KATHMANDU: India and Nepal are holding negotiations to sign a second Project Development Agreement (PDA) to generate hydorelectric power in the Himalayan nation endowed with rich water resources.
The negotiations for the 900 MW Arun-III project between Investment Board Nepal (IBN) and Satluj Jal Vidyut Nigam Ltd, India, which began here yesterday, continued today, Indian Embassy sources said, adding, they are set to continue tomorrow as well.
The format of the PDA will be same as that of 900 MW Upper Karnali project being developed by GMR Consortium of India.
GMR had signed an agreement with the Nepalese authorities in September for the 150 billion mega project.
Under the PDA signed between GMR and IBN, Nepal will get 22 per cent of the energy generated free from the project and 27 per cent free equity share in the project.
The same provisions may apply when Satluj signs a PDA with Nepal.
The signing of the PDA between IBN and GMR was a milestone in hydropower development in Nepal as the agreement paved way for the largest foreign direct investment.
Once the negotiations are over the two countries will sign the PDA for developing the Arun III project in the near future, according to officials. However, the date is yet to be finalized.
The two countries have also signed Power Trading Agreement last month (PTA) that would allow exchange of power between them.
(Source: The Economic Times, November 6, 2014)
UPERC SCRAPS 4 POWER PROJECTS ON NO PROGRESS
LUCKNOW: In another set-back to Uttar Pradesh’s tottering power sector, state power regulator UPERC has scrapped plans for four power projects with an envisaged combined capacity of 2,500 MW due to lack of any progress on the ground. These projects were first proposed in 2010, when Mayawati government was in power and were given two extensions by the present government.
The projects that were cancelled are 250-MW Parekh Aluminex, Barabanki; 600-MW Creative Thermolite Power, Murka; 250-MW Unitech Machines, Auraiya; and 1,320-MW Torrent Power cancelled. The projects continue to lack coal linkages and land has also not been acquired yet.
The regulator rejected the draft supplementary power-purchase agreements (SPPAs) between the UP Power Corporation (UPPCL) and the four private developers after a petition filed by UP Rajya Vidyut Upbhokta Parishad president, Avadhesh Kumar Verma. The petitioner had challenged the government’s repeated deadline extensions for setting up the plants despite the developers not doing any work on the ground.
“The commission has considered all the aspects before arriving at its decision. These plants were nowhere near completion despite two extensions,” AK Srivastava, secretary UPERC, said.
It may be mentioned that while the previous Mayawati government had signed 10 MoUs with private players for setting up power plants with a total generation capacity of 10,970 MW. The MoUs were to expire after 18 months on June 10, 2012, and had a clause that the state government was entitled to seize the bank guarantee submitted by the private players if it failed to get all approvals and begin work on their project within 18 months. Only one project, Lalitpur-I, which is being set up by Bajaj Hindusthan, had made some progress.
The MoU with Creative Thermolite was signed in October 2010, while the other three projects were signed in December 2010. Though all the four projects were to expire in June 2012, the Akhilesh Yadav government granted them an extension of another 18 months after he came to power in March 2012, as all of them got stuck up due to lack of coal linkages, which the private developers had promised to arrange on their own. However, when the state government gave another extension to the projects in December 2013, it was contested by the Rajya Vidyut Upbhokta Parishad.
Interestingly, the regulator granted approval to SPPAs of another four projects — 1,980-MW Lalitpur Power Generation Company; 1,320-MW Himavat Power, Bhognipur; 1,320-MW Lanco Anpara Power, Bhognipur; 1,320-MW Welspun Energy, Mirzapur — which have been able to make considerable headway.
However, speaking to FE, an UPPCL official said, “None of these projects had been allotted any coal linkage and no work had begun. As a result there is no real or actual loss to the state as such, but if one considers the fact that these projects ‘could’ have seen the light of the day and helped dispel the darkness that engulfs the state due to power deficiency, then yes, it is a loss.”
(Source: The Financial Express, November 6, 2014)
POWER REFORMS ON CARDS IN HARYANA
CHANDIGARH: Haryana Chief Minister Manohar Lal Khattar has indicated a thrust on power sector reforms.
Khattar, who also holds the portfolio of minister of power, said in the ongoing Assembly session the transmission and distribution losses of the state power utilities stood at 16 per cent and this plain theft of power restricts the power supply to the end-users.
He said schemes to ensure the efficient management of power sector would be drawn. Khattar also said the Opposition and the general public would be involved in decision-making process of the government.
Addressing the under-utilisation of installed generation capacity in the state, Khattar said the present installed capacity was 5,000 megawatts (Mw) against the demand of 4,000 Mw.
The total number of power plants in Haryana is 20 and on an average eight to nine plants remain functional. The state can have surplus power if the optimum utilisation of the power generation capacity is restored.
The then Congress government in Haryana, led by Bhupinder Singh Hooda, resorted to populism in the past few months.
The open-ended subsidies on power, giveaways such as no tariff revision in the financial year 2014-15 and subsidies to the agriculture consumers put an extra financial burden on the power utilities.
The short-run power liabilities of the state till March 31, 2012, are Rs 18,000 crore. According to the Haryana Electricity Regulatory Commission, Agriculture power subsidy bill of the state amounts to Rs 5,284 crore on June 1, 2014.
To bridge the gap between the average revenue realised and average cost of production, the tariff should have been revised by 52 paise a unit.
The revision was deferred, owing to the impending Assembly elections in the state.
Haryana is an agriculture dominant state and the power availability for agriculture is indispensable for irrigation.
The state is also dotted with the clusters of information technology outfits and automobile manufacturers. The rapid urbanisation of the state also adds to the demand for power every year.
(Source: Business Standard, November 6, 2014)
GORKHALAND TERRITORIAL ADMINISTRATION RECEIVES RS 8 CRORE FOR SIDRAPONG HYDEL POWER PLANT
DARJEELING: The Gorkhaland Territorial Administration (GTA) has received Rs 8 crore from the Centre for the renovation of the Sidrapong hydel project, one of the oldest hydel projects of the country.
Binay Tamang, the Executive GTA Sabha member in charge of Information and Cultural department, said, “In the memorandum of agreement signed with the Centre and the state government, we had demanded that Sidrapong hydel project, the oldest in India, be restored. The Union Finance department has allocated Rs 8 crore for its restoration from the annual central package of Rs 200 crore for the GTA.”
Tamang said the GTA had already received the amount and a meeting would be convened with officials concerned on Friday to draw up a blueprint to renovate the project.
“Once the renovation is complete, we will promote the project as a major tourism attraction,” he added.
The hydel project, situated 12 km from Darjeeling and in the foothills of Arya tea garden, was commissioned on November 10, 1897, by the then acting lieutenant-governor of Bengal, Charles Cecil Stevens.
The power station, situated at an altitude of 3,600ft, is fed by three streams, Barbata, Hospital and Kotwali. It still generates 0.6 megawatt of electricity a day and is currently managed by the West Bengal State Electricity Distribution Corporation Limited.
However, the plant produces power erratically as turbines are old and don’t function properly. Besides, the dam and the powerhouse are in run-down condition.
(Source: The Economic Times, November 6, 2014)
INDUSTRIES WANT DEFERMENT OF POWER TARIFF HIKE TILL APRIL
COIMBATORE: About 20 industrial bodies, under the banner of Tamil Nadu Electricity Consumers Association, today urged the state government to defer till April next the power tariff hike, proposed by Tamil Nadu Electricity Regulatory Commission (TNERC).
The bodies, which met and discussed the issue, were of the opinion that the present proposal to hike the tariff was unnecessary and unwanted, since there could be another revision again in April 2015, association President D Balasundaram told reporters here.
Stating that the tariff revision, as per the Electricity Act, was supposed to take place once in a year in April, he said TNERC has suo moto notified the proposal, cting the revenue deficit of TANGEDCO.
“The hike was announced without conducting enough consultation with consumers and various associated bodies. It was done in haste.
The last revision should have taken place in April this year, for which TANGEDCO had to send a proposal to the Commission in November 2013, but now it has been asked to send the proposal by the end of November for next revision to be taken place in April 2015, he pointed out.
The cost of power in the state had been highest in the country since 2010 except in 2012. Also, transmission and distribution loss had been high in the state for the last 20 years.
(Source: The Economic Times, November 6, 2014)
POWER IS NOT JUST A SUPPLY SIDE PROBLEM
The Tamil Nadu Electricity Regulatory Commission (TNERC) has issued its latest suo motu tariff petition proposing a tariff hike across all consumer categories. This hike could have been substantially reduced had the TNERC made the effort to enforce and implement its own directions given to the Tamil Nadu Generation and Distribution Company (Tangedco) in 2009 and its recent Demand Side Management (DSM) Regulations, 2013.
The application of DSM measures in Tamil Nadu can yield benefits for the State, which has been plagued by acute power shortages for the last few years. Energy demand is expected to be around 14,500 MW while installed capacity is estimated to be 11,000 MW according to Energy Policy Note 2014-15, leading to a shortfall of 3,500 MW. DSM measures can help reduce the electricity shortfall in the short-term, by more than 2,000 MW.
DSM consists of cooperative actions undertaken by the utility and consumers to reduce consumption of electricity. The main goal of any DSM programme is usually to encourage consumers to use less energy during peak hours or to move energy use to off-peak hours. DSM programmes are traditionally implemented for enabling consumers to use electricity with greater efficiency, with the objective of altering the end-use of electricity.
The ultimate aim of DSM measures is reduction of cost of service or price paid by the consumer, without compromising on the quality and reliability of the power being supplied. DSM measures result in (a) lower rate of additions to generation capacity, reducing blackouts and improving system efficiency; (b) reducing expensive imports of fuel and harmful emissions to the environment; and (c) ensuring energy and financial security.
The TNERC had given directions to Tangedco to implement DSM measures in 2009. In 2013, the TNERC brought out the Tamil Nadu Electricity Regulatory Commission (Demand Side Management) Regulations, 2013.
The DSM regulations seek to shift Tangedco from being supply focused to demand focused. It mandates that DSM measures be made part of Tangedco’s long-term power procurement plan and an “integral part of their day-to-day operations, undertake planning, designing and implementation of appropriate DSM programmes” (Section 4).
DSM measures are linked to cost of supply where the utility needs have to consider load management, energy conservation and energy efficiency measures in the tariff petition, and also show the “impact on energy and demand” of such measures through a cost-benefit analysis.
Within the TNERC, a DSM Consultation Committee (DSM-CC) oversees implementation — to advise, approve, review, apprise and promote all activities (Section 2). Within Tangedco, demand side management (DSM) cells will carry out the formulation and implementation of DSM activities and provide consultative services to consumers.
Section 11 mandates the formulation of a detailed DSM Plan together with a description of DSM programmes, implementation, monitoring and reporting and its cost effectiveness. Following approval from DSM-CC, a detailed DSM Programme Document (PD) is prepared by DSM Cells which “will guide implementation, monitoring, review etc. of all the approved individual DSM programmes contained in the plan” (Section 14).
The budget for the DSM Programme will form part of the multi-year tariff (MYT) petition for cost recovery of expenses incurred due to implementation of the DSM Plan.
However, the budget needs to be “substantiated by kW and kWh savings targets”. Tangedco can access international carbon finance and grants under the UNFCCC set of initiatives.
Section 19 directs a third party evaluation of the DSM programmes for evaluation, measurement and verification of savings.
Section 14(4) encourages “DSM measures related to implementation of building Code, use of energy efficient or star rated appliances including agricultural pump sets”. Section 22 suggests using time-of-day (ToD) meters up to Low Tension (LT) services. ToD meters record demand, time, and energy usage and replaces existing electrical meter. The meter benefits both utilities and consumers by decreasing the required capacity/demand and reducing utility bills. It suggests incentives for consumers to purchase the same through a rebate programme.
Section 17 (7) has allowed TANGEDCO to conduct consumer awareness, audits and promote a market for DSM services e.g. buyer-seller meets.
A response to a Right to Information application as on October 2014 states that Tangedco has set up the DSM Cell headed by the chief engineer, Demand Side Management, with nine sub-cells headed by executive engineers at the region level and executive engineers at the circle level as members of the respective sub-cells.
No DSM planning meeting has been held so far. An interim action plan has been given to the TNERC for approval and no action plan is in place. The DSM Regulations state that within one year of the formulation of the DSM regulations, a perspective DSM Plan must be placed for approval.
No load research study has been conducted so far. The design and development of DSM projects including cost-benefit analysis, plans for implementation, monitoring and reporting and for measurement and verification has not been developed by Tangedco.
Earlier, the TNERC had provisionally allowed Rs. 10 crore in the tariff order 2010 for DSM activities. Lack of progress resulted in additional expenses claimed for DSM measures — Rs. 10 crore in the tariff order 2013 being disallowed.
The government, regulator and utilities need to do much more to promote DSM measures to curb energy consumption while promoting energy security for Tamil Nadu.
The writer is with the Citizen Consumer and Civic Action Group (CAG)
(Source: Business Line, November 6, 2014)
CABINET NOD TO HIGHER AUTHORIZED SHARE CAPITAL FOR IREDA
NEW DELHI: In sync with the Narendra Modi-led government’s aim to promote clean energy, the Union cabinet on Wednesday approved raising the authorized share capital of Indian Renewable Energy Development Agency Ltd (IREDA) from the existing level of Rs 1,000 crore to Rs 6,000 crore.
“During the 12th Five-Year Plan, ministry of new and renewable energy (MNRE) has targeted 30,000MW (megawatts) from various renewable energy projects out of which IREDA aims to finance projects of an aggregate capacity of 4,800MW. For this, IREDA would need to mobilize financial resources to the tune of Rs 14,000 crore,” the press statement said.
The Bharatiya Janata Party-led National Democratic Alliance government’s energy security plans include harnessing renewable sources such as solar energy, biomass and wind power along with coal, gas, hydropower and nuclear power to bring about an “energy revolution” in the country.
In another decision, the cabinet chaired by Modi approved the withdrawal of the amendments to the Food Safety and Standards Act, 2014, setting aside the changes proposed by the previous Congress-led United Progressive Alliance (UPA) government.
A government statement said fresh amendments would be made after further consultations in the matter.
The UPA government had proposed amendments to the Act to expand the composition of the Food Safety and Standards Authority of India and dispense with some conditions in public interest while making regulations on food, the Press Trust of India (PTI) news agency said.
The Food Safety and Standards (Amendment) Bill, 2014, needs to be further amended after taking into account the judgements of the Supreme Court, the Lucknow bench of the Allahabad high court and representations received by the government and other recent developments, the PTI report said.
The cabinet also approved a Rs 2,375 crore scheme for revival of 23 unlicensed district central cooperative banks located in Uttar Pradesh, Maharashtra, West Bengal and Jammu and Kashmir.
While the Union government will contribute `673.29 crore, state governments will give Rs 1,464.59 crore and National Bank for Agriculture and Rural Development (Nabard) will contribute Rs 237.54 crore.
“This will result in protecting the interests of depositors and catering to the credit needs of farmers,” the release said.
In another decision, the cabinet on Wednesday approved the signing of a pact between India and Nigeria that will allow the transfer of sentenced persons to the other country to serve out their sentences.
The “signing of the treaty shall facilitate Indian prisoners imprisoned in Nigeria or vice-versa to be near their families, for serving the remaining part of their sentence and shall facilitate their social rehabilitation,” a government statement said.
India has so far signed similar pacts with Britain, Mauritius, Bulgaria, Brazil, Cambodia, Egypt, France, Bangladesh, South Korea, Saudi Arabia, Iran, Kuwait, Sri Lanka, the United Arab Emirates, the Maldives, Thailand, Turkey, Italy, Bosnia and Herzegovina, Israel, Russia and Vietnam, the statement said.
Negotiations for similar pacts have also been concluded with Canada, Hong Kong, Australia and Spain, it said.
(Source: Mint, November 6, 2014)
GOVERNMENT RECONSTITUTES CLIMATE CHANGE PANEL, NO MEMBER FROM INDUSTRY
NEW DELHI: Barely three weeks before crucial negotiations in Lima, the government has reconstituted the Prime Minister’s Council on Climate Change, reducing its size and dropping members, including sole industry representative Ratan Tata and Centre for Science and Environment director general Sunita Narain.
The 18-member council headed by Prime Minister Narendra Modi will, like its predecessor panel, focus on national action for assessment, adaptation and mitigation of climate change. ET had first reported about the Prime Minister’s plan to reconstitute the panel (October 9).
While the council will advise the government on domestic measures on climate change, it is clear from its membership that the deliberations of the panel would feed into India’s stance in the global negotiations. The Intergovernmental Panel on Climate Change said in a report on Sunday the window of opportunity for governments to prevent the severe and irreversible impact of climate change was fast closing.
The reconstituted council comprises mostly the ministers for external affairs, finance, environment, water, agriculture, urban development, science and technology, power, coal and renewable energy, as well as the cabinet secretary, foreign secretary and environment secretary. As in the previous council, ministers handling rural development and industry have been left out.
“The preponderance of government members does not mean that the government is not interested in experts and other voices,” a senior official said. “The panel has been reconstituted in a manner to ensure wider and diverse participation of experts, without additional demands on their time, as would be the case if they were to be full-time members.”
IPCC chief and the Energy & Resources Institute chairperson RK Pachauri, economist Nitin Desai and Chandrashekhar Dasgupta, former diplomat and a member of the Indian climate change negotiating team up until the Copenhagen round of talks in 2009, were retained.
Ajay Mathur, director general of the Bureau of Energy Efficiency, also remains on the panel. Mathur was a member of India’s negotiating team in Durban and the key architect of the climate technology arrangements set up under the United Nations Framework Convention on Climate Change (UNFCCC).
The new entrant to the panel is JM Mauskar, former co-chair of the Ad-hoc Working Group on the Durban Platform, under the aegis of the UNFCCC. Mauskar, a long-standing member of the Indian negotiating team, was special secretary in the ministry of environment and forests.
The panel is left with no industry representation after Tata was dropped. Industry is a key stakeholder in addressing climate change, especially since the focus will be on increasing the share of renewable energy and introducing mandatory energy efficiency norms in manufacturing processes, buildings and appliances.
“The government has opted not to name any one member of industry to allow for wider and more focused participation.
This will allow for the government to invite representatives of the different sectors to join the panel’s deliberations on a sustained and fruitful basis,” official sources told ET.
Countries have agreed to put in place a new global compact to address climate change and limit its impact by December 2015 in Paris. As part of this effort, each country is expected to put forward efforts and actions to tackle climate change.
There is some apprehension that the choice of members may preclude a more pro-active engagement by India at the climate talks.
(Source: The Economic Times, November 6, 2014)
HOPING TO SEE SUZLON MAKING PROFTS AS EARLY AS NEXT FINANCIAL YEAR, SAYS TULSI TANTI
NEW DELHI: Bullish on the domestic clean energy market, wind power equipment manufacturer Suzlon’s founder Tulsi Tanti hopes to see his company out of red and making profits as soon as next financial year.
“The last quarter of this financial year we’ll be very close to getting out of red and by next financial year we’ll be in, let’s say, green…I don’t like the word black. Let’s say green,” Tanti told ET.
The company, which is the fifth-largest wind energy equipment manufacturer in the world, reduced its losses year-on-year in September quarter to Rs 656 crore, down from Rs 782.37 crore in the same period last year. Shares of Suzlon rose 4.55 per cent to close at Rs 14.01 on Wednesday.
Betting big on India’s clean energy growth story, Tanti thinks that the ratio of his group’s revenues at 60:40, coming respectively from its German arm Senvion and Suzlon, will change to 50:50 in future as the domestic market will be more promising. The company currently has an order book of 4.6 gigawatt valued at Rs 38,000 crore.
Not only does the company see onshore and offshore wind energy potential in India at 200,000 megawatts but also thinks that 10,000 megawatts more of wind energy can be added within three years, given the government addresses a few glaring bottlenecks.
“Interest cost is very high for us. If the government can reduce interest cost by 5 per cent and also double generation based incentive ( GBI) to Rs 1 by using the money from clean energy fund, the cost of energy will go down making it lucrative for consumers,” Tanti said, adding that with such cost restructuring, capacity can be added quickly.
He also said that increasing the period of financing from 12 years to 20 years will also be helpful to reduce cost of clean energy for consumers as project developers will not be under pressure to amortise projects soon.
The company foresees 24 per cent increase in wind installations adding 4,000 megawatts by 2017.
(Source: The Economic Times, November 6, 2014)
COAL BLOCK AUCTIONS: HIGHEST BIDDER TO PAY 10 PER CENT OF NET PRESENT VALUE UPFRONT TO GOVERNMENT
KOLKATA: The government has decided to auction 74 coal blocks, on the basis of the amount of money a bidder is willing to pay the Centre for every tonne of the fuel produced.
The floor price for each tonne of coal, specific to each block, will be calculated on the basis of their net present value (NPV) — the current valuation of future earnings from each coal block.
The highest bidder needs to pay 10% of the total NPV for a block upfront to the government. The rest will be paid over the life of the block depending on the volume of coal it is expected to produce each year and the price the company had quoted for each ton.
The coal ministry had asked a public sector unit to calculate NPVs for 32 blocks that have not started production. These blocks have stage 1 and stage 2 environmental clearances from the government. However, eventually, all blocks, including 37 producing blocks and another five that are ready to produce will be auctioned under the same model.
“We have been asked to submit the data for the non-producing 32 blocks to the government by November 10. It is a mammoth task and all our officials are burning the midnight oil to collate data and compile them,” a senior company executive told ET.
Coal block auctions: Highest bidder to pay 10 per cent of net present value upfront to government “We are in touch with the Coal Controller for collating data. The ministry has also asked previous block owners to provide data.”
The net present value will be arrived at by evaluating total revenue the block will earn over its life by selling coal over the next 30 years, minus expenses it incurs, including infrastructure cost and costs involved in moving the coal. This value will be discounted by an estimated inflation rate for the next 30 years, and its present value will be arrived at. The NPV will then be divided by the volume of coal that the block is expected to produce in its life time and a per-tonne net present value of coal will be arrived at.
Ninety percent of the NPV of one ton of coal will be the floor price for auction for each block.
“The deciding factor, in evaluating NPVs is the benchmark price of coal. The centre has not conclusively decided on any benchmark price for such coal till now. There are two options for the government. Consider prices of international coal from countries like Indonesia for thermal coal or Australia in the case of coking coal or consider prices of domestic coal,” said the official cited above.”The floor prices will be higher in case international coal prices are considered than floor prices arrived at by considering domestic coal prices. Coal India’s coal sells at 30-40% discount over international prices,” he said.
This is in fact the same model that the earlier government planned to implement for auctioning three coal blocks for non-power companies.
However, the auction was cancelled as the Supreme Court had ruled against coal block allotments.
(Source: The Economic Times, November 6, 2014)
