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.

Power ministry seeks expert opinion for Rs 50,000 crore debt fund

The power ministry is consulting financial experts to work out the modalities of the proposed Rs 50,000-crore debt fund to finance electricity generation, transmission and distribution projects. "We are in talks with some economic experts...Can't name them right now, they would advise us on the debt fund...How to go about it," a power ministry official said.

The ministry is mulling to set up a debt fund for financing projects with an estimated corpus of Rs 50,000 crore.

State-run lenders Power Finance Corporation and Rural Electrification Corporation may also be roped in for the same.

The ministry is also in constant dialogue with the Planning Commission to work out a blueprint of the proposed fund.

Meanwhile, the Planning Commission has proposed a Rs 1,00,000-crore National Electricity Fund (NEF) to finance development of power transmission and distribution network in the country, which would soon go to the Cabinet for its approval.

The plan panel had last year announced setting up of NEF to finance the development of power transmission and distribution network by state utilities, so as to reduce transmission and distribution (T&D) losses.

It had suggested that the government should provide interest subsidy aimed at bearing part of the interest cost by the Centre. For example, if a state utility plans to raise funds at an interest rate of 10 per cent, four per cent of that would be borne by the government.

Power Finance Corp and Rural Electrification Corp are likely to be the nodal agencies to finance state utilities, as a part of NEF.

The support of World Bank and Asian Development Bank could be sought for improving electricity transmission and distribution network in the country.

Mumbai - Rinfra demands increase in wheeling charge and cross subsidy surcharge

RInfra has filed a petition for truing up tariff for year 2010-11 (up to March 2011).  RInfra has asked for 31% increase in wheeling charges (charges for using its network by other supplier to connect the switch-over consumers) from 88 paisa to 115 paisa. The company has also demanded a cross-subsidy surcharge varying from Rs 2 to Rs 8 (depending on category) for consumers who shift to Tata.Reliance Infrastructure (RInfra) doesn't want to burden its consumers further, but wants the regulator to approve more charges for those who switch over to other suppliers. The petition was discussed for technical validation at the office of the Maharashtra Electricity Regulatory Commission's (MERC) office on 16-11-2010.

As per MERC directive, the new multi-year tariff will come into force from April 2011. It means there will be no tariff revision every year.

More than 60,000 suburban consumers have shifted to Tata Power in the past year.

Consumer activist Sandeep Ohri, who debated RInfra proposal on, told the Hindustan Times that RInfra's demand would kill any kind of competition. "RInfra has done nothing to procure additional power to bring its own tariff down."

Ohri said there were many discrepancies in the petition. "MERC has asked RInfra to file a fresh petition within 10-12 days."

Renewable Energy Certificate to be Launched today (18-11-2010)

arooq Abdullah, Union Minister of New and Renewable Energy, will be launching Renewable Energy Certificate (REC) Mechanism at New Delhi on 18-11-2010. Shri Uma Shankar, Secretary (Power); Shri Deepak Gupta, Secretary (MNRE); and Dr. Pramod Deo, Chairperson, CERC will also be attending the launching function.

The Regulatory framework for REC mechanism has been notified by CERC and the REC mechanism is being supported by MNRE and the Ministry of Power. REC mechanism is expected to bring new investments in renewable energy projects and help introducing market based competition in renewable energy sector.

A large part of our Renewable Energy potential is concentrated in few States and some of these States have achieved comparatively high levels of renewable electricity purchase as share of their total electricity consumption. The electricity from renewable energy being more expensive than the conventional electricity, these States are not willing to buy renewable based electricity any further. For example, Tamil Nadu has more than 10% of total electricity from renewable sources of energy but still has untapped wind energy potential. On the other hand, there are States like Bihar and Delhi which have very little renewable energy potential but are required by the National Electricity Policy to enhance the share of renewable electricity in their total electricity consumption.

To address this mismatch, the Electricity Regulatory Commissions have collectively evolved REC mechanism under which the green electricity is to be split into two components, i.e. electricity and the green attribute. The electricity component can be sold to local distribution utilities at a price of conventional electricity and the green attribute is converted into REC which the generator can sell to the utilities of States like Delhi. Such a utility can fulfill its renewable purchase obligations by purchasing RECs.

Centre plans to defer tariff-based bidding in hydel projects for 5 years

The central government is all set to defer mandatory tariff based bidding for hydroelectric power projects by another five years. The deferment will be based on recommendation of a taskforce headed by power minister Sushilkumar Shinde.Major government-ow ned power utilities like NHPC, Satluj Jal Vidyut Nigam (SJVNL) and Tehri Hydro Development Corporation (THDC) stand to gain from such a decision.

A task force headed by Shinde has recommended that cost-plus tariff regime be extended for the sector till January 2016, a power ministry official said. "We are very much in agreement with the task force recommendations. The hydro sector is not mature to handle competition," he said.

The task force has cited high risks and uncertainties inherent to hydropower projects. "Given their location in hilly areas, sites for hydroelectric projects suffer from adverse geological conditions and natural calamities," the official quoted the task force report.

Power minister Sushilkumar Shinde held a meeting with state energy ministers on October 24 to decide on whether to exempt hydel projects from tariff-based competitive bidding beyond January 2011.

HPCL to invest Rs13,000 cr to augment Vizag refinery capacity

State-owned Hindustan Petroleum Corp Ltd (HPCL) plans to invest Rs13,000 crore to almost double the capacity of its Vizag oil refinery in Andhra Pradesh to 15 million tonnes a year by 2013-14. 

"We have asked for a detailed feasibility report (DFR) for raising capacity at the Vizag refinery," HPCL Chairman and managing director Subir Roychowdhary said here. 

The decision to expand the Vizag refinery follows steel tycoon Lakshmi Mittal group and French oil firm Total SA walking out of a proposed USD 4 billion project to build a 15 million tonnes per annum refinery and a 2.5 million tonnes per annum petrochemicals plant near HPCL's 8.3 million tonnes per annum refinery at Visakhapatnam. 

"That project is on freeze (since 2007 when Mittal walked out). We are now looking at raising our Vizag refinery capacity," he said. 

The other partners in the five-way consortium were state-run explorer Oil India Ltd and state gas utility GAIL India Ltd. 

HPCL does not intend to bring a partner onboard for the refinery expansion. 

It may add a new 180,000 barrels per day (9 million tonnes per annum) crude distillation unit (CDU) and scrap the old 36,000 bpd (1.8 million tonnes per annum) unit at the Vizag refinery. 

"We already have acquired land for the project," he said. "The project will take 3 years to complete." 

HPCL currently operates three CDUs at the 8.3 million tonnes a year (166,000 bpd) Vizag refinery. It also runs a 6.5 million tonnes a year refinery in Mumbai. 

Roychowdhary said HPCL and Mittal Energy, owned by billionaire Lakshmi Mittal, will mechanically complete the 9 million tonnes a year refinery at Bhatinda, in Punjab, by March, 2011, and the unit will be fully operational by September. 

HPCL is also looking at investing Rs30,000 crore to set up an 18 million tonnes a year refinery. 

The new refinery, to be set up in Maharashtra, was conceptualised to make up for space constraints at HPCL's existing Mumbai Refinery. 

"We have been told that 1,800 acres of land is available with MIDC (Maharashtra Industrial Development Corp). We have asked for 1,000 acres more land," he said. 

State-owned Engineers India has been engaged to carry out a feasibility study on the proposed refinery. The options under consideration are a single 18 million tonnes per annum unit or two units of 9 million tonnes per annum capacity each. 

The DFR will be ready by December, Roychowdhary said. The land earmarked for the refinery is located between Ratnagiri and Raigad and the unit, called Maharashtra Refinery, would be completed within 48 months from the date of receipt of all approvals.

Hopes to finalise overseas asset buy: Oil India exec

State-run Oil India is hoping to conclude a deal soon to buy a stake in an oil and gas producing asset overseas, its head of finance T.K. Anantha Kumar said on Tuesday. 

"We are looking at producing assets in Australia, South America and parts of Africa. It should be below $1 billion... we are not going for a multi-billion dollar deal," Kumar told reporters.