Power Sector Weekly News Review (21/02/11 – 27/02/11)
February 27th, 2011

Coal India hikes prices selectively (27/02/11)

  • Coal India Ltd (CIL) is increasing its prices. But marking a departure from the past, the price increase has been done selectively with the concept of dual-pricing being rolled out for the first time.
  • The logic behind the exercise is to minimise the impact of the price increase, while also protecting CIL’s margins. The impact of the increase on the wholesale price index has been assessed at 0.17 per cent.
  • the price hike would effectively be a three-tiered one, with the impact on the power sector being 7 paise per kilowatt hour.
  • While the power utilities, independent power producers (IPPs), fertilizer and defence sectors are being exempted from a straight across-the-board increase, a 30 per cent hike will become effective for all other sectors whose products enjoy market-driven prices. The increase has been pegged with the floor-level of the spot e-auction prices of coal. “The floor of spot e-auction prices (now commanding an 80 per cent premium) is 30 per cent above present notified prices.”
  • the idea behind introducing this concept was to introduce a differential pricing-system for sectors whose product-prices are market-driven and another for sectors like fertilizer and power whose prices and are not market-driven.

ONGC may complete Tripura project by December (25/02/11)

  • ONGC’s first power venture in India , the 8,500-crore, 727-MW gas-based power plants in Tripura, is likely to be completed by December, a year before schedule.
  • n MoU signed between ONGC Tripura Power Company (OTPC), a unit of ONGC, and the Bangladesh government in November 2010 for moving very heavy equipment through Bangladesh waterways will help OTPC save a year. ONGC, which is setting up two gas-based power units each of 363.3 MW in Tripura, had earlier planned to complete the first by December 2011 and the second by December 2012.
  • The equipment and turbines will be carried through Ashuganj port on the Meghna river in Bangladesh, which would take seven to eight days. The equipment will then be sent via the connecting road network between Ashuganj-Sultanpur-Akhaura check post. The total transportation time for the equipment is estimated to be 15 days.

Economic Survey calls for major reforms in power sector (25/02/11)

  • The Survey tabled in Parliament pointed out that India currently has one of the lowest and most uneconomical average electricity tariffs in the world, 8 cents per unit at the retail level, compared to about 12-15 cents in countries endowed with more coal or gas and 19-10 cents per unit elsewhere.
  • Based on above stated data Survey today asked the states to reduce subsidies and cross-subsidies on electricity and hike tariffs.
  • It also suggested reducing the monopoly of state electricity boards (SEBs) in power distribution by encouraging open sales of the bulk of power supply in the market, which would increase competition.
  • It also pointed out that the T & D losses is about 35% which is among highest in world.

Reliance Power leads race to supply 3,000 MW to Uttar Pradesh (25/02/11)

  • Reliance Power has emerged the frontrunner among six shortlisted entities for a tender floated by Uttar Pradesh Power Corporation Ltd (UPPCL) to buy 3,000 MW of power for 25 years starting 2014.
  • Reliance Power has offered to sell 2,456 MW of power at an average price of Rs 3.702 a unit. Although the tariff offered by the Anil Dhirubhai Ambani Group’s power utility is not the lowest, the quantity of power offered is the closest to the requirement of UPPCL. Only one company has quoted a lower price but it is offering only 10% of the power UPPCL wants to purchase.
  • In October 2010, UPPCL had invited bids for procuring power for four state power transmission utilities — Paschimanchal Vidyut Vitran Nigam, Dakshinanchal Vidyut Vitran Nigam, Purvanchal Vidyut Vitran Nigam, and Madhyanchal Vidyut Vitran Nigam.

Reliance Power project achieves 105% generation capacity (24/02/11)

  • Reliance Power’s Rosa plant which is one of its first greenfield project to become operational has now started generating at about 105% of its installed capacity
  • The two units of 300MW capacity (total=600 MW) each commissioned under phase 1 is now producing about 630 MW.
  • The company is setting up the 1,200 MW Rosa Power project n Uttar Pradesh. The first unit of 300 MW was commissioned in December 2009 followed by another unit of 300 MW. Both the units under phase of the project were commissioned ahead of their scheduled plan and were functioning at full capacity.
  • The Rosa project would sell the entire power produced by it to the UP government at cost plus tariff basis.

Power companies want extension of tax sops (23/02/11) –

  • Under section 80-I(A) of the Income Tax Act mega power generation projects, with over 1,000 megawatts (MW) in case of thermal and over 500 MW in hydro, are exempted from income tax for 10 years, if they are commissioned before March 2011.
  • Indian power sector expects the government to continue its thrust on infrastructure and pins its hopes on incentives for the renewable energy sector and extension of sunset clause under Income Tax Act in the federal budget for 2011-12 to be tabled in parliament on Feb 28.

Limited availability of coal could trip mega power plan (22/02/11)

  • An acute shortage of domestic coal is threatening to destabilize new power generation projects of about 15000 MW capacity in which developers have already invested an estimated Rs75,000 crore.
  • Coal India Limited had promised to supply 92 million tonnes (mt) of fuel to these projects, most of which were expected to be operational over the next one year. But the state-run firm now says it can deliver only 13mt. The available coal, which needs to be blended with imported coal before it is ready for use by generating companies, could produce barely 3,000 Mw of power.  “Coal India has indicated that availability for power utilities is likely to be 319mt only. Of this, fuel supply agreements have already been signed for 306mt generating units commissioned up to March 31, 2009,” the official said.
  • The coal ministry official said CIL production would not improve unless the environment ministry clears the hurdles for mining projects. He said more than 150 mining projects of Coal India are awaiting clearance from the environment ministry. These projects have a coal production potential of 210mt.
  • Supply of coal by CIL to power utilities over the past few years has been falling short of requirement for the electricity generation targets. The utilities had reported a loss of 10.9 billion units in 2008-09, 14.5 billion units in 2009-10 and 5.3 billion units between April 2010 and December 2011.

DERC free to fix new power tariff: Dikshit (22/02/11)

  • In May last year, the city government had through a notification stalled DERC’s decision to announce the annual tariff for 2010-11 till it re-examines the demands from discoms to increase the rates.
  • The DERC , which was making last minute preparations to announce the new tariff, after receiving the government directive had indicated that it had planned to cut down the tariff by 20 to 25 per cent as discoms would have a surplus of around Rs 4,000 crore if the existing tariff was not changed.
  • The government’s notification was quashed by the court on Friday last describing the intervention “absolutely unjustified, unwarranted, untenable.”

KfW earmarks 800 mn euros for India renewable energy projects (21/02/11)

  • German government-owned development bank KfW plans to lend 800 million euros in the 2011-12 calender year to finance various renewable energy projects in India.
  • They have already financed around 1.5 billion euros in the energy sector in India.
  • “We finance those government agencies which either implement renewable energy projects or lend funds to private or public investors,”  KfW Director Oskar von Maltzan said.
  • KfW has provided funds to state-run power generating companies such as North Eastern Electric Power Corporation (NEEPCO) and NTPC for undertaking hydro and solar-based projects.
  • Power Finance Corp, SIDBI, the Indian Renewable Energy Development Agency (IREDA), REC and India Infrastructure Finance Company (IIFCL) are some of the entities being funded by the German bank.
  • KfW Bank is in the process of signing a 200 million euro line of credit with IREDA next month, Maltzan said, adding that so far, it has provided 140 million euros to the state-run lender.
  • KfW will also sign a loan agreement worth 100 million euros with NTPC for a 15-MW solar plant in Rajasthan in the next few months, he said.
  • In addition, it plans to lend 100 million euros to REC to enable the company to invest in various energy-efficiency and renewable energy projects, Maltzan said.
  • Furthermore, the bank is looking at funding different programmes that are being implemented by NABARD and the Maharashtra State Electricity Generation Company (MAHAGENCO), he added.

One Response to Power Sector Weekly News Review (21/02/11 – 27/02/11)

  1. L R Patel says:

    There is no data publish regarding safety performance of power plant. Safety is a one of the important issue for thermal / nuclear / hydro power plant. There are nos of accidents, fire incidents, toxic gas leakges, boiler accidents,etc are occured.
    Therefore, I request to publish the statistic of accidents /incidetns of power plant as the other key performance data are published. This data help to each intersted party to evaluate & assess the safety performance with the other.
    L R Patel
    safety offiecer

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