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Power
India-US announce new research areas on transformational power generation
India and the US have announced new areas of research on transformational power generation based on supercritical CO2 (sCO2) power cycles and advanced coal technologies, including carbon capture, utilisation, and storage (CCUS), the Ministry of Science and Technology said. This emerged at a virtual ministerial meeting of the US-India Strategic Energy Partnership (SEP) to review progress, highlight major accomplishments, and prioritise new areas for cooperation. The meeting was co-chaired by Union Minister of Petroleum and Natural Gas Dharmendra Pradhan and US Secretary of Energy Dan Brouillette. The ongoing collaboration on smart grids and energy storage is being implemented by a consortium comprising 30 Indian and US entities with an investment of $ 7.5 million each by India's DST and US Department of Energy (DoE), with matching amounts provided by the consortium, Secretary of Department of Science and Technology (DST) Professor Ashutosh Sharma said. This project addresses essential issues related to the adoption and deployment of smart grid concepts along with Distributed Energy Resources (DERs), including storage in the distribution network for its efficient and reliable operation.
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Power demand to decline 8% in FY21, discoms' revenue to fall 13.1%: Report
Power demand is expected to decline by around 8 per cent in current fiscal due to the steep fall in demand from commercial and industrial
segments on the back of Covid-19 pandemicinduced nationwide lockdown, Emkay Global Financial Services said in a report. According to the agency, the fall in demand is likely to result in a 13.1 per cent year-on-year (YoY) decline in revenue of discoms (distribution companies) to Rs 6.8 trillion in FY2021. The nationwide lockdown to contain the spread of the deadly coronavirus during the first three months of the fiscal has significantly impacted economic activity, leading to 17 per cent fall in Q1FY21 power demand, it said. "Our analysis reveals that power demand will decline 8 per cent year on year in FY21 on a steep fall in commerical and industrial (C&I) demand," the agency said. Further, the gap between average cost of supply and average revenue realised in FY21 is expected to increase to Rs 0.95 per unit from Rs 0.50 per unit in FY2020, translating to an underrecovery of Rs 1.12 trillion.
India's power companies face cash crunch after PFC rating cut to junk
A downgrade to junk for a state-run lender to electricity projects risks worsening the cash crunch faced by the nation’s power firms. Power Finance Corp, India’s top dollar bond issuer in 2019, was cut to BB+ from BBB- by S&P Global Ratings last week, becoming the latest so-called fallen angel that’s dropped below investment grade. Yield premiums on its 3.95 per cent dollar notes due April 2030 surged the most in two months following the downgrade, according to prices compiled by Bloomberg. Electricity projects, already reeling under precarious finances, could see borrowing costs soar if Power Finance isn’t able to access the dollar bond market or raises funds overseas at higher rates due to the rating cut. This threatens to have a knock-on effect on domestic consumers, who may see an increase in power tariffs even as India’s economy is forecast to contract this fiscal year for the first time in more than four decades due to the coronavirus pandemic and a massive lockdown to contain it. The risk of Asia-Pacific corporate bonds becoming fallen angels has increased due to the pandemic, and Indian firms are closely watched because several are government-related issuers whose ratings are tied to the country’s, according to Fitch Ratings. India’s sovereign debt score was cut to the lowest investment level with a negative outlook by Moody’s Investors Service last month.
India will be looking at a demand drop in electricity between 7-17 percent by 2025: TERI
Demand for electricity in India will be lower by 7 to 17% due to covid-19 by 2025, a new report by TERI has found. All 10 of India's largest powerconsuming states will see a demand drop between 5 to 15%, it said. However, Union Power Minister RK Singh said that he wasn't worried about the impact of the lockdown, and that he expected demand to pick up. The report, titled ‘Bending the Curve: 2025 Forecasts for Electricity Demand by Sector and State in the Light of the COVID Epidemic’, also suggests policy-makers, developers, distribution companies, and investors need to be better prepared for the future, if the decline in demand growth persists. "In particular, the financial health of Discoms and the sustainability of the prevailing crosssubsidy may be even more pressing issues in a mid-term scenario of sustained muted growth in commercial and industrial demand," said the report.
Indian power regulator has proposed uniform price discovery through pooling of bids across power exchanges for optimal utilisation of transmission system besides stringent rules for electricity markets, including keeping a check on transaction fee of bourses. The industry, however, said stringent regulations and unnecessary interventions by regulatory commisson will impede deepening of electricity market in the country, which has just begun to evolve. It said regulator’s interventions pose questions on free-trade concept. The Central Electricity Regulatory Commission (CERC) issued elaborate draft power market regulations 2020, which provide for a new concept called ‘Market Coupling’, meaning a process of collecting bids from all the power exchanges and matching them to discover a uniform market clearing price. The job will be carried on by a ‘Market Coupling Operator’, an entity to be notified by the regulator.
CIL’s coal allocation to power sector under e-auction drops 29% in Q1
State-owned CIL’s coal allocation under special forward e-auction for the power sector declined 28.7 per cent to 4.74 million tonnes in the first quarter of the ongoing fiscal, official data showed. Coal India Ltd (CIL) had allocated 6.65 million tonnes (MT) of coal in April-June period of the last fiscal, according to coal ministry data. Coal allocation by the Maharatna firm under the scheme declined to 0.64 MT last month, from 0.88 MT in June 2019, the data showed. Coal distribution through forward e-auction is aimed at providing access to coal for such consumers who wish to have an assured supply over a long period, say one year, through e-auction mode so as to plan their operations. The purpose of the scheme is to provide equal opportunities to all intending coal consumers to purchase coal for own consumption through single window services and at a price determined by themselves through the process of online bidding. The state-owned miner produced 18.05 MT of coal during July 1 to July 16 against an output of 19.61 MT in the same period last year. Coal production in some of the major mines is still affected due to high coal stock and less offtake.Pithead stock of CIL as on July 16 was 72.88 MT as compared to 33.17 MT during the same period last year, it had said.
Only 1% coal power plant capacity has FGD, 72% yet to award bids
Only 1% of the total coal-fired power plant capacity which is required to comply with the emission standards under the current phasing plan have installed the mandatory flue-gas desulphurisers (FGD), an equipment to control toxic sulphur dioxide emissions. Of the total 169.7GW coal capacity in the country, plants with only 27% capacity have awarded bids for FGD implementation. Around 72% capacity haven’t even awarded the bids. This data was presented by the Centre for Research on Energy and Clean Air (CREA) during a webinar on emission standards compliance for coal power plants organized by CREA and Climate Trends. CREA further pointed out that if bids for FGD installation were yet to be awarded for a majority of the coal capacity, recent claims by power plant operators that the China power equipment ban would delay their ability to comply with emission regulations, were redundant. “India is in a position to construct retrofits without depending upon China,” the organization stated. Experts present in the webinar also slammed the Association of Power Producers (APP) for demanding another extension for thermal power plants for implementation of emission standards.
Govt allows electricity derivatives, forward contracts
Electricity will now be traded as other commodities with forward contracts and derivatives on exchanges as the government issued an order permitting this, a move experts say can transform power contracting in India. The power ministry issued the order on July 10 after consulting the Solicitor General on a decade-long jurisdictional spat between power regulator Central Electricity Regulatory Commission (CERC) and the Securities & Exchange Board of India (Sebi). The two regulators had earlier agreed to mutually settle the issue. The order is subject to a verdict by the Supreme Court that will hear the matter on August 28. Sources said delivery-based long-term contracts are likely to be traded on power exchanges under CERC’s jurisdiction, while the derivative contracts are likely to be traded on commodity exchanges under Sebi. Experts said power distribution companies (discoms) will have flexibility in long-term contracts. Currently, trading on power exchanges is restricted to11 days while long-term contracting by discoms is done through tendering. Once derivatives are introduced on commodity exchanges, the discoms will be able to lower their power procurement costs and hedge risks.
India to have 60% renewable energy by 2030: Power minister RK Singh
India will have around 60 per cent of its installed electricity generation capacity from clean sources by 2030, Power and New & Renewable Energy Minister R K Singh said. The minister also exuded confidence that the renewable energy capacity would touch 510 GW by 2030, including 60 GW of hydro power. In September last year at the United Nations Climate Action Summit, Prime Minister Narendra Modi had announced increasing the renewable energy target to 450 GW by 2030 from 175 GW by 2022. Participating in a webinar organised by The Energy Resource Institute (TERI), Singh said, “I would say that by 2030, 60 per cent of our capacity will be from renewables, and that is on a conservative scale.” About the progress on clean energy, he said that India’s clean energy capacity including under development projects and hydro electric power is around 190 GW, which is more than the targetted 175 GW by 2022.
India to set up solar power park in Sri Lanka
India plans to build a solar power park in Sri Lanka as part of a strategy to project its presence in the Indian Ocean Region (IOR) amid Chinese attempts to lure nations into its ‘Belt and Road’ initiative, said two people aware of the development. Leveraging its solar expertize, India’s largest power generation utility NTPC Ltd plans to set up this project in the island nation under the aegis of International Solar Alliance (ISA). The move comes amid a growing Chinese presence in the Indian Ocean Region, which India considers its sphere of influence. Further flexing its muscle, the Indian Navy conducted joint exercises in the Bay of Bengal with the US Navy, which sailed in with an aircraft carrier battle group led by the USS Nimitz. “We are looking at setting up a solar park in Sri Lanka," said a senior Indian government official requesting anonymity. State-run Ceylon Electricity Board has an installed power generation capacity of around 35.8 gigawatts (GW). India has been working on improving the energy infrastructure in Sri Lanka.Petronet LNG Ltd had earlier announced its plans of setting up a liquefied natural gas terminal in Sri Lanka.
India is also exploring laying an overhead electricity link with Sri Lanka as part of efforts to create a new-energy ecosystem in the South Asian neighbourhood. China is already one of the biggest investors in infrastructure projects in Sri Lanka.
The government’s benchmark rates for solar rooftop projects have fallen about 20%, the fourth successive year of decline. Rates have fallen by 22% for projects between 1 kW and 10 kW, currently averaging at around Rs 42 per watt. For projects having a capacity over 10 kW, the rates have fallen by 20%. The ministry of new and renewable energy (MNRE) listed rates for projects having capacities for less than 1 kW, between 1 and 2 kW, and between 3 kW and 10 kW. Earlier, all these capacities came under the same umbrella. The two brackets above 10 kW (10kW to 100 kW and 100 kW to 500 kW) continued to be listed as well. Some regions of the country come under a ‘special’ category, and attract a higher cost, due to the lack of an operational network at present. These include the northeastern states, Sikkim, Uttarakhand, Himachal Pradesh, Jammu and Kashmir, Ladakh, Andaman and Nicobar Islands, and the Lakshadweep Islands. On an average, the costs for the special states were Rs 4 to 5 per watt more expensive than the other states. However, the rooftop solar programme (RTS), a big focus of the MNRE, has been lagging behind its target. Per industry sources, the current installed capacity of rooftop solar projects is less than 3 GW. The stated target for 2022 is 40 GW.
Gas-based power plants seek to bid under renewable bundling scheme
According to industry sources, about Rs 50,000 crore of investments in gas-based power projects are in the doldrums due to the policy lacuna. Gas-based power plants seek to be included in an ongoing scheme which proposes to sell renewable energy and thermal power together in a bundle. In the existing format, the scheme does not allow gas-based plants to supply power even though sector experts feel that these power stations are better suited than their coal counterparts for balancing renewable energy. In a letter written to Union power minister RK Singh, the association of power producers (APP) said that about 25,000 megawatt (MW) of gas-based power plants are currently lying idle, adding that this fuel form causes less harm to the environment compared to thermal power generation. “Therefore, out of the ongoing 5,000 MW round-the-clock (RTC) renewable energy plus thermal tenders, a portion may be carved out for gas-based power to test the market,” APP wrote in the letter, reviewed by FE. State-run Solar Energy Corporation of India (SECI) has already invited bids from wind and solar plants to supply 5,000 MW power under the round-the-clock scheme, where 49% of the power supplied can come from coal-based power plants so that buyers are not put off by the intermittency of renewable-based generation can get the assurance of receiving uninterrupted electricity supply.
