Electricity Act, 2018 proposal encapsulates changing power market

The draft amendments to the Electricity Act, 2003 is finally out and it aims to keep at pace with the changing market dynamics, increasing renewable capacity and challenge of providing quality power supply. Business Standard explains the major changes introduced in the 2018 avatar of the torch-bearing Act for the sector and its impact. The draft amendments would need comment from the industry and stakeholders before being placed on the floor of the Parliament. Direct Benefit Transfer of Subsidy: Breaking the cycle of subsidy and losses incurred by the discoms, the Act has introduced DBT in electricity as well. The Act says: if the State Government or Central Government desires the grant of any subsidy to any consumer or class of consumers, such subsidy shall be directly transferred to the beneficiary by direct benefit transfer into the bank account of the beneficiary.” The same will apply if subsidy is given through any government scheme as well. Separation of content & carriage: The long-pending demand to separate the infrastructure builder for power distribution to consumers and the licensee to supply has been introduced in the Act. This would entail more than one electricity supplier in an area and consumer will have options to choose their preferred electricity supplier. Allied to it is introduction of time of the day tariff – power rate as per the energy source, season, time and demand.

Bankers, beware! India stares at a power debacle 20 times bigger than Enron

Enron Corp. is long gone, but the scandal it left behind in India has beguiled the country’s lenders for almost two decades.

However, if the bankers who financed the US energy company’s unviable power plant in Maharashtra state aren’t ruing that 2,000-megawatt debacle any more, it’s only because they’re now staring at a mess 20 times bigger.

India’s total electricity-generation ability is 344,000 megawatts, a 72 per cent increase over six years. The country, notorious for its outages, still doesn’t have a power surplus. But coal-fired plants in the private sector that ran at 84 percent capacity utilization at the start of the decade are struggling to stay alive with load factors of 55 per cent. As much as 40,000 megawatts of capacity — equal to 20 Enron plants — has become stressed assets for the banking system.

Nepal, China sign three pacts to boost energy, economic, technological ties

Nepal and China on Tuesday signed three pacts to further boost their ties in power and energy sectors and undertake a feasibility study to excavate natural gas and petroleum in the Himalayan country, including in the southern Terai plains.

The pacts were signed after visiting Chinese vice premier Wang Yang held discussions with Nepal's deputy prime ministers Bijaya Kumar Gachhadar and Krishna Bahadur Mahara.

The agreements cover three different domains - economic and technological cooperation, China-aid oil and gas resources survey project and framework agreement on promotion of investment and economic cooperation, Nepal's state-run National News Agency reported.

They include a feasibility study for excavating natural gas and petroleum in mountain areas and plains of the Terai region.

The two countries agreed to establish hydropower projects and transmission lines and take steps for economic and technological development in Nepal, which suffers from acute shortage of electricity.

Finance Secretary Shanta Raj Subedi told the agency the pacts would make significant contributions in Nepal's socio- economic transformation.

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Adani Group to finalise investment deal for Australian project by June

Indian conglomerate Adani Group plans to begin extracting coal from the $16.5 billion Carmichael project in Australia in 2020-21, its Chairman Gautam Adani has said.

The Group, which has interests from ports to power, would finalise by June an investment decision for the project, which has been delayed due to protests from environmental groups.

In an interview to PTI, Adani said his group is not just investing in coal but also in renewable energy in Australia, seeking to develop 1,500 MW of solar projects by 2022.

"Like in India, we are investing heavily in renewable energy in Australia too," he said.

It has signed pacts to build two solar farms, each with capacity of 100-200 megawatts in Queensland and South Australia.

Adani said the company has scaled down the coal mine capacity in the first phase.

Originally seen producing 60 million tonnes a year from six open-cut pits and five underground mines, a scaled-down first stage is now planned to produce 25 million tonnes a year of coal and will cost over $4 billion. Other phases will come later.

"We will begin work within months of getting final approval from the Australian government," he said.

Projections of a global glut of coal and prolonged low prices notwithstanding, Adani is pushing ahead with plans to build the mine that would produce thermal coal to generate electricity and operate for six decades.

"About 15 million tons of coal produced from the project (in the northern Australian state of Queensland) will be shipped to India for generating electricity," he said.

The group has for more than five years battled opposition from green groups who are opposed to any expansion of the port, saying it will cut into the Great Barrier Reef World Heritage Area. The port is to be used for exporting coal to India.

"A port already exists with capacity to handle phase-one coal," he said adding a rail line will have to be built for transporting coal from the mines to the port.

The group has so far invested Australian dollar 3.4 billion on the Abbot Point port and preparatory work for the Carmichael coal mine. It has applied for an Australian government agency loan to finance the railway line.

Adani said he is expecting Australian federal and state government nods for the coal project soon.

The Adani Group entered Australia in 2010 with the purchase of the greenfield Carmichael coal mine in the Galilee Basin in central Queensland, and the Abbot Point port near Bowen in the north.
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