The Central Electricity Regulatory Commission (CERC) Has Notified A Discussion Paper Titled ReDesigning Ancillary Services Mechanism In India.

Sep 3, 2018
Source Power Weekly Newsletter
Reforms and Regulations

The Central Electricity Regulatory Commission (CERC) has notified a discussion paper titled ReDesigning Ancillary Services Mechanism in India. The paper attempts to assess the performance of the current framework of frequency support and balancing ancillary services mechanism in India and to suggest next generation reforms by way of introduction of auction-based procurement of ancillary services. CERC has sought comments and suggestions on the paper by October 10, 2018

The Central Electricity Authority (CEA) has notified the draft Guidelines on Availability of Communication Systems for Interstate Transmission of Electricity. The guidelines have been prepared by the National Power Committee in line with the CERC’s Communication System for Interstate Transmission of Electricity Regulations, 2017. The draft guidelines elaborate upon the treatment of communication system outages and the methodology for computation of availability of communication system. CEA has sought comments/suggestions from various stakeholders by September 20, 2018.

CEA has notified the draft Technical Standards for Communication System in Power System Operations Regulations, 2018. The regulations seek to ensure seamless integration, reliable, redundant and secure communication in the power system. The regulations also aim to ensure that any network change does not cause any adverse effect on the functioning of the existing communication system. These standards will be applicable to all communication service providers, central and state generating companies including grid-connected captive generating plant, renewable energy generators, transmission licensees, distribution licensees, a bulk consumers, a consumer whose electrical system is connected to transmission system, distribution system, market operation service providers, and other service providers like forecast, weather, and, ancillary services, etc. CEA has sought comments/suggestions on the draft regulations by September 20, 2018.

Central Sector

The Ministry of Coal’s standing linkage committee has recommended fresh coal linkage of 2.8 million tonnes per annum (mtpa) for 500 MW of capacity for NTPC Limited’s 720 MW Barauni thermal power plant (TPP) in Bihar. The TPP already has a coal supply agreement for 220 MW capacity of the TPP. The standing committee has also recommended bridge linkages to a 500 MW unit at the Ukai TPP and an 800 MW unit at the Wanakbori TPP in Gujarat which are owned and operated by the Gujarat State Electricity Corporation Limited. The linkages will be allocated under the Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India.

NTPC Limited has set up an electric vehicle (EV) charging station in Simhadri, Vishakhapatnam, Andhra Pradesh. Designed by NTPC‘s in-house engineering team, the station can charge three EVs simultaneously. Earlier in May 2018, NTPC had commissioned an EV charging station at Talcher Super Thermal Power Station in Odisha. The company is actively looking at expanding its presence in the EV charging space.

State Sector

The Jammu and Kashmir State Administrative Council (SAC) has approved the formation of a joint venture (JV) between the central and the Jammu and Kashmir government for development of the 850 MW Ratle Hydro Electric Project (HEP). Majority of the ownership of the project ranging between 51 per cent and 90 per cent is proposed to be with the state. The HEP will be transferred to the state within a period of seven years from the start of commercial operation of the project. The Ratle HEP was earlier being developed by the GVK Group but work on the project was halted in 2014 owing to agitation by locals, tariff issues and financing problems. The state government reportedly terminated the contract with GVK in February 2017.

Odisha Hydro Power Corporation (OHPC) is planning to set up a 600 MW pump storage plant near Upper Indravati multi-purpose reservoir at an investment of Rs 30 billion funded by the International Finance Corporation (IFC). OHPC is likely to partner a private sector firm which would be selected through a bid process conducted by IFC. The private sector firm is expected to mobilise $210 million for the project. The proposed project will use solar power in the daytime to raise water to a height and then release it into a lower reservoir to generate power at peak hours in the evening.

Private Sector

Adani Power’s 4,620 MW Mundra thermal power project (TPP), Tata Power’s Mundra Ultra Mega Power Project (UMPP) 4,000 MW and Essar Power’s 1,200 MW Salaya TPP in Gujarat are likely to get relief as the Gujarat government is set to approve tariff revision with fuel cost pass-through. The high-powered committee (HPC) set up by the state government has suggested that the power purchase agreements (PPAs) need revision since the changes in the Indonesian regulation have led to an increase in imported coal cost. The committee has recommended that the fuel pass-through can be revised after five years based on coal price movement.

Siemens has commissioned the second block of the high-voltage-direct-current (HVDC) back to back link in Bheramara, Bangladesh to connect electricity supply networks in India and Bangladesh. The block 1 is in operation since 2013 and offers a transmission capacity of up to 500 MW. With the commissioning of the second block, the two back-to-back links would ensure a reliable electricity supply of up to 1,000 MW as well as help in avoiding transmission bottlenecks in power transfer to Bangladesh. From Bheramara at the Western border of Bangladesh, the 230-kV grid of the country will be connected via a substation and overhead lines to India's 400-kV grid.

Vikram Solar has commissioned a 10 MW solar power plant for Oil and Natural Gas Corporation Limited (ONGC) in Gujarat. The plant is divided into eight blocks of 1.25 MW capacity for increasing efficiency and uses polycrystalline technology. The project is developed to meet ONGC’s captive power requirements and will provide power to ONGC’s Dahej, Gandhar and Hazira facilities. The company is also responsible to provide operations and maintenance (O&M) services to the plant for a period of three years from the date of commissioning.

Debt and Equity

The State Bank of India (SBI) has stated that banks might need to abort lending to power sector projects, after the changes in recognition of non-performing assets in the Reserve Bank of India’s (RBI) February 12 circular. Around 30 power projects with a cumulative exposure of Rs 1.7 trillion would be facing bankruptcy proceedings after the Allahabad High Court’s order. SBI has found four out of eleven power assets to be not resolvable and has a total of Rs 270 billion exposure to the distressed accounts.

Jindal Steel & Power Limited is planning to split its steel, power, and international businesses into three separate entities to help reduce its Rs 420 billion debt. The international business includes the Oman steel plant of which 30 per cent of the stake would be sold in a period of two to three years through an initial public offer (IPO). The company is targeting to reduce its debt by 15 per cent in 2018-19. However, the plan is yet to be approved by lenders, regulators and the board.

Reliance Infrastructure Limited (RInfra) has paid all outstanding electricity duty and other taxes amounting to Rs 26.40 billion to the Maharashtra government leading to the largest ever debt reduction by a company in the Indian power sector. The company has reduced debt liabilities by Rs 138 billion from its deal to sell its Mumbai power business to Adani Transmission Limited. RInfra is expected to be debt free in 2019 after the flow of regulatory assets of Rs 50 billion back to the company, which are currently under approval.

India Grid Trust (IndiGrid) has completed the investment of Rs 2.32 billion in Patran Transmission Company Limited (PTCL). IndiGrid had signed an agreement in February 2018 to invest in PTCL. This is IndiGrid’s first investment in a third-party asset. The company has set a target of achieving Rs 300 billion of assets under management in the next five years.