More trouble for PDC as Govt sits on power selling proposal
While J&K Power Development Corporation (PDC) is struggling to find buyers for energy generated from 450-MW Baglihar-II owing to slump in the market, the State Government has sat on a proposal to allow the Corporation to sell power from the project on existing lower rates in the market, resulting in mounting losses to the PDC. Sources said more than a month ago the Corporation, after failing to get any buyer, moved a proposal to the Government to allow it to sell the energy from the project to the Power Trading Corporation (PTC) at the prevailing rates in the market which are lower than the per unit cost that was firmed up by the PDC for the project. Top officials from the PDC had met their PTC counterparts in New Delhi. “We could have settled at the rate of around Rs 3 per unit though we could have negotiated on the rates. Though these (Rs 3) rates were definitely lower but the Corporation would have been able to fetch some revenue,” said a senior PDC official. The PDC had earlier firmed up per unit cost at Rs 4.13 including water usage charges but the Corporation apprehends owing to slump in the markets it won’t be able to get this (Rs 4.13) rate. The official said the Government wasn’t however responding to PDC’s proposal, forcing it to continue with the sale of power to PDD at much lower rates of around Rs 2.50 per unit. “Despite settling at lower rates (with the PDD) we are not getting the payments regularly,” said the official. A part of revenue generated from sale of power has to go for clearance of the loan borrowed from different financial institutions for construction of the project earlier. The Corporation had in total borrowed Rs 1689 crores loan from the financial institutions which per the agreement has to be repaid in 10 years on quarterly basis. “The immediate worry is that if we are not able generate revenue from the sale of power it will negatively impact the loan repayment process which can hurt the Corporation’s credibility as well,” said the official. The Corporation started debt clearance in July 2016. “There are no buyers interested to buy the power at the firmed up rates. Instead of sitting back and doing nothing we need to find the buyer even if it means at lower cost. The Government can’t let the losses to pile. Whatever is the rate prevailing in the market we should be able to sell the power on the same basis to prevent losses,” said the official. “There are no options available except for selling power at lower rates for short term and generating some revenue.” The project, designed to generate power between May and September with annual generation of 1,302 million units, was first run on trial basis in September 2015 and it started commercial operations from April 2016. “Let the Government allow us to sell the power at least on short term basis to prevent further losses to the Corporation,” said the official. Another official said: “It was shocking on part of the government not to allow the Corporation to sell power in the energy market. This delay is at the cost of financial health of the PDC and is hurting it badly.” He said on one hand the Government was not making timely payments to the PDC for the power it gets from Baglihar-II and on the other hand it wasn’t allowing the PDC to sell power in the energy market. “This is beyond reason and is only hurting Corporation’s financial health,” said the official. Donald Trump Authentic Jersey
Tata Power generation capacity up 8% in Q3 FY’17
Tata Power on Tuesday announced a generation capacity increase of over 8% in the third quarter of the current fiscal compared to the year-ago period. “The company, together with all its subsidiaries and jointly controlled entities, has a gross generation capacity of 10,496 MW and a presence in all the segments of the power sector viz. Fuel Security and Logistics, Generation (thermal, hydro, solar and wind), Transmission, Distribution and Trading, thereby, reinforcing its position as the largest integrated power company in India,” Tata Power said in a statement. According to the statement, standalone generation stood at 13,022 MUs (million units) in Q3 FY’17, as against 12,032 MUs during the same quarter of FY’16. Tata Power MD & CEO Anil Sardana said in the statement, “Tata Power has and will continue to create tangible value for its stakeholders. We have in this quarter spread our footprint across two additional geographies, namely, South Africa and Zambia where additional generation is welcome. We will continue to be part of India’s growth story while selecting greener & good projects in select international geographies.” The company said that it is firmly on the road to generating 30-40% of its total generation capacity from non-fossil fuel sources by 2025. The company said that it has completed the acquisition of 1,141 MW of renewable power projects comprising about 990 MW solar power projects and about 150 MW wind power projects. Xavier Williams Womens Jersey
Bank investors beware! Power loans may trip next
In order to give better clarity of the stress they were carrying on their balance sheets, three large banks at the beginning of fiscal 2017 disclosed lists of close to Rs 1 lakh crore of loans from where they expected future slippages to evolve. Three quarters down the line, close to 39% of these “watch-list” accounts have slipped into the non-performing category , while only about 6% – Rs 6,100 crore -was either recovered or upgraded from the list. It appears difficult to conclude which lender has optimally managed its list of loans that would cause future pain given varied parameters. Among the three lenders that created inventories of stressed assets, or loans to “below investment grade companies”, the slippages from the lists have been varying. At 55%, the announced quantum of slippage from the watch list was the highest for Axis Bank, followed by SBI (44%) and ICICI Bank (27%). With such high level of recognition, Axis appears on track to recognise a substantial portion of the watch list as NPAs as it guided in April last year -the slippages are commensurate with the level of bad assets growth. Between March and December 2016, Axis reported the steepest rise of 355 basis points in its gross NPA ratio, as against ICICI’s 199 bps and SBI’s 73 bps growth. The nature of lists differs, too. Axis has only included its fund-based exposures to the list even as in the last nine months it also saw close to Rs 464 crore of devolvement from the non-fund-based (credit guarantees) exposure into the watch list. ICICI Bank includes nonfund-based exposure of the slipped accounts from the list in the total exposure. While Axis has termed its list to be a “closed“ one with no additions to be made over two years ending FY18, SBI has not ruled out changes though the quantum is unlikely to be that big. This makes the run-rate of slippages from outside the list an interesting tool to gauge the purpose of the watch list. Although SBI, which is confident of not overshooting its FY17 guidance of Rs 40,000 crore of fresh slippages into NPAs, close to a quarter of it so far has come from outside the watch list. ICICI has seen 48% of its gross slippages come from outside its “further drilldown list” and expects this runrate to continue. Axis has missed its guidance in this regard, with the outside watch list slippages from corporate book rising from 11% to 30%. In terms of sectoral recognition, the iron and steel space accounted for a fourth of total slippages from the watch list, and the power sector for more than a third, which is likely to bring the next bout of slippages. Shaquill Griffin Authentic Jersey
Discrimination on religious ground in electrification in UP: Piyush Goyal
Minister of state (independent charge) for power, coal, new and renewable energy and mines Piyush Goyal accused the UP government of partiality on the ground of religion on the issue of electrification and power supply in the state. “In its probe report, a high power committee pointed out that discrimination on religious ground was found in implementation of Deen Dayal Gram Jyoti Yojna in eight village of Moradabad,” said Goyal while talking to reporters here on Tuesday. He said that on the complaint of Moradabad MP a high level committee was constituted, which visited eight villages of the district on July 22, 2016. “Many other MPs also contacted me with similar complaints that the areas populated with particular caste and religion are facilitated with power supply and electrification,” he said adding that it is a very serious matter showing the biased temperament of the state government. However, the UP government in its written reply said that no discrimination is done in providing power connection, he added. “The chief minister claims that there is 24-hour power supply in the state. Fact surfaced with the outcome of a survey conducted by an NGO one week before and after the polling in different areas. It was found the power supply was normal before the polling, but after the polling frequent power cuts were noticed,” said Goyal adding that the Akhilesh government is not serious about state’s development, which is evident of the fact that state did not sign the ‘power for all’ agreement. “UP is the only state in the country that did not sign the ‘power for all 124×7’ agreement, which aims at providing uninterrupted power supply to all by August 2022,” he said. He further state that the UP also refused to purchase power from the centre at cheap rate saying that it has surplus electricity. “Against the target of giving 32,33,913 power connections during the 12 Five Year Plan, the state could give only 5.26 lakh connections, which is 16% of the target,” he said adding that it shows that the UP government wants to keep people deprived of electricity. “To hide the fact the state also stopped providing data of power supply since August 2016,” he alleged. Justin Williams Jersey
Philippines seeks investors to power growth, extra 7,000 MW needed
The Philippines needs to build an additional 7,000 megawatts of power generation capacity over the next five years to support its fast-growing economy and wants foreign investors to help, its energy minister said on Monday. Firms from China, South Korea, Russia and Japan were interested in new Philippine power projects, and the president would soon sign an executive order to address soaring power demand by giving priority status to get new projects ready in half the time, Energy Secretary Alfonso Cusi told Reuters. The Philippines, with a population of more than 100 million people and one of the world’s fastest growing economies, aims to double its power generation capacity by 2030 to avoid a return to the frequent blackouts suffered during the 1990s. At the end of June 2016, installed capacity was 20,055 megawatts, a third of it fuelled by coal, according to government data. Power is generated 34 percent by coal, 34 percent by oil and gas and 32 percent from renewable sources. The Philippines would be technology neutral, Cusi said, to avoid being shackled to caps and quotas and create more competition, with the aim of slashing electricity prices for industry and consumers. With no state subsidies, prices are the highest in Southeast Asia. “What we want is to build our supply to a level that is meeting the demand with sufficient reserve for industry,” Cusi said in an interview. “So it’s competition at work. Whoever comes first, offers a good project development, and it will bring down the cost – yes.” CHINESE INTEREST Chinese firms were interested in a lead role, he said, in areas such as hydro, nuclear, coal and LNG areas, plus construction of those facilities and their financing. “We were there basically to tell (the Chinese) that our energy sector is open for business,” he said, asked why an energy ministry delegation was in Beijing last month. At least three Japanese firms, including Osaka Gas and Tokyo Gas had been in talks about investments in new LNG projects, he added. Plans for gas power plants and storage facilities are in preparation for the anticipated depletion by 2024 of gas fields at the Malampaya project, an offshore field that fuels 40 percent of Luzon island, home to the capital Manila. Although energy security was a priority, Cusi said it was too early to discuss exploration of offshore gas fields known as SC 72 and SC 75, at the Reed Bank in the South China Sea. Though those are located within the exclusive economic zone of the Philippines, the sites fall within the vast area of the waterway that China lays claim to. By some industry estimates, SC 72 alone may have triple the reserves of Malampaya. But Cusi said the energy ministry needed to await direction from the foreign ministry on the status of diplomatic relations with China before lifting a suspension on exploration in those areas. “It needs to be clarified,” he said. “We want to go forward with it without any disruption.” He said it was too soon to discuss whether the two countries could share the resources, as has been suggested by President Rodrigo Duterte. Donald Trump Jersey
Drama unfolds in wind
Last Thursday 3 pm onwards, every player of the Indian wind industry geared up for real action which continued till wee hours of Friday. In the first ever wind bidding by state-run Solar Energy Corp. of India (SECI) for 1000 MW bidders were allowed to locate projects in the state of their choice and most have opted for Tamil Nadu and Gujarat. We congratulate the winners and are sure that comparatively they possess all right rationale and better knowhow / cost economics sense on desired returns to equity investors. While I believe every tariff is viable when you invest in a project. But the term ‘viability’ in renewables has assumed a new definition recently. It is time come to a consensus what should be the viable IRR for renewable projects in India? What is baffling me today is how the nightlong action packed thriller resulting in tariffs as low as Rs 3.46 can be considered as ‘investor friendly’ or ‘discom friendly’ tariff? Surprisingly, only a few months back majority of wind developers were fighting to improve the tariff of Rs 4.19 with regulators in Gujarat, which was ‘then’ considered quite low, not to mention that 50 paisa GBI was available over and above this tariff. At the above tariffs did the projects actually look unviable then, even when Gujarat discom is ‘A’ rated or will the recently bid wind projects be viable now? The power offtake is guaranteed in both cases. But I am sure people who have won this bid have figured a smarter way out as developers will not put up projects to lose money. Another interesting twist in this drama is that some turbine manufacturers themselves have also bid for quite low tariffs. My immediate thoughts are: Has the turbine prices crashed by 15 – 20 per cent in those 24 hours? What is the logical justification of their past project costs based on IRRs viz a vis new pricing to clients based on tariffs. Have they embraced the changing realities? However, ‘The End’ of this thriller is on a positive note where wind has competed with solar on ‘paisa’ to ‘paisa’ basis and is likely to give thermal a run for money. Let us wait for this blockbuster to perform at the box office. In my opinion the winners are A- Renewables B- Government C- Environment. Pierre Turgeon Jersey
KERC mulls surcharge for those opting out of grid power
A move by major stakeholders to shift from grid to captive and or green energy could come at a cost. Seized about anomalies this move could cause in terms of cross subsidy offered to domestic consumers’ vis-à-vis the industries opting for green power, the Karnataka Electricity Regulatory Commission (KERC) is mulling imposing cross subsidy surcharge for those opting out of grid power and as demanded by the electricity supply companies (Escoms). Noting that the move by industries to switch over to green power and their conviction to opt out of grid power supplied by Escoms is purely market driven, M K Shankaralinge Gowda, chairman, KERC told TOI, “Escoms have represented this issue to us as part of their annual tariff filings for FY 2017-18 and we are taking a close look at it. The final orders that the commission issues will have something to state about this issue include their demand for surcharge,” he said. Averring that this move to reduce dependency on grid power is per se not a question mark on the ability of Escoms to provide quality power as demanded by the industries, the KERC chief said, it could be more borne out of the economics of such a decision. Besides, if bulk consumers feel they can get power in open market at rates that are competitive than what their respective Escoms offer, it is natural that they will shift to such power and reduce dependency on the grid. The other major challenge before the commission as it decides on tariff filings by the Escoms for revision in power tariffs, Shankaralinge Gowda said is the challenge that supply peak will pose sooner than later. At present, Escoms are grappling with morning and evening load peaks. Once the state gets that 2000 MW solar power in the pipeline mid 2018, the question of supply peak will have to be dealt with and the commission is applying its mind to this issues as well. Supply peak will not address either the morning or evening supply peaks usually that Escoms experience from 6am to 8am and 6pm to 8pm. This comes between 8am and 6pm when solar power production is expected to be at its peak. Since it is not possible to store the power generated and used to manage morning and evening peaks, the power generator, Escoms will have to find consumers who can utilize this supply peak in a manner that it brings them revenue. Drew Brees Authentic Jersey
J&K: Govt mulls Power Trading Corporation to minimize purchase bill
In a bid to bring down power purchase bill, Jammu and Kashmir government is mulling to establish State Power Trading Corporation to “save substantial amount” on buying power from outside state entities. As the power liabilities on account of electricity purchased from outside entities have soared to above Rs 7,000 crore, the State government in a report has stated that “power purchases need professional outlook.” Ironically, despite JK having potential to generate 20,000 MW of electricity, the state is largely dependent on outside power supply to meet local demand, as major share of power generated in the State is controlled by the National Hydroelectric Power Corporation (NHPC) whose control on power projects on JK’s waters is being seen as “illegal” exploitation of resources of the State. “As management of power purchase from different sources is a serious business and has to be dealt with very professionally. The government wants to create State Power Trading Corporation to streamline the area of concern,” Economic Survey 2016 reads. “In respect of the power purchase mechanism it has become absolutely essential to run the power procurement on professional lines,” the official report mentions adding that “ expertise in trading of power has of late emerged as an important area and is bound to definitely save substantial amount once put in place,” it states. “Another major issue in the power sector is that of carrying forward liabilities on account of power purchases which has resulted in very high interest rate not favorable to the State Exchequer. PDD had conveyed that Rs 7,000 crore liabilities had been created over years due to extra purchase of power.” As per the report, Jammu and Kashmir government has spent Rs 20,000 crore for buying electricity from outside state in past five years denting the state’s economy. It reveals that in past five years, the JK government spent whopping Rs 20,000 crore to buy power from Central Public Sector Units (CPSUs) in India. The figures dished out in the survey report mentions that in 2015-16, JK government spent Rs 4,803 crore on power purchases from outside. In 2014-15, Rs 4,661 crore were spent on power purchases, in 2013-14 Rs 3989 crore, in 2012-13 Rs 3510 crore and in 2011-12 Rs 3051 crore were spent on power purchased from outside the state. The report states to meet the gap, the PDD enters into arrangements with NVVN, Punjab, Haryana, Chhattisgarh and also arranges from Power Trading Corporation (PTC), NTPC, Vidhyut, Vyapar Nigam Ltd, besides over drawls from Northern Grid. “The ever increasing power purchase cost and consequent mounting of liability is serious cause of concern for the economy of the state,” the report cautions. Devin Funchess Jersey
‘Power demand not to go up in 2017-18’
A society headed by a former chairman of the Madhya Pradesh Electricity Board P L Nene has said that there will be no growth in demand for power in the coming financial year 2017-18. This comes against likely projection of 10.32% increase in power demand by discoms. Electricity Consumers Society, headed by Nene, has submitted its objections against tariff hike and revenue requirement petition filed by discoms of the state. As per the submissions of the society, “In the past four year, actual consumption has been 15-20% less than what was projected. Further, there is unlikely to be any growth in power demand during 2017-18 because of energy efficiency programme ‘UJALA’ undertaken by Madhya Pradesh Urja Vikas Nigam. In an advertisement carried in local papers dated January 5 of this year, it was mentioned that one crore LED bulbs purchased in Madhya Pradesh will help save power to the extent of 50 lakh units per day. This works out approximately 1800 MU per year.” “The society therefore submits that no growth be allowed on domestic consumption during 2017-18 annual revenue requirement will improve by over Rs 150 crore,” says a petition submitted by the society. The society, in its petition, suggested various options, including loss reduction and proper management of power while claiming that these initiatives can save Rs 1000 crore and thus bridge the revenue gap. “The balance can be controlled by proper management of power purchase costs and progressive reform decisions like UDAY, meant for revival of debt-ridden power discoms. The society therefore submits that at this stage, no tariff revision is called for,” said the committee. It is noteworthy that discoms have sought an average power tariff hike of 10.65% for 2017-18 against a revenue gap (difference between income and expenditure) of more than Rs 4,000 crore. Johnny Bucyk Jersey
More wind power projects to go under hammer next fiscal
Buoyed by drop in tariff to record low of Rs 3.46 per unit in the first auction of wind power, the government is mulling putting on the block more such projects next fiscal. “Transparency which is the hallmark of the Modi government, has brought down the tariff of wind power. There will be more and more such projects on the block,” Power, Coal, Mines and New & Renewable Energy Minister Piyush Goyal told PTI. Asked whether he is expecting wind power tariff to fall further in a more competitive environment, he said: “That is the beauty of tariff based competitive bidding. We cannot predict the tariff. It is the bidders who decide what price should be quoted. I cannot interfere in that.” Goyal was of the view that the average wind tariff was hovering above Rs 5 per unit earlier due to feeding of rates and lack of transparency. “We will be looking at more wind power projects auction in the next financial year. We will formalise it. We have not decided yet on the quantum as it all depends upon the states demand because the projects are backed by them,” New & Renewable Energy Secretary Rajeev Kapoor said. The wind power tariff has been decided so far on the basis of inputs provided by power regulators such as cost of land and equipment and borrowing expenses. However, the feed in tariff used to remain same for the periods as long as 25 years and there was no fuel cost involved as in the case of thermal power. An industry expert said that now the feed in tariff would not survive for a very long time and there would more and more auctions in wind power segment in view of success of the first auction concluded yesterday. The wind power tariff touched record low of Rs 3.46 per unit in first even auction conducted last week by the state- run Solar Energy Corp (SECI) where firms Mytrah Energy, Green Infra Wind Energy, InoxBSE 2.00 % Wind Infrastructure Services, Ostro KutchBSE 4.96 % Wind and Adani Green Energy emerged as the lowest bidders. The auction witnessed aggressive bidding despite an advisory issued by industry body to avoid bold bids. The Indian Wind Turbine Manufacturers Association had reportedly issued an advisory to some players before the auction started in view of uncertainties due to the GST implementation. The auction assumes significance because India has set an ambitious target of having 60 GW of wind power capacity by 2022. The wind power deployment in the country started in early 1990s. The current wind power installed capacity is nearly 28.7 GW, accounting for over 9 per cent of the total installed capacity of 314.64 GW as in January, 2017. Globally, India is at the fourth position after China, the US and Germany in terms of wind capacity installation. The Centre has set an ambitious target of 175 GW power from renewable energy resources by 2022 and out of this, 60 GW has to come from wind power. Max Scherzer Authentic Jersey