Monthly Archives: August 2012

CAG pulls up hyrdo-power PSUs for project delays

The functioning of state-run power companies has come under strong criticism from the Comptroller and Auditor General (CAG).

The CAG has faulted NHPC, THDC, SJVN and NEEPCO for poor implementation of their hydro power projects, resulting in Rs.14,700 crore cost over-runs.

In its report tabled in Parliament on Friday, the CAG has stated that delay in implementing 16 hydro power projects by power PSUs leads to cost over-runs of Rs.14,700. “Delay in execution of 16 projects by four Central public sector enterprises (CPSEs) resulted in revision of their initial approved cost of Rs.30,005 crore to Rs.44,712 crore. In seven completed/ongoing projects, the cost over-run was in the range of 53 to 148 per cent,’’ the report titled “Capacity expansion in hydro power sector by CPSEs for the year ended 2012’’ states…

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India to see 30K MW renewable capacity addition in 12th plan

NEW DELHI: India is expected to see  renewable energy capacity addition of 30,000 MW, with significant contribution from  wind power, over the next five years.
“At the end of  12th Five Year Plan (2012-17), the country is expected to have total renewable energy generation capacity of 55,000 MW,” Joint Secretary at the Ministry of New and Renewable Energy Tarun Kapoor said here today.
India has renewables generation capacity of about 25,000 MW, he said at a conference on the  power sector.
Of the projected 30,000 MW capacity addition, around 15,000 MW would be from wind power….

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Renewable energy certificates witness a record trade in August on IEX

In its 16th trading session, Indian energy exchange (IEX) witnessed a record trading figure of renewable energy certificates (RECs). Out of the 5,68,097 RECs that were available for sale, 2, 48,165 RECs were issued – the highest issuance for any month till date. IEX is one of the major power exchanges of the country.

In the non-solar REC segment, IEX received buy bids of 2, 48,168 RECs and sale bids of 5, 68,097 RECs were received against which 2, 48,168 RECs were cleared at Rs 1500/REC. The price of non-solar REC came down from Rs 2,402/REC last month……

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Karnataka plans to buy 750 MW power from pvt players

To bridge the gap between demand and supply in the energy segment, the state government is all set to float tenders for procuring 750 MW of power from private power supply companies, according to DN Narasimha Raju, principal secretary, Energy Department.

Delivering a speech at a conference on ‘Sustainable Energy through Renewable’ organized by the Confederation of Indian Industry (CII), Karnataka, on Wednesday, Raju said the department of energy has been taking measures to meet the demand for power in the state. “The state government purchased 1650 MW of energy from other states and power entities last year,’’ he said.

He said hydro power projects in the state have been working at 65 per cent of their capacity against 78 per cent during the corresponding period last year. “We expect an improvement in hydro power supply in the coming months and it depends on the monsoon,” he said.

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NTPC’s Sri Lanka project may start by December

State-run power producer NTPC Ltd’s overseas plans are likely to take a new turn this year. According to sources, work on its Sri Lanka project is likely to start by year- end, while an environmental impact study is going on for its Bangladesh project.

Last year, both NTPC and the Ceylon Electricity Board (CEB) of Sri Lanka had incorporated a joint venture, Trincomalee Power Co, to set up a 2×250 megawatt (Mw) coal-based power project at Sampur in the Trincomalee region. The overall investment of the project was expected to be Rs 3,000 crore.

The feasibility report for the project is ready and both governments are likely to sign the remaining agreements, including a power purchase agreement by September, and the work on project is likely to start by December,” said CEB Chairman Wimaladharma Abeywickrama.


While confirming the Sri Lanka developments, a top NTPC official said an environmental impact assessment was going on for its proposed 1,320-Mw (2X660-Mw) project at Khulna in Bangladesh. “We are yet to get environment clearance for the Khulna project,” the official said. A 50:50 joint venture is already in place between NTPC and the Bangladesh Power Development Board regarding this.

However, environmental activists had approached the court, asking the project to be scrapped as it comes within 14 km of Sunderbans. According to them, the plant at Bagerhat district’s Rampal area in Khulna division comes with in the core area of Sunderbans. The project was pegged at about $1.5 billion. According to NTPC, another project in Bangladesh at Chittagong is still in its infant stages.

In yet another foreign venture, the firm was planning to develop a 620 Mw hydro electric project in Bhutan. It has already prepared a detailed project report on the Amochu hydro electric project in Bhutan. The state-run power major has already requested the Centre for allocation of the Amochu Reservoir Hydro Electric Project to NTPC for execution in joint venture mode. However, the official added NTPC’s plans to set up a solar project in Maldives was still in its initial stages

Solar grid parity by 2017, says ministry

Power produced by solar plants will be sold at the same price as that from conventional sources like coal by 2017, a power ministry official said Thursday.

“Solar power is very close to achieving grid parity. It will achieve grid parity by end of the 12th Plan in 2017,” Tarun Kapoor, joint secretary in the new and renewable energy ministry, announced at a conference here on the Indian power industry.

“Consequent to the launch of the government’s solar mission in 2010, we see large volumes (of electricity) coming into the sector and we’ve seen prices come down drastically,” Kapoor said.

Outlining the sequence of fall in tariffs, Kapoor informed the conference that from an initial tariff of Rs.17 per kilowatt (kw) hour fixed by the regulator, subsequent tenders had yielded lower average tariffs, and the last tender floated had fetched the tariff of Rs7.49 per kw hour.

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Solar energy sector gaining momentum in Karnataka

The solar power sector is gaining momentum in Karnataka ever since the government introduced a solar energy policy (2011-16). The government has recently concluded a bid process, in which 80 Mw (60 Mw for solar PV and 20 Mw for solar thermal) was allotted to developers at tariffs between Rs 7.94 to Rs 8.50 per unit for solar PV and Rs 10.94 and Rs 11.32 per unit for solar thermal projects.

According to a report Renewable Energy prepared by PwC, which was released at the conference on ‘sustainable energy through renewables’, organised by Confederation of Indian Industry (CII), here on Wednesday, Karnataka is the only state to have supported solar projects under the REC (Renewable Energy Certificate) mechanism. Close to 950 Mw of project proposals have been submitted to Karnataka Renewable Energy Development Ltd (KREDL), which are under different stages of implementation like preparation of DPR…..

UP Power Corp electrocuted by Rs 43,000-cr loss

Uttar Pradesh Power Corporation Limited (UPPCL), the state-run power utility, has run accumulated losses of almost Rs 43,000 crore.

The losses, which stood at Rs 151 crore at the end of March 2000, stood at Rs 42,745 crore as on March 31, 2011.

The UP State Electricity Board (UPSEB) was unbundled as UPPCL in 2000 with separate distribution companies (discoms) coming into existence for operational efficiency and accountability in the power sector.

At present, there are five dicoms in UP, namely Poorvanchal, Mandhyachal, Paschimanchal, Dakshinanchal and Kanpur Electricity Supply Company Limited (KESCO) catering to different regions.

In the five-year period between 2006-07 and 2010-11, the accumulated losses increased 155 per cent from Rs 16,700 crore to Rs 42,745 crore….

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China Widens Renewables Lead Over U.S. in Ernst & Young Ranking – India placed fourth

China widened its lead over the U.S. in a renewable energy ranking compiled by consultant Ernst & Young that gauges the attractiveness to investors of wind and solar power projects in those countries.

The U.S., weighed down by “uncertainty over the country’s long-term renewable energy strategy,” dropped 1.5 points to 66 in the quarterly renewables “attractiveness index,” E&Y said today in an e-mailed report. That pushed it into a tie for second with Germany, trailing China’s score of 70.2.

“The upcoming elections have led to an understandable slowdown in the decision-making process in the U.S.,” Ernst & Young Global Cleantech Leader Gil Forer said. “Germany is pushing ahead with its ambitious renewable energy agenda.”

U.S. wind power project developers face the expiration at the end of the year of a tax credit benefiting the industry. Americans vote in presidential elections in November and Congress has dragged its heels over renewing the incentive.

China dropped 0.2 points from the last report in May. While the government has cut incentives to solar projects, it also raised its target for solar installations to 21 gigawatts by 2015 and 50 gigawatts by 2020, up from 15 gigawatts and 20 gigawatts, E&Y said. Wind power has been curtailed by problems in gaining access to the grid in China, according to the report.

India placed fourth, the U.K. fifth, France and Italy tied for sixth, and Canada, Japan and Brazil rounded out the top 10. E&Y’s assessment criteria include regulations and planning barriers, as well as access to capital, land and power grids.

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Bain, KKR vie for 30% stake in Lanco’s power projects

Lanco Infratech is engaged in talks with private equity firms Bain Capital and Kohlberg Kravis Roberts (KKR) to sell stake in its power business. Lanco has been trying to find a buyer for its power business since the beginning of the year. It had talked about raising around $750 million (Rs 3,892 crore) for a minority stake. This time, the company is known to have put a higher stake on the block — around 30 per cent in some of its generation projects.

“It is quite possible that a structured deal would happen,” said an investment banker aware of the deal. Structured deals are ones where the investor gets minimum assured returns from a deal. These returns are assured by the promoters of the company. An emailed query sent to the private equity firms elicited no response, while Lanco said it was currently in discussions with investors to raise up to $750 million in private equity. “This will be done at the power holding company level. We have mandated Macquarie to facilitate a deal,” it said in an emailed response.

Lanco also said it was planning to monetise non-core assets to bring some additional liquidity into operations. “We are also looking to monetise our wind portfolio and our roads business where our portfolio consists of three highway projects. Aside from this, we are looking for a strategic partner in our solar vertical,” the company said.

Lanco Infratech had earlier indicated it planned to use the funds secured from a stake sale as equity for its new projects. “Lanco currently has around 8,800 Mw of new generation capacity under various stages of execution. Over half of this is already under construction and the balance has secured off-take agreements or fuel linkages, and is likely to attain financial closure over the next 12 months,” said a report by Edelweiss Securities, in its investment themes.

Lanco has an installed capacity of 4,480 Mw across coal, natural gas and hydel capacity, making it one of the largest private sector power manufacturers. Lanco Infratech has interests across the infrastructure sector, which include roads, engineering, procurement and construction, property development and natural resources like coal mines — both in India and abroad. The power sector, however, contributes to 51 per cent of its revenues.

The company’s power business has come under pressure after fuel availability affected both its coal and natural gas-based projects. State electricity boards also owe the company dues which total around Rs 2,800 crore, from Karnataka, Tamil Nadu, Uttar Pradesh and Haryana.

Source : Business Standard



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