Monthly Archives: December 2010

Govt should open up uranium exploration: Reliance

Reliance Industries has urged the government to open up domestic uranium exploration and mining in line with NELP, to increase domestic output to reduce dependence on import of the metallic element.

“When India will have to depend on nuclear power in future and supply will continue to be vulnerable, there should a policy by which the private sector should be allowed to explore and mine uranium in India,” Reliance Industries president (operations) Atul Chandra told PTI.

He believed that opening up the sector to the private sector with proper safeguards would help the country in uranium exploration.

Chandra said that he recognised the sensitivity of the sector and that there should be proper safeguards in selecting companies for the uranium business.

Currently, the state-owned Uranium Corporation of India has monopoly for exploration and mining of uranium.

Source – PTI

Private players to power 12th Plan capacity addition

Will account for 62% of 75,000 MW slated to come up

Amid an impending transition to a new competitive bidding regime for future generation projects, private sector developers are slated to corner a bulk of the power projects on the anvil.

A strategy plan submitted by the Power Ministry to the Cabinet Secretariat forecasts that the private sector will account for 62 per cent of the 75,000 MW capacity slated to come up during the coming Five- Year Plan period (2012-17), a big jump from the 20 per cent factored in for the current Plan period ending March 2012.

The total capacity addition requirement for the Twelfth Five-Year Plan is pegged at 88,000 MW, which includes 13,000 MW from renewable energy sources. Of the 75,000 MW slated to come up through conventional energy sources (coal, gas and large hydro projects) in the coming Plan period, the private sector is expected to be the biggest contributor with 46,500 MW.

“The increase in private sector participation from the current planned level of approximately 19 per cent to 62 per cent is a highlight of the next Plan (Twelfth Plan) in terms of generation,” the Power Ministry’s strategy document states.

Utilities in the State and Central sector are expected to account for 20 per cent (15,000 MW) and 18 per cent (13,500 MW) of the capacity addition envisaged during the Twelfth Plan period.

Advantage pvt players

According to experts, the transition to a new regime for the award of power projects from January next year makes the private sector players clear favourites to bag the new projects that are slated to be announced by various distribution utilities.

Besides, a large number of private projects are already in the pipeline, where construction activity is in various stages. Most of these are likely to come up as merchant projects, with plans to offload electricity in the spot market (either on the two operational power exchanges or sales through power traders).

Government firms, both in the State-sector as well as Central Sector utilities such as NTPC Ltd and Neyveli Lignite Corporation, have been finding it difficult to compete against aggressive private players to bag projects under the competitive bidding route, where the developer promising to offer the lowest tariff from a proposed project gets to set it up.

The Government has set January 5 as the cut-off date for power projects to shift to a tariff-based competitive bidding regime, effectively disallowing future generation and transmission projects to enter into power purchase agreements based on the current regulator-determined tariffs.

The private sector has shown a progressively improving trend in the commissioning of new projects during the first three years of the current Plan period.

According to Government data, of the 9,263-MW commissioned in 2007-08, the private sector accounted for only about eight per cent.

This improved to 25 per cent in 2008-09 (883 MW out of the 3,454 MW commissioned that year) and to 45 per cent during 2009-10 (4,313 MW out of the 9,585 MW commissioned).

Source – The Hindu

Rs.85 crore GSEB RAPDRP project won by Spanco

Spanco Ltd. has won the IT modernization project of the Goa State Electricity Board (GSEB) beating HCL, Reliance, Wipro, L&T Infotech, TCS and some others. This is Spanco’s Fourth consecutive win in this space. It has already bagged the states of Punjab, Maharashtra and Bihar. This win further consolidates Spanco’s position as one of the market leaders in the IT modernization projects within the State Electricity Boards under the RAPDRP program.

RAPDRP is an initiative driven by the center with collaboration with the state with a clear focus to bring in actual, demonstrable performance in terms of sustained energy loss reduction.

Key Objectives of RAPDRP Program:

The program spans from data acquisition at distribution level till monitoring of results of steps taken to provide an IT backbone and strengthening of the Electricity Distribution system across the Country under the program.

  • The objective of the program is reduction of AT&C losses to 15% in project areas.
  • In lieu of attaining the objective, the program is divided into 2 parts Part-A and Part-B.
  • Part-A will include projects for establishment of baseline data and IT applications like Meter Data Acquisition, Meter Reading, Billing, Collections, GIS, MIS, Energy Audit, New Connection, Disconnection, Customer Care Services, Web self service, etc. to get verified baseline AT&C losses.
  • Part-B will include distribution strengthening projects.

The current win comes under Part A of the program and will have the above mentioned scope. Spanco will supply, install and commission one integrated solution within the broad framework provided in the SRS (System Requirement Specification) document. SRS Committee under the guidance of Ministry of Power has finalized a detailed SRS document which covers all the components of the project including hardware, software, networking; GIS among others which
shall help the utilities improve their performance.

The size of the program is to the tune of 50,000 crores. The program consists of Part-A (to the tune of around Rs.10,000 Crore) covering Information Technology application in the electricity distribution system and Part B (to the tune of around Rs.40,000 Crore) covering the System strengthening, Improvement and augmentation of distribution system capacity.

Both parts entail planning of measures to be taken under the program, implementation of such measures to be taken and monitoring / evaluation of results / impact of the program as a whole and of its various components across the Country.

This project will work towards establishing reliable and automated systems for sustained collection of accurate base line data, and the adoption of Information Technology in the areas of metering, billing, energy accounting and customer care to provide the right information and experience to customers. This modernization of the IT systems will also help curb revenue leakages and ensure increase in overall revenues and thus contribution to the exchequer.

Power Finance Corporation Limited (PFCL) has been designated by GoI as the Nodal Agency for the program. Speaking at this occasion, Kapil Puri, CMD, Spanco Ltd. stated “We have set ourselves the target of becoming the best in the Power sector Technology Infrastructure space. This win further consolidates our market position and we expect to deliver to the State’s expectations. Our cross State expertise will further help improving overall integration
efforts”

The size of the current order is about 85 crores and further strengthens the RAPDRP related order book taking it to more than 650 crores.

UK firm offers to produce 65mw power from Bangalore garbage

A UK-based company proposed to set up a 65mw power-generating unit using the garbage generated in the city, but the BBMP was not convinced with the overall idea. Green Homes Global Energy, along with Bangalore-based Rushe Infratek Pvt Ltd, proposed implementing a 65mw an hour waste energy solution for the city. “The BBMP will provide the garbage generated in the city to the plant and we will produce the electricity and sell it to the power purchasing agency.

The BBMP needs to provide 6 to 10 acres of land for setting up the plant, which will cost about `3,000 crore. We will give back the city a greener, more peaceful and healthier environment as the plant doesn’t emit any smell nor create noise. Moreover, the residue after using the waste is very minimal”, said Green Homes representative Ajay Ahluwalia.

Rushe Infratek managing director Ravi Prakash said that BBMP will have to assure garbage supply for at least 25 years and the state government or an agency must agree to purchase power thus produced. They also said that the waste-to-energy plant can not only convert municipal solid waste but also medical, industrial and sewage waste.

The plant requires about one lakh tonnes of waste annually to generate 3 to 6mw of power an hour. The rejects from the garbage are nil. The waste is converted into energy by a special method called pyrolysis, where the common hazardous waste is converted into electricity by a total green technology.

Not convinced with the idea, BBMP commissioner Siddaiah expressed that the municipal garbage was no longer considered a waste, as it has become a revenue-generating product.

“We are thinking of generating revenue from the waste produced in the city. The company will produce electricity, sell it and make money; the purchaser will sell it making some profit on it. Both will make money, but how does the BBMP, that provides the garbage, be benefited”, he wondered and questioned the company representatives if they wished to purchasing garbage from the BBMP instead.
The company representatives, however, were firm that the Palike should provide garbage free of cost as they will give the city a clean and healthy environment by using up the garbage. “The BBMP collects the garbage and dump in landfills. But if we set up a plant, BBMP can dump the garbage in the plant which will be converted into power without pollution. That way, the city will be clean too”, Ajay said.

Negotiating further, BBMP officials asked, if garbage is given out free of cost, will they at least take up door-to-door collection work as Palike is spending nearly `12 crore for garbage collection every year. The representatives declined saying BBMP should collect and dump the garbage in the plant.

Almost everybody, including deputy mayor N Dayanand, ruling party leader Satyanarayana and standing committee chairmen were not convinced with the proposal. Siddaiah said the Palike can only provide land and garbage to the company if they set up a plant, but for power-generation or supply, the company has to approach the state government.

Source- NDTV

UP plans to add 20,000 mw by 12th Plan period

Uttar Pradesh is all set to ride the power wave in the next few years. The Mayawati government has been able to achieve a complete turnaround for the sickly power sector in the state. Thanks to a multi-pronged strategy of launching a much-criticised MoU signing blitzkrieg, with both the private and state sectors and through the competitive bidding process and even through procurement of power, the state government has signed contracts for capacity addition of almost 20,000 mw power in the current year.

The use of this combination is part of the state government’s plan to achieve 25,000 mw power by the end of the 12th plan period. So, from the present shortfall of roughly 2000-2500 mw daily, where most of the districts go without power for around 6-12 hours, UP is preparing to become a power surplus state with 24 hours electricity.

In fact, in order to beat the recent Group of Minister’s (GoM) decision to completely shift to the tariff-based competitive bidding regime instead of the MoU route by January 5, 2011, the state government is in the final stages of tying up the agreements for a couple of more MoUs with some big names in the power sector. While there are many who think that the MoU signing spree is a stunt for garnering political dividend for Mayawati in the forthcoming 2012 elections, it is a fact that by a deft combination of some out-of-box ideas with the private developers as well as with government agencies such as NTPC and Neyvelli Lignite, the present Uttar Pradesh government has been able to get what the state lacked the most and which had slowly started eating into its growth plans.

In fact, many are of the view that even if the state is able to see an addition of 5,000 Mw power during the current Plan and another 20,000 Mw by the 12th Plan, it will be no less an achievement given the fact that there has been almost no capacity addition in the last two decades.

Speaking to FE, the chairman of Uttar Pradesh Power Corporation Limited (UPPCL), Navneet Sehgal said, “Since electricity is critical for not only setting up industries but also for developing infrastructure, agricultural growth as well as for other social indicators, UP has embarked upon a plan to generate power so as to match the national figures in a time-bound manner.

Source – Financial Express

Power Finance Corporation FPO likely next fiscal: Solanki

Power Finance Corporation’s (PFC) follow on public offer (FPO) is likely to hit the market next fiscal, Union Minister of State for Power, Mr Bharat Solanki, said on Thursday.

“The necessary procedure for disinvestment in PFC is underway and we expect the FPO to come out some time in the next fiscal,” Mr Solanki told PTI on the sidelines of an event here. The Power Ministry has proposed a disinvestment of five per cent of the Centre’s stake in the public sector finance institution, as well as the issue of 15 per cent fresh equity, through the FPO route.

“The decision on the FPO will be taken, taking into consideration the market situation and its favourability. If the market situation is favourable, we can expect the FPO to come out anytime in the next fiscal,” he added.

The Corporation, which is engaged in funding power generation, transmission and distribution projects across the country, plans to use the funds raised from the FPO to finance both existing loans, as well as future lending activities.

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

The government, which hopes to raise Rs 40,000 crore through its disinvestment programme this fiscal, has already mopped up over Rs 20,000 crore through disinvestments in Coal India Limited, Satluj Jal Vidyut Nigam, Engineers India, Power Grid Corporatio n and MOIL.

Source – PTI

BHEL bags 3 orders to set up solar power plants

Public sector giant BHEL has bagged three orders for setting up solar photovoltaic power plants with a capacity of 2 MW each.

The plants will be operationalised as per the Indian Renewable Energy Development Agency Ltd scheme under Jawaharlal Nehru National Solar Mission (JNNSM).

The orders have been placed by Citra Real Estate, New Delhi & Sepset Constructions Ltd, New Delhi for their sites at Katol, Nagpur in Maharashtra.

The other order is from Priapus Infrastructure Pvt Ltd, New Delhi for its site at Bareilly in Uttar Pradesh.

The three orders are valued at Rs 26 crore each and envisages total turn-key solutions from concept to commissioning of 2 MW size plants each.

These orders are slated for execution during 2011.

BHEL is presently executing a 3 MWp order for KPCL and 1.1 MWp order for Lakshadweep, the company said in a release.

Source – PTI

Tariff-based bids to hurt power PSUs

Competition among power companies could become fiercer soon, with the Centre all set to introduce tariff-based competitive bidding for the allocation of projects from January 6. Consumers can rejoice as the new regime would bring down electricity tariffs across the country.

Private sector players like Reliance Power, Tata Power, Sterlite, JSW Energy, Adani and Lanco Infratech, who are well-equipped to negotiate prices with vendors and also have access to secure fuel supplies, would be at an advantage when it comes to grabbing projects under the new regime. However, NTPC, despite its unmatched project-execution expertise, is expected to face the heat, at least initially. Other state-run power utilities suffering from inherent procedural complexities would be in no better position either.

Under the tariff-based bidding system, all future power projects will be awarded after a process of competitive bidding where companies will have to fight it out among themselves and quote the best

tariff to bag deals. While private sector projects have been bidding on tariff for some time now, all PSU projects will also come under the new system from this January.

Private sector players have a definite edge in the new system, but the tariff-based bidding process is also expected to expose companies to cost escalation risks. Besides, project management skills of the developers would also be a critical factor for ensuring success in a competitive bidding dispensation given that cost escalation in case of project delays cannot be passed through.

Companies don’t seem to be wary of inherent risks under the new system. “Lanco has been participating in competitive bidding regularly over the last five years and we welcome the process,” G Venkatesh Babu, managing director, Lanco Infratech told FE.

“The process enables us to competitively bag projects and eliminates favouritism which ensures that certain project developers get

extra benefits from the states,” another official of a large private sector power producer said on the condition of anonymity.

India’s largest thermal power generator NTPC, which has been getting power projects through negotiation route, might feel the heat as it has little exposure to tariff bidding competition unlike private players who have already bagged projects under this route.”NTPC is fully prepared and geared up for the tariff-based regime. Necessary steps are being taken to make our offers very competitive,” NTPC chairman Arup Roy Choudhury said.

The Central utility has revisited key parameters for tariff bid preparation after badly losing the race for the Sasan ultra mega power project in 2006. It came second in the subsequent bidding race for the Tilaiya UMPP. However, NTPC is yet to prove that it can indeed bag a power project through competitive bidding route.

Other Central and joint public sector utilities like NHPC, SJVN Ltd

and Damodar Valley Corportion as well as state generators such as Apgenco, Mahagenco and UP Power Development Corporation Ltd might also feel the pressure.

Fuel accounts for 70% of the power generation cost. The balance 30% is cost of capital deployed to implement project. Private players like Adani Power, Reliance Power, Tata Power, JSW Energy and Lanco Infratech have taken key initiatives to secure fuel supplies by acquiring coal assets and picking up equity in mines abroad to improve their prospects of winning power projects through tariff bidding route. Players like Adani Power have gone beyond that to set up captive ports and procure their own ships so that they have control not only over coal cost but also transportation charges.

Developers usually quote their fuel cost in escalable and non-esclable parts. The lower the quantity under escalable category, the more  competitive would be the tariff bid. That means those with their

own coal mines would be in a better position to quote a higher coal quantity under the non-escaleble category.

Reliance Power has tied up bulk equipment supply for projects worth 20,000 mw from Chinese supplier Shanghai Electric Corp at a competitive price. Since equipment accounts for over 50% of the project cost, Reliance Power should be better placed to quote a competitive offer for the fixed component of the tariff.

“The capital cost of projects in cost-plus tariff route is open ended as there are numerous subsequent additional capitalisation which keep on expanding the equity base for allowing return on equity. Further, subsequent unforeseen increase in tariffs in case of cost-plus tariffs is fully passed on to the consumers, whereas a sizeable portion of such subsequent increase in tariffs is borne by the suppliers in case of tariff-based competitive bidding because the seller often quotes non-escalable components in both capacity charges

and and energy charges,” the Central Electricity Regulatory Commission has recently written to the Union power ministry, citing a key finding of its study.

Meanwhile, the power ministry has asked companies such as NTPC to work expeditiously towards securing fuel security that will help it to compete more effectively on projects. Besides, the company also intends to revamp its tendering process for equipment that helps it to get the best deals and in effect enables it to quote competitive tariff.

Source – Financial Express

Lanco Infra bags major order from Moser Baer

Lanco Infratech on Tuesday said it had bagged a Rs.4,100-crore order from a subsidiary of Moser Baer Projects to execute a 1,200-MW power project.

Lanco bagged the order through an international competitive bidding. “Lanco Infratech Limited (LITL) engineering, procurement and construction division has been awarded a Rs.4,100-crore EPC contract by a subsidiary of Moser Baer Projects Pvt Ltd for executing its coal-based 2×600 MW power project,” LITL said in a statement here.

“The scope of work includes completion of the main plant, including civil and structural works on engineering, procurement and construction basis,” it added. The company said it has already been asked to go-ahead with the project and the team for the purpose is already in place. “We have been looking at expanding capabilities to take contracts from external clients and this order will help us further strengthen our foothold in the space,” S. C. Manocha, whole-time director of Lanco Infratech and CEO of LITL EPC division said.

LITL EPC division is engaged in providing engineering, procurement, construction, project management and commissioning services on a turnkey basis to the power sector. It also has presence in Singapore and China.

On Monday, Lanco Infratech had announced that it has got letters of intent to develop a 5-MW solar PV (photovoltaic) project and a 100-MW solar thermal project in Rajasthan under the first phase of the National Solar Mission.

It had also unveiled plans to develop 200-300 MW of solar power over the next two years.

Source – Business Line

Coal India inks MoU with Shipping Corporation of India

Two public sector giants and ‘Navratna’ companies–Coal India Limited (CIL) and the Shipping Corporation of India(SCI)–signed a Memorandum of Understanding (MoU) here last night for promoting a Joint Venture company to create a comprehensive end-to-end logistic solution ”from load port to consuming end”.

The MoU for the 50:50 joint venture, the process of which began early this year, was signed at a formal ceremony by CIL Director Marketing A K Sarkar on one hand and by Mr A K Gupta, Director Technical Offshore, SCI on the other in presence of CIL Chairman Partha Bhattacharya, SCI Managing Director Siddharta Hazara,Kolkata Port Trust Chairman M L Meena and several high officials of the public sector units. Speaking to newsmen after the signing ceremony, Mr Bhattacharya and Mr Hazara said soon a consultant would be appointed to look into various aspects including the financial stakes before formalising the proposed JV within the next six months when the name of the new company would also be decided.

”We have only signed the MoU now to kick-start the process of formalising the JV which would incorporate the entire gamut of our business,” they said.

Referring to the country’s increasing demand for imported coal for various industrial purposes, particularly for running high capacitypower plants across the nation, the CIL Chairman said it was estimated that with the addition of about 9,000 megawatt of power generation in the country every year, as envisaged in the 11th five year plan, the gap between the demand and supply of coal would be around 25 million ton by 2014-15.

In order to bridge the gap, the CIL had decided to import high quality coal from Australia, Indonesia and Brazil to the tune of about 250 million tons within the next few years besides jacking up its own domestic production target, Mr Bhattacharya said and underscored the need for joining hands with the SCI for bringing the imported coal from around the world in its huge container vessels.

Echoing similar sentiments (of the CIL Chief), SCI MD said the proposed JV would go a long way in helping the CIL to meet the country’s growing energy requirement.

He said despite the steep increase of over ten per cent, of the cost of logistics provision, the SCI had agreed to participate in the equal partnership of the project in view of the national interest.

Also speaking on the occasion KoPT Chairman M L Meena referred to the role of Kolkata ad Haldia ports in the joint effort and said they were exploring the possibility of harnessing the inland waterways through the cousre of the river Hooghly in eastern and Northern India.

When implemented as per schedule by next year KoPT would use berges to carry coal through the river Hooghly/Ganges to bring them at the doorsteps of a number of major power plants in Eastern India including those run by the NTPC, WBPDC and CESC along the mighty river.

Moreover, he said, Kopt with central assistance was currently developing at least two new ports at Diamond Harborur, near the confluence of the Ganges, and at the Sagar Island within the next two years besides increasing the berth capacity at Haldia port in a big way.

When completed these would change the industrial scenario of eastern India not only in terms of infrastructural development, but also by means of supplying more coal to various power plants to help them generate additional power for the nation and its people.

Source – UNI

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