Monthly Archives: June 2013

CIL may stop supply to NTPC plants

Eastern Coalfields Ltd, a wholly-owned subsidiary of Coal India Ltd (CIL), is threatening to stop supplies of nearly 14.5 million tonnes of coal to NTPC power plants at Farakka (2,100 MW) in West Bengal and Kahalgaon (1,340 MW) in Bihar, for non-payment of dues. NTPC deducted over Rs 1,000 crore worth of payments, payable to the ailing CIL subsidiary, against supplies during the past six months, citing quality issues. Though the coal produced from the mine are graded between G-10 and G-13 in terms of heat value, NTPC claimed that the supplies were of much inferior quality and paid Eastern Coalfields at the rate of the lowest rank coal (G-17The company stopped the supply of coal for non-payment of dues in April this year. After intervention of the Coal Ministry its coal supplies were “partially resumed”. — Our Burea

(This article was published in the Business Line print edition dated June 30, 2013)

Solar renewable certificates lose sheen

Breaking from the past trend, the prices of solar renewable energy certificates (RECs) plummeted to the government-fixed floor price of Rs 9,300 per REC, due to poor demand, in the trading session of June. Of the 5,932 RECs on offer, only 1,479 were sold.

RECs are generation-based ‘certificates’ awarded to those who generate electricity from renewable sources such as wind, biomass, hydro and solar, if they opt not to sell the electricity at a preferentially higher tariff.

These electronic certificates, in demat form, can be traded on the exchanges. They are bought by ‘obligated entities’ who are either specified consumers or electricity distribution companies.

The obligated entities may either purchase a certain quantum of green power or buy RECs from the market.

There is a separate ‘obligation’ for RECs issued for solar power generators. Trading happens on the last Wednesday of each month.

Trading in non-solar RECs continued to be tepid, as it has been for several months now. Only 72,486 RECs changed hands on the country’s two energy exchanges — IEX and PXIL — and that too only at the floor price of Rs 1,500 a certificate.

In the first quarter of the current year, only 175,000 RECs (solar and non-solar) were sold, compared with the inventory of 24 lakh RECs.

The poor trading of RECs reflects poor enforcement by the various state electricity regulatory commissions, who are required to make sure that the obligated entities meet their commitments.

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Govt to issue executive order to set up coal regulator

The Finance Minister said earlier Pension Fund Regulatory and Development Authority (PFRDA) and Securities and Exchange Board of India (SEBI) were also set up under similar guidelines.

PFRDA continues to be under an Executive Order, while SEBI was later changed to a statutory body.

The Government takes this step as Parliament is not in session to approve a Bill.

Industry body CII said the regulator would make the sector more investment friendly and encourage more exploration.

“CII has been emphasising that the independent regulator for the coal sector should have the mandate of managing the allocation process, opening of new exploration areas, mine planning and development, compliance by developers and to act as a central repository of exploration data and pricing,” said Chandrajit Banerjee, Director-General, CII.

The Cabinet on Thursday gave its go-ahead for the setting up of an independent regulator for the coal sector.

According to the normal procedure, the Coal Regulatory Authority Bill 2013 needs to be placed before Parliament before it becomes a law.

The draft bill on Coal Regulatory Authority Bill, 2013 was submitted to the Cabinet for consideration on May 10, 2012. The panel decided to refer it to a Group of Ministers to sort out issues related to the powers of the proposed regulator.

On May 29, 2013, the Group of Ministers, headed by Chidambaram, gave its go-ahead for the Bill, taking the first step for an independent authority to tackle issues of pricing, supply and quality.

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Tripura rolls out Rs 400-cr plan to revamp power network

In an effort to further capitalise on the immense possibilities thrown open by the ONGC Tripura Power Company, the Tripura Government is now on an overdrive to modernise its rickety state power transmission and distribution (T&D) infrastructure.

Living in near isolation from the rest of the country, Tripura had a huge technological gap in synchronising the State grid with the modern-day 400 kv transmission facilities or supplying electricity to heavy industries. There were also technological inadequacies in seamless transmission of electricity throughout the State.

According to State Power Minister Manik Dey, Tripura has recently entered into a pact to roll out a Rs 400-crore project to revamp the T&D infrastructure. “The MoA (Memorandum of Association) was signed (with the World Bank) early this month,” Dey told Business Line.

Tapping investors

The project aims to replace the existing mixture of 132 kv and 66 kv transmission lines across the State by a seamless 132 kv transmission network. This, coupled with a 14 new substations, will ensure a seamless distribution of electricity through 33 kv (and below) lines.

Considering the recent proposal from ONGC to build a 1.3-million tonne fertiliser unit in the State in joint venture with Chambal Fertiliser, the revamped electricity distribution network will keep the State ready to cater prospective investors in the downstream fertiliser sector. Plans are also afoot to attract a gas-based petrochemicals facility in the State.

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Uttarakhand floods ravage Harduaganj power plant

After hydro power projects inUttarakhand, it is the turn of thermal power plants situated in UP to bear the brunt of ravaging floods in the hill state. At least nine units of Harduaganj power plant situated inAligarh district, with a total capacity of almost 900 MW, have been shut down because of high silt in the Upper Ganga canal from which water is drawn into the units. The silt came rolling down and filled the intake canals of all units which had to be shut down causing a further shortfall of around 900 MW to the power-starved UP.

According to the Northern Region Load Dispatch Centre (NRLDC), the closure started on the intervening night of Thursday and Friday. All nine units-varying in their installed capacity from 30 MW to 250 MW-started closing after water from the intake canal had to be stopped. While UP Rajya Vidyut Utpadan Nigam (UPRVUNL) chairman Kamran Rizvi was not available for comment, officials of Utpadan Nigam said they were unsure over when the units would start working. “We are assessing the situation. The silt has filled the canal because of water level has gone down,” a senior official in UPRVUNL said while speaking to TOI.

Director (technical) UPRVUNL Murli Dhar Bhagchandani, said the Irrigation department was releasing water in the upper Ganga canal. “But that is intermittent. Moreover the turbidity (existence of particulate matter in the water) is so high that we are not able to use it,” he said. Bhagchandani said they expect the situation to improve so that at least one unit (unit-8) could resume working.

The closure of Harduaganj comes as a significant setback to the UP which is likely to witness a sudden surge in demand for power when level of humidity rises. The units which have been closed down include right from unit-1 to unit-9, with unit-8 and unit-9 having an installed capacity of 250 mw each. Unit-7 comes in next with an installed capacity of 105 Mw.

Earlier, heavy floods have caused closure of four power units of 100 MW each in Vishnu Prayag in Uttarakhand which would supply power to UP. The units were closed manually due to high siltation in the Alaknanda on which the plant is located. There was still no official confirmation as to when the units would start working. Owned by the JP group, the project is situated at a height of 1,372 meters from the mean sea level in Chamoli district on the main route connecting Joshimath and Badrinath. Commissioned in 2006, provides 88% of the power to UP. It usually provides power supply between the April and October after which the level of water in the riverrecedes. A senior UPPCL official affirmed that the plant gets closed in the rainy season but for a very short period. But this time, the heavy floods have caused alarming siltation, which threatens to damage the power plant.


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NMDC selects IL&FS Energy as JV partner for power foray

State-owned iron ore miner NMDC has decided to rope in IL&FS Energy Development Company as joint venture partner for setting up a 500-MW thermal power plant in Uttar Pradesh with an estimated investment of Rs 2,000 crore. “We have decided to tie up with IL&FS Energy as our joint venture partner for setting up the plant in Uttar Pradesh at an estimated cost of Rs 2,000 crore. IL&FS will have 74 per cent stake in the venture and we will have the remaining,” a company official told PTI. NMDC in January invited expressions of interest (EoIs) from interested parties to be part of the power project, which would mark its foray into the power sector. Three companies, including IL&FS Energy and Jindal Power, had evinced interest to be a JV partner of NMDC for the power plant. After initial screening, Jindal Power and IL&FS Energy were found to be eligible on technical and financial criteria, a source said. The power to be generated from the plant would be used for plugging the demand-supply gap of the state. The balance would be transmitted to meet the need of NMDC’s upcoming three million tonnes per annum (mtpa) steel plant at Nagarnar in Chhattisgarh.

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Power tariffs rising faster than inflation: APTEL

Coal production needs to be stepped up to check the rise in power tariffs, which are ‘rising faster than inflation’, an APTEL technical member said today. “Power tariff is rising faster than inflation,” technical member, Appellate Tribunal for Electricity, Rakesh Nath said at the inauguration of the eastern region’s Appellate Tribunal for Electricity here.
Attributing the rise in power tariffs to sharp rise in fuel prices, he said there is a need to increase coal production to check rising power tariffs. Damodar Valley Corporation chairman R N Sen also said the situation of the power sector was very grave due to coal quantity and quality related issues and the power market is very dull. He said unless coal prices ease, it would be difficult to reverse the situation. The government could also offer coal blocks to the public sector to bring down the cost, Sen added.

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Renewable energy takes India forward

The 1990s is when renewable energy industry made a beginning in the country, although the history of wind power generation goes back to 1985. That was when the then Ministry of Non-conventional Energy Sources began an exercise to collect wind data extensively across the country. After the exercise, the Ministry estimated the wind power potential of India at 45,000 MW. Today, the country has 20,000 MW of wind capacity and the latest estimate of the potential is over ten times that capacity. This journey was possible, thanks to policy initiatives. First, at a time when electricity generation was the Government’s preserve, the Government opened wind power to the private sector. It gave those who put up windmills the 100 per cent ‘accelerated depreciation’ benefit — a major tax saver. Besides, profits from wind-generated electricity were exempt from income tax for five years. About five years back, distribution utilities were mandated to buy a portion of electricity they sell to consumers from renewable energy sources. And, facilitating those States that did not have possibilities of generating electricity from renewable sources was the renewable energy certificate, which could be traded.

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Wind power sector awaits nod for generation based incentive

The wind power sector is awaiting the Union Cabinet nod for generation-based incentive (GBI), a move that will accelerate the implementation of projects. Finance Minister P. Chidambaram had announced that the wind power units will be extended a generation-based incentive. The file is under consideration by the Prime Minister and needs Cabinet approval, according to Ramesh Kymal, Chairman, Renewable Energy Council, CII-Shorabji Godrej Green Business Centre. Speaking on the sidelines of the 12th Green Power International Conference and Exposition on Renewable Energy, 2013, hosted by CII, he said the Government was earlier extending generation based incentive and accelerated depreciation facility to wind farms. These had made it attractive to take up wind farms. But both of these have been withdrawn. However, during the Budget it was announced that GBI will be extended to wind farms. The industry is awaiting this as it would provide an additional 50 paise per unit to the generator in addition to the tariffs. “The country has potential to set up about 6 lakh MW of wind power. The current installed capacity is 18,000 MW. In 2011, the country added 2300 MW of wind power capacity. This had come down to about 1700 MW in 2012 and is likely to be in the same range this year. But next year it could go up to 3000 MW if promised incentives are extended,” he said. “The XI Plan envisages a capacity addition of about 15,000 MW of wind power. If this comes through, we will be able to save about Rs 50,000 crores worth of foreign exchange by cutting down import bill,” he said.

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Kudankulam project to become operational soon: R. Chidambaram

R. Chidambaram, Principal Scientific Advisor to the Government of India, on Saturday said the Kudankulam Nuclear Power Project would be operational anytime soon. “The decision will come anytime now. The reactor is a safe reactor (and there is) no question about it; it is designed with safety features. It depends on the Atomic Energy Regulatory Board (AERB) to examine the test results (and take a call),” Chidambaram said here. He was speaking to the media after an event to mark the 120th birth anniversary of P. C. Mahalanobis at the Indian Statistical Institute, Kolkata. According to Chidambaram, the Nuclear Power Corporation of India Ltd is supposed to provide the test results to AERB. The regulatory body, in turn, will decide on giving a go-ahead, considering whether further tests are necessary or not.
He added that there is a need for convincing the laymen about “probability of safety” of nuclear energy.

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