Et sept13 lowres

ETElEctricals todayManageMent expertise for the power industry

Role of SmaRt gRidS in Re integRation

DISTRIBUTION

aNaLYSISalteRnatiVe fUel oPtionS

ChaNDRa IYeNgaR, The fIRST wOmaN TO Be ON The BOaRD Of meRC, haS a STeeLY ReSOLve TO ShORe Up The SeCTOR

Total pages 44Volume 1 | Issue 8| September 2013 | `50

Published by ITP Publishing India

SubStanceWoman of

3September 2013 | Electricals Today

ConTEnTs

Cover storyChandra Iyengar, the first woman to be on the board of MERC, has a steely resolve to shore up the sector

ColumnNet metering is the way forward

DistributionRole of smart grids in renewable integration

FinanceChange in ownership norms of UMPPs is worrisome

Analysis For increasing problems of coal, the answer is renewables

16

14 22 27 32

Editor's NotE

Electricals today | September 2013 4

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Published by and © 2013 ITP Publishing India Pvt Ltd

Volume 1 | Issue 8 | September 2013

EtElEctricals today

ManageMent expertise for the power industry

The plunging of the rupee – it has hit a new lifetime low against the dollar – has dealt a huge blow to the otherwise laggard power sector. While the increase

in import of fuel has already stretched the balance sheets of power companies, the devaluation of the rupee is further adding to their woes and deepening the dent.

While addressing the media on the fall of the rupee, Finance Minister P Chidambaram made a statement regarding the state of the power sector. “Domestic coal mining should be increased so as to bring down the import of coal,” he said. “This will address many of the woes of the power sector. We should pull our acts together to address this.”

The first thought that crossed my mind when I heard Chidambaram was: what was stopping the government from pulling its acts together in the past four years? The industry at large, the consultants, the potential investors – both domestic and international – have been crying hoarse about the policy paralysis in the power sector but it has fallen on deaf ears. There is no doubt that the industry would have been only too happy to rally behind the FM had he been able to address the problems plaguing the power sector, even partially.

However, since the finance minister has done nothing of consequence to address the woes of the power sector, it appeared to me, and many others, that Chidambaram’s statement regarding the power sector was made merely to divert attention from the rupee crisis.

By all accounts, statements like these will not change the fortunes of the anguished power sector; the solution lies in the quick revival in the investment cycle. Despite the looming crisis in the power sector, it is sad to see policy-makers dodging the real issues, with an eye on the coming elections.

Dodging the real issues

Renjini Liza Varghese, [email protected]

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Volume 1 | Issue 1 | January 2013 | `50

ETElEctricals today

More power to the industry

ARE EnERgy-EfficiEnt

PRODUctS REAlly

EfficiEnt?

‘SMARt gRiD iS nO

lOngER A cOncEPt,

it’S A nEcESSity’

Even though Jyotiraditya Scindia

describes his current charge as

‘daunting’, the young power

minister is ready to take on the

challenges. But can he deliver?

Arun MAirA,

MeMber, PlAnning

CoMMission,

on whAt Ails

the industry

VIEWPOINT

01_ET_Jan2012_Cover.indd 1

07-01-2013 15:16:04

DS_ADVT.indd 2 5/3/2013 10:29:37 AM

Electricals Today | September 2013 6

BullETin

EGoM yEt to dEcidE biddinG norMs for UMPPs

No higher import duty oN power equipmeNt

Ring Fence SyStem FoR poweR theFt

The Empowered Group of Ministers (EGoM) is yet to finalise bidding norms for ultra mega power projects (UMPP) as some issues remain to be sorted out. "There are some issues which need to be further discussed," said a source in the ministry. No date was set for the next meeting. The bidding process for power projects is being revised to mitigate the risk from escalation of coal prices. The new norms will apply to Case-II projects, which includes UMPPs, where the location of the plant and fuel to be used are decided before competitive bidding starts. They will also apply in Case-I projects, where developers decide on the location, fuel and technology to be used. The decision is expected to speed up the

process of inviting bids for UMPPs proposed at Odisha (Bedaba-hal) and Tamil Nadu (Cheyyur). The government has so far

allotted four UMPPs. The first at Mundra in Gujarat was awarded to Tata Power, which had commissioned

the plant in March. Reliance Power bagged the others -- Sasan (Madhya Pradesh),

Krishnapatnam (Andhra Pradesh) and Tilaiya (Jharkhand). The new standard

bidding documents (SBDs) for Case-I projects are being drafted by the Power Ministry. Power

Minister Jyotiraditya Scindia will hold inter- ministerial consultations on Case-I norms, which will be taken to an advi-

sory group and then submitted to the EGOM for final approval.

Planning Commission member B K Chaturvedi indicated that there are no immediate plans to impose higher duty on imported power equipment. However, he said there is a need to assess the performance and servicing aspects of Chinese gear being utilised in the country. His comments come against the backdrop of concerns over cheaper power gear imports, especially from China, hurting the business of local players, including state-run BHEL. "No, higher duty is not on the table. There is a question of the overall need (for look-ing at servicing and other aspects)," he said. The Planning Commission recently asked the Power Ministry to provide the Central Electricity Authority's report on the performance of Chinese gear used at various power plants in the country. The CEA is the apex planning body for the country's power sector.

Facing Rs900 crore annual revenue loss, Assam Power Distribution Company, the state govern-ment said it will implement Ring Fence System, a technology to prevent stealing of power. This is will be at a total expenditure of Rs875 crore. The Ring Fence System will be set up in 72 towns along with the state capital under the Central government's Restructured Accelerated Power Development & Reforms Programme (R-APDRP). "To stop misuse of power, mainly theft, we are going to implement an advanced technology-based system, called Ring Fence System, in Guwahati and another 72 towns initially. The total expenditure of the project will be Rs875 crore," Assam Power Minister Pradyut Bordoloi told reporters.

p8

Cost for Ring Fence System

Jyotiraditya Scindia

Rs875 cr


BullETin

BullETincabinEt dEfErs dEcision on nHPc stakE salE

the government has deferred a deci-sion on 11.36 per cent stake sale plan National hydroelectric power Corporation Ltd (NhpC), india's biggest hydro- elec-tric producer. the proposed stake sale would fetch about rs1,850 crore to the exchequer at current market prices. "the decision on NhpC stake sale has been deferred," a source said after the meeting of the Cabinet Committee on economic Affairs (CCeA) headed by prime minister manmohan Singh reported news agen-cies. there were differences between the power ministry and the disinvestment department over the stake sale in NhpC.

the power ministry wanted the stake sale to happen only when market conditions improved. the government plans to sell 11.36 per cent of its stake or 120 crore shares in NhpC through an offer for sale (oFS) in the domestic market.NhpC, will independently decide on rais-ing rs1,000 crore through bonds, power minister Jyotiradiya Scindia said earlier steering clear of timing of the issue in stressed market conditions. "Let them (NhpC) take an independent decision. i don't believe in putting my finger in every pie. Let the management take an independent decision," he said.

p 11

NTPC To raise over rs1 lakh Crore debT

PPP model iN UP TraNsmissioN

State-owned power producer, NtpC, plans to raise over rs1 lakh crore of debt to fund expansion in the current Five year plan ending march 2017. the largest power producer, currently, has more than 41,100 mw of installed generation capacity, plans to add more than 14,078 mw during the 12th plan period. of this, 4,170 mw of

capacity was commissioned in the first year (2012-13). the company said the 12th plan outlay has been finalised at rs1,52,341 crore, with debt to account for about rs1,01,406 crore. debt of rs11,133 crore has already been deployed during Fy13 and debt of rs17,074 crore has been tied up and is yet to be drawn as on march

31, 2013, the power producer said in a presentation to investors. NtpC said debt was mobilised on "most optimal rates from both domestic and international markets due to low gearing and healthy coverage ratios." in the current financial year, NtpC expects to add 1,875 mw, besides 65 mw of solar capacity.

According to the latest reports, uttar pradesh Cabinet has cleared the pro-posal for public private partnership (ppp) model in power transmission projects of up power transmission Corporation Limited (uptCL). the corporation would now be able to call for competitive tariff based bidding for such projects. the decision was taken at a cabinet meeting chaired by chief min-ister Akhilesh yadav. in the first phase, the corporation was likely to solicit bids for projects worth about rs2,000 crore in Agra, mainpuri and Lalitpur districts for transmission lines of 2,000 km. the proposal of roping in private partners for the projects had been pending for some time.

Government to off load 11.36 % of its stake in NHPC.

UP transmission opts for franchisee model.


BullETin

Getco calls for uniform roW compensation In a bid to address the challenges of differential compensation in right of way (RoW) for transmission lines across the country, Gujarat Energy Transmission Corporation Ltd (Getco) has called for a uniform compensation formula across the country. The state transmission player has written to the Central government to evolve a uniform compensation formula to address the issue. The transmission line right of way is obtained from the land owner by paying a fixed charge decided by the transmission players. The Gujarat government has recently increased the com-pensation by around 80 per cent from Rs5 lakh per kilo metre of 400 Kv line to Rs9 lakh per kilo metre. The compensation for 220 kv line is Rs7.5 lakh per km, while for 132 kv and 66 kv lines, the compensation is Rs2 lakh and one lakh respec-tively.

PrivatisE PowEr distribUtion to taME lossEs, says MontEkpitching for privatisation in the power distribution sector, planning Commission deputy Chairman montek Singh Ahluwalia have suggested it can help in reducing huge losses and half of this business should be with private players. "of the total (power) distribution (sector) in the country, only four per cent is through the private sector suppliers. i don't think why it should not go to 50 per cent in the next 10 years," Ahluwalia told reporters. the power distribution sector is suffering due to huge losses of over rs2.46 lakh crore in the country. elaborating further, he said, "the distribution sector is really the weak part. the financial health of the distribution segment is an indication that financial viability of the system as a whole and at the moment that is not viable because they are making huge losses...it is not sustainable." Ahluwalia also suggested that the states should separate rural power feeders as it would have spill over benefits for them.

CCi aPProves arUNaChal hydro Power ProjeCTs

GUjaraT Gives Nod for NUClear Power PlaNTsthe gujarat Coastal Zone manage-ment Authority (gCrZmA) has given nod for Nuclear power Corporation of india Limited's (NpCiL) proposed 6,000 mw nuclear power plant in mithivirdi, Bhavnagar. it has recommended the project for costal regulatory zone (CrZ) clearance to the union ministry of environment and Forests (moeF). the proposed nuclear power plant

(Npp), with six light water reactors (Lwr) of 1,000 mw capacity each, has been facing stiff opposition from locals on the grounds that it would cause irreparable damage to environment. the Npp at mithivirdi is being set up 40 km from Bhavnagar and is located on sea coast on west side of the gulf of Khambhat, and will be spread across 777 hectare.

the Cabinet Committee on investment (CCi) is believed to have approved setting up two hydro power projects in Arunachal pradesh. "defence and home ministries have also given their consent for the construction of two hydel power plants in Arunachal pradesh," a source close to the development said, adding that the CCi has given approval to the project. hydro power contributes 18.6 per cent at 39,416 mw to the overall installed generation capacity of 2,11,766 mw in the country. As per reports, Arunachal pradesh has the highest potential for hydropower generation in the coun-try at over 50,000 mw NhpC is constructing hydro power projects of over 4,000 mw which includes 2000 mw Subansiri project at the Assam-Arunchal pradesh border.

Privatise to bring down T&D losses. formula

More hydro projects get Central approval.


BullETin

NTPC eyes To miNe 100 mT Coal by fy20

coal iMPort to toUcH 82 Mt

Coal ministry recently has allocated four additional coal blocks to NtpC - Banai and Bhalumunda in Chhattisgarh and Chandrabila and Kudanali-Laburiw in odisha. having bagged four coal blocks from the government last month, state-run power major NtpC said that it expects to produce nearly 100 million tonne coal over the next 5 to 6 years. "there is huge pressure on demand for coal. At the same time Coal india is struggling to increase production. we have our captive coal

indian power producers may import 82 million tonne (mt) coal in the current fiscal to meet raw material require-ments, the government said. the Central electricity Authority has import target of 50 mt coal for 25 power utili-ties to meet the shortfall in the domes-tic availability, pratik prakashbapu patil, minister of State for Coal said in a written reply to the rajya Sabha. in addition, 32 mt coal was assessed to be imported by power utilities for plants designed on imported coal, he said, adding that "total coal estimated to be imported during 2013-14 has been targeted around 82 mt." Coal imports by indian companies had touched a record of 137.56 mt last fiscal to meet the shortfall, despite meeting the 97 per cent domestic supply target at 557.70 mt.

mines and we expect to produce nearly 100 million tonne over the next 5-6 years to meet our fuel demand," NtpC Cmd Arup roy Choudhury said. the company is working on coal blocks in the pakri Barwadih, Chatti-Bariatu, Kerandari and Chatti-Bariatu (South) coal blocks in Jharkhand; the tallaipali mines in Andhra pradesh and dulanga mines in odisha with total geological reserves of 3,732 mt and mineable reserves of 2,035 mt. "we plan to mine around 33 mt per annum by 2017 from these blocks," he said.

NTPC to increase captive coal mining.

coal india, ntPc siGn fUEl sUPPly Pacts for 16 PowEr PlantsCoal india Ltd (CiL) has signed fuel supply pacts with NtpC's 16 power plants and joint ventures, while 11 more agreements with the power major and its JVs are being processed. "CiL has signed 82 FSAs of 34,793 mw capacities. these include 11 FSAs with NtpC and 5 FSAs with its joint ventures. Besides this, FSAs in 6 cases of 4,480 mw capacity with NtpC and 5 cases of joint ventures of NtpC are under process of signing," an official statement said. the Coal ministry said CiL has been directed to sign FSAs for about 78,000 mw within four weeks after the power producers fulfil the requisite conditions. A presidential directive has been issued by the ministry in this regard.More fuels supply agrements signed by power companies.

India's coal import increases every year.


BullETin

nEw wind EnERgy policy in gujaRaTthe gujarat state government has given nod to the new wind energy policy, state energy minister Saurabh patel said in a state-ment. As per the new policy, procurement price of wind power has been pegged at rs4.15 per unit. this tariff would be applicable for next 25 years. in order to promote green energy, in the new policy, the government has proposed exemption from electricity duty to wind power producers. the policy further proposes that power pro-ducers could use the wind power for captive consumption in their own units in the state. For this they will have to pay the wheeling and transmission charges. Also, if the power is to be used for captive consumption in more than one unit of the wind power producer, they will have to pay rs0.05 per unit more besides the wheeling and transmission charges.

R-powER commissions 45 mw wind pRojEcTreliance power said its 45 mw wind power project at Vashpet in maharashtra has commenced operations. the Anil Ambani-led company is already operating a 40 mw solar pV project in rajasthan and with the commissioning of the 45 mw wind power capacity, its operating renewable capacity has doubled to 85 mw, a company statement said. "we are committed to increasing our clean and green footprint by adding more renewable power to our portfolio and also by using advanced technologies for all our capacities to reduce carbon emissions," r-power Ceo Jp Chalasani said. the 45 mw wind project, set up with an investment of rs300 crore, consists of 18 wind turbine generators having 2.5 mw of rated capacity each, a company statement said. the power from Vashpet project would be sold to reliance infrastructure for distribution to mumbai in line with regulated tariff structure of the state, it said.

Vc funding in wind TouchEs $210 millionVenture capital funding in the wind sector saw a whopping 12-fold jump to $210 million in the June quarter on the back of some large deals going to project developers in india, says a report by mercom Capital group. wind venture capital (VC) funding in the second quarter of 2012 (April-June) stood at $17 million while the figure for January-march 2013 quarter was at $16 million. According to the report by mercom Capital group, a global clean energy communi-cations and consulting firm, wind sector VC funding in the second quarter of this year (April-June) saw high levels amid strong project acquisition activity. Among the notable deals, reNew power, an indian wind project developer, attracted $135 million from gold-man Sachs, which raised its total investment in the company to $385 million so far. NSL renewable power, also a project developer from india, received $60 million in funding from multiple investors. in two smaller funding deals, ideoL, a designer and installer of foundations for offshore wind projects, raised $9.1 million. Around $6.2 million was received by romo wind, a wind technology com-pany focused on improving wind turbine rotor function.

sanofi india To sET up 2.1 mw wind pRojEcTSanofi india Limited has signed an agreement with Suzlon energy for a 2.1 mw windmill for captive consumption at its Ankleshwar manufactur-ing site. Sanofi is one of the few healthcare companies in the country exploring the use of renewable energy for its manufacturing operations. “Sanofi believes in reducing our carbon footprint as part of our mission. we strongly support the use of renewable energies, and identified the renewable energy market in india and the available opportunities,” said dr Shailesh Ayyangar, md, Sanofi. the manufacturing site at Ankleshwar produces solid dose formulations.

Renewable energy roundup

Gujarat's new wind policy is encouraging for developers.

11september 2013 | Electricals Today

BULLETIN

GERC REjECTs GUVNL's pETITIoN sEEkING soLaR TaRIff CUTCiting delay and non-jurisdiction, the state power regulator Gujarat Electricity Regulatory Commission (GERC) rejected state discom Gujarat Urja Vikas Nigam Limited (GUVNL)'s petition seeking reduc-tion in solar tariff. GUVNL had filed the petition with the state regu-lator in the month of July, citing unjustified tariff charged by solar developers, who had signed power purchase agreements (PPA) for 971.5 MW for a period of 25 years. However, GERC dismissed the petition stating that the review petition should have been made within 60 days from the date of order whereas GUVNL had filed the petition with delay of more than three years. "Regulations 72(3) of the GERC (Conduct of Business) Regulations, 2004 provide for review of an order within prescribed period of 60 days from the date of such order . In the present case, the petitioner has filed a petition with delay of more than 3 years without any condonation of delay application and is thus not maintainable and hence is liable to dismiss," GERC stated in its order. According to the regulator, GUVNL had invoked protection of consumer interest stating that they should not be burdened with higher tariff for the solar power projects.

sU-kam To sEEk INVEsToR appRoVaL To hIVE off soLaR powER UNITEnergy solutions provider Su-Kam Power Systems will seek the approval of investors Reliance Group and Temasek Holdings for a plan to hive off its solar business unit, a top company official said. "We have already made a subsidiary -- Su-Kam Solar Energy Systems Ltd -- and are planning to seek approval from our investors Reliance Group and Temasek Holdings for making it operational," Kunwer

Sachdev, Managing Director of Su-Kam Power Systems, told news agency. Anil Ambani-led Reliance Group and Temasek Holdings, the investment arm of the Singapore government, have a 19.18 per cent stake in the company.Su-Kam also has plans to acquire firms and expand its solar power business."In the next five years, we do look at acquisitions as part of our expansion plans," Sachdev said.

TaTa powER To sET Up 28.8 mw pLaNT Country's largest private electricity producer Tata Power said that it is developing a 28.8 MW photovoltaic-based solar project in Maha-rashtra. The power producer's wholly-owned subsidiary Tata Power Renewable Energy Ltd (TPREL) is developing the plant in Satara dis-trict. "The power generated will be evacuated through Maharashtra State Electricity Transmission Ltd's network. The company has the major purchase orders for EPC in place and intends to commission the entire project capacity by December 2013," Tata Power said in a statement.

INdIa,Us CompLETE TaLksUNdER wToIndia and the US have completed consultations under WTO on American charges of discrimination against its products by India’s National Solar Mission. "Both the sides have completed the con-sultations. Now the ball is in the court of the US," a senior official in the Commerce Ministry said. The consultations followed after the US filed a complaint in the WTO in February alleging discrimination against American products. As per the procedure of the World Trade Organization, consultation is the first stage of a complaint filed with the global trade body. According to the official, in case the US says that it is not satisfied with the bilateral deliberations, America could go for setting up of a panel under the WTO's dispute settlement give the parties an opportunity to discuss the matter and to find a satisfactory solution without proceeding further with litigation. After 60 days, if consultations fail to resolve the dispute, the com-plainant may request adjudication by a panel.

Tata Power increases their renewable portfolio.

SERC rejects plea for tariff cut.

Electricals Today | september 2013 12

BULLETIN

The visiting high-level delgation of IEEE-SA.

High cost of technology and equipment casts shadow on India’s smart grid initiatives. However, IEEE, the global standard organisation, is hoping to bring down the cost through standardisation

Bringing cost effectiveness

standardisation plays a key role in smart grid which is a system of systems. It is important to choose the right kind of equipment

which is efficient and financially viable solutions while implementing smart grid application in any country. The consumers cannot adopt equipment randomly and keep replacing it every five years, which will be a costly affair. Keeping this in mind, IEEE Standard Association (IEEE- SA) is looking at putting standards in place for the vendors, which will be followed across the board.

“Standardisation does two things a) it grows market- any manufacturer can make the product anywhere in the world and the consumer can buy product from any part of the world b) because of the competition, it lowers the cost. Telecom industry is the best example,” said Srikanth Chandrasekaran, senior manager- standards, IEEE-SA. “Utilities come under the vendor categorisation. They require a lot of education, and are working on it. With the pilot projects, I think the government has opened the right path for them. Certainly there are some gaps which need to be bridged. It is not in India alone, but a global issue,” added Chandrasekaran.

Puducherry is the only smart grid project in the country. Power Grid Corporation which is the implementing body is testing various technologies involved and are evaluating how well the last mile connectivity works. The data coming from this project will enable the utilities and other stake holders to analyse and conclude on the different technologies, which are compatible to the Indian conditions.

“We are closely working with different agencies for the roll out of smart grids in the country. We are an advisory body, a neutral party, and with the varied experience and expertise

BY ET TEAM

acquired from working in different countries,” added Chan-drasekaran.

Smart gird needs large investments. It is estimated that the smart grid will have a global market to the tune of $13 trillion. Based on that, India being in its size requires a fair amount of capex for this technology implementation. Chandrasekaran pointed out, “If you look at the technologies, it will help leapfrog some of the issues and will eventually bring down the prices.”

For the 14 pilot projects, the funding is shared by the govern-ment and the utilities. “It is too early to talk about the funding model for smart grids in India, but in the 12, 13, and 14 Five Year Plans, there is a sizable allocation by the power ministry for the same. For the smart metering, it is said that it will be viable if the cost is below $20 per unit,” he added.

It was action filled week for the high-level delegation of IEEE Standards Association (IEEE-SA), who visited India recently. It gathered attention as India has started the roll out of the approved 14 pilot projects. The delegation met with the policy makers and industry leaders and also conducted workshops and seminar in different cities.


EVENTs

7Th REI 2013 ExpoVenue: India Expo Centre and Mart, Greater NoidaDate: 12-14 September 2013The seventh edition of Renewable Energy India Expo being held from 12-14 September 2013 at the India Expo Centre and Mart, Greater Noida (National Capital Region of Delhi) India. Organised by UBM India, the last edition of REI was held in November 2012. According to the organisers, the renewable energy sector is growing rapidly and the Cleantech sector has the potential to generate 10 million jobs in India by 2025.

ELECTRI Expovenue: HITEX Exhibition Centre, HyderabadDate: 3-5 October 2013The Electri Expo will be the first-ever exposition in Hyderabad dedicated to low voltage electricity devices. Organised by Hitex Exhibition Centre, the event will bring under one roof, energy efficient, environment friendly and sustainable devices. This show will act as a unique platform for those stake holders who are looking for innovative products.

ELECRama-2014Venue: BIEC, BengaluruDate: 8-12 January 2014Elecrama-2014, the 11th edition of the world’s largest power T&D confluence, will be hosted in Bengaluru this year. It is designed to maximise the participant experience by its multilateral approach to exhibitions and allied events. According to the organisers the highlights of the show are: international reverse buyer/seller meet, international conference on transformers, innovation day and students pavilion, CEO Nite with cross stakeholder debate and awards ceremony.

INdIaN RENEwaBLE ENERGy sUmmITVenue: Mahatma Mandir,Gandhinagar, Gujarat Date: 9-11 January 2014The first Indian Renewable Energy Summit, hosted in partner-ship with the government of Gujarat, will be the leading force in delivering a platform for the renewable industry to meet, share information on the challenges facing the industry and discuss solutions for advancing India’s energy requirement for the future. For companies involved in the manufacture of equipment to the supply of products or services to the power generation industry, the summit provides the platform and opportunity to reach, meet and demonstrate to the renewable energy industry professionals and key industry buyers and influencers of India.

EVENTs Lii 2013 to be held in Chennai

India’s largest lighting fair, Lii 2013 (Light India International 2013), will be organised by the Indian Society of Lighting Engineers (ISLE)from 13-16 September 2013. The show will be held in Chennai Trade Centre. The show is expected to host more than 250 manufactur-ers, including 100 from overseas. This include 100 plus international participants mainly from China, Taiwan, Korea, Italy, Germanyand USA.

ISLE had earlier organised six lighting speciality trade shows in different regions including New Delhi, Mumbai, Indore, Bengaluru and Chennai. With the overwhelming response during the previ-ous fair and the other shows in Chennai, the organisers find the city a key platform to conduct the fair. Chennai has been chosen for the second time as venue as the southern state and its sub-urbs are registering a rapid growth in lighting segment. The fair will provide the exhibitors and the visitors to explore its poten-tial growth opportunities. The exhibition will showcase a wide range of products over the 16,500 sq-m exhibition area, cover-ing residential, commercial and retail lighting, industrial lighting, street lighting, security lighting, environmental/landscape lighting, city beautification lighting, architectural lighting, railway/metro lighting, airport and runway lighting, refineries/mines lighting, LED lighting, intelligent lighting, lighting with non-conventional energy, speciality lighting, lighting accessories and controls, power saving solutions, and testing and measuring instruments. Semi-nars and technical sessions; theme pavilion and special outdoor lighting will be the other salient features of the fair. Mainly a B2B event, however, the fair will be open to public in the evenings from 3pm to 7pm.

Prominent speakers at Lii 2012.


column / Policy

Besides visible savings, it will reduce the demand supply gapSanjeev AggarwalManaging director, Amplus Infrastructure

Net MeteriNgBeNefits All

Delhi Government, in the first week of August has announced the plan to introduce of net metering for distributed solar generation. In normal times, it may not have caught the fancy of the general consumers. The times are

different now with electricity supply in the capital state becoming an election plank by itself with many categories of consumers paying tariffs higher than cost of generating solar power by themselves.

While the linkage of this announcement to elections will be a hazardous guess, I do believe that it is the step in the right direction. As argued in an earlier column, we need to move from MW to MWh, i.e., no more capital subsidies but the sup-port to renewable energy should be in the form of generation or production linked incentives. This will motivate the custom-ers to select the best technology and invest in maintaining the system. Thankfully, the Delhi Government has caught the correct idea. Central Electricity regulatory Commission (CERC) is also expected to soon come out with the guidelines for net metering across the country.

Net metering is not a new concept in the world. As per Wikipedia, it originated in the United States, where small wind turbines and solar panels were connected to the electrical grid, so that consumers would be able to use the electricity at a different time or date than when it was gener-ated. Minnesota is commonly cited as passing the first net metering law in 1983, and it allowed anyone generating less than 40 kW to either roll over any kilowatt credit to the next month, or be paid for the excess.

Net metering is a metering arrangement where the ‘excess’ solar electricity is sent to the grid through the existing distribution system that supplies power to the premises. There can potentially be two ways to measure it, either a bi-directional meter (that will only measure the net input from the grid) or two meters with the solar genera-

Net metering gives consumers visible savings every month.


column / Policy

Initially, the distribution companies encourage the distrib-uted solar because of under regulatory guidelines and

increasing environmental concerns. It also helps in reduc-ing their renewable purchase obligations. In a country like India, it also helps in reducing the demand supply gap, with solar pitching in the required generation at their average consumer tariffs.

Certain other benefits to distribution utilities include: lower power delivery costs, lower system peak costs and fuel flexibility benefits. The non-monetary benefits include: improved grid reliability, lesser transmission losses and local job creation.

However, over a period of time, experience shows certain reluctance of the utilities to absorb distributed solar, with common concerns being stranded cost of the generation infrastructure created by them, higher feed-in tariffs that they need to pay to the generator-consumers and surge in generation during certain times of the day.

Looking at the overall cost benefit of the solar genera-tion we are at a stage where solar is competitive with

respect to the delivered price of the power by our local distribution company. This gives us much more commercial certainity against fossil fuels. It is environmentally and socially responsible way of energy consumption.

The distribution companies need to recognise these aspects and prepare themselves with system planning that can absorb more and more of distributed generation. The time has come to embrace environmentally sustainable distributed generation. It may mean paying a higher cost for the lesser utilisation of that 4,000 MW coal power plant!

The governments and regulators should continue to take all the steps necessary for encouraging customers’ acceptance of the distributed generation. Let this not be a repeat of the Open Access that is mired with all artificial constraints and unreasonable charges.

Net metering gives consumers visible savings every month.

looking at the overall cost benefit of the solar generation we are at a stage where solar is competitive with respect to the delivered price of the power by our local distribution company

tion being measured as ‘feed-in-power’. Both systems exist in different parts of the world, with Germany—the clear leader in net metering space—adopting the feed-in-tariff approach.

Customers across the world love net metering, it gives them clear visibility of their savings every month and they

often prefer it over feed-in-tariff meter. It encourages them with more savings as they push back more into the grid.

However, the initial capital investment and a perceived technology risk may lead to some degree of discomfort. That is where the role of Renewable Energy Service Companies will become more important with the latter arranging technology and financing for these consumers.


covEr sTory / rEgulaTion

Chandra Iyengar, the fIrst woman to be on the board of maharashtra eLeCtrICIty regULatory CommIssIon (merC), has a steeLy resoLve to shore Up the seCtorBY RENJINI LIZA VARGHESE

Tariff revision always attracts opposition from both the state utilities and the consumers. The former feels it is inad-equate, and the latter feels the pinch. However, that seems to be a major tool to recover cost. What are the measures taken by the regulatory commission in this regard? I am speaking from the Maharashtra experience. Electricity is a product which is manufactured, sold and bought by someone. A tariff is basically the cost of that product and is fixed for power which is needed by people. The state revises the tariff every year, to keep the financial condition of the state distribution utility healthy. Maharashtra state utility, unlike the other state utilities, is in a reasonably healthy condition. Now with the multi-year tariff, it may be around two years, but not beyond that as the cost attached increases year after year and a revision is required.

womanofsubstance



17

womanofsubstance



To give an example, look at what is happening with coal in the recent past. Post EA 2003, there are many private players in electricity generation and they came through the bidding route. It is a new concept for all including the commission, I am not saying we are on the bottom of the learning curve, but the learning curve hasn’t flattened yet. There are people who have approached the commission to have a relook at the PPAs and yes there are issues of the sanctity of the contract. The ultimate aim of the commission is to keep the sector healthy, while protecting the interest of the consumer. One of the consumer interests is the financial interest where we certainly don’t want the consumer to pay enormously whether to the profits of the private parties or to the inefficiencies of a public utility. Ten years ago, the scene was very different with many states facing severe power cuts. But now the situation has improved a lot. So the commission has to do a fine balancing act between the consumer and health of the sector while revising the tariffs. Sometimes it is successful, sometimes it’s not, but that is the path which a regulator needs to go.

In Maharashtra, the state revises tariff on a yearly basis, all stake holders and the consumers are aware that the tariff is being looked at annually. And they all are aware that there is a good chance of it going up. So from the consumer point of view, there is no mental block that the tariff will remain untouched for years together which is a good sign. MERC has ensured certain discipline in revision of tariffs, which has led to periodic pass through of cost. MERC is the first state commission to implement the fuel cost adjustment mechanism. This is a means of steady cash flow for the state utili-ties and reduces the requirement for short-term borrowings. The multi-year tariff introduced in the state encourages the distribution licences to plan on a long-term basis.

MErc has asked the distribution utilities to increase efficiency. Please throw some light on the improvement witnessed in the sector, though there are always complaints about mismanagement by the state utility.I would give credit to the state distribution utility for bring-ing down the T&D losses. Including private players in the state

DEMAND MANAGEMENT PROGRAMMESSerial no. Approved programmes

1 T-5 FTL program

2 5 star ceiling fan program

3 Window A/C program

4 Thermal energy storage program

5 5 star rated refrigerator program

6 Demand Response (manual) program

7 Auto-demand response program

8 Energy audit

9 Gas water heater

10 Load survey / research

11 Agricultural pump DSM

Maharashtra revises its tariff every year.



you were part of the state government for long and also had a short stint with the electricity sector. What are the major changes according to you in the segment?Post-EA 2003 the segment witnessed a whole lot of changes; more private players entered the sector. In that sense there is lot more vibrancy now than earlier. However, there are some issues which remained as a concern, to name one, the issue of fuel — cost of fuel, availability of fuel, quality of fuel. And these are issues which are continuing. There is a skewed positioning of other resources in the country. All the hydro is available in the Himalayan region where the highest demand is in the southern part of the country. So what is required is a very strong national network which can take electricity across the country. In the 50’s we had the issue of food in the country, it was addressed by creating a road and rail network to move food grains from one part to the other. So it is imperative for power get a similar kind of a network in place.

When the rural electrification project was designed, the target was one connection (one bulb) in every panchayat, but now the poverty index asks is there a light and fan in the house? That is the kind of change we witnessed in the past few decades in the power segment. The idea of usage of electricity has changed completely in the past 30-40 years. The holistic development of any country, whether good or bad, depends on electricity now.

has helped in controlling the losses and we have seen consist-ent improvement in the past few years. Coming to the point of mismanagement, there may be complaints, but one should understand the magnitude of the state network. We are talking about a Rs50,000-crore company, manpower running into lakhs, villages are kilometres away from each other. I am not claiming that we will reach an ideal point where there will be no issues. But surely there will be more improvements in electricity segment going forward.

To bring in efficiency, better technology is required. However, there is resistance from the utilities to invest in technology adaptation. your comment?I don’t think that is right. If it is a government utility, there is a genuine issue of where the money comes from. If it is a large loan, you can get it from the banks, but then that gets on to the tariff. So there are tariff implications. In a government utility, for upgrading or replacement of existing technologies, allocation of funds is thought about a hundred times. The cost of such things has been an issue and may continue to be an issue. A public utility always keeps it in the back of their mind. However, we are seeing people being receptive towards newer technologies, may be in a slower pace. Yes, there is resistance as people are comfortable with the existing systems and not because of the technology. And Maharashtra is one of the states with advanced technologies in place in distribution.

How much is the pressure from the state regulator to the utilities to bring down the losses to the cErc-set target of 15 per cent?We are not a monitoring executive body. Our point of control is limited to fixing the tariff. And the state regulator looks at the tariff annually and there are questions raised on the high costs of the utilities and, if we don’t agree, then the tariff gets cut off. This shows the seriousness of MERC in bringing down the losses. So there is a financial pinch for the utilities if they don’t adhere to the guidelines.

could you elaborate on the regulatory steps on Demand side Management initiatives in Maharashtra?MERC is the first state regulatory commission in the country to notify Demand Side Management (DSM) regulations. MERC notified two regulations in this regard: (a) MERC Demand Side implication Framework regulations 2010 and (b) MERC DSM (Cost Effectiveness Assessment) regulation 2010. These regulations mandate the licensees to make DSM as part of their operations. There is a DSM committee constituted with the secretary MERC as chairman and members of utilities and experts from IIT Bombay to assist the commission in helping the utilities achieve their targets.

The time-of-day tariff was introduced in the year 2000, and in the subsequent tariff orders in the state, it has been extended for more categories. The other measures include the price difference increase between the peak-hour tariff and the off peak-hour tariffs, utility driven incentive schemes, replacement of old fan, refrigera-tors, window A/Cs, thermal storage systems, etc.

When the rural electrification project was designed, the target was one connection in every panchayat, but now the poverty index asks is there a light and fan in the house?



The generators always raise the issue of lack of evacuation facility. Explain the Maharashtra situation in this regard.Several states are facing this problem. Luckily, the state of Maha-rashtra does not face this problem neither intra-state nor at the inter-state level.

What, according to you, can ring in more changes to the electricity segment?Ideally, in the far-flung areas of the state, if you can have mini-grids, they will take care of the requirements of the particular area. On the other side, it will save the state utility from spending energy, money and resources in laying transmission networks which runs into kilometres in length. There should be a system in place, if the consumption goes beyond certain MW of power, then these grids get connected to the main grid. However, technologically, we are in no position to move in that direction.

But private players keep away from the rural market...It is true that private companies have their own strengths. But they can never be a substitute for the government. You cannot compare

the state utility, the size at which they handle to that of the private sector. The freedom that the private sector has in implementing projects is different from the accountability of the government util-ity in managing its affairs.

you were part of the government, and now you are a regula-tor. Explain the difference in the roles and the challenges? In the government, it was more of an executive role. It was hands-on. And you had the power to execute things. Here, as a commis-sion, it is more of an observer’s role. I may understand the problem that helps me in adjudicating. But that cannot affect the judge-ment. For example, if say factor A doesn’t fall under the four corners of the Act/ regulations how much ever I understand the problem, it will not help. As a commission, you need to be far more detached with the problems as you are a quasi-judicial body. So when you give a judgement, the standard I would set for myself is that the judgement given by the commission should be water-tight. They cannot be set aside in the normal course.

The challenges are many in the current role. The major chal-lenge is to keep the sector healthy for all stake-holders. And also to increasing awareness about renewable. When we talk about renewable, it is mostly the natural resources like hydro, solar and wind which dominates the chart. However, there is a lot of man-made renewable, there is solid waste (municipal waste), food waste, etc. We need to work on these areas to make it financially viable. Technology in this segment is extremely challenging.

What do you bring to the table as a woman?There are more and more women coming to the infrastructure sec-tor, so it is good to be part of the change happening in the sector. I think the advantages of being a woman is, women are far more informal, women also learn to take people along.

If it is a government utility, there is a genuine issue of where the money comes from. If it is a large loan, you can get it from the banks, but then that gets on to the tariff.

Consumers are more receptive towards regular tarrif hikes.


disTribuTion / smarT grid

Safer and financially viable DC micro-grids will change the face of power utilisation in Indian villages

solution for rural india

BY RENJINI LIZA VARGHESE

23


renewable energy (RE), in the past few years, has taken a lead in capacity additions. The country has touched the 30 GW mark in renewable energy. Though it is just 10 per cent of the energy basket, going forward, there are plans to

increase the RE share to 25 per cent. The ambitious plans are backed by all stake holders.

On the flip side, it brings with it lot of challenges. There needs to be a seamless integration of RE into the grid, else the volatility nature of the source can lead to a collapse. This is where smart grids come into play; they help in smooth integration of renewable energy. However, there are hurdles in their countrywide implementation. “Until and unless there is quantitative and qualitative data available in the country, it will be difficult to implement smart grids. It requires authentic data on which one can act upon. Smart grid helps to do many things more effectively and efficiently,” pointed out Prakash Nayak, chairperson of working group 9 (WG 9),

September 2013 | Electricals Today



All stake holders requires authentic data on which one

can act upon. Smart grid helps to do many things more effectively and efficiently," said Prakash Nayak

the renewable energy segment, with wind leading the pack as the highest contributor. The grid needs to be strengthened to integrate RE. It is necessary to avoid the repeat of the blackout that happened in the northern grid in July 2012. The unstable nature of renewable sources will be a major concern while add-ing it to the grid. “Now that the southern grid is also going to be part of the national grid by next year, the capacity of the grid will naturally go up. Before that, let us study the situation and recommend ways to maximise the capacity utilisation. It is easy to build up capacity once the integration is in place. The grid should be made ready for this. Look at Tamil Nadu, which has a huge wind capacity. However, only 50 per cent of it is being used because of grid issues,” pointed out Nayak.

In RE, with 30 MW coming from the source, suddenly the capacity scales to 7,000 MW. But the existing grids don't have the capacity to handle these sudden spikes in supply. The smart grid application will enable the grid to manage this volatility and prevent it from collapsing.

Unlike the European countries that export RE, our country hasn’t reached that stage. Many of these countries have large storage facilities in place. There are two technologies mainly, pump storage, which is used in some parts of the country, and bulk storage. Although there are discussions and research on storage facilities, the country, at this point, cannot afford it because of high costs involved. “The cost of the batteries for RE, even in the smaller kilowatt size solar panels, will be to the tune of 30-35 per cent of the total expense. Unless, we have break-

India Smart Grid Forum. Cost versus technology is an ever going debate in the country, and is a vicious circle. Distribution utilities often raise a question about who will bear the cost of smart grids. The debate started a decade ago when the country started analysing the need for implementation of smart grids. Sadly, even after a decade, though we have some answers, smart grids have not reached implementation level.

Integration of renewable sources will be challenging. Now, it may not be as tough as it sounds, but going forward, the mag-nitude of challenges will be higher. Realising this, the WG 9 has been constituted to look into hurdles of smart grid integration. Wind, solar and bio-mass are the three major contributors in

Smart grid enables a seamless integration of renewables to the grid.



through technologies like lithium–ion batteries, which can bring the costs down to an affordable bracket, things look difficult.

In long term, we are addressing the storage part of RE, but in the short term, the concentration is on integration and estima-tion of RE, which requires more support with scheduling and forecasting," explained Nayak. Recently, CEA has issued a guide-line on 15 minutes prior reporting and a day ahead forecasting for wind. Once the forecasting starts Nayak hopes that there will be much better control.

With the technologies available now, it is possible for an individual developer to put up a monitoring system. Many of the solar developers have already started installing the radiation monitoring systems. There is resistance from developers as has costs attached to it. The costing, business model and the return

model are still a concern in the RE segment. Above all, the pen-alty clause in the CEA draft is more worrisome.

There is a penalty for RE but if renewable is not able to produce energy according to the prediction, then conventional energy supplements the supply. Ironically, they get rewarded for it.

“Thus forecasting is important as the vulnerability of a grid for a collapse is higher when you have larger capacity of RE connected to it. It is essential to maintain the grid stability. One should understand that in case of both wind and solar the pre-diction will not be 100 per cent accurate. It will be plus or minus 30 per cent. Beyond a level, you cannot predict the pattern of natural resources,” said Nayak.

He added that WG 9 is looking at various available scheduling and forecasting tools. It also guides the ministry on the subject. Furthermore, it will be interacting with countries that have advanced in renewable energy generation, like Denmark and Germany (both countries export RE). In fact, in Germany, com-panies that take care of transmission and distribution are the ones who deployed tools for forecasting. In the daytime, these companies export the excess power to neighbouring countries.

What we as a country require is a renewable energy monitor-ing centre just like the state load dispatch centre. The genera-tion of RE is usually not near the control centers. So, the data from all these generation points should be connected to an office close to the state load dispatch centre (SLDC). There will be lot of coordination and information exchanges between these two offices. The centralised monitoring system will enable the SLDC also to management the grid in a better way. The monitoring office primarily would monitor the data coming from different sources and match it with the weather report. That helps the SLDC to chart the conventional energy offtake to a better level. It will be easy to collaborate and take cor-rective actions if the data is readily available from a single office. Once this is in place, within a year or so, the country will be in a better position to predict and manage both conven-tional and non-conventional energy. "One needs to start somewhere and that is where the WG9 aims to reach. The first task would be mapping the load curve, generation curve on a real time scale,” informed Nayak..

The generators has to take the responsibility of scheduling and forecasting as they are paid according to power gener-ated. It wouldn’t make any sense if they generate power when procurers don’t require it. So, generators need to monitor and tell the procurer that, this will be the pattern of generation from their RE plant. In this scheme of things the developer is only responsible for generating X amount of units from the plant. Whether he generated it in the month of June, July or August, it doesn’t matter. He is paid according to the generated accord-ing the amount of units. The change should start from here. The generator needs to tell the SLDC that this is the amount of electricity coming from my plant in next 15 minutes.

35% of the total cost will be for storage

India is yet to have a clear roadmap for smart grids.

Scheduling and forecasting will bring in more changes to renewables.



Apart from the RE integration the WB 9 is also looking into the microgrid application. The mission ‘Power for all by

2012’, which failed to meet the target, has a new deadline of 2017. As part of this, now the government is looking at rural electrification in a much bigger way. It is proved that the dis-tributed generation will play a major role in making electricity accessible to many villages. While looking at providing electric-ity, the most important aspect will be the affordability factor.

There could be multiple sources like wind, solar and bio-mass. The thrust will be on selecting an affordable solution. It should be a formula that ensures power to the villages at least for 10 to 12 hours a day. Now the question is, whether to look at a DC or an AC microgrid. DC emerges as the winning option. Purely because the efficiency of DC micro grids is 15-16 per cent higher than the AC microgrids. They may have a small storage system attached to and may not rely completely on a storage base system.

Nayak elaborated “DC microgrids are financially viable, and in terms of security are a better option as the awareness level of the villagers regarding electricity is lower. If you operate the equipment at voltages like 40 watt or 80 watt there are lesser chances of getting an electric shock from the conduc-tors, if at all one accidently touches it. It is much less hazard-ous than the 220 watts of AC Lines. Losses are minimal. We are also looking at connecting the AC line to the same grid, if there is a possibility in future. So we are looking at multiple solutions for villages.”

The good news is that the level of acceptance too is much higher. In regards to the power sector, India has reached a point of no return. And in every forum, the smart grid applications are discussed as a necessity for power sector. This is a welcome change and the encouraging support from both the regulators and the ministries involved will surely take the initiatives to the desired level.

In RE, with 30MW coming from the source, suddenly the

capacity scales to 7,000MW. But the existing grids don't have the capacity to handle the sudden spikes in supply."

DC microgrids are more financially viable than the AC microgrids.


financE / umpp

The power ministry's changes in the Case II bidding, allowing distribution utilities to take ownership of the project is proving to be a double-edged sword for developers

For better or For worse?BY ET TEAM


financE / umpp

While MoP has reduced the role of the developer from owner to a contractor, it has not entrusted greater responsibilities to the discoms like completing land acquisition, obtaining all the clearances for both the power project and the coal mine.

it appears that the recent changes introduced in the Case II bidding have addressed the long-pending issues of funding power projects. The new Standard Bidding Documents (SBDs) for Case II, circulated by Ministry of Power (MoP), propose to significantly modify the

framework from that of an ownership-based model to a conces-sionaire based one. The proposed SBDs are on the lines of the MCAs successfully used in the roads and ports sectors. However, developers have a different view of them. They feel that the new proposed model is like a boomerang. Giving takeover rights to distribution utilities invites more closures in the bidding docu-ment. These clauses in the long run can give unnecessary power to the discoms. Analysts are of the opinion that the involvement of discoms is not understandable as they don’t have much expertise in generation. This, according to them, invites unnec-essary resistance among developers.

As per the new SBDs, discoms will be owners of the power plant and private developers, the concessionaires, responsible for constructing and later supplying power to the discoms at a predetermined tariff, based on the bid submitted. Since the asset is not owned by the developer, it will not be possible to mortgage the assets for achieving financial closure. Without security creation on Project Assets including escrow accounts in favour of lenders, it will become unsecure lending. Lending on unsecured basis for ultra mega power projects (UMPP) /Case II project requiring substantial debt will have to comply to the regulatory guidelines and may also be detrimental to the financial health of the lenders. However, the recent RBI circular permitting banks to treat such project loans as secured debt would enable financing. The typical security available for such projects would be the first charge on the escrowed cash flows and is supplemented by the substitution rights available to lenders in case of default by a developer. 1. As an alternative, since such UMPPs are located at a single

location, it is possible to mortgage the asset with the approval of the discoms, similar to mortgaging assets of the transmission license with the approval of the commission. This would aid in achieving financial closure of the projects and also give the lenders the rights to mortgage.


financE / umpp

The new clause included in the UMPP case II bidding document, under which the fuel supply responsibility may shift to the discoms.This will, for sure, add to the financial burden of discoms.


financE / umpp

2. A BOOM (build, operate and own model) can provide the ideal middle path to address ownership and control issues of the discoms and developers. The contract could be extended at the end of the tenure, depending on the performance at that point of time; this would provide the state low cost power (as the asset has got depreciated entirely) and private sector efficiency.

While MoP has reduced the role of the developer significantly from owner to a contractor/lessor, it has not entrusted greater responsibilities to the discoms like completing land acquisition, obtaining all the clearances for both the power project and the coal mine. This lopsided contract would not be appreciated by the industry as it offers no benefits and in fact would only add to their woes.

Since UMPPs typically have multiple discoms as power purchasers, this mechanism would prove to be a costly affair

as requirements of multiple owners have to be met by the developer and hence would prove to be a tightrope walk for the entire tenure of the power purchase agrrement (PPA). Besides, not all discoms are adequately staffed with people, who can understand the nuances of such contracts, thereby making it difficult to handle ownership and fulfil related responsibilities.

Similar to substitution rights in case of default by the developer, substitution of the utlity too must require lender's approval or otherwise provide a clause that only higher rated discoms can replace a lower rated one.

If the developers were given a project on a platter based on competitive bidding with only the responsibility to build the

project and start the mining, the model would have received whole-hearted acceptance. The onus of completing the task would then be on the party best equipped to handle it.1. If the new UMPP envisages the role of the developer as a

contractor who merely converts coal to power, he should get the benefit of having a well-developed project from the bid process coordinator. Else, developers will have no option but to factor in the risk of delay in obtaining clearances, which would result in submission of a uncompetitive bid, further, resulting in loss for all stakeholders.

2. Getting clarity on imported coal treatment with respect to pass thorough is crucial for the success of future UMPPs based on imported coal.

3. There should also be clarity on use of excess coal mined. This is particularly important as the government is bracing extraordinary times with demand for forex from multiple frontiers including coal. The extra coal mined would only help the nation save valuable foreign reserves.

4. Clearances: Since the bid parameter is dependent on project cost, project viability will be affected because of cost escalation. The land acquisition and all necessary approvals are critical for such large size projects. Hence, there is always a cost overrun resulting into higher capac-ity charge due to non/timely compliance of this obligation. The project should not be awarded to the concessionaire or the appointed date should not be declared unless all

India is yet to have a clear roadmap for smart grids.

XXXXXXX

The change in case II bidding norms for UMPPs has not gone down well with the developers.


financE / umpp

necessary approvals are in place and the unencumbered land has been procured.

All developers would prefer to exit the project, make reasonable returns and redeploy the capital to future

investments. With ownership of the project lying with discoms, it would entirely prevent this scenario; and would also prohibit many good companies from taking up new projects due to possible paucity of capital. In this regard too, a build, oper-ate and own model would be preferable as it provides the required exit to developers with loss of control to the utilities.

Further, the time provided for financial closure of six months is quite inadequate considering the project size and param-

eters. The financial structure for an UMPP could involve various foreign funding and exotic structures to minimise the cost of

funding. Depending on the prevailing market scenario, this exer-cise could take anywhere between nine to 15 months.

Even though a consortium of lenders/FIs has been formed for infra projects, the process may take time. Further, certain project development work will take place post award of bids. Finan-cial close requires, inter-alia, debt tie-up, documentation and satisfaction of lenders’ PDCs (includes land acquisition, necessary clearances like MoEF), which also includes satisfaction of CPs under the SBD by both the Utility and the concessionaire. Lenders PDCs also include infusion of minimum amount of equity—25 per cent or above—to ensure promoter commitment, which may take longer as its infusion is dependent on project funding requirements. In the circumstances, delay prone activities like land, clearances, (including environment/forest clearance—two of the most common reasons for delays in project execution), prefer-ably by the time the model PPA is executed, will go a long way in early achievement of financial close/appointed date, and timely, project execution, within cost estimation.

The UMPP should come with a presigned FSA for the entire dedicated capacity, which is 80 per cent of the installed capacity. In case there is penalty for lower availability due to shortfall in fuel supply, there should be similar back-to-back stipulations in the FSA. If the developer is able to procure coal from his own sources, he should be allowed to sell the balance power in the open market to meet the power requirement of the nation. That would really be a step in the right direction. But as they stand now, it's difficult to whether the changes in SBD are for better or for worse.

If the developer is able to procure coal from his own sources, he should be allowed to sell the balance power in the open market to meet the power requirement of the nation.

The banks may be apprehensive in lending to the developers under the new norms in the UMPP bidding document.

analysis / renewables

32 electricals Today | september 2013

Finding substitutes For Coal


33september 2013 | electricals Today

Wind energy tariff in many states are competitive with coal-generated power now. Renewable energy, hence, will be an alternative for fossil fuel power

BY G M PILLAI

electricals Today | september 2013 34


security. At the same time, the study also assesses alternatives to ensure India’s long-term energy, environmental and economic security. While the findings are startling and have never before been put forth in the country, they are crucial for shaping India’s future economic policy, energy policy, and energy security. Policy formulation is after all about envisioning and securing the future and so the study is aimed at deriving the facts and figures relevant to India’s future energy policy and macro-economic management. The key findings and recommendations are sum-marised below.

Key FinDinGsThe total estimated coal reserves in India is 51.09 billion tonnes. However, the recoverable reserves are only 40.62 billion tonnes. Domestic coal production is likely to peak after 2031/32 at 1,100 million tonnes per annum (mtpa). This assessment is based on reserves to production ratio and does not consider risks, con-straints and other linking factors. World coal production is likely to peak around 2030. This is almost the same time that Indian production would also begin to peak. India is getting increasingly dependent on imported coal for power generation. In 2011/12, the country imported a total of 98.92 million tonnes (MT) of coal – (68.893 MT non-coking coal and 30.036 MT coking coal). This is projected to rise significantly in the future.

The projected coal production in India from 2011/12 to 2051/52 is given in table 1 below.

Modern society has been made possible on the bedrock of coal and coal-based electricity; any alternate ways of producing electricity would still undeniably be derived (in a large part) from coal during the transition period. Since India does

not have enough proved resources of conventional natural gas, coal may have to play the role of ‘bridge fuel’ for grid balancing and facilitating the transition to a green energy economy—till such a time that storage technologies and other advancements such as smart grids are widely available and commercially viable. However, the global threat posed by climate change cannot be addressed by a coal-based pathway. Climate mitigation should be a major concern, besides energy security and energy policy.

Coal is currently the mainstay of the Indian power sector. Understanding the long-term and multifarious implications of a coal-based strategy for power generation is crucial to India’s energy security. With this objective in mind, the World Institute of Sustainable Energy (WISE) recently concluded a twelve-month-long research study titled, Future of Coal Electricity in India and Sustainable Alternatives. The study covers the entire gamut of issues related to coal mining, processing, and combustion for thermal power generation in India from a holistic perspective. It links six themes—coal as a resource, environmental and climate externalities, the economics of coal, macro-economic implications of coal import, alternative RE-based transition pathways, and policy pointers — for creating a new framework for India’s energy

table 1: ProjeCted Coal ProduCtion in india (MtPa) FroM 2011/12 to 2051/52

Agency Resource 2011/12 2021/22 2031/32 2041/42 2051/52

CIL Existing 435 513 467 330 235

From Additional Resources in Known Areas (ARKA)

240 1 60 126 126

From accretions 1 25 26

Sub-total 435 514 528 481 387

SCCL and Goda-vari Valley

Existing 51 56 61 58 55

Captive mines Existing 38 238 475 475 375

From ARKA 20 60 74

From accretions 1 25 26

Sub-total 38 238 496 560 475

Old captives (TISCO, etc.)

Existing 15 20 25 17 9

Grand Total 539 828 1110 1116 926

Domestic coal production is likely to peak after 2013/32.


AnAlysis / REnEwAblEs

Securitisation of external supplies in the long-term is fraught with many dangers (medium level risk) like increasing prices,

decline of exportable surplus of major countries from where we source imports due to country policies aimed at conserv-ing resources for future domestic use, competing importers like China, etc. Such sudden policy changes were witnessed in Indonesia and Australia recently.

Almost all countries have, at one time or the other, adopted appropriate policies to control the export price of coal: Australia from 1971 to 1991, South Africa before 1986, and Indonesia in 2011, often guided by the desire to maximise profits from deplet-ing assets and to encourage domestic consumption.

The increase in price impacts the importing countries adversely in many ways, example by raising cost of produc-tion, lowering demand (and hence growth), under-utilisation of infrastructure, etc. If the change is not drastic—like the oil imbroglio of the 1970s—the market generally adjusts to such changes. The index-based pricing of Indonesian coal (intro-duced recently) affected the market by about US$15–US$20 initially, when the benchmark price for index coal in November 2011 was US$116.65. By May 2012, the benchmark price had come down to US$102.12; it may rise again, but the point is that it will be determined by market forces.

Indonesia had retained the right to direct coal output from private mines for national requirements right from the beginning of the Coal Contract of Work System, but it was never enforced. In 2011, the regulation of domestic market obligation made it man-datory for coal companies to sell up to 35 per cent of the output to specified local entities (basically the state-owned power utility). While for the seller’s comfort, the criteria provided have identified only around 50 companies so far, only 24 per cent of the produc-tion has been earmarked in the first two years and, in any case, since the coal will be actually sold domestically, for an importer, it reduces the availability and hence increases the cost.

Australia has recently passed two Acts that will affect coal importers adversely. While the more ominous-sounding Mineral Resource Rent Tax may not add substantially to the importer’s bill (being meant to target only companies making huge profits), the Carbon Tax of AU$35/tonne is going to increase costs of imports with consequent downstream problems.

The study has noted that if India needs to import large quantities of coal, particularly for power generation, there is sufficient potential for locating supplies in the interna-tional market for several decades. This, however, entails some medium-level risks. Analysts believe that the hardening of coal prices in the international markets may continue for a few more years until environmental concerns in the northern Asia-Pacific region and the US depress demand and lower prices. The cost of bulk transportation of imported coal may increase due to increase in oil prices in the mid- to long-term, due to peaking of oil. This poses an additional risk factor in the landed cost of imported coal. How far can India afford such large foreign exchange outgoes remains to be seen. In view of the large balance of payments problems that such large coal imports may entail, it would be necessary to try and reduce the quantum of imports by: Fig 1: Four scenarios of India’s future balance of payments

Wind energy is cheaper than coal based power.



areas for mining of coal, will render large tracts in central Indian states barren—devastation for short-term gain when other alternatives are available. Water availability for the complete value chain of coal mining, processing, and power generation will be another major constraint in the future. The average water requirement in India for power generation alone is around 3.83

• enhancingdomesticproductionwithspecialattentiononmaximising recovery from reserves in the ground, which is very low at present;

• improvingefficiencyofelectricitygeneration,transmissionandconsumption to reduce electricity demand;

• expeditingthedevelopmentofalternativeandrenewablesources of energy. Even if coal is available for import, India’s ability to import will be

severely constrained by unsustainable levels of current account deficit (CAD). Four scenarios of GDP growth and energy imports were considered for the future (Fig.1). It emerges that a business-as-usual scenario of fossil fuel imports could result in highly unsustain-able levels of CAD, upwards of 13 per cent GDP in 2030/31 and even reaching 39 per cent of GDP by 2030/31 in a worst-case scenario. The sustainable level is considered at around three per cent of GDP.

In the absence of viable alternatives to oil and the need for gas imports to sustain installed capacity, it would not be possible to restrict import of these fossil fuels. However, there are viable alter-natives to coal and hence it may become imperative to curtail coal imports to contain CAD in the not-too-distant future.

The environmental externalities of coal mining, process-ing, and combustion, and their combined effects on biotic

resources, habitats, water availability, livelihoods, and health of people will also work as major limiting factors in the future. Especially, attempts to dilute the restriction of ‘no-go’ forest

Table 2: Wind Vis-à-Vis Coal Tariff in Major Wind-GeneraTinG sTaTes

StateAverage Wind Tariff (`/kWh)

ScenariosBlending Ratio

Average Tariff (`/kWh)

Andhra Pradesh 4.70 Only domestic coal 100-00 3.78

Gujarat4.30

* Domestic Imported (D:1)

90-10 4.08

Karnataka 3.70 (D:1) 70-30 4.61

Kerala 3.64 (D:1) 60-40 4.86

Madhya Pradesh 4.35 (D:1) 50-50 5.08

Maharashtra 3.78-5.67 (D:1) 30-70 5.50

Punjab 5.07 (D:1) 20-80 5.68

Rajasthan 4.46-4.69

Tamil Nadu 3.51

*1. Derived normative tariff for coal-based thermal plant as per Central Electricity Regulatory Commission-2009 Tariff Regulation. 2. Wind power tariff as per recent SERC tariff orders.

India's ability to import coal will be constrained by unsustainable levels of CAD.



(mtoe) with constant real price, and 932 mtoe with real price increase of three per cent per annum. The final energy inten-sity of GDP is projected to decline at the rate of 1.96 per cent per annum over the time horizon 2009/10 to 2045/46, even if we consider the highest GDP growth of eight per cent per annum and no real energy price change scenario. The rate of decline of energy intensity can be enhanced to 3.74 per cent per annum if the final energy prices in real terms are allowed to rise at the rate of three per cent per annum, inducing technical change for energy conservation. The gross electricity requirement ranges between 3,767–3,485 billion units (BU) in 2045, considering a growth rate between seven and eight per cent per annum. A scenario of forced RE can deliver upto 2,980 BU of this requirement by 2045.

Enough RE resources to the tune of 3,941+ GW including 150 GW of hydropower resources are available the

Indian economy. The total installed capacity of RE could range between 346 GW and 401 GW by 2032 (33 per cent RE), and 1,731 GW by 2050 (75 per cent RE). The demand for electricity in 2050 for a popula-tion of 1.6 to 1.8 billion has been considered at a maximum of 5,500 BU. In this scenario, the per capita gross electricity generation would be 3,284 kWh per annum in 2045/46 as per the base case scenario of eight per cent growth and no real energy price change. India may need to increase wind turbine manufacturing capacities from the current ~10,000 MW/annum to 20,000 MW/annum.

The study shows that it is possible to generate 75 per cent of our electricity from renewable sources by 2050 (See Fig 2.). In order to achieve this, three penetration scenarios for four decades with varying incremental RE penetration targets are shown in Fig 2. The total land requirement under different scenarios would be less than 30,000sq-m, which is less than one per cent of the gross land area of the country.

litres/kWh. Some thermal power plants like Parli and Chan-drapur in Maharashtra have faced closure due to water shortage in the recent past.

Even from an economic perspective, large-scale development of coal-based generation may not be advisable in the long

term. At current prices of coal, the tariff for new coal power from domestic coal will be Rs3.78/kWh (6.87¢/kWh). If 90 per cent imported coal is blended, the tariff will increase to Rs5.86/kWh (10.65¢/kWh). Even pool pricing will significantly increase the cost of coal-based electricity. The above prices of coal-based electricity do not consider hidden subsidies and the cost of externalities. An earlier research study by WISE found that coal-based electricity already enjoys a hidden subsidy of 68 paise/kWh (1.45¢/kWh). This does not include subsidies given for transportation of coal. Based on internationally accepted norms of quantifying externali-ties, the best estimate of externality cost of coal power would be Rs8.92/kWh (17.84¢/kWh). When these two (subsidies + cost of externalities) are added, the real cost of coal-based power in India could range from Rs12.75/kWh (25.94¢/kWh) for domestic coal to Rs14.83/kWh (29.72¢/kWh) for imported coal-based power. Table 2 (right) shows the wind power tariff in different states in India and the tariff of new coal-based projects using domestic coal and blends of domestic and imported coal.

It can be seen from the above table (especially in Karnataka, Kerala, and Tamil Nadu) that even today, wind power is cheaper than coal-based power. Wind power is available in different states in the tariff range of Rs3.51 (7.16¢/kWh) in Tamil Nadu to Rs5.00+ (10.20¢/kWh) in Punjab and Maharashtra. Solar power prices have also fallen significantly in the recent past. In the recent bidding process in Tamil Nadu, the lowest quoted rate for solar power was Rs5.95/kWh (12.13¢/kWh). Solar power may reach grid parity sooner than expected—even as early as 2015. So all renewables are racing towards grid parity and have very negligible externalities.

Considering eight per cent growth rate (base case sce-nario), the study indicated that the final energy demand

in 2045/46 would be 1,858 million tonnes of oil equivalent

RE penetration profress scenarois by 2050

2010

5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Advance Scenario

Moderate ScenarioBusiness As Usual

Scenario

5%

5%

2020

15%

15%

15%

2030

40%

35%

30%

2040

60%

55%

50%

2050

75%

75%

75%

Fig 2: Decadal RE penetration scenarios by 2050 for India

5500 bU will be the electricity

demand in 2050

Solar power will soon be in the price range of thermal power.



Even though land requirement for the complete value chain of coal-based generation and RE would be similar, in the

case of RE, the land will not be permanently destroyed (as in coal mining) and can be reused after the project life. Rooftop and decentralised off-grid applications do not require land. In addition, RE projects will mostly come up in wastelands or arid and semi-arid areas where productivity and population pres-sures are low. Hence there will be no displacement, resettlement or rehabilitation problems. In addition, agricultural land will

not have to be diverted, thereby ensuring food security. RE technologies, except concentrated solar thermal power

(CSP) are largely water-neutral. In an emerging water-stress situation due to climate change

and environmental destruction, this is a huge benefit vis-à-vis coal based

thermal projects, some of which are facing closure due

to non-availability of water for cooling. Keeping the ‘no-go’

forest areas for coal mining intact by moving towards RE generation could save

large tracts of pristine forests. This is a great envi-ronmental benefit and will help maintain water security,

land productivity, and overall environmental security, especially in central India. Large-scale biotic destruction caused by pollu-tion from coal mining and coal-based power generation could be avoided. Emissions reduction will help improve air quality and prevent large-scale morbidity and mortality caused due to severe atmospheric pollution.

RE maximisation as proposed in this study could avoid up to 3.63 billion tonnes of CO

2 emissions per annum by 2050. RE

maximisation can generate upto 1.6 million jobs by 2020 and 25 million jobs by 2050 without causing environmental destruction. De-emphasising coal after 2022 will also save large investments in infrastructure (ports, railways, etc.) and free considerable rail transport for passenger movement. Accelerated development of renewables for power generation can have positive macro-economic impacts by solving the serious problem of current account deficit – which is projected to increase from 13 to 39 per cent of GDP by 2031/32, if the business-as-usual scenario of fossil fuel import continues. RE projects have very short lead times or gestation periods. Projects (except CSP) can be commissioned within 6 months to one year, due to the modular nature of equip-ment. Fast scaling-up of capacity is possible.

RECOMMEnDATiOns1) Exhausting our coal reserves will not be a wise policy since

coal may have to be used as a ‘bridge’ fuel during the transi-tion to a 75 per cent green energy system by 2050, pending maturity and large-scale availability of storage technologies and modern grid systems. Hence a policy of staggered use of coal is recommended. The concomitant policy choice implies a 1.5 per cent per annum mandated growth rate of RE between 2022/2032 and two per cent per annum mandated growth rate for the period 2032/2050.

2) Similarly, the solar manufacturing capacity will have to be stepped up from 2,000 MW/annum to perhaps 18,000–25,000 MW/annum by 2020, if accelerated targets are to be achieved.

Rs3.63 bT of CO2 emission can be avoided

through RE by 2050.

Coal may have to be used as a 'bridge fuel' during the transition to a green energy system.



development. Such a transition does not exclude coal. Since India has very small proved reserves of natural gas (not considering the yet to be explored shale gas with its serious environmental impacts), coal would need to be used as a ‘bridge’ or ‘transition’ fuel. That way, the impact of emissions would be staggered over a long period of time, while we transition to a truly green energy economy. The study also proves that such a transition would in fact bring in huge benefits, and even security, in terms of economy, environment and climate. The business-as-usual approach is ridden with climate, environmental, and macro-economic risks of gigantic proportions. A holistic approach to solving all the three problems together is essential. Since the spectre of climate change is haunting us—not just at the global level but also at the local level—environmental priorities would need to be thoughtfully integrated into policies and strategies for energy production and consumption. Such a transition seems imperative, considering the scale, complexity, and significance of the changes underway in conventional energy resources around the world, leading to their peaking around 2030—often referred to as the 2030 spike—and subsequent decline. It would appear that there are risks in the proposed transition pathway; but the risks are worth taking. A new policy pathway is critical for shaping our future energy economy.

G M Pillai is Founder Director General, World Institute of Sustainable Energy (WISE), Pune

3) Considering the above potential after the installation of planned coal-based power generation capacity in the 12th and 13th plan periods (upto 2022), it would be desirable to go for a ‘High RE, High Gas’ (HREG) capacity addition scenario (one of the three scenarios developed by the Central Electricity Authority, which tries to maximize substitution of coal-based generation with RE and gas) for generation of electricity. Coal-based project installation could be signifi-cantly reduced in this scenario to 21,675 MW during the 14th plan period (2022/2027) and 13,645 MW during the 15th plan period (2027/2032). This will be a huge reduction from the 51,400 MW capacity planned for the 12th plan period (2012/2017).

4) The above strategy, if implemented, will help contain CAD, externalities of coal-based generation, and lower the cost of power, among other things.

5) To achieve such a transition, we would require the evolu-tion of an alternative future-oriented policy framework for electricity. It would also require realistic assessment of GDP growth and energy demand by considering strategies for reducing energy intensity and decoupling energy growth from economic growth.

6) It is recommended to allow real final energy price index to increase at the rate of three per cent per annum. Over the long run, this would aid in reduction of energy intensity and energy conservation targets.

7) A coherent articulation of the many policy implications, arising from this change of path, should be ensured so that long-term performance is not compromised.

8) A critical element in such a new policy framework would be the creation of a legal framework or law for accelerated devel-opment of renewables.

9) Stricter electricity regulation measures to enforce renewable purchase obligation (RPO) would be required to achieve the projected RE capacity additions.

10) Providing low-cost finance in adequate quantities would be critical for this transition. Interest subsidies and such other instruments should be instituted for loans to the RE sector. Besides, a separate ‘priority sector status’ could be given for lending to RE projects.

11) Other concomitant actions like grid augmentation, establish-ment of green transmission corridors (or HVDC networks), and moving towards a smart grid would be essential. Invest-ments should be planned in these areas. Committed actions to promote large-scale R&D, innovation, and human resources development in RE technologies would be essential.

12) Besides actions taken at the central government level, state governments should also take proactive measures – as some of them are already doing. State-level RE master plans should be prepared based on revised RE resource assessments. Such master plans should form the basis of a planned transition to a green, clean, and secure energy economy.

This study dispels the myth that coal is eternally essential for India’s economic development, and in fact shows that we can

transition to a clean energy system without compromising the

Establishing green transmission corridors will be essential.


markET daTa

Seven states — Himachal Pradesh, Maharashtra,Gujarat, West Bengal, Karnataka, Mizoram and Tripura — can boast of minimum villages to be electrified. Howerver, the rural electrification is progressing at slow pace.

rural electrification on slow track

Progress report of village electrification as on 31-05-2013

sl. no. states/uts total inhabited villages as

per 2001 census

Villages electrified as on 31-03-2013 as per new definition (Provisional)

cummulative achieve-ment as on 31-05-2013 as per new definition

Percentage of vil-lages electrified as on 31-05-2013

unelectrified villages as on 31-05-2013 (V)

numbers Percentage

1 andhra Pradesh 26613 26613 100 26613 100 0

2 arunachal Pradesh 3863 2917 75.5 2917 75.5 946

3 assam 25124 24156 96.1 24156 96.1 968

4 Bihar 39015 36744 94.2 37084 95.1 1931

5 Delhi 158 158 100 158 100 0

6 Jharkhand 29354 26190 89.2 26190 89.2 3164

7 Goa 347 347 100 347 100 0

8 Gujarat 18066 18031 99.8 18031 99.8 35

9 Haryana 6764 6764 100 6764 100 0

10 Himachal Pradesh 17495 17480 99.9 17480 99.9 15

11 Jammu&kashmir 6417 6304 98.2 6304 98.2 113

12 karnataka 27481 27468 99.95 27468 100 13

13 kerala 1364 1364 100 1364 100 0

14 Madhya Pradesh 52117 50863 97.6 50863 97.6 1254

15 chattisgarh 19744 19181 97.1 19181 97.1 563

16 Maharashtra 41095 41059 99.9 41059 99.9 36

17 Manipur 2315 1997 86.3 1997 86.3 318

18 Meghalaya 5782 4988 86.3 4988 86.3 794

19 Mizoram 707 661 93.5 661 93.5 46

20 nagaland 1278 896 70.1 896 70.1 382

21 orissa 47529 37500 78.9 37500 78.9 10029

22 Punjab 12278 12278 100 12278 100 0

23 rajasthan 39753 38771 97.5 38778 97.5 975

24 sikkim 450 450 100 450 100 0

25 tamil nadu 15400 15400 100 15400 100 0

26 tripura 858 797 92.9 797 92.9 61

27 uttar Pradesh 97942 87086 88.9 87086 88.9 10856

28 uttaranchal 15761 15593 98.9 15593 (^) 98.9 168

29 west Bengal 37945 37941 99.99 37941 99.99 4

total(states) 593015 559997 94.4 560344 94.5 32671

union territories

1 a&n island 501 339 67.7 339 67.7 162

2 chandigarh 23 23 100 23 100 0

3 D&n Haveli 70 70 100 70 100 0

4 Daman & Diu 23 23 100 23 100 0

5 lakshadweep 8 8 100 8 100 0

6 Pondicherry 92 92 100 92 100 0

Total(UTs) 717 555 77.4 555 77.4 162

Total 593732 560552 94.4 560899 94.5 32833

(V)it includes no. of villages

that are not complying the

new definition of village

electrification of 2004& no.

of villages where no elec-

trification infrastructure is

available.

na-not available

(^) it includes 75 no.of vil-

lages which are found un-

inhabited and submerged

due to tehri dam.

(*)out of this 162 vil-

lages,88 villages are in

encroached forest area and

cannot be electrified as per

supreme court order

and 72 villages have been

washed away in tsunami

and population shifted

to other places already

electrified.

(**)35 villages unelectri-

fied due to going under

submergence, deepwater,

deep forest area and at

present no population.

(***)36 no. of villages to

be electrified by non-

conventional method.

(**)

(*)

(***)


markET daTa

Improved monsoon in the current year reflected in capacity addition of hydro power in the month of July. However, thermal was below the planned levels.

Hydro improves,thermal declines

ENERGYWISE - PERFORMANCE STATUS ALL INDIA - REGIONWISE

PERIOD: JUL-2013 VIS-A-VIS JUL-2012 AND APR-JUL-2013 VIS-A-VIS APR-JUL-2012SUMMARY - REGION WISE

category /

Monitored capacity (Mw) target apr

2013 to Mar 2014

Generation (GwH)

Jul-13 aPril 2013 - Jul-2013

ProGraM actual *"actual saMe MontH 2012 - 13"

" Percent-aGe of ProGraM (4/3)"

"Percent-aGe of last Year (4/5)"

ProGraM actual *actual saMe PerioD 2012 - 13"

Percent-aGe of ProGraM (9/8)

Percent-aGe of last Year (9/10)

1 2 3 4 5 6 7 8 9 10 11 12

NORTHERN REGION

tHerMal 35534.26 207657 17297 16632.85 14889.03 96.16 111.71 68134 64480.98 61734.93 94.64 104.45

nuclear 1620 10664 938 774.44 871.7 82.56 88.84 3565 3758.49 3452.32 105.43 108.87

HYDro 15541.25 61597 8217 8718.14 8300.69 106.1 105.03 26535 27483.81 26176.54 103.58 104.99

TOTAL 52695.51 279918 26452 26125.43 24061.42 98.77 108.58 98234 95723.28 91363.79 97.44 104.77

WESTERN REGION

tHerMal 60222.31 292416 21724 20330.83 21590.49 93.59 94.17 92970 91897.68 90258.63 98.85 101.82

nuclear 1840 12363 1013 1207.91 1197.4 119.24 100.88 3998 3828 4922.45 95.75 77.77

HYDro 7392 15843 1069 2580.56 952.03 241.4 271.06 3884 6458.2 4399.05 166.28 146.81

TOTAL 69454.31 320622 23806 24119.3 23739.92 101.32 101.6 100852 102183.88 99580.13 101.32 102.61

SOUTHERN REGION

tHerMal 29252.8 157021 12321 12049.7 13214.72 97.8 91.18 52023 54959.57 54595.44 105.64 100.67

nuclear 1320 12173 768 756.61 656.93 98.52 115.17 3036 2812.73 2763.22 92.65 101.79

HYDro 11387.45 29454 2424 2511.05 1271.25 103.59 197.53 8310 7103.1 6985.63 85.48 101.68

TOTAL 41960.25 198648 15513 15317.36 15142.9 98.74 101.15 63369 64875.4 64344.29 102.38 100.83

EASTERN REGION

tHerMal 27345.05 150503 12023 11619.82 10766.67 96.65 107.92 48867 46588.49 45431.98 95.34 102.55

HYDro 4078.7 11191 1242 1333.17 863.09 107.34 154.46 4024 4542.32 2554.48 112.88 177.82

TOTAL 31423.75 161694 13265 12952.99 11629.76 97.65 111.38 52891 51130.81 47986.46 96.67 106.55

NORTH EASTERN REGION

tHerMal 1258.7 5140 378 383.94 368.32 101.57 104.24 1497 1612.05 1453.87 107.69 110.88

HYDro 1242 4178 670 605.28 534.5 90.34 113.24 1591 1593.77 1302.54 100.17 122.36

TOTAL 2500.7 9318 1048 989.22 902.82 94.39 109.57 3088 3205.82 2756.41 103.82 116.3

BHUTAN IMP REGION

0 4800 759 685.16 993.84 90.27 68.94 1780 2117.58 1936.61 118.97 109.34

ALL INDIA REGION

tHerMal 153613.12 812737 63743 61017.14 60829.23 95.72 100.31 263491 259538.77 253474.85 98.5 102.39

nuclear 4780 35200 2719 2738.96 2726.03 100.73 100.47 10599 10399.22 11137.99 98.12 93.37

HYDro 39641.4 122263 13622 15748.2 11921.56 115.61 132.1 44344 47181.2 41418.24 106.4 113.91

BHutan iMP 0 4800 759 685.16 993.84 90.27 68.94 1780 2117.58 1936.61 118.97 109.34

TOTAL 198034.52 975000 80843 80189.46 76470.66 99.19 104.86 320214 319236.77 307967.69 99.69 103.66

* ProVisional BaseD on actual-cuM-assesMent


MarkET ColuMn

A closer look at the Q1 results of power companiesD K AggarwalCMD, SMC Investments and Advisors Ltd

companies on a slide

During 1QFY14, most of the power companies who have long term PPA(Power Purchase Agreement) and domestic fuel linkages (totally or partially backward integrated) showed good performance despite many challenges in the

power sector. On the other hand , the companies whose plants are running on imported coal reported huge losses on account of rupee depreciation during the quarter. Power grid, NTPC, NHPC and SJVN were the companies who reported profits and growth on Y-o-Y basis, while Adani power and Tata power reported huge losses on account of the reasons mentioned above.

Among the best performer category, Power grid reported better than expected revenue of Rs35.5billion registering 23 per cent y-o-y. and 5.3per cent quarter-on-quarter growth. Reported profit after tax was up 19.6 per cent at Rs10.3billion. The company capitalised projects worth Rs29.5bn in 1QFY14, and we expect, the capitalis-ing momentum to gear up in coming quarters. As per the management, the company planned Rs1,100billion of capex during the 12th Five Year Plan (FY13-17).

Plants running on imported coal reported huge losses on account of rupee depreciation during the quarter.

For power grid, the asset base increases with every tick. NTPC reported net sales of Rs156 billion (-2 per cent y-o-y). This was mainly on account of low PLF (plant load factor), it generated 57BUs as against 58.87BUs in corresponding quarter of previous year. PLF for coal stations were 79.12 per cent as against 86.45 per cent in 1QFY13. Availability factor of coal stations were 84.85 per cent as against 88.40 per cent in the corresponding quarter of previous year and that for gas stations were 94.39 per cent in 1QFY14 versus 92.63 per cent in 1QFY13 EBITDA stood at Rs50billion (+11 per cent y-o-y). This was mainly on account of low fuel cost(high operational efficiency).

PAT stood at Rs25billion( +1 per cent y-o-y). Loss due to fuel supply is 4.813BU’s in 1QFY14 as against 1.229BU’s in 1QFY13. However, we expect, after resolving issue with Coal India regarding fuel pact NTPC profitability to grow at a higher pace in future. Hydro power companies like SJVN and NHPC reported good set of numbers (15-20 per cent growth) on account of good monsoon during the quarter. Going ahead, we expect the same robust performance in 2QFY14E from these hydro power companies.

On the negative side, Adani and Tata power disappointed the most. Consolidated revenue went up by 24 per cent at Rs91,115million as compared to Rs73,164million. Consolidated EBITDA was up by 25 per cent at Rs85,742mn as compared to Rs68,516million. Consolidated PAT stood at Rs1,147mn as compared to Rs1,459million. This is on account of forex loss Rs2,927million. Adani power posted a net loss of Rs9,180million on account of same concern as in the case of Tata power.

Company Name

Net Sales INR mn

R PAT INR mn

Net Sales YoY%

R PAT YoY%

1 Tata Power Co. 91115 -1147 26.6% -178.6%

2 Power Grid Corpn 35537.5 10403.4 23.0% 19.6%

3 NTPC 156128.9 25270.2 -2.2% 1.1%

4 SJVN 5376.8 3432.4 6.7% 8.9%

5 NHPC Ltd 16005.1 7199.3 14.4% 7.5%

6 Adani Power 25348.6 -11982.9 68.8% 48.0%

Date post:	25-Mar-2016
Category:	Documents
Upload:	electricals-today
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