NEWS & EVENTS

  • Reality check! Peak power deficit in April-July at 0.9%, overall electricity deficit stood at 0.6%

    •    Source: PTI, The Financial Express / New Delhi, 20th August 2018 Published on : 20th August 2018

       

      India is still not power surplus as envisaged because peak power deficit in April-July was 0.9 per cent, while overall electricity deficit stood at 0.6 per cent during the 4-month period this fiscal.

      As much as 170.76 GW electricity was supplied during peak hours against the demand of 172.38 GW during April-July this fiscal, resulting in a deficit of 0.7 per cent, as per the Central Electricity Authority’s (CEA) latest power supply data.

      According to the CEA data, overall 433.48 Billion Units (BU) of electricity were supplied against the demand of 436.14 BU during the 4-month period, which indicated a deficit of 0.6 per cent.

      The CEA has pegged energy and peak power surplus at 4.6 per cent and 2.5 per cent, respectively, in 2018-19 in its load generation balance report (LGBR), which indicates that India will be a power surplus country in 2018-19. Last year, the CEA had also projected that India would become a power surplus nation in its LGBR. 

      “All India power supply position indicates that the country is likely to have a peak surplus of 6.8 per cent and energy (electricity) surplus of 8.8 per cent (in 2017-18),” the report had said. In 2017-18, the peak power deficit was 2 per cent, while overall electricity deficit stood at 0.7 per cent across the country.

      As much as 421.31 BU of electricity was generated in April-July period this fiscal recording a growth of 3.75 per cent compared to same period year ago. This does not include power generated from renewable sources like solar and wind energy.

      India has total installed power generation capacity of 345.49 GW, including around 70.64 GW of renewable energy such as solar, wind and small hydro.

      As per power sector experts, India is already a power surplus states. The deficit is mainly because the discoms don’t buy required power for supplying to consumers either due to financial stress or they have apprehensions about under-recovery of cost of power supplied by them.

       

  • Bajaj Group plans 3,000 crore IPO of power generation business

    •    Source: Swaraj Singh Dhanjal, Live Mint / Mumbai, 20th August 2018 Published on : 20th August 2018

       

      Bajaj Group plans to raise about 3,000 crore through an initial public offering (IPO) of its power generation business, said two people aware of the plans. The company is expected to soon file a draft prospectus with capital markets regulator Securities and Exchange Board of India (Sebi) for a share sale, the people said. “They have been working on the IPO of the power business over the past few months,” said one of the two people, requesting anonymity as he is not authorized to speak to reporters.

      Bajaj has hired investment banks UBS, Edelweiss Financial Advisors Ltd and IIFL Holdings Ltd as advisers for the proposed IPO, the person added. The power business has stable operating assets, with more than 2,000 crore of earnings, before interest, taxes, depreciation and amortization, the person said.

      Bajaj Group, led by Kushagra Bajaj, comprises flagship company Bajaj Hindusthan Sugar Ltd, one of the largest sugar producers in the country and Bajaj Corp. Ltd, an FMCG (fast-moving consumer goods) company with focus on haircare and skincare products. The group also has presence in infrastructure, real estate and coal mining. Emails sent on Friday to Bajaj Group, Edelweiss and IIFL did not elicit a response. UBS declined to comment to queries from Mint.

      The group’s power business comprises Bajaj Energy Ltd, which has five thermal assets of 90 megawatts (MW) each, totalling 450MW in Uttar Pradesh. It also includes Lalitpur Power Generation Co. Ltd, which comprises three thermal units of 660MW each, totalling 1,980MW, also in Uttar Pradesh.

      According to data from the group’s website, Bajaj’s energy assets have been built at a total cost of $447 million, while the Lalitpur unit cost $2.88 billion. Several power firms have queued for an IPO this year, though largely from the renewable energy space.

      Sembcorp Energy India Ltd, the Indian arm of Singapore-based utility group Sembcorp Industries Ltd, filed in February a draft prospectus for an IPO. As of 31 December, Sembcorp Energy India had a total power generation capacity of about 4.07 gigawatts (GW) across thermal and renewable energy.

      In May, India’s largest renewable energy producer ReNew Power Ltd filed a draft prospectus to sell shares worth around 7,000-8,000 crore in an IPO. Another renewable energy company, ACME Solar Holdings Ltd, has also file a draft prospectus.

      As of the date of the draft prospectus, Renew Power’s portfolio of assets stood at 5.85GW, comprising 3.92GW of operational capacity and 1.66GW of capacity under development. ACME Solar, had a portfolio of operational and under-construction projects with a capacity of 1,814 MW. So far this year, 20 firms have raised 27,377 crore via IPO, according to data from primary market tracker Prime Database.

       

       

  • Banks refuse lending to private power companies' for parts upgrade

    •    Source: Sarita C Singh, ETEnergyWorld / New Delhi, 20th August 2018 Published on : 20th August 2018

       

      Banks have refused fresh lending to private power plants for upgradation of equipment to abide by mandatory emission norms, threatening the closure of 60 GW of operational and near operation assets, starting December this year.

      Private power firms have sought the Centre’s intervention to get about Rs 1,80,000-crore financial assistance for installation of emission control equipment from sectoral financiers such as Power Finance Corp (PFC) and Rural Electrification Corp (REC), following refusal by banks.

      The companies are already behind schedule for placing equipment orders to meet the phased deadlines beginning this year-end. Power plants that fail to comply with emission norms as per timelines agreed in the Supreme Court will face closure.

      As per the implementation plan prepared by the Central Electricity Authority (CEA), the existing thermal power plants are required to comply with the new emission standards between December 2018 till 2022. Lenders are reluctant to provide additional financing of about Rs 300 crore for every 1000 MW for installation of emission control equipment because of the prevalent stress in the sector, overexposure to the power sector, ongoing bad debt corrective schemes and past experience with denial of pay-out in case of change in law by discoms, Association of Power Producers director general Ashok Khurana said.

      Power ministry officials were not available for comment. A government official, however, on condition of anonymity said banks’ concerns were based on lack of power purchase agreements and rising renewable energy generation. Arecent standing parliamentary committee report shows total outstanding loans of scheduled commercial banks to the power sector is at Rs 5.65 lakh crore and a fifth of this is stressed on various counts.

      Private power companies are fighting a legal battle against the Reserve Bank of India’s February 12 circular that mandates banks to start resolution proceedings within a day of default and complete the process in 180 days. If the Allahabad High Court does not extend the 180-days deadline, bankruptcy proceedings are likely to be initiated against 30 GW power plants. The court is set to hear the case on Monday, while the 180-day deadline expires on August 27.

      Khurana said in a response to a letter by APP on the funding issue that Indian Banks’ Association has expressed its inability to meet the required funding and opined that the ideal recourse in the present circumstances would be either in the form of equity, or soft loan by the ministries of environment and power. APP has taken up the matter with the Department of Financial Services. “The timelines will result in shut down of generation plants across India — leading to a power availability crisis.

      “Closure of these well-running plants due to non-compliance, on account of financial constraints, would dry up the power plants’ cash flow and consequently would lead to default in their debt obligations. This scenario, in all likelihood, would lead to a new wave of NPAs in the power sector,” Khurana said. The government had on May 30 issued an advisory stating that compliance with the new environment norms pertains change in law, which means the developers can pass through the incurred tariffs.

       

       

  • Govt bets on power sector to meet divestment target

    •    Source: Sanjay Dutta, ETEnergyWorld / New Delhi, 20th August 2018 Published on : 20th August 2018

       

      With a strategic sale of public sector companies such as Air India (AI), Hindustan Copper and Mecon off the table until next summer’s general elections, the government is eyeing state-run players in the power sector to replicate the ONGC-HPCL model to buy out its stake and also contribute to the “disinvestment” kitty.

      While discussions have begun, the list of companies is yet to be finalised with Satluj Jal Vikas Nigam (SJVNL) seen as a possible candidate, a source told TOI. One option is to get NHPC to acquire the Centre’s 63.8% in SJVNL, a joint venture with the Himachal Pradesh government, an official said.

      But others reckon that it may not be the best choice as the NHPC management is seen to be laid back. Instead they find NTPC a better bet given that it has a team that is focused on hydel energy. At the same time, the Himachal Pradesh government’s shareholding does not make it an automatic choice for the sell-off experiment.

      The discussions come at a time when the government has garnered a little over Rs 9,000 crore of its disinvestment target of Rs 80,000 crore for the financial year and is hoping to replicate last year’s experience of mopping up a record Rs 1 lakh crore, which was aided by the Rs 37,000 crore that came from ONGC’s acquisition of the Centre’s majority stake in oil marketing firm Hindustan Petroleum (HPCL).

      While close to a dozen public sector companies, mainly loss-making ones, is in the queue for divestment, over the next few weeks, construction player NBCC is expected to acquire Hospital Services Consultancy and Engineering Projects (India), where it has emerged the highest bidder in a marriage that was arranged by the government.

      NBCC, which has bagged several high-profile government projects, plans to run the companies as wholly owned subsidiaries for the time being, and it does not see the need to get rid of manpower. “In fact, the companies may need people,” said a source, adding that the NBCC is hoping to turn the two ailing entities profitable over the next couple of years.

      The government’s rush towards the power sector comes as it seeks to meet the year’s divestment target at a time when there is pressure on revenue and there is little scope to pare spending.

       

  • India's peak power deficit in April-July stood at 0.9 per cent: CEA

    •    Source: PTI, ETEnergyWorld / 20th August 2018 Published on : 20th August 2018

       

      India is still not power surplus as envisaged because peak power deficit in April-July was 0.9 per cent, while overall electricity deficit stood at 0.6 per cent during the 4-month period this fiscal.

      As much as 170.76 GW electricity was supplied during peak hours against the demand of 172.38 GW during April-July this fiscal, resulting in a deficit of 0.9 per cent, as per the Central Electricity Authority's (CEA) latest power supply data.

      According to the CEA data, overall 433.48 Billion Units (BU) of electricity were supplied against the demand of 436.14 BU during the 4-month period, which indicated a deficit of 0.6 per cent.

      The CEA has pegged energy and peak power surplus at 4.6 per cent and 2.5 per cent, respectively, in 2018-19 in its load generation balance report (LGBR), which indicates that India will be a power surplus country in 2018-19. Last year, the CEA had also projected that India would become a power surplus nation in its LGBR.

      "All India power supply position indicates that the country is likely to have a peak surplus of 6.8 per cent and energy (electricity) surplus of 8.8 per cent (in 2017-18)," the report had said.  In 2017-18, the peak power deficit was 2 per cent, while overall electricity deficit stood at 0.7 per cent across the country.

      As much as 421.31 BU of electricity was generated in April-July period this fiscal recording a growth of 3.75 per cent compared to same period year ago. This does not include power generated from renewable sources like solar and wind energy.

      India has total installed power generation capacity of 345.49 GW, including around 70.64 GW of renewable energy such as solar, wind and small hydro.

      As per power sector experts, India is already a power surplus states. The deficit is mainly because the discoms don't buy required power for supplying to consumers either due to financial stress or they have apprehensions about under-recovery of cost of power supplied by them.

       

  • CEA working on optimizing power system cost for 2030

    •    Source: PTI, ETEnergyWorld / New Delhi, 20th August 2018 Published on : 20th August 2018

       

      The Central Electricity Authority (CEA) has undertaken a study to ascertain the cheapest power mix in 2030, its Chairman Pankaj Batra said.  "We are working on what should be the 'Ideal System Cost' in 2030 and a report is expected in a month's time," Batra said.

      The report will try to find out the cheapest power mix with grid stability in 2030, and would give a direction to the power sector developers, he said.  The outcome of the study will also act as components to the regulators in determining power tariffs.

      According to estimates by the Ministry of Power, the share of renewable energy in India's electricity mix is set to increase to around 55 per cent by 2030.  At present, renewables account for nearly 20 per cent of the total installed capacity.

      India has committed to produce about 40 per cent of its installed electricity capacity from non-fossil fuel sources by 2030. It has also set a target of adding 175 GW of renewable energy capacity by 2022.  Meanwhile, the CEA is also closely working with stakeholders in building a cost-effective power evacuation infrastructure in Leh and Ladakh region of Jammu and Kashmir.

      "The region holds potential for 35,000 MW of solar power. We need to build a cost-effective evacuation transmission network before the solar projects are awarded there," Batra said.  It can be executed by a combination of underground cables and towers installed by airlifting, he said.

      The Jammu and Kashmir government has already signed an MoU with the Centre for development of two mega solar parks with a total capacity of 7,500 MW in the Ladakh region.

       

  • Goa govt to launch tender for solar-powered ferry service soon

    •    Source: Nidda Sayed, ETEnergyWorld / Panaji, 20th August 2018 Published on : 20th August 2018

       

      The river navigation department (RND) is gearing up to add new ferries to its fleet. While three new ferries will ply on the existing routes, the government is also seeking bids to launch the state’s first solar-powered ferry service. The tender for either of these is expected to be floated by the end of the month, sources from RND said.

      “We are in the process of floating a tender for three new ferry boats. The file is awaiting administrative approval. By the end of August, we will be floating a tender for the same,” an RND official said.

      Sources said that attempts are being made to ensure that the three new ferries are aesthetically better looking than the existing ones. “We have suggested some changes in the design in terms of its appearance. At the same time, we will get some ideas from the bidders and will decide what features to add, accordingly,” he said.

      In April this year, RND had launched three new ferries which are now operational on the state’s waterways.

      An expression of interest will also be published for the solar-powered ferry launch service. The ferry will run on solar energy and battery-run electric energy. The vessel will be supported by a generator onboard to be used as back-up.

      The eco-friendly technology of a solar-powered ferry launch service will be a 75-seater vessel. “We will procure one solar boat and operate it on a trial basis for a year. We are proposing a vessel which will run at 14-15 knots. If it’s successful, more solar boats will be procured for the state,” sources said.