UDAY Scheme turning around power discoms performance: India Ratings
The Modi government’s Ujjwal Discom Assurance Yojana (UDAY) scheme for power distribution reforms has started bearing fruits with major improvement witnessed in both financial and operational performance of debt-laden discoms, research and ratings agency India Ratings has said. “India Ratings and Research’s initial assessment of UDAY scheme suggests both financial outcome (gap between Average Cost of Supply and Average Revenue Realisation) and operational efficiency (decline in aggregate technical and commercial (AT&C) losses have improved at an aggregate level,” the firm said in a report issued today. It added a reduction in interest cost has also benefitted discoms’ finances which is estimated to have freed up Rs 22,000 crore capital of the banking sector. “However, in the medium-to-long-term, improvement in operational performance such as increased billing efficiency through feeder metering and feeder audit leading to higher collection will be crucial for keeping the discoms’ finances healthy. Tighter monitoring of action plan, appointment of nodal officers and state level monitoring committee are also equally important for achieving the desired results,” the report said. At the end of March 2017, 26 states and one union territory have joined UDAY. Nagaland, Odisha and West Bengal have not joined the scheme. Until FYE17, Rs 2.69 lakh crore of discoms’ debt qualified for restructuring, and the state governments and discoms together issued bonds worth Rs 2.33 lakh crore (86.5% of the discoms debt). At FYE17, pending bonds to be issued by the states is estimated to be Rs 36,278 crore, which are likely to be issued by discoms. Issuance by state government will be subject to the fiscal space of each state. According to the assessment, some green shoots have emerged so far as the financial performance of the discoms is concerned due to reduced interest cost and savings in power purchase cost (Apr-Dec 2016-17: Rs 14,089 crore). Chhattisgarh discom turned profitable in first quarter of 2016-17, while Gujarat discoms increased their profitability in Apr-Dec 2016-17. Similarly, Haryana discoms turned profitable in second quarter and third quarter 2016-17. “These results are encouraging. However, the success of UDAY lies in how quickly discoms of larger states such as Uttar Pradesh, Maharashtra, Tamil Nadu, among others turn around and make their finances self-sustainable. This will also improve the liquidity profile of independent power producers supplying power to these discoms,” India Ratings said. The firm also said that while the overall financial and operational parameters of discoms have improved at an aggregate level, this aggregate performance masks wide inter-state variations. Blake Martinez Womens Jersey
41 hydro projects running behind schedule: Government
A total of 41 under-construction hydro electric projects (above 25 MW) with a combined capacity of 11,792.5 MW are running behind schedule, Parliament was informed today. “Presently, 41 HEPs (above 25 MW), aggregating to 11,792.5 MW, are under construction in the country. All the above projects are running behind schedule,” Power Minister Piyush Goyal said in a written reply to Rajya Sabha. The projects are lagging on account of natural calamities, delays in forest clearances and land acquisition and law and order problems, the minister said. He also said state-owned NHPC is scheduled to generate 4458.69 million units additional power from two of its under- construction projects – Parbati-II (800 MW) in Himachal Pradesh and Kishanganga HEP (330 MW) in Jammu & Kashmir. While Parbati-II is scheduled to be commissioned in October 2018, Kishanganga is scheduled to begin in January 2018, he said. The minister said various steps are being taken for commissioning of pending projects. Rodney Gunter Jersey
NHPC’s Kishanganga to start ops by Jan’18: Piyush Goyal
NHPC’s 330-mw Kishanganga hydel power plant is likely to be commissioned in six months while the 880-mw Parbati –II hydro project will begin operations by October next year, Union power minister Piyush Goyal said on Monday. The two projects in Jammu & Kashmir are scheduled to generate 4458.69 million units additional power once operational, he said in in a written reply to a question in Rajya Sabha. Goyal said 41 hydropower plants of above 25 mw capacity, aggregating to 11792.5 mw are under construction in the country. All these under construction projects are behind schedule due to various reasons including natural calamities, geological factors, delays in forest clearances and land acquisition and law and order problems, the minister said. He said implementation of the under construction hydro power projects is being monitored seperately by the Central Electricity Authority CEA, the Power Project Monitoring Panel (PPMP) set up by the ministry of power and independently by the ministry. Hydel power projects of central power sector undertakings are incorporated in the annual performance memorandum of understanding and the same are monitored during the quarterly performance review meetings of the companies. Ryan Kesler Womens Jersey
Australia’s IFM puts two gas-fired power stations on the block
Australian infrastructure investor IFM is seeking to sell two gas-fired power plants, looking to exit the long-term investment amid uncertainty over Australia’s climate and energy policy, two industry sources said. The sale of the Ecogen assets comes as gas and power prices are soaring, while state and national leaders brawl over carbon emissions targets and energy policy, factors that have scared off big infrastructure investors. “It’s not a regime that is inviting for investors,” Ian Silk, chief executive of AustralianSuper, the country’s largest pension fund, said at a Reuters event last week. He called the energy market a “dog’s breakfast”. The sale process was in its early stages and information memorandums had not yet been sent to prospective buyers, said one of the sources with knowledge of the matter. IFM, which first bought into Ecogen in 2003, declined to comment on the proposed sale. Ecogen’s Newport and Jeeralang plants, with a combined capacity of about 1,000 megawatts, could be worth A$1.5 billion ($1.2 billion), based on a replacement cost of A$1.5 million per megawatt, said a Melbourne-based analyst, who declined to be named. However, analysts said it was difficult to value the ageing assets without knowing what gas supply contracts Ecogen has in place. If Ecogen has low-priced gas contracts that are set to expire, it is likely to face higher fuel costs down the track, which could cap the price IMF could fetch for the power plants. At the same time, Ecogen is set to lose a long-term hedge contract with EnergyAustralia, a unit of Hong Kong’s CLP Holdings, in 2019. The contract has provided the cash flow certainty prized by IFM. On the positive side, the power plants could attract bidders involved in the electricity market as they are essential to keeping the lights on in southeastern Australia as coal-fired power plants are closing. “Gas peaking plants are in a good position given volatility in the market. It’s probably not a bad asset to sell,” said Royal Bank of Canada analyst Paul Johnston. Bidders could include Alinta, owned by Chow Tai Fook Enterprises, as well as AGL Energy, Origin Energy and EnergyAustralia, analysts said. The companies did not immediately respond to a request for comment. James Bradberry Womens Jersey
UDAY impact: UP electricity earnings grow 28 per cent to Rs 7,822 crore current fiscal
A severe crackdown on electricity theft following the implementation of the centre’s flagship scheme Ujjwal Discom Assurance Yojana (UDAY) has led to a growth of 28.5 per cent in power bill earnings for Uttar Pradesh in the first quarter ended June, the power ministry has said. The state’s collection of power supply revenue grew to Rs 7,822 crore in the three months between April 2017 and June 2017 from Rs 6,086 crore in the corresponding quarter previous financial year (2016-17). “With better supply and lower losses, UP in particular, and India in general, are moving towards round-the-clock power for all,” a power ministry statement said. In volume terms, the first quarter collections in electricity procurement in Uttar Pradesh witnessed a growth of 15.5 percent as compared to the corresponding period in the previous fiscal. According to the statement, the state’s electricity procurement stood at 31,400 million units (MU) as compared to 27,200 million units in the same period last fiscal. UDAY is a power distribution reforms scheme launched in 2015 in a bid to revive and turnaround electricity distribution companies (DISCOMS) in India. Michael Grabner Womens Jersey
Cut power losses to below 10 per cent in 6 months, Centre tells states
The Union power ministry has asked states to slash electricity losses due to theft and technical reasons to below 10% within six months, an ambitious target given that some towns in Uttar Pradesh, Jharkhand and Bihar lose up to 90% of power. The target was put before the states in a review, planning and monitoring meeting held on July 22 by Union power minister Piyush Goyal with power secretaries of states. About 4,041 towns are being targeted under the proposal, officials said. Cities such as Ahmedabad and Visakhapatnam would find it easier to meet the target since they lose close to 10% power due to theft and technical reasons, but the move is being resisted by states such as Jharkhand, Uttar Pradesh and Bihar where pilferage and technical problems are a huge challenge. A senior government official said while the physical and commercial losses can be curbed by the state-owned discoms by raising billing-collection efficiency and curbing power thefts, the technical losses would require substantial investments in technology upgradation. He said the Centre is supporting the technology upgradation in distribution sector through the Integrated Power Development Scheme (IPDS) for strengthening of sub-transmission and distribution networks in the urban areas, metering of distribution transformers, feeders, consumers in the urban areas and IT enablement of distribution sector. Data available on the Centre’s Urja-India app showed that there are 201 towns where the percentage of power loss and thefts is below 10%. Another 200 towns faced power losses of 1o-15% while there were about 220 towns that had losses in the range of 15-20%. About 200 towns faced losses in the range of 40-90%. The power ministry last week said that the national aggregate technical and commercial losses in states reduced to 20% in 2016-17 from 21% in FY16, 25% in FY15, and 23% in FY14. The states participating in the scheme and performing as per operational milestones in the memorandums of understanding are proposed to be given additional funding through Deendayal Upadhyaya Gram Jyoti Yojana, IPDS, Power Sector Development Fund and other such schemes. Shaun Alexander Authentic Jersey
Cut power losses to below 10 per cent in 6 months, Centre tells states
The Union power ministry has asked states to slash electricity losses due to theft and technical reasons to below 10% within six months, an ambitious target given that some towns in Uttar Pradesh, Jharkhand and Bihar lose up to 90% of power. The target was put before the states in a review, planning and monitoring meeting held on July 22 by Union power minister Piyush Goyal with power secretaries of states. About 4,041 towns are being targeted under the proposal, officials said. Cities such as Ahmedabad and Visakhapatnam would find it easier to meet the target since they lose close to 10% power due to theft and technical reasons, but the move is being resisted by states such as Jharkhand, Uttar Pradesh and Bihar where pilferage and technical problems are a huge challenge. A senior government official said while the physical and commercial losses can be curbed by the state-owned discoms by raising billing-collection efficiency and curbing power thefts, the technical losses would require substantial investments in technology upgradation. He said the Centre is supporting the technology upgradation in distribution sector through the Integrated Power Development Scheme (IPDS) for strengthening of sub-transmission and distribution networks in the urban areas, metering of distribution transformers, feeders, consumers in the urban areas and IT enablement of distribution sector. Data available on the Centre’s Urja-India app showed that there are 201 towns where the percentage of power loss and thefts is below 10%. Another 200 towns faced power losses of 1o-15% while there were about 220 towns that had losses in the range of 15-20%. About 200 towns faced losses in the range of 40-90%. The power ministry last week said that the national aggregate technical and commercial losses in states reduced to 20% in 2016-17 from 21% in FY16, 25% in FY15, and 23% in FY14. The states participating in the scheme and performing as per operational milestones in the memorandums of understanding are proposed to be given additional funding through Deendayal Upadhyaya Gram Jyoti Yojana, IPDS, Power Sector Development Fund and other such schemes. Brent Urban Jersey
Rajasthan govt approves new policy for power connections to small and marginal farmers
Rajasthan government has approved agriculture connection policy-2017 for power connections to small and marginal farmers. As per the new provisions, small and marginal farmers belonging to below poverty line (BPL) category will get priority over others in receiving agriculture connections of 5 horsepower. Farmers living on the periphery of Indira Gandhi Canal Project who are affected due to the problem of waterlogged areas will also get the same benefit. Earlier, famers in BPL category along with those living near Indira Gandhi Canal Project were not able to avail connections on a priority basis. Under the new policy, power connections that were cut off can be reconnected for which interest rates on amount paid has been slashed from 16% to 12% yearly. The new policy will only be applicable on connections for five-star rated pump sets approved by bureau of energy efficiency and upto 20 horsepower. Also, those replacing their standard motors with five-star rated pump sets will receive subsidy of Rs 750 per horsepower from the government. After the notification of the policy, farmers who have received subsidy under solar pump sets will not be able to avail second agriculture connection in general category. For them, government will launch a separate scheme. These applicants will have to pay cost of sub-station but their tariff rates would be same as normal connections. In the new policy, government has relaxed provisions for martyrs’ families. They can apply for agricultural connections any time. Earlier, it was mandatory to apply within twelve years of the death or within two years of getting ownership of land. The new policy also says that farmers can revive their connections after paying Rs 500 if the demand note for connection was issued within five years. The farmers can also erect electric lines if the option was given during the deposit of demand draft. Chris Hogan Womens Jersey
Green energy sops may end in five years
The government plans to gradually withdraw all the incentives for the renewable energy sector over the next five years, a move that may face stiff opposition from an industry that is to see significant growth in the coming years. “There will be no targeting of renewable energy after 2022, and we will allow markets to determine the prices as well as kind of support the sector needs to sustain and integrate itself with the mainstream,” a senior government official told ET. The move is in line with the holistic draft National Energy Policy (NEP) drawn up by official think tank Niti Aayog, which has reasoned that the sector does not need any handholding after 2022, the official said. Reasoning the move, the official said a base load is needed to support the generation of renewables. “This comes at a cost of traditional electricity which therefore gets expensive.” NEP, which is to replaced Integrated Energy Policy of the previous UPA regime, aims to provide levelplaying field for all sectors and hence is batting for withdrawal of all kinds of support to the renewables also. According to Niti Aayog’s draft NEP, the sharp reduction in tariffs received in bids for solar and wind power is a reflection that these technologies are now exposed to market discipline and that there is a need to now address other lagging renewable sources such as hydro and biomass. “Therefore, the NEP proposes gradual withdrawal of the provisions of ‘must-run’ status and other supports such as non-levy of inter-state transmission charges,” the draft policy said. Under ‘must run’ status, any power generated by wind and solar power plants should always be accepted by state power distribution companies. “It is envisaged that as consumers become agnostic to the source of power, renewable energy will soon blend with conventional power and markets will determine dispatch rather than policy levers,” the policy paper said. However, companies operating in the sector are yet to firm up their views on whether this gradual withdrawal of benefits to the sector will help them or not. Doug Baldwin Womens Jersey
Major relief for solar power developers: Projects deadline extended
The government has granted major relief to solar power developers, allowing deadlines for project development to be extended in cases where there were delays caused by circumstances beyond their control. Developers had raised an alarm over a letter from the Ministry of New and Renewable Energy (MNRE) this month directing all states to strictly enforce deadlines for solar projects, eschewing extensions, as reported by ET on July 18. The ministry has now sent another letter that takes into account the concerns raised. “If there are delays of any kind on the part of the state government … like land allotment, transmission or evacuation facilities, connectivity permission or force majeure, the competent authority in the state may consider providing extension of the time duration,” the letter dated July 28 said. Both letters are written by Dilip Nigam, an adviser to the National Solar Mission at the ministry. Solar tariffs have fallen dramatically in the last two years, from around Rs 7-8 per unit in mid-2015 to aroundRs 2.50-3.50 at present, mainly due to a steep decline in the cost of solar cells and modules caused by global overproduction, especially in China. The MNRE was concerned that solar developers who had won projects earlier at relatively higher tariffs — when equipment costs were also high — might delay their purchase of solar equipment to benefit from falling prices and thereby reap windfall profits. “One of the reasons for falling tariffs is lowering of prices of solar cells/modules internationally,” the first letter, dated July 3, said. “Falling prices may give undue benefits to developers at the cost of the government if project duration is extended… It is important that already awarded projects are completed on time.” Power purchase agreements (PPAs) usually include severe penalties for failing to complete a project on time, but these are frequently not enforced and developers given extensions should they ask for them. The letter evoked strong protests from developers who pointed out that project delays were often due to lapses on the part of the state government or the concerned power distribution company. They even feared the letter could be used by state discoms to renegotiate PPAs, citing the fall in equipment prices. The second letter has made it clear that if a state government was culpable for any delays, the developer should not be made to pay for it. “It is clarified that the ministry had requested not to give time extension (only) if all the obligations are fulfilled by the concerned state government in a project,” it said.