Power

Power sector imports from China to face drastic cuts under new Atmanirbhar Bharat plan

The power ministry is set to establish three manufacturing hubs all over the country to produce critical energy and transmission equipment, which is currently fully imported from other countries including China, under the Atmanirbhar Bharat plan announced by Prime Minister Narendra Modi.

According to authoritative government officials, the Indian power sector in 2018-2019 imported Rs71,000 crore of equipment, of which Rs 21,235 crore came from China, according to the Directorate General of Commercial Intelligence (DGCI). Yearly Chinese imports in the power sector have been worth Rs 17,289 crore (2009-2010); Rs 22,114crore (2010-2011); Rs 34,000 crore (2011-2012); Rs 29,062 crore (2012-2013); Rs 22,679 crore (2013-2014); Rs 19,658 crore (2014-2015); Rs 19,301 crore (2015-2016); Rs 19,757 crore (2016-2017), and Rs 19,682 crore (2017-2018). In order to be self-reliant and cut down imports,

particularly from China, the ministry has prepared two lists. The first or the mandatory list has 239 items in which India has zero capacity to manufacture and, hence, must rely on imports till such time the manufacturing hubs come up. The second or the embargo list contains 95 items which are being imported by the power sector despite being manufactured in India. It has been decided that no power sector company, PSU or private, will be allowed to import items on the embargo list. Both these lists will be annexures with the Atmanirbhar Bharat policy.

Power ministry makes it mandatory for all discoms to comply with Energy Conservation Act

The power ministry today announced it has made it mandatory for all the distribution entities in the country to comply with the provisions of the Energy Conservation (EC) Act. The power ministry had issued a notification in September stating all the entities having issued distribution license by State or Joint Electricity Regulatory Commissions under the Electricity Act 2003 are notified as Designated Consumers. After this notification, all the DISCOMs will be governed under the provisions of EC Act, such as

appointment of energy manager, energy accounting & auditing, identification of categorywise energy losses and implementation of energy conservation & efficiency measures. Earlier, discoms with annual energy losses above 1,000 million units were only covered as designated consumers. With this notification, the number of discom covered under the EC Act will increase from 44 to 102. The ministry said the decision will facilitate energy accounting and auditing as a mandatory activity for all the discoms leading to reduced losses and increased profitability.

Power demand revival energises coal output

India’s coal production rose over 21 per cent year-on-year (YoY) in September 2020, according to the index of eight core industries compiled by the Ministry of Commerce and Industry. Sector watchers point to increased power consumption in States such as Himachal Pradesh (6 per cent YoY growth), Punjab (8 per cent), Uttar Pradesh (18 per cent), Uttarakhand (5 per cent), Gujarat (5 per cent), Madhya Pradesh (25 per cent), Bihar (12 per cent) and Jharkhand (18 per cent). “Peak demand is up due to a variety of other factors, too — agriculture pump-sets being used forirrigation (this is the rabi season), and employees from service hubs such as Bengaluru, Delhi, Chennai and Hyderabad moving back to their hometowns (due to the lockdown and continued closure of offices) leading to increased residential electricity usage,” said Deepak Krishnan, Associate Director for WRI India’s Energy Programme. “Another possibility, especially in States like Uttarakhand, Himachal and Gujarat, is the increased operation of pharmaceutical industries for drug production to fight Covid,” he added. The higher coal output is led by Coal India’s production of 40.51 million tonnes (mt) in September 2020 compared to 30.78 mt in September 2019, up 31.6 per cent. Coal India also said offtake was 46.46 mt in September 2020 (35.28 mt). Output decline in 2019.

Interregional electricity trade in India can boost solar at coal's expense - EIA

With more than 1.3 billion people, India is the second-most populous country in the world and has the third highest energy consumption level after China and the United States. To help meet the country’s energy needs, India is expanding its electric transmission infrastructure to improve electricity movement between regions of the country. In the International Energy Outlook 2020 (IEO2020), the US Energy Information Administration (EIA) considers how interregional electricity grid connections could influence India’s future electricity generating fuel choices. EIA’s modelling shows that greater levels of grid connectivity and electricity trade between regions result in more electricity generation from solar and less from coal.

In the past, EIA modelled India’s power market as one region with a single load shape, meaning EIA assumed electricity customers across the country consumed electricity at the same hourly, daily, and seasonal rates. For IEO2020, EIA modelled India’s power market as five distinct regions, representing the country’s five regional power grids. Modelling the power market using five regions better captures the effect of regional electricity transmission interconnections on capacity expansion decisions and longer-term fuel demands for India’s power sector.

High coal prices a dampener for gencos

Irregular payments by state-owned distribution companies (discoms) to power generation companies has been the problem most commonly cited in context of the power sector. Receiving less attention is the issue of high prices of domestic coal, which accounts for up to 80% of power production costs and impacts the balance sheet of power producers. Experts point that domestic coal prices are high not due to the cost of coal at the pitheads but owing to steep railway freight charges and an assortment of taxes and levies. Thus, conflicting with the Centre’s agenda of reducing coal imports by 100 MT, it is cheaper for a few power plants in the coastal areas to use imported coal than buy the domestic product. To take one example, the price of coal of 4,200 gross calorific value jumps from Rs 995 per tonne at the Mahanadi Coalfields Ltd mines to Rs 4,365 per tonne when it reaches a power plant at Tuticorin. The same grade of imported coal whose FOB (free on board) value at Indian ports is $50.19 or Rs 3,287 per tonne, costs only Rs 3,779 per tonne when it reaches the same power plant in Tamil Nadu.

While the average price of imported thermal coal in FY19 stood at Rs 5,388/ tonne — with international prices pegged at around $75/tonne — the higher average calorific value of imported coal (about 5,500 kcal/kg) also means it takes a lesser quantity of the imported fuel to generate the same amount of energy as the domestic product.

Sutirtha Bhattacharya, chairman of the West Bengal State Electricity Regulatory Commission, says on average the high freight rates charged by the Indian Railways account for 65% of the cost of coal at a plant. Besides, there are statutory levies like 14% royalty, 2% royalty for national mineral exploration trust and 30% royalty for district mineral foundation fund, which further jack up prices, says a Coal India (CIL) source.

PM Modi says India added more renewable energy capacity than coal-based power in last three years

Prime Minister Narendra Modi on Thursday said India’s annual renewable energy capacity addition has been exceeding that of coal-based thermal power since 2017. He claimed that in the last six years, the country has increased its installed renewable energy capacity by two-anda-half times.

Speaking at the RE-Invest 2020 conference, the prime minister highlighted his government’s efforts towards renewable energy and invited global investors to join the sector. “There are huge renewable energy deployment plans for the next decade,” he said, adding that these are likely to generate business prospects of around $20 billion (approximately Rs 1.52 lakh crore) per year. Modi said that India’s renewable energy capacity will rise to 220 Giga Watts by 2022 from the current 136 Giga Watt, and that at present it forms about 36% of India’s total electricity generating capacity. “Today, India’s renewable power capacity is the fourth largest in the world,” Modi claimed. “It is growing at the fastest speed among all major countries.”

The prime minister also said that his government has decided to give production linked incentives to high efficiency solar modules, following the scheme’s success in electronics manufacturing.

India's renewable energy growth unparallel in world, says R K Singh

India's renewable energy growth is unparallel in the world with continuous support from states, Union Minister R K Singh said on Friday asserting that renewables are becoming cheaper in the country. The renewable energy minister was speaking at the Chief Ministers' Plenary session of the virtual 3rd Global RE-INVEST Summit.

"India has done an exemplary work in the space of renewable energy and running the largest energy access expansion plan. We have connected every household, connected whole country into one integrated grid and we are the only G20 nation which has been able to keep the temperatures within 2 degree by its actions," Singh said in a statement.

He was of the view that renewable energy is becoming cheaper in India and lauded all the chief ministers for the great work. Singh also informed the session that India has attracted USD 64 billion foreign investment in Indian renewable industry in the last 4 years. He added that India has emerged as one of the most attractive investment destinations in the world with all major pension funds investing here. Highlighting the achievements of his state, Gujarat Chief Minister Vijay Rupani said Gujarat has been a pioneer in the space of renewable energy (RE) and in the last 3 years, the capacity of RE has increased considerably despite challenges.

Advances in energy storage tech needed for renewable energy to take off: Former Union Minister Suresh Prabhu

Efficient energy storage technology can help meet the challenges in India's renewables programme, former union minister Suresh Prabhu

has said. India has set an ambitious target of having 175GW of clean energy by 2022 including 100GW of solar and 60GW of wind power. "India has embarked upon an ambitious target (of adding renewable energy). However, challenges are there, and it can be met with efficient energy storage technology," Prabhu said while speaking at virtual event India Energy Storage Week (IESW). He was speaking at a pre-conference workshop held on 2 November. The IESW, organised by the India Energy Storage Alliance (IESA), is scheduled from 2-6 November. In his keynote address, Prabhu said, "Storage is going to be a new thrust area. I am happy that we will be discussing energy storage in-depth with industry pioneers, think-tanks, policymakers, global Leaders at the IESW." Renewable Energy Secretary Indu Shekhar Chaturvedi said,"The renewable energy (RE) sector is quite fragmented. It involves numerous sectors within itself. We are moving towards a major share of RE in the electricity mix and will only accelerate further."

Government's move to boost solar industry garners mixed reactions

The Union Cabinet’s decision to include ‘high efficiency solar photovoltaic modules’ among the sectors covered by its production linked incentive (PLI) scheme has drawn mixed responses from the industry. While some greatly welcomed the decision, others felt the amount allocated was too small. As part of its Make in India drive, the cabinet on Wednesday had approved an additional Rs 4,500 crore for the ministry of new and renewable energy (MNRE) to boost manufacturing of such modules. The MNRE held a meeting with industry stakeholders on Thursday, where it clarified that the scheme would be applicable only to new investments. "They told stakeholders that they would award incentives based on the extent of valueadd, capacity and technology," said a source close to the development. "The Union Cabinet’s decision to introduce the PLI scheme for solar PV modules and ACC batteries will go a long way in boosting domestic manufacturing of these critical components," said Sumant Sinha, Chairman & Managing Director of ReNew Power, largest renewable energy IPP. However not all felt that way. "It is a well constructed scheme with the intent of incentivizing localisation of the supply chain but the budget needs to be enhanced to make a meaningful impact in the industry," said Sujoy Ghosh, Vice President, APAC and India Region of First Solar