Power transmission sector shoots in the dark with no set targets
While the central government has clear targets for renewable energy and power distribution sector, the power transmission sector seems to have been left out. Since the start of the financial year, eight projects of Rs 9,635 crore have been announced to be offered through tariff-based competitive bidding (TBCB). However, these projects are at different levels of selection and yet to be awarded. The government plans to offer projects totalling Rs 4,500 crore, but there is no timeline yet. This comes at a time when the Centre has said Rs 50,000 crore worth of transmission projects will be awarded by the end of the financial year. According to officials, the amount reflects not the number of projects but the opportunity for the sector. Last year, projects worth Rs 18,000 crore were tendered out. “There is no particular benchmark or cost structure that is being followed to award transmission projects. When we say Rs 50,000 crore, it includes inter- and intra-state corridors, projects that state-owned Power Grid Corporation would build and also the spillover from last year,” said a senior power ministry official. He said the count for the projects would keep increasing as and when the screening committee clears the projects. The inter-departmental screening committee of the power ministry clears power transmission projects, which then move to the empowered committee that decides whether it would be awarded through TBCB or nominated to Power Grid. Power transmission sector was opened up to the private sector in 2010. The Central Electricity Regulatory Commission had, in 2011, mandated that power transmission projects should be awarded through TBCB like the case with generation projects. Power Grid was the only company operating in this space till then. The recently amended National Tariff Policy, 2016, mandates that apart from projects of strategic importance that would be nominated to state-owned Power Grid, all should be awarded through TBCB. However, the perimeter of nomination is not defined. Executives said the private sector is in a fix over the government projections. “The Centre should encourage states to adopt bidding route to reduce cost, which would help in achieving UDAY (Ujwal DISCOM Assurance Yojana) targets. In the recent past, TBCB projects have showcased that tariff and costs of competitively bid projects have been at least 30 per cent less than projects awarded under the cost-plus mechanism. State utilities can then deploy their capital to improve operational efficiencies,” said a senior power sector expert. Tarang, the power ministry’s monitoring portal for power transmission projects, cites 27 inter-state and 11 intra-state projects under the upcoming category. The cost is not mentioned. Intra-state projects fall in the regulatory ambit of the state governments. Most of the intra-state projects are nominated to Power Grid. Of the 27 inter-state projects, the Empowered Committee is yet to decide on the mode of awarding the latest 10 projects. This year, the focus is on inter-regional corridors and connectivity for mega solar projects coming up in several states. Some of the projects are North Eastern Region Strengthening Scheme, Eastern Region Strengthening Scheme, and transmission system for solar parks in Rajasthan, Gujarat and Karnataka, among others, which would be awarded under the bidding route. Sylvester Williams Authentic Jersey
Delhi’s Rajghat power plant may become waste-to-energy
Delhi government is planning to convert the Rajghat Power Plant into a waste-to-energy plant, Delhi Health Minister Satyendar Jain said on Wednesday. The proposal was discussed on Wednesday in a meeting of the inter-ministerial task force appointed by Delhi Chief Minister Arvind Kejriwal to tackle the issue of pollution and garbage disposal in the city. “Delhi produces at least 10,000 tonnes of garbage every day while we don’t have capacity to process even half of it,” Jain said. He added that the proposal to convert Rajghat Power Plant into a waste-to-energy plant was discussed with the three municipal corporations. “They all agreed with the plan. It is a viable option and the site is ideal as it is accessible from all three municipalities. We are thinking about starting with a capacity of 4,000 tonnes,” Jain said. “If we do that, we would have enough capacity to at least process the new garbage that is generated every day,” he added. Jain said the committee also discussed plans to start small waste processing plants in vegetable markets, residential societies, hotels and the like. “By doing that, there will be no need to transport garbage to the landfill sites. Our goal is to build a capacity to process more waste than we generate,” he said. “We don’t want to dump more garbage on landfill sites. The only option is to process the waste,” he added. Jain also announced that the government will soon launch a mobile app through which people will be able to know about sanitation workers posted in their area and will also be able to complain in case of their being negligent about duty. “The app will also allow people to inform the concerned authority about garbage in their area that needs to be cleared,” he said. Pierre-Edouard Bellemare Jersey
Google Earth images shed light on where solar rooftops make sense
During his free time on the job as a Google employee, Carl Elkin began tinkering with the company’s 3D mapping program, wondering if it could identify rooftops that receive enough sunlight to make installing solar panels worthwhile. When months later the U.S.-based engineer showed a handful of colleagues the results of his labor, they had a eureka moment. “The lightbulb kind of went off,” said Joel Conkling, Elkin’s colleague at the California-based company. “It felt like intuitively it had some real potential.” Soon after, a team followed Elkin’s lead and designed Project Sunroof. The project website uses Google Earth’s high-resolution aerial images to calculate any roof’s solar energy potential. For homeowners, figuring out whether installing thousands of dollars worth of solar panels is a sound investment can be confusing. Project Sunroof aims to make the decision easier – and speed up the adoption of solar energy, which today accounts for less than 1 percent of U.S. electricity generation. Homeowners interested in assessing their property’s solar potential can enter their address on Project Sunroof’s website, and in roughly a second get a calculation of how many hours of usable sunlight their roof receives, Conkling said. Thousands of lines of computer code analyze factors such as the shade trees cast on a roof, its orientation and local weather patterns, he said. Project Sunroof then connects users whose roof is suitable for solar panels with companies that install them. “People can come in and very quickly and very easily get a pretty sophisticated understanding of their solar potential and whether it makes sense for them to go solar,” said Conkling, a product manager for Project Sunroof. The response has been encouraging, he said. Last month, Project Sunroof was among 13 projects from around the world to win a Momentum for Change award, which recognises innovative and potentially transformative ways to tackle climate change and move toward a low-carbon future. “We were impressed by the scalability of the technology with more and more states and homes able to utilize it,” said Nick Nuttall, a spokesman for the Bonn-based U.N. Climate Change Secretariat, which presents the award. Since launching last year, Project Sunroof has expanded from offering analysis of rooftops in two states to 42 states, from New York to California. Thousands of users have been connected with solar-panel installers, Conkling told the Thomson Reuters Foundation. In many states, homeowners who produce solar energy can sell all or part of it the power grid. Such payments – and other incentives – are often essential to help offset the steep upfront investment, which can run between $17,000 and $24,000 for a typical solar panel system, according to data from research firm GTM Research. Other U.S. companies also map the solar potential of roofs, including Geostellar and Mapdwell. But Conkling said he is confident that Google Earth’s global reach and high definition images can help it cover more ground and provide estimates with an unprecedented degree of accuracy. Nuttall, of the U.N. climate secretariat, agrees the system potentially could be used in many more places. “There seems no reason why one day it could not go global,” he said. In recent years, Google has invested nearly $2.5 billion in clean energy wind and solar projects, according to the company’s corporate website. Andrej Sekera Jersey
Investment in smart grid, battery storage and efficiency falls 76 per cent
Investments in smart grid, battery storage and efficiency companies globally dropped 76.4 per cent to $102 million in the quarter ended September 2016 from $443 million investments made in the previous quarter (Apr-June 2016), according to a latest report by Mercom Capital Group, a clean energy consultancy. Third quarter funding has dropped by 79.3 per cent as compared to the corresponding quarter last year when $ 493 was gathered in investments. Mercom said in its report the top funded company was Ecobeean — an efficiency firm which manufactures Wi-Fi-enabled smart thermostat – that raised $35 million from Amazon Alexa Fund. Other notable investments were Skeleton Technologies raising $14.5 million from FirstFloor Capital and Sense attracting $ 14million from Shell Technology Ventures. Mercom in its report titled “Funding and Mergers and Acquisitions (M&A) Activity for Smart Grid, Battery Storage and Energy Efficiency Sectors” covered specific details of the three sub-sectors. Smart Grid Venture capital (VC) funding for smart grid companies was around $11 million in the third quarter of 2016 compared to $81 million in the same period in 2015. Also, smart grid companies raised $222 million in the second quarter 2016. Battery Storage Investments in battery storage companies declined sharply to $30 million compared to $96 million in the same period in 2015. Battery storage companies had earlier raised $125 million in Q2 2016. Since 2013, $1.1 billion has been raised in this sector, Mercom said. Efficiency Similarly, investments in energy efficiency technology companies fell again this quarter with $61 million raised compared to $86 million in Q2 2016. On a year-on-year comparison, efficiency companies in the third quarter 2015 collected a much higher $316 million. Seventeen investors participated in Energy Efficiency VC deals in the quarter as compared to 18 in the previous quarter. Mercom delivers market intelligence and funding and M&A reports covering Smart Grid, Battery Storage & Energy Efficiency, and solar energy sector. The firm also advises companies on new market entry, custom market intelligence and strategic decision-making. Tom Kuhnhackl Jersey
Resolve core issues, not just financials: Industry
The government’s plan to make state run banks takeover distressed assets could be seen as a shot in the arm for the beleaguered power sector, but industry players say the success of the move would hinge on resolving issues related to electricity offtake. The government is considering encouraging state-run banks to acquire assets of loan defaulters in steel, power and shipping sectors, and rope in state-run companies to manage them, in an attempt to help the lenders get rid of non-performing assets. “This move would have helped the distressed projects if the main problem was financing or quality of management. But more than 24,000 mw of projects are stranded either due to lack of fuel or due to lack of power purchase agreements. A change of hands wouldn’t resolve the fundamental issues of the sector,” said Ashok Khurana of the Association of Power Producers. The association estimates that around 14,000 mw of power generation capacity has coal available, but are stranded due to lack of power purchase agreements, while another 10,500 mw of capacity is stranded due to lack of coal. A senior government official said banks would soon start discussions with the power ministry to explore the viability of the plan to take over distressed assets and getting PSUs to run these plants till a new promoter is found. Banks are exploring if they can give the operation contracts to PSUs. In the past, public sector units like NTPC have seen proposals from the private sector, but turned them down on valuation concerns, a problem that may be resolved if the banks were to step in. PSUs have also been reluctant to acquire private sector assets on worries of being potentially questioned by government auditor Comptroller and Auditor General or the CBI. But this new proposed route may remove those roadblocks as well. A senior NTPC executive told ET: “We have been looking at acquisition of private plants but valuation of assets has been the biggest challenge. The issue would not be there if banks join in. We may explore options together with banks.” Growth in electricity generation has been slow as demand from state-run power distribution companies (discoms) remained muted, with them opting for planned outages instead of buying more power to keep a check on their bills. In the second quarter of 2016-17, total generation growth was a dismal 1.3% yearon-year. Thermal power generation expanded just 0.3%, even as the inventory coal increased. In a recent report, ICICI Securities said the Ujwal Discom Assurance Yojana to revive state distribution companies may take more time to influence demand for power. “First half of FY17 power generation growth was recorded at 5.2% year-on-year; corroborating our belief that impact of UDAY implementation on power demand will be weaker than expected and will take longer to play out,” it said. Ryan Miller Authentic Jersey
Government plans to rationalise power tariffs
The government plans to make electricity billing more efficient and transparent by reducing the number of categories of consumers, which should improve tariff collection and improve the health of distribution companies. The Central government and states have begun talks to rationalise various categories of consumers. Currently , states have different and complex tariff structure with various categories and sub-categories of power consumers, officials said. A senior power ministry official said a committee constituting officials from Union power ministry , state power departments, central and state electricity regulators and Central Electricity Authority will look into simplifying categories of electricity consumers across states. “The idea is to have similar categories and sub-categories of power consumers in all states. We are trying to minimise the tariff categories,“ he said. Most states had agreed to the idea of having uniform tariff categories of electricity consumers at a two-day conference of Union and sta te power ministers held earlier this month in Vadodara. “Tariff rationalisation is one of the key resolutions adopted by the states at the conference,“ the official said. The Economic Survey of 2015-16 released by the government in February had pointed out that India should simplify its power tariff structure by classifying its consumers in just 23 categories to bring transparency and efficiency in billing. “Simplification of tariffs with, perhaps no more than 2-3 tariff categories, will improve transparency and may well yield consumption and collection efficiency, along with governance benefits,“ it had said. According to the survey, “The complexity may prevent consumers from fully responding to tariffs due to the high cost of processing the price information, a behavioural effect referred to as salience.” Tavon Wilson Womens Jersey
NTPC Group looks to top 50 GW installed capacity by March
State-owned NTPC Group is gearing up to cross the milestone of over 50,000 MW installed power generation capacity by March-end 2017 with expected addition of over 4,630 MW. “The NTPC Group, including its joint ventures and other subsidiaries, will have over 50,000 MW of installed power generation capacity by the end of this fiscal,” a senior power ministry official told PTI. The NTPC Group has an installed power generation capacity of 47,228 MW, which includes 800 MW of hydro and 360 MW of solar energy. The official said, “Even if there is some slippage in capacity addition, the NTPC Group as a whole will cross the milestone of 50,000 MW by March-end 2017.” The company is expected to commission 550 MW of solar power project at Mandsaur, Ananthapuram and Badhla. Besides, thermal power generation capacities at Kudgi (1600 MW), Bogaigaon (250 MW), Mauda (660 MW), Solapur (660 MW), Nabinagar (250 MW JV) and Meja (660 MW JV) are in line for commissioning by March-end next year. Various projects with an aggregate capacity of around 24,000 MW are under implementation at 23 locations across the country. This includes 4,050 MW being undertaken by joint ventures and subsidiary companies. Out of the total capacity under implementation, 1,329 MW is based on diversified sources of renewable energy. The company is quickly moving towards its ambition of achieving a solar portfolio of 10 GW out of the 100 GW target of the government by 2022. Over 1,700 MW renewable energy projects of the company are under execution. Chipper Jones Authentic Jersey
Power sector debt worth Rs 1.34 trillion at high risk: Crisil
Nearly Rs 1.34 lakh crore worth of debt on operational and under-construction power projects is at risk, says ratings agency Crisil. As per Crisil estimates, around 17,000 MW of operational power projects with a debt of Rs 70,000 crore and additional 24,000 MW under-construction projects with a debt exposure of around Rs 64,000 crore are at high risk. “These operational projects are those, which are facing the consequences of aggressive bidding for coal supplies or facing huge cost overruns, and those with gas-supply issues,” Crisil Senior Director Sudip Sural said. He said over the period, the credit growth to the sector will moderate to 5 per cent over the next three years as compared to an average of 18 per cent witnessed in the last five years. “This is primarily because the discoms debt which has been the key components of this exposure, is going to go out of the banking system over a period of time and move to the fold of the state government because of the UDAY scheme,” Sural said. Also, fresh investments in the thermal generation sector will remain muted, while on the other hand the capacity addition in the renewable space will give some fillip to the credit growth, he said. As far as delinquencies are concerned, Crisil noted, that while the gross NPAs in the sector have increased from 1.3 per cent to 4.4 per cent in financial year 2015-16, the stressed assets as measured by gross NPAs and restructured standard assets continue to remain steady at 14 per cent. “They have not seen an increase primarily on account of the movement of Rs 75,000 crore out of this category on the account of UDAY scheme. So, essentially on the restructured assets quantum have come down,” Sural said. “But even with the reduction it continued to be at elevated level in the sector,” he added. Crisil further observed that in the discoms space banking sector debt is expected to come down significantly over the next 3 years with UDAY scheme making increasing impact. “What we will see is that state governments will take over the principal financiers to discom. As per our estimates as of March 2019, of the roughly Rs 4.6 lakh crore exposure to discoms Rs 3.4 lakh crore would be coming in from state governments,” he noted. Art Monk Jersey
IDFC Alternatives buys 3 Punj Lloyd solar projects
The India infrastructure fund of IDFC Alternatives is buying three solar projects in Punjab and Rajasthan from Punj Lloyd Infrastructure as part of the parent’s plans to establish a presence in the renewable energy space through acquisitions — as much as 1,000 megawatts in a year or so. The deal on the three solar projects with a total capacity of 45 megawatts was signed on Saturday evening, said people with knowledge of the matter. IDFC paid about Rs 100 crore to wholly acquire the three projects from the Punj Lloyd unit, they said. Aditya Aggarwal, partner, infrastructure, IDFC Alternatives, confirmed the deal but declined to disclose the price. This is IDFC’s second investment in the renewable energy space, having acquired a 25 MW wind power plant from Jindal Steel & Power Ltd for an undisclosed valuation in October. The company wants to put together a renewable energy portfolio in 12 to 18 months through acquisitions with a capacity of 500 to 1,000 MW, said people with knowledge of the matter. It envisages assets with capacity of 250 MW in six months based on solar, wind and hydro energy. IDFC, which plans to float a platform to hold its renewable energy assets, is creating an in-house team to manage them, said some of those cited above. This will include the recruitment of a CEO and CFO. Experts said the renewable energy sector is in consolidation mode. In June, Tata Power agreed to acquire Welspun Enterprise’s renewable energy business for an enterprise value of around $ 1.4 billion. Going ahead, many existing players in the renewable energy space will give way to newer investors, including private equity firms, they said. Theo Riddick Womens Jersey
Fewer power tariff categories likely in Andhra
To discuss ways and means to simplify power tariff structure, the Andhra Pradesh electricity regulatory commission (APERC) will hold a joint meeting of the state advisory committee (SAC) and the state coordination forum (SCF). The meeting will be held in Tirupati on Wednesday. In a press release on Sunday, the APERC said the meeting will discuss ways to reduce the number of tariff categories for the benefit of around 1.5 crore electricity consumers in the state. “We are holding the meeting with a view to protecting the interests of power consumers and developing the power sector by ensuring financial stability of power utilities,” said chairman of APERC justice Bhavani Prasad. The joint meeting is being convened for the first time to facilitate an elaborate discussion on issues pertaining to power sector, the press release added. Laremy Tunsil Womens Jersey