The Ministry Of Power Has Decided To Convert All Existing And New Meters Into Smart And Prepaid Meters Within Three Years Starting From April 1, 2019

Dec 24, 2018
Source Power Weekly Newsletter
Central Sector

The Ministry of Power has decided to convert all existing and new meters into smart and prepaid meters within three years starting from April 1, 2019. This step would result in reduction of aggregate technical and commercial (AT&C) losses, better revenue collection for discoms, incentivisation of energy conservation, ease of bill payments, and doing away with paper bills. Presently, about 24 per cent of the power produced is lost due to AT&C losses.

The union government has relaxed the cross-border power trading norms. The earlier cross-border trading power guidelines issued by the Ministry of Power in 2016 allowed cross-border trade only through the term-ahead market and not allow the day-ahead market. The latest guidelines for cross-border electricity trade have removed this condition. However, foreign entities would be required to participate in power exchanges only through Indian power trading entities. Further, the government has repealed an earlier provision, which stated that only companies fully owned by the governments of the concerned countries or those having at least 51 per cent equity investment of Indian public or private companies could export power to the Indian market after obtaining one-time approval from the designated authority in India.

As per a recent study by the Central Electricity Authority (CEA), a total of 200 potential sites have been identified for setting up large thermal power plants of capacity totaling 428.9 GW in the country. The study was conducted for identifying large pithead and coastal sites based on satellite mapping using remote sensing technology. Thermal plants are required as baseload and for grid stabilisation in view of the government’s ambitious target of having 175 GW renewable energy by 2022

NTPC Limited has proposed to purchase 1,500 MW of electricity from Nepal for long-term. In the first phase, NTPC Vidyut Vyapar Nigam (NVVN) plans to purchase 500 MW of the power produced at the 900 MW Upper Karnali hydroelectric project in Nepal and supply it to Bangladesh. In a separate development, NTPC has proposed a single window registration for supplies to all central public sector undertakings in India. The company has made 36 per cent of its procurement from micro and small enterprises (MSEs) in the current fiscal year till November 2018 as against a target of 25 per cent set up by the government.

NLC India Limited has retired the 100 MW unit of the Thermal Power Station-I (TPS-I) in Tamil Nadu as part of its planned phase-out process. The station's generating capacity stands reduced to 500 MW now. The TPS-I is a vintage plant and has been in operation for over 50 years. The phasing-out of other units will be scheduled in line with the directives of the Central Pollution Control Board. Further, a new plant, Neyveli New Thermal Power Project of capacity 1,000 MW (2x500 MW) is under implementation as the replacement plant for TPS-1 and is currently in its final stages of completion

The central government is soon likely to auction power transmission contracts worth over Rs 80 billion for connecting renewable energy projects in western and northern states. Contracts worth about Rs 35 billion have already been awarded on a nomination basis to Power Grid Corporation of India Limited (Powergrid). The government has also compressed the timeline for implementing the projects to 18 months while setting September 2020 as the target completion date for some projects. The National Committee on Transmission (NCT) has, however, deferred a decision on lines worth Rs 55 billion due to lack of clarity on the status of the renewable energy generation plants.

State Sector

The Chhattisgarh government is planning to reduce domestic electricity tariffs by half by April 1, 2019. The government will offer a subsidy of Rs 30 billion to Chhattisgarh State Power Distribution Company (CSPDCL) for compensating for the losses accrued by the discom. CSPDCL has already sent a proposal to Chhattisgarh State Electricity Regulatory Commission (CSERC) to set a new power tariff in the state for the same. The entire process is expected to take three months and about 4.29 million consumers are expected to be benefitted from this step.

Punjab State Power Corporation Limited (PSPCL) has sought a hike of around 8 per cent to 14 per cent in the power tariff for 2019-20. PSPCL is paying a significant interest of Rs 38.68 billion on the outstanding debt and there is a delay in the release of subsidy payments by the state government affecting profits. The total revenue requirement of the utility has been projected at Rs 3,680.20 billion for 2019-20.

Chandigarh’s administration has submitted a plan to Joint Electricity Regulatory Commission (JERC) for Goa and Union Territories, to expand its power infrastructure by spending around Rs 3 billion in 2019-20. The funds will be spent on projects like upgradation of substations and laying of underground cables. As per the plan, a few new 66 kV grid substations will be established while all the existing 66 kV substations will be upgraded. Also, there are plans to convert a 2,037 km overhead transmission line into underground line. In addition, the Electricity Department has already started work on a smart grid project under which 30,000 existing meters will be replaced by smart meters.

Private Sector

Azure Power has qualified the technical round in Solar Energy Corporation of India Limited’s (SECI) solar linked manufacturing tender. Azure Power is the sole bidder to have responded to the tender. The company submitted bids for setting up 2,000 MW solar power project combined with 600 MW manufacturing of solar components as against 10 GW solar capacity with 3 GW manufacturing capacity put on auction by SECI. SECI is now negotiating the tariff with Azure Power.

SB Energy has secured 250 MW of solar power capacity at the latest Gujarat 700 MW solar tender by quoting the lowest tariff of Rs 2.84 per unit. Finland based-Fortum bagged 250 MW and French major Engie got 200 MW, both bidding the same price of Rs 2.89 per unit. The price discovered in the present tender is 40 paise per unit higher than the one discovered in the last tender in Gujarat for 500 MW capacity in September 2018.

The Indian Wind Turbine Manufacturers Association has filed a petition against the Tamil Nadu Electricity Regulatory Commission (TNERC) before the Appellate Tribunal for Electricity (APTEL). TNERC has approved a ceiling tariff of Rs 2.65 per unit for an upcoming 500 MW wind power auction which is lower than the feed-in-tariff of Rs 2.80 per unit fixed by it in April 2018. As per IWTMA, TNERC’s feed-in-tariff was itself too low having grossly underestimated the costs incurred in setting up wind projects and now the decision to allow Tamil Nadu Generation and Distribution Corporation to set an even lower ceiling tariff will severely hamper the interest of wind power developers in the state.

Projects and Ventures

Sterlite Power has secured a new $600-million transmission project in Brazil. The company emerged the winner for Lot 13 in the recent auction for transmission projects conducted by Brazil’s Electric Energy Regulator ANEEL. The project will require an investment of $600 million over the period of next 3-5 years in the Rio Grande do Sul, south region of the country. This project takes company’s investments in Brazilian transmission sector over $2 billion spread across 10 projects. Earlier in 2018, Sterlite Power had announced plans to invest up to $4 billion in Brazil.

A consortium of GE Power India, GE Hydro France, GE Renewable Malaysia Sdn. Bhd. and Sinohydro Corporation (M) Sdn. Bhd. has secured an order for the 1,285 MW Baleh Hydroelectric Project in Sarawak, Malaysia from SEB Power Sdn. Bhd. The contract entails carrying out the main electrical and mechanical works for the project. The value of the order for GE Power India is $98.4 million (about Rs 6.89 billion). GE Power India will be the leader of the consortium and will be responsible for the design, manufacture, and supply of the main electro-mechanical equipment involving five 257 MW Francis turbines as well as part of the balance of plant equipment for the project.

Projects and Ventures

Lenders to Monnet Power Company Limited have rejected the bid from JSW Energy Limited to acquire the company due to poor terms of the offer. JSW Energy wanted to make the payment of Rs 500 million upfront and Rs 4.5 billion over ten years which was not accepted. The company will, therefore, go for liquidation.