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)

Another 660 Mw of nuclear power capacity in 6 months

Another 660 Mw of nuclear power capacity should become operational in another six months, from the Rajasthan Atomic Power Project (RAPP) at Kota and at the Kaiga Atomic Power Project (KAPP) in Karnataka’s Uttara Kannada district. RAPP’s current capacity is 740 Mw, using domestic uranium. The two new units, of 220 Mw each, will run on imported uranium, for which agreements were signed this January. The supply has started. Kaiga is at present generating 500 Mw; the new unit is an additional one of 220 Mw. It will also run on imported fuel. “We have received some consignments of uranium from Russia and France. RAPP units 5 and 6 should be commissioned in six months now, as soon as the pre-commissioning activities are over,” said a senior official from the Department of Atomic Energy (DAE). The Kaiga commissioning should follow soon after. The Indian government has a contract with TVEL, a joint stock company of the Russian Federation, for long-term supply of 2,000 tonnes of natural uranium. In another contract, Areva, the French energy major, has also committed to supply 300 tonnes of the nuclear fuel. Both contracts were signed in January. The two new units of 220 Mw capacity each at the RAPP will account for around 14 per cent of the 3,160 Mw of nuclear power generation capacity in the pipeline, and the first to receive the newly imported fuel. Experts, however, believe operation of the two RAPP generating units would require around 0.4 kg of uranium daily. The newly imported fuel would be processed at the Nuclear Fuel Complex (NFC) at Hyderabad before being fed to the two reactors. At present, Nuclear Power Corporation of India Ltd (NPCIL) alone produces nuclear power in the country. Its 17 units have an installed generation capacity of 4,120 Mw, which is about 3-4 per cent of total power generation capacity in the country. The aim is to increase the nuclear generation capacity to 20,000 Mw by the year 2020. NPCIL is planning to add another 3,160 Mw of capacity from three power plants in two to three years. These are all to be commissioned by 2012. This includes 2,000 Mw from two units of the Kudankulum Atomic Power Project in southern Tamil Nadu’s Tirunelveli region, 440 Mw from two units of the RAPP, one 220 Mw plant of KAPP in Karnataka and an addition of 500 Mw to the Kalpakkam atomic plant in Tamil Nadu, near Chennai (presently 440 Mw capacity). Fuel for the Kudankulam power project has already been sourced from Russia and the newly available uranium would be partly fed to the power plants of Rajasthan and Kaiga. This availability of imported uranium is expected to bring to an end the heavy dependence of nuclear power reactors in the country on domestic uranium. Power generated from the NPCIL-run reactors has been low due to lack of availability of fuel. The official said the company has now been able to ramp up its generation to over two-thirds of its capacity, owing to the exploration of new mines by Uranium Corporation of India Ltd (UCIL).

Source: Business Standard (2nd July, 2009)

Orissa resorts to overdrawal of power from eastern grid

Orissa, reeling under acute shortage of power, has resorted to overdrawal of power from the eastern region load despatch centre (ERLDC) to tide over the crisis.The state was forced to overdraw about 500 Mw yesterday from ERLDC as it failed to get additional 270 Mw power promised by the state owned National Thermal Power Corporation (NTPC) due to technical problems. Though there was overdrawal of 500 Mw from ERLDC, the state will not be required to pay any penalty on this. It may be noted, the NTPC Vidyut Vyapar Nigam Ltd is supplying about 40 to 50 Mw to the state regularly from 27 June from its un-allocated share. This power is made available during 6 pm to 10 pm. “Due to some technical reasons NTPC couldn’t supply the promised 270 Mw power to the state directly. However, we are overdrawing about 500 Mw from ERLDC and the situation has improved”, a senior official of the state energy department said. Meanwhile, the power situation is expected to improve further with the availability of 160 Mw from the second unit of the NTPC unit located at Kaniha, near Talcher from today. This will ease the task of state officials who are having a tough time in managing the situation. While the peak demand of power in the state ranges from 2400 Mw to 2500 Mw in the morning, it goes up to 2800 Mw in the evening. The deficit in the morning is about 240 Mw, increasing up to 600-700 Mw during the evening hours. As a strategic move, Grid Corporation of Orissa (Gridco) is drawing more power from ERLDC in the morning when the frequency is good and the rate is comparatively cheaper while keeping the state’s own hydro electricity generation at its minimum. At 11am today, against the scheduled drawal of 770 Mw from the central pool, the actual drawal was higher by 490 Mw at 1260 Mw. The hydro-power generation at 11am was at 60 Mw which is likely to be increased to 350 Mw in the evening. Besides, the captive generation plants (CGPs) injected 220 mw to the state grid during the day. However, there was no injection of power to the state grid from the CGP of Vedanta Aluminium Ltd (VAL) at Jharsuguda.

Source: Business Standard (1st July, 2009)

Power plants near Pipapav port likely to go on stream by 2012

The four power plants coming up around the Pipavav port in Gujarat are likely to become operational by 2012, said state energy and petrochemicals Saurabh Patel. The plants, with a total capacity of 3,300 Mw, are at various stages of development. Gujarat Power Corporation Ltd (GPCL) and Torrent Power Ltd are jointly developing a 1,000 Mw coal-based power plant near Pipavav. GPCL and Gujarat State Petroleum Corporation Ltd have joined hands to set up a 700 Mw gas-based power project, while Visa Power and Videocon are developing 1,000 Mw and 600 Mw coal-based power projects respectively in the same region. “Project developers require land, water as well as environmental clearances for setting up the project. Once these requirements are met, project implementations would start. The first phase of these four projects is expected to be operational by 2012,” Patel said in a written reply to the Assembly.
According to experts, the power plants would give a major boost to industrial activities near Pipavav. The state government intends to develop Pipavav as an alternative port. Gujarat plans to build a 10-lane road linking Ahmedabad and Pipavav to provide the much-needed hinterland connectivity to the port.

Source: Business Standard (30th June, 2009)

Gujarat seeks NLC's nod to develop 1500 Mw project

In yet another effort to put its 1,500-MW power project proposed at Surat back on track, the Gujarat government has urged the Union power ministry to ask Neyveli Lignite Corporation (NLC) to issue it a no objection certificate. The project, proposed in south Gujarat, has been delayed for about one-and-a-half years due to power sharing problems. The state government is seeking the NOC for developing the project on its own or by any state public sector undertaking nominated by it. Neyveli Lignite and the Gujarat government had signed a memorandum of understanding in July 2006 to set up this lignite-based power project at an investment Rs 7,500 crore. Work on the project was slated to start in 2007. The project is stuck because the Gujarat government had expressed its desire to get a major chunk of power from the project for the sate, while the Centre wanted the allocation as per the Gadgil formula, a method of transferring resources from Centre to states on the basis of income and population. If this formula is adopted, Gujarat would not receive more than 50 per cent of the power. Gujarat Power Corporation Limited is a partner in the project.
Source: Business Standard ( 29th June, 2009)

R-Power in Talks to Sell 15% to Foreign Investor

Reliance Power Ltd (R-Power), part of the Reliance Anil Dhirubhai Ambani (ADA) group, is in talks with five leading global power companies to sell 15 per cent equity stake in the company. Preliminary talks have started with three Chinese power companies, which include China Light and Power Holdings (CLP), and French and Canadian companies. According to sources, Anil Ambani was in China last week to hold discussions with Chinese power companies for a possible stake sale. The company is willing to place the equity to one or two power companies.
Source: vccircle.com (1st July, 2009)

L & T bags order for hydrocarbon projects

Larsen & Toubro has bagged major orders, aggregating Rs. 651 crore, for two hydrocarbon projects. It will build a green field refinery project at Bathinda for HPCL–Mittal Energy valued at Rs. 440 crore. In addition the company has received Rs. 211 crore order from Engineers India for the supply and construction of a reactor and regeneration system for the fluidised catalylic cracking unit of MRPL.
Source: The Hindu (2nd July, 2009)

Our state electricity regulators must push to reduce distribution losses and encourage open access. The budget can help by increasing incentives for loss reduction in accelerated power development and reform programme and compensation, if needed, as in adopting value-added tax, to implement open access. Part A of the budget, which deals with expenditure and proposals, can announce funds for modernization of Coal India Ltd and introduction of the private sector in coal, as in the new exploration licensing policy for petroleum and gas, along with a regulatory framework, as promised in the last full budget. Strict environmental safeguards and a generous rehabilitation policy for infrastructure projects can forestall legitimate land acquisition and environmental protests, which are under-appreciated hurdles to raising generation capacity. With natural gas from the Krishna-Godavari basin off India’s eastern coast, cheaper liquefied natural gas and a possible Iran pipeline, a common carrier national gas grid is an imperative. As the Petroleum and Natural Gas Regulatory Board offers greater clarity, private investors will emerge, but support for public investment, by raising GAIL (India) Ltd’s capitalization, is also needed. Conversely, a lighter helping hand for Power Grid Corp. of India Ltd would prevent it from becoming an inefficient behemoth and encourage more private investment in transmission. Finally, in energy, Part A could announce large budgetary support for Nuclear Power Corp. of India Ltd and Bhabha Atomic Research Centre, and simultaneously, legislation to permit entry of the private sector into atomic energy.
Source: Livemint.com (2nd July, 2009)

ABB wins Rs 220 cr order from Tata Projects

Power and automation technology group ABB has won orders worth Rs 220 crore from Tata Projects Limited to provide power products and solutions for a super-critical coal-fired power plant under construction in Andhra Pradesh. ABB would provide an integrated electrical Balance of Plant (eBoP) solution, including transformers, switchgear and protection equipment, as well as a 400-kilovolt turnkey substation to facilitate power transmission from the plant. ABB would also provide system engineering, installation, testing, commissioning and overall project management.
Source: Financial Express (24th June, 2009)

Govt to make energy label mandatory for cars

India's power secretary said on Tuesday the government would make energy efficiency labelling mandatory for automobiles by August, a move aimed to help energy conservation. H.S. Brahma said the move is aimed at certifying the energy efficiency claims of automobile makers, and helping consumer make choices. "This will help consumers in choosing the right quality of vehicle. Many automobile producers say their car can give an average of 18 kilometres or 20 kilometres a litre," he said.
Source: Financial Express (23rd June, 2009)

Govt asks RIL to sell gas to Essar, Ispat

The Government has asked Reliance Industries Ltd to sell natural gas from its eastern offshore KG-D6 fields to steel firms like Essar and Ispat to help the country's most prolific gas field to produce at an optimum level. The Ministry of Petroleum and Natural Gas issued orders directing Reliance to sell 3.75 million standard cubic metres of gas per day to Essar Steel, Ispat Steel and Vikram Ispat. Essar will get 2.86 mmcmd, Ispat 0.53 mmcmd and Vikram Ispat the remaining 0.36 mmcmd. Reliance is currently restricting output from KG-D6 to just 28 mmcmd as not all of the power and fertiliser customers identified by the Government are taking their full quota of allocation. After power and fertiliser, 5 mmcmd gas from KG-D6 was allocated for city gas projects but only 1.1 mmcmd can immediately be taken. The rest is now being distributed among steel firms. The allocation will boost the profitability of steel firms, which had been buying expensive LNG or naphtha to meet feedstock shortage at their plants.
Source: Financial Express (16th June, 2009)

Deora wants restoration of tax breaks on natural gas output

Petroleum Minister Murli Deora asked Finance Minister Pranab Mukherjee to restore tax breaks on natural gas production as is given for crude oil. He also discussed the deregulation of fuel prices. He also pressed for giving declared goods status for natural gas to end the differential sales tax in states. State retailers Indian Oil, Bharat Petroleum and Hindustan Petroleum may together lose close to Rs 60,000 crore this fiscal if retail prices are not changed with the hardening of crude oil prices.
Source: Financial Express (15th June, 2009)