Coal India Limited (CIL) Has Signed A Memorandum Of Understanding (MoU) With NLC India Limited For The Formation Of A Joint Venture

Oct 8, 2018
Source Power Weekly Newsletter
Central Sector

Coal India Limited (CIL) has signed a memorandum of understanding (MoU) with NLC India Limited for the formation of a joint venture (JV) company for setting up solar power projects aggregating 3,000 MW and thermal power projects (TPP) totalling 2,000 MW. The projects, which will be financed by a debtequity mix of 70:30, will have a cumulative investment of Rs 120 billion. Further, the JV will come up on equal equity participation of 50:50 and will have a timeline of 15 months for completion of solar power projects and 60 months for the completion of the TPPs

PTC India Limited has signed a $1.8 billion deal with the Bangladesh Power Development Board (BPDB) on October 9, 2018, to supply 200 MW of power. PTC has signed two new agreements for supplying 200 MW on short and long term basis for 15 years. The short-term power will be supplied from the power pool of West Bengal State Electricity Distribution Company Limited, while the long-term power will be supplied through an imported coal project of Meenakshi Energy Limited. At present, PTC is already supplying 290 MW of power to Bangladesh.

The Indian government has signed a pact with Russia to build six more nuclear reactors in India. Russia’s state owned firm Rosatom would build its third-generation water-water energetic reactors (WWER) at a new site, other than Kudankulam (Tamil Nadu) and the earlier proposed Haripur (West Bengal), with increased participation from Indian companies. In addition, the pact would facilitate the participation of Indian companies in Russian-designed nuclear power projects in at least one more country other than Bangladesh, where Indian companies are already participating in an upcoming project (Roopur). Further, negotiations on the production of nuclear fuel assemblies in India also proceeded further.

Captive power producers (CPPs) have booked 87 per cent of coal on offer in a recent CIL’s auction at an average premium of 21.54 per cent in the first ten days of the auction that offered a five year supply through e-bidding. CIL has lined up 17 million tonnes (mt) of coal to be supplied to CPPs in this round of auction. So far, 12.66 mt of coal from CIL’s subsidiaries has been put on offer, of which 11 mt has been booked. The average notified price for the booking was Rs 1,216 per tonne with an average premium of Rs 300 per tonne.

State Sector

A high powered committee appointed by the Gujarat government in July 2018 has submitted its report to Gujarat Urja Vikas Nigam Limited (GUVNL), recommending a revision in the tariff structures of the power purchase agreements (PPAs) for the three stressed projects in the state. The projects include Adani Power’s 4,620 MW Mundra TPP, Tata Power’s 4,000 MW Mundra Ultra Mega Power Project, and Essar Power’s 1,200 MW Salaya TPP. The committee has recommended to pass on the fuel cost to the consumers prospectively and extend the term of PPAs by ten years. It has also suggested lenders taking a cut in the interest rates in order to reduce the fixed costs by up to 20 paise per unit.

Private Sector

Essar Power has completed its Rs 800 billion capex programme with the commissioning of the second 600 MW unit of the 1,200 MW Mahan coal-based power plant in Madhya Pradesh. The second unit is supplied by China-based Harbin Electric and is designed to perform at optimum efficiency with domestic coal from pithead mines in the region. The company also established the Gajra Behra railway siding to handle coal requirements of the plant as well the 400 kV transmission system as part of the project. The company’s total installed capacity now stands at 3,830 MW and another 1,260 MW is under construction.

JSW Energy Limited is planning to revive the 240 MW Kutehr hydro power project in Chamba district of Himachal Pradesh. The project, conceived in 2007, was put on hold as the company could not sign a long-term power purchase agreement (PPA) with the buyers. The company has bid to supply 240 MW of the 500 MW for which bids were called by the Haryana government and is waiting for the result of the auction to take a final decision regarding the project.

The Indian Captive Power Producers Association (ICPPA) have requested the Prime Minister's office (PMO) to take steps to address the issue of coal shortage. The association, which comprises members from many industries including metals, has sought support for immediate resumption of coal supply for the industry (particularly aluminium) to sustain operations and rakes allocation on priority for optimum coal materialisation at par with independent power producers (IPP). ICPPA also expressed concerns on the difference in the price of coal supplied to IPPs and CPPs.

SoftBank, Acme Solar and Avada Energy have commissioned 360 MW, 200 MW and 60 MW capacities respectively at the Bhadla solar park in Rajasthan. With this, the total capacity of the solar park has reached 1,365 MW. The Bhadla solar park has a total capacity of 2,255 MW. The remaining 880 MW capacity will be installed by Hero Future Energies (300 MW), Azure Power (200 MW), Softbank (200 MW) and ReNew Power (50 MW) and will be commissioned by March 2019.

Projects and Ventures

Bharat Heavy Electricals Limited (BHEL) has secured four orders worth Rs 29 billion for emission control equipment from NTPC Limited. The scope of the order includes supply and installation of flue gas desulfurisation (FGD) systems for the control of SOx emissions at NTPC’s 1,980 MW North Karanpura TPP in Jharkhand, 1,000 MW Mouda Stage-1 TPP in Maharashtra, and 1,980 MW Barh Stage-1 TPP and 1,320 MW Barh Stage-II TPP in Bihar

L&T construction has secured multiple orders in domestic and international transmission and distribution market. Domestically, the orders were secured for the implementation of a high voltage distribution system in semi urban and rural areas of Kharagpur and Midnapur in West Bengal. On the international front, it has secured engineering procurement and construction (EPC) orders worth Rs 18.81 billion for constructing 22 132/11 kV substations in Kuwait.

Genus Power Infrastructures has secured an order worth Rs 3.12 billion from a state-owned utility for implementation of advanced metering infrastructure (AMI), including supply of 0.43 million smart meters. Reportedly, this is the single largest order for AMI, directly finalised by any state utility in the country

Indore Smart City Development Limited has issued a tender worth Rs 157.90 million for installation of 30,000 smart meters under the Indore Smart City project. The scope of work includes the supply, installation, testing, and commissioning of smart meters with radio frequency (RF) mesh communication. The bid-submission deadline is October 31, 2018. The time for completion of contract is 24 months.

Debt and Equity

NTPC has announced a voluntary liquidation of its JV with Bharat Forge under the Insolvency and Bankruptcy Code (IBC). BF-NTPC Energy Systems, a 49:51 joint venture between NTPC and Bharat Forge was incorporated in June 2008 with an aim of taking up manufacturing of casting, forgings, fittings, etc required for power and other industries. However, due to non-commencement of any business yet, both JV partners have decided to close down the company.

Greenko Energy Holdings has signed a pact to buy the assets of Pune-based Skeiron Green Renewables in Andhra Pradesh and Karnataka. The combined deal of Orange and Skeiron will add 1,300 MW of operating and near-completion wind and solar assets to Greenko along with an increase in the company’s operational capacity of wind, solar and hydroelectricity to 4.5 GW.

Infrastructure Leasing and Financial Services Limited (IL&FS) has put up the wind energy assets aggregating 775 MW for sale and entrusted HSBC to find them a buyer. The process to sell the wind energy platform, IL&FS Wind Energy, was initiated after a planned merger with the Orient Green Power Company failed. The wind assets are reportedly valued at around Rs 45 billion.

Suzlon Energy Limited is aiming to reduce 40 to 50 per cent of its debt by asset monetisation by March 2019. In the past, the firm had restructured its loans and had long term debt of Rs 71.40 billion. The move is reflective of the company’s anticipation of a rise in the sales volume in the next financial year.