Inc. made yet another foray into the resource-rich Canadian market with JSW Energy buying the Canadian coal company CIC Energy for $422 million, thereby giving it a significant foothold in the lucrative coal sector in southern Africa.
JSW joins Aditya Birla Group, Vedanta and the Tata Group in entering Canada in the past two to three years.
The deal at $7.42 a share has been given the green signal by the board of CIC Energy, which is listed in both Toronto and Botswana in southern Africa. In Botswana, CIC Energy operates the Mmamabula coal and power station project.
The deal is JSW's second acquisition in the coal sector in southern Africa within a year. Earlier, the Indian company had acquired a stake in South African Coal Mining Holdings .
The JSW offer to the Canadian company marks a 203 percent premium over the average trading price for CIC Energy shares on the Toronto Stock Exchange for the 30-trading day period ending Sep 14 - the day before the company received takeover proposal.
However, the $7.42 per share offer is below the non-binding $7.75 that the Canadian energy company received last month.
"We believe that the terms of this offer provide fair value for CIC Energy shareholders in the current environment," CIC CEO Warren Newfield said in a statement after the JSW offer.
"With South Africa's increasingly apparent shift in energy policy the outlook for coal-based power producers looking to supply South Africa has weakened," Newfield added.
While the Tatas own the iron-ore Millennium Corporation in Nova Scotia province, the Aditya Birla Group controls an iron ore mine near St. Johns.
Wednesday, November 24, 2010
Tuesday, November 23, 2010
IT is becoming the efficiency lever for power utilities
Year 2005: Kolkata, and West Bengal, suffer from sharp and sudden power outages. And much of the fault lies with sloppy fault attendance, lack of automatic meters and monitoring systems and not the least, Bengal’s poor work culture. Adding to the frustration, consumers receive inflated bills and above all, collection offices have few bill payment counters. Plus, the accounting system is paper-based.
2006-2010: During this phase, West Bengal State Electricity Distribution Company (WBSEDCL) — the power distribution utility — goes through a technology transformation. Five call centres are set up to handle the entire gamut of functions: from uploading new customer details to complaints to billing enquiries. Users making complaints get instant SMSes on how fast the fault is being rectified. Moreover, the state government installs 7,000 tathya mitras – e-kiosks integrated with 1,600 bill payment centres — set up. WBSEDCL is voted the second-best state-owned power distribution company and bags the Prime Minister’s award for technology initiatives.
“EVERY complaint has been given a fixed time to be addressed to. For example, if it is a local distribution fault, the time limit is a maximum of four hours. Every time a complaint is made, an SMS is generated and gets delivered to a team waiting in a mobile van — the one nearest to the fault location,” says MK De, chairman, WBSEDCL. “We have appointed five third-party agencies who handle all calls, specially fault complaints,” he adds.
So significant has been the technology-led change at WBSEDCL that its transformation has become a beacon for Delhi, Maharashtra, Gujarat and Andhra Pradesh, which are all modernising their IT systems to make power utilities more efficient. “The main concern of the government has been inadequate collection of bills and improper billings leading to leakages and losses. Some have been paying less than what they are consuming and others like the industrial consumers have been paying exorbitantly high prices,” Arvind Mahajan, head, energy and resources at KPMG said.
“The problem, however, is not all distribution companies have the wherewithal to invest. But power agencies in Maharashtra, Andhra Pradesh and Madhya Pradesh are planning to rope in private players for improving collection and plugging leakages. Some are even looking at monitoring load on a real-time basis and planning to implement a combination of ERP packages, better billing systems and improved customer interfaces,” says Mr Mahajan.
While experts say the total IT investment in the distribution sector could top Rs 3,000 crore over the two to three years, WBSECL itself is planning to invest Rs 600 crore in IT, spanning two years. Implementing an ERP package is part of this capital expenditure. The ERP system will cover accounting, human resources, stores and, project management functions. “We plan to call for bids soon. The system will make it easier for us to handle accounts leading to increased revenue earnings,” points out Mr De.
Taking technology intitiatives a step ahead, the state utility is planning to install wireless GSM-based meters at homes. The meters will automatically transmit reading from the meters to a control centre. In the first phase, the GSM meters will be installed for bulk consumers, whose consumption can be monitored on a real-time basis.
“These would be for consumers like malls, electric arc furnaces and hotels where consumption is over Rs 30,000 per month,” says a senior state government official. The system will have an in-built alarm which will buzz if it notices any anomaly in power consumption. In that way, the GSM-based meters will keep a tab on power theft, a major bugbear for all power utilities across the country.
NEW INITIATIVES
The company will be also implementing a Rs 100-crore smart grid project on a pilot basis. The grid is likely to handle all business operations – procurement and supply of power as well as billing and accounting — simultaneously through a single electronic platform. It will allow power connections to be remotely disconnected in case the bills are not paid on time.
A project — to be completed over the next two year — to introduce geographical mapping of entire electric network is on the cards too. With geo-location in place, an electronic control system will know if there are any faults and will make for faster fault finding. It will be faster for the company to allow load extensions and generation of quotation for new connections. Today, officials need to physically travel to the site to map these things — load and new connection.
On a similar line, WBSEDCL — which has as many as 473 revenue units — is networking all the revenue centres by December, 2010. This link-up will allow introduction of a host of services like ‘any-branch bill payment’ and bill payments through text messages.
To reduce bill payment queues further, the company is installing 450 cash-collections machines, which can be operated by the customers. It will also have a recorded voice system that will guide customers how to handle these equipment. A vendor will be in charge of the maintaining these machines and will earn commissions on the number of transactions the machines handle.
“This system cannot be fudged. The call centre is run by a third party, which will have no interest in fudging the reports,” said a senior official from WBSEDCL. Another third-party agency has also been appointed to make regular test checks with consumers after the fault has been attended to. This is to make sure that the team in charge of fault repairs is not making a false report on the complaint to be attended. This external team will audit about 5-10% of all complaints.
On the delivery side, WBSEDCL is also implementing a supervisory control and data acquisition (SCADA) package for monitoring power system faults. It will also be a load shedding management system that will control power load on a real-time basis depending on power availability and consumption. Right now, the command to carry out ‘load shedding’ — technical jargon for power cuts — is conveyed over phone from the main control room and there is a lag of a few hours.
2006-2010: During this phase, West Bengal State Electricity Distribution Company (WBSEDCL) — the power distribution utility — goes through a technology transformation. Five call centres are set up to handle the entire gamut of functions: from uploading new customer details to complaints to billing enquiries. Users making complaints get instant SMSes on how fast the fault is being rectified. Moreover, the state government installs 7,000 tathya mitras – e-kiosks integrated with 1,600 bill payment centres — set up. WBSEDCL is voted the second-best state-owned power distribution company and bags the Prime Minister’s award for technology initiatives.
“EVERY complaint has been given a fixed time to be addressed to. For example, if it is a local distribution fault, the time limit is a maximum of four hours. Every time a complaint is made, an SMS is generated and gets delivered to a team waiting in a mobile van — the one nearest to the fault location,” says MK De, chairman, WBSEDCL. “We have appointed five third-party agencies who handle all calls, specially fault complaints,” he adds.
So significant has been the technology-led change at WBSEDCL that its transformation has become a beacon for Delhi, Maharashtra, Gujarat and Andhra Pradesh, which are all modernising their IT systems to make power utilities more efficient. “The main concern of the government has been inadequate collection of bills and improper billings leading to leakages and losses. Some have been paying less than what they are consuming and others like the industrial consumers have been paying exorbitantly high prices,” Arvind Mahajan, head, energy and resources at KPMG said.
“The problem, however, is not all distribution companies have the wherewithal to invest. But power agencies in Maharashtra, Andhra Pradesh and Madhya Pradesh are planning to rope in private players for improving collection and plugging leakages. Some are even looking at monitoring load on a real-time basis and planning to implement a combination of ERP packages, better billing systems and improved customer interfaces,” says Mr Mahajan.
While experts say the total IT investment in the distribution sector could top Rs 3,000 crore over the two to three years, WBSECL itself is planning to invest Rs 600 crore in IT, spanning two years. Implementing an ERP package is part of this capital expenditure. The ERP system will cover accounting, human resources, stores and, project management functions. “We plan to call for bids soon. The system will make it easier for us to handle accounts leading to increased revenue earnings,” points out Mr De.
Taking technology intitiatives a step ahead, the state utility is planning to install wireless GSM-based meters at homes. The meters will automatically transmit reading from the meters to a control centre. In the first phase, the GSM meters will be installed for bulk consumers, whose consumption can be monitored on a real-time basis.
“These would be for consumers like malls, electric arc furnaces and hotels where consumption is over Rs 30,000 per month,” says a senior state government official. The system will have an in-built alarm which will buzz if it notices any anomaly in power consumption. In that way, the GSM-based meters will keep a tab on power theft, a major bugbear for all power utilities across the country.
NEW INITIATIVES
The company will be also implementing a Rs 100-crore smart grid project on a pilot basis. The grid is likely to handle all business operations – procurement and supply of power as well as billing and accounting — simultaneously through a single electronic platform. It will allow power connections to be remotely disconnected in case the bills are not paid on time.
A project — to be completed over the next two year — to introduce geographical mapping of entire electric network is on the cards too. With geo-location in place, an electronic control system will know if there are any faults and will make for faster fault finding. It will be faster for the company to allow load extensions and generation of quotation for new connections. Today, officials need to physically travel to the site to map these things — load and new connection.
On a similar line, WBSEDCL — which has as many as 473 revenue units — is networking all the revenue centres by December, 2010. This link-up will allow introduction of a host of services like ‘any-branch bill payment’ and bill payments through text messages.
To reduce bill payment queues further, the company is installing 450 cash-collections machines, which can be operated by the customers. It will also have a recorded voice system that will guide customers how to handle these equipment. A vendor will be in charge of the maintaining these machines and will earn commissions on the number of transactions the machines handle.
“This system cannot be fudged. The call centre is run by a third party, which will have no interest in fudging the reports,” said a senior official from WBSEDCL. Another third-party agency has also been appointed to make regular test checks with consumers after the fault has been attended to. This is to make sure that the team in charge of fault repairs is not making a false report on the complaint to be attended. This external team will audit about 5-10% of all complaints.
On the delivery side, WBSEDCL is also implementing a supervisory control and data acquisition (SCADA) package for monitoring power system faults. It will also be a load shedding management system that will control power load on a real-time basis depending on power availability and consumption. Right now, the command to carry out ‘load shedding’ — technical jargon for power cuts — is conveyed over phone from the main control room and there is a lag of a few hours.
Sunday, November 21, 2010
Coal India third most valued firm in India
State-run Coal India has become the third most powerful Indian company with a total market capitalisation (m-cap) of Rs 2,09,671.57 crore and is only lagging behind RIL and ONGC.
The coal behemoth added another feather to its cap last week when it replaced IT giant Tata Consultancy Services (TCS) to become the country's third most coveted firm.
CIL added Rs 7,611.21 crore to its valuation, which on Friday stood at Rs 2,09,671.57 crore.
According to market analysts, investors are optimistic about the stock and looking at the cash balance of the company it is likely that it may go for acquisitions either in the domestic space or overseas.
Meanwhile, the cumulative market valuation of the eight of the top-10 firms reduced by Rs 57,044.09 crore in the past week.
RIL, the country's most valuable firm, witnessed a wealth erosion of Rs 21,270.47 crore.
IOC beats RIL to be India's No 1 refiner
State-owned Indian Oil Corp (IOC) has surpassed Reliance Industries to regain its position as nation's biggest refiner after it completed expansion of its Panipat unit.
"We have this week completed expansion of our Panipat refinery (in Haryana) to 15 million tonnes (from 12 million tonnes)," IOC Director (Refineries) B N Bankapur said.
Before the expansion, IOC's eight refineries had a total crude oil refining capacity of 51.2 million tonnes a year and together with its subsidiary Chennai Petroleum Corp Ltd (CPCL), it had a combined refining capacity of 61.7 million tonnes.
After Panipat expansion, IOC group's refining capacity has increased to 64.7 million tonnes, ahead of 62 million tonnes of refining capacity that Reliance Industries has at Jamnagar in Gujarat.
IOC was the largest oil refiner in the country before Reliance started its 29 million tonnes a year only-for-exports unit adjacent to its 33 million tonnes a year plant at Jamnagar.
"This year have raised Haldia refinery capacity by 1.5 million tonnes to 7.5 million tonnes," Bankapur said.
IOC is mulling raising the capacity of its Koyali refinery in Gujarat to 16 or 18 million tonnes a year from current 13.7 million tonnes a year.
"We will conduct feasibility of raising Koyali refinery capacity to either 16 or 18 million tonnes in next 3-4 months," he said.
Also IOC has sought approval from Supreme Court to raise capacity of its 8 million tonnes Mathura plant to 11 million tonnes.
IOC's refining capacity would rise to 80 million tonnes by 2012 after it commissions a 15 million tonnes a year unit at Paradip refinery in Orissa.
Bids for 4000 MW power project in Orissa to be delayed:Shinde
Government on Thursday said invitation of bids for a 4,000 MW ultra mega power project in Orissa would be deferred for the fourth time on environment issues .
"It (bids for Orissa UMPP) will get delayed by about a month or so," Power Minister Sushil Kumar Shinde said.
The last date of submission for bids for the Bedabahal UMPP in Orissa was November 30.
But the Ministry of Environment and Forests (MOEF) is yet to give clearances for the coal blocks--Meenakshi, Meenakshi-B and Dip side of Meenakshi -- allotted for the project.
The Power Ministry wants to complete its homework on the projects like -- forest clearance of the coal blocks for the project -- before inviting the initial bids.
"I dont want developers to come and complain (about any discrepancy) later," he added.
MOEF classified 'no-go' areas as the zones where mining activity could not take place as it would have adverse impact on the environment.
One of the coal mines for the project fall under the 'no-go' category.
Bidding process for another such project at Sarguja in Chhattisgarh has already been delayed by two months from its prior date of November 8 due environment concerns, as the coal mines allotted for the project also fall under the 'no-go' category.
Government plans to add about 1,00,000 MW of power, of which a lion's share would be contributed by such UMPP projects.
It has awarded four such projects so far, three of which are at Sasan (Madhya Pradesh), Tilaiya (Jharkhand) and Krishnapatnam (Andhra Pradesh).
Tata Power is developing the fourth project at Mundra in Gujarat.
"It (bids for Orissa UMPP) will get delayed by about a month or so," Power Minister Sushil Kumar Shinde said.
The last date of submission for bids for the Bedabahal UMPP in Orissa was November 30.
But the Ministry of Environment and Forests (MOEF) is yet to give clearances for the coal blocks--Meenakshi, Meenakshi-B and Dip side of Meenakshi -- allotted for the project.
The Power Ministry wants to complete its homework on the projects like -- forest clearance of the coal blocks for the project -- before inviting the initial bids.
"I dont want developers to come and complain (about any discrepancy) later," he added.
MOEF classified 'no-go' areas as the zones where mining activity could not take place as it would have adverse impact on the environment.
One of the coal mines for the project fall under the 'no-go' category.
Bidding process for another such project at Sarguja in Chhattisgarh has already been delayed by two months from its prior date of November 8 due environment concerns, as the coal mines allotted for the project also fall under the 'no-go' category.
Government plans to add about 1,00,000 MW of power, of which a lion's share would be contributed by such UMPP projects.
It has awarded four such projects so far, three of which are at Sasan (Madhya Pradesh), Tilaiya (Jharkhand) and Krishnapatnam (Andhra Pradesh).
Tata Power is developing the fourth project at Mundra in Gujarat.
Tata Power to invest around Rs 5,000 cr in wind energy by 2017
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 .
"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 .
Friday, November 19, 2010
Mumbai - 8 cos submit EoIs for distributing power in RInfra's area
Eight companies have submitted their Expressions of Interest (EoIs) to the state's electricity regulator MERC for distributing power in the license area of RInfra in the city's suburbs. Last month, Maharashtra Electricity Regulatory Authority (MERC) had invited EoIs from interested parties for supplying power in the suburbs where presently the Anil Ambani-led Reliance Infrastructure (RInfra) is distributing electricity.
The company's license expires on August 15 next year. Maharashtra State Electricity Distribution Company (MSEDCL), which supplies power in the rest of the state, and RInfra's competitor Tata Power Company (TPC) have submitted their EoIs to the MERC.
Interestingly, RInfra has not submitted its EoI. Instead, it has filed a petition for amendment of license conditions. Apart from TPC and MSEDCL, Torrent Power Limited, DPSC Limited (Kolkata), Lanco Infrastructure, GMR Energy Limited, Indiabulls Power Limited and Enzen Global Solution Pvt Ltd (Bangalore) have submitted their EoIs.
Currently, RInfra has a consumer base of 27.24-lakh consumers, including residential, commercial, industrial and streetlights in its area of supply. Last year, the Supreme Court had upheld TPC's demand to operate as a retail distributor in the distribution areas of BEST and RInfra in Mumbai.
Following this, nearly 45,000 RInfra consumers had shifted to TPC. TPC and RInfra had entered into a legal battle after the former declined to supply 160 MW of power to the latter for supplying power to its suburban consumers.
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