Monthly Archives: December 2010

Powergear plan to foray into renewable energy sector

High voltage electricity equipment manufacturer Powergear Ltd has proposed a Rs 150 crore “greenfield project” with an European partner for making its formal foray into the renewable energy sector.
The Bangalore-headquartered company, which has been manufacturing “busducts” and “control cubicles” for the energy sector, is currently “holding talks” with top officials of an European company, Powergear Ltd Founder-Chairman X Durairaj said.
“We have started diversifying into Renewable energy sector and already we are in talks with European partner …The deal is likely to be completed in January second week”,he told PTI.
It would be a Rs 150 crore “greenfield” project whereby the European partner would provide “technology” and  “funding” support while his company would look after the “construction” and “operations” of the project.
It is understood that in the joint venture, the Indian company would hold a majority stake of 51 per cent. “It is too early to comment on this..”, he said.
For setting up the manufacturing facility through the joint venture, he said they were scouting for locations in Gujarat, Andhra Pradesh, Karnataka and Maharashtra.
“We need a 25 acre land for the facility.. While the wind energy in Tamil Nadu is exhausted, in these four states there is huge potential for us.. In Andhra Pradesh alone 90 per cent of the wind energy potential remains untapped…”, he said.
“We want to commence the production of the plant by January 2012 and in another 3-5 years we are expecting revenues (from this facility) of Rs 500 crore”, he said.
On future plans, he said they were expecting revenues of Rs 148 crore this year too.”That is mainly because of the recession .. Last year we reported Rs 148 crore. This year too we are expecting it to be the same..”, he said.
About 70 per cent of the products are exported and there is still some recession in the overseas markets, he said.
The company currently has four manufacturing facilities — two in Chennai, one in Bangalore and one near Andhra Pradesh, he said, adding they planned to make additional investments in the Chennai facility as part of expansion plan.
“We have planned to make Rs 10 crore additional investments in our plant at Maraimalai Nagar near Chennai. This is mainly to expand the facility. We want to increase the capacity of the plant”.
The Chennai facility manufactures busducts and control cubicles.
Durairaj and other company officials were here last night to announce the major shipment of 2×817 MW generator units for a nuclear power plant in Mexico.
“This is the first time an Indian company is exporting such huge generator units to a Nuclear power plant in Mexico”, he said.

Source – Chronicle

Gujarat to have Asia’s largest solar power park

Gujarat Chief Minister Narendra Modi Thursday laid the foundation stone of what is touted to become the largest solar power park in Asia.

Modi said this would be the first solar power park in Asia with a 500 MW generation capacity at a single location. The state government had signed power purchase agreements for about 933 MW ofsolar energy, the highest in India’s solar power sector, during the Vibrant Gujarat Global Investors’ Summit in 2009. The government had also signed a memorandum of understanding (MoU) with the Clinton Climate Initiative of Clinton Foundation in 2009.

The Rs.10,000 crore (USD 2.2 billion) park, on the lines of an industrial estate, is being developed by the sectoral nodal agency Gujarat Power Corporation Limited on over 2,089 hectare of wasteland bordering the Rann of Kutch, in Patan district.

In the first phase of the project, 15 solar power generation companies would produce 176 MW on the land leased out to them for 30 years, whereas Gujarat Energy Transmission Corporation Limited would set up a pooling station.

Anita George of the International Finance Corporation (IFC), World Bank, hailed the initiative and said the IFC had invested USD 1 billion so far on manufacturing and infrastructure projects in Gujarat.

The overall project cost in Phase I would be Rs.1,287 crore, including Rs.351 crore towards the cost of land and power infrastructure and evacuation facility worth Rs.624 crore. When completed, the 500 MW facility would have investments of another Rs.7,500 crore and generate about 5,000 direct jobs.

The planning commission has approved a one-time additional central assistance of Rs.210 crore for development of the park. The Asian Development Bank has also approved a soft loan of USD 100 million for the project, including development of a smart grid for evacuation of power.

With this solar power facility generating 1,250 million units, the country would save about nine lakh tons of coal and prevent emission of 12.5 lakh tons of carbon dioxide per annum. The area has 330 sunny days annually with high solar radiation ranging from 5.5 to six kilowatt per square metres per day.

Source – IANS

New tariff regime will electrify power sector

The transition to a new regime, under which power projects will be awarded to prospective developers offering the most competitive tariffs, is the most anticipated change in the power sector as we move into the year 2011.

The step is expected to usher in greater competition and eventually translate into lower electricity bills for the end-consumer. The year could also see some progress on the awarding of at least a couple of new Ultra Mega Power Projects (UMPPs) proposed in Orissa and Chhattisgarh, especially those which have been stuck through the current year for want of clearance.

The slack progress on the issue of distribution reforms, including the issue of distribution utilities lowering losses, is expected to remain an area of concern in the coming future. Analysts, however, envisage increased funds flows into the generation business in the coming year. The projection is broadly in line with the trend in inflows seen during the current year into the power sector, whose share has risen to around 8 per cent of total foreign direct investment this year, from around 5 per cent last year, according to PricewaterhouseCoopers estimates.

INCREASED PRIVATE SECTOR PLAY

The private sector, which is already beginning to flex its muscle in terms of the projects that have been bagged by it in the last couple of years, could see a bigger role going forward. Private sector players such as Reliance Power and Tata Power, which have emerged successful in the handful of generation projects awarded through the competitive bidding route, could consolidate on their experience so far. A bevy of private sector capacity is already coming up in various parts of the country, including in Tamil Nadu, Karnataka, Andhra Pradesh, Orissa, Chhattisgarh, Jharkhand and Himachal Pradesh. Going forward, it is expected that these private players would add more that 60 per cent of the incremental capacity of around 75,000 envisaged during the next five years or so.

FUEL WOES

During 2010, fuel was increasingly becoming another limitation in the wake of a severe domestic coal shortage. Most generation utilities, led by power major NTPC Ltd, are said to be better placed in 2011 in terms of having a coal import strategy in place. This includes tying-up supplies through firm contracts abroad or picking up stakes in mines in countries such as Indonesia, Australia, South Africa and Indonesia. Besides, increased gas availability is expected to boost generation from projects using gas as feedstock.

MARKET DEVELOPMENT

The development of the short-term power market, involving contracts spanning less than a year, has proved to be very useful by providing alternative to over drawing from the grid and reducing peaking shortages. At present, the size of the short term market is about 3 per cent of the total generation in the country, of which trading on the two operational Power Exchanges accounts for a significant chunk. This is expected to shoot up to upwards of 5-7 per cent in the coming years.

GREEN POWER

With progress picking up on solar power schemes, the coming year could see greater inroads being made by ‘green’ electrification projects. The Government has already selected 37 companies to develop new solar projects late this year, as the country moves forward with an ambitious plan that seeks to significantly scale up production from near zero to 20 Gigawatts by 2022.

SLOW ON HYDRO

It is likely to be a tough road ahead for future hydro projects, especially in the wake of some high-profile projects facing the axe following protests from environmental activists. These include NTPC’s 600-MW Loharinag Pala hydro-power project in Uttarakhand, where work was in advanced stages. On August 20, a Group of Ministers (GoM) had scrapped the hydel project on the Bhagirathi river, citing religious and environmental concerns.

Two other hydel projects proposed by the Uttarakhand Government on the Bhagirathi River – the 480-MW Pala Maneria and 381-MW Bhairon Ghati plants – have already been scrapped by the GoM. Projects in Himachal Pradesh are reported to be facing opposition from local environmental activists.

Source – Business Line

GMR Group plans floating LNG terminal on east coast

Soon, imported natural gas could find its way into the country through floating platforms. Bangalore-based GMR Group is exploring alternative ways of getting natural gas, including installation of a floating liquefied natural gas (LNG) terminal on the eastern coast, to support its plans of expanding the Vemagiri power station in Andhra Pradesh.

Due to its inability to ensure adequate gas supplies from domestic sources, Vemagiri Power Generation Ltd, a subsidiary of GMR Energy, is in talks with a Malaysian company for floating the LNG terminal, according to two persons in the know of the discussions.

This is for the first time an Indian company would be using a floating storage and re-gasification unit. GMR is planning to put up an additional capacity of 750 megawatt (Mw) at an expense of about Rs 2,500 crore in Vemagiri. The project is adjacent to its existing natural gas-fired combined cycle power plant of 388.5 Mw, which started commercial generation two years ago.

For the existing plant, the company has a long-term agreement with Reliance Industries Ltd and Niko Resources for sourcing gas from D6 field. Recently, GMR signed an agreement with GE to source turbines and generators for the expansion of its Vemagiri plant, with a 15-year sales and service support agreement. The plant is expected to go on stream by 2012.

A company spokesperson said, “This is purely speculative and it is not the company policy to comment on such speculation.” Sources close to the development said the terminal’s capacity could be between four and six million cubic meters per day. “Pricing of the gas and details of the floating vessel are being discussed at present,” sources said.

Industry experts say there is ample gas available in the global gas market. If a company goes in for a short-term arrangement of three years, it will have to pay around $10-12 per million British thermal unit (mBtu). In a long-term arrangement, gas is available at $15-16 per mBtu.

Few more power players are also looking at such arrangement so that they can go for an end-to-end integration of the total power production chain. “GMR will have to put in place the infrastructure for re-gasification of the gas. At present, there is no such facility on the eastern coast. GMR may either have to put up a platform in the sea or fit the LNG tanker with vapourisers for conversion of LNG into R-LNG, which would be pumped ashore via pipes. It may take GMR 8-12 months before its plans fructify,” said the LNG head of a public sector unit.

Source – Business Standard

SAIL FPO in Jan, ONGC in March, IOC deferred

Drawing a roadmap for disinvestment during the last quarter of this financial year, the government today said it would dilute its stake in SAIL in January, followed by Power Finance Corporation (PFC) and oil major ONGC in March.

“The new year would start with the stake sale of SAIL in January. We would do (disinvestment) in ONGC in March. PFC would also come this fiscal,” a finance ministry official said.

The official said the follow-on public offer of Indian Oil Corporation (IOC) has been deferred to next financial year.

IOC had last month appointed six merchant bankers for the sale of 10 per cent equity shares in the FPO that its chairman B M Bansal said was planned for third or fourth week of January.

“We can’t have disinvestment of two large companies (ONGC and IOC) from the same sector simultaneously,” the official added.

The government has also decided to defer the disinvestment of Rs 4,000-crore Hindustan Copper FPO till next financial year. Its disinvestment was earlier expected to take place this month.

“We have not taken any decision on Hindustan Copper disinvestment now. It would come next fiscal,” the official said, adding the government plans to divest its stake in Rashtriya Ispat Nigam Limited also in the next financial year.

The Cabinet, on December 1, approved the sale of government’s five per cent stake in ONGC, the nation’s highest profit-earning firm, to raise up to Rs 13,000 crore.

Source – Business Standard

NTPC, PowerGrid on signing spree for new projects


State-owned NTPC Ltd and Power Grid Corporation (PGCIL) — two of the country’s largest power utilities — have more or less insulated themselves against private sector competition for new projects, at least for a better part of the next 10 years.

With the impending January 5 cut-off for a phase-out of the MoU (memorandum of understanding) route for bagging generation projects, NTPC, which has a capacity of 33,000 MW currently, has already signed pacts with distribution utilities across the country for supplying a total of 85,000 MW of power in the coming years.

Of this, deals for well over 20,000 MW were signed in just two months — November and December — industry sources said. This ensures that the company is booked for well beyond 2017, by when the power major is targeting a capacity of 75,000 MW on the ground.

With the new bidding regime set to apply to the transmission sector as well, PowerGrid is pushing to sign pacts with private developers before the January 5 deadline. The utility has also been working on signing transmission agreements for the two Ultra Mega Power Projects (UMPPs) that are slated to come up in Orissa and Chhattisgarh, even though both projects are still to get environmental clearances.

Earlier this year, PowerGrid had signed up long-term transmission pacts for nine proposed high-capacity transmission corridors for wheeling power from a set of private projects coming up in the eastern and southern States. The move, entailing investments of about Rs 58,000 crore, has ensured that PowerGrid’s order book position is more than comfortable for the next several years.

Both NTPC and PowerGrid have been apprehensive about the transition to the new regime, where utilities have to shift to a tariff-based competitive bidding norm for bagging projects. This is especially in light of aggressive bidding by private players in a handfull of projects that have been handed out so far.

“The aggressive signing of pacts in the last two months means that NTPC should be secure till 2020, even if it does not bag a single project under the new competitive bidding format,” a Government official involved in the exercise said.

While for NTPC, the hurry to sign up power purchase agreements makes perfect commercial sense, analysts said that it was baffling that the state-owned distribution utilities were willing to reciprocate in equal measure. This is despite the proposed tariff-based bidding format promising better electricity tariffs for the consumers.

Under the new tariff-based competitive bidding regime, the developer that offers the lowest average electricity prices gets to set up the project. The move, which is expected to drive down electricity tariffs (or the cost per unit of power) at the consumer level and make the award of projects more transparent, effectively disallows developers of both generation and transmission projects to enter into MoUs with the distribution utilities for selling electricity post January 5.

Source – Hindu

UP looking to establish 9,750 MW of new power capacity by 2017

The Uttar Pradesh government has taken massive strides towards fulfilling its promise of becoming a power surplus state by 2017, signing MOUs with several major companies this year for establishing new plants with a cumulative generation capacity of 9,750 megawatts.

Faced with a power crisis year-after-year in the peak summer season, the state government this year secured promises from companies like Reliance Power , JP Power, Bajaj Hindustan, Lanco, Creative Thermolite, Unitech Machines, Parekh Aluminics, Torrent Power , Dalmia Group, Ashok Leyland , GVK, GMR Wellspun and the Aditya Birla Gro up to set up new projects in the state.

“A plan has been worked out by the state to enhance power generation capacity by ensuring rigorous implementation of power sector reforms and bringing in efficiencies of the private sector to meet full demand by 2014,” State Power Secretary Navneet Sehgal said.

“MoUs have been signed this year with Bajaj Hindustan for setting up power plants in Lalitpur and Chitrakoot for projects generating 1,980 MW of power each,” he said, adding that another MOU for a 450-MW power plant was signed with sugar mills owned by the group.

The government has also signed a MoU with Lanco-Infotech for two 1320-MW plants at Bhognipur, in Kanpur Dehat district, and with Parekh Aluminics for a project in Fatehgarh with a capacity of 250 MW, he said.

Sehgal further said that Unitech Machines will set up a plant with a capacity of 250 MW in Auraiya, while Neyveli Lignite will establish a 2,000-MW power plant in Ghatampur.

The power scenario has already started looking up, with two plants of 600-MW capacity each commencing operations at Roza and Shahjahanpur, official sources said.

However, the collapse of a 115-metre high chimney at the Parichcha power plant on May 20 has delayed 500 MW of power capacity coming onstream, sources said.

According to sources, the installed generation capacity of the state as of today is 4,082 MW, excluding around 526 MW of hydel power.

However, the state is only able to produce 3,000 MW of power on a daily basis. It also gets around 4,000 MW from the central pool, sources said. However, given that daily demand in the state amounts to 10,000 MW, this translates into an average daily shortfall of 3000 MW.

The scarcity of power is a a major political and election issue in Uttar Pradesh, as no new power plant has been set up in the past 20 years, even though demand has increased manifold during the period.

Source – Economic Times

Supercritical tech set to be made mandatory for coal power plants

The government may soon make it mandatory for power companies to switch to energy-efficient supercritical technology for their upcoming coal-fired power projects as it looks at playing a major role in global efforts to fight climate change by cutting down emission of greenhouse gases. The coal-based power projects have been identified as major contributor to environmental pollution. They contribute over 65% of the country’s total installed power generation capacity at present.

Coal-fired power plants based on supercritical technology are less polluting than conventional plants. The energy efficiency of these plants is 45% against 30-32% for conventional plants.

Indian power sector is predominantly based on coal and this will remain there for a long time in the new projects. Keeping this in mind, the government has already started several initiative to reduce emission from coal-based projects. Mandatory use of supercritical technology will be step in this direction,” said an official in power ministry in the know of the development.

It is expected that the government may announce a new policy soon for mandatory use of supercritical technology based power projects. As adoption of new technology for all projects is a time-consuming process, the government wants this to start from the 13th Five-Year plan period starting from 2017.

Equipment for a large portion of capacity for the 12 th Plan (2012-17) has already been ordered and it is feared that any new regulation for these projects may impact the capacity addition programme. “We expect that even in the 12th plan half of the capacity addition (of the total 100,000 MW) is based on supercritical technology,” said the power ministry official.

The country’s largest power producer, NTPC, has already adopted supercritical technology in a big way. Its first project based on this technology may get partially commissioned next month with the start of 660 mw unit at Sipat. In the 12th Plan, close to 90% of NTPC’s capacity is expected to be based on supercritical technology. A few private sector power projects have also ordered these equipment or 11th Plan projects.

“While the technology will definitely contribute towards improving the efficiency of coal-fired projects and reduce their emission levels, mandatory rules may impact small power projects as supercritical technology is available in large unit sizes of 660 MW and above,” said an industry expert.

“The government is not in favour of small coal- based power projects and will discourage such projects,” said a official of the Planning Commission. He said incentive schemes like including use of supercritical technology for giving mega power policy benefits could be used to promote its use. Under the mega power policy thermal units of 1,000 MW and get complete waiver from import duty on equipment purchase, income tax incentives and deemed export benefits.

The biggest bottleneck to large-scale introduction of supercritical technology comes from the shortage of manufacturing capacity for such high-end equipment. Only Bhel has recently started to manufacture supercritical equipment. Private sector major L&T is expected to start manufacturing it shortly. Other companies like Alstom-Bharat Forge, Toshiba-JSW and Italian company Ansaldo Caldie have shown interest is setting up domestic manufacturing of supercritical equipment.

Earlier, the Planning Commission had also suggested induction of supercritical to help overcome the shortage of coal being faced by several thermal power plants.

In 2009-10, the country is expected to import 29 million tonne (mt) coal for power plants. This would increase to 50 mt by 2011-12 and 120 mt in the subsequent year.

The commission has said that coal is not available for 28,000 MW of linkages granted in November 2008. Moreover 1,00,000 MW applications are pending for linkages with the power ministry.

Keeping the projected pollution in mind, the government is also thinking of introducing ultra supercritical technology and power projects based on integrated gassification combined cycle (IGCC) or clean coal technology.

A pilot project on IGCC technology is already in works in the country. The country is also working to increase the share of renewable power in the total power basket and increase generation from nuclear fuel.

Source – Financial Express

NTPC signs PPA with Gridco for its proposed projects

NTPC signed a Power Purchase Agreement (PPA) with the state-owned Grid Corporation of Orissa (Gridco) for sale of power from the central sector’s proposed projects in three eastern states of Orissa, West Bengal and Bihar.

The PPA, signed in presence of Orissa’s energy minister A S Nayak, aims to facilitate sale of power from NTPC’s proposed thermal power plants at Darlipali and Talcher Thermal Expansion in the state, Katwa in West Bengal and Pirpainti and Muzaffarpur Stage II in Bihar to be commissioned during the 12th plan period.

NTPC, which was setting up thermal generation stations in the eastern region with an installed capacity of 7830 MW, would benefit states like Orissa, West Bengal, Bihar and others.

While 3200 MW of power was proposed to be generated from Darlipali power station of NTPC, the central public sector would add another 1320 MW by expanding its Talcher plant in the state.

The state would get 50 per cent of power to be generated from NTPC’s Darlipali and TTPS’s expansion plan at the rate of power production cost.

Similarly, the company had been setting up two thermal power plants at Katwa (1600MW), Farakka, Stage-II (500 MW) of West Bengal and Pirpainti (1320 MW) and MTPS, Stage-II (390 MW) in Bihar.

All these plants would start operation during the 12th plan period.

As per the PPA signed today, the state government will avail 2818 MW of power from NTPC’s proposed plant at an estimated cost of Rs 2.30 to Rs 2.70 per unit,” said the minister A S Nayak.

At present, NTPC had an installed capacity of 7400 MW of power in the eastern region of which Orissa avails 1355 MW of electricity.

Stating that rise in the tariff was high due to the usage of imported coal in thermal power plants, Nayak requested NTPC to ensure mining of coal and provide adequate infrastructure like rail and road to facilitate coal availability in time and avoid depending on imported coal.

Source – Business Standard

Firms vie for gas-based power projects in state

A battery of global and Indian conglomerates have evinced interest in building three gas-based power stations in Karnataka with a cumulative capacity of 2,100 Mw, at Davanagere, Belgaum and Gadag. According to information available, global companies including GE, AES and Marubeni Corporation are among the ones that have shown interest in setting up these generating stations. Competing with these giants will be Indian corporations, including the Tata Group, Jindals, Reliance Power, L&T, Adani among others.

According to senior government officials in the Karnataka government, nearly 52 companies have shown interest in these projects being planned along the rote of the proposed Dabhol-Bidadi gas pipeline to be set up by the Gas Authority of India Limited. Government officials indicate that the projects will be allocated through the bid route.

In addition to these large projects, close to 90 private players have shown interest in taking up gas-based merchant power plants with capacities ranging from 50 Mw to 300 Mw. The state government is offering 900 Mw to private sector for setting up merchant power plants and all these projects cumulatively would require an investment of around Rs 12,000 crore. Industry analysts detail that gas-based power project cost little over half of what coal-based power project requires.

These steps to increase power generation in the state are part of the state’s long term agenda to plug the 26.5 per cent peak demand-supply gap. In addition to initiating a string of pacts with the public and private players to step up generating capacity in state, Karnataka has also requested the Centre to an increase of 1,000 Mw in its share from central generating stations from the present allocation of 1,534 Mw.

Karnataka has a total installed capacity of 9,559 Mw and the average availability is about 5,953 Mw. The average daily consumption is 115 MU and the energy shortage is 13.7 per cent.

“While the load growth is about 9-10 per cent annually, consumer growth is 6 per cent, while distribution losses is at 20.6 per cent, the transmission loss is 4.31 per cent,” the official detailed. As a result of these, the electricity supply companies are in severe financial crunch and the capital expenditure programmes for 2009-10 is near the Rs 3,000 crore mark.

Source – Business standard

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