Cabinet clears radical policy

The government of India’s state of Maharashtra has granted IPPs a host of concessions in a radical policy designed to attract serious investment in the region’s power generation industry.

Concessions included in the policy include faster clearances and exemption from various levies such as payment of tax on sale of electricity outside of Maharashtra. However, as the state will enjoy first right on the supply of gas from the proposed Dahej-Uran gas line, all IPPs will be required to sell 50 per cent of the power generated within the state.

As well as plans to also offer 100 per cent exemption from stamp duty and registration charges, the state government plans to offer a buyback guarantee to the extent of 2000 MW or 50 per cent of generation for the first five years.

According to the policy, IPPs can create power projects on their own or jointly with the Maharashtra State Electricity Board or its successor after the proposed restructuring. In order to qualify, projects must be a minimum of 250 MW and be commissioned by 14 March 2010.

Yangtze covets coal

China’s top listed power producer and operator of the world’s largest hydropower project has announced its intention to diversify into coal fired power generation.

If Yangtze Power were to buy some coal plants from the 6500 MW of capacity the State Grid Corp has made available, it would join the ranks of China’s big coal fired producers such as Huaneng Power and Datang International.

General manager, Bi Yaxiong, said: “We have expressed our interests to State Grid Corp. or others who have mature assets they want to transfer, and we will seriously consider buying them.”

While moving into coal would protect Yangtze Power from the varying water flows of the river, some have argued that such a move may disappoint investors: the company is not currently affected by the high coal prices, which have crippled many power producers profit levels.

Bi Yaxiong said the company was looking at coal fired plants in its current service area in central and southern China.

Roadshow attracts investment

A recent foreign investment drive from the Pakistani government has led to two pledges which cover 25 per cent of the funds needed to complete the country’s power projects over the next ten years.

Water and power minister, Liaquat Ali Jatoi, said that AES of the US had sent interest in writing to invest $1bn for the creation of a 1000 MW coal fired project at Thar. Similarly, Globeleq, from the UK, had shown interest in investing $1bn in the country’s power sector.

Jatoi said Pakistan had received a tremendous response from foreign investors during the two road shows held in Dubai and London recently. The government has outlined a strategy to install 7500 MW in the next eight to ten years to combat the looming power shortages and meet growing economic demand.

Tata studies $2bn spend in Bangladesh

Tata has announced that it is about to embark on a pre-feasiibility study with the intention of creating a 1000 MW coal fired plant in north west Bangladesh.

The Indian industrial company recently signed an Expression of |nterest to invest nearly $2bn in three significant projects in its Asian neighbour.

A $600m 1000 MW power plant would be part of a 2.4 million tonne capacity steel plant that is expected to cost the company around $1bn. The third project planned is a one million tonne capacity fertilizer plant.

Of the 1000 MW, the steel plant will consume 400 MW with the remainder being directed onto the Bangladeshi grid. If all necessary studies are completed successfully then groundbreaking should begin within 18 months.

China encourages clean energy

More emphasis will be placed on non fossil energy sources after a new bill encouraging use of renewable energy was passed by the Chinese government. Effective from next year, the new law includes a range of incentives to ensure that renewable energy can be produced and purchased.

Power grid operators will be forced to buy, ‘in full amounts’ resources from registered renewable energy producers within their domains at prices calculated by the government. The extra costs will be shared throughout the overall power network.

The law also offers financial incentives such as a national fund to foster renewable energy development, discounted lending and tax preferences.

India shakes up transmission

In a move that is expected to lead to the creation of a national grid, the Indian government has directed NTPC to diversify into transmission, bringing to an end the monopoly enjoyed by the Power Grid Corporation of India (PGCIL).

PGCIL controls around 20 per cent of the country’s 280 000 km of transmission lines, but the sector is now set to be opened to competition after years of being dominated by state-run companies.

It is hoped that with companies such as Reliance having expressed an interest in entering the transmission market, then capacity will rise as prices fall.

News digest

Australia: Singapore Power is poised to sell its retail and generation assets in Australia to CLP Holdings for approximately $1.6bn. CLP is looking to boost its overseas presence to combat its slow growing home market.

China: National Development and Reform Commission chairman, Ma Kai, has announced that 2005 will see China begin work on a further 65 000 MW of generating capacity, with a similar figure expected to come online.

China: One of the country’s largest power generation equipment makers is to float on the Hong Kong stock exchange next month. The Shanghai Electric Company could raise as much as $480m.

China: Contracts have been signed for the building of Lingao II, China’s first 1000 MW domestically built nuclear power plant. It will be operational by 2011.

India: Oil and Natural Gas Corporation, Reliance Energy and Hindustan Petroleum Corporation have all expressed serious intentions of developing further India’s wind energy industry.

India: The public offering of shares in Jaiprakash Hydro Power Ltd, was oversubscribed within minutes of opening. At the close of the day the offer had twice as much interest as stake available.

India: The country is faced with a peak power shortage of 10 625 MW, India’s power minister has told parliament. Against a peak demand of 87 906 MW, only 77 281 MW is generated domestically.

New Zealand: Genesis Energy has put plans for a coal fired station on hold, because of concerns about the availability of cheap local coal. Mighty River’s Marsden B plant will, however, go ahead because it is due to be fuelled by imported coal.

Philippines: A PHP128m ($2.3m) 69 kV interconnection project between Panay and Boracay will be completed by the National Transmission Corporation by mid December 2005 after the Energy Regulatory Commission gave the project the go ahead.

Philippines: The Department of Energy has launched its first auction for the development of wind projects in a bid to turn the country into the leading producer of wind power in Southeast Asia.

Thailand: Glow Energy and Hemaraj Land and Development have entered into a joint venture to develop independent power projects that will supply the Electricity Generating Authority of Thailand.

Vietnam: From 1 July 2005 China’s Yunnan power grid company will provide 50-70 MW of electricity for Vietnam’s northern provinces of Ha Giang and Yen Bai.

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