Power

Government permits thermal power plants to change the coal source without seeking amendment in Environmental Clearance

Thermal power plants are granted Environmental Clearance ("EC") as per the capacities mentioned in the Schedule to the Environment Impact Assessment ("EIA") Notification, 2006. The EC is granted based on a specific coal source and any change in fuel source mandates seeking an amendment in EC. However, the Ministry of Environment, Forest and Climate Change ("MoEF&CC") through a recent office memorandum ("OM") dated 11.11.2020 has done away with the requirement of seeking an amendment in EC when there is a change in source of coal by thermal power plants. The present process of seeking an amendment in EC due to a change in coal source involves certain stages and would approximately take a couple of months if not more. As per the OM, in order to simplify the procedure for change in coal source and encourage thermal power plants to use domestic coal, the MoEF&CC has decided to permit all the thermal power plants (including captive power plants) having EC to change the coal source (from imported to domestic, domestic to domestic, and domestic to imported) including lignite, without seeking the amendment in EC. As per the OM, the change in coal source can be done directly through e-auctions / short term linkages / long term linkages / other linkage options of Ministry of Coal or any organisation recognised for allotting coal linkages. However, this permission to change coal source without seeking amendment in EC is subject to the following conditions:

Details regarding change in source (location of the source, proposed quantity, distance from the power plant and mode of transportation), quality (ash, sulphur, moisture content and calorific value) shall be informed to the MoEF&CC and its concerned Regional Office. The quantity of coal transported from each source along with the mode of transportation shall be submitted as a part of the EC Compliance Report. The applicable flue gas emissions standards for particulate matter, sulphur dioxide, oxides of nitrogen and mercury shall be complied in line with MoEF&CC's Notification vide S.O. 3305(E) dated 7.12.2015 and subsequent emissions. A progress of implementation and its compliance shall be submitted as part of Compliance Report.

Govt may unveil ₹3 trillion power supply reform

Finance minister NirmalaSitharaman may announce a ₹3 trillion electricity distribution reform programme in the Union budget to help reduce losses and improve the efficiency of power distribution utilities, a government official said.

The Reforms-Linked, Result-Based Scheme for Distribution—initially referred to as the Atal Distribution System Improvement Yojana—was approved by the Public Investment Board, a government body that examines the proposals, earlier this month.

The scheme is aimed at helping power distribution companies (discoms) trim electricity losses to 12-15% from the present level and gradually narrow the deficit between the cost of electricity and the price at which it is supplied to ‘zero’ by March 2025. The reforms are also aimed at improving the reliability and quality of power supply. The government is expected to contribute around ₹60,000 crore of the scheme’s corpus, and the rest may be raised from multilateral funding agencies such as the Asian Development Bank (ADB) and the World Bank, the government official said, requesting anonymity. The new scheme will also subsume ongoing programmes such as the Integrated Power Development Scheme and the DeenDayalUpadhyaya Gram JyotiYojana, and funds will be released to discoms subject to them meeting reform-related milestones. “The Centre’s contribution can be met through the previous commitment of the ongoing schemes. There will be no additional financial burden on the government," the official said. The proposed scheme may also have a compulsory prepaid and smart metering component to be implemented across the power distribution chain, including in about 250 million households.

Government promulgates rules for right of power consumers

The government has promulgated rules for rights of electricity consumers which provide for penalties uptoRs 1 lakh on distribution companies for gratuitous load shedding and delay in grant of new connection or addressing a faulty meter.

Power minister R K Singh said that these rules shall empower the consumers of electricity. “These rules emanate from the conviction that the power systems exist to serve the consumers and the consumers have rights to get the services and reliable, quality electricity,” he said. Distribution Companies across the country are monopolies – whether government or private – and the consumer has no alternative, Singh said. Therefore it was necessary that the consumers’ rights be laid down in rules and a system for enforcement of these rights be put in place. The key areas are covered in the Electricity (Rights of consumers) Rules are release of new

connection and modification in existing connection, metering arrangement, billing and payment, disconnection and reconnection, reliability of supply and compensation mechanism.

Power minister says inefficiency in state discoms a barrier in investment; check how much loss they suffer

Inefficiency in billing and collection is the major reason for losses in the distribution companies. Power sector, discoms, distribution companies, investment, discom losses. The losses of discoms stood at Rs 33,894 crore in FY17, Rs 29,452 crore in FY18, and jumped to Rs 49,623 crore in FY19. Power minister R K Singh said that inefficiency in billing and collection is the major reason for losses in the distribution companies. R K Singh added if this inefficiency is taken care of, every discom will make profits. Speaking at the 93rd edition of FICCI AGM, he further said that the investment will not come unless there is viability in the system. The power minister also underlined that India is the fastest-growing Renewable Energy capacity in the world and has emerged as the most attractive destination for investment in the renewable sector.

The losses of discoms stood at Rs 33,894 crore in FY17, Rs 29,452 crore in FY18, and jumped to Rs 49,623 crore in FY19, according to the data provided in Lok Sabha. There are several reasons for discom losses, which include high AT&C losses; tariffs not being reflective of costs; uncovered revenue gaps; payment of subsidies by State not in accordance with announcements, etc, R K Singh had said in Lok Sabha. For instance, Google said its web search technology makes its app more useful for budgeting and sifting through transactions to spot granular categories such as "Mexican restaurants" or "T-shirts."Google reveals why Gmail, YouTube, other Google services went offline for nearly an hour Icra upgrades outlook for Indian steel sector to stable

Power consumers spared of tariff hike despite financial crunch: Minister

In spite of the huge revenue deficit caused by the COVID-19 pandemic and the severe financial crisis faced by the power distribution companies (Discoms), the government has refrained from increasing the tariff for the second consecutive year, Energy Minister BalineniSrinivasa Reddy has said. Accordingly, the Discoms had filed their Annual Revenue Requirement (ARR) before the AP Electricity Regulatory Commission (APERC), the Minister said while launching the new logo of the AP State Energy Conservation Mission (APSECM). The Minister said the government was taking all steps to improve the financial and operational performance of the power utilities. As part of it, the government had already released ₹17,904 crore for clearing the subsidy arrears of the Discoms pending as on March 31, 2019.

Govt issues guidelines for implementing feeder-level solarisation under PM-KUSUM scheme

The government issued guidelines for implementation of feeder-level solarisation under the PM-KUSUM scheme after consultation with state governments. In February 2019, the government had approved the launch of the Pradhan Mantri Kisan Urja Surakshaevam Utthaan Mahabhiyan (PM-KUSUM) scheme to provide financial and water security to farmers through harnessing solar energy capacities of 25.75

gigawatt (GW) by 2022. PM-KUSUM scheme Component-C provides for solarisation of grid-connected agriculture pumps. After consultation with states, it was decided to also allow feeder-level solarisation where instead of putting solar panels at each individual agriculture pump, a single solar power plant of capacity adequate to supply power to an agriculture feeder or multiple feeders will be installed.

This feeder-level solarisation would ensure economies of scale and better efficiency. In a statement issued, the Ministry of New and Renewable Energy (MNRE) said, "Based on discussions held with states it has been decided to also include feeder level solarisation under Component-C of PM-KUSUM Scheme." The scheme consists of three components. Component-A includes installation of decentralised ground mounted grid connected renewable power plants, Component-B includes installation of standalone solar powered agriculture pumps and Component-C includes solarisation of grid-connected agriculture pumps.

OPINION: Rights of Electricity Consumers Rules: A critical appraisal

Electricity distribution companies (DISCOMS) are natural monopolies. At the same time, electricity supply is largely seen as an obligation of the State – an obligation with dominant political facets. This dialectic has created systemic inefficiencies in power sector on one hand and a political demand for lower tariffs on another. While many diverse forces have shaped the power sector in India, this simplistic objectification helps in explaining the typical attitude of distribution companies towards electricity consumers and the poor state of electricity supply services in large parts of the country. DISCOMS (especially public sector DISCOMS) in India have a very distant relation with the consumers. Instead of being recognized as a mainstay of their earnings, consumers are reduced to genesis of most troubles that plague electricity distribution. At least that is the reality beyond the boundaries of our Tier-I and Tier-II cities. In this context, the Rights of Electricity Consumers notified by the Ministry of Power (MoP) through The Electricity (Rights of Consumers) Rules, 2020 (henceforth, the Rules) provide a crucial framework to safeguard interest of consumers. The said rules span over some key regulatory domains, namely Electricity Supply Code, Standards of Performance for Distribution Licensee and Grievance Redressal Mechanism. State Electricity Regulatory Commissions (SERCs) have notified such regulations based on their interpretation of the Electricity Act 2003 and various policies notified by MoP over the years. Hence, it is important to critically analyze these Rules and ascertain their potential impact on electricity consumers. To begin with, the Rules provide much to celebrate. They are a definitive reinforcement of the government's commitment towards achieving 24x7 supply of electricity across the country. They also define guidelines for key electricity related services such as release of new connection (or modification of existing connection), metering, billing and payment and grievance redressal. While states have existing regulations, the Rules provide a strict and uniform framework for SERCs to follow.

The mandate for introducing automated compensation (wherever feasible) to consumers in case of non-compliance of Standards of Performance is perhaps the highlight of the Rules. If implemented in spirit, they are likely to directly impact the outlook and commitment of DISCOMS toward quality of supply and services. Herein also lies a monumental challenge for DISCOMS.

Early winter: Power consumption growth slows to 4.7% in November

India's power consumption growth rate slowed to 4.7 per cent at 98.37 billion units (BU) in November this year amid the onset of early winters especially in the Northern part of the country. In November 2019, electricity consumption in the country was recorded at 93.94 BU, as per government data. Power consumption had entered positive territory in September and recorded double-digit surge in October, showed the power ministry data.

In September this year, power consumption recorded a growth of 4.4 per cent at 112.24 BU, compared to 107.51 BU in the same month last year. India's power consumption grew by nearly 12 per cent to 109.53 BU in October this year, as against 97.84 BU in the same month last year. According to experts, the onset of early winters especially in the Northern part of the country has

affected power consumption. Economic activities are almost near normal due easing of lockdown, they said adding that growth in power consumption would continue in coming months.

India’s wait for virtual Power Purchase Agreements

The need for clean energy is ever rising as businesses across the globe want to have in place a robust renewable energy strategy and focus on sustainable business practices reducing their carbon footprint. Reliance on clean energy resources also provides a reputational boost to organizations as stakeholders and consumers recognize them as businesses also contributing for society’s welfare. The goals are usually achieved by sourcing power in the most traditional way of power purchase agreements (PPAs). In third-party PPAs, a developer owns, operates, and maintains the renewable (PV/ Wind/Hybrid) system, and the offtaker purchases the renewable system’s electric yield for a pre-determined period at a pre-determined price. The arrangement allows the offtaker to receive stable and low-cost electricity. While PPAs are undoubtedly the most popular instruments for meeting the sustainability goals, the emergence of virtual PPA or synthetic PPA (VPPA) is on the rise. Simply put, VPPAs are a kind of contracting structure which provide a financial hedge against any future energy fluctuations. These VPPAs help in meeting an organization’s sustainability goals with benefits as they function in the realm of price discovery and risk management. Under a VPPA arrangement, the offtaker agrees to purchase a project’s renewable attribute at a pre-agreed price, while the renewable project receives the market price for energy sold in electricity exchange on day ahead/real time basis. If the market price is greater than the pre-agreed price, the offtaker receives the difference. On the other hand, if the market price is less than the pre-agreed price, the offtaker pays to the project to make up for the difference. Therefore, a VPPA works out to be a financial hedge against volatile electricity prices.

India plans to allow relinquished coal-fired plants to sell power

India's power ministry proposes letting coal-fired power plants keep selling power after completing their agreements with buyers, a letter seen by Reuters shows, despite national promises to close old plants to curb pollution. The proposal, if approved, would help old coal plants earn additional revenue, increase liquidity in short-term power markets and help distribution companies in states facing a power deficit

access cheaper power, the ministry said in the draft proposal. "It is in the consumer interest to keep the tariff of electricity as low as possible," says the letter sent to power departments of India's states and the heads of federal government-run utilities such as NTPC Ltd.

Such a move would enable federal-run electricity generators such as NTPC "to sell power in any mode" after distribution companies exit an agreement upon the completion of the tenure, the ministry said. Power Minister R.K. Singh and Finance Minister NirmalaSitharaman have previously said they plan to shut old coal-fired power plants. The environment ministry has also pushed for shutting down coal plants, which account for 80% of India's industrial pollution, if they do not comply with green laws. The outcome remains unclear. The power ministry has sought comments from the states and the heads of federal government-run power generators. A final decision on the proposal is not imminent.

Rider to old PPA cancellation policy a concern for NTPC

The proposal is also silent on allocation of coal to power plants once they lose the PPA with discoms, which could be a concern for NTPC with which bulk of the old PPAs are signed, they added.

The average cost of NTPC’s thermal power projects put together is in the range of Rs 3.5- 3.6 per kWh, while the lowest bid price for solar has dropped to Rs 2 per kWh. The power ministry’s proposal that electricity discoms can relinquish power purchase agreements (PPAs) of over 25 years with the central generating stations (CGS) lacks clarity on whether these loss-making entities can retain a section of the pacts that makes business sense for them, analysts said. The proposal is also silent on allocation of coal to power plants once they lose the PPA with discoms, which could be a concern for NTPC with which bulk of the old PPAs are signed, they added.

The current coal policy framework allows access to coal only to those projects that have PPAs. Industry experts believe, the coal access policy needs to be amended to make it easy for central generating stations like NTPC to sell in the market once PPAs are cancelled.

A senior industry official told FE on condition of anonymity that the discoms may like to retain the pit-head projects compared to a far away plants, which will allow them to use low variable cost power, as their fixed cost is already amortised.

Power consumption grows 4.8% in first half of December

After a gap of six months, power consumption recorded a year-on-year growth of 4.4 percent in September and 11.6 percent in October. power consumption, growth in power deman, power ministry data, power conduct during pandemic

Power consumption was recorded at 48.04 BU during December 1-15 last year, according to the power ministry data.(IE Image) India’s power consumption grew 4.8 percent to 50.36 billion units (BU) in the first half of December this year, showing consistency in economic activities, as per government data. Power consumption was recorded at 48.04 BU during December 1-15 last year, according to the power ministry data. For the full month of December 2019, power consumption was 101.08 BU. Therefore, the extrapolation of half-month data clearly indicates that power consumption is likely to record a

year-on-year growth for the fourth month in a row, according to experts.

Discoms supply record 14,856 MW power in Madhya Pradesh

A record 14,856 MW power was successfully supplied by electricity distribution companies in Madhya Pradesh, an official said. The state faced a peak demand of 14,856 MW and the same was supplied by power companies operating in the state. This was the highest-ever power supply in the history of the state, a Jabalpur-based public relations officer of MP Power Management Company said. According to the official, a demand of more than 14,000 MW has been recorded in the state during the past ten days which was supplied successfully. The previous highest peak demand was 14,555 MW, recorded on February 3 this year. The official said that during the peak demand, Madhya Pradesh West Zone Power Distribution Company (Indore and Ujjain Division) supplied maximum power of 6,077 MW, Madhya Pradesh Madhya Pradesh Power Distribution Company (Bhopal and Gwalior Division) 4,752 MW and Madhya Pradesh East Region Power Distribution Company (Jabalpur, SagarAndRewa division) recorded supply of 4,028 MW.

Delhi wants clean energy but idle fossil fuel power capacity is a headache

India’s capital city is seeking to shed its onerous contracts with fossil fuel power plants to reduce costs and free up funds for clean energy. Tata Power Delhi Distribution Ltd., which retails electricity to customers in New Delhi, is in talks with Delhi’s provincial government and the federal power ministry to get some of its contracted thermal power re-allocated to other states, Chief Executive Officer Ganesh Srinivasan said in a phone interview. It also plans to oppose any life time-extension plans for aging plants it has contracted to buy electricity from, he said. The effort underscores how India’s electricity sector continues to struggle with debt and overcapacity after a massive build-out of plants to power a surge in economic activity that never fully materialized. The pandemic has accentuated the problem, leaving nearly half of India’s thermal power capacity idled, with the cost overhang impeding investment toward renewables and grid improvements. “Our biggest priority is to reduce power purchase costs,” Srinivasan said. “We’re procuring renewables at a cheaper cost, but because we have so much of excess thermal long-term contracts, it limits our flexibility to buy more renewables.”

Solar power tariff decline supported by structural factors: Ind-Ra

Continuous decline in solar power tariffs since the start of the current financial year (FY 202021) has been driven by a mix of structural and state-specific factors with the former likely to sustain over medium-term, India Ratings and Research (Ind-Ra) has said. The tariffs declined to Rs 2.36 per kilowatt hour (kWh) in June and July, and Rs 2 in November. In the latest bidding as well, while the winning bids are at Rs 2 per kilowatt hour (kWh), the highest bid was at Rs 2.43 per kilowatt hour (kWh) which is lower than the earlier tariffs. The decline in tariffs is being driven by a lower capital cost per megawatt of around Rs 4 crore per megawatt because of advancement in panel designs, enabling a higher capacity utilisation factor (CUF). Besides, there has been a reduction in panel costs globally while financing costs have lowered. Ind-Ra estimates that a lower funding cost to foreign and domestic developers has resulted in a tariff decline of 10 to 15 paise per kWh.