Awards - 2016-2017
The cover story titled 'StUMPPed!!!' highlights the plight of UMPPs of Tata Power and Adani Power in the light of rise in coal prices due to change in regulations by Indonesia and Australia. But can India afford to forsake such huge assets built assiduously, is the question it raises.
Bidders had choice to bid for 'indexe' fuel cost
At the time of bidding for the Gujarat UMPP and also in the Case-2 Bidding based on imported coal, the bidders had a choice to bid for an (indexed÷ fuel cost, which meant that any variations in fuel cost could be passed through to the procurers based on an indexation formula defined in the PPA.
Many countries imposed regulations & taxes on coal, impacting end-users
Not just Indonesia, many countries, including Australia, have imposed regulations and taxes which impacted end-use companies that mined coal and commodities for purchase at cost of production. Higher taxes meant that input costs exceeded that on which the projects were constructed.
Change in coal export regulations by Indonesia and Australia has queered the pitch for Tata Power and Adani Power. But can India afford to forsake such huge assets built assiduously?
In the past five years, coal power made up over two-thirds of capacity additions in India's generation, and currently accounts for more than 60 per cent of India's power capacity. According to the International Energy Agency (IEA), India's coal demand will see the biggest growth over the next five years, despite a global slowdown.
Green Shoots for BoP
The stagnant state of industrial output has resulted in lower demand for electricity. From the inactive state, when the economy starts picking up, it is expected that there would be a demand surge in the long term.
Work on Adanis Jharkhand plant to start in June
The Adani group will start work on its 1,600 MW UMPP in Jharkhand in June, Jharkhand Chief Secretary Raj Bala Verma has said. The conglomerate has committed Rs.20,000 crore in various projects, including the plant at Godda, during the just-concluded Momentum Jharkhand investment summit.