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Delivering Knowledge Concise and Precise Fortnightly Thermal Bulletin Indian Edition

Volume 01 | ISSUE 05 | December 2012

Special Feature

Rs. 2,75,000 crore outlay proposed by Maharashtra in 12th five-year plan P1

This issue
India Highlights P2 Project Tracker P2 Market Data P3 Upcoming Events P4

Rs. 2,75,000 crore outlay proposed Maharashtra in 12th five-year plan

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In a plan to accelerate economic growth by implementing specially-designed growthoriented policies in the 12th Five-Year Plan Maharashtra proposes plan outlay of Rs 2,75,000 crore to achieve the growth target, said, Maharashtra CM Prithviraj Chavan. According to chavan, Maharashtra has achieved a growth rate of 8.6% during the 11th Five-Year Plan period, despite the impact of economic slowdown and erratic monsoon that adversely impacted farm production. "We now propose a gross state domestic product (GSDP) growth of 10.5% for the 12th Plan. We have proposed a plan outlay of Rs 275,000 crore in the plan," Prithviraj Chavan said. Maharashtra has withdrawn load-shedding in 80% area of the state and has added 1,500-MW capacity projects in 2011-12. Thermal projects with a capacity of 3,230 MW are under execution, and further 1,570-MW capacity projects are under planning with total investment of Rs 23,530 crore. Of this, Rs 8,205 crore has already been spent. During the 11th Plan period, the state attracted 4,630 projects, with a total investment of over Rs 6.5 lakh crore and employment potential of above 22 lakh.

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Market Highlights India

Indian Highlights BGR Energy to supply generators for NTPCs Chhattisgarh project BGR Energy is set to start work on the Rs 1,548crore contract to supply two 800-MW Steam Turbine Generators for NTPCs Lara Super Thermal Power Project in Chhattisgarh. The NTPC project is a 4,000 MW project of 5 x 800 MW and the Chennai-based BGR Energy will provide two (2 x 800 MW) steam turbine generators for the project. The company received the Notification of Award on December 13, said B.G. Raghupathy, Chairman & MD, BGR Energy. He said the company with its capability in engineering-procurement contracts and balance of plant work for power projects has emerged the lowest bidder in the NTPCs bulk tender for supply of 11 x 660 MW super critical boilers. EAC favours Tata Power's 1,980 MW coalbased Tiruldih project 1 year extention The expert appraisal committee (EAC) on environmental impact assessment (EIA) of thermal power and coal mine projects has recommended the extension of validity of terms of reference (ToR) for Tata Power`s 3x660 MW super critical coal-based Tiruldih power project, the committee agreed for 1 year extension since the coal and power ministries are yet to carry out the exercise for coal allocation for the 12th plan period. However, the committee did not immediately favor the change of coal-based unit and said that the project developer is required to submit compliance details prior to the EAC making any decision about the same. OTPCL may implement 2400 Mw project on its own Unable to find a suitable strategic partner for implementing the 2400 Mw coal-based power project, Odisha Thermal Power Corporation Ltd (OTPCL) is now set to implement the project on its own. OTPCL, a 50:50 joint venture between Odisha Mining Corporation (OMC) and Odisha Hydro Power Corporation (OHPC), has been allowed to take up project construction on its own without inducting a strategic partner at this stage. This decision was taken at a meeting of the steering committee recently. The committee felt that inducting a strategic partner under the present fluctuating and complex regulatory scenario may not fulfill the objectives of OTPCL. OTPCL has been permitted to take consultancy support of NTPC in providing technical consultancy for pre-project development, tendering and selection of bidders for supply and erection of plant's machinery, commissioning and post commissioning supervision including quality assurance on behalf of the company. Project Tracker Sterlites second thermal unit to start in March 2013 The second 80 MW unit of Sterlite Industries 160 MW thermal power plant at Tuticorin is set to go on stream by March 2013. The company, which uses Indonesian coal for the thermal power plant, had synchronised the first 80 MW unit in September 2012. About 70 MW from the plant will be used captively for the company's copper smelter operations at Tuticorin, and the excess power is being supplied to the state electricity utility Tamilnadu Generation and Distribution Corporation (TANGEDCO). GMR request for 1,370 MW super critical plant put on hold GMR Chhattisgarh Energy's request for an amendment to the environment clearance for its 1,370 MW super critical coal based project has been currently put on hold by the re-constituted expert appraisal committee on environmental impact assessment of thermal power and coal mine projects. The environment clearance for the project that was obtained last year needs to be amended to allow for a slight rearrangement in the Ash Pond and Water Reservoir area. During a committee meeting where the matter was raised, the committee told the developer that the amendment cannot be made till detailed information such as topographical features of the new area to be acquired is made available. Thermal power plant in modernise by Tata Power Trombay to

Private Investment in power sector is estimated at Rs 85,578cr in this fiscal, says Power Minister Jyotiraditya Scindia.

Private sector investment in the power sector is estimated at Rs 85,578 crore in this fiscal As per official figures, Rs 56,476 crore worth of funds were pumped in by the private sector during 2009-10, while in 2010-11, Rs 86,646 crore were invested by private companies. The investment was Rs 1,06,975 crore in 2011-12. Private sector investment in the power sector has not narrowed down in the last few years, he scindia said. The projected investments by the private sector during the current fiscal stand at Rs 85,578 crore. Up to 100 per cent foreign direct investment (FDI) is permitted in the power sector under the automatic route for generation, transmission and distribution, he added. The government has allowed issue of tax-free bonds for Rs 60,000 crore to finance infrastructure projects, which include Rs 10,000 crore for Indian Railway Finance Corporation, India Infrastructure Company and power sector," he added. External commercial borrowings to part finance rupee debt of existing power projects is also allowed. The government has reduced the rate of withholding tax on interest payments on ECBs from 20 per cent to 5 per cent for three years to provide low cost funds to infrastructure sectors including power.

Tata Power has proposed modernisation of its 500 MW Unit 6 at Trombay Thermal Power Station. At present, Unit 6 can operate only on oil and gas. The modernisation plan includes addition of coal firing equipment and installation of pollution control equipment to make the unit work on coal, oil and gas, wherein all three fuels can be combined in any percentage. This is being done to control spiralling oil cost which is affecting tariffs in Mumbai, the company said. Tata Power is to invest around Rs 1,174 crore for the modernisation exercise, Moreover, no additional water or any other resource is being sought to operate the modernised plant. East Coast Energy may resume work on thermal power project The East Coast Energy Pvt Ltd is likely to resume work on its thermal power project at Kakarapalli village in Srikakulam district in spite of stiff opposition from sections of local people and environmental activists. The company recently signed an agreement with the Central Power Distribution Company Ltd. of Andhra Pradesh for sale of 300 MWs as soon as the power plant begins generation. Initially, the company will generate 1,320 MWs.

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Transmission & Distribution Indian Scenario

Cabinet nod for two key power sector proposals The state cabinet gave its approval for the creation of Bihar Grid Company Ltd for which an agreement would be signed between the Bihar State Power (Holding) Company Ltd or its associate company and Power Grid Corporation of India Ltd (PGCIL), in a bid to strengthen the power transmission system in the state. According to, principal secretary, cabinet coordination, Vijoy Prakash, the decision to set up such a company was recently taken at a meeting to review different transmission projects in the state. The new company would function on build, own and operate (BOO) basis for strengthening the power transmission system in the state. The cabinet also approved a proposal to sign a memorandum of understanding (MoU) with Sutlej Hydro Power Corporation, a joint venture of Himachal Pradesh government and the Union government. Under the MoU, Bihar would have 85% share of the power generated from Chausa project and Sutlej Power Corporation would get the rest 15%. Power Grid to invest Rs 252 crore in two transmission projects State-run Power Grid Corp said its board has approved investments worth Rs 252.31 crore for two transmission projects. The power utility would invest Rs 96.27 crore for 'Northern Region System Strengthening Scheme - XXVII', which is expected to be complete within 20 months from the date of investment approval. Another investment to the tune of Rs 156.04 crore would be made for 'Augmentation of Transformers in Northern Region Part-A'. The commissioning schedule is 22 months from the date of getting the board's green signal. Torrent power seeks suppliers to meet 3,700 MW power requirement for FY14 Torrent Power Limited has invited bids from approved Trading Licensees, DISCOMs, State Electricity Utilities, Generators, etc to supply power on round the clock (RTC) basis from April 1, 2013 to March 30, 2014. The company has tentatively specified a quantum of 3,700 MW to be procured over the 12 month period. The successful bidder will be responsible for supply of power at the delivery point which is Gujarat state transmission utility - Gujarat Energy Transmission Company (GETCO). Applying for the open access bookings as per the latest open access guidelines will also be the responsibility of the bidder. CCEA approves setting up of National Electricity Fund The Cabinet Committee on Economic Affairs has approved the setting up of a "National Electricity Fund (Interest Subsidy Scheme) to provide interest subsidy aggregating to Rs.8,466 crore on loan disbursement amounting to Rs.25,000 crore to the state power utilities both in public and private sector, to improve the distribution network". The scheme will become operational within six to 12 months. The fund is being set up to provide interest subsidy on loans to be disbursed to the distribution companies (DISCOMS)to improve the distribution network for areas not covered by the government's Rajiv Gandhi Gramin Vidyutikaran Yojana (RGGVY) and Restructured Accelerated Power Development and Reforms Programme (RAPDRP) project areas. Rajasthan Transco gears up to raise Rs 250 crore through bonds Rajasthan Rajya Vidyut Prasaran Nigam Limited (RVPN) has planned to raise Rs 250 crore, with a green shoe option of Rs 300 crore, through private placement of unsecured redeemable non convertible bonds. The face value of the bonds is Rs 10, 00, 000 each and the bonds are in the form of taxable debentures. The funds raised will be utilised towards part funding of capital expenditure on transmission projects and other business transactions of the state utility. The bonds will be issued for a 12 year period to be redeemed in three installments at the end of the 10th, 11th and 12th year in a 30:30:40 ratio. REC invites project RfQs for transmission

POLICY INSIGHTS
Dollar bidding to be allowed by CIL for mine development The worlds largest coal miner, which is gearing up to offer multi-billion dollar contracts for mine development and operation (MDO) as well as equipment purchase in 2013-14, is now redrafting its tender documents to allow bidding in the US dollar, according to sources. The demand for dollar bidding has come from prospective bidders during recent rounds of pre-bid meetings. As most of the mining contracts are long-term in nature, global players are unwilling to share the downside risk of currency fluctuation. A global opencast equipment supplier said, in a competitive environment, where we have limited space to earn profits, it is extremely risky to agree to payments in rupee terms in contracts lasting over 11 or 12 years. A devaluation in the rupee and we may end up in the red. According to CIL Official, Ideally, contractors should take the performance risk while we should share the risk of volatility in Indian currency. The argument is simple. If the Indian currency devalues further, forcing CIL to pay more in rupee terms, it can always recover the same by tweaking the price of coal. The company will allow bidders to claim payment in dollars for the 11-year maintenance and repair contract. The face value of the equipment, however, will be paid in rupee terms.

NUCLEAR HIGHLIGHTS
India, Russia to embark on $45 bln nuclear energy roadmap India and Russia agreed to an ambitious roadmap for deepening their cooperation in civilian nuclear energy and construct together 16 to 18 nuclear energy plants in India of 1000 MW each. This can be huge of all Indo-Russian joint projects and collaborations and this also explains why Russian President Vladimir Putin paid a stand-alone visit to India on December 24. The proposed 16 to 18 nuclear power plants would be costing about $ 2.5 billion apiece and hence the figure of $45 billion, considering one takes the figure of 18 proposed plants. It is not yet clear whether the proposed roadmap is for 2020 or 2025 or 2030. Most likely, the roadmap would be targeting the deadline of the year 2030. But even if it is 2030 it would mean one new joint Indo-Russian nuclear plant every year for the next 18 years.

REC Transmission Projects Corporation (RECTPCL) a subsidiary of Rural Electrification Corporation, has invited RfQs from eligible companies for transmission system project. The RfQs have been invited for selection of transmission service provider on BOOM basis for transmission system for connectivity for NCC Power Projects Ltd. (1320 MW) through tariff based competitive bidding process. Last date for the submission of bids is 5 February 2013.

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OIL & GAS

Output of Crude Oil Rises, Natural Gas Falls India's crude-oil production rose by a marginal 0.8% from a year earlier in November, while natural-gas output continued its declining trend, underlining the South Asian nation's struggles in maintaining production at its ageing fields and its increasing dependence on imports. Crude output rose to 3.11 million metric tons, or 759,115 barrels a day, oil ministry data showed. It, however, missed the government's target of 3.33 million tons. At state-run ONGC, output fell 4.1% from a year earlier to 1.86 million tons, or 454,460 barrels a day, hurt by high water content in its production and power shutdown at fields in Gujarat. Also Mumbai High offshore field didn't yield expected results. ONGC's crude production has been declining for years now. India's natural-gas output dropped for the 24th month in a row in November, falling 15.2% from a year earlier to 3.26 billion cubic meters and missing the government's estimate of 3.43 billion cubic meters. Gas based power station is demanded by J&K Chief Minister In a letter to the petroleum ministry, Kashmir CM Omar Abdullah had requested for a base load gas based power station which would make up for power failures experienced during winters on account of transmission breakdowns. J&K at present generates most of its electricity requirements from hydel power projects but generation witnesses a steep fall during winter months. Abdullah had suggested that arrangements be made for the proposed plant of 500 MW capacity to draw fuel required from the GAIL pipeline which is under construction from Punjab to Kashmir. He had solicited support from the petroleum ministry after suggesting the same to the power ministry and appealed that the proposal be put under consideration during the 12th plan. It is estimated that the winter peak demand would be 2,800 MW by the 2017 in the state and this is further expected to grow to 4,000 MW by the end of 13th plan.

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