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Power
Integrated energy policy need of the hour: Coal Secretary
Coal powers almost three-quarters of the country’s electricity generation in India, and half of the total energy consumed. The government estimates that the country will need 892 million tonnes of the fuel in FY30—around 40% higher than current levels— for power generation. To address the transition in energy sources, where renewable sector is seen to gradually have a larger share, an integrated energy policy with a balanced approach towards all forms of fuel is the need of the hour, Union coal secretary Anil Kumar Jain said on Monday. With new technology such as coal gasification coming in, coal can have a number of alternative uses in the future other than power generation, Jain added. Coal powers almost three-quarters of the country’s electricity generation in India, and half of the total energy consumed. The government estimates that the country will need 892 million tonnes of the fuel in FY30—around 40% higher than current levels— for power generation. The fuel is also deeply intertwined into the country’s economy not only as a source of employment, but a significant source of revenue for the Central government, state governments and the railways. The secretary also pointed that the removal of coal would also warrant the government to find alternative sources of revenue.
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India's dependence on thermal power to dip to 50% by FY22: Report
India's dependence on thermal power will reduce to 50 per cent by 2021-22 and 43 per cent by 2026-27 on the back of renewable energy (RE) capacity additions, a report said. Thermal power includes diesel, gas and coalbased electricity generation which contributes 63 per cent of total electricity generation capacity in India as per the report. "India is chasing ambitious RE targets and enhancing its T&D (Transmission & Distribution)
infrastructure. Increasing RE use is decreasing dependence on coal. Contribution of the thermal sector will reduce to 50 per cent by FY22 and 43 per cent by FY27," said a report by Praxis Global Alliance and Zetwerk. The recent study by Praxis Global Alliance, a leading management consulting and advisory firm, and Zetwerk, an Indian B2B marketplace for manufacturing products and services, highlights the impact of COVID-19 on the overall power sector including key segments - generation, transmission, and distribution. According to the report the installed power generation capacity has increased at 8.6 per cent CAGR over the period FY12FY19 and renewable energy is growing at the fastest pace. New private investment in the generation sector is expected to be largely in the renewable sector, it added. The report showed that owing to past bad experiences, long-term PPAs (power purchase agreement) in thermal power are unlikely to pick-up in the future. Renewables sector is likely to continue with long-term PPAs, it added.
Power tribunal allows passing pollution control costs on to tariffs
Setting the stage for meeting the cost of mitigating pollution by passing it on to tariff, the Appellate Tribunal for Electricity (APTEL) has asked the Punjab government to treat investment made by Vedanta promoted-Talwandi Sabo Power Ltd and Larsen & Toubro’s Nabha Power Ltd as "change in law relief". This will allow the companies to recover costs for setting up FGD (flue-gas desulfurization) mandated under the ministry of environment norms from tariff to be paid by the state owned power distributor. APTEL, simultaneously, rejected an appeal filed by the Maharashtra State Electricity Distribution Co. Ltd. against a state regulator’s order allowing Adani Power’s 3300 Tiroda plant to load on the increased cost on to tariffs. Vedanta’s Sterile Power Ltd signed a share purchase agreement for taking over the Punjab government special purpose vehicle on September 1, 2008. On the same day, a power purchase agreement (PPA) was executed between TSPL and erstwhile Punjab State Electricity Board for sale of power from its 1980 (3x660) MW plant. The company contended that almost seven years after that the Environment (Protection) Rules, 1986 were amended by the MoEF on December 7, 2015 introducing the standards of emission and the level of water consumption for all coal based thermal power plants in India. The MoEF rules set emission limits of suspended particulate matter and introduced new emission norms of sulphur dioxide (S02), nitrogen oxide (NOx) and mercury came in December 2015. Thermal power plants are required to adhere to the specified emission and water consumption limits based on the year of their commissioning. All power plants have to be compliant by December 2022.
Cabinet expands lending limits for power discoms to help them clear dues
The Cabinet Committee on Economic Affairs (CCEA) on Wednesday relaxed the lending limits of the state-owned power distribution companies (discoms), in order to assist them to clear their dues to power generation and transmission companies. Discoms can borrow only up to 25 per cent of their last year’s working capital, under the limits stipulated in the UDAY scheme for turnaround of the discoms. Any lending was tied with the performance of the discom. This was done to discipline the discoms’ finances. The CCEA has now relaxed this limit for onetime lending. This would help discoms that have exhausted their borrowing limits. The loan is part of the Aatmnirbhar package announced by the finance ministry in May to infuse liquidity in the financially ailing power distribution sector. The scheme aimed at providing a one-time loan by Power Finance Corporation and Rural Electrification Corporation to discoms for clearing their dues to generating and transmission companies. As of June 2020, the total dues of the discoms to gencos stood at Rs 1.13 trillion.
Smart metering will improve discoms' efficiency, high cost a hurdle: Crisil
Smart metering will help empower discoms by improving billing efficiencies and reducing leakages, however, the scale of financial investment required is a major roadblock in its path, according to a report. India's traditional power metering system is inadequate, resulting in MBC (metering, billing and collection) inefficiencies, high commercial losses and revenue leakages, Crisil Ratings said in a report. Smart metering could empower discoms by improving billing efficiencies, enhancing customer services and reducing leakages, thus enabling financially distressed discoms to maximise revenues, it added. The report also noted that smart metering could also help meet the need for robust metering systems, given the rising dependence on renewable energy will result in a growing tribe of distributed generators with net metering requirements. State discoms with high MBC efficiencies may believe that they can postpone the switch to smart meters, however, the pandemic has shown that Indian discoms need to be better prepared to tackle such events. Further, the report stated that smart meters could help ensure that they are future-ready. Despite the benefits, only 3 million smart meters are operational in India compared with 270 million traditional meters, it said. CRISIL Research estimates that the country would need to invest Rs 65,000 crore to transit from traditional to smart meters entirely, assuming a substantial reduction in current meter prices coupled with rising volumes.
Western Coalfields offers additional coal to various power gencos at cheaper price
Western Coalfields Ltd (WCL) has offered additional quantity of coal to various power generation companies of central, west and south regions at a cheaper landed price, according to a WCL release. WCL, a subsidiary of Coal India Ltd, said the move will not only help power generation companies (gencos) minimise their cost to cut power tariffs, but will also reduce import of thermal coal. The company has the advantage of having its mining operation in central India, it added. This helps consumers of central, west and south India to get cheaper landed coal due to advantage in lesser railway freight in comparison to other coal companies of CIL located in the eastern part of the country. “With locational advantage and phenomenal growth in production, WCL has offered 20-25 million tonnes of coal to state gencos, NTPC and other independent power producers (IPPs) by swapping their linkage from other coal companies. This will be in addition to their existing linkage quantity with WCL,” it said. WCL further said that in a series of detailed discussion during the past two days with WCL and state gencos of Maharashtra, Madhya Pradesh, Karnataka, Gujarat, followed by NTPC and IPPs, all parameters of existing linkage and future swapping have been discussed along with financial benefit to gencos.
Indian power market goes green with GTAM launch
As a first step towards the greening of the Indian short term power market, Power Minister R.K. Singh on Tuesday launched the pan-India Green Term Ahead Market (GTAM) in electricity. The introduction of GTAM platform would lessen the burden on RE-rich states and incentivise them to develop RE (renewable energy) capacity beyond their own RPO (renewable purchase obligations). This would promote RE merchant capacity addition and help in achieving RE capacity addition targets of the country he said at the launch held via video conference. He added that GTAM platform will lead to increase in number of participants in the RE
sector, and will benefit buyers of RE through competitive prices and transparent and flexible procurement. It will also benefit RE sellers by providing access to pan-India market, the Minister said. The government target of 175 GW RE capacity by 2022 is driving accelerated renewable penetration pan-India. Green Term Ahead Market contracts will allow additional avenues to the RE generators for sale of renewable energy, enable obligated entities to procure renewable power at competitive prices to meet their RPOs, and provide a platform to environmentally-conscious open access consumers and utilities to buy green power. Further, within the two segments, GTAM contracts will have Green Intraday, Day Ahead Contingency, Daily and Weekly Contracts with bids on a 15-minute time-block wise.
India to have 220 GW renewable energy capacity by 2022: PM Narendra Modi
Prime Minister Narendra Modi on Tuesday exuded confidence that India will increase its existing clean energy capacity of 134 GW to 220 GW by 2022 and stressed on reducing tariffs further through technological advancements. New and Renewable Energy Minister R K Singh read out Modi's message at the virtual summit. "We have scaled up our non-fossil fuel based generation to 134 GW, which is about 35 per cent of our total power generation. We are confident of increasing it to 220 GW by 2022," Modi said. Modi also mentioned the 'One World, One Sun, One Grid' project which is aimed at clean energy supplies across nations. The Prime Minister asserted that ISA is part of this project which can bring transformational benefits for entire humanity. He also stated that the government wants to take solar energy to all villages in the country and replace diesel with this clean source in the farm sector. "Our oil and gas companies are also making efforts to deploy solar panels across the value chain of their operations, and current installed solar power capacity is 270 MW. Additional 60 MW solar capacity will be added in the coming year. We have taken up the mission of solarising about 50 per cent of fuel stations owned by public sector oil companies in the next five years," he added.
India’s Adani Group is the world’s largest solar power developer with 12.3 GW of a solar portfolio, according to a Mercom Capital ranking. The ranking includes the company’s 2.2 GW of operating and 10.1 GW of under construction and awarded solar capacity. Hong Kong-based GCL New Energy is the second-largest solar developer with 7.1 GW, followed by Japan’s Softbank-backed SB Energy (6.9 GW) and Italy’s Enel Green Power (5.9 GW). Adani is the only Indian company to rank amongst top 10 developers globally—compared to the engineering, procurement, and construction (EPC) market, where four of the top 11 spots were claimed by Indian companies (Sterling & Wilson Solar, Acme Solar, Mahindra, and Larsen & Toubro) in a WikiSolar ranking. “Adani’s renewable energy portfolio exceeds the total capacity installed by the entire United States solar industry in 2019 and will displace over 1.4 billion tons of carbon dioxide over the life of its assets, a report by Mercom stated.
Bidders can furnish letter of undertaking instead of bank guarantees for renewable power projects
The government on Friday said clean energy developers can furnish letter of undertaking issued by IREDA, PFC or REC in lieu of bank guarantees under state auctions for renewable power projects. The move will further improve
ease of doing business for companies, New and Renewable Energy Minister R K Singh said. In a statement, the Ministry of New and Renewable Energy (MNRE) said Singh "has approved a proposal for acceptance of Letter of Undertaking issued by IREDA, PFC and REC in lieu of bank guarantees for Earnest Money Deposit (EMD) by SECI (Solar Energy Corporation of India), NTPC and NHPC in the case of tenders/ biddings for developing renewable energy (RE) projects in the country." SECI, NTPC, NHPC are the government nodal agencies for bidding out clean energy projects. In a letter to the agencies, MNRE said SECI, NTPC, NHPC or any other implementing agency on behalf of the ministry may accept EMD, in the form of bank guarantees or 'Payment on Order instrument'. "'Payment on Order instrument' means Letter of IREDA or PFC or REC Ltd... to pay in case situation of default of RE power generator in terms of tender conditions and/or Power Purchase Agreement (PPA) arises," it said. The communication further said "the above decisions may be treated as amendments to the respective Standard Bidding Guidelines (SBG) (solar/ wind) and notified accordingly." IREDA, PFC or REC may issue such letters of undertaking as per their policy, on merit and after due diligence.
Solar power not finding buyers – Here’s what Centre plans to do
To address the issue of solar power not finding buyers, the government will bundle projects in order to cushion the hit to state-run power distribution companies (discoms) from high tariffs discovered under certain auctions, Union power minister RK Singh told FE. To start with, projects with a combined capacity of 3 gigawatt (GW) bid out under the manufacturing- linked solar scheme in January will be bundled with a total 3.2 GW capacity awarded in the last two auctions held in February and June. This means that the discoms concerned could buy power at composite rate of `2.66 per unit, against a higher tariff of `2.92 discovered the manufacturing-linked scheme. The 3 GW capacity to be combined with other projects is part of the 12 GW projects awarded in the maiden auction under the manufacturinglinked scheme. The winners of the February auctions for 1.2 GW were SoftBank Group’s SB Energy, Canadian energy firm AMP Energy’s India unit, New York-based Eden Renewables’ Indian arm and ReNew Power. In the June auction for 2 GW — where the all-time low tariff of `2.36 per unit was discovered — the winners were Spanish firm Solarpack’s Indian arm, Avikiran Surya (backed by Italian utility Enel), Eden Renewables, a subsidiary of Germany’s Ib Vogt, UK’s CDC-backed Ayana Renewable, Amp Energy Green and ReNew Power.
PPA-starved power companies seek changes in rare 25-year RE + Thermal tender
Thermal power producers have sought changes in tender documents for a 5,000-mw renewable-plus- coal power supply, citing difficulties deterring them from participating in a rare 25year long-term tender in a decade. The companies have sought to become signatory to the power purchase agreement as the tender documents in present form allow agreement between only renewable power developers and the Solar Energy Corp of India (SECI), which has floated the tender. The Association of Power Producers in its letter to power secretary Sanjiv Sahai has also sought extension of the bid submission deadline by one month from the present September 15. As per the bidding document, the renewable power developer is required to bid and enter into agreement for an aggregate bundled quantum of renewable plus thermal capacity, of which 51% should comprise green energy. The arrangement is only good for companies which have imported coal tie-ups. However, lack of PPA with SECI will disallow thermal companies to approach regulators seeking changein law relief if the coal costs or levies rise or in case of other unforeseen circumstances over 25 years of supply period.
