Tuesday / June 18.


egNEW DELHI: A visiting US team has told Indian negotiators it would link pacts on the power sector to the agreement the two countries draw on climate change and one would not happen without the other.


This message was conveyed by the US team to India in a meeting held with the power ministry on Wednesday. Power Minister Piyush Goyal and other ministry officials attended the meeting.


The US team, headed by Todd Stern, the US special envoy on climate change, also called on Environment, Forests and Climate Change Minister Prakash Javadekar in its bid to stitch an agreement on various climate change issues.


Sources said the meeting with the environment ministry focused on areas where the two countries could sign pacts for cooperation; these included air pollution abatement and developing baseline data on carbon emissions from forestry sector and smart grids.


With the power ministry, the US asked for a better investment environment in India. The Indian side in return asked the US to suggest specific projects and areas where it would like to bring in technology. Energy efficiency and investing in smart cities are two areas of convergence that the delegations are expected to firm up deliverable projects on under Indo-US agreements. While India has conveyed that it was not ready to accept a binding target on energy efficiency in the building sector – a demand the US has made often at various forums – it is keen to work with the US on a programmes in the sector that do not force greenhouse gas emission reduction commitments.


The trade dispute between the two countries about restrictions India imposes on imported solar power equipment was also part of the discussions. The US has taken India to the WTO dispute settlement mechanism on it. It was decided to also engage on the issue bilaterally even as the WTO mechanism takes its time to play out.


The US delegation also put forth its views on the negotiations of the 2015 UN global agreement on climate change with Javadekar. The basic negotiating draft for this agreement is to be prepared by the end of 2014 with a series of high profile meetings scheduled across the world before that. The meeting with the minister was followed by the meeting of the Joint Working Group of the two countries on climate change, which had officials from various Indian ministries on board too.


The US delegation, sources said, expected a ‘dynamic’ interpretation of the principle of common but differentiated responsibilities under the new climate agreement. It implies India and other emerging economies take on greater burden of emission reduction under the new agreement than is required under the UN climate convention.


Javadekar and his team expressed their reservations on the issue, pointing to the fact that developed countries were required to show leadership under the convention and India was against breaking the existing embedded differentiation between rich and developing countries. Javadekar also insisted that the principle of equity needed to be adhered to while distributing the burden of reducing emissions globally.


Sources said India did convey that an implicit differentiation of commitments would naturally be visible when the countries submit their “contributions” to reducing emissions in March 2015 – the deadline set at the UN conference. At the last UN talks, all countries have agreed to table the menu of “actions” that they are willing to take under the new climate agreement, though, strong disagreements remain about the nature of “actions” that must be submitted.


A decision was also taken by the US and Indian teams to have structured bilateral discussions on the contentious issue of refrigerant gases that cause global warming and their replacement. The US has been pushing India hard to agree to make the transition to alternatives, some of which are proprietary technologies of US-based chemical companies. The move ranks high on US President Barack Obama’s agenda but it remains a non-negotiable issue for India, which insists such a deal must come along with the global comprehensive climate agreement in 2015 or after. A source said the US delegation surprisingly did not spend time too much time on the issue in the hour-long meeting. In the past, US climate delegations have put tremendous diplomatic pressure on India to accept its terms.


A senior official present at the meeting said, “While the details of the agreements are being fleshed out between the two sides and these make all the difference on the climate change front, there are areas of technical cooperation that we are happy to work on bilaterally. Naturally, both sides will be mindful of each other’s red-lines.”


Another official, who was party to the discussion, said, “It was a relatively short meeting with each side only touching upon their positions on climate change. There was no detailed dialogue at the moment on the contentious bits but both sides also saw some common grounds progressing towards the 2015 agreement.”


One of the common grounds India has found with some developed countries, including the US, concerns how the voluntary pledges of the countries under the new climate agreement would be reviewed or revised. But wide disagreements remain between the two countries on whether the main 2015 agreement should be only about emission reduction or be a balanced package containing commitments on finance, adaptation and technology as well.


The backroom negotiations between the two sides continued on these possible agreements on Thursday, even as US Secretary of State John Kerry arrived in India.

(Source: Business Standard, August 1, 2014)




BANGALORE: Given the fluctuating cost of raw material, the Karnataka Electricity Regulatory Commission (KERC) has sought the views of stakeholders to fix fuel costs for biomass-based power plants.


The Commission, in a ‘discussion paper’, has said that in Karnataka power is generated using agro-waste from cotton/ prosopis juliflora / jowar stalks/ paddy husk, and so on. Through the alternative use of biomass in brick kilns and other industries it has led to erratic biomass prices, leading to cost variation in power generation.


Karnataka has an estimated biomass power generation potential of 1,000 MW, in which power projects of about 90 MW have been commissioned and over 300 MW has been allocated to prospective developers.


Less than 10 per cent of the potential for power generation by biomass has been realisedin the State. Some of the biomass units have stopped operations, either due to non availability of fuel or on account of the high fuel prices pushing up the cost of generation.


To address this issue, KERC in 2013 had asked The Energy Research Institute (TERI) to study the operation of biomass-based generation projects.


According to TERI, of the nine plants commissioned, only six are in operation. Five of the six plants are situated in paddy-growing areas and primarily use paddy (rice) husk as the major fuel.


Due to alternative uses of rice husk (like brick kilns), the price is reported to have increased from Rs. 1,800 in FY09 to Rs. 2,500 per tonne in financial year 2013. TERI also noted that, in Karnataka the biomass fuel price varied from Rs. 1,400 per tonne for chilli stalks to Rs. 2,500 per tonne for rice husk, and that fuels such as prosopis juliflora cost less than Rs. 1,000 per tonne.


With this price variation as the base, TERI has recommended a two-part tariff for biomass projects, keeping in view fuel cost variability.


The Commission has sought information from stakeholders on whether the biomass fuel price needs to be revised upwards for all existing biomass power projects. And, if so, what the base price in FY15 should be.


Other issues are: whether the biomass fuel price has to be indexed as specified by CERC instead of setting a flat rate of annual escalation. And, if so, what parameters need to be considered. Another issue is whether the tariff for biomass power plants should be two-part, instead of the existing single-part tariff.

(Source: Business Line, August 1, 2014)





MUMBAI: NTPC, the largest thermal power producer in the country, registered a decline of 13 per cent in profit, owing to new tariff regulation.


The unaudited profit after tax stood at Rs 2,201 crore for the first quarter of financial year 2014-15, compared to Rs 2,527 crore in the corresponding quarter of the previous year.


The company’s stock fell by 3.01 per cent corresponding to announcement of its first quarter results. The company cited the decline in profit is due to the implementation of new rate guidelines as suggested by central electricity regulatory commission.In a statement issued on Thursday, NTPC said under the new regime, almost 53 per cent of energy sent out has negative contribution on the financial incentives.


The new tariff guidelines expect the power producers to avoid any retrospective adjustment, including any change in the projected capital expenditure.


NTPC gross power generation for the quarter grew to 63 billion units from 57 billion units of previous corresponding quarter, up by 10.7 per cent.


NTPC currently has an installed capacity of 43,128 Mw. Its coal based power stations clocked plant load factor of 84.29 per cent, an increase of 5.2 per cent, compared to the previous corresponding quarter.


The unaudited total income increased by 15.2 per cent to Rs 18,885 crore in the first quarter of current financial year, in comparison to the Rs 16,391 crore reported for the corresponding quarter in the previous year.

(Source: Business Standard, August 1, 2014)




LUCKNOW: Paschimanchal Vidyut Vitran Nigam Limited (PVVNL), the power distribution company for western Uttar Pradesh, is likely to introduce a smart electricity management system to tide over the losses arising out of power pilferage.


PVVNL managing director V V Pant told Business Standard, “We have got encouraging results in the pilot project and now plan to introduce it in more areas.”


He said the system would be launched commercially after the pilot project meets all the stipulated parameters and milestones. Later, a tender process would be taken up, which could take about two months.


The new system incorporates power theft detection with real-time alerts, which would help curtail commercial losses. Besides, wrong reporting of meter status as well as incorrect and incomplete meter reading would be addressed.


The system is expected to introduce transparency by eliminating wrong billing.


A private company has joined hands with PVVNL for the pilot project.


The aggregate technical and commercial (AT&C) losses in the 14 districts incurred by PVVNL were high. AT&C losses are the sum total of technical losses, commercial losses and shortage due to non-realisation of the total billed amount. It also includes power theft and losses during transmission and distribution of power.


The AT&C losses for the state of UP stood at a whopping over 30 per cent during 2013-14.

(Source: Business Standard, August 1, 2014)





MUMBAI: Anil Ambani-controlled Reliance Power has initiated early stage discussions with Temasek Holdings, the Singapore government-owned investment firm, to raise up to $500 million and tie up funding for the three Jaypee Group hydroelectric power assets that it’s acquiring.


A clutch of other marquee global pension and infrastructure focused funds have also been tapped as RPower begins to firm up its funding strategy for the Rs 12,300-crore ($2 billion) acquisition – the biggest in the domestic power sector as well as for the entire group.


Other than Temasek, Reliance is also in discussions with Canadian pension fund giant PSP Investments and homegrown PE firm IDFC Alternatives, part of infrastructure finance company IDFC, for equity funding, added the people cited above. Relaince Power in talks with Temasek Holdings and PSP Investments to fund Jaypee Group deal Both had joined Abu Dhabi’s TAQA as 49% financial investors in a consortium that had agreed to buy the same hydro assets in March.


Last Thursday, in a sudden move, TAQA pulled out of the deal, citing a global “shift in strategy.” PSP is believed to have shown its readiness to offer up to $1 billion dollars of funding to Ambani last week. The commitments till date far exceed the actual funding requirement, so the final disbursals may actually be a lot less.


However, the talks are still in early stage. The Anil Ambani-led Reliance Group plans to raise Rs 9,500 crore debt on the back of cash flows of the Jaypee assets that have already touched Rs 800 crore in FY14.


Additionally, it will infuse Rs 2,500 crore as equity. But there are no plans to raise equity at RPower. Instead, the company may offer minority stakes to financial investors such as long-only pension, sovereign funds or even infrastructure-focused PE firms at a 100% dropdown subsidiary, Reliance CleanGen (RCL), the vehicle used to acquire the Jaypee assets.


The plan is to club the three operating Jaypee assets with the three that RPower has in its own portfolio and bring them all under the aegis of Reliance CleanGen. The company may eventually need only Rs 1,000-1,500 crore equity funding from outside sources.


The rest will be funded with its cash flows, reserves and accruals.

(Source: The Economic Times, August 1, 2014)




HYDERABAD: Tata Power Company has set a target of commissioning at least 150 MW of wind farms and 50 MW of solar projects during the year. Rahul Shah, Chief, Business Development, India Business and Renewables, says Tata Power is keen on advocating a policy structure based on predictable tariff and faster approval that enables the growth of renewable energy in the country.In an interview with Business Line , Shah explains how the company is looking at both organic growth and setting up projects while being open to acquisitions. The BL queries on the company business were initially answered by Anil Sardana, Managing Director, Tata Power, through an email interaction, followed by a telecon with Shah. Edited excerpts:


What are your plans in the renewable energy sector ?


The goal is to set up 150-200 MW of wind energy and about 50 MW of solar every year. This can come through new sites that the company develops or through acquisition of operating projects.


The company currently has around 450 MW of operating hydro, 126 MW of hydro in Bhutan in joint venture with the Government of Bhutan that is very close to commissioning and 421 MW of hydro under development in Himachal Pradesh and around 185 MW of hydro under construction in Georgia.


Tata Power commissioned a 28-MW solar project in Satara two months ago. Some wind projects are under construction in Maharsahtra and Gujarat.


Has the cost of developing wind projects stabilised?


The company is constructing a 240-MW wind project in South Africa through a joint venture. Wind projects generally require about Rs. 6.5-7 crore per MW and solar projects work out to around Rs. 7-8 crore per MW. Four years ago, it was Rs. 18 crore per MW. The cost of setting up wind and solar projects has stabilised now. Tamil Nadu, Karnataka, Maharashtra, Gujarat, Rajasthan, Andhra Pradesh and Madhya Pradesh are among the States with wind power generation capacity. Apart from Andhra Pradesh and Madhya Pradesh, these States have seen a lot of addition of wind generation capacity and they have already met the mandated RPO (renewable energy purchase obligation) compliance.


There seems to be a concern about implementation of RPO.What is your assessment?


The RPO mechanism is well thought out. Unfortunately, the health of the distribution companies in various States has not allowed the regulators to ensure RPO compliance. As a result, a lot of projects are being affected because the Renewable Energy Certificates (RECs) they generate do not have demand.


By when do you see the grid parity coming through?


Renewable energy makes eminent sense in spite of the initial cost. The cost of conventional power will keep rising whereas once you have taken the renewable energy plant then you are going to get power at the same cost for the next 25 years.


Already the tariffs in some States, when it comes to supply to commercial and industrial sectors, are on par with wind and solar power generation. With the return of the accelerated depreciation as an incentive for wind, the capacity addition in the country will go back to about 1500-2000 MW per year.

(Source: Business Line, August 1, 2014)





CHENNAI: The Central Government proposes to tap the solar and wind energy potential lying unexplored in deserts in the country.


The ministry of new and renewable energy has assigned a study to the Power Grid Corporation of India Ltd (PGCIL) to identify likely renewable power potential in desert regions, Piyush Goyal, minister of state for power, coal & new and renewable energy (independent charge), has said.


PGCIL will identify potential regions in Rajasthan ( Thar), Gujarat (Rann of Kutch), Himachal Pradesh (Lahul & Spiti) and Jammu & Kashmir (Ladakh), according to an official release.


In December 2013, the PGCIL submitted a study report titled “Desert Power India- 2050″ assessing renewable power potential, transmission infrastructure requirement and balancing reserve in the identified desert regions. The report has assessed a total available potential of 315.7 GW of solar and wind power in these regions.


The report has further estimated that the investment requirement for harnessing the available potential till 2050 would be Rs 43,74,550 crore, the minister is quoted as saying in the release.


This announcement comes just weeks after finance minister Arun Jaitley said in the budget speech that one of the country’s four ultra-mega solar power projects would come up in Ladakh.

(Source: The Times of India, August 1, 2014)




NEW DELHI: The Indian Solar Manufacturing Association and KPMG have called on the Government to provide support to domestic solar power equipment manufacturers.


The two have drawn a similarity between solar manufacturing and the electronics manufacturing industry and recommended that the Government aid be provided to solar manufacturers, in a study released on Thursday.


“The country imports over $30 billion of electronic goods annually making it the fourth largest item in import basket contributing to 23 per cent of trade deficit. This situation could have been prevented, if the electronics industry was supported during the nascent stage,” the ISMA-KPMG study points out.


ISMA’s President Ashwani Sehgal said in a statement that like China, Japan and the US, India too should give incentives such as reduced interest, credit guarantees, capital subsidies, tax holidays, anti-dumping measures and preferential domestic procurement to domestic manufacturers.


“Indian solar manufacturing is competitive but suffers due to lack of incentives that are provided to other nations.


Forty per cent of Indian solar producers have shut down with the industry utilisation at just 21 per cent,” Sehgal said.


The study states thatsustainable domestic manufacturing for solar power equipment can help save $42 billion of equipment imports, create 50,000 direct jobs and 125,000 indirect jobs as India is estimated to install 100 GW of solar capacity by 2030.


“Supporting domestic manufacturing industry could result in moderately higher price of solar power in the short run but the cost curve would fall in the medium term as scale and supply chains develop,” said Santosh Kamath, Head of Renewable Energy at KPMG.

(Source: Business Line, August 1, 2014)




CHENNAI: US-based First Solar, one of the world’s leading solar module manufacturers and solar power plant owners, says it is willing to facilitate funding for micro-grid based rural electrification projects in India.


Solar plant-local grid combination is seen as a solution to the vast number of villages that have none or no meaningful electricity. A few hundred villages have been provided solar-based electricity by companies such as Mera Gaon Power, a start-up, and Minda NexGen Tech of the Minda group. But the challenge (and the profits) lies in scaling it up.


Government data show that 95.65 per cent of the 5.9 lakh villages have been “energised”, but to come under that definition it is enough if only 10 per cent of the households get electricity. Some 400 million Indians are said to be without electricity.


Minda NexGen Tech has done about 250 installations. However, all but one-tenth of them have been bought by companies to fulfil their CSR.


The scale-able model is where a village entrepreneur buys the solar-micro-grid system and supplies electricity to villagers, who pay him out of what they save on kerosene. “Funding is not there for the entrepreneur-model,” says Praveen Bhasin, who heads the business in Minda NexGen.


Entrepreneurs have skills but no money, large companies have access to money. “Conversely, large corporates who have access to institutional capital have not been successful in creating such assets and running them profitably in remote areas,” notes Sujoy Ghosh, Country Head, First Solar.


First Solar’s solution is to facilitate funding. “What we need is a framework that will allow both the entrepreneurs and the big corporates to co-exist. This framework is what we intend to pilot,” says Ghosh.


Many solar biggies in India are eyeing the micro-grid space. They know there is a pot of gold at the bottom of the pyramid but not quite how to get at it.


American company, SunEdison, which is the largest foreign owner of solar power plants in India, has just won a mandate to put up micro-grids in seven villages in Madhya Pradesh (159 KW of capacity) and 54 villages in Andhra Pradesh (241 KW), through the respective State tenders. Here, the systems are subsidised by the government.


Another US-based company, Azure Power, is examining the viability of micro-grid projects with a view to building and operating them (as opposed to selling the systems to local entrepreneurs).


Welspun Energy, India’s largest solar power plant owner, is doing a pilot and intends to scale-up.


For these large companies it would not make sense to get into this low-revenue business unless they do thousands of micro-grids. This means that a lot of funds are set to flow into this business — whether the companies’ own funds or institutional finance facilitated by them.


“If the commercial viability is established it is a good opportunity for micro finance institutions,” says PN Vasudevan, Founder and Managing Director of IFC-backed Equitas Micro Finance Pvt Ltd.


Up till now, solar-micro-grid has mostly been CSR activity. The migration of ‘solar plus micro-grid’ based rural electrification from CSR to commercial space is one of the mega trends in the Indian solar industry today.

(Source: Business Line, August 1, 2014)





NEW DELHI: Government has set a deadline of next month to constitute a panel of third party sampling agencies amid allegations that stones were being dispatched by Coal India Ltd even after the introduction of the mechanism to assess the fuel quality.


“A panel of third party sampling agencies is to be prepared and the consumer shall appoint his sampling agency from the panel,” said a source, adding that the deadline for the same is “August 31, 2014″.


The issue of fuel quality being supplied to the power plants had also cropped up in the presentation on coal sector earlier made to the Prime Minister Office.


Coal and Power Minister Piyush Goyal had last week said in a written reply to the Lok Sabha that to address the issue of fossil fuel quality, third party sampling and analysis facilities at loading ends have been introduced, and the process is being further streamlined.


He was responding to a query on any tiff between the two PSUs in regard to conducting the tests of samples of coal by a third party.


The issue of third party sampling of coal had also come up for discussions during the Coal India board meeting held this month.


Finance Minister Arun Jaitley during his Budget 2014-15 speech had said that stringent mechanism for quality control of coal were being put in place.


A system for third party sampling of coal is already in place since October last year at loading points.


The Power Ministry had earlier alleged that stones and boulders were still being dispatched to the power plants.


“Supply of excessive stones and boulders especially from BCCL (Bharat Coking Coal Ltd), a Coal India subsidiary, is a matter of concern. It results in high detention of railway rakes and damage to coal handling system of power plants,” said a Power Ministry document.


The mechanism could not address the quality issue and so there is a “need to be done at unloading point”, it said.


The issue of coal quality last year had resulted in a standoff between the country’s largest power producer NTPC and the world’s largest coal producer CIL.


After the government intervened, it was decided that a third party mechanism would be introduced to check coal quality.

(Source: The Financial Express, August 1, 2014)




NEW DELHI: The government is preparing a draft policy on underground coal gasification, Coal and Power Minister Piyush Goyal said today.


“A draft policy is under formulation for development of Underground Coal Gasification from unexplored coal and lignite bearing areas in the country,” Goyal said in a written reply to the Lok Sabha.


Underground coal gasification (UCG) is a method of converting coal still in the ground to a combustible gas that can be used for various uses, including power generation.


“Further, production of syngas through Coal Gasification (Underground and Surface) and coal liquefaction have been notified as end uses for the purpose of Coal Mines (Nationalisation) Act. 1973 and Mines and Minerals (Development & Regulation) Act, 1957,” Goyal said.


Two coal blocks– Yellendu (Dip Side) in Telangana and Bandha-Singrauli Main Basin in MP–and five lignite blocks have been identified for offer for development of UCG, he said.


The lignite mines are Sindhari West, Chokla North, Nimbalkot and Nagurda in Barmer, Rajasthan and Dungra in Surat, Gujarat.


Vastan Lignite block in Gujarat has been identified for UCG purpose for government companies in the state and the applications for the same have been invited, Goyal said.


Coal India Ltd (CIL) is also contemplating to develop UCG projects within its command area. Two such blocks are Kaitha in Ramgarh Coalfield in Central Coalfields Ltd, Jharkhand and Thesgora “C” in Pench-Kanhan Coalfield in Western Coalfields Ltd, Madhya Pradesh have been identified for taking up UCG.


“Action is being taken for commercial development of UCG in the aforementioned,” Goyal said.

(Source: The Economic Times, August 1, 2014)




NEW DELHI: India has identified a few of Coal India’s mining projects that could be operated by foreign firms, the coal and power minister said, a step aimed at raising supply from a monopoly that has failed to meet its output target for years.


Coal India, the world’s top coal miner, has been hobbled by inefficiency, worker strikes, delays in getting environmental clearance and other issues, leading to coal shortages, which have contributed to utilities’ difficulties in providing enough power.


“For augmentation of coal production, a few projects of Coal India have been identified for operation under the mine-developer-cum-operator route, where international as well as domestic operators may take part,” coal minister Piyush Goyal told parliament on Thursday.


Goyal said that the government had approved 15 projects for Coal India, with total combined annual capacity of 136 million tonnes, for the five-year plan period of 2012-2017.


Coal India produced 462 million tonnes in the last fiscal year, against a target of 482 million. Goyal has been pushing the company to raise its output quickly to help realise Prime Minister Narendra Modi’s promise of power for all. But given issues such as the difficulties in acquiring land in India, international firms also may find it tough to bring mines into operation. Thiess Minecs, the Indian mining unit of Australia’s Leighton Holdings, was brought in to operate a coal mine owned by NTPC, India’s largest power generator. But NTPC said in May it had decided to terminate the $267 million contract after Thiess failed to make any progress in developing the mine, even though the development period had been extended twice.

(Source: The Financial Express, August 1, 2014)

PDF Converter    Send article as PDF