Inergystat Exclusive- Power Generation- General - March 2020 in Minutes

Check out the important news of the Power Generation- General sector happened during March 2020:

• As per CSE report, India has enough reserves of limestone to enable thermal power plants to install flue gas desulphurization (FGD) systems by 2022 in order to meet the new emission norms for the sector. The latest report refutes the contention of power plants, which have been delaying implementation of the norms by raising concerns about the availability of limestone and use of its byproduct, FGD gypsum.
• Power distribution and transmission companies have been given a three-month moratorium on payments to power generation companies, who have also been directed not to cut power supply in case of payment delays due to the ongoing nation-wide lockdown. This relaxation will be valid till Jun 30, 2020.

The power ministry has also asked state governments to ask their power regulators to issue the necessary directives.

• NTPC Ltd. total installed capacity at the group level has raised to 62,110 MW after stake acquisitions of NEEPCO & THDC India Ltd. NTPC Group’s total installed and commercial capacity now stands at 62110 MW and 61126 respectively. 
• The power ministry has asked the coal and railways ministries to exempt power plants from advance coal and freight payments for three months, in order to avoid electricity supply disruptions.

Power minister R K Singh has written to Coal minister and Railways minister seeking the exemption for three months to maintain electricity supply during lockdown. The Reserve Bank has allowed financial institutions to give a moratorium of three months on repayment of loans, however, Covid-19 poses a challenge in terms of recovery of dues from state electricity distribution companies.

• As per the report, global coal power plant development declined for the fourth year running in 2019, while a total of 13 GW of capacity construction has been delayed so far this year due to the coronavirus.

New coal plant developers face increasingly difficult conditions as restrictions on investment have come from banks and insurers, as well as government commitments to phase out coal.

• As per a report, a staggering 47.4 GW coal-fired power projects at different stages were canceled in India in 2019 reducing total under development coal capacity to 66 GW. Pre-construction capacity halved in just the past year in India from 60.2 GW in 2018 to 29.3 GW in 2019 with another 37 GW in under-construction stage.

The shrinking coal pipeline in India forced by huge overcapacity, subdued demand for electricity, falling utilization factor, falling prices of renewable energy, drying investments, and increasing public resistance due to pollution gives hope for a future with reduced fossil footprint for India.

• The government’s pilot scheme, Security Constrained Economic Despatch (SCED) has been allowed to run till May 31, 2020. Scheme help to reduce power generation cost, which saved about Rs 2.75 crore per day in the April-December 2019 period, currently the scheme involves 52 coal-based power plants with a cumulative capacity of 58,060 MW, and their tariffs are decided on the ‘cost-plus’ basis (no competitive bidding) by the CERC.
• Union Power Minister shared that India is the third-largest electricity producer across the globe. Also as per IEA, India secured the 106th position in terms of per capita consumption in 2017.
• As per officials, Jammu and Kashmir will produce 5069.5 MW in the year 2024 after the completion of four under-construction projects in district Poonch and Kishtwar, which is 30 percent of the total identified power potential of 16,475 Mega Watt in the Union Territory. Jammu and Kashmir is presently generating 3360 MW from 11 hydro projects.
• Almost all power plants which are buying fuel from Coal India and its subsidiaries are now refusing to accept supplies and have stopped making payments. Most of its power sector consumers have started regulating coal receipt by filing lesser or no rail movement programs at all.

Following increased production and supplies from the subsidiary, fuel stocks at most these plants are adequate for 35-40 days, one of the highest ever, prompting them to regulate receipt of the dry fuel.

• Union MoEFCC Babul Supriyo shared that coal-based power plants worth 62 GW of capacity are currently under various stages of construction in the country. Out of this, there are 19.78 GW of central sector coal-based projects, 18.72 GW of state sector power projects and 23.73 GW of total private sector projects.
• Uttar Pradesh Power Minister Shrikant Sharma stated that Govt. is making an all-out effort to make the state "self-reliant" by increasing power production, the government plans to double the power production by 2022 i.e. from 6,134 MW to 12,734 MW by the year 2022.
• As per data, as on March 11, the coal stock at thermal power plants in the country has risen to its highest-ever level at 39.48 million tonne. It is "sufficient" for running the power plants for 23 days, a day more than the 22-day fuel stock mandate of CEA. The stock is expected to further increase during the remaining days of the current fiscal. The fuel stock at the pitheads of coal India mines mounted to 51 million tonne on March 11. 
• A parliamentary committee on energy wants the revision of power purchase agreements (PPAs) with under-construction plants that are facing delays. There are 19 thermal power plants, under the Central government, where construction delays have raised project costs to Rs 1.99 lakh crore from the initial estimate of Rs 1.87 lakh crore. Similarly, there are 13 hydropower plants being built by central government units, where project expenditure has gone up to Rs 86,698 crore from Rs 50,336 crore due to time overruns in construction.

The parliamentary panel recommended the Union power ministry to ‘make a provision for review of such PPAs, wherein, tariff has been increased owing to cost overrun due to delay in development of a power project’. 

Revising power tariffs of under-construction projects could help a number of hydropower plants see the light of the day as discoms would then find the rates viable and would agree to buy power from such units. 

Some of the major reasons behind delays in power project construction are slow civil works, contractual issues, law & order problem, delay in handing over the units by BHEL, and changes in layout plan. For hydro plants, delays are caused by land acquisition, environment and forest issues, rehabilitation and resettlement issues, natural calamities, geological uncertainties difficult terrain, and poor accessibility.

• Union power minister R.K. Singh stated that India has gradually moved from energy-deficit country to near power-surplus country. The country has installed power generation capacity of 369 GW against the peak demand of 183 GW occurred during the current year 2019-20 (up to February 2020).

The all-India installed capacity of power generation is projected to grow to 619 GW by the end of 2026-27, which includes both conventional and renewable sources. This projected installed generation capacity is expected to meet the demand projection for the year 2026-27 made by the 19th Electric Power Survey. 

• Union power minister R.K. Singh stated that union territory of Jammu and Kashmir will generate 1709 MW more electricity in next four years with the completion of four hydro-electric projects, which are being executed by Chenab Valley Power Projects Limited (CVPPL) and Jammu and Kashmir Power Development Corporation (JKPDC).

This includes 1000 MW Pakal Dul Hydroelectric Project by Chenab Valley Power Projects Limited likely to be completed by December 2024, 624 MW Kiru Hydroelectric by Chenab Valley Power Projects Limited likely to be completed by September 2024, 37.50 MW Parnai project executed by Jammu and Kashmir Power Development Corporation will be completed by February 2022, and 48 MW Lower Kalnai Hydroelectric Project will be completed during 2023-24 subject to restart of the work.

• Union Power Minister R.K. SINGH stated that as per the extant National Electricity Plan, the installed capacity of thermal power plants of the country, comprising of Coal-based and Gas & diesel-based plants, is likely to be 243,037 MW in 2021-22 out of a total projected Installed Capacity of 479,419 MW. The Plant Load Factor (PLF) of Coal-based capacity in 2021-22 is likely to be 56.5%.
• A parliamentary panel has stated that the Indo-US nuclear deal has not yet resulted in any "new" power projects with foreign assistance and that the Department of Atomic Energy (DAE) should, for now, adopt home-grown 700 MW heavy water reactors for its expansion program.

Signed in 2008, the Indo-US nuclear deal ended India's nuclear pariah status and enabled import of uranium for its power reactors. In 2008, France also signed a deal.

The Standing Committee also observed that negotiations with American and French companies have been going on for a decade. The committee feels that at this point of time it would be better for the DAE to adopt a standardized 700 MW heavy-water reactor and use that standardized design for its expansion program in an aggressive manner. 

• India Ratings and Research (Ind-Ra) has revised the power sector outlook to negative for FY21 from stable-to-negative on account of muted growth in electricity demand and rising discoms dues. The average plant load factor (PLF) of thermal power generation units is on a decline in the country. At 57.61 percent, the PLF in January touched a five-year low.

This is due to limited improvement in the financial profile of distribution companies (discoms) since the launch of the Financial Restructuring Plan and Ujwal Discom Assurance Yojana(UDAY).

Ind-Ra estimated a continued muted outlook for thermal plant load factor (PLF 9M FY20: 55.2 percent) and expects it to remain below 60 percent for FY21.

The low expected PLFs, lack of strong balance sheets in the sector, limited appetite of discoms to tie-up long-term power purchase agreements and low project returns will continue to prevent any major fresh project coming up in the thermal sector.

• As per Ember analysis, India's coal-based power generation recorded its first fall in 29 years in 2019 but the fall was likely a one-off event caused by the combination of a large reduction in demand growth and weather-driven increase in hydro generation while wind and solar also played a role.

As per the report, the 3 percent fall in coal-based generation also pulled down carbon-dioxide emissions from the power sector by 3 percent in 2019. 

• As per Axis Capital report, failure to meet the revised pollution norms set for power projects located in critically polluted areas has cast fears of shortfall in generation.

Report highlighted 2020 as the year of large scale disruptions, leading to either partial or full shutdowns of the impacted power plants and levy of severe penalties.

Power projects of capacity totaling 163 GW have been identified for FGD installations to meet sulphur dioxide norms. FGD orders for 8.1 GW or 64 percent of the identified capacity are yet to be placed by state governments. Such power projects run the risk of partial or complete shutdowns unless the Supreme Court or CPCB provide special exemptions since it takes 18-24 months to install FGD equipment.

CLP India Pvt Ltd is the only company to have complied with December 2019 deadline. JSW’s Ratnagiri station and Adani owned Mundra IV unit have also installed FGD.

• Union Power Minister R K Singh stated that the country needs coal-based plants for now and he is not in favor of shutting them down immediately. 

His statement comes on the back of Chief Justice of India SA Bobde's remark that all thermal power plants in the country should be shut down to check air pollution. 

He further stated that we are adding renewables but there is space for coal as we are adding new consumers, the country registered 26.4 lakh new consumers under Saubhagya. Of the 32 odd stressed power plant, 14 have come out of stress. With coal availability, 5000 MW power purchase agreement aggregation schemes, and new connections, the demand for electricity is likely to increase. 

• Jitendra Singh, Minister of State for Department of Atomic Energy (DAE) stated that India, which currently produces less than 2 percent of its electricity from nuclear power plants, is aiming to increase its nuclear power generation capacity by over three times in 10 years.

As of January 2020, the installed nuclear power capacity (which is the current nuclear power capacity) is 6,780 MW — which is about 1.84 percent of the total installed capacity of 3,68,690 MW.

Within the next five years, a capacity of 5,300 MW is proposed to be added on progressive completion of nuclear power plants at Kakrapar in Gujarat, Rawatbhata in Rajasthan and Kudankulam in Tamil Nadu.

• NTPC stated that the company including its joint venture and arms - has achieved its annual commercial capacity addition target of 5,290 MW for 2019-20. This is also the largest ever commercial capacity addition for the group in a single year. 

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