Power Pulse Special Conference Issue

Special Conference Issue: e-Newletter on Power
Independent Power Producers Association of India
ower pulse Special Conference Issue
CONTENTS
FOCUS2
TIME TO PLAY FAIR, Mr DEORA By MJ Akbar
IPP's & CPP's ..13

GMR Energy plans to construct 800-Mw coal-fired power plant on the eastern coast of India Essar Energy to start coal-bed methane (CBM) production from Raniganj block in West Bengal from December 2009 Phillips Carbon Black plans to sell about 40 MW of excess capacity from its captive power plants in 2009-10 JSW Energy aims to generate 11,390 Mw by 2015 Adani Power likely to commission its second 330-MW unit at Mundra towards the end of September or early October CESC takes 50.1% stake in Dhariwal Infrastructure Pvt. Ltd's 600MW power plant at Chandrapur in Maharashtra Bhushan Power and Steel plans capacity addition to take its total power-generation to 640 mw CEA recommends coal linkages for six captive power projects
REGULATION.3
Mechanism for switch to Open Acreage Licensing Policy to be in place by 2010 CCI not to look into KG D-6 gas dispute unless matter is referred Maharashtra bows to political pressures and "indefinitely" stays implementation of the latest power tariff order approved by MERC
POLICY ....5
MoP and CEA seek investor friendly fiscal policies for the power sector Power projects that claim tax sops may see a cap on the price they charge for electricity sold in open market Power projects based on supercritical technology to get sops like extension of excise waiver and income-tax holiday benefits
TRANSMISSION & DISTRIBUTION14

Government pushing for removal of licensing requirements needed to distribute power to establishments located inside SEZ's L&T bags four EPC orders in Qatar, UAE and Oman worth about Rs 1,044 crore
COAL ....5
Planning Commission advocates pricing of coal based on its gross calorific value ( GCV) CIL claims proposed 11% increase in coal prices will have only a marginal impact on inflation Coal India Ltd proposes to divest 15 per cent in two stages over the next one year CIL to set up a wholly-owned subsidiary in Mozambique to expedite exploration process in two exploratory coal blocks awarded JSW Energy close to finalising a coal-supply linkage pact in Indonesia to secure supplies for its forthcoming power projects
DEALS, FINANCES & TENDERS 16

NTPC and CIL close to signing proposed 50:50 JV to develop two coal blocks and set up a pithead thermal power station Maharashtra lines up investments of more than Rs 75,000 crore for generation, transmission and distribution Tata Power reports 160% increase in net profit for the quarter ended June 30, 2009
OIL & GAS .8

RIL agrees to a special CAG audit of its KG-D6 as a one-time exception and hopes it does not set a precedent for the future Power and Petroleum Ministries keen to explore a mutually acceptable solution to the ongoing legal battle between NTPC and RIL Cairn India-led joint venture discovers market price of $6.75 per mBtu for gas from Ravva Satellite field RIL finds natural gas reserves in well drilled on its NEC-25 block in the Mahanadi basin, off Orissa coast Power projects to be commissioned soon might find favor in next round of allocation of gas from the RIL's KG D6 block Potential of commercial extraction of gas hydrate deposits from KG D6 has German researches interested ONGC gears up for gas production at first underground coal gasification project on pilot basis at Vastan Mine Block near Surat ARTICLE: The Ambani Brothers Dispute By Dr Bhamy Shenoy
HYDRO POWER 16
Poor rainfall forces many hydel power plants to operate at about 40% PLF Tamil Nadu reports lower hydel generation figures for April - August period than last year NHPC, SJVN and government of Manipur to form JV to develop 1,500-MW Tipaimukh hydropower project
RENEWABLE ENERGY ....17

RS India Wind Energy signs MoU with Haryana Renewable Energy Development to set up solar photovoltaic power project in the state Rajasthan targets to establish 3,000 MW to 5,000 MW of solar power projects in the State NTPC to largely focus on wind energy in its efforts to diversify its fuel mix in the renewables space Tamil Nadu sees gradual seasonal tapering of wind power generation in August Bharat Forge to enter the wind energy business
POWER TRADING ..10

Transmission capacity constraints hamper trading volumes at electricity exchanges Indians spend 30,000 crore every year on fuel and maintenance cost on power equipment for back-up against outages
NUCLEAR POWER ..18

Maharashtra to make fresh appeal to CEA for forming JV with NPCIL for its proposed 10,000 mw project at Jaitapur in Raigad district AEC asks Indian companies in the civil nuclear sector to be vigilant while entering into tie-ups with overseas companies
STATE SECTOR ...12

NTPC likely to find going tough when cost-plus regime effectively moves to tariff based competitive bidding from January 6, 2011 Bihar seeks immediate additional central sector power allocation Chhattisgarh scraps controversial proposal to award 1,350MW power project and a coal mine to state-owned mineral trading company MMTC UPPCL proposes an average hike of 20 per cent in power tariffs Railways in JV with NTPC to set up 1000 MW power plant at Nabinagar in Bihar to meet its power requirements
IPPAI CONFERENCES .18

PAPER PRESENTATION By Sunil Agrawal - GMRETL
Disclaimer: Power Pulse e-newsletter is intended solely for the use of members who have subscribed to it. The data used is from various published and electronically available primary and secondary sources of information. Any views or opinions expressed are solely those of the author and primary and secondary data sources and do not necessarily represent those of Independent Power Producers Association of India, which confirms the exercise of due diligence. Independent Power Producers Association of India neither takes responsibility nor vouches for the views or opinions expressed therein. This document is provided for information purposes only and does not constitute any business advice.
FOCUS:
Mobashar Jawed Akbar (born 11 January 1951) is a leading Indian journalist and author. He is the Chairman of the for tnightly newsmagazine Covert, which he launched in May 2008. He is also the founder and former editor-inchief and managing director of The Asian Age, a daily multiedition Indian newspaper with a global perspective. Left journalism for a brief stint in politics and contested the general elections of 1989 from Kishanganj in Bihar on a Congress ticket, and despite the fact that the Congress was wiped out from the political map of the state, won his seat. Served in Lok Sabha from 1989 and 1991 and joined Government as advisor in the Ministry of Human Resources, and helped policy planning in the key areas of education, the National Literacy Mission and protection of heritage. Resigned from government, and left politics in December 1992 to return to journalism and full time writing. He has written several non-fiction books, including a biography of Jawaharlal Nehru titled Nehru: The Making of India, a book on Kashmir titled Kashmir: Behind the Vale, Riot After Riot and India: The Siege Within, among many others. POWER PULSE brings you his article on the gas pricing row which first appeared in the Times of India dated August 09, 2009.
An Australian journalist, Hamish McDonald, has written an unauthorized, but semicollaborative (Reliance executives are thanked in the forward), biography of a great, but occasionally errant, genius, titled The Polyester Prince: The Rise of Dhirubhai Ambani. There are five references to Dhirubhai's first ally in politics, an alliance that began when Dhirubhai's vision was buffeted on all sides by cynicism. The first reference, on page 36, is sufficient: "After getting on his feet back in Bombay, Dhirubhai used to make frequent trips to New Delhi. He frequently went in the company of Murli Deora, a fellow yarn trader who was then working his way up the Congress party machine in Bombay... Dhirubhai and Deora used to catch an early flight up to Delhi, and park their bags with a sympathetic clerk at the Ashoka Hotel while they did their rounds of politicians and bureaucrats to speed up decisions on import licences." The past cannot be held against Murli Deora's present. He might, in fact, justifiably feel that he should have been cabinet minister much before he was finally sworn in. He is certainly one of the more competent ministers. The question is about his portfolio, which he has held since he joined the cabinet. He takes decisions that affect the most substantive part of Dhirubhai's inheritance. Dr Manmohan Singh believes in the Caesar's Wife principle: in public life, you must be above suspicion. Would Caesar's Wife have accepted the oil portfolio if she had been a fellow yarn trader of Dhirubhai? There is too much that is odd about Murli Deora's insistence on raising the price of a national asset that is in the private possession of Mukesh Ambani. This must be the first government that is determined to raise the price of an essential commodity, rather than bring it down, or indeed keep it at a level that a private company offered and accepted as part of a contractual agreement. On Friday, Sharad Pawar, replying to the debate on essential commodities in the Lok Sabha, blamed the higher price of energy as one of the reasons for rising food prices. Attendance on Friday was higher than on Thursday, with heavyweights present, possibly because it was the last sitting of the session, but was anyone listening? The fight between the brothers, Mukesh and Anil, is a bit of a red herring. Mukesh Ambani is not going to sell his gas at nearly twice a contracted price only to his brother. NTPC, a nationalized Navaratna company will have to pay at least Rs 20,000 crores more to Reliance. Anil Ambani is a big boy. He can look after himself. If Mukesh Ambani needed a hundred million mobile telephones, Anil Ambani would have tried to double the price of his phones. But public concern is legitimate when a public sector company cannot defend its interests because its nominated guardian, its cabinet minister, is supporting the opposition. NTPC is in litigation against RIL in the Mumbai high court to protect its interests, while its parent ministry takes a contradictory view in the SC. Murli Deora's logic for raising the price of gas shifts from odd to downright curious. Gas, he says, is a national asset. The government therefore should fix the price. But who gets the money? Not the nation, but a private company. Finance ministers squirm even when forced to raise energy prices in order to bump up government revenues. But one cannot see a single squirm in this controversy. Patriotism has clearly become the last refuge of Murli Deora.
Time to play fair, Mr Deora

By
M J Akbar
Is live coverage of Parliament very kind to democracy? A friendly exchange of obscure questions and obtuse answers in the morning, and exclusive footage of MPs in mortal combat against sleep in the afternoon, does not make for high TRPs. The periodic slogan-andwalkout routine has become just that: routine. When the Lok Sabha debated steepling prices of essential commodities on Thursday afternoon, kind cameramen did their best to avoid empty spaces and vacant faces. Compare this to the sui generis turbulence within the political class over the price of one reasonably essential commodity, gas. There has to be a good reason. The merchants of tur dal have cash in their pockets. The merchants of gas have both cash and MPs in their pockets. The metaphor is not original. Murli Deora, Minister for oil and gas, who tends to get communicative under stress, used it in Parliament. He lamented that alleging "this fellow is in his pocket, this fellow is in another's pocket" did no service to anyone. It certainly does no service to Mr Deora. An independent MP , Parimal Nathwani, was candid about his personal pocket of residence. He was an advocate for Mukesh Ambani. The Marx in Ms Brinda Karat leapt to the fore and she became instantly cross. She demanded review of the candour clause in House rules, arguing that it had come into conflict with the "dignity of the House". She may have missed her mark by a few notches. She should have been discussing the dignity of the Union cabinet.
REGULATION
CCI not to look into KG D-6 gas dispute unless matter is

referred The Competition Commission of India (CCI) has said it will look into the gas dispute between the Ambani brothers provided someone forwarded a request. The competition watchdog has said that, thus far, no reference has been made to it and has therefore not initiated any enquiry when asked if it could look into the gas supply dispute considering that it was already before the Supreme Court. RNRL wants the court to direct RIL to supply gas to it at $2.34 per mmBtu, but RIL has argued that it cannot do so without government approval. The CCI Act empowers the CCI to look into cases pertaining to abuse of dominance, and anti- competitive practices, which are exactly the issues raised by Anil Ambani at the AGM of RNRL last month. RNRL has accused RIL of trying to ''perpetuate this monopoly, and earn disproportionate profits at the cost of the people.'' RIL has called for restraint while the matter is in the courts. RNRL has not
Mechanism for switch to Open Acreage Licensing Policy to be in place by 2010

The government has plans to get away from the current regime of periodic auctions of government-nominated blocks and switch to a round-the-year mechanism for accepting exploration bids, in less than 18 months. The Directorate General of Hydrocarbons, has called the switch to open acreage licensing policy, or OALP , a natural progression and has confirmed that the information database will be ready by December and the entire mechanism in place by 2010. Canada and the UK are among the countries that offer acreage for E&P on an open basis and while it is too early to gauge how this change will impact government revenues, what is a welcome development is that the new licensing regime will eliminate micromanagement by the regulator of the block auction process under the current NELP . Besides, it will give greater flexibility to operators. Currently, India has just offered its eighth NELP round in which 70 blocks are on offer and the seven rounds thus far, starting 1998, have offered 256 blocks with a total committed investment of $11.9 billion (Rs57,477 crore). A prerequisite for the transition to OALP is a national data repository which will act as a public pool of crucial raw information on geological and geochemical characteristics, a key information input for those looking for potential hydrocarbon reservoirs. The new regime envisages that any explorer can bid for any unallocated area at any time, with the blocks not being predefined. The regulator will assess the bid made by an operator, call in any competing bids and, finally, decide whether to grant it or not. OALP will allow every company to study and specialize in certain geographies if they so wish, making the entire country open for E&P. Right now, companies are limited to what the DGH puts on offer. According to an analyst, the regime gives operators flexibility in block location, size and project financing by creating multiple opportunities that can be staggered over time instead of making over-aggressive bids in NELP rounds and also facilitates them to extend their block boundaries if they find that the hydrocarbon channels in their designated blocks are extending to nearby underground rock layers, and the adjoining areas are open. According to DGH, about 830,000 sq. km of potential hydrocarbon reserves are left and can be explored under OALP.
specifically mentioned the CCI, but has expressed hope that public accounting bodies like Comptroller and Auditor General (CAG) and Central Vigilance Commission (CVC) will, examine all relevant facts, and take appropriate action against the guilty persons, if they have caused huge losses to the public exchequer.
Maharashtra bows to political pressures and indefinitely stays implementation of the latest power tariff order approved by MERC
The Maharashtra government has indefinitely stayed implementation of the latest power tariff order approved by the Maharashtra Electricity Regulatory Commission (MERC), bowing apparently to political pressures. Political parties, like the Shiv Sena and the Maharashtra Navnirman Sena, had pilloried the order by claiming that it crosssubsidised power for builders, malls, and multiplexes at the cost of residential consumers who thereby were being subjected to a 4.2% increase in tariff. MERC had passed the order in response to state utility Maha Discom's petition for 36% tariff increase and was meant to be effective from August 1, 2009. The State Energy Minister Sunil Tatkare, in response to the stay order, has announced that the state had used its powers under the Electricity Act, 2003 and did not specify till what date the implementation of the order would remain stayed. Analysts believe that it is absolutely unlikely that the stay would be lifted before Assembly polls due in October. The MERC had approved a 4.2% hike to help Maha Discom cover revenue loss of Rs 1,099 crore in the current fiscal but the order was slammed by the MNS which claimed that the regulator had favoured builders whose power tariff had been reduced by Rs 5.10 per unit, by bringing down their tariffs to Rs 7.15 from the existing Rs 12.25/unit. It further contented that malls and multiplexes would also benefit from the tariff order as the tariff for this category has been reduced from Rs 7.39 per unit to Rs 7.15. Meanwhile, Maha Discom has countered the allegations by saying that though the hike for the residential consumers was marginal, the order indeed ended up making power cheaper for bulk commercial users.
POLICY
that have tied their entire capacity under long-term PPAs with state utilities and trading entities. It also provides an exemption from Customs duty on import of capital goods and deemed export benefit, in the form of excise duty waiver, for supplies by domestic bidders. The projects also get income-tax holiday under Section 80-IA. The change is likely to hurt those projects that do not tie up their entire output under long-term power purchase agreements (PPAs) with state utilities and trading entities. Power companies have firm commitments with states and trading firms to sell 60-85% of generation at pre-determined rates and can sell balance output in the open market, while thermal power plants can sell 15% of generation capacity, hydel plants are allowed to sell 40% of the power they generate.
Power projects based on supercritical technology to get sops like extension of excise waiver and income-tax holiday benefits
Power projects based on supercritical technology, including largesized energy-efficient power equipment, are likely to find favor from the government through sops like extension of excise waiver and income-tax holiday benefits. This proposal will form a part of the new mega power policy which is being worked out since the existing policy has no incentive granted to new-generation supercritical power projects. Additionally, the new policy would also allow projects that have completed financial closure but have not tied up the requisite long-term power purchase agreements (PPAs), to apply for mega power status and avail incentives. These changes will be incorporated in the final draft of the new mega power policy being finalised by the government. The benefits would be extended only if supercritical projects source equipment by inviting international competitive bidding with the mandatory condition that the supplier sets up an indigenous manufacturing facility. The existing mega power policy already allows duty-free import of capital goods and extends excise duty waiver for supplies by domestic bidders. It also provides an income-tax holiday under Section 80-IA. These incentives are given to hydel power projects of 500 mw and above and thermal projects of 1,000 mw and above. According to MoP, the changes in the policy have been proposed to encourage technological innovation and technology transfer for developing indigenous capacity for manufacturing of supercritical equipment.
MoP and CEA seek investor friendly fiscal policies for the power sector
In an effort to bring in more investor friendly policies for the power sector, the MoP and Central Electricity Authority (CEA) have made a fresh plea to the Centre for further liberalisation of RBI guidelines for use of external commercial borrowing proceeds for rupee expenditure. They have also pressed for long-term price hedging instruments in the power markets and for disinvestment proceeds being made available for investments. The demand for such amendments are being put forward especially since the growth of credit has slowed down from 68% in 2007 - 08 to about 34% in 2008-09, while the share of power sector in FDI to infrastructure sectors increased only marginally from 16% to 18% over 2006-09. The Power Ministry has claimed that bank credit to the power sector is subject to sectoral and group exposure limits and banks are delaying disbursal of sanctioned loans; term lending institutions are constrained by prudential norms and foreign direct investors are shying away due to insufficient return on equity. Meanwhile, even state-run Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) are constrained by prudential exposure norms for groups and companies and have to seek RBI approval to raise ECB. Further, government borrowing is crowding out private sector borrowers and the duty and tax regime are not conducive to innovative infrastructure lending. The MoP and CEA have also mentioned that lenders are cautious about lending to projects coming through the MoU route while also saying that the insistence of lenders on power purchase agreements (PPAs) creates difficulties for independent power producers (IPPs) and merchant power plants (MPPs). It has become difficult to raise debt since Banks and NBFCs are comfortable only with PPAs tied to ultimate offtakers and not traders. Further more, the poor financial health of state sector utilities hampers investments, as they are not allowed return on equity and delays in land, forest and environmental clearances also lead to cost escalations.
COAL
Power projects that claim tax sops may see a cap on the price they charge for electricity sold in open market
According to MoP , power projects that claim tax sops may see a cap on the price they charge for electricity sold in open market through a change that will be incorporated in the mega power policy. The action is aimed at preventing companies from making windfall gains while enjoying tax benefits since the Finance Ministry and Planning Commission are opposed to extending tax sops to merchant sale of power. The cap proposed could be Rs 5-7 a unit. Currently, with a shortage of power across the country, merchant sale commands a premium as high as Rs 15 per unit while pre-determined rates are at Rs 1.20-3.50 per unit. The cap on price is likely to be included in the final draft of the new mega power policy. Currently, the mega power policy provides tax benefits to thermal projects with over 1,000 mw capacity and hydel projects with over 500 mw capacity
Planning Commission advocates pricing of coal based on its gross calorific value (GCV)
The Planning Commission is keen to implement a complete revamp of the system for coal pricing and moving it into a free trade zone. It has said that coal prices should ideally be left to the market and trading of coal, nationally and internationally, should be free. It is also advocating export of coking and non-coking coal and has suggested benchmarking export prices with import rates. Although coal prices were de-regulated in 2000, its price is fixed by stateowned companies under the guidance of the Ministry of Coal. The Planning Commission, while reviewing the Integrated Energy Policy, has said that high quality coking and non-coking coal, which are
exportable, should be sold at export parity prices as determined by import price at the nearest port minus 15% and since a substantial amount of coking coal is imported, domestic coking coal should be priced at import parity price. It has also suggested for a shift to gross calorific value basis (GCV) for coal pricing instead of the present useful heat value (UHV). It has suggested that coal prices should be made fully variable based on GCV and other quality parameters instead of the current system of pricing on the basis of broad bands of UHV. Since the Coal Ministry has so far not adopted the system of GCV and as a step towards migration from UHV to GCV for pricing of domestic coal, the Ministry will reduce the bandwidth of current UHV grades in coal, limiting them to 300 kilo calories on a trial basis from dedicated coal mines to NTPC where automatic sampling arrangements are available at both ends. Meanwhile, even the 11th Five-Year Plan (2007-12) has envisaged pricing of coal based on its gross calorific value. Coal India, which accounts for more than 80% of the country's total coal reserves, last raised coal prices in 2007 by 10%.
production and has a policy currently to offer jobs to eligible candidates or provide cash payments against land acquisition. But, with the land acquisition getting increasingly sensitive, CIL plans to compensate the land-losers by offering stakes in future projects so that they can also be partners in the growth and be compensated through a mechanism that kind of factors in futuristic value of the land asset.
CIL to set up a wholly-owned subsidiary in Mozambique to expedite exploration process in two exploratory coal blocks awarded
Coal India Ltd has decided to set up a wholly-owned subsidiary in Mozambique to expedite the exploration process after it was awarded two exploratory coal blocks in that country. It has proposed to set up a separate company for carrying out coal mining activities there, which will be a fully-owned subsidiary of CIL and will forge a joint venture (JV) with a state run mining firm in Mozambique. The CIL subsidiary will have an 85 per cent stake in the JV, while the remaining 15 per cent will be held by the Mozambique-based mining company, with the modalities of the JV yet to be decided. The two exploratory coal blocks awarded are the A1 and A2, in Tete province of Mozambique, having an estimated reserve of one billion tonnes. While the exploration of these two coal blocks, spread over 224 sq km, is set to commence within a few months, the mining activities are expected to begin after three and a half years. Besides, CIL has offered to distribute artificial limbs in the war-ravaged nation before starting mining operations in Mozambique with the setting up of a premier mining institute in Mozambique, on the lines of the Indian School of Mines, Dhanbad. CIL had also stepped up its efforts to acquire stakes in coking and thermal coal assets in Australia and has invited Expressions of Interest (EoIs) from mining firms in Australia by the end of August. The coal major was keen on entering into a strategic partnership with Australian mining firms having proven expertise in mining for developing the coal assets.
CIL claims proposed 11% increase in coal prices will have only a marginal impact on inflation
India's largest coal miner, Coal India Ltd., has proposed a 11% increase in coal prices and has argued that the price hike will have only a marginal impact on inflation. The price increase is likely to net CIL an additional revenue of Rs4,629 crore to shore up its bottomline after the company posted a profit of Rs300 crore on a turnover of Rs46,000 crore last year. Incidentally, the weightage of coal in the Wholesale Price Index, or WPI, is 1.753%. Analysts have predicted that with CIL mining 84% of the coal produced in the country, a 11% increase will push up inflation by around 0.16%. The larger impact of the price hike will be felt by cement, power and steel companies. CIL is free to fix the price of coal after prior approval from the government and its last price revision was in December 2007. The latest revision is expected to partly bridge the price gap with international coal, which is about one-third higher than domestic coal. It is understood that the envisaged hike will increase the price for coal to the power sector by Rs77 per tonne, which will work out to around 5 paise per unit of power generated and for the cement sector, the impact will be around Rs20 per tonne which will work out to around 80 paise on a 40kg bag. Some believe that the price hike is more to allow CIL to partly offset the increase in input costs, such as a higher wage bill on account of the Sixth Pay Commission, and thereby show a healthier balance sheet ahead of its proposed listing on the stock exchange. For the record, Indian coal, with a calorific value of 3,500 kilocalorie per kg, is priced at around $38 (Rs1,835) per tonne, which works out to around 30-40% lower than international prices. India has 256 billion tonnes of coal reserves, of which around 455 million tonnes (mt) per annum is mined and CIL is targeting a production of 435 mt this year, against 403.73 mt achieved in 2008-09. Meanwhile, demand for coal is expected to reach about two billion tonnes a year by 2031-32, about five times the current rate of extraction, with the maximum demand coming from the power sector.
JSW Energy close to finalising a coal-supply linkage pact in Indonesia to secure supplies for its forthcoming power projects
In an effort to secure coal supplies for its forthcoming power projects, JSW Energy is close to finalising a coal-supply linkage pact in Indonesia and is also exploring options of acquiring coal mines in South Africa and Australia. The company is in the final stages of completing due diligence for the 50-million tonne coal linkage in Indonesia. Meanwhile, JSW Energy has already identified a coal mine in South Africa and if the deals are finalised, JSW Energy would get additional coal linkage of 250 mt. Currently, it has limited access to coal reserves in India and is largely dependant on imports and apart from making full-fledged acquisitions, is also in talks with the South African government for jointly developing coal mines. JSW Energy has targeted to commission 3,140 mw by the end of 2010 and may enter the capital market by the end of October through an IPO, the proceeds of which will go for developing identified generation and transmission projects, mining ventures and to service debt. It currently generates 560 mw of power from a plant in Karnataka and has projects totaling to 3,090 mw of generating capacity in various stages of implementation. The company has also entered into long-term PPA's with the governments of Rajasthan and Maharashtra. JSW Energy has plans to import 13 mt of coal for its upcoming power plants at Ratnagiri and Vijaynagar, Karnataka and has secured coal supplies from a block in Orissa where it has a JV with Mahanadi Coalfields, from whom it would be able to procure around 90 mt in the long term.
Coal India Ltd proposes to divest 15 per cent in two stages over the next one year
Coal India Ltd, with an equity capital of Rs 6,316 crore, has proposed to divest 15 per cent in two stages over the next year. In the first stage, five per cent disinvestment in favor of employees and a trust will take place; and in the second, another 10 per cent will be offloaded through an IPO. Of the proposed five per cent first stage disinvestment, two per cent would be offered to its 4.25 lakh employees and the balance three per cent to a trust which would be responsible for issuing shares to those who may lose land in the company's future mining projects. The issue price would be set at a fair value as evaluated by valuers. The company has opted for a disinvestment as it is sitting on a cash reserve of Rs 30,000 crore and it may prove costly for CIL to service a bigger equity created through fresh issue of shares. CIL needs to acquire land at the rate of 40,000-50,000 acres a year to maintain growth in domestic coal
OIL & GAS
is a legal agreement signed between the government and oil companies that determines rights and obligations of both sides after oil and gas is produced, and not to indulge in the dispute between the Ambani brothers. The government, therefore, wants to treat the NTPC vs RIL case separately.
Cairn India-led joint venture discovers market price of $6.75 per mBtu for gas from Ravva Satellite field
A Cairn India-led joint venture has discovered a market price of $6.75 per mBtu for the fuel from a field in the KG basin. Partners Cairn, Oil and Natural Gas Corp (ONGC) and Videocon have written to the government seeking an increase in the Ravva Satellite field gas price to $6.75 per mBtu. The new price sought by the Ravva consortium is 60 per cent more than the maximum price of $4.20 per mBtu approved for RIL's KG-D6 fields for five years to March 2014. GAIL, which markets the gas produced from Ravva and Ravva Satellite gas fields, had in October last year offered a price of $5.73 per mBtu for the fuel but the price was not acceptable to the joint venture partners. Ravva joint venture in April this year invited offers from Vemagiri Power Generation Ltd of GRM Group, GVK Power and Infrastructure Ltd and Silkroad Sugar Pvt Ltd. Silkroad offered a price of $6.75 per mBtu and accordingly the Ravva joint venture has asked GAIL to match the price. The Petroleum Ministry has asked GAIL if it is willing to buy gas at the new price and in case the staterun firm refuses, the Ravva joint venture would have the freedom to market the gas produced from the satellite field to private parties at a price not less than $6.75 per mBtu.
RIL agrees to a special CAG audit of its KG-D6 as a one-time exception and hopes it does not set a precedent for the future
Reliance Industries Ltd has agreed to a special CAG audit of its KGD6 contract, but hopes that it will be a one-off case. It has conveyed its 'no objection' to the Petroleum Ministry saying that it hopes this is a one-time exception which does not create a precedent for the future. RIL has added that though the PSC (production sharing contract) does not allow special audit, it is willing to accept a CAG audit for the ensuing year but not 2006-07 and claimed that it did not understand the scope of such an action since audit up to 200607 has already been conducted by the government-appointed auditors and RIL has been supplying all information required to the DGH from time to time. Meanwhile, the Government has informed RIL that the special audit has been ordered under Section 1.9.1 of accounting procedures in the PSC and that it was for the sake of transparency and cooperation. The development follows the CAG announcing that it was having problems with accessing books of oil/gas field developers, although it did not point out RIL specifically. Incidentally, the government had ordered a special audit of eight contracts, including RIL's, which involve substatial financial stakes for the government, in November 2007.
RIL finds natural gas reserves in well drilled on its NEC-25 block in the Mahanadi basin, off Orissa coast
Niko Resources of Canada, RIL's JV partner, has announced that they have found natural gas reserves in a well drilled on its NEC-25 block in the Mahanadi basin, off the Orissa coast. The gas was discovered in the well AJ2 last month, according to Niko, which added that it was not a new discovery but an appraisal of earlier gas finds. AJ2 is an appraisal well drilled to access the potential in the previous A6 and J1 discoveries and gas struck in AJ2 is not a new pool. Niko Resources holds 10 per cent interest in the Mahanadi basin shallow water block covering an area of 10,755 sq km in water depths ranging between 20-600 meters and RIL holds 90 per cent interest in the Bay of Bengal block. RIL has so far made eight gas discoveries in NEC-25, off which six were declared commercially exploitable and development plans have been submitted to the Directorate General of Hydrocarbons (DGH) in 2007. Field Development Plan (FDP) is an investment proposal for bringing to production oil or gas finds and operators can only begin such investments after getting the necessary approval from DGH, the sector regulator. Meanwhile, Niko has not committed on the potential reserves in the AJ2 well but has claimed that the discovery looks promising.
Power and Petroleum Ministries keen to explore a mutually acceptable solution to the ongoing legal battle between NTPC and RIL
The Ministries of Power and Petroleum are exploring a mutually acceptable solution to the ongoing legal battle between governmentowned NTPC and RIL. The ministries have announced that they would prefer and are open to a mutually agreed solution if it could be worked out between RIL-NTPC, as it involves a government undertaking. The Petroleum Ministry believes that the NTPC vs RIL case is different from the RIL vs RNRL case - where the government is a party. Its contention is that the government has not received any proposal from RIL to approve the sale of natural gas from RIL's KGD-6 block to NTPC, hence no decision has been taken by it in the matter. But, the Ministry has added, that in the case of RNRL, the government has already rejected the gas price of $2.34/mmBtu. This appears to be a kind of climb down by the Petroleum Ministry which had, till now, upheld only the $4.20 per million metric British thermal unit (mmBtu) as the official selling/valuation price approved by the government. But, what is intriguing, is to see how the government separates the NTPC vs RIL case from the RIL vs RNRL case. Meanwhile, RNRL has argued that the gas contract between RIL and RNRL was drawn from the NTPC vs RIL contract and so, even if the two ministries do manage to reach a consensus, it is likely to have implications on the RIL vs RNRL case. Meanwhile, the Government continues to toe the line that the objective of the government is to protect its rights under the production sharing contract (PSC), which
Power projects to be commissioned soon might find favor in next round of allocation of gas from the RIL's KG D6 block
The Government will soon take a decision on further allocation of gas from the Reliance Industries Ltd-operated Krishna Godavari Basin D6 block and deliberations with the Ministry of Power on the additional requirement of gas for the sector have already taken place. It is likely that the list of beneficiary-companies has been decided by the Ministries of Power and Petroleum and will be announced soon. It is more than likely that only those projects to be commissioned soon may become the beneficiaries this time and power plants that have sought allocation of D6 gas are from Delhi, Andhra Pradesh and Gujarat. Allocations for the initial production
of 40 mscmd from the block have already been made by the Government and the current production from D6 is 37 mscmd, against a peak production which is estimated at 80 mscmd. RIL, is supposedly not ramping up production from the field for want of buyers. But, with new allocations to happen soon, the production from the block is expected to go up. The Government had, in accordance with the gas utilisation policy and the approved pricing formula, allocated gas to priority sectors from the initial production at a landfall point price of $4.2/ mBtu. Accordingly, 15 mscmd was allocated to the existing urea plants, 18 mscmd to the existing power plants, 3 mscmd to the existing liquefied petroleum gas (LPG) plants and the remaining 5 for city gas distribution projects. It was also decided that the unutilised gas against this allocation will be allocated to the existing gas-based steel and power plants, including captive ones. RIL has so far signed contracts with 15 fertiliser plants, 20 power plants, three steel plants, and one city gas distributor.
ARTICLE
Dr. Bhamy Shenoy is an alumnus of IIT Madras with a Ph.D in business administration from University of Houston . He worked for Conoco in all facets of International Petroleum Industry for 21 years from 1966 till 1987. He took early retirement in 1987 to return to India to get involved in India 's development. As an activist, he has been associated with Mysore Consumers Council, an NGO for consumer and environmental protection and Pratham, an NGO for providing education to slum children. He contested election twice as an independent. From 1997 till 2003 he was involved in energy sector reform in former Soviet union countries of Kazakhstan , Uzbekistan , Turkmenistan , and Georgia and was board member of the National Oil Company in Georgia . He was successful in implementing reforms to reduce oil sector corruption in Georgia . He is a senior advisor to Center for Energy Economics at University of Texas as Austin. Here, he shares his thoughts on the Ambani family feud for the exclusive benefit of POWER PULSE subscribers.
Potential of commercial extraction of gas hydrate deposits from KG D6 has German researches interested
German researchers have gotten interested in the gas potential in India and are planning to invest around e43 million by 2011 for its exploration. Plans are to extract methane gas from the KG basin, which has the largest recent find of methane hydrate deposits, the core material used to produce natural gas capable of powering vehicles and even rockets. According to the researchers, the largest methane hydrate bed ever seen has now been discovered in the Krishna-Godavari basin which it hopes to tap through new hi-tech pressure devices to pump out the methane. Scientists from the Leibniz Institute of Marine Sciences at the University of Kiel (IFM-GEOMAR) are leading this project in India that deals with the exploration and subsequent processing of the submarine gas hydrate resources which aims to produce natural gas from marine mevthane hydrates. According to the project head, the innovative aspect of this project is that it can enable long-term sequestration of CO2 from marine sediments. The technology involves liquid CO2 to be injected into the hydrate deposits to induce the dissociation of methane hydrate and to fill the pores with CO2 hydrate instead. Incidentally, the relative abundance of methane and its clean burning process makes it an attractive fuel since it is a much more environment-friendly than other fossil fuels, such as gasoline, diesel and petrol, and can be used for electrical generation and for vehicles. But, the thing that has enthused most is the fact that processed methane has the potential to be used as rocket fuel, though it has never powered a spacecraft or plane before. The researchers are working along with Indian institutes including the Directorate General of Hydrocarbons (DGH), National Institute of Oceanography (NIO) and others. The commercial extraction of gas hydrate deposits has so far only been realised in a few cases with key dominating roles by Japan, the US, Canada, South Korea and China.
The Ambani Brothers Dispute By Dr Bhamy Shenoy

Unfortunately, instead of the Indian government using all the legal power it has from production sharing act (even assuming it is slanted towards Mukesh Ambani's RIL), it is acting like a banana republic. There are some basic features of any PSCs which should help the government to be in the driver's seat. But the government is acting as though it has poor cards to play with. The government has set up yet another committee to look into the pricing regime for gas sector and also "study the feasibility of having a uniform cost price regime for gas sector". At present there are three gas regimes: The administered gas mostly owned by ONGC and Oil India is sold at or above $2 per mmbtu. The other regime for pre NELP (New Exploration Licensing Policy) has a price range of $3.5 to $5.73 per mmbtu. It is not clear how this was arrived at. The third regime is for imported gas (regasified liquid natural gas) whose price ranges at present over $5 per million btu and it varies from time to time in line with international oil price. Under the NELP PSC the price formula is based on so called "arms length basis to be approved by the government". Though new NELP was based on lesser role for the government in price fixing, excepting that of monitoring and approving, the governmnet is trying to get back into this. This will work against attracting the exploration investment into India despite the great discoveries in KG Basin. The government has set a committee of ministers to look at what should be the position of the government about Ambani brothers. This committee is headed by the Finance Minister and consists of the Law Minister, Petroleum Minister and Power Minister. When this is purely an implementation of PSC to be done by Director General of Hydrocarbons which should have the competence to interpret the PSCs, why are we politicizing this whole issue? As discussed before there are two basic issues. Under any PSC, without the concurrence/approval of the government, the original signatories to PSCs can negotiate the "sale" of the reserves to a third party. This gives a strong position to the government to null and void the original contract itself. At the least, it gives every legal right to null and void the contract signed by RIL with RNRL when the partition agreement gave some rights in KG basic gas reserves to Anil Ambani's RNRL.
ONGC gears up for gas production at first underground coal gasification project on pilot basis at Vastan Mine Block near Surat
ONGC is gearing up for gas production at India's first underground coal gasification (UCG) project on a pilot basis at Vastan Mine Block near Surat in Gujarat. The field is expected to produce about 5.5 lakh cubic metres of synthetic gas per day by end of 2010 and if the pilot project is a success then ONGC aims to go commercial by producing about 2 billion cubic metres of the synthetic gas per annum from this field by 2013-2014. The investment for commercial rollout of the project would be in the range of Rs 1,000-2,000 crore and the field has enough reserves to last for about 30-40 years. Apart from Vastan Field, ONGC is also looking to set up a UCG project at Bhavnagar in Gujarat and one in Rajasthan. The calorific value of synthetic gas is 10 times lower than natural gas and so far, only Russia has achieved commercial success in a UCG project.
In addition, as many have already pointed out and also the Petroleum Ministry, that the Article 21-6-1 in PSC obliges the contractor to sell all the gas at arms length prices to the benefits of the parties to the PSC. The formula / basis on which the arms length sale is determined is required to be mandatorily approved by the Government of India prior to the sale of all gas and the gas has to be marketed domestically and in accordance with the Government Policy on utilization of natural gas and approval of price formula / basis. It was always understood by the parties to this litigation that, under the PSC, the contractor's right to market the gas is subject to the approval of price formula / basis of Government of India as well as the gas utilization policy of the Government of India. With such powerful legal backing why is the solicitor general suggesting for negotiations with the parties? Does this imply that the government should give up something to get back some thing from the brothers? RIL stands to get higher price and is not a loser. RNRL will also get access to gas since power plants are on priority list in any case. But they will not get a ridiculously agreed price of $2.34 per mmbtu for 17 years. In any case, RNRL will get reimbursed for higher cost since the power it sells is controlled unless they were to sell in the open market. In that case they should give higher price for gas also based on market. The same set of situation holds good for NTPC which is also arguing for a lower and fixed price. NTPC will also be able to pass on the higher cost of gas to its customers. Now let me give two graphs to show how gas prices move with the oil prices and also how it commands premium or is discounted depending upon the supply/demand. These are based on BP's latest Statistical Review of World Energy, June 2009. This is almost like a bible for international energy economists.
had price control on gas. It became so complex at one stage they had more than 300 types of gas, though all of them had exactly the same composition and was not different in terms of quality. For pricing purpose there were so many different types. India, instead of dismantling such a regime, which is not all that complex today, is getting ready to build a new edifice of great complexity. Bureaucrats would simple love it. It gives them enormous power and also great opportunities to earn huge "rents". What we need is a free market which will work to the benefit of all, especially the "aam admi". (** Views expressed in the contributed papers are those of the authors and Power Pulse may or may not subscribe to them, either fully or in part.)
POWER TRADING
Transmission capacity constraints hamper trading volumes at electricity exchanges

Inadequate power transmission capacity, has finally come to haunt traders at exchanges, with volumes of electricity traded at exchanges jumping multifold in the past one year but the absence of a comparable increase in the transmission capacity to support the evacuation causing bottlenecks. This is likely to hurt the shortage prone areas like the northern region but more importantly will thwart the growth of the power market in the country. It is learnt from the Indian Energy Exchange (IEX) - India's first power exchange promoted by the Financial Technologies India ltd (FTIL) and PTC India, that more than 20 per cent of the volume of power scheduled at the exchange every day is not evacuated due to lack of transmission capacity. While bids are placed for over 20 million units of power daily, anything above 14 million units is unable to flow. What this boils down to is that the remaining 6 MUs of curtailed power translates to a daily revenue loss of over Rs 4 crore for the Indian power market. In order to evacuate the 20 MUs of power transacted at the exchange, IEX requires a transmission capacity of up to 1,000 Mw on a daily basis against which a capacity of only 400 Mw becomes available. The lack of required transmission capacity is a huge stumbling block for the growth of the nascent power market in the country and potential growth in daily trading volume has not been achieved due to transmission constraints. Transmission constraints have impacted volumes at all power exchanges. Power is traded at the exchange by first discovering a market price by inviting bids from interested buyers and sellers in the bid-call period and once the price is discovered, the exchange then notifies the national and regional load dispatch centers to allocate the required transmission corridors, which is where the problem arises.
Graph-1
According to this graph, gas prices have fluctuated closely with international oil prices. Since the US has a huge gas market and also the role of imported gas is not significant, and based upon the gas bubble in the early 90s and later after 2006, gas prices have been discounted with respect to oil prices. This can be seen clearly in the following graph.
Graph-2
This graph clearly shows that before the recent price increase in oil prices, LNG imported into Japan had commanded a premium over oil prices. During the last five years, LNG in Japan and Gas Europe (mostly piped gas) were sold at a discount. One thing which should be obvious from these two graphs is that it is not possible to fix price of gas based on historical basis and it fluctuates widely. At the same time it should also be clear that gas prices move with oil prices and they are not independent. In this back ground, how could the Petroleum Ministry approve $2.34 per million btu for 17 years. Second, how could the Petroleum Ministry suggest a price of $4.20 as the right price today? This implies a huge discount with respect to the current oil price and international LNG prices. The latest GAIL committee to look at one more pricing regime for gas and potential pool price for whole of India will force Indian economy to pre 1991 days, when license-permit-quota raj was dismantled and fresh air of liberalization, though in small doses, was allowed. This is the lesson which the US learnt when they also
Indians spend 30,000 crore every year on fuel and maintenance cost on power equipment for back-up against outages
As a back-up to secure against frequent outages, Indians spend a staggering 30,000 crore every year on fuel and maintenance cost on power equipment. In a pan-India study conducted by Wartsila India, the expenses on power generation using inverters, generators and other back-up equipment are almost 80% more than what consumers pay on grid supply and the operational expenses on generating back-up power in the country are estimated to be around Rs 30,000 crore every year. The study was carried out over a five week period in May-June 2009 and covered 1,500 respondents across 21 cities in the country. The study has also shown that the cost difference to a consumer on an average is about 80% above the grid cost when faced with 6-7 hours of load-shedding every day which increases three-fold if all the appliances like fridge and TV are run on back-up. While releasing the study, Wartsila India said that a 'reliability surcharge' of as little as 50 paisa per unit can support rapid power generation capacity build-up in the country which would be far less than the extra charges consumers incur on back-up equipment. It also called for other complementary technologies and solutions to impart much-needed flexibility into the system to improve peak load management.
10
STATE SECTOR
The three power stations have a combined generation capacity of 6,940 mw. Farakka TPS has a total installed capacity of 1,600 mw, while Talcher TPS's installed capacity stands at about 3,000 mw and Kahalgaon's capacity is about 2,340 mw but are operating at less than optimum levels. Meanwhile, Bihar has invited bids for franchise power distributors in Patna, Gaya, Muzaffarpur and Bhagalpur circles. R-Infra has bid for all 4 circles, CESC for Patna and Muzaffarpur while Glodyne has bid for Patna and Gaya.
Chhattisgarh scraps controversial proposal to award 1,350MW power project and a coal mine to state-owned mineral trading company MMTC
Chhattisgarh has decided to scrap a controversial proposal to award a 1,350MW power project and a coal mine to state-owned mineral trading company MMTC, triggered by charges that the state government had not followed due and transparent procedures. Concerns were also raised over awarding and giving access to a coal mine to MMTC which also did not have much experience in either power generation or mining. What bothered many was that the deal was being finalized by sidestepping a sealed financial tender and based on a simple presentation by some invited companies. Now the government has announced that the Chhattisgarh Mineral Development Corp. (CMDC) is processing for a fresh tender which may give it a better deal from the last. MMTC had plans to execute the project through a public-private partnership route and had sought an EoI, to form a joint venture and seven companies, including the Indiabulls Group, Adani Group, Tata Power Ltd and Larsen and Toubro Ltd (L&T), were shortlisted. About 40 public sector firms, including Bharat Heavy Electricals Ltd and MMTC, had responded to the EoI tender and were required, on selection, to form two separate joint ventures with the Chhattisgarh State Electricity Board (CSEB) and CMDC, respectively.
NTPC likely to find going tough when cost-plus regime effectively moves to tariff based competitive bidding from January 6, 2011
NTPC and RIL may be locked in a legal dispute over K-G D6 gas pricing, for now, but as per the National Tariff Policy (NTP), the stateowned power generator will have to do all purchases of power competitively from January 6, 2011. NTPC, which conducted an open transparent international competitive bidding (ICB) to discover gas price of $2.34 per mmBtu where RIL willingly bid its price, does not have an option for making higher gas price as pass through to its customers. If NTPC accepts the gas price of $4.20 per mmBtu as per the NPT it will be passed on its consumers from the western region comprising Maharashtra, Madhya Pradesh, Chhattisgarh, Goa, Dadra and Nagar Haveli. NTPC's proposed expansion of 2,650 mw at Kawas and Gandhar, will come up only in 2012-13 and it will not be possible for it to construct these plants before January 6, 2011, as gas-based power plants take 30-36 months to construct. MoP has confirmed that the cost-plus regime for power sector effectively moves to tariff based competitive bidding to lower power costs from January 6, 2011. The change is effected through Para 5.1 of the National Tariff Policy notified by Government of India as mandated by Electricity Act 2003, which states that all purchases of power have to be done competitively, even from public sector projects from January 6, 2011. NTPC could suffer losses if the gas prices are high and the resultant tariffs are not competitive. Meanwhile, NTPC had earlier harped on the fact that it would not be impossible for it to purchase gas above $2.34 per mmBtu for carrying out the expansion of 2,650 mw at Kawas and Gandhar. Besides, ADAG, through its advertisements in public interest has claimed that NTPC will lose Rs 30,000 crore if it agrees for the gas price of $4.20 mmBtu.
UPPCL proposes an average hike of 20 per cent in power tariffs

The UPPCL, in its Annual Revenue Requirement (ARR), submitted with the UP State Electricity Regulatory Commission, has proposed an average hike of 20 per cent in the power tariff for different categories of consumers. In its ARR, the UPPCL has proposed to link tariff with number of supply hours. While no hike had been proposed for agriculture and rural domestic consumers, it has been proposed to link the tariff charged from the urban domestic consumers with the hours of supply made to them.
Bihar seeks immediate additional central sector power allocation

Bihar government has sought immediate additional central sector power allocation. Its problems got compounded ever since the bifurcation and creation of Jharkhand, which left Bihar without any thermal stations and making it almost entirely dependent on central sector drawals. The Centre has formed a four-member committee with members from coal, power and railway ministries and NTPC to examine the issue to redress Bihar's problem. The committee visited CIL's Rajmahal mines and NTPC's Farakka power plant to take stock of the situation especially on the back of the non-availability of coal at NTPC's three eastern generating stations of Farakka, Kahalgaon and Talcher which has forced their operations at low plant load factors. Bihar draws a sizeable degree of power from these three plants but reduced generation due to uncertainty in coal availability has led to lower supplies and heavy power cuts in Bihar.
Railways in JV with NTPC to set up 1000 MW power plant at Nabinagar in Bihar to meet its power requirements
The Railways is looking to set up a 1000 MW capacity power plant at Nabinagar in Bihar to meet its power requirements. The plant will be set up under a joint venture with NTPC and the Railways have already formed 'Bharatiya Bijlee Company Limited' for initiating power projects for itself. The upcoming plant will feed 164 traction sub-stations located in Eastern and Western region of the country. Railways consumed more than 14,096 million Kwh in 2007-08 for operational (traction) and non operational (non traction) purposes and its power needs are currently met by different state utilities and companies like Tata Electric, Damodar Valley Corporation and NTPC. Meanwhile, Railway Minister Mamata Banerjee has also announced setting up of another 1000 MW power plant at Adra in her Budget speech this year, which will feed power required for the tractions at economical tariff.
12
IPP's & CPP's
Phillips Carbon Black plans to sell about 40 MW of excess capacity from its captive power plants in 2009-10
Phillips Carbon Black Ltd may sell nearly 40 MW in 2009-10 from its captive power plants located at the various greenfield and brownfield projects. It is also looking at possibilities to generate from renewable sources by using waste rubber in the factories of another group company CEAT, which could be used for own consumption. The company generates electricity from lean gas at cogeneration plants at its carbon black factories. It recently commissioned a 30 MW plant at Durgapur, raising the total power generation capacity to 48 MW and has a target to generate over 80 MW of renewable energy by this fiscal. Currently, it generates 20 MW at Durgapur of which 15 MW will be up for sale and 12 MW at Vadodara of which 8 MW could be surplus. At its proposed 16-MW plant in the greenfield project in Mundra, the company hopes to have a 10 MW surplus, after meeting its requirements and the project is expected to be commissioned by the end of this calendar year. There are plans afoot to expand the production capacity at its Kochi plant from 2.5 MW to 16 MW in 2011-12 while also generating 16 MW at its greenfield carbon black factory in Vietnam. These initiatives through renewable energy sources would help the company to explore revenue potential while optimising power cost.
GMR Energy plans to construct 800-Mw coal-fired power plant on the eastern coast of India
GMR Energy is considering plans to construct an 800-Mw coal-fired power plant on the eastern coast of India, which is expected to be in the vicinity of its existing 388-Mw power plant at Vemagiri in Andhra Pradesh. GMR Energy also has plans to add another 4,200 Mw over the next few years, till 2015 to its existing capacity. It is planning a 1,200-Mw plant on the west coast and recently achieved financial closure for its 1,050-Mw, coal-based project in Orissa and has nearly achieved another closure for its 1,200-Mw plant at Chhattisgarh. Besides, GMR is also expanding its Vemagiri power project in an effort to more than double the capacity. Of the 4,200Mw addition, 2,250 Mw will be coal-based and 1,190 Mw will be hydro-powered, while another 750 Mw will be through natural gas. These expansions would be on top of the two acquisitions, which GMR effected recently with the addition of a 600-Mw project being set up in Maharashtra from EMCO and an 800-Mw natural gasfired power project in Singapore. It also has a 50 per cent stake in InterGen, a global power generation company which has 7,700 Mw of gross operating capacity across five countries and an additional 2,800-Mw capacity under development. Keeping these long-term power generation plans in mind, GMR has made two strategic acquisitions of coal mines in Indonesia and South Africa early this year. It acquired a 100 per cent stake in a coal mine PT BSL, Indonesia for around $80 million, which has a mine life of approximately 25 years besides also acquiring a 34 per cent stake in Homeland Energy Group (HEG).
JSW Energy aims to generate 11,390 Mw by 2015

For developing a 3,000 Mw of generation capacity, building transmission infrastructure and undertaking mining projects, JSW Energy will borrow around Rs 5,000 crore over the next year and a half, in addition to raising around Rs 4,000 crore from the market and through internal generation. JSW Energy, which aims to generate 11,390 Mw in the country by 2015, has tied up with two consortiums of lenders, led by IDBI Bank and State Bank of India for the loans. The company also plans to dilute 10 per cent of its equity through fresh issue to the public and of the total Rs 14,048 crore requirement for the projects under implementation, it has already tied up Rs 9,900 crore debt so far., out of which the two lenders' consortiums have already disbursed Rs 4,038 crore till June this year. As the projects progress, JSW is likely to disburse about Rs 5,000 crore within the next 15-18 months. At present, the promoters and promoter group companies, including listed companies JSW Steel and JSW Holding, are jointly holding 92 per cent stake in the company and the remaining eight per cent is with Mauritius-based companies Steel Traders Ltd and Indus Capital Group Ltd.
Essar Energy to start coal-bed methane (CBM) production from Raniganj block in West Bengal from December 2009
Essar Energy will begin production of coal-bed methane (CBM) from Raniganj block in West Bengal from December 2009. In the first phase it would be producing the gas, which is found in coal seams, from 15 wells. Essar will be writing to the Directorate General of Hydrocarbons (DGH) soon, seeking permission to produce gas by the year-end. DGH has certified reserves of 2.2 trillion cubic feet in the block. Essar has not divulged the price at which the company would be selling gas to its customers but has confirmed that it has already identified the markets and the buyers for the CBM gas. It is also considering the sale of the gas to nearby industrial houses in West Bengal, who could use it as a substitute for furnace oil and the company is in the process of signing the gas offtake agreements. Essar, which holds 100 per cent rights to the block, will become the second company after YK Modi-promoted Great Eastern Energy Corporation to produce CBM in the country. It expects to produce 100,000 standard cubic metres of gas (scmd) a day initially, which would be scaled up in the second phase. The company has estimated CBM production per well in the region at more than 5,000 scmd.
Adani Power likely to commission its second 330MW unit at Mundra towards the end of September or early October
Adani Power Ltd (APL) is likely to commission its second 330-MW unit at Mundra towards the end of September or early October. Meanwhile, the generation from the existing 330-MW unit has been stabilised at full capacity, recently, after being brought on stream in May. But, the existing unit is now undertaking rectification of 'minor problems' in the sea water processing equipment. In the absence of any supply commitment till February 2010, APL is supposedly selling its entire generation as merchant power on spot basis through the power-trading arm of its parent, Adani Enterprises. It is understood that parts of the generation were sold to the Punjab state utility at approximately Rs 6.5/unit. Meanwhile, Adani Power is scheduled to supply 1,000 MW to Gujarat state utility beginning February 2010 and long-term supplies of another 1,000 MW to Haryana through a dedicated transmission facility will begin at a later stage.
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CESC takes 50.1% stake in Dhariwal Infrastructure Pvt. Ltd's 600MW power plant at Chandrapur in Maharashtra
CESC, which generates and distributes electricity in Kolkata and its suburbs, has announced its intention to expand nationally with a Rs200 crore acquisition of a power project in Maharashtra from a group of investors led by Pune-based Manikchand Group. CESC has paid Rs200 crore for a 50.1% stake in Dhariwal Infrastructure Pvt. Ltd (DIPL), which has obtained all necessary licences and acquired 450 acres of land at Chandrapur, 150km from Nagpur, to generate 600MW of power. CESC will be acquiring the rest of the shares in the company by March next year at an insignificant cost, according to the company. DIPL has not started building the plant, which is estimated to cost Rs2,800 crore, but has secured the right to buy around five million tonnes of coal annually from South Eastern Coalfields Ltd, a subsidiary of Coal India Ltd.. CESC has contended that Maharashtra is the most lucrative state for power companies, and has estimated that at Mumbai suburban tariffs they would have made Rs1,600 crore in extra profits every year. After its entry into the west, CESC is now looking to expand in the north and the south, and is eyeing unfinished power projects across India. It is expected that CESC will tie up the funding for the plant by the end of the year, and if all goes well, will start generating power within 33 months of financial closure. Under an agreement with the state, DIPL would have to sell at least 50% of the 600MW it generates to the Maharashtra State Electricity Distribution Co. Ltd, or MSEDCL, and though regulated by the state government, MSEDCL's average tariff is Rs5.80 a unit which is significantly higher than CESC's average tariff of Rs3.90 a unit. DIPL will be selling the remaining 50% that it generates at a much higher price than the MSEDCL rate and CESC has estimated an internal rate of return (IRR) of around 20% on its investment in Maharashtra. Currently, it generates 975MW at four plants in Kolkata and its neighbourhood, and is ready to start building a new plant at Haldia in West Bengal's East Midnapore district while also looking to set up power plants in neighbouring states such as Jharkhand, Bihar and Orissa. A new unit at CESC's Budge Budge plant in Kolkata will be commissioned next month which will raise its generation capacity to 1,225MW.
TRANSMISSION & DISTRIBUTION
Government pushing for removal of licensing requirements needed to distribute power to establishments located inside SEZ's
The government is pushing for removal of licensing requirements needed to distribute power to factories, business outsourcing units, software developers and social infrastructure like hospitals and malls located inside Special Economic Zones (SEZ). The move is aimed at easing procedural hassles and the Power and Commerce ministries are in advanced stages of inter-departmental talks that would lead to doing away with the requirement. However, a SEZ developer will have to obtain a licence if it wants to distribute power outside the zone. The proposed move is expected to help in cutting down the long-drawn licensing requirements needed for obtaining a licence for distribution of power and will help scores of other SEZs, which are on their way of becoming operational. The proposed move will mean that the moment a SEZ gets notified, the developer will get a deemed licence status to distribute power to the units and other supporting infrastructure inside the zone. The Commerce Ministry had released guidelines on generation and distribution of power in SEZs on February, 2009 where it had spelt out norms for building power plants inside the tax free industrial enclaves and had stipulated that the developers will have to obtain a distribution licence, as mandated by the Electricity Act, 2003. Currently, there are 98 functional Special Economic Zones housing 2279 units while scores of other zones are likely to start exporting by the end of this year. Incidentally, Mundra SEZ, which is being developed in over 6,000 hectares and is currently the largest SEZ, will host a 4,629 mw power plant in side the zone, which will not only supply power to the units located inside it, but also to grids located outside while Reliance Utilities Ltd, which partnered Reliance Jamnagar Infrastructure Ltd in building the Jamnagar-based Special Economic Zone refinery, has already built a 720mw plant inside the zone.
Bhushan Power and Steel plans capacity addition to take its total power-generation to 640 mw
Bhushan Power and Steel (BPSL) plans to invest Rs 3,000 crore to add 250 mw capacity to its existing power plant and to increase production of value-added steel at its Orissa facility over the next one year. BPSL already has a 260 mw captive power plant in Sambalpur (Orissa) and plans are afoot to increase its capacity to 390 mw by the year-end. The planned capacity addition will take the company's total power-generation capacity to 640 mw. It hopes to sell its surplus generation through open access at spot prices in the market.
L&T bags four EPC orders in Qatar, UAE and Oman worth about Rs 1,044 crore
L&T has bagged four engineering-procurement-construction (EPC) orders, in Qatar, UAE and Oman, aggregating approximately to Rs 1,044 crore, for the construction of substations for the major Gulfbased infrastructure firms like Qatar Petroleum, KAHRAMAA, Dubai Electricity and Water Authority (DEWA) and Oman Electricity and Transmission Company (OETC). The contract from the oil and gas major, Qatar Petroleum, which was secured by L&T against stiff international competition, envisages the construction of four substations at Ras Laffan, including development of a 33 kV and 11 kV power distribution network and is valued at Rs 737 crore. Slated to be executed over a period of 32 months, the project is one of the key phases of the overall development of Ras Laffan Industrial City in Qatar. The order awarded by Qatar's electricity and water corporation, KAHRAMAA, is worth Rs 96 crore and involves the construction of one 66/11 kV gas insulated substation (GIS) at the Education City, in Doha to add to its constructing of five similar substations in the capital city, already. DEWA has awarded L&T a Rs 115 crore order for the construction of a 132/11 kV substation in Dubai, where L&T is already constructing two similar substations while its joint venture, L&T Oman, has secured a Rs 96 crore order from OETC for the construction of one 132/33 kV GIS substation at Nakhal in Oman.
CEA recommends coal linkages for six captive power projects

The Standing Committee of CEA has recommended coal linkages for six proposed, as well as existing, captive power projects. The CEA has proposed grant of long-term coal linkage after it found the required infrastructural inputs to be in order. The captive power projects that are being recommended are Ispat Energy Limited's 250 MW project in Maharashtra, Hindustan Zinc Limited's (HZL) 160 MW project in Rajasthan, Bindal Paper Limited's (BPL) 15 MW co-generation project in Uttar Pradesh, Abhinav Steel Private Limited's (ASPL) 15 MW project, also in Uttar Pradesh, and Viraj Steel and Energy Limited's 12 MW project in Orissa.
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DEALS, FINANCES & TENDERS
Tata Power reports 160% increase in net profit for the quarter ended June 30, 2009
Tata Power has reported a 160% increase in net profit at Rs 572.65 crore as compared to Rs 219.85 crore in the corresponding quarter in the previous year for the quarter ended June 30, 2009, on a consolidated basis. Revenue for the quarter increased 15.82% at Rs 4,713.16 crore compared to Rs 4,069.34 crore in the corresponding period last year. On consolidated segment-wise performance, net revenue for power business was Rs 3342.97 crore and for the coal business was Rs 1158.43 crore as compared to Rs 2888.32 crore and Rs 1011.84 crore respectively, during the corresponding periods last year. PBIT for power business was Rs 662.41 crore against Rs 315.36 crore, 110.05% higher, whereas, PBIT for coal business stood at Rs 373.16 crore as compared to Rs 296.85 crore, 25.71% higher than corresponding quarter in the previous year. It has also lined up nearly Rs 24,000 crore as capital expenditure in the next three years and has over 30,000 consumers till July-end who have evinced interest to switch over to Tata Power for their electricity requirements. It currently supplies power to around 28,500 consumers, including individual and bulk industrial consumers like airports and state installations.
NTPC and CIL close to signing proposed 50:50 JV to develop two coal blocks and set up a pithead thermal power station
The NTPC board has cleared a proposal for a 50:50 JV between NTPC and Coal India (CIL) which will pave the way for the CIL board to clear the proposal and sign the JV agreement soon. The JV plans to develop two coal blocks at Brahmini and Chicro Patsimal in Jharkhand and set up a pithead thermal power station. The power plant details are yet to be prepared but, based on the initial reserve estimates at these mines, coal production could easily support at least a 4,000 mw thermal plant. But since the two blocks are unexplored, the JV will have to ascertain the quantum of coal reserves and seam location following which mining work can start. While the NTPC board has cleared the proposal, CIL had raised some issues on pricing of the coal from these blocks which had forced NTPC to redraft the agreement. Meanwhile, CIL is also working to float four separate foreign mining joint ventures with local partners, one each in the US, Australia, South Africa and Indonesia.
HYDRO POWER
Maharashtra lines up investments of more than Rs 75,000 crore for generation, transmission and distribution
Maharashtra has lined up investments of more than Rs 75,000 crore for various power projects in the state spread across the board in generation, transmission and distribution which include those projects which are currently at various stages of development after having obtained all approvals. According to the state power department, in the next three to four years, over Rs 60,000 crore would be invested by state-run power utilities, with about Rs 30,000 crore marked for generation projects and Rs 15,000 crore each for transmission and distribution with a large portion of debt being committed by public financing companies including Power Financing Corporation and Rural Electrification Corporation. According to KPMG the biggest advantages for Maharashtra state utilities getting greater chunk of debt from PFC and REC is that they are less exposed to the volatility in the finance markets and have been aggressive in implementing power projects and have also been very successful. According to the Maharashtra Electricity Distribution Co a combined capacity of over 10,000 megawatts is expected to be added by state and private power generation firms by 2012 while the state distribution arm is looking at enhancing its carrying capacity from 10,000 MW to 20,000 MW. Maharashtra believes that if these targets are achieved, power deficits in the state could be a thing of the past. Currently, the state faces a power shortage of around 5,000 MW daily during peak hours which is likely to rise to 10,000 MW by the end of 2012. Meanwhile, NTPC and some private players such as Tata Power, Reliance Power, Adani Power, JSW Energy and Jindal Power are also expected to complete commissioning of few units. Analysts believe that private firms may add nearly 4,000 MW to the state grid by 2012.
Poor rainfall forces many hydel power plants to operate at about 40% PLF
Poor rainfall has forced many hydel power plants to operate at about 40% capacity and most are perilously close to a complete shutdown for want of adequate water in their reservoirs. This has led to the thermal power plants bearing the extra load, but also raising concerns that a failure at a big thermal power plant could disrupt supplies across the country. According to MoP, generation from the hydel sector is already down substantially and only about 27,000-28,000 mw is available which could fall sharply if the monsoons continue to play truant. Meanwhile, even the Central Electricity Authority (CEA), has warned of the sluggish progress of the monsoon during June-July, and the corresponding below-normal rainfall in the catchment areas of reservoirs in the southern, western and eastern parts of the country which has resulted in a decline in water storage levels at most hydroelectric projects. It has informed that because of water shortage, hydel power plants are currently running only in the peak hours, i.e. 6-10 pm. It is learnt that the water level in the Bhakra reservoir on the Sutlej is down to 70 mtrs against average levels of 500 mtrs in June-July while its average generation is at 846 mw against an installed capacity of 1,480 mw. Likewise, in Gujarat, the 1,200 mw Sardar Sarovar hydroelectric project has shut down after generating only 50 mw in early July and the 1,500 mw Nathpa Jhakri hydel power project in Himachal has been temporarily closed due to technical reasons. The Tehri hydel project is also facing critical water levels and if it is forced to shut, then the northern grid could lose another 1,000 mw, which would make it extremely difficult for the north Indian states of Punjab, Delhi, Haryana, Chandigarh, Jammu & Kashmir, Rajasthan and Uttarakhand.
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Tamil Nadu reports lower hydel generation figures for April August period than last year
Tamil Nadu has reported lower hydel generation figures by logging 1,637 MUs of hydel power in the period from April 1 till August 19, compared with 2,190 MUs in the corresponding period last year. However, the shortfall, compared with last year, has not been increasing and in the last three months, it has hovered around 550 MUs. What is also working positively in favor of Tamil Nadu, till now at least, is that TNEB data has shown that the potential storage thus far this year is better than in the corresponding period last year, which could generate 1,125 MUs against 826 MUs. Tamil Nadu has 2,186 MW of hydel capacity. Storage at Mettur was reported at 58,894 million cubic feet, recently, which is 66.6 per cent of the reservoir's full capacity of 88,452 mcft. At the beginning of the month last year, the storage here was 59 per cent of capacity and encouragingly, inflows have been consistently higher than the discharge.
be debt. It has projected 325 sunny days in a year and forecast the annual generation capacity of this project at about 59 lakh units, of which 49.10 lakh units would be available for sale. Haryana Electricity Regulatory Commission has fixed the tariff of this project at Rs 15.96/unit of which Rs 12 will be paid by the Centre and the rest by the state government. The other three firms who are re-working their details include Astonfield Renewable Resources for a 3 mw plant; Epuron Renewable Energy for a 2 mw plant and Azure Power India, also for a 2-mw plant. One factor that these companies will have to consider is the module cost, which was around Rs 170-200 per watt four months back but has now been reduced to Rs 140150/watt which will make their projects more viable and bankable and maintaining a minimum internal rate of return of 14% to make it a profitable venture. Further, as per guidelines of the Centre, these projects should be commenced before December 31 for a tariff of Rs 15.96 or March 31, 2010.
NHPC, SJVN and government of Manipur to form JV to develop 1,500-MW Tipaimukh hydropower project
NHPC, through a JV, will develop the 1,500-MW Tipaimukh hydropower project in the north-eastern state of Manipur. The project was initially awarded to the state-owned North Eastern Electric Power Corporation Ltd. The Union Power Ministry has reportedly asked NHPC, Satluj Jal Vidyut Nigam (SJVN) and the state government of Manipur to form a joint venture to develop the project in which NHPC would hold a 69% stake and SJVN 26%. The other 5% share would be with the Manipur government. NEEPCO's planned capacity addition target has come down to 3,000 MW from 4,500 MW as planned earlier for by the end of March 2017, after losing the Tipaimukh project. NHPC is finalising the draft Memorandum of Understanding for the proposed Tipaimukh JV and work is already in process and the draft MoU would be submitted within a month to the government, as desired by the Power Ministry.
Rajasthan targets to establish 3,000 MW to 5,000 MW of solar power projects in the State
Union Minister for New and Renewable Energy, Mr Farooq Abdullah has assured that every village in Rajasthan would be supplied with power within the next five years. He made the comment while drawing attention to efforts being made to establish solar power projects of 3,000 MW to 5,000 MW capacity in the State. He added that the ministry would shortly chalk out an action plan for supplying electricity to villages which were not connected to the Grid substations and underlined the importance of non-conventional energy sources in this regard. It is expected that Rajasthan with its rich resources of solar and wind energy, shows immense potential to be a front runner for power generation through the non-conventional sector. Also expressing concern over global warming and environmental degradation he added that gradual discontinuance of fuels like coal, gas and crude oil for power generation should be the way forward in preference of environment-friendly resources of bio-mass, solar and wind energy. The desert State with its availability of enormous solar radiation has a huge potential for becoming the leader in non-conventional power production and has also set the target for producing 500 MW power every year by harnessing wind energy in Barmer and Jaisalmer districts.
RENEWABLE ENERGY
NTPC to largely focus on wind energy in its efforts to diversify its fuel mix in the renewables space
NTPC is fast-tracking plans on diversifying its fuel mix and is keen to make wind power a key thrust area in the renewables space. It is likely to soon roll out plans for 1,000 MW of greenfield wind power installations across Karnataka, Gujarat and Andhra Pradesh over the next few years. The company's first wind project is expected to come up in Karnataka, with wind farms totaling 500 MW at half a dozen locations in the State and is in advanced stages of finalising the Detailed Project Reports for the projects in Karnataka while also assessing the techno-commercial viability of the other identified projects. NTPC has already signed a MoU with the Karnataka Power Corporation Ltd. (KPCL) for setting up the 500-MW wind power capacity, under which KPCL will provide the land while NTPC will set up and operate the wind farms. NTPC's move to focus on green projects is a response to increasing environmental consciousness and its commitment to the global climate change agenda. Currently, around 78 per cent of NTPC's installed capacity of 30,644 MW is coal-fired, while much of the remaining capacity is based on natural gas. According to the Global Wind Energy Council, India added just 1,800 MW during the last year, taking its total installed wind generation capacity to 9,645 MW while China added a whopping 6,300 MW, second only to the US in terms of new additions, taking its capacity at the end of the year to 12,210 MW. The US added a whopping 8,358 MW during the year and with that overtook Germany as the leader in terms of total wind energy installed capacity.
RS India Wind Energy signs MoU with Haryana Renewable Energy Development to set up solar photovoltaic power project in the state
RS India Wind Energy has been the only company, of the four companies that signed a MoU with Haryana Renewable Energy Development Agency (HAREDA) last year, to acquire land so far for setting up solar photovoltaic power projects in the state. Despite submitting their detailed project reports, the other three projects have been found to be not bankable which has forced them to now rework their projects to make them feasible and for resubmitting new reports soon. RS India Wind Energy had submitted a proposal for developing a 3-mw capacity solar power plant and has taken 30 acres on lease in Raisena village in Gurgaon district. A total of 15,008 solar photovoltaic (SPV) modules of 200 watt each would be used in the project to harness solar energy for power generation. HAREDA has announced that the total expected cost of the project is around Rs 57 crore, of which 30% will be equity and the rest will
17
Tamil Nadu sees gradual seasonal tapering of wind power generation in August
In a huge blow to the TNEB, which banks on its wind power potential, the last few days has seen a gradual seasonal tapering of wind power generation in Tamil Nadu. After hitting highs of 46 million units a day in early August, wind power generation began dropping, first to 41 MUs on August 11, and then to around 13 MUs on August 16. And since, it has hovered around 3 MUs a day, and swinging rarely up to 10 MUs. What is hurting Tamil Nadu is that the Tamil Nadu Electricity Board, had targeted generation of 1,315 million units for August, against which the achievement, till mid month, was a paltry 630 MUs. What has worsened the situation is that hydel power generation too thus far in the current financial year has been lower than in the corresponding period last year.
AEC asks Indian companies in the civil nuclear sector to be vigilant while entering into tie-ups with overseas companies
Calling Indian companies in the civil nuclear sector to exercise due diligence and read the fine print, Atomic Energy Commission (AEC) Chairman Anil Kakodkar has asked interested companies to be vigilant while entering into tie-ups with overseas companies so as to not jeopardise their growth prospects. He cautioned Indian companies against allowing themselves to be subjected to extraterritorial application of foreign laws that could restrict their participation in the indigenous three-stage nuclear power programmes. Likewise, it is also likely that in addition to Indian companies being tied down to their alliance partners in the domestic sector, there is also the danger of them not being allowed to operate overseas. The note of caution comes at a time when Indian companies are not only engaged in the fully indigenous nuclear power programme but also looking at participating in overseas projects. Kazakhstan is poised to place orders for Indian 220 MWe pressurised heavy water reactors. But after India's acceptance in the civilian nuclear energy mainstream, it is critically important that domestic companies should neither compromise their independence nor surrendered technology. He added that while there should be no difficulty in protecting acquired technology and its use, the right to use pre-existing technology should be preserved and exercised.
Bharat Forge to enter the wind energy business

Bharat Forge Ltd is set to enter the wind energy business and will be supplying some critical components for wind turbines for Tata Power's upcoming power plants in Maharashtra. The company will be supplying 1.5 mw wind turbines for Tata Power's upcoming 10 mw power plant coming up at Satara where installation work is likely to begin shortly. The company's client base, currently, in the renewable energy sector includes GE and Siemens.
IPPAI CONFERENCES
PAPER PRESENTATION
NUCLEAR POWER
POWER PULSE brings you a presentation made by Mr Sunil Agrawal of GMRETL on the subject of "Denial of Open Access" made at a past IPPAI Conference "Impact of Denial of Open Access on the Power Sector - Solutions & Way Forward" which was held in New Delhi, in the recent past.
DENIAL OF OPEN ACCESS

Impact of Denial of Open Access on the Power Sector Solutions & Way Forward
Presentation By
SUNIL AGRAWAL - GMRETL Snap Shot on Indian Power Trading Maharashtra to make fresh appeal to CEA for forming JV with NPCIL for its proposed 10,000 mw project at Jaitapur in Raigad district
The Maharashtra government and its undertaking MahaGenco, are keen to make a fresh appeal to the Central Electricity Authority (CEA) for forming a joint venture with the Nuclear Power Corporation (NPCIL) for its proposed 10,000 mw nuclear project at Jaitapur in Raigad district of the state. The fresh attempt by the state government and MahaGenco, comes at a time when the Bombay high court recently allowed NPCIL to go ahead with land acquisition for the project. The project is likely to come up over 900 hectares and Nuclear Power Corporation has already joined hands with Areva for a European Pressurised Water Reactor (EPR) of 1,600 mw. The project entails an investment of around Rs 50,000 crore and MahaGenco had initially desired to acquire upto 49% equity in the project. The project has become crucial for Maharahstra which is witnessing a rapid rise in demand for power while MahaGenco, currently, has an installed capacity of about 9,000 mw. Only a few traders are actively trading Trading percentage has not crossed even 5% of total generation Overdraw volume from all five grids is around 5.54% of total generation
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Section-11 of EA-2003
The Appropriate Government may specify that a generating company shall, in extraordinary circumstances operate and maintain any generating station in accordance with the directions of that Government. Explanation. - For the purposes of this section, the expression "extraordinary circumstances" means circumstances arising out of threat to security of the State, public order or a natural calamity or such other circumstances arising in the public interest. The Appropriate Commission may offset the adverse financial impact of the directions referred to in sub-section (1) on any generating company in such manner as it considers appropriate.
Questions???
Who is appropriate Government in case of merchant plant Is any word missed out in provision Which are extra ordinary circumstances How long extra ordinary circumstances can continue How many times these circumstances can repeat Which are other circumstances can be included in public interest, and so on. ************* x**************
CERC NOTIFICATIONS / CIRCULARS

(The pdf version of the entire regulation comes to POWERPULSE subscribers as an attachment to the current newsletter.)
Some Suggestions for way forward

Early implementation of Intra-state ABT as this may be a preamble for implementation distribution open access similar to Inter-state ABT for transmission open access. Preparation of Road Map for reduction of losses and cross subsidies through efficiency improvements by way of privatization. Distribution surcharge is to be decided in a manner so as to generate enough competition. Captives, Merchant and Independent Power Producers needs an alternatives in case of Open Access denial at last moment as these might have made advance arrangement for supply of power. SEZ power evacuation policy should be in place for their connectivity to the grid and flow of power and vice versa. Opening a new alternatives for IPP/MPP/CPP to sell their entire power in UI under the circumstances of legal proceedings on open access denial by states. If the over drawl volume from all five grids are traded through bilateral or Power Exchange the trading volume would jump from 3.15% to 5.54 % of total generation. Paying the proportionate Transmission Loss by the utilities in addition with UI charge for over drawl from grid. Regulatory and technical barrier for open access need to be reduced for greater assurance to customer (viz. rationalization of grid support & demand charges).
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Special Conference Issue: e-Newletter on Power

Independent Power Producers Association of India

ower pulse Special Conference Issue

IPP's & CPP's ..13

TRANSMISSION & DISTRIBUTION14

DEALS, FINANCES & TENDERS 16

OIL & GAS .8

RENEWABLE ENERGY ....17

POWER TRADING ..10

NUCLEAR POWER ..18

STATE SECTOR ...12

IPPAI CONFERENCES .18

ower pulse Special Conference Issue

Time to play fair, Mr Deora

ower pulse Special Conference Issue

CCI not to look into KG D-6 gas dispute unless matter is

Mechanism for switch to Open Acreage Licensing Policy to be in place by 2010

ower pulse Special Conference Issue

ower pulse Special Conference Issue

ower pulse Special Conference Issue

OIL & GAS

ower pulse Special Conference Issue

The Ambani Brothers Dispute By Dr Bhamy Shenoy

ower pulse Special Conference Issue

Transmission capacity constraints hamper trading volumes at electricity exchanges

ower pulse Special Conference Issue

UPPCL proposes an average hike of 20 per cent in power tariffs

Bihar seeks immediate additional central sector power allocation

ower pulse Special Conference Issue

IPP's & CPP's

JSW Energy aims to generate 11,390 Mw by 2015

ower pulse Special Conference Issue

TRANSMISSION & DISTRIBUTION

CEA recommends coal linkages for six captive power projects

ower pulse Special Conference Issue

DEALS, FINANCES & TENDERS

ower pulse Special Conference Issue

ower pulse Special Conference Issue

Bharat Forge to enter the wind energy business

DENIAL OF OPEN ACCESS

ower pulse Special Conference Issue

CERC NOTIFICATIONS / CIRCULARS

Some Suggestions for way forward

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