54MW share from 4th unit of Kaiga to bring relief to TN

The fourth unit of 220 MW Kaiga Generating Station (KGS-4), located in Uttar Kannada district of Karnataka, was connected to the southern power grid. Tamil Nadu will get 54 MW as its share and this comes as a minor relief to the Tamil Nadu Electricity Board which faces a deficit of 1,000 MW.This amount of power is sufficient enough to provide electricity to an locality like Chintadripet in the city which has a power demand of 50 MW. The TNEB already gets its share of 171 MW from Kaiga's three other units.

As on date, the demand of the TNEB stands at nearly 10,000 MW while the generation is nearly 9,000 MW, which includes purchased power. The deficit of over 1,000 MW is met either by power production from wind energy or by procurement from private power producers or other states.

"Our share from Kaiga's three units is 171 MW and as on date we get nearly 115 MW from it. So the supply will vary according to the generation of the units.

But any quantity of power supplied now will be of great help as summer is nearing and the demand is expected to go up," said a TNEB official.

According to a press release, the fourth unit kicked off generation after the grant of clearance by Atomic Energy Regulatory Board (AERB). With this synchronisation of KGS-4 with the grid, India's nuclear power capacity has shot up to to 4780 MW, with 20 reactors in operation. The installed capacity of Kaiga station is now 880 MW, making it the third largest after Tarapur (1400 MW) and Rawatbhata (1180 MW). The unit, fuelled by indigenous uranium, will supply electricity to Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Puducherry.

Meanwhile, the TNEB is bracing itself for summer which starts early in Tamil Nadu. This time, power managers do not want to rely on wind power alone, as last year it had dropped from nearly 2,500 MW to zero, causing massive power cuts across the state.

This year, the TNEB already invited tenders for supply of round the clock supply of 300 MW, 400 MW and 350 MW for the months of February, March and April respectively.

For April and May, the TNEB has invited tenders for supply of 800 MW during peak hours and 200 MW for off-peak hours.

L&T inaugurates 4000 crore power equipment facility

India's first private sector facilities for the manufacture of supercritical boilers and turbine generators was inaugurated at L&T MHI Plant at Hazira in Gujarat on January 12, 2011. Two separate functions were held for the supercritical boilers and turbine generators facilities. The first one was attended by Union minister of power Sushil Kumar Shinde, Union minister of state for power Bharatsinh Solanki and Union minister of heavy industries Vilasrao Deshmukh. The second function was attended by Chief Minister Narendra Modi.

A joint venture between L&T and Mitsubishi Heavy Industries (MHI), the facilities are among the largest of their kind in the world with Rs 4,000 crore investment. They have an annual capacity to manufacturing 5,000 MW of equipment which is likely to be expanded to 6,000 MW by 2012.

Addressing the gathering at Hazira, Union minister of power Sushil Kumar Shinde said, "In the 10{+t}{+h} Five Year Plan, there were only 6 to 7 per cent of private players in the power sector. Now we have about 26 per cent which is set to go up to 50 per cent in 12{+t}{+h} Five Year Plan."

Shinde said the JV between L&T and MHI has made a beginning and that India is expected to become the number one exporter of state-of-the-art boilers and turbines to the world.

Union Minister of Heavy Industries Vilasrao Deshmukh said "I consider the public sector company BHEL and L&T as sister concerns and together we both can deliver exponently to the power needs of the country. There is a need to bridge demand supply gap in the power sector by scaling up the power generation to more than 1 lakh MW in the 12{+t}{+h} five year plan."

Chief Minister Narendra Modi said "I am quite busy with the Vibrant Gujarat celebrations. But I owe a great deal to L&T because of the fact that this was the only company that stood by Surtis during the devastating floods of 2006 and it cleaned up the whole of Surat. I am proud of the fact that the first private sector facilities for manufacture of supercritical boilers and turbine generators have been inaugurated at Hazira."

273 mini hydro-electric projects allotted to entrepreneurs in Himachal

Himachal Government had allotted 273 mini hydro electric projects out of 300 projects allotted recently to the entrepreneurs of the state with a view to make them partner in the progress of the State, especially in hydel power generation.This was stated by Prof. Prem Kumar Dhumal, Chief Minister, while addressing an impressive public meeting at Boh, in the remote interiors of Dhar Kandi area of district Kangra, after he dedicated 4 MW HEP constructed in private sector by Sodhi Brothers of Ayush Herbs.

Chief Minister said that it had been the policy decision of the State Government to allot upto 2 MW of HEPs to the entrepreneurs while according preference in projects upto 5 MW capacity. He said that the State Government was endeavouring to inculcate entrepreneurship amongst the youth of the State so that besides finding themselves self employment avenues, they could also generate employment to other youth and add to their income. He said that IPPs were required to be partner in progress of the area they had constructed their projects. He said that all such projects authorities should cater to the local developmental needs and participate in their social activities. He said that the State was computirizing the revenue record to provide people efficient services through the internet services.

Prof. Dhumal said that State had over 23,000 MW of identified hydel potential out of which only 6,650 MW had been harnessed and 15,000MW targeted by year 2015 and 20,000 MW by year 2020. He said that hydel power would be one of the major source of income to the State on exploitation of entire hydel potential available in the State. He said that road, education and health were on the priority agenda of the State besides according top priority to the self-employment, self-reliance and ultimately resulting into self-respect of every individual. He said that although the State had vast area of 55,675 square KMS. geographical area out of which cultivable land was limited. He said that the State Government had launched Rs. 353 crore Pandit Deen Dayal Kisaan Baagwan Samridhi Yojna which had the record highest upto 90 percent subsidy component to the BPL families opting for construction of Poly House to diversify their traditional farming practices and take maximum benefit of the limited land holdings available with the farmers.

Chief Minister said that the State had launched Atal Swasthya Yojna on the birthday of former Prime Minister Shri Atal Behari Vajpayee from December 25, 2010 which had the facility of free ambulance service in emergent cases on toll free number of 108. He said that the State had also provided four CFL bulbs to each of the domestic consumers of the state free of cost by spending Rs. 80 crore over the same. He said that the scheme was aimed at not only on saving the power but also to provide consumers quality electricity. He said that the State had earmarked upto 2 MW hydel projects exclusively to Himachali entrepreneurs.

Prof. Dhumal said that the State Government had also launched Rs. 300 crore doodh Ganga Yojna to give boost to animal husbandry and self employment avenues to the local people in dairy farming. He said the Scheme had subsidy component upto 25 percent to the general category and 33 percent to the scheduled caste categories of beneficiaries. He further added that Bhed Palak Yojna had also been launched for the benefit of the shepherds of the State with a view to motivate them continue with their traditional avocation of sheep rearing. He said that the scheme had provision of providing loan upto Rs. 5 lakh which contains subsidy component of 33 percent to the beneficiaries. He said that shepherds could purchase fourty sheep and four rams with the loan amount to give boost to their traditional avocation of sheep rearing. He assured the people that Tehsildar Shahpur would be available for a week at any designated place to provide local people revenue services at their door steps. He also sanctioned Rs. 10,000 to the school children for promotion of cultural programme.

CM was accorded a rousing reception by the residents of Shahpur segment enroute from Shahpur to Boh village who waited for him at different points to welcome the Chief Minister to their area.

Eco issues delay bids for Sarguja UMPP in Chhattisgarh

Environment issues have once again delayed the invitation of bids for the 4,000 Mw Ultra Mega Power Project (UMPP) at Sarguja in Chhattisgarh. The preliminary bidding process for the project has been delayed by two months. Now the last date of submission of bids is on March 8, a power ministry official said. This is the fourth time the process has been delayed, Power Finance Corporation (PFC), the nodal body for the execution of UMPPs in the country had invited initial bids for the Chhattisgarh project in March, 2010.

The bidding process has got delayed four times till date as the Ministry of Environment and Forests (MoEF) is yet to approve mining from the coal blocks allotted for the project.

MoEF is yet to come clear on the subject of ‘go' and ‘no-go' areas for coal mining. MoEF classified no-go areas as the zones where mining activity could not take place as it would have adverse impact on the environment.

The Coal Ministry had allotted Hasdeo coal block in Chhattisgarh for the Sarguja UMPP.

Another such project at Orissa is likely to get MoEF clearance for its coal blocks.

The government has so far allotted four UMPPs.

Three have been bagged by Reliance Power - Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh), Tilaiya (Jharkhand). Tata Power bagged the Mundra UMPP in Gujarat.

These projects are part of government's ambitious plan to mitigate electricity shortages, and add to India's capacity addition initiative.

The government plans to add about 1,00,000 Mw of power.

The major chunk would be contributed by such projects.

Gujarat's new UMPP sites face environmental hurdles

Gujarat may have to be content with just one 4,000 mw ultra mega power project as the two other sites offered by the state for building such projects have not been found feasible by the power ministry due to environmental reasons. The state had identified two sites - one near Junagarh and another near Jamnagar-for setting UMPPs of 4,000 mw capacity each. "Junagarh is not possible, as it is near the Gir Forest area, and as far as Jamnagar is concerned, it is near the limestone mines and we have to receive permission from the Gujarat State Mining Corp ," a power ministry official said. "These two projects look unlikely....but let's see," he added.

At present, the country's largest private power producer, Tata Power, is executing the 4,000 (800x5) mw UMPP at Mundra in the state.The first 800 mw unit of this coastal project is expected to be completed during the current 11th Plan period (2007-12).

Power Finance Corporation (PFC), the nodal agency for these kind of projects, has already awarded four projects to the successful bidders. Reliance Power bagged three of the allotted four projects at Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh) and Tilaiya (Jharkhand) while the Tatas won the Mundra project.

The government, which plans to add 1,00,000 mw of electricity in the upcoming 12th Plan period (2012-17), is relying on the contribution from these UMPPs. These projects are likely to be commissioned over a period of 4-5 years from now.

The invitation of preliminary bids for the two proposed projects at Bedabahal (Orissa) and Sarguja (Chhattisgarh) are stuck because of lack of environment clearance for the coal blocks allotted to the projects. Therefore, the power ministry would not finalise any other site in any other part of the country without obtaining the mandatory approvals from the respective authorities.

Rs.85 crore GSEB RAPDRP project won by Spanco

Spanco Ltd. has won the IT modernization project of the Goa State Electricity Board (GSEB)beating HCL, Reliance, Wipro, L&T Infotech, TCS and some others. This is Spanco's Fourth consecutive win in this space. It has already bagged the states of Punjab, Maharashtra and Bihar. This win further consolidates Spanco's position as one of the market leaders in the IT modernization projects within the State Electricity Boards under the RAPDRP program.

RAPDRP is an initiative driven by the center with collaboration with the state with a clear focus to bring in actual, demonstrable performance in terms of sustained energy loss reduction.

Key Objectives of RAPDRP Program:

The program spans from data acquisition at distribution level till monitoring of results of steps taken to provide an IT backbone and strengthening of the Electricity Distribution system across the Country under the program.

The objective of the program is reduction of AT&C losses to 15% in project areas. In lieu of attaining the objective, the program is divided into 2 parts Part-A and Part-B. Part-A will include projects for establishment of baseline data and IT applications like Meter Data Acquisition, Meter Reading, Billing, Collections, GIS, MIS, Energy Audit, New Connection, Disconnection, Customer Care Services, Web self service, etc. to get verified baseline AT&C losses.
Part-B will include distribution strengthening projects.

The current win comes under Part A of the program and will have the above mentioned scope. Spanco will supply, install and commission one integrated solution within the broad framework provided in the SRS (System Requirement Specification) document. SRS Committee under the guidance of Ministry of Power has finalized a detailed SRS document which covers all the components of the project including hardware, software, networking; GIS among others which
shall help the utilities improve their performance.

The size of the program is to the tune of 50,000 crores. The program consists of Part-A (to the tune of around Rs.10,000 Crore) covering Information Technology application in the electricity distribution system and Part B (to the tune of around Rs.40,000 Crore) covering the System strengthening, Improvement and augmentation of distribution system capacity.

Both parts entail planning of measures to be taken under the program, implementation of such measures to be taken and monitoring / evaluation of results / impact of the program as a whole and of its various components across the Country.

This project will work towards establishing reliable and automated systems for sustained collection of accurate base line data, and the adoption of Information Technology in the areas of metering, billing, energy accounting and customer care to provide the right information and experience to customers. This modernization of the IT systems will also help curb revenue leakages and ensure increase in overall revenues and thus contribution to the exchequer.

Power Finance Corporation Limited (PFCL) has been designated by GoI as the Nodal Agency for the program. Speaking at this occasion, Kapil Puri, CMD, Spanco Ltd. stated "We have set ourselves the target of becoming the best in the Power sector Technology Infrastructure space. This win further consolidates our market position and we expect to deliver to the State's expectations. Our cross State expertise will further help improving overall integration
efforts"

The size of the current order is about 85 crores and further strengthens the RAPDRP related order book taking it to more than 650 crores.

UK firm offers to produce 65mw power from Bangalore garbage

A UK-based company proposed to set up a 65mw power-generating unit using the garbage generated in the city, but the BBMP was not convinced with the overall idea. Green Homes Global Energy, along with Bangalore-based Rushe Infratek Pvt Ltd, proposed implementing a 65mw an hour waste energy solution for the city. "The BBMP will provide the garbage generated in the city to the plant and we will produce the electricity and sell it to the power purchasing agency.

The BBMP needs to provide 6 to 10 acres of land for setting up the plant, which will cost about `3,000 crore. We will give back the city a greener, more peaceful and healthier environment as the plant doesn't emit any smell nor create noise. Moreover, the residue after using the waste is very minimal", said Green Homes representative Ajay Ahluwalia.

Rushe Infratek managing director Ravi Prakash said that BBMP will have to assure garbage supply for at least 25 years and the state government or an agency must agree to purchase power thus produced. They also said that the waste-to-energy plant can not only convert municipal solid waste but also medical, industrial and sewage waste.

The plant requires about one lakh tonnes of waste annually to generate 3 to 6mw of power an hour. The rejects from the garbage are nil. The waste is converted into energy by a special method called pyrolysis, where the common hazardous waste is converted into electricity by a total green technology.

Not convinced with the idea, BBMP commissioner Siddaiah expressed that the municipal garbage was no longer considered a waste, as it has become a revenue-generating product.

"We are thinking of generating revenue from the waste produced in the city. The company will produce electricity, sell it and make money; the purchaser will sell it making some profit on it. Both will make money, but how does the BBMP, that provides the garbage, be benefited", he wondered and questioned the company representatives if they wished to purchasing garbage from the BBMP instead.
The company representatives, however, were firm that the Palike should provide garbage free of cost as they will give the city a clean and healthy environment by using up the garbage. "The BBMP collects the garbage and dump in landfills. But if we set up a plant, BBMP can dump the garbage in the plant which will be converted into power without pollution. That way, the city will be clean too", Ajay said.

Negotiating further, BBMP officials asked, if garbage is given out free of cost, will they at least take up door-to-door collection work as Palike is spending nearly `12 crore for garbage collection every year. The representatives declined saying BBMP should collect and dump the garbage in the plant.

Almost everybody, including deputy mayor N Dayanand, ruling party leader Satyanarayana and standing committee chairmen were not convinced with the proposal. Siddaiah said the Palike can only provide land and garbage to the company if they set up a plant, but for power-generation or supply, the company has to approach the state government.

Despite low prices, short-term power deals find few takers

istribution companies reluctant to draw power due to financial problems and selective allowing of open access by states, prices have crashed to Rs 2.50 per unit from Rs 7 per unit at one time. Around five per cent power goes through this route, which has two exchanges. The market was introduced after the Electricity Act of 2003.

Data from state utilities and power exchanges show the number of short-term applications across the country to be 150 in this month, from 400 in December 2009. These applications are received by regional load despatch centres for scheduling of power.

The fall in demand is forcing power generators to sell embedded distribution companies only. Further, distribution companies are reluctant to buy power through traders or merchant power plants, despite their quoting lower rates.

Indian Energy Exchange (IEX) sources said: "There has been an improved power situation, largely due to better hydro generation and water availability. However, a large number of states are not willing to supply power to areas with high distribution losses. State utilities prefer load-shedding and demand cuts due to paucity of funds. More important, open access is not being granted by many states, particularly to industrial consumers, despite shedding load on these categories of consumers." IEX^'s daily turnover is 35,000 Mw-hours and sources saye prices have fallen to Rs 2.50 per unit.

Power Exchange India (PXI), whose daily turnover was 7,000 to 8,000 Mw-hours has a similar story. PXI sources said: "States are not fulfilling the universal service obligation as mandated by the Electricity Act, 2003. A large number prefer to shed load than to procure power. For example, Maharashtra continues to carry out daily load shedding to the tune of 4,000 Mw, despite the availability of power in the short-term market."

Maharashtra State Electricity Distribution Company (MahaVitaran) sources admitted to load shedding instead of procuring power from the short-term market.

D Radhakrishna, sector analyst, says the main reason for the crash in the short-term market is that utilities, which are prime buyers, are showing reluctance in buying costly power and selling the consumers at a rate fixed much lower.

"Actually, this trend is good, as it will avert ‘California Shockâ€^TM, in which there was bulk buying from traders at a high cost and retail consumers refused to pay . The recent tenders invited by Andhra Pradesh, Maharastra and Tamil Nadu for buying power for January on have also received astonishingly low rates of Rs 3.50 per unit. Some states have started arrangements under which they take power now and return it during the June-August months. It is risky as a good rainfall will boost hydel power, as experienced during the current year."

An analyst with a broking firm said: "The message is clear, that power trading must come to its real objective, that consumers will have a choice at a market-driven price and regulators must pave the way for industrial consumers or commercial consumers to opt for the external market at lower price. Issues like cross-subsidy and energy accounting need to be thrashed out."

Gas power projects via tariff-based bids soon

The government proposes to make it mandatory to award gas-based power projects on competitive tariff-based bids.This is aimed at making gas-based projects competitive vis-à-vis coal-run projects once the government ends cost-plus tariff regime in January 2011. Power developers have hailed the move.Beginning, January 5, 2011, all electricity distribution licensees will have to procure electricity based on tariff-based competitive bids. Power generators, private or public, will not be allowed to enter into power purchase agreements on cost-plus, regulator determined tariffs with state distribution companies.

"When cost plus regime makes way, gas-based project developers may find it difficult to sell electricity from their plants as gas is costlier than coal. Power from gas projects costs developers Rs 2 per unit as compared to about Rs 1.5 per unit from coal-fired projects," a power ministry official told media.

Power secretary Uma Shankar confirmed the development. "Once a developer sets up gas-based project, how does he sell power? Earlier they used to sign power purchase agreements with distribution companies. But now they will have to be competitive in pricing," he said.

If competitive bidding is introduced, gas projects will not be required to compete with coal-fired projects, he said. The power ministry is considering both case-I and case-II bidding procedures for determining tariff from gas-based projects.

Under case-I bidding, distribution utility invites tariff-based competitive bids for required capacity but does not play any role in procuring land, fuel and regulatory clearances. This is unlike case-II bidding -- followed for awarding ultra mega power projects, where government assumes the role of a facilitator.

Power ministry officials are likely to deliberate the issue with Central Electricity Authority (CEA) next week.

GMR Energy chief executive officer Raaj Kumar said, "Any kind of tariff-based bidding is welcome for consumers as well as developers. It also reduces risk exposure from fluctuations in gas price and currency. Typically, when gas price is at $ 6 per million metric standard cubic meters per day (mmscmd), power costs around Rs 2.2 per unit to developers as against coal based generation at Rs 1.2 per kWh."

Meanwhile, an official in Lanco Infratech also welcomed the move. The official said that in next five years only 60 mmscmd extra gas was likely to be available from domestic resources that could feed additional generation of about 8,000-mw. Presently, India's demand for natural gas is pegged at 170 mmsmcd of which 142 mmscmd is sourced from domestic fields and rest is imported.

The country's natural gas production from home fields is expected to touch 151 mmscmd by 2011-12 and 186 mmscmd by 2012-13. Reliance Industries Ltd operated D6 block in KG basin is at present producing 55-60 mmscmd. The production is expected to touch only 80 mmscmd by 2012-13. Maharashtra State Power Generation Corporation, Torrent Power, GVK Power, GMR Energy, and Gujarat Powergen Energy Corporation are some of the companies that have submitted request for gas allocation for projects coming in the 3-4 years.

CEA, planning body for the power sector, has rece­ived over 104 applications fr­om government and private project developers seeking gas supply to fuel nearly 1,18,000-mw capacity. The projects would require gas supply of 570 mmscmd at 90 per cent plant load factor. All the projects are proposed to be operational in the 12th pl­an period starting 2013. Co­al and gas linkages to po­wer projects are based on re­c­o­mmendations made by CEA.

The government has decided to weed out non-serious private companies seeking gas for power projects with a stiff grading system in place. As per the proposal, only companies with firm land, water allocation, sound financial background and equipment sourcing contracts would be preferred for gas linkages.

Competitive tariffs may not affect power PSUs

The Ministry of Power's proposal to move out of cost-plus power purchase agreements to competitive tariff bidding for power projects from January may not have an adverse impact on public sector power generation companies in the medium term. Private companies on the other hand, have already proved their capability in competitive bidding in UMPPs, accepting lower return on equity on their projects.

For NTPC, the impact is neutral at least until end of 12 {+t} {+h} five year plan given that it intends to secure a good portion of its capacities through power purchase agreements (PPAs).

According to the NTPC's management, the company had signed cumulative PPAs of 62,000 MW as of September 2010 under regulated tariff mode and had plans of securing around 75,000 MW of power purchase agreements through regulated tariff route before the new regime takes effect. Therefore, the company is protected till end of 12 {+t} {+h} plan and the early part of 13 {+t} {+h} five year plan. With enough projects in hand, NTPC may also not choose to participate in competitive bidding and may choose to protect margins for a while.

As tariff-based bidding is market-determined, tariffs in such bidding are typically lower than cost-based bids. While this is positive for distribution companies, which have weak financials, power players do lose out on returns as has been the case with UMPPs.

However, using low cost power equipment and merchant operations to make up for lost returns on PPAs are some of the strategies that private players have implemented, to keep returns viable with lower tariffs.

In the case of regulated tariff projects, with majority of costs being passed-through, the incentive to save costs has also been low so far. With the regulated tariffs disallowed for future projects of players such as NTPC, Neyveli Lignite Corporation and Power Grid Corporation, these companies may be forced to improve efficiency and save costs to tackle lower returns. NTPC for its part is scouting for coal assets abroad to gain fuel security going forward.

If reports of the company closing in on Indonesian coal (said to be relatively inexpensive) transpires, it may aid the company to participate in competitive tariff bids.

Gujarat setting up 8,000-crore solar power park at Charanaka

Charanaka, a village nestled in a remote corner of Patan district in north Gujarat is destined to become the state's hub of solar power generation. Solar panels will be laid on close to 3,000 acres of land in this village , where the state government is going to set up a ' Gujarat Solar Park . at an investment of Rs 8,000 crore. The apex state utility, Gujarat Urja Vikas Nigam Ltd (GUVNL), is currently in the process of entering into long term power purchase with agreements with 80 solar power project investors to commission almost 1,000 MW of generation capacity. This capacity will help procure 1,700 million units of environment friendly electricity per annum.

Many of these 80 developers will set up their generation facilities ranging from 1-45 MW units at Gujarat Solar Park. In first phase, developers will commission 500 MW of generation capacity at the park. The Centre's National Solar Mission aims to install 1,000 MW of grid solar power by 2013, and 20,000 MW by 2022. Interestingly , Gujarat is the lone state which is in the process of inking power purchase agreements to procure 965 MW of solar power from 80 project developers to attract investments of Rs 15,000 crore in the next couple of years.

The state government has already acquired 2,500 acre of land for the park. It is expected to have basic infrastructure in place by December, just ahead of the Vibrant Gujarat Global Summit, 2011 (a state-sponsored biannual event for attracting investments in Gujarat).

The project is part of the Solar Power Policy-2009 , which proposes to encourage generation of green power. Parts of North Gujarat, Kutch and Saurashtra regions have been identified to have optimum solar power plant load factor.Charanaka in North Gujarat will be the first site to be developed.

According to the state Power ministry, large parts of the state have solar insolation of 5.8-6 .0kWh per metre square per day. Insolation is a measure of solar radiation energy received on a given surface area in a given time.

The chosen site of Charanka has an insolation of 5.9kWh per metre square per day, said a state government official. Developers have already started work at the site as the government intends to showcase the site to the participants of the Vibrant summit, said a state government official.

CERC planning to introduce capacity trading

The central electricity regulatory commission (CERC) is thinking of introducing some innovative, power exchange-based electricity trading instruments that would deepen the short-term electricity market and encourage investment in merchant power generation capacity. The regulator is also mulling a move towards capacity trading to reduce the incidents of low grid frequency and improve the quality of power supply.

For example, the CERC is planning to introduce instruments like shorter bidding time block for day-ahead trading at power exchanges that would overcome the problem of transmission network congestion and make it easier for buyers to forecast their electricity demand.

Now buyers and sellers submit bids for an hourly block that match with the system operator's scheduling period for physical delivery, as prescribed in the Indian Electricity Grid Code. "If congestion develops in the transmission network even for 15 minutes during an hour, the operator has no option but to reject the delivery schedule. That means traded power cannot be delivered for a full hour even though congestion is just for 15 minutes", CERC chairman Pramod Deo said.

If bids are submitted for a 15-minute block instead of an hour, the system operator can deliver power for 45 minutes, if not possible for an hour. In other words, the new bidding time-frame would be more dynamic and promote power trading.

The short-term power market in the country has proved a catalyst in attracting private investment in electricity generation. It has also helped improve the quality of power supply and grid management. Annual volumes of power traded through short-term contracts have been in the range of 4% of the total electricity generation in recent years. However, this share is stagnating now.

Bidding for day-ahead trading of electricity through power exchanges is done in the morning. The CERC now plans to introduce an evening session as well. "This is meant to address the issue of opportunity loss due to uncleared and unmatched volume on power exchanges in the morning day-ahead market. The evening session would provide a mechanism to clear the uncleared orders in the morning session and help utilities balance their demand supply portfolios for the next day. The opportunity loss of power trading due to uncleared orders is quite high. It is even bigger than the volume lost due to congestion of transmission network," Deo told FE.

Power exchanges have a full bouquet of very short-term products like intra-day or contingency contracts, day ahead contracts and week ahead contracts. Now the CERC is planning to introduce longer-tenure products like month-ahead and six-month to one-year contracts. "These will be non-transferable specific delivery contracts. Such contracts will help distribution companies to procure for a longer period. For example, a month-ahead contract would allow distribution companies to buy power for the full month of December in the beginning of November," the regulator said.

However, contacts with tenure longer than 11 days are governed by Forward Contract Regulation Act (FCRA). To avoid any jurisdictional overlap with the Forward Market Commission, the CERC has advised the central government to carve out such instruments under section 27 of the FCRA. If contracts are meant for physical delivery of power and not future trading, they can be launched by exchanges under the exclusive jurisdiction of CERC.

The regulatory authority is already publishing a three-month electricity market forward curve that would provide price signals to buyers.

"We firmly believe that there has to be a harmonious development of the short -term power market, and both power exchanges and licensed traders have specific roles to play. While exchanges would provide standardised contracts, licensed traders can offer customised contracts," Deo said.

Currently, only generated power is traded. But now the CERC wants to usher in trading of power capacity. Under the model mooted by the regulator, load despatch centres will buy large generation capacity from plants which can ramp up generation at a short notice and feed power to the grid in the event of falling frequency during the peak hours.

National and regional load despatch centres will pay to generators for keeping their merchant capacity on standby. The cost will be recoverable from consumers as quality power charge. Gas and hydro power power plants are the most reliable sources for meeting peak power requirement as generation from them can be easily ramped up.

Capacity trading is already in place in Europe and America where power markets are well developed. However, this is yet to become a reality in India. Financing power plants with 100% merchant power plants is still supposed to be risky in India given that power supply from them is not tied up.

However, the scenario would radically change when the CERC moves forward on capacity trading. Since gas-based power plants can be easily started and shut down as per convenience, capacity addition in gas-fired merchant power generation is likely to get a major boost from capacity trading.

Tata Power to add 100-150 MW wind power capacity per year

Ratan Tata-led Tata Power aims to have at least a 25 per cent of its power generation or around 8,000 MW from clean sources by 2017 and will invest around Rs 5,000 crore in wind-energy alone, a top company official said. "We have set ourselves a target to achieve 25 per cent of our total generation from clean sources by 2017. These will comprise wind, solar, hydro, geo-thermal and gas. In wind-power alone, we will be investing around Rs 5,000 crore," Tata Power's executive director-strategy & business development, Banmali Agrawala, said in Mumbai.

The company, which presently has a little over 200 MW of wind capacity, plans to give a strong thrust to wind-energy as "it is the most commercially viable and established form of renewable energy," he said.

The company is presently in the process of rolling-out 150 MW and an additional 750-800 MW will be added at the rate of around 100-150 MW annually through to 2017.

It costs around Rs six crore for generating 1 MW of wind-power presently, Agrawala said.

In solar, the company aims to have 300-400 MW capacity by 2017. The first steps will be taken by end-this year with the commissioning of a 3 MW plant at Mulshi in Maharashtra, he said.

Tata Power is also all set to sign a Power Purchase Agreement (PPA) with the Gujarat Government for a 25 MW plant to be commissioned by end-2011.

"This plant will be set up in Mithapur on land owned by Tata Chemicals and we hope to sign the PPA by end-this month," Agrawala said.

In geo-thermal, Tata Power is already engaged in a 240 MW project in Indonesia in a joint venture with Origin of Australia, which it plans to commission in five-years.

Tata Power and Origin hold a 47.5 per cent stake each with the balance held by a local company.

"We are eyeing another 600-700 MW in Indonesia and also other markets with a good geo-thermal potential by 2017. Apart from Indonesia which lends itself to geo-thermal, we feel there is a great potential in Africa and we plan to scout for assets there as well," Agrawala said.

It costs around $3.5 million to generate 1 MW of power (geo-thermal) and while Agrawala would not give any investment figure, going by the above, it could entail a total investment of between Rs 8,500-9,000 crore for the 600-700 MW.

"We would like to work with our partner, Origin, not only in Indonesia but also in other markets as well," he said.

For gas-based power, Tata Power has applied for gas allocation, he said, adding that the company possesses the expertise in this field and has also zeroed-in on potential sites.

"We are presently fine-tuning our plans here," he said.

Pricing of gas is still an issue and there needs to be a greater clarity on policies. Once these issues are sorted out, we will go full-steam ahead on gas," Agrawala said.

On hydro, in which the Tata Group has been present for nearly a century, the company is contemplating bidding for a clutch of projects in Himachal Pradesh, Tata Power's Executive Director-Operations, S Padmanabhan, said.

Tata Power, which now has a capacity of 447 MW in hydro, is presently engaged in constructing a 114 MW plant in Bhutan in a joint venture with the Bhutanese Government. It is also developing an 800 MW plant in Nepal in a joint venture with Norway's SN Power .

Mumbai - Hitech power theft by Bhandup-based industrialist unearthed

Power thieves in the city have started using high-end technology to cut down bills making it difficult for the Maharashtra State Electricity Distribution Company (MSEDCL) to pin the blame on culprits. In a recent case of meter tampering caught at the Bhandup industrial area, a factory owner was arrested for allegedly switching off the electricity meter with an advanced remote control, and stealing 30,000 electricity units that cost Rs 2.71 lakh.

The accused, Vishwas Kadam, owner of Vishwas Enterprises in Bhandup East has been charged under the Electricity Act (2003), which makes stealing power or meter tampering a crime. An FIR was lodged against him on November 12 at Kalyan police station and he has been billed for his illegal unit consumption.

A meter is tampered with so it calculates a low power reading, leading to a lower electricity bill. But it has to be physically tampered with, at least in the old analog meters. But Vishwas Kadam, owner of Vishwas Enterprises in Bhandup East, used something called a high frequency jammer to rig the digital meter in his factory.

"We have a meter reading instrument (MRI) wherein a meter can store six months of data within its memory which can be retrieved later from the device. We discovered that the power supply for the factory was being shown switched off despite the power being supplied to it from our systems," said an MSEDC official.

Officials say that what also raised their suspicion was when they first paid a regular visit to check the meters in late August. "We found the meter switched off and thought that it might have a technical defect.

We removed it and replaced it with a new meter on September 8 and sent the older one to the manufacturing company. But the company told us that the meter was in good shape. They then suggested the possible use of some sort of a remote device," an official said.

Three officials made a second visit on November 12 and the new meter was again found switched off. "While we were retrieving the data, the owner arrived and the meter automatically switched on. That confirmed our suspicion that he was using a high frequency jammer," said the official. Kadam used to switch off the meter using the remote every fortnight for four to five days and then again switch it on.

Officials, however, say that they haven't yet found the remote and Kadam has not admitted to using one. The only evidence they have are records showing the meter being switched off and the number of units consumed that have gone unrecorded in the meter. "He will obviously not part with the remote," the official said.