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1.

Vietnamese contractors seek position in international bidding packages

Monday, September 2, 2019 10:00 am (DTT) - It is no longer rare for Vietnamese contractors to be named in international bidding packages. After a long journey of efforts, reaching out from being a sub ......

  • Vietnam
  • Administration & Marketing
  • 20 Sep 2019
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Description Monday, September 2, 2019 10:00 am (DTT) - It is no longer rare for Vietnamese contractors to be named in international bidding packages. After a long journey of efforts, reaching out from being a subcontractor, providing labor, now Vietnamese contractors have been independent and joint venture to win bidding packages with the scale of thousands of billion dong, to confront the "Big" world horns. From losing to winning in the coal industry ... Coal supply packages for thermal power plants of the Electricity Group (EVN) are a fierce arena for all contractors, both domestic and international. And the "identity" journey of Vietnamese contractors in these bidding packages is very tough and challenging. Recently, Package 11 of the Vinh Tan 4 Thermal Power Plant Project expanded to save more than 45% through international open bidding. The winning bidder is Hoanh Son Group Joint Stock Company, with a winning price of VND 605.105 billion. This is a completely "pure Vietnamese" contractor, rising to become a formidable opponent for every "big" specializing in supplying coal with a huge volume. The Management Board of EVNs construction investment and technology project (the tenderer) said that there were 10 contractors submitting bids (HSDT), including 3 foreign contractors and 6 joint venture contractors. Vietnamese contractors and foreign contractors, 1 Vietnamese contractor. Through evaluation, 5 contractors have passed the technical evaluation. Hoanh Son is the only independent Vietnamese contractor to bid and win the bid, eliminating 4 competitors in the financial evaluation. But not all bidding packages Hoanh Son won that way. In June 2019, GENCO 3 announced the results of selecting contractors for the Import Anthracite Coal Supply Package for power generation for Vinh Tan 2 Thermal Power Plant in 2019. Hoanh Son has "fallen" before Consortium Tata International Singapore Pte Limited 7 - Architectural Construction and Trading Joint Stock Company 36 (Company 36). However, the winning bid also includes the name of a Vietnamese contractor. Examining the bidding packages at other thermal power plants, it can be noticed that Vietnamese contractors try their best to participate as many bidders. According to the contractors, by way of partnership, Vietnamese contractors have a wise step in competition. At Duyen Hai 3 Thermal Power Plant, in 2017, Power Generation Corporation 1 announced the results of selecting contractors for 3 packages corresponding to 3 commercial coal purchase. The first phase of coal bidding package is 1.892 billion dong, Franky - Tata International JV is the winning bid of 62 million USD. The second package of coal purchase is worth VND 1,892 billion. The third package of coal purchase is worth VND 1,739 billion, JV VN - BANPU consortium won the bid at US $ 75.6 million. In 2018, the package of Buying coal for trial run of the expanded Duyen Hai 3 Thermal Power Plant costed VND 1,153 billion, selecting contractors for the lots including IPECO - CTS Joint Venture; DIC - SGE Investment and Trading Joint Stock Company - Vien Lam Hanoi Joint Stock Company. For Vinh Tan 4 Thermal Power Plant, there are 2 bidding packages for international bidding to buy coal that have announced contractor selection results. The first bidding package approved in March 2017 is Package 12 Supplying imported coal for commissioning and acceptance of Vinh Tan Thermal Power Plant 4. Joint Venture of DIC Investment and Trading JSC - PT SUMBER GLOBAL ENERGY - Vien Lam Hanoi Joint Stock Company won the bid with a very high discount (bidding package price of 1,750 billion dong, winning price of 1,084 billion dong). The package of Supplying imported coal for commercial operation of Vinh Tan 4 Thermal Power Plant - phase 1 has a bid of VND 2,071 billion, approved the result in December 2017, Hoanh Son Joint Venture - VSSC Singapore won Bid for $ 68.99 million. Thus, among the contractors who have won the multi-trillion-dong coal supply packages for international bidding at Duyen Hai 3 Thermal Power Plant and Vinh Tan 4 Thermal Power Plant, there are many Vietnamese contractors, such as IPECO. , JSC Investment and Trade DIC, JSC Vien Lam Hanoi. ... to the brand of the marine engineering team Among Vietnamese contractors who constantly strive to assert their names in the international arena, objectively speaking, the marine engineering team deserves a pioneer. Many bidding packages worth tens of millions of dollars, invited by governments, belong to a team of skilled engineers of Vietnamese maritime mechanics. In particular, the Maritime Mechanical Services Company (PTSC M&C) has affirmed its position as one of the leading EPCI contractors in the country and has reached the regional level for 10 years. According to PTSC M & C leaders, from medium-sized projects to domestic oil and gas companies, PTSC M & C enters a new field full of confidence: international bidding for projects on design and construction of oil and gas rigs. With strict technical requirements, the volume of manufacturing equipment and installation of more than thousand tons. It is the Project of Designing, purchasing, manufacturing and testing WHP-A wellhead rig of Su Tu Den field for Cuu Long JOC investor. The scope of the project includes WHP-A wellhead rig and all electrical and automation technology systems, total weight 2,400 tons. In 2018, this contractor won the EPCI General Contract of Al Shaheen Project, invested by the North Oil Company (Qatar). The contract value of this package is up to hundreds of millions of dollars. Previously, PTSC M&C had won bids for oil and gas drilling projects for foreign countries such as Talisman (Malaysia), Total (France), and India Oil and Gas Group - ONGC. In Vietnam, oil and gas infrastructure projects of the Oil and Gas Group and its affiliates, even foreign investors, have put a lot of faith in PTSC M&C because of their capacity and reputation. It can be said that in the current context, for international bidding packages, PTSC M&C has the right to choose its partnership, no longer in the position of "thanks" to the joint venture to assert its brand. This is a position that a lot of sweat, effort of a team of engineers, skilled marine mechanic workers nurture. And what are the opportunities at the North-South Expressway Project? The story of contractors who are interested in attending packages under the North - South Expressway Project has probably been the topic of construction contractors recently. There are also concerns when the contractor force of another country has overwhelming proportions. And how much does the capacity of Vietnamese contractors in these packages really compare? However, the spirit of the Government of Vietnam always prioritizes the selection of contractors with financial capacity, construction experience, and a team of experienced personnel without regard to nationality. This is the root for our contractors to go regional. Even in the field of construction, Coteccons, Hoa Binh are well-positioned to "choose investors", even with foreign investors. Or in the field of tunneling, FECON has assumed the item that has long been for foreign contractors. So, why not give more trust to Vietnamese contractors when participating in bidding packages under the North - South Expressway Project? The Ministry of Planning and Investment and the Ministry of Transport have affirmed that the opportunity for all contractors in this project is the same, and Vietnamese contractors have many ways to contribute to the Project. Bidding is independent of a medium-sized bidding package, Mr. Le Viet Hai, Chairman of Hoa Binh Construction Group Joint Stock Company, Vice Chairman of Vietnam Association of Contractors said that the construction industry is a major proportion in the current economy. And as the country becomes more and more integrated, it is essential to share experiences and solidarity among domestic construction enterprises. "We have to do so when we go to the big sea, we do not just take a big boat but the whole fleet," Hai said.
Industry Administration & Marketing
Source https://baodauthau.vn/dau-thau/nha-thau-viet-tim-vi-the-trong-cac-goi-thau-quoc-te-107548.html
2.

Centres green panel for action against Bhubaneshwar Power for violating EC norms

Consequently, the panel has also deferred its decision on the companys proposal seeking extension of temporary permission for road transportation New Delhi: A green panel under the union environment m ......

  • India
  • Energy & Power
  • 19 Nov 2018
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Description Consequently, the panel has also deferred its decision on the companys proposal seeking extension of temporary permission for road transportation New Delhi: A green panel under the union environment ministry has recommended action against Bhubaneshwar Power Pvt Ltd (BPPL) for violating environment clearance (EC) norms with regard to transportation of coal by road, as per an official document. The panel has said that BPPL must immediately stop road transport of coal from Talcher (97km) to its thermal power plant in Cuttack district, Odisha and only do it from the Raja Athagarh rail siding, as has been temporarily permitted till December 2018. Consequently, the panel has also deferred its decision on the companys proposal seeking extension of temporary permission for road transportation "The ministry (of environment) may take a separate call to initiate action against the project proponent (BPPL) on the violation of environment clearance conditions that has already occurred," according to the the minutes of meeting of the Expert Appraisal Committee (EAC). The EAC found that the company was sourcing 90 per cent of its coal requirement through spot e-auction. Further, this e-auction coal was being transported by road from Talcher itself (97 km) even without any permission. The reasons cited by the company for transporting coal by road from Talcher were not adequate and the "EC conditions were being violated for at least the past year," it said. Further, the panel found that there was no traffic impact assessment conducted for the route which the company sought for extension of temporary permission for transportation of coal by road. The company has also not provided the concrete timeline to complete the construction of rail route including the coal yard. The company has further mentioned that even though rail route is complete, transportation of coal by roads will continue as coal will also be purchased through e-auction, which will be allowed only if coal is transported through roads. The EAC said that this logic was "untenable". In this backdrop, the panel has also recommended the union environment ministry to inform the Odisha State Pollution Control Board to initiate action against the company regarding violation of the consent to operate the plant. That apart, the EAC said that e-auctioning of coal was allowed to the company by state-run Mahanadi Coalfields Ltd (MCL) without obtaining permission of e-auction based coal-supply from the Centre. In this regard, the union environment ministry may seek clarification from MCL regarding how e-auctioning to the company was allowed, it added. The EAC also suggested that the ministry should discuss with Coal India Ltd and the Railway Ministry regarding the policy of not making rakes available for transport of coal supplied through e-auctions, and may take a suitable decision to make rail transport possible in the interest of reducing the environmental pollution burden. The BPPLs 135 MW captive thermal power plant in Cuttack district was commissioned in 2016. Its annual coal requirement is 1 million tonnes.
Industry Energy & Power
Source https://energy.economictimes.indiatimes.com/news/power/centres-green-panel-for-action-against-bhubaneshwar-power-for-violating-ec-norms/66544799
3.

Khurja plant to supply power at competitive rates, less pollutive: THDC

Rejecting a report that claimed the proposed Khurja coal power plant in Uttar Pradesh will push up the electricity cost and increase air pollution levels in Delhi New Delhi: The Tehri Hydro Developmen ......

  • India
  • Energy & Power
  • 19 Nov 2018
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Description Rejecting a report that claimed the proposed Khurja coal power plant in Uttar Pradesh will push up the electricity cost and increase air pollution levels in Delhi New Delhi: The Tehri Hydro Development Corporation said Wednesday its Khurja thermal plant would supply power at competitive rates and is equipped with a technology to reduce emissions which would be 50 per cent less than permissible levels. Rejecting a report that claimed the proposed Khurja coal power plant in Uttar Pradesh will push up the electricity cost and increase air pollution levels in Delhi, THDC India Limited (THDCIL), formerly known as Tehri Hydro Development Corporation Ltd, said, "this is totally baseless and appears to be motivated." The report by the Institute for Energy Economics and Financial Analysis (IEEFA) evaluating THDCs proposed Khurja coal power plant has recommended re-evaluation of the proposal against severe air pollution levels in Delhi. THDCIL is a joint venture of the Centre and Uttar Pradesh government with equity sharing in the ratio of 3:1 (75:25 per cent). The state-run firm said that the Khurja Super Thermal Power Project is being implemented by THDCIL and power purchase agreements (PPA) for the entire off take of power have been signed with various beneficiary states of northern region including Uttar Pradesh. UP has has signed PPA for 60 per cent power allocation from the project. "The first year tariff is estimated at 390 paise per unit while levellised tariff is 361 paise per unit considering the coal supply form Amelia Coal Mine and is duly vetted by Central Electricity Authority. It is the price which is quite competitive and reasonable," THDCIL said in a statement. Amelia Coal Mine in Singraulli (MP) has been allotted by Ministry of Coal to THDCIL for meeting fuel requirement of Khurja STPP. As per the IEEFA report, the estimated tariff is about Rs. 5.67 per unit which seems to be based on very low grade Coal of gross calorific value (GCV) around 2800 Kcal per kilogram whereas the average coal grade of Amelia mine is with GCV of about 4750 Kcal per Kg, the statement said. THDCIL said that there would be a coal price difference of about Rs 2 per unit which stipulates that IEEFA report has not considered realistic figures while speculating the tariff of Khurja STPP and "Thus, their estimate is bogus and unrealistic." Rejecting the allegations around rise to pollution level by the plant, THDCIL said that the proposed Khurja project is based on latest supercritical technology, equipped with Flue Gas Desulfurization (FGD), etc to meet out even stringent norms which are less than about 50 per cent of that prescribed under Central Pollution Control Board norms. "Khurja Supercritical Plant will be having pollution levels below 50 per cent of even the permissible limits prescribed," the statement said. THDCIL said Khurja is situated in South East direction of Delhi and prominent winds flow from Delhi towards Khurja rather than Khurja to Delhi and therefore, Khurja Thermal Power Plant "will not contribute to any air pollution in Delhi", the statement said.
Industry Energy & Power
Source https://energy.economictimes.indiatimes.com/news/power/khurja-plant-to-supply-power-at-competitive-rates-less-pollutive-thdc/66356457
4.

Government may auction power contracts with coal supplies

The proposals are being deliberated at the high-level empowered committee headed by the cabinet secretary that is likely to meet next on Friday. New Delhi: The government plans to auction power supply ......

  • India
  • services
  • 17 Sep 2018
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Description The proposals are being deliberated at the high-level empowered committee headed by the cabinet secretary that is likely to meet next on Friday. New Delhi: The government plans to auction power supply contracts with attached coal supplies, ease norms to allow coal usage for short-term power contracts and put in place a payment mechanism to help power projects recover dues in time from state electricity distribution companies to alleviate the sectoral stress to a large extent. The proposals are being deliberated at the high-level empowered committee headed by the cabinet secretary that is likely to meet next on Friday. “It has been proposed that the government removes restrictions on coal usage to include shortterm PPAs,” a person in familiar with the development said. “Auction of another 2,500 MW aggregated PPA scheme, this time with attached coal supply, has been proposed. Work has already begun on drafting a bill discounting mechanism to ensure recovery of timely payments from state power distribution companies directly to banks.” A payment mechanism for private power companies will release Rs 15,000 crore dues owed to private power companies. The state-owned power generators have payment security mechanism with the Reserve Bank of India on its board. Private sector generators, on the other hand, face delay of up to six months in payments by discoms, adding to their stress and defaults on loan servicing. The empowered committee will also discuss issues related to gas-based power plants on Friday. The first meeting of the committee took place on August 31. “All these proposals, if implemented, will address the problems in the Indian power sector to a large extent,” he said. Amendments to the tariff policy are also likely to be finalised soon to address regulatory issues, sources said. The draft amendment to National Tariff Policy 2016 provides for consumer friendly measures, including penalising the discoms for power cuts other than in force majeure conditions. It also provides that after March 2019, the distribution companies will not be able to pass on more than 15% technical losses into electricity tariffs. The government on August 27 directed power regulator Central Electricity Regulatory Commission (CERC) to allow changes in any central or state government duty to be passed on to consumers even after award of bids, in a move to help revive some stuck power projects. The pilot round of PPA auction was conducted by Power Finance Corp and Power Trading Corp in July for 2,500 MW contracts. Seven companies including RKM PowerGen, Jaiprakash Associates and IL&FS bid for bagging 1,900 MW three-year power supply contracts at a price of `4.24 per unit. Telengana and Tamil Nadu are negotiating to offtake 500 MW each from the scheme, while Haryana is likely to buy 400 MW and Bihar another 200 MW, the sources said. According to the report of the 40th Standing Committee on Energy, the total coal-based power capacity in the private sector is nearly 90,000 MW, of which 75,000 MW is operational. It is estimated that 60,000-65,000 MW of this capacity may be under financial stress.
Industry services
Source https://energy.economictimes.indiatimes.com/news/power/government-may-auction-power-contracts-with-coal-supplies/65803163
5.

Power projects heading to NCLT may get to retain fuel supply pacts

New Delhi: Stressed thermal assets that are referred to the insolvency court may retain their coal and power supply and long-term transmission network access rights. The high-level empowered committe ......

  • India
  • services
  • 17 Sep 2018
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Description New Delhi: Stressed thermal assets that are referred to the insolvency court may retain their coal and power supply and long-term transmission network access rights. The high-level empowered committee, constituted by the Prime Minister’s Office, considered these special dispensations to the troubled projects to help their lenders recover a fair value. Power projects referred to the National Company Law Tribunal (NCLT) lose their fuel supply agreements (FSAs) with Coal India Ltd, power purchase agreements (PPAs) with state governments, and long-term transmission contracts with Power Grid Corp of India. “The high-level empowered committee during its first meeting has decided to preserve the three contracts vital to the power projects that can save the value of the projects and fetch fair deals,” said a government official on the condition of anonymity. “If the government asks the public sector utilities to retain the contracts and they oblige, the projects will attract more investors and higher bids,” he said. The panel also looked into reform proposals including doing away with the requirement of power generation plants having power purchase tie-ups to get coal and setting up a payment security mechanism to timely recover dues from the distribution companies, he said. According to the report of the 40th Standing Committee on Energy, the total coal- based power capacity in the private sector is nearly 90,000 mw, of which 75,000 mw is operational. It is estimated that 60,000-65,000 mw of this capacity may be under financial stress. The projects are stressed due to coal supply, lack of PPAs or regulatory issues. Plants such as Avantha Power (Jhabua), Avantah Power (Korba), Lanco Amarkantak Power and Lanco Anpara have coal supplies, but no or part PPAs. While some like GVK Goindwal Sahib and Essar Power Jharkhand have complete PPAs or near full PPAs. A few projects like Lanco Anpara and GMR Warora have full PPAs and FSAs, but are stressed due to under recoveries and cost overruns. Of the 34 assets listed in the report, 14 have coal issues, eight have PPAs but no coal linkage, and three neither have PPA nor coal supply. There are three plants whose coal block allocations were cancelled, the report stated, adding lenders have exposure of approximately Rs 3 lakh crore to such assets. On Monday, lenders are expected to file cases for a dozen unresolved assets to NCLT as mandated by the Reserve Bank of India circular. This follows a verdict of the Allahabad High Court refusing extension of the RBI circular deadline to complete resolution of private power plants outside IBC. Essar Power, GMR Energy and RattanIndia Power have again approached the Allahabad HC seeking directions to RBI for extension of deadline to refer their plants to insolvency court by 60-90 days. Similar cases have been filed in Madras, Punjab and Delhi high courts. Madras High Court will hear the plea of IL&FS and RKMPowergen on Monday while as per the February 12 circular lenders have to refer unresolved stressed assets to NCLT by Tuesday.
Industry services
Source https://energy.economictimes.indiatimes.com/news/power/power-projects-heading-to-nclt-may-get-to-retain-fuel-supply-pacts/65747567
6.

Seven companies bid lowest in power supply auction, quote Rs 4.24/Unit

??According to a senior official, Jindal India Thermal Power, Avantha Group’s Jhabua Power and SKS Power were the other three that matched the lowest price. NEW DELHI: RKM PowerGen, Jaiprakash Associa ......

  • India
  • services
  • 07 Jul 2018
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Description ??According to a senior official, Jindal India Thermal Power, Avantha Group’s Jhabua Power and SKS Power were the other three that matched the lowest price. NEW DELHI: RKM PowerGen, Jaiprakash Associates, IL&FS and MB Power are among seven companies that have bid the lowest in an auction of three-year power supply contracts with stressed plants, quoting a price of Rs 4.24 per unit. According to a senior official, Jindal India Thermal Power, Avantha Group’s Jhabua Power and SKS Power were the other three that matched the lowest price in the pilot scheme for plants stressed for want of power contracts. The companies either have fuel supply agreements with state-run Coal India or have tieups for imported coal, the official said. The contracts will help these plants meet part of their debt obligations, persons aware of the matter said. Sembcorp Energy, which had submitted technical bids, decided against matching the winning price. The company is looking for a long-term power purchase agreement (PPA), but its plant is not financially stressed because it is running with short-term contracts and spot market sales. The financial bids were opened on Friday. “RKM PowerGen’s Chhattisgarh-based coal project emerged as L1 with Rs 4.24/unit power supply at state’s periphery,” the official said. “All bidders, except Sembcorp, matched the L1 tariff.” The scheme, which is likely to see tie ups for a total of 1,900 Mw, assures minimum offtake of 55% of contracted capacity. The tariff will be fixed for three years without any escalation. Also, the fixed cost for the PPA auction has been kept at 1paisa per unit. The official said that as per the tender, the distribution company will get additional discount of 1% in tariff on each 5% extra procurement over 55% of a project’s capacity. “Hence, if a distribution company dispatches 100% power, it would get a discount and shall pay tariff reduced up to Rs 3.86 per unit,” he said. Industry executives, however, said, high power supply will be possible with increased coal supply availability. According to the official, power flow should start in October, considering the required transmission access. He said eight states including Gujarat have requisitioned a total of 4,800 Mw under the scheme. Ashok Khurana, director-general of Association of Power Producers, said, “Lowest bid of Rs 4.24 per unit, fixed for three years in the pilot scheme is very encouraging. This is a very good mechanism for providing PPAs and improving cash flows of stressed assets. Next tender with slight adjustment of risk apportionment and coal linkage may see bids in the range of Rs 3.75 unit.” In April, the government had kicked off the pilot scheme for procurement of aggregate power of 2,500 Mw, with PFC Consulting Ltd as the nodal agency and PTC India is PPA aggregator. Bids were received for 2,200 Mw from eight companies. The scheme looks to address the issue of stressed assets. Lack of PPAs is one of the key reasons for stress in the power sector, besides factors such as promoters’ equity crunch, no coal supply and regulatory and contractual issues. Electricity distribution companies have not called long-term contracts in the last few years.
Industry services
Source https://energy.economictimes.indiatimes.com/news/power/seven-companies-bid-lowest-in-power-supply-auction-quote-rs-4-24/unit/64892924
7.

Hope flickers for troubled power projects in Gujarat

Distribution companies, which signed contracts to purchase power from these projects at a particular price, have strongly resisted any attempt to increase the tariff. Shimla: Stressed power projects o ......

  • India
  • services
  • 07 Jul 2018
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Description Distribution companies, which signed contracts to purchase power from these projects at a particular price, have strongly resisted any attempt to increase the tariff. Shimla: Stressed power projects of Adani, Tata and Essar groups may get a favourable package soon as a panel headed by a former Supreme Court judge has been appointed to resolve issues of Rs 40,000 crore of projects idling or underutilised because they are unviable. The panel’s recommendations, which may include making tariffs viable by reviewing the power purchase agreements, or acquisition of the projects, are expected in two months. The panel comprising Justice (retd) R.K. Agarwal, former deputy governor of RBI S.S. Mundra and former chairman of the Central Electricity Regulatory Commission, Pramod Deo, will be assisted by SBI Caps and NTPC. The government of Gujarat, where the plants are located, says reviving these plants will help consumers get much cheaper electricity and has asked the panel to submit its recommendations in two months, according to the state’s order issued on Tuesday on “Formation of High Power Committee on finding solutions in respect of power supply by imported coal based power plants to the procurer states”. SBI Caps will assist the panel. Distribution companies, which signed contracts to purchase power from these projects at a particular price, have strongly resisted any attempt to increase the tariff. The companies argued that coal prices rose sharply because of unexpected changes in Indonesian regulations, making the plants unviable, and forcing two plants to shut down and one to run at a low capacity and make losses. With such a large capacity shut down, Gujarat, Haryana, Punjab, Rajasthan and Maharashtra, which would together get 8,000 MW of power from these plants, are facing a huge shortage. “Resultantly all these states are required to purchase/generate power at higher cost/rates. Thus due to prevailing conditions the consumers of these states are to be put to pay much higher cost of power,” the government order appointing the panel said. The Gujarat government said states were suffering big losses. “Due to non-availability of power under these PPAs, there is a huge financial implication on procurer states in respect of power purchased/generated at the cost much higher than PPA rates which is putting these states under heavy stress,” it said. Officials said Gujarat had to purchase costly electricity from the spot market at an additional cost of Rs 3,000 crore in the last few months. Officials said the committee would deliberate on the recommendations of State Bank of India, the lead banker to the Mundra units of Tatas, and Adani and Essar Power’s Salaya unit, which has proposed that the Gujarat government buy imported coal and supply to the plants while only paying the generators the fixed cost—which is 40% of the tariff. While Adani Powers 4,620 MW plant and Essar Powers 1,320 MW Salaya plant have stopped operating, citing non viability, Tata Power has been operating the 4,000 MW project that made a loss of Rs 1,700 crore in the last financial year. In June last year, Tata Power, Adani Power and Essar Power had offered majority stakes in their imported coal-based power plants in Gujarat to the state government at Rs 1 each. The three companies had sought interventions of the Gujarat government, the Union power ministry and the prime minister’s office (PMO) after the Supreme Court disallowed tariff compensation to Tata Power and Adani Power for rise in imported coal prices due to change in the Indonesian law. In letters written to Gujarat Urja Vitaran Nigam (GUVNL), also marked to the power ministry, the chief secretary to the Gujarat government, and the principal secretary to the prime minister, the companies had suggested selling 51% equity at Re1and letting the company operate the 4,000 MW plant as remaining stakeholder. CGPL’s Mundra has power supply pacts with five states. On April 11, 2017, the Supreme Court ruled that increase in coal prices due to change in overseas laws cannot be considered as change in law under the PPA. Adani Power and Tata Power had approached power regulator Central Electricity Regulatory Commission (CERC) for compensation after Indonesia banned coal supply at less than international prices in September 2010. The CERC had ruled that such change cannot be classified as change in law or ‘force majeure’ under the PPAs but allowed compensatory tariff under exercise of regulatory power. The Appellate Tribunal for Electricity ruled that the case qualifies under the force majeure clause and asked the CERC to reconsider the quantum of compensation. Against this, the state distribution companies appealed in the Supreme Court. The apex court allowed the CERC to calculate compensation till verdict. The CERC had issued the mechanism to compensate the companies. The Supreme Court finally said the increase in coal prices cannot be considered force majeure or change in law and asked the CERC to look into the matter afresh in light of its verdict.
Industry services
Source https://energy.economictimes.indiatimes.com/news/power/hope-flickers-for-troubled-power-projects-in-gujarat/64849191
8.

PPA auction for stressed power stations gets bids for 2,200 mw

Bids were received for 2,200 mw PPAs against 2,500 MW offered by the government. New Delhi: Sembcorp Energy, Jaiprakash Associates, IL&FS and RKM PowerGen are among eight companies that responded to t ......

  • India
  • services
  • 07 Jul 2018
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Description Bids were received for 2,200 mw PPAs against 2,500 MW offered by the government. New Delhi: Sembcorp Energy, Jaiprakash Associates, IL&FS and RKM PowerGen are among eight companies that responded to the government’s pilot scheme to aggregate and auction power purchase agreements (PPAs), to help them generate electricity from idling plants and repay loans. Bids were received for 2,200 mw PPAs against 2,500 mw offered by the government. Projects of some companies, including GMR Energy, Coastal Energen and Lanco Infratech, which do not have assured coal supplies or are pending in insolvency court, could not participate in the bidding process, people close to the development said. “Companies that are in the insolvency court did not receive the requisite permission from NCLT,” one of the sources said. “Companies that do not have an assured supply of coal have stayed away from bidding. The no escalation clause could also have been a deterrent,” the person said. The aggregate PPA demand from states, however, has been close to 5,000-mw, he said. Companies that submitted bids for the PPA auction include MB Power, Jindal India Thermal Power, Avantha Group’s Jhabua Power, and SKS Power. These companies either have fuel supply agreements with Coal India or have imported coal tieups, sources said. The companies had submitted technical and price bids on Tuesday. The price bids of technically qualified companies will be opened on July 6. “It is a welcome step, idling capacity with coal linkage/imported coal of 2200 mw will get PPA and will be able to service loan and meet O&M costs,” said Ashok Khurana, director general at Association of Power Producers, said. “Next aggregated bid should be with coal linkage so that idling plants without coal can also bid,” he said. PPA auction for stressed power stations gets bids for 2,200 mw The government had in April kicked off the pilot scheme for procurement of aggregate power of 2,500 mw on competitive basis for three years from commissioned projects without PPAs. PFC Consulting Ltd has been appointed as nodal agency and PTC India is the PPA aggregator that will sign the PPAs with successful bidders and discoms. Under the scheme, a single entity can be allotted maximum capacity of 600 mw. The scheme assures minimum offtake of 55% of contracted capacity and the tariff will be fixed for three years without any escalation. Also the fixed cost for the PPA auction has been kept at 1 paisa per unit. The scheme looks to address the issue of stressed assets. Lack of PPAs is one of the key reasons for stress in the power sector, besides factors such as promoters’ equity crunch, no coal supply, and regulatory and contractual issues. Electricity distribution companies have not called long-term contracts in the last few years. Long-term PPAs of some states like Kerala, Maharashtra and Uttar Pradesh did not materialise.
Industry services
Source https://energy.economictimes.indiatimes.com/news/power/ppa-auction-for-stressed-power-stations-gets-bids-for-2200-mw/64757316
9.

Ramaphosas Move to Cut Boards out of Tender Loop will help Stem Corruption

President Cyril Ramaphosa’s announcement on Friday that nonexecutive directors of state-owned companies will be "removed from any role in procurement" is expected to have a profound effect on systemic ......

  • South Africa
  • Oil & Gas
  • 19 Feb 2018
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Description President Cyril Ramaphosa’s announcement on Friday that nonexecutive directors of state-owned companies will be "removed from any role in procurement" is expected to have a profound effect on systemic corruption, which has flourished over the past decade. State-owned entities (SOEs), particularly Eskom and Transnet, have been engaged in huge infrastructure expansion, over which board members have wielded increasing influence in decision making. Newly appointed Eskom chairman Jabu Mabuza said he had been alarmed to discover the existence of a board tender committee and although it had been constituted along with all other board committees since the new board was put in place he had written to Public Enterprises Minister Lynne Brown expressing concern about its desirability and mandate. Over the past decade, appointments of board members of SOEs have become a politically negotiated process with the line minister, the ANC’s deployment committee and the president all jostling to get their candidates appointed. Boards have been the central vehicle through which patronage has been dispensed and political control over tenders exercised. In his speech, Ramaphosa said he would "change the way boards are appointed so that only people with expertise, experience and integrity" would be eligible to serve. Mabuza said while best practice allowed boards of directors in the private sector to review procurement decisions over a particular threshold, directors did not have the knowledge to make decisions about customers, suppliers or staff. At Eskom, the board tender committee has been integrally involved in decisions on coal supply, for example. Board tender committees in state-owned companies were first established when the companies were corporatised in the late 1990s and are contained in their memorandums of incorporation, which sets out the responsibilities of the board to the shareholder minister. Ramaphosa also promised to review the funding model of SOEs and, in what was a clear reference to Eskom, said the companies "could no longer borrow their way out of financial difficulties". His comment, and those by Mabuza in January that Eskom’s capital structure was unsustainable, will open the way to discussions on private ownership or participation in state-owned assets, on which the ANC has always been ambivalent Going into Wednesday’s budget, Ramaphosa has given the go-ahead to a commission of inquiry into tax administration and the governance of the South African Revenue Service (SARS), which would be appointed soon, "to ensure that we restore the credibility of the service and strengthen its capacity to meet its revenue targets". This comes after Finance Minister Malusi Gigaba asked former president Jacob Zuma in November to set up an urgent judicial inquiry into the revenue service, which has been plagued by corruption allegations and has lost significant amounts of expertise over the past three years since Tom Moyane was appointed its commissioner. SARS’s failings and a decline in tax morality have contributed to revenue shortfalls on a scale not seen since the financial crisis, putting pressure on public finances. The tax advisory committee headed by Judge Dennis Davis recently completed a report on tax administration and identified flaws in SARS, but the committee does not have judicial powers to subpoena witnesses so is constrained in its ability to probe allegations of misconduct.
Industry Oil & Gas
Source https://www.businesslive.co.za/bd/national/2018-02-19-how-ramaphosas-changes-to-acquisition-process-will-help-curtail-corruption/
10.

Dayton Seeks FERC Approval of Transfer of Power Plans to Another AES Unit

Under a plan previously approved by the Public Utilities Commission of Ohio, Dayton Power and Light (DP&L) and AES Ohio Generation LLC (AES Ohio Gen) applied Aug. 25 at the Federal Energy Regulatory C ......

  • United States
  • Energy & Power
  • 02 Sep 2016
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Description Under a plan previously approved by the Public Utilities Commission of Ohio, Dayton Power and Light (DP&L) and AES Ohio Generation LLC (AES Ohio Gen) applied Aug. 25 at the Federal Energy Regulatory Commission for approval of a transfer of DP&L's mostly coal-fired power plants to AES Ohio Gen.
These two companies are both subsidiaries of AES Corp. (NYSE: AES). Utility subsidiaries of FirstEnergy and American Electric Power have already sold their power plants in Ohio or that are outside of the state but are serving their Ohio needs to non-regulated subsidiaries under Ohio's utility deregulation program.

In 2014, the Public Utilities Commission of Ohio (PUCO) approved a plan for DP&L to divest its generation on or before Jan. 1, 2017. This transaction involves the transfer by DP&L of generation facilities, along with ancillary assets and property associated with generation assets, to an affiliated entity, AES Ohio Gen. AES Ohio Gen, as the ultimate acquiring entity, will consolidate these assets with its existing generation assets and will continue to use its existing and newly acquired generation assets to make wholesale sales in interstate commerce under its market based rate authority granted by FERC.

The applicants requested that FERC establish a period of not more than 21 days for comments on the application and issue an order within 45 days of the date this application is filed. The transaction is scheduled to close on or before Jan. 1, 2017.

AES Ohio Gen is an Ohio public utility, engaged in the generation of electric power and wholesale power sales from its existing generation assets located in Ohio and Indiana. Prior to Feb. 1, 2016, it operated under the legal name of DPL Energy LLC. Its existing generation assets are capacity resources within the PJM Interconnection region and are bid into markets administered by PJM. AES Ohio Gen owns no transmission facilities except those necessary to interconnect with the PJM transmission grid.

The generation assets owned by DP&L to be transferred are:

Stuart Units 1-4, 35 percent ownership, 808 MW summer rating (DP&L share), Coal
Stuart Diesel, 35 percent ownership, 3 MW summer rating (DP&L share), Oil
Killen Unit 2, 67 percent ownership, 402 MW summer rating (DP&L share), Coal
Killen CT, 67 percent ownership, 12 MW summer rating (DP&L share), Oil
Conesville Unit 4, 16.5 percent ownership, 129 MW summer rating (DP&L share), Coal
Miami Fort Units 7-8, 36 percent ownership, 368 MW summer rating (DP&L share), Coal
Zimmer Station, 28.1 percent ownership, 371 MW summer rating (DP&L share), Coal
Hutchings Turbine Unit 7, 100 percent ownership, 25 MW summer rating, Gas
Tait CT Units 1-3, 100 percent ownership, 256 MW summer rating, Gas
Tait Diesel, 100 percent ownership, 10 MW summer rating, Oil
Monument, 100 percent ownership, 12 MW summer rating, Oil
Sidney, 100 percent ownership, 12 MW summer rating, Oil
Yankee Street CT Units 1-7, 100 percent ownership, 101 MW summer rating, Gas
Yankee Solar, 100 percent ownership, 1 MW, Solar
The generation assets currently owned by AES Ohio Gen are:
Tait CT Units 4-7, 100 percent ownership, 320 MW summer rating, Gas
Montpelier Units 1-4, 100 percent ownership, 236 MW summer rating, Gas

In addition, AES Ohio Gen will assume rights and obligations held by DP&L under contracts with third parties that are directly tied to the generation business and are still in effect as of the closing date. DP&L currently owns only a portion of several generation units, the other portions of which are owned by various subsidiaries of Dynegy (NYSE: DYN) or, in some instances, by a Dynegy subsidiary and the Ohio Power unit of AEP. AES Ohio Gen will assume DP&L’s rights and obligations under the contractual relationships among the co-owners.

Similarly, any of DP&L’s coal supply agreements or power sales or purchase agreements that are still in effect as of the closing date will be assigned to AES Ohio Gen. Any power sales transactions that are still in effect as of the closing date and which were entered into based on the underlying generation assets, will also be transferred to AES Ohio Gen.
Industry Energy & Power
Source http://www.power-eng.com/articles/2016/08/dayton-seeks-ferc-approval-of-transfer-of-power-plans-to-another-aes-unit.html?

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