RRVUNL

Turning in profits

Incorporated in July 2000, post the unbundling of the Rajasthan State Electricity Board (RSEB), Rajasthan Rajya Vidyut Utpadan Nigam Limited (RRVUNL) has come a long way. The state-owned generation company has an installed base of over 6,500 MW including a supercritical 660 MW coal-based unit, which was commissioned in the current fiscal. Over the past two years, the company has transitioned from being a loss-making utility to becoming a profitable company.

Going forward, the genco has 1,980 MW of coal-based capacity under construction, which will be based on supercritical technology. Besides, the genco is making efforts to ensure that the existing capacity is compliant with the new norms.

Installed capacity

The state genco’s installed capacity stands at 6,617.35 MW, as of January 2019. Of this, about 88.4 per cent is coal based, 9.1 per cent is gas based and the remaining is hydro.

RRVUNL’s coal-based power stations include the 1,500 MW Suratgarh Super Thermal Power Station (SSTPS); the 1,240 MW Kota Thermal Power Station (KTPS); the 1,200 MW Kalisindh Super Thermal Power Station (KaSTPS); the 1,660 MW Chhabra Thermal Power Station (CTPS); the 250 MW Giral Lignite Thermal Power Station (GLTPS). Commissioned in August 2018, the 660 MW Unit-5 of CTPS (Stage-II) executed by L&T is the latest addition to the installed base. The project was synchronised faster than any indigenously manufactured supercritical unit installed so far. The tariff for coal-based power stations for 2018-19 was determined at Rs 4.626 per kWh.

One of the major sources of coal for the company is Coal India Limited (CIL), which provides about 170 million metric tonnes (mmt) – 129 mmt through South Eastern Coalfields Limited and 41.5 mmt through Northern Coalfields Limited. Besides, RRVUNL has two captive coal blocks, the Parsa and Kente Extension coal blocks in Chhattisgarh. With approval from the Ministry of Environment, Forest and Climate Change, the mining capacity of coal blocks has been increased from 10 million tonnes per annum (mtpa) to 15 mtpa with effect from August 2018.

Meanwhile, the utility’s Dholpur Combined Cycle Power Station (DCCPS) and Ramgarh Gas Thermal Power Station (RGTPS) have a capacity of 330 MW and 273.5 MW, respectively. These stations source fuel from Oil and Natural Gas Corporation Limited, GAIL (India) Limited and Focus Energy (an independent oil and gas exploration and development company holding an oil and gas block in the Indus basin in Rajasthan).

The company also owns the 140 MW Mahi Hydel Power Station (2×25 MW and 2×45 MW units), which has been in operation for almost 30 years now. Further, mini-hydel schemes contribute to 23.85 MW of the company’s installed hydro capacity. RRVUNL also manages and operates the 172 MW Rana Pratap Sagar Hydro Power Station and the 99 MW Jawahar Sagar Hydro Power Station, which are owned by Rajasthan Rajya Vidyut Prasaran Nigam Limited.

The company sells power from its power stations to the state discoms, and the overall tariff for its power stations for 2018-19 stood at Rs 4.13 per unit. For coal-based stations, the tariff for 2018-19 is Rs 4.62 per unit.

Operational performance

During 2017-18, RRVUNL generated 27,647 MUs of electricity, a marginal increase of about 1.43 per cent over 2016-17 (27,257 MUs). Over the past five years, power generation has witnessed a mixed trend while growing at a compound annual growth rate of around 2.43 per cent.

In 2017-18, more than 90 per cent of the company’s generation was based on coal. Gas and hydro-based plants accounted for 6 per cent and 3 per cent respectively.

The PLF of its coal-based plants increased marginally, from 54.40 per cent in 2016-17 to 55.25 per cent in 2017-18. During April 2018 to January 2019, the company’s PLF stood at 61.82 per cent, higher than the national average of 60.92 per cent. CTPS and KSTPS have been running at 81.65 per cent and 75.06 per cent, respectively.

Meanwhile, RGTPS and DCCPS recorded PLFs of 61.1 per cent and 8.5 per cent, respectively, in 2017-18. DCCPS, which depends on the Panna-Mukta and Tapti gas fields and the KG-D6 basin for its fuel supply, recorded lower PLF due to low availability of gas whereas RGTPS received gas supply from GAIL. In addition, DCCPS received instructions from the state load despatch centre to back down operations, resulting in even lower load levels.

Financial performance

RRVUNL registered a turnover of Rs 128.456 billion in 2017-18, as against Rs 118.27 billion in 2016-17, marking a year-on-year growth of nearly 8.61 per cent. The genco also registered profits in 2017-18, the second year in a row. Its (consolidated) profits after tax (PAT) stood at Rs 7.8 billion in 2017-18, almost four times higher than the Rs 2.09 billion PAT posted in 2016-17. This was mainly on account of efficiency improvement.

Future plans

Going forward, RRVUNL is focusing on adding supercritical capacity. The company is executing two such projects (2×660 MW each) as extensions to the existing plants at Suratgarh and Chhabra.

While unit 5 of CTPS was commissioned in August 2018; Unit 6, synchronised in July 2018, is expected to be commissioned shortly in 2019. Meanwhile, major works for the Suratgarh project (Units 7 and 8) have been completed and are expected to be commissioned in 2019. The company is also in the process of adding a 160 MW unit to RGTPS. The project is currently on hold for now due to the non-finalisation of gas prices by Focus Energy Limited and GAIL (India) Limited.

RRVUNL is also taking measures to control pollution and keep the emission within the prescribed limits. The company is drafting tender specifications and issuing tenders for the implementation of flue gas desulphurisation systems at all four coal-based plants. The project is expected to be completed between 2020 and 2022.

On the fuel supply front, RRVUNL has been allocated the Parsa and Kente Extension coal blocks with a capacity of 5 mtpa and 7 mtpa, respectively. Mining at these blocks has not yet started.

Issues and challenges

The majority of the issues faced by RRVUNL are concerned with coal. The company has been able to materialise only 50-55 per cent of the allocation from CIL. This is because of low availability of railway rakes and high cost of transporting coal through alternative routes such as road.

Another major area of concern is the retirement of fleet to address environmental concerns and efficiency concerns. Four units (200 MW each) of KTPS are more than 30 years old, which are required to be retired as per the guidelines issued by the government, or replaced with different technologies such as ultra supercritical and later to carbon capture and storage. These technologies entail high investments.

Further, the recovery from state discoms has been low. The company’s receivables increased from Rs 110 billion in 2016-17 to Rs 124.91 billion in 2017-18.

Future outlook

RRVUNL is also looking at the restructuring and disinvestment of some of its plants including CTPS, KaSTPS and GLTPS. In January 2017, it signed an MoU with power major NTPC Limited, which has been extended till November 2018, for the acquisition of CTPS by NTPC in a phased manner. This has, however, not yet materialised and enabling actions for the transfer are still under way. The disinvestment process of KaSTPS is also on hold due to issues pertaining to transfer of coal linkages. For restructuring of GLTPS, a share purchase agreement is currently being drafted.

Overall, with the commencement of almost 1,980 MW of capacity in 2019 and sustained improvement in revenue and profits, the company’s performance is expected to improve in the short to medium term, although fuel supply will remain an area of concern.

Based on a presentation by Pollakonda Ramesh, Special Secretary, Department of Energy, Government of Rajasthan, and Chairman and Managing Director, RRVUNL

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