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Metis Weekly Sectoral PostPower & Coal Sector

October 25-30, 2010



2 | Metis Power & Coal Weekly Sectoral Post

October 25-30, 2010

Power

Generation

NTPC scouts globe for independentnuclear power plant's reactor suppliersADAG to invest Rs 75000 crore inMadhya Pradesh in 5 yearsONGC's Tripura power project to startproducing electricity next yearRPower awards Rs 10K cr order toGE for Samalkot projectIndia to build 2 TPPs for Bangladesh& supply 250 Mw of power from 2012Sterlite revises Punjab power projectoutlay by Rs. 3k crore- to add a 660MW unitNTPC to set up a TPP in MP at Rs20K crL&T appeal on NTPC tenderdismissed by SCCentre asks Goa to set up gas-basedpower plantAdani Power plans APMLshareholding merging with itReliance Power signs $8.3-b deal withShanghai Electric

Transmission

Kalpataru Power Transmissionsecures 2 orders worth Rs. 384 crore

Distribution

IIT to improve power distribution inDelhiMSEDCL dithers on open accessregime: to lose major revenue sourcePSPCL aims to save Rs 400 cr a yearby shifting out all power meters

Renewable

10,000 villages to get power fromrenewable energy sourcesSuzlon Energy planning to spread itsoperations in LatAm, AfricaIndosolar inks Rs 2,700-cr deal withChinese companyIndia emerging key hub for windturbines

Others

All eyes on High Court ruling onregulatory jurisdiction over powerderivatives

SJVN hopes to enter power tradingthis fiscal

Import duty on power equipment onhold: Shinde

http://news.metisbs.com/web/permalink.php?type=1&id=382









October 25-30, 2010

Coal Villagers accept Jindal's coal washery project Row over Bengal coal block

Think growth, give full mining rights: Coal min Coal India issue price fixed at Rs. 245 per share Power ministry asks for environment clearance for coal mines India to use coal tax revenue to establish risk fund to encourage loans to Solar Power

Projects




October 25-30, 2010

GenerationNTPC scouts globe for independentnuclear power plant's reactor suppliers -NTPC Ltd is scouting for tie-ups with global

reactor manufacturers for setting up nuclearpower projects on its own. The thermal powermajor plans to firm up independentcollaborations with global reactor vendors toset up imported Light Water Reactor-basedatomic projects. The company feels that theIndo-US deal has opened up opportunities forit to foray into independent nuclear powerproduction. It also has a JV with NPCIL forbuilding a 700 MWe indigenous PressurisedHeavy Water Reactor-based project.

ADAG to invest Rs 75000 crore in MadhyaPradesh in 5 years - The Reliance- ADAG willinvest over Rs 75,000 crore in power, miningand coal projects in Madhya Pradesh in fiveyears. The company would make megainvestments that include India‟s largestprivate-sector coal mines with a capacity toproduce 25 million tonnes a year and acement plant that will initially produce 10million tonnes a year and its capacity wouldlater be doubled.

ONGC's Tripura power project to startproducing electricity next year- Oil andNatural Gas Corporation's (ONGC) first unit ofa capacity of 363 MW, of its 726 MWcommercial power project in Tripura wouldstart generating electricity in December nextyear. The project is being developed by itssubsidiary ONGC Tripura Power Co Ltd(OTPC). A consortium comprising of the US-

based General Electric (GE) and India's state-run BHEL has been awarded the contract tosupply gas turbines for the thermal powerproject. The power project is beingcommissioned in Palatana, about 60 km southof Agartala, at a cost of Rs 9,000 crore. Thepower project would fully start generating 726MW power by March 2012.RPower awards Rs 10K cr order to GE forSamalkot project - Reliance Power said it hasawarded a Rs 10,000 crore equipment order to

GE Energy India for the expansion of its2,400-MW gas-based power project atSamalkot, in Andhra Pradesh. GE will supplysix frame 9FA gas turbines, 3 D-11 steamturbines and generators for the power projectunder the contract. Reliance Power has alsosigned a 15-year contractual serviceagreement under which GE will providemaintenance services for the power project.This contract is the largest order for GEEnergy in India.

India to build 2 TPPs for Bangladesh &supply 250 MW of power from 2012 - Commerce Minister Anand Sharma has saidthat India would start supplying electricity tothe neighbouring country Bangladesh from2012. India has agreed to supply 250 MWelectricity from its grid to the power-starvednation.

State-run NTPC in collaboration withBangladesh Power Development Board wouldestablish two thermal power projects atChittagong and Khulna for mitigating thepower shortages in the neighbouring nation.Feasibility study of the two power projectswould commence soon. A Memorandum ofUnderstanding was signed between the twoparties here in August for setting up two 1,320MW each power projects. The power plantsare likely to come up at an investment ofapproximately Rs 13,200 crore. The coal-firedpower plants are likely to be installed on a50:50 equity basis to be run on imported coaland operated by NTPC.

Sterlite revises Punjab power projectoutlay by Rs. 3k crore- to add a 660 MWunit - Vedanta Group firm Sterlite Energy hasrevised the outlay for its 2640 MW, proposedTalwandi Sabo power project in Punjabupwards by over Rs 3,000 crore, taking thetotal investment commitment to around Rs13,000 crore. The Punjab government hadrecently given the nod to Sterlite Energy toadd one more unit of 660 MW to the upcomingthermal project at Talwandi Sabo, in Mansa

district. Earlier this month, an MoU to this



































October 25-30, 2010

effect was also signed. This has increased thecost by Rs. 3,000 crore. The initial project costwas Rs. 10,000 crore. The project will becommissioned by 2014-15.

NTPC to set up a TPP in MP at Rs 20K cr-NTPC has executed a Memorandum ofUnderstanding (MoU) with Madhya Pradeshand MP Power Trading Company for settingup a 3,960 MW thermal power project atBarethi in the state. It will invest about Rs20,000 crore for setting up this coal-basedpower project. The project is likely to becommissioned during the XIIth Five Year PlanPeriod (2012-17).

This is a part of NTPC's plan of adding 50,000MW by 2012. Its current capacity is over30,000 MW.

L&T appeal on NTPC tender dismissed bySC - The Supreme Court on Monday,dismissed Larsen & Toubro's appealchallenging its disqualification fromparticipation in state-run NTPC's Rs 15,000crore power equipment tender and seeking astay on the bidding process. However, theapex court directed the High Court, where thematter is still pending, to decide the issueexpeditiously.

In a setback for L&T, the Delhi High Court hadon September 14 refused its plea to stay thebidding process for NTPC's tender, after theinfrastructure major was disqualified fromparticipation, ostensibly because it did notmatch the technical criteria for selection. TheHigh Court had also refused to intervene in thebidding process.

Centre asks Goa to set up gas-basedpower plant - The Power Minister on Tuesdaysaid that the Centre has asked the Goagovernment to consider setting up a gas-based power plant in the state. Goa being atourist destination, the power project had to beenvironment-friendly, he said.

Adani Power plans APML shareholdingmerging with it - Adani Power Ltd. is planning

to merge shareholding entity of Adani PowerMaharashtra Ltd (APML) in Adani Power. Themove is aimed at making APML a 100%subsidiary of APL. APL currently holds 74%stake in APML, a joint venture company

floated to execute 3300 MW power project atTiroda in Maharashtra. Adani Power did notdisclose the name of its JV partner in APML,which it plans to merge with it. However, asper Adani Power's Red Herring Prospectusfiled with Securities and Exchange Board ofIndia (SEBI) Millennium Developers hold 26%in APML. "In order to hold 100% of AdaniPower Maharashtra Limited (as againstcurrent holding of 74%), it is decided toevaluate the proposal to merge 26%shareholding entity of Adani PowerMaharashtra Limited in Adani Power Limitedsubject to necessary permission andapprovals in this regard.

Reliance Power signs $8.3-b deal withShanghai Electric- Reliance Power onThursday announced that it has given a $8.3-billion contract to Shanghai Electric Group CoLtd (SEC) for supply of 36 coal-fired thermalpower generation units, spare parts andrelated services over a 10-year period. Thistakes the total deal size between ReliancePower and the Chinese power equipmentmaker over the past couple of years to $10billion. SEC will supply boiler, turbine andgenerator packages for 30,000 MW capacity ofcoal-based power at six plants including the3,960-MW ultra mega power project atKrishnapatnam, the 5,940-MW project inChitrangi, and the 3,960-MW project in Tilaiya.

TransmissionKalpataru Power Transmission secures 2orders worth Rs. 384 crore - Kalpataru PowerTransmission (KPTL) has secured two ordersworth over Rs. 384 crore from PMC Projects(India) and National Grid Corporation of thePhilippines. It has secured a order for supplyand construction of 466 Km, 765 KV S/C Akola- Aurangabad Transmission Line for PMCProjects (India) - a joint venture betweenMaharashtra State Transmission and Adani






























October 25-30, 2010

Power. The order is worth Rs. 286 crore. Thecompletion period for this order is 14/16months. The other order secured by KPTL isfrom Philippines for supply and construction of108 Kms, 230 KV double circuit, Kirahon-

Maramag Transmission line for National GridCorporation of Philippines. The completionperiod for this order is 14 months.

DistributionAPDRP makes no impact in JK - AcceleratedPower Development and Reforms Programme(APDRP), a multi-ended centrally sponsoredpower reforms oriented scheme, has failed tocreate much impact in Jammu and Kashmir as

one of its major components to improve thepower distribution network in the state has notwitnessed much progress, particularly in theurban areas. The Transmission andDistribution losses in Jammu and Kashmirhave reached to 46%.

JK despite getting nearly Rs 500 crore in thepast 6-years under the scheme was unable tomake desirable progress in the replacement ofworn and old Transmission and Distributionnetwork.

MERC plans to stay power tariff hike byReliance Infra - Maharashtra government hasinstructed the MERC to stay the power hike byReliance Infrastructure. This decision came inresponse to the protest by political partied ledby Congress. Reliance power is the costliestcompared to other suppliers as it hiked tariffsby 3% with immediate effect last month.

A cabinet minister said that considering

severity of the issue, the cabinet has informallydecided to instruct MERC, using its specialpowers bestowed to under Section 108 of theElectricity Act, to ask Reliance Infrastructure toimmediately stay the power hike. The ministersaid that the issue would now come up beforethe cabinet sub committee on power for finalapproval. Earlier also, the State Governmenthad instructed MERC to stay tariff hike by theReliance.

MSEDCL dithers on open access regime: tolose major revenue source - TheMaharashtra State Electricity DistributionCompany Ltd (MSEDCL) is reluctant to let goof its major source of revenue — its industrial

consumers. The utility is yet to give NoC toover five proposals from industrial houses inPune for purchasing their own power andthereby paving the way for an “open access”regime. The Maharashtra ElectricityRegulatory Commission (MERC), meanwhile,is in the process of issuing a regulation on thematter by November this year.

MSEDCL managing director Ajoy Mehta saidthat the utility had no objection to the openaccess policy. “But we have to protect theinterests of farmers and smaller consumers,”he said, adding that they were waiting for theMERC regulation on cross-subsidy surchargethat can be levied from those who want topurchase power.

PSPCL aims to save Rs 400 cr a year byshifting out all power meters - Making theshifting of all power meters outside thepremises of the consumer a top priority,Punjab State Power Corporation (PSPC)hopes to save around Rs 400 crore annuallyfrom this exercise by March 2011. However,the Corporation has so far managed to getonly 20 per cent of the total of 66 lakh powermeters outside the consumers‟ premises. Theprocess of accomplishing the task so far hasnot been smooth for the PSPCL staff.

According to the new system, each consumerwould continue to have an electronic powermeter of his own but it would no longer be

installed within his premises. Instead, theelectronic meters would be installed on specialpillars outside the premises of the consumer,in order to avoid any kind of tampering. Themove would help prevent power theft byconsumers, as well as power losses, and theconsumer would be charged from the outsidepoint where his meter is installed. This wouldhelp check power losses as the Corporationwould tally the total units on the outside meterand add up the individual meter billing to

match the two. 800 million units of power can






















October 25-30, 2010

be saved once all the meters are shifted out ofthe consumer‟s premises, which will result intotal saving of about Rs 400 crore a year.

Renewable10,000 villages to get power fromrenewable energy sources- Union Ministerfor New and Renewable Energy FarooqAbdullah on Tuesday announced that 10,000remote villages across the country would beelectrified with renewable sources at a cost ofRs. 500 crore by March 2012 under aninnovative initiative that will also generateemployment.

Under the scheme, one person would beappointed in each village for maintenance ofpower plants set up there. The type of plantsto be set up would depend on the renewableenergy source available in the villages.

Suzlon Energy planning to spread itsoperations in LatAm, Africa- Wind turbinemajor Suzlon Energy has said it is looking toenter new regions, mainly Latin America andthe African continent in the coming years.

“Though our major focus will be on India only,we are planning to enter the markets of LatinAmerica and African countries in the next fewyears,” Suzlon Energ y Director, Mr HarishMehta. Suzlon is the third largest player in theglobal market with 10% share worldwide, andmore than 50% share in the Indian market.

Indosolar inks Rs 2,700-cr deal withChinese company- Indosolar Ltd,photovoltaic (PV) cell manufacturer, hasentered into a deal for procuring high qualitywafers from China-based GCL-Poly EnergyHoldings Ltd. GCL will supply silicon wafers foran approximate value of Rs 2,700 crore toIndosolar from 2010 to 2014. It will provideIndosolar a total of 209 million pieces(equivalent to 815 MW) of wafers in the nextfour years. The deal was signed on Tuesday.

India emerging key hub for wind turbines-India, with an installed wind generatingcapacity of 12,800 MW, is emerging as a

major manufacturing hub of wind turbines. Asof now, 17 manufacturers have a consolidatedannual production capacity of 7,500 MW andnine new companies are expected to enter theIndian wind energy sector in the next one or

two years. The annual wind turbinemanufacturing capacity is likely to cross17,000 MW by 2012-13, according to abackground note on the wind energy industry,prepared by the Global Wind Energy Council.

Indian companies are exporting wind turbinesand turbine blades to Europe, the US,Australia, China and Brazil. Some of theforeign companies with subsidiaries in Indiaare sourcing more than 80 per cent of theircomponents from Indian componentmanufacturers.

because of the advances in technology thathelp harvest more wind even at lower speeds.)

The renewable energy certificates, whichwere among the regulatory measures taken tohelp grow the renewable energy sector, will belaunched shortly and they will also help thesector grow.

OthersAll eyes on High Court ruling on regulatoryjurisdiction over power derivatives-Whether the Forward Markets Commission orthe Central Electricity Regulatory Commissionwill have jurisdiction over trading in electricityderivatives will be decided any time now bythe Bombay High Court.

The hearings in the matter of the two cases ofFMC and Multi-Commodities Exchangeagainst CERC got over last week and thecourt is expected to deliver its verdict shortly,according to sources. An official at MCX(which had started electricity derivatives inJanuary 2009) said it discontinued trading inFebruary this year because of the dispute.

Meanwhile, it is little known that at a meetingof a Committee of Secretaries a couple ofmonths ago, it was decided that till the disputeis resolved, CERC will omit the provisionsrelating to electricity derivatives from its powermarket regulations; and that the Department of























October 25-30, 2010

Consumer Affairs will de-notify electricityunder Section 15 of the Forwards ContractsRegulations Act. There will be no trading inelectricity futures for the time being, said theminutes of the committee.

The dispute started when Power Exchange ofIndia (in which NSE is a promoter) complainedto CERC saying that electricity futures arewithin the domain of CERC and that FMCcannot give permission to MCX for electricityderivatives.

SJVN hopes to enter power trading thisfiscal - State-owned hydel power producer,SJVN, has firmed-up plans to start a powertrading subsidiary and hopes to earn up to Rs80-crore revenue per annum from the vertical.

"We already have additional power and we willalso request Himachal Pradesh for giving ustheir share of power (for trading). We want toenter into power trading," SJVN's Chairmanand Managing Director, H K Sharma, toldreporters.

The hydel power company is also bullish onalternate sources of power and is mulling toset up a massive 50 MW solar power

generation farm in Karnataka and a 50 MWwind power project in Gujarat, he added. "Weare looking for a joint venture partner from theprivate sector to set up the solar farm projectin Karnataka. We have invited expressions of

interest to set up solar projects in the state,"Sharma said.

Import duty on power equipment on hold:Shinde - Power Minister Sushilkumar Shindeformally declared that an import duty on powerequipment has been pushed off until at leastthe 12th plan, after the finance ministry blastedthe proposal placed before the Cabinet lastweek. The duty, pushed by BHEL and Larsen& Toubro for all ultra mega power projects,failed to meet muster, thus allowing any newUMPP order to be imported duty free for atleast the next two years.














October 25-30, 2010

CoalRow over Bengal coal block - Six Bengal-based sponge iron manufacturers are in a fixas the coal block allotted to them is located in

the leasehold area of Great Eastern EnergyCorporation Ltd (GEECL) that produces coalbed methane from the region. Biharinath blockin Bankura, Bengal, was allotted for captiveuse by the six companies that had formed aconsortium for the block. However, their plansto start mining on the 10.5-sq-km block havehit a roadblock after the environment ministryand subsequently the directorate general ofmines safety (DGMS) refused to give them thego-ahead following objections from GEECL.Bankura DRI expected to mine 700,000tonnes of coal per annum to be distributedequally among the six companies.

However in 2001, the oil ministry awarded theblock to GEECL, India‟s first company tocommercially produce coal bed methane(CBM). The company has invested Rs 800crore in the block spread over 210 sq km.However, they are yet to start work atBiharinath. GEECL started commercialproduction of CBM three years ago.

Think growth, give full mining rights: Coalmin - The coal ministry is reaching out to otherministries to put an end to the exercise ofclassifying coal fields into „go‟ and „no go‟areas according to their forest cover.

The ministry has circulated a Cabinet note,which make the argument that mining shouldbe allowed across the country wherever thereare proven coal reserves . In the meantime,

the coal ministry has rallied end-userministries like power and steel around it. Puttogether, the ministries appeared to havepainted a grim picture of slowing growthprospects. It is argued that paying too muchattention to environmental concerns would ineffect lead to "curtailment of energy source".This move would "ultimately result in thecountry missing growth opportunities."

In its Cabinet note, the coal ministry says "any

new criteria at this stage that causes us toreassess our resource base will not only pushthe power generation growth plans of the

country but will also have its effects in thefuture when the climate change issuebecomes more stringent. Thus on the whole,it will only result in precious loss of time forbuilding up our power generation capcity andenergy supply capacity." The ministry hasargued that the initial study of nine coal fieldsput 203 of a total of 603 blocks in the "no go"category. A move that would put 660 MT ofcoal every year out of reach.

Coal India issue price fixed at Rs. 245 pershare - The government on Monday fixed CoalIndia‟s mega IPO issue price at Rs. 245 per share, the upper end of initial offer price range.It would fetch over Rs. 15,000 crore by issuing63.16 crore shares of Coal India at a price ofRs. 245 per share. It will offer a discount offive per cent to retail investors.

The board of Coal India meeting is on toapprove the issue price. The company isexpected to list on stock exchanges onNovember 4.

Power ministry asks for environmentclearance for coal mines - India's powerministry has approached the environmentministry to allow functioning of some of thecoal mines which fall under restricted areasand were dedicated to supply coal to powerplants, an official said Tuesday. PowerSecretary P. Uma Shankar said that about 10projects, which were coal mines being

developed by power developers fell underareas classified as 'No Go' by the Environmentministry.

A number of power projects and developingmines to supply coal to thermal plants havebeen put on the back burner with the ministryof environment and forests withholdingpermission to them.

'If this is stopped the money spent will be






















October 25-30, 2010

wasted. We have also said this will affectcapacity of Coal India to develop coal mines,'he added.

India to use coal tax revenue to establish

risk fund to encourage loans to SolarPower Projects - The Indian government isconsidering using revenue from a coal tax fora fund designed to minimize to the risk offinancing solar projects and convince privatebanks to lend to the sector. “It‟s a riskmitigation fund, in the range of a few billionrupees ”, said Debashish Majumdar, managingdirector of the Indian Renewable EnergyDevelopment Agency Ltd. The fund will seekto partially protect solar projects from any latepayments or defaults by state distributioncompanies that are expected to buy theirpower under a government project aiming toboost India‟s solar capacity .

Part of the money raised from a new tax oncoal producers may go toward the fund, hesaid. India imposed a coal levy in July, whichis expected to raise 25 billion rupees ($406million) in the financial year ending March 30,according to Environment Minister JairamRamesh.











October 25-30, 2010

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