GST to have marginally negative impact on new solar projects: ICRA
The GST rate of five per cent on solar PV cells and modules is likely to have a marginally negative impact on new solar power projects, says ICRA. The GST rate of five per cent is finalised on solar PV cells and modules as per the notification dated June 3, 2017 which thus clears the ambiguity surrounding the applicable rate, the rating agency said in a statement issued here today. “This in turn is expected to have a marginally negative impact on new solar power projects due to an increase in capital cost arising from higher tax rate applicable under GST, given that the solar energy sector has been availing various exemptions and concession rates in indirect taxes,” ICRA said. According to ICRA’s group head and senior vice- president Sabysachi Majumdar, the impact of the GST rate on capital cost for new solar power projects is estimated to be limited at about six per cent, which would thus translate into an increase in levellised cost of generation by 11-12 paise per unit for such projects. “With this, the developers who have already won solar power projects under the competitive bidding route especially in last six month period, where the execution is under progress would incur a higher capital cost as against the cost envisaged at the time of bidding,” he said. Majumdar said given that the competitively bid-based solar tariffs have significantly come down over the last 4-5 month period, timely approval by regulators for pass-through of any higher cost incidence due to change in taxation which is permitted under change in law, remains crucial from developers’ perspective. According to ICRA, the solar project awards in last 5-6 month period stood at about 2.5-3 GW mainly under National Solar Mission route and state policy route, wherein tariffs have fallen from Rs 4.4 unit in November 2016 to Rs 2.44 in May 2017 for projects in Badla Solar Park in Rajasthan. The viability of such bid tariffs hinges on structuring of debt with longer tenures, competitive funding costs and the ability of the project developers to keep the cost of modules within the budgeted levels, the rating agency pointed out. “Besides, the timeliness in seeking approvals, land acquisition and development of associated infrastructure remains critical for projects outside the solar park, given the strict timelines for project execution as per PPA,” Majumdar said. Nathan Eovaldi Womens Jersey
Despite UDAY bailout package, net loss of Uttar Pradesh’s discoms rises
Even the Ujwal Discom Assurance Yojana (UDAY), a whopping Rs 39,000 crore financial dose, appears to have failed to inject life in Uttar Pradesh’s ailing power sector so far. That is what the Centre’s latest analysis report on the distribution companies’ performance indicates. The Centre has found the UP discoms to have further slipped on all the operational and financial parameters of performance since UP government took over their 75% of the Rs 53,2,11 crore debt with support of the Central government in January 2015. Curiously, the only positive thing that has been found about the discoms is that they have been consistent in getting the power tariff increased for consumers every year with electricity having been costlier in the state by more than 40% in the last three-four years. “As per the analysis, UP is the second largest state to take over the discoms’ debt (Rs 39,000 crore) and has also been successful in restructuring discoms’ debt of Rs 10,700 under UDAY,” says Ritu Maheshwari, executive director, Rural Electrification Corporation (REC) in her report (dated May 31) to UP’s principal secretary, energy, and Uttar Pradesh Power Corporation Ltd (UPPCL) chairman Alok Kumar. She adds, “But the overall net loss of the discoms of the state has increased to Rs 7932 crore in financial year (FY) 17 from Rs 7,791 crore in FY 2016. On the operational front, the discoms’ aggregate technical and commercial (AT&C) losses have been found to have increased to 27.6% from 25.7% in the FY 2016, instead of decreasing as per the undertaking given by them under UDAI. “The UP discoms’ AT &C losses at 27.6% are significantly higher than the national average of 19.8%,” she observes in her report ‘Analysis Report of Uttar Pradesh under UDAY for FY 2016-17’. A component-wise break up as given in the report also shows negative trends. “For example, billing efficiency has reduced from 78.8% to 78.2% against UDAY states’ average of 83%, collection efficiency from 94.3% to 92.6% against UDAY states’ average of 97%,” it discloses. Similarly, power purchase cost in the report has also shown a 4% increase in the FY 2017 (Rs 4.63 per KWh) in comparison to the 2016 level of Rs 4.45. The progress on feeder segregation during 2016-17 has been found zero which, according to the report, is in contrast to the fact that some of the discoms have a high proportion of agriculture sales. It is also observed that there are still around 18% unmetered and 22% un-formalised domestic households in the state, the report says. On the positive side, the report says, the state has been regular in tariff hike and overall revenue realised at the state level is stable. Revenue has increased steadily from Rs 2.81 per kWh in 2013 to Rs 3.99 per kWh (41.9%) at the end of FY 17. This probably the only ‘achievement’ the UPPCL/discoms can boast of. Maheshwari, who is holding a high-level meeting with officials here on Tuesday, has in her report expected the state/utilities to look into the analysis and address concern areas immediately so that the trajectory agreed by the state in the UDAY MoU can be achieved at the end of the FY 2018-19. Reacting to the report, UP Rajya Vidyut Upbhokta Parishad president Avadhesh Kumar Verma said it was ridiculous that discoms had been found good only at getting tariff increased while failing on all the fronts of operational and financial performance. “The state government must fix the accountability of the officials who signed an agreement under UDAY committing to reducing losses and increasing collection efficiency, among other things,” Verma demanded. Pat Lafontaine Jersey
Indian Power Surplus Outlook Signals Lagging Electrification
India expects to have a surplus of power for the first time in at least 13 years, a sign that the country’s goal of full electrification may be lagging. The country’s power plants are forecast to produce 8.8 percent more electricity than its distributors will demand during the year to March, the Central Electricity Authority said in an annual generation report last week. That would be the only surplus in records going back to the year ended March 2006. The narrowing deficit in recent years, and the projection for a surplus this year, have been aided by slowing demand growth from state distribution companies, known as discoms, who struggle to purchase enough electricity for the populations they serve. The CEA defines demand as the amount of power that distributors buy, not necessarily how much electricity would be needed for the whole country. That helps explain why an estimated 45 million rural households lack electricity and several cities face regular blackouts. “One of the main reasons for the lower growth in power demand is the reluctance of discoms to increase their purchases to supply uninterrupted power,” said Shantanu Jaiswal, an analyst at Bloomberg New Energy Finance. “Several power stations in India are running at low capacity factors, producing a fraction of the power they are built to generate.” Demand for electricity grew 2.6 percent in the last fiscal year, slipping for a second year and undershooting the CEA’s 9 percent forecast. Consumption this year is estimated to increase by 7.6 percent, according to Bloomberg calculations based on the CEA’s outlook. India’s slowing economic expansion may be a challenge to the country hitting the CEA’s power demand growth estimates. Gross domestic product grew at the weakest pace in more than two years in the three months to March, dragged down by Prime Minister Narendra Modi’s cash ban in November and the weight of the country’s bad bank debts. The utilization rate at India’s coal-fired power stations, which dominate the nation’s electricity generation, is declining as capacity grows faster than discoms are able to purchase power, leading to a glut. Supply last year increased by 4.1 percent, compared with the CEA’s forecast of 12.8 percent. “We have enough capacity to generate more and consume more,” CEA Chairman Ravindra Kumar Verma said in a phone interview. “However, due to reasons like breakdown of transformers, inadequate transmission capacity and distribution infrastructure, we’re forced to switch off our generation.” Modi’s government is aiming to supply power to all citizens in the world’s second-most populous nation by 2019. To help reach that goal, his administration launched a debt-restructuring program aimed at making all state retailers profitable by that year. Most of India’s provincial electricity retailers lose money selling below cost to poor and agricultural customers and through power theft. State-run distributors held combined debt of 4.3 trillion rupees ($67 billion) as of September 2015, the latest year of available data. The results of the plan to turn around the retailers are emerging, said Sabyasachi Majumdar, senior vice president at rating agency ICRA Ltd. Discoms are taking steps to reduce theft, while the falling price of renewables and efforts to bring down fuel costs will make cheaper electricity available to them. “In the power sector all these things take time. It will not improve overnight,” said Ashok Kumar Khurana, director general at Association of Power Producers, a lobby group of private-sector generation companies. “All of these reforms show impact in the medium-term, not the short-term. Terrance West Authentic Jersey
Power cuts across Delhi as demand touches new high
With Tuesday’s peak power consumption — 6,526 MW at 3.31pm — breaching even Monday’s record demand, the highest since 1902, social media and complaint centres filled with hundreds of complaints of power outages across the capital. On Monday, the peak demand had touched 6,361 MW at 3.06 pm. Multiple and prolonged power cuts ranging from 1 to 8 hours — some of which lasted the whole night — occurred since Monday evening, even forcing the chief minister to take note of the situation. Areas like Laxmi Nagar, Janakpuri, Aya Nagar, Chhatarpur, Uttam Nagar, Paschim Vihar, Narela, Jahangirpuri, Burari, Pattparganj and even south Delhi localities like Vasant Vihar, South Extension and Defence Colony reeled under multiple power outages, with people complaining of lacklustre consumer support by the three power distribution companies — BSES Rajdhani Power Ltd and BSES Yamuna Power Ltd and Tata Power Delhi Distribution Ltd. “In two days we have had 20 power cuts and we spent the whole night without electricity,” said Madhav Anand, a resident of Aya Nagar phase-6. A resident of Uttam Nagar, Gaurav Anand, said “All my calls were rejected by the customer care centre even though we faced a power cut for 14 hours at a stretch.” Mitashi Sinha, a resident of South Extension-II, said that they faced frequent power cuts in the locality throughout the day, which collectively lasted for over 5-6 hours. However, discoms said that there is enough provision to meet the power demand and outages are occurring due to “local faults”. “Due to extreme heat and power demand the electricity network does not get sufficient time to cool down. This, at times, leads to local faults. Another common reason is unprecedented load growth in high power theft areas, which leads to power trip or ‘burn out’ of distribution equipment,” said a power official. He added that declaration made by the consumers, about required load and about enhancement of load with passage of time is crucial to maintain the distribution network’s health and to “ensure quality power at home and office”. A BSES spokesperson said that company has “invested substantial resources to strengthen the network to ensure reliable power supply during upcoming summer months”. “We have even increased the call centre strength by over 150%, besides deploying additional manpower and mobile transformers,” he added. Praveer Sinha, CEO of Tata power, said, “we are working in cooperation with the government and have already increased our call centre and maintenance staff. The problems of outages are arising due to local faults.” Officials from power ministry, however, refused to comment on whether the situation warranted a response from Delhi government but attributed the “stress on the system” for the power outages. Robin Salo Womens Jersey
Arvind Kejriwal pushes for compensation from power discoms
Delhiites may be compensated by power distribution companies for unscheduled power cuts if Lt Governor Anil Baijal approves the Aam Aadmi Party (AAP) government’s proposal. Chief Minister Arvind Kejriwal has directed Chief Secretary MM Kutty to place the proposal before the LG today, a day before his weekly meeting with Baijal. Last year, the AAP government had implemented its decision to penalise discoms for unscheduled power cuts. However, this was later struck down by the Delhi High Court as the LG’s prior approval had not been sought. In his written direction to the chief secretary, Kejriwal said, “The file of compensation to be paid to every consumer by discoms for power cuts of more than two hours to be placed before the LG today itself for approval.” According to the compensation policy on power outages that was struck down by the high court, a penalty of Rs 50 per hour per consumer was to be levied for the first two hours followed by Rs 100 for every subsequent hour. The fine amount would be adjusted in the consumers’ monthly bills. The policy stated that if any consumer approached the Delhi Electricity Regulatory Commission (DERC) after 90 days with a complaint that he or she had not received his compensation, DERC would have to order and ensure payment to all consumers affected by that power cut. Rocky Bleier Womens Jersey
Piyush Goyal: The harbinger of change in the power sector
Son of late Ved Prakash Goyal who had served as a Union Minister for shipping in the Atal Bihari Vajpayee cabinet, Piyush Goyal, the Minister of State with Independent Charge for Power, Coal, New and Renewable Energy and Mines, has in the past three years completely transformed the power and energy scenario in the country. The days of power shortages are over. In fact, for the first time India has become a power surplus country. The CA-turned-politician Goyal, who was given the task of reviving the country’s comatose power sector, has not only made electricity accessible and affordable, but also made India climb to the 26th position in the World Bank’s electricity accessibility, which was 99 in 2014. The most important aspect of Goyal’s plan is the stress on renewable energy. The heartening part is that the amount of coal required to generate a unit of electricity has decreased by 8 per cent in the last three years as rapid growth in the renewables has pushed the green energy share to 30 per cent with significant contribution from hydro and wind generation being supplemented by fast expansion in solar power. This is in line with India’s commitment to curbing carbon emissions under the Paris climate agreement. However, the major thrust of Goyal’s energy transformation plan is rural electrification. In February, Goyal informed Lok Sabha that as many as 12,033 villages out of 18,452 un-electrified have been provided with power and the remaining would be electrified by May 2018. In this regard, the game changer has been the Ujwal Discom Assurance Yojana (UDAY). Scripted by Goyal himself, UDAY is the first comprehensive power sector reform seen in India as it covers the entire value chain in the power sector from fuel, to generation, transmission, renewables, distribution and consumers. It has also turned around highly indebted state power distribution companies, the weakest link in the entire electricity value chain. Efficient and healthy power distributors are able to buy more power from generators, while keeping consumer’s power bills to the minimum. Goyal, who had more than 200 meetings with different stakeholders, says UDAY will spur foreign investment as it will bring down the cost in the entire ecosystem of power, coal, and renewable energy by about Rs 1.8 trillion every year by 2019 against a business-as-usual scenario. Goyal has dispelled the air of negativity surrounding the electricity sector, and replaced it with a sense of optimism by implementing a raft of reforms. In an interview, he said: “We have been able to change the mindset of this country from despondency to confidence. Earlier, the story was of shortages of power and coal, of a weak system, and of failing distribution companies which are perpetually in losses—a story of negativity. Today, the sector is full of optimism and positivity.” NO MEAN FEAT In February, Goyal informed Lok Sabha that as many as 12,033 villages out of 18,452 that were un-electrified have been provided with power, and the remaining would be electrified by May 2018 Scripted by Goyal himself, UDAY is the first comprehensive power sector reform seen in India as it covers the entire value chain in the power sector Jose Bautista Jersey
Adani Power to consider hiving off Mundra plant today
The board of Adani Power will meet today to consider hiving off its flagship Mundra power station to a new subsidiary in which the Gujarat government entity may take a majority stake. “A meeting of the board of directors of the company is scheduled to be held on June 6, 2017 to consider and evaluate, among others, the Slump Sale of its Mundra power generating business undertaking to its subsidiary company, name Adani Power (Mundra) Ltd,” the company said in a regulatory filing. Industry sources said Gujarat Urja Vikas Nigam Ltd (GUVNL) — the Gujarat government entity — which buys bulk of the 4,260 MW electricity generated at Mundra – may take 51 per cent stake in the new subsidiary. While emails sent to company for comments remained unanswered, GUVNL officials could not be immediately reached for for the same. Last month, Adani Power had discontinued 1,250 MW power supply to GUVNL in a phased manner, mainly due to the unviability of running its power plant at Mundra on imported coal. Of 2,000 MW power provided by Adani Power to GUVNL under different power purchase agreement’s (PPAs), 1,250 MW supply was discontinued. Sources said the company had told the state government that operating Mundra power plant at the tariff specified in the PPA using imported coal (from Indonesia) was unviable after the Supreme Court disallowed raising power tariffs to compensate for rise in price of coal from Indonesia. Adani Power had entered into a long-term PPA with GUVNL in 2007 for supply of 1,000 MW of electricity at a levelised tariff of Rs 2.35 per unit for a period of 25 years. More supplies were contracted under PPAs signed at different times. It also contracted to sell 1,424 MW of power to Haryana. Mundra plant has a capacity of 4,620 MW, comprising of four units of 330 MW each and 5 units of 660 MW each. The 330 MW units are based on sub critical technology and the 660 MW units are based on supercritical technology. Power from the plant is evacuated by two transmission lines — one 433 km, 400 KV transmission line to transmit 1,000 MW from Mundra to Dehegam in Gujarat and another 989 km, 500 KV high Voltage Direct current (HVDC) bipole line with the capacity to transmit 2,500 MW from Mundra to Mohindergarh in Haryana. Blake Martinez Jersey
Delhi records country’s highest power demand
With the mercury rising in the national capital, the peak power demand shot up to 6,361 MW this afternoon, the highest ever recorded in the city. This is also the highest peak power demand in any city of the country. The previous record of 6,261 megawatt (MW) on July 1 last year is also held by Delhi. According to the power department figures, the peak power demand was 6361 MW at 3:06 PM. This is 12 percent more than the peak power demand of 5,673 MW recorded on the same day last year. Yesterday, as the maximum temperature soared up to 44.6 degrees Celsius, four degrees above the normal, the peak power demand was 5,775 MW at 11:06 PM. The peak power demand in the capital this year, breached the 6,000 MW mark in May at 6,021 MW, second highest this year on May 17. The power discoms have expected the peak demand this year to be around 6,600 MW. The hot summer months this year have pushed the peak power demands to set new records, with April registering the highest ever demand for the month at 5,685 MW which was 18 percent more than the peak power demand of 4,797 MW in the same month last year, an official of discom BSES said. In March, the peak power demand in the city crossed the 4,000 MW mark for the first time ever, he said. The peak demand of Delhi, even at the 6,000 MW level is three-fold of Kolkata(2,100 MW) and about 60 percent more than that of Mumbai(3,700 MW). While it is four times that of Chennai and Himachal Pradesh, it is two and half times more than that of the entire northeastern states in the country, the BSES official said. The power distribution company has made arrangements including long power purchasing agreements (PPAs) and banking arrangements with other states besides strengthening distribution network for ensuring uninterrupted supply to its consumers during the peak summer, he said. Vernon Hargreaves III Jersey
House on wheels sets off to tell India solar power has arrived
A small house on wheels with all the electrical appliances used in a typical household — but all powered by rooftop solar panels and within approachable budget — the Solar Comet was flagged off on the World Environment Day for a 20-day tour. The solar bus is expected to bust myths and create awareness about solar power. Lit up with power saving LED bulbs, the Solar Comet with its modern fixtures houses mobile charging points, a mixer grinder, an air cooler, a refrigerator, washing machine and even an air conditioner. While the temperature outside soared beyond 40 degrees Celsius, the mini-house with necessary furniture has an ambient environment. “This project fitted with a 2 kilowatt rooftop panel demonstrates how solar power can easily run an entire household — even heavier appliances like air conditioner,” said Pujarini Sen, climate and energy campaigner, Greenpeace India. “Another myth about solar power is that it is expensive. But in the last three years alone the installation cost per kilowatt of such panel has come down from around Rs 1 lakh to Rs 50,000. This is the ideal time to go solar,” she added. Delhi’s total solar potential is 2,500 MW with a residential potential of 1,250 MW. The official target in Delhi is to reach 1,000 MW worth solar installations by 2020 and 2,000 MW by 2025. But as of December 2016, only 35.9 MW have been installed out of which, only 3 MW were residential installations in March 2016. “The Delhi government came up with the city’s solar policy last year. But despite the benefits that it offers, Delhiites haven’t really woken up to the idea. Till now the response has been very low residential sectors,” Sen said. The ministry of new and renewable energy (MNRE) offers a 30% national incentive for installing a solar power panel. Besides this, grid connectivity through net metering allows a consumer to sell the excess amount of electricity generated to the main grid and save up on their power bills. “One can break even on their investment in four to five years. The solar panels have a life of 25 years and require very low maintenance,” Sen added, giving example of Pankaj Rajpal, a senior citizen, who managed to reduce the expenses from Rs 8,500 per month to Rs 1,200 p/m by installing a 5KW solar system in his Kailash Colony residence. Director of Energy Programme at TERI Giritsh Sethi, who flagged off the bus, hoped that by roping in RWAs directly the comet will be able to bring in a change. Roof rights are a common problem faced by people living in apartments, where the rooftop is usually owned by the family living on the top floor. “In such cases, the RWAs can take a collective decision to install a solar power system in the common areas of the colony. Residents of Rishi Apartments in Alaknanda have pledged to install a 21 KW solar system,” said Sen. Junior Seau Authentic Jersey
One-year ban for 71 solar panel companies
The government has barred 71 firms from rooftop solar projects for a year by removing them from the panel that makes them eligible to bid. These include Amra Raja Electronics Ltd, Cleantech Synergy, Hollandia Power Solutions, IL&FS Energy Development Co and Jindal Green Technologies. The government has written to the companies saying they had failed to update details of the projects that they had executed. “Empanelled companies offer solar panels, which are technically complaint with standard requirements. All tenders which Solar Energy Corporation of India (SECI) floats require bidders to be empanelled,” said a senior executive from SECI. Sunil Jain, chief executive officer at Hero Future Energies, said the government probably wants to prune the number of empanelled firms to 100 serious companies from 400. “Majority of the ones that were struck out did not execute any projects in the last one-two years, which indicated they were not too serious about solar roof-top business,” he said. Surendar Kumar, director at Jindal Green Technologies, said plunging tariffs did not make it worthwhile to be in the panel. “Hence, we decided on not being part of the list. Additionally, we also gathered that getting subsidies involved uncertainty and delays.” IL&FS Energy Development Company declined to comment on the issue, but an executive, who did not want to be named, said no projects were being executed in the recent past, which may have led to the situation. Marcus Murphy Womens Jersey