Metis Weekly Sectoral Post

Power & Coal Sector

March 7-12, 2011

Sectoral Post
Power Headlines Coal Headlines Power News Generation Transmission & Distribution Renewable Others Coal News Coal Statistics About Metis Contact Us 3 4 5 5 6 6 7 8 10 12 13

Metis Power & Coal Weekly Sectoral Post | March 7-12, 2011

Power Headlines
Generation
Govt may allow UMPPs to divert surplus coal JSW to sell stake in Ratnagiri to Ispat Adhunik Metaliks plans to set up new power project Kol dam hydropower project likely to be commissioned by 2013 DVCs Bokaro power plant is expected to be completed in 2012-13 HP Govt to set up 3 hydro electric projects at Beas NTPC to bid alone for NELP rounds NTPC Jhajjar project begins commercial operations Yavatmal Energy to change its 1251 MW TPP location from Maharashtra to Chhattisgarh

Renewable
IFC to work jointly with GERMI on renewable energy projects NTPC to invest INR 480 crore for renewable energy projects in 2010-11 KfW, IREDA sign loan agreement RE firm Entegra to raise INR 1500 cr CLP India to increase wind power capacity, plans to enter solar power CERC approves procedure for execution of RRF mechanism NTPC to sign $100 mn loan agreement with KfW soon Government likely to ban import of equipment for solar mission projects

Others
PTCs Athena emerges as the lowest bidder for UP Power 3,000 MW tender GMR raises Rs 500 cr debt from PFC

Transmission & Distribution

APtransco commissions 400 kv line, plans to strengthen network

Metis Power & Coal Weekly Sectoral Post | March 7-12, 2011

Coal Headlines

CIL floats EoI for acquisition of coal mines in foreign countries CIL gets final clearance for 14 projects NTPC to float tender for 4 MT coal import Coal min to renew privatisation push, identifies removal of entry barriers as priority Adani diversifies coal supplies; buys its 1st Russian coal cargo NTPC may lose five captive coal mines Great Eastern sells CBM at $7 per unit Coal Min: Coal production from CIL's 46 blocks delayed Coal block auction delayed ICVL places bids for Grosvenor mine

Metis Power & Coal Weekly Sectoral Post | March 7-12, 2011

Power News
Generation
Govt may allow UMPPs to divert surplus coal- The developers of ultra mega power projects might be allowed by the government, to use surplus coal from allocated blocks for other projects in which they hold majority stake. NTPC and Jindal Power say that the move will led to reduction in electricity tariffs. There are 12 more UMPP projects in the pipeline. According to the government, developers should hold majority stake in the other power project to which coal is being diverted and the coal can only be used for generation of electricity by successful bidder. This move would make UMPPs more attractive leading to low tariffs. JSW to sell stake in Ratnagiri to Ispat- Ispat industries, dolvi based steelmaker that was acquired by Sajjan Jindals group will have a 26% stake in the groups 300 MW Ratnagiri Power Project. The transaction costs around INR 100 crore. This will allow Ispat to use electricity generated from the plant for captive consumption to produce steel at Khopoli in order to avail tax benefit. According to JSW the Ispats cost of electricity at 6 a unit would be reduced to 4.5-4.8 due to synergies. Adhunik Metaliks plans to set up new power project- Adhunik Power and Natural Resources, a subsidiary of Adhunik Metaliks, is planning to setup a new power plant near its current setup for which it will be investing INR 3,000 crore initially. The company has already completed acquisition process of more than half of the required land for the project and is waiting for clearance from Environment Ministry which is expected to be received after two months. The construction work is expected to commence after six months. Kol dam hydropower project likely to be commissioned by 2013- A mega hydropower project in Himachal Pradesh developed by NTPC was earlier aimed to be commission by March 2012 is now expected to be commissioned by 2013 after much delay. The project was going through some issues by Central Environment and Forest Ministry as the ministry was against the diversion 124.054 hectares of forest land from the Majathal Wildlife Sanctuary in Solan district to build the 800 MW Kol Dam project. In 2010, the Environment and Forest Ministry's highpowered committee took a serious view of the submersion of more than 50,000 trees due to the construction of a reservoir and the threat to the sanctuary's flora and fauna. DVCs Bokaro power plant is expected to be completed in 2012-13- Damodar Valley Corporations 500 MW thermal power project station in Bokaro, Jharkhand is expected to be commissioned in the financial year 2012-13, the cost for setting up the plant is about INR 3,550 crore. DVC is also setting up another 500 MW Chandrapura Thermal Power station at Chandrapura in Bokaro, the cost of which is estimated at INR 2,611.34 crore and is expected to start within the XI plan period (2007-2012). The two units were commissioned in November 2009 and March 2010. HP Govt to set up 3 hydro electric projects at Beas- Three hydro electric projects of 258 MW will be established by HP govt on the downstream of river Beas. The projects are Berry Nichli of 78 MW, Dhoula Sidh of 66 MW and Thana Palon of 141 MW projects, to be laid on area from Padoh Dam in Mandi district to Pong dam at the edge of Kangra district on the boundary of Punjab. The Berry Nichli is being constructed by the Himachal Power Corporation at a cost of Rs 700 crore. NTPC to bid alone for NELP rounds- NTPC Ltd bids alone in the ninth round of auctions for hydrocarbon blocks under the new exploration licensing policy (NELP) and is interested in bidding for small areas in shallow waters. The company has, in recent times, faced limited natural gas supplies from overseas and is hoping to secure acreages within the country to meet its growing demand for gas to fuel existing capacities and expansion plans. Although NTPC has been allotted five blocks under NELP, it has been unsuccessful in securing gas supplies from Nigeria and Yemen. NTPC operates seven power plants fuelled by gas or liquid fuel with a total installed capacity of 3,955MW. It also runs a gas-based plant through a joint venture. It has a gas requirement of around 17 million cu. m per day (mcmd) of gas. Participation in the eighth round had been low because of

Metis Power & Coal Weekly Sectoral Post | March 7-12, 2011

uncertainty arising from the governments policies on pricing and taxation, said oil industry executives. NTPC Jhajjar project begins commercial operationsNTPC said commercial operations of the 500-MW thermal power project at Jhajjar, which would supply power to Haryana and Delhi, began on Saturday. The 500-MW unit is part of the 1,500-MW capacity Indira Gandhi Super Thermal Power Project coming up at Jhajjar in Haryana. At present, the work is progressing at the two other 500MW units. Yavatmal Energy to change its 1251 MW TPP location from Maharashtra to Chhattisgarh- Yavatmal Energy has decided to shift the location of its upcoming 1215 MW TPP from Yavatmal district in Maharashtra to Raigarh district in Chhattisgarh due to some issues relating to environmental clearance, transportation problems, infrastructure facilities and the distance of evacuation lines from Yavatmal. Further to this the project is in its advance stages and has already made significant progress in the development of TPP in Chhattisgarh.

memorandum with GERMI during the Vibrant Gujarat 2011 summit, and identified areas of cooperation. NTPC to invest INR 480 crore for renewable energy projects in 2010-11- NTPC has made provisions for investment of INR 480 crores in 2010-11 for developing renewable energy projects. By 2017, NTPC is planning to set up 1,000 MW capacity using renewable sources. NTPC, ADB and Kyuden of Japan had signed a Memorandum of Understanding (MoU) to setup a 500 MW renewable energy projects in the country. KfW, IREDA sign loan agreement- German Government-owned development bank (KfW) along with the Indian Renewable Energy Development Agency Limited (IREDA) signed a loan agreement worth $200 million to promote development of renewable energy in India. The agreement comprises of concessional loan and technical assistance to strengthen long standing relationship between the two. The New Renewable Energy Programme with IREDA consists a credit line of $200 million and an accompanying grant component of $0.5 million for technical support. RE firm Entegra to raise INR 1500 crEntegra, a renewable energy development firm, has decided to raise INR 1,500 crore through private placement of shares or follow on offer. The board of the company had been given authority to appoint advisors and merchant bankers for the issue. Entegra aimed at energizing the future by providing sustainable and cost-effective solutions. CLP India to increase wind power capacity, plans to enter solar power- CLP India plans to increase wind power capacity by 200-300 MW on a yearly basis over the next three years and to enter into solar power in the next two years. The company is also expanding its Gujarat based plant by 1000 MW with the expected investment of around 4000-5000 crore. The company has signed an agreement with Enercon to develop two new wind farms in Rajasthan and Andhra Pradesh of 102.4 MW and 50.4 MW, respectively. The company is setting up a 1,320 MW supercritical coal fired power project in Haryana and is also expected to expand in the transmission line projects. CERC approves procedure for execution of RRF mechanism- The Central Electricity

Transmission & Distribution

APtransco commissions 400 kv line, plans to strengthen networkAPTransco announced the commissioning of a 400 kV double circuit transmission line from Kothagudem thermal power stage VI to Khammam sub-station of Power Grid Corporation of India thereby strengthening high voltage transmission infrastructure in the state grid. This aimed at strengthening the network thereby increasing the power generation in the state.

Renewable
IFC to work jointly with GERMI on renewable energy projects- International Finance Corporation (IFC) along with Gujrat Energy Research and Management Institute (GERMI), will identify and develop renewable energy projects in South Asia and is currently working on design and structure of a distributed roof top solar power project for Gandhinagar. According to IFC, this 5MW solar power installation project is expected to mobilize about USD 20 million in private sector investment and reduce emission by about 6,000 tonnes annually. IFC had signed a

Metis Power & Coal Weekly Sectoral Post | March 7-12, 2011

Regulatory Commission (CREC) has granted approval to the draft procedure for implementation of the Renewable Regulatory Fund (RRF) mechanism. The procedure would be applicable to wind farms and solar generating plants with a collective capacity of 10 MW and 5 MW and above, respectively, connected to the transmission or distribution system of any state or to the interstate transmission system, at connection level of 33 kV and above, and which have not signed any PPA with states/UTs/DVC or others. NTPC to sign $100 mn loan agreement with KfW soon- NTPC, which plans to set up a 15MW solar power plant at Anta in Rajasthan, is in talks with German bank KfW, among others, to tie-up for funds. The loan amount is understood to be $100-million. The cost of the project is estimated around Rs 225 crore (Rs 15 crore per MW). Capacity addition of 301 MW through solar PV and thermal by March 2014, has been envisaged in line with the National Solar Mission. Government likely to ban import of equipment for solar mission projects- The Government of India is planning to put a ban on import of equipment for projects under the National Solar Mission. This initiative is expected to benefit domestic solar equipment suppliers; however, according to project developers, such a move could prevent the Government from achieving its target of 20,000 MW of solar power generation capacity by 2022. Over 70 per cent of plants being set up under the first round of the mission are based on imported equipment. Amidst strict competition from foreign players, domestic solar equipment makers were able to corner only 30 per cent of projects, totalling 704 MW, in the first round of bidding under the National Solar Mission. The next round of bidding for 296 MW of solar photovoltaic projects is expected to start in April 2011.

PTCs Athena emerges as the lowest bidder for UP Power 3,000 MW tenderPower Trading Corporations (PTC) Athena plant in Chhattisgarh has won a tender issued by the Uttar Pradesh Power Corporation Ltd. (UPPCL) for the purchase of 3,000 MW power for 25 years starting in 2014. The Bid Evaluation Committee of the Uttar Pradesh Government has accepted PTC as the L1 (lowest bidder) offer for supplying 300 MW of power at an average price of INR 3.324 per unit for the next 25 years. The next bidder (L2) is Anil Dhirubhai Ambanis Reliance Power, which has offered to sell 2,456 MW of power at an average price of INR 3.702 per unit. GMR raises Rs 500 cr debt from PFC- GMR Energy, the flagship energy subsidiary of GMR Infrastructure, has raised around Rs 500 crore of debt from Power Finance Corporation (PFC) to achieve financial closure of its various power projects. The period of repayment for this loan is around 15 years, with an average interest rate of 12%. The company has three completed energy projects- a barge-mounted power plant at Kakinada, Andhra, and another in at Vemagiri, plus a 200-MW power plant in Chennai. The company has a power generation capacity of 808 MW by endDecember 2010 and 11 projects with a total capacity of 8,448 MW in various stages of development.

Others

Metis Power & Coal Weekly Sectoral Post | March 7-12, 2011

Coal News
CIL floats EoI for acquisition of coal mines in foreign countries- To select the strategic partner in preferred foreign countries, CIL had issued a global Expression of Interest (EoI) in July 2009. To acquire stake in existing or Greenfield coal resources, certain specifications were to be met through the notified deal structures. With the aim of ensuring security of supply and insulation from the volatility of the global prices, CIL is planning to import coal. CIL gets final clearance for 14 projectsClearance for 14 projects have been given from the Ministry of Environment and Forest, out of which five are from Mahanadi Coal Fields Ltd and three each from Eastern Coalfields Ltd and Western Coalfields Ltd., two from Bharat Coking Coal Ltd. and one from South Eastern Coalfields Ltd. These projects were stuck up for the last six months to one year due to some environmental issues. The development came close on the heels of Environment Minister Jairam Ramesh softening his stance on "no go" status for coal blocks falling in environmentally sensitive areas during the meeting of a Group of Ministers (GoM) on Coal last month. NTPC to float tender for 4 MT coal importTo meet the requirements of its expanding capacity, first tender of NTPC will be issued in March 2011 to import 4 million tons of coal. The companys coal consumption is expected to reach 12.5 million tons in the current year ending March 31, 2011. NTPC, through its tender would be requiring 5,700-6,300 gross calorific value coal to be delivered at its plant. The companys coal import requirement is expected to increase as it aims to have 75000 MW generation capacity plant by March 2017. Coal Min to renew privatisation push, identifies removal of entry barriers as priority- Union Coal Ministry has decided to renew its old proposal, so as to let enter the private players. The United Progressive Alliance (UPA) government is working on proposals such as free entry of private sector in mining, setting up independent coal regulator, etc. so as to liberalise this sector, thereby bridging the demand-supply gap of coal. The removal of the entry barriers for private players would lead to reduce countrys import dependence on coal. The government had already disinvested 10 per cent of its equity in Coal India last year to raise Rs 15,000 crore as a part of its overall strategy to bridge the burgeoning fiscal deficit by selling stakes in major PSUs. This strategy from coal ministry is facing opposition to open up coal sector to private investment for commercial mining. Adani diversifies coal supplies; buys its 1st Russian coal cargo- To diversify Adanis coal supply, first cargo of Russian coal was bought in a bid by them. The March loading capesize cargo of low-sulphur coal will be shipped from a Pacific port by one of Russia's biggest exporters as he prices were close to the current levels of South African coal. NTPC may lose five captive coal mines- The Company may lose five captive coal mines as the company has failed to achieve the necessary milestones after 5 years of allocation. The five coal blocks that are likely to be deallocated are Kerandari (228 million tonne), Chatti Bariatu (243 mt), Dulanga (260 mt), Talaipalli (965 mt), Brahmini and Chichro Patsimal. The committee, under the joint secretary (coal), has recommended revoking the mines. On its acceptance, the mines may be allocated to Coal India Ltd (CIL), which will supply coal to NTPC after the company sets up the end-use plant based on the criteria fixed for supply of coal by the government. The coal ministry on the companys not achieving the milestone had said, If the allocatee companies have not achieved the milestones after expiry of the timeline for production of coal from the blocks, these blocks may be considered for deallocation with conditions that the blocks will be developed by Coal India and its subsidiaries. Great Eastern sells CBM at $7 per unit- Gas from Great Eastern Energy's Raniganj block was sold at $7 (per unit) which is an enormous deal to attract other CBM players. For five years, the government had fixed KG-D6 gas price at $4.2 per unit. YK Modi-promoted Great Eastern located in southern part of Raniganj near Asansol in West Bengal, is the first company in India to commercialise CBM gas, which was currently producing 0.16 million standard cubic meters per day (mmscmd) gas, which will be ramped up to 3 million mmscmd in next 6-7 years. The company is supplying fuel to over two dozens

Metis Power & Coal Weekly Sectoral Post | March 7-12, 2011

small industrial units through a 78 km pipeline. hile private firms have made significant progress in developing CBM blocks, ONGC is lagging behind despite having some blocks adjacent to private CBM projects. India is the third largest proven coal reserves and the 4th largest coal producer in the world. The prognosticated CBM resources are about 50 tcf, out of which only 8.39 tcf has been established. Coal Min: Coal production from CIL's 46 blocks delayed- The government said that due to some issues and environmental hurdles, the production from 46 projects of Coal India Ltd. (CIL) have been delayed. Of these, 11 projects did not got the clearance from MoEF, 14 projects were stuck in land acquisition and R&R issues, 9 delayed due to lack of participation in bids, 2 delayed due to adverse geographical conditions and 5 projects due to certain delays. The minister also said domestic coal production fell short of target over the last three years due to various problems like environmental clearances and land acquisition problems among others. Coal block auction delayed- Due to the launch of environment ministry controversial no-go policy, auctioning of the coal block has become difficult, thereby delaying the policy of Competitive bidding. Competitive bidding is expected to induce transparency and objectivity in the overall coal block allocation

process, which will replace the current practice of allocating blocks to the private sector for notified captive use based on recommendations of an inter-ministerial committee. The No-Go policy was carved out by the environment ministry over a year before for areas with a gross forest cover exceeding a threshold of 35 per cent. The policy, in its current indicative form, engulfs coal blocks with reserves of over 600 million tonnes. Blocks allotted to over two dozen companies including NTPC, Coal India, Essar Power, Rungta Mines and Adani are currently falling in No-Go zones, casting doubts over their timely development. ICVL places bids for Grosvenor mineInternational Coal Venture Pvt. Ltd. (ICVL) has submitted a bid valued at about $200 million (INR 900 crore) for a 12% holding in Anglo American Plcs Grosvenor mine Australia, putting it in competition with at least three other companies, including Chinese firms, for the stake. Grosvenor mine production is expected to increase by 4.3 mtpa till it reaches full production in 2016. The bid values at around $1.6 billion.

Metis Power & Coal Weekly Sectoral Post | March 7-12, 2011

Coal Statistics
Coal Price Trend till March 2011 (in US$/ton)
160 140 120 100 80 60 40 20 119.51 130.3

Newcastle Richards Bay

Qinhuangdao Coal Price Trend till February 2011 (in US$/ton)

160 140 120 100 80 60 40 20 0 137.94

Metis Power & Coal Weekly Sectoral Post | March 7-12, 2011

Coal Price CFR, India (in Us$/ton)

345 305 262 265 225 185 145 105 65 25 98 100 112 119 129 136 131 133 245 245 268 297 279 288 295

Coking Coal Non-coking Coal

India Monthwise Coal Import in MT

3500000 3000000 2500000 2000000 1500000 1000000 500000 0 895642 854648 835299 2246367 2500743 1800384 1511654 2000967 2958016

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Metis Power & Coal Weekly Sectoral Post | March 7-12, 2011

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Metis Power & Coal Weekly Sectoral Post | March 7-12, 2011

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Metis Power & Coal Weekly Sectoral Post | March 7-12, 2011