Power India

RPower seeking Gas allocation for Samalkot Project…

noreply@blogger.com (Spark Network) — Tue, 31 Jan 2012 07:19:00 +0000

From the sources, Spark found that Reliance Power Limited (RPower)’s 2,400 MW Gas Based Power Project at Samalkot, Andhra Pradesh has requested the Government to allocate gas as the Project is on the verge of completion.

RPower’s Samalkot Project which is based on Gas as fuel will require around 9.6 milllion cubic meters/day (mmcmd) gas. Spark found that, RPower has written a letter to Hon’able Prime Minister Mr. Manmohan Singh for allocation of the required gas to the Project. RPower’s application has already been recommended by Ministry of Power (MoP) and is pending with Empowered Group of Ministers (EGoM) for the 18 months.

In the ruling of Supreme Court in 2010, for the adjudication between Reliance Industries Ltd (RIL) and Reliance Natural Resources ltd (RNRL), it was ruled that the group’s demand for gas allocation should be considered in line with government policy. As the RPower is ready for the plant commissioning and has fulfilled all requirements for gas allocations as outlined in the gas utilization policy, the require quantity of gas should be allotted to Samalkot Project.

Solar Energy Corp. of India – national solar company of India in making…

noreply@blogger.com (Spark Network) — Fri, 27 Jan 2012 16:35:00 +0000

Spark, from the online resources, have learnt that, India is planning to set up a company to build federal solar projects and to assist the country reach a target of 20 GWs of solar energy capacity by 2022. Spark found that the initial capital of the company will be Rs. 20 Billion (USD 405.6 million).

This decision was taken considering shortage of funds and a relative lack of interest by commercial companies, India may miss solar energy targets set under a federal program.

Mr. Gireesh B. Pradhan, Renewable Secretary, said in an recent interview that the dedicated company will ensure that India meet solar target effectively.

The company (Solar Energy Corp. of India) will gradually take over responsibility for federal solar projects from NTPC Vidyut Vyapar Nigam Ltd., an arm of India's largest power producer NTPC Ltd.

First round of bidding under the National Solar Mission, has received little interest from domestic and foregin companies due to narrow margins, financial difficulties, nascent technologies and other hurdles. However, the second round of bidding after tweaking of bidding rules have generated higher interest.

Also, according to source, government is working to infuse more capital in the Indian Renewable Energy Development Agency (IREDA).

MoEF cleared Kudgi Thermal Project of NTPC…

noreply@blogger.com (Spark Network) — Fri, 27 Jan 2012 15:48:00 +0000

Spark, from the various online Sources, learnt that National Thermal Power Corporation (NTPC – Largest Power Generating Company of India) had received clearance from Ministry of Environment and Forests (MoEF) for its upcoming Kudgi Super Thermal Power Project Stage – I ( 3 X 800 MW) being set up in Bijapur district of adjoining Karnataka.

Recently, the Board of Directors of NTPC, have cleared the investment proposal of Rs. 15,166 Crs for setting up the project. With the MoEF Clearance in place, NTPC can immediately start construction work at the plant site. Spark learnt that the company has began sourcing of the 800 MW units through bulk tendering process.

Kudgi upon commissioning will become NTPC’s first plant in Karnataka by NTPC with a total installed capacity of 4,000 MW.

Spark analyzed that the project is proposed to have super critical boilers and latest technology. Coal requirement will be met from NTPC's own mine at Pakhri Barwadi in Jharkhand. Land for the project to the tune of 1,923 acres for the main plant have already been alloted by Karnataka Industrial Area Development Board. Land acquisition for the balance 1,600 acres is in progress.

To meet the water requirement, Karnataka Government has sanctioned 5.2 TMC of water per annum from Almatti Dam, which is 18km from the plant site. The power to be generated from this project would be supplied to Karnataka, Tamil Nadu, Andhra Pradesh and Puducherry.

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RPower to hire RWE Power to coal mining of Tilaiya UMPP…

noreply@blogger.com (Spark Network) — Fri, 27 Jan 2012 05:59:00 +0000

According to Sources, Reliance Power Limited (RPower) has roped in RWE Power International (Germany) to assist the company for mining the coal from its captive mines at Tilaiya Ultra Mega Power Project (UMPP).

Spark found that, RWE Power is one of the leading energy utilities of Europe and Biggest Coal Miner of Germany. RWE Power shall assist RPower to design and plan the engineering aspects of captive mines and procurement of equipment and ensure quality control.

Government has allocated Kerendari B and C coal blocks of North Karanpura coal fields in Jharkhand to meet the fuel requirements of the Tilaiya project. These mines have reserve of over 1 billion tonne. The company plans to produce 40 million tonnes of coal per year.

MoP forwards 12th Plan capacity addition proposal to Planning Commission…

noreply@blogger.com (Spark Network) — Fri, 27 Jan 2012 05:52:00 +0000

According to Sources, Ministry of Power (MoP) has set a target of capacity additions to the tune of 76,000 MW during the 12th Five Year Plan (FY 2012 – 17) and 93,000 MW during 13th Five-Year Plan (2017-22). However, Spark found that, the Planning Commission is mulling to fix the target of about 1,00,000 MW of capacity addition in the Power Sector.

MoP have sent its proposal for addition of 76,000 MW of power capacity in the 12th Five-Year Plan to the Planning Commission for the approval, even as the sector battles acute fuel shortages and environmental issues. However, Planning Commission member BK Chaturvedi had earlier said the Planning Commission may fix a target for about 1,00,000 MW of capacity addition in the power sector.

During this period, an investment of about Rs6 lakh crore is expected in power generation projects.

Power projects being executed by state-owned hydro-power generation company NHPC, which were scheduled for commissioning during the current Plan, would now start electricity generation in the 12th Plan.

NHPC’s 2,000-MW Subansiri project in Assam and 3,000-MW Dibang project in Arunachal Pradesh are still awaiting environment clearances.

The country’s largest power producer, NTPC, which had set itself a mammoth target of becoming a 75,000 MW company by 2017, is also believed to have brought down this target to 70,000 MW because of scarcity of gas.

Coal Prices to be revised by end of Month…

noreply@blogger.com (Spark Network) — Fri, 27 Jan 2012 05:41:00 +0000

According to Sources, Spark found that Coal India Ltd (CIL) is planning announce the new set of coal prices this month. This will be done prior to the retirement of the acting CIL Chairman Mr. N. C. Jha on 31st January 2012.

The decision comes after the ministry formally asked CIL to relook its January 1 pricing.

According to Mr. Jha, CIL were planning to revisit the coal pricing in March; however, Coal Ministry had formally sent a letter on 25th January 2012 to relook the prices immediately to prevent any major impact from the previous price regime.

However, Mr. Jha clarified that, the GCV (Gross Calorific Value) mechanism will not be rolled back in the current price change.

"As switchover from Useful Heat Value (UHV) concept to GCV had happened under me, so I'll address the price issue before I retire," he told to the reporters.

Spark believes that the revised pricing would benefit or reduce the price shock in C, D and upper E grades of coal under UHG category. The earlier pricing benefitted CIL by close to 12.5% in additional revenue and the new pricing will eliminate most of it. The January 1 pricing was based on discount on import price but now the pricing would be done on what the consumers were paying in UHV regime.

CIL had attempted to reduced the gap of landed international coal price with domestic coal which was as high as close to 75% in certain coal varieties like C, D and part of E grades.

NDMA asks Nuclear Plants to prepare emergency plans…

noreply@blogger.com (Spark Network) — Thu, 26 Jan 2012 04:39:00 +0000

Spark learnt from the sources that, National Disaster Management Authority (NDMA), asked the states having nuclear projects to prepare plans for development of emergency planning zone in 16 KMs radius around these plants.

The move came with the memories of Japan’s Fukushima Nuclear Disaster last year.

The proposal established by the Vice President, NDMA after consultation with Rajya Sabha MP Sitaram Yechury, was for the plan covering all the villages and habitations falling under the Emergency Planning Zone.

A statement from NDMA said that the Authority had carried out mock exercises last year to look at the off-site nuclear emergency plans as part of its initiatives of enhanced preparedness in the country in the wake of the Fukushima experience. After the exercises it was decided that a development plan covering all the villages and habitations falling under the 16-km radius of the plant must be developed.

Spark found that, the government of Karnataka has already prepared a proposal for upgrading the infrastructure around the Kaiga Atomic Power Plant.

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Solar Panels in Housing Projects of Rajasthan…

noreply@blogger.com (Spark Network) — Thu, 26 Jan 2012 04:07:00 +0000

Spark learnt from the sources that, the Urban Development & Housing Department (UDH), Jaipur is planning to introduce the provisions of electricity generation by solar panels in housing projects under the proposed section of 90A of the Land Revenue Act.

Spark believes that, this move will help Jaipur to reduce the frequency of power cuts in the city.

UDH, Jaipur is planning to accommodate the solar plants in housing project and for that the certain changes in the building bylaws will also be required. However, the decision has to be taken after consultation with Rajasthan Renewable Energy Corporation (RREC) to provide subsidy in installation of solar panels.

As per the draft provisions being planned, each household or society will be able to generate solar electricity for its personal consumption; the excess generation will be bought by the discoms and will be transferred into the grid.

Spark found that, Ministry of New & Renewable Energy (MNRE) is also finalizing the guidelines for setting up of solar panels in individual houses and apartments and purchasing of generated electricity from these panels.

To give a push to the UDH proposal, the Centre is providing 30 percent subsidy in installing solar panels. Currently, the capital cost comes around Rs 2 lakh per kilo watt. However, experts believe that with more use of solar energy in the country and manufacturing of equipment, the cost can come down to Rs 1 lakh per kilo watt.

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Talma Chemical commissions 25 MW PV Project in Gujarat…

noreply@blogger.com (Spark Network) — Wed, 18 Jan 2012 16:43:00 +0000

The 25 MW Solar Photovoltaic (PV) Project of Visual Percept Solar Project (VPSPPL), a subsidiary of Talma Chemical Industries (Bhanshali family promoted company) in Gujarat has been commissioned today.

The Power Purchase Agreement (PPA) for the said project has been signed with Gujarat Urja Vikas Nigam (GUVNL) for a period of 25 years.

Solar Modules for the project have been procured from Hanwha Solar One (China) and China Sun Energy while the Inverters have been sourced from Power One (Italy). The EPC Services have been provided by Sterling & Wilson (Shapoorji Pallonji Group Company)

Karnataka’s RE potential far more than 38 GW of which current utilization 3.45 GW…

noreply@blogger.com (Spark Network) — Wed, 18 Jan 2012 16:34:00 +0000

World Institute of Sustainable Energy (WISE), Pune based renewable energy consulting agency have studied the renewable energy potential of Karnataka. As per the study, the potential is more than 38 GW of which only 3.45 GW has been tapped till November 2011.

The said installations of 3.45 GW includes 1,929 MW of wind, 86 MW of biomass, 782 MW of bagasse co-generation, 646 MW of small hydro and 9 MW of solar. Wind offers the maximum potential, with an untapped capacity of 11 GW. Obviously the huge untapped RE potential also creates an investment opportunity.

Significant potential also exists for solar, small hydro, bagasse co-generation and biomass sectors. Under the state's RE Policy, it is estimated that by 2014, there will be a generation of 6,600 MW of renewable electricity. The Renewable Purchase Specification in the state is for of 7%-10%.

Committee of Secretaries (CoS) to drive next generation of Power reforms…

noreply@blogger.com (Spark Network) — Wed, 18 Jan 2012 16:26:00 +0000

Update of Meeting of Head Honchos of Indian Power Sector with Hon’able Prime Minister Manmohan Singh…

A Committee of Secretaries (CoS) will be constituted under the Principal Secretary Mr. Pullock Chatterjee
Secretaries from the Ministries of Power, Petroleum, Coal, Environment and Finance would be a part of the panel.
CoS will work out a time bound action plan to chalk out plans for issues related to power sector such as coal and gas shortage, cheap imported coal, hike in power tariffs and will unleash second generation of power reforms.
The CoS would work out a 30-day, 60-day and 90-day action plan to address the short and long term concerns of this sector and specially address the issues raised during Wednesday’s meetings.
EGoMs would be convened at the earliest by the concerned Ministries so that decisions are not delayed and policy is not put on hold.

Among others who took part in the meeting included the Finance Minister, Pranab Mukherjee, Environment and Forest Minister, Jayanthi Natarajan, Deputy Chairman Planning Commission, Montek Singh Ahluwalia. Prominent industrialists apart from Mr. Ambani and Mr. Tata included L. Madhusudan Rao, Anil Aggarwal, Prashant Ruia and Ashok Hinduja.

Broader guidelines for Environment Clearances to the Power Sector…

noreply@blogger.com (Spark Network) — Wed, 18 Jan 2012 11:24:00 +0000

There may be some more good news to the Power Sector as Jayanthi Natarajan (the Hon’able Environment Minister, GoI) has announced today that Indian is planning for broader guidelines for environment clearances to the power sector; also the timelines of issuance of environment clearance will be prescribed.

"Within my mandate to protect the environment, our policy will be to have consistent, transparent guidelines," Jayanthi Natarajan said.

This move will substantially help the coal miners as:

India holds about 10% of the world's coal reserves, but has struggled to provide enough fuel to its under-performing power sector, because of policy challenges.
Coal India, State-run coal Minor, is keep on missiong the production targets because of delays in environmental clearances at some of its mines, even as demand rise from power plants and industries.

Power Honchos’ meeting with Coal Ministry…

noreply@blogger.com (Spark Network) — Wed, 18 Jan 2012 11:10:00 +0000

The head honchos of private power producers such as Mr. Anil Ambani (Chairman – Reliance ADA Group) and Mr. Cyrus Mistry (Tata Group) has met the Mr. Sriprakash Jaiswal, the Hon’able Coal Minister, Indian Government. The meeting was the part of the whole day meetings with the top government officials regarding various ongoing and upcoming issues of the Indian Power Sector.

Spark learnt that the outcome of thee meting with the Coal Minister was:

Lots of issues are prevailing in the gas and coal supplies for the power plants.
Power producers are seeking for pooling of domestic and international coal prices in the total cost to be shared by all the power companies.
However, the above proposal was rejected by the Coal Ministry.
Other requirement was the signing of the FSA (Fuel Supply Agreement) which currently is 50% of the requirement. Power companies have requested to increase this level to 65% to 70%.
It seems that Coal Ministry may agree with this proposal after discussing with the Power Ministry.

DVC’s thermal unit to go on stream soon…

noreply@blogger.com (Spark Network) — Wed, 18 Jan 2012 06:45:00 +0000

The maiden 500 mw unit of Durgapur Steel Thermal Plant being established by Damodar Valley Corporation is set to start commercial generation by end of January. The unit was put on stream in July 2011.

In a bid to achieve completion of 2 x 500 mw capacity addition in the 11th Plan Period, another unit of the same size is expected to be commissioned by March 2012.

The company is presently operating a total capacity of about 3,800 mw of which about 3710 mw is thermal while the rest at 144 mw is hydel. DVC has decided to add 4000 mw of fresh power generation capacity in the 12th Plan Period which starts from April 2012. The units will be put up depending on coal availability for the units.

The company is in talks with Life Insurance Corporation for raising funds through government guaranteed bonds, in order to finance its expansion plans. The power generator plans to raise a total of Rs 4400 crore from LIC and a clutch of banks for financing its capital expenditure through such bonds.

The company has been financing its projects on a 70:30 debt equity ratio.

Good news to power sector from banks…

noreply@blogger.com (Spark Network) — Wed, 18 Jan 2012 06:41:00 +0000

In a big relief, there is some good news from banks for the power sector, especially to companies which seek a loan recast.

A number of state electricity boards (SEBs) or distribution companies (discoms) which had taken short-term loans from banks for liquidity support have found themselves in no shape to repay as committed.

Currently, talks are on between the Uttar Haryana Bijli Vitaran Nigam and its lenders, and between its counterpart in Tamil Nadu and the latter’s banks.

“Restructuring proposals from Rajasthan and Punjab are expected to reach bankers in the January-March quarter,” said Subhalakshmi Panse, executive director, Vijaya Bank.

There are other state agencies which had taken short-term loans (which run for around a year) from banks to bridge their revenue gaps. With repayment due, discussions on restructuring these have begun or soon would. Good news, isn’t it?

MCL to set up 1600 MW power plant…

noreply@blogger.com (Spark Network) — Wed, 18 Jan 2012 06:38:00 +0000

Coal India Ltd’s flagship company Mahanadi Coalfields Limited (MCL), will set up a 1600 MW power plant with super critical technology at its Basundhara area in Sundargarh district in joint venture.

MCL would be the only coal company in the country to venture into power generation. It intends to utilise its huge undespatchable coal reserve in Basundhara and invest its own surplus funds creatively.

A special purpose vehicle (SPV) Mahanadi Basin Power Limited has been formed last year. The Director Finance of MCL, Kulamani Biswal, has been appointed as the chairman of the Public Limited Company.

According to Biswal, the proposed coal-based power plant would be the first of its kind in the coal behemoth and is estimated to cost around `9000 crore. It will have two 800 MW units of super critical technology, Biswal added.

“The power project will be funded with debt-equity ratio of 70:30 where MCL will be holding 26 per cent of the stake. It may go up to 49 per cent. However, the management will be under a private partner,” Biswal said.

China Sunergy’s 13MW Solar Modules Commissioned in a 25MW Indian Solar Project…

noreply@blogger.com (Spark Network) — Wed, 18 Jan 2012 06:35:00 +0000

China Sunergy Co., Ltd. (“China Sunergy” or the “Company”), a specialized solar cell and module manufacturer, today announced that a solar PV project in Guajarat, India including China Sunergy’s solar panels was successfully connected to the grid. The 25 MW Project, of which 13 MW of high quality solar modules were supplied by China Sunergy, was completed in partnership with Visual Percept Solar Projects Pvt. Ltd (“Visual Percept”).

China Sunergy entered into its strategic partnership with Visual Percept, one of the leading solar project developers in India, last year. The CSUN solar modules deployed in the newly commissioned Project were supplied to Visual Percept in August 2011.

Stephen Cai, China Sunergy’s CEO commented, “The Indian solar industry has huge potential, and the country is keen to expand its alternative energy usage. We are very committed to this market, and are very pleased that this project is now up and running, which is a testament to our reliable product quality. China Sunergy is not only further diversifying its geographic focus but also endeavoring to create better life for people all across the globe with our value-added products.”

“China Sunergy’s high performance products and dedicated service strongly impressed us. We look forward to working with China Sunergy on future projects to realize India’s National Solar Mission,” said Mr. Akash Bhanshali, Director of Visual Percept’s parent company.

Tata Power to offer Mumbai users incentive to cut consumption…

noreply@blogger.com (Spark Network) — Wed, 18 Jan 2012 06:33:00 +0000

In an effort to encourage its customers in Mumbai to cut peak-hour electricity consumption, Tata Power Co. Ltd plans to share with users the savings that will result from having to purchase less power from the open market to meet demand. India’s largest integrated private power company is yet to work out a way of sharing the savings.

“Sharing savings is a widely used concept in the Western countries, especially in the US,” said S. Padmanabhan, Tata Power’s director of operations. “If we are buying expensive power at `8 per unit to meet a customers’ peak-hour demand, and his tariff is `5 per unit, and if he doesn’t consume that unit during peak hours, then I, as a utility, don’t have to buy that unit of power. So it brings savings to both me and him. In this case, the saving will be of `3 per unit. This saving can be shared based on a predetermined formula.”

Tata Power caters to one-third of Mumbai’s total demand, which is 2,400-2,500 megawatts at present and goes up to 3,000-3,100 megawatts during summers. The remaining demand is met by the Brihanmumbai Electricity Supply and Transport Undertaking (BEST) and Reliance Infrastructure Ltd. While BEST supplies power between Colaba and Nariman Point in south Mumbai, and Sion and Mahim in north Mumbai, Reliance supplies power to suburbs.

Power distribution utilities buy expensive power through short-term contracts to meet peak-hour demand. Typically, contracted power costs `2.5-4 per unit. Buying power in the spot market or through short-term contracts can cost anything between `5 and `11 per unit, depending on the season.

Tata Power’s customer base in Mumbai grew from around 22,000 in 2008 to over 250,000 by the end of 2011. Its power generation capacity for Mumbai is around 1,800 megawatts. During the winter season it purchases about 70-100 megawatts from the open market at the average rate of around `5 per unit. It also supplies power in Delhi through its subsidiary North Delhi Power Ltd. Power generated from Tata Power’s own generation capacity costs around `3.70 per unit. The demand can shoot up to 150 megawatts during summers, and so do the rates.

If supply does not match demand even after the purchase of the expensive power, utilities resort to load shedding. But since Mumbai is the only city in India to have 24x7 electricity supply, this option is not available to utilities like Tata Power.

Padmanabhan said the proposed sharing of cost savings is part of the company’s plan to implement several demand-side management programmes to reduce peak-hour consumption, which will help the company improve its profitability.

”Over the next five years, we expect (Mumbai’s power) demand will grow beyond 4,000 megawatts and our company is aiming to have a 50% market share of the total power supplied in Mumbai,” said Padmanabhan. The company is planning to invest `250 crore annually over the next four to five years to enhance its network. Currently, it is using Reliance Infrastructure’s network.

“To introduce such a (savings sharing) scheme, Tata Power will have to put in place information technology infrastructure to monitor the pattern of energy consumption of its customers,” says Ashwini Chitnis of Pune-based think tank Prayas Energy Group, which does research on issues and policies related to the energy sector.

Added Kameswara Rao, executive director and head of the infrastructure, utility and mining practice at consultancy firm PriceWaterhouseCoopers India Pvt. Ltd, “Such saving schemes can be implemented only for industrial and commercial consumers who are charged much higher tariff than average cost of power supply whereas residential and other consumers are subsidized by these industrial and commercial consumers.”

L&T Infrastructure's power sector exposure not stressed…

noreply@blogger.com (Spark Network) — Wed, 18 Jan 2012 06:29:00 +0000

Trouble in the power sector notwithstanding, the portfolio of L&T Infrastructure Finance is not "stressed", a senior company official said today.
"Our exposure in the power sector is not stressed and there had been no case of restructuring of loan. (This) despite our exposure in the sector being 37 per cent," joint General Manager (risk and asset management), L&T Infra Dhananjay Yellurkar said on the sidelines of roadshow for infrastructure bonds.
In the power sector the problem is only in thermal power projects due to coal issues, he said.
Thermal power projects are just 13-14 per cent of their Rs 8,800 crore cumulative exposure and only 4-5 per cent of their exposure is in thermal projects linked to coal linkages from Coal India and another just two per cent linked to imported coal, Yellurkar said.
Telecom portfolio since last few years had shrunk to 12 per cent, he said adding the company is bullish on green energy sector in which company's exposure remains 20 per cent.
L&T Infra has exposure in renewables, hydro and cogeneration.
Last year, focus was in solar and this year it will be in wind, he pointed out.
Roads remained another area of focus with current loan portfolio of 17 per cent, but Yellurkar said they remained vigilant in selecting road projects.
"There was some aggressive bidding in some road projects compared to realistic traffic projections. So we have to vigilant," Yellurkar said.
Meanwhile, the infrastructure finance company raised Rs 530 crore through first tranche of infra bonds out of a total of Rs 1,100 crore in the current financial year.
The easing of yield on 10-year paper since December helped the company to reduce rate of the tranche 2 bond by 30 basis points to 8.7 per cent to raise upto another 470 crore.
The issue opened in January 11 and will close on February 11.

Reliance Power - Attractive, despite concerns - Initiate coverage with Buy…

noreply@blogger.com (Spark Network) — Wed, 18 Jan 2012 06:26:00 +0000

An update from Equity Bull

In an uncertain environment for Indian power players given concerns on fuel shortage and financial health of State Electricity Boards, we believe Reliance Power is favourably placed amongst its peers. RPWR's UMPPs have captive coal mines. Its UMPP tariffs are also the lowest, reducing risk of a SEB default. While concerns and uncertainty on coal for Krishnapatnam and Chitrangi remain, on conservative estimates, we arrive at a SOTP-based target of Rs115. Initiate with a BUY.
Fuel security: Out of 17.6GW of coal-based capacity under construction, 90% have captive coal blocks. For balance projects, CIL has assured a linkage of about 50%. Given most power capacities are facing delays and uncertainties due to coal concerns, we believe RPWR's projects will be on track.
Fears of SEB's ability to pay: With most of RPWR's projects tariffs being low, we believe it faces minimal risk of SEB default compared to peers.
Projects likely to earn IRRs in excess of 16%. Our analysis of RPWR's various projects indicates project IRRs in excess of 16% on conservative assumptions despite very low levelised tariffs.
Earnings CAGR of 25% over FY11-14: We expect the company's revenues to grow by 126% and earnings to grow by a compounded 25% over FY11-14. Most of the projects are currently in a construction stage and hence the company should benefit from a low FY11 base.
Valuations attractive, initiate with BUY: Serious concerns on fuel availability, regulatory uncertainties, availability of finance, and health of SEB's has resulted in de-rating of the sector. However, we believe RPWR's current low valuations are not justified. On conservative assumptions, our SOTP-based target comes to Rs115, an upside of 33% from current levels. We initiate coverage with a BUY rating.
The Reliance Power stock closed the day at Rs.88.80, up by Rs.1.95 or 2.25%. The stock hit an intraday high of Rs.90.10 and low of Rs.87.55.
The total traded quantity was 12.54 lakhs compared to 2 week average of 15.21 lakhs.

Surcharge shocker for AP power consumers…

noreply@blogger.com (Spark Network) — Wed, 18 Jan 2012 06:24:00 +0000

With the AP Electricity Regulatory Commission (ERC) on Tuesday night approving the fuel surcharge proposals submitted by four discoms, nearly 2.2 crore power consumers across the state will have to cough up nearly Rs 3,050 crore passed on to them by the discoms for the power purchased by them at exorbitant rates during the years 2008-09 and 2009-10.
"The fuel surcharge will be collected from the consumers with immediate effect though there could be a delay with regard to some categories of consumers due to a stay granted by the AP High Court," AP Transco chairman Ajay Jain told TOI. According to sources, depending on the consumption, the fuel surcharge could range from Rs 120 per year to several thousand rupees per consumer.
However, in a big relief to the domestic consumers, they need not pay the fuel surcharge for 2008-09 as then chief minister Y S Rajasekhara Reddy had agreed for the state to reimburse their share to the discoms. But industrial and commercial consumers will have to pay the fuel surcharge for 2008-09. For the year 2009-10, all consumers including domestic have to pay the surcharge as YSR's successor K Rosaiah had refused to take care of the dues of the domestic consumers. Since the 28.5 lakh agriculture farmers in the state are being supplied free power, the fule surcharge will not apply to them.
Of the total Rs 3,050 crore that the discoms are coughing up from the various consumers for those two years, the domestic sector will have to pay Rs 807 crore. "The domestic consumers will have to pay about 0.18 paise per unit in addition to their regular bill which means about 18% increase in their bills from next month onwards," said a senior official with the AP Transco.

Lanco missted the quarterly repayment of loan…

noreply@blogger.com (Spark Network) — Wed, 18 Jan 2012 06:20:00 +0000

Lanco Infratech has missed its quarterly repayment of loan raised for its 1,200-mw imported coal power project at Udupi in Karnataka as the poor health of state distribution companies is taking a toll on power utilities.
Lanco Infratech's subsidiary Udupi Power Corporation Ltd (UPCL) was unable to make a debt repayment of 90 crore that was due on January 15, as it has not received payments totaling 450 crore from the state distribution companies (discoms) in Karnataka for its first unit of 600 mw at Udupi. Also, inordinate delay in commissioning of the second unit of 600 mw has further worsened cash flows to the company.
"There has been delay in payment on outstanding of 90 crore as we have receivables due with the state discoms. We are working closely with the state government so that the issue is resolved and we have cash," a senior executive from Lanco Infratech said.
The company had raised a loan of 4,500 crore for the project from a consortium of 15 banks led by state-run Power Finance Corporation. Although the company did not reveal names of other banks, analysts said that the consortium included Bank of Baroda, Dena Bank, IFCI, Canara Bank, Bank of India, Indian Overseas Bank, Punjab National Bank, Indian Bank and IDBI. They said that ICICI Bank, Axis Bank and Rural Electrification Corporation do not have any exposure to the loan.
"UPCL has paid all installments until now. The non-payment in January is not yet a concerna¦it takes six months to consider it as a non-performing asset," Power Finance Corporation's chairman and managing director Satnam Singh said.
UPCL is in pact to sell power to eight state-run power distribution companies, of which seven are located in Karnataka and one in Punjab. The first unit of 600 mw, which sells power primarily to Karnataka discoms, started operations in 2010. The second unit is ready for commercial operations but is not able to do so as Karnataka Power Transmission Corporation has not been able to complete the transmission line due to delay in clearance from the ministry of environment and forests.
In April 2011, the company's loans were rescheduled due to a delay in commercial operation of the second unit from an earlier schedule of August 30, 2010, to April 30, 2011. It has been further postponed to August 2012.
Earlier this month, CRISIL Ratings downgraded the ratings on the bank facilities of UPCL to 'CRISIL B+/Negative' from 'CRISIL BB+/Negative' and cautioned that the company may not be able to service its debt repayment in January. The rating agency had said that UPCL was seeking an additional loan of 340 crore and was talking to its offtakers for payment to manage cash flow.

Power Trading Update – 17th January 2012

noreply@blogger.com (Spark Network) — Wed, 18 Jan 2012 06:16:00 +0000

Power Trading snapshots of two major exchanges IEX (Indian Energy Exchange) and PXI (Power Exchange of India) for 17th January 2012.

Market Snapshot on IEX

Category	Purchase Bid (MWh)	Sell Bid (MWh)	Unconstrained MCV(MWh)	Constrained MCV (MWh)	Unconstrained MCP(Rs/MWh)
Total	51319.5	58891.5	37284.9	32770.8	-
Max	2835.2	3371.8	1837.0	1691.6	4100.5
Min	1715.6	1697.1	1140.1	993.4	2058.5
Average	2138.3	2453.8	1553.5	1365.5	3009.6

Market Snapshot on PXI

Category	Purchase Bid (MWh)	Sell Bid (MWh)	Unconstrained MCV(MWh)	Constrained MCV (MWh)	Unconstrained MCP(Rs/MWh)
Total	1826.4	4614.0	1069.7	606.9	--
Max	87.6	272.0	79.8	40.4	4990.0
Min	56.6	50.0	1.5	0.2	2490.0
Average	76.1	192.3	44.6	25.3	3365.4

Legends:

MCV : Market Clearance Volume
MCP: Market Clearance Price

Equity capital of IREDA likely to quadruple…

noreply@blogger.com (Spark Network) — Mon, 16 Jan 2012 17:55:00 +0000

According to reports, the union ministry of new and renewable energy is lobbying the finance ministry to almost quadruple the paid up equity capital of the Indian Renewable Energy Development Agency (IREDA) to enable the latter to catalyse and fund the development of renewable energy projects in India.
“We are petitioning the ministry of finance to invest between Rs 2,000-2,500 crore additional equity capital into Ireda to allow it to expand its role in funding green power projects. We want IREDA to be able to do for the sector what the Rural Electrification Corporation and the Power Finance Corporation are playing in the conventional power sector in the country,” a top bureaucrat with the government of India told Financial Chronicle.
Ireda established on 11th March 1987 as a public limited government company promotes, develops and extends financial assistance for renewable energy and energy efficiency conservation projects. Notified as a public financial institution, Ireda is registered as Non-Banking Financial Company (NFBC) with the Reserve Bank of India (RBI).
The agency’s equity base has been steadily increased by the central government from Rs 539.6 crore at the end of March 2010 to Rs 589.6 crore at the end of March 2011 to Rs 639.6 crore at the end of September 2011.
The main objectives of Ireda are: to maintain its position as a leading organisation to provide efficient and effective financing in renewable energy and energy efficiency/conservation projects and to increase its share in the renewable energy sector by way of innovative financing.
Tarun Kapoor, joint secretary at the ministry of new and renewable energy said the ministry is working on methods by which to channelise a larger quantum of cheaper funds to IREDA.
“At this point of time the agency’s cost of funds is just around 1-1.5 percentage points. We are taking a multi pronged approach to this by setting up Solar Corporation of India as well as looking to allow IREDA to raise foreign currency denominated debt in global markets.”

Suzlon to develop 3,000 MW of wind energy in Andra Pradesh…

noreply@blogger.com (Spark Network) — Mon, 16 Jan 2012 17:53:00 +0000

According to reports, India’s largest wind turbine manufacturer Suzlon Energy will develop 3,000 MW in Andra Pradesh by 2016 with a potential investment of Rs.18,000 crore.

The company signed a memorandum of understanding (MoU) with the state government during last week’s Partnership Summit 2012 in Hyderabad.

Andra Pradesh is one of the fastest emerging wind energy destinations in the country.

As per the MoU, the state government will help Suzlon in obtaining mandatory permissions, registrations, approvals and clearances necessary for developing wind-based energy farms, the company said in a filing to the Bombay Stock Exchange (BSE) Monday.

“Suzlon, in turn, will play the role of developer and facilitate the channelisation of investments into the state through its customers investing in wind energy,” it said.

The MoU covers development of new capacity in wind farms across the state, with developments planned in the districts of Tallimadugula, Alankarayanipeta, Gandikota and other parts of Andra Pradesh.