ET
Total pages 52 Volume 1 | Issue 10| November 2013 | `50
Electricals Today
Management expertise for the power industry
Generation Dilemmas in fuel price pass-through
Renewables Small hydro segment on upswing
Towering presence
KEC International’s Ramesh Chandak on how his company has successfully powered infrastructure development in over 48 countries across the world Published by ITP Publishing India
Contents
20 Cover Story KEC International’s Ramesh Chandak on how his company successfully powered infrastructure development in over 48 countries across the world
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29
35
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Products
Distribution
Generation
Renewables
New section on components in electricity generation
Communication tools for smart grids
An analysis on the fuel price pass-through impasse
Private investments flowing to small hydro november 2013 | Electricals Today
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Editor's Note
The polishing act
T
here are no quick-fix solutions for majority of the problems in power sector. But those in the sector are aware that some of the problems can be addressed by the stake-holders themselves. This is one segment where they don’t require ministry approval or policy support. The reference here is the long pending complaint of the industry on lack of skilled manpower in the country. Though there is no dearth of educated people, the industry ends up spending at least six months in training fresh minds before fully inducting them into the company. We all know how the country’s education system fails to meet the industry requirement standards. However, now the policy makers, bureaucrats and those who matter, have taken an advisory role in asking the industry to get more involved in skill development. It is not as if the industry had not taken any action in this direction, but what is necessary is early involvement in moulding the talent. This could mean adding an additional curriculum paper as per the requirement of the industry or more practical (in this case, industry) training during the course. The suggestion has been well accepted by the industry bodies and the orientation process at graduation and post graduation levels has started. Currently, some colleges have a tie up with the industry in skill development, and the industry associations even support these initiatives through stipends to the students for the course duration. In the changing market conditions, with large capacity additions planned in generation, transmission and distribution, it is imperative that the industry requirement parameter rises with every passing year, which forces the industry to get its act together in getting trained manpower from the college level. The result may not be visible immediately, but, surely in the coming years, the industry will have a ready workforce with the required skill set. The seed sown now will reap results soon.
ET Electricals Today
Management expertise for the power industry
Volume 1 | Issue 10 | November 2013
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Electricals Today | november 2013
p9
Bulletin
India begins electricity export to Bangladesh
PM Manmohan Singh joining the inauguration in Dhaka through video conference.
Indo-Bangla cooperation in the power sector entered a new phase, with the two countries breaking ground for a 1,320 MW coal-fired power plant and inaugurating a joint transmission line that will export 500 MW from India. "This inauguration represents an important milestone in connecting our two countries and the broader region through a growing wave of cross-border energy links and trade," Prime Minister Manmohan Singh said. These initiatives will strengthen the bonds of friendship between
India and Bangladesh and add a rich dimension to bilateral relations, he added. Bangladeshi PM Sheikh Hasina, said, "The inter-grid connectivity is part of an immediate solution which would go a long way to alleviate the power deficit in Bangladesh." The inauguration began with the supply of 175 MW from India to Bangladesh's National Grid and officials said the agreed quantum would start coming from November.
Alstom to supply transformers for NTPC's Nabinagar project Alstom T&D India will supply a power transformer package for Nabinagar Power Generating Company Limited's (NPGCL ). This super thermal power project is located in Bihar, and is part of a bulk tender which has been set up to accelerate the pace of thermal capacity addition in the country.
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Electricals Today | november 2013
Rathin Basu, MD, Alstom T&D India said, “As a pioneer in the field of power transformers Alstom T&D has a wide range of short circuit test compliant generator transformers and associated power transformers designed specifically for super critical power projects.� This order is worth Rs1055 mil-
lion and covers design, engineering, manufacture, supply, testing, erection and commissioning of generator transformers and shunt reactor. All equipment will be manufactured in Alstom's manufacturing and testing facility in Naini (Uttar Pradesh). And is due to be delivered by October 2017.
BULLETIN
p12
Electrical equipment makers should focus on developing skilled force: Nachiappan The Indian electrical equipment sector should focus on developing human resource capital and needs to increase its investment in creating more skilled manpower in order to compete with the global markets, said EM Sudarsana Natchiappan, minister of state for commerce & industry, department of industrial policy & promotion. This segment, $25 billion industry, contributes 1.4 per cent to the nation's GDP. It is estimated that the electrical equipment industry requires almost 80,000 to 90,000 skilled workers every year. A large number of skilled workers coming out of technical institutes do not possess the required skills and are not employable. This is one of the major reasons for the low productivity of manpower in India as compared to other economies. On the growing cheap imports from China which is hurting the electrical industry, Natchiappan added that since India is bound by WTO rules, the government will look into the matter to provide more safeguards for the industry.
Newly elected IEEMA President Raj Eswaran with minister EM Sundarsana Nachiappan and other dignitaries.
Slow growth in transmission due to lengthy execution process: FICCI
Kalpataru bags New Orders worth Rs620 crore
Transmission projects in the country take about five years to complete, a factor responsible for the slow rate of growth in the sector, says a report. "An important factor for the slow rate of growth is the long process time from conceptualisation to commissioning," a FICCI report on Power Transmission said. In the current system, average time from concept to commissioning is about 60 months or five years. As per the report, "It takes three months for a project approved in Standing Committee to come to the Empowered Committee for approval." Post the Empowered Committee's nod, it takes eight months for finalisation of the structure, which includes formation of SPV (special purpose vehicle) by Bid Process Coordinator, appointment of a consultant and publishing of RFQ (Request for Qualification).
Kalpataru Power Transmission Limited (KPTL), has secured new orders worth over Rs620 crore, from Tamil Nadu Transmission Corporation Ltd and HPCL. Commenting on the announcements, MD Ranjit Singh said, “The order pipeline remains strong this year. In the first half, we have won orders worth Rs1,750 crore and expect the momentum to continue in the second half also” , as many projects are in the final stage of award.” The Tamil Nadu order includes supply and installation of 171 kms 400 KV D/C transmission line worth Rs463 crore. And installation of 160 kms cross-country LPG pipeline worth Rs94 crore from HPCL.
november 2013 | Electricals Today
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BULLETIN
West Bengal Secures loan for power sector modernisation
World Bank to fund West Bengal power sector.
Multilateral development agencies, including World Bank and Germany's KfW, have agreed to offer Rs1,100 crore in fresh soft loans for modernisation of the power sector in West Bengal. "World Bank has offered $50 million and KfW (German development bank) euro 90 million. The combined soft loans from these development agencies are close to Rs1,100 crore of the Rs1,700 crore needed to modernise three old units of Kolaghat," state's power secretary Malay De said. "The balance has to be raised from other sources to complete the renovation of three units of 210 MW each at the Kolaghat thermal power plant," he added. Renovation of the old units would help increase the life span and fuel efficiency.
IBM ties up with Tata Power Delhi Distribution IBM has been selected by Tata Power Delhi Distribution [TPDD] to conceptualise, design and deliver an Advanced Smart Grid Solution for the distribution company. This will collect and analyse real-time information from smart meters and data from the communication and management infrastructure. This will enable TPDD to better manage energy output and further reduce outages. "TPDDL is committed to accelerate the smart grid deployment which will give customers more visibility and control in managing their energy usage and transform the electric network into a robust, secure and intelligent system,” said Praveer Sinha, CEO and ED, TPDD. As a joint venture between Tata Power and the Delhi Government, TPDD sought a solution that would enhance the reliability and efficiency of energy distribution across the northern and north western parts of Delhi. Additionally, the solution would also help empower its over 1.3 million electric consumers to manage their own energy usage.
Dabhol power plant may be rented out After being forced to shut the Dabhol power plant in Maharashtra due to a natural gas shortage, GAIL India and NTPC are considering renting out the 1,967MW unit to private electricity generators. Ratnagiri Gas and Power Pvt Ltd (RGPPL), a joint venture between gas utility GAIL and the nation’s biggest electricity generator, NTPC, shut the Dabhol power plant in March this year after gas supplies from Reliance Industries’ KG-D6 fields was stopped. Finding no buyers for power produced using costlier imported gas (liquefied natural gas), RGPPL is mulling giving out the power plant to private operators on a tolling basis. Two or three power producers, which recently approached GAIL to source LNG for their upcoming plants, were asked if they would be interested in taking Dabhol on rent.
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Electricals Today | november 2013
Dabhol power project was stalled because of the non-availability of gas.
BULLETIN
Selection of developer for Bhedabahal UMPP by Jan 2014
Bhedabahal is the first UMPP in Odisha.
The union power ministry has decided to complete the process of bidding and award of projects for the Bhedabahal (Odisha) and Cheyyur (Tamil Nadu) ultra mega power projects (UMPPs) by January next year. The decision was taken at a meeting
of the power ministry. Power Finance Corporation (PFC), the nodal agency for UMPPs in the country, has invited preliminary bids for selection of developers. As per the revised standard bidding documents, the projects would be set up on design, build, finance, operate
and transfer (DBFOT) basis. The Odisha Integrated Power Ltd (OIPL), a fully owned subsidiary of Power Finance Corporation (PFC), is conducting the bidding process for selection of developer for the first 4,000 MW UMPP in Odisha at Bhedabahal.
JSPL in talks to buy power project in AP
More power projects stalled for want of clearances
Jindal Steel and Power (JSPL) is known to be in talks to purchase a 1,320 MW coal-based power plant at Nellore, Andhra Pradesh, that belongs to Hyderabad-based Kineta Power. While the value of the deal is not known, sources said the cost of setting up the power plant is Rs5,000 crore. The project, which is currently under implementation, has already received forest and defence clearance. In response to a questionnaire, a spokesperson of Jindal Power said: “We evaluate potential options for inorganic growth through acquisitions on a continuous basis. As a matter of policy, we would not like to comment on a specific case.� The project is promoted by Bangalore-based Kineta Mines and Minerals and owned by V Balashowry, who is the chairman and managing director of Kineta Power. The group is primarily engaged in export of iron ore and are also the suppliers of burnt lime, limestone and dolomite.
According to data compiled by the Prime Minister's Project Monitoring Group (PMG), industrial projects worth over Rs15 lakh crore are stalled for want of various clearances and other issues. Of this, power is the most troubled sector, where 136 projects worth over Rs7.14 lakh crore have been stalled. This is followed by steel, where 25 projects entailing investments of over Rs3.36 lakh crore are stuck. The other leading sectors where investments are stuck are oil and gas sector (32 projects entailing Rs2.08 lakh crore investments), special economic zone (Rs52,271 crore), roads (Rs40,155 crore) Slow capacity addition in thermal. and mines (Rs37,399 crore). The PMG, since its constitution in June, has so far cleared 78 projects entailing investments of over Rs2.93 lakh crore, as revealed by data available on its website. The PMG was set up as a facilitating body for resolving specific issues of the projects and fast tracking them.
november 2013 | Electricals Today
9
BULLETIN
Many power generators are approaching regulators for tariff hike
Reliance Power seeks relief from CERC for Tilaiya UMPP Reliance Power has sought increase in tariff from its Tilaiya project in Jharkhand due to factors including withdrawal of various duty exemptions and cost escalation on account of resettlement and rehabilitation programme. As per the petition filed by the company with CERC, Reliance Power has cited reasons including withdrawal of exemption in respect of custom and excise duties on mining equipment and fuel transportation. The petition was filed last month by Jharkhand Integrated Power
Limited, a subsidiary of Reliance Power which is executing the Rs20,000 crore project. "Withdrawal of exemption in respect of duties of custom and excise on mining equipment and fuel transportation," the company said in its 500-odd page petition to the Central Electricity Regulatory Commission. The company is also seeking relief due to withdrawal of exemption of excise duty on cement and steel as well as removal of subsidy on price of diesel.
CIL reports negative coal balance The Coal Ministry has rejected the Power Ministry's request to grant linkages for GVK Power's 540 MW plant in Punjab saying that state-owned Coal India Limited (CIL) has a negative coal balance. "It is stated that CIL and its subsidiary coal companies are reporting negative coal balance, therefore there is no India's coal consumption is on the rise. scope for issue of any new LoA (Letter of Assurances) to any power project," according to a coal ministry document. The ministry had received a reference from the ministry of power which stated that the first unit of GVK's 540 MW TPP (Thermal Power Project) has successfully completed the synchronisation test in July 2013. The power ministry had further stated that the developer has cited several reasons beyond its control in carrying out mining operation from the allocated captive coal mine Tokisud North Block in Hazaribagh district of Jharkhand.
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Electricals Today | november 2013
Bihar to be a power surplus state: CM Chief Minister Nitish Kumar has hinted that Bihar would become a power surplus state in a couple of years. Kumar said that an additional 2,000 MW would be generated from the thermal power plant at Nabi Nagar which was being constructed in partnership with the NTPC. The 1,20 X 3 thermal power plants at Chausa, Kajra and Pirpaiti were in various stages of constructions. He said that extensive work was being carried out to tone up the transmission and distribution networks and to augment generation capacity with the Barauni and Kanti thermal power plants being renovated with the help of NTPC. The supply availability according the CM is rising to 3100 MW at present against 750 MW in 2005.
BULLETIN
Tata Power starts work on 400 MW hydel project in Georgia
Tata Power MD Anil Sardana addressing the gathering. Tata Power has commenced construction work for the first phase of its joint venture 400 MW hydro power project in Georgia. The ground breaking ceremony for construction of the first phase Shuakhevi project, having a generation capacity of 185 MW, was performed by Georgian Prime Minister Bidzina Ivanishvili.
Alstom bags 100 mn euro contract from GVK Power Alstom India has bagged a 100 million euro contract to supply equipment for GVK Power and Infrastructure’s 850 MW Ratle hydropower plant in Jammu and Kashmir. "Alstom has been awarded a contract worth over 100 million euro (Rs840 crore) by GVK Power and Infrastructure Ltd to equip the 850 MW Ratle hydropower plant, which will be commissioned in 2017," the company said in a statement. “We are happy to be supporting the country's plan to further incorporate renewable energy into its energy mix," Patrick Ledermann, MD and vice chairman, Alstom India. The contract includes the supply of four turbines of 205 MW each, and one turbine of 30 MW. All equipment will be manufactured at Alstom's Vadodara facility in Gujarat.
Ground-breaking by Georgian PM Bidzina Ivanishvili. "We are delighted with the commencement of the first phase of the hydro project in Georgia," Tata Power MD Anil Sardana said. The hydel project would be jointly developed by Tata Power along with Clean Energy Invest AS, Norway (Clean Energy) and IFC InfraVentures (IFC). Agreement with Clean Energy and IFC was
signed earlier this year and the projects are being developed for sale of power primarily to Turkey, Tata Power said in a statement. Tata Power, India's largest private power producer, has hydel generation capacity of 450 MW in Maharashtra. The company has an installed capacity of over 8,500 MW.
NHPC seeks Navratna status State-owned National Hydroelectric Power Corporation (NHPC), which has embarked on ambitious expansion plans, has approached the government seeking 'Navratna' status that would provide the power producer more leeway in investment decisions. The move comes at a time when NHPC, the country's largest hydel power generator, has firmed up plans to foray into thermal, solar and wind energy segments. "We have submitted the proposal seeking Navratna status to the government," a senior official told news agency. The proposal was submitted to the power ministry, which has forwarded the same to the Department of Public Enterprises (DPE), the official said. According to the official, Navratna status would provide the company with more autonomy and flexibility in deciding on investments. Currently, NHPC is a 'Mini Ratna Category-I' enterprise. Established in 1975, the company has an authorised share capital of Rs15,000 crore.
NHPC is India's largest hydro corporation.
november 2013 | Electricals Today
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BULLETIN
Renewable energy roundup Tata Power buys 39.2 MW wind farm in Gujarat
CLP India partners to introduce pooled financing for wind assets
ASW was the last operating Indian wind asset of AES Corp.
Tata Power Renewable Energy Limited (TPREL), a 100 per cent subsidiary of Tata Power, has signed a share purchase agreement (SPA) for acquisition of AES Saurashtra Windfarms Pvt Ltd (ASW). ASW is a100 per cent subsidiary of AES Corporation and operates a 39.2 MW wind farm that is near Dwarka in Jamnagar district of Gujarat, has been operational since January 2012. It has a power sale agreement with Gujarat Urja Vidyut Nigam to sell the power it generates, for a tariff of Rs3.56 per unit. Tata emerged as victorious bidder in the process conducted for the sale of the farm. “The acquisition is subject to certain conditions, which are expected to be addressed in a few months time,” Tata Power said. This acquisition will take the portfolio of Tata Power's wind power generating capacity to 437 MW.
CLP India, one of the largest foreign investors in the Indian power sector, has announced the signing of an innovative financing structure, ‘Pooled Financing’, for its wind assets. The agreement is with three leading financial institutions – Standard Chartered Bank, IDBI Bank Limited and IDFC. Rajiv Mishra, MD, CLP India, said, “With a number of existing challenges in the conventional power space, we are now seeing a much greater focus on renewable energy not only amongst private investors, but also amongst lenders, policy makers and state governments. At CLP India, renewable energy forms an integral part of our business philosophy, which reflects in a strong wind portfolio of over 1,000 MW that has been built over four years. This new, innovative approach to financing wind projects will strengthen our competitiveness and business performance.” The new financing structure is expected to boost the growth of CLP India’s wind portfolio.
750 MW solar power project gets the nod NSM targets to add 20,000 MW by 2022.
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Electricals Today | november 2013
The union cabinet has approved the setting up of a 750 MW power generation capacity under initial leg of the second phase of the National Solar Mission (NSM) implementation. The projects would be set up with viability gap funding (VGF) support from the government's clean energy fund. The total VGF requirement for the scheme works out to Rs1,875 crore. According to an official release, "The support is estimated to leverage private investment to the tune of Rs5,000 crore in setting up the projects." The National Solar Mission, launched in 2010, aims at setting up 20,000 MW of solar power by 2022 in three phases. The second phase began this year and is due to end in 2017.
BULLETIN
Sterling and Wilson awarded Best Solar EPC-2013
Events 6th Energy Expo 2013 Venue: Ahmedabad, Gujarat Date: 5-7 December 2013 Confederation of Indian Industry (CII) has been playing a pioneering role in developing the Indian Energy Industry with a move to integrate it since 2004. With this background, CII is organising the Energy Expo in Ahmedabad to showcase the progress made in this regard, to explore the potential opportunities and to create a roadmap for sustainable growth and development.
Sterling and Wilsom commissioned 30 MW last year.
This year prestigious “BEST SOLAR EPC 2013— by Ernst & Young” in India was awarded to Sterling and Wilson Ltd, an associate of Shapoorji and Pallonji group. This has been achieved by commissioning the 30 MW Solar Park which is located in Berami village, Rajasthan. The Solar Park constitutes plants of various sizes ranging from 1 MW to 8 MW for 11 different customers. The commissioning of the plants was achieved in merely 83 days. The company has a total of 149.28 MW capacity and 200 MW under construction.
APPOINTMENT Raj Eswaran is IEEMA’s new president Indian Electrical and Electronics Manufacturers’ Association (IEEMA), the 800-member apex association of electrical equipment manufacturing industry, has announced the appointment of Raj Eswaran as the new President for the year 2013-14. Raj Eswaran is MD of Easun Reyrolle Ltd, has been also associated with Easun Products of India Pvt Ltd for the last 15 years, and is currently the director in EHV Cables and Substation Division. On his appointment, Eswaran, said, “We at IEEMA are extremely proud to be a body representing the over Rs1.30 lakh crore Indian electrical equipment manufacturing industry which provides direct and indirect employment to over 1.5 million people. The electrical industry is not only of vital importance to the economy, but of strategic importance to the nation.” He holds a B E in Electrical and Electronics Engineering, and has done his Masters in Business Administration from the London Business School.
ELECRAMA-2014 Venue: BIEC, Bengaluru, Karnataka Date: 8-12 January 2014 Elecrama-2014, the 11th edition of the world’s largest power T&D confluence, will be hosted in Bengaluru this year. It is designed to maximise the participant experience by its multilateral approach to exhibitions. According to the organisers, the highlights of the show are: international reverse buyer/seller meet, conference on transformers, innovation day and students pavilion, CEO Nite with cross stakeholder debate and awards ceremony.
EnerTech World Expo Venue: Bombay Convention & Exhibition Centre, Mumbai, Maharashtra Date: 10-12 February 2014 EnerTech World Expo will be a three day event and will be an ideal platform for the attendees to showcase products such as transmission and distribution equipments, rotating equipments, light fixture and fittings, solar power equipment, pollution control equipment and control gears. The participants will share their views about the latest developments related to thermal, hydro, nuclear and renewable energy sectors. Product display, conference, networking opportunities and meeting with industry leaders will be some of the highlights of this show.
International Power Transmission Expo Venue: Bombay Convention & Exhibition Centre, Mumbai, Maharashtra Date: 27 February - 1 March 2014 International Power Transmission Expo show ranks high on the popularity count, with more than 2500 qualified visitors attending the show on a regular basis. The latest developments and market trends from this sector are discussed upon during the show. On the side lines, topical business seminars are also organised. Exhibiting companies from as many as seven different countries participate in the event, showcasing a varied array of gear transmission products, oils and adhesives, belt drives, cutting equipments, processing tools and a host of other associated products.
november 2013 | Electricals Today
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Products Cost-efficient generator Cooper Corporation, an engine major introduced cost efficient and eco friendly diesel generators under the brand name “Cooper ECOPACK”. Cooper has come out with revolutionary breakthrough technology in collaboration with Ricardo, an international design engineering company. Features: The low fuel consumption generator is lighter in weight, smaller in size and meets with American and European emission norms. It is available in power ranging from 10 KVA - 180 KVA. The 10 KVA to 40 KVA genset range is powered by a twin cylinder, in line 4-valve, and liquid cooled, Cooper diesel engine, based on CRDi technology. The entire range goes up to 180 KVA powered by 3, 4 and 6 Cylinder Cooper engines. Web: www.coopergenset.com
New testing facility Avantha Group Company CG inaugurated its 1600kV Ultra High Voltage (UHV) research centre at its Switchgear Complex in Nashik. CG has invested nearly Rs400 million in the world class infrastructure to enhance its R&D capabilities to achieve global excellence in the UHV domain. Features: The research centre is an electrical-noise-free infrastructure equipped with the latest testing facility. The centre facilitates new product development of UHV/EHV markets, spanning 800kV EHV to 1200 kV UHV power transmission systems. The focus will be on R&D of high power sub-station equipments, such as circuit breakers, GIS (Gas Insulated Switchgear), instrument transformers, transformer bushings, surge arresters, and disconnectors.
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Electricals Today | november 2013
Web: www.avanthagroup.com
Products
Power metering Schneider Electric launched PowerLogic PM5000 series power meter. This series is a compact meter that is ideally suited to energy cost management applications. These high performance meters directly connect to networks rated up to 690 V L-L without potential transformers. ďƒœ Features: The new series products are compliant with IEC 61557-12, IEC 62052/53 and IEC 61053-22 metering standards: PM5100 and PM5300 models are class 0.5S while PM5500 models are class 0.2S. Essential features such as different communication and I/O options, a battery-backed real-time clock, alarms, multiple tariff schedules, MID compliance and data and event logging ensure the PM5000 series has the capabilities to perform energy cost allocation and tenant metering / sub-billing. Web: www.schneider-electric.com
Smart solution The SmartRow Solution is a data centre solution produced by Emerson Network Power for indoor environment such as medium and small-sized data centre or computer room. It is an intelligent integrated infrastructure that combines industry’s finest power, precision cooling and infrastructure management technologies in a sealed environment. ďƒœ Features: It supports up to 40kW of IT equipment in a multi-rack configuration with integrated power, cooling, infrastructure management and fire suppression. It reduces energy consumption by up to 27 per cent compared to a data centre with conventional design. The system comes with a dedicated rack-level cooling, optimal space utilisation, is energy efficient and saves power, easy relocation because of the design, and intelligent sensors, which can monitor temperature, humidity, etc. Web: www.emersonnetworkpower.com
Novemberber 2013 | Electricals Today
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Products
Switch gear station The Danish Parliament wishes to upgrade the visual appearance of the Danish power grid. As a result, Energinet.dk has decided not to construct a new large open-air switchgear station in Vejen, Jutland, but instead build a gas-insulated switchgear station - also called a GIS station. The idea has been to give the technical enclosure of the station, placed in the open landscape, a distinct architectonic profile, and at the same time maximize the future flexibility. Features: The station has been designed as a series of modules. Arranged in series, the modules create a transparent gill-like envelope with triangular openings, letting ample daylight into the interior and allowing glimpses of the GIS units at the heart of the building. Web: http://www.energinet.dk/
Lapp’s first cable factory Oskar Lapp (1921-1987) was not only an ingenious inventor, but he was also a passionate entrepreneur. The Stuttgart-based Lapp Group celebrated the 50th anniversary of Lapp GmbH Kabelwerke on 27 September. The company currently produces approximately 15,000 kilometres of cable every year. Features: In 1963, just four years after the establishment of U.I. Lapp KG, they started the first own production plant. Lapp developed the first industrially manufactured control cable with coloured cores. With the support of his wife Ursula Ida, he ensured that the new product became indispensable in the mechanical engineering and plant construction industry. Ground-breaking was also the idea to give the invention the brand name ÖLFLEX® – a name which is internationally synonymous for connection and control cables. Lapp Systems GmbH also manufactures custom-made cable and piping systems.
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Electricals Today | november 2013
Web: http://lappindia.lappgroup.com/
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Reaching for the Sun The country has set an ambitious target of 10,000 MW of solar energy in Phase 2 between 2013 and 2017 Sanjeev Aggarwal Managing director, Amplus Infrastructure
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fter a long wait, the MNRE has finally come out with the draft guidelines to award 750 MW grid connected solar projects through Viability Gap Funding Mechanism (VGF). Going by the interest level of scores of bidders during the last two rounds, it may be safe to assume that this round may also be a huge success. However, there are few key factors that may differentiate this round from the last ones.
L
et us examine which one is better — bundling scheme or viability gap funding or generation based incentives (GBI)? One of the most important differentiators is that the last time solar power was bundled together with the cheaper power of National Thermal Power Corporation (NTPC), it brought down the average cost of power that was sold to distribution companies. This time there is a fixed tariff and the bidders need to bid for the capital subsidy to be released in tranches over five years. This essentially means that the interest level of the bidders in performance of the Allocation from NCEF technology is limited to maximum of five years unlike the last time where the performance of the plant was important during the entire duration of the power purchase agreement (PPA). Theoretically there are provisions that Solar Energy Corporation of India (SECI) can impose a penalty on behalf of the discoms with the provision that the state regulatory commission actually penalises the concerned discom for shortfall in meeting latter’s obligation. But it
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will be a tall order to really impose these penalties given the track record of state commissions in imposing renewable energy purchase obligations (RPO). In case the plant does not perform for a continuous period of one year, SECI is also seeking refund of VGF from the
column
developers, though the payment is unlikely to happen given that there will be no guarantee of the promoters by that time. In that case, SECI is seeking a pro-rata charge along with the banks on the project assets. It is still unclear how SECI will get a refund of VGF since the banks will be struggling to meet their own debt service coverage ratio (DSCR) and there is unlikely to be a buyer for an under-performing plant. Here, we have not even touched upon the likely reluctance of the banks to share their first charge with SECI at the time of financing, as they would evaluate the project based on the project cost after deducting the VGF amount. Are we heading for another road sector type of scenario where the developers only interest is to draw the VGF and when the project under performs, leave the bleeding project to be handled by the lenders and NHAI.
S
hould we not promote our domestic manufacturer? But not at the cost of the consumers. The bidding capacity has been divided into two halves with each being sourced from domestic component and imported component. The
logic seems to be sound with an incentive to promote local manufacturing capacity. Ministry of New and Renewable Energy (MNRE) also expects the two price points to be different. No prizes for guessing which one will be higher! It is the customer who will be paying the higher price. But can we say that we can source any quality from anywhere as long as it is cheap? Can we completely ignore promotion of the Indian industry? Where does the balance really lie? I think the answer lies somewhere in-between. We should insist on certain quality parameters to be met by all the technology providers including Indian suppliers. In addition, to safeguard the consumers, we should insist that the VGF sought under the domestic category shouldn’t be more the 10 or 15 per cent than what is being sought in the open category. None of the suppliers should take the buyers for a ride.
I
s the role of multiple agencies a case of too many cooks? One of the important accomplishments of Phase 1 has been quick implementation of the projects. It has been achieved mainly because of the excellent facilitation role played by NTPC Vidyut Vyapar Nigam Limited (NVVN) as the bidding agency, PPA counter-party, as well as payment security provider. This time the situation is very different. SECI is the bid facilitator with NVVN as its support agency. The power purchasers are yet to be identified. SECI is to provide payment security from multiple sources to have a corpus to cover three months payment. Multiple agencies that are involved this time are bound to lead to complications and consequent delays. The payment security fund by SECI is to be funded from encashment of BGs, interest earned on this fund, incentives for early payment, the extra money coming from 10 per cent lower tariff to developers claiming accelerated depreciation (AD) and grants from Government/ NCEF (national clean energy fund) will be used to build this fund. The fund is expected to be approximately Rs200 crore. We can only hope that this gets funded well in time.
F
Though India failed to meet phase 1 targets, the country is optimistic about phase 2 targets.
inally, what is a better mechanism for achieving what we aspire for? Leaving aside all these complicated issues of this round of bidding, is it not possible for providing a simple mechanism where the incentive is based on generation rather than the often misused capital subsidy programmes. The states should pay what they can afford and the rest be paid by the government through GBI mechanism over a longer horizon. The bidding could have been on GBI rather than the VGF.
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Towering
presence KEC International’s Ramesh Chandak on how his company has successfully powered infrastructure development in over 48 countries across the world BY RENJINI LIZA VARGHESE
I
f it were a game of snakes and ladders, KEC International has been fortunate enough to find the ladders while the competition has had to grapple with the snakes. The company, known to be risk averse, has continued to dominate the Indian T&D market, using a combination of cautious business approach and diversification into connected businesses. From 20-plus per cent growth rate two years ago to going into the red in one of the recent quarters, the electrical equipment segment has had a roller coaster ride. It registered lowest growth rate in the last three decades. While India targets to be a $100 export market in the segment, things seem to be not moving in its favour. Government policies which allowed import of electrical products have dampened growth in the domestic market.
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cover story While the industry is fighting its battle for revival, KEC International, the leading player in the transmission segment has managed to sustain its growth. This became possible with the company taking the diversification path and look beyond Indian borders. Sixty-five per cent of its business comes from overseas operations in 40 different countries. From being a Rs500 crore company in 2002 to Rs7,000 crore in 2013, Ramesh Chandak, MD and CEO, KEC International sees the domestic transmission segment bringing in more business. The transmission and distribution segment has seen a slowdown, despite PGCIL continuing to announce projects. What should one believe? If one goes with newspaper reports, what you say is absolutely right. But KEC had the highest growth in transmission business last year—30 to 35 per cent. In fact, the first four months of this year registered around 28 per cent growth. As far as KEC is concerned, the company had a healthy growth and continues to enjoy good market share. Unlike many companies in the segment which are facing problems, KEC is bidding, executing and taking orders aggressively. The order book has grown by Rs1,000 crore and stands at Rs10,000 crore plus now. In spite of the fact that our exposure is 28 per cent more than last year.
KEC had the highest growth in transmission business last year—30 to 35 per cent. And the first four months of this year registered around 28 per cent growth. Are all the orders from India? And what is the debt position looking like? No, it is 50 per cent domestic and 50 per cent from outside India. Last year it was 65 per cent. We are evenly spread in more than 40 countries. In the Americas we are 12-13 per cent, Middle East 13-14 per cent, Central Asia 10 per cent, Africa is 10-11 per cent, India 37 per cent, South East Asia, 6-7 per cent. We have around Rs1,800 crore debt on the book. If you look at the turnover, it is Rs7,000 crore. So for a company of this size, the debt is not so high. If you look at the balance sheet, every year, the receivables are coming down by four-five days. Last year we have had an improvement by five to six days. The net working capital is below 90 days now. And let me highlight that in the last 17 years, the company has not gone to the market for raising funds. In 2002-2003, our turnover was Rs504 crore which has reached Rs7,000 crore in 2013,without any increase in capital. That is because we have deployed the profits back to the business. Measures have also been taken to improve the working capital system, better working efficiency, which put together provided the adequate capital.
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What made KEC grow, while many companies in the segment took severe hits? In addition to transmission and distribution, which is our main business, we have entered into some related businesses. Like a) Railways, b) water treatment and, c) power systems. Though we were doing electrification with railways for the last 50-60 years, we looked at other opportunities with them recently. We have started doing the civil side too, such as construction of bridges, tunnels and signalling. We have completed one project and some others are in the pipeline with the railways. The second segment which we entered into is water, because,
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Erection of a tower in process.
worldwide water is a problem. One BBC documentary put it in perspective by saying, ‘the next world war will be on water.’ Our focus on water is on the resource side as well as on the treatment side. We have completed projects on resource management that’s the irrigation side. In transmission, we manufacture parts of a tower—at least 25 per cent of the tower is being manufactured by us. In distribution, one of the integral parts of the system is cables, we have taken over a cable company to meet this requirement. So now, we have cable manufacturing and transmission manufacturing in our kitty. In transmission we
have three manufacturing plants in India, one in Mexico and one in Brazil. In cable segment, we have three manufacturing facilities, all in India — one in Silvasa, second in Mysore and the third in Baroda. At the Baroda plant, we have started the production of 220 kV cables which is extra high voltage cables. So when we talk about transmission and distribution,we have a wide range of products and have a wide-spread presence in terms of project implementations. As we have dominance in T&D, we decided to look at the electrical BoP in generation projects as well. Renewables is another new focus for us, especially wind and
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Consumers are more receptive towards regular tarrif hikes. Inside a tower manufacturing unit.
solar. Though we have not done many projects, we have designed a tower for the wind segment. We expect our first in solar order in couple of months time. How much has the diversification helped in tiding over the economic slowdown? Currently, the company has a turnover of Rs7,000 crore. Had we stuck to the core business, the turnover would have been Rs4,000 crore. The additional Rs3,000 crore came from diversifications. This includes subsidiaries which we bought in the US, Mexico and Brazil. The new initiatives contribute 30 per cent to the turnover.
10,000 cr
Rs
Water is a growing segment. What is your business expectation from this order book segment? The business or opportunities in water are as big as the transmission and distribution segment. We are a new player, but still have a good chance as we have the experience of dealing with public utilities and also implementing projects at cross- country levels. We feel that we will be able to get a higher chunk of business from this segment. There is a large amount of funding coming from World Bank and ADB for water projects. Unlike T&D funding, these banks are ready to disperse funding though there may be no returns, at least immediately.
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What kind of growth do you see in the renewable energy segment? There are a lot of things to be sorted. The government’s concentration is diverted now. Post election, I expect the segments will return to the earlier momentum of growth. This is a lean period, and we see it as time in hand to understand the business better and gear up. Rural electrification initiative by the government has gathered momentum in the past few years. What is its contribution to your business? It is not really a big contributor. I should admit that execution of a rural electrification project is really tough. We are dealing with rural population in many areas. But there is a tremendous
SAE manufacturing facility in Mexico.
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We have increased our pole manufacturing capacity internationally with our plant in Mexico. The capacity has been increased from 5,000 metric tonnes to 15,000 metric tonnes a year.
Transmission line 1,890 metres above sea level in Himachal Pradesh.
amount of confusion especially in the execution. We have had orders, and executed some, however, we found it difficult, and have reduced our exposure considerably. What is your position in the global tower business? We are the largest in tower business domestically and internationally. Today, KEC is the largest in the world, in Lattice tower production capacity. Could you throw some light on the technological developments in the segment and its benefits which helped your business? The good part about KEC is that we operate in 48 countries. Each country adopts a different technology. In the UAE (Abu Dhabi), everything is using cranes. In Kazakhstan, everything is prefabricated as the temperature remains in -40 degree levels through the major part of the year. In South Africa, the execution technology is entirely different. Our experience of working in different countries, with different technologies
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Why is the electrical segment facing problems? Huge quantum of imports has come into the Indian market in this segment even for equipments which are manufactured domestically. That’s one of the major reasons. 220 kV substation in Kazakhistan.
helps us tremendously while implementing projects in India. We are implementing a project with a tower height of 236 metres, which is two thirds the height of Eiffel Tower. This is an ongoing transmission line project currently at Haldia, West Bengal for CESC. The project involves supply, erection and stringing of the river crossing section of 400kV DC transmission line between Haldia power generation plant of CESC and Subhashgram substation of Power Grid. The unique part of this project is that KEC is establishing this line across the Hooghly river which is a major navigable river and passage for international freight. The span between the river growth in transmission crossing towers between last year Haldia and Raichak ends is 1,572 metres, while the total length between anchor towers on either side is 2,923 metres. The towers used for river crossing are massive structures having a base-width of 55 metres and weight above 1,700 MT each. The work requires immense technical capability as some part of it needs to be executed on the Hooghly river under effect of tidal waves.
30-35%
What are the challenges in implementing the transmission projects? Today, the biggest challenge across the globe is the Right of Way (RoW) or permissions. Everyone wants power but they don’t want that tower near their house or the housing complex or near the road or near the farms. Permissions which took three or four days earlier now takes 30- 40 days. This
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affects the transmission project in a big way. This is a problem which needs to be addressed immediately and in the near future I see this posing challenges to transmission projects. Raising funds for transmission projects continue to remain a challenge. What kind of improvements do you expect in the short term? If the project is viable, then there is no dearth of finance in the world. What happens in many cases is that the companies bid aggressively. Competition takes the lead and financial feasibility takes a back seat here. If the bank rejects these proposals, one cannot blame the banks! I have not seen any project suffering if it is financially viable. In my opinion, one should bid for transmission projects with financial viability being top of mind. Privatisation of transmission has not taken off well. The number of companies bidding for projects has come down from 35 to less than 10. Your comments. Privatisation has to happen in transmission. The exit of private companies, in my opinion, is a result of their inability to execute the projects in the stipulated time and cost. Ultimately, price discovery has to happen, then the projects will definitely get funded. However, privatisation will definitely be the way forward. India being a price sensitive country, do you expect a price discovery happening any time soon? I am yet to come across a country which is not price sensitive. The most price-sensitive according to me is US, because for them quarterly profit and loss is a way of life. There are companies
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in India, in Europe which take a long term view. For US clients, money is the only criteria. In comparison, I think, India is not that sensitive to costing factor. Electrical segment has taken a hit in the last couple of years in terms of growth. From double digit (20 per cent plus) two year ago to a single digit growth in the recent quarter (2 per cent). What is your expectation for the year? One or two companies having healthy order book is not the a reflection of the entire industry. The average sector growth is what matters. Firstly, I don’t see much progress this year. The problem is that huge quantum of imports have come into the Indian market, especially, in the electrical segment even for equipment which are manufactured domestically. These are not technically better or of the superior quality, but because the government policies allowed uncontrolled import, most imports have been without even minimum safeguards. One is not sure of the quality, maintenance, reliability or durability of the product. Typically, the life of power equipment is 35-40 years. But people who opted for imported equipment have started facing problems in two years! That is alarming. The government may not have realised the magnitude of
problems which accompany imported equipment when allowing imports. In many a case, the user manuals are not available in English language. Secondly, because of fuel constraints — the non-availability of gas and coal — project developers are facing huge losses. Money is stuck with no immediate solution in sight. Good quality generating assets are available but are not producing power. This is keeping new investor away from the sector. Given all this it is natural for growth rate to slide down. Until we resolve this, the sector will not grow. The government has set an aggressive target of making electrical equipment a $250 billion export segment by 2022. Don’t you think it is contradictory? Let me put it this way: we have set the target, but have not taken any action to achieve it. True, the government and the industry has agreed to have exports at least to the tune of imports, as part of the 2022 Mission Plan. Do you see a policy change with regard to electrical equipment imports? Already, the government has made changes in this regard. In the UMPP segment, import of equipment are not allowed. In
Rub' Al Khali Desert, Abu Dhabi, UAE.
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A cross section of transmission lines passing through sea.
the existing scenario, there is competitive bidding in generation and generating companies will to bring in the lowest cost. However, if you put a condition that the bidding should be based on Indian products then, I am sure, it will start working in favour of the industry. Elaborate on KEC’s international manufacturing facilities. And also the business plan for next two years. We have increased our pole manufacturing capacity internationally with our plant in Mexico. The capacity has been increased from India targets export in 5,000 to 15,000 metric electrical equipment tonnes a year. We are trying to do some construction activities for transmission towers and wind turbine towers in Brazil and Latin America. We believe that the potential is higher in America, not only in North America and Canada but also the rest of the region as well. Then Central Asia, Southeast Asia, Philippines, Malaysia, Laos, Cambodia and Middle East are good markets. All these contribute between 8-12 per cent of the business for KEC.
100 BN
$
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Europe is left out, any particular reason? We are not present in Europe, Russia and China. In Europe, there is not much action in transmission. The population is not growing and the manufacturing facilities are also not going up. The power consumption is not going up like other regions. Russia and China don’t take World Bank fundings, they have local business and deal in local currency. The projects we implement are mainly funded by World Bank, ADB, African Development Fund, Asia Development Fund etc to name a few. The US also does not have funded projects, but KEC has a factory there. Smart grid is gearing up for a larger roll out in India with government announcing the Road Map. Your views on the opportunities this presents. You have no other choice other than implementing smart grid applications in India. I am not sure whether everybody knows the definition of smart grid when we talk about it. The gist is that power should be utilised evenly through the day. Unlike what we see now — the consumption in the night is much lower than the day. There are ways to tackle this in smart grid. Then, ensure minimum wastage of power in transmission and distribution by implementing smart applications, minimising the outages and ensuring consistency of supply.
distribution
Intelligent interface India is working towards putting the communication channel for smart grids on the IPV-6, the rest of the advanced economies have already moved towards this
BY RENJINI LIZA VARGHESE
T
hat advanced technologies enhance communication, is a known fact. In smart grids everything revolves around two-way communications. It is imperative for India to bring the best practices in communication while rolling out smart grid projects right at the pilot project level. It is with this aim, the Working Group (WG-3) was constituted by India Smart Grid Forum (ISGF). The WG-3 will also focus on analysing both wired and wireless communication technologies with due consideration to total cost of ownership (TCO) and future requirements of the smart grid in the Indian context.
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distribution The world has changed dramatically since most power grids were built. Today, power utilities face a host of challenges that aging and traditional infrastructure solutions simply cannot support. A major part of the problem is that people expect access to as much electricity as they want, whenever they want it. Responding to sudden spikes in energy demand is expensive and inefficient, and can threaten the delivery of reliable, high-quality power. While power utilities do have very sophisticated systems to predict demand and monitor supply, many rely on historical data rather than real-time usage information. The key enabler for the smart grid is the availability of twoway data communications in real-time across the entire delivery chain, which will allow monitoring and control of the grid in effective and efficient manner. As explained by Ajoy Rajani, collecting real-time usage data by going straight to the source of the challenge — the businesses and households generating the demand — and empowering people to take a more active role in managing their own energy use will help flatten demand peaks. However, delivering the combination of secure,
real-time communications, applications and services required to make this customer connection is another significant hurdle that must be overcome. The challenges of managing increasing and fluctuating demand are compounded by political and regulatory pressure to shift to renewable energy sources that will reduce the power utility’s carbon footprint. That shift creates the need to add small-scale, remotely located power resources that are typically connected to the least automated part of the grid — the low-voltage parts of the distribution network that are not currently covered by the communications network. And intermittent energy sources, such as wind and solar, cannot be allowed to destabilise the local grid. The answers to these challenges can be found by transforming the grid at the heart of their operations to a smart grid. Real time data once analysed will enable the utilities to manage the grid with minimum hiccups. It also appraises utility with the problems in the grid on a real-time basis and permits them to attend to it without any time loss. A smart grid leverages information and communications technology (ICT) to interconnect and enable the flow of real-
Transmission Grid Different sources of generation integrated to transmission lines and to the distribution network.
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distribution Wireless Communication Technologies Technology
Advantage
Disadvantage
Application
Zigbee(IEEE 802.15.4, ZigBee Alliance) Low-cost, low power, wireless mesh standard for wireless home area networks (WHANs) or wireless personal area networks (WPANs)
Very low cost -inexpensive consumer devices; Low power consumption -years of battery life; Self-organizing, secure, and reliable mesh network; Network can support a large number of users; Smart energy profile for HANs is available
Very short range; Does not penetrate structures well; Low data rates; Developers must join ZigBee Alliance
HANs for energy management and monitoring; Unlikely to be used in NANs
Wi-Fi(IEEE 802.11b/g/n) Indoor wireless local area networks (WLANs), wireless mesh networks
Low-cost chip sets -inexpensive consumer devices; Widespread use and expertise; Low-cost application development; Stable and mature standards
Does not penetrate cement buildings or basements; Small coverage and short distances limit wide spread use; Security issues with multiple networks operating in same locations
Could be used for HANs, MGANs, and NANs
3G Cellular(UMTS, CDMA2000, EV-DO, EDGE) Wide-area wireless networks for voice, video, and data services in a mobile environment
Expensive infrastructure already widely deployed, stable and mature; Well standardized; Equipment prices keep dropping; Readily available expertise in deployments; Cellular chipset very inexpensive; Large selection of vendors and service providers
Utility must rent the infrastructure from a cellular carrier for a monthly access fee; Utility does not own infrastructure; Technology is in the transition phase to LTE deployment; Public cellular networks not sufficiently stable/ secure for mission critical/utility applications; Not well-suited for large data/high bandwidth applications
AMI Backhaul, Field Area Network (FAN)
LTE Enhancements to 3G Universal Mobile Telecommunications System (UMTS) mobile networking, providing for enhanced multimedia services
Low latency, high capacity; Fully integrated with 3GGP, compatible with earlier 3GPP releases; Full mobility for enhanced multimedia services; Carrier preferred protocol; Low power consumption
Utility must rent the infrastructure from a cellular carrier for a monthly access fee; Utility does not own infrastructure; Not readily available in many markets/still in testing phases in others; Equipment cost high; Vendor differentiation still unclear; Lack of expertise in designing LTE networks; Utilities’access to spectrum
AMI Backhaul, SCADA Backhaul, Demand Response, FAN, Video Surveillance
WiMAX(IEEE 802.16) Wireless metropolitan area network (MAN) providing high-speed fixed/mobile Internet access
Efficient backhaul of data –aggregating 100’s access points; QoS supports service assurance; Battery-backup improves reliability and security; Simple, scalable network rollout and customer-premises equipment (CPE) attachment; Faster speeds than 3G cellular; Large variety of CPE and gateway/ base station designs
Limited access to spectrum licenses in the US; Trade off between higher bit rates over longer distances; Asymmetrical up and down link speeds; User shared bandwidth; Competing against future 4G cellular
AMI Backhaul, SCADA Backhaul, Demand Response, FAN, Video Surveillance
Courtesy: From paper presented by WG-3
If you don’t adopt smart grids, one will have not have real time visibility over the AT&C losses, theft and other recorded losses in power segment," says Ajoy Rajani, Chair, WG-3, ISGF
time information within the power utility, between the power utility and its suppliers and partners, and between the power utility and its business and domestic customers. “Smart grids and their applications rely on a robust communications network that is secure, highly scalable and always available. The communications network must now reach out to the periphery of smart grid and into every home and business. It must support smart grid’s potential to generate massive amounts of real-time data. And it must enable the distribution network to support monitoring and management of millions of devices and smart meters in real time. As the enabler for smart grids, the communications network forms the basis for smart grid transformation and a revitalised power utility,” pointed out Ajoy Rajani, chair, WG-3, ISGF. “The country has to move towards adoption of smart grid; otherwise you will be islanded by the rest of the world. Look at China they have deployed 160 million smart meters already. We
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The smarter home –talking to the internet Distributed electricity generation and storage
Wind Turbine
Displays
Home Displays
In-Home Energy Display
Solar Panel
IPv6 Network
Security Home Gateway Light
Appliances Load Control Sensors
Water Meters
Gas Meters
Smart Meters
Smart metering devices
Home network –LPRF –IEEE-802.15.4 are talking about 200 million meters in next 15 – 20 years horizon. Both North America and Europe are issuing RFPs for smart meters as we speak,” points out Rajani. Given the current demand supply gap and the cumulative losses of all the state utilities – there is but no alternative to modernise, deregulate and have better control over the efficiencies. The cumulative losses are perhaps close to 3 per cent of the GDP now. “If you don’t adopt smart grids, one will have not have real time visibility over the AT&C losses, theft and other recorded losses in power segment. The losses are not coming down as the dependency on human interventions is still very high. You need to automate the system to bring this under control,” pointed out the WG-3 chair. You cannot control what you can-
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not monitor and technologies under the ambit of smart grid are envisioned to provide end-to-end visibility on the entire grid. In the existing system, when the utility opts for load-shedding to manage demand in an area, a good paying consumer also suffers. What change we could anticipate is, with smart meters, the consumer has access to real time data and utility with fully automated system can island out the bad paying consumer without interrupting the supply to other consumers.
A
mission-critical wide area network infrastructure based on IP and Multi-protocol Label Switching (IP/MPLS), combined with appropriate power sensors in the distribution network, allows power utilities to collect and transport increased volumes of real-time usage data. With this visibility, power utilities
distribution
There were glitches and delays, but if you have a look at perspective of the programme, India has done a great job in implementation of R-APDRP", says Rajani
A typical implementation chart showing network with integrated smart applications.
can more accurately respond to rising or falling consumption. They can also dynamically adjust electricity supply to meet demand and better predict when and where there could be a weakness or a failure in the grid. In case of an outage, an IP/MPLS infrastructure enables smart grid applications to take immediate and automatic actions to limit spread of the outage and to dispatch right workers with the right tools and information to restore power as soon as possible. The carrier-grade characteristics of an IP/MPLS infrastructure — 99.999 per cent reliability, guaranteed Quality of Service (QoS) and full redundancy — also allow power utilities to safely and securely shift crucial Supervisory Control and Data Acquisition (SCADA) and tele-protection applications onto a common infrastructure as they gradually migrate to an all-IPnetwork
that supports both existing and new services. WG-3 is working towards preparing the system to be inter-operability ready as above. Rajani continued by saying, “One of the key efforts that we are putting our energy in is to make IPV-6 specified as transport protocol of choice, be it RF, be it cellular radio, so that you have a basic level of inter-operability at the lowest level. The key to smart grid is smart meters, SCADA and other machines talk in an inter-operable way so that one can derive the benefit. Unless all this is integrated, one can’t reap the benefits. You will have an isolated system.” Unlike the R-APDRP where in terms of communication – the specifications tended towards “one cap size fits all” – a plethora of different communication technologies needs to be adopted depending upon the specific applications, needs, geography, equipment demographics, but with IP as the underlying layer, etc. Rajani also highlighted the magnitude of R-APRDP, “No other country in the world has embarked on such a large programme overnight. There were glitches and delays, but if you have a look at perspective of the programme, India had done a great job in implementation of R-APDRP. So, with the national roadmap in place, utilities have no choice but to follow suit in case of smart grids as well.” million In terms of communicasmart meters in 15 years tions technology with 3G, 4G, wi-max, 6LoWPAN, etc., the country has progressed way ahead. The advancement made in communications has not yet percolated to the power sector. “We are still grappling with basic problems of billing, consumer care and so on. They need to fast forward in action to catch up with the changes in terms of adaptations. The country should opt for the most suitable and affordable communication technology for smart grids and not necessarily be limited by what is on offer by the meter vendors. The next anticipated challenge will be at the utility level.
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NIST Priority Action Plans Priority Action Plan (PAP)
Standard(s) or Guideline(s)
PAP 0 -Meter upgradeability standard
NEMA Meter Upgradeability Standard
PAP 1 -Role of IP in the Smart Grid
Informational IETF RFC
PAP 2 -Wireless Communications for the Smart Grid
IEEE 802.x, 3GPP,3GPP2, ATIS, TIA
PAP 3-Common Price Communication Model
OASIS EMIX, ZigBee SEP 2, NAESB
PAP 4 -Common Scheduling Mechanism
OASIS WS-Calendar
PAP 5 -Standard Meter Data Profiles
AEIC V2.0 Meter Guidelines (addressing use of ANSI C12)
PAP 6 -Common Semantic Model for Meter Data Tables
ANSI C12.19-2008, MultiSpeak V4, IEC 61968-9
PAP 7 -Electric Storage Interconnection Guidelines
IEEE 1547.4, IEEE 1547.7, IEEE 1547.8, IEC 61850-7-420, ZigBee SEP 2
PAP 8 -CIM for Distribution Grid Management
IEC 61850-7-420, IEC 61968-3-9, IEC 61968-13,14, MultiSpeak V4, IEEE 1547
PAP 9 -Standard DR and DER Signals
NAESB WEQ015, OASIS EMIX, OpenADR, ZigBeeSEP 2
PAP 10 -Standard Energy Usage Information
NAESB Energy Usage Information, OpenADE, ZigBeeSEP 2, IEC 61968-9, ASHRAE SPC 201P
Courtesy: From paper presented by WG-3
Discoms should adopt the right technology and not on the basis of availability. As an example, as illustrated by Rajani – a lot of utilities have adopted Zigbee as the choice of local RF solution for clustered meters. Zigbee is primarily a home area network and is not scalable to the size that is required. This challenge can cause more issues than the earlier said ones.“We are looking at mandating standards for products as well. As far as quality, design and features are concerned, it will differ from vendor to vendor. However, the vendor ecosystem needs to meet the laid down standards,” added Rajani. “We are strongly recommending communications for smart grid on the IPV-6 platform. IPV-6 is a known system with a clear roadmap from DoT in place. Unless we do this, we won’t develop the eco-system. And IPV-6 is not just scalable but assures inter-operability across the entire communication value chain of the utility. As an example, we are funding from MoP talking about 200 million smart meters. IPV-6 is mature, has specific standards for local RFs, power line and other media. All the terminals, as an example, in the telecom sector are IPV-6 compatible. Now the power sector has been left behind and needs to be brought to the same level,” added Rajani. WG-3 will work closely with the National Institute of Standards and Technology (NIST) to develop a framework that includes
50%
34
Electricals Today | november 2013
The country should opt for the most suitable and affordable communication technology for smart grids. The purpose is to get the near real time data transfer" says Rajani protocols and model standards for information management to achieve inter-operability. NIST activities will include Priority Action Plans (PAPs) to address the existing gap where a standard extension or new standard is needed and where there is an overlap of two complementary standards address some information that is in common but different for the same scope of application. What India requires at this point is, outreach programmes to increase awareness of smart grid applications. The benefits will be far more than the investments; the return on investment will be far shorter in India. And this could bring in more private investments to the power segment.
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generation
The PPA conundrum
36
Electricals Today | november 2013
generation
Generating companies are seeking tariff revisions from Electricity Regulators, who are caught in a bind between maintaining the sanctity of bidding process and the resultant contract and the need to keep the power flowing. How does one balance the interest of the consumers and the financial viability of the power sector? BY Arijit Maitra
G
eneration, arguably the most important segment in the power sector, has suffered another setback following impasse owing to the non-availability of coal from domestic sources. National Coal Distribution Policy, originally assuring 100 per cent availability of coal has been slashed to a significant level, making the power producers run helter-skelter, for sourcing coal from diverse sources. Since the allocation of captive coal mine in the absence of a full coal linkage by Coal India Ltd, was not very easy for power producers, the only option left to them to honour the contractual obligations to supply power under the power purchase agreements signed with state-owned distribution utilities under the competitive bidding route, was to look at the import of coal. The direct consequence of this was that power producers could not supply power at the contracted rates. If the power producers were to use a significant portion of imported coal, it is obvious that the brunt of the expense ought to be passed to the purchasers of power, namely the distribution licensees. There is an upshot of these facts on the legality of upholding the sanctity of contracts. The power purchase agreements have been signed on the basis that generating company was selected pursuant to a competitive bidding process conducted by the distribution licensee in accordance with the guidelines notified by the central government. The distribution licensees have stoutly opposed the claim of the power producers for passing the burden of procurement of coal from imported sources or other sources on to the distribution licensees. One major area of opposition has been on the ground that power purchase agreements having been concluded and signed pursuant to a statutory competitive bidding process ought not to be disturbed or reopened. On the other hand, power producers have raised a claim before the Electricity Regulators that the inability to produce power at the rates originally tendered, owing to the non-availability of coal from domestic sources has shaken the very basis of the contract. That this is akin to a force majeure situation preventing the power generators to generate power due to reasons clauses deal with financial totally beyond their control, impact ex-post events is the crux of the legal controversy, which many Regulatory Commissions in the country are faced with. One is reminded of the legal conundrum that occurred nearly a decade ago in the case of Dabhol Power Company where the inability of the State Electricity Boards to honour their contractual obligations under the PPA had shaken the very foundation of investment in the power generation segment in the country. India is still reeling under the perception that the damage was caused by the State Electricity Boards. Today, we are at yet another crossroad where there is a legal and commercial conundrum posing danger to the financial viability and hence, the very existence of
2
november 2013 | Electricals Today
37
generation independent power generators. This situation would warrant considering a different approach. Virtually all procurement of power by distribution utilities is being done by inviting tenders through the competitive bidding process. There is also an indication of mandate not under the statute but under the Tariff Policy for the distribution licensees to henceforth procure power only through competitive bidding process. In this light, it is indeed a curious situation that there is only one section in the Electricity Act, 2003. It is incredible that the enabling provision for competitive bidding finds place in the one sentence in section 63 of the Act. The thrust of this section lies in the guidelines issued by the central government. The operative part of this section states that the Regulatory Commission shall adopt the tariff if such tariff has been determined through a transparent process of bidding in accordance with the guidelines issued by the central government. However, once having adopted the tariff obtained by the bid process, how does the Regulatory Commission handle any extraordinary situations that necessitate revisitation of the adopted tariff? There is nothing either in this regard in the Competitive Bidding Guidelines that have been issued by the government or in
Distribution licensees have opposed the power producers passing the burden of coal procurement on to the distribution licensees. The agreements signed earlier ought not to be disturbed or reopened. the Act itself. The standard power purchase agreements issued by the government have been used by the seller and purchaser. The only two clauses that deal with the financial impact of ex-post events are the clauses relating to force majeure and change in law. As regards the clause relating to change in law which obviously means that the party which has been affected adversely by a change in the law that was prevailing on the date of execution of the contract (PPA) has to be put in the same economic position that such a party was prior to the execution of the contract as if such a change in law had not occurred. However, the seller and purchaser have disagreed on the scope and interpretation of the clause relating to change in law. In certain cases, the power producers want mitigation of the increase of coal price on account of new legislation in Indonesia mandating the export of coal at market rates. The distribution companies argue that “law” in the clause relating to “change
38
Electricals Today | november 2013
Generators are asking regulators to have a relook at the tariffs.
in law” is only Indian Law. This might be a ridiculous proposition because it is a known fact that power plants source many essential components and fuel from foreign countries. So, what happens when there has been a change in law in those countries? Who mitigates the adverse financial impact on Indian companies in such a situation? Certainly, the power producer is not expected to spend a lifetime in foreign litigation to prove to that country that it should be insulated from the change in law in those countries. On the other hand, how does one balance the interests of the Indian distribution company and its consumers? There is no straight forward “rule of thumb” necessitating outright rejection of the claim of change in law made by the power producers. Neither is the clause relating to “change in law” clear enough to ex-facie exclude change in foreign law. When the
generation
principle behind enabling a party adversely affected on account of change in law is to mitigate the financial impact on it, then why should the change in foreign laws not also be taken into account in view of the fact that very often essential components of a power plant is sourced from a foreign country. If the power procurer is getting the benefit of the pricing on the efficiency of the components of a power plant that has been sourced from a foreign country, then why should you oppose the mitigation of any adverse financial impact on the power producer on account of any change in law in the country from where the components for the power plant was sourced?
T
here is no available forum where the consequences of such a financial impact can be adjudicated upon if it is thrown out of the ambit and jurisdiction of Indian Regulatory Authori-
ties and Indian Courts. This will militate against fundamental legal principles that no party can be rendered without any remedy. The sequitor is that unless adequate and relevant provisions in this regard are built into statutory provisions including the competitive bidding guidelines, this grey area will remain a severe dampener to international investment in the Indian power sector. Large power projects have also been adversely affected owing to cancellation/non-allocation of coal blocks and steep rise in international prices of coal. Consequently, the claim of power producers has been that there should be mitigation of financial impact by invoking the clause relating to “force majeure”. On the other hand, arguments have been laid out that sanctity of a contract must be upheld. This begs the question that what is so sanctimonious about a concluded contract that it can’t be reopened, particularly when one is threatened with its failure? Are these not supervening events which radically alter the contract from terms originally entered into by parties? Power Sector is a special sector; its dynamics are different. The theory of common law that rise or fall in prices does not affect the bargain made by the parties, would render large capacities idle because these will not be able to supply if appropriate financial mitigation does not take place. Instead of being bound by the surmise that certain eventualities were not factored in the financial bid offered during selection of the supplier, a practical approach is necessitated to ensure that large capacities come on stream. Despite the central government, in its standard PPAs as well as the PPAs that have been executed between the sellers and purchasers, provisioning for “changes in cost of fuel for the project” as force majeure events, the approach has been to put the cart before the horse. To say that the power producer is not affected in the performance of his duties on account of change in the dynamics of coal sourcing would be to say the very least, naive. The short answer is to build a proviso under the current wordings of Section 63 (determination of tariff by bidding process) of the following words “provided that the appropriate commission may revise the tariff so adopted if the exigencies of the situation so require”. EA 2003 is the enabling provision This will be an enabling for competitive bidding provision which could set at rest the scope, ambit and the depth of the powers of the Regulatory Commission to revisit the competitively bid tariffs. This will also take care of the contention of the procurer distribution companies that the benefit of reduced costs pursuant to any reverse change in law be passed on to the consumers. This will give enough handle to the Regulators to ensure that they follow the mandate of section 61 inter alia that “generation and supply of electricity are conducted on commercial principles”. Insolvency of distribution segment or provision of free power are no reasons for keeping the pricing inflexible. The upshot is that the domestic position on coal availability needs to be given
Section 63
november 2013 | Electricals Today
39
generation
The new directive puts the burden of fuel supply on to distribution utilities.
Power producers have raised a claim before Electricity Regulators that the inability to produce power at rates originally tendered, owing to non-availability of coal from domestic sources has shaken the very basis of the contract. a practical view and imports should be supported. When the ministry of power issued a letter on October 17th, 2013 indicating amendments to the Electricity Act 2003, it was considered a possible game changer for viability in the power sector. However, the draft amendments issued under the ministry’s letter do not address this reality. Instead of creating and sustaining a legal conundrum there is a need for long-term planning to ensure that supply meets
40
Electricals Today | november 2013
demand over medium term. These are trying times when the need is felt for a single disciplined and strong leadership to convey a clear and integrated policy. Fragmented policies navigating across several states will not work. Distorted pricing and fuel shortage amongst others would be retrograde to the sector. There are examples that provide for reopening of contracts enabling mitigation of adverse financial impact, as in Australia and the US. One could look at costs sharing arrangements. These would be the appropriate models to adopt rather than getting entangled in fiefdoms, rigid policies and inflexibilities. But stopping to supply power from these projects would cause serious loss, for which both the sellers and buyers would be responsible. It would be for the concerned authorities, to think of out-of-the-box solutions to break the deadlock. This requires a multi- factorial approach. The impossibility of performance of contracts would have to be considered in terms of the contractual matrix and the nature of the supervening events. Where a commercial transaction such as the PPA is involved, the process of ascertaining whether or not a particular set of circumstances constitutes a ‘disruption’ or ‘hindrance’ within the meaning of force majeure clause ought to be informed by considerations of commercial practicality. Not a mere increase in price, but the totality of the circumstances requires to be seen. A new doctrine may need to be evolved on commercial lines, one of justice. (Arijit Maitra is principal, PA Legal)
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renewables
42
Electricals Today | november 2013
renewables
SmallWonders W In a country where almost all large hydro projects are stuck either at the clearance or at the construction stage, the small hydro segment is booming with nearly 3,000 MW of installed capacity. What makes small beautiful and bountiful? BY SURESH PRASAD SHUKHLA
ater constantly moves through a vast cycle, evaporating from lakes and oceans, forming clouds, precipitating as rain, flowing back down to the ocean. The energy of this water cycle, which is driven by the sun, can be tapped to produce electricity. Hydropower is the use of water to power machinery to make electricity. It uses a fuel — water — that is not reduced or used up in the process. Because the water cycle is an endless, constantly recharging system, hydropower is considered a renewable energy. Ministry of New and Renewable Energy (MNRE) has been vested with the responsibility of developing Small Hydro Power (SHP) projects up to 25 MW station capacities. The estimated potential for power generation in the country from such plants is over 15,000 MW. Most of the potential is in Himalayan states as river-based projects and in other states on irrigation canals. The SHP programme is now essentially private investment driven. Projects are normally economically viable and the private sector is showing lot of interest in investing in SHP projects. The viability of these projects improves with increase in the project capacity.
november 2013 | Electricals Today
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renewables MNRE aims that at least 50 per cent of the potential in the country should be harnessed in the next 10 years. Hydro power projects are generally categorised in three segments, i.e., mini/micro, small and large. In India, hydro projects up to 25 MW station capacities have been categorised as SHPs. While Ministry of Power is responsible for large hydro projects (above 25 MW), the mandate for the SHPs (up to 25 MW) is given to MNRE. Small-scale hydro power projects are scaled down versions of the large hydro power stations using big dams and reservoirs. Depending upon the physical size, head height and electrical power generating capacity, small hydroelectric schemes can be categorised into small, mini and micro scale hydro schemes as follows: Small-scale hydro power is a scheme that generates electrical power of between 2000 kW (kilo-watts) and 25 MW feeding this generated power directly into the utility grid or as part of a large standalone scheme powering a cluster of communities. Mini scale hydro power is a scheme that generates power between 101 kW and 2,000 kW, feeding it directly into the utility grid or as part of a large AC powered standalone system. Micro scale hydro power is usually the classification given to a small home made run-of- the river type scheme that produces electrical power between a few hundred watts up to 100 kW as part of a battery-charging standalone system or for couple of users.
Power projects up to 25 MW capacity are classified as small hydro.
S
HP programme is one of the thrust areas of power generation from renewable resources in MNRE. It has been recognised that small hydropower projects can play a critical role in improving the overall energy scenario in particular for remote and inaccessible areas. The ministry is encouraging development of small hydro projects both in the public as well as private sector. Equal attention is being paid to grid-interactive and decentralised projects for evacuation. The ministry’s aim is that the SHP installed capacity should be about 7,000 MW by the end of 12th Plan. The focus of the SHP programme is to lower the cost of equipment, increase its reliability and set up projects in areas which give the maximum advantage in terms of capacity utilisation. An estimated potential of about 15,000 MW of SHP exists in India. MNRE has created a database of potential sites of small hydro and 5,415 potential sites with an aggregate SHP potential is capacity of 14,305.47 MW for projects up to 25 MW capacity have been identified. Small-scale hydro power is an important energy source with multiple advantages over other forms of renewable energy, and has few environmental risks. As the potential energy of flowing water is readily available, small-scale hydro power projects can utilise this free energy providing a low cost and reliable source of "green electricity". Small-scale hydro power system uses a stream or a river having enough water flow pressure that can feed a water turbine connected to a generator that will supply power. Like any other renewable energy system, a SHP can be either grid connected, or
15,000 MW
44
Electricals Today | november 2013
stand alone just to meet the local energy requirements. Small hydro power systems are designed using impulse type of hydro turbines. The generation potential of a particular site will depend on the site conditions and location and the rainfall characteristics of the catchment area. If there is sufficient head and flow, small hydro power plants can be fed directly from a river or stream, called a "run-of-the river" system, built into or at the side of a river or a stream without the need of a dam, divert or change in the flow of water in. In a run-of-the river hydro scheme, the flow of the water is not altered, so its minimum flow rate needs to be the same or higher than that of the proposed water turbine output ensuring maximum efficiency. Thus, it becomes the cheapest solution for generating power and has less environmental impact. The big disadvantage is that the water flow rate is not uniform throughout the year and the power system therefore is unable to generate steadily due to water flow variations. The development of a small-scale hydro power schemes, which use a small dam or weir, water storage reservoir (impoundment) or needing a diversion of the river’s water flow through tunnels or canals, require far more water usage in total, as well as very heavy civil and earth works, to match the site elevation besides the environmental impact that's proportional to the size of the scheme.
renewables
A reservoir impoundment system or high head system has a far higher power generation potential than that of the smaller run-of-the-river scheme, due to both the increased water volume and velocity of the usable water. This compensates for the larger capital investment, but costs can be kept optimal using simple designs and easily constructed civil and mechanical works.
W
the actual components may vary for individual small-scale hydro power scheme, the type of scheme chosen will determine the need of a diversionary weir or a dam or a forebay, depending on the available "static head" of water. The water turbine and connected generator has to be chosen carefully as it will depend on the head, speed of the turbine and gearing system required in the hydro generator to convert the slow turbine speed to the required high speed for the generator to produce power at correct voltage and frequency. There are many factors to consider when designing a hydro energy system, but with the right site selection and equipment, careful planning, and detailed attention to the local laws, small-scale hydro power systems can provide a clean, reliable and maintenance-free source of power for many years to come and reduce the need for
ater turbines convert the kinetic energy of water into mechanical energy which drives an electrical generator, producing electricity. The maximum amount of electrical power that can be obtained from a river or stream of flowing water depends upon the amount of power within the flowing water at that particular point, as the water is moving a hydroelectric system converting this kinetic energy into electrical power. Power potential of the water flowing in a river or stream is determined both by the flow rate of the water passing a point in a Private investors are showing more interest in small-hydro projects. given time and the vertical height (head) through which the water needs to fall. Thus the maximum theoretical power that is available in the water is a function of the product of “Head” and “Flow”.The actual power output will also depend on the efficiency of the hydro electric system itself. A typical small-scale hydro power scheme needs a water stream, an intake system to divert the water, a canal or channel called a penstock to carry the diverted water, a water turbine to convert the water’s kinetic energy into a rotational mechanical energy and an electrical generator to convert this rotational energy from the wheel into electricity. Although
The SHP programme is now essentially private investment driven. Projects are normally economically viable. MNRE aims that at least 50 per cent of the potential in the country should be harnessed in the next 10 years.
november 2013 | Electricals Today
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renewables
Small-scale hydro power system uses a stream or a river having enough water flow pressure that can feed a water turbine connected to a generator that will supply power. Like any other renewable energy system, a small hydro power system can be either grid connected, or standalone just to meet the local energy requirements. fossil fuels, reducing the country’s carbon footprints. Hydro power offers many advantages over other energy sources but faces unique environmental challenges. Hydro power is fuelled by water, it's a clean fuel source and does not pollute. Hydro power is generally available as needed; and produces electricity on demand. Hydro power plants provide benefits in addition to clean electricity, for irrigation, drinking water supply and flood control besides recreational/tourism facilities. Hydro power system does not have any greenhouse gas emissions. New hydro power facilities impact the local environment and may compete with other uses for the land and result in loss or submersion of land. The original uses may be more highly valued in a community or locality than electricity generation. Humans, flora and fauna may lose their natural habitat. Local cultures and historical sites may be damaged or vanish under water. Some older hydro power facilities may have historic value, so renovations or up gradation of these facilities must also be attempted with sensitivity to such preservation concerns and to impacts on plant and animal life including fish migration upstream or downstream and overall impact on aquatic ecosystems, flora and fauna.
7,000 MW to be installed by 2017
D
evelopment, operating, and maintenance costs, and electricity generation vary from project to project. Construction cost varies between 25 to 80 per cent. No fuel costs, low O&M costs and long life, higher payback period (30 years), etc. make SHPs a good investment for the future. Costs include the design services for installation, water royalty, planning, civil and earthwork, plant and machinery and cost of evacuation connection to the electricity network. Decentralised power feed-in and independent power producers (IPP) expectations of different players require a policy frame-
46
Electricals Today | november 2013
work designed to attract SHP investors. Feed-in tariff systems and standardised Power Purchase Agreements (PPAs), connection agreement (Grid Code) and legal framework with minimum policy hassles are necessary for developing the SHP potential in the country. Conflicting interests between the optimal use of water resources for various purposes and SHP development have to be addressed. Successful SHPs are mostly based on BOO (Build-OwnOperate) concept, i.e., no transfer of the asset to the state at the end of a specified contract period or water use concession. SHP plants are usually attractive for the private sector only if investor can make use of the available water flow and produce electricity irrespective of the power demand in the grid. Effective policy is required to oblige grid operators to accept, at all times, power generated from small hydro producers. A proper implementation agreement should be a part of the said policy to ensure that a project developer has adequate resources to see a project
renewables
In hydro power, the fuel (water) does not go through any changes even after power generation.
through and does not leave the site with a half-finished plant which may become a threat to other water users and the environment. As a matter of policy, local population should be involved at all stages, so that sociopolitical impact of project implementation can be contained. Key issue here is the requirement of regulatory framework, which is conducive to SHP development, but which does not distort market conditions of the power sector, water use rights and royalties, special grid connection policy for SHPs, etc. Hydro power projects normally have limited environmental impact, therefore, full-scale environmental impact assessments are not required for SHPs. The feed-in tariff system should be adopted. Hydro power is one of the most advanced and flexible sources of renewable energy. It is considered as tested, reliable, low cost and is independent of the energy price volatility associated with plants using fossil fuels. Hydro power plants have usually a life
time without major replacements. Grid-connected hydro power can improve energy security through the reduction of fossil fuel import dependency, diversification of the energy mix and reduction of electricity shortages. It can help to meet the rapid growth of electricity demand in urban centers and industry. Small-scale hydro (SHP) can be connected to a central grid, to a rural isolated grid or can be connected to a dedicated power load (e.g. Cement factory, lodges, mines). SHP can serve the priority needs of the rural poor and boost local development, productive uses (e.g. processing and conservation of agricultural products, water pumping and desalination) and basic social services (e.g. health care, education). (The article uses data and information sourced from proprietary databases, primary and secondary research and analysis by our team of experts. Suresh Shukla is Director Probyon Power Consultants, Retd Executive Director, BHEL and former Regulatory Expert, MERC)
november 2013 | Electricals Today
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market data
Improved Capacity addition In the month of September, the capacity addition in thermal and hydro power showed tremendous improvement. While thermal and hydro power capacities showed 104 and 106 percentage, nuclear registered only 81 per cent additions during the month. Year on year from April to September, thermal and hydro has climbed the 100 per cent mark, but nuclear just above 90 per cent ENERGY WISE - PERFORMANCE STATUS ALL INDIA - REGION WISE PERIOD: SEP-2013 VIS-A-VIS SEP-2012 AND APR-SEP-2013 VIS-A-VIS APR-SEP-2012 GENERATION (GWH) Monitored "Category / Regions" Capacity (MW)
Target APRIL 2013 - MAY2014
September 2013
April 2013-September 2013
Program
Actual*
Actual same % of last "% of program month 2012-2013 year
Program
Actual*
ACTUAL % of proSAME PERIOD gramme 2012 - 13
% of last year
NORTHERN REGION THERMAL
35784.26
207657.00
16121.00
17173.29
14000.49
106.53
122.66
100569.00
97032.49
89996.24
96.48
107.82
NUCLEAR
1620.00
10664.00
912.00
838.20
1015.89
91.91
82.51
5415.00
5553.28
5411.01
102.55
102.63
HYDRO
15541.25
61597.00
6764.00
6778.83
7798.60
100.22
86.92
41739.00
43399.73
42312.65
103.98
102.57
TOTAL
52945.51
279918.00
23797.00
24790.32
22814.98
104.17
108.66
147723.00
145985.50
137719.90
98.82
106.00
THERMAL
61122.31
292416.00
21157.00
23015.54
19349.51
108.78
118.95
135527.00
134241.97
129282.44
99.05
103.84
NUCLEAR
1840.00
12363.00
1084.00
1029.18
946.20
94.94
108.77
6196.00
6158.90
6875.44
99.40
89.58
HYDRO
7392.00
15843.00
1933.00
2547.88
2726.59
131.81
93.45
7510.00
12230.43
9564.91
162.86
127.87
TOTAL
70354.31
320622.00
24174.00
26592.60
23022.30
110.00
115.51
149233.00
152631.30
145722.79
102.28
104.74
WESTERN REGION
SOUTHERN REGION THERMAL
29852.80
157021.00
11951.00
12225.56
11861.39
102.30
103.07
76386.00
77712.46
78975.04
101.74
98.40
NUCLEAR
1320.00
12173.00
1121.00
664.93
709.41
59.32
93.73
4925.00
4244.88
4117.30
86.19
103.10
HYDRO
11417.45
29454.00
3447.00
3705.52
2020.39
107.50
183.41
15030.00
16023.86
10574.84
106.61
151.53
TOTAL
42590.25
198648.00
16519.00
16596.01
14591.19
100.47
113.74
96341.00
97981.20
93667.18
101.70
104.61
THERMAL
27345.05
150503.00
11925.00
11485.51
9631.64
96.31
119.25
72460.00
68661.42
65004.32
94.76
105.63
HYDRO
4078.70
11191.00
1340.00
1378.19
1398.18
102.85
98.57
6814.00
7339.22
5177.65
107.71
141.75
TOTAL
31423.75
161694.00
13265.00
12863.70
11029.82
96.97
116.63
79274.00
76000.64
70181.97
95.87
108.29
EASTERN REGION
NORTH EASTERN REGION THERMAL
1259.00
5140.00
372.00
347.36
345.72
93.38
100.47
2248.00
2305.27
2183.53
102.55
105.58
HYDRO
1242.00
4178.00
576.00
524.33
543.17
91.03
96.53
2854.00
2680.79
2364.89
93.93
113.36
TOTAL
2501.00
9318.00
948.00
871.69
888.89
91.95
98.07
5102.00
4986.06
4548.42
97.73
109.62
0.00
4800.00
737.00
794.05
921.73
107.74
86.15
3284.00
4264.35
3894.70
129.85
109.49
THERMAL
155363.42
812737.00
61526.00
64247.26
55188.75
104.42
116.41
387190.00
379953.61
365441.57
98.13
103.97
NUCLEAR
4780.00
35200.00
3117.00
2532.31
2671.50
81.24
94.79
16536.00
15957.06
16403.75
96.50
97.28
HYDRO
39671.40
122263.00
14060.00
14934.75
14486.93
106.22
103.09
73947.00
81674.03
69994.94
110.45
116.69
BHUTAN IMP
0.00
4800.00
737.00
794.05
921.73
107.74
86.15
3284.00
4264.35
3894.70
129.85
109.49
TOTAL
199814.82
975000.00
79440.00
82508.37
73268.91
103.86
112.61
480957.00
481849.05
455734.96
100.19
105.73
BHUTAN IMP. REGION
ALL INDIA REGION
48
Electricals Today | november 2013
market data
Deficit
Better PLF As the fuel supply positions started improving, the Plant Load Factor of thermal power also improved. In the month of September, thermal was five per cent above the planned PLF. If the comparison to the same period last year, in thermal there is growth in PLF. Nuclear continues to meet the programmed targets in capacity addition, thus registering a lower PLF. However, with the Kudankulam nuclear plant coming onstream, one expects great improvement in the segment. ENERGYWISE - PERFORMANCE STATUS ALL INDIA - REGIONWISE PERIOD: SEP-2013 VIS-A-VIS SEP-2012 AND APR-SEP-2013 VIS-A-VIS APR-SEP-2012 PLANT LOAD FACTOR (%) September-2013
"Category / Regions" Program
APRIL 2013 - SEP-2013
Actual*
ACTUAL SAME PERIOD Program 2012 - 13
Actual*
ACTUAL SAME PERIOD 2012 - 13
NORTHERN REGION THERMAL
68.85
72.73
62.74
70.76
67.44
66.39
NUCLEAR
83.33
71.86
87.10
81.11
78.05
76.05
HYDRO
102.57
TOTAL
106.00
WESTERN REGION THERMAL
62.14
60.25
59.48
65.25
60.12
NUCLEAR
81.82
77.69
71.42
76.67
76.21
67.48 85.08
HYDRO
127.87
TOTAL
104.74
SOUTHERN REGION THERMAL
72.57
69.42
72.95
76.77
74.68
81.98
NUCLEAR
67.11
69.96
74.64
75.57
73.22
71.02
HYDRO
151.53
TOTAL
104.61
EASTERN REGION THERMAL
63.32
59.70
53.97
63.07
59.16
61.38
HYDRO
141.75
TOTAL
108.29
NORTH EASTERN REGION THERMAL
0.00
0.00
0.00
0.00
0.00
September peak power shortage at 3.6% : CEA
0.00
HYDRO
113.36
TOTAL
109.62
BHUTAN IMP. REGION 109.49 ALL INDIA REGION THERMAL
65.75
64.65
61.41
68.03
64.15
68.38
NUCLEAR
76.22
73.58
77.62
77.73
76.01
78.14
According to the official data, healthy monsoon leading to lesser agricultural demand and higher hydro power generation narrowed the country's peak electricity shortage in September to 4,881 MW or 3.6 per cent. The total peak demand for the period was 1,34,150 MW, of which 1,29,269 MW was met, the Central Electricity Authority (CEA) data showed. The peak power deficit in the same period last year had soared to 13,246 MW or 10 per cent. As much as 20,000 MW capacity has been added in the past one year. Peak power deficit in the northern region nearly halved to 5.9 per cent last month from 11.6 per cent in the same period last fiscal. Southern states showed the maximum improvement with 2.8 per cent in September 2013 as compared to a whopping 19 per cent in September last year. The eastern states witnessed peak power deficit of 2.3 per cent as against 6.4 per cent last year. The north-eastern region showed little improvement from previous year. The region recorded a shortage of 8.2 per cent this year as compared to 9.7 per cent last September.
Novemberber 2013 | Electricals Today
49
last word
UMPP Qualification Criteria: Too Strict? Scepticism prevails as another round of bidding is starting Salil Garg, Director-corporates, India Ratings & Research
P
ower generators are abuzz with interest as fresh round of bidding was announced for two Ultra Mega Power Projects (UMPPs) by government appointed nodal agency Power Finance Corporation (PFC) on September 25, 2013. Out of these the Odisha UMPP will be captive coal based whereas the Tamil Nadu UMPP is envisaged to be imported coal based. Bids for new UMPPs have been invited after a gap of almost four years since the last successful bid for a UMPP was held in 2009. This bid has to be seen in the context of performance of the four UMPPs already bid out during 2007-2009. Out of the four UMPPs bid out, only one has become fully operational so far and the second is partly operational. The rest 2 have not achieved full financial closure and not started the construction. All four UMMPs have approached the regulator for revision in tariff. Another important feature of the last round of UMPP bidding was that three out of the four bids were won by a single industrial group. As UMPPs are an important initiative of the government in field of power generation success of this initiative could set the tone for a fresh round of investments in the power sector. Aware of these challenges the government agencies have spent considerable time in revising the parameters for the UMPP bid. One thing that particularly strikes in this bid proThe fine print that goes with these conditions includes:
50
1
A multiplier factor of 1.25 for investment / operation in power, 1.00 for investment / operation in core sector, 0.75 for construction in power and 0.50 for construction in core sector is applied to project size in respective categories. Projects located in a developed OECD country are further discounted by a multiple of 0.50.
2
Core sector includes, telecom, ports, airports, railways, metro rail, highways and bridges, industrial parks/ estates, logistic parks, pipelines, irrigation, water supply, sewerage and real estate development.
3
The eligible projects in investment category should provide services to a public sector entity or non-discriminatory access to its users, the bidder should have held at least 26% stake in such projects and minimum size of a single project should be Rs1,260crore.
4
The minimum size of project in construction category is Rs1,890crore.
5
Double counting of a project across categories and bidders is not allowed.
Electricals Today | november 2013
cess is the new technical capacity qualification criteria. In simple terms, the minimum technical capacity qualification for the new UMPP sponsors now is: A minimum score of 25,200 which is equal to indicative project cost of Rs25,200crore towards investment/operation and/or construction in the power sector in the past seven financial years or a minimum score of 37,800 that is equal to 1.5 times of the indicative project cost of Rs25,200crore towards investment and construction in the power and core sectors in the past seven financial years.
T
here are many permutations and combinations possible with this complex eligibility norm. To give some examples, to be technically eligible the bidder could have in past seven years: a) invested Rs20,160crore in power projects; or b) invested Rs37,800crore in core sector projects; or c) done EPC of power sector projects of Rs33,600crore; or e)done EPC of core sector projects of Rs75,600crore. Now, compare this with the technical capacity criteria in the initial standard request for qualification issued by Ministry of Power at the time of first round of bidding. That technical capacity criterion was a limited investment score of 1000 arrived through the almost same formula. Thus where at one point as investment of Rs800crore in power projects could have made one eligible to participate in the bids, the number now is almost 25 times. Many capex intensive sectors like refining, steel and cement are excluded while calculating the technical eligibility. One might ask who now would be eligible to meet this criterion: a handful. While the need to make the technical criteria robust enough to allow entry of technically sound players is understandable but is this criteria taking the concept a bit too far. As such interest in new power projects is muted due to problems that have cropped up in development of Greenfield power projects including UMPPs. If the entry is restricted so strictly to a few then the question we might ask is that will it leave enough serious players in the field? In the coming months we shall know the answer to this and if the response is not good then government agencies will have to revisit the criteria once again.