Power Sector Budget Outlay for the Year 2014-15

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A detailed outlay of budget planned for the year 2014-15 for Indian Power Sector by the much hyped Union Government was released recently. Every sector of the Indian economy has enormous expectations from the government and is keen watching its very move and every initiative. Lets have a look at the proposed union budget for power sector for the year 2014-15 that is expected to bring momentum to the renewable energy generation in the country. 
Conventional Power Source: The total outlay for the power sector is Rs.60,384.02 crore, out of which Rs.9,642.00 crore is budgetary support for Schemes/projects –

Scheme/ Project
Allocation(Rs. Crore)
North Eastern Electric Power Corporation - Rs.142.10 crore
142.10
Tehri Hydro Development Corporation India Limited (THDCIL) - Rs.62.92 crore
62.92
Central Electricity Authority - Rs.46.29 crore
46.29
Rajiv  Gandhi Grameen Vidyutikaran Yojana
5144.09
Restructured Accelerated Power Development Resource Programme 
1261.04
Central Power Research Institute - Rs.295.53 crore
295.53
National Power Training Institute - Rs.60.52 crore
60.52
Energy Conservation  Rs.107.65 crore, Bureau of Energy Efficiency - Rs.139.55 crore
139.55
National Hydro Electric Power Corporation Limited  NHPC) - Rs.478.80 crore
478.80
Interest Subsidy - National Electricity Fund - Rs.50.69 crore
50.69
Strengthening of Transmission System in the States of Arunachal Pradesh and Sikkim - Rs.175.18 crore
175.18
220 KV transmission line from Srinagar to Leh via kargil - Rs.268.14 crore
268.14
Financial Support for Debt Restructuring of Discoms - Rs.1,200.00 crore
1200
Power  System Improvement Project in NER (except Sikkim and Arunachal Pradesh) - Rs.200.00 crore
200
Deen Dayal  padhyaya Feeder Separation Scheme - Rs.500 crore
500
Power Sector Support to NCT of Delhi - Rs.200 crore
200
Integrated Power Development Scheme - Rs.100 crore.
100

IEBR of Rs.50,742.02 crore is for schemes/projects –
Scheme/ Project
Allocation(Rs. Crore)
National Thermal Power Corporation Ltd.
22400.00
NHPC
2745.46
Damodar Valley Corporation
2764.99
EEPCO
945.88
Satluj Jal Vidyut Nigam Ltd.
1091.93
THDCIL
793.79
Power Grid Corporation of India Ltd.
20000
Nuclear Power: The total outlay under Power Sector for 2014-15 is Rs.8213.42 crore. The plan Outlay consists of Rs.970.00 crore by way of budgetary support and Rs.7243.42 crore by way of Internal and Extra Budgetary Resources (IEBR). The budgetary support includes equity investment in Bharatiya Nabhikiya Vidyut Nigam Ltd. (BHAVINI), externally Aided Project at Kudankulam, being executed by the Nuclear Power Corporation of India Ltd. with the assistance of Russian Federation. Neighbourhood Development Projects (in Kundankulam), Projects of Bhabha Atomic Research Centre and of Indira Gandhi Centre for Atomic Research to provide R&D support for the power programme are also included.
New and Renewable Energy: The Plan outlay for the Ministry of New and Renewable Energy (MNRE) is Rs.5,519.00 crore (inclusive of Rs.3,000.00 crore as IEBR and Rs.1578.00 crore from National Clean Energy Fund) for the year 2014- 15. The following physical targets/activities have been set under the various programmes during the financial year:
·         Grid-Interactive and Distributed Renewable Power: Provision of Central Financial Assistance for about 3770 MW grid-interactive Power capacity addition from Wind, Small Hydro, Biomass Power/Cogeneration, Urban & Industrial waste to Energy and Solar Power and deployment of about 150 MW equivalent Off Grid/Distributed Renewable Power Systems. These figures include 1000 MW grid power and 60 MW equivalent off-grid/distributed solar power systems to be installed under Solar Mission. It is also proposed to launch new schemes on Solar Pumps, Solar Energy Parks and Schemes on Solar Parks near irrigation canals. It also includes provision of Central Financial Assistance for Scheduled Castes beneficiaries.
·         Renewable Energy for Rural Applications: The provision will be used for construction of 1.10 lakh family type biogas plants and start of a new programme on cook stoves. It also includes provision for Scheduled Castes beneficiaries.
·         Renewable Energy for Urban, Industrial and Commercial Applications: Deployment of Solar Thermal Systems and Promotion of Energy-efficient buildings and master plans for Solar Cities.
·         Research, Design & Development in Renewable Energy: R&D activities on different aspects of new and renewable energy technologies, support to MNRE Centres/Institutions (SEC, C-WET and NIRE); Standards &  Testing; Renewable Energy Assessment (including Research Design & Development activities to be undertaken under Solar Mission).
·         Supporting Programmes: Information, Publicity and Extension (IPE) of Renewable Energy Systems; International Relations; Administration and Monitoring including HRD & Training; Support to States (including HRD & Training activities to be undertaken under Solar Mission).
Source: Union Budget 2014-15
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Quick Review of Major Initiatives Taken With a View to Improve Power Sector in 2013-14

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Indian Power Sector has seen quite a good number of initiatives that are expected to yield fruitful results in improving the operational statistics. It included initiatives from foreign direct investments, fuel supply agreements, power purchase agreemtns, coal block allocations, etc. A quick overview of the initiatives taken in the power sector during the year 2013-14 is presented below.


Automatic approval for foreign direct investment
  • Automatic approval (Reserve Bank of India [RBI] route) for 100 per cent foreign equity is permitted in generation, transmission and distribution, and trading in the power sector without any upper ceiling on the quantum of investment. The government on 22.08.2013 notified its revised position on foreign direct investment (FDI) cap for power exchanges registered under Central Electricity Regulatory Commission (CERC) Regulations 2010 as 49 per cent (26 per cent FDI+23 per cent foreign institutional investment [FII]) through automatic route.
Signing of fuel supply agreements
  • The Cabinet Committee on Economic Affairs (CCEA) in a meeting held on 21 June 2013 issued a directive to the Ministry of Coal/Coal India Limited to sign fuel supply agreements (FSAs) for a total capacity of 78,000 MW, including tapering linkage, which are likely to be commissioned by March 2015. With concerted efforts made in this regard, FSAs have been signed for 160 units totaling capacity around 74,000 MW.
Allocation of new coal blocks to the NTPC
  •  The National Thermal Power Corporation (NTPC) has been allocated four coal blocks (Banai, Bhalumuda, Chandrabila, and Kudanali-Laburi) in August 2013 for power projects of 8460 MW.
Pass-through mechanism
  • Pass-through mechanism for the concluded PPAs has been approved by the CCEA (14,000 MW-Case I and Case II post 2009 plants) in June 2013.
  • The CERC/State Electricity Regulatory Commissions (SERC) have been advised to consider the request of individual power producers in this regard as per due process on a case-by-case basis in public interest. The appropriate commission has been requested to take immediate steps for the implementation of this decision of the government.
Incorporation of PPA condition for coal block allocation
  • The Ministry of Coal has issued letters to independent power producers (IPP) and state governments for incorporating the PPA condition at the time of executing mining lease with IPPs for coal block allocation so that the benefits of low cost coal can be passed on to the consumers.
Independent Coal Regulatory Bill
  • The Independent Coal Regulatory Bill has been approved by the Cabinet on 27 June 2013. The Ministry of Coal introduced the Bill in Parliament in December 2013. An executive order for setting of coal regulation has been issued by the Ministry of Coal.
Third-party sampling and quality control mechanism
  • The Ministry of Coal/ Coal India Limited agreed to third-party sampling at loading points to address the issue of coal quality in October 2013. A Coal India Limited (CIL)-appointed agency for third-party sampling has been operational w.e.f. 1.10.2013.
Source: Economic Survey 2013-14
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