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The Central Electricity Regulatory Commission (CERC) has notified the Terms and Conditions of Tariff (Second Amendment) Regulations, 2019

The Central Electricity Regulatory Commission (CERC) has notified the Terms and Conditions of Tariff (Second Amendment) Regulations, 2019

Reforms and Regulations

The Central Electricity Regulatory Commission (CERC) has notified the Terms and Conditions of Tariff (Second Amendment) Regulations, 2019. The amendment pertains to insertion of a clause related to the transmission majoration factor (TMF). Accordingly, TMF admissible for transmission projects executed through the joint venture route in terms of Regulation 4.10A of the CERC (Terms and Conditions of Tariff) Regulations, 2001 will be available for a period of 25 years from the date of issue of the transmission licence.

Central Sector

The budgetary allocation for the Ministry of Power stands at Rs 158.74 billion under the Interim Budget 2019-20, an increase of 1.60 per cent over Rs 156.25 billion (revised estimate) allocated during the previous budget of 2018-19. The allocation to central sector schemes registered a decline of 12.4 per cent from Rs 138.58 billion in 2018-19 to Rs 121.31 billion in 2019-20 in the current budget. While no major announcements were made regarding the power sector in the Interim Budget 2019-20, the finance minister highlighted the expansion of LED distribution programme with the distribution of 1.43 billion LED bulbs and growth of the country’s solar generation capacity by ten times in the last five years. In addition, an emphasis was laid on promoting the use of electric vehicles (EVs) and energy storage solutions to cut down costly imports of oil, enhance energy security and save foreign exchange. Further, the central government will provide electricity connection to every willing household under the Saubhagya scheme by the end of March 2019.

The budgetary allocation for the Ministry of Coal stands at Rs 8.22 billion in the Interim Budget 2019- 20, an increase of 12.8 per cent over Rs 7.82 billion (revised estimate) allocated in the previous budget. The Ministry of New and Renewable Energy has been allocated Rs 52.54 billion as against Rs 51.46 billion, an increase of 2 per cent. Meanwhile, the budget allocated Rs 167.25 billion to the Department of Atomic Energy, a decline of 1.4 per cent over Rs 169.65 billion allocated in 2018-19

The Ministry of Environment, Forests and Climate Change is working on a policy framework to regulate the use of high-ash coal by power plants as part of efforts to reduce pollution. The ministry has asked generators, state-run coal producing companies and certain environmental organisations for suggestions to curb the ash content in coal. The policy will also ensure production of better quality coal.

The central government has constituted a committee under the Central Electricity Authority (CEA) to explore prepaid payments by discoms to power generators. The committee comprises chairmen of distribution companies of Tamil Nadu and Maharashtra, representatives from the power ministry, and members of power associations. The committee will study working capital cycles of discoms and gencos to devise a payment/billing mechanism. The move is in line with the recommendations made by the cabinet secretary P.K. Sinha-led panel to resolve the stress in the power sector.

The Solar Energy Corporation of India (SECI) has floated new manufacturing linked solar tender after the earlier similar tender for 10 GW failed. The new tender comprises 3 GW solar capacity linked with 1.5 GW of manufacturing capacity. The minimum bid size is 1,000 MW for a power project linked with 500 MW capacity of equipment manufacturing. The tariff is capped at Rs 2.75 per unit.

State Sector

The Gujarat government has notified a land policy for renewable energy projects. Under the policy, it has decided to earmark land to set up wind, solar, and wind-solar hybrid parks with a capacity of 1,000 MW and above. The land for these projects will be identified by a committee. Initially, the land required for about 30,000 MW of power capacity will be fixed, out of which 10,000 MW of capacity will be reserved for state government companies. Further, it will now be mandatory for the tender issuing authority (SECI) to consult with Gujarat state departments before issuing tenders for wind or hybrid project capacities to be set up in the state.

The Odisha government is planning to waive all kinds of transport-related fees and road tax on the purchase of EVs. The proposed incentive is aimed at encouraging the use of EVs to address the problems of air pollution and rising fuel prices. A gazette notification for the same will be issued after government approval.

Private Sector

Thermax Limited has inaugurated a new manufacturing facility at Sri City in Andhra Pradesh. The facility will manufacture a range of vapour absorption machines comprising chillers, heat pumps and heaters in its first phase. Built with an investment of Rs 1.66 billion, the unit has a capacity to produce 400 machines per year. Besides meeting domestic demand, the new facility will also augment Thermax’s export capabilities.

Suzlon Energy Limited has commissioned 8.4 MW captive wind energy project for Hindustan Aeronautics Limited (HAL) in Bagalkot district in Karnataka. The project comprises of four 2.1 MW wind turbine generators and will help in offsetting about 25,162 tonnes of carbon dioxide emissions annually. With the completion of this project, HAL’s total wind energy capacity delivered by Suzlon stands at about 14 MW and caters to 46.6 per cent of HAL’s energy consumption in its Bengaluru-based divisions.

Projects and Ventures

Bharat Heavy Electricals Limited (BHEL) has secured a Rs 3 billion order from the Central Organisation for Railway Electrification for electrification of 440 track kilometers railway line. The engineering, procurement and construction contract has been placed for the sections: Birlanagar - Etawah, Bhandai - Udi and Farrukhabad - Shikohabad (including Mainpuri - Etawah) of North Central Railway. BHEL’s scope of work includes supply and commissioning of 25 kV, 50 Hz, AC single-phase electrification works including overhead equipment, traction substations, supervisory control and data acquisition (SCADA) system, and associated civil and signal and telecom works. This order marks BHEL’s foray into track electrification.

KEC International has secured transmission and distribution orders worth Rs 15.84 billion across India, Abu Dhabi, Thailand, and America. This includes transmission line package from Power Grid Corporation of India Limited’s subsidiary under tariff-based competitive bidding route and orders for construction of transmission lines and air-insulated switchgear substations from Bihar State Power Transmission Company Limited. In addition, KEC’s railway business has secured an order for overhead electrification works and associated civil works in Western India.

Siemens Gamesa Renewable Energy has secured an order from ReNew Power to supply wind turbines for two projects aggregating 567 MW in Gujarat and Karnataka. The scope of work includes the supply, installation, and commissioning of 270 units of wind turbines. Siemens Gamesa will provide the infrastructure needed to install and operate both wind power facilities located at Bhuj in Gujarat and at Davanagree in Karnataka, respectively. Both projects are expected to be commissioned by the first quarter of 2020.


NTPC Limited has recorded a standalone total income of Rs 243.08 billion for the quarter ended December 2018, an increase of 15.2 per cent over Rs 210.87 billion recorded in the corresponding quarter of 2017-18. Its net profit grew by 0.8 per cent to Rs 23.85 from Rs 23.60 billion during the same period.

Tata Power has recorded a consolidated total income of Rs 77.21 billion for the quarter ended December 2018, an increase of about 20 per cent over Rs 64.51 billion recorded in the corresponding quarter of 2017-18. The company’s profit after tax (PAT) declined by over 67 per cent to Rs 2.05 billion from Rs 6.28 billion during the same period.

JSW Energy Limited has recorded a consolidated total income of Rs 24.92 billion for the quarter ended December 2018, an increase of about 20 per cent over Rs 20.81 billion recorded in the corresponding quarter of 2017-18. The company’s net profit more than trebled to Rs 1.46 billion from Rs 0.51 billion during the same period.

KEC International has recorded a consolidated total income of Rs 26.50 billion for the quarter ended December 2018, an increase of 10 per cent over Rs 24.11 billion in the corresponding quarter of 2017-18. Its net profit increased marginally to Rs 1.12 billion from Rs 1.11 billion during the same period.

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