pw_march2010 by Next Gen Publishing Ltd.

PowerWatch www.powerwatchindia.com

Vol 1 Issue 1 March 2010 Rs. 100

POWER Where We Stand Featuring Industry Voices

INTERVIEWS S K Jain Ajay Mathur M Venkatraman

SPECIAL Supercritical technologies

SPOTLIGHT Distribution

IN FOCUS West Bengal reforms

IAL C E P S URE

F E AT ETâ&#x20AC;&#x2122;10 BUDG

Publisherâ&#x20AC;&#x2122;s Note The power sector, along with infrastructure, constitutes perhaps the most critical sector for the Indian economy in the next decade. The power sector will pose new challenges technologically and financially. To address the publishing needs of this extremely important sector, we are pleased to introduced Power Watch India. This monthly magazine will showcase the industry, raise issues critical to its success and create an interactive community within the sector. We trust you will like the inaugural issue and we await your feedback.

Khushroo Bhadha Publisher

PowerWatch

pwi@nextgenpublishing.net Executive Editor Saptarshi R Dutta Editorial Advisory Board Hoshang S Billimoria Adi Engineer Amulya Charan C A Colaco Associate Editor Shilpi Aggarwal Features Writer Anwesh Koley Creative Director & Head Production Atul Bandekar Design Shweta Choudhary

he Union Budget 2010 may not have been as power-packed as the industry expected it to be. No big tax breaks or incentives have been oﬀered. For thermal

developers expecting a cut in duty on imported coal, the energy cess of 50 rupees per tonne on imported coal, has found a few takers. The budget, however, signals a positive move in the direction of renewable energy development and initiatives in combating climate

Illustrator Ajay Paradkar

change. The outlay for power development has also been doubled

Image Desk Deepak Narkar, Ninad Jadhav

– making the target of ‘quality power for all at aﬀordable rates’

Publisher Khushroo Bhadha Product Manager Khushraho P Kapadia Advertising & Marketing Manager Sandeep Sood Circulation Sanjeev Roy Subscription Supervisor Sachin Kelkar Tel: +91-22-43525220 Fax: +91-22-24448289 Email: subscriptions@nextgenpublishing.net New Delhi Nihir Kumar Jha - Account Manager Block No. 24 & 30, 1st Floor, Okhla Industrial Estate, Phase III, New Delhi - 110020. Tel: +91-11- 42345678 Mumbai Prasad Parte - Response Executive 2nd Floor, Khatau House, Mogul Lane, Mahim (W), Mumbai - 400016. Tel: +91-22-43525252 Fax: +91-22-24448289 Ahmedabad Gaurav Choudhary - Account Manager Chandan House, 3rd Floor, Mithakhali Six Roads, Ahmedabad - 380006 Tel: +91-79-4000 8000 Fax: +91-79-4000 8080 Bengaluru Shailaja Narayana - Regional Manager #903, 9th Floor, ‘B’ Wing, Mittal Towers, M. G. Road, Bengaluru - 560001 Tel: +91-80-66110116 Fax: +91-80-66110117 Chennai A. Mageshwar - Regional Manager Unit No. 30, 3rd Floor, Modern Towres, No. 35/23 West Cott Road, Royapettah, Chennai - 600017. Tel: +91-44- 65612566.

– seem a little more achievable than before. More on this in our special section on the Budget. Close on the heels of the launch of the Jawaharlal Nehru National Solar Mission (NSM), has come the announcement of an allocation of Rs 1,000 crore for renewables. We trace this development and more in the NSM story. While coal block allocation takes the competitive bidding route, in view of the quality of indigenous coal, the thermal generation segment would do well to turn to the more fuel-eﬃcient supercritical technology. This issue provides the reader with a primer on this. This issue’s cover story focuses on where we stand in 2010. More of an overview of what has been achieved by the sector since the process of reformation began, it also raises a few slightly uncomfortable questions on fuel security, dependability of our T&D infrastructure and funding bottlenecks. Among other stories, we take an incisive look at the China vs. India technology tussle; highlight the T&D initiatives of a state otherwise perceived to be technology-intolerant; and talk to those that have made the country’s power progress possible. I wish you, dear reader, a pleasurable and informative read.

Pune 401B, Gandhi Empire, 2, Sareen Estate, Kondhwa Road, Pune - 411040. Tel: +91-20-32930291 Fax: +91-20-26830465 © 2010 Next Gen Publishing Ltd (NGPL). All rights reserved. Published with the permission of NGPL. Reproduction in any manner in any language in whole or in part without prior written permission from NGPL with regard to their content is prohibited. Published by Khushroo Bhadha on behalf of Next Gen Publishing Ltd., 2nd floor, Khatau House, Mogul Lane, Mahim (W), Mumbai - 400016. Printed by Khushroo Bhadha Next Gen Publishing Ltd., 2nd floor, Khatau House, Mogul Lane, Mahim (W), Mumbai - 400016. Printed at Kalajyothi Process Pvt. Ltd, 1-1-60/5 RTCX Roads, Hyderabad - 20. Published at Next Gen Publishing Ltd., 2nd floor, Khatau House, Mogul Lane, Mahim (W), Mumbai - 400016. Newsstand distribution - India Book House Editor: Saptarshi R Dutta

Saptarshi R Dutta Executive Editor

Editor’s note Editor’s note

PowerWatch

Contents

Budget Special Dispatches

8 10

National International Finance Q3

Power 2010 Where we stand

As India enters the global stage as an economic superpower to be reckoned with, there is an increasing need for the country’s power sector to don the mantle of precursor for all infrastructural and social development…

Green Ahead

India on Mission Impossible? The country has come up with the world’s most ambitious solar plan till date. PWI takes stock of the ﬁnal document...

On Site: Azure Power Azure Power becomes India’s ﬁrst IPP in the space of MWscale solar power

Special

Supercritical Tech: Promising Future To give thermal power generation a clean image, the government is mulling a new policy in favour of energy-eﬃcient supercritical technology

Nuclear Watch

Power Rush An easing international environment has indeed worked well for the Indian nuclear industry. Recent developments suggest a spur in business

46 Trade Talk

Interview with Chairman, NPCIL, Dr S.K. Jain

Spotlight

Challenges in Power Distribution

India’s power trading market may have bent the rules of the game. Still, there is a long way to go...

As eﬀorts are being made to scale up power generation capacity additions, power distribution is a link that cannot be overlooked

In Focus

Where states are faltering with their power reform processes, states like West Bengal claim to have set examples worth considering...

BEE Awards

In futuro

Rewarding industrial prudence

Looking Ahead

Interview with Secretary General, BEE, Dr Ajay Mathur

Our future energy needs depend on new renewable technologies. At PWI, we take a look at what companies are doing across the world in this domain

Tech’tonic

West Bengal: Tracking Reforms

Interview with CEO, NDPL, Mr Sunil Wadhwa

En-con

Power Trading: A Road Less Travelled

Power Equipment India’s target of “Power for All by 2012” requires the timely completion of capacity addition targets and the ready availability of power equipment. But the domestic equipment industry ﬁnds itself woefully inadequate in meeting this demand...

Interview with President, IEEMA, Mr Murali Venkatraman

CSR Watch

Giant on a Mission: Tata Power True to its name, Tata Power goes on lighting up lives for generations to come...

Tenders Vital Stats

90 92

Special Budget ’10

Power Promises

A lot was expected from it, but many stakeholders remained discontented. The 2010-11 Union Budget drew mixed responses from the energy industry...

he Indian power sector plans to add 78,700 MW of generation capacity in the 11th Five Year Plan. The Union Budget for the fiscal year 2010-11 has more than doubled the planned allocation for the sector, signaling the strong commitment towards “Power for All” by the government. The finance minister has gone ahead and allocated Rs 5,130 crore for power, compared to Rs 2,230 crore in the previous financial year. The proposal to improve the coal allocation process by allotting coal blocks for captive mining to power producers through competitive bidding has received a positive response. As coal accounts for more than 75 per cent of India’s total power generation, the budget announced that the Government proposes to take steps to set up a coal regulatory authority to create a level plain field in the sector. These announcements have come to the rescue of the power sector, which is grappling with financial closure of key projects coupled with delays in major power 8 • POWERWATCH INDIA

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March 2010

generation companies in meeting targets. This has made power companies cautious in bidding for new projects. The government has proposed to establish a national clean energy fund and is targeting the setting up of 20,000 MW of solar power by 2022, highlighting the importance of clean energy. Allocation for renewable energy has been increased to Rs 1,000 crore from Rs 620 crore in the previous year. A separate sum of Rs 500 crore has been earmarked for the setting up of solar and small hydro power units. However, the imposition of a clean energy cess of 50 rupees per tonne on domestic as well as imported coal might not be in accordance with industry expectations which was expecting a cut in duty on imported coal. The move will lead to an additional cost of 3-4 paise per unit of electricity produced using coal, feel industry experts. The union budget has lavished funds for the power sector with the hope of meeting optimistic targets for capacity addition of 78,700 MW for the current plan period. This will also go a long way in paving the ground for the 12th Plan’s target of 100,000 MW of installed capacity addition. We spoke to a cross-section of industry watchers on their opinion... “Budget outlays are never adequate, but they are suﬃcient for now” It is encouraging to note that the plan allocation for power sector has been more than doubled. However, in a growing economy, budget outlays are never adequate, but given the constraints of the government, they are suﬃcient for now. Faster approvals for local coal linkages have been facilitated in the budget. This will increase local supplies and the rest needs to be met by imports. Most of the large companies have acquired stake in coal mining companies in coal producing countries. Supercritical capacity targets cannot be met this year, but going forward, the ratio

of supercritical capacities will increase, given the better efficiency of the technology and increased focus on large capacities. D D Sharma, Sr. Vice President, Research, Anand Rathi “The allocation does nothing to support the electrical manufacturing industry” The budgetary allocation does nothing for supporting the electrical manufacturing industry. Further, the industry’s, as well as the power ministry’s long-standing demand of enhanced funding for CPRI has again been ignored, with allocation announced at a meagre Rs 78 crore. There was no mention about government support in increasing the competitiveness of the manufacturing sector against imports. A level playing field is needed to deal with the threat of imports from non-market economies. Increase in MAT by 3 percentage points is again not good news for the industry. However, the government announcing a reduction in surcharge to 7.5 per cent from 10 per cent, will take away some of the negative impact. The industry was expecting the surcharge to be removed completely. Murali Venkatraman, President IEEMA “There is no option but for the government to increase its expenditure in T&D” The increased focus on clean energy is a step in the right direction. This is extremely important as a bulk of the future power capacity proposed in India is through coal (this will increase carbon emissions). Due to the current low efficiency of clean energy mechanisms, around 4 MW of clean energy capacity may be required to be set up to replace 1 MW of polluting coal capacity. Further, the announcements would also bring in the necessary focus on solar energy in India. Kuljit Singh, Partner, IRG Infrastructure, Real Estate & Government, Ernst & Young Write to us with your feedback at pwi@nextgenpublishing.net

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Dispatches National Power ministry upset over delays in projects The Power Ministry is upset over the slow progress made by the power developers. Four teams have been dispatched by the ministry to review the progress on the projects undertaken by independent power producers (IPPs) and captive power producers (CPPs). The power projects under the scanner are of 100 MW and above. Speaking to the media persons on the sidelines of Elecrama 2010 Expo, the Minister of Power, Mr Sushil Kumar Shinde said, “The ministry is displeased with

the slow progress made by these developers, despite the allocation of coal linkages. The ministry is keen to add more and more capacity and is quite liberal on the proposals of utilities, state or private, for coal linkages. However, (we) have information that in a large number of cases, there was no action at the ground.” He further elaborates, “Four separate teams have been sent north, south, east and west to see what IPPs and CPPs have done.”

Adani Power bags CDM certiﬁcate from

UNFCCC Adani Power is currently in the process to set up an ambitious 9240 MW thermal power generation capacity in the country - 4620 MW is at Mundra, Gujarat, 3300 MW at Tiroda, Maharashtra and 1320 MW is at Kawai, Rajasthan. More than 85 per cent of the total capacity of the company is based on environment friendly supercritical technology. Supercritical technology is an advanced clean coal technology, which results in enhanced plant efficiency and reduction in emissions of carbondioxide and other pollutants by consuming less fuel per unit of electricity generated. APL’s Mundra plant is expected to generate 18,39,560 Certified Emission Reductions (CER) annually for its first ten years of operations when generation will start.

India-Bangladesh finalise power link deal Bangladesh signed an agreement with India on January 12, 2009 for setting up a 400 KV power transmission link with an investment of Rs 882 crore. The joint transmission network will of 130 Kms. In media briefing, power secretary, HS Brahma confirmed, ‘‘We have decided to set up a power transmission link between India and Bangladesh to be operational in two years time or by July 2012 at an estimated cost of about Rs 882 crore,” India’s largest power generation company, 10

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NTPC has given the responsibility to set up power projects in the neighbouring country. The company will also be responsible for the renovation and modernization plans of the existing projects. India’s central power utility Power Grid will bear the cost of initial investment of Rs 178 crore while the remaining cost would be borne by Bangladesh.

Dispatches National Coal regulator likely by March 15 Establishment of coal regulator has long been pending issue, biting dust on the table of the Ministry of Power. It ﬁnally managed to attract the attention of the government. The Minister of State for Coal, Sriprakash Jaiswal announced the setting up of coal regulator by March 15 when he came to Kolkata to lay the foundation stone for Coal India Ltd’s (CIL) new oﬃce building at Rajarhat. However, he did not divulge details on the structure of the regulator or the scope of its function.

CERC issues new power trading norms India’s apex power regulatory body, Central Electricity Regulatory Commission (CERC) has unveiled new regulations to ﬁx the margin for inter-state trading in electricity. New trading margin would be applicable on shortterm buy and sell contracts, including day ahead, week

ahead and month ahead contracts. However, CERC has exempted long-term agreements from trading margin in order to facilitate innovative products and contracts.

Thermal power plants proposed near Kanpur The Ministry of Coal and NTPC Limited have expressed interest in setting up two power plants near Kanpur. Two locations have been proposed to the state government - 2,000 acres land in Bilhaur

division and Ghatampur near Kanpur - for these power plants with a combined capacity of 2,270 MW.

Companies foraying into hydel power RPG-led power utility, CESC is intending to add 5,000 Mw generation capacity through hydel power. However, no time frame has been revealed by the company yet for this generation capacity. The company said, it is the ﬁrst time the company is exploring other options than thermal generation.

The another company exploring the options in hydel power genration is Shishir Bajaj-promoted Bajaj Hindusthan. The country’s biggest sugar producer intends to use the cash ﬂow into power business. It even has plans to add thermal power capacity in excess of 1,200 MW with an investment of Rs 6,000 crore.

Govt lays down rules to boost green power investment In a move to encourage the investment in renewable sources and rewarding the power producers of clean energy, India’s power regulator has laid down regulations for trading of

renewable energy certiﬁcates (RECs), which can be bought by companies to meet statutory obligations to purchase a minimum level of renewable energy.

NTPC aims for 75k MW in next 7 years India’s largest power utility, NTPC aims to become a 75,000 MW entity and has plans to invest Rs 2,25,000 crore in the next seven years in capacity expansion.

Currently, the company boosts a production capacity of a little over 30,000 Mw annually, constituting 19 per cent of the country’s total installed capacity of 1,55,000 MW.

March 2010

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Dispatches International NEW INCENTIVES TO BE UNVEILED BY ITALY FOR SOLAR POWER

The Italian government soon plans to unveil a much-awaited plan for new incentives in order to provide fuel to a rapidly growing solar energy sector, Economic Development Undersecretary, Stefano Saglia said. Italian and international investors who advanced into Italian solar industry lured by the current generous scheme had, till now, been extremely vigilant to ﬁnd out details of the new plan which would reduce incentives as the government aims to ease the budget burden. The new incentives plan would be presented at a meeting of a government body for relations between the state and regions, Saglia told reporters, adding that new gas distribution system proposals would also be presented at the meeting.

GOVERNMENT AND UTH PRIVATE SECTOR IN SO KOREA JOIN HANDS TO IMPROVE POWER DISTRIBUTION BY 2030 make electricity South Korea is aiming to over the next two decades distribution more efficient 27.5 trillion won through an investment of ds. This will also cut ($24 billion) on smart gri and save $26 billion in greenhouse gas emissions rea, the OECD’s fastestenergy imports. South Ko st and the world’s fifth-large growing carbon polluter smart grids to manage oil importer, is betting on ntly, and aims to create electricity use more efficie 2030 for an electricity a nationwide smart grid by won, the energy ministry market worth 68 trillion said in a statement. consortiums for a It has already picked eight ich will save consumers test-bed of the project, wh ls, reduce blackouts and money on their utility bil y power supplies. carry solar and wind energ spend 2.7 trillion won on The government is set to the project while the private sector is seen investing an estimated 24.8 trillion won by 2030, the energy ministry said.

European Union (EU) and Iraq Ink Energy Cooperation Pact

Australia To Supply Gorgon LNG To China

BG Group To Buy Queensland Gas For $3.1 Billion

The European Union (EU) and Iraq have inked an agreement to enhance cooperation in the energy sector providing a boost to energy cooperation betwwen the two countries.

Liqueﬁed natural gas worth 50 billion Australian dollars will be supplied by Australia to China. This is the largest resources deal that has ever been struck by Australia till now.

BG Group of Australia would buy Australian coal seam gas ﬁrm Queensland Gas Co for $3.1 billion, the details of the deal are awaited. AGL Energy will sell 24.9% stake to BG group.

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TO S T U C B G JO N I AN T A M L R P E M G E S T S CON 90 ACROSS IT N E M E I S 19 F O nnual E N s after the a U y S a d T o N tw E O s, ve TH IVISI representati D L A I eting. R rs T e hold me drives re a sh g n INDUS ri cuts at the ee st engin rope’s large u E , G A s n out 1,990 Sieme ns to cut ab la p it id sa divisions company, s industrial u o ri a v s it t jobs a ompany any as the c rm e and G ss ro ac drop in dem t n a c iﬁ n g si witnessed a cts. u d -called for its pro ce at the so la p e k ta l il dustry The cuts w well as at in s a it n u s’ ologie aﬀected ‘drive techn . Factories id ngen sa s n e m ie dt and Erla a st u e N solutions, S d a B pany include the s. The com n e by the cuts m ie S to ers’ cording eeting work m r e ft facilities, ac a ts u e planned c disclosed th

id the ing Siemens sa y “an ongo b d te a it ss e s nec division wa key lume in the et,” slump in vo eering mark in g n e l a ic mechan atement. company st a to g in rd l reasons, acco operationa r fo s ﬀ -o y l avoid la Siemens wil plant ins, powera tr it added. d e e p -s of high ressure to The maker s is under p lb u b t h g li e orders. ts and mers reduc o st componen u c s a s operation streamline

CONSUMERS ENERGY TO BUILD WIND PARK IN TUSCOLA, HURON COUNTIES

Consumers Energy Co. is moving ahead with its plans to build two Mich igan wind farms, one in the Thumb area and the oth er in west Michigan’s Maso n County. The latter, to be called Lake Winds Energ y Park, will be capable of pro ducing up to 100 MW of power and is scheduled to begin commercial operation in 2012. In the Thumb’s Tuscola an d Huron Counties, the utility is planning the Cr oss Winds Energy Park tha t is scheduled for commerc ial operation in two phase s, 2015 and 2017. Consume rs has not released other

details. Consumers has issued a request for proposals to manufactur ers of wind turbine compon ents for the park. The utility has been discussing turbines that would each produce 1.5 MW to 2.5 MW of power, which could me an some 40 to 66 turbin es although precise numbers have not been determine d. The utility has secured ab out 16,000 acres of easements for the park.

Shell Agrees Landmark 4.0 Billion Dollars Gas Deal With Iraq

Nuclear power in Italy will involve 350 companies

Xstrata plans A$15 billion coal expansion in Australia

Anglo-Dutch oil company Royal Dutch Shell has entered into a joint venture with Iraq government to produce gas worth $4 billion. The project will operate as a joint venture with Shell having 49% stake.

Nuclear energy production in Italy will need a 30-billion euro investment now, more than two decades after the country mothballed its reactors, as per Italian business lobby Conﬁndustria.

Xstrata, leading thermal coal exporter, is considering up to A$15 billion ($13.3 billion) investment to boost output at its Australian thermal coal project to 100 million metric tonnes a year.

March 2010

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Dispatches Finance National Power Grid inks deals with private developers In an unprecedented move to boost the country’s power generation capacity, the India’s largest transmission utility, Power Grid signed long term agreements with 37 private developers on February 27, 10. The move is expected to add over 42,000 MW of power generation in the existing capacity. These agreements are aimed at facilitating the transfer of power from energy surplus areas to energy deﬁcit areas. It is expected that this move will help the company to sail smoothly with its plans for seven proposed transmission corridors for wheeling power from new private projects coming in eastern and southern parts of the country. The move demands investments worth Rs 48,000 crore.

O expectP F d ri G r e w Po mber ed by Septe , state-owned In all probability ility, Power transmission ut on of India Ltd Grid Corporati y to float its (PGCIL) is likel ic offer by follow-on publ year. has September this ny, the proposal pa m co e th of In words try, which will to power minis t n se en be y ad try. With alre e Finance Minis th to d de ar rw then be fo to raise pany has plans m co e th , O P F on plans. this fund its expansi to l ta pi ca e or cr Rs 3,500 a 5 per cent earlier divested d ha e tr en C e Th e maiden ybacking on th gg pi , IL C G P stake in y. by the compan equity offering

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DAMODAR VALLEY CORP BOND ISSUE RECEIVES GOOD RESPONSE Damodar Valley Corporation’s Rs 500-crore ‘DVC 2017’ bond issue, which was opened for private placement on February 19, has been subscribed by 1.6 times. The subscription will allow the organisation to retain an additional Rs 140 crore by exercising the green-shoe option. The funds raised through the issue are slated to be used for replacement of equity finance by debt-finance, in a number of generation, transmission and distribution projects already brought on stream. As per media reports, the company is satisfied with the response it got.

Alstom, Scheider Electric ink deal to acquire Areva T&D French companies Alstom and Scheider Electric joins hands to take over the global transmission and distribution (T&D) business of Paris-based Areva. According to the combined statement of the two companies, the companies have signed an agreement for the acquisition of T&D business of Areva. As per the agreement, Alstom is likely to handle the transmission business and the distribution business will be handled by Scheider. The two companies had jointly bid for acquiring transmission and distribution business of Paris-based Areva for an equity value of euro 2,290 million (about Rs 16,000 crore).

Dispatches Finance International World Bank approves $250 million loan for Iraq The World Bank has approved the first of two $250 million loans for Iraq to help plug a large financing gap caused by the sharp drop in global oil prices since 2008. The shortfall of close to $5 billion through to the end of 2011 has posed challenges for rebuilding the country from years of conflict and just when violence has started to subside. Iraq relies on oil exports for as much as 90 per cent of its revenues, and lower oil prices mean it will not have enough resources to meet reconstruction needs. “Iraq’s immediate needs are to manage this short-term financing gap in ways that soften the impact of this fiscal crisis on its citizens,” said Hedi Larbi, World Bank country director for Iraq. The Bank’s loan will help Iraq protect key social and infrastructure expenditures.

SouthGobi Energy to raise $400m through Hong Kong IPO SouthGobi Energy Resources, a Canadian-listed coal mining company, plans to raise about $400 million from a Hong Kong initial public oﬀering. The company said it would use the proceeds of the share sale to expand production capacity and access regional infrastructure. SouthGobi, which started IPO premarketing, is focused on expanding its coal production capacity in Mongolia, centered around its Ovoot Tolgoi mine. The news sent shares of SouthGobi up 4.3 per cent on Monday, and lifted shares of its 80 per cent owner, Canada-based Ivanhoe Mines by 5 per cent. The expected cash infusion follows a US $500 million investment from China sovereign fund China Investment Corp announced in October, which SouthGobi also plans to use to expand its Mongolia development. Ovoot Tolgoi’s production target for 2009 was 1.5 million tonnes and it plans to eventually extract 8 million tonnes of metallurgical and thermal coal a year from Ovoot Tolgoi. According to the term sheet, 75 per cent of the oﬀering would be allocated to institutional investors, 15 per cent to Canadian investors and 10 per cent to Hong Kong.

UK govt to pay 25% of electric car price The British government is to give up to 5,000 pounds (US $7,668) to anyone who buys an “ultra-low carbon” car from next year and will build recharging hubs, the Department of Transport said. The Plug-in Car Grant of 25 per cent towards the purchase price, capped at 5,000 pounds, will be available across Britain for both private and business ﬂeet buyers from January 2011, by which time a range of eligible vehicles should be on sale. “By this time next year, cutting edge motorists will be on the roads with these next generation cars they’ve purchased because of our help,” Transport Secretary Andrew Adonis said. Only battery electric, plug-in hybrids with will be eligible for a part of the fund.

Minnesota Power adds transmission Minnesota Power will be buying a 465-mile transmission line between Center, N.D. and the Arrowhead Substation in Hermantown, a move that will bring a substantial amount of renewable energy into the region. The company announced that the purchase was worth approximately $70 million.The company plans to build the 33-turbine, 75 MW Bison wind farm near New Salem, N.D., and bring it via the 250 KW direct-current line. March 2010

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Dispatches Q3 Reports NTPC REGISTERS MODEST RISE OF 5% IN Q3 State run largest generation company NTPC Limited posted an increase of 5 per cent in its net profit at Rs 2,365 in the third quarter of this fiscal over the corresponding quarter of last fiscal. Its last year third quarter ending December 2009 stood at Rs 2,250.9 crore. The rise in net profit is due to the lower fuel cost. Company’s net sales for the quarter under review stands at Rs 11,709.2 crore, marking a dip by 1.2 per cent, compared to Rs 11,863 crore in the quarter ending December 2009 last year. The company has raised Rs 8000 crore by diluting 5 per cent of government’s stake through an FPO, which opened on February 3 and closed on February 5.

BHEL Q3 RISES 35% India’s leading power equipment supplier, Bharat Heavy Electricals Limited declared a jump of 35.67 per cent in its net profit at Rs 1,072.50 crore for third quarter ended December 31, 2009, as compared to the corresponding quarter last fiscal. Total income grew by Rs 7,422.5 crore for the December quarter, against Rs 6,328.5 crore in the same period previous fiscal. The company also boosts an outstanding order book position of about Rs 1,34,000 crore, at the end of December quarter of the current financial year.

POWER GRID Q3 NET PROFIT UP 31%

L&T PERFORMED POORLY, NET PROFIT DOWN BY 50%

India’s Central Transmission Utility (CTU), Power Grid Corporation of India declared a 31 per cent jump in its net profit at Rs 487.84 crore in the third quarter ended December 31, 2009, over the same period a year ago. Last year in the same quarter, the company had a net profit of Rs 372.35 crore. Power Grid engaged in bulk power transmission business said, its total income increased to Rs 1,525.41 crore in the quarter from Rs 1,477.44 crore during the same period previous year. The net profit soared in April-December to Rs 1,494.42 crore from Rs 1,074.47 crore in the same period last fiscal.

Larsen & Toubro has registered a 50.10 per cent decline in net proﬁt after (PAT) tax at Rs 758.82 crore for the quarter ended December 31, 2009 as compared to Rs 1,520.44 crore in the quarter ended December 31, 2008. Company’s total income has declined to Rs 8355.75 crore for the quarter ended December 31, 2009 from Rs 8,924.32 crore for the quarter ended December 31, 2008. Its net sales are down 6 per cent to Rs 8,071 crore as against Rs 8,594 crore.

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Dispatches Q3 Reports REC Q3 NET UP 49% Rural Electriﬁcation Corporation (REC) has reported an increase of 48.68 per cent at Rs 474.07 crore in its net proﬁt for the quarter ended December 31, 2009, as compared to the corresponding period last year. The company’s operational income grew by 34 per cent at Rs 1653.2 crore from Rs 1233.77 crore last year. The company’s total expenditure during the quarter stood at Rs 1061.66 crore against Rs 801.20 crore last year during the same quarter.

BHARAT FORGE Q3 NET JUMPS 773% Bharat Forge reported a 773.3 per cent jump in its net proﬁt at Rs 37.99 crore for the third quarter ended December 31, 2009. The company had a net proﬁt of Rs 4.35 crore in the same quarter last year. The company said, there is a jump of 11.34 per cent in its total income to Rs 516.96 crore in the third quarter from Rs 464.28 crore in the corresponding period previous year.

TATA POWER Q3 NET PROFIT UP 40.4% India’s largest private power generating company, Tata Power reported its third quarter results. Its net profit has seen a 40.4 per cent rise at Rs 141.9 crore in the third quarter ended December 31, 2009. Its net profit stood at Rs 101.1 crore in the same quarter previous year. Company’s net sales declined 16.7 per cent to Rs 1,449.80 crore in the quarter from Rs 1,741.5 crore for the same quarter last year. Net profit may have increased but its way below the expectation. The decline in net profit is increasingly been seen due to the variation in fuel mix and lowering of fuel prices in the Mumbai Licence Area. According to the company’s executive director, S. Ramakrishnan, the increase is mainly attributed to the rise in power generating capacities of over 250 MW. Company’s total income also registered a dip from Rs 1822.87 crore for the quarter ended December 31, 2008 to Rs 1611.68 crore for the quarter ended December 31, 2009.

RELIANCE POWER Q3 NET JSW ENERGY Q3 NET SEES AN RISE OF 26% SURGES 73% Reliance Power announced a rise of 26.46 per cent in its net profit at Rs 133.64 crore for the third quarter ended December 31, 2009 over the net profit of Rs 105.68 crore in the corresponding quarter of financial year 2009. Total income witnessed an increase by 36.44 per cent to Rs 179.16 crore in the third quarter from Rs 131.31 crore in the December quarter a year-ago.

JSW Energy announced a nearly 73 per cent rise at Rs 204.87 crore in net proﬁt for third quarter ended December 31, 2009. Company’s total income rose to Rs 701.58 crore in the third quarter of current ﬁscal year from Rs 576.39 crore as compared to the corresponding quarter last year. March 2010

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Dispatches Q3 Reports SUZLON SHOWS SIGNS OF STERLITE Q3 NET SOARS 3FOLD RECOVERY IN ITS Q3 Suzlon Energy reported a net proﬁt of Rs 14.1 crore in the third quarter of FY 10 as against a loss of Rs 64.87 crore in the December quarter last year. Its total revenue declined from Rs 6,922 crore in the year-ago period to Rs 5,590 crore in the reporting quarter. According to the oﬃcial release, India’s largest wind turbine-maker’s total income stood at Rs 5,608 crore in Q3 FY10 as against Rs 6,942.52 crore in the year-ago period.

JAIPRAKASH POWER Q3 NET PROFIT STANDS AT RS 16.8 CR

India’s leading Hydro electricity company, Jaiprakash Power Ventures declared a net profit of Rs 16.86 crore for the third quarter ended December 31, 2009 against a net profit of Rs 44 crore in the December quarter last fiscal. The company said, the results for the current quarter ninemonth period are not comparable as there is a an addition of 400 Mw Vishnuprayag project. Company’s total income rose to Rs 119.03 crore for the December quarter from Rs 61.87 crore during the same period previous year. Its net profit stands at Rs. 190.96 crore for the nine-month period ended December 31, 2009. Its last year for same period net profit stood at Rs 165.46 crore. 18

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March 2010

Sterlite Technologies announced a jump of over three-fold to Rs 73.72 crore in its net proﬁt for the quarter ended December 31, 2009, over the same period last year. Its net sales registers an increase at Rs 867.27 crore for the quarter ended December 31, against Rs 641.99 crore in the same period last year. Further, the company has sanctioned a raise of Rs 1,500 crore through various domestic as well as international sources. The allotment of bonus shares in the ratio of 1:1 to the existing shareholders of the company is also sanctioned by the company board..

JINDAL STEEL & POWER Q3 NET DIPS 3.2% Jindal Steel & Power (JSPL) said its net profit went down by 3.20 per cent for the third quarter ended December 31 at Rs 874.35 crore, compared to the same period corresponding fiscal. Total income declined to Rs 2,687.10 crore for the latest quarter against Rs 2,948.57 crore for the same period previous fiscal. Company’s total net profit for the nine month period ended December 31, 2009 stands at Rs. 2,671.18 crore against Rs 2,109.24 crore last fiscal. On a standalone basis, the company reported a net profit of Rs 325.62 crore for the quarter ended December 31, against Rs 325.17 crore for the same period a year ago.

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Cover Story As India enters the global stage as an economic superpower to be reckoned with, there is an increasing need for the country’s power sector to don the mantle of precursor for all infrastructural and social development…

Power 2010 Stand Where We

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March 2010

traditional bastion of the government, reforms in the power sector started taking definite shape after the Electricity Act, 2003 (EA2003). In fact, it was under the patronage of the EA2003 that major institutions such as regulatory authorities and the Appellate Tribunal for Electricity (APTEL) were set up, and activities such as power trading kick started. While progress has been significant, a lot remains to be accomplished. We now have an installed generation capacity of 156,783.98 MW (as on January 31, 2010). While this figure seems behemoth, according to the latest available estimate (2007-08), the country’s per capita consumption of electricity was 704.2 kWh, as against the United States’ 13,635.7 kWh (in 2005-06) or closer home, Singapore’s 8,357.9 kWh. Obviously, this mounting demand-supply gap needs to be bridged. There needs to be greater policy thrust on encouraging private sector participation, bringing about more market orientation in the sector and facilitating more efficient power transfers.

BRIDGING THE GAP

THE DEMANDSUPPLY GAP

Supply continues to be dogged by Year Actual Actual Demand Availability demand issues. The unmet demand (MUs) (MUs) for electricity has grown at an average 1997-98 424,505 390,330 annual growth rate of over 10 per cent 1998-99 446,584 420,235 since 1998-99. As of January 2010, the 1999-00 480,430 450,594 country had a demand deﬁcit of over 10 2000-01 507,216 467,400 2001-02 522,537 483,350 per cent, with a peak shortage of over 2002-03 545,983 497,936 12 per cent. 2003-04 559,264 519,556 Industrialization levels have a direct 2004-05 591,373 548,203 bearing on consumption. This accounts 2005-06 632,099 579,003 2006-07 693,057 624,716 for why the western region has the 2007-08 739,345 666,007 maximum unmet demand, 2008-09 777,039 691,038 followed by the northern, southern, eastern and the northeastern regions. Assuming an industrial growth rate between 8 and 9 per cent, the power ministry has projected an actual power demand in the staggering range of 1,029-1,077 billion units by the end of the Eleventh Plan period!

Average shortage (%)

Peak Demand (MW)

Peak Met (MW)

Peak shortage (%)

8.1 5.9 6.2 7.8 7.5 8.8 7.1 7.3 8.4 9.9 -9.9 -11.1

65,435 67,905 72,669 78,037 78,441 81,492 84,574 87,906 108,211 119,326 108,866 109,809

58,042 58,445 63,691 67,880 69,189 71,550 75,102 77,621 93,061 98,787 90,793 96,785

11.3 13.9 12.4 13.0 11.8 12.2 11.2 11.7 14.0 17.2 16.6 11.9

Source: Central Electricity Authority (CEA)

FUNDING POWER PROJECTS The power sector draws financial sustenance from union government funding and budgetary outlays. The trend in successive Five Year Plan outlays indicates that the share of the power sector has typically been in the 12-17 per cent range. In fact, post the just-concluded Union Budget 2010, the government has doubled the Plan allocation for the sector to Rs 5,130 crore for 2010-11 from the previous Rs 2,230 crore for 2009-10. Planned outlay in the power sector has registered a sharp increase due to flagship programs – Restructured Accelerated Power Development Reforms Programme (R-APDRP) and the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY). The former has an outlay of Rs 3,700 crore towards driving the loss reduction efforts in government-owned distribution utilities, while the latter, spearheading the government’s rural electrification programme, now has an outlay of Rs 5,500 crore.

THE POWER VALUE CHAIN GENERATION EA2003 brought about liberalization and delicensing in the generation segment with a view to bringing in greater private sector role. The private sector now has a 15 per cent share in generation. Adding captive power installations, this ﬁgure rises further to a 37 per cent share. Policy focus on generation is high. The government has set a target of adding 78,700 MW by the end of the Eleventh Plan period. However, underachievement of targets is rife in the sector. Since the Eighth Plan, the sector has seen an achievement of only 50 per cent of planned targets.

Capacity Upscaling Over 80,000 MW of conventional generation capacity is currently under various stages of execution. Image courtesy: ABB Limited (top left) Siemens Energy

March 2010

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Cover Story This is where the role of ultra mega power projects (UMPPs) comes in. Each of these 4,000 MW coal-based projects, to be built at an investment of Rs 160-200 billion, is to be set up based on a tariﬀ-based competitive bidding process. All projects will be based on supercritical technology. The ﬁrst four projects have already been awarded – Sasan (Madhya Pradesh), Mundra (Gujarat), Krishnapatnam (Andhra Pradesh) and Tilaiya (Jharkhand).

TRANSMISSION Weak Link The final link in the power value chain, distribution has suffered high losses and the poor financial health of its utilities has been a cause of concern. Image (bottom): Csepel Thermal Power Plant near Budapest. Courtesy: Alpiq

Eﬃcient transmission linkages are crucial for evacuation of power generated from geographically dispersed locations. Transmission lines have grown by almost two and half times from around 156,000 ct. km in March 1985 to more than 379,000 ct. km in January 2009. The phase-wise development of a national grid is making steady progress. The interregional transmission capacity has increased to 18,700 MW and all regional grids except the southern grid have been synchronised resulting in the formation of the Northeast-East-West (NEW) grid. The NEW grid is one of the largest synchronously connected grids in the world with a total generation capacity of over 106,000 MW.

DISTRIBUTION The ﬁnal link in the power value chain, distribution has, however,

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March 2010

Cover Story suﬀered high losses and the poor ﬁnancial health of distribution utilities has been a cause of concern. The distribution sector has been characterised by persistently high AT&C losses. The all-India average for AT&Clossescontinuestohoveraround 32-34 per cent. This is the reason why AT&C losses have been the key target for major central government programmes such as R-APDRP. Policy support has resulted in key systemic improvements such as comprehensive metering and increasing use of IT-enabled applications.

THE RENEWABLE ROUTE

Note: * till February 2009

The share of renewable energy within grid-connected electric power has grown in the past several years. India now ranks fifth in the world with respect to wind energy and second after China in biogas installations. Installed grid-interactive renewable power generation capacity stands at over 13,870 MW which is over 9 per cent of the total installed capacity in the country. About 6,795 MW capacity was added during the 10th Plan. Renewable energy applications also provide viable solutions in the off-grid mode to meet electricity and thermal energy needs of remote villages in the country. By 2012, the government expects renewable energy to contribute 10 per cent of total power generation capacity, with the MNRE setting an aggressive target of 25,000 MW for the time frame. Renewable energy purchase obligations (RPOs) have also been announced by states, made mandatory under the National Power Tariff Policy. The National SHARE OF RENEWABLES Solar Mission was recently announced, setting a goal of generating at least 10 per cent of India’s power from Year Installed capacity Total installed Percentage of solar energy. Planned outlay for solar energy in Budget of renewable energy capacity (MW) total capacity (MW) (per cent) 2010, has been raised by 61 per cent to Rs 1,000 crore. 2001-02 1,628.39 105,045.96 1.55 Financing options have increased across the renewable 2002-03 1,628.39 107,877.37 1.51 sector, making projects more viable. 2003-04

2,488.13

112,683.50

2.21

2004-05

3,811.01

118,425.70

3.22

REGULATORY REVIEW

2005-06

6,190.86

124,287.17

4.98

2006-07

7,760.60

132,329.21

5.86

2007-08

11,125.41

143,061.01

7.78

2008-09*

15,691.43

156,092.23

10.05

The sector’s development relies largely on a tight policy and regulatory framework. Over the years, the government realized the importance of private players in the sector and set the stage for competition through EA 2003. The Act led to a major overhaul of the sector, ending

Source: Central Electricity Authority

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KEY POLICIES UNDER EA2003 National Electricity Policy

Under the provisions of section 3(1) of the Electricity Act, 2003, National Electricity Policy was framed with an aim of expediting rural electriﬁcation and make electricity available to all households. The policy has set the minimum lifeline consumption of electricity at one unit (kilowat hour) a household a day. Power availability on demand is envisaged to be fully met by 2012.

Tariff Policy

National Tariff policy was notified under Section 3 of the EA 2003. It basically lays down the various parameters with respect to fixation of tariffs so that generators and suppliers get adequate return on investments and consumers should be reasonably charged. It lays downs uniform guidelines for SERCs and CERC and talked about the constitution of a forum of regulator to facilitate consistency in regulatory approach. The two main features of the policy is competitive bidding for all power projects and mechanism for determination of cross subsidy surcharge. Since its notification in 2006, the policy has undergone into amendment in March 2008.

RGGVY

RGGVY was launched in April 2005 under the National Common Minimum Programme for providing access to electricity in the rural areas. Currently the programme is running in a number of Indian states. Under this, 90 per cent grant is provided by the central government and 10 per cent as loan by REC to the state governments. As of December 2009, the total fund released is Rs 17150.2 crore.

Rural Electriﬁcation Policy

In compliance with Section 6 and Section 43 of the Electricity Act, REP made obligatory for State Governments to notify a rural electriﬁcation plan to achieve the goal of providing access to all households by year 2009 within six months of the policy being notiﬁed – end of February 2007.

Hydro Policy

Under the new hydro policy, the government oﬀers incentives to make hydel sector attractive for private players. The government has made guidelines to address the problems related to displaced population. Developers are given the opportunity of merchant sale of up to 40 per cent of power generated. Developers will also be penalized against preemptive biding if they are slow on project development.

the monopoly of vertically integrated SEBs by splitting them into three divisions - generation, transmission and distribution - with states given the leeway to privatize these utilities. Concepts of open access and power trading were introduced. The idea behind the act is to accelerate competition in the sector that brings prices down and expands service reach and quality.

THE WAY AHEAD Over 80,000 MW of conventional generation capacity is currently under various stages of execution. Even as conventional energy holds sway, renewable energy is slowly closing the gap. There is a speciﬁc encouragement towards domestic equipment manufacturing facilities and technology transfer. The CEA has recently recommended the waiving of import duty on machinery that will be used to make supercritical power generation equipment. Business proposals in nuclear power have already shown that India could well be the manufacturing hub for some of the most advanced nuclear reactors in the coming years. The case for new grid solutions, such as intelligent grid systems, are steadily gaining ground. In distribution, utilities are being encouraged to undertake capital intensive investments such as automated metering systems, supervisory control and data acquisition (SCADA) systems, enterprise resource planning and energy accounting. While a path has been set, and the guide ropes deﬁned by way of regulations and facilitative policies, the development of the power sector will call upon a synergistic participation of all stakeholders with unequivocal commitment. -Saptarshi R. Dutta

Unmet Targets Since the 8th Plan, this sector has seen an achievement of only 50% of planned targets. Image (top left): HVDC valve hall Latina Courtesy: ABB Limited

March 2010

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Cover Story

Industry Voices PWI spoke to a cross-section of industry experts from turnkey and business automation solutions providers, to power sector consultancy organizations and industry associations, on the sector’s achievements and on what still needs to be done. We present their opinions… Quality power, this achievable?

aﬀordable

rates:

K Nanda Kumar Different sections of consumers need different levels of energy prices. There is a need to profile customers and define energy prices based on multiple factors like segment of society, level of usage, purpose, etc. Load balancing is an essential element of energy efficiency, and this should be priority one for the energy sector. ar K Nanda Kum cer, ffi O e iv ut ec Ex Chief up SunTec Gro

DIFFERENT SECTIONS OF CONSUMERS NEED DIFFERENT LEVELS OF ENERGY PRICES.

Mukul Modi The generation sector is by and large supplying quality power at aﬀordable rates. Hence, it is the sub-transmission and distribution infrastructure that needs to be revamped drastically to improve the quality of power as well as increase the aﬀordability at the last mile. Vivek Pandit The government’s target of “Power for All by 2012” is achievable. The deadline is two years away from now. Policies are already in place and are conducive to the growth of the sector. Only implementation is faltering, especially at the state level.

Mukul Mo di Vice Presiden t, Project Advisory an d Structured Finance, SB I Capital Market Lim ited

TAKE OUT FINANCING WILL HELP IN ALLEVIATING SOME FUNDING ISSUES.

J P Rao Quality power appears to be an uphill task in the present scenario, as coal of a high calorific value is very difficult to find in India. Boiler efficiency mostly depends on it; in term of PLF enhancement, this becomes a bottleneck. Innovation in technology and timely completion of projects will certainly lead to an optimization of capex and financial borrowings including interest amount. The resource question: Do we have enough raw energy to fuel our ambitious generation plans? Mukul Modi There is a deficit in raw material availability as far as major thermal fuels such as coal and gas are concerned. Wherever possible, coal mine productivity needs to be improved. We need to adopt more fuel efficient technologies so as to maximize the output given the deficits expected in the availability of indigenous coal. Vivek Pandit Thermal will continue to dominate, and there are issues with the quality of Indian coal because of its high ash content. I am also a little skeptical on energy sources. Renewable energy sources have their own constraints. We must maximize our available fuel resources and also look out for efficient varieties of coal beyond our geographical boundaries. The foreign basket should be spread out in a way that we are not dependent on one source or one country. What we actually need here is a strategic fuel policy.

J P Rao Raw energy in the form of coal and gas is very much available in India. Only the regulatory policy needs to be rationalized. Our coal reserves of around 60-70 billion tones are anticipated to last for 35-40 years. We have abundant gas reserves in Gujarat, Assam, Andhra Pradesh and Tripura.

environment impact assessment (EIA) clearance cause delays in fund approvals. Many power players are also not fully committed owing to various commercial interests.

The money question: Is there a bottlenecking in funding?

K Nanda Kumar In order to meet the sector’s emerging needs, there needs to be increased participation from the private sector. This will bring in eﬀective measuresinimprovingenergyeﬃciency,reducingthe carbon footprint and increasing the use of technology. Hence, policies need to be further liberalized to encourage private sector participation and competition.

K Nanda Kumar India needs a lot of funds in the energy sector to enhance energy efficiency, enhance technology adoption, improve energy availabilityandaffordabilityandcreateagreenenergy regime. The current allocation towards the sector is insufficient, and there is need for further funding. Mukul Modi The total funding required by private players for 11th and 12th Plan capacity additions is around Rs 5,000 billion. The private sector will need equity of Rs 1,250 billion. But equity markets have shown a lukewarm response to power sector IPOs. Securing over Rs 3,750 billion in debt is expected to be equally challenging as banks face regulatory caps on exposure to single borrowers, single business groups and the power sector. Take out financing would help in alleviating some of these funding issues. Vivek Pandit There is no bottlenecking in funding. Power IPOs are doing well. Even the NTPC FPO and the REC IPO were oversubscribed. Thus funding is not a constraint. Projects are quite bankable and getting financial closing. The problem lies at the implementation stage. Procedural and project management issues are areas that need to be looked at right earnest. J P Rao Bottle necking in funding appears to be a speed breaker. The reasons are evident. Land acquisition problems, coal block availability, water source and

Facilitators: Are policies and regulations able to keep pace with demand? Vivek Pandit and Director, Energy n of tio Defence, Federa of rs be m Indian Cha stry du In d an Commerce (FICCI)

THE POWER SECTOR IS BEING USED AS A POLITICAL FIELD RATHER THAN AS A GROWTH Mukul Modi ACCELERATOR. Policies and regulations at the central level are encouraging and are keeping pace with demand. However, there are issues with implementation at the state level. Mechanisms such as Case II bidding and UMPPs are good examples of combining efficient project development, while simultaneously discovering reasonable tariffs and hence, need to be emulated in generation as well as transmission. Vivek Pandit The power sector has an enabling policy framework. But we need to understand that enablers cannot make action. The real issues are lack of implementation and political will. Many states are lagging behind; in fact, some started un-bundling only a few months back. The power sector is being used as a political field rather than as a growth accelerator. J P Rao This is a vital aspect of the power business. Policies need constant updating. While guidelines are generally set up, their interpretation creates loopholes. The time taken to formulate policies is invariably inversely proportional to demand, as circumstances and conditions change very fast. March 2010

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J P Rao Senior Vice Presi dent, Design, Build an d EPC, Power, Shapoorji Pallonji & Company Lim ited

FUNDING APPEARS TO BE A SPEED BREAKER.

POWERWATCH INDIA

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Green Ahead

India on Mission Impossible? The country has come up with the world’s most ambitious solar plan till date – a mission to achieve 20 GW solar power capacity by 2022. After much considerations and reconsiderations, drafts and re-drafts, the mission was launched on January 11, 2009. PWI takes stock of the ﬁnal document...

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March 2010

n the drive to meet energy needs and help climate change, India has come up with the world’s most ambitious solar plan – a mission to achieve 20 gigawatt (GW) of solar power capacity by 2022. According to the International Energy Agency (IEA), global solar capacity is predicted to touch 27 GW in the same span, whereas India alone is planning to contribute a substantial chunk to this ﬁgure! As on date, India’s grid connected solar power facilities stand at approximately 8 MW, which is about 0.003 per cent of the total grid based power capacity. India is aiming to change this statistic in a big way. The country undoubtedly has a lot of potential for solar power and is home to one of the most abundant solar resources in the world. It has around 3 million sq. km of tropical and subtropical land and an average of 250-300 clear sunny days a year. Most of its parts receive 4-7 KWh per sq. m per day. The country receives approximately 5,000 trillion KWh energy per year – a ﬁgure which is far more than its entire energy consumption of about 848 billion KWh in 2010. Solar power can work almost anywhere in India. The country can meet a substantial share of its energy needs through solar power using both

Large scale diﬀusion of solar products empowers rural India

centralized and decentralized production. Despite the fact that today coal is the cheapest electricity source, future energy security depends on solar energy. As the country moves towards imported coal to meet its growing energy demands, coal may get costlier and so will be the cost of electricity. Moreover, solar generation is non-conventional and environment friendly with absolutely no emissions. Dream Mission On January 11, 2010, India launched the much awaited ‘Jawaharlal Nehru National Solar Mission’, under the brand name ‘Solar India’ at Vigyan Bhawan, New Delhi. It

is one of the eight missions underlined in the National Action Plan on Climate Change (NAPCC), aiming to promote the development and use of solar energy for power generation and other off-grid uses in the country. The mission adopts a three phase implementation approach leading up to an installed capacity of 20,000 MW by the end of the 13th Five Year Plan in 2022. The first phase (up to 2012-13) will comprise 1,100 MW of grid-connected and 200 MW off the grid, with an objective of achieving rapid scaling up to drive down costs. The mission anticipates achieving grid parity by 2022 and March 2010

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Green Ahead Application segment

Target for Phase I (2010-13)

Target for Phase 2 (2013-17)

Target for Phase 3 (2017-22)

Solar Collectors

7 million sq meters

15 million sq meters

20 million sq meters

Off Grid Solar Applications

200 MW

1000 MW

2000 MW

Utility Grid Power, Including Roof Top

1,000-2000 MW

4000-10,000 MW

20000 MW

*National Solar Mission document, MNRE

parity with coal based thermal power by 2030. At the end of each plan, there will be an evaluation of progress, review of capacity and targets for subsequent phases. The first phase will focus on capturing the lowhanging options in solar thermal; on promoting off-grid systems in rural areas and modest capacity addition in grid based systems. In the second phase, after reviewing the first phase, capacity will be aggressively ramped up to create conditions for up scaled and competitive solar energy penetration in the country. The key driver for promoting solar power will be through Renewable Purchase Obligation (RPO), mandated for power utilities, with a specific solar component. The government sees potential in promoting decentralized and off-grid applications so as to bring remote and far flung areas in the umbrella of the mission. The mission plans to electrify about 10,000 villages and hamlets through solar lighting systems under the ongoing remote village electrification program of MNRE. Standalone rural solar power plants will be set up in Lakshadweep, Andaman and Nicobar Islands, and in J&K. To encourage the private sector to take up this opportunity, a soft re-finance facility will be made available through Indian Renewable Energy Development Agency (IREDA), which would in turn provide re-finance to NBFCs and banks with the condition that it is on-lend to the consumer at rates of interest not less than 5 per cent. Government will 30

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March 2010

Increased deployment of solar panels

provide budgetary support to IREDA. NTPC Limited’s subsidiary, NTPC Vidyut Vyapar Nigam Ltd. (NVVN) will be designated as nodal agency by the Ministry of Power (MoP) for entering into a Power Purchase Agreement (PPA) with solar power developers. Central Electricity Regulatory Commission (CERC) is authorized to ﬁx the tariﬀ and PPA duration. The PPAs shall be signed with the solar power developers within the next three years and are connected to the grid at 33 KV level and above. The PPAs will be valid for a period of 25 years. For each MW of solar power installed capacity for which PPA is signed by NVVN, MoP shall allocate to NVVN an equivalent amount of MW capacity from the unallocated quota of NTPC stations. The mission aims not only to position India as a global leader in solar power generation but also in solar manufacturing and technological innovation. Setting up of Solar Research Council is proposed to oversee the strategy, taking into account ongoing projects, availability of research capabilities and resources and

As on date, India’s grid connected solar power facilities stand at approximately 8 MW, which is about 0.003 per cent of the total grid based power capacity.

possibilities of international collaboration. Greater stress has been given on solar manufacturing. India has a PV module manufacturing capacity of about 700 MW, but there is no indigenous capacity for solar thermal power projects. It is proposed that solar power developers (SPDs) in solar PV to solar thermal should be in the ratio of 40:60 by the end of the mission. For this, proactive implementation of the Special Incentive Package (SIP) policy is suggested. And to ensure high standards in solar manufacturing, solar components will be covered under the Bureau of Energy Efficiency’s ‘star rating’ program. It is envisaged that at the end of the mission, solar industry will employ at least 100,000 trained and specialized personnel across the skill spectrum. If Dream meets Reality... If everything goes on plan, the country will see a huge uptake in solar and speed up in PV and solar activities. A hefty job market will be created in solar manufacturing and installation. High technology diffusion will be triggered. Low reliance on coal and fossil fuel will happen. Consequently, overall development and poverty alleviation will occur. And needless to say, this will contribute immensely in the fight against climate change. An analysis done by Climate NGO, Greenpeace shows that this plan will ensure an annual reduction of 434 million tonnes of CO2 emissions every year by 2050 based on the assumption that solar will replace fossil fuels. Internationally, if the plan is realized, India could successfully outshine current global solar leaders Germany, Spain, Japan, and the United States in both domestic market size and export manufacturing. In fact, after the announcement of the National Solar Mission (NSM), a lot of foreign investors have shown interest. The CEO of California-based BrightSource Energy was recently in the country to look for potential JV partners. There are others

March 2010

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POWERWATCH INDIA

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Green Ahead POWER SOURCE Solar

Renewable Power

MNRE

GUJARAT

RAJASTHAN

Generation-based subsidy up to Rs 12/kWh for 10 years Cap of Rs 15/kWh after state support Cap of 10 MW per state

PV tariﬀ Commission before 12/31/2010: Rs 13/kWh for 12 yrs Rs 3/kWh for yrs 13-25 Commission before 03/31/2014: Rs 12/kWh for 12 yrs Rs 3/kWh for yrs 13-25

Custom/Excise duty cuts 10 year tax exemption on income from electricity sales

Renewable Purchase Obligation (RPO) – 10% (starting 2014) Depreciation tax credits

Proposal: 10 year feed in tariﬀ Rs 15.78 / kWh for MNRE supported projects. Rs 15.6/kWh for others (50 MW cap)

RPO – 6% (FY10)

WEST BENGAL Proposal: 20 year feed in tariﬀ 2009-10: Rs 11/kWh Post 2010: Rs 10/ kWh

RPO – 10% (FY12)

*USIBC Briefing Book, 2009 / Azure Solar Power

The foremost concern is to bring down the cost and increase the scalability of solar technology, which demands active private participation. But, there is a growing uncertainty of policy support over project life among the private investors. 32

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March 2010

who are exploring the opportunities. To name a few, California-based e-solar, Singapore based Delta Power, and Germany’s Solar Millennium. As far as domestic players are concerned, they are in a ‘wait and watch’ mode so as to see what the government platter has on offering for them. The Big Question The big question is: Will India be able to achieve this tall target? The past records of government-sponsored programs are not very impressive. Going by their history and shoddy implementation, it seems a distant dream. Several loopholes are there in the mission document itself. Budgetary and funding aspects are not adequately dealt with. It is still unclear how much budget the entire program requires. Nor there is a mention of how much fund will be generated internally and how much is expected from international bodies. In the earlier draft released, a small levy on fossil fuels was proposed as one of the mechanisms of generating finance but this has been removed in the final document. The same goes with feed-in tariffs which were well elaborated in the previous draft but vague in the final document. The mission is a part of NAPCC. Programs relating to solar energy as envisaged in NAPCC are yet to be included in plan

PUNJAB Feed in Tariﬀ – 25 years – Rs. 8.93/kWh. Supported by MNRE target of Rs. 15/kWh or Rs 6.07 per kWh

Solar lamps illuminating future India

schemes, allocations are yet to be made, and a coordination mechanism yet to be established at the central and state levels. To meet the targets as envisaged under NAPCC, all states will have to undertake comprehensive review of the RPS/RPO Regulations. However, it is unlikely that all states will develop the mandatory RPS/RPO framework before April, 2010 and the obligated entities will actually be able to meet the targets in the short term. The biggest roadblock in meeting targets is the high absolute cost of the solar power. Cost of a solar power project range between Rs15-25 crore per MW, as compared to that of a conventional power project cost of Rs 4-6 crore per MW. Resultantly cost of generation from solar power plants vary between Rs 12 per kWh to Rs 18 per kWh. The foremost concern for government is to bring down the cost and increase the scalability of

solar technology, which can only be done with the active participation of private players. Recognizing this, the government has brought policy and regulatory support in terms of Generation based Incentive (GBI), Preferential Tariﬀs, Renewable Purchase Obligations (RPO) in place. Although these eﬀorts have led to private sector interest in the sector, project plans are yet to pick up. There is a growing uncertainty of policy support over project life among the private investors. These measures may have worked well for promotion of sources like wind, biomass, etc. But with exceptionally high cost of solar based generation, how far will these go in exciting the budding entrepreneurs? It is yet to see. Till then, we can only hope this mission should not meet the same fate but create a benchmark for the country! - Shilpi Aggarwal Write to us with your feedback at pwi@nextgenpublishing.net

March 2010

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POWERWATCH INDIA

•

Green Ahead Forum

How realistic is the target? Will India be able to achieve the target of 20 GW by 2022? We asked players cutting across the industry...

The ﬁgure is achievable

Gopal K. Saxena, CEO, BSES Rajdhani Power Limited

Given the finest facilities available in glass technology, metallurgical and heat exchanger technology as well as our R&D and IT infrastructure, the figure is very much achievable. Yes, there are issues related to policy and regulatory framework to be addressed to make the segment attractive not only for private power generating companies but also for distribution companies. Due to the non-uniformity of tariffs across states, and 34

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POWERWATCH INDIA

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different levels of T&D losses, there are no uniform incentives for consumers across the country. Further, the draft agreements proposed by NNVN should consider firm and committed supply to discoms, which is essential for us as we are accountable to our consumers for procuring appropriate levels of power. Finally, proper settlement mechanism/cross subsidization needs to be in place for solar energy. For power generating and transmission companies, open access and wheeling charges should not be levied in order to insulate them from state control and different levels of T&D losses across the states. National grid should supply the power to the discoms on displacement basis. Conditions should be put in place to use the infirm power generated from solar plants.

March 2010

K Subramanya, CEO, Tata BP Solar

Encourage private participation It is absolutely possible to reach these targets, provided the sector receives political priority, policy direction and budgetary support. To achieve first phase target, the authorities need to move quickly and decisively to lay out a framework for private investments into the area. The generic tariff for solar power must be attractive enough for prospective developers. Given that the developers will sign PPAs for 25 years, the tariff must be reasonable for the developers, the government and the consumers at large. The other issue to be looked at is the promotion of local manufacturing so as to give a fillip to the industrial development and creation of employment and entrepreneurship opportunities through the solar deployment.

Call for concerted action The target is certainly doable if all the concerned players work in a concerted and goal-oriented fashion. We need to desist doing business in usual manner and that, Dr Amit Kumar, perhaps, calls for a new Director and Senior institutional framework Fellow, Energy Environment as well. The initiative Technology must come from the Development Division, government in terms of TERI right policy environment

Cost: Major bottleneck

Is the government serious?

The high cost of generation, uncertainty of policy support over project life, risks related to generation and technology - limits the exploitation of potential in grid connected projects. Government and State Energy Development Agencies are actively working towards addressing these issues. But considering the high absolute cost, the response from private sector has not been suﬃcient so far.

There is a need for measures in terms of development of R&D to reduce cost and policy support to ensure tariﬀ realization over project life to boost the interest in investments in this stream. Once investments in cost reduction are channelized for research and indigenous development of technology deployment means, the mission is likely to a fruitful means in broad based adaptation of the technology.

Hitesh Sachdeva, Head, M&A & Pvt. Sector Solutions, CRISIL Infrastructure Advisory

Saurabh Kamdar, Team Leader, M&A & Pvt. Sector Solutions, CRISIL Infrastructure Advisory

The solar mission is an unilateral action. And as per the mission document clause, India is depend on international funding to meet the targets. Now the question is: Will India Siddharth Pathak, Policy Officerretain this ambitious target, Climate and Energy, if international finance Greenpeace India does not come through? Further, the success of any policy relies on its effective implementation. The solar mission stipulates a separate nodal executive body to look after the implementation aspect. There is already a mention of MNRE and CERC in the final release – MNRE taking care of entire renewable energy sector in India and CERC looking after tariffs. How will the mandate of this executive nodal body work along with the mandates of these existing bodies has to be seen. The mission document is unclear on this front.

Hazy document and other favorable signals. The emphasis should be on creating a policy and regulatory framework that facilitates, on one hand the demand creation and on the other hand, enables the industry to take up the challenges and fulﬁll the deﬁned goals. An overarching area, that needs equal focus, pertains to a vibrant and mission-mode R&D.

The biggest concern is that the scheme eﬀectively stops at 2013, and there is no clarity on the development framework thereon. Even with cost reductions, it is unlikely that solar thermal Anish De, CEO, will become competitive in Mercados EMI comparison to alternatives like coal or gas by then. Thus such projects will depend on Generation Based Incentive (GBI) or any other subsidization mechanism. Hence clarity on such matters is essential. Namrata Mukherjee, Bundling will surely help in Manager, Mercados EMI

bringing down cost. Indigenization too can reduce costs as much as half, but developers will come forward if they foresee long term prospects. The another aspect is to reduce the duty structure for solar equipment. The NSM is a signiﬁcant step but much still needs to be done to translate policy intent into reality. The greatest haziness lies in the post 2013 subsidy framework, and little is available beyond policy intent.

March 2010

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POWERWATCH INDIA

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Green Ahead On Site

Scripting Success in Solar Power Azure Power becomes India’s first IPP in the space of MW-scale solar power

CEO of Azure Solar Power, Inderpreet S. Wadhwa at company’s plant Courtesy: Azure Power

he launch of the Jawaharlal Nehru National Solar Mission is a testimony of India’s commitment to increase the share of solar in its energy mix and the ﬁght against climate change. While the government is striving hard to boost the interest of the private sector in this domain, one company created history of sorts in December 2009 – Azure Solar Power. Azure Solar Power is the ﬁrst privately operated utility scale, solar power plant in India. The plant was inaugurated by Dr Farooq Abdullah, Minister of New and Renewable Energy, in Awan (Punjab) on December 15, 2009. The 2 MW (1 MW commissioned)

photovoltaic (PV) project is built, owned and operated by Azure Power, a US-based Independent Power Producer (IPP), is the ﬁrst privately operated MW scale solar power plant in the Indian subcontinent. Located in the village of Awan in Punjab’s Amritsar district, the solar PV ﬁeld built over 10 acres of land will provide electricity to about 42 villages around Awan, under a 30-years power purchase agreement (PPA) with Punjab State Electricity Board. The plant is expected to power 4,000 rural homes, totaling 20,000 people, while eliminating as much carbon dioxide pollution as 535,000 trees do annually. The project is facilitated and supported by

Punjab Energy Development Agency (PEDA) and the Ministry of New and Renewable Energy (MNRE). With the launch of this project, PEDA has taken a major leap forward in its endeavor to put up solar PV power projects in the MW scale in the state. This particular power plant at Awan, Amritsar has been constructed by Azure in a record time of six months. The project exploits the solar passive concept, whereby natural ventilation, passive cooling and daylight are optimally utilized. Power from the plant is transmitted directly to a substation in the local community, thereby nullifying transmission and distribution losses. A total investment of Rs 19 crore has gone into commissioning the 1 MW output. The U.S. Overseas Private Investment Corporation (OPIC) provided the loan required to finance the project. The company is a brainchild of Mr Inderpreet S Wadhwa, who founded Azure Power in 2007 after leaving a successful technology career in the Silicon Valley in the US. On being asked how he zeroed on to solar energy as his first private venture, he says, “I was always looking for a business opportunity that would have a direct impact on improving livelihood in rural India. That time, there was a huge policy push for rural electrification. Given

that energy security is core to the development at the grass root level, plus my background in electronics engineering, I decided to take a plunge into the sector.” Azure Power has improvised a business model where instead of selling to individual households, the company builds medium-scale solar power facilities to service the demands of several households with a single facility. Explaining his business model, Wadhwa adds, “We identified distributed medium scale solar power generation as key to energy efficient economic development almost five years ago ahead of national initiatives and international investment in MW-scale solar power generation in India. We took on the task to prove the model March 2010

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Top: Graphical representation of plant process. Courtesy: Azure Power/Mail Today Bottom: CEO of Azure Solar Power with Minister of New and Renewable Energy, Dr Farooq Abdullah, at the inauguration of the plant in Awan on December 15, 2009. Courtesy: Azure Power

POWERWATCH INDIA

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Green Ahead On Site

Interaction with community members Courtesy: Wall Street Journal / Azure Power

•

of distributed solar power generation at the tail end to enhance the grid as well as the livelihood of communities in rural India.” Further, he says, “We are aiming for aggregating electricity demand in rural and semiurban areas in India and improving livelihood in over 200,000 households by oﬀering energy security through medium-scale solar power generation facilities. These facilities also help stabilize the grid at tail end and minimize transmission losses. Solar power and other distributed sources of energy can help reduce the impact of grid losses. Much electricity is lost due to poor infrastructure, theft and other ineﬃciencies. Distributed generation at the point of consumption reduces such losses.” On how he sees the future of solar power in India, Wadhwa says, “India needs 500 MW of power generation per week for the next 25 years to maintain a GDP growth of 8 per cent per annum. We see solar power

POWERWATCH INDIA

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March 2010

to be a significant contributor to India’s renewable power generation in the coming years. More specifically, Solar power is ideally positioned to address the severe power shortage in rural India. It is our mission to play a leading role in the electrification of rural India and we are confident that solar power can do the job.” - Shilpi Aggarwal, based on company inputs Write to us with your feedback at pwi@nextgenpublishing.net

Project Factfile Company

: Azure Solar Power

CEO

: Mr Inderpreet Wadhwa

Project Category

: BOO in IPP

Project

: 2 MW solar PV

Supported by

: PEDA, MNRE

Total investment

: Rs 19 crore

Funding agency

: U.S. Overseas Private Investment Corporation (OPIC)

PPA

: 30 years PPA with Punjab State Electricity Board

Location

: Awan, Amritsar, Punjab

CO2 emission level

: equivalent to 550,000 trees

Power supply to

: 42 villages - 4,000 rural homes, totaling 20,000 people

Special

Supercritical Tech: Promising Future 40

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POWERWATCH INDIA

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March 2010

To give thermal power generation a clean image, the government is mulling a new policy in favour of energy-efficient supercritical technology.

Nordjylland Power Station in Denmark

PLAN PERIOD

itting on large coal reserves and facing ﬂak from environmentalists the world over, India is in a fast rush to give its thermal power generation industry a clean image. Following the course of developed nations like the US, Germany, Japan and Denmark, the government of India has turned its focus on energy eﬃcient supercritical technology and is contemplating a complete shift to this technology in its coming Five Year Plans. There is a growing realization that despite the government’s boost to renewables, coal will continue to dominate the energy mix of the country and contribute substantially in government’s “Power for All by 2012” target. Analysts have a view that to meet this ambitious target, around 15,000-16,000 MW of new generating projects per year are expected to be installed, in which coal will have 60 per cent share and out of the upcoming projects, 80 per cent are likely to

be built upon supercritical technology. The government is quite enthusiastic about this technology. In fact, it wants all coal-ﬁred power stations to be run on supercritical technology by the end of the 13th Five Year Plan (2017-22). Eﬀorts are being made to have over 50 per cent of the proposed capacity to be based on supercritical technology in the 12th Five Year Plan. The Power Ministry already seems to be on an overdrive on the matter, and is considering a proposal to deny its sanction to all projects below 660 MW based on subcritical technology.

WHY SUPERCRITICAL? Supercritical steam cycle technology is not a new concept. It has been around for decades and is a part of commercial coal-ﬁred plants in many countries. It is heartening to see that ﬁnally India has realized its importance and is gearing up for this transition. Supercritical technology is nothing but a means to

THERMAL MW

SUBCRITICAL MW

660 MW

800 MW

SUPERCRITICAL MW

SUPERCRITICAL %

10TH

9620

11TH

52030

44490

7540

12TH

74113

30473

43640

13TH

64100

100

March 2010

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POWERWATCH INDIA

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Special SUPERCRITICAL PLANTS BEING CONSTRUCTED IN INDIA

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NAME/LOCATION OF THERMAL POWER STATION

UTILITY

Dhenkanal, Orissa

Lanco Infratech Limited

2x660 MW

Pussurar Region, Raigarh, Chhattisgarh

Infrastructure Leasing & Financial Services Ltd

3x660 MW

Chutru region of Jharkhand

Infrastructure Leasing & Financial Services Ltd

3x660 MW

Chandil region of Jharkhand

Infrastructure Leasing & Financial Services Ltd

3x660 MW

Bade Dumarpali, Raigarh, Chhattisgarh

Athena Chattisgarh Power Private Limited

2x660 MW

Gondia, Maharashtra

Adani Power Maharashtra Private Limited

3x660 MW

East Godavari, Kakinda

Spectrum Power Generation Limited

2x660 MW

Sinnar, Nasik, Maharashtra

Fama Power Company Limited

2x660 MW

Nagapattinam, Tamil Nadu

PEL Power Limited

2x660 MW

Nandgaon pet, Amravati, Maharashtra

Sophia Power Company Limited

4x660 MW

Tamnar Raigarh, Chhatisgarh

Opelina Finance and Investment Limited

2x660 MW

Tamnar Raigarh, Chhatisgarh

Jindal Power Limited

2x660 MW

Lathur, Maharashtra

Amravati Thermal Power Limited

2x660 MW

Machillipatnam, Andhra Pradesh

Thermal Powertech Corporation (I) Limited

2x660 MW

Gopuvanipalem, Krishna, Andhra Pradesh

Nagarjuna Construction Company Limited

3x660 MW

Simar Thermal Power Plant, Junagarh, Gujarat

JSW Energy Limited

2x800 MW

Salaboni Thermal Power Plant, Paschim Midnapore

JSW Energy Limited

2x800 MW

Manappad, Tuticorin, Tamil Nadu

Ind-Bharat Power (Madras) Limited

2x660 MW

Mudnra, Kutch, Gujarat

Adani Power Limited

3x660 MW

Sompeta, Drikakulam, Andhra Pradesh

Nagarjuna Construction Company Limited

3x660 MW

Central India Power, Phase-II, Maharashtra

Central India Power Company Private Limited

1x668

Tanda Expansion, Uttar Pradesh

NTPC Limited

2x660 MW

Katwa, West Bengal

WBPDCL

2x660 MW

Bakreshwar, Extension Project

WBPDCL

1x660 MW

Koradi Extension Project, Maharashtra

Mahagenco

2x660 MW

East Coast, Andhra Pradesh

East Coast Energy

2x660 MW

NSL Power, Tamil Nadu

NSL Power Private Limited

2x660 MW

Marakanam, Tamil Nadu

NTPC Limited

4x800 MW

Darlipali, Orissa

NTPC Limited

4x800 MW

Lara, Chhattisgarh

NTPC Limited

5x800 MW

Kudgi, Karnataka

NTPC Limited JV with PCKL

3x660 MW

Mundra UMPP, Gujarat

Tata Power

5x800 MW

Sasan UMPP, Madhya Pradesh

Reliance Power

5x800 MW

Krishnapatnam UMPP, Andhra Pradesh

Reliance Power

5x800 MW

Tilaiyya UMPP, Jharkhand

Reliance Power

5x800 MW

POWERWATCH INDIA

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March 2010

UNIT CONFIGURATION

improve the efficiency levels of coal which in turn increases the amount of energy that can be extracted from a single unit of coal. Increasing the efficiency of coal is a very important aspect for coal-fired power generation in India. Coal, under subcritical or conventional parameters, has an effective efficiency of 26 per cent to 36 per cent. In India, in fact, the average efficiency seen in coal power plants is of 32 per cent. This translates into burning of a large amount of coal to produce per unit of energy, as a result of which emissions of NOx and SO2 per kWh are also high. This inefficiency and consequent greater consumption of coal-fuel lead to tariffs for power that are out of reach for a large section of the Indian population - a situation that is against the grain of the lofty “Power for All” goal. The term ‘supercritical’ refers to a state of a substance. In this case it is water where there is no sharp separation between the liquid and gaseous states, so they behave as a homogenous unit. At a pressure greater than 221 bar, water reaches such a condition. Since the cycle medium at such pressures is a single phase fluid with uniform properties, there is no need for a separate drum to separate steam from water, as is required in subcritical set ups. Currently, on an average, supercritical power plants exhibit efficiencies of more than 45 per cent. Studies have shown that specific coal consumption can be brought down by 4 per cent if the steam parameter is increased from 167 bar/538°C/538°C to 250 bar/

566°C/566°C. This implies a cutback of more than 100,000 tonnes of coal in a 660 MW unit, the most common unit size considered for installation within India, leading to significant operational cost savings and, consequently, lower tariffs. In fact, the 4000 MW Sasan UMPP, based on 800 MW supercritical units, being developed by Reliance Power, has a levelized tariff of Rs 1.32 per unit. Based on 8000 hours per year of operations, supercritical boilers can also cut down SO2 emissions by more than 400 tonnes. Nitrogen oxide emissions are reduced using a combination of low NOx burners and selective catalytic reduction technology. In general, an American study has shown that 1 per cent increase in efficiency leads to 2 per cent reduction in NOx, SOx and particulate emissions. In addition, supercritical boilers can maintain high efficiency even at low loads. Loads can be scaled up or down between 30 per cent and 70 per cent without much ado, enabling handy two-phase operations.

COST ISSUES Supercritical set up leads to cost savings. However, the requirement of components to withstand high temperatures and pressures, and sophisticated control systems oﬀset these savings. Currently, supercritical plants are 2 per cent more expensive to set up than their subcritical counterparts. Lower lifecycle costs in the form of lower fuel requirements make up for this small premium, while cost per MW decreases substantially with increase in

Supercritical technology is nothing but a means to improve the efficiency levels of coal. It increases the amount of energy that can be extracted from a single unit of coal. March 2010

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POWERWATCH INDIA

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Special

unit sizes. Thus, cost is not really a stumbling block anymore.

ENTHUSIASTIC MARKET In 2003, the Central Electricity Authority (CEA) set up a committee to decide on subsequent unit sizes for coal-fired stations. The committee felt that with the progressive increase in installed capacity, higher share of thermal generation and large peak to off-peak ratios, backing down and cyclic operation of thermal units is imminent. Thanks to load flexibility, supercritical thermal units appeared to be a better choice in such an environment. The committee recommended that the next higher unit-size adopted in the country should be of 800 to 1000 MW, along with steam parameters of 246 - 250 kg per sq. centimeter, and steam temperatures of 568°C 44

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POWERWATCH INDIA

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March 2010

to 593°C, depending upon site-speciﬁc techno-economics. At that time, the committee also put forward the suggestion of bulk-tendering 8 to 10 such supercritical units. With the approval of proposal for bulk-tendering 11 supercritical units of 660 MW each, it was also stipulated that the winning bidder must commit to indigenize the manufacture of supercritical components via a clearly deﬁned phased manufacturing program, under the duress of liquidated damages worth 5 per cent of contract costs. It was also decided to give BHEL preferential treatment in the whole process. Notably, out of these thermal ventures, nine are being installed, jointly or independently, by the domestic power major, NTPC, while the remaining two projects are being developed by Damodar

Supercritical once-through boiler ﬂow Main Leed pump Economizer

Furnace waterwalls

Separators

Primary Superheater

Secondary Superheater

Spray

To turbine

Drain Tank

Boiler circulation pump

Source: Control Engineering with data from Emerson Process Management

While supercritical once-through boilers not having a stream drum to cushion demand changes increases eﬃciency, the DCS must regulate fuel and boiler feedwater precisely to follow turbine loading.

DID YOU KNOW? The 400 MWe, Unit 3 at Nordjylland Power Station is the world’s most efficient coalfired power station.

Valley Corporation Limited (DVC). Consequently, in order to be able to bid on these contracts, L&T, in joint venture with Mitsubishi Heavy Industries (MHI), is setting up a facility in India for manufacturing 4,000 MW worth of supercritical boilers as well as turbine-generators (TG). And a consortium of Bharat Forge and Alstom is also putting up a manufacturing capacity of 5,000 MW for TG sets. In addition, JSW and Japan’s Toshiba are, together, developing indigenous facilities for 3,000 MW of TG sets, while a GE-Ansaldo JV intends a 2,000-MW boiler manufacturing facility. The Ministry of Coal has, recently, facilitated the actual issue of tenders for these 11 units by agreeing to process the letter of assurance for the requisite coal supplies. In addition, NTPC intends to issue the NIT for seven 800 MW-supercritical units by February of this year. NTPC’s Barh STPP is likely to be India’s ﬁrst commissioned supercritical power plant, while Tata Power’s 4000 MW Mundra UMPP will be the ﬁrst to use 800 MW units.

ROAD AHEAD It is expected that supercritical technology will takeoﬀ in India in a big way, given the voracious appetite for cheap energy in the country. In the medium-to-long run, ultra-supercritical (270 bar/565°C/ 593°C) and advanced ultra-supercritical (295 bar/600°C/ 600°C) power plants, currently at a nascent stage, would enter the mainstream. Currently, for once-through boilers, operating pressures of up to 300 bar represent the state-of-the-art. However, superior alloy steels are required for the boiler and other components in direct contact with the steam in such power plants. Steam conditions of up to 300 bar/600°C/620°C may be achieved using steel with 12 per cent chromium content. 315 bar/620°C/620°C requires Austenite, a tried and tested but pricey alloy. Nickel-based super-alloys would permit 350 bar/700°C/ 720°C, with corresponding eﬃciencies of up to 48 per cent. The future for supercritical technology, thus, seems exceedingly bright! - Shilpi Aggarwal Write to us with your feedback at pwi@nextgenpublishing.net

March 2010

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POWERWATCH INDIA

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Nuclear Watch

Power Rush An easing international environment has indeed worked well for the Indian nuclear industry. Recent developments suggest a spur in business

t would not be inaccurate to say that India presently has the most diverse nuclear power program in the world. No other country has a program that envisages the setting up of Light Water Reactors (LWRs), Pressurized Heavy Water Reactors (PHWRs), Fast Breeder Reactors (FBRs) and Thorium utilizing reactors simultaneously. This peculiar state of aﬀairs is no doubt a result of the country’s three stage program and is a 46

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POWERWATCH INDIA

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March 2010

testimony to both the deepening as well broadening of the nuclear energy eco-system in India. To put this in further perspective, India intends to have in place at least 40,000 MWe of nuclear capacity by 2020. This mammoth undertaking is certainly being aided by India’s re-entry into the international nuclear order. A ﬁne example of the impact of India’s new found ability to import uranium is the commissioning of RAPP-5 in early February and the attain-

ment of criticality by its twin unit RAPP-6 in the same period. These reactors had actually been completed two years ago but could not be started up on account of a paucity of domestic fuel. That situation has now been overcome through import. Given that domestic sources of uranium are also being augmented, it is likely Indian nuclear reactors will soon return to operating at the high capacity factors that was so characteristic of their performance in the late nineties and the ﬁrst few years of the new millennium. The PHWR program has indeed picked up pace in recent months. Kaiga-4 is nearing completion and given that the fuel mismatch issue has been overcome via imports from France and Russia, it is reasonable to assume that this unit will see commercial operation soon. Construction of four 700 MWe PHWRs is slated to begin this year – two at Rawatbhatta site and the other two at Kakrapar site. Some 20 new PHWRs are to be constructed by 2025-2027. Even as the PWHR program has found its feet again, the move to set up imported LWRs continues apace. Kudanakulam 1 and 2, despite delays, will see commissioning in mid 2010 and 2011 respectively. Interest-

ingly, four more reactors of the VVER-1000 design have been cleared at the Kudanakulam site and ground break for the ﬁrst of these two units is expected to take place within a year or two. Meanwhile pre-project activities have begun at Jaitapur and it is expected that all environmental clearances will be in place by the second half of 2011. The Jaitapur site has of course been earmarked for French major Areva’s 1600 MWe European Pressurized Reactors. NPCIL expects to set up six such reactors at this site. Progress has also been made on designating further sites to various reactor suppliers from around the world. The Americans, who were a triﬂe concerned about not getting a share of the Indian nuclear pie fast enough have been allocated a site each in Gujarat and Andhra Pradesh. While the Mithi Virdi (or Chayamithi Virdi) in Gujarat has been selected to host Westinghouse AP1000 reactors, Kovvada in Andhra Pradesh will get GE Hitachi Advanced Boiling Water Reactor units. The Russians have been allocated an additional site at Haripur in West Bengal which is expected to witness the setting up of four 1200 MWe VVER-1200 units.

Atomic Power Station

Capacity (MWe)

Agency

Expected commissioning date

*Physical progress (%)

Kaiga-4, Kaiga,

220

NPCIL

100

1,000

NPCIL

2010

94.20

1,000

NPCIL

2010/2011

85.40

500

BHAVINI

2011

–

Karnataka KNPP-1,

* Data as of December 2009

Kudankulam, Tamil Nadu KNPP-2, Kudankulam, Tamil Nadu PFBR, Kalpakkam, Tamil Nadu TOTAL

2,720

March 2010

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POWERWATCH INDIA

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Nuclear Watch REACTOR

•

POWERWATCH INDIA

•

COMMISSIONING DATE

RAPS-1, Rawatbhatta, Rajasthan

PHWR

December 1973

RAPS-2, Rawatbhatta, Rajasthan

PHWR

April 1981

RAPS-3, Rawatbhatta, Rajasthan

PHWR

June 2000

RAPS-4, Rawatbhatta, Rajasthan

PHWR

December 2000

RAPS-5, Rawatbhatta, Rajasthan

PHWR

February 2010

RAPS-6, Rawatbhatta, Rajasthan

PHWR

March 2010

MAPS-1, Kalpakkam, Tamil Nadu

PHWR

January 1984

MAPS-2, Kalpakkam, Tamil Nadu

PHWR

March 1986

NAPS-1, Narora, Uttar Pradesh

PHWR

January 1991

NAPS-2, Narora, Uttar Pradesh

PHWR

July 1992

Kaiga-1, Kaiga, Karnataka

PHWR

November 2000

Kaiga-2, Kaiga, Karnataka

PHWR

March 2000

Kaiga-3, Kaiga, Karnataka

PHWR

May 2007

KAP-1, Kakrapar, Gujarat

PHWR

May 1993

KAPS-2, Kakrapar, Gujarat

PHWR

September 1995

TAPS-1, Tarapur, Maharashtra

BWR

October 1969

TAPS-2, Tarapur, Maharashtra

BWR

October 1969

TAPS-3, Tarapur, Maharashtra

PHWR

May 2006

TAPS-4, Tarapur, Maharashtra

PHWR

September 2005

The second and third stages of India’s three stage nuclear program seem to be gathering steam as well. The Pressurized Fast Breeder Reactor (PFBR) being constructed at Kalpakkam crossed an important milestone in the closing stages of 2009 when the main vessel for the PFBR was installed in the reactor vault. In all likelihood, the PFBR will see commercial operation in 2011. The Kalpakkam site will host a further two 500 MWe Fast Breeders by 2020 and four more are expected to come up elsewhere by the same date. It seems that India’s ﬁrst thorium 48

TYPE

March 2010

utilizing reactor, the Advanced Heavy Water Reactor (AHWR) will see construction in the 12th Plan period (2012-17). Although no site has been decided as yet, a critical facility for the AHWR was commissioned at BARC, Trombay in 2008. This 300 MWe reactor combines features of both LWRs as well as PHWRs and represents a generational jump in terms of safety and durability. All the good news detailed above notwithstanding, the Indian nuclear program will not be able to realize its true potential without adequate support from domestic

The Indian nuclear program will not be able to realize its true potential without adequate support from domestic manufacturing

manufacturing. Fortunately the past year has seen domestic companies looking to enter the nuclear component manufacturing space in a big way by leveraging both in-house capability or by entering into JV with international majors. The leader of the pack is of course Larsen and Toubro (L&T), being just one of ten international companies qualiﬁed by the American Society of Mechanical Engineers to fabricate nuclear-grade pressure vessels and core support structures. The company presently has a new forging facility under construction at Hazira, Gujarat in an agreement with NPCIL in 2008. This facility will produce 600-tonne ingots and consist of a very large forging press designed to supply ﬁnished forgings for nuclear reactors, pressurizers and steam generators. L&T has also entered into component supply agreements with GE-Hitachi, Atomstroyexport, AECL and Toshiba-Westinghouse. BHEL meanwhile plans to spend 7.5

billion dollars in the coming years building plants to supply components for reactors of sizes up to 1,600 MWe. It is contemplating to enter into JVs with NPCIL and foreign enterprises. The names the companies are in talks with are Areva, Bharat Forge and UK’s Sheffield Forgemasters. HCC (Hindustan Construction Co.) formed JV with UK-based AMEC PLC last year to undertake consulting services and nuclear power plant construction. The materialization of these ventures will definitely ease things for the Indian nuclear program as it steams into the 21st century unshackled by the vestiges of the 20th. Indeed the indigenization of imported nuclear plants is a stated goal of Indian nuclear planners and must be pursued as nothing short of an ideology. It is only then that the Indian nuclear program will be able to fulfill its destiny of becoming a prime contributor to India’s quest for energy security. -Saurav Jha

March 2010

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POWERWATCH INDIA

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Nuclear Watch Interview

Man At the

Helm

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March 2010

The Indian nuclear sector is set for exciting times. Amidst all the happenings, PWI caught up with the Chairman of the country’s apex nuclear body, NPCIL, Dr S.K. Jain, on current and future issues for the nuclear business in India...

hen do we expect to see Kudanakulam 1 and 2 (KNPP 1 and 2) commissioned? What accounts for the delays in this project? KNPP-1 will reach criticality in the second half of 2010, as only some work on the instrumentation and control systems and cabling remain. Otherwise the plant is over 99 per cent complete. KNPP-2 will see hot commissioning in 2011. As of now, at least four more reactors of the same capacity are expected to come up at this site. We had hoped to commission in a six year time frame from commencement of construction. The work was actually progressing at a steady pace. However, something totally beyond our control was taking place in Russia. Russian nuclear industry underwent a period of liberalization when they actually tried to privatize some of their industry. Subsequently, they once again consolidated the various nuclear entities, leading to a great churning of this business in Russia. NPCIL suffered because this led to delays in the supply of critical equipment from the Russian side and naturally this had an effect on the Kudanakulam project. Who are the chief beneficiaries of these plants and how competitive will these

be vis-a-vis other forms of base load generation? They will be quite competitive. The cost of electricity from these reactors is going to be less than Rs 3.00 per unit. In fact, it is going to be in the Rs 2.60-2.70 per unit range. As far as those benefiting from this project are concerned, Tamil Nadu is getting 49 per cent followed by Kerala, Karnataka and Goa in that order. Has the easing of the international environment helped NPCIL overcome the fuel mismatch issue that was plaguing its PHWRs? Also, what are the new sources of fuel that are now available to NPCIL both within India and outside? Oh Certainly. We were able to restart RAPP-2 from the 1st of September 2009 and this unit is presently operating at over 90 per cent capacity factor. NPCIL has also been able to commission reactors RAPP 5 and 6 which were getting delayed due to the fuel non-availability. RAPP-5 has commenced commercial operation on February 4, 2010 and RAPP-6 attained criticality on January 23. RAPP 3 and 4 will also start benefiting from imported fuel in 2010. Obviously, Tarapur 1 and 2 have also benefited with the last fuel consignment having come from Russia. I can confidently say that the fuel March 2010

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Nuclear Watch Interview

I am conﬁdent that fuel mismatch will become a non-issue progressively.

mismatch problem will become a non-issue progressively. However, we need more work on this aspect since domestic production has peaked and our requirement is in excess of production. This needs early opening of new mines and processing mills. Nevertheless, as per our geologists, there are huge undiscovered deposits of Uranium, deeper in the ground. If validated, these may take our Estimated Additional Resources to 200,000 tonnes, that is about twice of current estimates. Internationally, we will continue to source fuel from Russia and France and from countries like Kazakhstan, Namibia, Canada and Mongolia as well. How are talks with the US on the reprocessing issue progressing? Will this include the used fuel from Tarapur 1 and 2 or is this meant only for future reactors, imported from the US? Talks are progressing well and naturally both Tarapur 1 and 2 as well as future reactors have been discussed. Having said that I would also refer to our stated position, which is quite simple - the contract for Tarapur 1 and 2 has long since expired. So we are well within our rights to reprocess the fuel, if we want to. However, our side is exercising voluntary restraint and setting up a dedicated reprocessing facility for just these two reactors at the moment does not make a lot of commercial sense. 52

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March 2010

Could you tell us a bit about the growth of reactor component manufacturing in India and the prospects for the same? NPCIL is in talks with a number of Indian majors in this sphere. The entire thing is a co-ordinated eﬀort and as you may know a few agreements are already in place. We are working in close co-operation with companies such as L&T, NTPC and BHEL in this domain. We envisage for future that value wise our reactors will have a 50:50 ratio in terms of domestic and international inputs. Of course, civil works and Balance of Plant are areas where the Indian domestic sector is already involved. In the next 10-15 years, we will see them entering the forging and casting side of things in a much more substantial manner. However NPCIL will continue to support indigenization to whatever extent is technically feasible and also economically viable. Is NPCIL satisﬁed with fuel linkeages for the variety of reactors it operates? Absolutely. I am glad that India has credible capability in the fabrication of fuel for all kinds of reactors ranging from PHWRs to BWRs. A new fuel fabrication complex is coming up in Rajasthan catering to the needs of the new 700 MWe reactors. Other facilities have also been set up in Palaikal in the South. We actually fabricated fuel for TAPP-1 and 2 way back in 1993-94 from UF6 that was supplied by France for these BWRs.

Spotlight Power Distribution

Challenges

in Power Distribution in India

By Ramesh Narayanan

he framework for the development of a sustainable power sector have been put in place by formulating electricity policy, tariﬀ policy and other rules and regulations as envisaged under the Electricity Act 2003. In spite of all these developments, India continues to face acute power shortages. The average energy shortfall in the country is about 11 per cent and which is 12 per cent at the peak. About 56 per cent of all rural households do not have access to electricity. This, despite the fact that the Northern, Western, Eastern and North-Eastern Regional Grids have been operating in synchronism. To bridge the demand supply gap in the country, 100 GW capacity addition is envisaged for the 12th Plan Period (2012-17). This is besides the 78700 MW of generating capacity under execution in the 11th Plan. In addition to this, renewable energy is expected to contribute around 20 GW of additional capacity under the 12th Plan. Therefore, our country needs matching infrastructure to

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March 2010

transmit and distribute the expected capacity to the real consumers. Typically, the distribution sector will need infrastructure equal to almost 2.1 times the additional power being added to the system. Thus for the 12th Plan Period, 250 GW distribution infrastructure will be required additionally to deliver the power being added in the system. Finance for distribution sector On an average, Rs 1.5 crore is required to create 1 MW distribution infrastructure. This includes 66/33 KV transmission lines, sub-stations, 11 KV HT & LT lines, transformers and other related service infrastructures for metering, billing etc. Therefore, during 12th Plan Period, a whooping Rs 3,75,000 crore will be required to create matching distribution infrastructure in the country. Assuming 70:30 debt-equity ratio, Rs 2,62,500 crore will be required by the distribution sector as debt to create the necessary infrastructure. Distribution sector will need infrastructure equal to almost 2.1 times the additional power

being added in the system. The distribution of electricity is a fully regulated business. Currently, investors are allowed only a fixed return on equity (ROE) of 14 per cent by the regulators. All efficiency gains in this business go towards subsidizing the increase in power purchase cost and other operational expenses in the ARR. Invariably, the DISCOMs have to front end this increase in power purchase cost, capex etc. and put up to the regulators through ARR for their consideration for suitable pass through in the retail tariff. The regulators perpetually appropriate all efficiency gains of the discoms against the deficit caused by the increased power purchase cost and other operational expenses and only remaining revenue gap is allowed as a pass through in the retail tariff. Whereas, in case of generation and transmission business, the efficiency gains beyond the normated tariff levels are allowed to be retained by the generators/transmission companies, thus making such ventures attractive and bankable. Accordingly, the balance sheet of such companies are strong, enabling them to attract cheaper debts for their developments. On the other hand, the balance sheets of the distribution companies are weak due to lack of adequate margin in their business. This makes the distribution business less attractive which affects the development and growth of distribution sector adversely. Normally, the generation and transmission projects are developed on a project finance basis where the revenue generating contracts namely the PPA or the BPTA are held as collaterals by the lending institutions. Whereas, the distribution business does not get such project financing therefore would require stronger balance sheets for raising its required capital for growth and development. Therefore, there is a need to review the viability of the distribution sector to explore ways and means to enhance its attractiveness to sustain its development

matching the progress happening in the generation and transmission sector. This is essential for the beneďŹ ts of development in generation sector to actually reach the end user. Otherwise there is a risk of power getting bottled-up and not reaching the real user, thereby defeating the sectoral objective of power for all by 2012 in India. Lack of adequate margin makes the distribution business less attractive which aďŹ&#x20AC;ects the development and growth of the sector adversely. Also, the distribution sector would require support for accessing soft and easy loans for which government could consider raising suitable low cost funds through various means and make it available to this sector. In fact, private DISCOMs and municipal utilities would also require easy access to funds like JNNURM, R-APDRP and RGGVY etc. Currently, these funds are not being extended to such bodies. Technology Typically, the power is delivered to the end user in India through a three stage transformation process. Firstly, the power is stepped down from 400/220 KV level (UHV) to either 66 or 33 KV level. Then, transformation takes place to step down this voltage further from the 66/33 KV level (EHV) to 11 KV level. Finally, the power is delivered to the end user after the last stage transformation from 11 KV level (HT) to 415 volts (LT). Higher transmission and distribution losses have always been a concern for distribution sector. The present voltage level in our transmission and distribution system has its limitations in controlling T&D losses. Reduction in technical losses could be achieved through elimination of extra voltage level in transmission and distribution network as indicated in the given diagram. The advantages of elimination of a voltage level will deďŹ nitely help in containing

technical losses and also help in reducing requirements of land, capex, manpower, maintenance etc. Man-per-power Typically a conventional power plant depending upon its unit size would require about 0.5 men per MW. Similarly, the transmission system would require around 0.1 men per MW. Whereas, the distribution business depending upon the extent of rural/urban mix and geographical spread of its license area could require any thing between 10-15 men per MW. Special courses could also be introduced at ITIs, engineering colleges and management institutions to cater to the specific skill, knowledge and attitude required in this sector. Accordingly, it is estimated that 6 lakh men will be required by the distribution sector to handle the additional power (1,20,000 MW) during 12th plan period. Out of this, 70 per cent would be skilled manpower. To train, develop and deliver such a large skilled work force, there is a need to have dedicated distribution sector-specific training institutions. Special courses could also be introduced at ITIs, IITs, Engineering colleges and management institutions to cater to the specific skill, knowledge and attitude required in this sector. Long-term strategy Distribution sector per say is going to be more and more customer centric in years to come. Quality and reliability of power supply is the growing need of all stake holders. Also, there are other challenges like reduction in AT&C losses, technology upgradation (AMR, SCADA etc.) etc. Distribution sector is required to formulate appropriate strategies to meet these growing challenges not only at discom level but also at sectoral level. We require suitable institutional arrangements for

evolving suitable business strategy to achieve all sectoral objectives. Innovation Research and development in the distribution sector (which prominently involves EHV, MV & LV system) so far have been lagging behind (or almost negligent). With growing challenges, there is a need for distribution sector- centric research and development work. The major areas where R&D are needed most are remote metering, people less customer care/services, automation, safety, O&M practices, etc. For this purpose, dedicated research and development centers are needed to cater to the needs of distribution sector. Separate fund is also required to accelerate the R&D work at these dedicated centers.

Sectoral Objectives Electricity for all by 2012 Open & ﬂexible energy markets Reduction of AT&C losses and cost of supply Improving the quality & reliability of supply Create product and service differentiation for different types of consumers

The way ahead The need of the hour for the power distribution sector is to meet the growing demand and challenges faced by it. Funding for expansion and augmentation of distribution infrastructure is a major concern area for discoms under present regulated regime. There is a need to make the sector attractive and strengthen the balance sheets of discoms to help them garner adequate funds at competitive rates. Technological advancement through dedicated R&D centers could also help the sector in a big way in meeting growing stake holder’s demand for quality, reliability of supply and customer services. The 12th plan period is going to be crucial for Indian power sector in general and distribution sector in particular for realization of all our sectoral objectives. Thus there is an urgent need for re-structuring the regulatory and ﬁnancing arrangements for the distribution sector to make it equally attractive and commercially lucrative for enhanced private participation. ‘Power for All’ should not merely remain a statement. (The author is CEO, BSES Yamuna Power Limited (BYPL)) March 2010

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Spotlight Interview North Delhi Power Limited (NDPL) has been lauded for its power distribution reforms and consumer friendly practices in the city. Chief Executive Ofﬁcer, NDPL, Mr Sunil Wadhwa, shares with PWI, the success story of the company...

Setting Standards

he government intends to achieve Power for All by 2012. What role does the power distribution sector have to play in achieving

this target? The poor financial health of bulk power purchasers (SEBs/State utilities) is a major roadblock in the development of the sector. The continuously rising commercial losses of SEBs have touched Rs 26,000 crore in 2000-01. This payment deficit continues to rise and threatens the viability of the central power utilities. The inability of SEBs to pay has been the basic reason for poor private investment, both domestic and foreign, in spite of liberalization of polices at central government level. Till the health of the SEBs improves, major investment from the private sector cannot be expected. The poor financial health of SEBs also seriously affects their ability to invest in new generation capacity, to upgrade their transmission and distribution network and to

undertake system improvement. Distribution is the weakest link in the chain of power supply. Hence distribution reforms are very essential and have been identified as the key area of focus in the power sector reform process. What have been NDPL’s achievements as a private discom? NDPL has been the frontrunner in implementing power distribution reforms in the capital city. Since privatisation, AT&C losses in NDPL areas have shown a record decline. Today they stand at 15 per cent (as on March 31, 2009) which is an unprecedented reduction of over 73 per cent from an opening loss level of 53 per cent. On the power supply front too, NDPL areas have shown remarkable improvement. we have implemented hi-tech automated systems for its entire distribution network. To fight the menace of power theft, modern techniques like High Voltage Distribution (HVDS) System and LT Arial Bunch Conductor have been adopted. NDPL has won several accolades for its pioneering efforts. It has the rare distinction of being the first power distribution utility from India by winning the 2008 Edison Award. Some of the other key recognitions include international Palladium Balanced Scorecard Hall of Fame Award 2008, SAP Ace Award 2008; UPN, USA Metering Award; Asian Power Award 2009 (3rd consecutive year); the Asian Power Most Inspirational CEO of the Year 2008 Award; CII EXIM Award for ‘strong commitment to excel’; and National Award for Meritorious Performance by the MoP, GOI.

What can you tell us about NDPL’s consumer outreach program? Apart from internal reforms, a key area that was crying for change was the customer interface. As mentioned earlier, in the last seven years, NDPL has used IT extensively to enhance the consumer’s experience. Our other key initiatives include doorstep delivery of new connections to make the process of getting new connection hassle-free, privileged consumer scheme where regular-paying consumers are being rewarded with oﬀers and discounts, customer relationship management by associating with RWAs, automated bill payment kiosks and SMS based fault management system.

Distribution is the weakest link in the chain of power supply.

What has been the level of process automation and IT deployments at the discom? NDPL believes that a sound and robust network infrastructure coupled with IT enablers result in efficient service and lower costs. Major emphasis has been laid on deploying technology ensuring uninterrupted power supply. In order to have better monitoring and control of network, NDPL is deploying new technology related to grid automation, supervisory control and data acquisition system (SCADA), distribution management system (DMS), Geographical Information System (GIS) and outage management system (OMS). While grid automaton and SCADA have been deployed, we will soon be deploying DMS system. Implementation of OMS and DMS will help in faster identification of fault and reduction of outage time by faster restoration of supply from remote location. We are using off-line tools like Cyme and PSAF for network. analysis for optimal design of network. March 2010

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Special En-con

BEE Awards Rewarding industrial prudence

n 27th March 2010, people across the world will display their solidarity against climate change by turning off their electrical appliances for one hour. Named as ‘The Earth Hour’, the event brings to light the global concern mounting in favor of energy conservation. While people worldwide are coming forward in a big way to address the issue, governments are no far playing their roles. Indian government is equally concerned. Its body, Bureau of Energy Efficiency (BEE) in consultation with the Ministry of Power (MoP) brings out annual awards in energy conservation for the corporate sector. Realizing the importance of encouraging the industrial sector to undertake energy conservation measures for long term benefits, MoP introduced Energy Conservation Awards as one of its voluntary schemes. Started in the year 1991, the awards are coordinated by BEE after its formulation and reward those industries which have taken extra efforts to reduce their intensity of energy consumption while maintaining existing production levels. Every year on December 14, the awards celebrate the initiatives taken by industries in energy conservation. The day is observed throughout the country as “National Energy Conservation Day”.

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The ﬁrst time the awards were given away was December 14, 1991. Since then, the event has set the tradition of rewarding companies’ innovation and achievements in energy conservation. The ambit of the award is quite large – not only does it include large industries but also considers buildings, railways, state designated agencies, aviation segments, manufacturers of BEE star labeled appliances and municipalities.

FORMATION OF BEE Under the Energy Conservation Act, 2001, the BEE was established. The organization was given the responsibility for spearheading the improvement of the energy situation in the country with various regulatory and promotional methods. Till date, the mission of the BEE remains to institutionalize energy eﬃciency services, promote its delivery mechanisms and encourages all sector for prudent usage of energy in their operations. It is essential as the industrial sector in India consumes the major chunk of energy, accounting for about 48 per cent of total

commercial energy consumption. The MoP realised the importance of encouraging the industrial sector along with various sectors to undertake energy conservation measures for long term beneﬁts. Thus, one of the voluntary schemes initiated by the ministry was the introduction of Energy Conservation Awards. Though the awards were started in the year 1991, they are coordinated by BEE after its formulation and reward those industries which have taken extra eﬀorts to reduce their intensity of energy consumption while maintaining existing production levels. Each year on December 14, which is celebrated as ‘National Energy Conservation Day’, the awards are given away by MoP.

AWARDS IN DETAIL =First and second prizes given in each sub-sector in the form of a Silver Plague with

appropriate citation on such awards as may be decided by MoP. =The unit getting the first position for the third year in a row is eligible for a ‘Top Rank Award’ for that year. In that case, the units getting second and third position in that year are given the first and the second prize respectively. =From 1999 onwards, the ‘Top Rank Award’ was renamed as the ‘Excellence Award’. =The award applications are evaluated by the Technical Sub-Committee and its recommendations are put up to the Award Committee. An inter-disciplinary Energy Conservation Award Committee under the chairmanship of the Secretary of Power decides the winners for the year. The MoP has also set up a Technical Sub-Committee to assist the Award Committee in the finalization of awards. The Technical Sub-Committee for the year 2009 is headed by the Deputy Director-General (National

Year-wise energy savings achieved by participating units in MoP’s National Energy Conservation Awards Scheme (1999-2009) YEAR

ONE TIME EQUIVALENT FURNACE OIL ANNUAL EQUIVALENT NO OF INVESTMENT AVOIDED AND OTHER SAVINGS AVOIDED PARTICIPATING IN RS CAPACITY LIQUID FUEL IN RS CRORE CAPACITY UNITS CRORE IN KW SAVINGS IN IN KW LAKH KL

COAL GAS SAVINGS SAVINGS IN LAKH IN LAKH CUBIC METRIC METERS TONNES

2009

558***

2377

3180

2451

359

5.65

12.4

4275

2008

368**

1859

2493

2216

325

1.85

3.47

15729

2007

384*

1843

2923

1620

308

1.25

5.86

15379

2006

388*

1135

1266

1288

245

1.19

5.17

29044

2005

343*

993

1319

1327

252

2.4

7.58

13122

2004

297

763

1364

814

155

2.49

5.37

18585

2003

191

539

1071

542

103

2.21

12.65

73181

2002

174

594

691

641

122

1.7

7.4

35588

2001

157

587

659

485

2.21

4.79

3929

2000

120

366

630

524

100

1.33

0.64

707

1999

123

205

940

205

1.62

2.15

2444

11261

16536

12113

2104

211983

Total

* participating units include industrial units, buildings and zonal railways ** participating units include industrial units, buildings, zonal oﬃces, state designated agencies and municipalities *** participating units include industrial units, buildings, zonal oﬃces, state designated agencies, municipalities and manufacturers of Star-labeled appliances

March 2010

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Special En-con

Productivity Council), with members drawn from Central Electricity Authority, National Productivity Council, Bureau of Indian Standards, Ministry of Railways, GTZ and the Bureau of Energy Eﬃciency. In 1999 the number of participating units were a mere 123. It grew to 157 in 2001 and in 2006, there were 388 units participating. However, 2009 saw a substantial jump in membership which went up to 558 units, compared to 368 units in 2008; an increase of 45 per cent in participation. This shows in the amount of energy which all the participating units have saved till date. In 2009, the participating units saved electrical energy worth 2451 million kWh which is equivalent to the energy generated form a 359 MW thermal power station at a Plant Load Factor (PLF) of 0.78. In other words, these participating units have avoided the installation of power generating capacity equivalent to 359 MW thermal power stations in 2008-09, which would otherwise have been required to meet the power demand of these units. In the last

11 years of the award scheme from the period 1999-2009, the participating units have collectively saved Rs 11261 crore and the investment made on energy eﬃciency projects was recovered in 17.6 months. In energy terms, 12113 million kWh of electrical power, 24 lakh kilolitre of oil, 67 lakh metric tonne of coal and 21.2 billion cubic meter of gas was saved, through the energy conservation measures of the participating units. The participating units of the 2009 awards have collectively invested Rs 3180 crore in energy conservation measures, and achieved a monetary savings of Rs 2377 crore every year, implying a very short payback period of 16 months only. Progressive industrial units and other

establishments across the country have already realized the cost effectiveness of energy conservation measures and honoring their efforts on National Energy Conservation Day, has given a positive message to thousands of other industrial units and establishments who may have not yet fully utilized their cost effective potential through energy conservation. As more and more units join in energy conservation, the role and importance of the bureau only increases. It is hoped that National Energy Conservation Award scheme would help in motivating the other energy consumers in joining and promoting a nationwide energy conservation movement. - Anwesh Koley Write to us with your feedback at pwi@nextgenpublishing.net

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En-con Interview

ow do you define ‘energy efficiency’? Is there a consensus amongst global heads regarding a defined model for achieving it? Energy efficiency, as described by the World Energy Council (WEC), encompasses all changes that result in a reduction in the energy used for a given energy service (heating, lighting, etc.) or level of activity. Avoiding unnecessary consumption or choosing appropriate equipment to reduce the cost of energy, helps to decrease individual energy consumption without impacting individual welfare. For example, thermal regulation of room temperature, or automatic de-activation of lights in unoccupied hotel rooms are good examples of how equipment can reduce the influence of individual behavior. There is broad consensus globally on the benefits of achieving energy efficiency. The “one size fits all” model does not work here since energy efficiency is based on local environment and circumstances. Despite

this, some commonalties do exist. For instance, any cost related decision concerning energy efficiency at the individual level, is based more or less on a trade-off between the immediate cost and the future decrease in energy expenses expected from increased efficiency. The higher the energy price, observed or expected, the more attractive are the energy efficient solutions. What are the challenges faced in the implementation of energy efficiency techniques in India and what measures has BEE either taken or planning to take in this regard? There are many barriers to energy efficiency in the industrial sector. Commercial barriers are a major obstacle which prevent access to technologies and the spread of efficient energy forms. Some of these in particular are high cost of energy efficient equipment, lack of information on available technologies, higher perceived non-performance risk of newer technologies, etc. At BEE, we have initiated several programs/schemes to address these issues.

The PWI team met up with the BEE’s Director General, Dr Ajay Mathur in his office. The team discussed the Bureau’s efforts in pan-industry energy conservation and efficiency measures. Excerpts from the interview…

Energy Efﬁciency Decoded March 2010

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En-con Interview One of these is a mandatory Standards and Labeling system for few products. The another one is Energy Conservation Building Code (ECBC) where we have a pool of ECBC-expert architects and engineers for creating facilities for material testing and certification, and carrying out a series of awareness workshops in all the climatic zones for manufacturers, builders, architects, etc. A scheme for the rating of office buildings has also been introduced by BEE. In other developments, we are partnering with CFL manufacturers and discoms to reduce the cost of these products. We are working with State Designated Agencies (SDAs) who deliver against a uniform Energy Conservation Action Plan (ECAP) developed by us. We are also planning workshops for farmers and utility employees in areas where DPRs are being developed. Organizations that meet the norm or consume less than the prescribed energy levels will earn certificates and those who fail will have to buy certificates in proportion to the excess power consumed. How will this entire system be carried out? Will there be a dedicated body to keep a track of it? The “Perform, Achieve, Trade” (PAT) is one of the initiatives as spelt out in the implementation plan of the National Mission of Enhanced Energy Efficiency (NMEEE) which is one of the Eight Missions of the Prime Ministers’ National Action Plan on Climate Change. The PAT scheme refers to industries and not organizations. In March 2007, the

Government notified units in 9 industrial sectors, namely aluminum, cement, chlor-alkali, pulp and paper, fertilizers, power generation plant, steel, and railways, as Designated Consumers (DCs). These industries have to appoint an energy manager, file energy consumption returns every year and conduct mandatory energy audit. They also will have to adhere to the energy consumption norms specified by the Government. The scheme is proposed as a market based mechanism to enhance cost effectiveness of improvements in energy efficiency in energy-intensive large industries and facilities, through certification of energy savings that could be traded.

There is broad consensus globally on the benefits of achieving energy efficiency. But the “one size fits all” model does not work here. 66

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How are energy intensity and emissions intensity co-related, especially since India plans to increase its energy intensity and reduce its emission intensity? We would like to decrease both our energy intensity and our emissions intensity. India’s energy intensity has been on a declining trajectory due to high energy prices and a shift towards the services sector. From 0.19 kgoe (kg of oil equivalent) per dollar of GDP at purchasing power parity in 2000, its energy intensity has fallen to 0.15 kgoe in 2008. The relationship between energy and emissions intensities is complex. At one level, if energy intensity decreases, so does the emission intensity because most emissions are from energy use. However, there are exceptions. For example, most people below the poverty line use biomass and wood as fuel, which is very energy inefficient, but its carbon dioxide emissions are very close to zero, as biomass is grown, cut and then grown again. But as they move to kerosene, the energy efficiency

will improve, while the carbon intensity will worsen. Over long time frames, the two parameters are different. The National Mission on Energy kicks off in April 2010. What all can be expected from it on the energy efficiency front? This Mission is the second mission to be approved by the Prime Ministers’ Council on Climate Change. The Mission will enable about Rs. 75,000 crore worth of transactions in energy efficiency. In doing so, it will, by 2015, help save about five per cent of our annual energy consumption. As already mentioned, the most innovative and challenging new initiative is the PAT mechanism which will assign energy efficiency improvement targets to the country’s most energy intensive industrial units, with the provision of allowing them to retain any energy efficiency improvements in excess of their target in the form of Energy Savings Certificates, called ESCerts. Units will also be allowed to use purchase ESCerts to meet their targets. March 2010

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POWERWATCH INDIA

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Tech’tonic

CEA has identiﬁed equipment supply constraints to be the most important bottleneck in realization of capacity targets

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March 2010

Power Equipment The Chinese debate

he steady growth of the Indian manufacturing sector was a major factor for the country achieving a 7.9 per cent growth rate for the second quarter of 2009-10. Buoyant manufacturing growth has been led by a rise in production of basic goods, intermediate goods and consumer durables. While manufacturing is on an uptrend with the majority of the sectors recording positive trends in the ﬁrst half of the ﬁscal year 2009-10, there is no ignoring the most critical component for this commendable feat - power. The power sector will play an important role in this economic development and hence, needs focused attention. The Indian government has set for itself a target of “Power for All by 2012”; an ambition that will require the timely completion of capacity addition targets and the availability of the desired power equipment by the industry.

WHERE THINGS STAND Through the years, the Indian power equipment manufacturing industry has shown an improvement and has been at par

India’s target of “Power for All by 2012” requires the timely completion of capacity addition targets and the ready availability of power equipment. But the domestic equipment industry finds itself woefully inadequate in meeting this demand... with the requirement of the industry. But due to the global economic crisis, the Indian power equipment sector’s half yearly growth registered in 2008-09 was down to 8.57 per cent from 14.6 per cent in the previous ﬁscal year (2007-08). However, the country posted positive growth compared with global growth ﬁgures, where the growth has been negative - a fall of 2.2 per cent in 2008-09 compared to 2007-08. The gap between capacity manufacturing and the requirement for power equipment in the sector widens further due to the fact that the same manufacturing capacity also caters to the spare parts market and for the renovation and modernisation (R&M) of existing March 2010

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POWERWATCH INDIA

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Tech’tonic power plants with large generation capacity exceeding a life span of over 20 years. State-owned Bharat Heavy Electricals Limited (BHEL) has been the primary source of power equipment supply in the country. Given the limited capacity with BHEL to produce power equipment, it has become diﬃcult for the public sector behemoth to manufacture enough equipment in the country to meet the growing demand. In 2006, around 4,000 MW of capacity addition was delayed on account of BHEL accounting for more than 30 per cent of the total equipment supply slippages in the 10th Plan Period. Even in the current plan period, the Central Electricity Authority (CEA) has identiﬁed equipment supply constraints to be the most important bottleneck in the realization of capacity targets. Over 90 per cent of thermal plant equipment orders from government-owned power companies such as NTPC Limited are placed with BHEL.

WHERE THE PROBLEM LIES However, BHEL currently manufactures equipment that can only generate 10,000 MW of electricity. Thus, faced with achieving a massive generation capacity target of 78,500 MW during the 11th Five Year Plan, Indian generators, both private and state-owned, have been grappling with the challenge of sourcing power equipment. With overﬂowing order books and limited capacity (about

The gap between manufacturing capacity and the requirement for power equipment widens further due to the fact that the same manufacturing capacity also caters to the spare parts market and for the R&M of existing power plants. 6,000 MW per year), the sole Indian power equipment manufacturer, BHEL, has been unable to meet the huge requirements. Chinese power equipment suppliers have hence, seized the opportunity by leveraging their massive capacities and the resultant economies of scale to promise delivery of these equipment at competitive prices.

ALL EYES ON CHINA In fact, thermal power generation equipment of 21,055 MW for the 11th Plan (of which 2,865 MW has already been commissioned) and 13,870 MW of capacity for the 12th Plan have been ordered from Chinese manufacturers. Out of 43 supercritical units ordered so far, 20 units have been ordered

GLOBAL TECHNICAL PARTNERS FOR CHINESE MANUFACTURERS

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POWERWATCH INDIA

CATEGORIES

SHANGHAI ELECTRIC

DONGFANG ELECTRIC

Coal

Alstom (boiler), Siemens (turbine, generator)

Hitachi

Gas

Siemens

Mitsubishi

Hydro

Siemens

GE, Alstom

Nuclear

Westinghouse

Areva

Transmission and Distribution

JVs with ABB and Siemens

•

March 2010

TECHNOLOGY RANGE SG TG

PRESENT CAPACITY/STATUS OF DEVELOPMENT TG

TARGET CAPACITY (MW)/YEAR

BHEL

Manufacturing facility for 10,000MW

15,000

L&T & Mitsubishi Heavy Industries

Manufacturing facility under implementation, to commence by May 2010

4,000

Expansion and technology transfer plans

NAME

Ansaldo Caldie & Thermax

Toshiba & JSW

Manufacturing to commence by 2011, second phase by 2015. License for 800 MW; 1,000 MW awaited

3,000

Alstom & Bharat Forge

Manufacturing by 2011

5,000

TOTAL

27,000 from Chinese manufacturers. A study conducted by Assocham and Ernst & Young titled “Power Sector: Ambitious Mission and Major Challenges” says that the management of equipment availability is one area in which India can learn from China. Once it was realized in China that they would acquire large capacity addition for a signiﬁcant period of time, they acted accordingly. Some of the key steps taken by China to ensure availability of power equipment to meet the projected requirements included: Bulk ordering of capital equipment to reduce procurement time and costs and also assist local industry to grow through strategic technology transfers. Standardization of machinery to cut down on manufacturing time and costs and also reduce the construction and O&M costs due

· ·

to optimization of inventory. Increasing indigenous manufacturing capacities. Enhancing sources of fuel through development of indigenous reserves as well as through international tie ups. Indian power equipment manufacturers have taken some steps in a similar direction and there are signs of improvement and development of manufacturing capacity to bridge the gap between equipment demand and supply. BHEL, however, had expressed serious concern over the climbing import numbers from Chinese equipment manufacturers and it seems the government has taken seriously the threat to BHEL from imports. In order to mitigate the threat from the Chinese, the government has already put up conditions for having a manufacturing facility in India and participating in bidding for bulk supply of supercritical equipment to projects envisaged by NTPC and DVC. BHEL hopes to beneﬁt from this move. Meanwhile, the government also plans to bar developers of UMPPs from importing equipment by putting in conditions of having a manufacturing facility in India. This would also help BHEL gain its lost ground. - Anwesh Koley Write to us with your feedback at pwi@nextgenpublishing.net

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POWERWATCH INDIA

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March 2010

Tech’tonic Interview

‘‘IE

l a i c e p s s a h focus

’ ’ Es

M S on

, PWI h t i w view MA, r t of e t s n i o E h g eelin nt of IE about a reas, h w ree reside n talks cus a ies, f a In the P ama s fo ompan t r i t a nk rc om ali Ve ging fr membe reat. r u Mr M es ran e of its ese th issu rmanc e Chin o h perf to t

he Indian power sector is currently facing a shortfall in equipment supply. What role can IEEMA play in dealing with the situation? This is a wrong perception. As fas as transmission and distribution sector is concerned, there is no shortfall. In fact, more than adequate manufacturing capacity is available for all voltages up to 500 kV DC and in certain cases, even for 765 kV AC equipment. Typically, the capacity utilization in vari-

ous industry verticals varies from about 45 per cent to 70 per cent. Industry has IEEMA members who have clearly proven their capability and willingness to invest in capacity enhancement ahead of demand curve - due to which, today the sector has more than adequate production capacity. However, we are requesting the power March 2010

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dian nt of In Preside and al Electric s ic n o r t Elec cturers Manufa n (IEEMA), tio Associa rali Mr Mu aman Venkatr

POWERWATCH INDIA

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cus o f ur g the o , ar otin and e y r T h i s n p ro m d i a ’ b r k e t s . is o e in In nal ma d o ‘Ma er nati t in in

zed by Organi crama le E , IEEMAia’s leading is Ind electrical expo in lectronics and e ipment equ

ministry and various utilities to ensure that their ordering schedules should be planned in such a manner that bunching of tenders, which would create temporary mismatch in production, could be avoided. IEEMA members are also working with Power Grid to develop products for the 1200 kV AC systems, the next generation UHV technology, which will be introduced into the Indian grid. Chinese manufacturers are entering the Indian market. What implications does this have for domestic manufacturers? What steps is IEEMA taking in countering the entry of cheap equipment? The threat of Chinese products to penetrate the Indian market through unfair trade practices is very real and is very much happening. IEEMA is closely working with manufacturers to ensure that we use the available trade protection mechanisms wherever possible. As far as this threat is 74

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March 2010

concerned, our position is very much clear - we welcome competition as long as it results in establishing the domestic manufacturing base. IEEMA believes that the equipment manufacturing has to be completely indigenous, then only it would ensure adaptation to our electrical environment. Secondly, this would also ensure in continuing and guaranteed support to the Indian customers and utilities, creating jobs and passing on benefits to the Indian supply chain. How has been the performance of member companies of IEEMA this year? The performance of most industry verticals has improved during the current fiscal year as compared to last fiscal. On a

About IEEMA Founded in 1948, Indian Electrical and Electronics Manufacturers’ Association (IEEMA) is the representative organization for manufacturers in electrical, electronics and allied equipment segments, having over 550 members. Now in its 60th year of existence, IEEMA continues to be forerunner in bringing the industry’s issues and concerns into the fore, thereby making necessary government policy changes. Training for members and non-members on topical issues, library and business center facilities are among its other initiatives. Today, the organization boosts combined annual turnover of over Rs. 1,00,000 crore. IEEMA has the distinction of being the first association in India to achieve an ISO certification in January 1998 and successfully re-certified for the second time for ISO 9001:2000 in 2006.

year-to-year basis, most sectors are showing positive growth with some exceeding 10 per cent. However, the low voltage sector including cables is faced with dumping and significant over-capacity. What are the thrust areas for IEEMA in 2010? This year, our focus is on promoting the ‘Made in India’ brand in international markets, creating a sustainable model for revamping the employability skills of fresh electrical graduates and supporting member concerns and assist them in using

As far as the Chinese threat is concerned, our position is clear - we welcome competition as long as it results in establishing the domestic manufacturing base.

appropriate trade protection mechanisms. Besides, IEEMA is also participating with other stakeholders to improve the testing capabilities within the country and promoting the efficient usage of energy amongst all stakeholders. Where do SMEs fall into the association’s scheme of things? What support does IEEMA provide to them? The SME segment is very important in the overall electrical and industrial automation industry since a large portion of the supply chain for OEMs constitute small and medium sized companies. IEEMA has constituted ‘IEEMA SME Quality Award (ISQA)’ for business excellence which is specifically targeted to the SME sector. Participation in this award process is a very robust process, where companies will be given active support and hand-holding by trained professionals assessing all areas of their performances with recommendations for improvement. Secondly, IEEMA also actively encourages the SME sector to participate in Elecrama Exhibitions to enable such companies to reach out to international audience for both markets as well as technology. Thirdly, IEEMA conducts a number of training programmes throughout the year in specific domain related and generic subjects. These programmes see active participation by SME organizations.

March 2010

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POWERWATCH INDIA

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Trade Talk

A Road Less

Travelled

India’s power trading market may have bent the rules of the game. Still, there is a long way to go...

o many industry watchers, a market transaction of eight per cent of the total electricity generated might seem small (as of October 2009) but it has greater implications suggesting the long-drawn aim of ‘price discovery’. Going by international standards, India’s power market operates in somewhat unique conditions. Despite facing an energy deficit, the country boasts of two power exchanges with a third on the anvil. Currently, utilities intending market mediated settlement of short term deficits and surpluses prefer this market. Astonishingly, in the last five years, the traded volumes have doubled up, registering an average annual growth of over 20 per cent, posing a big challenge in regulatory oversight. The power market is skewed towards long term contracts. Power trading accounts for a minuscule 4 per cent share of total generation. Clearly, it is too

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March 2010

small for a market to achieve price discovery in the present conditions. But even with this pace of development, the segment is evidently representing the dynamics of the short term power market.

DEVELOPING MARKET On the demand side, the trading market meets the obligations of distribution utilities to procure unanticipated demand, which generally arises during summers or due to rise in industrial consumption. On the supply side, power generators expect to gain remunerative return for short term surpluses. In this case, beneﬁcial parties are captive power plants, co-generation units and merchant power plants. Till recently, few hydro power plants in Himachal Pradesh reaped windfall gains, selling power for as high as Rs 12 per unit. Under the regulations stipulated by Central Electricity Regulatory Commission (CERC), trading is carried out through registered trading licensees and power exchanges. As of end October 2009, there are about 38 trading licensees operating in the country. Two power exchanges – Indian Energy Exchange (IEX) and Power Exchange of India Limited (PXIL) which came into operation in 2008. Not all registered trading licensees are active traders. CERC data shows that only about 7-8 entities are active in the market, which account for 80-90 per cent of the total traded volume. The limited number of

active traders is explained partly by the limited trading margins allowed by the regulator and by the recent regulations which made tighter norms for companies in the market. PTC India has the natural advantage of being the first power trading company formed in the country in 2001. IEX and PXIL commenced operations since June 2008 and October 2008 respectively. The response for both has been overwhelming. Beginning with modest 239.81 million units (MUs) in August 2008, today (as on October 31, 2009) CERC reports both traded 639.02 MUs. Till September 2009, the exchanges traded only in the day ahead market. This means that the trading platform mainly took the demand and supply bids for the previous day. Now, exchanges have come up with new product offerings such as term-ahead contracts, day-ahead contingency contracts, intra-day contracts, and daily contracts. For utilities, this translates into better efficacy in load management and, at the same time, helps developing the required depth in the market.

PRICE: A CONTENTIOUS ISSUE The market moves in tandem with the evolving situation of shortages or surpluses. And price is the signal for such movements. This fundamental rule of economics played out in the power trading market as well, even though with occasional hiccups. To begin with, average

Average hourly monthly clearing volume (MCV) and monthly clearing price (MCP) for February 2010 Source: IEX

March 2010

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POWERWATCH INDIA

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Trade Talk price (taken as a weighted average) of power traded through licensees increased from Rs 2.32 per unit in 2004-05 to Rs 7.29 per unit in 2008-09. During 2008-09, IEX clocked an average of Rs 7.48 per unit while PXIL had Rs 7.60. Another striking aspect has been the wide range of fluctuation. During trading hours, exchanges have often reported a range which included prices reaching Rs 17 per unit or dropping even below a rupee. Rising prices have been a contentious issue, especially with concerns about speculation and market manipulation. Working through a tightrope balance between consumer interests and investor perceptions (mainly prospective merchant power producers), the CERC finally decided to intervene. A price cap was imposed for a period of 45 days, starting from September 11, 2009 to ensure orderly conditions in the market. The ceiling was fixed at Rs 8 per unit. While the merits of such intervention could be debated, the regulator arguably succeeded in sending a message about its mandate. Prices signal the relative scarcity at

particular time and place. This explains the persistent high prices in the short term market as a whole. With peak power shortages of 12-14 per cent, this is a market short of liquidity. So the prices convey the scarcity, which is just the signal for a prospective merchant power producer. As has been international practice, these are essentially peaking power stations based on hydro or gas to meet sudden surge in short term demand at attractive prices. In India, this market is yet to come to a promising start.

PRYING REGULATORY WATCHDOGS In an evolving market like India, regulatory oversight has a major responsibility. CERC has seized of various teething issues in this yet immature market. Some of the key issues CERC has targeted recently include eligibility of trading licensees, trading margins, and price caps among others. It has recently revised its norms for eligibility of trading licensees. A trading entity now should have a net worth ranging from Rs 50 million to Rs 500 million to qualify for one of the

TRENDS IN POWER TRADING VOLUMES YEAR

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TRADING VOLUME BILLION UNITS

ANNUAL GROWTH %

TOTAL ELECTRICITY GENERATION BILLION UNITS

2004-05

11.85

7.40

548

2.16

2005-06

14.19

19.75

579

2.45

2006-07

15.02

5.85

624

2.41

2007-08

20.96

39.55

666

3.15

2008-09

24.69

17.80

691

3.57

March 2010

ELECTRICITY TRADED DURING OCTOBER 2009 TRADING LICENSEE

SHARE IN TRADING VOLUME %

PTC INDIA LIMITED

48.22

NTPC VIDYUT VYAPAR NIGAM LIMITED

12.86

TATA POWER TRADING COMPANY

12.00

JSW POWER TRADING COMPANY LIMITED

9.78

LANCO ELECTRIC UTILITY LIMITED

5.97

RELIANCE ENERGY TRADING PRIVATE LIMITED

5.92

ADANI ENTERPRISES LIMITED

2.41

GMR ENERGY TRADING LIMITED

2.06

RPG POWER TRADING COMPANY LIMITED

0.42

KNOWLEDGE INFRASTRUCTURE SYSTEMS PRIVATE LIMITED

0.22

INSTINCT ADVERTISEMENT AND MARKETING LIMITED

0.10

MITTAL PROCESSORS PRIVATE LIMITED

0.04 Source: CERC

three licence categories. Aiming to improve the incentives, in January this year, CERC notified new trading margin norms. For a sale price exceeding Rs 3 per kWh, a licensee is now allowed to charge a margin of up to Rs 0.07 per kWh, while for sale price less than or equal to Rs 3 per kWh the permissible margin is Rs 0.04 per kWh. Earlier the cap on margins was cited by many existing players as a key hindrance in furthering business. Taking a pervasive outlook for the sector, CERC has come out with the “Power Market Regulations 2010.” Covering all market participants in this industry, the regulations suggest significant changes in the functioning of the existing market operations. Power exchanges are asked to undertake a series of changes such as diversified shareholding pattern, introduction of settlement guarantee fund, three-tier default mechanism and establishment of clearing corporation to separate market ‘clearing’ function from ‘price discovery’. The regulations also identify

several emerging contracts for the market such as capacity contracts, renewable energy certiﬁcates and ancillary services contract.

TAMING ENERGY DEFICIT The market is hamstrung by energy deﬁcits. The situation can only be dealt with by bringing additional capacities. The sector has seen growth indeed in recent years. But capacity has to be expanded to remove bottlenecks. Both exchanges and traders have complained of lack of transmission passage in trading hours. Open access, though available at inter-state level, continues to be resisted at intra-state level. State regulatory authorities must come forward and take proactive steps in this direction. As such, policy and regulatory framework must ensure that incentives are in line with the long term horizon of market development. - Saptarshi R. Dutta Write to us with your feedback at pwi@nextgenpublishing.net

March 2010

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POWERWATCH INDIA

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In Focus West Bengal

est Bengal’s restructuring program for its power sector has started paying dividends. Initiated in October 2005 with the approval for unbundling of State Electricity Board in 2007, the power sector in the state has indeed come a long way. Transmission and distribution entities have long left the dependence on state government and are making

fast progress on their own. Initiated with an aim of sustainable improvements in commercial eﬃciency and enhanced service delivery levels, today the state’s reform process has set a benchmark for the country in power sector reforms. Restructuring measures have led to the transfer of the state’s power distribution and hydel generation to the West Bengal State Electricity Distribution Company Limited (WBSEDCL). And, its transmission and load dispatch businesses were handed over to West Bengal State Electricity Transmission Company Limited (WBSETCL). Its power utilities, WBSEDCL and WBSETCL take pride in the fact that the

Tracking Reforms

Where states are faltering with their power reform processes, states like West Bengal claim to have set examples worth considering...

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March 2010

MINIMAL GOVERNMENT SUPPORT IN RS CRORE

2004

2005

2006

2007

2008

2009

LOANS RECEIVED

2,254*

533

534

550

262

146

TOTAL INFLOW

2,254*

533

534

550

262

146

DEBT SERVICING



100

162

178

399

ELECTRICITY DUTY 11

151

203

220

246

281

TOTAL OUTFLOW

184

303

382

424

680

NET GOWB OUTFLOW

2,243

349

230

168

162

534

NET LOSSES

305

285

257

3982

182

228

FIGURES ARE AN INDICATOR OF EFFICIENT MANAGEMENT OF RESOURCES BY WBSEDCL & WBSETCL

WBSEB AND SUCCESSOR COS

*includes Rs 1800 crore for securitization of CPSU dues.

MASSIVE ELECTRIFICATION NO TARIFF SHOCK TO END CONSUMERS

Average Tariﬀ - declines from Rs. 3.53/unit to Rs. 3.46/unit Industrial Tariﬀ - declines from Rs. 3.69/unit to Rs. 3.48/unit * FIGURES ARE IN COMPARISON OF 2008-09 TO 2003-04

T&D LOSS REDUCTION

Village Electriﬁcation: increases to almost 100% from 83% Household Electriﬁcation: increases to 46% to 23% * FIGURES ARE IN COMPARISON OF 2008-09 TO 2003-04

sector is thriving with minimal government support and the reforms did not create any tariff shock to end consumers. People of the state are also enjoying the increased penetration of electricity. To keep the momentum going, both WBSEDCL and WBSETCL have undertaken a number of transformational initiatives to make their business operations effective and customer focused. These initiatives are in the areas of realignment of corporate and field-level structures, redesign of business processes, creation of asset database, training and development of employees and investment for creation of infrastructure/facilities for enhancing customer service delivery. The initiatives have been targeted at

T&D Losses: Down to 22.8% from 34.4% Initially, the performance of West Bengal in rural electriﬁcation was very poor. Since 2003-04, considerable progress has been made in this direction.

Collection Eﬃciency: Increases to 98.2% from 86.2%

* FIGURES ARE IN COMPARISON OF 2008-09 TO 2003-04

sustaining their positions as a leading distribution and transmission utilities in India in terms of system availability and reliability. Currently, both WBSEDCL and WBSETCL are in the process of massive IT penetration into their organisational structure and the implementation of organisation-wide Enterprise Resource Planning (ERP) systems. At present, WBSEDCL has taken up two major IT intervention projects. The ﬁrst project is the implementation of state-of- the-art Commercial and Customer Management Systems under the Government of India funded Restructured Accelerated Power Development and March 2010

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In Focus West Bengal Reform Program (R-APDRP) in 62 towns. The another one is the implementation of organisation-wide ERP system to make these changes systemic and irreversible. These two IT projects would be implemented over the next two years and is expected to be fully “go live” by December 2011. Like WBSEDCL, WBSETCL is taking up the implementation of organisation-wide ERP system and this project would be implemented over the next two years and is expected to be fully functional by December 2011. Some of the key beneﬁts which would accrue from the implementation of these projects are: Improved customer service delivery and customer management: Introduction of CRM software along with re-engineered business processes would reduce the response time for customer complaints and also help in intelligently targeting erring customers to enhance revenue and reduce commercial losses. Streamlined procurement and material management: Automated

application system managing the materials management process will provide the decision makers a complete visibility into the stocks across the locations. The system will enable optimization of allocation based on actual requirement, thereby reducing the overall inventory level by 5-7 per cent (indicative) and also reducing time taken from material requisition to delivery. Effective financial management and control: Integration of all functional transaction systems under ERP would enable better financial management and control. The annual financial book closure time is expected to get reduced by nearly 15-20 per cent and generation of accurate financial reports would be quicker.

KEY CHALLENGES As outlined above, for both WBSETCL and WBSEDCL, there is a need to sustain the momentum set forth by the transformation initiatives and in-grain the same into an environment of continuous improvement. In this backdrop, the significance of successful implementation of an enterprise-wide information systems such as ERP cannot be overemphasized. It is equally important to take due cognizance of the challenges for implementing such a system in both WBSETCL and WBSEDCL. The most important challenge for introducing, implementing and sustaining ERP in both organizations is related to “organizational change management”. This pertains to overcoming the natural resistance to change which would be brought in by the implementation of processes under proposed ERP system. This would be overcome through continuous emphasis on the benefit elements envisaged and making sustained efforts towards realization of such benefits. Write to us with your feedback at pwi@nextgenpublishing.net

Interview with Dr G.D. Gautama What were the key challenges at the beginning of power sector reforms in West Bengal? In the beginning of the reform program being launched in West Bengal, the state was facing many challenges. First challenge was to eliminate the dependence of the sector entities on budgetary support from the state government. At that time, T&D loss and collection were poor. Only 23 per cent of rural households were electriﬁed. There was an urgent need to work on the increased customer service level by providing quality supply and service at competitive tariﬀ, which was essential to meet the growing demand among industries in West Bengal.

Dr G.D. Gautama Principal Secretary, Department of Power and Non-conventional Sources, GoWB

What were the objectives of the reforms? Our topmost priority was to make the sector and its entities self sufficient with no budgetary support from the state government. The reforms were aimed at financial restructuring to clean up past burden, creating no tariff shocks for consumers and effective management within government ownership framework through induction of good corporate governance practices. What were the steps taken for T&D loss reduction in West Bengal?

T&D loss reduction was high on the priority of the state. We took number of steps to make this happen. First, we identified revenue leakage points, then took measures relating to improvisation of the monitoring system which boosts 100 per cent feeder metering and nearly 100 per cent consumer metering. Then legislative measures were laid out to check power theft ensuring strict enforcement of anti-theft legislation with focused drive for revenue recovery. We installed capacitors at 11 kV bus, DTRs in all LT industries, bifurcating overloaded long 11 kV feeders, implementing smaller capacity DTRs to improve HT/LT ratio. We are using LT ABC in theft prone areas and augmenting conductor/cable size and/or drawal of parallel feeders and energy auditing and monitoring. What have been the key impacts of the power sector reforms? Reforms and restructuring have definitely done a lot of good for the sector. Today, the sector is self sustainable. Unlike pre-reform days, it is not dependent on state funding and support. Other major achievements are minimal tariff shock to end consumers and increased penetration of electricity in rural parts of the state. March 2010

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POWERWATCH INDIA

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In futuro

Looking Ahead Our future energy needs depend on new renewable technologies. At PWI, we take a look at what the companies are doing across the world in this domain.

echnology of the future has lots to prove: to stabilize climate and stabilize populations, optimize energy consumption and restore the economy’s natural support systems and to reduce dependence on fossil fuels and free leaders of the world from nightmares of harrowing deadlines of when such resources will be no more. The picture appears challenging, but pollution levels make it mandatory: the future should be in tune with the environment, lest the generations to come hold grudges for not letting them breathe clean. Means of generating sustainable energy are present, but the world still prefers coal and oil for regular energy requirement. Solar power, wind energy and hydral power are few of the notable sources that must be adopted and developed in abundance.

SOLAR POWER In the 21st century, though solar power has already become a small part of daily life, many wonder if small applications will be all solar power is capable of handling. However, experts insist that the future of solar energy is quite sunny. The world’s first solar thermal power station at Kibbutz Samar in southern Israel is a leading example of solar power being an important component of alternative energy. It was launched by Weizmann Institute in association with Aora, a leading Israeli solar energy technology company. This power station is situated in an area of half an acre of land and has thirty tracking mirrors (heliostats). Each of the thirty heliostats tracks the sun and reflects its rays towards the top of a 30 meter-high tower. This tower contains a special solar receiver along with a 100 kilowatt gas turbine. This receiver utilizes the solar energy to heat air to a temperature of 1,000 degrees Celsius. Now this heat energy is directed into the turbine, which converts the thermal energy into electric power that will be fed directly into the national grid. It is a sincere effort on the part of the company to bridge the chasm between massive solar thermal arrays in the desert and small photovoltaics at home.

WIND ENERGY The most satisfying aspect of wind energy is that the major technology developments enabling wind power commercialization have already been made. Wind mills have long 84

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March 2010

HYDRAL POWER

provided power to various parts of the globe and it’s a matter of time before the cool breeze up a smile and a home. Imagine your city being lit up by high-ﬂying kites in the sky. Scientists at the Carnegie Institution and California State University are exploring the possibility of developing kites which harness high-altitude winds. Their estimate is that high-altitude winds contain enough energy to meet the world’s demand 100 times over. The researchers have marked the eastern U.S. and East Asia as best suited for wind harvesting and are considering New York as the prime location for initial exploitation of winds. By employing this technology, scientists believe they can generate up to 40 MW of electricity and transmit it to the ground via tether. There is massive scope for power generation through winds, with wind ﬂuctuations being the only hitch to be taken care of.

There is no denying the enormous current possessed by waves in the ocean. While capable of causing unprecedented destruction, water currents can be successfully used to generate energy. This sort of energy production has its own advantages. The pollution created by hydroelectric energy generation is quite minimal. It also does not produce radioactive waste or involve the environmental impact of fuel being transported to it. Besides, the construction of hydroelectric power stations is a low key affair compared to conventional thermal stations and they can be set up in almost any size, depending upon the river or stream used to operate them. On these lines, the world’s first known device that could draw energy from most water currents around the world has been developed by an engineer with the University of Michigan. It is a device that acts like a fish that turns the potentially destructive vibrations in water into clean, renewable energy. This machine is named as VIVACE (Vortex Induced Vibrations for Aquatic Clean Energy). According to its developer Michael Bernitsas, if 0.1 per cent of the energy in the ocean could be harnessed, the energy needs of 15 billion people could be met successfully. New technologies need investment and vision. But countries across the world are witnessing a rise in awareness towards methods which can stand up to the test of environmental sustainability. Research and development is improving, success rates are going up and a general acceptability on the part of nations is a positive step forward for technologies that will empower people. - Anwesh Koley Write to us with your feedback at pwi@nextgenpublishing.net

March 2010

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POWERWATCH INDIA

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CSR Watch

Giant on a Mission

True to its name, Tata Power goes on lighting up lives for generations to come…

n India, the words “corporate social responsibility” ring almost synonymously with “Tata”. The Tatas have a long tradition for sustainable development and community building. In fact, long before the term CSR became popular in corporate India, the Tatas were actively involved in imbibing the case of social good in their business operations. With a presence of nearly a century in the power sector in India, Tata Power has taken numerous initiatives to ensure the holistic development of communities in its areas of operation. The company’s initiatives, ranging from responsive action to sustainable activities, are clearly a sign of its commitment towards society. Tata Power has, in fact, made a signiﬁcant contribution to society and has improved the quality of life through various initiatives. 86

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March 2010

ECORESTORATION AND ECODEVELOPMENT The Western Ghats of India is one of the most sensitive ecosystems in the world. Taking due consideration of the urgent need for its restoration and development for more than a few decades, Tata Power has been running a project that deals with the catchment areas of six lakes in the Western Ghats of Maval and Mulshi talukas in Pune district. Since 1979, the company has planted more than seven million saplings of sixty species of tree. Shalini Singh, Head, Corporate Communications, Tata Power, elaborates, “These lakes contribute around 500 MW of power to Mumbai and its adjacent areas. Indiscriminate deforestation and change in land use pattern could shorten the life span of these lakes. Hence, protection of these areas is of utmost importance. At Tata Power, we

have a target of planting over 600,000 trees every year as a re-forestation measure.” In 2008, the Tata-run Mahsheer Breeding Program entered into its 36th year. The Indian Council of Agricultural Research has recognized the work done by the company in mahsheer conservation and sustaining it for more than three decades. Incidentally, this is the most successful mahsheer breeding facility in India and South East Asia.

ENERGY CONSERVATION Being India’s largest private power utility, Tata Power is in the forefront in creating awareness among youth to reduce power wastage and conserve energy through its informal Tata Power Energy Club. Under this program, the company is doing a wonderful job of sensitizing children from Class V to VIII standards on issues relating to energy efficiency and conservation. The company is equally excited about this event and has big plans to make this a mass phenomenon. The accolades are coming from all quarters. Ambika Menon from Cambridge School, Noida, expresses her gratitude for the company and says, “The energy conservation workshop conducted by the company in June 2009 was very effective. As a part of the program, students actively collected energy consumption figures from their homes. At present, we have 18 energy monitors from class IV, VI and VIII who are monitoring the correct use of electrical energy and helping keep electricity bills under check. Such programs help our students to take charge of issues affecting our world.”

EDUCATION AND SUSTAINABLE LIVELIHOOD Tata Power is equally concerned about people. The company has initiated various income generating activities as measures to make the youth employable. One such

activity is the distribution of fruit trees to self-help groups in villagers in Mulshi and Maval talukas. These groups were encouraged and guided in caring for them. This activity ensures the maintenance of greenery and prevents soil erosion. Till date, the total number of trees distributed is 35,000. Besides such activities, a number of training programs in various disciplines such as welding, tailoring, computer literacy, horticulture, light motor vehicle maintenance and paper production have also been carried out to facilitate skill development amongst the youth. Another remarkable initiative was the setting up of a “Knowledge Centre” in collaboration with Microsoft-NASSCOM at Mulshi in November 2008. Here, special emphasis is given on computer literacy, adult literacy and mother and child care. Families in 45 villages surrounding Mulshi were given the opportunity to pay Rs 100 per family per annum, to be enrolled in this center. Till date, the company has built over 65 primary schools, 4 high schools, 20 rooms for teachers, and has repaired and renovated many schools.

CSR Watch

HEALTHCARE In the domain of health, the company carries out regular medical check-ups and provides free medicines at its medical centers across India. It conducts a number of health awareness programs like eye and blood donation camps. A successful healthcare program is the Suraksha Rally, organized to promote awareness of HIV/AIDS amongst students and communities. Tata Power has won the Dahanukar Award for HIV/AIDS intervention at the work place for the year 2007.

electrification project. Grid connectivity was a difficult proposition in this area. Huts of tribal people, located away from the main village, have also been provided with independent home lighting systems and streetlights. The company provided a 10 per cent share of the electrification project approved by MEDA, jointly with the Ministry of Non-conventional Energy Sources. Tata Power has certainly an impressive record in resource conservation, environment protection and enrichment and development of local communities. True to its name, the company is lighting up lives for generations to come!

RURAL ELECTRIFICATION Tata Power took the villages - Udhewadi and Walwandi - under the ambit of its rural

Aakash Pravin Thakor, IX standard student at Senapati Bapat School, Mulshi “When I ﬁrst came to Mulshi, I was very bored. I asked my father to buy me a new computer or get me enrolled into classes either in Pirangut or Paud. There the fees was very high. In fact, I did not understand many of the things that were taught there. But since I joined here, I am learning a lot of new things about the computer including MS Word and Powerpoint. Teachers here are very friendly and teach us well. Learning here is fun.”

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POWERWATCH INDIA

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March 2010

- Shilpi Aggarwal Write to us with your feedback at pwi@nextgenpublishing.net

Tenders NTPC LIMITED Description: Through this EOI, NTPC intends to identify the probable vendors in India and abroad who have experience in executing the contracts for cooling towers and have executed similar jobs in past. This invitation for expression of interest is not intended for empanelment or pre-qualification of bidders. Separate NITs shall be floated by NTPC for procurement of induced draft cooling towers for its forthcoming projects as and when required. Closing Date: March 26, 2010 Contact: Sr. Mgr. (CS-P&S)/AGM (CS-P&S), NTPC Limited 6th Floor, Engineering Office Complex A-8A, Sector – 24, Noida - 201301 Distt. Gautam Budh Nagar Uttar Pradesh, India Tel. no. 91-120-2596619 / 2410341 / 2596661 Fax No.: 91-120-2410011 POWER GRID CORPORATION OF INDIA LIMITED PGCIL Description: Supply of 1 anolog insulation tester- megger 50kv rechargeable battery operated 2 gigital battery operated insulation tester 50kv 3 digital low voltage insulation tester - insulation test voltages DC 250v,500v,1000v battery operated. Closing Date: March 30, 2010 Contact: Chief Manager Cspowergrid Corporation of India Ltd NR, II Grid Bhawan, Jammu Tel. no. 91-191-2473469 BHARAT HEAVY ELECTRICALS LIMITED BHEL Description: Rate contract for off loading of computerization jobs for all engineering departments Closing Date: March 20, 2010 Contact: AGM/ T&C Engg-FES 2nd Floor, New Engineering Building BHEL, Ramachandrapuram, Hyderabad - 502 032, Tel. no. 91-40-23183423 90

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March 2010

NHPC LIMITED Description: Repair of damage portion of S-2 Block of spillway glacis for stoppage of leakage Closing Date: March 20, 2010 Contact: Manager (P&C) P&C Complex Teesta (Stage-V) Power Station Balutar, East Sikkim KARNATAKA POWER CORPORATION LIMITED KPCL Description: Providing through rails renewals (TRR) works in marshalling yard at RTPS. Closing date: March 12, 2010 Contact: Chief Engineer (Civil Thermal) Raichur Thermal Power Station Karnataka Power Corporation Limited Shakthinagar-584170, Raichur District KERALA STATE ELECTRICITY BOARD KSEB Description: Repairing of 10 MVA 110/11 KV power transformer (Sl No.120251-4) at 110 KV substation Kizhissery. Closing Date: April 8, 2010 Contact: Deputy Chief Engineer Transmission Circle Office KSE Board, Munduparmbu (P.O.) Malappuram, Tel. no. 91-483 2738625 COAL INDIA LIMITED CIL Description: Notice inviting offer to certify the annual production and closing stock as on 1.4.2010 in all mines/washeries/coke plants of CIL. Closing Date: March 15, 2010 Contact: Mr Asok Ray, GM (Production) 10 Netaji Subhas Road, Kolkata West Bengal, 700001, India Email ID: prodcil@vsnl.net Tel. no. (Office): 91-33-2243-5446 (M)09432486238 TEHRI HYDRO DEVELOPMENT CORPORATION LIMITED THDC Description: Supply, installation and erection of

air gap and vibration monitoring system for 4X 250 MW hydro machines. Closing Date: April 6, 2010 Contact: SM (C&MM) THDC India Ltd. Gangotri Administrative Building Bhagirathi Puram Tehri-Garhwal - 249001 Phone 91-1376-235447/235115 COAL INDIA LIMITED CIL Description: Expression of Interest (EoI) for identification of suitable collaborator (s) for Coal Mine Methane (CMM) development in 5 Identified CMM blocks of BCCL and CCL from reputed, resourceful and experienced collaborator(s). Closing Date: March 11, 2010 Contact: HOD,CBM,CMPDI 10 Netaji Subhas Road, Kolkata West Bengal - 700001, India Email: bnprasad54@yahoo.co.in Tel. no. 91-651-2230011 NTPC LIMITED Description: Notice inviting tender for supply, installation and commissioning of 200 KW induction heating equipment for centralized repair facility at Rihand Super Thermal Power Station. Closing Date: April 1, 2010 Contact: AGM(C&M, NTPC Ltd Northern Region Headquarters TC-33/V-1, Vibhuti Khand, Gomti Nagar Lucknow-226010 BHARAT HEAVY ELECTRICALS LIMITED BHEL Description: Receipt of equipment/material at site, unloading, inspection, verification, storage, up-keeping during storage, erection, testing, commissioning and handing over of 400/220 kv substation at Chandrapur and associated substations - all in Maharashtra

Closing Date: March 24, 2010 Contact: BHEL, Industry Sector, BHEL, integrated oﬃce complex, Lodhi road, New Delhi-110003, Tel. no. +91 11 41793381 POWER GRID CORPORATION OF INDIA LIMITED PGCIL Description: Insulator packaged for 400 kv d/ c Kishanganj-Patna transmission line (part-III) associated with transmission system (part-b) for transfer of power from generation projects in Sikkim/Bhutan. Closing Date: March 25, 2010 Contact: Additional General Manager (CS-G2) Powergrid Saudamini Plot no 2 Sector-29, Gurgaon-122001 Haryana Tel. no. 91-124-2571700-19, 2341/2336/2364, 91-124-2571839 NHPC LIMITED Description: Supply of transformers 500 KVA for steping up/down of the DG set Voltage 433/ 11 KV 50HZ. Cast resin dry type out door (Make: ABB/Kirloskar/Crompton Greaves (PR no. 249) Closing Date: March 30, 2010 Contact: Chamera HE Project Stage-III P & C Complex,Dharwala, P.O. Churi Distt. Chamba, H.P. Tel. no. 01899-279693, 279608, Fax: 01899-279575 KARNATAKA POWER CORPORATION LIMITED KPCL Description: Import and Supply of 9.00 lakh Metric Tonnes of Steaming Coal for Raichur Thermal Power Station, Karnataka for the ﬁnancial year 2010-2011. Closing Date: April 4, 2010 Contact: Executive Engineer Karnataka Power Corporation Limited No. 82, Shakthi Bhavan, II Floor Race Course Road, BANGALORE – 560 001 Tel. no. 080-22203894 March 2010

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Vital Stats REGIONWISE SUMMARY OF POWER GENERATION JANUARY 2010 Category/Regions

Monitored Capacity (MW)

Generation (GWH) Program

Actual

Percentage of Program

Northern Region Thermal

23607.76

14152.35

14135.83

99.88

Nuclear

1180

721

42366

58.76

Hydro

13775.84

2678

2292.09

85.59

Total

38563.6

17551.35

16851.58

96.01

Thermal

34386.31

19950.86

20147.08

100.98

Nuclear

1840

693

684.78

98.81

Hydro

7669.8

1496

1316.44

Total

43896.11

22139.86

22148.3

100.04

Thermal

31364.61

12575.87

12519.37

99.55

Nuclear

1100

465

451.51

97.1

Hydro

11482.1

2582

2242.19

94.59

Total

33946.71

15622.87

15413.07

98.66

Thermal

19588.05

10757.78

9393.8

87.32

Hydro

4013.35

601

345.77

57.53

Total

23601.4

11358.78

9739.57

85.74

Thermal

884.92

358.5

394.88

112.02

Hydro

1202.7

209

165.43

79.15

Total

2087.62

561.5

560.31

99.79

Imports from Bhutan

336

141.56

42.13

Thermal

99831.65

57789.35

56590.96

97.93

Nuclear

4120

1879

1559.95

83.02

Hydro

38143.79

7566

6561.92

86.73

Bhutan Imports

336

141.56

42.13

Total

142095.44

67570.35

64854.39

95.98

Western Region

Southern Region

Eastern Region

North Eastern Region

All India

GWH: Giga-watt hours

Source: CEA 92

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March 2010

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POWERWATCH INDIA

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3167 2511

5756 10740 39515 36190 63755 7417 214447 9390 58090 35278 102512 1624

Himachal Pradesh

Jammu & Kashmir

Punjab

Rajasthan

Uttar Pradesh

Uttarakhand

Northern Region

Chhattisgarh

Gujarat

Madhya Pradesh

Maharashtra

Daman & Diu

Dadra & Nagar Haveli 3320

Goa

64485 36581 14464 62.591

Andhra Pradesh

Karnataka

Kerala

Tamil Nadu

212788

Western Region

2572

1485

28705

Haryana

58877

14107

33958

640496

184977

83871

28884

55911

9147

189078

7001

49600

35169

33884

8300

5621

27329

20862

21025

Delhi

1317

-3714

-357

-2623

-3989

-27811

-61

-153

-139

-18641

-6394

-2179

-243

-25369

-416

-14155

-1021

-5631

-2440

-135

-1376

-163

-31

MU

-5.9

-2.5

-7.2

-6.2

-13.1

-2.4

-4.7

-8.6

-18.2

-18.1

-3.8

-2.6

-11.8

-5.6

-22.2

-2.8

-14.3

-22.7

-2.3

-4.8

-0.8

-2.3

%

Availability Surplus/Deﬁcit (-) (MU)

1348

Requirement (MU)

April 2009 to January 2010

Chandigarh

State/System/ Region

443

Nagaland

MU: Million units

All India

688171

North-Eastern Region 7926

729

292

Mizoram Tripura

434 1304

Meghalaya

4387

334

73137

200

304

27972

17714

4825

Manipur

Assam

Arunachal Pradesh

Eastern Region

Andaman-Nicobar

Sikkim

West Bengal

Orissa

Jharkhand

12489

DVC

179874

Southern Region

9832

Lakshadweep #

Bihar

1754

Puducherry

620003

7028

651

388

238

1127

355

3998

271

69853

150

263

27211

17551

4475

12076

8276

169067

1629

-68168

-898

-78

-55

-54

-178

-79

-389

-63

-3284

-50

-41

-761

-163

-350

-413

-15556

-10807

-12.5

MU

Source: CEA

-9.9

-11.3

10.7

-12.4

-18.5

-13.6

-18.2

-8.9

-18.9

-4.5

-25

-13.5

-2.7

-0.9

-7.3

-3.3

-15.8

-6

-7.1

%

State/System/ April 2009 to January 2010 Region Requirement Availability Surplus/Deﬁcit (-) (MU) (MU)

ALL INDIA POWER SUPPLY POSITION FEBRUARY 2010

Vital Stats CRUDE OIL PRODUCTION DURING JANUARY 2010 Name of the undertaking unit

Planned production of the month

Production during the month Month under review*

Corresponding month last year

Preceding month of same year

Oil & Natural Gas Corp. Ltd. 2406

2129

1998

2109

Onshore

654

635

572

635

Gujarat

496

494

442

495

Assam

121

Andhra Pradesh

Tamil Nadu

Mumbai High Offshore

1752

1494

1426

1474

Oil

1580

1311

1259

1298

Condensates

172

183

167

176

Oil India Ltd. (OIL)

306

304

274

304

Assam

304

302

270.4

302

Arunachal Pradesh

2.5

3.2

DGH (Private/JVC)

919

484

389

492

Onshore

463

107

111

Arunachal Pradesh

12.5

6.8

Assam

3.6

1.5

Rajasthan

429.6

Gujarat

17.1

13.2

Offshore

456

377

367

381

Grand Total

3631

2917

2600

2905

Onshore

1423

1046

867

1050

Offshore

2208

1871

1793

1855

Source: MoPNG

$: Includes production from oﬀshore east coast *Provisional

COAL STOCK POSITION AT THERMAL POWER STATIONS IN THE COUNTRY AS ON MARCH 1, 2010 Region/State

Name of Thermal Power Station

Capacity (MW)

Coal Requirement (in ‘000 tonnes)

Actual Stock

Rajghat TPS

135

2.2

Badarpur TPSBadarpur TPS

705

13.1

154

Faridabad TPS

110

Panipat TPS

1360

20.9

Yamuna Nagar TPS

600

9.1

In ‘000 tonnes In days

Northern Delhi

Haryana

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POWERWATCH INDIA

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March 2010

Punjab

Rajasthan

Uttar Pradesh

GH TPS (Leh.Moh)

920

12.1

147

GND TPS (Bhatinda)

440

5.2

107

Ropar TPS

1260

19.2

329

Kota TPS

1240

20.5

127

Suratgarh TPS

1500

23.9

289

Chhabra TPP

250

3.2

Anpara TPS

1630

24.3

268

Tanda TPS

220

2.9

Obra TPS

1372

111

Panki TPS

210

3.1

120

Parichha TPS

640

10.3

111

Dadri NCTPP

1330

13.5

292

Rihand TPS

2000

30.1

600

Singrauli TPS

2000

33.6

424

Tanda TPS

440

7.4

240

Unchahar TPS

1050

200

19412

288.6

3758

Korba East 5

500

7.7

Korba 2

440

Korba West TPS

840

13.3

436

Korba TPS

2100

33.4

556

Sipat STPS

1000

10.4

226

Pathadi TPP

300

5.4

Gandhi Nagar TPS

870

12.1

Sikka Rep. TPS

240

3.3

Ukai TPS

850

12.8

Wanakbori TPS

1470

25.9

149

Torr Power AEC

400

5.7

Amarkantak Ext.TPS

450

4.7

Sanjay Gandhi TPS

1340

20.3

132

Satpura TPS

1142.5

20.4

262

Vindhyachal STPS

3260

51.7

650

Total of NR Western Chhattisgarh

Gujarat

Madhya Pradesh

Maharashtra

Total of WR

Bhusawal TPS

475

8.5

Chandrapur (Maharashtra) TPS

2340

42.1

298

Khaparkheda TPS 2

840

15.8

264

Koradi TPS

1040

18.1

221

Nasik TPS

880

16.2

246

Parli TPS

1170

213

Paras TPS

305

6.4

157

Dahanu TPS

500

8.6

22752.5

369.8

4441

Southern

March 2010

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POWERWATCH INDIA

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Vital Stats Region/State

Capacity (MW)

Coal Requirement (in ‘000 tonnes)

Actual Stock

Dr N Tata Rao TPS

1760

20.4

290

Kothagudm TPS

1220

21.1

555

Ramagundem B TPS

62.5

1.2

Rayalaseema TPS

840

14.3

188

Ramagundem STPS

2600

42.5

570

Simhadri

1000

192

Raichur TPS

1470

23.5

248

Bellary TPS

500

8.6

138

Ennore TPS

450

6.3

Mettur TPS

840

13.5

North Chennai TPS

630

9.7

Tuticorin TPS

1050

18.4

443

12422.5

196.5

2741

Baurani TPS

310

1.1

Muzaffarpur TPS

220

Kahalgaon TPS

2340

30.2

Patratu TPS

770

Tenu Ghat TPS

420

4.7

174

Bokaro B TPS

630

9.1

363

Chandrapura (DVC) TPS

1000

5.3

355

IB Valley TPS

420

8.7

232

Talcher (Old) TPS

470

8.5

201

Talcher S TPS

3000

56.3

143

Durgapur TPS

340

3.3

Mejia TPS

1340

19.9

Bakreswar TPS

1050

11.8

Bandel TPS

450

4.9

DPL TPS

690

9.3

Kolaghat TPS

1260

19.8

Sagardighi TPS

600

9.1

Santaldih TPS

730

8.3

Budge Budge TPS

750

5.6

246

New Cossipore TPS

160

1.1

Southern Repl. TPS

135

2.2

Titagarh TPS

240

3.5

Farakka S TPS

1600

29.2

Total of ER

18925

256.5

2276

All India Total

73512

1112

13215

Andhra Pradesh

Karnataka

Tamil Nadu

Name of Thermal Power Station

Total of SR

In ‘000 tonnes In days

Eastern Bihar

Jharkhand

Orissa

West Bengal

Sources: CEA and CIL

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March 2010

NATURAL GAS PRODUCTION DURING JANUARY 2010 Name of Undertaking unit

Planned Production during the month (in million cu mt)

Production during the month (in million cu mt) Month under review*

Corresponding month last year

Preceding month of current year

Oil & Natural Gas Corp. Ltd.

1989

1936

1807

1936

Onshore

461

471

464

474

Gujarat

152

162

155

160

Rajasthan

1.3

1.6

1.3

Assam

39.1

Tripura

41.6

50.6

44.4

Andhra Pradesh

116.4

122

123.2

124

Tamil Nadu

102

103.2

101

Offshore

1528

1465

1343

1462

Mumbai High Offshore

1528

1465

1343

1462

Oil India Ltd. (OIL)

213

194

175

210

Assam

188

175

155

190

Arunachal Pradesh

1.9

Rajasthan

23.4

17.3

DGH (Private/JVC)

2539

2510

604

2251

Onshore

Arunachal Pradesh

0.8

Assam

7.8

4.2

Rajasthan

4.5

3.7

Gujarat

West Bengal $ (CBM)

4.3

3.4

Offshore

2491

2464

545

2205

Total

4742

4641

2586

4397

Onshore

723

712

699

730

Offshore

4019

3929

1887

3667 Source: MoPNG

$: Coal Bed Methane Production *Provisional

March 2010

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