Power – Page 4 – Diligentia Services

‘Uday’ gets discoms back in shape, boosts power supply

The Modi government’s prescription for ailing state power distribution companies is slowly putting them back in shape and reducing the duration of blackouts in the nearly two years since the treatment began. Data presented during last week’s review of ‘Uday’, the revival plan for discoms, by the PM show major improvements in the key parameters on which health of discoms are judged. The government approved Uday on November 5, 2015, when all state discoms were gasping under a collective debt of Rs 3.95 lakh crore. Some 90% of this debt, or Rs 3.82 lakh crore, belonged to states that were ready to swallow the pills being proposed in Uday. Almost two years down the line, the participating states now have found relief for their debt pain by floating bonds worth Rs 2.32 lakh crore, or nearly 87% of the burden. The next step was to regain operational strength by reducing AT&C (aggregate transmission and commercial) loss — a euphemism for power theft — through widespread metering and improve revenue through robust billing and collection. Tests have been positive on both counts, with 12 states reporting a reduction in AT&C losses and 15 states shrinking the gap between their aggregate cost of supply (ACS) and aggregate rate of realisation. At an overall level, the ACS-ARR gap has reduced from 59 paisa per unit in 2016-2017 to about 45 paisa per unit at present. Simultaneously, the average AT&C loss for all states that have signed up for UDAY has come down to 20% this fiscal. No wonder, the average annual loss of discoms have come down from Rs 51,340 crore in fiscal 2016 to Rs 40,295 crore in 2017. So what does all this mean for average consumers? Well, longer supply hours, for one. A recent government statement said the average duration of power cuts declined 61% to 7.45 hours a month in May this year from 19.38 hours in the year-ago period. Herman Edwards Jersey

Buy abroad diktat doesn’t worry India’s solar sector

India has to make suitable policy changes by December this year to remove measures it had undertaken to protect its fledgling solar manufacturing sector from foreign competition, according to a recent notice issued by the Dispute Settlement Body (DSB) of the World Trade Organisation (WTO). DSB adjudicates on trade disputes between national governments. “The United States and India have agreed that the reasonable period of time for India to implement the recommendations and rulings of the DSB in the dispute ‘India – Certain Measures Relating to Solar Cells and Solar Modules (WT/DS456)’ shall be 14 months from the October 14, 2016, date of adoption of the DSB recommendations and rulings. Accordingly, the reasonable period of time expires on December 14, 2017,” DSB said in a communication on June 16. “We have been given time till December and have been asked to complete all on-going projects. We will not be able to keep the provision of a secure market for Indian suppliers. Even Indian projects, which are owned by the private sector, cannot have Domestic Content Requirement (DCR),” said an official in India’s Ministry of New and Renewable Energy (MNRE). “However, WTO permits us to do projects by the government. So, if the government or its public sector units are undertaking a project, they have the provision of DCR.” On February 6, 2013, the United States had requested consultations with India concerning certain measures of the country relating to domestic content requirements for solar cells and solar modules. The matter reached the level of a dispute, was taken to the WTO, and was settled in October 2016 in the favour of the US. The June statement comes after India accepted the ruling. The December deadline is not a surprise, according to Raj Prabhu, CEO and co-founder of Mercom Capital Group, a clean energy consultancy. “Public sector units were already reluctant to tender DCR projects due to cost issues. The government has finally realised that it has to pay from its own pockets to pursue protectionist policies,” he told indiaclimatedialogue.net . “Some manufacturers will lose out, but most have not invested in R&D, so the result is not unexpected.” According to Bridge to India, a renewables consulting firm, India provided some breathing room to local manufacturers through DCR and toyed briefly with anti-dumping duties. However, such protectionist measures have not helped local manufacturing anywhere in the world and the share of imports in India has continued to go up from 74 per cent in 2014-15 to 89 per cent in 2016, it said. There are no real threats to the Indian solar industry in the short-term, Prabhu said. “The government is all for lowest power prices and it is doubtful they will disrupt the markets when they are getting solar power at cheaper prices than coal. With DCR tenders disappearing, some manufacturers will fail, but most of the jobs in solar are in project development and not manufacturing.” The Indian solar sector had brushed aside any worries earlier as well. However, there had been some concern just after the WTO ruling came out. Madhavan Nampoothiri, founder-director of RESolve Energy Consultants, also believes there will be no major impact due to this ruling. However, the capacity utilisation of domestic manufacturers, which is already low at an industry level, could go down further, Nampoothiri said. The MNRE official said private developers who own a project, and install and develop it on their own and then sell power to the discoms will not have the DCR component. But projects owned and undertaken by government-owned National Thermal Power Corporation, Coal India or Solar Energy Corporation of India will continue to have the local content policy. “We have a scheme called Central Public Sector Units (CPSU) and, under this, there was a target of 1,000 MW. Now, we are in the process of bringing the second phase of this scheme, which will have a target of 7,500 MW,” he said. “Once that comes, the Indian industry supplier will have an adequate market.” Prabhu explains that even when the DCR category was in place, Indian manufacturers were way behind the Chinese. “As of now, there is no competition between the two as Indian solar manufacturers form a negligible part of the global solar manufacturing industry. Solar tariffs have been going down largely due to cheaper Chinese modules, for example, in Rewa, Kadapa and the Bhadla solar parks. The Indian solar market is completely dependent on Chinese modules now and the Chinese are subsidising Indian solar installations.” “It is a fact that our suppliers are not competitive enough. Their prices are higher than the imported ones and that is precisely the reason why for the developer mode projects, they would always opt for the cheaper Chinese modules, since they have to compete,” said the MNRE official. “When it comes to bidding for a tariff, the cheapest one will give benefits, so they opt for it. This is unfortunate but is the case now.” Bridge to India suggests that instead of considering a short-term response to this issue, “the Indian government should consider long-term implications for the sector and send a clear policy signal to reduce uncertainty for all stakeholders.” India’s National Solar Mission talks of creating a domestic manufacturing supply chain. However, market dynamics have not supported that vision, says Prabhu. “Currently, the Indian module manufacturing business model is built on importing Chinese cells and assembling them in India.” The MNRE official said that the Indian government doesn’t want to remain dependent on imported solar cells modules and is committed to supporting the industry. “We will ensure that some kind of policy is always in place to support the solar industry,” he said. Tyler Myers Authentic Jersey

In two years solar energy for residential sector would be cheaper than electricity grid: Solar players

In the next two years, solar power will be cheaper than the electricity grid in the residential sector, says solar energy provider SunSource Energy which on Monday successfully implemented the first two phases of a 100 MW solar project in South East Asia. Stating that while the solar energy in India has already reached ‘grid parity’ in commercial, industrial and utility sectors, soon this would be achieved in residential sector as well. The grid parity happens when the cost of the electricity produced by an alternative source — solar in this case — becomes lesser or almost equal to that being supplied from the conventional source e.g coal. At present, India has installed capacity of 327 GW (One GW is equal to 1000 MW), of which about 40 GW is Solar (12 GW) and Wind energy (27 GW) combined. About 70 per cent of power comes from coal-based power plants and the remaining from hydro and other sources like biogas. “Solar energy in India has already reached grid parity in the commercial, industrial and utility sectors. In most scenarios, in the next two years solar power would be cheaper than the electricity grid in the residential sector as well,” said Adarsh Das, Co-Founder and CEO SunSource Energy. The solar company has designed and built over 100 solar projects across 18 states in India, with a focus on decentralised power projects. It is currently involved in nearly over 150 MW of solar projects in India and overseas. Its rooftop projects include the India Habitat Centre. “Aligning with Prime Minister Narendra Modi’s target of 100 GW by 2022, including 40 GW from rooftop and decentralised projects, we are focused on developing, designing and building 400 MW of decentralised solar projects by 2022,” said Kushagra Nandan, Co-Founder of SunSource Energy. Chase Roullier Jersey

Distribution companies want to rework pacts as solar tariffs hit new low

Solar tariffs have fallen so dramatically that tariffs which were at record lows just three months ago no longer appeal to distribution companies, creating a big challenge for renewable energy companies. In April, French solar developer SolaireDirect won 250 MW in an NTPC conducted auction at Kadapah Solar Park in Andhra Pradesh, quoting a tariff of Rs 3.15 per kwH. At the time, this was a record low, beating the previous record of an average tariff of Rs 3.30 per kwH set in the auction conducted at Rewa Solar Park in Madhya Pradesh in February. But with tariffs having dropped even further, reaching an all-time low of Rs 2.44 per kwH at an auction conducted in May by Solar Energy Corporation of India (SECI) at a solar park in Rajasthan, Andhra Pradesh has made it clear to NTPC that it does not want solar power at Rs 3.15 per kwH, a tariff it now believes is too high. NTPC is left with the unenviable task of finding a new buyer. “We have given NTPC permission to find another off-taker,” said Ajay Jain, chairman, New and Renewable Energy Development Corporation of Andhra Pradesh (NREDCAP). “We have said we will waive the transmission charges. There is no immediate requirement for us to take on this power.” NTPC officials refused to discuss the matter. French power giant Engie, which acquired SolaireDirect in 2015, was also unwilling to comment. Ever since solar tariffs began tumbling in the last few months, thanks to a steep global fall in the price of solar equipment, a number of state discoms have been regretting the relatively higher tariffs at which they agreed to buy solar power during earlier auctions. Uttar Pradesh has renegotiated the tariff for an auction it conducted in September 2015, despite having already signed the necessary PPAs. Jharkhand has been delaying signing PPAs with the winners of an auction conducted 16 months ago. But Andhra Pradesh does not even want to renegotiate – it is simply not interested any more. Andhra Pradesh added maximum amount of solar installed capacity among states in 2016-17, a sizeable 1,294.26 MW, achieving a cumulative installation of 1,867 MW by end March. Joe Vitale Authentic Jersey

Centre to notify guidelines for renewable power procurement: Haryana govt

The Union Ministry of New and Renewable Energy has clarified that a guideline for procurement of renewable power through competitive bidding would be notified shortly by the Centre, the Haryana government said today. Till then, projects may be set up under existing provisions of the Electricity Act, 2003 under section 62 wherein the State Regulatory Commission is to be approached for fixation of tariff, a Haryana government statement said here. The release, quoting a spokesman of Haryana Renewable Energy Development Agency (HAREDA), said that after the notification, any project developer may set up a project for generation of renewable energy as per the bidding guideline if it qualifies for the same. “In the National Tariff Policy 2016 purchase of power by the states from renewable energy sources has been contemplated through competitive bidding. “This created confusion among the Independent Power Producers (IPPs) as on the site identified by them no one else could bid. Therefore, HAREDA sought clarification from the Ministry of New and Renewable Energy in this regard,” the release said. It added that in the renewable energy policy of the Haryana government, there is a provision for setting up of renewable power projects by independent power producers on the site identified by them. For this, they have to submit their proposal along with detailed project report (DPR) to HAREDA. After approval of the DPR, they have to file a petition before the Haryana Electricity Regulatory Commission (HERC) for fixation of tariff for their projects for sale of power to the state grid. Cody Eakin Womens Jersey

Centre to notify guidelines for renewable power procurement: Haryana govt

India’s first wind power auction: Developers sign PPAs for 550 Mw capacity

Major wind power developers including Adani and Mytrah Energy today signed Power Purchase Agreements (PPAs) with Power Trading Corporation (PTC) for supply of 550 Mw power to states as part of India’s first wind power auctions scheme. The pacts were signed in the presence of power, coal, renewable energy and mines minister Piyush Goyal here. As per the PPAs signed, Mytrah Energy, Inox Wind and Ostro Kutch Wind would supply power of capacity 250 MW each. Further, Green Infra would supply 249.9 MW and Adani Green Energy 50 MW from their wind power projects through inter-state transmission system at a tariff of Rs 3.46 per unit discovered through open and transparent competitive bidding process,” the ministry of New and Renewable Energy (MNRE) said in a statement. “For the first tender, a tariff of Rs 3.46 per unit is great news. Feed-in tariffs can be good for initial hand-holding period and we can look ahead now. I have been told that for the second tender we have already received bids of about 2,800 MW,” Piyush Goyal said. For these projects, Solar Energy Corporation of India (SECI) conducted e-reverse auction on in February this year and issued Letter of Award (LoA) to successful wind power developers in April. The wind power projects under first wind auction are likely to be commissioned by September 2018. “As of today, we have 32.5 GW of installed wind capacity which amounts to only 10 percent of the total potential wind capacity. Earlier, transmitting wind energy from wind to non-wind states was a major challenge which prompted us to revise the wind policy. We are also planning to hold stakeholders sessions in order to address the challenges in the wind energy sector. The minister has asked us to come up with bids every month,” MNRE Secretary Anand Kumar said. PTC India has tied-up this wind power for sale to power distribution utilities of various states. As part of the scheme, Uttar Pradesh would receive 449.9 MW, Bihar 200 MW, Jharkhand 200 MW, Delhi 100 MW, Assam 50 MW and Odisha 50 MW for meeting their Non-Solar Renewable Purchase Obligation (RPO). MNRE had sanctioned a scheme for setting up of 1,050 MW inter-state transmission system (ISTS)-connected Wind Power Projects on 14 June last year with the objective to encourage competitiveness through scaling up of project size and introduction of efficient and transparent e-bidding and e-auctioning process. Goyal also said it was time to review the need to have separate RPOs, adding the commercial aspects of such a move could be left to the states to decide depending on their requirements. Owen Tippett Authentic Jersey

UP government launches free power connection scheme for BPL families

Uttar Pradesh Power Minister Srikant Sharma today launched free power connection scheme for the BPL card holders in the state. “The scheme of providing free power connection to the BPL card holders has been launched at 624 places across the state,” he said. Sharma said the scheme would also benefit the poor people who do not have BPL cards at present. “Such people would have to pay between Rs 80 to Rs 120 for getting the power connection,” he said. “The scheme would also provide relief to the middle class people as the instalment payment facility would be admissible for them,” the minister said. Sharma said while the Centre had launched the free gas connection scheme for the poor, the Yogi Adityanath government in Uttar Pradesh is giving free power connection to the same class of people. “The Yogi government is working for the common man and the poor,” he claimed. Sharma accused the previous government of not being “worried” about the poor. “The body was in India, the soul was in Italy,” he alleged. He said, “The Saifai system is now over and the whole of the state is getting uniform power supply,” he claimed, adding that the same principle is being applied for development. “The work on making the state free of crime and corruption is going on a war footing,” he added. Isaac Rochell Womens Jersey

NTPC a key enabler of India’s electricity transformation: IEEFA

A recent Morgan Stanley report has downgraded the Indian utilities industry. It highlighted that renewable energy is becoming so cheap that thermal power, mostly coal, is uncompetitive. This is a highly significant market signal which will likely be accompanied by growth in the already impressive list of high calibre international investors moving into India’s renewables sector, including from Japan, the Netherlands, Italy, China, France, Australia, Singapore, Hong Kong and Canada. The Institute for Energy Eonomics and Financial Analysis (IEEFA) has long predicted India’s growing global leadership role in the transformation to a low carbon economy. But it is happening at a speed faster than we dared to imagine. India’s draft National Electricity Plan forecasts that 57 per cent of the country’s energy capacity will be from renewables and other zero emissions technologies by 2027. This is well ahead of the Paris target of 40 per cent by 2030. But this is not fundamentally a matter of environmental concern. It is common sense economics since solar is now cheaper than existing coal-fired generations. Indian state-owned utility National Thermal Power Corporation (NTPC) is a case in point. IEEFA’s recent report on NTPC details how, despite its deep historical connection to coal-fired electricity generation technology, it stands to be one of the country’s key clean energy enablers. The company provides 25 per cent of India’s electricity supply and as such it plays a critical role in the country’s economic activity. With economic growth at 7-8 per cent annually, India is the world’s fastest-growing major economy. Last week, a news report stated that NTPC was planning to invest $10 billion in three new coal-fired power stations over the next five years. Citing senior officials, the article stated that the expected 5 GW of coal would nearly double the capacity of those currently being phased out. It went on to say that if built it would “raise questions about Prime Minister Narendra Modi’s vow to stand by commitments under the Paris climate accord”. This is a misrepresentation of the actualities. NTPC’s current development pipeline represents its past more than its future. The latest National Electricity Plan has made it clear that no new coal-fired generation will be needed beyond what is already planned. The Power Ministry has stated that 11GW of NTPC’s older coal-fired plants will be shut down over the next five years, to be replaced by new, super-critical plants in an effort to increase efficiency and reduce India’s carbon footprint. In an electricity market where demand is growing plus-six per cent per annum, a one per cent per annum expansion of coal capacity is still likely to be needed. If current trends persist, new demand will increasingly be covered by lower cost renewables. NTPC will be a key enabler of this transformation. Its Chairman and Managing Director Gurdeep Singh, in his discussion with IEEFA, noted that it expects to progressively close end-of-life inefficient coal capacity. This will mean its net thermal addition is more like 1 GW per annum. Indian thermal power plants are now operating at a utilisation rate of 50-60 per cent. This is mainly because demand has not kept up with the rollout of new fossil fuel generation infrastructure. One innovative solution being proposed to maximise such existing assets is to build solar PVs around them. This will leverage current land and grid connectivity and allow NTPC to continue to supply 24X7 power as needed — solar in the day and coal as the balance. NTPC is also playing an important role in private solar developments by purchasing the electricity. Its strong balance sheet de-risks such private investment, helping to drive down the cost of solar in a country that has seen a succession of low-cost records set and then broken in 2017. There has also been a move into hydropower and electric vehicle charging infrastructure, further diversifying NTPC away from coal. All of this is a major strategic shift for NTPC. Utilities in many countries, including the US, Germany, France, Italy and Australia, are at various stages of business-model transformation in response to a rapidly changing technology and investor-driven environment. As innovation continues, acceleration towards a cleaner economy will take an exponential trajectory. NTPC stands to be a cornerstone in India’s national electricity transformation, which has now reached critical mass. As per the recent Blackrock (the largest investor in the world) announcement — coal is dead. It will take decades to fully transition, but the process is now unstoppable. DJ Chark Jersey

OPINION: Focus on distribution, not power generation

It is welcome that Union power minister Piyush Goyal has offered the Centre’s good offices to sort out the problem of stressed stranded projects in the vexed power sector. As many as 54 projects adding up to over 25,000 MW are currently stranded and not generating power. But the problem, in the main, is the sorry lack of reforms in distribution and attendant, routine and large-scale theft of power. It is rampant revenue loss in distribution and moribund finances of state power utilities that stultifies offtake and demand. In a shocking illustration of the problem, engineer Abhimanyu Singh was killed and four of his colleagues injured while fleeing a mob attack in southwest Delhi on Monday, where they had gone for spot inspection of power theft. The powers that be must immediately resume CISF protection for theft detection teams, which was questionably withdrawn in 2009. The fact is that despite showcase power reforms in Delhi, large pockets continue to experience massive theft and recurring non-payment with 25-50% of power unaccounted for. The point is to clamp down on political patronage of theft and non-payment for power in the states. It is true that of late, 25 states have issued bonds under the Ujwal Discom Assurance Yojana for over Rs 2 lakh crore, to clear state power utility losses. But in tandem, we need revamped institutional mechanism and improved governance to stem revenue losses in distribution. The way forward is to mandate stringent norms to boost transparency. For starters, distribution results need to duly be complied and published widely on a quarterly basis. Utilities can provide steady returns for the long term, and the Narendra Modi government needs to put distribution reforms at the core of its reform agenda. Patrick Maroon Jersey

Category: Power