Indian Power Sector

Avinash Energy Pvt Ltd is planning to set up a Thermal Power Plant at Katni in Madhya Pradesh. The project involves Power generation. As of 8/26/2011, the company has just received Industrial License from Secretariat of Industrial Assistance (SIA), Department of Industrial Policy and Promotion, Government of India for setting up the project.

Contact:

Avinash House,MarutiBusinessPark,Ge Road,Raipur, Chhattisgarh – 492001

Steel major SAIL has sought gas allocation of 5 million standard cubic metre per day for its proposed 1,050 MW independent power plant at Jagdishpur near Amethi in Uttar Pradesh.

A top official said, “SAIL has submitted an application to Central Electricity Authority for allocating 5 mscmd natural gas from domestic sources for the power plant project.”

He said that “I have written to Shinde Saheb. He will prioritise it and would pitch for gas allocation.”

Steel Authority of India had earlier proposed to set up a steel plant of 2 million tonnes per annum capacity along with a 1,050 MW power plant for the revival of erstwhile Malice Steel at an estimated investment of INR 10,000 crore.

However, it had to change the plans following a rejection of its request by the Petroleum Ministry for allocation of gas.

Bangalore’s Namma Metro is getting a boost, with the Bangalore Electricity Supply Company (Bescom) assuring two megawatts (MW) of power per day to run the locomotive of the metro rail project, which will begin its commercial operations on October 20.

Bescom Managing Director P Manivannan said though the demand by BMRCL for their entire project is 19 MW, this being a first stage, two megawatt is sufficient for now. “It is just the first stage. When they complete the whole project they need 19 MW. Now they can manage with just two megawatt,” he said.

Asked him about the BMRCL’s application before the Karnataka Electricity Regulatory Commission to supply power at a lesser cost, claiming that the project was not commercial and was a public service project, he said that BMRCL has been offered power at a cost lesser than commercial rate at Rs 5.50 per unit.

However, he pointed out that commercial establishments within the Metro stations would have to pay for power at commercial rates, as they are independent of the public project. The BMRCL, in a recent notification said the traction system in Bangalore Metro Rail Project is 750 V DC third rail system.

Thanks to a spurt in international coal prices due to new regulations in Indonesia and to cater to the possibility of future increases in raw material rates, the Power Ministry may tweak the bidding documents for upcoming ultra mega power projects.

The Power Ministry has discussed such a proposal with the Coal Ministry and Law Ministry and is awaiting their response.

“The Power Ministry has sought response over amendments in the bidding documents of the UMPP from the law and coal ministries… It would accommodate changes in international coal prices,” a Power Ministry official was quoted as saying.

The current bid document for UMPPs does not have any such provision, he said.

Tata Power, which is executing the 4,000-MW ultra mega power project at Mundra, in Gujarat, and Reliance Power, which is developing the Krishnapatnam UMPP in Andhra Pradesh, had reportedly requested the Power Ministry to allow them to increase the tariffs of these projects due to a rise in international coal prices.

Power Finance Corporation, the nodal agency for UMPPs in the country, has allotted four such projects to developers.

Reliance Power is developing the Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh) and Tilaiya (Jharkhand) UMPPs, while Tata Power is engaged in execution of the Mundra UMPP, the first 800-MW unit of which is likely to be commissioned by January next year.

Bharat Heavy Electricals Limited (BHEL) has received a major order from Singareni Collieries Company Limited (SCCL) for supply and installation of the main plant package for a power project in Andhra Pradesh, involving two thermal power generating units of 600 MW each.

The contract, valued at Rs.40,710 mn, envisages setting up a 2×600 MW thermal power generating unit for SCCL’s upcoming coal-based super thermal power project, located at Adilabad in Andhra Pradesh.

BHEL’s scope of work in the contract envisages design, engineering, manufacture, supply, erection, testing and commissioning of Steam Turbines, Generators and Boilers, along with state-of-the-art Controls and Instrumentation (C&I) and auxiliaries including associated civil work.

Significantly, only two orders for coal-based Boiler Turbine Generator (BTG) packages, namely 2×660 MW – DB Power and 2×600 MW – SCCL, have been finalised in the country in the current financial year, since April, 2011, and both have been secured by BHEL.

BHEL has fully established state-of-the-art technology for the manufacture of thermal sets up to 1,000 MW rating. To meet customer demand, the company has introduced new rating thermal sets of 270 MW, 525 MW and 600 MW, in addition to 250 MW and 500 MW thermal sets. Notably, BHEL has so far secured orders for Twenty Three (23) numbers of 600 MW thermal sets.

25,000 MW of thermal power capacity is stranded due to non-availability of coal and gas linkages and over Rs 1 lakh crore of investment in the power sector is stuck, which may hamper energy generation capacity addition in the country.

“The issue of adequate coal linkage to power projects has assumed critical importance as nearly 25,000 MW of thermal power capacity is presently stranded. This implies a locking up of Rs 100,000 crore in stalled power projects,” a report by FICCI said.

The report observed that the capacity addition in the 12th Plan (2012-17) also runs the risk of getting derailed because of uncertain fuel availability and volatile international process of coal, unless immediate reforms are undertaken to augment domestic coal supply.

Most critical challenges being faced by the power sector today are domestic fuel shortages and financially precarious condition of distribution utilities.

The Ministry of Power had set a target of adding 78,000 MW of power during the current Plan period (2007-12) but was curtailed to 62,000 MW by the Planning Commission due to various factors like fuel shortage, environment clearances and land acquisition problems.

To tide over the problem, the report suggested a few remedies, which includes allowing captive mines to sell surplus coal at market prices which will incentives additional production and full-scale commercial mining at market prices through amendment in the MMDR Act Mines and Minerals (Development and Regulation) Act.

The government has set a target of adding 1,00,00 MW capacity in the 12th Plan period, however, the sector needs to respond quickly and definitively to the challenges, the report said.

In the third quarter of calendar year 2011, that is between July and September, the energy sector has attracted maximum investments from the private equity players.

Of the $2.25 billion worth PE placements across 98 deals in Indian companies during the quarter, about $823 million, or 37%, was in 16 energy-sector companies, according to data by Chennai-based research firm Venture Intelligence.

Among some of the largest investments in the quarter are The Blackstone Group-owned Sithe Global Power’s around Rs1,280 ($261 million) investment in SKS Chhattisgarh Power Generation, Blackstone’s direct Rs500 crore ($111 million) investment in Visa Power and Goldman Sachs’ Rs1,000 crore ($204 million) commitment to ReNew Wind Power.

Industry experts said that increased traction in the energy space is also because most companies are adopting the cluster approach to fundraising (seeking investments in multiple assets) as compared to a single asset approach earlier.

Vikram Uttam Singh, head-private equity, KPMG, said, “We saw deals of close to $5 billion in the energy space last year and what is happening now is an extension of it. One of the reasons for this is that until recently very few deals of this size were available in the market. Power industry is very capital intensive and hence the deal sizes tend to be huge.”

Deepak Ferro Alloys Ltd is planning to set up a Thermal Power Plant at Balaghat in Madhya Pradesh. The project involves Generation & Transmission of Power. As of 8/24/2011, the company has just received Industrial License from Secretariat of Industrial Assistance (SIA), Department of Industrial Policy and Promotion, Government of India for setting up the project.

Contact:

2, Pratap Sadan, Rathore Chowk, Ramsagar Para,Raipur- 492001

S M Mp Power India Pvt Ltd is planning to set up a Thermal Power Plant at Singrauli in Madhya Pradesh. The project involves Electric Power Generation. As of 7/19/2011, the company has just received Industrial License from Secretariat of Industrial Assistance (SIA), Department of Industrial Policy and Promotion, Government of India for setting up the project.

Contact:

405, Tulip Apartments, 6-3, 655, Somajiguda,Hyderabad- 500082

Shree Renuka Sugars Ltd is planning to set up a Thermal Power Plant at,Belgaumin Karnataka. The project involves setting up a Cogenerated Power Plant. As of 8/17/2011, the company has just received Industrial License from Secretariat of Industrial Assistance (SIA), Department of Industrial Policy and Promotion, Government of India for setting up the project.

Contact:

Bc 105,Havelock Road,Belgaum, Cantonment,Belgaum- 590001