The Ministry Of Power (MoP) Has Announced Rs 1 Billion Award For States That Would Complete Household Electrification Early Under The SAUBHAGYA Scheme

Oct 15, 2018
Source Power Weekly Newsletter
Central Sector

The Ministry of Power (MoP) has announced Rs 1 billion award for states that would complete household electrification early under the SAUBHAGYA scheme. Apart from discoms, the employees would also collectively get an award of Rs 5 million for completing the task of electrifying households. There are three categories of states to compete under the scheme which include special category states (northeast and other hilly states), one pool of states where number of households to be electrified are less than 0.5 million and another pool would cover the states that have more than 0.5 million households to be electrified. The states (Gujarat, Punjab, Goa, Andhra Pradesh, Haryana, Kerala, Tamil Nadu and Himachal Pradesh) that have already achieved 99 per cent of household electrification work will not be considered for the award.

MoP is examining a proposal to bid out ultra mega power projects (UMPP) to meet the rising electricity demand in the country. It is estimated that it will take at least four to five years for UMPP bids to fructify, and by that time the demand in the country would also have accelerated. The central government’s flagship UMPP programme was launched in 2005 following which the 3,960 MW Sasan UMPP and the 4,000 MW Mundra UMPP were awarded and commissioned by Reliance Power and Tata Power respectively. The last UMPP bidding round was conducted in 2015 for Bedabahal (Odisha) and Cheyyur (Tamil Nadu) UMPPs but it was cancelled after private developers pulled out of the bidding process citing issues in the tendering norms.

NTPC Limited and National Aluminium Company Limited have decided to cancel the development of the proposed 2,400 MW Gajamara thermal power project in Odisha owing to land acquisition challenges and coal linkage issues. The landowners of 1,500 acres of land in Gajamara are demanding a higher compensation than what is offered by the developers. The project was expected to be developed with an investment of Rs 140 billion with three units of 800 MW each. In a separate development, NTPC has received support from banks for funding its plan to buy assets undergoing resolution in the National Companies Law Tribunal. Out of the 32 stressed coal-based units, the company has shortlisted eight to nine projects totaling 10 GW for acquisition

NTPC Limited’s 705 MW Badarpur coal-based plant has closed down its operations fully and permanently after it was identified as one of the largest contributors to air pollution in Delhi by the Environment Pollution (Prevention and Control) Authority (EPCA). In the last few years, only unit IV and V of 210 MW had been operational as the older ones were decommissioned due to high pollution levels. After the EPCA order in 2017, the plant was to go out of business on July 31, 2018, but the deadline had to be extended twice first to August 2018 and then till October 2018, as the Tughlaqabad substation was yet to be ready

NHPC Limited has shut down the 180 MW Baira Siul Hydro Power Station in Himachal Pradesh for renovation and modernisation (R&M) and life extension works. The plant will be under complete shutdown for six months effective from October 15, 2018.

State Sector

The Gujarat government has sought Supreme Court’s direction to the Central Electricity Regulatory Commission (CERC) to amend the power purchase agreements of Tata Power Company Limited, Essar Power Limited, and Adani Power Limited. The state government’s high-powered committee’s report that calls for relief for the power companies has been submitted to the apex court. The three companies were not allowed to pass the increase in the cost of imported coal on to tariffs for their respective projects in Gujarat. In April 2017, the Supreme Court had disallowed any pass-through of the cost of coal on tariffs for Adani Power and Tata Power.

Uttar Pradesh Power Corporation Limited (UPPCL) is planning to launch a new scheme ‘Jhatpat Connection Yojana’ for providing electricity connections easily and swiftly through quick processing of applications, mainly through an online process. Under the scheme, a consumer's application would be immediately forwarded to the concerned engineers under a swift processing system for quick approval. The below poverty line (BPL) consumers would be required to pay just Rs 10 for an electricity connection, while those in the above poverty line (APL) category would be required to pay Rs 100 for getting an electricity connection of load between 1 kW to 25 kW.

Bangalore Electricity Supply Company Limited (BESCOM) has introduced city’s second electric vehicle charging infrastructure in the premises of Karnataka Electricity Regulatory Commission (KERC) on Millers Road. It has planned to set up a network of charging stations at 11 identified BESCOM-owned locations and the work is expected to be completed in six months. The state’s transport department will also tie up with BESCOM to provide charging facility in 120 places in the city including IT parks, shopping malls, metro stations, airport, and BDA complexes.

Private Sector

Sterlite Power has commissioned of Northern Region Strengthening Scheme 29 (NRSS 29), two months ahead of schedule. The NRSS-29, with a project cost of Rs 30 billion, connects the northern grid to Jammu and Kashmir The project is capable of delivering an additional 1,000 MW to the valley of Kashmir through a 414 km long transmission line that will augment the state’s power transmission capacity by at least 33 per cent. About one-third of the peak demand in Kashmir would be met through this route. The company deployed helicranes in the Pir Panjal range to overcome challenges of high altitude, snow and inaccessible terrains

CESC Limited has announced its demerger into three entities, with the power and retail businesses getting separate identities, while IT, fast-moving consumer goods (FMCG) and Quest Mall would be under the third unit. power generation and distribution business would continue to be called CESC, while retail business would now be called New Retail. The third company, which would include IT, FMCG etc will be named Venture Companies. The demerger is expected to benefit all shareholders as they will be able to participate in the individual business where growth opportunities are better at different points of time.

Suzlon Group has installed India’s tallest wind turbine generator with a hybrid concrete tubular (HCT) tower at Tirunelvi in Tamil Nadu. The 140-meter HCT tower is a combination of concrete base and foundation supporting a tubular steel tower that enables higher hub heights while avoiding an exponential increase in the weight and costs of an all steel tubular towers. The new HCT tower will make low wind sites viable. The concrete tower was constructed onsite, using the pre-cast in-situ ensuring control on quality and internally reinforced with high strength steel cables.

UK-based Lightsource BP is planning on setting up solar power projects in India through its partnership with the National Investment and Infrastructure Fund (NIIF) of India. In April 2018, the UK Government and NIIF had announced an agreement to become joint anchor investors in the Green Growth Equity Fund with each committing £120 million to the fund. In June 2018, Lightsource BP completed its first project in India - the 60 MW solar photovoltaic plant in Wagdar, Maharashtra. In a separate development, the Saudi Arabia government has shown interest in partnering with India to develop complementary supply chains, and deploy funds and new technologies in the Indian solar sector.

Debt and Equity

NTPC’s foreign currency bonds and masala bonds have been listed on NSE-IFSC’s debt securities market. It has raised $2,400 million, €500 million and Rs 40 billion by issuing bonds in different tranches, under its $6-billion Medium Term Note Programme. The bonds are listed on stock exchanges at London and Singapore.

Sekura Energy Limited, which is backed by Edelweiss Infrastructure Yield Plus fund, is likely to acquire two operating power transmission assets from Essel Infraprojects Limited namely DarbhangaMotihari Transmission Limited and NRSS XXXI (B) Transmission Limited. It is also set to acquire WaroraKurnool Transmission Limited and NRSS XXXVI Transmission Limited, which are expected to be commissioned in 2019-20. The stake in the two under construction assets would be acquired post the commissioning of the assets.