New policy likely to ease pressure on merchant power tariffs

Experts from the industry expect the new open access policy to ease pressure on merchant power tariffs, if it is implemented

The Cabinet note for allowing the Indian government’s discretionary power quota being pooled into open access has been floated. Industry experts believe that the new policy could help ease fluctuating merchant power tariffs.

“It will free sufficient amount of capacity for the merchant market. I think that will also help in stabilising the tariffs in the merchant market to a reasonable level. Today, there is too much of fluctuation, it (the tariff) has also come down to as low as Re1 per unit. There is a lot of fluctuation and uncertainty. This (the policy) will surely have a stabilising effect,” said Raaj Kumar, chief executive for energy sector, GMR Energy Ltd.

On Monday, market price for merchant power fluctuated from Rs99.70 per megawatt hour (MWh) to Rs3,350 per MWh.

However, some analysts are still in the wait-and-watch mode over the policy. “There still needs to be certain clarity on the proposed law. More clarity is required on the new capacities and new plants that are being spoken about. If it is new plants, then the power would take another five years to be made available,” said an analyst from a leading brokerage.

Based on the inputs available at the moment on the proposed policy, the law will allow 25% of the government’s discretionary quota for open-access customers. The power ministry has discretion of using 15% of the output from federal generating stations.

The proposal also speaks about allowing State-run power producer NTPC Ltd to sell 50% from the government’s (up to) 50% unallocated quota in new plants to open-access customers. The existing power projects of NTPC would also be allowed to sell 25% of the government allocation.

“Open access is a requirement for all of us, if it comes out as a policy it will come out for all of us and not only for the central stations,” Mr Kumar further added.

When asked whether NTPC’s additional capacity in the merchant power segment would mean overcapacity in the merchant power segment, he added, “No, ultimately, the capacity remains the same.”

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    SC extends its order prohibiting mining by OMC in AP

    The Supreme Court extended its interim order banning mining and transportation of iron ore by Obulapuram Mining Company, owned by the Reddy brothers, in Anantapur district of Andhra Pradesh

    The Supreme Court on Monday extended its interim order banning mining and transportation of iron ore by Obulapuram Mining Co Pvt Ltd (OMC), owned by the Reddy brothers, in Anantapur district of Andhra Pradesh, reports PTI.

    The Bench comprising Chief Justice KG Balakrishnan and Justice BS Chauhan decided to continue with its 17 December 2009 order after both the Andhra Pradesh Government and OMC preferred that the matter be heard by the Supreme Court instead of the Andhra Pradesh High Court.

    The Supreme Court had stayed the High Court order allowing the mining and transportation of iron ore by OMC.

    Attorney general GE Vahanvati appearing for the Andhra Pradesh Government assailed the High Court order which allowed the mining activities despite the apex court—appointed by the central empowered committee (CEC)—and the government appointed three-member committee pointing out irregularities in the mining operation which was carried out by encroaching on the forest area.

    He said the committee criticised Karnataka minister G Janardhana Reddy and his brother for the illegal mining done by them in the Bellary reserve forest.

    Mr Vahanvati said that the CEC report alleged that OMC had extended the area of mining operations by removing the pillars which formed the boundary of the area for which the lease was granted.

    Further, he submitted that the company had not allowed the carrying out of the survey in the area.

    The attorney general argued that the matter was of serious concern as there was "complete breakdown" of law and order and around 1,95,000 tonnes of minerals were being mined "illegally" from the encroached area.

    Senior advocate KK Venugopal, appearing for the public interest litigation (PIL) petitioner, made submissions on similar lines and alleged that the Reddy brothers have taken the whole area as their fiefdom.

    OMC countered the allegations through senior advocate Mukul Rohatgi who alleged that the private matter has been turned into a political battle. He said that even the issue of survey, which had been raised, was not the order of the apex court.

    Mr Rohatgi also argued that there was no order for the CEC to give a report about the mine in question and the same was prepared without giving any notice to the party. He accused the Telugu Desam Party of giving the private matter the colour of a political battle.

    Pointing out that the company was having lease for three mines and the report was only related to one of them, he requested the apex court to allow the company to carry out mining activities in the rest of the two.

    The Bench observed that the main allegation against the company was that it has exceeded the boundary line. It said it would be for the High Court to hear the parties to pass an appropriate order on the merits of the case at the earliest. However, the parties urged the apex court to hear the matter.

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    Small and green cars to be the flavour of 10th Auto Expo

    The 10th Auto Expo will open in New Delhi on Tuesday with over ten global launches and previews of small and green cars by the likes of Honda and Toyota, during the week-long event

    The 10th Auto Expo will open in New Delhi on Tuesday with over ten global launches and previews of small and green cars by the likes of Honda and Toyota during the week-long event—billed as the world's biggest in terms of footfalls, reports PTI.

    "The Indian auto expo has been gaining stature with international original equipment manufacturers launching their global models as they do in other auto shows in the world," Society of Indian Automobile Manufacturers (SIAM) president Pawan Goenka told reporters.

    He said that over ten global launches and a total 50 new launches, which include variants of different existing models, will be held during the expo.

    Companies like Honda and Toyota are expected to launch global concepts of their compact cars, while the expo will also see automobile companies showcasing their green technologies.

    Earlier last month, SIAM director general Dilip Chenoy had stated the expo will "possibly be the largest in terms of footfalls", and it could be the third biggest after Frankfurt and Shanghai in terms of participants.

    "This will be the largest show ever held at Pragati Maidan and the largest auto expo ever held in India," Auto Expo steering committee chairman Rajive Kaul said.

    A total of 2,105 participants, including 800 from overseas, will be taking part in the expo showcasing their products in over 1.25 lakh sq mt of area that is expected to attract nearly 20 lakh visitors.

    Around 20 lakh people are expected to visit the expo this year, which has been shortened by two days compared to the previous one held in 2008, in the face of the global slowdown.

    "We are reducing the duration of the expo by two days. This has been done on feedback from participants and members, and it is for cutting expenditure due to the economic condition," Mr Kaul had said last month.

    While the Tata Nano was the star attraction of the last auto expo, this time the company will be launching four new models in different vehicle categories.

    Maruti Suzuki India will launch its new multi-purpose vehicle Eeco. Volkswagen will introduce the much-awaited Polo in the Indian market.

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