The Ministry Of Power (MoP) Has Notified A Draft Concept Note On Merit Order Operation For Flexibility In Generation And Scheduling Of Thermal Power Stations

Jul 16, 2018
Source Power Weekly Newsletter

The Ministry of Power (MoP) has notified a draft concept note on merit order operation for flexibility in generation and scheduling of thermal power stations. As per the draft note, flexibility should be given to generators to supply power from any of its generating stations through merit order operation at the national level. This will result in the dispatch of cheaper power first and, therefore, lead to a reduction of cost of power procured by the discoms. The MoP has sought comments on the draft note by August 1, 2018.

The Directorate General of Trade Remedies (DGTR) has proposed a levy of a 25 per cent safeguard duty on solar cells and modules imported from China and Malaysia for the first year. In the first six months of the second year, a 20 per cent safeguard duty will be applicable which will be reduced to 15 per cent in the second half of the year. In addition, DGTR has recommended that no duty should be levied on solar imports from other developing countries as the total share of their module and cell imports is very low. The findings and recommendations will be assessed by a board of secretaries from different ministries for approval from the central government.

About 35 domestic and international firms have responded to the expression of interest invited by the Ministry of New and Renewable Energy (MNRE) for developing the country’s maiden off-shore wind farm of capacity 1,000 MW. The project is proposed to come up off the coast of Pipavav Port in Gujarat. The request for proposal (RfP) for the project is likely to be invited in August 2018.

The central government has stated that there are currently 21 nuclear reactors with an aggregate capacity of 15,700 MW under implementation. Of these, nine nuclear power reactors are under different stages of construction, while 12 reactors were accorded administrative approval and financial sanction in June 2018. The nuclear reactors under construction are expected to be commissioned by 2024-25, while the remaining are slated for completion by 2031. In a separate development, Atomenergomash, a part of Russia’s Rosatom State Atomic Energy Corporation has recently shipped out a key set of equipment for Nuclear Power Corporation of India Limited‘s Kudankulam Nuclear Power Plant (Units 3 and 4) in Tamil Nadu.

The Vikram Sarabhai Space Centre will organise a pre-application conference, as part of the Indian Space Research Organisation’s (ISRO’s) initiative on technology transfer of lithium-ion battery technology to the Indian industry. The announcement for the technology transfer was made in June 2018 and over 130 companies have expressed interest for the same. The pre-application conference will address all queries or request for additional information concerning the request for quotation.

State Sector

BSES Yamuna Power Limited (BYPL) has signed a power purchase agreement for 100 MW of wind power with Solar Energy Corporation of India (SECI). Under the agreement, BYPL will procure power at a tariff of Rs 2.52 per unit for a period of 25 years, which will be supplied by wind power developers in Kutch, Gujarat. With this, the total wind power portfolio of the discom stands at 400 MW. Out of the 400 MW power, the discom will start receiving 100 MW from November 2018, and the remaining 300 MW will be available from November 2019.

The Uttar Pradesh government has announced a subsidy of Rs 15,000 per kW or a maximum of Rs 30,000 (for a 3 kW project) for the installation of solar plants by residential consumers. The state will provide this subsidy in addition to the 30 per cent subsidy that is being given by the MNRE. The aim of additional subsidy is to make rooftop solar power plants affordable in the state. Under the scheme, there is also a scope to set-up common solar power plants in residential areas having a maximum capacity of up to 25 per cent of the distribution transformer capacity. The applications for availing the scheme will be processed by the Uttar Pradesh Renewable Energy Development Agency.

Private Sector

SB Energy, Acme Solar, and ReNew Power Ventures Private Limited have secured the highest capacities in the 3,000 MW grid-connected solar power auction conducted by SECI. While SB Energy‘s special purpose vehicle SBE Renewables secured 1,100 MW at Rs 2.71 per unit, Acme Solar got 600 MW for Rs 2.44 per unit, and ReNew Solar Power Ventures Private Limited was awarded 500 MW at Rs 2.71 per unit. The other winners included Azure Power which got 300 MW at Rs 2.64 and Mahoba Solar (part of Adani Group) which gor 300 MW at Rs 2.71 per unit, while Rutherford Solar Farms got the remaining 200 MW at Rs 2.70 per unit.

Godavari Power and Ispat Limited has secured 115,900 metric tonnes (mt) of long-term coal linkage for use in its sponge iron unit in the recent auction conducted by Coal India Limited. In addition, the company has received 111,600 mt of coal linkage for its gasifier units, 98,064 mt for its captive power plant and 13,900 mt for its biomass power plant. The aggregate coal linkage of 718,564 mt, which has been awarded, fulfills 80 per cent of the total coal requirement of the company.

Projects and Ventures

Mytrah Energy (India) Limited has secured a contract from Maharashtra State Electricity Distribution Company Limited (MSEDCL) for setting up a 100 MW wind power project in the state. The contract has been secured through a competitive bidding process, which witnessed a participation from five more companies. During the auction, Mytrah quoted a tariff of Rs 2.86 per unit for 200 MW capacity and won the bid for supply of 100 MW of power to MSEDCL. Meanwhile, Adani Green Energy Limited and KCT Renewable Energy Private Limited have won a capacity of 75 MW each at a tariff of Rs 2.85 per unit, while Torrent Power Limited has been awarded a capacity of 124.4 MW at Rs 2.87 per unit.

Renewable energy developer KP Energy Limited has signed an agreement with GE India to set up a 300 MW wind power project at Kutch district in Gujarat. The project will use 120 wind turbine generators of 2.5 MW capacity each and will be connected with the inter-state transmission system (ISTS) network in Kutch. The project is expected to be commissioned by September 2019.

Debt and Equity

Vedanta Limited has reportedly offered the highest price of Rs 25 billion for GMR’s 1,370 MW coal-based power plant located at Raikheda in Chhattisgarh. Meanwhile, Adani Power Limited has reportedly quoted the second highest offer for the plant. The offer price is estimated to be Rs 18 million per MW, which is significantly lower than Rs 60 million per MW needed to set-up a coal-based power plant. The low prices offered for power projects reinforces the industry’s concerns that the National Company Law Tribunal’s proceedings will bring down the value of projects, impacting both lenders and existing promoters.

The National Company Law Appellate Tribunal (NCLAT) has rejected the appeal filed by UKbased Liberty House to temporary halt the bankruptcy resolution process of Bhushan Power and Steel Limited (BSPL). Liberty House has submitted a bid proposal for BSPL on February 20, 2018, against the due date of February 8, 2018. The proposal was, therefore, rejected by the committee of creditors due to delay in submission. Meanwhile, Tata Steel Limited has also proposed a resolution plan for the debtladen company. However, the bids are yet to be finalised by the lenders of BSPL.

Greenko Group and certain overseas electric utilities are reportedly planning to acquire the Indian hydroelectric assets of Equis Private Limited, which are valued at Rs 27 billion. Greenko Group is interested in the acquisition of the assets in order to diversify its business operations across renewable technologies. Currently, Greenko has a hydropower operating capacity of 490 MW, with 1,000 MW of capacity in the pipeline. If the deal is realised, it will increase Greenko’s total renewable energy capacity by 1 GW to 4.2 GW.

Kalpataru Power Transmission Limited is planning to raise Rs 3,000 million through the issuance of secured/unsecured redeemable non-convertible debentures. The company has sought shareholder’s approval for the same.