CLP India plans to bid for ultra mega power projects

CLP India, a large foreign-owned power generation company in India is now upsizing its 

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India business plan by bidding to develop an ultra mega power project (UMPP) from those that will be offered for bidding by the Power Finance Corporation, in the next few months.

Mahesh Makhija, director business development (renewables) at CLP India, told Financial Chronicle, “We are keen to participate in the development of clean power generation and will bid for one of the ultra mega power projects out of two that are currently open for building.” The UMPPs use the less polluting supercritical technology for thermal power generation that burns coal more efficiently producing more energy and emitting less carbon dioxide and carbon monoxide per unit of power produced as compared to conventional coal based power plants.

Power Finance Corporation (PFC), the nodal agency for UMPPs, had extended the deadline for submitting initial requests for participation for the Chhattisgarh and the Orissa UMPPs by another two to three months in January 2011. While this delayed these two projects further it may open up an area of opportunity for the Chinese major.

CLP is also in talks with wind turbine makers Enercon and Vestas to set up an aggregate of 200 mega watt (MW) of wind power projects over the states of Gujarat, Maharashtra and Karnataka. The Indian unit of the Hong Kong headquartered firm, recently announced its plan to set up 158 MW of wind power generation projects spread across Rajasthan and Andhra Pradesh.

CLP India had earlier stated its intention to set up 200-300 MW of renewable enegy projects every year.

Source: http://www.mydigitalfc.com/power/clp-india-plans-bid-ultra-mega-power-projects-549

Duty hike on iron ore not to hit industry: NMDC

India's largest iron-ore miner NMDC today said the hike in export duty on the

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raw material to 20 per cent will not hamper the profitability of the industry, including the Navratna firm, to a big extent.

"Basic purpose of the imposition of duty is to discourage iron ore exports. So certainly it will dip in the profits for the industry in general, but I believe that the margins will not be that bad for the industry," NMDC Chairman Rana Som told PTI.

Explaining that current market prices of the raw material are hovering between USD 160 to 180 per tonne, Som said that domestic producers will still be left with a margin of about USD 40 to 60 per tonne after paying all duties, royalty and freight charges.

"The move will definitely knock off the profits of the industry players, but not to a very big extent," he said.

Finance Minister Pranab Mukherjee, in the Budget for 2011-12, had fixed a uniform export duty of 20 per cent on all types of iron ore, which is a vital steel-making raw material.

Before the Budget announcement, the export of iron ore lumps attracted a duty of 15 per cent, while export duty on iron ore fines was 5 per cent.

According to industry body FIMI, iron ore exports will fall by 35 per cent annually due to the increase in duty, thereby leading to lower domestic production and a rise in prices.

"Because of the hike in export duty, no fresh contracts are signed now... Only earlier contracts are being honoured. This would lead to lower domestic production of the raw material, resulting in an increase in price," Federation of Indian Mineral Industries (FIMI) President Siddharth Rungta said.

Talking about the impact on NMDC, Som said, "We export only about 10 per cent of our production and our main production is iron ore lumps, on which duty has been hiked by only about 5 per cent. So the impact will be very marginal on us."

The Navratna firm, which accounts for 15 per cent of the country's total iron ore production, has targeted a 25 per cent increase in output to about 30 million tonnes in the ongoing fiscal.

The company exports around 3,000,000 tonnes to Japanese mills and 400,000 tonnes to Korean steel maker POSCO, while the remaining stock is sold in the domestic market.

Source:-http://www.mydigitalfc.com/news/duty-hike-iron-ore-not-hit-industry-nmdc-851

Survey calls for major reforms in power sector

Calling for bold reforms in the power sector, the Economic Survey today asked the 

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states to reduce subsidies and cross-subsidies on electricity and hike tariffs.

The Survey tabled in Parliament today pointed out that India currently has one of the lowest and most uneconomical average electricity tariffs in the world -- 8 cents per unit at the retail level, compared to about 12-15 cents in countries endowed with more coal or gas and 19-10 cents per unit elsewhere.

It also suggested reducing the monopoly of state electricity boards (SEBs) in power distribution by encouraging open sales of the bulk of power supply in the market, which would increase competition.

It pointed out that the transmission and distribution losses in the power sector, at 35 per cent, were among the highest in the world.

"This (loss) is draining public revenues, forcing larger price increase requirements and causing massive losses to the state electricity boards, which is about 1 per cent of the Gross Domestic Product," it said.

It stressed on the strong role of independent regulators to ensure adequate competition and act on uncompetitive behaviour in wholesale trade (of electricity), including capping wholesale tariffs and investigating competition.

In view of the monopoly of SEBs in power distribution, with mounting losses and poor services, the survey suggested three different ways to encourage open access or putting the bulk of power supply for sale in the market.

Firstly, there could be a public-private partnership mode with open access, where long-term concessions were granted to private distribution companies. These firms would be required to make high investments and adhere to performance benchmarks.

Under this mode, which is very similar to what is being followed in the telecom sector, the tariff would be regulated and bulk consumers would be permitted to access the network. This would involve the bulk of power supply being put on sale in the market.

The second option was a distribution franchisee model where operators are selected through competitive bidding and ownership of the assets remains with the state power distribution company. This mode is being adopted in Delhi.

In the third mode suggested by the survey, there could be a performance-based state distribution company where open access is allowed.

Source:-http://www.mydigitalfc.com/power/survey-calls-major-reforms-power-sector-427