Power companies embrace e-commerce

In a bid to cut costs and enhance customer experience, power companies in India like CESC — the Rs 4,200 crore RPG Group flagship — and Noida Power Company Limited (NPCL) — which distributes power in Greater Noida — have started focusing on e-commerce and e-procurement.

NPCL, for instance, has appointed e-Procurement Technologies as a service provider to conduct online reverse auctions. It is exploring new avenues to procure power from alternative sources and supplement the current intake arrangement so as to meet the increase in load demand in the short and medium terms.

CESC, on its part, is renewing its foray into e-commerce and e-procurement by using its revamped website as the platform. Relaunched after 10 years, the website wll extend the online transaction opportunities for consumers, shareholders and business partners. The new website has already seen 21,000 hits so far. CESC’s backend customer relationship management (CRM) system comprising millions of consumers, power plants, distribution points and thousands of kilometres of power lines have been integrated with the backend interactive voice response (IVR) facility to monitor its network and work with stakeholders easily.

CESC is adding 250mw power plant in the Kolkata area and was close to finalising power projects at Haldia port (West Bengal), Jharkhand, Orissa and Bihar. The revamped website will be the company's gateway for e-procurement and the plan to expand the e-commerce space. For instance, now most regular vendors are using this platform to submit tenders. The website also enables the e-tendering process. This not only convenient for business partners but also helps in procurement of a long list of items through the online gateway, thereby bringing overall operational costs down and minimising paperwork. For consumers, the company has already enabled the facility to view and print barcoded bills via email. The website has also added power saving and power consumption.

Source: Business Standard (23rd July, 2009)

Power situation set to improve

Power availability in the country is likely to improve in the coming days, as water levels in various reservoirs have started going up following the resumption of monsoon. According to the latest data obtained from the Central Water Commission (CWC), water storage at the 81 reservoirs across the country was 14 per cent of the total capacity of 151 billion cubic metres (bcm) of the reservoirs. It had risen to 11 per cent of the total capacity last week.

Accordingly, daily hydro power generation in the country has also increased by at least 12 per cent in the past one month to around 310 million units currently. Daily generation from NHPC Ltd, the country’s largest hydro power producer, alone has gone up by 11 per cent to 75 million units now as compared to last month. Similarly, keeping pace with this improving hydro power situation, the average price of power traded in the market has also started coming back to normal levels.

The latest data compiled by the Indian Energy Exchange (IEX) show the average price of electricity traded on it so far in the current month has slumped to Rs 4.89 per kilowatt hour (one kilo watt hour is one unit). Power was traded over 20 per cent higher at an average of Rs 6.19 per kilowatt hour last month when the reservoir levels were drying up as a result of delayed monsoon. Total power traded at the IEX has increased by over 25 per cent from 324 million units in May to 408 million units traded in the current month. IEX alone accounts for more than 90 per cent of the electricity traded at the two power exchanges in the country.

The moderation in power prices due to resuming monsoon is set to reduce the subsidy burden of states which otherwise have to procure power at a high cost to tide over the electricity crisis.

The downward spiral in the prices could also impact profit margins of merchant power generators as they account for a major chunk of the power traded at the exchange and earn profits in the lean period.

Heat wave in the northern region and a delayed monsoon had pushed up the peak demand for power to over 111,000 Mw in April-June period this year, around 5,000 Mw higher as compared to the same period last year. This increased demand had pushed up the prices of power traded at the exchange to as high as Rs 12 per unit.

Source: Business Standard

Power capacity trips on targets

The power minister said the country would add 100,000 Mw capacity (equal to what China does in a year) in the 12th Plan period. This is on top of his target to add 60,000 Mw in the current Plan period, which ends in 2012.

The ministry has to commission around 47,500 Mw capacity in the three years to 2012 if it has to meet the target of 60,000 Mw. This is because the first two years have seen an addition of just over 12,500 Mw. The government is banking on the private sector to generate over 30 per cent, or 20,000 Mw, to reach that target. But the private sector has so far been able to set up just 3,750 Mw and the rest is ‘under construction’.

India’s largest private sector power utility Tata Power is planning to reach a group power generation target of over 5,800 Mw from the current 2,800 Mw by 2012, an addition of about 3,000 Mw in three years. This includes a few units of the Mundra UMPP. The company’s joint venture with Damodar Valley Corporation (DVC), 4,000-Mw Mython, is also slated for commissioning before 2012-end. So far, half of Mython’s civil work has been completed and one-fourth in the case of Mundra.

Other major private players like JSW Energy, Lanco Infratech, GVK Power, Adani Power and Indiabulls have projects under implementation, but large-scale capacity addition is unlikely before 2012.

Issues such as land acquisition, environmental and other procedural hurdles are delaying most of the projects, besides other issues like lack of skilled manpower and delay in delivery of equipment. The global recession is also delaying financial closure of the projects.

India’s largest power producer National Thermal Power Corporation (NTPC), which has an installed capacity of over 36,000 Mw and accounts for about 30 per cent of the country’s power generation, is targeting to reach 50,000 Mw by 2012. Considering the pace at which the NTPC projects are progressing, that target may remain just a target.

The scene with hydropower, which contributes one-fourth of India’s power requirement, is also not bright. State-run hydel power company NHPC’s plans are to commission about 250 Mw in 2008-09, 2040 Mw in 2010-11 and another 2,000 Mw in 2011-12 — together only about 5,000 Mw in the Eleventh Plan period.

Source: Business Standard (21st July, 2009)

Adani Power may not develop Dahej, Kawai projects

Adani Power has said it may not develop its planned projects at Dahej and Kawai and that the company faces certain land acquisition problems in its 1,320-Mw project at Tiroda in Gujarat.

In the draft herring prospectus filed with the Securities and Exchange Board of India (Sebi), the company said the Dahej Power Project was expected to have an aggregate capacity of 1,980 Mw and was proposed to be developed by its wholly-owned subsidiary, APDL. The Kawai project was expected to have a capacity of 1,320 Mw and was proposed to be developed by its other subsidiary, APRL. “Although, we currently intend to develop these projects, we may not develop these as planned or at all. In addition, there is no assurance that if pursued, these projects will be implemented in a timely and cost-effective manner and will improve our results of operations,” the company said.

Adani Power proposes to raise Rs 2,200 crore through an initial pubic offer by offloading 337 million equity shares. After listing, promoter Adani Enterprises will hold 73.5 per cent in the power firm. The company is currently implementing two thermal power plants in Gujarat, one in Mundra and another in Tiroda, totalling 6,600 Mw capacity.Adani Power’s IPO is slated to open on July 28 and the company is expected to be listed by the month-end.
The firm is in the process of identifying and acquiring land for developing the Tiroda power project.

The overall debt requirement for the two projects is Rs 22,000 crore, which has been arranged from the State Bank of India, ICICI Bank, Power Finance Corporation (PFC) and Rural Electrification Corporation (REC). While SBI is lending Rs 16,000 crore, ICICI Bank is arranging Rs 1,200 crore and PFC and REC Rs 2,600 crore and Rs 1,500 crore respectively.

Adani Power has signed power purchase agreements with Haryana, Maharashtra and Gujarat governments for selling power from the two projects. The equipment for the two plants would be sourced from three Chinese companies —Shanghai Electric, Dong Fang, and Harbin. The company also proposes to set up a 1,320 Mw plant in Rajasthan and another 1,980 Mw project at Dahej in Gujarat.

Source: Business Stanadard (20th July, 2009)

R-Power achieves financial closure for Rosa project

Anil Dhirubhai Ambani Group (ADAG) company Reliance Power (R-Power) has signed financing agreements with a consortium of domestic banks to secure the debt portion for the second phase of the 600-Mw Rosa Power project in Uttar Pradesh’s Shahjahanpur district.

Sources said the consortium will lend around Rs 2,000 crore, of the project cost of Rs 2,700 crore. The remaining amount will be funded through equity. The company, which raised over Rs 11,000 crore through its initial public offering, is also attempting a strategic sale of 10-15 per cent equity to fund its projects.

Industrial Development Bank of India (IDBI) is the lead lender. The others are Punjab National Bank, United Bank of India, Life Insurance Corporation of India, Andhra Bank, Axis Bank, Indian Bank, Karur Vysya Bank, State Bank of Bikaner and Jaipur, State Bank of Mysore, Syndicate Bank, The South Indian Bank, Oriental Bank of Commerce, Corporation Bank and Vijaya Bank, said a press release.

R-Power had achieved financial closure for its Rs 19,500 crore, 4,000 Mw ultra mega power project coming up at Sasan in Madhya Pradesh in mid-April, in the largest debt funding for any infrastructure project in the country. Two months earlier, its group company Reliance Power Transmission (RPTL) also had announced financial closure for the Rs 1,385 crore Western Region System Strengthening Scheme (WRSS) transmission project in Maharashtra and Gujarat.

Rosa Power Supply Company (RPSCL), a wholly-owned subsidiary of R-Power, will become completely operational well within the Eleventh Five-Year Plan and will supply 900 Mw to Uttar Pradesh Power Corporation. The first phase of the project is in a very advanced stage of construction and is expected to commence generating power within this year itself, ahead of schedule, said R-Power. The company had achieved financial closure for the first phase in January 2007.

RPSCL has a fixed-price and time-based engineering, procurement and construction (EPC) contract with Shanghai Electric and Utility Energytech and Engineers Pvt Ltd for the second phase. The company has issued the ‘Notice to Proceed’ to Shanghai Electric, following the financial closure. The second phase has obtained all major approvals and clearances. Coal linkage from Central Coalfields Ltd from its mines at Jharkhand has been got for supply of around five million tonnes yearly for the project, which will be transported by the Indian Railways.

Reliance Power is implementing power projects to produce over 32,000 Mw in various parts of the country.

Source: Business Standard (15th July, 2009)

BHEL bags Rs 170-cr order from CPCL

State-run power equipment maker BHEL bagged a Rs 170-crore order from Chennai Petroleum Corporation for setting up gas turbine-based co-generation power plant at its Manali refinery. BHEL has secured a Rs 170-crore contract from Chennai Petroleum Corporation (CPCL) for setting up an energy efficient 20 MW co-generation power plant at its Manali refinery. A co-generation power plant provides heating water and power for an industrial site or an entire town. The project is being set up to meet the additional power and steam requirements of the refinery as part of its endeavour to achieve compliance to Euro-IV emission norms. BHEL's scope of work in the present project envisages design, engineering, manufacture, supply, erection and commissioning of gas turbine generator and heat recovery steam generator with associated auxiliaries and balance of plant. The equipment for the project will be supplied by BHEL's plants at Hyderabad, Trichy, Ranipet, Bhopal, Bangalore and Jhansi. Erection and commissioning of the captive power plant will be carried out by the company's Power Sector Southern Region, Chennai.
Source: Financial Express (29th June, 2009)

PFCL may reduce interest rate by 25 basis points

State-run Power Finance Corporation Limited (PFCL) is looking at a possible reduction in its interest rate by 25 basis points in view of the market conditions. The average lending rate of PFC is at present 11.75 per cent. PFC one of the largest specialised financier of power sector projects in the country expects 15-20 per cent growth in disbursal this financial year. The company basically provides funds based services like term loans, equipment leasing, bill discounting, buyer's line of credit. It also provides non-funds based services like guarantee services, consultancy services, to the power sector. Last financial year the total disbursement was to the tune of Rs 21,000 crore. This financial year the total disbursement is pegged at Rs 22-24,000 crore. The company plans to raise some ratio of this from the market, mainly through bonds, informed Goel. PFC also the nodal implementing agency for the three ultra mega power projects coming up in the states of Orissa, Tamil Nadu and Chattisgarh is also following up the routine processes with the respective state governments, after which Request For Qualification or RFQs will be issued, if all pre conditions are met.
Source: Business Standard (3rd July, 2009)