The Ministry Of Coal Has Issued A Tender For Allocation Of Coal Mines For Companies Engaged In Specific End-use Sectors

Oct 22, 2018
Source Power Weekly Newsletter
Central Sector

The Ministry of Coal has issued a tender for allocation of coal mines for companies engaged in specific end-use sectors including iron and steel, cement, and captive power plants (CPPs). The successful allottees of the captive coal blocks will be able to sell 25 per cent of their production in the open market at prices fixed by Coal India Limited (CIL). The ministry plans to auction 19 coal blocks of which 13 will be auctioned in the sixth tranche of auction for iron and steel, cement and CPPs while six coking coal blocks will be auctioned in the seventh round for iron and steel. The mines to be put to auction in the sixth round include - Brahmpuri coal mine in Madhya Pradesh, Bundu, Gondulpara and Chitarpur in Jharkhand, Gondkhari and Marki Mangli IV in Maharashtra, Jaganathpur A and Jaganathpur B in West Bengal, Bhaskarpara, Gare Palma IV -1 and Sondiha in Chhattisgarh, Jamkhani in Odisha. While in the seventh tranche the blocks are Brahmadiha, Choritand Tiliaya, Jogeshwar & Khas Jogeshwar, Rabodih OCP, Rohne in Jharkhand and Urtan North in Madhya Pradesh.

The State Bank of India (SBI) has moved the Supreme Court (SC) seeking implementation of Gujarat government’s high power committee’s recommendation to amend the power purchase agreements (PPA) between various discoms and Tata Power, Adani Power and Essar Power Gujarat Limited. SBI is a part of the consortium of lenders that has funded the Tata Power’s 4,000 MW Mundra ultra mega power project (UMPP), Adanni Power’s 4,620 MW Mundra thermal power project (TPP) and Essar Power’s 1,200 MW Salaya TPP in Gujarat. The projects are running losses as they cannot hike tariffs to compensate for the rise in cost of coal imported from Indonesia. The consortium of banks have lent Rs 191.27 billion to Adani Power, Rs 42.14 billion to Essar Power and Rs 101.59 billion to Tata Power till March 31, 2017. Recently applications were also filed by Gurjrat Urja Vikas Nigam Limited and the Gujarat government to the SC.

NTPC Limited is planning to start biomass co-firing across all its coal-based thermal power stations to reduce greenhouse gas (GHG) emissions. It plans to burn biomass like scrap lumber, forest debris, crop residue, manure and some type of waste residues along with coal to generate electricity. In this regard, it will soon float a tender for the procurement of biomass pellets and torrefied biomass pellets/briquettes. In a separate development, NTPC will sign a memorandum of understanding (MoU) with the Surat Municipal Corporation (SMC) for processing 1,000 tonnes of garbage per day by setting up waste-to-energy (WtE) plant at its 656 MW Kawas gas-based power plant in Hazira, Gujarat. SMC will supply the refused derivative waste (RDF) to NTPC by segregating combustible portion from municipal solid waste (MSW) that will be incinerated in WtE plant for generation of electricity.

CIL has offered an additional 5 million tonne of coal to NTPC on a credit basis to augment stock at its generating units. This implies that against the normal supply term of cash and carry where the generator has to pay upfront at the time of sourcing coal, the release of this additional 5 million tonnes will be on credit without any advance payment. The coal will have to be lifted by NTPC by road within 30 days of its release and payment will be made by NTPC after the receipts of the invoice.

Nuclear Power Corporation of India Limited’s 220 MW Unit 1 of the Kaiga Atomic Power Station (KAPS) in Karnataka has set a world record among pressurised heavy water reactors (PHWR) by running continuously for 895 days. The unit stands first among PHWRs and second in terms of all kinds of nuclear reactors in terms of continuous operation. The indigenous reactor powered by domestic fuel has been operating continuously since May 16, 2016. It started commercial operations on November 16, 2000. In a separate development, power generation from the 1,000 MW Unit-II of Kudankulam Nuclear Power Plant (KKNPP) in Tamil Nadu has been suspended as planned outage to take up maintenance work. Meanwhile, Russia’s Rosatom has shipped out moisture separater reheater for Unit 4 (1,000 MW) of KKNPP.

Korea Western Power Company (Kowepo), Korea’s state power utility, has begun arbitration proceedings against the Indian government for not honouring the fuel supply commitment for its 388 MW gas-based power plant in Maharashtra. The project is operated by Pioneer Gas Power Limited (PGPL) in which Kowepo has a 40 per cent stake. It has sought resolution of issues surrounding its project in six months or a compensation of $400-million for loss and damages. If the issues remain unresolved after six months, Kowepo will commence international arbitration proceedings under India-Korea Bilateral Investment Treaty (BIT) and Comprehensive Economic Partnership Agreement (CEPA)

As per a recent report by the US-based Institute for Energy Economics and Financial Analysis (IEEFA), THDC India Limited’s proposed 1,320 MW coal-fired Khurja power plant in Bulandshahar, Uttar Pradesh should be scrapped. The report highlights that the project would push up the cost of electricity and increase air pollution around Delhi NCR at a time when the country’s renewable energy options are cheaper and more sustainable. Further, the project will likely add to the lender, Power Finance Corporation’s US$4.5 billion of stranded assets, as per the report.

State Sector

The Bihar government has completed 100 per cent electrification of all willing households in the the state under the SAUBHAGYA scheme, much ahead of the December 31, 2018 deadline under the scheme. All 13.9 million households in rural as well as urban areas in the state have been electrified. Of these households, 3.25 million were covered under the SAUBHAGYA scheme. The state had highest un-electrified households next only to Uttar Pradesh at the onset of the scheme but it made rapid progress in electrifying those while Uttar Pradesh’s electrification rate stands at about 75 per cent at present.

Several TPPs in Karnataka are on the verge of closing operations owing to shortage in coal supply by Western Coalfields Limited (WCL) and Singareni Collieries Company Limited (SCCL). The affected power plants include the 1,720 MW Raichur thermal power plant (RTPS), the 1,700 Bellary TP, and the 1,600 MW Yeramarus TPS. The Karnataka government has placed its request before the MoC for 900,000 tonnes of coal which was to be provided by WCL. The shortage has arisen owing to logistical issues as railway lines to thermal power plants in Karnataka are congested and it would take time to clear the routes.

The Uttar Pradesh government has introduced a plan to ensure uninterrupted electricity supply as an incentive for districts with less than 15 per cent line losses. Across all districts, the accounts of power supply at every substation would be maintained and feeders registering higher line losses would be identified. Further, punitive action will be taken against officers responsible for high line loss. The plan will facilitate the provision of round the clock power supply to all the districts by 2034.

Chennai Metro Rail Limited (CMRL) has commissioned a 410 kW solar plant at its Koyambedu station installed its rooftop and ground areas. The plant is expected to generate around 55,350 units per month and CMRL will be saving around Rs 1.5 million per year as a result. The installation of another 5.5 MW rooftop solar power plant is under progress and is expected to be completed by end of 2018.

Projects and Ventures

ReNew Power has secured a tender for developing a 3 MW floating solar photovoltaic (PV) project to be set up at the Meghadrigedda reservoir in Visakhapatnam, Andhra Pradesh, in a bidding process conducted by the Greater Visakhapatnam Municipal Corporation (GVMC). It is estimated to generate around 4.2 MUs of power annually, offsetting over 3,960 tonnes of carbon emissions every year. The project would be financed by GVMC through a grant received from the Asian Development Bank under their Urban Climate Change Resilience Trust Fund.

Debt and Equity

The Rural Electrification Corporation (REC) has launched a global medium-term notes (GMTN) programe worth $ 5 billion at the global securities market. The launch has increased the total MTN programme for the present year to around $36 billion. Meanwhile, REC’s debt issue which is a part of its $ 5 billion MTN drawdown has been assigned a Baa3 rating by Moody’s. In a separate development, REC is also planning to raise $1 billion through a bond sale to US-based investors. It will issue 5-year and 10-year notes as part of their borrowing programme with a target to meet 15 per cent of their annual funding requirements through external commercial borrowings.

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