The Ministry Of Power (MoP) Has Notified The Draft Electricity (Amendment) Act, 2018 Carrying The Proposed Amendments To The Electricity Act, 2003.

Sep 10, 2018
Source Power Weekly Newsletter
Reforms and Regulations

The Ministry of Power (MoP) has notified the draft Electricity (Amendment) Act, 2018 carrying the proposed amendments to the Electricity Act, 2003. The major changes proposed the Act include provisions on direct benefit transfer of subsidy, separation of carriage and content in distribution, mandatory installation of smart meters, obligation of discoms to supply 24*7 power, and penalties for violation of power purchase agreements (PPAs). Further, the draft Act introduces penalties for not meeting renewable purchase obligations (RPO) and classifies hydropower under renewables though the size of projects has not been specified. The Ministry has sought comments on the draft Act by October 22, 2018.

MoP has proposed certain amendments in the Tariff Policy. The amendments further modify the provisions related to simplification of retail tariffs and tariff rationalisation notified in the draft amendment notified recently in May 2018. The ministry has now proposed to incorporate tariff categories on the basis of sanctioned load and consumption. MoP has invited comments on the revised provision by September 20, 2018.

Central Sector

The Supreme Court has granted interim relief to stressed power firms, directing lenders to maintain a status quo on the Reserve Bank of India’s February 2018 circular for banks to resolve these cases within 180 days. The apex court directed that all pleas filed by the central bank related to the circular should be transferred to it and it will hear the matter on November 11, 2018. The order will immediately benefit projects aggregating about 13 GW which are in their final stages of restructuring and insolvency proceedings. The order will also provide time to the High-Level Empowered Committee to submit its report on corrective actions. In a separate development, RBI has refused to be part of the cabinet secretary-led panel set up by the Prime Minister’s Office in July 2018 to resolve issues of the stressed thermal power sector.

The central government has directed NTPC Limited and Damodar Valley Corporation (DVC) to comply with revised emission standards for sulphur dioxide and particulate matter by December 31, 2021. The tenders for the same will be awarded by December 2018. In a hearing at the Supreme Court, the union government stated that NTPC has 48 thermal power plants while DVC has nine such units which have installed capacity of 500 MW and were located in dense or critically polluted areas. NTPC is already conducting a pilot project on the nitrogen dioxide emission and is expected to control it within permissible limits by December 2022. The Ministry of Environment Forests and Climate Change had notified the revised emission norms for thermal power plants in December 2015.

PTC India Limited will sign medium-term PPAs with 1,900 MW coal-based power projects under the union government’s pilot power procurement scheme for stressed projects without PPAs. Under the scheme, seven companies namely RKM PowerGen (550 MW), Jaypee Nigrie Thermal (100 MW), IL&FS Energy Limited (550 MW), MB Power (175 MW), SKS Chattisgarh Power (300 MW), Jindal India Thermal Power Limited (125 MW) and Athen Jhabua Power (100 MW), submitted bids for an aggregate capacity of 1,900 MW matching the L1 bid of Rs 4.24 per unit. The bids include a nominal fixed cost of one paisa per unit for the supply of power for a period of three years. Under the PPA, there would be no escalation of tariffs in the three years and the distribution companies can reduce their load up to 55 per cent.

NTPC Vidyut Vyapar Nigam (NVVN) has started the power supply of 300 MW to Bangladesh with effect from September 10, 2018. In this context, NVVN had signed a PPA with the Bangladesh Power Development Board (BPDB) on September 6, 2018 at Dhaka for the supply of 300 MW power from DVC and a back to back agreement has also been signed with the DVC. In addition, the 500 MW Baharampur (India) - Bheramara (Bangladesh) high voltage direct current link has been tested and would be used for power export to Bangladesh.

State Sector

The Maharashtra Electricity Regulatory Commission (MERC) has notified the revised retail supply tariffs for distribution licensees in the state for 2018-19 and 2019-20. The commission has notified a reduction of 5 to 7 per cent in the average tariff for 2018-19 and a further reduction of 2-3 per cent for 2019-20 for Brihanmumbai Electricity and Supply and Transport Undertaking. The Tata Power Company’s consumers will have an overall increase in tariff of 4 per cent over existing tariff in 2018-19 and a further increase of 2 per cent in 2019- 20. The consumers of Reliance Infrastructure (now known as Adani Electricity Mumbai Limited) will have a nominal increase of 0.24 per cent in tariff over existing tariff for 2018-19 and a further increase of 1 per cent in tariff in 2019- 20. Maharashtra State Electricity Distribution Company Limited’s (MSEDCL) consumers will face an average increase of 3 to 5 per cent in tariff over existing tariff for 2018-19 and an average increase of 4 to 6 per cent 2019- 20. The revised tariff came into effect from September 1, 2018.

Gujarat Urja Vikas Nigam Limited’s (GUVNL) 500 MW solar tender was oversubscribed by almost four times, attracting around 1,925 MW of project proposals. Azure Power offered the bid for the maximum capacity at 500 MW followed by Avaada Energy with 300 MW, Aditya Birla with 250 MW, and Adani Group with 200 MW. Meanwhile Fortum, UPC Solar and Tata Group bid for 50 MW of capacity.

Private Sector

Tata Power has signed an agreement with the Afghanistan government-owned electricity distribution company Da Afghanistan Bresha Sherkat (DABS) for generation, transmission and distribution of electricity. Through the agreement, Tata Power aims to tap huge opportunities in the power sector Afghanistan, where only 35 per cent of the people have access to electricity.

The Bombay Stock Exchange, PTC India and ICICI Bank have filed a petition with the Central Electricity Regulatory Commission for grant of the license to set up a new power exchange. The proposed exchange aims to leverage the expertise of the stakeholders in the power sector with respect to funding of power projects and associated infrastructure, setting-up and running various bourses and platforms in the country.

CLP India Private Limited and Suzlon Energy Limited have entered into a partnership for two solar projects of capacity 50 MW and 20 MW in Maharashtra. The projects were won by Suzlon via competitive bidding and CLP India will acquire a stake of 49 per cent in the projects. Further, a fixed tariff of Rs 4.115 per kWh for the 20 MW project and Rs 3.66 kWh for the 50 MW project has been decided for a period of 25 years.

French electric utility ENGIE and STOA, a French infrastructure and power equity investor have collaborated to set up a wind energy platform in India with a goal of setting up over 2 GW capacity over the next five years. The scope of the project includes both onshore and offshore wind projects under central and select state tenders. Earlier this year, ENGIE had won a capacity totalling 280 MW in three separate state and central tenders in India.


The Power Finance Corporation (PFC) has recorded a total income of Rs 70.52 billion for the quarterended 2018, an increase of 4 per cent over Rs 67.80 billion recorded in the same quarter of the previous year. The company’s net profit increased by 22 per cent to 13.73 billion from Rs 11.22 billion during the same period.

Debt and Equity

NTPC’s board has approved an investment of Rs 97.85 billion for the 1,320 MW Stage-III expansion of its Talcher thermal power plant at Angul district in Odisha. Presently, the plant has four units of 60 MW and two units of 110 MW which are operational.

Greenko group has abandoned its plans to buy Orange Renewable Power Limited due to the expiry of the contract citing a technical reason. Earlier in June 2018, the deal was finalised with an equity value of $300 million and an enterprise value, including a debt of $922 million. Meanwhile, investment bank Rothschild has initiated the process to find a fresh buyer for Orange Renewable.