The Central Electricity Regulation Commission (CERC) Has Issued The Planning, Coordination And Development

Jul 30, 2018
Source Power Weekly Newsletter
Reforms and Regulations

The Central Electricity Regulation Commission (CERC) has issued the Planning, Coordination and Development of Economic and Efficient Inter-State Transmission System by Central Transmission Utility and other related matters Regulations, 2018. The regulations lay down the broad principles, procedures, and processes to be followed for planning and development of an efficient, coordinated, reliable and economical system of inter-state transmission system (ISTS) for smooth flow of electricity from generating stations to the load centres.

The CERC has notified a discussion paper titled Re-Designing Real Time Electricity Market in India. The paper outlines the improvements required to ensure market operations closer to real time, to better harness not only the intermittent renewable enenrgy but also for optimal utilisation of resources in the intra-day time horizon. The commission has sought comments/suggestions on the paper by August 31, 2018.

Central Sector

The central government has constituted a high-level empowered committee to be headed by the cabinet secretary to look into the issue of stressed assets in the power sector. The committee comprises representatives from Ministry of Railways, Ministry of Finance, Ministry of Power, Ministry of Coal and the lenders having major exposure to the power sector. The purpose of the committee will be to resolve various issues while maximising the efficiency of investments including changes required to be made in the fuel allocation policy and regulatory framework. It will also improvise on mechanisms to facilitate the sale of power, ensure timely payments and necessary changes in Insolvency and Bankruptcy Code (IBC), Asset Restructuring Company (ARC) Regulations in order to avoid the investments to become non-performing assets.

The Ministry of Coal has decided to allocate 27 more mines to sectors including captive power plants, iron and steel, and cement. Of the 27 coal blocks, six coal mines are for the end use production of iron and steel, 13 are for end-use iron and steel, cement and captive power plants, two are for state government company for the sale of coal, and six for the purpose of own consumption of power. Under the Coal Mines Special Provisions Act, 2015, around 82 coal mines have already been allocated so far.

The Solar Energy Corporation of India has cancelled all the winning bids in its 3 GW solar power auction held on July 13, 2018, except the lowest one by Acme Solar that quoted a tariff of Rs 2.44 per unit for 600 MW of capacity. The bids were cancelled as they were deemed to be too expensive and not competitive. The cancelled projects include that of SB Energy, ReNew Power, Mahindra Solar, and Mahoba Solar (part of the Adani Group).

Kerala has emerged as the leading state in the first edition of the State Energy Efficiency Preparedness Index released by Bureau of Energy Efficiency (BEE) and NITI Aayog. Kerala, with 77 points, leads among the states and union territories, followed by Rajasthan (68) and Andhra Pradesh (66.5). The index has been developed taking into account sector-wise energy consumption, energy saving potential and states’ influence in implementing energy efficiency. The index examines states’ policies and regulations, financing mechanisms, institutional capacity, adoption of energy efficiency measures and energy savings achieved. The index has a total of 63 indicators — 59 across buildings, industry, municipalities, transport, agriculture, and discoms, and 4 cross-cutting indicators.

State Sector

Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) has announced the re-bidding of 500 MW of grid-connected photovoltaic (PV) projects through tariff-based competitive bidding. This comes after the state annulled the recent auction for development of 1 GW grid-connected solar PV projects, which was won by Adani Green Energy Limited (AGEL). UPNEDA cited a high tariff of Rs 3.48 per kWh as reason for cancellation of the auction.

Karnataka has overtaken Tamil Nadu to become the top state with the highest installed renewable energy capacity of 12.3 GW. As per a report by the Institute for Energy Economics and Financial Analysis (IEEFA), Karnataka is expected to more than double its renewable energy capacity by 2027-28.

Private Sector

U.S. Trade and Development Agency (USTDA) and IL&FS Energy Development Company Limited (IEDL) have signed a memorandum of understanding for the development of a 41 MW hybrid wind-solar and energy storage power plant in Andhra Pradesh. The technical assistance for the project will be carried out by Kansas-based Black & Veatch.

Reliance Infrastructure Limited’s (RInfra) transaction for sale of its integrated Mumbai power business to Adani Transmission Limited (ATL) will be closed in the upcoming week. The definitive binding agreement for the same was signed in December 2017, for 100 per cent sale of stake of power, transmission and distribution. The deal has a total consideration value of Rs. 188 billion. The proceeds from this transaction will be utilised for debt-reducing and deleveraging.

Aditya Birla Renewables Limited has emerged as the lowest bidder by offering a tariff of Rs 2.79 per unit for setting up a 75 MW solar power project in Odisha in response to the state‘s 200 MW solar power tender floated by Gridco Limited. Sukhbir Agro Energy Limited, Gupta Power Infrastructure Limited, and Eden Renewable Varenne Private Limited have bagged 25 MW, 20 MW and 50 MW of capacities, respectively, at a price of Rs 3.19 per unit. Aditya Birla Renewables may set up its plant at sites in Rayagada and Sambalpur.

Financials

Power Grid Corporation India Limited has recorded a total income of Rs 84.27 billion for the quarter ended June 2018, an increase of 14 per cent from Rs 73.89 billion recorded in the corresponding quarter of 2017-18. The company’s net profit increased by 9.2 per cent to Rs 22.40 billion from Rs 20.52 billion during the same period.

Torrent Power has recorded a total income of Rs 35.80 billion for the quarter ended June 2018, an increase of 16.2 per cent from Rs 30.79 billion recorded in the corresponding quarter of 2017-18. The company’s net profit increased by 11.8 per cent to Rs. 2.27 billion from Rs 2.03 billion during the same period.

ABB India Limited has recorded a total income of Rs 27.13 billion for the quarter ended June 30, 2018, a 21 per cent increase over Rs 22.33 billion recorded in the corresponding quarter of 2017-18. The company’s net profit increased by 36 per cent to Rs 1.02 billion from Rs 750 million during the same period.

GE Power India has recorded a total revenue of Rs 4.67 billion for the quarter ended on June 30, 2018, an increase of 20.3 per cent over Rs 3.88 billion recorded in the corresponding quarter of 2017- 18. The company’s net profit stood declined by 77 per cent to Rs 24.4 million from Rs 105.8 million during the same period.

Debt and Equity

The Tata Power Company Limited has received an approval from its shareholders to raise up to Rs 55 billion (~$801.11 million) through the issuance of non-convertible debentures on a private placement basis. The amount will be borrowed after the resolution for the same is passed within 12 months. The bonds will be repayable in next 12 months.

ReNew Power Limited is in discussions with Canada's pension fund OMERs (Ontario Municipal Employees Retirement System) to raise funds worth $300 million for growth capital. The company may sell a minority stake as part of the proposed transaction. ReNew Power's other existing investors include Canada Pension Plan Investment Board (CPPIB), Abu Dhabi Investment Authority, and Japan’s JERA Co — a consortium of two of the biggest Japanese utilities.

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