Delhi’s power subsidy policy helps rich more than poor
Delhi government’s policy to subsidise power for households is undoubtedly among the most generous in the country but it is benefiting the rich more than the poor due to inefficiencies. While poor households on an average get subsidy of around Rs 1,000 per year as they consume less electricity, rich households end up benefiting by Rs 9,000, a Brookings India research paper has said. This is happening due to the combined impact of the eligibility criteria, which is based on how much one consumes, and the high subsidy cut-off point of 400 units a month. As a result, around 80 per cent of households qualify for the 50per cent subsidy paid with taxpayer’s money. “In some months, this goes as high as more than 95 per cent of households. This is beyond cross-subsidies approved by the Delhi Electricity Regulatory Commission in the tariffs that keep household power prices lower than cost,” the paper written by Brookings India fellow Rahul Tongia said. “Mid-level consumers, ostensibly the middle classes, enjoy more benefits on a percentage basis than the poor. The lowest tier gets under 33 pr cent subsidy on net billing on an average, while those using a little under the limit get over 40 per cent net subsidy,” the paper added. Delhi is one of the richest states in the country and has the highest per capita power consumption for households. Milwaukee Brewers Jersey
In 10 years, half of India’s energy capacity will be from non-fossil fuel sources
Non-fossil fuels — renewables, nuclear and large hydroelectric power plants — will account for more than half (56.5 per cent) of India’s installed power capacity by 2027, according to a draft of the third National Electricity Plan (NEP3). The draft notes that if India achieves its target to install 175 GW of renewable energy capacity by 2022 — as committed under the 2015 Paris Agreement — it will not need to install, at least until 2027, any more coal-fired capacity than the 50 GW currently under construction. The Ministry of Power produces a National Electricity Plan every five years, in which it reviews the progress made over the previous five years, and sets out a detailed action plan for the next 10 with the overarching aim of achieving universal access to electricity and ensuring that power is supplied efficiently and at reasonable prices. NEP3 outlines how the government expects the electricity sector to develop over the five years from 2017 to 2022, as well as the subsequent five years to 2027. When the draft was released, India had installed just over 50 GW of renewable power capacity, of which wind energy made up 57.4 per cent and solar 18 per cent. This gave renewables a 15 per cent share in total installed capacity of just over 314 GW, while coal made up 60 per cent — the remaining being large hydropower, nuclear, gas and diesel. Renewables will have to scale rapidly to meet a national target set in 2015 to increase capacity to 175 GW by 2022 — 100 GW from solar, 60 GW from wind and the remainder from sundry smaller sources such as biofuels and biomass. NEP3 projects that not only will the 2022 target be achieved, renewable power capacity will reach 275 GW in 2027. This is three times the projection made in NEP2, of 70 GW, and significantly more ambitious than publicly proclaimed targets. Comparing NEP3 with India’s Intended Nationally Determined Contribution (INDC) under the Paris Agreement reached at the 21st Conference of Parties (COP21) to the UN Framework Convention on Climate Change (UNFCCC) in 2015 shows a higher level of ambition to reach a low-carbon economy faster. In its INDC, India had said it planned to achieve 40 per cent cumulative installed capacity from non-fossil fuel-based energy resources by 2030. NEP3 is significantly more upbeat, predicting that non-fossil power will make up 46.8 per cent of total installed capacity by 2021-22 and 56.5 per cent by 2027 — 10 years from now. If the NEP3 target is met as per the projected timelines, total installed renewable capacity will surpass coal-based capacity around 2024. Such ambitions are underpinned by the rapidly changing economics of wind and solar, whose price is falling rapidly. In February 2017, solar power was auctioned at a record low of Rs 2.97-Rs 2.979 per kilowatt-hour (kWh). Soon after, in auctions for wind power projects in March 2017, the winning bid quoted an all-time low price of Rs 3.46/kWh. Solar and wind are expected to reach grid parity — when they cost as much as conventional power — in the near future, perhaps as early as next year. As for other zero-emission sources like nuclear and large hydropower, NEP3 projects an addition of 7.6 GW of nuclear and 27.3 GW of large hydroelectricity capacity up to 2027, up from 6.7 GW and 44.4 GW of hydro installed as of March 2016, as ongoing and approved projects come online during 2017-22. While expecting renewable capacity to surge, NEP3 says no new coal-based capacity addition is required for the 10 years to 2027 beyond the 50 GW under different stages of construction and likely to come online between 2017 and 22. As per NEP3 projections, the 2022-27 period would require an addition of about 44 GW of coal-based capacity to meet projected demand, a requirement that would be adequately met by the 50 GW that will come online during 2017-22. This leaves India with 6 GW of extra capacity. The NEP’s projections for coal are different from INDC, which suggested the country would require 100 GW, and perhaps as much as 300 GW, of additional coal-fired capacity by 2030. The downgrading of coal expansion is not unexpected because rapid expansion of renewables means fossil fuel-based power plants are already under-utilised. NEP3 shows the average coal plant load factor — a measure of how much plants are used — has fallen from around 70 per cent to just over 62 per cent in the last four years, an “exceptionally low” level, according to the Economic Survey 2016-17. While renewable capacity is rising globally, developing countries including India are widely expected to continue using cheap coal. The International Energy Agency (IEA), an intergovernmental organisation that provides key information and statistics about the oil and energy markets, has forecast that India would witness massive growth in coal-fired capacity, with 438 GW of cumulative capacity by 2040, assuming India’s power system would quadruple in size to keep up with demand increasing by five per cent every year. NEP3 agrees with the IEA’s projections about growth in India’s coal capacity up to 2022, reflecting the 50 GW of capacity currently under construction, but suggests the IEA’s projections for the post-2022 scenario — made just two years ago — may need to be adjusted downwards. The current NEP concerns itself with the next 10 years only, but if the current trend of falling renewable power prices continues and India remains committed to cutting emissions, the country may well beat IEA forecasts while upholding and perhaps surpassing its INDC. Anthony Davis Jersey
China renewable power waste worsens in 2016 – Greenpeace
The amount of electricity wasted by China’s solar and wind power sectors rose significantly last year, environment group Greenpeace said in a research report published Wednesday, despite government pledges to rectify the problem. China has promised to improve what it called the “rhythm” of grid and generation capacity construction to avoid “curtailment,” which occurs when there is insufficient transmission to absorb power produced by renewable projects. But Greenpeace said wasted wind power still reached 17 percent of the total generated by wind farms last year, up from 8 percent in 2014, and was as high as 43 percent in the northwestern province of Gansu. The amount that failed to make it to the grid was enough to power Beijing for the whole of 2015, it added. Solar curtailment across China rose 50 percent over 2015 and 2016. More than 30 percent of solar power in Gansu and neighbouring Xinjiang failed to reach the grid. Greenpeace said earlier that total solar and wind investment between now and 2030 could hit $780 billion. But, rising levels of waste cost the industry as much as 34.1 billion yuan ($4.95 billion) in lost earnings over 2015-16, it said Wednesday. China’s energy regulator said late on Tuesday that it aims to raise the share of non-hydro renewable electricity delivered to the grid to 9 percent of the total by 2020, up from 6.3 percent last year and 5 percent in 2015. It said renewable capacity hit 34.6 percent of the national total in 2016, while actual generation from renewable sources – including major hydro projects – stood at 25.4 percent of the total last year. China produced 12.3 billion kWh of solar power in the first quarter of 2017, up 31 percent year-on-year but accounting for just 1.1 percent of total generation over the period, official data showed on Monday. Wind hit 62.1 billion kWh, 4.3 percent of the total and dwarfed by the 77.9 percent share occupied by thermal electricity. Grid construction has slipped behind, with China focusing on expensive ultra-high voltage (UHV) routes that better suit large-scale power generation projects. “Upgrades to the system are urgently needed, including a more flexible physical structure of the grid, efficient cross-region transmission channels and smart peak load operation,” said Greenpeace climate and energy campaigner Yuan Ying. Many regions have used renewables as back-up electricity sources during peak periods, and it falls idle when power use drops. Provinces are now lobbying for UHV connections allowing them to sell surplus power to other regions. Executives at a Shanghai conference on Wednesday said curtailment was eroding cash flows and discouraging investment, and while China was looking for solutions, the answer was likely to be technological. “If you are in remote areas and there’s no grid around, you build storage – transformer stations and storage plants that can make the energy available at a later stage,” said Andreas Liebheit, president of Heraeus Materials Technology Shanghai, which produces specialist materials for solar panels. Christian Dvorak Authentic Jersey
Solar tender and auction slow down despite installation speeding up
While solar installations in India have picked up speed, tender and auction activity have been slowing down over the last few quarters. The slowdown in activity has been disconcerting to developers and manufacturers that have been positioning for much higher levels of activity based on India’s solar installation goal of 100 GW by 2022. Mercom India Solar Project Tracker shows about 1.9 GW was tendered in the first quarter of 2017 (1 GW of this was a retendered) compared to 3.4 GW in Q4 last year. There were 1.3 GW projects auctioned in Q1 2017 compared to 255 MW in Q4 2016. It may be noted, India needs to install 18 GW of solar per year through 2022 to reach the 100 GW installation target set by the Centre. The pace of tenders and auctions must pick up quickly if the government wants to meet its solar installation goals and show the investment community and the industry that it is serious. Companies who have invested hundreds of millions in expanding to meet the demand and build projects are anxiously waiting for activity to pick up, say experts. Some of the reasons for the decline in tender and auction activity include the poor financial condition of distribution companies (DISCOM), transmission issues, weaker power demand and increases in a captive generation by commercial and industrial companies. DISCOMs that are continuing to struggle financially are not taking on a new generation that is more expensive than coal, which is leading to curtailment of solar and wind projects as well as payment delays to developers. In some states, weak power demand is contributing to the lack of urgency to speed up the pace of solar tenders and auctions. The increase in captive generation by industrial customers have compounded the situation since they are requiring less power generation from DISCOMs. The World Trade Organisation (WTO) ruling against India’s domestic content requirement (DCR) has resulted in continuous cancellations and postponements of planned DCR tenders. The recent record low bid of Rs.3.30 (~$0.494)/kWh at the REWA solar park auction is playing a big role in the slowdown of auction activity as government agencies and states are stalling to renegotiate PPAs that are more expensive than the bids received at REWA. For DISCOMs, coal is still the cheapest option available. According to Mercom’s December Solar Quarterly Report, DISCOMs have resorted to sporadic curtailment from some solar projects in Rajasthan and Tamil Nadu because cheaper power is available on the power exchanges. Even when there is demand, several states have complained that the DISCOMs are resorting to power cuts instead of buying power on the exchanges to save on costs. The report added, power purchase agreements for 1.1 GW of solar in Jharkhand are yet to be signed because the state DISCOM is not accepting the quoted tariffs. Tariffs quoted in the state ranged from a high of Rs.5.59 (~$0.0824)/kWh to a low of Rs.5.08 (~$0.0749)/kWh. The state had tendered 1.2 GW of solar since December of 2015 in an effort to achieve its 2,650 MW solar target by 2020, but there has been no activity since. In this case, the DISCOM was unwilling to sign the PPAs for tariffs above five rupees per kWh claiming it is not viable for the DISCOM. It has been disappointing with the delay in tenders. After September 2016, tenders have slowed down for IPPs. It is less likely we will see new tenders after the REWA bid as each bid is now being expected to meet the REWA numbers, which is ridiculous. The Kadapa Solar Park tenders are postponed as Andhra Pradesh has pulled out because they now have surplus power and their cash flow situation is bad. DISCOMs are currently of the belief that solar tariffs are falling, so let us wait, with states claiming that they are power surplus and don’t need any kind of power, let alone solar, stated a large developer. Raj Prabhu, CEO of Mercom Capital Group said that although this is the lowest tariff ever recorded in India, this auction has several special attributes which make it hard to directly compare with previous low bids. The size and location of the projects, payment guarantees, deemed generation benefit, longer construction timeline, the recent solar module price crash, and yearly tariff escalation for 15 years – all make the low bids unique.” Prabhu continued, “The fear is that media, government officials and analysts will hype up the low bids and other states will then start pressuring developers to match bids from the REWA auction tariffs, which has happened in the past.” Mercom’s Solar Project Tracker, tendering activity has declined in Several states including Bihar, Jharkhand, Tamil Nadu, Rajasthan, and Maharashtra are the problem states. For instance, Tamil Nadu Generation and Distribution Corporation (TANGEDCO) had tendered a total of 1,000 MW of solar in two separate tenders but received a tepid response due to TANGEDCO’s reputation of curtailing power, as well as delaying payments. Reluctance on the part of DISCOMs to buy from solar generating projects in the presence of cheap power from other sources is another challenge, said an official. The transmission system also needs to be developed in the state to allow optimum utilisation of solar projects. This is another reason tenders have slowed down in the state. “We hope this is a short-term issue which, once resolved, tariffs will get down to realistic levels and there will be a big spurt in activity. However, if some of these pressing issues are not resolved quickly, growth will stall,” said Prabhu, CEO of Mercom Capital Group. “There needs to be a policy mechanism put in place to avoid the stop and start in tender activity every time there is an outlier in terms of a low bid. However, if states revise their tenders to include all of the positive aspects of the REWA tender, it could be a win-win for all”. Al Davis Jersey
Govt to give custom, excise duty benefits to boost solar rooftop sector
In a boost to India’s lagging solar rooftop sector, the Union ministry of new and renewable energy (MNRE) has decided to give custom and excise duty benefits to it for ensuring high growth. The move will not only bring down the costs of setting up projects but also that of generation. Solar power developers setting up grid-connected solar PV (photovoltaic) projects have been seeking “grant of duty benefits” (custom and excise duty) from the MNRE for installation of rooftop systems. “The matter of extending the duty benefits to the rooftop grid connected solar PV power plants has been under consideration in this ministry for past some time. After examination of various issues involved, it has been decided to give customs and excise duty exemption certificates, with immediate effect, to all rooftop solar PV power projects upto a minimum capacity of 100 KW (Kilowatt) as a single project or bundled project,” said an MNRE order dated 11 April. India has set up an ambitious 100 GW solar power target by 2022. Of the 100 GW, 60 GW is planned through large- and medium-scale grid-connected solar power projects while 40 GW is planned from the solar PV (photovoltaic) rooftop system. But the sector has not seen great growth and the target of 40 GW by 2022 remains a mammoth task. As per reports, India’s rooftop solar capacity till 2016-end was about 1GW only. Experts welcomed the custom and excise duty benefits for the solar sector. “It’s a good decision. We have ambitious targets and we need to take various steps to encourage the solar rooftop sector. We need to bring the cost down and make it more lucrative,” said Rakesh Kamal, a consultant with The Climate Reality Project, an independent organisation working on climate change-related issues. Kamal, however, cautioned that MNRE should also focus on maintaining the quality of solar panels being used. India has given a huge thrust to the solar rooftop sector as it does not require pooling of land or separate transmission facilities and has minimal technical losses, unlike ground-mounted solar projects. The solar rooftop sector also benefits power distribution companies in various ways. For instance, rooftop projects enable these companies to meet their renewable purchase obligations, help them in managing daytime peak loads which are projected to become more widespread as India’s economy grows and in localised generation of power that ultimately helps them in avoiding costly power. States leading in providing solar rooftop power are Tamil Nadu, Gujarat and Punjab. Trey Hopkins Jersey
Export power to Pakistan to fill Punjab coffers: IIM-Ahmedabad
Many experts see Punjab’s border with Pakistan as a liability because drugs and terrorists sneak through it, wreaking havoc. But a study by India’s premier B-school, Indian Institute of Management, Ahmedabad (IIM-A), sees an opportunity in Punjab’s unique geography. A study , ‘Tariff and related matters: The electricity sector in Punjab’, prepared in May 2016 after the Pathankot terror strike, says Punjab, which has a massive Rs 1.34 lakh crore debt, can use the border to substantially increase its annual revenue collection. All the new Captain Amarinder Singh government has to do is sell its surplus electricity to Pakistan. The proposal has come at a time when Punjab has borne the brunt of two of the deadliest terror strikes in recent years originating from Pakistan – the Gurdaspur attack at Dinanagar of 2015 in which seven people were killed and the Pathankot airbase strike in early 2016 in which eight people died. The IIM-A study has crunched the numbers and given three ways by which the state can evacuate surplus power of Punjab State Power Corporation Limited (PSPCL). Punjab call sell its electricity to powerdeficit states like UP, sell it in the open market and to large consumers like Railways and export it to Pakistan. “Pakistan is facing acute energy crisis at the moment.There is scope to export power to Pakistan. The total available capacity for generation in Pakistan was only 12,361 megawatts (MW) in April 2016 ,” says the study , authored by G Raghuram and T S Krishnan. A study by India’s premier Bschool, Indian Institute of Management, Ahmedabad (IIM-A), sees an opportunity in Punjab’s unique geography . The study authored by G Raghuram and T S Krishnan says that as per projections, the need is bound to jump to about 40,000 MW by 2020. Jermaine Kearse Jersey
Power woes to multiply: Summer yet to peak, but Chandigarh already short of electricity
There could be a lot of sweating in store for residents with the UT administration not getting 30MW (around 10% of city’s peak demand of 400 MW) of power it used it used to buy from Jammu and Kashmir every year. UT electricity department superintending engineer MP Singh told HT, “We were drawing power up to 30 MW from Jammu and Kashmir during summers and we use to give them power during winters. The finances were settled mutually. Now, however, we will not buy power from them as they some financial issues to settle with the Central power authorities. ” “The maximum load is between 1 pm to 4pm and during the night. Now, rotational cuts likely to be deployed, the residents will be harassed. The department for year 2016-17, 17-18 and 18-19, has projected the peak demand to be 426 MW, 450 MW and 475 MW,” the officer added. UT buys power from central stations The electricity department does not have its own power generation source and buys power through its allocation from the NTPC, the NHPC, the NPCIL, the BBMB, Satluj Jal Vidyut Nigam (SJVN) and Tehri etc. ‘Heatwave to stay, rain by weekend’ The weather department has predicted no respite from the scorching heat (the temperature touched 39°C on Monday) for the next two days. Relief is likely only by the weekend as there is prediction of rain on April 21 and 22 (Friday and Saturday). Temperature is likely to touch 40°C over the next two days. The minimum temperature recorded was 25.2°C, 6°C above normal. The humidity oscillated from 20% to 57%. “The temperature will increase during the next two days, but it will decline on April 21-22, as there is a possibility of rain,” said Surender Paul, Director, India Meteorological department, Chandigarh. Zdeno Chara Jersey
Haryana govt promises unhindered power supply in Gurugram this summer
Rubbishing media reports of power outages in several areas of the Millennium city, the Haryana Power Utilities said they were fully capable of meeting the peak load this summer season and that there will no outages on account of deficiency in the system or shortage of power availability. The reaction came after a section of media reported frequent power cuts and tripping in the areas of South City, Sector 17, 30, 31, 43 46, 47, 21, 15, New Basti, Patel Nagar etc. “The power cuts reported in the above mentioned areas on Saturday were on account of planned maintenance activity and not due to any fault in the transmission or distribution system,” an official spokesperson said. He said power outage was permitted to facilitate the work of shifting of power lines coming in the way of construction of underpasses on the National Highway 8. Besides, HVPNL also had to shut down the Badshahpur Sector 15 power line due to erection and shifting of towers falling in the way of highway and the underpasses, he said. The spokesperson further clarified that there is a lot of construction activity going on along the highway for quite some time now, which has forced DHBVN and HVPN to allow shutdowns as per requirement of civic authorities. He said a special drive for maintenance and up-gradation of system has been launched since the last four months, and around 1,880 meter ACSR conductors have been erected and 154 transformers added to the system in Gurugram. “Dakshin Haryana Bijli Vitran Nigam (DHBVN) has set up a call centre in the city to deal with complaints of power cuts. The call centre can be reached 24X7 on toll free number 1912. Besides, another toll free number 1800-180-4334 has been set up for the consumers to contact the Helpdesk round the clock,” the spokesperson added. Doug Baldwin Authentic Jersey
NTPC power generation cost drops 39.5 paise to below Rs 2/unit
The state-owned NTPC has managed to bring down its cost of electricity generation by an average 39.5 paise while for the Mauda project, it was a decline of Rs 1.65 per unit, mainly because of improvement in coal quality and supply. Data available with NTPC showed that the overall cost of power generation has come down to below Rs 2 last fiscal, driven by improved quality of coal and its supplies, a power ministry official said. The overall cost of power generation of the company has come down by 39.5 paise. It does not include taxes and cess primarily imposed to finance protection of environment, the official explained. According to the data, the overall cost of power production for the company stood at Rs 2.01 per unit in 2014- 15, which has declined to Rs 1.94 in April-February of 2016- 17. Elaborating, he said the actual reduction was 6.4 paise per unit, but if increased levies and charges are taken into account, the total drop in power output cost translates into 39.5 paise. The data further showed that NTPC’s Mauda project registered an overall fall in cost of power generation at Rs 1.65 per unit, taking into account the impact of revision in levies and charges. The official explained that new projects and plants with high dependence of imported coal have benefited the most. The other plants which gained due to improved quality and supplies of coal are Barh Stage-II (Rs 1.24 per unit), Badarpur (Rs 1.16) and Tanda (93.6 paise). The official said the NTPC plants represent a quarter of thermal power generation projects in the country and indicate an encouraging trend in power generation cost. Brandon Fusco Jersey
Government’s coal reforms begin to pay off, reduce power costs
Coal sector reforms initiated by the Narendra Modi government are beginning to pay. Initiatives to improve coal quality and efficiency in the supply chain have brought down the cost of power from coal-fired plants in spite of revisions in coal prices, central cess and railway freight in the last three years. Decline in the cost of power has accrued mainly from power stations burning less coal to generate each unit of electricity on assured quality of domestic fuel. There is also import substitution worth Rs 23,349 crore, which saves fuel costs. Since cost of coal makes up 54%-60% of the price charged by power producers and is passed on to consumers, coal consumption has a bearing on tariffs and environmental dividend in terms of emissions. According to government data, power stations are now burning 8% less coal than they used to three years ago for each unit of electricity. State-run NTPCBSE -2.40 %, which accounts for 17% of all generation capacity in the country and is the key supplier to states, reduced its coal consumption by 5.5% in 2016-17. NTPC’s coal cost stood at Rs 2 per unit in 2014-15 and should have risen by 33 paise due to revisions in coal price, government cess and railway freight. Remarkably though, it stood at Rs 1.94 per unit for 2016-17. In other words, even after paying 33 paise more since 2014-15, NTPC’s power costs 6 paise less today. For discoms then, this actually means a saving of 39 paise per unit, taking into account the impact of the revisions, and translates into hundreds of crores of rupees. Lower cost of power ultimately benefits consumers by way of lower tariff. That happens only in an ideal situation. In reality, discoms coping with sagging bottomlines and commercial losses may not be able to reduce monthly bills of consumers immediately. But they will find it hard to justify demand for tariff hike to state regulators. In the long run, however, cheaper power will result in lower traiffs once the discom reforms take root. J.T. Compher Jersey