Embed Size (px)
Citation preview
1Essar Power Limited
A positive a++itude
ESSAR POWERESSAR POWER
CONFERENCE ON THE POWER MARKET POST ELECTRICITY ACT 2003
15th October 2003
INDEPENDENT POWER PRODUCERS PERSPECTIVE
A K SrivastavaMD - ESSAR POWER LTD.
2Essar Power Limited
ESSAR OIL LTD
EXPLORATION &
PRODUCTION
REFINING
MARKETING
ESSAR CONSTRUCTIONS
TURNKEY PROJECTS
- Marine
- Pipeline* Water line* Gas line
- Industrial Plant
- Civil & Irrigation
- Roads & Highways
Group Business Structure
ESSAR GROUPESSAR GROUP
STEEL SHIPPING& TERMINAL OIL & GAS POWER TELECOM CONSTRUCTIONS
ESSAR SHIPPING
OIL TANKERS
BULKERS
OFFSHORE
SUPPLY VESSELS
TERMINAL
FACILITIES
ESSAR POWER
HAZIRA
515 MW CC
VADINAR POWER
COMPANY
JAMNAGAR
77 MW COGEN
HUTCHISON ESSAR
JV with HUTCHISON
- Delhi
- Mumbai
- Chennai
- Kolkata
- Gujarat
- Andhra Pradesh
- Karnataka
- Haryana
- Rajasthan
- East UP
- Punjab
HAZIRA OPERATIONS
- Hot Briquetted Iron- Hot Rolled Coils- Down Stream
Complex
VIZAG OPERATIONS
HY-GRADE PELLETS
JV with STEMCOR
- Pellet Plant - Beneficiation plant- Slurry pipeline
INDONESIA OPERATIONS
P T ESSAR DHANANJAYA- Cold Rolling Mill
3Essar Power Limited
PROJECT CONFIGURATION
• Capacity : 515 MW Combined Cycle Power Plant.
• Commissioning Dates
First & Second GT - Aug 95
Third GT - Nov 95
Combined Cycle - October 97
• Comprises of :
3 Gas Turbines ( GE Make Frame 9E)
of 110 MW each.
3 HRSG (KHIC Make)
1 Steam Turbine ( GE Make)
of 185 MW.
• Multi Fuel capability
(Naphtha/ NGL/NG/HSD)
• Instrumentation & Controls (Siemens Make)
Hazira
4Essar Power Limited
POWER PURCHASE AGREEMENT
GEBESSARSTEEL
ESSARPOWER
515 MW
300 MW215 MW
5Essar Power Limited
SALIENT FEATURES OF PPA WITH GEB & ESTL
• Allocated Capacity - 300 MW for GEB & 215MW for ESTL
• Effective date - 1st July 1996 for GEB & 1st April 1996 for ESTL
• PPA : in accordance with GOI guidelines - Two Part tariff Structure
• Recovery of Fixed Charges at 68.49% PLF. ROE @ 16% at PLF of 68.49% PLF, Incentives @ .575% per % increase in PLF upto 80%.
• Approved Capital Cost Rs. 957 Crores for GEB & Rs. 810 Crores for ESTL
• Deemed Generation - 80% PLF average through the year
• Deemed Non-Generation - applicable if Essar not able to generate as per the declared availability
6Essar Power Limited
PLANT PERFORMANCE 1998-2003
98-99 99-00 00-01 01-02 02-03
Plant Availability (%) 96 97 94 97 97
PLF(%) 74 73 78 80 85
PLF (GEB) (%) 63 67 69 80 81
PLF (Essar Steel) (%) 90 80 80 80 100
7Essar Power Limited
FINANCIAL PERFORMANCE 1998-2002
(Rs. in Crs.)
Parameters 98-99 99-00 00-01* 01-02
Total Income 718 829 1034 648
EBIDTA 422 451 614 454
Interest 271 273 372 293
Depreciation 111 114 173 119
PBT 39 64 69 42
Tax 0 1 6 3
PAT 39 63 62 39
* for 18 months
8Essar Power Limited
OUR EXPERIENCE AS IPP’S
Lot of Clearances were required to set up the project such as• Environmental Clearance• State & Central Government Clearances• Techno-economic Clearance of Central Electricity Authority
(CEA)
PPA Finalisation was a long drawn process
Problems encountered during implementation of PPA• States are not honouring commitment given in PPA’s
concerning Payment Security Mechanisms• Deduct rebate for timely payment even though payment is not
made in time• Due to non-payment of dues to IPP’s and mounting of
overdue
9Essar Power Limited
OUR EXPERIENCE AS IPP’S
– Most of the IPP’s are defaulting to FI’s / Banks
– Do not have enough fund for O&M of plant
– FI’s / Bank tend to charge penalty & LD for not paying in time which is not recoverable in tariff
Though the plants are supposed to be “Base-Load” station, gas-based plants are asked to be back-down off & on which results in
• Frequent Starts & Stops• Higher heat rate due to part load operation and frequent
startups
Most of the states have started reopening & re-negotiation of PPA . This is threatening the viability of projects.
10 Essar Power Limited
IMPACT OF ELECTRICITY BILL 2003 FOR DEVELOPMENT OF POWER SECTOR
Provisions and intent of EC 2003 is a step forward in Power Sector reforms such as
• Power Generation is de-licensed except hydro• Open access system in Transmission• Open access in Distribution• Generators can supply Power directly to bulk consumers • Electricity Regulators role is defined and enlarged
However the above mentioned good intentions may be difficult to realise in practice in near future
• “Open Access” as of now would be an “As-is-Where-is” “As-Available-When-Available”
• For Supplying Power to bulk consumers directly, an element of “Surcharge” in lieu of cross subsidy would be levied. How long cross subsidy would continue? What would be the basis of Surcharge?
11 Essar Power Limited
IMPACT OF ELECTRICITY BILL 2003 FOR DEVELOPMENT OF POWER SECTOR
What issues EC 2003 has not addressed?• Power is in concurrent list. Each State, as a source of
revenue has imposed Electricity Duty on Power to Consumers which varies from Ps. 5/unit to Ps. 50/unit
• If Electricity Act 2003 does not provide any guidelines to States on Electricity Duty, then States may impose such Duty rates which may nullify good intentions of Power Sector reforms
• As a suggestion, EC 2003 can specify that Electricity Duty rates as prevailing on 10th June 2003 shall be the cap. Ideally it should be uniform throughout the Country.
• Electricity Duty should be scrapped on Captive Power Users.
12 Essar Power Limited
ROAD AHEAD
For increasing and encouraging the generation in Private Sector
• Generators should be encouraged to take up Distribution of Electricity
• To mitigate existing IPP’s financial problems, they may be given preference in allocation of Distribution Circles.
“Open Access” in Transmission and Distribution need to be given on fixed basis
“Surcharge” for supplying to the bulk consumers should be reasonable and abolished in definite period
Electricity Duty to be rationalised
Power trading needs to be encouraged
Tariff should be decided based on competitive bidding and cost-plus method should be discouraged
Electricity boards needs to be restructured to make them financially viable units
13 Essar Power Limited
THANK YOU
