This PDD is similar to DGEN. Hence comments are same.  PDD says the investment analysis calculation spread sheet is confidential; Annex 8, EB 66 states additionality related information cannot be treated as confidential. How did DOE accept this project for webhosting? 

All the explanations given in the PDD on the availability of natural gas do not give the true picture. If the DOE googles the non-availability of gas for power projects in India, it will come across a number of websites which prove that natural gas is not available. The Ministry of Power in its letter dated March 14th, 2012  states, “As per the information made available by MOP&NG regarding NELP gas the production is likely to go down by 15.03 mmscmd in 2012-13 and additional 3.42 mmscmd in 2013-14 against the availability of 42.67 mmscmd of gas in 2011-12. MOP&NG has not given any projections for the years 2014-14 and 2015-16. It is evident from above that no additional domestic gas is likely to be available till 2015-16. Hence, developers are advised not to plan projects based on domestic gas till 2015-16” (http://www.powermin.nic.in/whats_new/pdf/advisory_for_developers_for_not_planning.pdf) Why should the Government issue this notification two months back if natural gas is available in plenty? The report published in newspapers recently states that Reliance has been fined Rs.6600 crore for D6 output fall (http://articles.economictimes.indiatimes.com/2012-05-04/news/31559336_1_oil-ministry-ril-executives-kg-d6).  Latest newspaper report says that RIL gas output will fall further (http://timesofindia.indiatimes.com/city/delhi/RIL-gas-output-to-fall-further-Reddy/articleshow/13057790.cms) 

Another web site says, “Hyderabad-based Lanco Group has been unable to commission its 740MW power plant at Vijayawada in Andhra Pradesh because of the non-availability of gas. “We have invested close to Rs. 2,600 crore and the plant is ready for commissioning from the last two months,” a company official said, requesting anonymity. “We have not been able to sign a power purchase agreement as there is no assured fuel supply from the government despite several representations.” (http://www.livemint.com/2011/11/17233943/Decline-in-gas-supplies-makes.html).” Yet another website says, “Plant load factor—a key measure of efficiency at electricity generating units—of gas-fired projects declined to 57.93% in September compared with 67.16% in April” (http://www.eai.in/club/users/Nikoli/blogs/12122). There is an ICRA report on the NG availability in the website which contradicts the PP’s claim (http://www.icra.in/Files/ticker/Indian%20Downstream.pdf). Therefore, the PP’s argument on gas availability is not correct. 

Company’s Annual Report both 2009-10 and 2010-11 state that the natural gas is in short supply. DOE may refer to page 14 of 2009-10 Annual Report and page 31 – item G of 2010-11Annual Report. Either the company is giving incorrect information to the investors or to the global stakeholders. 

PP has selected the input parameters in such a way that the project becomes additional. There are reports available in the Published literature state that the cost differs only by 5-10% (see http://www.scribd.com/doc/3019711/Comparative-study-on-Subcritical-and-Super-Critical-Power-Cycles and also Mott Macdonald’s report available in the web). If the super critical project cost is Rs.52.18 mn. per MW, then the sub critical project cost should be Rs.45 mn. PP has taken Rs.31.36 mn. for sub critical plant using imported coal and Rs.38.75 mn. for sub critical plant using domestic coal. Why the project cost should differ so much depending on the source of coal?  When the project cost of baseline is reduced, the cost of project activity is given as Rs.48 million. Lanco Kondapalli project which is recently webhosted has taken the cost at Rs.35.18 mn for the project activity and Rs.40 mn. for sub-critical plant and Rs.49 mn. for super critical plant. Natural gas cost is taken at Rs.12/SCM whereas Lanco Kondapalli has taken 9.12/SCM. With such input figures, every project will be additional. 

PDD does not say whether the presented baseline alternative is linkage coal or pit head coal. If the alternative is only pit head coal, it is not correct. The project is in Gujarat where there is no coal mine. Pit head coal power plant is not realistic alternative and baseline. It should be only linkage coal power plant. DOE may take care of this issue 

The logic given arguing the use of levelised cost as financial indicator in sec. B5 is strange. If this argument is correct, then all energy power projects – renewable and fossil fuel based - can adopt investment comparison analysis with levelised cost as the financial indicator. PPs can always say that they can set up any other renewable energy based power project or fossil fuel based power projects instead of the project activity. PP should go through the guidance before advancing such misleading arguments. Step 1 of the methodology clearly states that the benchmark analysis should be used for additionality demonstration. Additionality tool gives benchmark only for NPV and IRR and not for levelised unit cost. The argument given for levelised unit cost is for misleading DOE. DOE should insist on the benchmark analysis as explained in the additionality tool and not as interpreted by the PP. When Lanco Kondapalli has used benchmark analysis (using project IRR as financial indicator), the argument given by the PP has no merits. 

This company is a DISCOM in Surat. Hence, the levelised cost is not the applicable tariff for the power sold. It should be the average power tariff realized by the company in its distribution business. This figure is available in annual reports. If the benchmark analysis is adopted, with corrections in the project cost, alternatives, fuel cost and the tariff, this project cannot be additional. 

The levelised cost is Rs.3.68 for project and Rs.2.36 for baseline. Will he CDM benefits fill this gap? If not why is the PP taking up this project? Public are shareholders of this company and the company cannot put up a project, which gives lower profit or results in loss for the shareholders. Either the figures given in the PDD are incorrect or the company is not working in the interest of shareholders.