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October 31, 2011

MoP on Draft LARR Bill, 2011-I: Incorporation of customary rights for ST a must, says ministry Oct 31: The Ministry of Power (MoP) has been left shell-shocked by the inadequacy of the Land Acquisition and Rehabilitation and Resettlement Bill, 2011 (LARR Bill, 2011), claiming that the bill has failed to address the issue of 'loss of customary rights', a provision that is of utmost importance for the scheduled tribes (ST). The power ministry has clearly asserted that the rights of the tribal community such as shifting cultivation on unclassified state and reserve forest land, a practice which is predominant in north eastern states, must be incorporated as part of a separate provision in the bill. Further, the MoP has shown favor towards inclusion of clauses that are designed for outlining details of the compensatory amount that are to be paid to the community, in the form of rights and privileges, instead of individuals. Apart from emphasizing the need to include customary rights, the ministry has also taken a firm stand against the repetitive delays faced in acquiring land and solving rehabilitation and resettlement (R&R) issues, claiming that time bound processes will have a positive impact on the project activities. MoP on Draft LARR Bill, 2011-II: Bill needs to be more in tune with reality Oct 31: Although the LARR Bill is aimed, with good intent, at establishing a law that protects the rights of people directly affected during the land acquisition process, the ministry is of the opinion that the creators of the bill have made a grave mistake of overlooking the diverse reality within the country, which has resulted in lot of provisions being unfeasible in the long run. The MoP has strengthened its stand by asserting that the tall claims of providing mandatory jobs for at least one member of every project affected family (PAF) may prove to be futile, considering the fact that the technology that has come into existence for generating power has left little space for employment opportunities. To overcome this problem, the ministry has recommended that the government should resort to annuity policies or one-time payment in the form of cash to the PAFs. In addition to the above mentioned flaw, the ministry has pointed out that the compensation package offered to land owners, which includes giving 20% of the developed land back to owners in urban areas, would be at least twice less than the market value, thereby putting an enormous financial burden on the developers. The ministry has also raised its doubts over the current system of fixation of market value for the acquired land, in which the revenue authority holds the power of fixing the market rate for the purpose of buying and selling. To add value to the existing system, the MoP has endorsed the incorporation of consent route - securing the prior informed consent of 80% of the PAFs - for speeding up land acquisition for projects. MoP on Draft LARR Bill, 2011-III: Ministry ridicules meager R&R provisions Oct 31: After carefully assessing the R&R provisions proposed in the bill, the power ministry has rendered the package offered to PAFs as being severely restricted and has pressed for more balanced, just provisions that cater to the interests of all communities. The power ministry has called for modification of the meager R&R provisions by suggesting a subtle yet significant change to the clause. In addition to the applicable R&R, the MoP has advocated the need for a special provision for SC/ST representatives in the R&R committee. At present, there is no clear distinction on which members residing in an affected area are truly affected by the acquisition of land. To cut through this issue, the ministry has opined that the clause must highlight that only affected members, comprising of women, SC and ST communities, are made a part of the committee. The ministry has brought out other glaring examples, including the R&R entitlements, which can pose to be a serious threat in implementation of the faulty LARR bill unless adequate measures are undertaken to turn around the processes. The MoP has stressed on the fact that the minimum prescribed families, for starting the R&R procedures, must be clearly defined. It has further maintained that without this provision, the struggle to execute R&R plan for PAFs, especially for transmission projects which have relatively less PAFs, will increase manifold. Working Group on Power-I: Single buyer model to be discontinued? Oct 31: The Working Group on Power has suggested that the single buyer model -- in which State Governments take over the responsibility of procuring power for distribution companies operating in the concerned states, through a state owned entity, like a trading company -- should be immediately phased out. The group has said that the National Electricity Policy (NEP) should be amended accordingly to indicate a timeline for States to wind up the single buyer model and expedite reassignment of power purchase agreements to the state discoms. Should this be accepted, it would come as good news to the sector since the model precludes the effective

implementation of the open access regime across the country, as the states would have a political and fiscal incentive to maintain inefficient pricing of power, thus creating a conflict of interest. Open access will only work in an unrestricted market scenario that envisages a large number of buyers and sellers of power. A legislated monopoly therefore, seems to be in contradiction to unfettered electricity trade. However, during the Working Group meeting held recently, certain representatives of the State of Gujarat asserted that the single buyer model was working well in the State and should therefore, continue to remain in existence. In addition, with regards to Renewable Purchase Obligation (RPO), they opined that the discoms purchasing renewable power in excess of their RPO be given Renewable Energy Certificates (RECs). Typically, RECs are unbundled and sold separately, from the underlying electricity generated. When purchased, the owner of REC is considered to have purchased renewable energy. While traditional carbon emissions trading programmes promote low carbon technologies, RECs can create an incentive mechanism to promote renewable energy by providing an additional revenue stream to electricity generated from renewable sources. Working Group on Power-II: CERC as coal regulator, proposes Uma Shankar Oct 31: Power Secretary, P. Uma Shankar has proposed that in the absence of a coal regulator, power watchdog Central Electricity Regulatory Commission (CERC) be vested with additional powers to act as an interim regulator to regulate coal pricing and freight charges for transport of coal for power projects. The proposal, initially brought to the fore by the Central Electricity Authority, has moved at a snail`s pace ever since it was mooted a few years ago. As per the Union coal minister Sriprakash Jaiswal, a coal regulator is now likely to be set up by the end of the ongoing fiscal year. With respect to Research and Development (R&D), it was unanimously agreed by the Working Group that Central Utilities need to follow state-run NTPC and Power Grid to set aside a percentage of their profits for R&D activities in the power sector. It was suggested that the State discoms allocate funds for the purpose. Regarding Demand Side Management, the secretary suggested that more measures need to be taken in respect of agricultural consumption. Use of DC Motors for Irrigation pump sets was also suggested. Pertinently, it was proposed to separate agriculture feeders so that the Distribution sector can more realistically address the needs of the agriculture sector. Thermal power plants battling coal shortages-I: Coal crisis deepens as coal stock critical at 44 TPSs Oct 31: With no respite in site from the looming coal shortages facing thermal power stations (TPSs) across the country, out of the 86 TPSs monitored by the Central Electricity Authority (CEA), 44 stations (as of October 11, 2011) have reported critical level of coal stocks, wherein operations can be supported for less than seven days. The standard coal stock for any power plant ranges from 21 to 30 days. The fact that the coal stock situation at 29 TPSs is super critical - coal stock is expected to last less than 4 days - is more worrisome. These encompass super thermal power plants such as the 2,000 MW each Rihand and Singrauli stations, along with the 3,260 MW Vindhyanchal power plant. Majority of these thermal stations are plagued with less receipt of coal from state-owned Coal India Limited (CIL) and its subsidiaries, which have instead put the onus of the shortfalls on the unprecedented rains for sapping the coal supply, unloading constraints and high turn around time of rakes between the power stations and coal blocks. Thermal power plants battling coal shortages-II: CIL to blame Oct 31: Inadequate supply of coal from Coal India has been cited as the major reason for the coal crunch facing the thermal sector. This irregular and short supply of coal has thus, forced several power stations to operate below their installed capacities. The website carries here, details of coal stock position at various TPSs in the country, as of October 11, 2011, with regards to the name of the TPS, capacity, critical coal stock and the reasons behind the shortage. Some of the plants facing acute coal shortages are as under: Dadri NCTPP (1,820 MW) -- Due to less receipt of coal from Central Coalfields Limited (CCL) Kahalgaon TPS (2,340 MW) -- Due to less receipt of imported coal because of transportation constraint of Railways Unchahar TPS (1,050 MW) -- Due to less receipt from CCL Rihand STPS (2,000 MW) -- Due to less receipt of coal from Northern Coalfields Limited (NCL) Sanjay Gandhi TPS (1,340 MW) -- Due to unloading constraints Simhadri TPS (1,500 MW) -- Due to less receipt from Mahanadi Coalfields Limitted (MCL)

NEEPCO's progress overshadowed by multiple constraints for 110 MW Pare HEP-I: Lack of manpower stymie contractor Oct 31: Pressed with severe time constraints to overcome a slew of unresolved issues pertaining to the 110 MW Pare hydro electric project (HEP), the helpless North Eastern Electric Power Corporation Limited (NEEPCO) has now been forced to revise the commissioning schedule, from August 2012 to August 2013, of its only project that has not had been postponed till date. Although NEEPCO has already awarded the packages for transformer and switchyard, hydro mechanical and electro mechanical works, the contractors have been unable to carry out the activities at a steady speed due to unavailability of adequate manpower. With only 29% of the dam excavation works completed till September 2011, the package contractor cannot afford to dilly-dally anymore and must step up the pace of works to adhere to the timeline outlined for conclusion of works as per the revised schedule. Further, while the boring of pressure shaft is progressing as planned, the contractor has made negligible progress for boring of head race tunnel (HRT) and has managed to achieve merely 28.77% of the required amount. The Pare HEP is planned as a run-of-river (RoR) scheme on the Dikrong river in the Papumpare district of the state. Located in the downstream of the Ranganadi HEP, this project is part of the Dikrong-Panyor Development Scheme, in the state of Arunachal Pradesh. The Pare HEP involves the construction of a 78 m high concrete diversion dam, a 2.81 km long, modified horseshoe-shaped head-race-tunnel (HRT) of 7.5 m diameter and two 55 MW surface power house units. NEEPCO's progress overshadowed by multiple constraints for 110 MW Pare HEP-II: Incessant rainfall adds to project's under-performance Oct 31: Everything seems to be falling apart for NEEPCO`s Pare HEP, as extreme weather conditions continue to mar the progress of restoration works of the diversion tunnel, which had overflowed with slush twice in the past few months due to incessant rainfall. With the contractor facing enormous problems in removing the muck that has accumulated at the outlet of the diversion tunnel, the works that can resume only after completion of restoration have now been postponed with no clear date in sight. Alongside this, the HRT face-III has suffered severe damage on account of another collapse due to loose fall. Although all efforts were lined towards building up the face whose support structure had been damaged initially, the contractor was forced to re-do all restoration works in the area where the ribs have been destroyed once again. Having wasted a considerable amount of time in ensuring that these works are concluded at the earliest, NEEPCO has now turned its attention to the poor condition of the road that has led to restriction in the movement of trailers for a long time, thereby resulting in slow progress of works at the site. For this purpose, it has sought the state government`s help to resolve this pending issue of the disruption caused by the main approach road. Plan-wise capacity addition for NHPC projects: Download Oct 31: The website carries here, details of the likely year-wise capacity addition program of NHPC projects during the 11th, 12th and 13th plan periods. Total capacity of projects being developed by NHPC, including on-going projects, projects under clearances, projects in joint venture etc. stands at 4,905 MW during the 12th plan and 7,816 MW during the 13th plan. During the ongoing plan period, 1,150 MW worth capacity has already been added, with another 1,970 MW worth projects currently under construction. NHPC`s ongoing projects, namely, Teesta low dam-III, Prabati-III and Subansiri lower, among others, will lead to a capacity addition of 3,682 MW during the forthcoming 12th plan. The state-run hydro major's own projects under clearances such as Dibang, Teesta-IV, etc. account for 4,920 MW worth capacity to be added during the 13th plan. Additionally, NHPC's 210 MW Dhauliganga intermediate project and 120 MW Gauriganga-III A project are under the Survey and Investigation (S&I) stage and are scheduled to go on stream during the final years of the 13th plan. SECL to speed up land acquisition and rehabilitation for its 3 MTY Baroud expn OCP Oct 31: The Ministry of Coal (MoC) has pulled up South Eastern Coalfields Limited for its half hearted efforts for land acquisition and rehabilitation with regards to its Baroud expansion Open Cast Project (OCP). In line with the above, SECL has now been advised to speed up the acquisition of land and rehabilitation process since 835 Project Affected Persons (PAPs) and 390 Project Affected Families (PAFs) are to be resettled. On a different note, the No Objection Certificate (NOC) application for 236.53 Ha of forest land has been submitted in 2009 although it is yet to be obtained after authority approval. The project, with a total capacity of 3 MTY, has been sanctioned at a total cost of Rs 135.58 crore. Of this total, an expenditure of Rs 28.84 crore has already been incurred on the project up to June, 2011. The project is scheduled to be completed by March, 2015.

SJVN's 600 MW Wangchhu HEP on track for completion in 13th Plan Oct 31: Work on all fronts at the site of SJVN`s 600 MW Wangchhu hydro-electric power project (HEP) is progressing as per schedule. As far as drilling is concerned, the following may be noted: - At the dam site, drilling of a total of 614 m has now been completed (as of September 30, 2011), while 3 additional holes that have been decided to be drilled, are now under progress. - At the power house, 400 m of drilling has been completed. Looking at the Environment Impact Assessment (EIA) - Environment Management Plan (EMP) studies, being done by WAPCOS Limited, the inception report, post monsoon and winter reports have been received for the project. Detailed survey of the dam site and power house (PH) site has also been completed. The project, a run-of-the river scheme with a budget estimate of Rs 6.75 crore, is expected to generate 2377.30 MU of energy, annually. The project will start in financial year 2012-13 and the expected year of completion is 2019-20. Final EMP clearance awaited for SECL's Manikpur expansion OCP Oct 31: The EMP clearance for Coal India subsidiary South Eastern Coalfields Limited`s (SECL) Manikpur expansion opencast project (OCP) in Chhattisgarh has been pending with the environment ministry for almost a year now and is now to be decided in the Environment Advisory Committee (EAC) meeting. It must be noted that the OCP area has been under the Comprehensive Environment Pollution Index (CEPI) imposed moratorium since January 11, 2010. As far as forest land is concerned, the No Objection Certificate (NOC) under the Forest Rights (FR) Act has already been issued and sent to the MoEF earlier this year. The stage-II clearance for the project is expected soon. The project has a sanctioned capacity of 3.5 MTY with an incremental capacity of 1.5 MTY. The sanctioned incremental cost of the project has been pegged at Rs 137.95 crore while the total cost has been estimated at Rs 321.50 crore. Of this total, an expenditure of Rs 223.01 crore has been incurred up to June, 2011. Natural gas production falls 7.6% in September Oct 31: ONGC and private JV/firms fell 1.7% and 14.2% short of their respective natural gas production targets during September, 2011. OIL, on the other hand, registered a marginal surplus of 2.9%. The industry, as a whole, missed its planned targets by 7.6% during the month. For the industry as a whole 3947.6 MCM gas was produced during September, as against the targeted 4,273.1 MCM. The cumulative production over the April-September, 2011 period, came to 24,405.2 MCM, which was 6.4% below the planned target of 25,421.5 MCM. During the month, ONGC`s gas production stood at 1,911.1 MCM, exceeding the monthly target of 1,944.7 MCM. The company registered a surplus in all its fields, barring Mumbai High, where the planned target for September 2011 fell short by 3.8%. This was on account of less than anticipated production from C-Series and B-22 Cluster series. OIL produced 227.9 MCM during the month. The company`s actual production exceeded the planned production of 221.5 MCM. Had BVFCL withdrawn more gas, the company`s production could have been more than the natural gas already produced. Private/JV firms also registered a significant shortfall, with total production from these companies coming to 1,808.6 MCM as against 2,106.9 MCM target set for September, 2011.The West Bengal Private/JV firm produced less than its respective target due to lower off-take by consumers. News Briefs Oct 31: Tata Power`s 120 MW Haldia plant has been honored with the Indian Register Quality System (IRQS)`s Certificate of Approval for ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007. The certificates have been awarded for generation of power from waste heat recovery system and supply to grid, subject to continued satisfactory maintenance of the occupational health and safety management system of the organization. The Permanent Court of Arbitration at The Hague, in the matter of Kishanganga project, passed its order on interim measures on 23.09.2011. Accordingly, construction work at the project can continue in the water conductor system, temporary bye pass tunnel excavation below the river bed and sub surface foundation of dam. Suzlon energy posted its unaudited financial results for the quarter ended September 30, 2011. The Company has posted a net loss of Rs.193.90 million for the quarter ended September 30, 2011 where as the same was loss at Rs.890.50 million for the quarter ended September 30, 2010. The company`s total income stands at Rs.20294.10 million for the quarter ended September 30, 2011 where as the same was at Rs.11760.20 million for the quarter ended September 30, 2010. Suzlon Group, on 27th October 2011, announced the transfer of the shares of the minority shareholders of REpower to Suzlon-subsidiary AE-Rotor Holding B.V, against a cash compensation of EUR 142.77 per ordinary bearer share without par value. This is in accordance with a Board resolution taken at the annual general meeting of REpower Systems SE on September 21, 2011.

NHPC Briefs Oct 31: NHPC, Indias premier hydropower company recently signed the Promoters Agreement with SJVN Limited and Government of Manipur for setting up a Joint Venture Company (JVC) for implementation of the 1500 MW Tipaimukh Hydroelectric (Multipurpose) Project in Manipur. NHPC Limited, SJVN Limited and Govt. of Manipur will have an equity participation of 69%, 26% and 5% respectively in the JVC. It is located in Churachandpur district of Manipur and has been conceived as a multipurpose storage project on the Barak river with the main objective of hydropower generation alongwith flood moderation of downstream area. Inspite of a slowing world economy, NHPC's half yearly results are some reason for cheer among investors. As per its unaudited financial results for the half year ended 30th September 2011, NHPC Limited has earned a Net Profit of Rs.1,757.52 registering an increase of 43.17% over the corresponding period of the past year. It also recorded a registered sales turnover of Rs.3,329.05 crore which is 42.49% higher than the previous year. NHPCs operating power stations generated 13372 Million Units (MUs) during the half year ended 30th September 2011 surpassing the Excellent MoU target of 12977 MUs by 395 MUs. The generation of 13372 MUs achieved during the half year ended 30th September 2011 was 3% higher than the 12874 MUs achieved during the corresponding period of the previous year. Till 27th October 2011, NHPCs power stations generated 14655 MUs against the Excellent MOU target of 14214 MUs. Meeting of Working Group on Power-I: Power purchase obligation from gas based sources on the anvil? Oct 30: The sub-committee on demand projections and generation planning of the Working Group on Power - constituted by the Planning Commission recently to formulate a strategy for the forthcoming 12th Plan (2012-17) - has emphasized the need to promote gas based generation in the country and has thus, recommended that measures similar to the promotion of renewables and solar power through power purchase obligations be implemented. The committee has suggested that distribution companies procure a minimum 20% of their total power from gas-based sources. In India, which is heavily dependent on coal, gas-based plants account for about 10% of the total installed power capacity. However, in a scenario where gas supplies are officially falling short and imported gas prices continue to rise, the committee has said that it is imperative to increase domestic gas production and pooling the costlier imported liquefied natural gas (LNG) with cheaper domestic gas. The committee has further suggested that a task force under the Central Electricity Regulatory Authority be set up to a deliberate a strategy for setting up peaking plants and creating generation reserves in the power system. In this regard, it has said that gas based peaking plants, worth 2,000 MW capacity, be set up during the 12th Plan. Meeting of Working Group on Power-II: Exemption from Gram Sabha consent, increased adoption of GIS to go a long way in timely implementation of transmission projects Oct 30: In view of the long delays associated with obtaining forestry clearances and getting the right of way (RoW), which have become a huge problem in implementation of transmission projects, the working group has recommended that transmission projects, which usually run across states and involve many Gram Sabhas (village councils), be exempted from consent of the latter. Exemption from such a rule will go a long way in timely implementation of transmission projects in the country, it has said. As per the existing process, a project developer is required to obtain a no objection certificate from the Gram Sabha, declaring that the rights of the primitive tribal groups have been specially safeguarded. However, most of the developers are unable to get the mandatory certificate because most of the villagers do not attend the meetings of the Gram Sabha or the quorum is not enough to certify, as a result of which the projects are delayed. Pertinently, with scarce land availability there is also a growing need for reduction of land use for setting up transmission systems. The group has in this regard called for an increased adoption of Gas Insulated Substations (GIS), which generally require 30% lesser land than conventional substations. In order to further optimize RoW, it has also suggested that high density transmission corridors be developed for future need.

SOURCE: Indianenergyline.com