Lok Sabha Question No. 626 (UNSTARRED), answered on 2018-12-13
Subject: Power Crisis
Ministry: POWER
Asked by: C. N. JAYADEVAN

## GOVERNMENT OF INDIA

## MINISTRY OF POWER

## LOK SABHA UNSTARRED QUESTION NO.626

## TO BE ANSWERED ON 13.12.2018

## POWER CRISIS

626.   SHRI C.N. JAYADEVAN:

Will the Minister of POWER be pleased to state:

- (a) whether there is any energy-crisis in the country, if so, the details thereof;
- (b) whether power producers sit on thousands of megawatts  of underutilized  capacities  and  are  facing  insolvency  proceedings  and  the consumers  are  facing  power  cuts  and  load  shedding,  if  so,  the  details thereof;
- (c) the details of the major problems faced by the power producers and remedial measures being taken to solve the problems; and
- (d) the  steps  taken  by  the  Government  to  solve  the  major  problems faced by the power producers?

## A N S W E R

THE MINISTER OF STATE (INDEPENDENT CHARGE) FOR POWER AND NEW & RENEWABLE ENERGY

( SHRI  R. K. SINGH )

(a) : At present, there is sufficient generation capacity to meet the electricity  demand  in  the  country.  As  reported  by  the  States/UTs  to Central Electricity Authority, the details of Power Supply position for the current year are given at Annex. It may be seen that the energy required and peak demand have been largely met.

(b) to (d) : Government have reviewed the status of 34 stressed Thermal Power  Projects,  as  per  the  list  provided  by  Department  of  Financial Services. Government have identified the major reasons for stress in the Power Sector, which are as follows:

- i. Issues related to Coal supply,
- ii. Delayed payments by DISCOMs,
- iii. Inability of the Promoter to infuse equity and service debt,
- iv. Slow implementation of project by the developers,

………2.

- v.
- Issues related to Banks/ FIs
- Aggressive  tariffs  quoted  by  bidders  in  competitive  bidding
- vi. process,
- vii.
- Regulatory and contractual disputes,
- viii.
- Legal issues related to auctioned coal mines,
- Other  operational  issues  such  as  delay  in  land  acquisitions,
- ix. inadequate transmission system etc.

Govt. of India have taken following steps to resolve the issues related to stress in power projects:

- i. Fuel Linkages under SHAKTI: Government have approved a new coal linkage allocation policy on May 17, 2018 named SHAKTI (Scheme for harnessing & allocating koyla transparently in India). IPPs having PPA but no coal linkages have been granted coal linkage for 11549 MW capacity (10 projects) including five stressed projects of total 8490 MW capacity.
- ii.  Pilot  project  for  procurement  of  2500  MW:  In  order  to  address  the problem of lack of Power Purchase Agreements (PPAs), the Ministry of  Power  have  notified  a  scheme  for  procurement  of  2500  MW  on competitive basis for a period of 3 years from the generators with commissioned projects having untied capacity. Under the scheme, PFC Consulting Ltd. invited bids for 2500 MW of power wherein PTC India  Limited  acted  as  an  aggregator  of  demand  for  purchase  of power  from  the  power  projects  and  sell  that  power  to  states utilities.  Bids  have  been  received  from  7  (seven)  projects  for aggregate power of 1900 MW. Letter of Award (LOA) has been issued to all the successful bidders (1900 MW). This will potentially improve the financial viability of the power projects and help developers in
3. serving the debt obligations.
- iii. Rationalization  of  Coal  Escalation  Index:  Some  generators  were facing  under-recoveries  due  to  anomalies  in  the  coal  escalation index  published  by  Department  of  Industrial  Policy  and  Promotion (DIPP).  Now,  CERC  vide  notification  dated  June  1st,  2018  has amended  the  guidelines  for  determination  of tariff by bidding process  of  power  procurement  by  distribution  licensee  to  remove those anomalies and adopt a new series of Wholesale Price Index (WPI) in non-coking coal (G7-G14).On the basis of the new Notification  of  CERC,  w.e.f.  April  1,  2017,  the  generators  will  be eligible  for  revised  tariff  calculated  on  the  basis  of  new  series  of WPI for non-coking coal (G7-G14). This will largely take care of the issues of under recovery of the generator's dues.

........3.

- iv. Additional cost implication to meet the new environment norms: The Ministry of Power  has issued direction to Central Electricity Regulatory Commission (CERC) under section 107 of The Electricity Act, 2003  on May  30, 2018  stating that the additional cost implications due to installation or up-gradation of various emission control systems and its operational cost to meet new environment norms, after award of a bid or signing of a PPA, as the case may be, shall be considered for being made pass through in tariff.
- i. Allowing  pass-through  of  any  change  in  domestic  duties,  levies, cess,  and  taxes  imposed  by  the  government:  Tariff  policy  2016 provided that any change in domestic duties, levies, cess & taxes imposed by Central/ State/ UTs etc. after award of bids, leading to corresponding changes in cost, may be treated as a change in law and allowed as pass through subject to PPA provisions and approval of  appropriate  Commission.  Further,  Ministry  of  Power  vide  letter dated  August  27,  2018  issued  directions  to  CERC  for  time  bound determination of per unit impact of such change in law in 30 days of filing of petition.
- ii. DISCOM  Payment  Monitoring  App  PRAAPTI:  A  new  App  PRAAPTI (Payment  Ratification and Analysis in Power  Procurement  for Bringing Transparency in Invoicing of generators) has been launched by the Ministry of Power to bring more transparency in the payment system by DISCOMs.

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ANNEX ANNEX  REFERRED  TO  IN  REPLY  TO  PART  (a)  OF  UNSTARRED QUESTION  NO.    626  TO  BE  ANSWERED  IN  THE  LOK  SABHA  ON 13.12.2018. *************** Power Supply Position

| Year                       | Energy Require ment (MU)   | Energy Supplied (MU)   |   Energy not Supplied (%) | Peak Demand (MW)   | Peak Met (MW)   |   Demand not Met (%) |
|----------------------------|----------------------------|------------------------|---------------------------|--------------------|-----------------|----------------------|
| April,2018 - November,2018 | 870,809                    | 865,476                |                       0.6 | 177,022            | 175,528         |                  0.8 |

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