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Powerinfo Weekly Volume 1(9); 3 July 9 July 2015

The Economic Times Magazine; July 5, 2015 PMO takes charge to revive investment cycle VIKAS DHOOT & SUGATA GHOSH New Delhi/Mumbai: Principal Secretary at the Prime Minister's Office (PMO) met bankers, project promoters, top ministry officials and chief secretaries of states to resolve hurdles delaying investments across sectors The PMO has taken charge of reviving the investment cycle and unravelling banks' chronic non-performing assets on account of investment plans worth lakhs of crores of rupees that have got entangled in red tape over the past few years. Over the past three days, Principal Secretary in the PMO Nripendra Misra has held hectic, virtually daylong parleys to arrive at a swift resolution of the hurdles delaying big-ticket investments across sectors. Stuck projects of companies like Tata Power, Avantha, Lanco, GMR and Essar Power, among others, were discussed. Decision on as many as 22 projects were taken, a person aware of the development, said. There is a realisation at the highest level that the investment climate is still tepid and not much is moving on the ground in terms of developers commissioning fresh capacities or launching greenfield and brownfield projects, said a top government official, adding that job creation would also remain subdued unless these projects are unshackled. The

PMO is mining through the 410-odd stalled investment projects worth 19.5 lakh crore that have sought and await an intervention from the project monitoring group in the cabinet secretariat. The group was set up by the UPA government in July 2013 to help negotiate hurdles holding up large investments. Officials from this group were present at these meetings. This is a very focused and meaningful exercise where decisions are being taken with a clear roadmap outlined for each stalled project to be operationalised. When an issue is beyond the realm of possible solutions, it's being ruled out straight away rather than let it linger in sus-pense, said another official, who at tended one of these meetings in the PMO this week. While state chief secretaries and line ministries like power, railways and finance have been asked to expedite clearances and other issues in their domains that have been scuttling specific projects, in a few cases, promoters have also been asked to bring more funds on to the table to make the project viable rather than expect banks and financiers to take haircuts alone. There are projects where developers have put up little equity and have left banks in the lurch citing lack of clearances, though in reality, their real concern is poor market condition and leveraged balance-sheets, said an official. The Economic Times; July 9, 2015 (Edited) Fin Min to bail out stalled power projects, frail SEBs Govt seeks to revive investment, lower NPAs SUBHASH NARAYAN & MUKESH JAGOTA New Delhi: The finance ministry is looking to bail out the power sector by helping projects that are stuck for want of funds and offering a new restructuring window to the state electricity boards that have piled up losses to the tune of 2,00,000 crore. The ministry has called a meeting of power sector representatives,

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bankers, RBI officials and other government departments to revive power projects that are held up either due to financial stress or other reasons. This is part of efforts to get the investment cycle moving again. Also, the government fears that delays in power projects can turn bank exposure into non-performing assets (NPAs). Late last month, the finance ministry held a similar meeting for steel projects following a warning from RBI that steel firms might add to the banks bad loan burden. The government will also discuss a new and focused restructuring plan for SEBs, whose financial constraints have been weighing on deliverables such as tariff fixing and improvement of the distribution infrastructure. The power sector is a cause of concern for banks due to their high exposure to the sector. The ministry would look at those projects where problems can be resolved easily so that they could go on stream soon, a senior govern-ment official said. The total exposure of banks to the power sector stands at 6,00,000 crore or about 9-10% of total advances. But the sector already has a whopping 16% share in total stressed advances of banks. At a time when gross NPAs of banks have risen to 4.3% of total advances in FY15 from 3.9% in the previous financial year as per RBI data, any addition to distressed assets could be a destabilising factor for the entire industry. An even bigger concern for banks is with respect of the SEBs. The public sector lenders total exposure to the SEBs now stands at 3.4% of total loans, or roughly 1,60,000 crore, out of which around 72,000 crore, or 46%, has already been restructured. The restructuring done in 2012 allowed a 3-year moratorium for the principal amount. If the power utilities now fail to pay the principal and/or interest by June 30 (90 days from the end of moratorium), these will turn into NPAs.

The finance ministry should get RBI on board to allow restructuring of loans to power projects that are delayed for no fault of project proponents, without categorising these as stressed assets, as that would attract stiffer provisioning norms. The current situation could dissuade banks from extending the term of any loan, said an official with a private sector power project developer. Government estimates show power projects of about 60,000 MW are either stranded or facing delays due to lack of statutory clearances. Out of this capacity, about 15,000 MW are gas-based plants stranded due to fuel shortage. A host of other thermal power plants have missed commercial operation dates due to delay in getting fuel linkages. These projects now need support from banks to get their debt restructured. But banks are wary of doing this, as higher provisioning would weaken their financial health. RBI has warned of a possible spike in bad loans in the sector. The heavily-indebted companies have been hit by slowing demand for power from states that prefer load shedding over buying additional power for their indebted SEBs. Finance minister Arun Jaitley had last month indicated that the government would identify sectors and specific projects that could be revived without putting stress on the banks. The financial services secretary, and if necessary at my level, will be calling a meeting of the representatives of state governments, those projects and the departments concerned over the next few days and try to resolve the issues, Jaitley had said. Financial Chronicle; July 8, 2015 (Edited) Govt devising contingency plan for power supply Plan includes deferment of planned shutdown of plants in northern region, diversion of gas from west to north UTPAL BHASKAR New Delhi: The government is working on a plan to mitigate the impact of a deficient monsoon on electricity supply,

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particularly in states such as Delhi, Punjab, Rajasthan and UP. The government believes that while western, eastern, north-eastern and southern regions will be able to manage the supply position during the monsoon months, the northern region, comprising states such as Haryana, HP, J&K, Uttarakhand, and Chhattisgarh are likely to be affected by rainfall deficit. As part of the exercise, the planned shutdown of thermal power units has been postponed and the government has decided to optimally utilize gas and liquid-fuelled pro-jects, divert gas from the western region to the northern region and expedite revival of projects currently under reserve shutdown. Even planned shutdown of ONGCs Mumbai offshore gas platform during July, which may impact 3 power projects totalling 1,912 MW, is being explored to be rescheduled. The government is seized of the situation. With the rainfall improving, there shouldnt be any problem, said a senior government official. In its second-stage monsoon forecast in June, the India Meteorological Department predicted that monthly rain-fall over the country as a whole is likely to be 92% of its average during July and 90% of its average during August, both with a model error of 9%. This amount of rainfall will qualify as below-normal. But better-than-expected rainfall in June led to improvement in reservoir levels. Of Indias installed power generation capacity of 272,503MW, hydropower projects account for 41,632.43MW. The northern states, with a power generation capacity of 71,383.40MW, had a peak shortage of 4.5% in May. In the northern region, 5 thermal projects with a combined 1,555 MW capacity have deferred maintenance activity. Also, if required, another 530 MW can be shifted to the post-monsoon period. In addition, the power flow from the western region to the northern region through 765 kV D/C Gwalior-Agra line has been approved - resulting in an additional supply of 300 MW from the current levels

of 1,250 MW. On 11 August 2014 around 30,000 MW of capacity was lying idle because of breakdowns and maintenance work on power plants. LiveMint; July 8, 2015 (Edited) Power generation: More is not merrier Power cos are still reeling under subdued demand and regulatory hurdles. SHREYA JAI New Delhi: The major issues which plague the Indian power sector are fuel availability, regulatory hurdles, demand-

supply mismatch, financing and legal tussles. While the UPA government pushed for mega power projects, the NDA government has taken steps to facilitate fuel supply to them. This

has shown quick results with power gen-eration increasing by 5.5% in May 2015. The 12th Plan period (2012-2017) has been a record-breaking year with thermal capacity touching 20,830 MW in 2014-15 - which is the highest capacity addition ever in the history of Indian power sector. During the first 3 years of the 12th Plan period, the private sector contributed 63% to the total thermal power capacity addition of 57,719 MW. Most of it is owing to CILs increase in production, international coal prices coming down, ass-ured future supply with coal block re-auctions and clarity on gas supply mechanism. Compared to last year, the share of long-term purchases has risen to 90.5% in FY15 from 89% in FY14. The sector is confident of a long-term growth trajectory. Its the short-term purchase of power, which is under pressure, said Rajesh K. Mediratta, director (business develop-ment), India Energy Exchange. According to latest data, in 2014-15, 3.1 BU of electricity were lost on power trading platforms. This is where all the big talk about massive capacity addition fails. Subdued demand from financially

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sick power distribution companies are hurting supply. Focus on long-pending issues of fuel availability and supply logistics might be yielding immediate results. But, on power distribution side, major intervention has not commenced. The financial restructuring plan (FRP) for improving the health of state distribution utilities has not taken off and cost recovery remains an issue. Regulatory assets compound the problem and private participation has been minimal, said Sambitosh Mahapatra, Partner - power and utilities, PwC. There are also projects totalling 20,000 MW under liti-gation of which cost pass through is the most contested issue. Noted power companies continue to reel under regulatory issues, including state-owned NTPC. The thermal power giant saw its net profit declining to 10,291 crore during 2014-15 from 10,975 crore in past year. The company has on several instances mentioned that the stringent tariff regulations are hurting its profits. The provisions of Tariff Regulations for the period 2014-2019 by CERC led to reduction in power sale tariff which NTPC has contested in court. The other legal hurdle hurting growth of power generators is compensatory tariff or pass thorough of increased cost of fuel on the power price. The 2-year old case of Adani Power and Tata Powers UMPP - both in Mundra and running on imported coal is back to square one with Appellate Tribunal of Electricity investigating the matter again. IPPs based on imported coal still dont have any cushion in their PPAs for fluctuating exchange rate and coal prices in the global market as there is no steady regulation on the same. Adani Power which mostly sources imported coal wit-nessed its consolidated net loss for 2014-15 increasing to 816 crore against 290 crore in 2013-14. It is the largest private power producer in the country with 10,440 MW of installed capacity. The company in its last statement said a lot is riding on the availability of domestic coal and regulatory clearances.

ICRA in its latest report on the power sector said the power generators would continue to reel under domestic coal deficit. This would lead to dependence on costlier imports, leading to under-recovery in energy charge. CERC also is yet to issue any final order for rate com-pensation request for impact due to Rupee depre-ciation, said ICRA. Meanwhile with cooling of inter-national coal prices last year, Tata Powers consolidated operating profit for the fourth quarter 2014-15 was 28% higher at 1,408 crore against 1,097 crore. The 13th Plan period pipeline for thermal power projects is empty, with none of the major infrastructure firms investing in new projects. With the other parts of the supply chain beleaguered, the excitement around power generation is short lived, warn power sector executives. The demand for power from states is subdued and distribution companies are still awaiting turnaround with 2 lakh crore of losses mounting annually. Fuel availability and generation numbers do not portray the right picture and turnaround in the power sector is still some way off. In a leaking bucket, whatever goes in doesnt matter, it still doesnt hold up. The political will to reform distribution sector is still missing across states, said Mahapatra. Business Standard; July 9, 2015 (Edited) Now & then: Plug Into power reforms JAIDEEP MISHRA Of the several issues current today, the power sector seems the least problematic. Output is rather buoyant, pan-India: the power ministry website mentions, in block letters, not just the highest-ever increase in generation capacity, but also that for transmission lines, and ditto for substations installed. And the Narendra Modi govern-ment promises `power for all' in the foreseeable future. Yet, the fact is that SEBs, which distribute the bulk of power nationally, are horrendously in the red, with cumu-lative losses put at well over 2,00,000 crore

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(up-to-date figures are apparently unavailable). And unless the cripp-ling finances of the utilities improve, the Centre's bright plans like `Make in India' and `Digital India' would dim. The entire economy would be adversely affected if we tamely plod along with power utilities terribly in the red. Already, the experts opine that the smart reduction lately in fuel shortages in power plants is more because state utilities are too broke to step-up power. Since the 1990s, most states have hived off their SEBs into separate units for power generation, transmission and distribution. There have been some reform initiatives, with select states seemingly reducing huge losses in power distribution. The Centre pitched in as well, offering incentives to restructure dues and securitise out-standings. The Electricity Act (EA), 2003, was seen as path breaking. Things seemed hunky-dory, for a while. There's certainly been huge capacity addition in the past decade, particularly by power producers. Yet, there's been a sorry relapse. Revenue losses in power distribution have now risen by leaps and bounds. Reportedly, all state distri-bution utilities are now severely affected. The situation has gotten bad to worse, thanks to reckless populism and giveaways in the form of unbudgeted power subsidies (read, nil or virtually nil tariffs) and plain theft. Now, power is in the concurrent list of the Constitution, with both the Union and the states having a say. However, central rules, norms and laws must prevail and the Centre needs to be much more focused than hitherto on purposefully reforming moribund finances of state power utilities, and sooner rather than later. A strong political initiative is surely warranted. State power utilities need to levy reasonable tariffs and generate adequate returns for plough-back and improved infra-structure. The law does mandate independent tariff-setting, but there have been instances galore when state regulators have simply preferred not to revise tariffs year after year, no doubt to

go out of their way to please the powers that be. But we just cannot carry on with such a state of affairs. We need transparency in power, one of the most capital-intensive sectors. The EA, 2003, does require `proper accounting and audit in the generation, transmission and distribution or trading of electricity,' as per Section 55(2). Note also that as per Section 74, power utilities are required to furnish to the central regulator `statistics, returns or other information relating to generation, transmission, distribution, trading and use of electricity as it may require and at such times and in such form and manner as may be specified'. The Centre needs to invoke the provision to make it com-pulsory for utilities to duly publish quarterly accounts. There is also a sound case for a suitable price index for the power sector, so that state regulators do not gloss over tariff revision. Instead, the estimated power infla-tion less an annual efficiency-improvement requirement needs to be duly factored into tariffs. Concurrently, given widespread energy poverty, states need to envisage limi-ted subventions, which would need to be budgeted and provided for, to encourage minimal power consumption levels. The point is to clean up balance-sheets of power utilities going forward, and drive home the political mess-age that sound utility finances are for the greater good. Abroad, in mature markets, utilities are a stable asset class and given our lowly per-capita power consumption levels and huge upside potential, improved state power finances can also provide pensions for all, sustainably. Hence the pressing need for multiyear reform of state utilities, so that they are in a better position to innovate and step-up power. Rooftop solar power and solar-powered pump sets are slated to be increasingly cost-effective going forward and with sound balance-sheets, power utilities would be better able to leverage techno-logical changes to boost supply. There is scope to rev up efficiency

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improvement; key in attractive bottom lines. The Economic Times; July 8, 2015 (Edited) CEA reorganisation begins SHREYA JAI New Delhi: CEA announced its reorganisation in an office order on June 30 for "creation of new divisions and restructuring of the existing formation". The authority is statutory body under the ministry of power and was constituted by the Electricity Act. It has 15 major fun-ctions specified in the Act ranging from data collection to setting of standards. It also investigates any major mishap, including grid failure. The CEA will now shift focus to renewable energy, T&D, and new policies. The new divisions introduced in the office of the chair-person are co-ordination of internal and external affairs, IT and HRD. The new tasks assigned to the planning wing are integrated resource planning, fuel management, power data management, power survey and load fore-casting, renewable energy development, thermal project planning and R&D. The existing wings - thermal, hydro, power systems, grid operation and distribution, and economic and commercial, have been expanded. Chief engineers have been given extra charge of power data management, power survey and load forecasting, UMPPs, hydro project appraisal, and thermal projects planning and development. CEA officials said the reorganisation preceded a road map for the govern-ment's '24X7 power for all' initiative and the 19th Electric Power Survey to forecast electricity demand. The authority is grappling with a staff crunch and lack of talent and technical expertise. A committee headed by Railway Minister Suresh Prabhu had in a report high-lighted the problems of CEA and suggested remedial measures. The officials said some junior posts such as deputy director had been abolished and member-level staff had been given additional tasks. "This has been done to prevent any financial burden. It has also

brought relief to those waiting for promotion," an official said. The CEA promoted 46 subordinate engineers to chief engineers last December. The member (planning) holds additional charge as chairperson. Business Standard; July 5, 2015 (Edited) Power capacity touches 16,000 MW in Chhattisgarh Raipur: In FY 2014-15, the power production capacity in the state touched 16,000 MW with the contribution of both public and private sector power plants, Chha-ttisgarh Energy Department principal secretary Aman Kumar Singh said. The Economic Times; July 7, 2015 (Edited)

The Financial Express; July 8, 2015 Thermal power generation dips marginally in June OUR BUREAU New Delhi: Thermal power generation fell marginally in June despite continued momentum in CILs production. During the month, thermal power plants in the country generated about 0.4% less power at 72,804.74 MU as against 73,134.59 MU in the same month last year, according to CEA data. The units were operating at an average PLF of 59.43% as against 66.31% in the same month last year. The overall power generation in the country, at 88,542.35 MU, was almost the same as in June last year (88,265.17 MU). Specifically, generation by coal-based power plants remained flat at around

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66,209.48 MU in June 2015. While power generation from coal-fired power plants remained flat, availability of the fuel increased sharply. During the month, CIL produced 12.4% more coal as compared to last year at 38.83 MT. Increased coal production meant only 13 of the 100 coal-based power plants had less than 7 days of coal stocks. All these are non-pithead power plants. The Hindu Business Line; July 7, 2015 (Edited) States unwilling to sign agreements with coal-based power plants AMAN MALIK New Delhi: Even as the government is reviving stranded gas-based power plants, significant coal-based capacity is idling simply because states are unwilling to sign long-term PPAs. Data available as of

end of March

show that coal-based

power capacity to the tune of

about 15,000 MW is lying unused. In addition to this, no PPAs have yet been signed for plants, which will come on stream by 2017, with capacity of around 5,000 MW. Reluct-ance of debt-laden state dis-coms seems to be the main reason for low off-take. Industry officials say that UP was the last state to sign a PPA in 2014. Rajasthan, which had signed a PPA in 2013, is now looking to scrap a part of that. AP, Telangana and Kerala are looking to purchase more power, but have not actually signed any agreements. Some of the things are in a regulatory haze, people dont want to take a decision at this point of time, said Dipesh Dipu, energy expert at Jenissi Management Consultant. He adds that a lack of clarity on the fate of UMPPs has further held states back from signing PPAs. Telangana and AP dont know if they should consider the Krishna-patnam UMPP gone and terminated or if they

should wait for longer, he said. Out of 16 proposed UMPPs, only 2 have actually taken off. Recently, Reliance Power walked out of a proposed project at Tilaiya in Jharkhand citing delays related to land acquisition. Another reason cited is that states are looking to meet some additional demand from alternative sources such as solar. This is some kind of an artificial comfort, said an industry official. The Hindustan Times, July 7, 2015

(Edited) Demand for power projects could revive in 2017: Ravi Arya, Hindustan Power SUMIT JHA Hindustan Power Projects Pvt Ltd (HPPPL), formerly Moser Baer Projects, forayed into coal-based thermal power projects over 3 years ago, on the back of a MoU with the MP government to develop 2,520 MW capacity. It commissioned the first 1,200 MW plant in Annupur, MP, recently. HPPPLs Ravi Arya, president-thermal, discusses the power sector scenario in India, with all its problems and promise. Excerpts: Could you find buyers for the power you produce? Our project was based on a MoU with the host state, which requires us to sell 35% of all commissioned capa-city to it. So far, that translated into 420 MW. We sell nearly 60 MW of this at a constant cost comprising only energy charge as per the agreement, while the rest of the capacity has been contracted at tariff determined by the state regulator. We also managed to tie up 361 MW with the UP government in 2012 but have not been able to start supply due to congestion in the west-north trans-mission corridor. In June, we have qualified to be a power supplier to AP for a contracted capacity of 374 MW, which leaves us with only 45 MW to spare. What problems do you face in supplying power to UP? The 400KV transmission line between Gwalior (western region) and Jaipur

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(northern region) that was supposed to have been ready by March 2014 got stuck because of lack of right of way as the line passes through areas with wildlife. The issue was taken to the National Green Tri-bunal. The delay seems to be over. We hope to have the corridor available by the end of August. Although the PPA was for supplying power from October 2016, we could start earlier as the UP government agrees to it. The non-availability of line has disrupted supply of power from the surplus western region to the starved northern region. Lack of PPAs has been a constant complaint from the power developers, but discoms blame high tariff for not buying power. What is the nature of your PPA with UP? Originally, UP had invited bids for 6,000 MW in 2012 but could only close the deal for 2,175 MW in the next 2 years. Our pact is at a levelised tariff (over 25 years) of 5.74/unit. Even though the tariff seems high, at the bus bar the state will only pay 4/unit in the first year. The tariff for the subsequent years will be determined by the escalation formula that takes coal prices and wholesale price inflation into account. So the levellised tariff is not the actual tariff but just a mathematical model developed for comparison among bidders. For instance, coal esca-lation has been a constant in the last 2 years. Hence the tariff for next 2 years would not be substantially different from the first year. Its a complicated metric and a cause for confusion even among veterans in the sector. When would work start on your next two 660 MW units? The preliminary work has been completed. But for a project that has a debt-equity mix of 75:25, we would need the lenders approval. The lenders will fund us only if we have secured fuel supply for the next phase. We have been holding back on the recently held coal block auction as we didnt need mines that were near production. We would bid for mines in the next phase, as those mines would take nearly 3 years to start produc-

tion, perfectly syncing with completion of new units. Is securing coal supply easier than finding power buyers? Over the last year some long standing issues in coal supply seems to be clearing up. It needs a lot more work still. As far as PPAs go, the industry has suffered a drought in the last 2 years but there are signs of it changing. The recently announced PPAs for AP was much needed and UP may also announce fresh bidding for the remaining capacity it originally wanted to buy. This would mean that by the end of this year there could be 3,800 MW of contracts to buy power up for grabs. Does that mean demand is back in the sector? Power is perhaps the most cyclical element of the infra-structure sector and although these PPAs bring much respite, the real demand has still not been created. In my view, action is likely to return by 2017. The reason for this is that no investment is being made in capacity addition, as the industry focuses on revival of stuck or non-viable projects. However, as the economy grows and demand inches up, these projects, which are under construction or just being commissioned, would be better placed to take advantage of it. Do you see uncertainty reversing anytime soon? While demand is sure to return sooner than later, uncer-tainty of the business may not only linger but could get even worse. The coal transportation problem is likely to get worse with time. We do not have enough railway lines to supply coal to plant locations and although work has started on those lines, it is unlikely to be fast enough. Land acquisition problems could hamper infrastructure building, leading to a spike in the cost of coal supply over long distances. Our plants are coal pithead plants that places us only 260 km away from the coal source. The flip side of being close to coal source is that we are some distance away from load centres. Congestion in trans-mission has been bothering us. But power sector eco-

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nomics says reliance on transmission is far less risky than relying on coal supply over long distances. Transmission lines once built would last through the plant lifetime, but coal supply with constrained transportation could be more complex and costly. The Financial Express; July 8, 2015 (Edited) State government moves HC against stay on Udangudi project tender Says validity of project expired on March 31 and bids of Indo-Chinese consortium and BHEL lapsed DENNIS S. JESUDASAN Chennai: The State government has filed an appeal in the Madras High Court against the interim stay order on the tender proceedings for the 2x660 MW Udangudi power project, contending that the single judge had no juris-diction to step into the shoes of the TANGEDCO Board and decide if administrative and policy decisions made to scrap the tender accorded with his own views. In a writ appeal, the government said the validity of the project had expired on March 31, 2015 itself. Therefore, the bids of both the Indo-Chinese Consortium (petitioner) and BHEL had lapsed and become invalid as per Rule 26(3) of the TN Tender Transparency Rules, 2000. A mere invi-tation to offer can never, under any circumstances, be construed as an assurance that the offer (the bid) made by the tenderer would be accepted, regardless of its flaws. It would be unprecedented for courts to direct the TANGEDCO Board to enter into a contract on the strength of the bid, and a defective bid at that. Bids submitted by prospective contractors were merely offers, which may or may not be accepted by the authority. Until offers are accepted, no obligation arises to bind either party. One of the main grounds for the judge to stay the tender process was that the consultant hired by the Board had not recommended the rejection of the bids, but only observed that both the bids

suffered from deficiencies. The consultants report was merely to assist the Board in evaluating the bids. It was not binding. The Board can independently take action based on the consultants report, which clearly said that both bids suffered from deficiencies, the government argued. As for the other ground that the delay was causing cost overrun, the government said it as misconceived. All that the judge could examine was the competence of the Board to scrap the tender and call for a fresh one. There was no finding whatsoever in the impugned order that the Board was incompetent or was barred by law from doing so, the government stated. The judge failed to note the extraordinary defects found in the Indo-Chinese Consortiums bid. The petitioner had submitted an incomplete price bid, which rendered it completely impossible to award the contract, the govern-ment clarified. Based on the grounds, the government asked the High Court to set aside the single judges order. The Hindu; July 8, 2015 (Edited) NTPC to finalise price bids for Pudimadaka plant SANTOSH PATNAIK Pudimadaka (Visakhapatnam District): NTPC, will shortly finalise price bids on turnkey basis for steam and turbine generators for the 4,000 MW UMPP being set up about 60 km from Visakhapatnam. The authorities have already opened the technical bids and an exercise is on to finalise the price bids for the turnkey package. NTPC has already paid the amount and acquired 700 acres for the project. Process is on to pay 400 crore more by this month end to take possession of the remaining 500 acres from the AP Industrial Infrastructure Corporation. NTPC-Pudimadaka project Group General Manager P.S. Radhakrishnan said that they had completed EIA study by Vimta Labs of Hyderabad. All other critical studies, inclu-ding bathymetric study, are at various stages of comple-

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tion. Packages are being finalised on turnkey basis for Turbo Generator Island, Steam Generator Island, coal, ash and water systems. The plant, which will have 4x 1,000 MW units will involve an investment of 20,000 crore to 24,000 crore. Radhakrishnan said that they would ensure 100% ash utilisation by installing super critical technologies. The plant will have a 275 metre-high chimney with direct sea-water cooling facility. Accor-dingly, the boilers will be designed. Coal will be sourced 100% from abroad. It will need 7 lakh cubic metres per hour. IIT-Madras has been engaged to conduct the relevant study. Though NTPC had set a timeline of 52 months for the project, efforts would be made to commission the plant in 42 months, Radhakrishnan said. The Hindu; July 8, 2015 (Edited) Neyveli Power Station-II completes operation SPECIAL CORRESPONDENT Neyveli: The 2x250 MW Unit-I of Neyveli Thermal Power Station-II expansion has completed its continuous opera-tion for 72 hours and qualified for Commercial Operation (COD). With this, the power generating capacity of NLC has expanded from 3,490 MW to 3,740 MW. NLC is setting up a 2x250 MW Thermal Power Station at Neyveli as part of its Thermal Power Station-II Expansion. Recently, Unit-I (500 MW) of NTPL Thermal Power Sta-tion, implemented through a JV Company, NLC Tamil Nadu Power Limited (NTPL) incorporated by NLC (89%) and TANGEDCO (11%) had attained COD on June 6.Unit-II of this Thermal Power Station had COD Declaration on April 21. Pre-commissioning activities in Unit-II are near-ing completion. This unit would also be ready for commercial operation this month. The Hindu; July 5, 2015 (Edited) SCCL boiler light-up for unit I completed STAFF REPORTER

Hyderabad: The boiler light-up of unit I of the Singareni Thermal Power Station at Jaipur, Adilabad was successfully completed, C&MD N. Sridhar, said. He informed that unit II will have its boiler light-up in August this year. Synchronisation is scheduled for unit I in November and for unit II in March, 2016. The Hindu; July 5, 2015 (Edited) Allow UMPP bid winners to mortgage land, coal blocks Panel also suggested that developers be allowed to pass on fuel cost to consumers SARITA SINGH New Delhi: Companies winning bids for UMPPs will be allowed to mortgage land and coal blocks attached to them if the government accepts recommendations of an expert panel. The panel, tasked to review the standard bid documents for 4,000 MW and above projects, has also proposed that developers be allowed to pass on the fuel cost to consumers. The power ministry had consti-tuted the panel under former central vigilance commi-ssioner Pratyush Sinha after all the qualified private deve-lopers withdrew from the final round of bidding for 2 proposed UMPPs in TN and Odisha, citing difficulty in securing bank finance due to flaws in the bidding norms. It has recommended to the power ministry to invite fuel cost from bidders for the first year while from the second year onwards, it will increase as per a CERC formula, a government official said. The fixed cost will be quoted for 25 years, he added. The official said the panel has acceded to most demands of private companies, inclu-ding re-introduction of the design-build-operate model for bidding of such projects in place of the existing design-build-operate-transfer model, which has been opposed by private developers. The panel has also recommended creating 2 special purpose vehicles (SPV) for each proposed UMPP. While one SPV will own land and captive coal blocks, the other will own the rest of the infrastructure. The panel has also

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suggested allowing the developers to pass through the cost incurred on R&R (resettlement and rehabilitation). The government had to scrap bidding for the two 4,000 MW UMPPs - in Cheyyur in TN and Bedhabahal in Odisha - after qualified private developers such as Tata Power, Adani Power, Jindal Power, CLP India, GMR Energy and Sterlite Energy withdrew from the final round of auction. In its report given 10 days ago, the panel has also proposed restricting the role of the independent engi-neer, who was given the power to interfere in the earlier bid documents. An executive with PFC said fresh bidding for the 2 UMPPs is expected to start in the next 3 months as the government has begun final deliberations on the bidding documents. The Economic Times; July 6, 2015 (Edited)

NTPC-Simhadri to add 1,600 MW capacity Ch R.S. SARMA Visakhapatnam: The NTPC-Simhadri thermal power unit at Parawada in Visakhapatnam district plans to expand its capacity from 2,000 MW to 3,600 MW. According to AK Samanta, GM, there are plans to add 2 more units of 800 MW each. We have adequate support from the authori-ties. We wish to acquire land in the adjoining area, he said. The company would need 800 acres for the project which will involve an investment of 5-6 crore per megawatt. It will be developed with ultra super critical technology with higher efficiency and less coal consum-ption and emissions compared to existing technologies followed at various power plants. He said NTPC is also in talks with the Visakhapatnam steel plant, for a JV to set up a 2x250 MW power plant on the land belonging to the latter in the city at Ukkunagaram. Samanta said NTPC-Simhadri has also decided to set up 20 MW solar energy power plant within the compound. Under CSR, the company had already distributed 48 solar pump sets to social welfare and other residential hostels

with net metering facility. At present, NTPC-Simhadri generates power at 82% PLF. The Hindu Business Line; July 7, 2015 (Edited)

GVK Power's Goindwal project cost shoots up to Rs 4,573 cr PRESS TRUST OF INDIA New Delhi: GVK Power in a BSE filing said the cost of its 540 MW Goindwal Sahib thermal power project in Punjabs Tarn Taran district is now estimated at 4,573 crore, sharply higher than the earlier estimate of 3,200 crore. The cost escalation means a higher debt load for the company. GVK Power (Goindwal Sahib) had com-pleted the financial tie-up and arranged 2,400 crore as loan for the power project in the beginning of 2010. Then, the total cost of the project was estimated at 3,200 crore, of which 800 crore was equity and the rest debt. IDBI Bank had syndicated the debt, apart from being one of the lenders in the consortium of bankers. Financial Chronicle; July 3, 2015 (Edited) Why not sell coal from 2 Chhattisgarh mines to JPL PRESS TRUST OF INDIA New Delhi: Delhi High Court suggested to CIL to sell to Jindal Power Ltd (JPL) the coal it has started to mine from 2 Chhattisgarh mines if it did not have the space to store the mineral. A bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva gave the suggestion after CIL moved an application seeking permission to sell the coal it started to mine from Gare Palma IV/2 and IV/3 mines after recei-ving environmental clearance. It moved the application as the high court on May 27 had kept in abeyance a CIL letter cancelling e-auction in which JPL had won 49,000 metric tonnes of coal to be mined from the 2 mines. CIL put before the bench 3 options - selling the coal by way of a fresh e-auction, selling it to those companies with

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whom the public sector unit has a fuel supply agreement or sale to NTPC - and asked the court which method it should go for. The counsel for CIL told the court that the problem was that after it had received environ-mental clearance, it had commenced mining. Now the mineral was accumulating at the site with no space to store it. It also sought clarity on whether the courts May 27 order would prohibit it from selling the coal it was mining. The court, however, only suggested that CIL can sell the coal it was mining to JPL or hold a fresh e-auction in which the power company can participate and did not pass any order. It listed the matter for further hearing on July 7. CILs application was filed in the main petition of JPL which has challenged a May 16 letter by which the PSU claimed the e-auction was cancelled. The Pioneer; July 2, 2015 (Edited) Coal-starved plants get e-auction breather For bidding by power plants with PPAs, it would be CIL price plus 20%, with no PPAs it would be plus 40% SUMIT MOITRA Kolkata: Profits of CIL are set to get a boost with the government deciding to raise e-auction quantity by crea-ting separate windows for stressed power companies without coal blocks or linkages. There are many power plants which are stressed and are starved of coal. For those who dont have linkage we are forming 2 e-auction windows, one for those who have PPAs and another for those without PPAs, minister Piyush Goyal said. Initially in both windows we would start with 5 MT each, and then expand it, looking at the response we get from the first exercise, the minister said. This 10 MT could be over and above the normal e-auction volume as CIL is now producing enough coal. We have now surplus power. Where there are transmission capabilities, we would provide as much coal as needed. Enough coal is available with power plants. So there is no risk of

any power plants having shortage, Goyal said. CIL normally sells around 10% of its output through e-auction at prices which are at a steep premium over linkage prices. Higher e-auction volumes always go to boost the miners bottom line. During early days of 2015, e-auction prices were reportedly 65% over notified or linkage prices. For those having PPAs, bidding would start at CIL price plus 20% as floor price. Those who dont have PPAs or only have short-term agreement, bidding would start at CIL price plus 40% premium. Both of these would be transparent processes through which everybody who doesnt have coal would have equal opportunity, the minister said. This would however be a temporary solution till April by when the government is expected to come out with a framework which would be a permanent solution. The stalled initiative to set up large sized power plants would soon get a boost with the Pratyush Sinha committee recently submitting its report on bid documents for UMPPs. Final consultation and final deliberation is going on and would be finalised very soon after which we would restart the process of bidding for UMPPs, Goyal said. DNA; July 4, 2015 (Edited) Aggressive coal bidding may hurt projects totaling 6,000 MW, says Icra RACHITA PRASAD Mumbai: Power sector now stares at higher risk of signi-ficant under-recovery and concerns on viability of pro-jects after the companies bid for coal aggressively, Icra said. The rating agency said in a report that the recent bid for coal blocks that were earlier de-allocated saw nega-tive price bids ranging from 300-1,100 a tonne by winners, which `could translate into under-recovery. 1.20 per unit of 40 paise for projects totaling 6,000 MW, creating concerns over viability. Icra said that the sector's credit profile continues to be weighed by issues such as falling thermal PLF, increasing coal import dependence and domestic gas deficit that

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may continue in FY15, uncertainty on implementation of tariff compensation, significant cost over-run in projects, aggressive bidding seen in auction of coal blocks and rising subsidy and weak cost coverage ratio for discoms. The report said that almost 35,000 MW of projects have seen cost overrun of 35% due to delays in land acqui-sition, lack of fuel and other problems. On the positive, we do see some movement. A lot of generation capacity has come up stream and we expect some more to start generation. We are seeing some improvement in coal availability although the coal auction is yet to give results. CILs incremental output going ahead would be better than past and there has been softening of international coal prices, said Sabyasachi Majumdar, senior VP and co-head corporate sector ratings at Icra. But we still see a lot of concerns on the distribution side as many discoms in some of the more challenged states remain in precarious condition which impacts their ability to buy power, Majumdar said. The subsidy scheme to encourage the utilization of stranded gas based projects allowing R-LNG to initiate interim measure, and however, its viability is dependent upon prevailing R-LNG price exchange rate and availability of moratorium period on debt servicing, Icra said. The report noted that there was a sharp decline in thermal PLF from 75% in FY 2011 to 65% in FY 2015. The Economic Times; July 8, 2015 (Edited) Group company rules for coal auctions to be tightened AMAN MALIK New Delhi: With the intent to try and prevent any chance of cartelisation or collusion among bidders during the forthcoming round of captive coal block auctions in August, the government is mulling tightening the definition of what constitutes a group company. A person aware of the matter said that the government is contem-plating making the

definition more stringent than the present one, which has been taken from the foreign direct investment (FDI) policy. This person said that the government is looking at defining a group company on the basis of ownership and control. This internal discussion comes following rejection by the government of bids for 4 blocks for which Jindal Steel and Power Ltd (JSPL) and Bharat Aluminium Co (Balco) had emerged as the successful bidders. Following this, both companies had moved the Delhi high court challenging the rejection of their bids. The court later said it had found no evidence of collusion in at least 3 of the 4 cases. To be sure, this is as yet a matter of debate within the government and no final call has been taken. There are a number of aspects you continue to discuss, some of them fructify, some dont, another person aware of the discussions said. According to a press note on FDI, 2 or more entities are considered group companies if they can, directly or indirectly, exercise 26% or more of voting rights in each other, or if they can appoint more than half the directors on each others boards. Already, the government has said that multiple bids from one company for a particular block will be treated as one bid. For the purposes of auction, the government already defines an associate company on the basis of control of at least 20% of share The Hindustan Times, July 5, 2015 (Edited) 'Orissa Government scuttled coal block project' EXPRESS NEWS SERVICE Thiruvananthapuram: The Baitarani coal block project had failed to take off as Orissa had shown scant interest in co-operating with Kerala, Power Minister Aryadan Mohammed told the Assembly. The New Indian Express; July 8, 2015 Coal India goes on a production overdrive

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to fuel economy PROBAL BASAK Kolkata: Recover the coal sector for me, the entire economy will rebound. This was PM Narendra Modis first message to Union Coal Secretary Anil Swarup last October after appointing him as an OSD in the ministry. Recalling the conversation, Swarup now believes, with the successful auctioning of coal blocks to captive miners and state-owned CIL recording double-digit production growth, he and the CIL management are on course to deliver on the PMs mission.

Core sector data for the month of May shows the coal sector was one of the best performing sectors, with 7.8% growth on a year-on-year (Y-o-Y) basis. The growth engine for the sector is CIL, which accounts for Indias 80% coal output. CILs production data shows that its production is growing for quite some time (see chart) and since April, it has been recording double-digit production growth. In the month of May 2015, CIL produced 40.97 MT, registering a growth of 11.8% and in June, it registered 12% growth output. Although the Modi governments ambitious target for CIL to achieve the 1 BT production target by 2019-20 might be a long way off, both the coal ministry and CIL mana-gement say the company is on the right track. While operational success has contributed to recent growth, CIL is banking on easing of land acquisition and environ-mental hurdles to meet the target in the long term.

Consider this: Coal Indias output from 2010-11 to 2013-14 grew from 431 MT to 462 MT, adding only 31 MT in the last 4 years. On the other hand, CIL output in 2014-15 reached 494 MT, recording a growth of 33 MT in a single year. Coal India has begun 2015-16 on a strong note registering a 12% growth output at 121.33 MT in the first quarter and meeting 99% of the target. Small wonder the Union Coal Minister Piyush Goyal is ecstatic. It is the same Coal India, the same executives and the same workmen. We have just ensured better management of operational affairs, showed the right intention and always believed in our potential, Goyal said. The fact that coal ministry is keeping close tabs on the daily operational details of CIL, was evident when Goyal speaking on the subject on July 3 in Kolkata, checked the message on his phone to tell the audience that CIL loaded 206 rakes on July 2. I get daily updates on my phone, he noted. On the ground, CIL officials say, minor operational bottlenecks in terms of labour, law and order issues, have eased in the past 1 year because of better coordination with state governments and local administration in major mining states. On its turnaround strategy, Swarup said he and CIL C&MD Sutirtha Bhattacharya have divided the job between them. I have told him to take care of digging in the mines and I am there to coordinate with state governments and negotiate with them if there are any issues. And almost every week, I meet chief secretaries of some mining state or the other, he said. Also, according to him, the recent auctioning of coal blocks, which were de-allocated by the Supreme Court, has indirectly helped in a way. As the entire proceeds of coal block auctions would go to respective states where the blocks are situated. It has brought the states and the Centre closer, easing operational bottlenecks for CIL in mining states. But better management of affairs and coordination of states in operational

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matters will not help CIL to fulfil the dream of producing I BT by 2019. 1 BT is not a target enforced from the top. Rather, its a bottom-to-top calculation. We asked all subsidiaries what they could produce by 2019-20. We have chalked out a plan for 925 MT by 2019-20. I think, we can reach 1 billion, too, Swarup said. The man to deliver on the promise is Bhattacharya. The key issues that the coal miner is basically relying on, are timely completion of 3 critical railway lines, land acquisition and green clearances, Bhattacharya said. There has been significant progress as CIL has already acquired 2,000 hectares and received 41 environmental and forest clearances in the past 8 months. It has chalked out mine-wise plans to meet the 925 MT production target by 2019-20. Chhattisgarh-based South Eastern Coalfields and Odisha-based Mahanadi Coalfields will account for half the targeted output. Both subsidiaries have received green clearances for 5 blocks each in 2014-15 and many more are expecting clearances this year. There are technolo-gical challenges, especially for underground mines. CIL is banking on a public-private partnership model. Engaging private contractors for mining is already operational in CIL under a Mine Developers and Operators (MDOs) model but CIL is now looking to expand this. Awarding contracts to operators in the past few years under MDO model were on piecemeal, not on turnkey basis. Here, the miner would be handed over the mines for a much longer period and it would be awarded on a turnkey basis - from production to transport till the loading point, an official explained. And even if the target is achieved, coal evacuation would be a major issue for CIL. The govern-ment is working on 3 major new railway lines in Jhar-khand, Chhattisgarh and Odisha that have the potential to evacuate 200-300 MT once ready by July 2018. Business Standard; July 7, 2015 (Edited)

Huge eastern arms contribution in CIL 12% growth PRESS TRUST OF INDIA New Delhi: CILs Jharkhand-based arm, Central Coalfields Ltd (CCL), has topped among 8 subsidiaries by surpassing output target with production of 12.59 MT in the first 3 months of the current fiscal. CCL not only achieved 120% of the 10.50 MT target set for April-June quarter but also registered a record 26.6% over the corresponding period in the previous fiscal, CIL said. CCL during the last fiscal had become the first subsidiary of CIL to achieve its pro-duction target as well as growth in raw coal output by registering unprecedented growth of 11.2% in raw coal output. Its coal production had stagnated at around 48 MT for 4 consecutive financial years from 2009-10 to 2012-13 due to "acute shortage" of land but in 2014-15 it notched 55.64 MT production against 55 MT target on account of various expansion and other initiatives, as per its C&MD Gopal Singh. Another arm Eastern Coalfields Ltd (ECL) too surpassed the production target during April-June 2015 and recor-ded an output of 9.12 MT against 8.998 MT target. Two other arms - Mahanadi Coalfields Ltd (MCL) and NCL (Northern Coalfields Ltd) too registered impressive shows by achieving 99% production of the targeted quantity at 31.07 MT and 18.26 MT, respectively during the period. MCL recorded a 13.3% growth in production over the same period in previous fiscal, while NCL output was higher by 18.2%. South Eastern Coalfields Ltd (SECL) and Bharat Coking Coal Ltd (BCCL) achieved 95% each of the target recording 31.16 MT and 8.81 MT of production, 13.2% and 3% growth in output in April-June period compared with a year ago period. Western Coalfields Ltd (WCL) achieved 90% of the target by producing 10.26 MT during the period. However, the worst performance was shown by North East Coalfields (NEC) which could achieve only 27% per cent of the target by producing 0.07 MT of coal.

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CIL which accounts for over 80% of the domestic coal production has 8 subsidiaries - ECL (West Bengal), BCCL (Jharkhand), CCL (Jharkhand), SECL (Chhattisgarh), WCL (Maharashtra), NCL (Madhya Pradesh), MCL (Odisha) and NEC (North East). The Centre has announced plans to boost CILs annual production to the level of 1 BT by 2019 to meet growing fuel demand. However, the company has successively missed its output targets. The Statesman; July 6, 2015 (Edited) CCL to start new projects for coal mining in Jharkhand PRESS TRUST OF INDIA Ranchi: We will start mining of coal over a stretch of 34,000 acres of land in Jharkhand and land authentication process is on, said CCLs C&MD Gopal Singh. Singh (who will take charge as NMDCs MD next January). He told that progress of land authentication work was monitored by Jharkhand CM Raghuvar Das and Chief Secretary Rajiv Gauba. We are also holding camps in villages to authenticcate the land, he said, adding that the new mining project will begin in CCL command area of the state, he said. Besides, the unit will recruit 17,000 people in the next 2 years, Singh said, claiming that around 1.70 lakh people in and around the proposed projects will indirectly benefit following their implementation. The C&MD said 2 of its projects in Madadh Amrapali, touted to be one of Asias largest projects, have even featured in the PMs Pragati portal. CCL has been emer-ging as the best coal company of the country, he added. Asked the reason behind CCLs whopping growth, Singh said it was because of good co-ordination among all stakeholders, including government agencies, contact-ors, employees etc. The Financial Express; July 5, 2015 (Edited) Underground coal mining plan hits hurdles

The share of underground coal mining in India has slumped from 16.3% to 8.8% in the last decade GAURAV MISHRA New Delhi: The government is considering a push for underground mining to extract deep-seated coal in a bid to boost coal production, but is facing challenges of resources and lack of machinery. Theres a definite thrust towards it. We are trying to understand it, coal secretary Anil Swarup said. India has set itself an ambi-tious target of increasing coal production from 565.77 MT in 2013-14 to 1.5 BT by 2020 to reduce dependence on imports. The most prevalent method of coal mining in India is opencast or surface mining, used for extracting coal deposits at shallow depths. Its a more efficient process than underground mining, the latter needing high technical expertise and greater investments. The share of underground coal mining in India has slumped from 16.3% to 8.8% in the last decade. The primary reason is rise in production from opencast mines, which is increasing at a greater rate than under-ground mines. Some potential underground mines have also been converted to opencast mines, said S.K. Dubey, technical secretary at the Central Mine Planning and Design Institute (CMPDI), the consulting arm of CIL. The most efficient way to carry out underground mining is to extract long panels of coal with use of massive shearers and a roof support system through longwall mining. A typical longwall machine moves along the coalface cutting coal slices while the roof is allowed to collapse. This mining technique hasnt been successful in India because, Dubey said, We dont have large areas of continuous coal deposits underground. This makes esti-mation and implementation of mining very difficult. We had very ambitious projects in the 1970s and 1980s, which were unsuccessful due to these conditions. In China or the US, large deposits of coal seam are available free from geo-mining

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disturbance, which makes longwall mining feasible. In India, Singareni Collieries Co Ltd (SCCL) has the highest share of underground mining production. According to an SCCL official, the company has been sourcing machinery required for longwall mining from Caterpillar Inc., since last year. Technology needs to be upgraded. For long-wall mining, our plan for the future is to get mines enlar-ged by merging 2 mines or opening a new large mine where longwall mining is possible, said Swarup. One of the ways that can boost underground mining is through a continuous miner. It requires less investment and can work in difficult conditions, even in the absence of a long stretch of continuous deposition. Continuous miners have already been deployed at many mines and it has shown great potential, said Dubey. Productivity in a mine is measured through output (in tonnes) per man-shift (OMS). The OMS for underground mines of CIL in 2013-14 was 0.76. The corresponding figure for opencast mines was 12.31. There are restric-tions in underground mining. Coal can only be extracted by haulage or conveyor belts. It has to travel a long distance and therefore the efficiency is low, said the SCCL official. There is, however, one important factor which strengthens the case for underground mining. The use of explosives in opencast mining affects the vege-tation, soil and wildlife around the mine. Environ-mentally, underground mining is much better than opencast because it doesnt immediately affect the natural habitat, said Swarup. Hopefully the proportion (of underground mining) would go up a bit in the sense of our understanding of new technology and opening of larger mines where new technology could be deployed, said Swarup. LiveMint; July 4, 2015 (Edited) Coal India to return 75% of Mozambique blocks

DEBJOY SENGUPTA Kolkata: CIL will relinquish 75% of the area in the 2 coal blocks it had acquired in Mozambique about 6 years ago. The move follows the local government's decision to double charges of holding the blocks, which have so far not yielded any coal worth the effort. At a board meet-ing last week, it was decided that Coal India Africana Ltd, will just about keep 54 sq km of the 205 sq km blocks that it had earlier acquired, a senior coal sector official said. The decision was taken following completion of a near 3-year exploration programme. About 6 years ago, Coal India had won a 5-year licence for exploration and development of A1 and A2 blocks in Mozambique's north-western province of Tete. The blocks were unexplored and it was upon CIL to explore and ascertain the quality of coal there. Following the acquisition, CIL set up Coal India Africana for carrying out the exploration at the 2 blocks. When CIL acquired the blocks, the authorities in Mozam-bique had indicated that the 205 sq km area holds a mix of premium and normal variety of coal, and reserves could be around 1 BT. We were told that 20% of the deposits in these blocks are expected to be of superior variety, good enough to be used in steel making, while the remaining was expected to be thermal used as fuel in power plants. It seemed a viable option at that time, said the official said. The Economic Times; July 7, 2015 (Edited)

ONGC to cut gas production by 40% PRESS TRUST OF INDIA New Delhi: ONGC will cut gas production from its biggest fields in the Arabian Sea by about 40% as it carries out repair work on a pipeline that carries the gas to shore. ONGC produces 33 mmscmd of natural gas from the Bassein

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field in the western offshore. The gas is carried to shore by 2 under-sea pipelines, a 42-inch line and a 32-inch line. The company plans to carry out repair work on the pipeline that carries natural gas from the Bassein field to Hazira, from July 7 to 27. The repair work was to last 24 days but we have squeezed it in less than 3 weeks, a top official said. The repair work is to tentatively start from July 7 but could be pushed back to July 8 or 9. This would lead to stoppage of production at some wells. The output will fall by 13-14 mmscmd during the shutdown period, he said. GAIL India Ltd, which sells gas produced from the ONGC fields to customers, has been intimated of the shutdown. GAIL will supply LNG purchased from spot market to fertiliser plants that will be deprived of ONGC gas. Power plants have said that they are not in such a dire need and they can manage without ONGC supplies. They do not want GAIL to give them LNG procured from Qatar on long-term contract as it costs most. Fertiliser plants want GAIL to supply LNG from the spot market which is 40% cheaper than Qatar gas, the official said. While domestic gas is priced at USD 4.66 per mmBtu, LNG in the spot market is available at USD 7-8 per mmBtu. LNG from Qatar on a long-term contract costs almost USD 13. The Financial Express; July 3, 2015 (Edited) Canada LNG import on menu OUR SPECIAL CORRESPONDENT New Delhi: India is exploring the possibility of importing LNG and crude oil from Canada as the country looks to reduce its dependence on West Asia. "Canada could potentially supply a significant amount of the 44 billion cubic metres of natural gas that India is forecast to import annually by 2025," the petroleum ministry said. Oil minister Dharmendra Pradhan met Canadian minister for natural resources Greg Rickford at the second India-Canada Ministerial Energy Dialogue in Calgary

to enhance energy co-operation between the two countries. "Our energy cooperation is steadily growing but the potential is much higher. Let's convert the potential into reality," Pradhan said. IOC has already picked up a 10% stake in an integrated LNG project called Pacific NorthWest LNG proposed at Lelu Island in British Columbia. Real estate firm Hiranandani Group has also announced plans to develop a 4.5 MTPA LNG export terminal in Melford, Nova Scotia, at an estimated cost of $ 3.3 billion by 2020. The Telegraph; July 8, 2015 (Edited) Hurdle to Bengal gas project R. SURYAMURTHY New Delhi: A major industrial project in investment- star-ved WB is facing roadblocks prior to its implementation. The proposed natural gas pipeline from Bengal's Contai to Dattapulia and Paradip (Odisha), planned by H- Energy Pvt Ltd, a subsidiary of the Hiranandani Group, seems to have run into rough weather with stiff opposition from state-owned gas transporter GAIL, refiner Indian Oil and Adani Enterprises. H- Energy is setting up a floating sto-rage regasification unit (FSRU) on the sea near Digha with capacity to convert 6 MPTA of imported LNG to natural gas. The LNG terminal is expected to be commissioned in 2018-19 at a cost of around 2,400 crore, while the pipeline requires 2,700- crore investment, both for the sub-sea and onshore components put together. The company has submitted an expression of interest to the Petroleum and Natural Gas Regulatory Board (PNGRB) to lay the pipeline from Contai (East Midnapore) to Dattapulia (Nadia) and Paradip. The oil regulator has sought the views of the industry players on the issue, resulting in objections from GAIL, IOC and Adani. The Statesman; July 6, 2015 (Edited) RLNG pipeline project gets on fast track GAIL to resume outstanding pipe-laying work S. ANANDAN

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Kochi: With the State getting its act together to fast-track the 504-km R-LNG pipeline project through its northern districts, which had been slowed down due to opposition from locals and subsequent withdrawal of contractors, GAIL is gearing up to resume outstanding pipe-laying work in a months time. Sources said that unfinished work along a total distance of 31-km - in areas in Ernakulam, Thrissur, Palakkad and Kasaragod districts - would recommence in the first week of August. The plan is to concurrently lay pipes along the entire stretch by the end of the year so as to finish the job by mid-2016. A safety audit by international agencies will be carried out before commissioning the line, said the source. GAILs roadmap now suggests that it is planning to complete the work in 15 months - earmarking 12 months for construction and the rest for safety audit. The Hindu; July 5, 2015 (Edited) MHI bags IOC contract for 2 LNG storage tanks at Ennore The high-capacity LNG storage tanks will have a capacity to hold 180,000 cubic meters of gas each PRESS TRUST OF INDIA New Delhi: Indian Oil Corp (IOC), the nations largest fuel retailer, has awarded a contract to build 2 football stadium-sized LNG storage tanks at its upcoming Ennore LNG import terminal in TN to Mitsubishi Heavy Industries Pvt Ltd (MHI) of Japan. The LNG tanks will be the main facility at the first LNG receiving terminal to be cons-tructed on Indias east coast, MHI said. This is also the first LNG storage tank order that MHI has received from India. Construction of the tanks is slated to begin in July; completion is scheduled for the spring of 2018, MHI said. The high-capacity LNG storage tanks will have a capacity to hold 180,000 cubic meters of gas each and will be installed at a LNG terminal that IOC will build near Ennore port, about 25 kms north of Chennai on the Bay of Bengal. LNG

imported to the terminal will be supplied as feedstock to fertiliser plants, and to utility company power generation plants for use as an alternative fuel. The terminal will initially have the capacity to handle 5 MMTPA, expanding to 15 MMTPA in the future, the statement said. IOC plans to build a terminal to import gas turned into liquid at -160 degrees Celsius in ships at Ennore at a cost of 5,150 crore by 2019. Ennore will be the third LNG terminal on the east coast with GAIL building a facility at Kakinada in AP and Petronet LNG Ltd proposing a 5 MPTA facility at Gangavaram in AP. India currently has four LNG import terminals, all on the west coast - Dahej and Hazira in Gujarat, Dabhol in Maharashtra and Kochi in Kerala. LiveMint; July 6, 2015 (Edited)

L&T delivers indigenously designed reactor for nuclear plant OUR BUREAU Mumbai: L&T Heavy Engineering has delivered its first indigenously designed pressurised heavy water reactor for the nuclear plant being developed by NPCIL in Gujarat. The first of the 2 nuclear 700 MWe steam generators was delivered at the Kakrapar plant on June 16 and another will be dispatched on Saturday. Each steam generator weighs about 215 tonnes and is made of special low alloy quenched and tempered steel with nickel-iron-chromium alloy tubes and stainless steel internals. M.V. Kotwal, President (Heavy Engineering), L&T, said the completion of the steam generator is a major milestone towards Make in India vision of the government. The 3D multi-phase thermal hydraulic analysis and safety analysis including accidental conditions were designed in-house by L&T. The nickel-iron-chromium alloy U-Tubes were manufactured as a joint effort with Nuclear Fuel Complex, Hyderabad. L&T Special Steel and Heavy

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Forgings, a 65000 sq. meter integrated facility at Hazira, will supply forgings for future nuclear power plant projects. LTSSHF is a JV between L&T and NPCIL. The Hindu Business Line; July 3, 2015 (Edited) Kalpakkam breeder reactor to go on stream T.S. SUBRAMANIAN Chennai: The 500-MWe prototype Fast Breeder Reactor at Kalpakkam is getting ready to be commissioned in September. When the reactor goes critical, it will signal Indias triumphant entry into the second stage of its 3-stage nuclear power programme. The PFBR will use plutonium-uranium oxide as fuel and 1,750 tonnes of liquid sodium as coolant. We are committed to making PFBR attain criticality in September, said P. Chellapandi, C&MD, Bharatiya Nabikhiya Vidyut Nigam Ltd, a public sector undertaking of the DAE, tasked with building breeder reactors. We are awaiting clearance from AERB for sodium charging, fuel loading, reactor criticality and then stepping up power generation, Chellapandi said. The Hindu; July 8, 2015 (Edited) India, Kazakhstan ink deals on uranium supply, defence Kazakhstan signs contract to supply 5,000 tonnes of uranium to India during 2015-19 DIPANJAN ROY CHAUDHURY Astana, Kazakhstan: India and Kazakhstan inked a deal for a renewed long-term supply of natural uranium, and a wide-ranging defence cooperation pact besides a railway cooperation agreement to boost connectivity to realise full economic potential. Kazakhstan, a leading uranium producer globally , will supply 5,000 tonnes of uranium to India during 2015-19, its President Nursultan Nazarbayev announced following his talks with Narendra Modi. Kazakhstan will emerge as the biggest source of uranium for India besides Canada and Australia. This is the

second such agreement between Astana and Delhi since 2009. Kazakhstan's uranium firm KazAtomProm supplied 600 MT of uranium ore concentrate in 2010-11, 350 MT in 2011-12, 402.5 MT in 2012-13 and 460 MT in 2013-14. The five-year contract to supply uranium ended last year. Kazaksthan was one of the first countries with which we launched civil nuclear cooperation through a uranium purchase contract. We are pleased to have a much larger second contract now, Modi said in his joint presser with Kazakh President indicating nuclear cooperation is a key pillar of partnership. The Economic Times; July 9; 2015 (Edited) Drop power plant move Agitation planned during PMs visit to Visakhapatnam STAFF REPORTER Srikakulam: The CPI (M) demanded that the proposal for a nuclear power plant at Kovvada in the Ranasthalam area of Srikakulam district should be withdrawn imme-diately as the AERB has not given a site clearance certificate either to the State government or NPCIL. The party released a copy of the letter purportedly written by the AERB stating that a lot of mandated conditions need to be met before finalising the site. The partys State secretariat member Ch. Narasinga Rao and other leaders said the State government had no business to begin land acquisition without first obtaining a site clearance certificate from AERB. The Hindu; July 3, 2015 (Edited)

NHPC lines up 15-yr NCD to raise 1,475 cr RAVI RANJAN PRASAD New Delhi: NHPC will be launching secured non-convertible bonds with 15 year tenure which has been given AAA rating by India Ratings and Research. NHPC is planning to raise 1,475 crore

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by issuing these bonds with a green shoe option of 1,275 crore. Government of India owns 85.96% stake in the company. India Ratings and Research has assigned NHPCs 14.75 billion (including a green shoe option) of 12.75billion secured non-convertible taxable bonds a long-term rating of 'IND AAA with a Stable Outlook, India Ratings said in note. NHPC proposes to raise the bonds with a tenor of 15 year including a 3-year moratorium period. The bonds will be repaid in 12 annual equal repayments beginning from the fourth year of issuance and up to the 15th year, India Ratings said. The funds raised through this issue are likely to be used by the company for meeting capital expenditure requirements of ongoing projects and recoupment of expenditure already incurred. The coupon rate for the bonds will be announced at the time of the launch and will be spread over the 10-year Government Securities yield, said Rakesh Valecha Senior Director, India Ratings and Research. NHPC in FY14, it had revenue of 7,250 crore and in FY13 of 6,240 crore. It is operating 18 hydro power plants with a capacity of 4,857 MW on multiple rivers and selling to multiple parties. As Indias largest hydro power generating company, it contributes 12% to all-India hydro capacity at a standalone level. NHPCs 4 under-construction projects of 3,290 MW capacity with an estimated capital outlay of 23,000 crore are facing execution delays, India Ratings said. The projects could see an increase in costs if execution timelines are further extended. Moreover, the capital cost estimates of 2 projects facing execution delays (TLDP-IV and Subansari Lower) have been estimated at July 2010 and December 2010 price levels, while actual capital costs would have increased, India Ratings said. Financial Chronicle; July 8, 2015 (Edited)

Ukhand rains make UP power plants trip

TIMES NEWS NETWORK Lucknow: After causing a flood-like situation in parts of UP, heavy rains in Uttarakhand have come to spell trouble for UP's ailing power sector as well. As many as 4 units, each of 100 MW, at Vishnuprayag hydroelectric project, which provides 88% power to UP, have tripped following heavy siltation in water channels of the power plant located on Alaknanada River. The problem in the power plant, located in Chamoli district of Uttarakhand, about 15 km downstream of the Badrinath shrine, has led to immediate shortfall of around 300 MW in the UP state grid. Owned by the JP group and commissioned in 2006, these have been facing problems during monsoon. According to Northern Load Dispatch Centre (NRLDC), the problem has been prevailing since June 26 when heavy rains were reported in upper reaches of the hill state. There is no confirmation as to when the four units of the power plant would resume functioning. Officials in UPPCL, however, said that they were in touch with the Uttarakhand government for early resumption of the power supply from the project. The tripping has, in fact, immediately contributed to nearly one-third of the total shortfall between power demand and supply. According to UPPCL data, as against a total restricted power demand of more than 13500 MW, the supply is to the tune of around 12400 MW, leaving a gap of over 1000 MW according to data, made up partially for the loss of power from Vishnuprayag by resorting to overdraw of around 250 MW from the Central quota. Sources said that the energy department asked UP Rajya Vidyut Utpadan Nigam to step up efficiency of state-owned power plants, which otherwise wheeled out just around 3000 MW. Private power plants like Rosa and Bajaj were providing 815 MW and 354 MW respectively. A major chunk of power supply was provided by the Central pool: around 6400 MW. UP was also getting just above 600 MW through bilateral and power banking.

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The Times of India; July 5, 2015 (Edited) NHPC to develop hydroelectric projects in Darjeeling PRESS TRUST OF INDIA New Delhi: NHPC said it will set up 4 hydroelectric projects with a total generation capacity of 293 MW in the Teesta Basin of Darjeeling. In a BSE filing, NHPC said: "An agreement has been signed on July 3, 2015 for the development of 4 hydroelectric projects of total esti-mated capacity of 293 MW, in Teesta Basin, amongst WB government, WB State Electricity Distribution Company and NHPC." The 4 projects are: Teesta Low Dam-V, Teesta low dam I&II combined, Teesta Intermediate Stage and Rammam Stage-I, located in Darjeeling District, it added. These projects shall be developed on build, own, operate and maintain basis by NHPC, the filing said. Financial Chronicle; July 6, 2015 (Edited) Not quite in full flow India's water security would be nothing more than a term if the problems plaguing the Himalayan rivers are not immediately addressed For most pilgrims on their way to Kedarnath, Srinagar in the Garhwal region of Uttarakhand is just a town they might stop at for a cup of tea or snack. Almost equidistant from Haridwar and Kedarnath, there is nothing that marks it out. But all you need to do is stop your car just outside Srinagar before you enter it from Haridwar, step off the road and take a few steps toward the Alaknanda river. Almost immediately, scars of the floods in Uttara-khand would be visible to everyone, over 2 years after the disaster. The SSB auditorium, damaged then, still stands askew with its dome - a not so insignificant reminder of the havoc the river wrought between June 15 and 18 in 2013. As if that were not enough, what used to be a park till June 14 now has mounds of muck the river brought, which

gives one the feeling of impending construction activity. Vijaylaxmi Raturi, a lawyer who stays across the road, says most of the muck is debris from GVK Power & Infrastructure's 330 MW hydel power project a few kilo-metres upstream, which was under construction then. It had rained as heavily before as well but there was never any muck, says Raturi. The Alaknanda meets the Bhagi-rathi downstream at Devprayag to form the Ganga. In a 2014 report by a committee set up by MoEF, which said hydel projects in Uttarakhand - home to the contro-versial Tehri dam - aggravated the June 2013 disaster, there were conflicting views on the impact of the Srinagar project. According to environmental activists and scien-tists, dams along with pollution and climate change are among the biggest threats facing Himalayan rivers like the Brahmaputra, the Indus and the Ganga. These have a direct bearing on India's water security because Hima-layan rivers account for nearly two-thirds of India's national river flows, and 43% of India's population depends on just the Ganga for their water needs.

India has 4,857 large dams (more than 15 m in height or 10-15 m if it fulfils some other conditions) in operation and 314 under construction. While 9 out of 10 dams in India have irrigation as their main purpose, in the Hima-layan region, these account for 70% of hydel power potential. India, China, Nepal and Bhutan are in a race to build dams for hydro power. Dams are increasingly becoming a source of geopolitical tension between coun-tries, especially India and China over

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the Brahmaputra, which originates in Tibet. Science magazine says India has plans for 292 dams in the Himalayas to double hydel power by 2030 and that region could have one of the highest dam densities in the world. Large hydro power projects (more than 25 MW) account for 15% of India's installed power capacity of 2,72,503 MW, but it has identified hydel capacity to be developed which is two-and-a-half times the existing capacity, the highest of which is in Arunachal Pradesh, followed by Uttarakhand, J&K, HP and Sikkim. The GVK project, which changed hands a few times since the 1980s before being acquired by the company in 2005, has faced opposition from locals (it was commissioned in March). Bharat Jhunjhunwala, an activist and a former professor at IIM, Bengaluru, contested in the High Court of Uttarakhand in 2009 that the original capacity appro-ved for the project was only 200 MW and that the environmental clearance given had lapsed. The Supreme Court in 2013 gave the project a go ahead. Locals say that ever since the project started operating, there has been severe water scarcity. A GVK spokes-person says since it is a run-of-the-river project, the flow in the river after the powerhouse is the same as the inflows before the dam. He adds that to meet water requirements of the stretch between the dam and the powerhouse, there are minimum environmental flows of 5 cubic metres per second, which includes public water supply requirements, as approved by MoEF. Environ-mental flows, which refer to the quantity, quality and timing of water flows required for a river to perform its ecological functions, has gained credence. In the Indian context, given rivers' religious significance some people have even added the socio-cultural dimension to environ-mental flows. Ashok Khurana, director general, Asso-ciation of Power Producers, says there should be an objective scientific assessment of hydro projects in the Himalayas. No one wants to defile the environment. Every project

will have an impact, but there are mitigating measures. We first need to find out how much hydel power can be developed in a sustainable manner in the Himalayas, he adds. While those critical of large dams in India cite the US' policy to decommission some large dams, Kameswara Rao, partner, energy and utilities, PwC, believes there is more to it: Canada has continued to invest in hydel [power] and the US imports hydro power from Canada. European countries like Norway, Sweden and Switzerland continue to depend on hydro power. One of the proposed ways to regulate development along rivers is cumulative impact assessment which, in case of a hydel project, does not look only at the impact of that project which is what environment impact assessment (EIA) does, but also impact on the river of all the other hydel projects and other developmental activities like roads and irrigation projects in the region, the people living there and biodiversity. We need a river basin approach to rivers, similar to the landscape approach we have for forest and wildlife conservation, says VB Mathur, director of Dehradun-based Wildlife Institute of India. Jhunjhunwala, who fought an unsuccessful legal battle against the Srinagar project, says while he is not opposed to hydel power, a part of the river should be allowed to flow uninterrupted at all times, unlike now when some-times the entire flow of the river is halted. Adds Himan-shu Thakkar of the South Asia Network on Dams, Rivers and People, We have accepted we need to save tigers, but we have no law to save rivers. India's long-pending plan to link 37 rivers has been criticised on the grounds that it could do irreversible damage to rivers. The Economic Times Magazine; July 5, 2015 (Edited) India, Russia sign MoU for funding of hydro generation projects AJAY KAUL, PRESS TRUST OF INDIA

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Ufa: Russias Direct Investment Fund (RDIF) signed a MoU with Indias Infrastructure Development Finance Co (IDFC) for funding of hydro-generation projects. RDIF Director General Kirill Dmitriev told the BRICS Business Council meeting in Ufa that his company signed a MoU with its partners in BRICS member-states to work with sovereign funds, with the BRICS Bank and invest in the equity of infrastructure projects in these countries. We have signed an MoU with 5 funds from our 5 countries: the Russian Direct Investment Fund, the Silk Road Fund from China, IDFC from India, the Development Bank of South Africa and the Brazil BTG Pactual fund, he said. With the IDFC in India, we discussed projects in hydro-generation where Russia has a lot of expertise, Russian news agency Tass quoted him as saying. The BRICS Bank will be doing a lot of debt providing, while the IFI (Infrastructure Fund Initiative) will be investing in equity, Dmitriev said. LiveMint; July 8, 2015 China offers USD 50 bln for hydroelectric projects in Pakistan PRESS TRUST OF INDIA Islamabad: China's state-run power company, Three Gorges Corporation (CTG), is keen to participate in a financing consortium to fund up to USD 50 billion of hydroelectric power projects in Pakistan. CTG expressed interest in financing projects in Pakistan in conjunction with International Finance Corporation, the Express Tribune reported. CTG owns and operates the world's biggest Three Gorges Dam, having a capacity of 22,500 MW, which is equal to Pakistans total installed capacity of 23,500 MW. Pakistan has a potential of producing up to 60,000 MW of hydroelectric power, of which 40,000 MW is located in a region called the Indus Cascade, which begins in Skardu in Gilgit-Baltistan and runs through to Tarbela, the site of Pakistans biggest dam, in Khyber-Pakhtunkhwa. The

biggest project the government has already identified and begun preliminary work on is the Diamer Bhasha dam, which would require USD 15 billion to construct and would have a capacity of 4,500 MW. Financial Chronicle; July 3, 2015 (Edited)

Renewable Energy Ministry wants one Act for all green energy policies Says it will lead to better implementation; but move could spark turf war with Power Ministry DEBABRATA DAS & RICHA MISHRA New Delhi: The Ministry for New & Renewable Energy (MNRE) proposes to put in place an Act that would bring under one roof various policies that govern this sector. Till now, renewable energy sector has been policy driven and there is no separate law governing implementation norms. What we are working on right now is an Act. Most of the countries which have large investments in renewable energy have an Act that defines quality standards of equipment as well as address manufac-turing, standardisation and certification issues. The Act will also provide a definite framework for the tariff structure, Upendra Tripathy, Secretary, MNRE, said. MNRE plans to put out the draft for the Renewable Energy Act in the next 3 months. But, formulating an Act may not be easy, as Piyush Goyals two ministries - Power and New & Renewable Energy - could get into a turf war. A senior official associated with the process said, The Act, when in place, would be able to govern only off-grid projects as the grid connected ones could come under the purview of the Electricity Act - implemented by the Power Ministry. Whether the Power Ministry would like to let go of its domain is the question.

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The government, anyway, is proposing changes to the Electricity Act that brings in a Renewable Generation Obligation to ensure thermal power generators have at least 10% of their generation capacity from renewable energy sources. Then there is the issue of tariff. Renew-able energy developers, particularly solar power produ-cers have flagged off problems in finding buyers for the power they generate, as it is expensive. The solution for this again lies in the Electricity Act. To address this issue, we are strengthening the RPO. Once the RPO goes up after the Electricity Act is amended States will have to buy more power and that is the time we need to produce additional electricity from renewable sources. Solar parks are also being set up in various parts of the country according to RPO requirements of States, Tripathy said. The Hindu Business Line; July 2, 2015 (Edited) Wind power mission on anvil to achieve 60,000 MW by 22 Policy note envisages 10,00,000 cr outlay, fiscal sops SUBHASH NARAYAN The government proposes to launch a national wind mission (NWM) on the lines of the ongoing solar mission as part its drive to achieve exponential growth. The main objective of this initiative would be to make India a global leader in wind power, by creating conditions conducive for its diffusion across the country in a time-bound manner. The cabinet note on the new policy is already in final stages and would come up for approval shortly. NWM will set a target of raising wind power generation to 60,000 MW by 2022 with an investment of 10,00,000 crore. It will aim to add further capacity through a mix of fiscal incentives to encourage adoption of new tech-nologies and flow of global investments. We intend to launch NWM before the end of this financial year, a government official said. The need for a long-term and stable policy framework covering all key aspects such as land allocation, tariff fixation,

incentives, manufacturing policy, planning for transmission infrastructure and managing intermittency (in supply) is the key driver for this exercise, the official said. As