• Good news for Delhi residents: Policy to make discoms pay consumers for power cuts gets Kejriwal government go-ahead

    •    Source: FE Online, The Financial Express / New Delhi, 19th April 2018 Published on : 19th April 2018


      Citizens residing in the national capital are set for major relief from the unscheduled power cuts with the Aam Aadmi Party government giving its approval to a policy that stipulates power discoms to compensate citizens if an unscheduled power cuts last longer than an hour.

      On Tuesday, Chief Minister Arvind Kejriwal approved the policy proposal asking discoms to pay compensation to users of Rs 50 per hour in case of “unscheduled power cuts by the private power distribution companies.” The move has put the discoms more accountable to its customers.

      Under the new policy, discoms will be exempted from paying penalty in the first hour of an unscheduled power cut. For the next hour, consumers will be paid Rs 50, after which compensation will be paid at a rate of Rs 100 per hour. The first-hour exemption from penalty will be available once a day for the discoms. The compensation amount will be adjusted in the monthly power bill.

      Consumers can also register a complaint against the discoms to the Delhi Electricity Regulatory Authority (DERC) if the compensation is not paid to them. In such a case, the amount of compensation will be Rs 5,000 or five times of the compensation payable, whichever is higher.

      The affected consumers will be required to file a “no current” complaint through SMS, email, telephone, mobile apps or official websites of discoms, giving their particulars such as name, consumer account (CA) number and mobile number. The discoms will attend to the complaint and will send a confirmation message to consumers with the date and time of restoration, an official statement said. The statement further added that after the permissible time limit ends, the respective compensation amount will be automatically credited to the CA number without any manual intervention and a message will be sent to the consumer.

      The file has been sent to Lieutenant Governor Anil Baijal for his green signal. “The Delhi government is confident that the L-G will concur with the policy and will endorse this pro-consumer step,” the statement added.

      The Delhi government believes that power distribution privatisation in Delhi, which was done around 15 years back, should benefit the consumers, and uninterrupted power supply for which they pay, is their right, it said.

      An industry source, however, told The Indian Express that compensation has to be determined on a case by case basis after a proper hearing. “An automatic imposition of compensation by way of regulation is not possible,” the source was quoted as saying.

      As per the IE report, domain experts have listed “practical difficulties” such as “determination of the reason for the outages” — whether the outage is due to “distribution, transmission or generation failure or consumer’s own installation failure”.

      Earlier in 2016, the proposal to compensate power consumers for unscheduled electricity cuts was cancelled by the then L-G Najeeb Jung. The national capital will become the first in India to draw up a ‘Power Consumer Compensation Policy” if it comes into force.


  • States looking at getting discoms/SEBs to compensate consumers for power outages must fix the right penalty amount

    •    Source: The Financial Express, The Financial Express / New Delhi, 19th April 2018 Published on : 19th April 2018


      The Delhi government has proposed a policy that will make it mandatory for discoms to compensate for unscheduled power outage. As per a report in The Times of India, unscheduled power outages will attract Rs 50 per hour penalties for the first two hours and Rs 100 per hour penalty after that. The amount the consumer is billed over the billing period will be adjusted for the compensation due to her during that period. Delhi, over the last couple of summers, has seen an average peak power demand of over 6,000 MW—and this is predicted to touch 7,000 MW soon.

      For meeting such massive power demands, discoms need to procure enough power from generation companies. While the two Delhi discoms have long-term power purchase agreements (PPAs) with government-owned generation companies, state electricity boards (SEBs) in most states have shied away from long-term PPAs—only four states, in the four years to November 2017, had invited bids for long-term PPAs. Even then, the agreements signed made for a fraction of the total bid capacity of the utilities in these states.

      Given falling solar power rates and the rise in the price at which thermal power from conventional sources is procured—the price of one unit of power sold in the spot market is 1.5 times of what it was a year ago—SEBs and discoms are not keen on long-term PPAs. While mid-term and short-term power purchases are being preferred, in peak-demand season, SEBs and private discoms tend to offset lower-than-demand purchases with long scheduled and unscheduled power outages.

      High rates of power procurement from generating companies is likely to exacerbate this. In a scenario where discom/SEB losses from power purchase at high costs are higher than fines imposed for outages, the utilities are likely to prefer paying fines over bearing the losses. Hence, Delhi as well as other states that are looking to implement a compensation policy for power outages need to make sure that penalties pinch the utilities.


  • Clean energy sector misses capacity target for second consecutive year

    •    Source: G Balachandar, The Hindu Business Line / Chennai, 19th April 2018 Published on : 19th April 2018


      The renewable energy sector has missed its capacity addition target for the second year in a row.

      Against the target of 14,450 MW for 2017-18, the new capacity addition from all major segments stood at 11,754 MW, effectively achieving only 81 per cent of the target for the year ended March 31, according to data available with the Union Ministry of New and Renewable Energy.

      However, the capacity addition in FY18 was slightly higher than the 11,320 MW added (against the target of 16,660 MW) in FY17.

      Solar (ground-mounted), which continues to be the driver of clean energy capacity addition, and bio-power segments exceeded the capacity addition targets during 2017-18. Solar (ground-mounted) ended the year with new capacity addition of about 9,010 MW, marginally higher than the the target of 9,000 MW. The rooftop solar segment added only 353 MW against the target of 1,000 MW.

      New bio-power capacity in 2017-18 stood at 519 MW against the target of 340 MW. Small hydro power added a new capacity of 106 MW, higher than the target of 100 MW. FY18 proved to be a challenging year for wind power, with the sector adding one of the lowest annual capacities in the recent years.

      Against the target of 4,000 MW, this segment added just 1,766 MW. As of March 31, the total grid-interactive installed capacity in the renewable energy sector stood at 69,022 MW.

      The total installed capacity of wind power stood at 34,046 MW. Solar segment (both ground-mounted and rooftop) occupied the second position with a cumulative capacity of 21,652 MW. Bio-power had a total capacity of 8,701 MW, while the small hydro segment’s cumulative capacity was 4,486 MW. The waste-to-power segment’s capacity was 138 MW.

      Wind power prospects

      For the current fiscal, the wind power sector is bullish as it sees growth returning with a strong potential to add 10-12 GW annually over the next 2-3 years.

      The wind power market will stabilise in the coming years as demand will be fuelled by both Central and State government auctions, Ramesh Kymal, Chairman & Managing Director, Siemens Gamesa India, said recently.

      In solar, the capacity addition is likely to fall by about 40 per cent to 4-4.5 GW during this fiscal, mainly due to the subdued trend in tendering of solar projects since June 2017. Also, uncertainty over the safeguard duty is a cause for concern, pointed out a report from rating agency ICRA.

  • CBI arrests Diamond Power promoters in Rs 2,654 cr bank fraud

    •    Source: Our Bureau, The Hindu Business Line / Ahmedabad, 19th April 2018 Published on : 19th April 2018


      The three promoters of Vadodara-based Diamond Power and Infrastructure Ltd(DPIL), who have been charged for defrauding 11 public and private sector banks of over Rs 2,654 crore, were arrested on Wednesday, the Central Bureau of Investigation (CBI) has said.

      The CBI has arrested Suresh Narain Bhatnagar, founder of DPIL, Amit Bhatnagar, Managing Director, and Sumit Bhatnagar, joint MD, in an ongoing investigation.

      "The arrested accused will be produced before the Special Judge, CBI Cases, Ahmedabad on Wednesday," the CBI sources said. The trio were on the run after the CBI, on March 26, had registered a case on allegations of cheating the banks to the tune of about Rs 2,654.40 crore by falsification of accounts, creation of false documents, and forgery of records.

      After registering a First Information Report (FIR), the CBI had conducted raids at the residences of the promoters, factory and office premises of DPIL. This was followed by the raids by Enforcement Directorate to investigate for money laundering, while the Income-Tax Department too joined in the probe.

      The CBI FIR stated that DPIL had fraudulently availed itself of credit facilities from a consortium of 11 banks (both public and private) from 2008, leading to an outstanding debt of Rs 2,654.40 crore as of June 29, 2016. DPIL accounts in Bank of India and Bank of Baroda were declared NPAs on February 16, 2016, while other banks declared the company's accounts as NPAs from December, 2017.

      According to CBI FIR, Bank of India's exposure to DPIL stands at Rs 670.51 crore, Bank of Baroda has an exposure of Rs 348.99 crore, Allahabad Bank 227.96 crore, Dena Bank 117.19 crore, while SBI's exposure stands at Rs 266.37 crore. Among the private sector lenders, ICICI Bank has an exposure of over Rs 279 crore and Axis Bank has Rs 255.32 crore.


  • Wind power capacity addition to improve to 3 GW this fiscal: ICRA

    •    Source: PTI, The Hindu Business Line / New Delhi, 19th April 2018 Published on : 19th April 2018


      ICRA Ratings today said the wind power capacity addition will improve to 3 GW this fiscal, backed by project awards by Solar Energy Corporation of India (SECI) and state utilities.

      “The capacity addition in the wind power sector is expected to improve to about 3 GW in FY2019, backed by the project awards by the SECI and state distribution utilities since February 2017,” said Sabyasachi Majumdar, Senior Vice President & Group Head, ICRA Ratings in a statement.

      Majumdar further said the SECI and the distribution utilities in Gujarat, Maharashtra and Tamil Nadu have issued bids for wind-power capacity of 7.5 GW over the past 14 months. This capacity is expected to be commissioned over the next 6-18 months, which would support capacity addition in FY2019 and FY2020.

      Competitive bidding

      The Ministry of New and Renewable Energy (MNRE) announced the trajectory for award of wind power projects through competitive bidding to achieve the cumulative wind capacity target of 60 GW by FY2022.

      In line with this target, bids for about 20 GW wind-based capacity are proposed to be awarded over FY2019 and FY2020. This bidding programme, if implemented in a timely manner, provides a visibility to support the capacity addition over next four-year period, it added.


      The timely completion of project awards and subsequent signing of both power purchase agreements (PPAs) by the SECI and back to back power sale agreements (PSAs) with state-owned distribution utilities is required, ICRA said, adding that in this context, the willingness to participate and sign PSAs by discoms especially in states with limited wind energy potential remains critical.

      The wind energy sector witnessed a capacity addition of only 1.7 GW in FY2018, which is a significant drop from the 5.5 GW capacity added in FY2017.

      “This was driven by a transition from the existing feed-in tariff-based PPA regime to a competitive bid-based PPA regime in the wind energy sector, following the large reduction in tariffs discovered through the competitive bidding route against the earlier feed-in tariff regime,” the report said.

  • TN wind tariff too low, says industry

    •    Source: M Ramesh, The Hindu Business Line / Chennai, 19th April 2018 Published on : 19th April 2018


      The Indian Wind Turbine Manufacturers’ Association (IWTMA) has said that the recent tariff order of the Tamil Nadu Electricity Regulatory Commission, which fixed the feed-in tariff for wind energy at 2.86 a kWhr, is too low.

      The Commission has arrived at the tariff of 2.86 per kWhr, taking the capital cost of setting up a MW of wind power capacity at 5.25 crore. “We are of the opinion that the correct tariff calculation should be between 3.10 and 3.20,” the Association Secretary General, DV Giri, told BusinessLine.

      The tariff fixed by the commission is the per-unit price that the state’s electricity utility Tangedco will pay wind energy companies that put up wind power capacity in the State between April 13, 2018 and April 12, 2020. These companies will get that tariff (2.86) for 25 years from the date of commissioning of the projects. The earlier tariff that was fixed by the commission was 4.16, which was the least for all the states in the country.

      Competitive bidding

      Some industry observers have noted that the fixed tariff is only of academic interest, because the norm in the industry today is to determine the price at which electricity will be purchased by utilities on the basis of competitive bidding.

      In successive bidding rounds in the recent past, wind tariffs have been only falling, and reached a low of 2.43 a kWhr in Gujarat. The industry is also sore with the changes in the ‘banking facility’, which allows a generator to supply power when he can and call for it back later – again for supply to the utility.

      This facility is particularly useful to wind power generators who can produce power only during the windy months between April and September – they can ‘bank’ the power with the grid and ask for it back later, say, during non-windy months, after paying ‘banking charges’.

      ‘Banking’ charges

      The Commission has hiked the banking charges from 12 per cent to 14 per cent of the energy supplied, but importantly, has reduced the period within which the energy can be asked back from one year to the one month. “It is grossly unfair that the banking period has been reduced from a financial year to one month,” Giri said.

      The Commission has weighed in the argument of the utility, which finds the ‘banking facility’ a loss-maker because often it has to buy power at a higher cost to re-supply. Tangedco has argued it loses Rs 1,900 crore due to banking of wind power.

      The Association has said that the process of competitive bidding does not give an opportunity to medium and small sized companies to put up power plants (because they would never be able to give a competitive tariff quote.)

      It had often demanded for reservation of a certain capacity for projects under 25 MW, for which a fixed tariff would be paid (and not tariff determined competitively.) “This has not been addressed at all,” Giri said

  • NIIF partners UK govt for Green Growth Equity Fund

    •    Source: Kavya Kothiyal, Live Mint / Mumbai, 19th April 2018 Published on : 19th April 2018


      The government’s National Investment and Infrastructure Fund of India (NIIF) on Wednesday announced a partnership with the UK government to launch Green Growth Equity Fund (GGEF), an alternative investment fund registered with the Securities and Exchange Board of India (Sebi).

      NIIF and the UK government have committed £120 million each for the fund which will be managed by EverSource Capital, a joint venture of home-grown private equity firm Everstone Group and Lightsource BP.

      Everstone is a multi-asset investment firm with assets under management of about $4 billion while Lightsource is a global market leader in renewable energy development and management with $3 billion of capital invested across over 2 gigawatts of solar projects globally.

      British oil and gas major BP Plc owns a 43% stake in Lightsource BP. Green Growth Equity Fund aims to raise £500 million from international institutional investors to invest in areas such as renewable energy, clean transportation, water, sanitation, waste management, emerging technologies and other similar industries in India.

      “The joint initiative and commitment of India’s National Investment and Infrastructure Fund and the UK government to invest in and develop green infrastructure in India is a unique and amazing investment opportunity. By using a pooled investment vehicle and a public plus private partnership approach, global investors will get the opportunity to be part of this exceptional investment platform,” said Sameer Sain, co-founder and chief executive of Everstone Group.

      On 5 April, Mint reported that NIIF was in talks with private equity firm Everstone Group for a tie-up to manage the Green Growth Energy Fund. NIIF, an institution sponsored by the government of India, is a collaborative investment platform for international and Indian investors.

      The government had set up the Rs40,000 crore NIIF in 2015 as an investment vehicle for funding commercially viable greenfield, brownfield and stalled projects.

      “NIIF is delighted to be an anchor investor in GGEF, which will be the first investment for NIIF’s Fund of Funds. GGEF will provide investors with a vehicle to invest at scale into one of the largest and most attractive clean energy markets in the world. Everstone’s capabilities of building successful operating companies in India and Lightsource’s global renewable energy experience will provide a strong platform for EverSource Capital to successfully execute GGEF’s investment strategy,” said Sujoy Bose, chief executive officer of NIIF. Everstone Group and Lightsource BP will collectively invest £20 million in the fund.

      “Broadly a third of the fund would go into the regulated space, which is grid-connected renewable assets such as wind, solar, mini hydel and biomass; a third would go into off-grid strategies and a third into other clean-tech strategies around water, electric mobility etc. The final close of the fund should take about 9-12 months,” said Dhanpal Jhaveri, managing partner (private equity), Everstone Capital. As the economy keeps building out, these sectors will be increasingly more interesting, he said.

      “These sectors are now operating on a competitive basis where the economic model of all these businesses can be self-sustaining without any requirement for subsidies. And therefore it competes very well with traditional sources of energy and is a big opportunity,” Jhaveri added.