Corporate PR-India Power Corporation Limited
What is the kind of estimated loss per annum in terms of energy at prevailing prices and estimated capital/interest loss for the companies that have set up these capacities?
Stranded assets could be valued at Rs 150,000 crore (at an average of Rs 7.5 crore per MW), which is staggering, to say the least. Going by the perceived idle capacity of 20,000 MW, the cumulative losses incurred by the power companies every year come to around Rs 12,000 crore on fixed cost alone.
In terms of cost of borrowing, the power companies which have invested big in setting up generation capacity are really bleeding, coughing up a minimum interest rate of 11.5%, going up to 14.0%, probably the steepest in the world, even as the RBI´s key interest rate remains pegged at a mirage-like 7.25%.
Due to prevalence of higher generation capacity, power is trading at very low prices on the power exchanges. To what extent is it affecting viability of new projects - coal or gas-based or any other ones?
Unless power companies can realise the minimum cost of power generation, no one will embark on a new venture. Banks and lending institutions will also not come forward to lend money, because of the supply overhang that precipitates risks. Yes, power is trading at rock-bottom rates at power exchanges as the government allows power generators to sell spare capacity on the exchanges as part of ongoing reforms.
How are power and related sectors getting affected due to the inability of the discoms to buy more power and provide round-the-clock power supply? How do you see the contrast between surplus power capacity and scheduled power outages?
Yes, discoms are in a bind thanks to the pathetic financial status of the SEBs, and are more often than not unable to service their debts. Unless discoms regain their financial health, the future of power-generating companies doesn´t look bright. On the one hand, they are resorting to scheduled outages, and on the other, they have no money to buy more power. So, it´s a bruising stalemate. The high national average aggregate technical and commercial (AT&C) losses at 27 per cent is another crippling blow. Under the circumstances, banks and lenders have become wary of extending loans to the power sector.
The finance ministry directive to banks to stop providing working capital finance to utilities with huge losses hasn´t helped either.
Is there any problem arising from the lack of a 360-degree national transmission grid for the generation industry?
As of now, the pan-India power transmission grid structure is such that Northern, Eastern and Western regions are connected. Once the Southern Region can also be included in the seamless loop and full connectivity is achieved, it will probably improve the power situation in the southern states and new markets could also open up for the North.
What are the remedies available for bringing the companies suffering from idle capacities above water?
There are no quick-fix solutions to this problem. However, a positive step would be to issue more distribution licences (DLs) and franchises (DFs) to private companies in a big way. This will not only cut AT&C losses, but also reduce power cuts in local areas.
There are 70 distribution circles with AT&C losses of above 70 per cent across different states. Private DLs and DFs can sure make a difference. It is also imperative to allowing out more open-access power by reducing cross-subsidy charges, while balancing the mix right. Also, introduction of the´content and carrier system´ would eventually help power companies and industries streamline their operations.. If AT&C losses can be cut, it´s a big tool to pare losses.
According to reports, about 20,000 MW of built power generation capacity is lying idle due to various reasons. What is the real quantum and what are the reasons for such a huge idle capacity?
Lack of demand has turned India into a major power-surplus country saddled with a massive quantum of idle capacity, which could now be upwards of 20,000 MW. With some good initiatives from the government, major raw material (coal) situation is easing. However, lack of power-purchase agreements (PPA) is still a major deterrent and over 12,000 MW of new capacity doesn´t have any PPA, a sad commentary on the prevailing situation. Also, since the power distribution companies (SEBs/discoms) are bleeding, it has become increasingly difficult for the discoms to service their debts. So, even as they resort to load-shedding in their distribution areas, they don´t have the solvency to buy power. A few gas-based power plants are lying idle too.
It is a strange fallacy, while generation companies are suffering for want of buyers, over 30 per cent of Indians live in darkness.
What is your generating capacity, and give a break-up of various sources. Is your company facing idle generation capacity? If so, what are the reasons?
India Power Corporation Limited currently has around 100 MW of wind assets in operation in Rajasthan, Gujarat and Karnataka. We have a 12-MW generation capacity in thermal at the old DPS plant in Dishergarh. We have also developed a 2-MW grid-connected solar power plant along with West Bengal Green Energy Development Corporation Ltd. in Asansol. We were one of the first companies to obtain an RPO certificate by installing a 2-MW grid solar PV power plant on 8.3 acres of our own land at Seebpore Power Station in Jamuria. We also have a 450-MW thermal power plant coming up in Haldia. Our intent is to scale up our power generation portfolio to 2,000 MW in the coming years.
At present, we don´t have any idle generation capacity.
I wish to start pvc / pp electric wire unit in Delhi. What kind of information I can get if I subscribe for your magazine
Pls invite me all auction in gujarat
we are doing business developing for solar power ,thermal power , customer supporting and we have 45 mw splar power on hand needs investors.....
pls call +910842559230