NEW DELHI: Power consumption in the city touched an all-time high of 5,155 MW at 3.23pm on Wednesday afternoon. The previous record was recorded less than a week ago on Friday.
Power sector experts attributed the growing demand for electricity to the rising mercury and noted a trend in consumption pattern which showed a widening gap between minimum and maximum power demand. Discoms said that Wednesday’s peak demand was successfully met without any load-shedding.
The electricity demand in the city is growing by an average 20% annually and discoms are gearing up to meet a load requirement of up to 5,500 MW this summer. However, power sector experts say that demand crossing 5,000 MW in May is worrying as usually June-July record the season peak.
“If the highest demand has been recorded in May, then one can expect that June-July will see significantly higher electricity demand. Apart from the heat, the purchasing power of people in general has also gone up and more and more households have air-conditioners now. Over the years, power demand has shown significant growth, which is a clear indication of increasing prosperity,” said an official. The demand in eastDelhiareas recorded by BSES Yamuna was 1,387 MW, while south and westDelhiareas under BSES Rajdhani recorded a demand of 2,037 MW.
A trend has also been noted in the power consumption pattern of Delhiites this year. Power officials said air-conditioners are being used a lot more in the afternoon than at night. This is partly because of power consumption by offices during the day and partly due to the afternoon heat. But the minimum demand has been lower than expected, said an official. “Power consumption pattern ofDelhiis quite different from other states. Normally, there is a difference of around 20% between the maximum and minimum demands daily. But due to the rising temperature, the difference between the maximum and minimum demand has gone up to 50% daily,” said a Transco spokesperson. The minimum demand recorded on Wednesday was 3,276 MW at 06.49am, while the maximum was 5,155 MW at 3.23pm. “This kind of situation puts extra burden on the power companies. When the power demand is minimum, the companies have huge surplus of power. And when the power demand is very high, these companies have to buy power at very high rates,” said the spokesperson.
Power sector officials said that power consumption was directly affected by the weather. “Power demand is increasing every year and during the last decade it has increased from 3,097MW in 2002 to 5,155MW in 2012. If the hot weather persists, the demand may go up to 5,500MW this summer,” said an official. The power department added that the peak was successfully met. There was no shortage in bulk supply and no noticeable load shedding was reported due to any shortage in supply. However, any load shedding occurred due to local fault was rectified within few minutes/shortest possible time,” said a senior government official.
DISCOMS TOLD TO ENSURE 7-HOUR SUPPLY TO FARM SECTOR
HYDERABAD: The Andhra Pradesh Chief Minister, Mr N. Kiran Kumar Reddy, today asked the distribution companies to ensure seven-hour power supply to the farm sector.
Following a review meeting on the power sector, the Chief Minister wanted a monthly report of how the distribution transformers that have been damaged were being attended to. The Discoms were asked to deploy vehicles with geographical positioning system (GPS) by September 1, 2012 to ensure timely replacement of failed distribution transformers.
AP Transco said that the power supply position is satisfactory and that seven hours of power to agriculture sector in two spells is being ensured.
In fact, small-scale industries, spinning mills, rice mills, poultry, cold storage, Government hospitals are among those exempted from power cuts.
However, major industries continue to face 30 per cent power cut.
The average demand in May 2012 was 262 million units a day against 227 mu/day during the same period last year, registering an increase of 15.41 per cent. Discoms are supplying 239 mu/day and the shortfall is 29 mu/day. The Government has negotiated a loan of Rs 988 crore under the Overseas Development Authority (ODA) and the tendering process is now underway.
The total installed capacity of gas-based stations is 2,770 MW.
Due to drastic reduction in supply of gas from Reliance D-6 blocks, it has resulted in idle capacity of about 1,300 MW.
The Ministry of Petroleum and Natural Gas has indicated further reduction of gas from existing level which may further reduce the output of independent power producers. They are already operating at a critical level of 38 per cent.
POWER PRODUCTION OF MOUDA UNIT TO STABILIZE BY JULY END
NAGPUR: The commercial operation date (COD) of first 500MW unit of NTPC’s Mouda power plant is expected to be in the end of July or beginning of August. After COD the unit will start producing power continuously. The state’s share of power generated from this unit is 150MW. The remaining power will go to Gujarat, Madhya Pradesh, Chhattisgarh andGoa.
An NTPC official said that the unit was synchronized on April 8 and then generated on full load on April 20. However, since last few days the unit is again being tested. “Once COD is achieved, any unit is not supposed to stop generation until it is taken offline for maintenance and overhaul, which happens after eight to ten days. Hence, we sort out all the problems before COD. Actually, any unit is deemed to be operational only after the COD,” he explained.
Meanwhile, Adani Power’s first 660MW unit at Tiroda plant is expected to start its trial run in the coming days. MSEDCL is the sole buyer of the power generated by this unit.
The new 500MW unit of Mahagenco’s Khaparkheda power plant had achieved COD on April 16. However, it has not been generating consistently and has been taken offline several times for some hours or even a day or two. Same is the case with two new 500MW units at Bhusawal plant.
One of the major reasons behind Mahagenco’s decision to close down four vintage 105MW units at Koradi plant was commissioning of the 500MW Khaparkheda unit. However, the new unit’s performance so far has failed to justify Genco’s move.
The power from the four new units will be crucial in meeting the winter demand of 2012-13 and summer demand of 2013. It is imperative that the generation stabilizes before November.
POWERGRID PLANS RS 1-LAKH CRORE CAPEX FOR 12 {+T} {+H} PLAN
MUMBAI: PowerGrid has planned a capital expenditure of Rs 1 lakh crore for the 12 {+t} {+h} Five Year Plan. For FY13, it will be Rs 20,000 crore.
Mr R.N. Nayak, Chairman, Power Grid Corporation, said the capital expenditure will be for transmission jobs. The equity component will be at 30 per cent and the balance debt.
In FY 13, the company expects the central sector to add 6,200 MW, independent power producers 3,800 MW and ultra mega power plants 1,600 MW.
Apart from its core verticals of transmission, grid management, consultancy and telecom, the company will eye opportunities in inter-State transmission systems, smart grid, asset management and engineering, procurement and construction, besides avenues in backward integration, he said.
Mr Nayak expects short-term open access transaction prices to come down further from the present levels once the southern and western region inter-connectivity was established. The inter-connectivity is expected to be completed by March 2014.
On telecom, he said PowerGrid has a 25,000-km network providing backbone connectivity to all metros, major cities and towns, including remote areas inJammu and Kashmirand the north-eastern states. The company had entered into infrastructure sharing agreement with a telecom infrastructure service provider for mounting telecom antennas on the power line towers inPunjab, J&K and Himachal Pradesh. The company has offered about 800 towers for installation of the antennas, but would wait to finalise the contract as there is a possibility of higher returns.
On Wednesday, the company scrip closed 1.95 per cent down at Rs 105.50 on the BSE.
NATIONAL POWER BOURSE GETS MERGER OFFERS FROM 2 OTHERS
MUMBAI: The National Power Exchange (NPEX), the country’s third power exchange which is yet to launch its operations, has received separate merger proposals from the other two power exchanges, Indian Energy Exchange (IEX) and Power Exchange India (PXI).
M G Raoot, managing director (MD) and chief executive officer (CEO) of NPEX, said it had informally discussed the merger issue with IEX and PXI, but was yet to take a decision on the issue.
“NPEX is poised to hit the market at an opportune time. The Central Electricity Regulatory Commission (CERC) has recently given its approval for our business rules and by-laws. We are going ahead with our business plan. It’s true that both IEX and PXI have informally discussed with us a proposal for merger. We have not taken any formal view in this regard,” Raoot told Business Standard.
The proposal aims at synergising opportunities in power trading on exchanges. NPEX is promoted by NTPC, NHPC, Power Finance Corporation and Tata Consultancy Services. The other equity partners are BSE, IFCI, Meenakshi Power and DPSC.
“We are confident we will be able to grab the required market share for becoming economically sustainable through our well-conceived business plan,” Raoot added.
IEX MD and CEO Jayant Deo confirmed the merger issue was discussed informally between the two exchanges. “There is a synergy. When IEX came to know that NPEX is thinking of merger, we felt that they should merge with the leader (IEX). The issue is being discussed informally,” he said.
Rupa Devi Singh, MD and CEO of PXI, said the exchange was actively engaging with stakeholders and was confident of its strategy to increase its market share and product offerings. “PXI has been in the forefront of several policy advocacy issues to develop the power market in an orderly manner, such as congestion management and trading of longer tenure products. This will lead to increased market participation and growth of overall market,” she said.
IEX and PXI are currently engaged in energy transactions in the day-ahead and term-ahead markets and issuing renewable energy certificates. The daily turnover at IEX is about 45 million units, while PXI clocks three million units. During 2011-12, IEX’s total transaction was 13.8 billion units, while for PXI it was 1.028 billion units.
KUDGI POWER PLANT KICKS UP GREEN STORM
BIJAPUR: The Kudgi power plant, the foundation stone for which is set to be laid on Saturday, has kicked up a controversy with environmentalists opposing the project on the grounds that it would adversely affect health of the people in the region, besides harming the ecology.
M P Patil, a retired scientist from the Department of Atomic Energy, has filed a petition before the National Green Tribunal seeking that the permission granted on January 25 this year by the Union Ministry of Environment and Forests (MoEF) to the 2,400-MW power plant in the first phase should be withdrawn.
The scientist has accused the National Thermal Power Corporation (NTPC) of giving false information that the 3,000 acres of land on which the thermal plant is coming up is barren, rocky terrain. However, the special land acquisition officer of KIADB has identified 1,600 acres of the total 3,000 acres as irrigated land and is disbursing compensation to the land owners accordingly. This debunks the claim over the type of land acquired for the project.
Patil told reporters here on Wednesday that the Tribunal had issued notices to the NTPC and the special land acquisition officer of KIADB following the petition. The Tribunal had heard the matter on April 25 and sought an explanation from the MoEF.
He said he had brought to the notice of the Tribunal the false claims made over the topography of land acquired for the power plant, during its May 18 hearing. Refusing to stay the permission granted by MoEF, the Tribunal has directed that NTPC and the special land acquisition officer of KIADB be made respondents in the case.
The scientist accused the NTPC of misleading the MoEF while getting the latter’s approval for the power plant.
The ill-effects of the project on the environment and the minutes of the public hearing held for the project had not been taken into account and this would help him in his fight against the Kudgi project, the scientist said. The next hearing of the Tribunal is scheduled for July 5. NTPC officials only said the Corporation being a Government of India undertaking, had got the MoEF clearance after following all necessary guidelines.
SPARKS FLY OVER STALLED BHEL PROJECTS IN TAMIL NADU
CHENNAI: Mining and power generating company Neyveli Lignite Corporation (NLC) recently declared it had been unable to add around 1,500 mega watt (Mw) of power to the grid in Tamil Nadu which would have been crucial to easing the crisis in the electricity-starved state. The culprit? NLC points its finger at Bharat Heavy Electricals Ltd (BHEL), which is both a boiler supplier and an engineering, procurement and construction contractor.
NLC Chairman and Managing Director A R Ansari says BHEL’s delay in delivering equipment for a power plant is as much as 45 to 50 months. Tamil Nadu Electricity Board (TNEB) Chairman Rajeev Ranjan cites this as one of the reasons why his firm has bled at least Rs 5,000 crore in power revenues. NLC is one of the major suppliers of electricity to Tamil Nadu, which procures 1,170 Mw of the company’s total output of 2,490 Mw, generated from three of its thermal power stations in the state.
NLC is not alone. National Thermal Power Corporation (NTPC) and many state governments, such as Rajasthan, have also come down heavily on BHEL over project delays. A recent report quoted the Central Electricity Authority as saying: “BHEL has failed to meet the deadline in nine of the 17 thermal projects that were to be commissioned last financial year”. The tragic irony for NLC is that it has to support its PSU cousin BHEL, and is forced to adhere to the lowest-bidder rule for equipment contracts instead of being allowed to factor in delivery schedules and other parameters in its selection process.
The sheer number of projects experiencing delays because of BHEL is breathtaking. The 2×800-Mw super critical project at Udangudi as well as the 1,000-Mw thermal power project at Tuticorin, Tamil Nadu, have also been delayed for about three years now, costing the latter Rs 2 crore per day, according to NLC General Manager Ganesan. The various phases at the Rs 5,423.55-crore project at Vallur have also been delayed by 18-20 months. According to the 11th Plan (F2008-12) working group report, 14 per cent (5.7 Gw) of the planned capacity was missed because of BHEL’s failure to provide equipment on time.
What could be the reason for such consistent failure in meeting deadlines? BHEL says that matters are simply out of its hands. These hiccups, its officials say, are directly linked to factors such as lack of human resource needed for construction, land-acquisition issues, regulatory clearances and the country’s poor infrastructure.
A K Ghosh, CEO, BHEL Power Sector, Southern Region (PSSR), illustrates this by pointing out that when BHEL was trying to move a 380-metric-tonne stator motor to the North Chennai Unit-II project from its Haridwar plant in Uttarakhand, it fell in a river due to a bridge collapse at Binapure, 40 km from Gairatganj nearBhopalin Madhya Pradesh. A sea route had to be used instead, and the shipment experienced further delays at the port. NLC’s Tuticorin project is dogged by land acquistion problems, says BHEL. And, in Rajasthan, the quality of lignite mined is vastly different from the sample given to BHEL for the purpose of designing boilers.
“People are giving you a wrong impression. BHEL’s scope in any of these power projects is only 45-50 per cent. We cannot be blamed . We are responsible for boiler turbines while the balance of plant (BoP) is handled by others. Wherever they (NLC) are working, they face problems related to BoP,” says a senior official from BHEL’s head office.
Analysts say BHEL has a reputation for being a very efficient company, but it has been drowning in a sea of orders—something that inevitably causes delays. But, that’s changing, as demand, after rising initially in the last few years, has begun to slow due to a dearth of both coal and financing options. Consequently,Indiais seeing a transition from being a significantly undersupplied market to a massively oversupplied one.
Either way, this has been disastrous for BHEL. The Tamil Nadu government has scrapped the Rs 8,000-crore Udangudi project. TNEB will assume the reins of the project along with a private player. BHEL officials express surprise over this development, saying no such decision was mentioned at the last board meeting. Similarly, the Rajasthan government scrapped tenders worth Rs 12,000 crore for the two separate thermal power projects bagged by BHEL a year ago. The company has even lost NTPC’s Rs 16,000-crore project to a joint venture between BGR Energy andHitachipower.
This could hit BHEL hard. According to Morgan Stanley Research, 61 per cent of the country’s power capacity has been installed by BHEL via orders placed by central and state utilities. But, recently, with the advent of more Indian and foreign firms competing for projects, there has been a noticeable change in the power equipment landscape. BHEL had a market share of 65 per cent in the boiler turbine generator space. This reduced to 40 per cent last financial year. Then, according to BHEL’s recent announcement, order inflows plunged by 63 per cent in 2011-12 to Rs 22,096 crore, from Rs 60,507 crore just a year ago. Its order book in 2011-12 was at Rs 1,35,000 crore, as compared to Rs 1,64,145 crore the previous year, down by 18 per cent.
So, who gains from BHEL’s pain? Chinese firms such asHarbin, SEC and Dongfeng Electric are making hay. Also doing well are domestic players who have joined hands with multinationals. L&T, for instance, has linked up with Mitsubishi and BGR-Hitachi, Bharat Forge with Alstom. and JSW with Toshiba. Doosan, an entrant, hasn’t tied up with any domestic player. Shubhranshu Patnaik, senior director, DeloitteIndia, says Chinese products are 20-25 per cent cheaper than the international ones, and pose a clear threat to domestic players. However, relying on Chinese companies for spare parts and servicing could become problematic. Also, the life cycle of Chinese products is yet to be proven inIndia. “Today, we know and we have seen BHEL products working for so many years: This is not the case with the Chinese ones. Long-term dependence on Chinese products will raise alarm bells,” cautions Patnaik.
But, this is cold comfort for a company that has much bigger problems on its hands.
NUCLEAR POWER CORPORATION NOT AFFECTED BY RUPEE DEPRECIATION: OFFICIAL
CHENNAI: The rupee depreciation will not impact the Nuclear Power Corporation of India Ltd (NPCIL) as it has already imported the required quantities of uranium, said a top company official.
“We do not import on monthly basis. We have already imported the required quantities of uranium and the rupee depreciation will not impact us,” S.K. Jain, NPCIL chairman and managing director (CMD) told IANS, ahead of laying down office Thursday.
According to Jain, tariffs are not affected due to rise in fuel costs or rupee depreciation. The fuel cost in a nuclear power project constitutes just a fifth of generation cost.
“We have 10 years’ fuel for the Kudankulam reactors and it is stored in just one room,” Jain said.
The first unit of two 1,000 MW atomic power reactor at Kudankulam Nuclear Power Project (KNPP) is expected to start power generation some time next month, while the commercial production is expected to happen this August, said Jain.
“The process of removing the dummy fuel will be over in couple of days and the real fuel will be loaded after that. The KNPP power will be sold at Rs.2.65 per unit despite the delay and the consequent increase in the project cost,” Jain said.
“However, the exact rate at which the Kudankulam power would be sold will be known only after the reactor is commissioned and full capacity is reached,” he added.
Stressing the importance of nuclear power to secure the energy needs of the country, Jain said thermal power is polluting while solar and wind power are uncertain.
“The success of solar power inIndiais a big question mark given the dust levels. Dust will settle on the solar panels which have to be cleaned,” Jain said.
Queried about his post retirement plans, Jain categorically said that he will not join any private sector company.
Jain has served the country’s atomic power establishment for 42 years and as the head honcho of NPCIL from 2004.
During his tenure as NPCIL’s chief managing director, six nuclear reactors were commissioned and eight got modernised.
Terming KNPP as his baby, Jain was involved deeply in the 123 agreement with theUnited States.
According to him, it was a challenging and satisfying period. The challenge was to meet the fuel shortage with more reactors getting commissioned, while fuel production did not match the requirement.
“Though 27 kg of uranium is required to generate one million units of power, in view of the fuel shortage, we brought it down to 18 kg for a million units through innovative ways,” he said.
Jain also looks back with satisfaction at floating the concept of public-public-partnership in the atomic field with NPCIL signing three joint ventures with three public sector companies – NTPC, Indian Oil Corporation and NALCO.
SOLAR RECs LISTED ON POWER EXCHANGE FOR FIRST TIME
MUMBAI: In a first, as many as 100 solar renewable energy certificates (RECs) were traded on the Power Exchange of India (PXIL), out of which five were bought at a price of Rs 13,000 per certificate.
“PXIL has made a history by concluding the first successful solar REC trade. The first certificate was traded on the exchange, which helped the participants to meet their obligations. They were traded at Rs 13,000 per certificate,” PXIL chief executive Rupa Singh told PTI here.
RECs are generation-based ‘certificates’ awarded (electronically, in demat form) to those generating electricity from renewable sources such as wind, biomass, hydro and solar, if they opt not to sell the electricity at a preferentially higher tariff.
These certificates are tradeable on power exchanges and are bought by ‘obligated entities’ that are either specified consumers or electricity distribution companies. These obligated entities may be required to purchase a certain quantum of either green power or RECs.
The obligations are split into non-solar and solar — which means the obligated entities have to purchase either power from solar power projects or RECs generated by them. The RECs of M and B Switchgears, manufacturer of transformers, were traded on the exchange.
M & B Switchgear, which has commissioned the first grid connected 2 MW solar power plant (Madhya Pradesh) in March, has become the first solar power producer in the country to be issued 249 solar RECs by the National Load Dispatch Centre (NLDC).
“Today’s trading has shown that there is sellers- market and there are buyers who want to comply with renewable purchase obligation (RPO). We expect a good response going forward,” she said.
PXIL is expecting another company with a capacity of 0.5 mw to commence trading on the exchange next month.
GOVT SWITCHES ON, LIFTS COAL MINING HURDLES
NEW DELHI: The government has removed roadblocks to coal mining by leading business houses and taken the first step to relax scrutiny of corporate expenditure on oil and gas fields, in a burst of action that has cheered investors and industrialists in the languishing energy sector.
A group of ministers recommended to the cabinet on Wednesday that Reliance Power’s Chhatrasal block, which is attached to the 4,000 mw Sasan Ultra Mega Power Project, and Mahan block for captive use by Hindalco and Essar should be given forest clearance, subject to some conditions. The projects have been mired in controversy after the Comptroller and Auditor General ofIndiasaid in a leaked draft report that the government had given undue benefits to private companies by handing out coal blocks, a charge vehemently denied by the coal ministry and Prime Minister Manmohan Singh.
Separately, the oil ministry announced it had set up a panel under C Rangarajan, chairman of the Prime Minister’s Economic Advisory Council, to review the production sharing contracts (PSC) with oil companies and suggest ways to minimise the government’s monitoring of expenditure by oil companies. ET first reported this on Monday.
The ministry also wants the panel to recommend guidelines on gas pricing and suggest a new mechanism for contract implementation instead of the current system in which nominees of the government and the regulator are nominated to the management committee of each block.
The current system effectively involves the bureaucracy in micromanagement of commercial operations, and has triggered disputes with companies such as Reliance Industries Ltd (RIL), which discovered a large gas field in theBay of Bengal.
The long-pending decisions in the energy sector, coming barely a week after state oil firms announced the biggest-ever increase in petrol prices despite concerns of inflation, has cheered investors fretting over policy inaction by the government.
A Balasubramanian, CEO of Birla Sunlife Mutual Fund, said the increase in petrol prices had signalled the government’s intention to take bold decisions. “One by one, they are clearing some long-pending things. These are sensible decisions. If they are able to implement in the true spirit, it will help in reviving investor confidence. There is a realisation that this is the time that certain steps have to be taken in the long-term interest of the economy,” he said. Industry officials said the Rangarajan committee could resolve the simmering dispute between Reliance and the oil ministry, which has refused to allow the company to fully recover its field-development cost from gas sales because output has fallen, prompting RIL to initiate arbitration. A source close to the company said the development was positive, but would depend on what action the oil ministry finally took. The ministry has adopted a tough approach towards RIL ever since the CAG accused it of being lenient with private firms.
Oil industry experts such as RS Sharma, former chairman of ONGC, welcomed the government’s action. “This shows the government is thinking in the right direction. It will boost global investors’ sentiment that government is taking action to resolve vexed issues with an open mind,” he said.
The GoM’s decision to recommend clearance of coal blocks will help Reliance Power generate electricity from the Sasan UMPP as well as the Chitrangi project, which would use surplus coal from mines attached to Sasan. It will also help Essar generate 1,200 mw of power and Hindalco to use coal for a smelter.
Officials said the GoM had recommended clearance of coal blocks subject to stiff conditions. “The GoM has recommended clearance to both Mahan and Chhatrasal blocks, but with strict riders on afforestation, corporate social responsibility (CSR) and compensation as recommended by the expert group,” Coal Secretary Alok Perti told reporters after the interministerial meeting.
The GoM, in its last meeting in March, had asked the ministry of environment and forests to form an expert panel to evaluate the impact of mining in the two blocks on the environment. The expert committee suggested clearances to both Mahan and Chhatrasal coal blocks with conditions on the companies to spend 5% of project outlay on CSR activities in surrounding areas.
A top government source said the environment ministry had expressed some reservations about the coal blocks, but these were overruled by other ministers. Association of Power Producers Director-General Ashok Khurana welcomed the GoM’s decision. “It is positive step. This will help stalled projects to come to operation quickly,” he said.
COAL MINISTRY EXAMINING CRISIL BID FOR CONSULTANCY CONTRACT
NEW DELHI: The Coal Ministry is examining the bid placed by Crisil for contract to prepare a framework for auctioning of coal blocks.
“We are examining the bid and would award the contract at the earliest,” said a Coal Ministry official. Central Mine Planning & Design Institute (CMPDI), a subsidiary of Coal India Ltd, had sought the expression of interest (EoIs).
Three bidders, SBI Caps, PwC and Crisil, were shortlisted to submit financial bids. Crisil has emerged as the lowest bidder for the job.
The Coal Ministry is in the process of finalising auction norms for the latest round of mine exploration. The winner of this contract would suggest mechanisms for finalising bid documents, deriving a formula to determine reserve price, and the agreement to be signed between the contractor and the Government.
The most important job of the consultant will be to derive a formula to determine a reserve price for every coal block. The company which is awarded the coal block will have to pay this price to the respective State government where the block is located. This would be imposed also for Coal India Ltd.
Second, an agreement to be signed between the Government and successful winner of coal block would be formulated. This agreement is expected to be in the lines of production sharing contract signed for oil and gas blocks.
The Coal Minister, Mr Sriprakash Jaiswal, recently told Business Line that his Ministry is in the process of putting in place a new, transparent mechanism for coal block auction. “This would be in place in the next three months,” Mr Jaiswal said.
Fifty-four coal blocks with total geological reserves of about 18.22 billion tonnes have been identified for allocation.
NO CONCRETE RESULT FROM COAL, POWER MINISTRIES MEET ON FSA FRAMED BY CIL
NEW DELHI: Nothing concrete has emerged from the meeting of the coal and power ministries which met to deliberate on the new clauses framed by CIL in the fuel supply pact that were objected to by some power companies.
State-owned Coal India Ltd has stated that the clauses it introduced in the new model fuel supply agreement (FSA) are aimed at protecting the PSU’s interest.
The meeting followed the Coal Ministry asking CIL to examine the new FSA clauses that have been objected to by some power companies. The power ministry had also raised their concerns with the coal ministry.
“The officials from both the ministries met yesterday and deliberated on the clauses of the fuel supply pact which are being objected to by the power companies. However, nothing concrete came out of the meeting which was chaired by coal secretary Alok Perti,” said an official who attended the meeting.
The Power Ministry delegation was led by Joint Secretary with Power Ministry I C P Keshari, the official said.
A couple of days ago, the Coal Ministry had asked CIL to examine issues, including changes in penalty clause, raised by the power producers regarding the model fuel supply agreement.
The move followed NTPC and many power companies refusing to ink fuel supply pacts with CIL, disagreeing with the introduction of the new clauses.
In a letter to the Coal Ministry dated May 18, the Power Ministry flagged concerns raised by power producers regarding the model Fuel Supply Agreement.
The Power Ministry also requested the Coal Ministry to ensure that CIL inks fuel pacts with power companies within a month based on 2009 model FSA, by only changing the minimum supply level to 80 percent.
Following the communication, the Coal Ministry wrote to CIL seeking comments on the FSA-related issues.
Among others, the new FSA states that CIL is not liable to pay penalty for the first three years (from the date of signing the pact) even if there is supply shortfall. This as well as clauses related to ‘force majeure’ and compensation for stone content in the fuel, are being opposed by power companies.
Apprehending shortfalls in coal supply to power producers, CIL informed the Coal Ministry a few days back that fuel supply pact clauses being opposed by a few companies were aimed at safeguarding the interest of the PSU firm.
MINISTERIAL PANEL OKAYS MINING OF CHHATRASAL, MAHAN BLOCKS, REFERS TO CABINET WITH RIDERS
NEW DELHI: Giving a shot in the arm to Essar Power, Hindalco and Reliance Power, a ministerial panel on mining in densely forested areas on Wednesday okayed the exploration of Mahan and Chhatrasal coal blocks by these entities and referred the matter to the Cabinet for final clearance, though with certain riders.
If the Cabinet clears the panel’s proposal, then the entities would be able to mine the blocks for their respective power projects.
The Group of Ministers (GoM) headed by Finance Minister Pranab Mukherjee, which deliberated on the matter for almost two hours, decided to allow Essar Power and Hindalco Industries to mine the Mahan block, and simultaneously okayed the mining of Chhatrasal coal block by Reliance Power.
Sources close to the development said that the panel decided to refer both the blocks to the Cabinet for final approval, however it has added certain riders like the entities would have to modify their mining plan by excluding around 100 hectares of good quality forest area from the mining lease.
Apart from this, the panel is said to have decided that the companies would have to compensate for the loss of good quality forests, and would have to do compulsory afforestation in the mining area. Also, according to sources, the companies would have to shell out funds for restoring degraded forests.
In addition to this, the entities would have to spend 5 per cent of their estimated project outlay for corporation social responsibility activities.
A sub-committee set up by the ministerial panel in March had been mandated to chart out conditions for mining of the two blocks, which have been hanging fire since quite some time as they are situated in densely forested areas and had been red-flagged by the Environment Ministry.
The aforementioned riders have been drafted by the sub-committee and according to sources, the ministerial panel approved these before okaying the mining of the two blocks.
Mahan Coal Limited, which is a 50:50 joint venture (JV) firm of Aditya Birla Group flagship Hindalco Industries and Essar Power, has to mine the Mahan block, which is situated in Singrauli district of Madhya Pradesh
While Essar Power has plans to start a 1,000 MW power project in Madhya Pradesh, Hindalco proposes to set up a 750 MW captive power plant. Both the plants were to start production from last year, but the inordinate delay in clearance of the block had messed up their plans.
The Chhatrasal block, situated in Sidhi (Madhya Pradesh) belongs to Anil Ambani-led Reliance Power and is essential for its Sasan ultra mega power project.
MENU 