The Ministry Of Power Has Announced That The Households In Eight More States Have Achieved 100 Per Cent Electrification Under Saubhagya.

Nov 26, 2018
Source Power Weekly Newsletter
Central Sector

The Ministry of Power has announced that the households in eight more states have achieved 100 per cent electrification under Saubhagya. The states include Madhya Pradesh, Tripura, Bihar, Jammu and Kashmir, Mizoram, Sikkim, Telangana, and West Bengal. In total 15 states in the country now have achieved 100 per cent household electrification. Some states like Maharashtra, Uttarakhand, Himachal Pradesh, Arunachal Pradesh, and Chhattisgarh etc. are left with a small number of un-electrified households and are expected to achieve the target any time. The states completing 100 per cent household electrification by December 31, 2018 will also receive an additional grant of 15 per cent of the project cost sanctioned under Saubhagya.

The National Green Tribunal (NGT) has imposed penalties of up to Rs 50 million on thermal power plants (TPPs) that have not fully disposed of the fly ash generated from operations. The TPPs failing to comply with the 100 per cent fly ash disposal criteria will have to deposit compensation ranging from Rs 10 million to Rs 50 million (depending upon capacity) to the Central Pollution Control Board by December 20, 2018. If erring plants failed to deposit the fine, such plants will have to pay a 12 per cent interest. The Ministry of Environment, Forests and Climate Change stipulated in November 2011 that TPPs commissioned before the date of notification have to ensure 100 per cent fly ash utilisation in five years. Those commissioned after notification have to ensure 100 per cent compliance within four years of the date of commissioning.

NTPC Limited is planning to commission the 800 MW unit of its 1,600 MW coal-based supercritical power plant at Darlipalli in Sundergarh, Odisha in 2018-19. By September 2019, the full capacity of 1,600 MW is projected to start producing power. The total cost of the project is estimated at Rs 125 billion and Odisha will get 50 per cent power of the total capacity. The company will source coal from its Dulanga coal mine in Odisha to meet the fuel requirements of the project. For additional requirements, it will source coal from Mahanadi Coalfields Limited. The project will consume 8 mt of coal annually. Besides Odisha (800 MW), West Bengal (423 MW), Jharkhand (142 MW), Sikkim (21 MW) and Bihar (215 MW) will receive power from the upcoming power project.

NHPC Limited is expected to resume work at its two hydropower projects at Lower Subansiri and Dibang in Arunachal Pradesh with a combined capacity of 4,800 MW as the NGT has rejected the appeals stalling these projects. The tribunal has however directed for the project proponent to meet all the conditions laid down in the environmental clearance. Following this development, NHPC is soon planning to call bids to award turnkey contracts to build a 70 meter high concrete dam on the Dibang River.

The Supreme Court has sought a response from Parsa Kente Collieries Limited (PKCL), a joint venture (JV) between Adani Enterprises Limited and Rajasthan Rajya Vidyut Utpadan Nigam Limited (RRVUNL), over a plea seeking cancellation of coal blocks allocated to the company. The allotment has caused an estimated loss of Rs 12 billion to the exchequer and has been done despite the Supreme Court’s ruling passed in 2014 wherein it had deallocated 204 coal blocks that were awarded to various companies during 1993-2010. The court subsequently held that any JV set up to transfer the mining rights to a private company were illegal. However, PCKL was re-allocated the coal block and allowed to carry on mining in 2015.

State Sector

The Odisha government is soon planning to invite tenders for 550 MW of solar photovoltaic power capacity. GRIDCO Limited will float tenders for 300 MW capacity and bids for the residual 250 MW will be invited by Green Energy Development Corporation of Odisha Limited (GEDCOL) for developing solar parks in cluster mode. The auctions would be conducted on the reverse bidding mode. The chosen developer will have the discretion to select the location.

The Maharashtra government has stated that the land acquisition process of the proposed 9,900 MW Jaitapur Nuclear Power Project coming up in the state has been completed. Nuclear Power Corporation of India Limited (NPCIL) and French utility Electricite de France (EDF) are implementing the project. The project would comprise six reactors of capacity 1,650 MW each. The work on the project is expected to start by year-end and would take 6-7 years to be completed.

Private Sector

The Shapoorji Pallonji Group has won the country’s first large-scale floating solar project by securing 50 MW capacity in Solar Energy Corporation of India’s reverse auction at a tariff of Rs 3.29 per unit. The project will be located on the Rihand Dam along the Uttar Pradesh-Madhya Pradesh border. The timeline of the project is thirteen months but acquiring floating structures within this deadline could be a challenge. SECI intends to auction a further floating solar PV capacity of 100 MW in blocks of 50 MW each.

EV Motors India Private Limited is planning to set up 6,500 electric vehicles (EV) charging stations over the next five years in partnership with DLF, ABB India Limited, and Delta Electronics, with an investment of $200 million. The company plans to set up twenty outlets in Delhi-NCR in the next one year, followed by expanding its reach to other major cities and will also be setting up service centers at each of these cities.

Projects and Ventures

The Himachal Pradesh government has awarded the 780 MW Jangi-Thopan-Powari hydroelectric project in Kinnaur district to SJVN Limited. The project will be developed a build, own, operate and transfer (BOOT) basis for a period of 70 years. The project will increase SJVN's portfolio of projects to around 6,800 MW. The project lies in the upstream of the company's 1,500 MW Nathpa Jhakri project. The company is expected to benefit from its vast experience of executing large projects in the Sutlej river basin.

Hartek Power Private Limited has secured an order from Power Grid Corporation of India Limited for augmenting an extra high-voltage 400 kV substation project. Under the project, Hartek Power will convert fixed line reactors to switchable line reactors so that these devices can be optimally used to curtail line outages at 400 kV substations located in Ballia and Sohawal in Uttar Pradesh, Kankroli in Rajasthan and Abdullapur in Haryana. The project, which will go a long way in strengthening the northern grid, is scheduled for completion by February 2020.

Debt and Equity

The central government is likely to merge the two state-run lenders namely Rural Electrification Corporation Limited (REC) and Power Finance Corporation Limited (PFC) together. The first phase of the deal will see REC acquiring a major stake valued at $2.5 billion in PFC by March 2019. The second phase includes merging both companies to help finance power projects. The proposed deal is part of the central government’s plan to meet its 2018-19 divestment target of Rs 800 billion.

The central government is planning an offer-for-sale to sell at least 3.5 per cent stake in NTPC with a greenshoe option in December 2018. The move is expected to help collect Rs 38 billion to the exchequer. Earlier in August 2017, the government had disinvested 6.75 per cent stake in the company, thereby raising about Rs 92 billion.

NRSS XXIX Transmission Limited, a special purpose vehicle of Sterlite Power, has raised Rs 30 billion by issuing bonds on a private placement basis. The AAA bonds have been fully subscribed on the Bombay Stock Exchange bond platform. The project includes three 400 kV double circuit transmission lines and one 400/220 kV gas insulated switchgear substation to deliver over 1,000 MW of electricity from Punjab to the Kashmir Valley.

Lenders to Jhabua Power Limited (JPL) are planning to invite fresh bids for the company after earlier attempts failed. In August 2018, Goyal MG Gases Private Limited had offered Rs 23.50 billion for the stressed company for which a deadline but little progress has been made on the transaction. Currently, the lenders hold about 61 per cent of JPL’s shares while the Avantha Group holds the rest.