Monthly Archives: January 2013

Gujarat looking to promote the CSP advantage

As India’s National Solar Mission takes a back seat for concentrated solar power projects, regional opportunities have sprung to the fore – and Gujarat intends to capitalize.

When it was announced in December that the CSP allocation of the National Solar Mission would be delayed, developers began looking further afield in the quest for new projects. Gujarat has been pushing hard to promote renewables in the state, so now could be the time for CSP to lay a claim there.

There are a number of factors that make Gujarat attractive to CSP, according to Dr. Ketan Shukla, Secretary at the Gujarat Electricity Regulatory Commission (GERC). In a recent presentation, Dr. Shukla noted the availability of land in areas of high solar radiation, high water availability (particularly in the north of Gujarat) and strong infrastructure (a road network of 74,000Km) as positives that the industry should consider.

“The North Western part of India, particularly Gujarat and Rajasthan, gets high levels of solar radiation through most of the year” Dr. Shukla explained. In terms of policy, a Solar Power Policy was initiated in 2009 offering solar thermal a tariff of Rs. 11.55/kWh.

Gujarat will be discussed in further detail at the CSP Today India 2013 conference, taking place 12-13 March in New Delhi. Attendees will also hear from Pranav Mehta, Chairman of the Solar Energy Association of Gujarat, to get to grips with the opportunities open there.

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Matt Carr
CSP Today

Tata Power lines up Rs 1,250 cr capex plans in wind power

Amid a major drop in fresh capacity addition by wind energy farms, Tata Power, part of the $100 billion Tata Group, plans to spend around Rs 1,250 crore to build electricity generating capacity aggregating to around 180 MW. In addition the firm also plans to set up solar power generating units with potential to produce more than 50 MW of power by the end of 2013-2014.

Rahul Shah, chief business development officer, India business & renewables of Tata Power, told Financial Chronicle that a lot of companies in India stalled their wind capacity development plans after the government withdrew the accelerated depreciation benefits and tax incentives last year. “But our investment into renewable source of power is not based on garnering tax benefits but it’s a company policy to generate 25 per cent of the total portfolio via clean energy sources. We would continue to achieve our target of 150-200 MW of power in wind sector and around 50 MW in solar segment annually,” said Shah.

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Coal price pooling would erode railways’ earnings in 2 years: CEA

The government’s proposed pooling of domestic and international coal prices to make costly imports viable would erode Indian Railways’ freight earnings by Rs 2,200 crore over the next two years, the topmost power sector planning body said today.

Pooling will rationalise coal transport, bringing down the freight bill of coal companies, according to the Central Electricity Authority (CEA).

Currently, state-owned Coal India Limited (CIL) supplies coal to power companies across the country, irrespective of their location. Pithead plants account for 28 per cent of installed coal-based capacity, coastal plants account for 16 per cent and non-pithead non-coastal projects account for the 56 per cent capacity. Owing to domestic shortage, individual utilities resort to coal imports.

Once pooling comes into effect, imported coal will have to be supplied by CIL to all the three kinds of stations. Movement of imported coal to new inland plants and movement of domestic coal of CIL to existing coastal plants will lead to criss-cross movement.

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Five years on, Indiabulls Power’s Chhattisgarh project in peril

The Chhattisgarh government is considering scrapping Indiabulls Power’s 1,320 megawatt (Mw) power project at Bhaiyathan.

“The project is stuck. Ideally, it should have started construction by now. We are going to take a decision on it in the next six months,” a senior state government official told Business Standard on condition of anonymity, adding it was being treated as a “null” project. He said the project was yet to be formally handed back to the state government.
Chhattisgarh has around 18 power projects, under development but the state does not count the Indiabulls project among these.

Five years ago, the Bhaiyathan project was auctioned with a unique model and had been quoting one of the lowest rates in the country. The project was won by Indiabulls for a competitive rate of 81 paise per unit. This, however, was only for 65 per cent of the power of the project, to be supplied to the state discoms.

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Suzlon’s debt recast: Tilting at the turbines?

Suzlon Energy takes its name from the Gujarati word “sooj-booj”, which means clever thinking, and loans from banks , or ‘lon’. Both these ingredients, says its founder Tulsi Tanti, form the cornerstone of any successful business. But it is the latter part of the name that Suzlon has come to be known for in recent times. Even a slew of good news from the maker of wind turbines — a number of big-ticket domestic and international orders — has not been able to mask the infamy from an underlying Rs 13,000-crore loan on its balance sheet.

The company, whose business has suffered in recent times owing to the global economic slowdown, removal of certain tax breaks for wind power producers in India and onslaught of cheap products from China, recently got a breather. In October, it was referred for corporate debt restructuring (CDR) after it defaulted on payments of foreign currency convertible bonds (FCCBs) worth $221 million. The lenders restructured its loans to the tune of Rs 9,500 crore, giving it a two-year holiday from interest payment, and enhanced working capital facilities. But will these steps be enough to add new wind to its sail?

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India urged to re-think huge dam projects

India’s government has proposed building nearly 300 dams throughout the Himalayan range by 2030 to help meet its energy needs, which are under pressure from its booming population and rapid economic growth.

This will supplement India’s other energy sources such as nuclear, coal, solar and wind for power generation and energy supply, according to a  new study released by a group of scientists at National University of Singapore (NUS).

The government is proposing dams as the solution to attain energy-efficiency, economic growth and environmental protection, but Professor Maharaj K Pandit, who led the NUS study, argued that the enormous number of dams planned across Himalayan rivers could displace millions of people and destroy the natural resources there.
“ It is not only about the Himalayan valleys, but the downstream human population, their livelihoods and also likely dangers from unfortunate dam-breaks,” Pandit told Eco-Business in an e-mail interview.  Some of the biggest river basins in the world such as the Indus, Ganga and Brahmaputra, have been identified.

“The Himalaya are a young mountain chain and are geologically very unstable, prone to earthquakes, therefore, we must be cautious about haphazard dam-building. There is a need for moderation which can come only through scientific studies.”
Using field data and modelling, his team which also involved researchers at the University of Delhi and the Kunming Institute of Botany of the Chinese Academy of Sciences, discovered that almost 90 per cent of the Himalayan valleys would be affected by dam building and that 27 per cent of these dams would affect dense forests with unique biodiversity.

The researchers projected that dam-related activities will submerge and destroy about 170,000 hectares of forests. They also predicted that the dam density in the Himalaya is likely to be about 62 times greater than the current global average, which would result in deforestation and the extinction of 22 flowering plants and  seven vertebrate species.

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Powerless against policy winds

Lately, the winds in India have been blowing slowly. A sector that saw spectacular growth over the past decade has slowed down significantly over the last year. In the first half of the year, the industry recorded close to a 40 per cent dip in its installations. This is a stark reflection on reforms that have perhaps lost their momentum.

Recent reports peg the potential for exploitable wind energy in India at 300 GW. This is far in excess of earlier estimates. The share of renewable energy in the country’s total energy mix has increased from 7.8 per cent in financial year 2008 to 12.1 per cent in 2012. Not only is there an abundance of wind energy, it is also at an affordable cost: The levelised cost of energy for 20 years is Rs 4.5 and for 10 years stands at Rs 6 per unit.

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Cross-subsidy leading to 160% tariff for industries in AP

Representatives from the industry today expressed concern about the severe power shortage, hike in power tariff and fuel surcharge adjustment (FSA) being levied by distribution companies.

They stated that the cross-subsidy is much more than the permissible limits working to about 160 per cent of the cost of service.

Devendra Surana, President, Federation of Andhra Pradesh Chamber of Commerce and Industries, met Botcha Satyanarayana, President, State Minister for Transport, to express industry and trade concerns about power shortage and its impact on their productivity.

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Power companies like Adani, Tata Power & others lose top talent as slowdown takes toll

Reliance Power’s senior executive Ashwin Kumar, who was president of corporate development and instrumental in setting up the company’s maiden project at Rosa in Uttar Pradesh, joined Larsen & Toubro this week as the CEO of power development business.

Last year, L&T lost Ravi Uppal, who was heading their power equipment business, to Jindal Steel and PowerBSE -1.61 %, where he joined as managing director and chief executive officer. Other leading power companies like Adani PowerBSE -1.17 %, Tata PowerBSE -2.73 %, JSW EnergyBSE 0.00 % and Lanco InfratechBSE -1.18 % have also lost top executives in the last 18 months.

What may seem like a game of musical chairs may actually be one of the biggest churn in the power sector which fights tough times. Experts say that the churn at the top positions is due to varied reasons such as inability of CEOs or chief financial officers to meet targets amid slowdown in the sector or sheer frustration over the slow moving decisions in the sector.

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Gurgaon consumes 33.9% of DHBVN power supply: Study

The city consumes 33.9% of the load of the Dakshin Haryana Bijli Vitaran Nigam ( DHBVN) and contributes 40.4% to its revenues. Also, the collection efficiency of Gurgaon stands at cent percent, which means consumers are paying their bills without fail. But Gurgaonites are still facing power-cuts, ranging from five to six hours.

This data is part of a detailed study on power distribution situation conducted by Amara Raja and Ranjith, second year students of the city-based Great Lakes Institute of Energy Management and Research.

A citizen forum – Gurgaon First – had commissioned the study so that this could be discussed with concerned government agencies at a workshop on ‘Revamping Gurgaon’s Electricity Scenario’.

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