FOR THE FIRST TIME, INDIA BECOMES A NET EXPORTER OF ELECTRICITY, SAYS POWER MINISTRY:

As per an article in the Times of India, the power ministry on 29th March, 2017 declared that India has now become a net exporter of power. Power export of about 5,498 million units was seen from April ’16 – February ’17 and this value was 4% higher than the power India imported from Bhutan. New electricity lines to neighboring countries such as Nepal, Myanmar and Bangladesh will only aid in the sale of electricity from the country.

This is an interesting prospect for India since it has always been a power deficit country. Though there are many villages as mentioned in the  Economic Times article within India which do not receive electricity all day round, India has been able to gain the status of being a net exporter. This is mostly because of the poor financial health of DISCOMS in the country.

 

TN lifts ban on inter state open access

According to an article in Times of India (refer), Tamil Nadu has allowed consumers and generators in the state to procure and sell power from/to outside states.

The directive comes in continuation to commitment given by Hon’ble CM of TN –  that there would be no scheduled power cuts in the state and also grated “must-run” status to all windmills.

A statement from Raj Bhawan reads –

“In exercise of the powers conferred by sub-section (1) of Section 11 of the Electricity Act, 2003 (Central Act 36 of 2003), the Governor of Tamil Nadu hereby rescinds the Energy Department Notification No. II(2)/EGY/104(c)/2009, published at page 1 of Part II—Section 2 of the Tamil Nadu Government Gazette, Extraordinary, dated the February 17, 2009,”

Following this directive it can be expected that power business in Tamil Nadu becomes more competitive with time.

Rs.1.5 lakh crore loan recast for Discoms

In a recent article covered by The Times of India , it mentioned that the centre has agreed to provide loan to power distribution companies as their status at present is very low financially . In this restructuring exercise the centre has planned that state governments and the utilities take over the entire burden of Rs 1.5 lakh crore, instead of banks taking over half the liability.

The decision to restructure the power sector liabilities was taken at a meeting at the Prime Minister’s Office.The state governments will issue bonds of about Rs 1.5 lakh crore along with the discoms.

The package was approved after the finance ministry agreed to a staggered restructuring under which state governments, which will bear 50% of the burden, will issue bonds to banks in line with the dues. These bonds will fetch banks interest of 9-10% and will have a maximum 10-year term, said sources. In the process, short-term loans extended to the discoms will become longer tenure loans.

The restructuring was necessary as the discoms were under financial crunch and they are finding it difficult to pay their dues to the lenders. The state governments are not allowing to increase the electricity prices whereas the cost on the other side has gone up resulting in stagnant revenues and losses.

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