This document provides a summary of recent headlines in the Indian power sector:
1) The Power Ministry has approved a coal swap agreement between NTPC and Gujarat that will allow NTPC to swap imported coal for domestic coal from Gujarat's Bilaspur mines. This will save on transportation costs for both parties.
2) A new report projects that India will see 900 MW of new solar capacity added this year, lower than previous estimates, due to delays caused by the national elections and uncertainty around proposed anti-dumping duties on solar imports.
3) The central government plans to ensure 24/7 power supply to the states of Delhi, Rajasthan, and Andhra Pradesh but details of
This document provides a summary of recent headlines in the Indian power sector:
1) The Power Ministry has approved a coal swap agreement between NTPC and Gujarat that will allow NTPC to swap imported coal for domestic coal from Gujarat's Bilaspur mines. This will save on transportation costs for both parties.
2) A new report projects that India will see 900 MW of new solar capacity added this year, lower than previous estimates, due to delays caused by the national elections and uncertainty around proposed anti-dumping duties on solar imports.
3) The central government plans to ensure 24/7 power supply to the states of Delhi, Rajasthan, and Andhra Pradesh but details of
This document provides a summary of recent headlines in the Indian power sector:
1) The Power Ministry has approved a coal swap agreement between NTPC and Gujarat that will allow NTPC to swap imported coal for domestic coal from Gujarat's Bilaspur mines. This will save on transportation costs for both parties.
2) A new report projects that India will see 900 MW of new solar capacity added this year, lower than previous estimates, due to delays caused by the national elections and uncertainty around proposed anti-dumping duties on solar imports.
3) The central government plans to ensure 24/7 power supply to the states of Delhi, Rajasthan, and Andhra Pradesh but details of
Power Sector-Technical Services Technical Information Centre
Date: 4.9.2014
HEADLINES:
Power Ministry approves coal swap between NTPC, Gujarat
India to see 900 MW solar capacity addition this year: Report
Centre assures 24X7 power supply to Delhi, Rajasthan, Andhra Pradesh
Hindalco and JSPLs coal mines don't find mention on government's exemption list; face de-allocation
Mumbai: Power outages spark clash among producers and distributors
Energy producers want credible gas pricing policy
Government to take neutral stand in Supreme Court on coal block allocations
Power Ministry approves coal swap between NTPC, Gujarat
The total installed power capacity of Gujarat is 27,647 MW The Ministry of Power is believed to have permitted state- run NTPC to swap imported coal it receives through Gujarat for its thermal plant in Chhattisgarh with the fuel available at Bilaspur mines. In turn, the state can utilise the imported coal for its power plants. Being closer to the sea, Gujarat can save freight cost for sourcing coal from domestic mines, and consume imported coal for its thermal plants. According to sources, Power and Coal Minister Piyush Goyal has approved this arrangement proposed by the state. Countrys largest power producer NTPC operates 2 projects Korba (2,600 MW) and Sipat (2,980 MW) in Chhattisgarh. The total coal requirement of NTPC is estimated to be 177 million tonnes, of which the company will import 17 MT. During 2013-14, NTPC consumed 158.57 MT coal, with imports accounting for 10.39 MT. Chhattisgarh has 16 per cent of the total coal deposits of India. The 12 coalfields, in the districts of Raigarh, Surguja, Koriya and Korba, have estimated reserves of 44,483 MT. Most of the coal deposits are of power grade coal. The total installed power capacity of Gujarat is 27,647 MW. Gujarat Energy Minister Saurabh Patel had approached the central government with the swap proposal in June. The state had also asked the central government to deliberate on the issue of coal quality, pricing of coal and freight cost during that meeting. Source: Nation dt. 4/09/2014 India to see 900 MW solar capacity addition this year: Report India is projected to see a solar power capacity addition of 900 MW this year as uncertainty over anti-dumping levy proposal slowed installation growth.
NEW DELHI: India is projected to see a solar power capacity addition of 900 MW this year as uncertainty over anti-dumping levy proposal, among other factors, slowed installation growth, says a report.
The latest projection from Mercom Capital Group is slightly lower than 1,000 MW estimated by it in May. BACK Revising its solar capacity addition forecast to 900 MW for this year, Mercom said: "delays caused by the elections and uncertainty that surrounded the anti-dumping case have slowed installation growth".
However, Mercom said that it appears 2014 would be the third consecutive year solar installations will come in around the 1 GW mark. So far this year, about 500 MW capacity has been added, it said in a statement.
In the last three months, major factors that impacted domestic solar market include general elections, anti-dumping case and the recent release of draft guidelines for Phase II, Batch 2 of the Jawaharlal Nehru National Solar Mission ( JNNSM).
On August 22, the deadline lapsed for the proposed imposition of anti-dumping duties on cells and modules manufactured in China, Taiwan, Malaysia and the US. As a result, there would be no anti-dumping levy on solar components imported from these nations.
Mercom Capital Group CEO and Co-Founder Raj Prabhu said that although the anti-dumping case affected short-term outlook on installation growth, the end result was good and the new NDA administration was able to take decisive action.
The pragmatic, big picture decision would remove uncertainty and help put the solar industry back on track for sustainable, long-term growth, he added. The group is a global clean energy communications and consulting firm.
Source: The Economic Times dt. 3/09/2014
Centre assures 24X7 power supply to Delhi, Rajasthan, Andhra Pradesh
NEW DELHI: The Centre plans to ensure 24X7 supply of power to Delhi, Rajasthan and Andhra Pradesh.
Interacting with journalists at the BJP headquarters, power minister Piyush Goyal said the government wants to ensure that the national capital, Andhra Pradesh and Rajasthan don't suffer from power cuts. "The government is ready with plans that will ensure that these states have 24 X 7 power supply," he said while refusing to elaborate.
Goyal's interaction was part of the those planned on completion of 100 days by the Narendra BACK Modi government. The minister said he has already met chief ministers of Punjab, Haryana, Jammu and Kashmir, Rajasthan, Gujarat, Jharkhand and Andhra Pradesh besides the Delhi LG on the issue of power. He said he didn't have the opportunity to meet with CMs of Telengana and Uttar Pradesh so far.
He denied that the government is worried of the impact on power sector if the Supreme Court scrapped all the 218 coal block allocations. "The government is ready for any eventuality. We have our plans ready irrespective of any orders. We are waiting for the final court verdict," Goyal, who is also the coal minister, said.
According to him, the government has sped up work on increasing coal production and measures are in place. The minister said the government has also put in a plea to the court to consider exempting 40 coal blocks which are already in production and produced 37 million tonnes of coal last year and are expected to produce 50 MT this year. He said another six coal blocks are ready and their lease for mining is to start. The government will abide by all court orders and has told the court that "If the court desires, it may consider allowing these coal blocks to function".
Asked about possibility of reduction in power tariff, he made it clear that while the government had no way to regulate rates, it planned to make the power production system efficient to increase production and even out the prices.
Goyal mentioned the Centre's policy decision to replace power plants that are more than 25 years old by super ultra critical thermal plants to increase efficiency. Since there are huge costs involved, the Centre could facilitate some of the states, the minister assured.
He pointed out power theft as a major problem in the sector and said one of the effective models to curb the menace has come up in non-BJP-ruled state. Prime Minister Narendra Modi wanted other states to adopt the same measures, he said. Source: The Economic Times dt. 4/09/2014 Hindalco and JSPLs coal mines don't find mention on government's exemption list; face de-allocation Mahan Coal is a joint venture between Hindalco Industries and Essar Power, which have already invested Rs 20,000 crore for setting up end-use plants. MUMBAI/KOLKATA: Eight years after HindalcoBSE -4.05 % Industries was allocated Mahan Coal block to feed its power-hungry aluminium plant in Madhya Pradesh, the Supreme Court may de-allocate the mine after the Indian government did not request the court for its exemption. BACK
Mahan Coal is a joint venture between Hindalco Industries and Essar Power, which have already invested Rs 20,000 crore for setting up end-use plants. With Mahan Coal block's name missing from the list of 46 blocks for which the government requested the Supreme Court for an exemption, the chances of a de-allocation have risen, clouding the long-term viability of the project.
Jindal Steel and Power's Utkal B1 block also did not find a mention in the government list. And just like Hindalco, JSPL too needs access to cheap coal from Utkal B1 mine to make money on its ambitious steel and power project at Angul in Odisha.
JSPL has already pumped in some Rs 30,000 crore at Angul, where it has commissioned 2.5 million tonnes of steel and 810 MW of power capacity with plans to add another 4 million tonnes of steel capacity.
The apex court's ruling last week termed 218 coal mine allocations between 1993 and 2010 as arbitrary and illegal, putting a question mark on the fate of several mines, owned by not only Hindalco and JSPL but also Sesa Sterlite's Bharat Aluminium, National Aluminium and so on.
All these companies are already speaking to the government to look for a resolution.he rest of the miners that have started production of coal or are about to start before fiscal 2015, have to submit an affidavit on the status of coal blocks by Thursday. Hindalco's Mahan smelter is running on imported and domestic coal acquired at market prices.
If it has to continue to do so, the logistics cost of transporting coal to a land-locked state will keep rising ruining the profitability of the plant. It hasn't been able to start mining coal due to local protests and other court cases.
"The government is planning to curtail coal available for e-auction, which will be another problem for Hindalco. It will then have no choice but to import," said Goutam Chakraborty, a metal analyst at Emkay.
"Unless aluminium prices on the London Metal Exchange go up and the premium stays at high levels the project would remain under pressure. But if LME goes down, it will be a double whammy."
Adding to this are interest and depreciation costs which are already hurting Hindalco's profitability. The Kumar Mangalam Birla-controlled company had debt of Rs 63,300 crore as of March 31 on a consolidated level.
Hindalco's only operational mine, Talabira I, which supports existing aluminium operations has been included in the report, according to documents on the coal ministry's website. It is, however, expected to run out of coal in a few years.
Source: The Economic Times dt. 4/09/2014
Mumbai: Power outages spark clash among producers and distributors
MUMBAI: After Tuesday's power outage that plunged many parts of the city into darkness, severe infighting seems to have broken out between power producers and distributors in Mumbai.
While Tata PowerBSE -1.67 % denied that it held BEST to ransom during the power outage by demanding a tariff of Rs 13 per unit for power produced at its oil-based unit 6 of Trombay power plant, BEST officials told ET that the company will not pay higher tariff and will escalate the matter to the Maharashtra Electricity Regulatory Commission (MERC).
Tata Power also refuted in a letter Maharashtra State Load Despatch Centre's (MSLDC) claims, where it questioned the power company's decision to not operate unit 6 despite MSLDC's precise instructions to 'synchronise unit 6'.
MSLDC threatened punitive action against the company under the Electricity Act. "We had a very productive meeting with BEST officials earlier today and there's absolutely no discord. Also, the decision to keep unit 6 on cold till yesterday was taken by the procurer i.e., BEST, as it did not want to incur the cost tariff of Rs 12," said Anil Sardana, Chairman and Managing Director, Tata Power, at a conference held in Mumbai on Wednesday. A senior BEST official, however, denied this, saying, "Tata Power's statement about keeping unit 6 shut at our behest is completely misleading as they have no proof and nothing in writing from us on this issue".
The unit 6 assumes significance in the context of the massive power outage due to the tripping of unit 5 of Tata Power's Trombay power plant. The situation was exacerbated by the fact that two other units, 6 and 8, of the Trombay power station, generating a combined 750 mw, were also not functioning then.
Brihanmumbai Electric Supply & Transport (BEST), which is an undertaking of the BACK Brihanmumbai Municipal Corporation, threatened to take the matter to MERC, and aren't ready to pay the higher tariff. "If they want to shift their unit 6 from oil to coal, that's their problem. We will demand a full inquiry into the outage and the high tariffs," the official added.
Source: The Economic Times dt. 4/09/2014 Energy producers want credible gas pricing policy AOGO said any country looking for private sector participating to explore its vast unexplored basins needs to maintain the sanctity of contract.
NEW DELHI: An association of top energy firms, including Reliance Industries, Cairn and BP has demanded a natural gas pricing policy that is "legitimate, relevant and credible" to maintain investor interest in Indian E&P sector.
In its submission to the four-member panel of secretaries working out a new gas pricing mechanism, Association of Oil and Gas Operators (AOGO) said the government had awarded areas for exploration of oil and gas under New Exploration Licensing Policy (NELP) "on the basis of maximising government share and not lowest price of hydrocarbons."
The Production Sharing Contracts (PSC) government entered into firm like RIL for exploration and production (E&P) provides for marketing freedom to contractors for sale of gas within India at arm's length to the benefit of all the parties to the contract.
The government, as per PSC, has limited role of only "approving a formula or basis for sale of gas," it said, adding, the contract enjoins both government and the explorer to operate on the principle of maximising the total revenue.
A four-member panel of secretaries from different ministries is holding consultations to work out a new gas pricing mechanism, as the Rangarajan formula of doubling rates to USD 8.4 per mmBtu was not acceptable to the new government.
"Subsidies borne by the government are extraneous to the PSC and cannot form any part of the calculus for determining the basis of pricing under PSC," AOGO said.
AOGO said any country looking for private sector participating to explore its vast unexplored basins needs to maintain the sanctity of contract. BACK Domestic exploration can be expedited only if rice is fair and competitive. "There are a number of discoveries that are still awaiting production in the absence of a proper pricing policy," it said. "An artificially fixed intermediate level pricing regime divorced from the market suffers from serious drawbacks."
AOGO said a higher price will substantially increase government revenues from tax, royalty and profit share which can be used to subsidise priority sectors.
"We understand there is already over 10 trillion cubic feet of gas reserves awaiting right price signal for development... These discoveries have potential to add over 70 million standard cubic meters per day of gas production saving almost about USD 16 billion of import bill every year," it said.
AOGO said globally all economies particularly energy deficit ones are moving towards freer market prices. "Gas pricing reforms has been the basis of the shale gas revolution in the US and the country's march to self-sufficiency."
"In Brazil and China, two key BRIC countries with economic conditions similar to India, unlocking of value in the gas sector has been based on market linkages to crude oil prices," it added. Source: The Economic Times dt. 3/09/2014
Government to take neutral stand in Supreme Court on coal block allocations The government will now merely pass on the information collected from the coal-block owners to the Supreme Court during the next hearing on September 9
NEW DELHI: The government will not press its request for sparing 46 coal blocks from cancellation at the next Supreme Court hearing, even as it started identifying mines that would likely become available for auction after the court's judgement.The decision was taken at a meeting held by Coal Minister Piyush Goyal with his ministry's officials on Wednesday, a senior government official said. Last week, the Supreme Court held that the allocation of coal blocks to various firms between 1993 and 2009 was illegal. Following that, the government asked the court to spare 40 producing and six soon-to-be-operational blocks from cancellation, and instead impose penalties on the operators for any wrongdoing while procuring them. Wednesday's decision is a change from that BACK stand.
The government will now merely pass on the information collected from the coal-block owners to the Supreme Court during the next hearing on September 9, which is crucial for the developers as it is probably the last chance for them to save their blocks. The government will submit an affidavit containing names and status of the 46 blocks, but would not bat for them, the official said. "The government has decided to be silent and neutral during the hearing." The coal ministry on Wednesday shot fresh letters to the owners of the 46 blocks asking them to submit affidavits swearing that the information on coal blocks being submitted to the ministry was correct.This is in addition to the information regarding status of their coal blocks sought by the ministry on Monday. Half of the producing 40 blocks are owned by private firms and the rest by state-run companies. Jindal Steel & Power, Steel Authority of India, Prakash Industries, Damodar Valley Corp, Monnet Ispat & Steel, Prakash Industries, Sunflag Industries, Electrosteel Castings and state utilities of West Bengal and Karnataka are among the owners. The six coal blocks that are expected to commence production shortly are allotted to companies including NTPC GVK Power & Infrastructure, Damodar Valley Corp and Jaiprakash Associates The ministry has also sent letters seeking information to state utilities in Rajasthan and Gujarat that operate 15 lignite mines.The official said the coal ministry has started identifying blocks that could come back to its kitty after the Supreme Court's hearing on next Tuesday.\The government's pilot round of coal block auction didn't elicit any response from steel and cement companies, forcing it to scrap the bidding process. The ministry has been looking for mines with substantial reserves and pre-obtained clearances to attract investments.Goyal had on August 25 said the government was prepared to act quickly on the final decision of the Supreme Court. "Decisions will be taken expeditiously to ramp up indigenous production of coal," he said at that time.