Indian Power Sphere

Lanco seeks restructuring of Rs 1000 crore loan of Andhra Pradesh power plants

2015-02-23T23:16:00.001+05:30

Lanco Group has approached lenders for restructuring of Rs 1000 Crs debt of two of it gas based power projects in Andhra Pradesh and to reschedule the repayment till January 2018. It has also sought similar reprieve from lenders for some of its power plants under Reserve Bank of India's 5/25 formula.

Lanco Kondapalli Power Limited (LKPL), Lanco Group company, operates three gas based power projects in Andhra Pradesh. Of this, two plants, Unit-II and III, are not able to operate due to lack of gas supplies from KG-Basin. Unit-III is yet to declare Commercial Operation Date.

Between these two units the debt is around Rs 2400 Crs for a capacity of 1100 MW.

The Group is also in the process of approaching lenders to rescheduling of loans of some of its power plants under the Reserve Bank's 5/25 Rule.

This rule enables a bank to extend loans to an infra developer for 25 years with an option to rewrite or reset the terms of the loan or transfer it to another bank or financial institution after five years.

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FinMin rejects power ministry's plan to make gas projects viable through subsidy…

2014-01-16T20:52:00.001+05:30

The finance ministry has rejected a proposal by its power counterpart for making stranded gas-based projects viable through subsidizing high cost imported fuel.

“We had proposed subsidizing the high cost of imported Re-gasified Liquefied Natural Gas (R-LNG) through pooling. The finance ministry has turned down the proposal last week,” power secretary P K Sinha told reporters at the sidelines of the ministry’s media interaction. The ministry is now reworking the proposal.

Speaking at the event, power minister Jyotiraditya Scindia said the government is mulling seeking a relief mechanism for the gas-projects which have been stranded for want of lack of availability and high cost of fuel.

He added that power generated using costly imported Re-gasified Liquefied Natural Gas (RLNG) will not get scheduled as the output prices are regulated. “Power sector will not be able to bear a gas cost of more than $5 per million metric british thermal units (mmbtu).”

Power projects are facing an acute gas shortage owing to dwindling output from Reliance Industries’ KG-D6 block off Andhra coast. The government has notified an increase in prices under a formula that will push up gas prices from the current $4.2 per mmbtu to $8.4 an mmbtu.

The new price regime will kick in from April 1 and be applicable for five years. Every quarter, prices will be reviewed and adjusted, depending on how global prices move. Scindia said the sector will get additional gas of around 8.9 mmscmd over the next three years helping ease the crunch.

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GVK seeks MoEF nod to use HSD for gas-based power project…

2014-01-15T17:19:00.001+05:30

With gas supplies from KG-Basin coming to a standstill, Gautami Power Ltd, a GVK group company has sought permit from the Ministry of Environment and Forests (MoEF) to use High Speed Diesel (HSD) instead of natural gas at its plant in East Godavari district of Andhra Pradesh.

This comes after a committee under the MoEF opined that usage of HSD for power generation will not be as eco-friendly as natural gas and directed the company to obtain views of Ministries of Power, Petroleum and Natural Gas on the issue.

"The Committee deliberated on the proposal and noted that the quantity of HSD to be utilised for power generation is quite substantial. The usage of HSD in such quantities will not be as eco-friendly as natural gas.

The Committee therefore desired that the PP shall obtain the views/comments of Ministry of Power and Ministry of Petroleum & Natural Gas on the use of HSD for the project before taking a decision," the Expert Appraisal Committee (EAC) under the MoEf said in its meeting last month.

It was also noted that Government is subsidising HSD for certain specific-end users only such as for transportation, the EAC further said. The gas-based power project has natural gas allocation of 1.96 MMSCMD by MoPNG from KG Basin for operating the plant on full capacity.

As the gas supplies for the project have come down due to reduction in gas production in the KG D6 fields, it is requested to amend the environment clearance for using HSD (green diesel) with sulphur content not exceeding 0.05 percent as an alternate fuel instead of emergency fuel. The plant operated on full generation for the years 2009, 2010 and 2011 using gas supplied from KG D6 gas fields. However, since October 2011, the total gas supply from KG D6 has been reducing from the original level of 60 MMSCMD to less than 15 MMSCMD and supply to power sector was stopped since March 2013.

As per the existing policy of the Government, power generation using indigenously sourced HSD is allowed.

The Ministry of Power and MoPNG has already accorded NOC for HSD as fuel for GVK's Jegurupadu Phase II Power Project (220 MW) in East Godavari district last year. Many gas-based power plants including that of GVK's are sitting idle due to non-availability of gas.

GVK Power stock price

On January 15, 2014, GVK Power & Infrastructure closed at Rs 10.20, down Rs 0.23, or 2.21 percent. The 52-week high of the share was Rs 15.36 and the 52-week low was Rs 5.52. The latest book value of the company is Rs 15.84 per share. At current value, the price-to-book value of the company was 0.64.

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GSECL’s Dhuvaran 3 Gas based power project stranded due to no gas allocation...

2014-01-07T16:05:00.001+05:30

Gujarat State Electricity Corporation Limited (GSECL) is finding itself in a complex situation with the Ministry of Petroleum and Natural Gas rejecting company’s request to utilise unused natural gas from Dhuvaran unit 1 and 2 of the power plant for the commissioning of the third unit.

As a result GSECL is finding it difficult to commission its third unit at Dhuvaran. According to petroleum ministry Dhuvaran 3 does not qualify for diversion of gas.

As per the guidelines on clubbing/diversion of gas between power plants, the clubbing/diversion is possible only among original gas allottees and Dhuvaran 3 has no allocation. Further, the petroleum ministry has noted that higher production of electricity after undertaking the proposed diversion has not been certified by the power ministry and on these grounds also the ministry has rejected GSECL’s request.

GSECL’s Dhuvaran Combined Cycle Power Plant, at present, has two units, both of which were taken under commercial operation since November 2007.

While the unit one has total installed capacity of 106.617 MW, unit two has total capacity of 112.45 MW.

Dhuvaran 3 proposes to add another 375 MW generation capacity. Originally, Dhuvaran thermal power station had 6 units of oil and gas based power plants with a total generation capacity 534 MW which were retired from service between 2007 and 2010 after their useful life.

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50-MW Gas based power plant to come up by ONGC in Cachar of Assam...

2014-01-06T16:14:00.001+05:30

A gas-based power plant with a capacity of 50 MW is being set up at Sidubi locality in Assam's Cachar district.

An official of the Central Assam Power Distribution Company said the company has come to an understanding with the Oil and natural Gas Corporation Ltd (ONGC) for supply of the gas necessary for the project. He said the ONGC will supply gas for its Sonabarighat well near Silchar.

He said work has been started for the project, which is to come up on an area of 10 acres of government land. Work on the project will be completed within the next three years, the official said.

He said once the project is completed, the gap between demand and supply of power in Barak Valley will be substantially reduced. While the valley needs 100 MW of power daily, it gets less than half of this amount, causing a lot of inconvenience to people.

At present, Barak Valley has practically no source of power of its own. Private real estate company DLF had earlier started two power projects with the help of gas supplied by the ONGC from its nearest fields. But, after a few years, gas supply was stopped at both the projects, causing the power plants to shut down.

In 2009, BHEL, the Power Finance Corporation and the state government had signed a memorandum of understanding for setting up of a 250-MW thermal power plant at Digarkhal in Cachar district on an investment of Rs 1000 crore. But, the project is yet to see the light of the day as work is yet to start.

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Power Sector Yet to Get its Act Together...

2013-12-26T09:55:00.001+05:30

Like any other year, this calendar year also did not bring any good cheer for the power sector.

Fuel linkages be it coal, gas or other sources were the factors that held back the sector growth. While power plants from AP to Maharashtra stalled production as promised gas linkages from power plants from AP to Maharashtra continued to reel under acute fuel shortage as Reliance Industries’ eastern offshore KG-D6 fields failed to supply required gas because of a sharp drop in gas production from those fields.

With six power plants shutting down in states including AP and Maharashtra, power generation to the tune of 3000 MW was affected as Reliance failed to supply gas.

Similarly thermal power plants that are dependent on coal had minimal coal stocks throughout 2013 with most of them reporting 60-70 per cent plant load factor.

CIL despite interventions from the Prime Minister’s office failed to honour the FSAs made with different power plants. Following PMO intervention 157 of the 173 supply pacts were signed.

As far as generation capacity addition is concerned the overall conventional capacity addition has been about 50 GW against a target of 62 GW in this plan period.

The peak and energy deficits are down to 10.6% and 8.5%, respectively. The country aims to add over 100 GW in the 12th Plan, half of which is to come from private sector.

The silver lining however was government inviting bids for two ultra mega power plants, one each in Odisha and Tamil Nadu. To be built at an estimated cost of `25,000 crore each these plants could help ease India’s power deficit problems.

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Government moves RBI to bail out lenders of Dabhol Gas based power plant...

2013-12-23T10:06:00.001+05:30

Coming to the rescue of the lenders of Ratnagiri Gas and Power Projects Ltd (RGPPL), including SBI and ICICI Bank, and PSU promoters NTPC Ltd and GAIL India Ltd, which have huge exposure in the beleaguered Dabhol project, the finance ministry has asked the Reserve Bank of India (RBI) for a one-time relaxation to save the company and its Rs. 13,000-crore assets from being classified as a non-performing asset (NPA).

“At a recent meeting chaired by finance secretary Arvind Mayaram it was directed that the department of financial services (DFS) will take up the matter for relaxation of asset classification norms to RGPPL with RBI, with a request for extended forbearance till March 31 2014 as a one-time exception, considering the circumstances and the exposure of PSUs, including PSU banks,” a senior government official told Hindustan Times.

The move would not only provide RGPC a breather, but also give some time to the lenders who would otherwise have had to show fresh slippage in their books.

RGPPL is the company promoted by NTPC and GAIL India’s largest gas-based power plant, the 1967 mega watt Dabhol Power project that is currently stranded due to lack of availability of domestic natural gas.

The lenders and PSU promoters of RGPPL have been sounding the alarm over Dabhol’s balance sheets. NTPC, SBI and ICICI Bank had in separate communications to the government warned that the project is on the verge of becoming an NPA, which would have a backlash on its promoters.

The company has a debt exposure of Rs. 8,500 crore, apart from equity ownership by PSU and banks.

“The viability of the plant is in question, and it was clearly pointed out in the meeting that RGPPL has not been able to repay debt to lenders from September 2013, and unless adequate affordable domestic gas is ensured and the beneficiaries commence paying corresponding fixed cost, the plant will be declared an NPA,” the official said.

The meeting also decided that the petroleum ministry would move a note seeking directions from the empowered group of ministers (EGoM), about gas allocation and implementation of priority to RGPPL along with fertiliser units as per its original decision.

Further, Mayaram will write to chief secretary of Maharashtra, indicating that the state government is required to pay outstanding dues to RGPPL for the period when power was supplied to it.

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Tripura's 726 MW Palatana Gas based power project of to resume generation this week...

2013-12-18T17:07:00.001+05:30

North-East India's biggest gas fired thermal power project at Palatana in Tripura's Gomati district which stopped generation few months ago will be operational this week.

The ONGC-Tripura Power Company project had developed some faults in the compressor which were repaired by BHEL, ONGC's Tripura Asset Manager Ved Prakash Mahawar said today.

"It will start generation within this week," he told PTI.

Its first unit of 363 MW of the 726 MW was dedicated to the nation by President Pranab Mukherjee on June 21 to cater to seven of the eight states in the region plagued with power shortage.

The second 363 MW would start generation in February next, Mahawar said.

The project, which received fuel from ONGC at a firm price with extension of 4 per cent a year over long term, will help reduce the power crisis in the region.

Assam will get the maximum share of 240 MW, followed by Tripura (196 MW), Meghalaya (79 MW), Manipur (42 MW), Nagaland (27 MW), Mizoram (22 MW) and Arunachal Pradesh (22 MW), while Infrastructure Leasing & Financial Services (IL&FS) and ONGC Tripura Power Company (OTPC) would retain 98 MW.

The states have formed a transmission company in partnership with Power Grid Corporation to evacuate the power.

Mahawar said that there were some problems in drawing up a 400 KV power transmission line through Assam for connection with the national grid at Bongaigaon.

"Some legal problems are coming in the way of setting up high transmission towers and unless proper transmission system is set up it will be difficult to evacuate the power generated from the Palatana project," Mahawar said.

The power project combined with linked transmission project and upstream gas supply network has attracted investments of around 10,000 crore in the region.

The project, taken up in 2005, has been delayed due to hurdles in transport of large equipment in the hilly region.

Neighbour Bangladesh, however, allowed India to transport the equipment using its ports and land routes.

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Dabhol Power Plant's generation restored after supply of 1.4 MMSCD gas from GAIL India...

2013-12-09T15:11:00.001+05:30

After the forced shut down of about 4 months and 20 days for want of gas, the Ratnagiri Gas & Power Pvt Ltd (RGPPL) has restored power generation from early Saturday morning. The plant with a total generation capacity of 1,967 MW is currently generating 320 MW following the supply of 1.4 million standard cubic meters per day (MMSCMD) gas from GAIL India.

The power is supplied to Maharashtra State Electricity Distribution Company and union territory of Dadra, Daman and Diu at the per unit tariff of Rs 4 to 4.50.

As reported by BS, the plant was closed since July 16 for the non availability of gas. The closure prompted ICICI Bank, one of the lenders to the project, to appeal to the petroleum and power ministries for an early restoration of gas. The frequent closure of plant had led to the successive default in the repayment by RGPPL to its lenders with an exposure of Rs 8,500 crore.

RGPPL requires about 8.5 gas for full operation and its allocation has been made by the Centre since it was revived in April 2006. Company has so far supplied about 48 Billion Units to Maharashtra using Naphtha, R-LNG & domestic gas. Of the 8.5 MMSCMD, 7.6 MMSCMD of gas was from KG D-6 Basin and 0.9 from Marginal Gasfields of ONGC (through GAIL). In addition, RGPPL has tied up R-LNG, the available alternative fuel on fallback basis. However, RGPPL was not able to use R-LNG following strong opposition from MahaVitaran which draws 95% of the power. MahaVitaran has said R-LNG use will lead to increase in the per unit tariff to Rs 8-9 and will put further stress on its balance sheet.

RGPPL spokesman hoped that the restoration of gas will help earn revenue from the power purchasing states and thereby able to part pay the total monthly instalment of rs 108 crore to the lenders. RGPPL had projected that it faces a realistic prospect of turning into an NPA by December 2013 unless another Rs 200 crore are urgently released.

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Fate of Dabhol power plant remains uncertain...

2013-12-03T12:13:00.001+05:30

The saga of the ill-fated Dabhol Power Plant in Maharashtra continues. Days after coming to power for the first time in May 2004, the United Progressive Alliance government formed its first empowered group of ministers to try and revive the project, but even as the UPA is coming to the end of its second term, Dabhol is again sinking.

As a first step, the government formed the Ratnagiri Gas and Power Pvt Ltd (RGPPPL), a joint venture between gas utility GAIL, power generator NTPC and the Maharashtra government in July 2005.

This was after Dabhol's principal promoter US-based Enron Power declared itself bankrupt in 2001, and the project seemed doomed. GAIL and NTPC hold 32.9 per cent stake each in RGPPL while the Maharashtra government has 17.4 per cent. Lenders to the project - IDBI Bank, State Bank of India, ICICI Bank and Canara Bank - hold the remaining 16.8 per cent.

The country's biggest gas-based plant, with a generation capacity of 1967 MW, RGPPL was allocated gas on priority from the Reliance Industries' operated KG D6 gas field and from marginal fields of ONGC. But following the decline in gas production at KG-D6, there is now no gas for the plant. Against an allocation of 9.2 MMSCMD of gas, the plant now gets nothing at all. It has stopped producing power since March. "Only occasionally, if ONGC has some excess gas and provides it, the plant is run on limited capacity. Else it is lying idle," says an official from the company.

The official adds that unless RGPPL gets domestic gas or the government intervenes in some other manner, it is impossible for the company to earn revenues. The Maharashtra State Electricity Distribution Company, or MSEDC, the RGPPPL's primary consumer, has refused to buy electricity generated with imported gas, as that would make it too expensive.

"We have requested the petroleum ministry to allocate at least 5 mmcmd gas to us so that we could generate at least 60 per cent of the installed capacity, or else we cannot even break even," he says.

However, RGPPL's proposal for being given top priority in getting gas has hit a roadblock with Andhra Pradesh Chief Minister Kiran Kumar Reddy opposing it.

NTPC Chairman and Managing Director Arup Roy Choudhury admits to the problem, but says he in touch with both the finance and petroleum ministry's to resolve it. "We became part of this company because the government wanted us to. The government wanted us because this project was sinking. Now again the project is sinking," he adds.

He confirms that RGPPL had appointed global consultant Delloite Touche Tumastu to suggest the way forward.

The company has a mounting debt of Rs 8436 Crore. In the first quarter of this fiscal year, it was unable to pay even the interest as MSEDC defaulted on its payment. "It has now agreed to pay," says Choudhury.

Naturally, investors are worried and are seeking the government's intervention. A senior official in power ministry told Business Today that ICICI Bank Managing Director Chanda Kochhar had recently written to the ministry, seeking review of the project and urging that operations be started as soon as possible. Kochhar added that if these issues are not dealt with, the banks will find it difficult to finance such projects. ICICI is one of the major lenders to the project.

"We have not defaulted on any payment as yet, and are servicing our debt," says Choudhury. Nor was NTPC trying to get out of the project. "We will not run away from this," he adds. But in the same breath he admits that once the new formula for domestic gas comes in play from April next year, it will be impossible for RGPPPL to run gas based power plants. "I am finding it difficult to find consumers at even existing rate of $4.2 per mmbtu price of gas," he says.

There may be a ray of hope for the company in the gas import business. But here too, unlike the other gas terminals in the country, it is only available for eight months, as RGPPL does not have breakwater facility - the infrastructure required for holding ships during uneasy waters, especially during monsoon season.

"We are in process of tendering for this facility which was stopped because of a legal matter that has been resolved now," CMD GAIL B. C. Tripathi earlier told Business Today. He also said RGPPPL has plans to increase the import capacity and re-gassify more gas. "The demand for gas is huge in the country, where industry wants to replace expensive fuel with gas," he said.

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Swan Energy gains after securing a contract in Gujarat...

2013-12-02T14:00:00.001+05:30

Swan Energy rose 1.9% to Rs 110 at 12:27 IST on BSE after the company said it has been selected by the Gujarat Maritime Board as the developer for a greenfield project in Gujarat.

The announcement was made after market hours on Friday, 29 November 2013.

Meanwhile, the S&P BSE Sensex was up 102.22 points or 0.49% at 20,894.15.

On BSE, 1.23 lakh shares were traded in the counter as against average daily volume of shares in the past one quarter.

The stock hit a high of Rs 111 and a low of Rs 107.75 so far during the day.

The stock had underperformed the market over the past one month till 29 November 2013, sliding 4.47% compared with the Sensex's 0.65% fall. The scrip had also underperformed the market in past one quarter, gaining 3.4% as against Sensex's 12.99% rise.

Swan Energy said that the Gujarat Maritime Board (GMB) has selected the company as the developer of Greenfield LNG Port Terminal with Floating Storage and regassification Unit (FSRU) project at Jafrabad, Gujarat on built-own-operate-transfer (BOOT) basis.

Swan Energy's net profit declined 14.5% to Rs 4 crore on 47.3% growth in net sales to Rs 81.73 crore in Q2 September 2013 over Q2 September 2012.

Swan Energy is an emerging green energy company with a pipeline of innovatively structured power projects. The company is currently undertaking a gas-based energy projects in Gujarat through 49% equity participation in special purpose company, Gujarat Pipavav Power Co (GPPC).

Source

CCI intervention likely in RGPPL gas allocation issue...

2013-11-23T10:55:00.001+05:30

The power ministry may refer the issue of gas allocation for Ratnagiri Gas and Power (RGPPL), formerly the Dabhol Power Company, to the Cabinet Committee on Investment to fast-track the process and prevent lenders’ exposure of R8,500 in the project from turning into a non-performing asset.

A source said while an EGoM on March 28 has approved priority gas allocation (along with the fertiliser sector) to the project, the 1,967-MW plant is non-operational since August 1, 2013. “Involvement of a high-level body to resolve the issue quickly may prevent the project from getting bust,” the source said.

The power ministry has already raised the issue of gas allocation for RGPPL with the oil ministry that is understood to have expressed its inability to give additional gas allocation to the project. Considering the seriousness of the issue, an EGoM meting could also be convened.

Faced with a low outputfrom RIL’s KG-D6 block, the EGoM on August 23 capped gas supply to fertiliser units at 31.5 mmscmd and allowed all additional gas available beyond this upto 2015-16 to the power sector. But this exercise would leave only 1.125 mmscmd of gas for power in 2013-14, 3.980 mmscmd in 2014-15 and 6.895 mmscmd in 2015-16, leaving little for priority allocation for RGPPL.

“...the company is finding it difficult to meet its debt service obligations to lenders who have large exposure in RGPPL of about R8,500 crore,” ICICI bank managing director and CEO wrote to power minister Jyotiraditya Scindia flagging off the issue.

“Immediate supply of at least 2.5-3.0 mmscmd to RGPPL from APM sources as an interim measure is needed in order to bring parity with other gas based power plants which are currently operating at around 25-30% PLF. This would ensure that company is able to meet its debt service obligations without default,” she said.

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Power ministry seeks gas for Dabhol Power Project...

2013-11-21T09:45:00.001+05:30

The Dabhol power plant, the Centre's most prestigious business rescue mission, has been languishing for almost nine months now. But it took ICICI Bank MD Chanda Kochhar's warning to shake the power and oil ministries out of their stupor.

Earlier Kochhar wrote to power minister Jyotiraditya Scindia to warn that Rs 8,500-crore loan to the Dabhol project could turn sour for lenders as the plant was running at merely 3% of its capacity and unable to pay installments.

After Kochhar's letter, the power ministry asked the oil ministry to give the Dabhol project top priority at par with fertilizer sector and allot gas from new sources available in 2013-14. The power ministry has sought more than a million cubic metres a day (mcmd).

In its communication to the oil ministry, the power ministry has admitted that Dabhol's entire 1,967MW capacity has been stranded in the absence of domestic gas supply. The project is also unable to recover its fixed costs by running the plants on costlier imported fuel since this pushes up the price of electricity which consumers are unwilling to buy.

Dabhol was created after taking over Enron's mothballed plants and an adjacent gas shipping port after the US energy major went bust in 2001. It is now owned by Ratnagiri Gas and Power Projects Ltd, a joint venture of state-run gas utility GAIL and power generation major NTPC.

The project has to run at a minimum 85% capacity to be able to pay installments. This requires about 6.5 mcmd of gas. But the supply to the plant dwindled to 0.6 mcmd, or 7% of its allocation, before coming to a grinding halt from March 1 after the government refused to give power sector equal priority with fertilizer industry in allocation of domestic gas.

Industry sources said it was important to keep Dabhol spinning since any default by the project would have a severe impact on the banking industry and make a dent deeper than the outstanding loan.

Lenders already sacrificed about Rs 2,500 crore at the time of asset takeover and also addressed the need for Rs 1,220 crore as completion cost at the time of restructuring in 2009.

Dabhol's case is a pointer to the crisis gripping the gas-fired power industry. LNG, or gas imported in ships, cannot be used as an alternative since it costs nearly three times that of domestic fuel and pushes up power tariffs. State utilities refuse to buy power at higher tariffs for fear of evoking public ire. As a result, most of the old gas-fired plants aggregating over 18,000MW capacity are running at less than 30% of their capacity.

The power ministry reckons Rs 40,000 crore invested in new gas-fired power plants with an installed capacity of 4,904MW are at risk of turning into non-performing assets (NPAs) due to non-availability of domestic gas, primarily due to low production from the Reliance-operated Andhra offshore field. These plants were set up after Reliance projected a production of 80 mcmd of gas. The plants have been rendered idle as production has fallen to 10 mcmd after briefly hitting a peak of about 69 mcmd in March, 2010.

Source

Around 55,000 MW capacity projects are on anvil in Tamil Nadu...

2013-11-20T10:42:00.001+05:30

Massive expansion of thermal generation capacity to the tune of over 55,000 mw is on the anvil in Tamil Nadu.

Though power cuts in the state are not uncommon, they come at a time when the demand for power is abysmally low; this shows the extent of the power crisis. Failure to augment capacity of thermal power stations in the state in the last decade has led to the present power crisis.

Over 80 per cent of the proposed projects are to be set up in the three districts of Tuticorin, Nagapattinam and Cuddalore, raising environmental concerns. Tuticorin will have the highest concentration of thermal power plants with a capacity of 20,800 mw with Nagapattinam and Cuddalore with 11,800 mw and 8,600 mw, according to the union ministry of environment and forest data.

The proposed gas and coal based thermal power projects are in various stages of implementation.

The total installed electricity generation capacity in the state is around 18,515 mw including 8150 mw from thermal power plants and 8,000 mw from renewable energy sources.

New power projects account for more than seven times the existing installed thermal capacity of 8150 mw.

According to MoEF statistics, 29,921 mw projects have got environment clearance (EC) while 25,000 mw projects await EC, or have terms of reference (TOR) or are awaiting TOR.

While the state and central sectors have a large share in the existing thermal power stations with about 85 per cent, the proportion of private sector plants has increased to a whopping 75 per cent.

A senior Tamil Nadu Generation and Distribution Corporation official said that capacity addition and new power projects of the state and the central governments would directly improve the power situation.

“Projects like the NLC-TNEB joint venture project in Tuticorin, Udangudi, Uppur and the Cheyyur ultra mega power project will be commissioned by 2018-19,” the official said, pointing out that the coming up of new state and central projects besides long term power purchase would make the state a power surplus one by the end of next year.

As regards merchant power projects, the official said that they need not get any license from Tangedco under the Electricity Act 2003. The 2003 act enables merchant power plants to generate and sell their power at their will, the official said, adding they do not have any details on private power projects coming up in the state.

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Jindal Steel's Coal to GAs Project at Odisha to be commissioned next month...

2013-11-15T20:24:00.001+05:30

Jindal Steel and Power Ltd (JSPL) today said it will commission its coal-to-gas project, the first such project in the country, at Angul in Odisha next month.

“The coal-to-gas project (at Angul) will be commissioned next month,” JSPL Chairman Naveen Jindal said.

The coal-to-gas project is a part of the Rs 21,000 crore investment that the company has made at Angul for setting up a 1.5 million tonnes per annum (mtpa) steel mill and a 810-MW power plant.

Once commissioned, this would mark the completion of 1.5 mtpa integrated steel plant of the company in the first phase.

The company has also proposed to expand its steel-making capacity at the facility to 12.5 mtpa and generate 2,600 MW of power in phases.

JSPL has signed an agreement with Lurgi Technology Company, South Africa, for providing the technology for coal gasification.

The technology to be used in this plant offers practical means of utilizing indigenous coal for meeting stringent environmental control requirements.

The plant would produce 225,000 Nm3/hr synthetic gas.

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Installed Power Generating Capacity of India stood at 228.72 GW...

2013-11-06T16:38:00.001+05:30

India having the second highest population in the world has the world’s fifth-largest electricity generation capacity. However, still the per capita consumption of electricity is one of the lowest in the world and owing to the multifold increase in the industrialization and other aspects of the economy the demand of power is expected to surge in the coming years.

Due to these reasons, the power sector is high on priority for both the Government & Private bodies as it offers tremendous potential for investing companies based on the sheer size of the market and the returns available on investment capital.

Power India has prepared and attached a report on the installed power generating capacity of India as of September 2013.

In this report, country’s total installed capacity as on the month ending of September 2013 has been analyzed and depicted in the tabular as well as graphical formats.

Below are some of the observations presented in the report:

India’s total power generation capacity stood at around 228.72 GW.
Out of the 5 regions (and Islands), Western region tops the list with around 34% share; followed by Northern Region (27%), Southern Region (25%) and Eastern Region (13%).
The top 5 power generating states are Maharashtra (31.9 GW), Gujarat (26.13 GW), Tamil Nadu (20.11 GW), Andhra Pradesh (17.18 GW) and Uttar Pradesh (14.08 GW).
Share of State Generating Utilities is highest with 39% followed by Private Generating Utilities at 32% and Central Generating Utilities at 29%.
Countries power portfolio mainly dominated by Coal based projects with around 59% share followed by Hydro with 17%, Renewable Energy projects with 12%, Nuclear power with 2% and Diesel Projects with 1%.

The report is embedded below:

The complete report in pdf format can be downloaded from this link.

FinMin seeks gas allocation details from Power Ministry...

2013-11-05T14:54:00.001+05:30

The Finance Ministry has sought from the Power Ministry details of fuel allocation to gas- based plants before giving its nod to pool prices of imported and domestically produced natural gas.

"Ministry of Finance has asked us to provide the gas allocation list of power plants and also the ones which have signed PPAs (Power Purchase Agreements)," a Power Ministry official told PTI.

The ministry has proposed to pool prices of imported and domestically produced natural gas to be supplied to power plants stranded due to drop in production of the fuel from Reliance Industries' KG-D6 block.

The ministry floated a Cabinet note last month to seek approval to pool imported liquefied natural gas (LNG) with the fuel available from the KG-D6 block after meeting the requirements of fertiliser units. The move is aimed at helping gas-starved power plants.

As per the ministry's proposal, during 2014-15, around 3,000 MW capacity power plants will get gas under the gas-pooling mechanism. The electricity produced from these plants is likely to be sold at a tariff of Rs 7 per unit.

The proposed electricity tariff was derived after pooling the prices of imported and domestic gas and deducting government subsidy, which requires approval, the official said.

The tariff may increase to Rs 7.50 per unit in 2015-16, when gas will be made available to additional power plants.

And in the financial year 2015-16, the remaining 4,800 MW capacity plants will also be able to get gas.

Currently, 7,800 MW of gas-based power generation is stuck due to scarcity of natural gas.

The proposal will be finalised once the Finance Ministry agrees to provide the subsidy. State-run GAIL India will be the facilitator for the price-pooling mechanism.

The price of KG-D6 gas was set at USD 4.2 per million British thermal units by the government and is proposed to be doubled from April 2014. LNG costs about USD 13-14 per mmBtu.

The fertiliser sector currently gets 31 million standard cubic metres a day of gas from domestic fields.

Source

India seeks sovereign payment guarantee from Pakistan ahead of gas deal...

2013-11-04T10:06:00.001+05:30

India has sought from Pakistan sovereign payment guarantees before it can sign a contract to export natural gas through a pipeline from Punjab. Stateowned gas utility GAIL India plans to initially supply five million standard cubic meters per day of gas to Pakistan through a 110-km pipeline from Jalandhar to international border near Atari.

But before GAIL enters into a gas supply contract with a Pakistani firm, New Delhi wants Pakistan to provide payment guarantees, sources privy to the negotiations said. Five rounds of negotiations have been held between the two sides and it has been found technically feasible to export gas from Punjab into Lahore.

Besides sovereign guarantees, India wants sureties for three months payment and advance termination commitments, they said. GAIL plans to import gas in its liquid form, called liquefied natural gas (LNG), on a port in Gujarat or Maharashtra. After converting this again into gaseous state, it is proposed to transport the gas through cross-country pipeline network to Jalandhar. From Jalandhar, a 110-km line is proposed to be laid to international border near Atari.

Pakistan wants to import gas from India to meet its rising energy deficit. Initially, it wants to take 1-1.5 MT of LNG. Pakistan faces huge power deficits and its electricity generation capacity at about 20,000 MW is less than India's generation capacity from renewable energy sources like wind. Sources said pipeline exports to Pakistan are being looked upon as mode for testing viability of an energy pact with the neighbouring nation as a precursor to India importing gas through Turkmenistan-Afghanistan-Pakistan-India pipeline.

Source

Gas-hit Lanco seeks govt help to save AP power project...

2013-10-26T12:23:00.001+05:30

Invoking its rights under the company laws, infrastructure major Lanco has rushed to the ministry of power and the corporate affairs ministry, urging them to suspend two key provisions in the accounting standards (AS) to save its gas-based Kondapalli power project in Andhra Pradesh, which has come to a standstill after a complete stoppage of supplies from Reliance Industries' KG-D6 block.

Lanco Kondapalli Power (LKPL), an independent power producer of the Lanco group, has written to the government seeking changes in the accounting norms that would allow the company to capitalise its borrowing costs and other expenses being incurred in the project pending completion of the commissioning activities that are delayed due to stoppage of KG-D6 gas supplies.

"We are seeking intervention of the corporate affairs ministry to suspend two key accounting standards dealing with 'accounting for fixed assets (AS-10)' and 'borrowing cost - suspension of capitalisation (AS-16)' citing unprecedented fuel and regulatory challenges beyond the control of the company. Once approved, the changes would benefit not only us, but close to 9,300 MW of gas-based power that are ready for commissioning but are without any gas," LKPL director and CEO, P Panduranga Rao.

Apart from Lanco, around 12 other gas-based projects, totalling a capacity of close to 8000 MW and investment of about Rs 45,000 crore, are under an advanced stage of construction and ready for commissioning but are without any gas allocation.

All these projects were constructed on promise of domestic gas allocation.

The projects are owned by companies such as GMR, Beta Infratech, Torrent, Reliance Power, GSECL.

As per AS-10, if the interval between the date of a project is ready to commence commercial production and the date at which commercial production actually begins is prolonged, all expenses incurred during this period are charged to the profit and loss statement. LKPL wants a relaxation in AS-10.

Similarly, the company wants a relaxation in AS-16, which states that the capitalisation of borrowing costs should be suspended during extended periods in which active development in interrupted.

According to LKPL, the disruption in gas supplies has delayed the commercial operation date of its 742 MW Kondapalli Stage III (the company has got project commissioning date extended by lenders from January 2013 to January 2015) by two years but the company expenses are being treated under revenue head subject to tax liability and this should be relaxed.

The Rs 2,610-crore project has a debt component of Rs 1827 crore financed by six lenders with Axis Bank as the lead lender.

Under Section 211 (4) of the Companies Act, 1956, a company on its own can also apply to the government to seek modification to the applicability of any requirements of the Act regarding matters to be stated in its balance sheet and profit and loss account, Kumar said.

Source

NTPC seeks gas from KG Basin beyond 2014...

2013-10-25T20:20:00.001+05:30

NTPC has asked the Government to extend gas supplies from the D6 block in the Krishna Godavari (KG) basin beyond 2014.

In 2009, an empowered group of Ministers (eGoM) allocated 4.46 million standard cubic metres per day (mmscmd) to the public sector power sector.

Out of the total gas allocated, 2.30 mmscmd has been contracted with Reliance Industries Ltd (RIL), the operator of D6 gas fields. The present gas sale agreements are valid till March, as the allocation of KG D6 gas was made for five years.

“It is understood that the production from KG D6 fields is likely to continue beyond March 2014. From a fuel security point of view, continuation of supply of KG D6 gas in future is very crucial for NTPC gas stations,” NTPC wrote to the Power Ministry recently.

NTPC uses the KG D6 gas at its power stations in Anta, Auraiya, Dadri and Faridabad.

In addition, NTPC has informed the Government that RIL and its partners are unilaterally changing the terms and conditions of the gas-sale-purchage-agreement (GSPA) in their favour. For example, in the new draft, GSPA has proposed that the seller will have no liability and the buyer will have no right to sue the seller for any delay or shortfall or interruption of gas.

NTPC has said that the supplies under GSPA may get restricted under two circumstances — lack of availability of gas, in line with Government directives. However, RIL is not agreeing to modification of GSPA.

The public sector power producer has sought the nodal Ministry’s intervention for resolution of differences over GSPA.

Source

EGoM meeting scheduled on August 14 to discuss and finalize plans for power sector...

2013-08-08T20:27:00.001+05:30

The Empowered Group of Ministers (EGoM) will be meeting on August 14 discuss and finalize plans of diverting a small volume of gas from non-priority user to the fuel starved power generation projects.

According to sources, the EGoM may consider sparing around 2 million standard cubic meter per day of gas to the power projects during the current financial year which shall be able to generate around 480 MW of electricity.

It seems that the spare gas shall come from the western offshore fields of Panna/Mukta and Tapti. However, according to government officials sparing gas from the current year's output of 105 mmscmd will be difficult which shall be improved in 2015 with 10 mmscmd of additional output.

The power sector’s woes are due to a fall in production at Reliance Industries’ eastern offshore KG-D6 field to less than 14 mmscmd. Output is projected to drop further to 11 mmscmd this fiscal before rising to 19 mmscmd in the first quarter of 2015 and remain at that level till 2016-17.

The decline in KG-D6 output from 62 mmscmd achieved in March 2010 means 25 power plants that signed up for 29.74 mmscmd of KG-D6 get no gas supplies.

Upon instructions of the EGoM, the Oil Ministry carried out a detailed exercise to assess additional gas available and demand.

About 4-5 mmscmd of additional gas will be available from the fields of ONGC and GSPC in 2013-14. A similar volume may be produced in the next fiscal and a further 2 mmscmd from GSPC in 2015-16.

This additional production will make up for the shortfall that fertilizer plants will face with the further fall in output at KG-D6 and also help to meet 3.8 mmscmd needed by five newly converted fertiliser plants, for which allocation had previously been approved by the Cabinet and EGoM.

Also, 2.95 mmscmd has to be given to LPG extraction plants of GAIL and ONGC, they said, adding LPG has been given second priority after urea manufacturing units.

Sources said out of the additional 4-5 mmscmd of gas in 2014-15, 2-3 mmscmd would be available for the power sector.

Most of this will flow to the Dabhol power plant, which had been given equal priority as fertiliser plants after its revival at a cost of Rs 13,000 crore. No KG-D6 gas flows to the plant now, although it had been allocated 7 mmscmd.

Additional availability of about 10 mmscmd during 2015-16 could be provided for the power sector, sources said, adding further supplies of 29 mmscmd from ONGC during 2016-17 and 11 mmscmd from RIL’s R-Series fields in the KG-D6 block in 2017-18 would be sufficient for power and fertiliser plants.

For the present, the power sector may be asked to consider buying more imported LNG to produce electricity.

Currently, only a third of the 72 mmscmd of gas needed by 18,713 MW of power plants is being met. While another 8,000 MW of capacity is almost ready for commissioning, there is no gas available to fire the plants.

At its previous meeting, the EGOM rejected a proposal to snap natural gas supplies to urea plants and divert the fuel to power companies.

Source

BHEL won 103.5 MW order for Gas Turbine Generator from BPCL for its captive power plant...

2013-08-07T21:41:00.001+05:30

Bharat Heavy Electricals Limited (BHEL) won a contract for supplying the Gas Turbine Generator package from Bharat Petroleum Corporation Limited (BPCL) for its energy efficient and environment-friendly co-generation captive power plant at Kochi Refinery in Kerala

The contract is valued at around Rs. 2650 Million, and envisages supply and supervision of 3 nos. Gas turbines having 34.5 MW each along with the associated auxiliaries and control systems.

The gas turbine will be operated in the cogeneration mode for meeting the power and process steam requirement of the upcoming Kochi refinery expansion project.

According to BHEL, the equipment will be supplied from Hyderabad & Bangalore plants.

More literature on this...

http://www.indiainfoline.com/Markets/News/BHEL-wins-contract-from-BPCL/5752195834

IL&FS is executing 10,000 MW of coal and gas based projects...

2013-08-04T15:07:00.001+05:30

IL&FS Energy Development Company is executing 10,000 MW coal and gas based projects, and some of them are expected to start generation in the next one year.

As said by the company during the event organized by Independent Power Producer's Association of India, it has 4,000 MW coal based thermal power projects coming up in Cuddalore, Tamil Nadu. It will be having 6 units of which two will be commissioned by December 2014. The company is likely to the sign the PPA (Power Purchase Agreement) with Tamil Nadu for 15 years.

IL&FS Energy has also envisaged setting up of some other projects as below:

4,000 MW thermal plant in Gujarat
2,000 MW gas-based plant and an LNG (Liquefied Natural Gas) terminal alongside the plant
1,000 MW gas-based capacity in its kitty would do so by executing a 750 MW gas based plant in Joint Venture with ONGC in Tripura using the state-run company's gas.

Further, iron ore miner NMDC has decided to rope in IL&FS Energy Development Company as joint venture partner for setting up a 500 MW thermal power plant in Uttar Pradesh with an estimated investment of Rs 2,000 crore. IL&FS Energy would arrange coal for the power plant either through purchase, auction or long-term fuel supply agreement.

In addition to the conventional energy projects, the company is also hopeful of completing 1,000 MW wind power projects during this year.

More literature on this...

http://economictimes.indiatimes.com/news/news-by-industry/energy/power/ilfs-energy-aims-to-add-10000-mw-of-power/articleshow/21593752.cms

NTPC's 50% gas based projects lying idle due to non availability of gas...

2013-08-02T21:30:00.001+05:30

National Thermal Power Corporation's (NTPC) 2000 MW of gas based power generation capacity is lying idle due to non availability of fuel (gas).

The gas-based plants of the biggest power producer in India are running at 50% of their capacity of 4,000 MW due to lack of assured supply of gas.

NTPC requires around 17.35 million metric standard cubic meter per day (mmscmd) of gas for its 4,000 MW gas based power projects to run at 90% Plant Load Factor (PLF). However, it received only 7.93 mmscmd in the firs quarter of the current financial year which was significantly lower than the 13.08 mmscmd gas it received during the same period last year.

This has left almost 2,000 MW capacity to be idle which was equivalent to light up over 2 lakh households or around 500 shopping malls.

Additional Reading...

http://www.dnaindia.com/money/1868909/report-ntpc-s-2000-mw-gas-capacity-idle

Power Surplus Gujarat's 6500 MW Installed capacity is lying unutilized...

2013-07-27T16:55:00.001+05:30

As per the Gujarat Government, around one third of state's power generation capacity is lying idle due to lower demand as well as non availability of natural gas for the power projects..

The installed capacity of Gujarat is around 17,300 MW, with a combination of Coal and Gas based projects, out of which around 6500 MW is not producing power.

As said by the Energy & Petrochemical Minister,

“Gujarat’s 5000 Mw of gas-based capacity involving an investment of around Rs 20,000 crore is lying idle due to non-availability of gas,”

As per the Government Officials

Around 1500 MW of coal-based power plants are shut for over last six months due to the lack of buyers. Peak electricity demand of the state is around 12,350 MW.
Idle gas based capacity is causing loss to the tune of Rs. 1,000 Crore annually in the form of fixed cost.
This has caused a loss of Rs. 600 Crore as a fixed cost as plants remain idle which works out to be Rs. 1200 Crore annually.

The state is also unable to sell power to the deficit area of Southern India due to lack of connectivity between western and southern transmission corridor.

Additional Reading...