Power

THERMAL

Centre to release 80K cr to states for power sector reform

Centre launched a programme in June this that allows additional borrowing space to State Governments sustaining specific reforms in the power sector.

The additional borrowing limit permitted for power sector reforms is 0.5% of the Gross State Domestic Product (GSDP) of the respective state. This being the first year of the current version of the scheme, the requirements of reforms and actions has been kept less onerous, with the bar raised for future years, pushing the states towards higher level reforms, a release stated.

Under the scheme, the states may commit to reforms and be eligible for increased borrowing space of ~Rs. 80,000 Crores. This scheme adopts a novel approach to incentivize the states, to commit to reforms and in turn, take benefit in the form of availability of enhanced financial resources, it added further.

Almost 20 states have already shown interest in taking benefit under the scheme.

Based on the recommendations of Ministry of Power in respect of such proposal from Andhra Pradesh state, Ministry of Finance had accorded their approval and the state has already availed borrowings of more than 2100 Crore, to partly utilize such allowed additional borrowing space. Proposals of Manipur and Rajasthan are also under active consideration at Ministry of Finance, both of which may be eligible

for the maximum limit of 0.50% increased borrowing space, based on reforms carried out by them in the power sector. Rest of the states are also submitting their proposals.

India’s annual power consumption to grow at 6.5% during 202224

Power demand in the country is expected to grow at an annual rate of 6.5 per cent between 2022 and 2024 backed by rising consumption from residential and industrial segments, the International Energy Agency (IEA) has projected.

The projection comes as India clocked the highest 10 per cent Y-o-Y growth in power demand during the 2021 calendar year (CY), sharing the stage with China. This was achieved in a year when global consumption registered its largest ever annual increase in absolute terms, of more than 1,500 trillion watt hour (TWh) as well as the largest relative rise since recovery from the financial crisis in 2010.

“Over 2022-2024 we expect annual demand growth to remain above pre-pandemic levels at around 6.5 per cent per year,” the IEA said in its latest report on power supply-demand projections. “The majority of supply growth in the years between 2021 and 2024 is expected in China, accounting for around half of the net total increase, followed by India (12 per cent), Europe (7 per cent) and the United States (4 per cent),” the report has projected.

Surging global electricity demand peaks emissions to record levels: IEA

Global electricity demand surged in 2021, creating strains in major markets, pushing prices to unprecedented levels and driving the power sector's emissions to a record high, the International Energy Agency (IEA) said.

Electricity is central to modern life and clean electricity is pivotal to energy transitions, but in the absence of faster structural change in the sector, rising demand over the next three years could result in additional market volatility and continued high emissions, said an IEA report. Driven by the rapid economic rebound, and more extreme weather conditions than in 2020, including a colder than average winter, last year's six per cent rise in global electricity demand was the largest in percentage terms since 2010 when the world was recovering from the global financial crisis.

In absolute terms, last year's increase of over 1,500 terawatt hours was the largest ever, according to the January 2022 edition of the IEA's semi-annual Electricity Market Report.

The steep increase in demand outstripped the ability of sources of electricity supply to keep pace in some major markets, with shortages of natural gas and coal leading to volatile prices, demand destruction and negative effects on power generators, retailers and end users, notably in China, Europe and India.

India to shut down thermal power plants in phases

In a bid to fufill the commitment made by the Prime Minister Narendra Modi at the Glasgow Environment Summit two months ago that India would become carbon neutral by 2070, the Centre has decided to phase out the India's thermal power plants.

While speaking at the Energy Summit organised by the Indian Chamber of Commerce that Union Energy Secretary Alok Kumar said to achieve a carbon balance, the country will have to switch to an alternative system within 50 years. All thermal power plants in the country will be shut down by 2070 to reduce carbon emissions.

Switching to renewable energy would reduce the toxicity of carbon emissions. A guideline is being prepared to make use of solar energy, compressed biogas, hydrogen and battery power instead of thermal power, which presently accounts for more than 60 percent of India’s total installed power generation capacity.

The decision to completely stop the production of coal in the power sector will be implemented. The current thermal power generation is two lakh megawatts per day. In ordert to end this completely in 50 years, at least 4000 MW of thermal power will have to be reduced every year.

Power Ministry to Empanel Members of Committee to Resolve Contractual Disputes

The Ministry of Power (MoP) has invited an expression of interest (EoI) to empanel members of the conciliation committee of independent experts (CCIE) to resolve disputes in contracts of central public sector undertakings (CPSU) or statutory bodies of the ministry.

The EoI must be submitted within 21 days.

To be eligible for empanelment as a member of the CCIE, candidates should have held the post of the rank of secretary or additional secretary to the Government of India of any of the ministries or departments. Alternatively, they must have held the post of full-time functional director (dealing with technical matters) or CMD in the board of a CPSU operating in the field of power generation, distribution, or transmission.

The candidate must have held the post of full-time functional director in the board of a state PSU or private sector company, with an annual turnover of 20 billion, operating in power generation, distribution, and transmission. Candidates who have been chairpersons or members of the Central Electricity Authority or Central Water Commission are also eligible for empanelment.

Alternatively, the candidate should have experience as a full-time functional director or CMD in a commercial bank, financial institutions, or non-banking financial companies like REC, PFC, or Indian Renewable Energy Development Agency (IREDA).

Pvt. Sector plays important role in journey towards net-zero emissions: Minister

The private sector plays an important role in the journey towards net zero as bulk of the emissions come from industries and it has already woken up to this reality, Union Environment Minister Bhupender Yadav said.

Speaking virtually at a private event, the minister said several companies have announced net-zero ambitions over the past year.

"The private sector plays an important role in our journey towards net zero. Since bulk of the emissions come from industries, any climate action will need to reduce or offset emissions that emerge from the industrial and commercial activity.

The minister said India's announcement of net zero at COP 26 in Glasgow in the UK is a major step considering the country is “not the cause for climate change and has not been a historical contributor to the greenhouse gas emissions."

NTPC top biomass user in India, consumes 58,000 MT, tenders 10.7 MMT: Power Ministry

State-run power giant NTPC has emerged as the top biomass user, having co-fired about 58,000 MT of biomass, while tendering a total of 10.7 MMT over short-term and long-term basis, the power ministry said.

As on date, approximately 59,000 metric tonnes (MT) of biomass has been co-fired in thermal power plants in the country, while tenders for 12 million metric tonnes (MMT) are at different stages of process for short-term & long-term duration, the ministry said in a statement.

"The biomass co-fired in the NCR (national capital) region stands at 21,000 MT and tenders floated in the region are about 5.50 MMT. Contracts have already been awarded for more than 11 lakh MT of biomass pellets," it added.

Elaborating the progress of national biomass mission, SAMARTH (Sustainable Agrarian Mission on use of Agro Residue in Thermal Power Plants), the ministry said, among the state governments, Haryana State Genco has been able to co-fire around 550 MT of biomass in two of its stations and floated tenders worth 11 lakh metric tonnes.

Discoms' Outstanding Dues Surge 4.4% To Rs 1,21,030 Crore In January

Total outstanding dues owed by electricity distribution companies (DISCOMs) to power producers rose 4.4 per cent year-on-year to Rs 1,21,030 crore in January 2022.

DISCOMs owed a total of Rs 1,15,904 crore to power generation firms in January 2021, according to portal PRAAPTI (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators). On a sequential basis also, total

dues in January increased from Rs 1,15,462 crore in December 2021.

The PRAAPTI portal was launched in May 2018 to bring in transparency in power purchase transactions between generators and DISCOMs.

In January 2022, the total overdue amount, which was not cleared even after 45 days of a grace period offered by generators, stood at Rs 1,01,357 crore as against Rs 99,650 crore in the same month a year ago. The overdue amount stood at Rs 99,981 crore in December 2021. Power producers give 45 days to DISCOMs to pay bills for electricity supply. After that, outstanding dues become overdue and generators charge penal interest on that in most cases.

Union power secretary Alok Kumar stresses on viability of distribution companies

At a time the outstanding dues of the power distribution companies are on the rise, Union power secretary Alok Kumar has said there is a need for a political consensus in the interest of viability of distribution companies.

The outstanding overdue amount in January 2022 has reached Rs 1,37,363.80 crore as per the Praapti portal of the ministry of power and has been on a rise since October 2021.

“There has to be a certain political consensus that if India has to develop, it will require robust and reliable electricity supply for households, industries, offices, shopping malls. That cannot come unless our distribution companies are viable and run on sound commercial principles.

“The key thing is regular and periodic tariff determination reflecting full cost tariff,” said Kumar at an Indian Chamber of Commerce organised event.

Electricity is a concurrent subject and determination of tariff lies with the state authorities and political considerations often prevail in determining the price of power in a state.

Govt allows use of existing power connections to charge EVs

The government has revised the rules for the electric vehicle (EV) charging infrastructure and allowed their owners to charge their EVs using the existing electricity connections at homes or offices. It has also given the go ahead for the allotment of government land to private entities through bidding for setting up public charging stations (PCS).

The Union power ministry issued the revised promulgated guidelines and standards recently and said the government plans to roll out PCS on a large scale in two phases. The first phase will cover megacities with a population of above 4 million as per the census 2011, expressways, and important highways connected to these mega cities. Big cities such as state capitals, Union Territory headquarters, and important highways connected with these cities will be covered in the second phase.

Owners may charge their EVs at their residence or offices using their existing electricity connections. The tariff applicable for domestic consumption shall be applicable for domestic charging, the ministry said in a statement.

As per data with the ministry of road transport and highways, India has 947,876 registered electric vehicles. But only 1,028 PCS have been installed throughout the country so far.

With Cop26 goals in mind, Centre sets up new panels

The Centre has begun working on its Cop26 goals, setting up panels to draw up action plans to meet its climate targets announced by Prime Minister Modi at the Glasgow conference.

Various panels have already begun meeting to detail every aspect of the scale-up -- from year-wise action plans for the increase in renewable energy, to ensuring a transmission system, storage options and purchase by discoms.

On December 30, 2021, the Ministry of New and Renewable Energy set up a committee for preparing a roadmap for 'Mission 500GW' co chaired by secretaries to the ministry of power and MNRE. It is tasked with defining state-wise and year-wise share of solar, wind and other renewable energy sources to achieve the target by 2030. The mission will look at ways to incentivise and make the storage concern affordable.

A separate Group of Officers has been created by the power ministry in November 2021, days after the Cop 26 declaration, to formulate a policy framework to promote energy storage in the power sector.

Four sub groups -- on policy and regulation, financial and taxation issues, technology and demand management -- have helped put together a draft policy

on energy storage which is under discussion, sources told ET. A third committee is looking at the other major issue that arises out of scaling up RE in India- transmission planning.

RENEWABLES

Budget 2022: Industry demands incentives for Renewable Energy technologies

The Union Budget 2022-23 must focus on incentivising technology adoption in the renewable energy sector through tax concessions and credit guarantee, industry chamber Federation of Indian Chambers of Commerce and Industry (FICCI) has said.

"China incentivized companies in developing green technology in solar by providing free land, concessional power cost and funding at low interest cost. Many other countries which have emerged as hubs of solar modules and components like Taiwan, Malaysia, Vietnam did so on back of huge government incentives," FICCI said.

Detailing the tax incentives that may be considered for promotion and adoption of green technology, FICCI said the government must extend concessional tax rate of 15 per cent to companies which invest in green technologies and it must allow full deduction towards investment or purchase of green technology assets.

"A credit guarantee scheme should be created, specifically for risk mitigation for customers with lower credit rating. This will enable such consumers to avail of bank financing for setting up rooftop solar projects," the chamber said.

Power Ministry clears Leh-Kaithal green energy transmission corridor

The Power Ministry has cleared the proposal to lay power transmission link for evacuating renewable energy (RE) from Ladakh as part of the green energy corridor. (GW ) transmission link from Pang (Leh) to Kaithal (Haryana). The project, which also includes 12 GWh of battery energy storage system (BESS), is to be completed in five years.

The estimated project cost is around 27,000 crore. State-run transmission giant Power Grid is the implementing agency for the project. The scheme is under the regulated tariff mechanism (RTM). The proposal was cleared by the National Committee on Transmission (NCT) on January 3, 2022.

The project will provide 76 per cent utilisation of transmission capacity and will help evacuate 13 GW of RE generation (9 GWp of solar and 4 GW of wind). Out of 12 GWh battery energy storage, about 1-2 GWh will be developed as part of transmission element to keep the line charged during the period of no generation.

Besides the transmission corridor and battery storage systems, Power Grid will strengthen the AC system in Ladakh and Jammu & Kashmir to provide RE power within Ladakh as well as to Jammu & Kashmir.

Cabinet approves Rs 1,500 crore additional equity infusion in IREDA

The government has approved equity infusion of Rs 1,500 crore in the Indian Renewable Energy Development Agency (IREDA), which would raise its additional lending capacity by Rs 12,000 crore.

"The enhanced lending capacity will enable IREDA to finance addition renewable energy capacity of up 4000MW. Present loan book size of IREDA is around Rs 27,000 crore," an official told PTI.

The minister said the infusion of Rs 1,500 crore will enable IREDA to lend Rs 12,000 crore to the renewable sector.

As per the RBI lending norms, a lender can lend up to 20 per cent of its net worth. Thus, IREDA would now be able to lend up to Rs 900 crore in an RE projet as its net worth is increased to Rs 4,500 crore from existing Rs 3,000 crore, the official explained.

According the statement, the equity infusion will also enable IREDA to enhance its net worth which will help it in additional RE financing, thus contributing better to the government targets for RE and also to improve the capital-to-risk weighted assets ratio (CRAR) to facilitate its lending and borrowing operations.

Power and NRE Minister reviews progress of Solar Roof Top Scheme

The Union Minister of Power and New & Renewable Energy Shri R.K Singh reviewed the progress of the Roof Top Scheme on 19th January 2022. After the review, the Minister gave directions for simplifying the Roof Top Scheme, so that the people are able to access it easily. He has directed that henceforth, it will not be necessary for any household to get the roof top installed by any of the listed vendors.

The intimation to the DISCOM of the installation of the roof top can be given either in the material form through a letter / application or on the designated website which has been set up by every DISCOM and by the Govt. of India for the Roof Top Scheme.

The distribution company will ensure that the netmetering will be provided within 15 days of the information being received. The subsidy to be given by the Govt. of India which is 40% for roof top of upto 3 KW capacity and 20% beyond that upto 10 KW will be credited to the account of the householder by the DISCOM within 30 days of the installation.

In order to ensure that the quality of the solar panel and the inverter is according to the prescribed standard; the Govt. of India will publish from time to time the lists of solar panel manufacturers and inverter manufacturers whose products meet the expected quality standards and the price lists thereof; and the householder can select the solar panels and inverter of his choice.

India requires 18 GW capacity addition to meet hydro purchase obligation norms by 2030: Icra

Around 18 GW hydro capacity addition is required to meet the hydro purchase obligation (HPO) norms by 2030 in the country, according to rating agency Icra To further the growth of hydro energy segment, the Centre has outlined policy measures over the last two-year period to promote the investments in the segment through notification of HPO norms, long term trajectory for HPOs as well as tariff rationalization measures.

"Based on the notified hydro purchase obligation norms & trajectory available till 2030, incremental hydro power capacity requirement is estimated to remain significant i.e. at about 18 GW, which corresponds to about 39 per cent increase over the existing installed hydro power capacity in the country," said Girishkumar Kadam, Senior Vice President & Co-Group Head - Corporate ratings, Icra.

The HPO norms have been subsequently notified by SERCs (state electricity regulatory commission) in few states only, in line with policy targets as of now, he noted. Hence, he stated that timeliness as well as consistency in the notification of HPO norms by SERCs in other states as well as subsequent implementation of the same by the obligated entities too remain a key monitorable.

SECI invites bids for setting up 1,200 MW wind power projects

The Solar Energy Corporation of India (SECI) has invited bids to set up 1,200 megawatt (MW) interstate transmission system (ISTS) connected wind power projects across the country.

The project will be bid under the tariff-based competitive bidding process under the Standard Bidding Guidelines. The last date to submit bids is 18 February, 2022, according to the tender document.

It added that the scope of work includes identifying land, installation, and ownership of the project, obtaining connectivity, long-term access, and necessary approval and interconnection with the ISTS network to supply power to SECI.

Bidders can bid for a minimum capacity of 50 MW and a maximum of 1,200 MW. The document added that project developers will be responsible for the acquisition of land for the projects.