NEWS COVERAGE FROM POWER, COAL & PORT SECTOR AS ON 20TH MAY 2012 NEWS FROM FINANCIAL EXPRESS

EXTRA COSTS OFFSET OPEN ACCESS GAINS FOR POWER

Even as the central government is pushing states for mandatory implementation of open access (OA) for bulk power consumers, an analysis by a regulators body has revealed that contrary to expectations, the consumers in 12 states have had to pay more for power under the new regime. OA at various levels is the hallmark of electricity reforms and the regime has been effective in 20 states since January 2009 on an optional basis. Under the OA regime, bulk consumers enter into bilateral deals with discoms and stay outside the ambit of the regulated tariff system. According to a study by the Forum of Regulators, which compares average cost of power for open access and regulated-tariff consumers of 20 states in the financial year 2009-10, the 12 states where OA consumers paid prices higher than the regulated tariffs include Tamil Nadu, Bihar, West Bengal, Orissa and Jharkhand. Analysts, however, reckon that higher prices under the open access regime are due to factors like the steep rise in input costs primarily coal since 2009 and doesn't negate the principle that open access promotes competition. Also, many large consumers must have chosen to pay higher prices for better-quality power from distant discoms. There are also other reasons for this phenomenon, which on the face of it seems to belie the concept that OA regime would promote competition and correct market distortions. Analysts feel that helped by regulators, discoms have burdened OA consumers with numerous unprescribed charges and surcharges to increase cost of power for them. As per the regulators study, net OA charges were upwards of R2 a unit in six states during the period. It worked out to R1-2 a unit in six other states. Under the Electricity Act, open access consumers have to pay OA charges including wheeling and standby charges and cross-subsidy surcharge, besides the cost of electricity. But regulators have been levying numerous charges in addition to those prescribed. Regulators have been approving numerous additional charges like scheduling and grid support charges proposed by discoms, increasing burden for open access consumers, a source said. Besides, cross-subsidy surcharge liability figures are highly inflated. This is possible because regulators follow different methodologies for calculating cross-subsidy surcharge, the source added. A cross-subsidy surcharge is payable by OA consumers as they are required to share
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the subsidy burden from electricity sale by discoms to farmers and economically weaker sections of society as per regulations. High cross-subsidy surcharge remains a major disincentive to open access consumers, said PTC India chairman TN Thakur. Cross-subsidy surcharge should be reduced to encourage open access consumers, said PwC senior manager Charudatta Palekar. Only in eight states Haryana, Karnataka, Maharashtra, Punjab, Rajasthan, Uttar Pradesh, Madhya Pradesh and Gujarat did OA consumers pay less compared with normal consumers.

DUTY-FREE IMPORT NORMS FOR POWER COS MAY BE EASED

Power companies may soon be allowed to produce bank guarantee for duty-free import of equipment based on the provisional mega power certificate issued by the finance ministry. Currently, developers furnish a fixed deposit receipt (FDR) of an amount equivalent to the duty on equipment import for getting tax relief. However, companies feel the current practice locks in a large sum of money that could, otherwise, be used for projects, especially at time when it is difficult to mobilise cheaper credit. Under the mega power policy, the government allows duty-free imports for all thermal projects of 1,000 mw and above and hydro projects of 500 mw and above. The policy intends to promote growth of large power projects. The ministry is reconsidering a proposal to allow bank guarantee, in addition to FDR, to mega power projects having a provisional mega certificate. The option is being studied afresh as the power ministry is keen on preventing projects from getting stuck in a difficult economic environment, said a government source privy to the development. A similar proposal of the power ministry was earlier turned down by the finance ministry last year as a fixed bank guarantee was not found feasible in the light of the huge government revenues involved. However, the power ministry has kept up pressure to get the approval. Power minister Sushilkumar Shinde apprised the finance minister Pranab Mukherjee of the issues in a fresh letter last week. Shinde asked the department of revenue to suitably amend the customs/excise notification dated July 21, 2011, to allow the option of bank guarantee, in addition to FDR, to developers having provisional mega power certificate. several power developers, and their associations, have represented that furnishing fixed deposit receipts upfront involves a huge financial burden on developers, besides affecting cash flows. It will result in changing the utilisation of funds sanctioned by FIs who have appraised the project, considering the fiscal
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benefits allowed under the mega power project policy, Shinde said in his letter to FM. The move could expedite the process of setting up power projects and help in better planning of equipment imports that constitutes almost 50-60% of the total project cost, said an official of a private sector power company. Several companies already have good relations with banks and providing bank guarantee would not be difficult, the official added. Under the existing provisions, developers are allowed duty-free import by furnishing a security in the form of an FDR from any scheduled bank for a period of 36 months or more in the name of President of India for an amount equal to the duty payable by them. The duty could be either custom duty payable by developers for import of equipment or excise duty to be paid by them if equipment is sourced from the domestic market. Provisional certificates can also be obtained by developers that currently have only an in-principle approval on mega power status by complying with new security deposit mechanism. Under the system, developers will need to provide a final mega power status certificate within a period of 36 months from getting a provisional certificate. Failure to comply with this regulation result sin forfeiture of the FDR.

BANKS RECAST R75,000-CRORE SEB LOANS

Public sector banks are estimated to have restructured around R75,000 crore worth of loans to state electricity boards (SEBs), mainly the three distribution companies of Rajasthan, Uttar Pradesh and Haryana. Much of the recast has taken place in the March 2012 quarter. Of the total power sector portfolio of nearly of R5 lakh crore, Crisil estimates that approximately R3 lakh crore has been lent to state-owned utilities. Bank of Baroda's ( BOB) restructured loans worth R5,281 crore in the three months to March, 2012, including R2,000 crore to SEBs. Punjab National Bank restructured loans toalling R4,700 crore to SEBs as a result of which its restructured portfolio jumped to R8,600 crore. At Central Bank of India, too the restructured portfolio ballooned to nearly R8,000 crore in the March quarter, more than half of which related to loans to SEBs. Apart from the power sector, banks have recast loans to the aviation space. Banks have gone ahead with rejigging the loans to SEBs since they are hopeful the state governments will hike tariffs shortly.

After a detailed study of the power sector, Crisil has estimated that tariffs need to be hiked by an average of 50% for state utilities to break even. However, analysts
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believe that while tariff increases will help bridge operating deficits, they will not be enough to repay past debts. As of now, banks have allowed the discoms a twoyear moratorium period and have extended the repayment period by eight years. Post the moratorium, banks could levy additional interest at 1.0-1.5%. The risk to these lenders arises primarily from potential weakening in their asset quality due to two critical issues: escalating losses and debt levels in the power distribution sector and the shortage of fuel for power generation. We estimate that the losses in the distribution segment have mounted to R350-400 billion in 2010-11, nearly doubling from 2008-09 levels,'' Crisil observed. Central Bank is the lead banker for the Jaipur discom, while BoB and PNB are leading the restructuring process for discoms in Ajmer and Jodhpur, respectively. BoB has restructured R800 crore worth of loans given to Ajmer discoms while PNB has restructured R630 crore of loans it gave to the Jodhpur discoms. The Rajasthan SEB is possibly the worst affected and banks have restructured an estimated R38,361 crore. SL Bansal, CMD, Oriental Bank of Commerce, which leads the Haryana discom consortium, said, The state government has committed to a revision in tariffs and has guaranteed support in case of a default. Also, the discoms are requesting the state government for a budgetary support to help improve cash flows. Analysts estimate another R75,000 crore worth of loans to discoms could require restructuring. Canara Bank has so far not restructured any SEB loans and could recast R5,400 crore in the June 2012 quarter.

NEWS FROM BUSINESS LINE PEAK POWER DEFICIT NEARLY 11,000 MW IN APRIL
In signs of worsening power supply situation for consumers, the shortfall in electricity generation during peak hours stood at nearly 11,000 MW in April as fuel scarcity hurt performance of thermal plants. The countrys peak power deficit shortfall in generation capacity during the time when the electricity consumption is the maximum - touched 10,876 MW in April, according to the official data. The significant deficit implies non-availability of enough electricity to meet the needs of consumers. Many states, especially in south India, are already grappling with load shedding and power cuts. Data compiled by the Central Electricity Authority (CEA) showed that total power generation capacity was just 1,17,124 MW last month whereas the demand was pegged at 1,28,000 MW. In terms of million units, the countrys total power demand was 78,947 MUs but availability was only 72,447 MUs. Page 4 of 14

Megawatt (MW) is used to refer to generation capacity while Million Unit (MU) indicates the amount of power produced. For instances, a 500 MW capacity plant running for 24 hours can roduce 12 MUs of energy. Consumers in the southern states of Andhra Pradesh, Kerala, Karnataka and Tamil Nadu, and union territory of Puducherry were the worst affected by electricity shortage. Severe coal shortage is hurting power generation. Thermal plants account for majority of electricity produced in India. On an average, at least 25 thermal power stations on an average in the country were starved of required coal in April. Experts felt that power situation could worsen in the coming months, unless the fuel issues are addressed at the earliest. In the south, the peak demand shortage stood at almost 15 per cent in April. The actual availability in the region was 30,681 MW while the demand hovered at 36,067 MW, as per CEA data. Apart from southern states, another worst-hit state was Uttarakhand, where the peak power deficit touched 15.7 per cent in April. Among other states, Delhi, Gujarat and Goa seemed to be better off when it came to electricity supply. Going by the data, Delhi managed to meet its peak power demand of 3,779 MW. The deficits in Gujarat and Goa were just around 0.2 per cent and 0.4 per cent, respectively. In the Northern region, that includes Haryana, Himachal Pradesh and Punjab, the peak deficit touched 7 per cent. In the Western region, Madhya Pradesh recorded around 18 per cent power deficit. The Power Ministry expects to generate around 9,20,000 MUs of electricity this fiscal. Out of the total, 7,60,000 MUs would be from coal-based plants. The government might also import 5,000 MUs of electricity from Bhutan.

NTPC WILL GET COAL EVEN WITHOUT FSA FOR 2012-13

NTPCs reservation in signing the Fuel Supply Agreement (FSA) with Coal India will not impact the countrys largest power producer as CIL will not restrict supply of fuel in the current financial year 2012-13 even if the agreements are not signed. NTPC will continue to get coal whether FSA is signed or not as government has asked us to extend the same for the current year even though MoUs expired in March, CIL Chairman and Managing Director S Mr Narsing Rao told PTI. CIL in the previous year had supplied 36 million tonne of coal to NTPC and in the current fiscal the projected requirement was 90 million tonne based on 80 per cent supply, he said. There was also a payment due of close to Rs 400 crore at end of April over differences in Gross Calorific Value (GCV) based formulae of coal.
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Payment is due and the amount is close to Rs 400 crore from January to April. The NTPC Chairman Mr Arup Roy Choudhury had a meeting with me on May 6 and they agreed to clear some of the dues, Mr Rao said. The main bone of contention between the two PSUs on FSAs, was NTPC declining to accept the GCV based formulae and wanting to go back to the Useful Heat Value system. The system has been changed by the government and so you do not have any choice whether you like it or not, Mr Rao said hinting that CILs FSA agreement would not be diluted in the wake of reservations from certain power producers including NTPC to sign FSAs. The coal ministry has also not received any formal refusal for signing the agreements with NTPC plants. The FSAs to be signed by NTPC are mostly for additional units completed till 2011 at the existing power stations for which pacts have already been entered. Call to augment thermal power. The State government should increase power generation from thermal power plants during the summer months to tide over the power shortage in the State and the subsequent load shedding, said Mr A.N. Rajan, president of the Kerala Electricity Workers' Federation (AITUC). A total of 771 MW power can be produced at the six thermal power plants in the State, but only 300 MW is being produced. Load shedding can be done away with if the plants function optimally. The high price of naphtha (for use in the plants) can be brought down if it is made available for Rs 22,000 a tonne, the rate at which it is given by the Centre to private fertilizer manufacturing companies. Using this, a unit of power can be manufactured at less than Rs 5, he said.

POWER GEAR: ORDERS PICK UP, BUT COMPETITION HITS PLAYERS

Chinese companies, new entrants gain market share. A stream of new orders in the March quarter, after a hiatus in the first half of FY-12, must ideally spell good news for companies in the power transmission and distribution space. But things are not looking too bright for established players such as ABB, Siemens, Crompton Greaves or KEC International. Most of these players have lost market share in FY-12 either to Chinese players or new domestic entrants. In a sector where the profit margin is largely linked to volumes, it may be tough for domestic players to return to the high double-digit operating profit margins of a few years ago. ORDER FLOW BACK
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PowerGrid Corporation of India (PGCIL) increased its pace of awarding transmission and distribution (T&D) orders in the March 2012 quarter. The public sector company placed orders worth Rs 10,791 crore to private players in this period. That is 50 per cent of the total orders of Rs 22,000 crore placed in FY-12. This meant orders for companies that make power equipment such as transformers, sub-stations, conductors and transmission and distribution lines. Companies such as ABB, Siemens, Crompton Greaves, and Transformers and Rectifiers did receive orders, though not in the same proportion as last year. CHINESE BACK WITH A BANG In the transformer space, it appeared that the Chinese were less aggressive for a good part of FY-12. But they more than made up for their absence in the last quarter, bagging close to 40 per cent of the transformer orders awarded by PGCIL. Interestingly, the Chinese went for the kill in the high-end (also higher-margin) 765-KV transformer space. According to data from MF Global India Research, Crompton Greaves dominated this segment in FY-11 winning a third of the order value. In FY-12, though, TBEA Shenyang walked away with 27 per cent of the orders in the 765-KV segment, leaving Crompton Greaves with just 12 per cent. TBEA did not win any orders in FY-11. It is now setting up a plant in Gujarat and is likely to scout for orders to utilise the local capacity. Overall, in the transformer space (across various transformer capacities), Crompton Greaves was the top loser. Siemens saw its share falling from 12 per cent to three per cent, while ABB's share dropped from seven per cent to three per cent. Alstom T&D was the only one to buck this trend with an increase in market share. And it managed this by ramping up its 765 KV orders, close on the heels of TBEA. MORE PLAYERS If the Chinese grabbed transformer orders, in the sub-station space, it was intensified competition from local players that reduced the market share of the experienced companies. ABB bore the brunt of this. While ABB won a whopping four-fifth of the orders in this space in FY-11, its share dwindled to just six per cent in FY-12. New local players disrupted the market share game in this segment. PGCIL, in early 2011, brought in a new norm, where orders for substations and circuit-breakers could be placed separately (it was earlier done as a package). The split in orders led to a much smaller order size for players such as ABB and Siemens.
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This also aided entry of new players such as Sterling & Wilson, especially in the 400-KV space. The new norm also helped less entrenched plays such as L&T, Jyothi Structures and Techno Electric gain more orders in FY-12. The dwindling market share poses the risk of lower profit margins for T&D players. The aggressive competition also means that these players will have to compromise on margins to win orders. Crompton Greaves, one of the worst hit in the transformer space, has seen its standalone operating margins dwindle from close to 20 per cent two years ago to around 10 per cent in the December 2011 quarter.

WEATHER PLAYS DAMPENER FOR POWER DEVELOPERS

Spot electricity price averages at Rs 3/unit for first fortnight. The delayed summer may prove to be a dampener for power developers, but may lift the spirit of consumers. In the North, the first fortnight of May has seen spot prices averaging around Rs 3 a unit. Only recently, it touched around Rs 4 , those tracking the sector said. If the current trend continues, June may see a similar or slightly higher spot electricity prices. For the South, though the prices saw a drastic upward movement averaging around Rs 10 a unit, the volumes were low (about 150 MW). LOW TRANSMISSION CAPACITY One of the main reasons cited for this was that buyers from South have not purchased high volumes because of low transmission capacity. Other regions North, East, West and North-East have not been very aggressive. Besides, they have also added capacity. The country is experiencing a power shortage of 7-8 per cent, at present, down from 10-13 per cent at the start of the 11th Plan. But that unmet demand is likely to further widen the shortage gap. In the first fortnight of May, the peak demand met was 110,000-115,000 MW, the energy consumed was 2,500-2,600 million units per day, sources said. This was higher than last year's 2,400 million units. Of this 2,600 million units, about 80-100 million units were coming from renewable sources, mostly from wind. DEMAND VARIATION Stating that it is difficult to measure the power shortage, sources said that it varies on a day-to-day basis. The demand variation, particularly peaking, is met from hydro power. Almost 17,000-18,000 MW comes from hydel segment. INSTALLED CAPACITY

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As on March 31, 2012 the installed generation capacity in the country was 1,99,627 MW. During 2011-12, almost 20,502 MW capacity has been added. Electricity generation capacity target of 855 billion units was surpassed. It was 876.5 billion units in 2011-12.

FUEL PASS-THROUGH IMPERATIVES

The unprecedented rise in coal prices in recent years have made a mockery of power purchase pacts based on pre-determined tariffs. This had to change. The Power Ministry has taken an-principle decision to allow pass-through' of fuel costs for all projects to be awarded under the tariff-based competitive bidding route during the 12th Plan period. This is a sensible move from the perspective of attracting fresh investments in power generation capacity, which energy-starved India desperately needs. The existing competitive bidding guidelines require developers those bagging projects by quoting the lowest average (levelised) tariffs to sign standard Ministry-approved power purchase agreements (PPA) with distribution utilities. These guidelines, however, do not provide for any mechanism to insulate the developers from fuel price vagaries, even when these occur because of factors beyond their control. Excluding fuel from the force majeure provisions of the standard PPAs, in effect, transfers the risks on this count to the developer. This was fine so long as fuel price itself was not a major issue: Until about five years ago, obtaining assured domestic coal linkage was a mere formality, while it was equally viable to set up coast-based power plants running on imported fuel. As a result, many private players bid aggressively at rates anywhere from Rs 1.19 to Rs 2.33 a unit, with bankers, too, lining up to fund these projects.

These bets have since gone horribly wrong. Just as nobody imagined Coal India's production to flounder the way it has in the last 2-3 years, a spurt in imported coal prices from $30-35 to $100-120 a tonne on the back of changes in mining laws and new tax imposts by Indonesia and Australia has come like a bolt from the blue. In this scenario, where fuel supply and pricing uncertainties are a reality, there is no option but to incorporate them in the proposed new competitive bidding documents and relevant PPA articles. The Power Ministry should do it quickly. The 11th Five-Year Plan that ended in 2011-12 saw 54,964 mega-watts (MW) of fresh capacity additions, as against 21,180 MW in the preceding Plan period. Much of it was made possible by private investment, which holds the key
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for meeting the 76,000 MW target for the 12{+t}{+h} Plan as well. And that cannot happen without a competitive bidding regime reflecting the new realities. But what about those projects based on the existing bidding framework that does not cover fuel risk? Salvaging their viability would mean reopening the PPAs already signed, which poses obvious legal hurdles. However, there is a need to look beyond technicalities. A fine distinction can be made, for instance, between those developers who have gone ahead with commissioning despite their fuel calculations going awry, and the ones that have simply shelved work. There is a case to allow at least a partial fuel pass-through for the former, only to avoid stranded capacities a luxury the country can ill-afford today. The projects that haven't taken off should be straightaway rebid under the new pass-through dispensation.

FUEL SUPPLY PACTS

This refers to Power will cost more as Ministry decides to allow fuel price pass on (Business Line, May 18). In the scheme of input-output balancing, if pricing and costing are left to market forces, they would find the right levels. This issue has surfaced in the case of coal supply to power plants. It is assumed that Coal India is a highly resourceful company that can sign fuel supply agreements with power companies. The clauses in the new fuel supply agreement appear to be broadly on the right lines. Coal India's capacity to produce coal is limited. When it imports, it must ensure that there is a cost advantage; this has been the pattern adopted by fertiliser companies. The penalty and bonus clauses among the parties in the agreement must be based on sound business principles. Thus, monitoring the fuel supply agreement, say, for a fixed period, is a better option than finding fault and delaying issues.

COAL INDIA HOPES TO BREAK FUEL PACT DEADLOCK IN TWO WEEKS

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SOURCE: BUSINESS LINE, PRATIM RANJAN BOSE / KOLKATA, 21 MAY 2012

Coal India is expecting to resolve the fuel supply agreement (FSA) deadlock in next two weeks. While 14 private and public sector units have already entered the long-term pact, the largest power producer NTPC is yet to sign an agreement. A total of 48 thermal power units, commissioned between April 2009 and December 2011, are scheduled to enter supply pacts with the coal major in the current round. We are expecting to complete signing FSAs latest by the first week of June, a senior company official told Business Line. Though some of the private players are also yet to sign the agreement, CIL is currently more focussed on settling issues with NTPC. The public sector power major which is reportedly enjoying 65-70 per cent of coal supplies for the respective units against existing memorandum of understandings has raised primarily two sets of arguments on the FSAs. On one hand, NTPC wants the recent round of FSAs to have similar penal and force majeure conditions as was in the pacts signed till March 2009. The CIL board, while clearing the draft on April 16, diluted the penal provisions for supplies below the minimum assured 80 per cent of requirement to negligible. The coal major also imposed stricter force majeure clauses passing the buck on the buyer even for CIL's failure to procure spares and others. NTPC now wants us (CIL) to set varying penalty clauses for supplies less than 80 per cent. For example 50-80 per cent of supplies may attract a lower penalty when compared to supplies less than 50 per cent of requirement, a source said. However, any such change in FSAs may not be possible without some binding order to the board by the Government. And, there is no clarity as yet if the Government would repeat the precedence of Presidential Order. Till that happens CIL is working on ironing out NTPC's other grievances which include demand for a more disciplined sampling procure so as to ensure the quality of coal. This is a fair demand from a buyer and is doable. We are hopeful to resolve such issues in a week or so, the company source said. On the private sector, the coal major feels that while the companies which are in need of coal and have the requisite power purchase agreements (PPAs) in place, have either initiated the process of signing FSAs or have already entered the pact.
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These include Lanco, Reliance Power, CESC Ltd and Bajaj Energy. Adani Power, which requires supplies for nearly 1500-2000 MW, is yet to enter into a pact.

NEWS FROM BUSINESS STANDARD MOSER BAER PLANS TO RESTRUCTURE OVER RS 1,800-CR TERM DEBT
CFO says restructuring may strengthen the company's abilities to leverage future opportunities. Solar cell maker Moser Baer plans to restructure over Rs 1,800 crore of its term debt as the company looks to strengthen its abilities to leverage future opportunities in the growing sector. "We are looking at restructuring over Rs 1,800 crore of term debt that the company has through Corporate Debt Restructuring programme. This is almost half of the total Rs 3,500 crore debt," Moser Baer Group CFO Yogesh Mathur said. Restructuring is seen as an ideal solution to strengthen the company's abilities to leverage future opportunities, he added. He cited a McKinsey report which suggests the solar industry is likely to install an additional 400-600 GW of photovoltaic (PV) capacity between now and 2020 globally. Though the global demand for solar power is still high, the growth is expected to be flat this year. Rapidly falling prices of solar panels and components has also impacted the profitability of solar cell makers, with companies like Solar Millennium and Solon SE filing for bankruptcy. Moser Baer is also in discussions with banks for refinancing its outstanding Foreign Currency Convertible Bonds (about $88.5 million as nominal value). "The restructuring is happening by realigning it with Moser Baer India Ltd's cash flows," he said. Banks are positive about the company's future plans and Moser Baer is looking forward to speedy completion of the debt restructuring and thereafter, to consolidate business and cash flows, Mathur added. The company narrowed its loss for the quarter ended March 31, 2012 to Rs 59.60 crore from a loss of Rs 131.20 crore in the same quarter last year. Total income from operations increased to Rs 462.33 crore in the reported quarter from Rs 458.95 crore in the year-ago period. The company is bullish on the solar industry as the
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global PV market is forecast to witness substantial growth on account of higher installations anticipated in key markets such as the US, Germany and China. The industry witnessed a 76% year-on-year growth in PV installations during 2011, as per a EPIA - Global Market Outlook 2016 report.

NEWS FROM ECONOMIC TIMES TOUGH TIMES FOR CONSUMERS; POWER DEFICIT TOUCHES 11K MW IN APRIL
In signs of worsening power supply situation for consumers, the shortfall in electricity generation during peak hours stood at nearly 11,000 MW in April as fuel scarcity hurt performance of thermal plants. The country's peak power deficit shortfall in generation capacity during the time when the electricity consumption is the maximum - touched 10,876 MW in April, according to the official data. The significant deficit implies non-availability of enough electricity to meet the needs of consumers. Many states, especially in south India, are already grappling with load shedding and power cuts. Data compiled by the Central Electricity Authority (CEA) showed that total power generation capacity was just 1,17,124 MW last month whereas the demand was pegged at 1,28,000 MW. In terms of million units, the country's total power demand was 78,947 MUs but availability was only 72,447 MUs. Megawatt (MW) is used to refer to generation capacity while Million Unit (MU) indicates the amount of power produced. For instances, a 500 MW capacity plant running for 24 hours can produce 12 MUs of energy. Consumers in the southern states of Andhra Pradesh, Kerala, Karnataka and Tamil Nadu, and union territory Puducherry were the worst affected by electricity shortage. Severe coal shortage is hurting power generation. Thermal plants account for majority of electricity produced in India. On an average, at least 25 thermal power stations on an average in the country were starved of required coal in April. Experts felt that power situation could worsen in the coming months, unless the fuel issues are addressed at the earliest. In the south, the peak demand shortage stood at almost 15 per cent in April. The actual availability in the region was 30,681 MW while the demand hovered at 36,067 MW, as per CEA.
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Apart from southern states, another worst-hit state was Uttarakhand, where the peak power deficit touched 15.7 per cent in April. Among other states, Delhi, Gujarat and Goa seemed to be better off when it came to electricity supply. Going by the data, Delhi managed to meet its peak power demand of 3,779 MW. The deficits in Gujarat and Goa were just around 0.2 per cent and 0.4 per cent, respectively. In the Northern region, that includes Haryana, Himachal Pradesh and Punjab, the peak deficit touched 7 per cent. In the Western region, Madhya Pradesh recorded around 18 per cent power deficit. The Power Ministry expects to generate around 9,20,000 MUs of electricity this fiscal. Out of the total, 7,60,000 MUs would be from coal-based plants. The government might also import 5,000 MUs electricity from Bhutan.

POWER MINISTRY PANEL TO EVALUATE OUTPUT OF IMPORTED GEAR

Amid continuing debate over imposing higher duty on overseas gear, the power ministry is believed to be in the process of collecting information to evaluate the performance of Chinese and other imported equipment that are being used at various power plants. Many power projects are running on overseas equipment and some of the developers have placed big orders, especially with Chinese companies, for upcoming plants. A panel set up by the power ministry is collecting data on imported equipment, especially from China, that are being used at different power plants. After collating the necessary information, the performance of overseas gears would be evaluated, sources said. Even though the panel was set up last year, not much headway was made in the absence of necessary information, they added. According to sources, in recent months, power project developers have started providing requisite data and the evaluation process is expected to be completed in a couple of months. A significant percentage of power generation plants in the country are running on imported equipment. Going by the estimates, Indian entities have placed orders for more than 40,000 mw of overseas power equipment and most of them are to come from Chinese firms. To provide a level playing field for domestic equipment manufacturers, such as Bharat Heavy Electricals Ltd ( Bhel) and L&T against cheap Chinese imports, the government is planning to slap higher duty on overseas gear. A final decision on the issue is yet to be taken but the quantum of hike could be as much as 19%.
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