the rich marine biodiversity of the Konkan belt but also destroy the livelihood of the local population.

”The true impact of the project of this scale will never be known unless one decides to do a comprehensive bio-diversity assessment. The thermal discharge of this scale is bound to cause an eco-system shift in a large area. Even a 0.5 degree of continous thermal stress will lead to mortality of marine species. And here we are talking about a 5 degree shift,” said Deepak Apte, marine biologist and deputy director of Bombay Natural History said.

Incidentally, environment clearance for Jaitapur project was given in just 80 days from the time final environment impact assessment report was submitted by Nuclear Power Corporation. An agreement between Areva and NCPIL is expected to be signed during French President Nicholas Sarkozy’s visit to India next month.

While approving the project, MoEF has prescribed 35 stringent conditions and safeguards, of which 23 specific conditions would have to be met within a year’s time. These include the preparation of a comprehensive biodiversity conservation plan, with BNHS and state forest department, to maintain health of 150 hectares of mangroves in the area.

Stressing the need for cleaner technology, Ramesh said nuclear energy was a cleaner option compared to coal.

”From the environment point of view, a nuclear project is land-intensive and greener. Today 38% of India’s greenhouse gas emissions come from the electricity generation sector. If we wish to maintain a GDP growth rate of 9% every year, then our power sector needs to grow at 7% annually,” he said.

Source – TOI

Competitive tariff bidding for thermal projects from 2011

All thermal power projects and transmission systems will be awarded on competitive tariff bidding and trading in renewable energy certificate (REC) is set to start, India’s power sector regulator said Sunday.

The ministry of power has agreed to the suggestion of competitive bidding for all thermal power projects to be set up in the country after January 2011 onwards. This will be applicable for all projects whose power purchase agreement (PPA) would be signed from next January onwards,” Central Electricity Regulatory Commission (CERC) chairman Pramod Deo said.

Speaking to reporters on the sidelines of the All India Conference of Chairmen of Central and State Electricity Regulatory Commissions here, he said: “Public sector utilities like NTPC (National Thermal Power Corporation) have completed their PPA for their projects. The ministry of power has said it will not extend the deadline.”

Deo said the process of trading in RECs will start in two months as registration has commenced with the Power System Operation Corporation Ltd (POSOCO).

“The volume of RECs that would come up for trading is not possible to estimate,” he added.

The REC is classified into two categories – solar and non-solar – and will be issued to renewable energy generators.

Power distribution and captive power companies can buy RECs to meet their green power norms.

On the issue of payment of transmission charges by NuclearPower Corporation of India Ltd (NPCIL) for its Kudankulam power plant with effect from 2009 onwards when the plant is yet to start power generation, Deo said: “The same principle will be followed in the future. Where ever the transmission infrastructure is ready to evacuate power, the power generating company will have to pay the charges.”

Source – IANS

Coal sector news digest

  • Coal India studying acquisition of five mines in the US, Australia and Indonesia to meet the country’s demand for the fuel
  • Rival interest helps speed up JSW Energy-CIC deal – It took JSW Energy about two months to finalise the acquisition
  • MoEF signals its readiness for a compromise to allow coal mining to fuel a 4,000 MW ultra mega power project in Bedabahal, Orissa
  • 20 new washeries proposed to augment availability of quality coal – Parliamentary consultative committee of coal meets

Firing on all turbines, Dabhol project generates Rs 220-cr profits

The Dabhol power project, after years of operational losses and shutdowns, is seeing a strong rebound, , with its half yearly profits at Rs 220 crore during the current fiscal.

Ratnagiri Gas and Power Pvt Ltd (RGPPL) the company that now owns the project made all six gas turbines operational earlier this year, achieving full capacity of 1,940 MW on March 31.

The gas-based power project, which had registered a loss of Rs 600 crore in 2008-09, had notched up a marginal operational profit in the year-ended March 2010.

Power major NTPC Ltd, which is operating the gas-based project and has been instrumental in turning around the project, has a 29.65-per cent stake in RGPPL, with GAIL (India) Ltd and the Maharashtra State Electricity Board being the other key shareholders.

Many a problem:

  • “Spearheading the revival of Ratnagiri project by making all six gas turbines operational and achieving full capacity has been one of our most challenging turnaround stories. The operationalisation of the sixth turbine was done earlier this year, while five machines were already running,” an NTPC official said.
  • The problems faced by NTPC in turning around the project included the absence of contractual arrangement with the original equipment manufacturer and a lack of drawings and essential documents, including user manuals and service schedules.
  • Besides, NTPC, which had turned around several older coal-fired plants in the past, did not have any prior experience of operating the advanced class gas turbines supplied by General Electric for the project.
  • The achievement of full capacity of 1,940 MW (de-rated from the original installed capacity of 2,140 MW because of problems with equipment), brings to a close a chapter that began in 1992, when the original developer, Enron Corporation of the US, signed the power purchase agreement with the Maharashtra Government.
  • The project was taken over by a conglomerate that included public sector banks, MSEB, GAIL, NTPC and some financial institutions in October 2005, after the US power firm declared bankruptcy.
  • The assets were transferred to RGPPL, a special purpose vehicle, which had NTPC and GAIL as the main equity stakeholders.
  • NTPC was drafted into the scheme of things for reviving the power blocks, while GAIL was put in charge of restarting the under-construction LNG facility.

Source – Hindu Business Line



Ministry of Power, Govt. of  India, as a part of Reforms  in  the Power Sector, has  launched  the Restructured  Accelerated  Power Development  and  Reforms  Programme  (R-APDRP) in  the  XI Five year Plan. The focus of the program is on the actual demonstrable performance in terms of AT&C  loss  reduction,  establishment  of  the  reliable  and  automated  sustainable  systems  for  collection  of  base  line  data,  adoption  of  information  technology  in  the  areas  of  electricity accounting, Consumer care and strengthening of Distribution network of State Power Utilities. A provision of Rs.50,000 crores has been made for funding during XI plan  for the Projects under the scheme  to be  taken up  in  two parts  in urban areas  –  towns and cities with population of more  than  30,000  (10,000  in  case  of  special  category  states).  The  scheme  also  envisage establishment  of  supervisory  control  &  data  acquisition  system/  distribution  management system in large towns, capacity building, incentive scheme for distribution personnel etc.

Power  Finance  Corporation  Limited  (PFC) has  been  designated  by  Ministry  of  Power, Government  of  India  as  the  Nodal  Agency  for  operationalization  of  the  programme.  PFC  is supported/ advised by  various  consultants  for  implementing  the  programme. PFC  intends  to appoint  Third  Party  Independent  Evaluation Agencies  for  Energy Accounting (TPIEA-EA) under  R-APDRP  to  Establish  /Verify  AT&C  losses  including  Annual  verification  of AT&C  losses  of  the  project  areas  and  state  power  utilities/distribution  companies  to  achieve programme objective of AT&C losses reduction in project areas/ state.

Program Coverage

  • It is proposed to cover urban areas – towns and cities with population of more than 30,000 (10,000 in case of special category states).
  • In addition, in certain high-load density rural areas with significant loads, works of separation of agricultural feeders from domestic and industrial ones, and of High Voltage Distribution System (11kV) will also be taken up.
  • Further, towns / areas for which projects have been sanctioned in X Plan, R-APDRP shall be considered for the XI Plan only after either completion or short closure of the earlier sanctioned projects.

Proposed Scheme

Projects under the scheme shall be taken up in two parts. Part-A shall include the projects for establishment of baseline data and IT applications for energy accounting/auditing & IT based consumer service centres. Part-B shall include regular distribution strengthening projects. The activities to be covered under each part are as follows:

Part – A: It includes

  • Consumer Indexing, Asset Mapping
  • GIS Mapping of the entire distribution network Automatic Meter Reading (AMR) on DT & Feeders
  • Automatic Data Logging for all Distribution Transformers and Feeders
  • SCADA  system in big towns / cities. Criteria:

i) Towns must be covered under Part-A and commitment to take up Part-B under R-APDRP

ii) Population of 400,000 (Census India 2001) & Annual input Energy of 350 MUs

iii) Population/MU criterion is not applicable for HP, Goa, UTs & NER towns for which the list will be added shortly

iv) Orissa & Delhi having Pvt. Utilities may be considered later.

  • Feeder Segregation/ Ring Fencing
  • IT applications for redressal of consumer grievances, integrated meter reading, billing & collection
  • Energy accounting & auditing and MIS
  • Establishment of the Base Line data System


Part – B: It includes:

  • Renovation, modernization and strengthening of 11 kV level Substations, Transformers/Transformer Centres
  • Re-conductoring of lines at 11 kV level and below
  • Load Bifurcation, Load Balancing
  • HVDS (11kV)
  • Installation of capacitor banks and mobile service centres etc.
  • Aerial Bunched Conductors in populated areas
  • Strengthening at 33 kV or 66 kV level.


Eligibility Criteria for RAPDRP Assistance

The States / Utilities will be required to:

1)  Constitute the State Electricity Regulatory Commission

2)   Achieve the following target of AT&C loss reduction at utility level:

  • Utilities having AT&C loss above 30%: Reduction by 3% per year
  • Utilities having AT&C loss below 30%: Reduction by 1.5% per year

3)   commit a time frame for introduction of measures for better accountability at all levels in the project area

4)   submit previous year’s AT&C loss figures of identified project area as verified by an independent agency appointed by Ministry of Power (MoP) by 30th June; the independent agency would verify that:

  • All input points are identified and metered with downloadable meters for energy inflow accounting in scheme area
  • All outgoing feeders are to be metered in substation with downloadable meters
  • Scheme area should be ring fenced i.e. export and import meters for energy accounting shall be ensured besides segregating the rural load of the scheme area by ring fencing if not on separate feeder
  • The above shall provide the input energy and corresponding cash collected for calculating AT&C losses. The same shall be carried out for at least for three billing cycles and got verified by the independent agency. This loss level will be the baseline for considering conversion of loan into grant for Part B projects
  • Devise a suitable incentive scheme for staff linking to achievements of 15% AT&C loss in the project area.

Funding of Schemes/Project:

  • Total Programme size is about Rs 50,000 Cr

-GoI Grant component for Part-A     Rs.10,000 Cr (Max)

-GoI Grant component for Part-B     Rs.20,000 Cr (Max)

-PFC/REC Loan for Part-B              Rs.20,000 Cr (Min)

  • GoI will provide 100% Loan for part A of the schemes including IT applications.
  • GoI will provide 25% Loan for Part B of the schemes (90% for special category States).
  • The counterpart funding will be done by PFC/REC upto 75%.

Conversion of GoI Loan to Grant:

  • The entire amount of GoI loan (100%) for partA of the project shall be converted into grant after establishment of the required Base-Linedata system within a stipulated time frame and duly verified by Third Party Independent Evaluation Agency (TPIEAs).
  • Upto 50% (90% for special category States) loan provided for Part-B projects shall be converted into grant progressively on achievement ofAT&C loss reduction targets.

Responsibilities Flow Diagram:



Nodal Agency

PFC will act as Nodal Agency to provide single window service under R-APDRP

  • PFC will coordinate with agencies involved such as MoP, APDRP Steering Committee, CEA and various Consultants for speedy and timely completion of projects and thus assist the utilities achieving loss reduction targets
  • As Nodal Agency, PFC will have overall responsibility of Implementation of Programme
  • Provide necessary support to APDRP Steering Committee and MoP
  • Finalisation of biddable SRS document, model DPRs for Part A etc.
  • PFC will recommend projects for sanction to APDRP Steering Committee
  • Scrutiny & vetting of DPRs for Part A & B
  • Scrutiny of claims & recommendation to MoP for conversion of loan to grant and Release of grants to Utilities
  • Monitoring of implementation of Part A & B
  • Random inspection of works (Part B)
  • Examining & recommending deviations
  • Establishment of base line data and evaluation  of yearly AT&C loss by Independent Evaluators
  • Certification of work completion (A & B)
  • Empanelment of IT consultants and IT  Implementing agency to assist Utilities
  • Creation and maintenance of web based MIS
  • Capacity building of utilities & awareness through workshops etc.


Process Consultant

  • Process Consultant will assist Nodal Agency for Finalization of System Requirement Specification (SRS) and convert it into a  biddable document for use by utilities for base line data collection system
  • Developing the methodology for establishing base line data system
  • Empanelment of IT consultants for Part A
  • Empanelment of IT Implementing Agencies for Part A
  • Short listing and appointment of Third Party Independent  Evaluation Agencies (TPIEAs)

IT Consultant

IT Consultants will assist the Utilities:

  • To customize project level Bid Documents for Part-A, meeting the requirement of specific utility and comprising of

i)  Utility IT mapping, segregation of feeders
ii) Geographical area/ feeders to be covered for IT implementation
iii) Provision for increased customer satisfaction
iv) Base line data collection system etc.


IT Implementation Agency

IT Implementation Agencies will assist Utilities:

  • To Implement the IT related schemes in the defined area/ feeders as per scope and terms and condition stipulated by the Utility/ IT Consultant.
  • To establish Base Line Data Collection System


Third Party Independent Evaluation Agencies(TPIEAs)

TPIE Agencies will act as independent third party agency for:

  • Establishing base line data (initial loss level in the system)
  • Annual project wise verification of yearly loss levels against the benchmark parameters
  • Assessment of claims for conversion of loan into grant for Part-A and Part-B projects
  • Submission of periodic reports to Nodal Agency

Web Based IMS

Creation  of Web based comprehensive  MIS and monitoring system for R-APDRP. It will include:

  • The objective and coverage of the program
  • The policy guideline of the program.
  • Status of DPRs submitted, sanctioned etc.
  • Status of Project Progress ( Physical & financial)
  • Scheme wise Benchmark parameters

Preparation at Utility Level for the “R-APDRP”

  • Identification of the Project areas i.e. towns having population more than 30,000. Rural areas with heavy loads requiring feeder segregation may also be included in the project areas
  • The ring fencing of the project area to measure energy flow should be initiated at the earliest
  • The utilities should be able to measure the inflow and outflow from the project area
  • The corresponding revenue collection should also be determined separately
  • The energy flow to the project area and corresponding revenue collection should be verifiable by the independent agency appointed by MoP
  • Dedicated IT Cell in each utility
  • Training of utility staff to handle extensive IT component in re-structured APDRP

Nuclear Power to Commission 220 MW Kaiga-4 Unit Today

Nuclear Power Corporation of India Ltd. (NPCIL) will commission the 220-MW nuclear power plant Kaiga stage 4 project on Saturday.

The entire power will be supplied to the Southern Grid. Speaking at the India Energy Forum here, NPCIL Associate Director N. Nagaich said the commissioning of the project would be done by NPCIL Chairman and Managing Director S. K. Jain.

Mr. Jain said NPCIL would stop making nuclear power with capacity of 220 MW and 540 MW with the commissioning of the 220-MW of Kaiga unit.

In future, only over 700 MW nuclear power plants would be set up to make power projects of much higher capacity as NPCIL had acquired enough expertise for mega power projects over the years.

Mr. Nagiach said NPCIL would also like to focus on export of nuclear reactors and the company was in talks with a couple of neighbouring countries for export of nuclear reactors.

Responding to a query on Indian Oil Corporation’s joint venture with NPCIL, Mr. Nagaich said the role of IOC in the joint venture was only to pump-in equity support and the balance would be organised and arranged by NPCIL .

Mr. Nagaich exuded confidence that financial resources would never be a constraint for NPCIL to commission its future nuclear power plants as it would successfully tie-up with resourceful players in the private sector through joint venture arrangements for mustering up financial support.

Ministerial note on 15% disinvestment in PFC

The Power Ministry is believed to have sent a cabinet note to the department of disinvestment on its 15 per cent follow on public offer (FPO) in Power Finance Corporation next year, a source revealed today.

“The ministry has circulated the note to Department of Disinvestment yesterday for its comment on the FPO,” the source said.

The government plans to divest 10 per cent stake in Power Finance Corp through the follow-on public offer, while the company has offered a five per cent of fresh equity.

Power Finance Corp, which is engaged in financing the power projects, is likely to raise Rs 6,300 crore through the share sale programme.

Earlier, Minister of state for power Bharatsinha Solanki had informed Parliament in the last session that the board of Power Finance Corp has approved a proposal for a fresh issue of equity shares along with disinvestment, not exceeding the aggregate 20 per cent.

At present, the government holds 89.78 per cent stake in the public sector company. It had divested 10 per cent stake through an initial public offer in 2007.

The government, which hopes to raise Rs 40,000 crore through disinvestment this fiscal, has already mopped up close to Rs 20,000 crore through divestment in PSUs Satluj Jal Vidyut Nigam, Engineers India, Coal India and PowerGrid.

Other stake sale programme in line are Hindustan Copper, SAIL, Oil Corporation and ONGC among others.

Source – Business Standard

ADB signs JV with NTPC to develop renewable energy

The Asian Development Bank (ADB) signed a joint venture agreement with NTPC Ltd. and Kyushu Electric Power Company of Japan to develop and operate 500 megawatts of renewable energy projects in India in the next three years. India is the third largest electricity consumer in Asia, after the People’s Republic of China and Japan, and demand has grown at an average of 8% a year since 1995. However, supply falls well below demand, leading to regular blackouts and chronic shortages which are undermining the country’s economic and social development. Moreover, much of the electricity is generated from increasingly uncertain domestic sources of coal or from ever-more-costly imported coal.

“The new joint venture company will help India achieve its goal of reducing the country’s dependence on fossil fuels, will cut greenhouse gas emissions and improve its energy security,” said Michael Barrow, Director in ADB’s Private Sector Operations Department (PSOD), who signed the agreement in New Delhi. “We hope this company will also provide an example to other foreign investors looking at India’s renewable energy sector.”

Under its National Action Plan on Climate Change, the government has set a target of generating 15 percent of its total power from renewable sources by 2020. Currently, renewable energy accounts for 10 percent of total power capacity in India while 65 percent comes from thermal power plants – mostly coal-fired – which generate the majority of the country’s carbon emissions. The remainder of India’s power comes from hydropower and nuclear power.

“India now has the capacity to generate just over 11,000 megawatts of wind power, but, with the right investment, that could increase to almost 48,000 megawatts. At the same time, small hydropower has the potential to generate about 15,000 megawatts of power and, what’s more, is often the best way of providing electricity to low-income households in remote areas,” said Don Purka, Senior Investment Specialist with ADB’s PSOD.

NTPC, the largest power generating company in India with a 33 percent market share, is majority owned by the Government of India but operates on a commercial basis as an independent company. It currently has a generating capacity of 32,694 megawatts but is working to increase that to 75,000 megawatts by 2017.

Kyushu Electric Power is an integrated private sector generation, transmission and distribution company. The company owns and operates about 20,024 megawatts of power generation capacity including hydroelectric, wind, solar and geothermal projects on Japan’s southwesthern Kyushu Island.

Under the joint venture agreement, ADB will invest up to 40 million dollars for a 25 percent stake in the company. The move is part of ADB’s goal of investing two billion dollars a year in renewable energy and energy efficiency projects in Asia and the Pacific to help put the region on a sustainable development path. NTPC will have a 50 percent holding in the company with Kyushu Electric Power owning the remaining 25 percent.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.

Established in 1966, it is owned by 67 members – 48 from the region.

In 2009, it approved a total of 16.1 billion dollars in financing operations through loans, grants, guarantees, a trade finance facilitation program, equity investments, and technical assistance projects. ADB also mobilized cofinancing amounting to 3.2 billion dollars.

Source – ANI



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