Electricals Today April 2013 Issue

An ITP Publishing India Publication

Total number of pages 52Volume 1 | Issue 3 | April 2013 | `50

ETELECTRICALS TODAYMORE POWER TO THE INDUSTRY

RELY ON HIMRELY ON HIMYOU CANRELY ON HIM

RELIANCE INFRA CEO LALIT JALAN HAS TURNED

STATES NOT READY TO PRIVATISE DISCOMS

FOCUS

RELIANCE INFRA CEO LALIT JALAN HAS TURNED AROUND THE POWER DISTRIBUTION BUSINESS

JAYALALITHAA AND HERPOWER STRUGGLE

SPOTLIGHT

3april 2013 | Electricals Today

ConTEnTs

33

42

17

10 Column Sanjeev Aggarwal, MD of Amplus Infrastructure, on

how the wind sector in India has finally come of age

12 Cover story Lalit Jalan, CEO of Reliance Infrastructure, talks about

the success of the PPP model in distribution

42 spotlight Tamil Nadu CM J Jayalalithaa is struggling with a power crisis of historic proportions

PeoPle

17 Focus Despite the successes of Mumbai and Delhi, few

states seem willing to privatise their distribution

33 special report The Indonesian government's announcement

banning the export of low-calorie coal has sent tremors across the Indian power sector

36 In-depth This year's drought is an alarm bell for the water crisis that looms ahead

40 Analysis A detailed analysis of the budget proposals for the sector shows that a mixed bag came its way

RePoRTS

06 news, people & events Industry round-up, including news and events

46 Market data A look at key industry trends and statistics

50 Ten things about How supercritical plants save on carbon emissions

ReGUlARS

Lalit

Jal

an12Discoms today, whether in the public or private sector, urgently require tariff hikes to the tune of 50-60 per cent to meet their operating costs."

03_ET_Ap13_Contents.indd 3 04-04-2013 09:54:07

Electricals Today | april 2013 4

CommEnT

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Volume 1 | Issue 3 | April 2013

ETElEctricals todayMore power to the industry

J Jayalalithaa is many things to many people. But, to me, she has always been one thing: a megalomaniac. I believe the puratchi thalaivi (revolutionary leader) cap sits rather uncomfortably on her egocentric head – how else can you explain why the TN chief minister, who has senior party leaders routinely prostrating at her feet, is still struggling to find a plausible explanation why an estimated Rs100 crore was squandered away for the lavish wedding of her foster son V Sudhakaran even as her state teetered on the brink of poverty? Not surprising then that her party was wiped out in the subsequent Assembly election a year later in 1996!

But then, Jayalalithaa is nothing if not enterprising. Even as most parts of the state grapple with around 10 hours of daily power outage – plunging the industry in darkness and making Tamil Nadu one of the states with the biggest power deficit in the country – the CM has announced that she wants to make the state power surplus by the end of this year!

While sceptics have their reservations, the TN chief min-ister is unfazed as she goes about her task. Among others, Jayalalithaa has now taken it upon herself to personally monitor four in-the-works power projects in North Chennai, Vallur, Mettur and Neyveli. With the addition of 2,609 MW capacity when these plants are ready, Tamil Nadu’s installed capacity will cross 20,000 MW by mid-2014, compared to a peak demand of 14,174 MW.

It’s all very well on paper, but the reality is quite different. Theoretically, Tamil Nadu is still counted among the few states that are power surplus, if only the difference between total installed power capacity and the peak demand is taken. The truth, however, is that a lot of this capacity (3,483 MW – amounting to 28 per cent of the consumption in the state) comes from central projects. A large portion of the capacity – to the tune of 7,300 MW – is from wind resources, which can’t be scheduled accurately. And, last but not the least, there is the problem of underperforming units.

What’s more, despite a 4 GW power deficit and a discom with an accumulated loss of Rs40,000 crore, Jayalalithaa continues to provide free power to agriculture. (The average price paid by agriculture for power on an all-India basis is about 27 per cent of what domestic consumers pay.)

It is not as if the power brokers are not in the know. But the big question is: who is to tell her? Clearly, there are few takers for the job. More so as Jayalalithaa, like some other chief ministers, is gearing up to use power as an electoral plank. By all accounts, this is just another power trip for the puratchi thalaivi.

Jayalalithaa: On a power trip

Shafquat ali,Group editor, itp [email protected]

04_ET_Ap13_Ed letter.indd 4 04-04-2013 09:55:37

Electricals Today | APRIL 2013 6

NEWS

NEWS & PEoPlE

ANDHRA PRADESH CM PRoPoSES A REvERSE SwAP foR gAS

Hyderabad Hit by 4-Hour power cuts

unallocated power for Kerala

Andhra Pradesh Chief Minister N Kiran Kumar Reddy has proposed re-arranging the swapping mechanism for natural gas: RLNG being exchanged for domestic gas for power units in the state.In a letter to the Petroleum Minister Verrappa Moily, Reddy claimed that

the gas meant for fertilizer plants in the western region could be successfully diverted to power plants in the state and that in lieu,

spot RLNG could be supplied to the fertilizer plants, thereby economizing on the logistics involved.

The exercise would bring the cost of power down from Rs10.50 to Rs8 /kwh, he claimed.

He pointed out that the cost of LNG by the time it reaches Andhra Pradesh is

inflated by an additional 25 per cent by way of various levies. It would be easier if the gas-based

units in the west are given RLNG, instead of sending it via the pipeline all the way to AP and the surplus power

transmitted to Andhra Pradesh, Reddy has suggested. The minis-try's response is not known.

Power utilities in Hyderabad have resorted to four hours of daily power cuts in Greater Hyderabad. The Central Power Distribution Company Limited (CPDCL) which had been resorting to two-hour load-shedding increased it to four hours recently to cope with city's the peak demand.

The utilities had resorted to four-hour power interruption in April last year too after demand crossed 40 million units during peak hours. However, they have already rolled out a four-hour outage schedule this year since March to meet rising demand.

Keeping in view the acute power shortage faced by Kerala due to mon-soon failure, NTPC has suggested that unallocated power from its eastern region power stations could be pro-vided to the state. NTPC pointed out that cheap coal-based power has been allocated to Kerala time to time from the unallocated quota of NTPC’s east-ern stations by the ministry of power for pooling with the naphtha-based Kayamkulam power.

In 2011 315 MW, including 180 MW from Talcher stage-II and 135 MW from Farakka STPS, Kahalgaon STPS and Talcher stage-I, was allocated to Kerala. Recently, this was reduced to 215 MW which is not enough to make power generation from the Kayamkulam power station affordable for Kerala.

8

Reverse swapping will reduce the power cost from Rs10 to Rs8

Power crisis: In Andhra Pradesh, 6,500 MW of capacity has been lying idle due to gas shortage.

Rs8/kwh

06_09_ET_Apr13_News.indd 6 04-04-2013 11:11:38

7APRIL 2013 | Electricals Today

NEWS

NEWS & PEoPlE>>> RPowER flAgS off 1St uNit of SASAN uMPP

Reliance Power informed the Bombay Stock Exchange that the first 660 MW unit of its Sasan UMPP has been commissioned. "The first 660 MW unit at the Sasan Ultra Mega Power Plant has been successfully synchronised on March 9, 2013," a company state-ment said. The first unit would start commercial operations or selling of electricity from the plant in the next fortnight. This is Reliance Power's first UMPP with an estimated investment of over Rs20,000 crore. The project was awarded to the company in 2007. The electricity generated from Sasan would be sold to 14 distribution com-panies across seven states benefiting an estimated 35 crore people, the statement said. Coal production has already com-menced from the Moher and Moher-Amlohri coal mines and the Chhatrasal coal block has also received forest clearance and is under development. Reliance Power is also executing the Krishnapatnam and Tilaiya UMPPs.

9

We are happy to announce the commencement of power generation

at the Warora Plant, the group’s first coal-based power plant."

We have units which are not able to export power to the

extent they are available on the merchant side. Anything between 10-15 per cent of what is available for sale, we are not able to dispatch for

several reasons, one of the reasons being off-take.” Anil Sardana, chief executive officer, Tata Power

GM Rao, group chairman, GMR Group

Rating disoms will enable the identification of areas of concern

that impact their performance adversely and incentivise utilities

to improve their operational and financial performance.”

P Uma Shankar, secretary, ministry of power

06_09_ET_Apr13_News.indd 7 04-04-2013 11:11:40


NEWS

TPC’s MunDrA uMPP CoMPLeTeD

The completion of the 4,000MW Mundra ultra Mega Power Project (uMPP), being developed by Tata Power, comes as a relief for the ministry of power. Anil sardana, managing director, Tata Power, said, “The synchronization of unit 5 of Mundra uMPP by Tata Power marks a milestone in India's history as the first ultra Mega Power Project, setting execution excellence benchmark for Indian power sector.”

>> > aT a glaNcEIndiabulls Power synchronizes amravati TPSIndiabulls Power, the flagship company of the Indiabulls Group, announced the suc-cessful synchronization of the first unit (270 MW) of its 1350 MW Amravati Phase I Thermal Power Plant in Maharashtra with the western region grid. Power from the plant will be supplied to the Maharashtra State Electricity Distribution Company Limited (MSEDCL) over a 25-year period.

DPSc to commission 220/33 KV SubstationDPSC Ltd is strengthening its power transmission and distribution network in West Ben-gal and is developing a 220/33 KV substation at JK Nagar in Burdwan district. DPSC on behalf of the West Bengal State Electricity Transmission Company Limited (WBSETCL) will construct the 15-km new 220 KV double circuit transmission line from Mangalpur to J K Nagar substation. This will help connect the area with the national grid via the Santaldih TPS of WBPDCL and Durgapur 220/132/33 KV Substation of WBSETCL. The project is expected to be commissioned by 2013-14 at cost of Rs117 crore.

THDc’s revenue realisations dropThere has been a dramatic drop in the revenue realised by Tehri Hydro Development Corporation (THDC) between 2006 and 2012-13. Between 2006 to 2011, the company had a record 100 per cent revenue realisation but after 2011 the beneficiaries began defaulting and realisation till February 2013, stood at a mere 45 per cent. This uncertainty of payments from the customers of Tehri and Koteshwar HEPs since 2011 has sapped THDC of its financial strength. To help tide over its financial trouble, Canara Bank has offered a Rs-300 crore short-term loan to THDC at the base rate of 10.25 per cent. THDC has also been sanctioned short term loans from Punjab National Bank, Power Finance Corporation and Rural Electrification Corporation.

Eac denies clearance to Purthi’s HEPThe expert appraisal committee (EAC) of the ministry of forests and environment (MoEF) for river valley and hydro-electric projects has once again refused scoping clearance for the Purthi hydroelectric project on the Chenab river in Himachal Pradesh. The environmental clearance proposal for the project was discussed in a recent meeting of the EAC where the committee noted that the project remains unacceptable from an environmental point of view. Earlier too the project was discussed by the EAC, when the committee pointed out that it violates some of the key conditions that must be adhered to for maintaining ecological balance and refused clearance. The committee said that the proposed tunneling, as a result of depriving the release of tail race tunnel (TRT) water of Reoli-Dugli back into Chenab, will virtually dry up and deprive the river of water flow in a 23.32-km long continuous stretch. In addition, the tail water level (TWL) of Purthi HEP will match with the FRL of the downstream project Sach-Khas, which has already been approved by the Government of Himachal Pradesh and thus, leaves no free-flow stretch.

MPPgcl to replace Satpura stage 1 with 660 MW unitMadhya Pradesh Power Generating Co. Ltd. (MPPGCL) has proposed to set up a 660 MW unit to replace the 42 year-old coal-fired Satpura thermal power station at a cost of Rs4,035.61 crore. Stage 1 of the Satpura TPS has 5 units of 62.5 MW. These units have been operation for the past 42 years and have out-lived their useful plant life. MPPGCL will decommission these units and replace them with higher-sized units. Both the ministry of environment and forests and the CEA have already asked the company to retire these units. The proposed unit will require 3.34 million tonnes of coal and have a levelised tariff of Rs 3.05/Kwh at PLF of 85 per cent.

PuNjab INVITES bIDS foR 300 MW of SolaR caPacITy aDDITIoNpunjab energy development agency (peda) has invited offers for promotion and development of grid-connected solar power projects with an aggregate capacity of 300 Mw. of this, 250 Mw would be created by developing projects with a capacity of 5 to 30 Mw. the balance would be split between solar power plants of 1-4 Mw capacity. to be eligible to participate in the bid, a bidder should have successfully installed and commissioned at least one project with a capacity of 5 Mw or higher grid connected capacity which has been in operation for at least one year.

TPc To PRocuRE PoWER foR MuMbaI tata power company Limited’s distribution business for Mumbai, (tpc-d), has invited tenders for medium-term purchase of electricity under case-1 bidding procedure for distribution in Mumbai and adjoining licensed suburbs. the company will procure power during the next three fiscals and has invited tenders to procure 300 Mw power (± 20%) from april 1, 2013 to March 31, 2014 and april 1, 2014 to March 31, 2015 (supply period i & ii) and 250 Mw (± 20%) from april 1, 2015 to March 31, 2016 (supply period iii) on diurnal load basis.

06_09_ET_Apr13_News.indd 8 04-04-2013 11:11:41


NEWS

fiRst-eveR vgf pRoject in tRAnsmission inAuguRAted in HARyAnA

india’s first viability-gap funded, 99-km power transmission line project in Haryana has been inaugurated. the 400 KV double circuit Jharli-Kabulpur-rohtak line was built by a joint venture of Kalpataru power transmission and techno electric engineering company. the rs444-crore public-private-part-nership project with the Haryana government has received rs92 crore of viability gap funding from Government of india. the joint venture partners brought in rs76 crore of equity (51 per cent with Kalpataru) and raised debt of rs276 crore.

EAton nAmEs south AsiA hEAddiversified industrial manufacturer eaton has consolidated the the company’s New delhi-based power distribution and power quality commercial organizations for south asia and named sushil Virmani as sales director, electri-cal sector, south asia. He will report to anoop Nanda, managing director – rest of asia, electri-cal sector. the consolidation aims to increase eaton’s penetration and grow the overall busi-ness in south asia.

Virmani has held a variety of senior manage-ment roles over his 13 years with eaton. in his most recent role as sales director for eaton’s power quality business in south asia, he was responsible for the development of the compa-ny’s power quality sales strategy, channel partner development, customer service and sales team management across south asian countries. in his new role, Virmani will be responsible for leading the south asia commercial organization and driv-ing a unified strategy in this market.

Milestone: The Jharli-Rohtak line recieved

funding of Rs92 crore.

EPc coNTRacTINg: lEgal, TaxaTIoN, coMMERcIalS aND RISK Venue: Crowne Plaza Okhla, New Delhi date: April 22-23as india’s infrastructure sector grows, it offers challenging oppor-tunities for the investors and developers. with the increase in the number of projects being executed and contracts being awarded, it is important to understand and manage the commercial and legal challenges associated with these projects. Here is an opportunity to address these issues.

coal TRaDINg SuMMIT: INDIa 2013Venue: Crowne Plaza, Okhla, New Delhidate: May 24with increased emphasis on developing strong coal trading and infrastructure platforms on national and global level, indian organizations are rushing to secure their growing energy needs. this conference aims to bring together delegates from across the globe to deliberate on the emerging coal policy landscape, domestic coal scenario, global trends and demand-supply logistics.

RENEWablE ENERgy WoRlD INDIa 2013Venue: Bombay Exhibition Centre, Goregaon, Mumbaidate: May 6-8renewable energy world india 2013 shifts from New delhi to india’s financial hub, Mumbai, where the event was last held in 2010. with this move, the high-level conference and exhibition aims to expand its coverage from the northern part of india, which has been its main focus, to include the west and south. under the theme, indian power – time to deliver, the event brings together decision-makers and professionals from leading companies.

lII 2013 (lIgHT INDIa INTERNaTIoNal)Venue: Chenna Trade Centre, Chennaidate: September 13-16india’s largest and brightest lighting fair, Lii 2013 (Light india international, is being organized by the indian society of Lighting engineers. Last year, the event attracted 220 participants includ-ing 80 from overseas, and 15,000 business visitors. this is year is expected to be no different with Lii 2013 expecting more than 250 manufacturers, including 100 from overseas. the exhibition will showcase a wide range of products over a 16,500 sq. m exhi-bition area. For more information, log on to www.lii.co.in

EVENTS

06_09_ET_Apr13_News.indd 9 04-04-2013 11:11:42


column

The wind energy sector in India is rapidly coming of age as lenders get more comfortable with the business model. But, for now, it is over to policy-makers and regulatorsSanjeev AggarwalManaging director, Amplus Infrastructure

Winds of change

In the recent past, wind industry has been undergoing a regulatory transition given its increasing importance in India’s energy basket. The Central Electricity Regulatory Commission (CERC) ordered on January 16, that mock exercises for scheduling power from wind farms, prior to

implementing the unscheduled interchange (UI) mechanism, be completed within three to six months.

With the increase in wind capacity across the country and in particular its concentration in some states, it is indeed a cause for worry, considering the infirm nature of this resource. There is no doubt that once the forecasting and scheduling for wind energy stabilizes, the image of the wind energy business will be boosted and it will be a near-firm power from being considered an infirm power, as it is now. This will also ease the job of the SLDC and will be of great help to third-party sales and inter-state exchange of power.

Countries such as Denmark, Germany and the United States have been able to meet their strict forecasting guide-lines through the availability of updated met information and employing various technical measures like energy assessments, use of a sufficient number of onsite meteorological masts, wind

flow modeling, etc. And we want to go the same way.

look BEFoRE lEapInGBefore we move in that direction, there are

certain technical imperatives that need consideration:

• Advanced technical measures are bet-ter suited to geog-

raphies with consistent wind patterns, unlike India. It is

not possible to forecast wind in hilly areas like we have in the states of Karnataka

and Maharashtra.

• Metering facilities as well as the technology to evaluate forecasts and schedules provided by wind energy producers will require significant new investments.

• Wind energy contributions to the grid vary vastly across states and with some states such as Tamil Nadu having relatively high contribution to the grid vis-à-vis conventional energy and other states like Orissa and Jharkhand with limited wind energy poten-tial. Therefore, regulators need to reconsider whether a one-size-fits-all policy is the best way to go about scheduling wind power in India.

• Machine to machine forecasting and scheduling varies signifi-

Denmark, Germany and the US have been able to make accurate wind forecasts employing various technical measures like energy assessments, use of a sufficient number of onsite meteorological masts, wind flow modeling, etc. And we want to go the same way.

cantly as forecasting and scheduling of every machine is depen-dent on various factors according to wind speed at the location, height of the nassel, make of the machine, etc.

FIndInG ITs FEETApart from the technical imperatives outlined above, probably the more important part here is that the Indian wind industry is just starting to mature now with the investors and lenders getting com-fortable with the wind risk. It has taken a long time for the lenders to accept the wind risk in a typical project finance model.

Netting P50 or P70 over 10 years will give comfort to

lenders

p50

10_11_ET_APR13_Sanjeev Agarwal.indd 10 04-04-2013 10:35:33


WIND ENERGY

While there is intra-hour, intra-day and intra-month variability, a netting effect over longer timescales also exists that gives the inves-tors comfort that over a 10-year horizon, that there is a good likeli-hood of achieving P75 or P50. It is this netting effect over the long term that provides enough predictability at least for wind power developers to gain access to capital.

Now if we increase this risk by saying that now you need to extend the risk horizon by getting into 15 minutes prediction in an uncertain technological and geographical terrain like that of India, that is really creating another challenge for an industry that is just coming to a mature level of investments.

The absence of reliable meteorological data, historical wind pat-tern data, sophisticated wind prediction technology coupled with inconsistent wind-flow patterns prevalent in India, means that the imposition of UI charges will have a crippling effect on financing of wind energy projects as well as project profitability.

It is particularly important in cases where there is no potential upside for the generator since they are in any case taking the risk of wind resource in a feed-in-tariff scenario where they are paid for only what they inject in to the grid.

WaY FoRWaRDSince bringing about grid discipline is the underlying rationale for scheduling and imposing UI charges, sched-uling wind energy at this stage for practical consider-ations is likely to hurt more than what we stand to gain. Some practical suggestions that the regulators need to work on are:

• We need to provide enough interconnection to wind projects so that wind can flow into the larger grid on a real-time basis. Rather than state grids, we need to create green corridors that transmit power across states and across regions.

• Another solution lies in the more advanced meth-ods of energy storage. Pump storage via hydro-power is already operational in many countries including in India, and there are potential new technologies in everything from compressed air to giant flywheels. Not many people would have noticed that Apple Inc has filed a patent that proposes electricity gen-eration from heat transfer rather than rotational energy, which is how most wind turbines work. Now, whether this technology works or not, this is the step in the right direction to deal with infirm sources of energy.

• Consider matching up the wind generation with the gas-fired plants that can quickly ramp-up in case of sudden shortfall in generation due to wind change. Gas-fired plants can be consid-ered as a natural hedge to the vagaries of wind and the cost can be reasonably absorbed in the system.

ovER To ThE REGulaToRs Unless the regulatory framework gets it right, there could be serious drawbacks to investing in additional wind capacity, hampering India’s efforts to achieve low-carbon power genera-tion and the wind industry investments can really suffer.

Let us leave the system for now as real feed-in for renewable sources so that they are not curtailed for economic or opera-tional reasons, and back them down only when the stability of the grid is at stake.

10_11_ET_APR13_Sanjeev Agarwal.indd 11 04-04-2013 10:35:51


covEr sTory

12_16_ET_Apr13_Cover story_Jalan.indd 12 04-04-2013 11:23:36

Mr reliable The sofT-spoken Ceo of RelianCe infRasTRuCTuRe, laliT Jalan, is pushing foR The publiC-pRivaTe paRTneRship model in disTRibuTion aCRoss The CounTRy. iT is only a CusTomeR-CenTRed appRoaCh and a give-and-Take RelaTionship beTween The goveRnmenT and The pRivaTe playeR ThaT Can seRve up The winneR, he says

INTERVIEWED By NIRaNjaN MuDholkaR

Lalit Jalan joined the undivided Reliance group in 1995 at the request of his Wharton business school mate Anil Ambani as the head of the polypropyl-ene business and grew it to Rs6,000-crore revenue venture, despite having no background in the

petrochemicals industry. At 39, he was the youngest-ever CEO at Reliance. From 2003 onwards, he has led the metamorphosis of what was once a plain-vanilla power distribution company into the Rs17,900-crore multi-business infrastructure company.

In the context of the huge power outage that happened in the north last year, you have said that India needs a more cohesive energy policy as well as strict grid manage-ment. What exactly did you mean by these two points? Have you seen steps being taken towards it since then?Back to back grid failures last year, leading to complete blackout of the entire northern half of the country, affecting over 600 mil-lion people, was as much due to lack of investment in capacity building and modernization of transmission networks, as it was due to the excess drawls by the states.

The issue of excess drawl needs to be addressed at two levels. Firstly, it is necessary to evolve and implement a comprehen-sive energy policy to bridge the power deficit situation in the country by encouraging and facilitating private investments in the sector. A few years ago, the private sector had responded enthusiastically. But their enthusiasm has been seriously dented due to issues such as delays in clearances, land acquisition, fuel linkages and the stressed condition of distribution utilities. Solu-tions to all these challenges must be found urgently. Secondly, grid discipline needs to be enforced strictly, so that the distribu-tion utilities maintain discipline and do not overdraw.

Financial Restructuring package towards addressing the issues of Distribution utilities, signing of FSA's by coal India, setting up of cabinet committee on Investment are definitely steps in the right direction. Further, National Power Committee to suggest methods for enforcing grid discipline is a welcome move.

one of the biggest challenges for the power sector comes from the massive AT&c losses. rInfra’s Delhi distribu-tion, running on one of most successful PPP model in India, has in a few years, brought down the AT&c loss from over 55 per cent to less than 20 per cent. How did you make this possible? can this model be replicated elsewhere?When we took over our Delhi discoms in the year 2002, the legacy that was inherited was in complete shambles and on the brink of a collapse. Electricity theft was rampant and the system looked financially unviable and unsustain-able. There was near zero investment on network upgradation.

It was clear to us that network and technology would be a critical partner in this transforma-tion. So we invested about Rs6,500 crore for the complete overhaul of systems and processes. State of the art technologies such as SCADA and GIS sys-tems were introduced which led to dramatic improvements in the quality of power supply. These ultramodern technologies also helped reduce


DIsTrIbuTIon

Rinfra's investment in upgrading the network in delhi

rs 6,500 cr


equipment failures substantially besides helping us detect theft. Single-minded determination and focus to contain theft

led to unprecedented reduction in commercial losses, from 45-percent levels at the time of privatization to 4-5 per cent

currently. We undertook major initiatives such as replace-ment of electromechanical meters, replacement of

bare overhead conductors with insulated aerial bunched conductors, revamping LT (low

tension) distribution system, installation of HVDS (high voltage distribu-

tion system), installation of APFCs (automatic power factor controllers). Apart

from that, right metering solu-tions with tamper-evident features

were implemented to eliminate manual reading and consequential errors. Automated

meter reading (AMR) technology was deployed for high-end customers. Simultaneously, theft-prone areas

were identified and regular raids were carried out to book offenders.

As recently as five to six years ago, a typical Delhi resident was completely exasperated by 4-5 hours of daily power cut. It is an amazing feat that he now experiences mere 4-5 hours of

interruptions in the entire year! A true testimony of the fact that reliability levels in Delhi are now comparable to international benchmarks. This success not only gives hope to the planners and policy makers that a solution exists but also provides them with a tried and tested approach and methodology that can be successfully replicated elsewhere in the country.

RInfra is the largest private sector distributor of power supply-ing to over six million customers in two metros.

What are the biggest issues faced by the distribution sector?The clear lesson from the recent Indian experience is that the most critical challenge faced by the power sector is the abysmal health of discoms, which has led to inadequate investments in the sector. This has, in turn, led to serious power shortfall, as well as poor quality of supply, which are both very serious constrain-ing factors on overall economic output.

The combined financial losses of all the power distribution companies stand at a staggering Rs1,200 billion (Rs1,20,000 crore or nearly 1.5 per cent of the country's GDP). These losses have accumulated due to the rising gap between the average cost of supply and the average realization, which means that distribution companies lose Rs2 for every unit of electricity sold.

Keeping this in mind, discoms today across the country, whether in the public or private sector, urgently require tariff hikes to the tune of 50-60 per cent to meet their operating costs. While an increase of this magnitude will seem staggering to the political leadership and the consumer, the stark fact is that this hike would still leave unattended the subject of past accumulated losses due to irrationally-low tariffs.

There are other issues such as the need for reduction of cross-subsidies between diverse consumers. One testimony to the twisted nature of such arrangements is the fact that 24 per cent of entire electricity supplied flows to the agricultural sector, but yields less than 6 per cent of the total revenues. While it is laudable that the government is investing huge amounts in electrifying villages under the RGGVY programme, the question remains whether financially distressed distribution utilities are in a position to supply power to these villages at zero net real-ization after accounting for cash expenses. RGGVY provides only capital subsidy. The corresponding revenue subsidy support should also be considered by the government. Very often, we find that cash-constrained SEBs prefer selling power outside the state to paying customers than supply to non-paying farmers.

Another critical challenge faced by the power sector in India is the exceptionally high technical and commercial (AT&C) losses, which are prevalent across all distribution utilities. The national average of AT&C losses stands at an astounding 30 per cent today. IT-based analytics, energy audit, network augmenta-tion and unyielding focus on containing theft will aid discoms in containing these losses.

What is your power purchase plan?We have tied up all our power requirements, keeping in mind our consumers and load growth and ensured that it is as effi-cient as possible; i.e., at cheaper rates. We have also proposed


covEr sTory

Current commercial losses, down from 45% levels

4-5%


to pass on the benefits of the same to our consumers through reduction in tariffs.

you are working with the PPP model (in Delhi), private distribution (in Mumbai)? Which one do you prefer and why? Do you feel there is a need to further tweak these business models to make them more effective? Why?Mumbai is privately owned ever since its inception in 1929. On the other hand, Delhi is a Public Private Partnership (PPP) initiative and has completed a remarkable 10 years’ journey. Mumbai operations were always considered as a benchmark in the country. It is Delhi has truly been a turnaround story. It has witnessed a record loss-reduction of 40 per cent (from 57 per cent to 17 per cent), benefiting the Delhi government by a whopping Rs37,500 crore. At the same time, the citizens of Delhi have experienced phenomenal improvements in quality and reliability of power supply. It is interesting to note that the sale of generator sets, inverters and stabilizers have long since dropped to near zero in the city. Relentless focus on the customer has meant that service levels are comparable to global benchmarks. The success of this model lies in adopting a partnering approach between the government and the private player. The right implementation is also critical to success. Fac-tors such as transition support by the government, setting up of special courts and police support and independent regulator are also vital o the success of the model.

Compared to the franchisee model, the Delhi model is the one that holds greater promise and needs to be replicated else-

where in the country as a tried and tested long-term solution to the serious challenges that the sector faces.

How does your power price compare with Tata Power? How do you see the market moving when it comes to power tariffs? Despite efficient power procurement at rates cheaper than Tata Power, our tariffs are still higher because of our highly skewed consumer mix and the huge cross subsidy required to serve a large number of low end consumers. In absence of correct cross-subsidy surcharge, industrial and commercial consum-ers, who subsidize lower end residential category, were able to escape this responsibility by shifting to Tata Power. In the last three and a half years, around 3lakh plus consumers, majority of them high-end, moved to our competitor on account of sup-pressed cross-subsidy surcharge. However, it is pertinent to note that due to the high quality of services that we provide, many have subsequently switched back to us.

In addition to this, as I said earlier, in view of our cheaper power procurement costs in future, we have already proposed tariff reduction in out multi-year tariff proposal to the regulator, which if approved, would enable us win back our consumers.

you have always propagated reform and rationalisation on this front but do you see that happening? After all, it is a politically sensitive issue.Yes, timely tariff hikes in the power sector are perhaps its most

The most critical challenge faced by the power sector is the abysmal health of discoms, which has led to inadequate investments in the sector. This has, in turn, led to serious shortfall, as well as poor quality of supply, both of which are serious constraining factors on overall economic output.”


DIsTrIbuTIon


politically sensitive issue. Many states have not revised tariffs in the last 5-6 years, and some for over a decade. With average cost of supply growing at over 7 per cent CAGR in recent years, the situation has become untenable.

It’s critical to understand that purchase costs for power typi-cally comprise up to 80 per cent of the total cost of the distribu-tion function. Since the “truing up” process, involving a fix on the gap between power purchase costs and the revenues from sales, can take a few years for reasonable estimation, it’s important to institute and implement mechanisms that enable immediate pass through of any variation in power costs. This will avoid build up of so-called “regulatory assets”.

It is a welcome sign that governments and policy-makers have begun to acknowledge the dire necessity for tariff reform. Calen-dar year 2012 witnessed tariff hikes in 30 Indian states and union territories, averaging between 10 and 37 per cent. This is the first time that almost all states have raised tariff. Also, in a landmark decision, Tamil Nadu, increased tariff on electricity supplied to its agricultural consumers by 589 per cent, to Rs1.75 per unit.

One factor that has led to this more rational view is to do with the stringent measures made mandatory by banks and other institutional lenders for the disbursal of any fresh loans to the distribution companies, and the empowerment of state power regulators to revise tariffs by the relevant appellate tribunals.

Do you see any breakthrough happening with the coal linkage issue?

While, in the short term, Government is working on price pooling mechanism, the only solu-

tion in the long-term is to de-bottleneck domestic coal production, by either

improving Coal India’s produc-tivity or involving private players in coal production.

Power costs can be brought down by over 20-25 per cent from

the current levels, if we can do away with coal imports at three times the cost.

rInfra is also developing five transmission projects across 10 states worth about rs6,600 crore,

through its arm reliance Power Transmission Ltd (rPTL) making it the largest private player in the transmission sector. Tell us about the progress on this front.Reliance Infrastructure is currently developing five transmission projects, namely, Western Region System Strengthening Scheme II (WRSSS–II), Parbati-Koldam Transmission Project, North Karan-pura Project and Talcher II Augmentation Project through its arm Reliance Power Transmission Ltd.

WRSSS – II has been secured through the first ever tariff-based international competitive bidding in the Indian power sector. This is being implemented on a build, own and operate (BOO) basis. The cost of the project is about Rs1,700 crore and involves con-struction, maintenance and operation of nine transmission lines of 3,017 ckt km length, mostly in Maharashtra, MP and Gujarat. The project will help power flow into energy-starved Western region. Six transmission lines with a cumulative line length of about 1,434 ckt km have been commissioned. The remaining lines are on the verge of completion and the whole project is expected to be commissioned during 2013-14.

North Karanpura and Talcher II augmentation projects were won through tariff-based competitive bidding on BOOT basis. The North Karanpura project involves construction of three 765 kV transmission lines of approximately 800 km, two 400 kV transmission lines of 250 km and one 400/220kV gas insulated substation (GIS) while the Talcher II project comprises of three 400 kV double ckt transmission lines of 670 km in length as well as one 400/220 kV substation. The estimated cost for both the projects is about Rs3,900 crore. The projects will start once the statutory clearances are in place.

The Parbati-Koldam transmission project is being imple-mented by a JV with PGCIL and a cost-plus tariff model. The estimated cost of the project is about Rs1,000 crore. The project entails the construction of three lines - two single circuit lines from Parbati-II to Koldam and one double circuit line from Koldam to Ludhiana with total line length 480 ckt km. Power evacuated from these stations will benefit Uttar Pradesh, Raj-asthan, Punjab, Haryana, Jammu & Kashmir, Himachal Pradesh, Delhi, Chandigarh and Uttarakhand. All statutory approvals are in place, and a 6 km priority section in the project is expected to be completed shortly. The project is expected to get commissioned in Q3 2013-14.

RGGVY provides only capital subsidy. The corresponding revenue subsidy support should also be considered by the government. Very often, we

find that cash-constrained SEBs prefer selling power outside the state to paying customers rather than supply to non-paying farmers.”


covEr sTory

of the cost of a distribution company goes into power

purchase

80%



discoms

ExisTing modEls Experiments with privatising the distribution network is not a new phenomenon in India. Orissa in 1999 tried the private model by keeping the management control with the state utility. “The Orissa model failed miserably because of three major reasons—there was no commitment on returns; the past liability was also transferred to the private company; there was no investment by the private entity but only a fee for managing the distribution,” said Kapil Sharma of Reliance Infra, Mumbai.

In the past decade, state governments have tried out different models to improve the quality of power supply by allowing private companies in the distribution segment. The three models which are prevalent currently are:

Few states seem ready to taKe the bull by the horn and privatise their distribution companies. 'no privatisation' is the message coming through From states such as KeralaBY Renjini Liza VaRghese

in this year’s budget speech, Finance Minister P Chidam-abaram was categorical while appealing to the state governments to consider privatisation of their discoms. The message as intended was loud and clear, that the state governments need to find a path to strengthen the power

distribution network in the respective states by improving the health of the discoms.

In the last decade, losses of the distribution entities have mounted over Rs2 lakh crore. The central government had announced a bailout package for seven of the most critically-hit states. Though the financial assistance package was announced six months ago, till date there are only a few takers owing to the stiff parameters specified in the package. Among them are strict norms for debt reduction (See story in ET's March 2013 issue).

Far From reality

17_20_ET_April13_Focus Discom.indd 17 04-04-2013 11:27:34


Focus

Franchisee model • Where the private company’s role is limited to end-of-the-line

operation of the distribution network. • Assets remain with the state-owned utility. • Private company need not possess a distribution licence.• Power purchase is not the responsibility of the franchisee.• There is a regulatory gap as the franchisee is not regulated by

the concerned State Electricity Regulatory Commission.PPP model• In this model, the ownership is divided between the state-owned

distribution utility and the private company in the ratio 49-51 per cent, respectively.

• Initial investment by the private company.• Requires a distribution license by the private company. • Has to procure power.

Fully owned Private distribution• In this model, the distribution company should possess a license

for distribution.• Has to procure power and invest in creating infrastructure.

succEssFul modElsthe bhiwandi modelThe oft-quoted private distribution model in the country is the Bhiwandi model. Bhiwandi, near Mumbai, is an area predominantly comprised of small and medium industries and considered difficult by the Maharashtra state distribution entity for improvements in curtailing theft and collection efficiency. In 2006, the state awarded distribution in the area to Torrent Power. The rest, as they say, is history. The first successful franchisee model, which has recorded tremendous improvements both in terms of bringing down distri-bution losses and collection efficiency.

Torrent Power, acting as a contractor for Maharashtra State Electricity Distribution Company Limited (MSEDCL), in the first two years of its operation concentrated on improving distribution infra-structure with an investment of Rs200 crore. When the Bhiwandi franchise was handed over to Torrent, distribution losses in the area were above 40 per cent and collection efficiency was 68 per cent.

Torrent's first step was to improve the distribution network in this area so as to ensure a better quality of power supply, clubbed with curbing theft in a big way. People were simply reluctant to

Bhiwandi area

Year Distribution losses in percentage

Collection in percentage

reduction of losses per annum (%)

2006-2007 42 68 5

2012-13 17 97.8 NA

Source: Mahavitaran

Maharashtra saw a few More cities following the franchisee route

City Year of award T&D loss in %

Nagpur May 2011 34

Aurangabad May 2011 40

Jalgaon November 2011 38

Source: Mahavitaran

role model: The Delhi PPP model has been recommended by the Planning Commission as being the most suitable for government support.



discoms

of customers. The commercial and industrial consumers were more dependent on diesel-generated power given the regular break-down of transmission lines. This state of affairs forced the Delhi government to rope in Tata Power and Reliance Infra (former BSES) to take over the distribution of electricity in he city. Unlike Orissa, in Delhi, past liabilities of the utility were not transferred to the new private entities that took over power distribution in the city.

Delhi is a successful model because of two major factors, pointed out a power sector expert. The political will power of the Delhi state government and the funding or the viability gap funding of Rs3,400 crore, which was earmarked by the government in the first five years of privatization in the city. Secondly, the private entities could start on a clean slate as past liabilities were taken care of by the state utility.

Even here there are problems. Says Gopal Sharma, CEO, Delhi Distribution, Reliance Infra: “Delhi has seen a tariff increase of 65 per cent in the last 12 years out of which 45 per cent of the hike hap-pened only in the last two years. Whereas the bulk purchase cost of power has gone up by 300 per cent. So there is a wide gap. This needs to be addressed with regular tariff revisions. " The 100% privaTe model or The mumbai modelThis model is commonly known as the Mumbai model. Where private companies like Reliance Infra and Tata Power are present as distribution entities as private but regulated entities. The island city is served by the state-owned BEST which supplies power from Colaba to Mahim and Reliance Infra serving the 400 sq km of sub-urban Mumbai. Tata Power which has a historical licence to supply power in the city has started supplying power in both the areas since 2009 after a Supreme Court ruling allowing it do so.

benefiTs of privaTisaTionPrivate entities bring professionalism to the table as their major contribution, followed by efficiency in management in the overall system. This in simpler words means: (i) quality of power increases (ii) assured power service with no break downs (iii) fewer power cuts and (iv) quality of life is bettered.

Whether it is the franchisee model, PPP model or the Mumbai model, private entities have concentrated on stricter implemen-tation of installing meters and regular readings. Some entities have gone to the extent of downloading the meter readings at centralized offices to prevent pilferage or tampering with readings. They have installed tamper-proof meters based on feedback from the ground staff. In both the private and PPP models, the discoms have also laid equal emphasis on creating new infrastructure and upgrading existing networks to improve efficiencies. As a result, both collection and delivery efficiencies have improved by several folds.

no privaTisaTion in disTribuTionWhile some states are all for privatising their discoms, there are oth-ers that are resistant to the idea completely. Though the benefits of privatization are beginning to be seen as a solution for improved service delivery, not everyone is convinced. There are states like Kerala which are saying a loud and clear ‘no’ to privatisating their discoms.

pay up. Those who were making part payments were convinced to make full payments with the assurance of quality power. This seemed to work in short term and collections from the area improved. Though there is a decimal bad debt in the area, both the state utility and the franchisee were able to recover their money to a large extent.

A state like Maharashtra which registers T&D losses above 30 per cent and had already tasted success with the franchisee model was quick in making plans to take privatization to other parts of the state. However, it hit roadblocks when it came to the awarding the Nagpur franchise. The Bhiwandi model in the first place was easy to implement as people were unaware of the pros and cons of privatisation.

“The apprehension in the minds of the employees was the biggest resistance given their fear of job losses,” said a senior Mahavitran official who did not wish to be named. A public interest litigation (PIL) was filed in the Mumbai High Court in which the verdict went in favour of MSEDCL. The High Court in its judgment pointed out that “according to the Electricty Act 2003, MSEDCL has the right to privatise the distribution network”.

“Each bid process is a learning and bids running into litigation is not a good sign,” pointed out Umesh Agrawal, senior partner - grid, PricewatehouseCoopers. Though franchisee model was in exis-tence from 2006, the delay in the process of awarding the franchise is not sending out a good signal, he reasoned: “There is movement in the segment but not at the pace at which it should have been.”

While implementing the Bhiwandi model, the state utility did not have any other model to refer back to. The flaws in the model, according to the Mahavitaran official, were rectified while imple-menting the Nagpur and other franchises in the state. Now these models are being copied in other state including UP, Bihar and Andhra Pradesh.

The delhi modelIn the segment of public-private-partnership (PPP), Delhi model is a trend-setter in all aspects. In this model, there is no transfer of assets back to the state distribution utility as with the franchisee model.

Between 1999 and 2002 Delhi witnessed tremendous load shedding - upto seven hours a day and theft across all categories

In the Indian context, taking into consideration the fact that the electricity is and will remain a political issue, privatisation of discoms may face resistance for the foreseeable future.



FOCUS

that neither complete privatisation (the Mumbai model) nor the franchisee model would deliver the desired outcomes, but a well-formulated PPP model could be the way forward. The proposed PPP model would also enable limited recourse fi nancing and VGF support, which do not seem possible in the Mumbai model."

Given that distribution under EA 2003 has to be a regulated business, everyone agrees that 100 per cent privatization is not a viable option in India. But whatever the model, franchisee or PPP, few states are making moves in the direction of handing over their distribution business to private entities.

6000

5000

4000

3000

2000

1000

0

Annual

Cummualtive

FY03

67

67

155

232 1571 2435 2921 3327 3903 4379 4912 5216 5746

1339 864 486 406 576 476 533 304 530

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13*FY13*FY13*FY12FY12FY11FY10FY09FY08FY08FY03 FY04 FY05 FY06 FY07FY03 FY04 FY05 FY06 FY07 FY09 FY10 FY11

530533476576406Annual 1339 48667 155 1339 864 486 576 476 533 304 530

5746521649124379390333273327Cummualtive 1571 2435 292167 232 1571 2435 2921 3903 4379 4912 5216 5746

Over Rs5,700 crore

BSES RAJDHANI CAPEX OUTLAY

“The state disom is effi cient enough to handle the distribution of power in Kerala. There is no need for privatisation,” said Aryadan Muhammed, Kerala State Power Minister.

S Shivshankaran, chairman of the Kerala State Electricity Board (KSEB), the state distribution utility, reasoned out the minister’s statement saying, “The KSEB is on par with the private companies in terms of effi ciency. We do regular meter readings, tariff in the state is revised regularly, there is segment-wise tariff in the state and AT&C losses are manageable.” He added that there are no power cuts in the state, unlike the neighbouring Tamil Nadu. But he admitted that KSEB does use load shedding to manage load

during peak hours. Both he and Mohammed vehemently denied any move to privatise the state discom. “The decision of ‘No

Privatisation’ is not a political one but a professional decision,” asserted Shivshankaran.

In the Indian context, taking into con-sideration the fact that electricity is

and will remain a political issue, privatization of discoms may face resistance for the foresee-

able future. The states that are considering priva-

tization are of the opinion that the franchisee model will be the most benefi cial from their point

of view as the liability of the state utility remains at a minimum without losing control of the assets.

But the model may not address signifi cant issues such as the need for capital investments, ensuring quantity and quality of supply, fi nancial sustainability in the long run and the introduction of competition and open access. “The state government has to improve the distribution network. So, sooner or later they will have to look at privatization,” said PwC's Agarwal.

According to a 2011 Planning Commission report on Public Private Partnership in the electricity distribution, “It was suggested

Tata Power's T&D losses in New Delhi, down from

50 per cent in 2002

15%In focus: All private entities took on power theft ahead of all other issues.


coal

AFTERshockGreen tax, price rationalisation and a ban on the export of low-calorie coal - news from Indonesia is worrisome for Indian power generatorsBY Renjini Liza VaRghese

Every bit of news coming out of Indonesia is sending ripples of shock to the thermal power producers in India. The first shock came when Indonesia imposed price rationalisation on par with international prices. This in turn saved the

country from losing on the tax which was the case earlier. Now Indonesia is contemplating a ban on the export of

low-calorie coal from its mines. This will have an adverse effect on the Indian thermal sector as a majority of the proj-ects are in some way or the other dependent on imported coal and Indonesia is the closest destination for coal imports. According to available reports, 18,000 MW to 20,000 MW worth of power projects in the country are based on imported coal. The sector has already taken a hit owing to fuel-supply constraints which have surfaced in the past two years. The dip in domestic coal supply in turn increased the dependence on imported coal by 15-20 per cent.

The international coal market has witnessed a positive ride owing to demand increase from China and India. This resulted in increased output from coal-rich countries like Indonesia, Australia and South Africa.

But a power-deficit Indonesia is planning to impose a law to curb the export of low-calorie coal. The argument

put forth by the Indonesian government is: while the country is deficient in power, why allow the

export of power-grade coal, which can be used to build power plants.

Nor can one blame the Indonesian government.

Eighty-six million Indonesians, a third

of the country’s population, still don’t have

access to electricity. Their target is to make power available to 90 per

cent of the population by 2020. And the new policies are geared towards achieving this

target. According to a power sector expert who does not wish to be named, “If you take into consideration the issues and the power problems faced by Indonesia, it is the best move from their point of view. Too bad this is affecting Indian power generators as Indian capacity addition was planned on coal imported from Indonesia.”

Why IndonEsIan coal The Indian growth story in the past several years has been pegged on the continued availability of coal – both from imported and domestic sources. It was expected that the Indian power sector would register a double digit growth (around 13-14 per cent) to meet the energy demands of the country. On this basis the government had planned an aggressive capacity addition for generation in the 11th and 12th Plans. When the government-owned Coal India Ltd, the sole supplier of coal in the country, failed to meet the grow-ing demand from the power companies, the power genera-tors opted for imported coal.

“There is still no clarity on the Indonesian announcement. The effect of the announcement could vary on a case-to-case basis and power generators may have different levels of exposure to imported coal,” said Shantanu Dixit of Prayas Energy Group, a Pune-based think-tank.

Indonesian coal came in as a first choice a) because of that country’s proximity to India which reduces logistical issues, b) the low price of power-grade coal, c) lower demand for this grade of coal, and d) easy laws favouring exporters. However, with the new set of laws and taxation regime com-ing into force in Indonesia, the Indian power companies have been left groping for answers.

“This was expected. But the implementation and the detailing of the clause is yet to be clarified. Indian power companies which are importing high-calorie coal from there won’t be affected at all as the prices are already on par with international prices,” said Gopi Krishna P, AVP, project advi-sory and structured finance, SBI Capital.

"Power plants which were planned at 90 per cent PLF

Likely increase in the price of power produced from Indonesian coal

Rs1

33_34_ET_April13_Special Report Indonesian Coal.indd 33 04-04-2013 10:38:14


sPEcIal REPoRT

may not achieve that level of production, while the cost of generation could rise from Rs2 to Rs3 on the basis of this announcement, " added Krishna.

Such a change in fuel cost can have a spiraling effect. Funding for new power projects could become a challenge. “As far we have been able to ascertain from news reports from Indonesia, it appears that the new law is not applicable for those companies which own a mine there,” said Sanjay Chakrabarti, partner, infrastructure, industrial and consumer at Ernst & Young.

The new development in Indonesia will surely make the Indian power companies to explore new avenues for fuel. “Power companies are already weighing import options from South Africa, Mozambique and even the US,” said Dixit of Prayas.

In short, it is going to be tough going for power generators in India who based their bets on imported Indonesian coal.

"There is still no clarity on the Indonesian announcement. Its effect may vary on a case-to-case basis as power generators would have different levels of exposure to imported coal."Shantanu Dixit, Prayas Energy Group

33_34_ET_April13_Special Report Indonesian Coal.indd 34 04-04-2013 10:38:21

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ETELECTRICALS TODAY

MORE POWER TO THE INDUSTRY

ARE ENERGY-EFFICIENT

PRODUCTS REALLY

EFFICIENT?

‘SMART GRID IS NO

LONGER A CONCEPT,

IT’S A NECESSITY’

Even though Jyotiraditya Scindia

describes his current charge as

‘daunting’, the young power

minister is ready to take on the

challenges. But can he deliver?

ARUN MAIRA,

MEMBER, PLANNING

COMMISSION,

ON WHAT AILS

THE INDUSTRY

VIEWPOINT

07-01-2013 15:16:04


Drier Days aheaDBrace for less water supply, longer power cuts and costlier power in the coming months. This year’s drought raises an alarm for the impending water problem the country’s power sector is heading intoBY Renjini Liza VaRghese

IN-DEPTH

36_38_ET_April13_In-Depth Water storage.indd 36 04-04-2013 10:45:59


The world celebrated March 22 as World Water Day. This year, for India, the day had more signifi-cance as many of the states are reeling under a severe drought. This also means that power gen-eration in the country, both hydro and thermal,

will be hit severely. The lackclustre monsoon last year is the obvious villain.

Hydroelectric projects in many of the states are producing much less electricity owing to the non-availability of water. Thermal power stations, which consume water for cleaning coal and managing ash, are also threatened by the non-availability of water.

THE ProblEm The year 2012 saw the worst power crisis in India with the failure of national grid. However, the following month, start-

ing from October through the winter, a majority of the states saw severe power cuts. This has been the only constant in India's power sector since 2011, varying from 30 minutes to 14 hours a day, with urban areas typically facing fewer cuts. The worst-hit sates are Maharshtra, Tamil Nadu and Andhra Pradesh. Officially, most states are unwilling to admit to the power crisis; unofficially, all of them agree that there exist long hours of power cuts.

States like Kerala, Assam, Himachal Pradesh which are dependent on hydro power will be the worst-hit when it comes to electricity this summer. Though the main problem is power shortage, the magnitude and the degree vary from state to state, because each state has its own peculiar issues. Drying dams and rivers are said to be the main reason these hydro-dependent states are facing a power crisis.

In Assam the demand is 1,150 MW and the state is produc-

waTEr sHorTagE



IN-DEPTH

ture. “Though we were able to make short and medium-term agreements with generators in other parts of the country, the non-availability of grid corridor makes it difficult to procure power,” pointed out S Shiv Shankaran, chairman of the Kerala State Electric-ity Board (KSEB). It is indicative of the practical problems faced by all the four states in not having the southern grid connected to the national grid. Shankaran added, “PGCIL, which was in charge of the augmentation of the grid, taking into consideration the various projects under construction, concentrated on the north and east integration. If all the projects like Kudankulam, Neyveli 2 units, Velloor had come on stream, the southern states would not have faced this kind of crisis this summer.”

KSEB chairman also pointed out that the state resolved the water problem for NTPC's Kayamkulam power plant which runs on naphta. NTPC was contemplating shutting down the plant owing to an increase in the salinity of the water they were using. The state provided an alternative, giving water through irrigation canals.

All these problems and solutions point to one thing - that a severe water shortage is waiting in wings. Unless addressed immediately, this could blow up into another crisis, much like coal. India needs to harness its water resources in a better way - by taking consistent steps to rejuvenate and conserve water sources and conserving water itself.

India faces water stress in many regions today and the situation is likely to worsen with increased economic growth, urbanization and rising standards of living. It thus becomes an imperative in India to reuse wastewater judiciously and secure our water resources.

Wastewater from any source, domestic or industrial, needs to be viewed as a valuable resource. With appropriate process design and use of advanced technology, wastewater can be reused for industrial processes, non-potable domestic applications and indirect potable reuse.

GE has demonstrated capabilities in successfully reusing a wide range of wastewater including municipal sewage, ash pond wastewater, cooling tower blow-down & boiler blow-down in power, process wastewater in industries such as petrochemical refining, steel, F&B, textiles, mining, etc. With in-depth process capabilities, high-quality ultra-filtration & RO membranes, membrane bioreactor and wastewater chemistries, GE can help customers reuse their toughest wastewater to achieve water sustainability.

Even waste water is importantHosHang subawalla business leader, gE water & process technologies

ing only 220 Mw, 12 per cent of the original capacity of the hydel projects. The state power minister

Pradyut Bordoloi said that the state is importing 550 MW to meet demand

which still leaves a gap of around 400 MW. He is

hoping for better rains next year.

The Assam SEB is weighing all options to

minimize the gap, asking more from the central pool and purchasing

in the open market through open access. The demand in Kerala is 3,500 MW during

peak hours, whereas the state is able to produce only 2,000 MW, a short fall of 1,500 MW. The gap predict-

ably enough is addressed through load shedding and some power procured from the market. Unlike the other states, Ker-ala faces a peculiar problem - the fear of a dam burst. There was news last monsoon that the Mullaperiyar dam is not strong enough to hold the designated capacity and could burst during the monsoon. This dam, which is situated on Kerala-Tamil Nadu border, supplies water to Tamil Nadu. As a precautionary measure, the government of Kerala took a call to decrease the water levels at Kerala’s largest hydro project, Idukki to minimize the chances of a potential dam burst in the upper part of the Mullaperiyar reservoir which serves the Idukki HPP. “During monsoon we normally reserve water for power generation in the summer, but the peculiar problem of Mulleperiyar Dam has forced us to increase power genera-tion from Hydro during monsoon, which has put the state in a severe power cruch situation,” said Aryaadan Muhammed, the state electricity minister.

March saw the shutdown of the 1,130 MW Parli power plant in Maharashtra. This thermal power plant with six generation units scaled down operation owing to water scarcity. The first two units were shut down in December 2012 foreseeing the water problem. The plant was drawing water from Jayakwadi and Mazalgaon dams, both of which have dried up.

In Andhra Pradesh, the power and water crisis have seen the consumers take to the streets. Non-availability of water and maintenance brought water supply through canals to a grinding halt in January. This threw normal life in some parts of Hyderabad out of gear with inadequate water and power supply. Hyderabad Electric Supply Company (Hesco) spokesperson, Sadiq Kubar, said that Hesco at one point was forced to impose a six-hour load shedding in urban areas, followed by an eight-hour load shedding in rural areas to manage the supply.

During last year's power shortage, Karnataka, which has been fighting a power deficit of 25 per cent for more than a year, had appealed to people to cut down the use of fans and air conditioners. This appeal came April last, just when the summer was peaking.

The southern states were hoping to buy electricity in the spot market. But this hope has been dashed by the lack of infrastruc-

Power shortfall in Kerala. (The demand during peak hours

is 3,500 MW)

1,500 mw


ETELECTRICALS TODAYMORE POWER TO THE INDUSTRY

TO ADVERTISE CONTACT

HAFEEZ SHAIKH , EMAIL: HAFEEZ.SHAIKH ITP.COM

FINDING YOUR TARGET AUDIENCE DOESN’T HAVE TO BE THIS DIFFICULT

MAKE A SMART CHOICE


When Finance Minister P Chidambaram stood up to present the budget for 2013-14 in Parliament on February 28, it was widely anticipated that the exercise would reflect the politi-cal compulsions of the ruling United Progressive Front (UPA) government. This was the last budget this government was

presenting and no section of the electorate could be alienated.However, it is a measure of Chidambaram’s dexterity and political

savvy that he has managed to sail through the post-budget debate relatively unscathed and yet most sections of the industry are still trying to assess what the budget has actually given them, or taken away.

For the power sector, though, the first impression of the post-budget impact is that it is a mixed bag, with little to bring about the long-term changes the sector needs. While the big players are critical of import duty hikes, those in the renewable energy sector have welcomed the proposal to provide more incentives for wind energy projects.

One major policy announcement is the re-introduction of generation-based incentives for wind power generation projects. The ministry of non-renewable energy has been given a budgetary allocation of Rs800 crore for this purpose. Coupled with the recommendation of low-cost finance for renewable energy projects, the measures look positive for investments in renewable energy sector. The incentives have been described as “timely” by the Indian Wind Turbine Manufacturers Association whose president Ramesh Kymal believes the move would “rejuvenate the sector with more investments coming in. ” The availability of low-interest funds from the National Clean Energy Fund will encourage investors for whom wind energy may come up as a good investment opportunity.

A major relief for power companies is the extension of tax holiday by one more year, up to March 31, 2014. Under this benefit, projects in the power sector can avail income tax benefit under section 80IA of IT Act. The relief stipulates tax benefits on 100 per cent of the profits and gains derived by an undertaking engaged in the business of generation or gen-eration and distribution of power for a period of 10 consecutive years.

There is positive news on the front of four Ultra Mega Power Plants

ANALYSIS

MIXED BAGBY RATAN MANI LAL



(UMPP) of about 4000 MW capacity each. Among the major policy changes is the one related to pro-

viding support to projects producing energy from waste. The government will provide support to urban local bodies to go in for projects to produce energy from waste products in the PPP mode. Support will be in the form of viability gap funding or VGF, repayment grants and low-cost capital. According to Chandra Kumar Chhabra, president of the Institute for Research in Envi-ronmental Education and Development (IREED), this will attract entrepreneurs towards setting up waster-energy plants. “It will help reduce power shortage in our cities and also ease the prob-lem of solid waste and garbage management to some extent.”

The budget has a special provision for Delhi which is obvi-ously influenced by the events of last summer’s grid failure. There is a move to implement an islanding scheme to safeguard Delhi and its surrounding areas from electricity supply disrup-tion during any future grid failures.

Among major long-term policy related announcements is the move for financial restructuring of power distribution compa-nies (discoms). Under the new guidelines, state governments have been urged to finalise and implement financial restruc-turing plans for ailing discoms. This will help in improving the financial health of the state power utilities.

Incidentally, the Indian electrical equipment industry has wit-nessed a negative growth of 4.1per cent in the second quarter of the financial year, according to figures released by the Indian Electrical and Electronics Manufacturers’ Association (IEEMA), the apex Indian industry association of manufacturers of electri-cal, industrial electronics and allied equipment.

Said J G Kulkarni, president of IEEMA, “We were hoping for some corrective measures to revive the downturn in the domes-tic electrical equipment industry which is reeling under the twin onslaught of the slowdown in the country’s power sector - which has depressed domestic demand - and the continuing escalation in imports of electrical equipment. This has resulted

MIXED BAG The Union Budget handed the power sector an extension of tax bene�ts, availability of low-cost finance for renewable sector and a hike in customs and countervailing duty on steam coal. ET examines the impact

in underutilisation of the manufacturing capacity for electri-cal equipment”. IEEMA also feels that the reduction in central plan allocation for Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) from Rs4,900 crores (2012-13) to Rs4,500 crore (2013-14) is a matter of concern.

Sandeep Pandey, a spokesman for the Power Engineers’ Association, says the biggest problem facing the power sector is that of coal shortage, leading to a shortfall in thermal power generation. However, the budget does not appear to have taken up this challenge seriously.

The government appears keen to reduce the power plants’ dependence on imported coal and towards this end a pubic private partnership framework with Coal India to increase produc-tion of coal has been announced in the budget.

“The PPP move with Coal India Ltd. as one of the partners to increase domestic coal produc-tion and reducing the dependence on imported coal is clearly a long-term policy initiative. It will not have any immediate impact on coal supply position,” he says.

Similarly, the upward revision of customs duty and countervailing duty on steam coal from 0 per cent and 1 per cent, respectively to 2 per cent each is also a negative mea-sure as it would have an adverse impact on players with limited fuel arrangements. “This is a strange move especially at a time when the country is facing coal shortage,” he says.

He also points out the growing use of plant machinery made in China in power plants. This may have led to a reduction in the commissioning time for generation units, but the consequences on efficiency and reliability of such equipment are disastrous. “The government needs to put a check on imports,” says Pan-dey, echoing the views of IEEMA.

BUDGET

Reduced from the RGVVYprogramme allocation

Rs400 cr



SPOTLIGHTSPOTLIGHT

Up in arms: Protesters near the Kudankulam atomic power plant in Tamil Nadu.

42_45_ET_April13_Spotlight Coimbatore.indd 42 04-04-2013 10:50:21


disTribuTion

From being power surplus a decade ago, Tamil Nadu has sunk to being the state with one of the biggest power deficits while its discom has the highest negative net worthBY TEAM ET

A decade ago, Tamil Nadu was the torch-bearer for the power sector in the country with surplus power and zero power cuts and was cited as example by none other than Narendra Modi, the then new Gujarat chief minister.

Since then Tamil Nadu has fallen off its high perch while Gujarat has increased its capacity two-fold and is now surplus with an envi-able record in drawing industrial investments.

In Tamil Nadu, on the other hand, crippling power cuts are shut-ting down factories and threatening an industrial crisis that may see many businesses go under.

As Tamil Nadu’s demand-supply gap has widened to 18 per cent, double the country’s average, it has led to sustained power cuts of up to 14 hours every day. While demand is around 12,000 MW, sup-ply is about 8,000 MW, leaving a gap of 4,000 MW. The biggest hits have been sustained by the state’s once-robust industries. Despite this, Puratchi Thalaivi (revolutionary leader) as she is known, auda-ciously expects that the situation reverse by the end of this year.

Since J Jayalalithaa came to power in Tamil Nadu a year-and-a-half ago, she has sought to manage the state’s grave power crisis by increasing tariffs, launching new projects, unveiling an ambitious solar policy and approving the bailout of the state utility. Yet, Tamil Nadu continues to be hobbled by a lack of adequate reforms.

What ails Tamil Nadu? Tamil Nadu, despite 4 GW of power deficit and a discom with an accumulated loss of Rs 40,000 crore, continues to provide free power to agriculture. And the subsidy is laughable – while the average cost supply to agriculture is Rs 5.96 unit, the subsidy provided by the state government is only 25 paise per unit!

The average price paid by agriculture for power on an all-India basis is about 27 per cent of what domestic consumers pay. In Guja-rat it is 42 per cent, in Bihar it is 21 per cent, those in Haryana and Andhra pay 8 per cent. In Punjab and Tamil Nadu, it is free.

Unlike Punjab, in Tamil Nadu's case, the power supplied to agriculture is not even metered, making it difficult to determine the level of subsidy required. Jayalalithaa raised tariffs by an average of 37 per cent in FY 13 for the first time in eight years. Between 2003-FAL

L FRO

M GRA

CE



sPoTLiGHT

11, the average revenue realised increased just 3.4 per cent while the cost of supply went up by 11.5 per cent.

Sbicap Securities said it expects an average hike of 36.5 per cent in FY13, 15 per cent in FY14, followed by an annual hike of 5 per cent till FY17, since Tamil Nadu has the highest negative net-worth.

Foreseeing a worsening of power crisis, Jayalalithaa has demanded an allocation of 2,830 MW from central generating stations as an interim arrangement and to dedicate the entire power generated from the Kudankulam nuclear power project to the state. (Kudankulam project was delayed for more than two years owing to intense protest from the residents in the localit)Despite her oft-repeated requests, the central government has not responded, citing transmission constraints. Transfer of additional power to the state will not be possible until the southern grid is fully integrated with the rest of the national grid, something that’s expected only by 2014.

Nor are any of the reforms that can change the larger picture in the state likely to begin before 2014 as parliamentary elections edge closer with the power shortage already being picked up by the state’s opposition as its one of its main planks.

Meanwhile, the state is calling for bids for two thermal power projects for 2,640 MW and seriously considering solar power worth 3,000 MW to meet its future requirements.

How the times have changed... A decade ago, it was Narendra Modi, the then new CM of Gujarat, who was praising the Tamil Nadu CM J Jayalaithaa as the poster-girl for the state's 'powerful' presence. Since then Tamil Nadu has fallen off its high perch, while Gujarat has raised its capacity two-fold.



DISTRIBUTION

COIMBATORE The rooftops of all establishments within Coimbatore corporation limits will soon turn to generating energy with the civic body planning to install rooftop solar panels. The Coimbatore civic body in a recent resolution said that it proposed to install solar panels on the terrace of all its establishments.

Said S Sivarasu, deputy municipal commissioner, Coim-batore, “This is just one of the measures we planned under the renewable energy project. We have prepared a comprehensive plan for renewable energy intervention in various sectors.” The total investment on the project is Rs13.29 crore over �ve years. The state government or the local body concerned would contribute 14 per cent of the cost, while 24 per cent will come from MNRE and the rest would have to be invested by the bene�ciary. In the commercial and institutional sector, the corporation plans to introduce community solar cooker for mid-day meals at its schools, solar water heater for hospitals, biogas systems for restaurants, solar water heat-ers for restaurants and photovoltaic systems for education institutions. It plans to encourage industries to go in for solar water heating and steam generation. In the government/municipal sector, it will provide grid incentive for solar power plants and solar-powered water heaters at all its hospitals.

ANANTHAPURAnantapur in Andhra Pradesh is another town to focus on solar power to overcome its chronic power shortage. It is setting up a solar power project to power its water pumping operations and street lights. The plan involves the installation of a 5 MW solar PV project in the town. The project will be connected to the state’s grid and will power the water pumping and street lights of the entire town. Anantapur has already attracted investment from project developers under JNNSM.The project requires an investment of Rs60 crore and includes the installation of nearly 40,000 solar panels. The municipality currently consumes 5 MW for water pumping and street lights. With the new solar PV project, the municipality will be able to save Rs 55 lakh a every year as well as o�set over 180,000 tonnes of carbon emissions over the 25 years of its life. Andhra Pradesh recently �oated a tender to set up 1,000 MW of solar power capacity.

FACED WITH SEVERE AND UNRELENTING POWER SHORTAGES, SMALLER CITIES AND TOWNS ARE TURNING TO SOLAR ENERGY TO MEET AT LEAST A PART OF THEIR POWER NEEDS

Sunny side up

Andhra Pradesh 23.15

Chhattisgarh 4.00

Gujarat 824.09

Haryana 7.80

Jharkhand 16.00

Karnataka 14.00

Madhya Pradesh 7.75

Maharashtra 25.00

Orissa 13.00

Punjab 9.00

Rajasthan 251.25

Tamil Nadu 17.05

Uttar Pradesh 12.00

Uttranchal 5.00

West Bengal 2.12

Delhi 2.52

Total 1,233.73

INSTALLED RE CAPACITY STATE-WISE (MW)

AGRAThe Uttar Pradesh government plans to develop Agra as a solar city in order to save the Taj Mahal from pollution. The proposal for making Agra a solar city was approved by MNRE way back in 2009, following which the Agra Nagar Nigam prepared a master plan which was approved by the centre in 2012. The detailed project report is yet to be approved. The state govern-ment has set a target of generating 500 MW solar energy by 2016-2017.

23.15

17.05

14.00

842.09

251.25

9.00

4.00

7.75

12.00

5.00

25.00

16.00

13.00

2.12842.09

251.25

7.802.25


markET daTa

Power markets across segments remained dull as the financial year drew to a close. With both summer and economy yet to pick up, demand for electricty was low in February-March, though prices showed a slight upward trend towards the end of March

LackLustre

Power prices

rEC trades

rangE-boundPower prices remained range-bound despite several ups and downs up to the first week of March between Rs2.1 a unit at night to Rs3.4 a unit during peak hours. Average price for the period was Rs2.8 a unit. In the last week of March, however, prices picked up as the heat rose in the subcontinent with prices averaging in the last days of March at Rs3.1. Volumes also rose during this period.

non-solarThe demand for non-solar RECs decreased to 153,000, down 21 per cent from Jan 2013 to Feb 2013. Over 17,42,000 RECs were bid for sale (no change from last month). Significant oversupply situation continues to persist, despite the increase in demand. A totoal of 3.5 lakh RECs were not bid for sale in the trading session, representing 17 per cent of the total available RECs.

solarDemand dropped to 6,777 from a high of 42,000 last month, which a significant rise as the compliance year comes to a close. Given the small capacity in the solar REC market at present, demand remains significantly higher than supply. Supply of solar RECs was at 2,700 (down 23 per cent from January; in January 3,300 RECs were issued while only 1,900 were issued in February.)

UN MCP

Prices IEX INR / MWhDaily prices are simple average of non-zero prices in (24*4)

no of 15 minutes time block of respective day.

Buy9

Feb

1310

Feb

1311

Feb

1312

Feb

1313

Feb

1314

Feb

1315

Feb

1316

Feb

1317

Feb

1318

Feb

1319

Feb

1320

Feb

1321

Feb

1322

Feb

1323

Feb

1324

Feb

1325

Feb

1326

Feb

1327

Feb

1328

Feb

131

Mar

13

2 M

ar 1

33

Mar

13

4 M

ar 1

35

Mar

13

6 M

ar 1

37

Mar

13

8 M

ar 1

39

Mar

13

10 M

ar 1

311

Mar

130

25000

37500

50000

62500

75000

87500

100000 4000

3500

3000

2500

2000

12500

REC Data at Indian Energy Exchange (IEX)

January 2013

Solar Non Solar Solar Non Solar

Feruary 2013

13000

9750

6500

3250

00

50000

100000

150000

200000

46_49_ET_April13_Market data.indd 46 04-04-2013 10:51:34


markET daTa

low concentration

short-term trendsbilaTEral TradEs PrEvail The percentage of short-term transactions of electricity to total electricity generation was 10.64 per cent. Of the total short-term transactions of electricity, 56.83 per cent was transacted through bilateral traders and term-ahead contracts on power exchanges and directly by distribu-tion companies, followed by 25.16 per cent through Power Exchanges and 18.01 per cent through UI, as per January 2013 data.

Top five trading licensees had a share of 73.43 per cent in the total volume traded by all the trading licensees. The HH Index for volume of electricity traded by trading licensees was 0.1328, indicating an unconcentration of market power. Top five regional entities purchased 53.64 per cent of the volume - Rajasthan, Madhya Pradesh, Tamil Nadu, Maharash-tra, Uttarakhand and Himachal Pradesh. Of the total Power Exchange transactions, top five regional entities sold 64.50 per cent of the volume, and these were Karnataka, Gujarat, Delhi, Jindal Power Limited and Sterlite Energy Limited. Top five regional entities purchased 78.96 per cent of the volume, and these were Rajasthan, Gujarat, Andhra Pradesh, Punjab and Tamil Nadu.

VOLUME OF SHORT-TERM TRANSACTIONS OF ELECTRICITY (ALL INDIA)

Sr.No Short-term transactions Volume (MUs) % to Volume of short-term transactions

% to Total Generation

1 Bilaleral 4740.11 56.83% 6.05%

(i) through traders and PXs 3547.34 42.53% 4.52%

(ii) Direct 1192.76 14.30% 1.52%

2 through Power exchanges 2098.59 25.16% 2.68%

(i) IeX 2045.40 24.52% 2.61%

(ii) PXIL 53.18 0.61% 0.07%

3 through uI 1502.50 18.01% 1.92%

Total 8341.20 100.00% 10.64%

Total Generation 78403.87 _ _

source: NI Dc

VOLUME OF SHORT-TERM TRANSACTIONS OF ELECTRICITY

Volume of Various Kinds of Electricity Transactions in Total Electricity Generation

18.01%

25.16%

56.83%

Bilateral

long-term BilateralThrough power Exchanges Through Ui

pTC india ltd. adani Enterprises ltd.Tata power Trading Company (p) ltd.reliance Energy Trading (p) ltd

JSW power Trading Company ltd.long-term

power Exchanges Unscheduled interchange

6.05%2.68% 1.92%

89.36%

Percentage Share of Electricity Transacted by Trading Licensees

26.57%

8.48%

12.62%12.76%

15.18%

24.39%



markET daTa

Frequency Profile April, 2012, to February, 2013

Northern / Western / Eastern / North-Eastern Regions

MonthPercentage of Time when Frequency was

Below49.5 Hz

Between 49.5-50.2 Hz

Above50.2 Hz

Average Frequency

Max. Freq. Min. Freq.

April, 2012 2.31 93.75 3.94 49.92 50.66 49.08

May, 2012 11.80 86.85 1.35 49.80 50.75 48.81

June, 2012 19.95 78.65 1.40 49.76 50.68 48.79

July, 2012 23.68 73.57 2.75 49.71 51.39 48.02

Aug’ 2012 1.53 90.67 7.80 49.96 50.65 48.82

Sep’ 2012* 0.27 87.60 12.13 50.04 50.65 49.04

Average 9.92 85.18 4.90 49.87 50.80 48.76

MonthPercentage of Time when Frequency was

Below49.7 Hz


Above50.2 Hz

Average Frequency


Oct’ 2012 3.53 90.17 6.30 50.04 50.61 49.37

Nov’ 2012 3.37 86.51 10.12 50.05 50.64 49.33

Dec’ 2012 4.72 83.75 11.53 50.01 50.67 49.25

Jan’ 2013 5.38 82.30 12.32 50.02 50.78 49.30

Feb’ 2013 1.50 79.40 19.10 50.09 50.75 49.40

Mar’ 2013

Average 3.70 84.43 11.87 50.04 50.69 49.33

MonthSouther Grid - percentage of Time when Frequency was

Below49.7 Hz


Above50.2 Hz

Average Frequency


Oct’ 2012 8.25 89.39 2.36 49.87 50.73 49.19

Nov’ 2012 4.16 91.85 3.99 49.91 50.69 49.15

Dec’ 2012 3.68 93.40 2.92 49.90 50.87 49.28

Jan’ 2013 3.78 91.41 4.81 49.94 50.87 49.24

Feb’ 2013 9.32 88.42 2.26 49.87 50.90 49.20

Mar’ 2013

Average 5.84 90.89 3.27 49.90 50.81 49.21

* IEGC Range : Till 16th September, 2012 : 49.5 Hz to 50.2 Hz and from 17th September, 2012 onwards : 49.7 Hz to 50.2 Hz

Central Sector Generation - Firm and Unallocated Share

region allocatedCapacity

Firm Share

Unallocated Share

Merchant power

remarksTotal Specificallocations

Quantum for pooling including unallocated

from other regions

Not in common

pool

Northern 21,253 19,064 2,189 585 1385 219 0 Note (1)

Western 16,537 14,789 1,748 492 1256 0 0 Note (2)

southern 11,386 9,931 1,455 20 1435 0 0 Note (3)

eastern 11,612 10,956 606 5 601 0 50 Note (4)

North-eastern

1,474 1,072 377 0 183 194 25 Note (5)

total 62,262 55,812 6,375 1,102 4860 413 75

Non-DocO capacity

1,750

Grand total

64,012

Frequency

supply

allocations

minor sliPPagEFrequencies on the national grid have been slipping consistently since October 2012, after maintaining a healthy average post the July, 2012 blackouts. In February, it was in the pre-ferred 49.5-50.2 zone only 79.4 per cent of the time, compared to 90.1 per cent in October. The smaller southern grid remained in the safe zone through much of this time.

dEFiCiTs ConTinuEThe southern and northern regions faced the maxi-mum supply cruches in Februray-March at 15.3 per cent and 9.4 per cent, respectively, on a year-to-date basis. For the month of February the figures were at 16.5 per cent and 8 per cent, respectively. The all-India deficit was at 8.8 on a YTD basis and 8.4 for February 2013. (See the chart on the opposite page)

unalloCaTEd CaPaCiTyThis is the quantum that states eye when in need. Both Kerala and Tamil Nadu have demanded a lion's share of the unallocated caapcity given the massive power shortage in both states - Kerala on account of low monsoon and Tamil Nadu on account of rising demand from industry.



markET daTa

POWER SUPPLY POSITION (PROVISIONAL)

state (Figures in Mu net) February,2013 (Figures in Mu net) april,2012 to February,2013 (Figures in Mu net)

system requirement availability surplus / Deficit (-) requirement availability surplus / Deficit (-)

region ( Mu ) ( Mu ) ( Mu ) ( % ) ( Mu ) ( Mu ) ( Mu ) ( % )

chandigarh 99 99 0 0.0 1,533 1,533 0 0.0

Delhi 1,538 1,536 -2 -0.1 24,365 24,230 -135 -0.6

Haryana 2,445 2,346 -99 -4.0 38,273 35,129 -3,144 -8.2

Himachal Pradesh 662 659 -3 -0.5 8,268 8,025 -243 -2.9

Jammu & kashmir 1,299 975 -324 -24.9 14,091 10,569 -3,522 -25.0

Punjab 2,268 2,196 -72 -3.2 44,203 41,623 -2,580 -5.8

rajasthan 4,357 4,351 -6 -0.1 50,308 48,648 -1,660 -3.3

uttar Pradesh 6,441 5,366 -1,075 -16.7 83,938 70,058 -13,880 -16.5

uttarakhand 858 840 -18 -2.1 10,419 9,805 -614 -5.9

Northern Region 19,967 18,368 -1,599 -8.0 275,398 249,620 -25,778 -9.4

chhattisgarh 1,249 1,224 -25 -2.0 15,377 15,110 -267 -1.7

Gujarat 7,423 7,422 -1 0.0 82,780 82,631 -149 -0.2

Madhya Pradesh 3,589 3,463 -126 -3.5 47,250 42,371 -4,879 -10.3

Maharashtra 8,353 8,100 -253 -3.0 112,160 108,430 -3,730 -3.3

Daman & Diu 165 165 0 0.0 1,795 1,664 -131 -7.3

Dadra & Nagar Haveli 401 401 0 0.0 4,197 4,027 -170 -4.1

Goa 276 271 -5 -1.8 2,865 2,790 -75 -2.6

Western Region 21,456 21,046 -410 -1.9 266,424 257,023 -9,401 -3.5

andhra Pradesh 8,110 6,625 -1,485 -18.3 90,123 74,577 -15,546 -17.2

karnataka 5,600 4,763 -837 -14.9 59,938 51,839 -8,099 -13.5

kerala 1,658 1,550 -108 -6.5 19,322 18,532 -790 -4.1

tamil Nadu 6,993 5,703 -1,290 -18.4 83,765 69,223 -14,542 -17.4

Puducherry 183 182 -1 -0.5 2,126 2,087 -39 -1.8

Lakshadweep # 3 3 0 0.0 33 33 0 0

Southern Region 22,544 18,823 -3,721 -16.5 255,274 216,258 -39,016 -15.3

Bihar 1,174 927 -247 -21.0 14,064 11,737 -2,327 -16.5

DVc 1,412 1,338 -74 -5.2 15,959 15,025 -934 -5.9

Jharkhand 587 547 -40 -6.8 6,418 6,130 -288 -4.5

Odisha 1,836 1,831 -5 -0.3 23,110 22,281 -829 -3.6

West Bengal 3,087 3,076 -11 -0.4 38,466 38,170 -296 -0.8

sikkim 37 37 0 0.0 378 378 0 0.0

andaman- Nicobar # 20 15 -5 -25 221 171 -50 -22.6

Eastern Region 8,133 7,756 -377 -4.6 98,395 93,721 -4,674 -4.8

arunachal Pradesh 41 39 -2 -4.9 544 511 -33 -6.1

assam 476 441 -35 -7.4 6,020 5,627 -393 -6.5

Manipur 41 38 -3 -7.3 529 500 -29 -5.5

Meghalaya 155 143 -12 -7.7 1,665 1,457 -208 -12.5

Mizoram 31 29 -2 -6.5 370 344 -26 -7.0

Nagaland 45 43 -2 -4.4 525 496 -29 -5.5

tripura 88 85 -3 -3.4 1,024 975 -49 -4.8

North-Eastern Region 877 818 -59 -6.7 10,677 9,910 -767 -7.2

All India 72,977 66,811 -6,166 -8.4 906,168 826,532 -79,636 -8.8

# Lakshadweep and andaman & Nicobar Islands are standalone systems, power supply position of these does not form part of regional requirement and availability.

Power supply



10 THINGS ABOUT...

Current supercritical units operate at 242 bar main-steam pressure, 565ºC main-steam temperature and 593ºC reheat steam temperature.

Supercritical technology has evolved over the past 30 years. Advanced metallurgy and design have made these units highly effi cient.

For 800 MW supercritical units, the annual reduction in CO2 emissions is about

Above 221.5 bars, at a temperature over 374.15degree C, water is a fluid. In supercritical plants, equipment is designed to operate in these conditions.

Overall supercritical power plant effi ciency of 42% is achievable with current supercritical parameters.

Supercritical units help cope with the rising pressure on fuel, land and water and reduce emissions.

India has moved from 500/600 MW sub-critical sets to 660 and 800 MW supercritical units.

Supercritical technology

units, the annual reduction in CO2 emissions is about

Modern supercritical technology is largely available in Japan and Europe for boilers and turbines ranging upto 1,100 MW.

Modern supercritical technology is largely available in China, Japan and Europe for boilers and turbines ranging up to1,100 MW.

Improved heat rate results in 5% reduction in fuel consumption and hence 5% reductions in CO2 emissions per MWh energy output.

This results in fuel savings to the extent of

MW

tonnes725,000

660

DS_ADVT.indd 2 4/4/2013 9:36:20 AM

Electricals Today April 2013 Issue

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Transcript of Electricals Today April 2013 Issue