A sharp drop in gas production from Reliance Industries' eastern offshore KG-D6 fields saw a dozen power plants with nearly 3,000 MW of generation capacity shutting operations and a similar number not being able to be commissioned.

There were also problems in getting coal, which fires nearly three-fourth of India's power plant, due to dispute over terms of a new supply agreement with Coal India Ltd. But these issues did not deter Anil Ambani Group, Tatas, Adanis and Jindals to fiercely fight for a pie of the Ultra Mega Power Projects (UMPPs) in the year 2013.

The year began with six power plants of GMR, Lanco and GVK in Andhra Pradesh shutting down due to stoppage of KG-D6 supplies and was followed by a showdown between electricity generation firms and Coal India Ltd over signing of fuel supply agreements.

While state-owned NTPC was embroiled in a spat with the coal major over the quality of dry fuel, other companies showed unhappiness over the quantity of fuel supplied to them.

It took an intervention of the Prime Minister's Office (PMO) and the Cabinet Committee on Investments (CCI) to break the logjam over the contentious issue. The result was visible in December with as many as 157 FSAs having been signed out of 173.

Then Ambanis, Adanis, Tatas and Jindals came up with proposals to set up the UMPPs in 2013.

UMPP or ultra mega power project are Power Ministry's ambitious projects entailing Rs 25,000 crore investment each. As many as nine companies showed interest in executing the 4,000 MW UMPP at Odisha and eight firms for setting one such project in Tamil Nadu.

"After a gap of few years the government has launched two UMPPs. For the first time these bids will be carried out with new bidding guidelines and surprisingly there is fairly good amount of interest among both public and private utilities to participate in these bids," Debasish Mishra, Senior Director at Deloitte said.

Some relief on dwindling gas supplies came in the form of assurance from the Empowered Group of Ministers', headed by Defence Minister AK Antony, in August. The panel suggested that any additional gas extracted from RIL's KG basin, in the next three years, will be made available to the power sector.

While, it was welcomed by the gas-starved power plants the results will be seen only in the next fiscal.

Even though the ailing health of the distribution utilities became of a cause of worry for the Power Minister Jyotiraditya Scindia, the discoms got a shot in the arm after they were offered Financial Restructuring Package.

Approved in 2012, the FRP scheme gained momentum in the early months of the year, with as many as five states including Tamil Nadu, Haryana and Rajasthan, Bihar and Uttar Pradesh approaching the Centre for participating in the programme.

And by the end of the year some of them even launched the bond issue under the flagship scheme. There were some states which received some special privileges under the scheme to be able to accommodate a little more debt than what was approved earlier, mainly to bring them on board.

Describing this as the most significant development in the sector, Mishra said, "If the utilities stick to the signed up business plan, it would result in a massive financial turnaround of the sector."

While imported coal became a contentious issue in 2012, it brought some respite to the private companies like Tata Power and Adani Power in the form of 'compensatory' tariff approved by none other than the electricity regulator CERC (Central Electricity Regulatory Commission).

The Year 2013 in power sector was also marked by some exits and new entries in the government. While on the one hand Power Secretary P Uma Shankar retired and was succeeded by his Shipping Ministry counterpart PK Sinha, on the other the sector's lead lender Power Finance Corporation also witnessed change of guard with erstwhile Chairman and Managing Director Satnam Singh demitting office in July this year.

The government is yet to finalize his successor and the company's Director (Commercial) MK Goel is currently the acting CMD of PFC.

Yet another PSU - NHPC - which is functioning without a full-time CMD for over year will have to wait a little longer as the selection process for the post is yet to kick start.

For the government, what needs to be tackled is the issue of stranded gas projects that remained the biggest drag on the power sector in 2013.


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