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.

ONGC to get 10 per cent RoI on Cairn blocks

In order to boost ONGC’s valuations ahead of followon public offer (FPO) which is scheduled early next year, central government has given in principal ok to the proposal which ensures  Cairn gets minmum 10 per cent return on investment (RoI) in Cairn India’s Rajasthan block.  The government’s in principal approval also paves the way for Cairn-Vedanta deal. 

 The state-run explorer has been losing money from these blocks, as it has to bear the  entire royalty burden, and has been using the deal to negotiate better terms for itself.  The petroleum ministry sources said, the government may transfer a part of its own share of profit from the blocks to help ONGC, but this would require the approval of the finance ministry as it means giving subsidy to the ONGC..

Officials in the finance ministry said, they were looking at ways to help ONGC while petroleum secretary S Sundareshan said his ministry wanted India’s second-largest company by market capitalisation to get a reasonable return.

“This will come as an upside for investors ahead of the FPO as the Rajasthan blocks will generate more revenues in the years to come. A positive return for ONGC would help the Cairn-Vedanta deal as well as ONGC’s concerns would be addressed without making any changes for Cairn India materially,” says Sanjeev Prasad of Kotak Securities .

The ministry is considering ways to give ONGC a return of 10-15 per cent on its investment in the Rajasthan blocks and is consulting ONGC and the Directorate General of Hydrocarbons, the quasi-regulator for the sector, the official said, requesting anonymity. One of those options is to amend the tripartite contract between Cairn India, ONGC and the central government for the Rajasthan blocks. The amendment would allow the Union government to directly compensate ONGC.

By altering a specific contract, as opposed to making a policy change that affects 70-odd royalty deals that are in the same situation as ONGC, the government will not need cabinet clearance, speeding up the deal. The government would like to resolve the royalty issue quickly, as it is looking to sell 5 per cent in ONGC through a public issue by March 2011; if the royalty issue is still pending, it might lower the valuations the government gets.

However, the Cairn-Vedanta deal, pending for about four months, might run into another hurdle. If the delay continues, Vedanta Resources might ask Cairn Energy, Cairn India’s Scottish parent, to lower the deal price, a person involved in the transaction said last Thursday.“The change in crude prices and scrip movements will be variables we will have to keep in mind as the deadline approaches,” he said. The deadline for the deal is April 15, which can be extended by one month.

Strong growth in power capacity and generation

Power capacity addition spurted by 2,085 mw during October, three times around the 716 average megawatt added in the previous two months and nearly 50 per cent more than that targeted for the month. In fact, this was the largest monthly capacity addition during the ongoing plan. The projects commissioned during the month included Rajiv Gandhi (Hissar) TPP U-2 and Sterlite (Jharsuguda) TPP U-1 (600 mw each); Indira Gandhi STPP U-1 (500 mw) of Aravli Power; Wardha Warora TPP U-2 (135 mw); and Pragati Stage- III (Bawana) CCPP GT-1 U-1 (250 mw). With this, the first seven months of 2010-11 have seen the commissioning of 7,020 mw of capacity, meeting 60 per cent of the targeted augmentation for the period. Fiscal 2009-10 had witnessed 51 per cent of target achievement, 2007-08 57 per cent, and 2008-09 only 31 per cent.

Cumulatively, the net capacity addition in public utilities till October in the ongoing 11th Plan amounted to 25,923 mw in public utilities, comprising 22,588 mw of thermal, 2,675 mw of hydro (renewable) and 660 mw of nuclear power. The renewable energy sources (grid connected) including small hydropower, biomass gas/power and wind energy etc., whose estimates are sourced from the Ministry of New and Renewable Energy, contributed 9,026 mw. The state governmentowned power plants accounted for 49 per cent of the total installed capacity of 167,278 mw in October, followed by 31 per cent in central government-owned plants, and 20 per cent in private sector plants. In RES, however, private sector accounted for 83 per cent of total capacity of 16,787 mw.

Even as the fructification of power capacity is running below target in the current plan, as in earlier five-year plans, addition to stock of public utilities till October has exceeded 21,151 mw added during the 10th Plan and 18,524 mw in the 9th Plan. Renewable energy, a star performer, has in fact already surpassed the climb in the earlier plan by 50 per cent. The total stock of installed generating capacity at the end of October worked out to 167,278 mw; of which 10 per cent (16,787 mw) comprised RES. Grid-connected captive generating capacity contributed another 19,509 mw.

The western region has 31 per cent of grid-connected power capacity (including RES) followed by northern and southern regions contributing around 27 per cent each. The eastern region has 13 per cent of installed generating capacity, with the northeastern region accounting for just around 1-2 per cent. The southern region dominated in RES with 51 per cent followed by 29 per cent in the western region and 16 per cent in the northern region.

Total power generation including that from the Bhutan joint venture shot up 8.4 per cent in October, reversing the slide that had pulled down the growth rate to around 1.3-1.4 per cent in August- September, from 3.9 per cent in June-July and 6.6 per cent in April-May. Cumulative increase in power generation over April- October worked out to a somewhat respectable 4.7 per cent, which though was below 6.5 per cent in the corresponding period of 2009-10. Plant load factor for thermal plants (coal and lignite) was assessed at 72.5 per cent during April-October 2010, which was markedly lower than 75.7 per cent in this period a year ago. PLF for nuclear power improved from 49.8 per cent to 56.2 per cent between these periods due to better availability of nuclear fuels.

The average deficit went down to about 9.2 per cent during April- October 2010, from 9.8 per cent in the corresponding period a year ago, and 10.5 per cent during this period two years back. Peak demand level deficit worked out to 10.1 per cent against 12.1 per cent in the same period last year and 13.5 per cent two years ago. Lower power shortage could be reflective of a slowing economy as growth in generation during the period was lower than that a year ago.

Among the regions, the western region, which accounts for 30-31 per cent of power availability as also demand, faced 13.7 per cent average deficit, much higher than the average for the country. The northern region faced 8.8 per cent deficit. The southern and eastern regions faced 6.3 per cent and 4.9 per cent deficit, respectively.

Among the states, Madhya Pradesh and Maharashtra, faced 18 per cent power deficit during April-October; Uttar Pradesh faced 16 per cent; and Karnataka 10 per cent.

Power Sector Performance in 11th Five-Year Plan
	2007-08	2008-09	2009-10	2010-11 (up to October)
Capacity addition (mw)	9,263	3,454	9,585	7,020
Generation ('000 GwH)	704	724	772	468
Power deficit (per cent)	9.8	11	10.1	9.2

 

Cancun Talks: China, India Brazil press for more US cuts

China, India, Brazil and South Africa said the US must pledge deeper cuts in greenhouse gas emissions to help make progress in United Nations climate talks, sharpening divisions between rich and poor countries on how to combat global warming.

The four developing nations at the talks in Cancun, Mexico, also called on industrialized economies to provide more aid for countries seeking to clean up their energy industries, adding to demands that the US and European Union said may wreck the meeting.

“There is an agreement to be had,” US lead climate negotiator Todd Stern said yesterday in Cancun. “I’m not sure whether we will actually get it. I think that question hangs in the balance.”

With the two-week conference involving 193 nations entering its final four days, the EU said negotiating documents are too complex and too full of disputed items for this stage in the talks. The remarks add to the chances negotiations may follow last year’s gathering in Copenhagen in failing to produce an agreed package of measures to keep a lid on global temperatures.

“The texts are still much too long,” said Connie Hedegaard, the European Commissioner in charge of climate policy, referring to UN documents outlining possible goals at Cancun. “There are much too many options. They are still too complicated.”

Leaders gathering Venezuelan President Hugo Chavez, Evo Morales of Bolivia and Rafael Correa of Ecuador are among the 35 leaders arriving for the final days of the conference. US president Barack Obama, who attended last year in Copenhagen, is not coming this time.

The delegates are looking for ways to curb fossil fuel emissions blamed for global warming once limits agreed in the 1997 Kyoto treaty expire in 2012. After failing to reach a legally-binding agreement last year, the UN scaled back ambitions for this meeting, focusing on agreeing regulations to protect forests, verify emissions cuts and channel up to $100 billion a year in climate aid to developing nations.

A UN text sketching out the options for Cancun says the nations of the world need to limit temperature increases since the 1700s to “below 2 degrees Celsius.” Carbon dioxide emissions have risen 40 per cent from 1990 to 2008, double the level that would produce a 3.5 degrees Celsius increase in global temperatures, the International Energy Agency said yesterday.

US position

The US, the only industrialized country not to ratify the 1997 Kyoto Protocol, has pledged to cut emissions about 17 per cent by 2020 based on 2005 levels. That amounts to a zero reduction from 1990, the baseline for Kyoto, according to the Indian environment minister Jairam Ramesh.

“The US offer is disappointing to say the least,” he said yesterday. He joined the other developing nations in insisting that the industrial countries make a second round of commitments under Kyoto, an effort that the UN says is not possible at this meeting.

“We need to stick to the Kyoto Protocol because it’s the result of a long-term effort and the only legally binding document on emissions reductions,” ie Zhenhua, China’s top official on climate policy, said at a briefing yesterday in Cancun. “We need to continue the second commitment period.”

Copenhagen compromise

Both the US and EU are pressing for a new climate agreement to include reduction pledges made earlier this year under the Copenhagen Accord, a non-binding accord cobbled together in the Danish capital last year when treaty talks failed.

The US wants the Copenhagen pact to serve as the basis for a new treaty that includes cuts from fast-growing countries like China and India. Japan, Russia and Canada have refused to sign up for a second round of cuts under Kyoto without developing country participation. China wants to stick with the Kyoto approach, which requires actions from only industrial countries.

The EU, which has committed to cutting emissions 20 per cent by 2020 from 1990 levels, urged all countries to make compromises, noting there were limits to what it could achieve.

“We can’t leave Cancun empty-handed,” Hedegaard said in a news conference.

Forest snag

Bolivia yesterday stepped up its call for rich nations to make deeper cuts. Its negotiator, Pablo Solon, also is resisting the forest protection measures, saying the methods being considered to count the stocks of carbon sequestered in trees don’t do enough to protect “the rights of nature.”

The Latin American country’s concerns are important because under the UN rules, which require consensus, any party to the talks can hold up progress with an objection.

The rich-nation targets in the 1997 Kyoto negotiation text range from 15 per cent below 1990 levels in 2020 to 50 per cent below by 2017, according to a document on the website of the United Nations Framework Convention on Climate Change.

The EU has said it will boost its reduction target to 30 per cent if other countries also strengthen their commitments.

“What we need is that others also move,” Hedegaard said.