Monthly Archives: August 2013

Loss on subsidised fuel sale could touch Rs 1.8 lakh crore: M Veerappa Moily

Battling double whammy of dipping rupee and surging global oil rates, Oil Minister M Veerappa Moily has written to Prime Minister Manmohan Singh saying without corrective steps losses on sale of subsidised fuel sales will rise to unprecedented Rs 1,80,000 crore. In a detailed note, Moily told Prime Minister that rupee has dropped from Rs 54.45 to a US dollar in 2012-13 to Rs 68.36, raising cost of importing oil. “If the present position persists, the total under-recovery (revenue loss) would reach to a level of Rs 1,80,000 crore in the current financial year as compared to Rs 1,61,000 crore during 2012-13,” he wrote to Prime Minister on August 30. Losses on diesel sales at government-controlled rates have widened to Rs 10.22 per litre from Rs 9.29 a litre at the beginning of the month and less than Rs 3 per litre in May, even as prices are raised by 50 paise a litre every month. Besides, the oil companies lose Rs 33.54 per litre on kerosene and Rs 412 per 14.2-kg cooking gas (LPG) cylinder.

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Power Grid preparing road map for SAARC electricity grid

State-run Power Grid is preparing a road map for setting up an electricity grid to connect SAARC nations including Pakistan and Sri Lanka. The feasibility study for an under sea line with Sri Lanka is being finalised, according to transmission utility Power Grid Corp. In its annual report for 2012-13, the company said it continues to play an active role in “preparing a road map for developing South Asian Association for Regional Cooperation (SAARC) market for electricity to develop a cross country power grid”. The proposed cross country grid is being envisaged for harnessing each SAARC nation’s capacities and resources to address growing energy needs in the region. India, Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka are part of SAARC. Among others, India plans to export electricity to Pakistan. “… discussions at government level are being held for interconnection between India and Pakistan through Amritsar (India)-Lahore (Pakistan) line,” the report said. For interconnection between India and Sri Lanka, feasibility study for a 400kV, 500/1,000 MW under sea HVDC bipole line is under finalisation, the report said.

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CIL falls below IPO price on share sale concerns

The Coal India Ltd (CIL) stock on Friday slipped below its initial public offering (IPO) price, after the government appointed merchant bankers to manage the company’s share sale. In intra-day trade, the stock touched a record post-listing low of Rs 238.35, before recovering about five per cent to settle at Rs 250.5 on BSE.

In October 2010, the Centre had sold 10 per cent stake in CIL through an IPO, at Rs 245 a share. To narrow its fiscal deficit for this financial year, the government is considering selling another five per cent stake in the coal miner.

On Thursday, the government appointed seven bankers, including Goldman Sachs, Credit Suisse and Deutsche Bank, to manage thestake sale in the company.

Experts said concern on further disinvestment in CIL by the Centre was weighing on the stock price. Typically, the market hammers the stocks of public sector undertakings on news of disinvestment. Government-run companies, including NTPC, Hindustan Copper and Steel Authority of India Ltd, have seen erosion in their market capitalization following news of disinvestment.

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DoT for running towers on renewable energy

Concerned over the widespread usage of diesel by over six lakh telecom towers in the countrythe telecom department is working on running towers on renewable energy, starting with non-grid areas.

Telecom companies are estimated to be the second-biggest consumers of diesel in the country, behind only the railways. Apart from leading to high carbon emissions, diesel usage by telecom towers is also a big drain on the exchequer as the loss to the government on account of the cheaper fuel is pegged at over Rs 4,500 crore.

The Department of Telecom (DoT) has initiated projects in non-grid areas in around 20 states where they power the towers using green energy sources like solar panels and wind energy. The tests have been found to have “worked out well” and there are now plans to actively spread them to more regions, sources said.

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Bengal to implement solar RPO this year

In a bid to boost non-conventional energy production, the West Bengal government is set to implement the solar renewable purchase obligation (solar RPO) this year, a minister said Friday.

The RPO mandates that every company generating, distributing and consuming power has to source around nine percent of its energy from renewable energy components.

“The solar RPO will be implemented this year. The state Electricity Regulatory Commission (ERC) has not said anything on the penalty issue but it will be brought into effect by next year,” said Power and Non-conventional Energy Sources Minister Manish Gupta.

He was speaking on the sidelines of the “Energy Sustainability Conclave 2013: Energy Security-Empowering the Energy Future”, organised here by the Bengal Chamber.

Renewable or non-conventional energy resources include wind, solar, hydro and biogas.

The solar RPO policy devised for all the states, determines the amount of renewable energy production target to be achieved by each state and the country. It is part of the National Action Plan on Climate Change.

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Around 27 power units face problems in signing FSAs with CIL

Around 27 power units face problems in signing fuel supply pacts with state-owned Coal India (CIL) due to the absence of letters of assurance, ownership issues and non-achievement of milestones. “There are around 27 power units which are facing problems in signing of fuel supply pacts. While in some cases there is a problem of change in ownership, in others it is non-achievement of milestones,” a source said. Citing examples, the source said, “While Talwandi Power is facing problem in change of ownership, R K M Powergen has not achieved milestones.” The source added that some power plants are reluctant to sign fuel supply agreements (FSAs) because they don’t have power purchase agreements. The units are also required to have letters of assurance from the Coal Ministry on fuel linkages. CIL has to sign 173 FSAs with power companies for a total capacity of 78,000 MW by the month end, as directed by the Coal Ministry on July 17. The CIL board had on August 3 approved signing of FSAs for a capacity of 78,000 MW instead of 60,678 MW earlier, the source added. The capacity of 60,678 MW was the projected requirement for 131 power plants commissioned or to be commissioned by March 2015.

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8 social venture funds that invest in India’s clean energy sector

On July 30th and 31st,India suffered the world’s biggest blackout, which left more than 600 million people without power, leaving the government shamed. Despite being the world’s second most populous country, its share in world energy consumption stands at a meager 4.2%, The International Energy Agency (IEA) estimates that India needs an investment of at least $135 billion to provide meet the energy needs of its population. However, it has a significant renewable energy power generation potential; solar energy is a source with the highest attractiveness in the country, and is among the 15 most attractive countries for renewable energy. Despite an increase in the installed capacity of power through conventional energy sources and the National Solar Mission launched in 2010, India is energy-deficient. About 400 million people have no access to the power grid and therefore rely on kerosene, which is hazardous to health and releases tons of carbon dioxide in the atmosphere. Energy access is poorest in remote and rural areas: overall electricity access of rural households has increased from 36% in 1994 to only 56% in 2011. However, electricity access is limited even in electrified villages due to inadequate generation and distribution infrastructure. Ensuring a lasting supply of clean energy becomes a prime requirement to promote inclusive growth. The good news for the country is that its energy needs can perhaps be fully met entirely by solar and other renewable sources.

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UPERC accused of having double standard on petitions

LUCKNOW: The Uttar Pradesh Electricity Regulatory Commission (UPERC) had cited the absence of a full member board for not taking up petitions pertaining to power tariff revision. But in a surprising move, the Commission set aside this reason and took up the petitions of some industrialists regarding their private profitability issues on Thursday.

The UPERC hearing has stirred a controversy with its secretary objecting to it. UPERC secretary AK Srivastava termed the Thursday hearing as “discriminating with previous petitions” which sought review of the power tariff. The tariff was raised by about 30-40%, mainly for domestic consumers, in June.

The UPERC has been without a full time chairman and a member for nearly eight and three months respectively. In fact, this was the key reason cited by the lone member, Meenakshi Singh, for not taking up petitions pertaining to tariff hike and public grievances. Instead, Singh had suggested that such issues be “put before the next Commission”, which has a chairman and at least two members.

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Power Plus Solar : The journey So Far and Road Ahead

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Govt not considering subsidy to coal importing power cos: Jyotiraditya Scindia

The government is not considering any subsidy to power generators or hiking power tariffs to lessen the financial burden of costly coal imports, power minister Jyotiraditya M Scindia said on Thursday. However, cost of imported coal is to be considered for pass through to consumers as per modalities suggested by the Central Electricity Regulatory Commission, he said in a written reply to the Lok Sabha. The coal ministry has issued orders supplementing the new coal distribution policy while the power ministry has issued appropriate advisory to regulatory commissions to consider the request of individual power producers to decide for pass through of higher cost of imported coal on a case-to-case basis, Scindia said. “There is no such proposal under the consideration of Central Government to provide subsidies to lessen the financial burden on coal importing power generators as well as hike the power tariff to make generation of electricity from imported coal more viable,” he said. Price of imported coal depends upon various factors such as heat value, moisture content, ash content, source of origin, ocean freight, etc. and varies from week to week. The price of domestic coal also varies from mine to mine depending upon grade of the coal, he said.

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