The abysmal financial condition of state discoms is adversely affecting their financial condition, leading to long delays in payment of dues to power generators,” says Ravi Arya, President – Thermal, Hindustan Powerprojects
The current government has taken some radical steps to revive the ailing power sector. However, Ravi Arya, President – Thermal at Hindustan Powerprojects believes that the government’s efforts are yet to translate into tangible results. “Although the concerns with respect to coal availability and generation capacity addition have been addressed to a reasonable level, however, the sector still remains plagued with transmission and distribution issues,” he states.
In addition, he adds, “Over the last couple of years, the pace of transmission network augmentation has not been able to swiftly match capacity addition by the private sector leading to increased congestion of transmission network. Thus despite having generation capacity ready on ground, generators are not able to supply power to deficit regions of the country due to an inadequate transmission network.”
Nonetheless, all the efforts towards capacity addition and fuel supply front may not prove adequate unless the last leg of value chain that is power distribution is revived to address the growing inefficiencies of the state discoms and improving their financial health, adds Arya.   Impact of roadblocks over HPPL’s businessSpeaking over the impact on the business, Arya states, “Our business pivots around power generation and sale of power in bulk. Due to the prevailing policies and regulations, linking supply of coal to long term PPAs, the avenues for power sale have shrunk with the state discoms being the limited consumers for tie-up of power on long term basis.”
However, he adds that various factors like operational inefficiencies, populist tariff regime etc, have put the state discoms in extreme financial duress. As a result, despite there being a growing demand for power, the state discoms are resorting to under procurement of power. “In the last few years, we have seen very limited Case-1 bids getting successfully concluded. This has resulted in operation of power plants at sub-optimal PLFs,” he says.
Further, he states, “The abysmal financial condition of state discoms is adversely affecting their financial condition, leading to long delays in payment of dues to power generators.”
Unlocking the unmet demandA few short term measures across the entire value chain can provide a long awaited impetus to revitalise the sector. In the last one year, CIL’s coal production has increased tremendously. To revitalise the power sector, Arya suggests, “The coal companies may be directed to ensure seamless supply of quality coal to the power sector.”
Further he adds, “On the power distribution side, the State and the Central Regulatory Commission needs to come up with measures like suo-motto revision of the tariff on an annual basis, making it mandatory for the state discoms to supply power for minimum of 18-20 hours a day across the board. This would immensely help in unlocking the unmet demand, thereby leading to optimal and sustainable operation of power plants. This would definitely address the current paradoxical situation of the country that is lower PLF of generation plants at one hand and continuous load shedding by state discoms on the other.”
Enhanced R&D infrastructureTo ensure sustainability, Arya suggests, “We need to strike a balance between coal-based generation and renewable. While the conventional generation can continue to cater to the base load, renewable source of energy like solar, hydro, wind must be utilised to meet demand during peak hours. This can only be achieved by creating better R&D infrastructure and indigenisation of plant equipment to ensure renewable power generation at more competitive levels.”
Further he adds, “More attention needs to be paid towards augmenting transmission and sub-transmission and distribution infrastructure to alleviate the growing transmission congestion in the country.”
New tie-ups  The generation portfolio of Hindustan Power Projects comprises both conventional coal-based generation and the renewables. The company already has 600 MW coal-based capacity operational on ground which is expected to be increased to 1,200 MW in the next couple of months. In addition to this, HPPL has another 3,000 MW coal-based capacity in various stages of development. 
“On the renewable front, we are the largest solar developer in India with almost 500 MW of commissioned solar farms and we aim to have a solar portfolio of 2GW by 2017,” commits Arya. In addition to this, HPPL also has hydro capacity of around 500 MW under development.
Regarding long- and short-term strategies, Arya says, “We have recently entered into the credit enhanced bond market with the Issue fully underwritten by YES Bank Limited. The clean energy arm is set to issue secured, rated, listed, partially guaranteed, debentures of Rs 380 crore on a private placement basis to YES Bank Ltd for three of its AA+ SO rated projects in, Gujarat.
He stressed that depending on market conditions, HPPL is planning on hitting the market. “The timing depends on the market and right energy mix portfolio,” he concludes.

 The abysmal financial condition of state discoms is adversely affecting their financial condition, leading to long delays in payment of dues to power generators,” says Ravi Arya, President – Thermal, Hindustan Powerprojects
The current government has taken some radical steps to revive the ailing power sector. However, Ravi Arya, President – Thermal at Hindustan Powerprojects believes that the government’s efforts are yet to translate into tangible results. “Although the concerns with respect to coal availability and generation capacity addition have been addressed to a reasonable level, however, the sector still remains plagued with transmission and distribution issues,” he states.
In addition, he adds, “Over the last couple of years, the pace of transmission network augmentation has not been able to swiftly match capacity addition by the private sector leading to increased congestion of transmission network. Thus despite having generation capacity ready on ground, generators are not able to supply power to deficit regions of the country due to an inadequate transmission network.”
Nonetheless, all the efforts towards capacity addition and fuel supply front may not prove adequate unless the last leg of value chain that is power distribution is revived to address the growing inefficiencies of the state discoms and improving their financial health, adds Arya.   Impact of roadblocks over HPPL’s businessSpeaking over the impact on the business, Arya states, “Our business pivots around power generation and sale of power in bulk. Due to the prevailing policies and regulations, linking supply of coal to long term PPAs, the avenues for power sale have shrunk with the state discoms being the limited consumers for tie-up of power on long term basis.”
However, he adds that various factors like operational inefficiencies, populist tariff regime etc, have put the state discoms in extreme financial duress. As a result, despite there being a growing demand for power, the state discoms are resorting to under procurement of power. “In the last few years, we have seen very limited Case-1 bids getting successfully concluded. This has resulted in operation of power plants at sub-optimal PLFs,” he says.
Further, he states, “The abysmal financial condition of state discoms is adversely affecting their financial condition, leading to long delays in payment of dues to power generators.”
Unlocking the unmet demandA few short term measures across the entire value chain can provide a long awaited impetus to revitalise the sector. In the last one year, CIL’s coal production has increased tremendously. To revitalise the power sector, Arya suggests, “The coal companies may be directed to ensure seamless supply of quality coal to the power sector.”
Further he adds, “On the power distribution side, the State and the Central Regulatory Commission needs to come up with measures like suo-motto revision of the tariff on an annual basis, making it mandatory for the state discoms to supply power for minimum of 18-20 hours a day across the board. This would immensely help in unlocking the unmet demand, thereby leading to optimal and sustainable operation of power plants. This would definitely address the current paradoxical situation of the country that is lower PLF of generation plants at one hand and continuous load shedding by state discoms on the other.”
Enhanced R&D infrastructureTo ensure sustainability, Arya suggests, “We need to strike a balance between coal-based generation and renewable. While the conventional generation can continue to cater to the base load, renewable source of energy like solar, hydro, wind must be utilised to meet demand during peak hours. This can only be achieved by creating better R&D infrastructure and indigenisation of plant equipment to ensure renewable power generation at more competitive levels.”
Further he adds, “More attention needs to be paid towards augmenting transmission and sub-transmission and distribution infrastructure to alleviate the growing transmission congestion in the country.”
New tie-ups  The generation portfolio of Hindustan Power Projects comprises both conventional coal-based generation and the renewables. The company already has 600 MW coal-based capacity operational on ground which is expected to be increased to 1,200 MW in the next couple of months. In addition to this, HPPL has another 3,000 MW coal-based capacity in various stages of development. 
“On the renewable front, we are the largest solar developer in India with almost 500 MW of commissioned solar farms and we aim to have a solar portfolio of 2GW by 2017,” commits Arya. In addition to this, HPPL also has hydro capacity of around 500 MW under development.
Regarding long- and short-term strategies, Arya says, “We have recently entered into the credit enhanced bond market with the Issue fully underwritten by YES Bank Limited. The clean energy arm is set to issue secured, rated, listed, partially guaranteed, debentures of Rs 380 crore on a private placement basis to YES Bank Ltd for three of its AA+ SO rated projects in, Gujarat.
He stressed that depending on market conditions, HPPL is planning on hitting the market. “The timing depends on the market and right energy mix portfolio,” he concludes.