Monthly Archives: September 2012
The recently concluded meeting of the US-India Energy Dialogue has decided to constitute a group to discuss financing options for encouraging electricity generation from renewable sources.
The US-India Energy Dialogue was formed in May 2005 to promote trade and investment in the energy sector. Under the auspices of the Dialogue, four working groups (on oil and gas, coal, power and energy efficiency, new technologies and renewable energy) met in Washington DC this week. The Indian delegation was headed by B.K. Chaturvedi, Member, Planning commission.
Among the issues discussed were assessment of solar and wind resources, integration of renewable energy grids and testing of solar modules.
In order to bring down the fiscal deficit, the government has hiked prices of essential commodities such as diesel and power. These decisions have generated a storm within the Government, with the Trinamool Congress having withdrawn support.
In the case of power, the critical issue of consumption patterns is overlooked. Power tariffs are raised without giving much thought to variations in consumption patterns between rural and urban areas, and within rural and urban areas. A uniform increase across categories leads to an unfair burden on consumers who are less well-to-do.
Gujarat has announced five more rooftop solar photovoltaic power projects in five cities, totalling 25 MW. The State Government has advertised calling for bidders to buy the ‘request for proposal’ documents.
The five projects are divided into three packages. The first is for putting up a 5 MW plant each in Vadodara and Mehsana. The second is for a 6.5 MW project at Rajkot and a 3.5 MW one at Bhavnagar. The third is for one project of 5 MW at Surat.
The drivers of renewable energy are storage and dispatch, said Debashish Majumdar, Chairman and Managing Director, Indian Renewable Energy Development Agency (IREDA).
He was addressing the media at ‘Renewable Energy Conference – Policy, Regulation, Technology and Finance,’ organised by the European Business and Technology Centre and Council of EU Chamber of Commerce in India here on Tuesday.
As of now no grid manager wanted renewable energy due to issues of dispatch. The solution lies in storage as it would help streamline supply according to gird requirements. The storage can be in the form of heat or in case of solar through thermal storage, he said.
Majumdar said smart grids, storage and forecasting were crucial to further accelerate renewable energy growth. Research had proved that it was possible to forecast wind with an accuracy of up to half-an-hour, he said.
There was potential for generation at point of use as also in off-grid locations. Here, technology would have to play a major role as like telecom where prepaid cards helped in expanding the networks to rural areas.
On parity of solar tariff with conventional energy sources, he said it was possible not because of the declining cost of solar panels but also due to the rising cost of conventional energy over the last 24 months.
On financing for renewable energy sector, he said availability was not an issue but the poor health of the public utilities, which should take up the power, was of concern.
The Ministry of Renewable Energy also funded projects based on new technology which could translate to higher efficiency. One such project had been tried out at a sugar mill near Pune, where German technology helped molasses generate gas to run the boiler.
Plans were on to replicate this at other sugar mills. Similarly, talks were on with Spain for electricity storage through thermal and molten salt.
On States coming up with renewable energy policies, he said by and large they were in sync with the Central norms.
Source : The Hindu
Two weeks after showcasing Kerala as a shining, investor-friendly state in Emerging Kerala Summit, the industries in Kerala will plunge into darkness with the introduction of load-shedding for one hour during morning and evening.
Small-scale industries which are functioning round-the-clock would be the most affected with most of them forcing to switch over to generators during the peak hours.
To maintain production, the industries have to change shift or provide overtime to workers incurring huge loss. Confederation of Indian Industry (CII) chairman V K Mathews said that power is the major sector which the Kerala Government has to seriously look into. Wind energy is the least exploited sector in Kerala and it should be given more focus. Though the capital investment is huge, the operating expense is less and it will ensure power for a long period of time,” he said.
Though Kerala is comfortable when compared to neighboring states, an investor will not be interested to invest in a power deficit State.
Kerala State Small Industries Association (KSSIA) state president Shaji Sebastian said that showcasing Kerala as an industry-friendly state and imposing load-shedding will result in a negative impact to Kerala. KSSIA has decided to approach the government to provide subsidy for purchase of generators so that the power consumption can be reduced and the production will not be affected.
He alleged that there are no long-term power projects planned in the state and without proper planning the industries would be forced to reduce or stop production.
Already, the KSEB had submitted a request to government for considering the tariff hike for industries. The proposal is to collect market price for 30 per cent of the consumption and a decision in this regard is yet to be taken by the government.
Mytrah Energy – one of the most ambitious wind developers active in India – claims to be making solid progress, despite delays and changes of plans in a market “where identifying and executing projects with attractive returns is becoming an increasingly difficult task”.
Mytrah has 316MW of capacity installed at seven projects in India, leaving it slightly behind the 337MW it forecast during its last update to investors in May. It expects to add another 24MW by the end of this year.
The UK-listed group remains well shy of the 400MW mid-2012 forecast it gave in March.
Despite this, Mytrah’s chief executive Ravi Kailas claims that the “slight delay in commissioning some of our assets” is offset by the better-than-expected operating performance of the wind farms it has in place.
Kailas says the revenue generated by the installed wind gives it “greater visibility” on the speed at which it can pursue its build programme – with the latest capacity estimate given as “over 600MW during 2013”.
Mytrah aims to reach that figure via 270MW of new generating capacity in the states of Karnataka, Maharashtra, Andhra Pradesh and Tamil Nadu.
Construction has started at the Tamil Nadu and Karnataka sites, with work in Maharashtra and Andhra Pradesh due to begin shortly.
The company says it is in “active discussions with several banks” and expects to wrap-up senior debt agreements for those projects by the end of 2012.
“Subject to securing this funding, these projects are scheduled to be commissioned in stages from April to September 2013.” They will benefit from positive changes to feed-in tariffs in various Indian states, it adds.
The company says it will “redeploy” its resources to boost its ability to finish projects on schedule. It has cancelled its 33MW project at Vita, Maharashtra, adding to a previously-announced group of developments that have been halted or scaled-back.
“The board had become concerned about possible delays at these sites and therefore decided to redeploy the group’s resources to sites where we have greater visibility on the execution timetables.”
Mytrah has agreements with India wind group Suzlon to build projects on a turnkey basis, and a separate deal with Spanish turbine supplier Gamesa for its self-development phase.
Mytrah will now outsource its balance-of-plant and project development team of about 170 employees to Bindu Urja Infrastructure – a company owned by Kailas – in a move it says will save it $10m.
This is to avoid a rapid growth of “three to four times” in the size of the team that would be needed to deliver the 270MW under its self-development strategy.
“The board believes would unnecessarily increase the group’s fixed cost base and have a resultant impact on group profitability,” says Mytrah.
The developer says it has allotments and concessions in western and southern India that total more than 5GW.
“About 500-700MW is at a very advanced stage and can be commissioned as early as in the year 2014. We plan to start construction at some of these locations in mid-2013 with a target to commission the assets by mid-2014,” Mytrah says.
Source : Reechargenews.com
Washington: India and the US are exploring the possibilities of large scale cooperation in generation and storage of power from renewable sources like solar and wind power to make power cuts in India a thing of the past.
The two countries are setting up a group to discuss financing options for encouraging energy generation through renewable sources and integration of various renewable energy source with the grid and storage technologies.
The decision to set up the group was taken here Friday at the just concluded India-US energy dialogue co-chaired by B.K. Chaturvedi, member, Planning Commission, and US Energy Secretary Steven Chu.
Indian Foreign Secretary Ranjan Mathai, US Deputy Energy Secretary Daniel Poneman and other senior officials from both sides were present during the dialogue, according to an Indian embassy release.
The dialogue also noted the enormous trade and investment opportunities……
Kazakhstan has the highest wind-energy potential per capita of any country in the world, according to the United Nations Development Program.
That would seem to make it a natural for wind farms.
But there are a few catches. One is that Kazakhstan’s best wind potential is in gorges where speeds can reach near-gale force. Under such conditions, a conventional windmill shuts down to prevent damage.
Another catch is the high cost of the cables needed to connect conventional windmills to each other and the electrical grid. The fact that high-tower windmills must be spaced considerable distances from each other — for safety reasons – increases those costs.
Almaty power engineer Marat Kombarov has found a way to get around these problems. The founder of EcoWatt has designed a new kind of windmill that can operate without damage in high wind.
The compact design, which has won an international innovation award, also allows windmills to be placed close together in clusters to decrease the cost of transmission cables and to cut power-transmission loss.
Marat said his windmills will produce 25 to 30 percent more power than conventional models, since they will not have to be idled during high wind. They will also be cheaper to produce than standard windmills and will be able to be built in Kazakhstan, he said.
“Ideally, we’d like to have 100 percent Kazakh content in our windmills,” Marat said, “but we may have to import some components at first.
“Two (domestic) companies have already shown very keen interest in manufacturing our turbines,” he added. “They make plastics and plastic pipes,” expertise that will help produce windmills whose components will include sizable splashes of plastic.
The key differences between EcoWatt’s windmill and the high-tower version are the shape and orientation of the blades.
Marat’s shorter and wider blades are fixed along a horizontal shaft so they’re always oriented toward a gorge’s winds, which blow in only two directions – coming or going.
“We’re trying to capitalize on a niche for those wind sites where the wind blows in two alternating directions,” Marat said.
Financial restructuring of Discoms comes with riders
The bailout plan for power sector by way of debt restructuring of power distribution companies (Discoms) with total losses of Rs. 1.9 lac crore is a welcome step but mandatory conditions linked with it may not yield desired results.
Support under the scheme will be available for all participating state owned Discoms on fulfilling certain mandatory conditions. The State Governments will have to convert all their loans to equity. All outstanding energy bills of the state departments as on March 31, 2012 are to be paid by November 30, 2012.
Although the scheme is not mandatory for all states, but it requires that the states which agree on adopting the package will have to pass the State Electricity Distribution Responsibility Bill in their respective states following which the package will be made effective and the government grants will start flowing in. The real bail out will come only after 5 years of consistent performance by Discoms when the center will pay 25 % of restructured debt.
The restructuring package for the State Electricity Boards (SEBs) has to be supported by tariff hikes, a timely and adequate financial support by the state governments, and better regulatory process and disclosures to yield results
The most dangerous condition is that involvement of private sector in state distribution sector through franchisee arrangements or any other mode of private participation to be prepared within a year by the Discoms.
The debt restructuring plan is based on the report of Shunglu Committee. The Shunglu committee had come to the mistaken conclusion that distribution franchise was the only solution to the ills of power sector. Further the sweeping conclusion that reduction in AT & C losses is not possible until the distribution companies are under state control. This loss reduction could be achieved only under private sector for which input based distribution franchise must be introduced throughout the country.
Shunglu Committee overlooked the fact that the distribution companies working in state sector in Andhra Pardesh , Tamil Nadu, Punjab and Karnataka, the AT&C losses had been reduced significantly in the range of 15%. In Punjab , PSPCL has brought down the AT&C losses from 22.5 per cent to 17.6 per cent.
It may be mentioned that in 2002-03, a financial package had been introduced by implementing the Ahluwalia Committee Report by which outstanding dues of state electricity boards of about Rs.43, 000 crore were securitized by the State Governments through the issue of bonds. As the cost of power supply was always more than the average revenue realized, the SEBs of the country again went into the red.
The Government has never tried to diagnose the problems faced by power sector but only tried to treat the symptoms. The experimentation in power sector continues only to benefit the private players at the cost of tax payer’s money. Franchisee system in power distribution means beginning of end of role of state Discoms.
Under political pressure to sell below cost and losing more than a quarter of power supply to theft and decrepit networks, distribution companies have been borrowing for years to fund their losses. Further years of populism, corruption and mismanagement are the main reasons for Discoms losses.
The franchise/ privatization system was resulting in higher tariff on the consumers which was requirement for ensuring high profit margins for the private franchisee. The government has become a willing partner to increase the tariff every year for the benefits of franchisee companies.
Fitch the international rating agency commented on debt restructuring that strong political will be needed to achieve meaningful reforms .It should allow the entities to upgrade their infrastructure, curtail inefficiencies and improve credit profile. However, the long-term benefits will only materialize if the SEBs meets their milestones on tariff rises and reducing the large operational inefficiencies that lie at the core of the problem.
Just seven of the country’s 28 states – Rajasthan, Uttar Pradesh, Haryana, Tamil Nadu, Punjab, Madhya Pradesh and Andhra Pradesh account for 70 % of loans and these states are awaiting eagerly for the bailout package. The bailout plan for power sector has indeed not addressed the country’s long-term energy problems and may only drag government lenders deeper into the trouble.
The electrical equipment industry in India, which caters to the needs of the power generation, transmission, distribution and energy management sectors, has to grow four times to $ 100 billion over the next decade if its contribution to the country’s economic growth has to be maintained, the government ha said.
The $25 billion industry comprises manufacturers of power transformers, capacitors, cables and rotating machines among other equipment. The industry is currently facing troubled times at the back of intense competition from cheaper Chinese imports and slowing domestic sales leading to huge over-capacity creation. The electrical equipment sector accounted for 1.46% of India’s Gross Domestic Product (GDP) last fiscal.