InfralinePlus November 2016 Edition by infralineenergynoida

November 2016 Volume 5 | Issue 7 | `100 www.InfralinePlus.com

The Complete Energy Sector Magazine for Policy and Decision Makers

CLIMATE CHANGE: Can India move away from coal?

Lack of coal demand poses fresh challenge to the Government

Yoshiaki Inayama Managing Director Toshiba JSW Power Systems Pvt Ltd

Anil Joshi President GSPC LNG Ltd

India needs to invest in Smart grid to be a low-carbon economy

Dr. U.D. Choubey

Prashant Panda

Director General SCOPE

President, Solar Business ACME Solar

,00 0+ c 0+ irc rea ulati on de rsh ip

,00

&2016

Yearbook DirectorY

Key Highlights

Sector Performance Review: FY 2015-16 Key Policy and Regulatory updates Extensive Database of Sector specific Companies including Manufacturers, Developers, EPC’s, BFSI’s and Consultants Top management with contact details

Oil & Gas

ory 2016 Yearbook & Direct

Renewable

Energy

Yearbook & Directory 2016 • Roads

Power

tory 2016 Yearbook & Direc

Yearbook & Directory 2016 • Renewable

tory 2016 Yearbook & Direc

Yearbook & Directory 2016 • Oil & Gas

Yearbook & Directory 2016 • Power

Direct exposure to top decision makers and influencers

ory 2016 Yearbook & Direct

Roads

For any further information, kindly contact us on the below mentioned coordinates:

Ashwini Solomon, (Manager– Business Development) Tel: +91-0120-6799157/100 (D), +91-9811708110 (M) Fax: +91-0120-6799101; Email: ashwini.solomon@infraline.com marketing@infraline.com

InfralinePlus

November 2016 | Volume 5 | Issue 07

The Complete Energy Sector Magazine for Policy and Decision Makers

Editor’s Letter

Editorial

India’s recent decision to ratify the Paris Agreement on Climate Change has been applauded by one and all. India, which accounts for 4.1% of the total global emission, now has a tough challenge ahead, that of balancing its growth needs and also reducing its carbon emission intensity by 33-35% from what it was in 2005, by 2030. The aim is to produce 40% of the total electricity from sources other than fossil fuels. India is banking on renewable capacity to meet its electricity requirement, and rightly so. However, it must not ignore other cleaner fuels in the process, such as natural gas, hydro and nuclear, all of which are currently grappling with various set of challenges. However, the moot question still remains - can India move away from coal? India has a clear advantage when it comes to coal. The country has the 5th largest coal reserves in the world and is set to surpass the US as the world’s biggest coal producer after China by 2020, as Coal India is in the process of ramping up output. Further, considering the fact that India is one of the fastest growing economies in the world and more than 300 million people are yet to receive power, India cannot afford to do without coal and needs to tread cautiously as far as its long term energy strategy is concerned. Also, use of technology in the form of ultra-super critical thermal power plants is an exciting option that needs to be explored. Also to be taken into account is the growth in the manufacturing sector. Manufacturing, currently, is undergoing slow growth. If the Indian economy gets back to the trajectory of 9-10 per cent annual GDP growth, electricity consumption could see a sharp increase. This can lead to a catch-22 like situation as getting additional conventional capacity in time to meet power requirement might prove challenging, while building hydel and nuclear power plants takes time. Nonetheless, as India makes a transition from conventional to renewable generation, it will throw up radically new challenges. Identification of the appropriate new technologies and their actualisation will be the need of the hour. Smart Grid is one such technology for the future. Smart Grids can turn out to be a key enabling infrastructure to develop smart solutions to resolve India’s energy woes and address troublesome issues such as massive transmission and distribution losses and power thefts. Expanding the use of smart grid technologies will also be instrumental as India strives to increase generation from variable renewable sources. Smart grid systems can help integrate multiple, variable renewable energy sources. Meanwhile, lack of coal demand continues to pose new challenges to the Government. India had initially planned to increase its domestic coal production to 1bn tonnes by 2020 in light of the ever-increasing demand from the power sector. However, the demand from the power sector has declined significantly over the past one year due to falling demand from state electricity distribution companies (DISCOMs). Owing to the bad financial health of the DISCOMs, states have been resorting to power cuts and load shedding and prefer to buy cheaper power from the Power Exchanges. The state DISCOMs have failed to sign long term power purchase agreements since 2013 and the recent trend indicates that the market is slowly but surely shifting to short term power purchase planning. With a large proportion of the population still not having proper access to electricity, the country’s large dependency on imported fuel and economic and social impacts due to climate change has driven the Government to identify measures for harnessing renewable energy and energy efficient measures for improving the country’s energy security and efficiency. In this context, RPO compliance by Obligated Entities is the need of the hour to bring liquidity, fresh investments which could pave the way for a ‘comprehensive market’, which will allow the government to achieve its objective of declaring India as a ‘green powered’ economy in near foreseeable future. We also bring to you a study on how the Delhi Metro is showing the way in sustainable transport. The study talks about the various green and sustainable initiatives taken by Delhi Metro and how it can serve as a role model for public transport across the country. It is a benchmark which all should follow.

Shashi Garg, Editor News Team Chetan Gupta Analyst Mohd. Arif Content Consultant News Monster

Business Development Manoj Narang, Director Tel.: 0120-6799106 / 100 Email: manoj.narang@infraline.com

Advertisement Ashwini Solomon Tel.: 0120-6799157/100 Mobile: +91 9811708110 Email: ashwini.solomon@infraline.com advertising@infraline.com

Circulation & Subscription Sneha Pandey Tel.: 0120 6799125 Email: sneha.pandey@infraline.com

Form IV Periodicity of its Publication: Monthly Printer’s / Publisher’s / Mrs Shashi Garg Editor’s / Owner’s Nationality Indian Address

14-D, Atmaram House, 1, Tolstoy Road New Delhi - 110001

Place of Publication

14-D, Atmaram House, 1, Tolstoy Road New Delhi - 110001

Printed at Address

SHASHI GARG Managing Director and Editor InfralineEnergy Research and Information Services Registered Office

Branch Office

14th Floor, Atmaram House, 1, Tolstoy Road, New Delhi - 110001 Email: business@infraline.com

Noida A-31, Sector 3, Noida Tel.: 0120-6799100

Sagar Offset Printer (I) Pvt. Ltd. Plot No 518, Ecotech-III, Udhyog Kendra Extn-II, G. Noida, G.B. Nagar (U.P.) 201308

Name and address of individuals who own the newspaper and partners or shareholders holding more than one percent of the total capital Owner: M/s Infraline Technologies (India) Private Limited, 14-D, Atmaram House, 1, Tolstoy Road, New Delhi - 110001 Shareholders holding more than one percent of total Capital of the owner Company 1. Mrs Shashi Garg, 60, Siddhartha Enclave, New Delhi-110014 2. Abhav Garg, 60, Siddhartha Enclave, New Delhi-110014 I Shashi Garg hereby declare that the Particulars given above are true to the best of my knowledge and belief. Sd Mrs Shashi Garg Signature of the Publisher

November 2016 www.InfralinePlus.com

InfralinePlus

Contents Editor’s Letter

Cover Story

33 Climate Change: Is India ready to move away from coal?

On October 2, 2016, India made a strategic decision to move away from coal as a source of electricity in the long run by ratifying the Paris Agreement on Climate Change. The deal aims to cut greenhouse gas emissions by shifting away from fossil fuels to limit global warming to “well below” 2C compared with pre-industrial times. However, considering the fact that India is one of the fastest growing economies in the world and more than 300 million people are yet to receive power, the decision to ratify the Agreement has raised a question mark on the long term strategy of the country to tackle the vital issue of energy security.

31 Power News Briefs

Coal

News Briefs p22

In Conversation: Yoshiaki Inayama, Managing Director, Toshiba JSW Power Systems Pvt Ltd p10

Expert Speak: Anil Attavar, Director, Way 2 India p25

In Conversation: PK Ranade, Chairman and Managing Director, AMTL p13 In Depth: India needs to invest in Smart grid to be a low-carbon economy P16 Statistics

In Depth: Lack of coal demand poses fresh challenge to the Government p28 Statistics

p20

Topics Covered

Manufacturing

Coal demand

Energy meters

Thermal plants

Smart grids

Coal pollution

p31

November 2016 www.InfralinePlus.com

Oil and Gas

Renewable

News Briefs p38

News Briefs p55

Expert Speak: Anil Joshi, President, GSPC LNG Ltd p41

Expert Speak: Prashant Panda, President, Solar Business, ACME Solar

Expert Speak: Dr. U.D. Choubey, Director General, SCOPE p44 Expert Speak: Neeraj Gupta, Director, iEnergy Innovations Pvt. Ltd

p47

p60

In Depth: RPO compliance by Obligated Entities need of the hour p63 Statistics p66

In Depth: Fourth consecutive reduction in Natural Gas price p50 Statistics p53

Topics Covered

LNG terminals

Energy storage

Natural gas pipeline infrastructure

Grid stability

Natural gas prices

RPO compliance

Expert Speak/Interview

PK Ranade

Neeraj Gupta

Chairman and Managing Director AMTL

Director iEnergy Innovations Pvt. Ltd

Off Beat

Expert Speak: Delhi Metro: A road map to sustainable transport

Anil Attavar

Harveen Kaur

Director Way 2 India

PhD Scholar University of Delhi

Reports & Studies

People in News

November 2016 www.InfralinePlus.com

NewsBriefs | Power Government aims to achieve 100 percent power connectivity

Stating that government’s aim is to provide electricity for all citizens irrespective of BPL or APL criterion, Union Minister Piyush Goyal has said states are free to use any data they want for implementing rural electrification project. Goyal stressed that there is no need to focus only on BPL (Below Poverty Line)

or APL (Above Poverty Line) criterion when it comes to providing power connections in villages. “During our deliberations, our Power Secretary raised the issue of BPL data, which according to him is not updated. Upon learning about this issue, I have taken a decision on the spot that States are free to take into account any data they want to implement rural electrification programme. Do not discriminate between citizens,” the Minister of State for Power said. Stating that there is no need to discriminate among poor, BPL, APL or any other type, he said, “Our aim is to provide electricity to all. Don’t restrict yourself to BPL or APL. Once electricity reaches to a village, electricity should reach all houses.

CERC panel pushes for customer-oriented transmission planning

A committee appointed by the Central Electricity Regulatory Commission (CERC) has suggested an overhaul in transmission planning to facilitate the transfer of power that is going to take place, on economic principles. Further, transmission planning will have to be aligned to meet customer aspirations rather than sticking to the outdated model of planning transmission system only associated with the long-term power purchase agreements (PPAs). The committee said the transmission planning may be done on the basis of projected load of the states and anticipated generation scenario based on economic principles of merit order operation. In a bid to promote power market, the committee has suggested that the

transmission corridor allocation be suitably made. Five percent (5%) of each flow gate may be reserved for day ahead collective transactions which may be released for contingency market in case of non-utilization of the corridor by power exchanges.

National Centre tells state powers to push reforms, unlock demand

The Centre has put the proposed amendment to the Electricity Act on the backburner, opting instead to work with state governments on measures to open up the power market and unlock latent demand through regulatory reforms. “Do you see any work (reforms) suffer or stalled (in the absence of the amendments)? Our initiatives are progressing well even without the (proposed) amendments to the Act. We are working with states on taking things forward,” power minister Piyush Goyal said. The amendments seek to segregate the distribution (carriage) and supply (content) businesses. This is expected to bring competition by having multiple distribution licences in an area, giving consumers the freedom to choose their supplier. The amendment Bill was introduced in the Lok Sabha on December 19, 2014. It was referred to the Parliamentary Standing Committee on Energy. The panel submitted its report on May 7, 2015. The refreshed amendment Bill, incorporating the committee’s recommendations, will have to be cleared by the Cabinet before it can be reintroduced in Parliament.

Power generation rises 2.1 percent in September, but demand remains low India’s electricity generation for the month of September rose about 2.1% year-on-year compared to flat growth in the month of August compared with last year, shows data from Central Electricity Authority (CEA). This rise in generation, however, does not necessarily reflect a rise in demand for the sector, which is hurt by over-capacity and a lack of demand from distribution companies (discoms). The slight rise in generation in September is not indicative of any rise in demand, said a brokerage analyst. “The 2.1% rise by itself does not mean anything, it’s a marginal number. The basic problem still remains that with the industry having shifted to captive, there is a serious crisis of credible

customers, who will pay on time. And this also impacts the volume growth,” he said. The compound annual growth rate (CAGR) of captive power generation between 2006-07

and 2014-15 is 9.3% compared to 4.6% for electricity procured from utilities, according to the Economic Survey notes released in February 2016. India’s power demand is unlikely to grow beyond 6-7% over FY20, according to a MotilalOswal Securities.India’s power generation had remained flat yearon-year in August hurt by improved rainfall, which slowed demand across the agriculture sector. This has led to the overall sector’s plant-load factors (PLFs) to decline by about 4.4% to 42.7% from same period last year, an Emkay Global Financial Services Ltd report said. With power deficit falling, merchant power tariffs are also down 23% year-on-year to Rs2.16 per unit.

November 2016 www.InfralinePlus.com

NewsBriefs | Power Transmission project worth Rs 50k crore to go under hammer in FY’17

Transmission projects worth more than Rs 50,000 crore would be up for bidding during the current fiscal to increase power evacuation capacity in the country, Power Secretary P K Pujari said. “Transmission projects worth Rs 50,000 crore would be auctioned. It could be even more than this during this fiscal,” Pujari noted. He further

said: “Last year (2015-16), we bid out transmission projects worth over Rs one lakh crore out of which Power Grid Corp got projects of Rs 56,000 crore and Rs 35,000 crore were awarded to private sector (on tariff based competitive bidding).” There has been healthy growth of the transmission sector during the 12th Plan (2012-17). After April 2012, India has added 90,000 circuit kilometres of transmission lines and 2.72 lakh MVA of transmission capacity. The auctioning of transmission projects assumes significance in view of government’s ambitious target of adding 175 GW of renewable power capacity by 2022. “The share of renewables in energy mix, which is 6 per cent at present, will go up to 40 per cent by 2030.

Fuel surcharge increase makes power costlier Electricity consumers of Torrent Power Ltd will have to shell out a little more for the power they consume. The private sector company recently increased Fuel and Power Purchase Price Adjustment (FPPPA), also known as fuel surcharge, for OctoberDecember quarter. The fuel surcharge has been hiked by 10 paise per unit to 90 paise/ unit from 80 paise per unit, which will translate into a burden of Rs 33 crore for 30 lakh consumers of the company. Torrent supplies power to Ahmedabad, Gandhinagar and Surat. A power company is allowed to offset any increase or decrease in fuel (coal and gas) cost by way of FPPPA. Earlier, state-run Gujarat Urja Vikas Nigam Ltd

(GUVNL) also received Gujarat Electricity Regulatory Commission (GERC) approval to recover additional fuel surcharge of 9 paise/ unit, which was due in January-March, 2016.

National Govt likely to modify captive power equity structure

Rules for captive power generating units are likely to be made more stringent by the government. The industry’s worry is that this could mean higher costs. The suggestion is on the equity structure of owners in such units. Most power producers own at least 26 per cent of the equity and consume at least 51 per cent of the power generated from a captive unit. The rest is sold to entities in other states. The structure, known as ‘group captive’, is to avoid the cross-subsidy charges levied on interstate sale. The modification proposed is on the definition of ownership. Ownership in relation to a generating station or power plant set up by a company or any other body corporate shall mean the paid-up equity share capital with full rights, such as value, share of profit/dividends, capital appreciation, voting rights, transfer of shares, etc. In other cases, ownership shall mean proprietary interest and control over the generating station or power plant; go the proposed changes, in the draft rules.

Banks eye takeover of debt-laden power plants Lenders to several power projects have started talks with investors as well as state-run NTPC to take over these generation units, in a stern message to promoters who are reluctant to pay or want to shift the burden of reviving the projects to banks. The move comes at a time when public sector unit SAIL is set to take over the operations of Electrosteel Steels, which has massive debt. It is learnt that the plan has the backing of the finance ministry, which is keen to ensure that banks be firm with errant promoters, while showing flexibility wherever there is a possibility of reviving projects if the management and lenders share the burden. NTPC

has been approached to take charge of a few projects such as Athena Power in Chhattisgarh in addition to some projects

in Andhra Pradesh. Similarly, there is a possibility of Aadhunik (promoted by Aggarwals), which has a plant in Jharkhand, too being offered to the state-run power producer. Apart from the public sector giant, some global players were also looking at some of the generation assets, which are troublesome for the lenders. “The lenders have approached us with some stalled projects and want us to complete or run them. We are open to the suggestion,” said an NTPC executive. Although talks have been going on for taking over stalled projects by NTPC for some time, now firm proposals have been put forward on the table.

November 2016 www.InfralinePlus.com

NewsBriefs | Power MSEDCL to get state subsidy of Rs 992 crore for 5 years

The state government has signed a tripartite agreement with Maharashtra State Electricity Distribution Company Limited (MSEDCL) power utility firm and Central government for the Ujwal Discom Assurance Yojna. Under the scheme, MSECDL will get state subsidy of around Rs 992 crore to improve its infrastructure

for next five years. The scheme primarily aims at reducing the distribution losses, to improve the quality of power infrastructure, improve the billing efficiency, to reduce peak load and to make provision for the required power demand. Under the scheme, the Maharashtra government will float bonds of 75% amount of the midterm and small term debt of MSEDCL as on September 30 which comes to around Rs 4,960 crore in the market. The amount collected from these bonds will be given as subsidy to MSEDCL by the state. From this financial year to the next 5 year (till 2020-21), Rs 992 crore will be given to MSEDCL as subsidy by the state government in five installments.

Power charges up by 11 paise per unit in MP

Get ready to pay more for electricity as the energy charges have gone up by 11 paise per unit from October in MP. This hike will remain in force from October to December 2016 after which it will be revised for the next quarter. Madhya Pradesh Electricity Regulatory Commission (MPERC) has approved the increase in electricity tariff from 4 paise per unit to 14 paise per unit. In addition, consumers will have to pay one paise as electricity duty. This means the power tariff will increase by 11 paise per unit per month in the state and will cover all categories of consumers â&#x20AC;&#x201C; domestic, industrial, agriculture, rural etc. This is a 1.95% rise in electricity cost for domestic

consumers and a 1.48% rise for high-tension supply line consumers which include industries. Till September, electricity cost from Rs. 3.65 per unit to 6.10 per unit to domestic consumers while industrial consumers paid 6.20 per unit.

States AP takes over Rs 7,376 crore debt burden of Discoms

Andhra Pradesh government has issued special securities worth Rs7,376 crore under the UjjwalDiscom Assurance Yojana (UDAY) Scheme to take over the debt burden of power distribution companies (Discoms). The Union Government launched the UDAY scheme in 2015 for operational and financial turnaround of Discoms giving the States a two year time time frame to take over debt by 2016-17. The State tried to seek more time but the Centre refused to extend the time-frame given under the UDAY scheme. The government issued bonds for an amount of Rs7,376 crores based on competitive interest bids from the institutions.For the 70 per cent of the amount, bonds were issued for an interest rate of 7.35 percent and the remaining at 7.35 and 7.37 per cent. For the remaining amount of Rs880 crore, the bids were rejected and they would be taken up later. The security bonds for the above loan with six equated amounts would have to be redeemed at the end of 10th, 11th, 12th, 13th, 14th and 15th year.

Demand from AP, Karnataka propels power purchase in southern region The volume of power bought by Southern region in the Indian Energy Exchange increased 160 per cent year on year in September 2016, driven by higher demand from Andhra Pradesh and Karnataka, data from the exchange reveals. Data from the exchange shows that among the States in the region, Tamil Nadu and Kerala sold more power, while Andhra Pradesh and Karnataka bought more power. Tamil Nadu and Kerala put together sold 77 million units in September 2016 compared with 13 million units in the comparable period last year. Both the States in total bought 70 million units in September 2016 compared with 88 million units in

the same period last year. Andhra Pradesh and Karnataka bought 642 million units and sold 259 million units respectively

in September 2016. In the comparable period last year, they bought 184 million units and sold 265 million units.Tamil Nadu had good power availability helped by wind power generation and supply from Kudankulam. That is why the buying volume was low. Because of higher power availability, the prices were also low. Southern region power rates on the exchange were Rs. 2.41 per kilo watt hour during September 2016, down from Rs. 6.18 per kilo watt hour in the same period last year. In September 2016, northern region rates stood at Rs. 2.73 per unit, while rates of North-East, East and West stood at Rs. 2.35 per unit.

November 2016 www.InfralinePlus.com

NewsBriefs | Power Sri Lanka seeks investments from Qatar for power sector

Sri Lanka is exploring the possibility of attracting investments from Qatari entrepreneurs and government agencies in its health sector, Minister of Health Rajitha Senaratne said. The Minister, who was on a two-day visit to Qatar, said he had held discussions

on investment prospects in his country with Qatar Minister for Finance HE Ali Sherif alEmadi. “While apprising the Qatar Minister of the areas where Sri Lanka is looking for foreign investments, we gave him a picture of the current economic position of our country and also the sectors where investments could fetch good returns,” Senaratne explained. The Sri Lankan Minister said he also spoke to the Qatar Minister on the prospects of attracting investments to his country’s power sector. “We have some ambitious plans as well to capitalise on our favourable weather conditions to develop solar and wind energy projects to meet the growing power requirements.”

UAE’s nuclear power project achieves $24.4 bln financing close The United Arab Emirates’ nuclear energy project has completed a $24.4 billion financing for its first plant with most of the cash coming from state sources. In 2009, Korea Electric Power Corporation (Kepco)-led consortium won a contract to build four 1,400 megawatt nuclear reactors that are being constructed at the Barakah plant to meet the UAE’s surging demand for electricity. Emirates Nuclear Energy Corp (ENEC) and Kepco jointly own the Barakah nuclear energy plant project. The financing comprises direct loans of $19.6 billion with $16.2 billion from the Abu Dhabi government and another $2.5 billion from the Export-Import Bank of

Korea (Kexim). It also includes equity commitments from Enec and Kepco totaling $4.7 billion as well as a $250 million loan provided by National Bank of Abu Dhabi, First Gulf Bank, HSBC and Standard Chartered. “

International Australian alliance buys power grid; Chinese bid blocked

Half of Australia’s largest electricity network has been sold to two local firms for A$16.189 billion (US$12.38 billion), after Canberra blocked a Chinese bid citing national security. The Australian government has been concerned about investment from Beijing and twice rejected the sale of the country’s biggest private landowner cattle firm S. Kidman & Co to Chinese-led consortiums. The sale of 50.4 percent of Ausgrid, New South Wales (NSW) state’s electricity network, for a 99-year lease to the all-Australian consortium — fund manager IFM and pension fund Australian Super — means the transaction does not have to be approved by the Foreign Investment Review Board (FIRB). “This is an outstanding result and it is great to see a completely Australian consortium investing in this asset,” NSW Treasurer Gladys Berejiklian said. “The NSW government is delighted to be entering into a partnership with IFM and Australian Super given their demonstrated track record in the management and long-term investment in infrastructure assets.”

Bangladesh to build over 1,600 MW hydro projects In a first major hydro investment deal between Nepal and Bangladesh, the two countries have signed an agreement to build two hydroelectric plants capable of generating over 1,600 megawatts of electricity in Nepal. Commerce Minister Romi Gauchan Thakali and his Bangladeshi counterpart Tofail Ahmed signed the pact. The proposed projects are 1,110MW Sunkoshi II and 536MW Sunkoshi III located at Sunkoshi river in central Nepal. Both the countries have agreed to develop the projects under the BBIN (Bangladesh, Bhutan, India, Nepal) initiative which was signed by four countries to facilitate the regional trade

and business. As per the agreement, the electricity produced from Sunkoshi river would be evacuated to Bangladesh via India through the BBIN economic corridor. “Minister Thakali signed the agreement after the Bangladeshi side expressed interest to invest in Nepal’s hydropower sector,” said Ravi Shanker Sainju, joint secretary at the Commerce Ministry, who had accompanied the minister to Dhaka. Earlier, the Department of Electricity Development (DoED) had assumed the responsibility of conducting the feasibility study of both the projects spread across Kavre, Ramechhap, Sindhupalchok and Sindhuli districts.

November 2016 www.InfralinePlus.com

InConversation

Efficiency improvement of thermal, nuclear expansion key for future Yoshiaki Inayama, Managing Director, Toshiba JSW Power Systems Pvt Ltd, feels that despite the surge in renewable energy capacity, thermal sector will continue to maintain the lead in Power Generation. Further, use of super critical technologies would benefit India in providing more reliable and affordable power. Excerpts:

What is your outlook on the thermal sector in India considering that demand has tapered off in recent times with no new capacity addition planned? Thermal power has always been the main contributor to India’s energy requirement and would remain largest modality for ensuring Energy security. It continues to serve as the cornerstone of the grid as it provides stable energy output and retains its position of providing reliable and affordable power. With the introduction of Ultra Super Critical and forthcoming Advanced Ultra Super Critical technology having higher efficiency provides environmentally friendly energy. To support India’s economic growth, the growth in electric power is must and in consideration of direct relation of GDP growth and Power growth, the development of environment friendly fossil fuel based power is necessary. To keep the high quality equipment cost competitive, TJPS is also continuously improving the manufacturing ecosystem for local sourced components by developing and expanding its vendor base in India. We appreciate and support increase content of renewable energy

as projected by Government of India we shall continue to develop and apply Technologies such as Ultra Super Critical (USC) and AdvancedUltra Super Critical (AUSC) that are efficient and environmentally friendly thus reducing carbon emissions. We are confident that in near future application of USC and AUSC technology will be introduced by India to enhance the performance as well supporting capacity addition. How has thermal sector growth been impacted by growth in renewable energy capacity? India’s power sector is one of the most diversified in the world with sources of power ranging from conventional to renewable sources. Today, of the 305.5GW installed capacity, thermal power has the largest contribution at 212.5GW, followed by hydro 42.97 GW, renewable energy 44.24 GW and nuclear 5.8 GW. To cater to the increasing energy demand, the Government’s Twelfth Five Year Plan for 2012 to 2017 aims at boosting generation capacity by 88.5 GW, of which 80% of the capacity addition is planned from Thermal Power Generation. In consideration of demand forecast to meet the GDP growth

Yoshiaki Inayama, Managing Director, Toshiba JSW Power Systems Pvt Ltd

target for next two decades, we believe Thermal sector will continue to be maintaining the lead in Power Generation because of instability of renewable energy. Considering environmental factor, efficiency improvement of thermal, stability improvement of renewable and nuclear expansion will be keys for future. Toshiba group can contribute in all these areas and TJPS can contribute efficiency improvement of thermal power generation by applying USC and AUSC technology for new construction including scrap and build and proper maintenance of operating plant utilizing Toshiba’s state of the art technologies. This takes us a step further in our endeavor to contribute to Indian’s suitable power supply by its endeavor of continued innovations. We have capability and experience to apply & execute such technologies for the growth of industries ‘for the next India’.

November 2016 www.InfralinePlus.com

What kind of new technologies can India benefit from in the thermal sector? Since 2004, India applied use of Super Critical technology and is now at the advent of applying Ultra Super Critical technologies with a vision of applying Advance-Ultra Super Critical technologies in near future. This would benefit India to providing more reliable and affordable power as these technologies are more efficient. We believe with application of such technologies and development of materials for such technologies, the Make in India will get further boost. In Japanese coal thermal plants, the Operation and maintenance is given high importance and best practices are followed to ensure that performance levels are not deteriorated beyond global acceptance norms. We continue to bring plants very near to design performance levels over the designed life of plant by applying best techniques and practices. We shall be applying similar practices ensuring better performance over the designed life of Power equipment manufactured by us. What are your views on the ‘Make in India’ initiative of the Government? How has it impacted the power equipment market? Government’s ‘Make in India’ campaign has further reinforced the conducive policies laid down to achieve a more reliable and stable power supply required for the growth of critical industries. With this initiative, many multinational companies have set up base in India that not only will help in creating a strong local manufacturing ecosystem for components and equipments, but will also augment the technology transfer and development of skills the youth of India deserves.

India’s power sector is one of the most diversified in the world with sources of power ranging from conventional to renewable sources. Today, of the 305.5GW installed capacity, thermal power has the largest contribution at 212.5GW, followed by hydro 42.97 GW, renewable energy 44.24 GW and nuclear 5.8 GW Toshiba, long before the announcement of the ‘Make in India’ campaign had identified and established India as its manufacturing base and development hub having skilled manpower. Furthering our commitment, TJPS started its own Welding Training School at the Chennai factory, and tied up with the

local chapters of Industrial Training Institute to impart on-site skill development training. In addition, many engineers at TJPS factory are trained by Japanese engineers visiting India or are sent for a training program at the Toshiba factory in Japan. With our commitment, capability, and experience, we will continue to contribute for the growth of industries ‘for the next India’. What are the key issues facing the power sector in India today? Please provide suggestions to address them. While several initiatives have been taken by respective government agencies at Centre and also in States, we do believe that intent of providing reliable, affordable “Power for All” has not met the success as envisaged. We feel this could be due to mismatch between Generation capacity, Transmission network and Distribution network. We also observe that Distribution network is quite old which impacts the operation to large extent. We feel that integration of Generation,

November 2016 www.InfralinePlus.com

InConversation Transmisison, and Distribution with applications of technologies in all that compliment each domain would help in overcoming technological bottlenecks and reduce the losses and this lost energy will be available to the consumers. In addition to that, carbon dioxide emission reduction will be one of the most important issues for power sector in India. In order to respond this challenge, efficiency improvement of thermal, stability improvement of renewable energy and nuclear expansion will be keys for future. Toshiba can provide solution for this challenge. The other area which needs to be addressed is infrastructure which needs to be available for rapid development of Projects and also for effective operations. 12

Please share your presence in the power sector in India. Toshiba has a pedigree of over 60 years of expertise in power and a strong lineage of association with India, entering the thermal power market by supplying two 500MW

subcritical steam turbines and generators at Anpara B thermal power plant. Today, Toshiba JSW Power Systems Pvt ltd (TJPS), with its state-of-art manufacturing facility at Chennai to manufacture Subcritical,

Carbon dioxide emission reduction will be one of the most important issues for power sector in India. In order to respond this challenge, efficiency improvement of thermal, stability improvement of renewable energy and nuclear expansion will be keys for future. Toshiba can provide solution for this challenge

Supercritical and Ultra supercritical Turbine and Generator with unit capacities in the range of 250MW to 1000MW, has already established itself as a dominant player in the supercritical steam turbines and generators (STG) in the 800MW category in India, having won orders for ten sets in all. In line with the Group’s ‘Make in India’ commitment and its business strategy to keep the high quality equipment cost competitive, TJPS recently shipped its first ‘Made in India’ steam turbine generator. The 800-megawatt steam turbine generator (STG) for Unit 2 of the Kudgi Supercritical Thermal Power Station in Karnataka state is Toshiba’s first large-scale generation system to be manufactured and assembled with locally procured parts and systems, and tested in India. Toshiba JSW is geared up to contribute to the government’s goal to provide 24x7 electricity for residential, industrial, commercial, and agriculture use ‘for the next India’. For suggestions email at feedback@infraline.com

November 2016 www.InfralinePlus.com

InConversation

India to be a strong growth driver in global energy demand Advance Metering Technology Limited (AMTL) is on a growth path. The Noida-based company recently formed a strategic tie-up with Grasslin Gmbh – a subsidiary of US electrical product MNC Intermatic Inc – to bring energy efficient technologies in India. Speaking to InfralinePlus, AMTL’s Chairman and Managing Director, P. K. Ranade, talks of why India is expected to be a big market for energy efficient technologies in future and the key growth drivers. Excerpts:

What is your outlook on the energy sector in India? What are the key growth drivers according to you? Energy consumption in India has almost doubled since 2000 and the sector has high growth potential. India’s per capita electricity consumption has been continuously increasing over the years. However, the country’s per capita electricity consumption is about 1/3rd of the global average. Further, India uses only 6% of the world’s primary energy, even though its houses 18% of the world’s population. This offers tremendous scope for growth in future. Coal, however, is the most dominant fuel in the energy mix and there is a strong government push to increase share of renewable energy in the energy basket. India has also recently ratified the Paris Agreement which underlines its commitment to a growing role for low-carbon sources of energy led by solar and wind power. According to reports, India will be a major contributor to global energy demand by 2040. While energy use is projected to decline in other developed countries including China, India will emerge as a strong growth

driver in global energy demand and all modern fuels and technologies are expected to play a role. With a major push towards creation of new infrastructure and urbanisation, India’s energy requirements will also see an upswing. Initiatives like “Power for All” and “Make in India” will also act as strong growth drivers. The company recently entered the solar EPC business. What kind of opportunities are you looking at in this segment? The EPC business will be a strong growth area for us. We recently bagged a contract in Noida to develop green building for an IT company on turnkey basis. The entire package for the project will be executed by us such as civil and electrical works, designing, engineering as well as water treatment, waste disposal and Solar PV. We have developed strong in-house expertise to execute solar turnkey projects which will serve as a one-stop shop providing complete range of building products and solutions. AMTL is now ready to offer turnkey and retrofit solutions to IT business buildings across the country.

PK Ranade, Chairman and Managing Director, AMTL

A target of 175 GW to be achieved by 2022 and India’s global commitment to increase share of nonfossil fuels to 40% in its electricity generation by 2030 are strong growth drivers for the solar EPC industry. I feel the industry is on a major growth curve and there are numerous opportunities in this segment for EPC players. With falling solar tariffs no longer an exception but a trend, the need of the hour is to have a strong and robust EPC industry in India which can sustain delivery both in terms of time and quality. The ‘Solar revolution’ in India can only succeed if it is adequately supported by a strong EPC segment. Please share your manufacturing plans for energy meters and panels. What is the capacity of your manufacturing facility? Is it sufficient to meet demand? AMTL has invested in production capacity infrastructure over the past

November 2016 www.InfralinePlus.com

InConversation few years and has been able to deliver a double digit percentage year on year growth consistently. We are currently in a position to deliver more than 2 million meters annually and at the same time more capacity is being added to cater to the demand generated by the aggressive electrification schemes of the Government. We feel that the demand in the short term is significantly more than the supply capacity available. However, this will reach a saturation point when the electrification schemes reach their peak deployment rate in the medium term.

How can energy audit and energy management benefit the industry? Energy audit and energy management is a critical area for organisations and utilities. Given the strong emphasis of the Government on energy efficiency and energy conservation, it is imperative to conduct regular audits to assess the trends in energy consumption as well as provide solutions to reduce energy usage through use of energy-efficient products and solutions. Energy Audit is the key to a systematic approach for decisionmaking process in the area of energy management. It attempts to balance the total energy inputs with its use, and serves to identify all the energy streams in a facility. It quantifies energy usage according to its discrete functions. Industrial energy audit is an effective tool in defining and pursuing comprehensive energy management programme. We provide energy audit services to organisations in various sectors such as industries, hospitality, IT, BPO & Malls and office buildings. The scope of the audit includes electrical energy audit, thermal energy audit, Thermography of LT & HT System, Power Quality Analysis and Water Audit.

Energy audit and energy management is a critical area for organisations and utilities. Given the strong emphasis of the Government on energy efficiency and energy conservation, it is imperative to conduct regular audits to assess the trends in energy consumption as well as provide solutions to reduce energy usage through use of energy efficient products and solutions In addition, Perform Achieve Trade (PAT) assistance, support for energy efficiency enhancement projects and trainings to improve Energy Efficiency are some of the other focus areas.

What are the technological offerings of AMTL that can help India in its quest for clean technologies? We are an energy-centric organization with focus on ensuring a greener and cleaner economy with a three pronged approach, namely Generation of power from renewable sources, manufacturing of world class energy monitoring devices and Energy Audit Services. Recently, we have entered into a tie-up with GrĂ¤sslin Gmbh, Germany, (a subsidiary of Intermatic, USA) to expand our presence in the electrical equipment market. After this tie-up, we are now distributing electrical products across India such as time switches, light and temperature control solutions. To give you an example, the time switch technology is unique for it makes life easier, safer and helps save energy efficiently in residential, office, commercial and industrial buildings. DIN- rail and universal time switches offer diverse use options both indoors and outdoors, for central switching of different rooms, vacation programs and universal switching tasks in switching

November 2016 www.InfralinePlus.com

stations, in machine controls or specific solutions such as swimming pool or sprinkler system controls. Similarly, light controls offer the highest possible degree of functionality, switch separately for the desired situation in residential, office, commercial and industrial buildings and outdoors and at the same time ensure noticeably improved energy efficiency. India is projected to become the largest market for LEDs in India. Please share your outlook and growth plans in this regard. There is no doubt that India has witnessed a stellar growth in the LED market in the last few years. A strong government support coupled with introduction of innovative LED lighting products by manufacturers has resulted in reduction in prices of these products, thereby offering consumers with more options to choose from depending on their needs and preferences. Increasing focus on energy efficiency to reduce carbon

footprints, rising income and smart city development are some of the key triggers for the growth of LED

There is no doubt that India has witnessed a stellar growth in the LED market in the last few years. A strong government support coupled with introduction of innovative LED lighting products by manufacturers has resulted in reduction in prices of these products, thereby offering consumers with more options to choose from depending on their needs and preferences

lighting industry. The Unnat Jyoti by Affordable LEDs for All (UJALA) scheme which aims at replacing all inefficient bulbs with energy-efficient lamps has been instrumental in bringing about this change. AMTL has been developing its portfolio of LED products and has been active in the B2B segment so far. Retail has been a part of our plans and we will be introducing products in the market as a part of our retail expansion. AMTL also has presence in generation of renewable energy. Please outline your existing portfolio and growth plans in this regard. AMT currently owns and operates 11.7 MW of wind power.This supplies energy to the state grid. We are currently evaluating options for expansion either via a greenfield project in Solar or Wind or a strategic acquisition of an existing project. For suggestions email at feedback@infraline.com

November 2016 www.InfralinePlus.com

InDepth

India needs to invest in smart grid to be a low-carbon economy

►► Existing distribution grid infrastructure is primarily designed for one-way flow of electricity ►► Smart grid systems can help integrate multiple, variable renewable energy sources

By Team InfralinePlus

India’s journey from an ageing transmission & distribution (T&D) to a smart grid-enabled network infrastructure can have several enabling drivers. Clearly transition from conventional to renewable generation will throw up radically new challenges. Identification of the appropriate new technologies and move to actualisation of the same will be the need of the hour. Smart Grids are a key enabling

infrastructure to develop smart solutions to resolve India’s energy woes, and address troublesome issues such as massive transmission and distribution losses and power thefts. Smart grids are crucial to some of the key projects of the Government of India (GoI): 100 Smart Cities; 175 GW of installed renewable energy generation capacity by 2022; cumulative 40% of the total generation from renewable

energy sources by 2030; electric vehicles (to combat air pollution); and 24x7 power supplies to all citizens (‘Power for All’ scheme). The challenges of climate change and the continued growth of electricity demand (albeit at tepid growth rate) are putting increasing stress on the India’s electricity network infrastructure. The existing distribution grid infrastructure is primarily

November 2016 www.InfralinePlus.com

designed for one-way flow of electricity and limited consumption in the home. With the growing implementation of large-scale, intermittent renewable energy generation, distributed generation and electric vehicles, the operational limits of the network as it is currently designed will be reached. India is now at the point of transition to a new era where power generated from clean sources (renewable energy) will be at a premium, networks will need to be flexible to the incorporation of new low-carbon technologies and customers will demand greater insight and control over their own consumption with greater use of

Information and Communication Technology (ICT), more than ever before. Expanding the use of smart grid technologies will also be instrumental as India strives to rapidly increase generation from variable renewable sources. Smart grid systems can help integrate multiple, variable renewable energy sources by directing the power efficiently to electricity end users. Smart grid technologies can act as an enabler for better integration of renewable sources into the grid, given their ability to reduce the variability in the system by allowing the integration of renewables into diverse electricity resources, including load control (e.g. Demand

Figure 1: Drivers for Growth of Smart Grid Market in India

Expanding the use of smart grid technologies will also be instrumental as India strives to rapidly increase generation from variable renewable sources. Smart grid systems can help integrate multiple, variable renewable energy sources by directing the power efficiently to electricity end users Side Management (DSM), Advanced Metering Infrastructure (AMI), and enhancing the grid operation.

Policy and Regulatory Intervention Government of India launched National Smart Grid Mission (NSGM) on March 27, 2015. The mission is an institutional mechanism for planning, monitoring and implementation of policies and programs related to Smart Grid activities. Under this mission, the Forum of Regulator (FoR) notified the model regulation on the (Smart Grid)

November 2016 www.InfralinePlus.com

InDepth

Regulations, 2015. The objective of the model regulation is as follows (Excerpts from the regulations): (1) The objectives of these regulations are to enable integration of various smart grid technologies and measures to bring about economy, efficiency

improvement in generation, transmission and distribution licensee operations, manage the transmission and distribution networks effectively, enhance network security, integrate renewable and clean energy into the grid and micro grids.

Smart Grids in Urban context

Smart Distribution

Smart City

Advanced Metered Infrastructure (AMI)

Smart Buildings & Homes

Outage Management System (OMS)

Smart Mobility/Transportation

Power Load Management (PLM)

Water Management

Power Quality Management (PQM)

e-Security

Integration of RE sources

e-Medical

Micro Grid Electric Vehicles

Smart Cities, Smart Grids, Smart Meters! The announcement of the National Smart Grid Mission (NSGM) and the release of the Model Smart Grid Regulations by the Forum of Regulators (FoR) in 2015 have set the stage for a paradigm shift in India’s electricity distribution system. • One of the commitments under the government missions (NSGM) / schemes (UDAY) is to make the installation of smart meters compulsory for all consumers using more than 200 units of electricity a month. • The UDAY scheme envisages fast track rollout of 35 million smart meters by the end of 2019. • Smart metering infrastructure is expected to be a long-term asset for the utilities in India, while smart meter technologies are dependent on the rapidly developing electronics design and manufacturing industry.

Renewable energy based mini-grids can be a possible solution to meet the electricity demand of vast rural population of India which addresses the climate change issues. Various renewable based mini-grid models have emerged in India. They have could set examples of how mini-grids can bring an end to energy poverty in India (2) The objectives also include enhancing network visibility and access, promoting optimal asset utilization, improving consumer service levels thereby allowing for participation in operations of transmission licensees, distribution licensees through greater technology adoption across the value chain in the electricity sector and particularly in the transmission and distribution segment.

Smart Grids in Rural context Renewable energy based mini-grids can be a possible solution to meet the electricity demand of vast rural population of India which addresses the climate change issues. Various renewable based mini-grid models have emerged in India. They have could set examples of how mini-grids can bring an end to energy poverty in India. But mini-grids developed so far in the country are facing several challenges due to high capital and operating costs, high tariff and inconsistent revenue collection, low demand in the villages, and bureaucratic delays etc. In some states with its unique geography and the current state of economy and village habitations, grid

November 2016 www.InfralinePlus.com

connectivity is neither feasible nor cost effective. Therefore, off-grid solutions like Decentralized Distributed Generation (DDG) facilities stand as an ideal mode for supply of electricity. DDG can be based on either conventional or renewable sources and is usually implemented in remote villages where connectivity to the grid is not feasible or cost effective. DDG enables electricity generation at the local level using locally available resources ensuring reduced dependence on external resources. Local distribution networks or mini-grids are set up over a cluster of villages and powered by a local generating plant which may be based on conventional fuels such as diesel, natural gas, fuel oil or on renewable energy such as wind energy, solar energy, hydro power, and biomass. RE mini-grids have distinct advantages over central grid extension and other decentralized energy options in providing access to reliable and affordable electricity. 1. Compared to central grid extension, RE mini-grids can be less expensive due to lower capital cost of infrastructure (depending on distance) and lower cost of operation by avoiding transmission and distribution losses. 2. In countries with power shortages, electricity supply through the central grid, especially in rural areas, may not be reliable. In such regions, RE mini-grids that can be designed and operated effectively, can be more reliable than the central grid in providing electricity access and can ensure local energy security. 3. Mini-grid developers have the potential to access capital beyond the traditional power sector, and may be able to provide quicker access to electricity than central grid extension that may be prone to bureaucratic hurdles and slow implementation. 4. Unlike other decentralized energy

options like solar home lighting systems and off-grid lighting products, mini-grids (depending on their size) can provide electricity to not only residential loads like lighting and phone charging, but

In some states with its unique geography and the current state of economy and village habitations, grid connectivity is neither feasible nor cost effective. Therefore, off-grid solutions like Decentralized Distributed Generation (DDG) facilities stand as an ideal mode for supply of electricity

also to commercial loads like mills and oil presses. 5. RE mini-grid developers have strong incentives to pursue demand-side management, to keep capital cost of generation equipment low. 6. Development and operation of mini-grids can create local jobs. The development of a fully-fledged, low-carbon economy with increasing deployment of renewable sources will require changes to the existing transmission and distribution infrastructure. Smart technologies will be a vital component of this transformation. Increasingly, consumers expect reliable supply, clean energy, responsive service, new facilities and cost efficiency from their utilities. Smart grids can enable all that and more.

For suggestions email at feedback@infraline.com

November 2016 www.InfralinePlus.com

StatisticsPower State/Utilities wise Cross Subsidy Surcharge for 2016-17 (September, 2016) S. No.

Name of State

Telangana

Odisha

Kerala

Haryana

Gujarat

Name of Discom

Category of consumers HT-I Industry (11 kV) HT-II - Others (11 kV) HT-I Industry (33 kV) TSNPDCL HT-II - Others (33 kV) HT-I Industry (132 kV and above) HT-II - Others (132 kV and above) HT-I Industry (11 kV) HT-II - Others (11 kV) HT-I Industry (33 kV) TSSPDCL HT-II - Others (33 kV) HT-I Industry (132 kV and above) HT-II - Others (132 kV and above) CESU EHT CESU HT NESCO EHT NESCO HT WESCO EHT WESCO HT SOUTHCO EHT SOUTHCO HT EHT General EHT Commercial HT-I Industry (B) KSEB HT II General (A) HT II General (B) HT-IV Commercial HT industry Bulk Supply (other than DS) DHBVN & UHBVN Railways (Traction) LT Industry NDS (HT) UGVCL, MGVCL, PGVCL & DGVCL HT Category Large supply

Punjab

PSPCL

Domestic supply Non-Residential supply Bulk supply Railway Traction

Rajasthan

AVVNL, JVVNL & JDVVNL

Chhattisgarh

CSPDCL

Joint Electricity Regulatory Commission For the State of Goa and Union Territories, Gurgaon

DNH Power Distribution Corporation Limited

For 220 kV/132 kV consumers For 33 kV consumers HT & EHT

SBPDCL 10

LIP - EHV LIP - 33 kV LIP - 11 kV ML - EHV ML - 33 kV ML - 11 kV NDS - EHV NDS - 33 kV NDS - 11 kV

Bihar NBPDCL

Cross Subsidy Surcharge (CSS) 1.66 INR/kWh 2.03 INR/kWh 1.44 INR/kWh 1.78 INR/kWh 1.34 INR/kWh 3.55 INR/kWh 1.65 INR/kWh 2.03 INR/kWh 1.48 INR/kWh 1.81 INR/kWh 1.35 INR/kWh 1.77 INR/kWh 143.58 p/kWh 95.58 p/kWh 126.03 p/kWh 65.82 p/kWh 126.68 p/kWh 83.45 p/kWh 191.03 p/kWh 141.02 p/kWh 180 p/kWh 210 p/kWh 50 p/kWh 10 p/kWh 180 p/kWh 230 p/kWh 0.93 INR/kWh 1.54 INR/kWh 0.12 INR/kWh 0.57 INR/kWh 1.46 INR/kWh 1.45 INR/kWh 89 paise/kWh (85 paise/kVAh for Large Supply General Industry and 87 paise/kVAh for Large Supply PIU/Arc Furnace industry) 92 paise/kWh (85 paise/kVAh) 107 paise/kWh (98 paise/kVAh) 55 paise/kWh (52 paise/kVAh) 82 paise/kWh (80 paise/kVAh) 0.18 INR/kWh 0.13 INR/kWh 0.05 INR/kWh 0.15 INR/kWh 0.09 INR/kWh 0.02 INR/kWh 0.49 INR/kWh 0.43 INR/kWh 0.36 INR/kWh Rs. 1.16 per kWh (which is 90% of the computed value of Rs. 1.29 per kWh) Rs. 1.21 per kWh (which is 90% of the computed value of Rs. 1.34 per kWh). 0.22 INR/kWh

Industry For 132 kV consumers For 33 kV consumers (other than HTSS) For 11 kV consumers (other than HTSS) For HTSS consumers (33 kV& 11 kV) For 132 kV consumers For 33 kV consumers (other than HTSS) For 11 kV consumers (other than HTSS) For HTSS consumers (33 kV& 11 kV)

Rs. 0.69/kWh Rs. 0.78/kWh Rs. 0.77/kWh Rs. 0.40/kWh Rs. 0.69/kWh Rs. 0.78/kWh Rs. 0.79/kWh Rs. 0.40/kWh

November 2016 www.InfralinePlus.com

S. No.

Name of State

Name of Discom

SPDCL

Andhra Pradesh

EPDCL

MSEDCL 12

Maharashtra

R-Infra Tata Power

Himachal Pradesh HPSEB

DVVNL, MVVNL, PuVVNL, PVVNL

Uttar Pradesh KESCO

NPCL 15

Uttarakhand

Jammu & Kashmir JKPDD

Tamil Nadu

Karnataka

UPCL

TANGEDCO

BESCOM, HESCOM, MESCOM, GESCOM & CESC

Assam

APDCL

Meghalaya

MePDCL

Category of consumers LT-II: Non-Domestic/Commercial LT-III: Industrial LT-VII: General LT-VIII: Temporary Supply HT-I(A): Industrial HT-I(B): Ferro-alloys HT-II: Others HT-III: APTs, BSTs and Rly. Stns. HT-IV(A):Lift Irrigation HT-IV(B):Composite Water Schemes HT-V: Railway Traction HT-VI: Townships & Colonies HT-VIII: Temporary LT-II: Non-Domestic/Commercial LT-III: Industrial LT-VII: General LT-VIII: Temporary Supply HT-I(A): Industrial HT-I(B): Ferro-alloys HT-II: Others HT-III: APTs, BSTs and Rly. Stns. HT-IV(A):Lift Irrigation HT-IV(B):Composite Water Schemes HT-V: Railway Traction HT-VI: Townships & Colonies HT-VIII: Temporary HT I (A): HT - Industry (Express Feeder) HT I (B): HT - Industry (Non-Express Feeder) HT I: HT-Industry HT II : HT- Commercial HT I: HT-Industry HT II : HT- Commercial Large Industrial Power Supply EHT Consumers Large Industrial Power Supply HT 2 Consumers Irrigation & Drinking Water Supply Category - EHT Consumers Irrigation & Drinking Water Supply Category - HT Consumers Bulk Supply Category - EHT Consumers Bulk Supply Category - HT Consumers HV-1 (Supply at 11 kV) HV-1 (Supply above 11 kV) HV-2 (Supply at 11 kV) HV-2 (Supply above 11 kV ) HV-3 (Supply above 11 kV ) HV-4 (Supply at 11 kV) HV-4 (Supply above 11 kV ) HV-1 (Supply at 11 kV) HV-1 (Supply above 11 kV) HV-2 (Supply at 11 kV) HV-2 (Supply above 11 kV ) HV-1 (Supply at 11 kV) HV-1 (Supply above 11 kV) HV-2 (Supply at 11 kV) HV-2 (Supply above 11 kV ) HT industrial consumers Non-domestic consumers Nil Industry (Injection & Drawal Voltage 230 kV) Railway traction (Injection & Drawal Voltage 230 kV) Government Educational Institution Etc. (Injection & Drawal Voltage 230 kV) Pvt. Educational Institutions etc. (Injection & Drawal Voltage 230 kV) Commercial and Other (Injection & Drawal Voltage 230 kV) HT-2a (66 kV & above) HT-2a (HT level-11 kV/33kV) HT-2b (66 kV & above) HT-2b (HT level-11 kV/33kV) HT-2c (66 kV & above) HT-2c (HT level-11 kV/33kV) HT-4 (66 kV & above) HT-4 (HT level-11 kV/33kV) HT-5 (66 kV & above) HT-5 (HT level-11 kV/33kV) HT II Industry category EHT HT

Cross Subsidy Surcharge (CSS) 2.54 INR/kWh 1.15 INR/kWh 0.49 INR/kWh 3.1 INR/kWh 2.39 INR/kWh 0.29 INR/kWh 4.6 INR/kWh 2.53 INR/kWh 1.29 INR/kWh 0.11 INR/kWh 1.21 INR/kWh 0.27 INR/kWh 3.97 INR/kWh 2.79 INR/kWh 0.60 INR/kWh 0.00 INR/kWh 2.42 INR/kWh 2.07 INR/kWh 0.12 INR/kWh 4.22 INR/kWh 2.36 INR/kWh 1.88 INR/kWh 0.91 INR/kWh 1.22 INR/kWh 0.63 INR/kWh 0.00 INR/kWh 1.49 INR/kWh 1.09 INR/kWh 0.2 INR/kWh 1.19 INR/kWh 0.81 INR/kWh 1.12 INR/kWh 1.95 INR/kWh 2.05 INR/kWh 2.56 INR/kWh 1.83 INR/kWh 2.59 INR/kWh 2.01 INR/kWh 2.8 INR/kWh 2.16 INR/kWh 1.05 INR/kWh 0.63 INR/kWh 1.52 INR/kWh 2.17 INR/kWh 2.36 INR/kWh 3.04 INR/kWh 2.57 INR/kWh 1.2 INR/kWh 1.26 INR/kWh 4.84 INR/kWh 4.40 INR/kWh 2.97 INR/kWh 2.82 INR/kWh Rs. 0.47/kWh Rs. 0.74/kWh 350.69 (Paise/kWh) 312.99 (Paise/kWh) 262.61 (Paise/kWh) 304.29 (Paise/kWh) 523.28 (Paise/kWh) 118 Paise/unit 86 Paise/unit 253 Paise/unit 222 Paise/unit 128 Paise/unit 96 Paise/unit 45 Paise/unit 14 Paise/unit 709 Paise/unit 677 Paise/unit 0.54 Rs/kWh 1.9 INR/kWh 1.75 INR/kWh

November 2016 www.InfralinePlus.com

NewsBriefs | Coal Government decides to factor in indexed imported coal prices into UMPPs

New ultra mega power projects (UMPPs) based on imported coal may be insulated from uncertainties in fuel costs, with the power ministry deciding to factor in indexed imported coal prices into tariff for such plants. The ministry has agreed

to use an index of prices of imported coal from Indonesia, South Africa and other coal exporting countries for calculation of electricity tariff from such plants. While the ministry has agreed to provide for the escalation clause in bid rules, the final go-ahead has to be given by the Cabinet, it is learnt. This will safeguard companies against unexpected changes in fuel costs that have adversely impacted the existing UMPPs based on imported coal. The ministry had in December last year issued draft bid guidelines for imported coalbased UMPPs that contained provisions for unforeseen events related to coal imports.

India to overtake US as world’s biggest coal producer after China

India is set to surpass the US as the world’s biggest coal producer after China by 2020, as state-miner Coal India Ltd. ramps up output to meet demand from domestic power producers, according to BMI Research. The South Asian nation’s share of world output will increase to 12.7% by 2020 from 9.8% in 2016, BMI said in a report. It cautioned that the country will still fall short of the government’s ambitious coal output target and domestic demand will continue to exceed production up to 2020. India, where coal accounts for 61% of electricity generation capacity, is seeking to reduce imports of the fuel by boosting domestic output. India foresees coal as a dominant source of energy at least for a couple of decades, while other

countries, including the US, are moving faster toward replacing the fuel with cleaner energy sources such as natural gas to meet tougher emissions standards. India plans to expand coal output to 1.5 billion metric tons by 2020 from an estimated 634 million tons in the year ended 31 March.

National Assocham seeks relaxation in longterm PPA norm for coal

Industry body Assocham has sought relaxation in the norm that seeks long-term power purchase agreements (PPA) with distribution companies (discoms) to get coal under fuel supply agreement. “In the current scenario, CIL’s over capacity of coal production and thus removing the cap of long term PPA would be beneficial for them and also help increase the consumption of coal as CIL may get the share of demand of coal by the power plants who have not been able to sign a long term PPA due to paucity of bidding opportunities,” Assocham SecretaryGeneral D S Rawat recommended in a letter to coal secretary Anil Swarup. He, however, did not highlight the number of power plants or the capacity that was suffering from this issue. Explaining the need for the same, Assocham pointed out that there was no such condition at the time when such projects were conceptualized and investments were made in these power plants.

JSPL reopens Mozambique mines to tap rising coking coal price Jindal Steel and Power Ltd (JSPL) has reopened its mines in Mozambique from 1 October as the price of coking coal, used in steel production, has surged because of supply cuts in China. The company, which is in the process of selling some of its assets in the power sector to reduce over Rs40,000 crore of debt, expects the rise in coking coal prices to help improve the performance of its mining operations in the second half of the year. JSPL, which has mining, steel, power and construction businesses, had reported a consolidated loss of Rs1,082 crore for the June quarter, double the loss it had reported in the year

ago period, mainly on account of nearly flat demand for steel and high financing costs. Ravi Uppal, managing director and group chief executive officer of JSPL, said its unit JSPL Minerale Mozambique LDA has restarted mining operations at the Chirodzi Mines in Tete Province in Mozambique as the global price of coking coal, also known

as metallurgical coal, has risen by more than 150% since August. JSPL expects access to own coking coal will also give its steel output a competitive edge. India has no coking coal reserves and the entire requirement is imported from markets such as Australia, Canada and Africa. While the increase in the price of coking coal in world markets is welcome news for miners, passing on the increased cost of coal may not be easy for domestic steel producers in the face of cheap steel imports from China and from countries with which India has free-trade agreements such as Japan and South Korea.

November 2016 www.InfralinePlus.com

NewsBriefs | Coal Chhattisgarh registers fivefold increase in mineral revenue

Revenue from minerals in Chhattisgarh has increased by fivefold over the past decade. The mineral-rich state contributes 16 per cent of the minerals produced in the country. The state has been endowed with 28 types of minerals, which include diamond, coal, iron ore, limestone, bauxite, dolomite, tin

ore etc. According to the report of the state’s mining directorate, Chhattisgarh had produced minerals worth about Rs 20,000 crore in the financial year 2015-16 and earned a revenue of Rs 3,709 crore. The revenue earned was almost five times the revenue collected by the state from minerals in 2005-06. With the increasing graph of mineral production, the state has registered a growth of almost twofold in the past six years. Minerals valuing Rs 10,674 crore were produced during 2008-2009. The production of black gold tops the list. The state has 16.36 per cent of the total deposits of coal, with a 41,442 million tonnes reserve.

Coal import declines 6 pc to 16 mn tonnes in September Coal imports fell 6 per cent to 16.1 million tonnes in September over the same month last year owing to higher prices of the fossil fuel in the international market. “Coal import (all types of coal) in September 2016 stood at 16.01 million tonnes (MT) (provisional) against 17.10 MT in September 2015,” Vinaya Varma, the newly-appointed CEO of mjunction services, an online procurement and sales platform floated jointly by SAIL and Tata Steel, said. He further said that higher prices in international markets appear to be discouraging Indian buyers from importing coal as they expect rates to soften and this is the primary reason for falling inward shipments in recent months, including September 2016, he said. Varma further said that a suf-

ficient stock of domestic coal is available in the country. In addition, the demand for coal in India is not rising as per expectation as overall economy is not growing in the way it was expected to grow, leading to lower-thanexpected demand for steel and cement.

National CIL coal linkage likely for NTPC Pudimadaka power project

In a major boost to the 4000 MW NTPC thermal power project in Pudimadaka in Andhra Pradesh, the Union Power and Coal Minister Piyush Goyal has assured fuel linkage from CIL for the project. This project was earlier proposed to be developed by using imported coal. This announcement comes following a review meeting of various power projects by Piyush Goyal and Union Information Minister M Venkaiah Naidu. While reviewing the progress of other projects, the Government said the Mannavaram Power Projects Equipment Manufacturing Plant will not be shifted and efforts would be made to ensure more business, the Power Minister assured. Venkaiah Naidu convened a meeting with Goyal and Minister of Heavy Industries Anant Geete, and officials of NTPC, BHEL and NTPC BHEL Power Projects Ltd (NBPPL), coming up at Mannavaram in AP to review their progress.

World Coal Association exhorts India for sustainable use of cleaner coal The World Coal Association (WCA) has urged India to work towards deployment of cleaner coal. The global industry association for coal has said that in order to support a sustainable development of the resource, the world’s third largest energy consumer, India, will require financial, technological and other support internationally. Benjamin Sporton, Chief Executive, WCA, said: “We are excited to be in India and have come here to observe and take back key insights. As an international organization, we can support the sustainable development of India’s coal, mining and power sectors in

partnership with Coal India, NTPC, and other public and private enterprises. As India is going to rely on coal to power up its economy in the decades to come, I think it is important to look for ways to mine coal in a sustainable, efficient and safe manner, as well as look for ways to utilize it through modern high-efficiency, low-emission (HELE) power generation

technologies to reduce emissions. For the international coal community, India is of high strategic importance and therefore, WCA has decided to convene its annual board meeting in New Delhi, this year.” According to the guidance given by the International Energy Agency (IEA), by 2040, India’s energy consumption will surpass that of the Organisation for Economic Cooperation and Development (OECD) Europe, and would be rapidly approaching that of the US. Like other countries before it, the country’s economic growth will be still largely powered by coal.

November 2016 www.InfralinePlus.com

NewsBriefs | Coal US power sector coal consumption to near 1984 levels in 2016: EIA

Coal production in the US is projected to total 725.9 million st in 2016, down 19% from last year, according to the Energy Information Administration’s monthly Short Term Energy Outlook. The agency expects production to fall across all basins, particularly in the western US, where production

is projected to decline 21.7% from 2015. In 2017, the agency estimates US coal production will climb to 754 million st, partly due to higher natural gas prices. Growth is projected across all basins, led by growth in the Interior region, at 7%. The Interior region includes the Illinois Basin. Electric power sector coal consumption is projected to total 673 million st in 2016, down 9% from last year, which would be the lowest annual total since 1984. In 2017, power sector coal consumption is projected to total 684 million st, up 1.7%. For 2016, the agency expects US coal generation to total 30%, compared with 33.2% last year.

Indonesia says coal price rally to extend into Q1, boost mining revenues

The current rally in thermal coal prices could extend through to the end of the first quarter of 2017, an Indonesian mining ministry official said, helping cash-strapped miners boost revenues in Southeast Asia’s largest economy. Coal prices sank 70 percent over 2011 and 2015 amid worries imports by top consumer China had peaked on measures to combat pollution. However, contrary to expectations of further falls, prices have rallied by about 75 percent this year with producers trimming supply due to concerns over demand. Indonesia, where thousands of coal mines went out of business as prices cratered, is now confident of achieving its target of 30.11 trillion rupiah ($2.32 billion) in non-tax revenue from the

coal and minerals sector this year, Coal and Minerals Director General Bambang Gatotsaid. In 2015, the world’s top thermal coal exporter had missed its target by 43 percent. “Right now we’re almost at 50 percent. With the rise in coal prices hopefully we’ll reach it,” Gatotsaid.

International Australian coal prices reach $100 per tonne since 2012

As Australian thermal coal prices hit $100 per tonne recently for the first time since 2012, the fuel’s rally is now among the commodity’s top-three bull-runs on record. The bull-run rivals the 2011 Fukushima nuclear meltdown and Australian mining flood spike, and the 2008/09 financial boom and bust. With Australian New castle spot cargo prices for November, up almost 100 percent since June to $100 per tonne, their highest since 2012, traders and analysts say a bust is inevitable. “Of course it’s not going to last. Rising prices are encouraging Chinese miners to raise output and the government, seeing how much prices have risen, has backed down somewhat and asked for an increase in production,” said Ralph Leszczynski of shipping brokerage Banchero Costa. However, many believe prices could keep rising until the end of the year or possibly into early 2017 as the winter season fuels demand and miners take time to bring on more production.

World Bank money is helping to finance Asia’s coal boom A coal boom in Asia could destroy any chances of meeting global climate goals, World Bank Group President Jim Yong Kim pronounced recently said. “If all the new coal plants on the books earlier this year were constructed – especially in Asia – it would be impossible to stay below two degrees,” he said, referring to the temperature change target set in the Paris Agreement. Slowing the growth of coal fired power plants is “perhaps the most urgent” task for global leaders trying to curb climate change, Kim said, emphasizing the need for a “greener finance sector.” Since 2013, the World Bank Group limited its own financing of new coal projects to

“rare circumstances.” Meanwhile, according to a report led by US-based NGO Inclusive Development International, the Asian coal

boom Kim describes as a “disaster” has been quietly enabled by the International Finance Corporation (IFC), the private sector arm of the World Bank Group. After two years of sifting through a commercial banking database, researchers found the IFC has financial ties to 41 new coal projects launched since 2013. These projects include highly controversial power plants like the Mahan plant in India, the proposed Lanao Kauswagan power station in the Philippines and the Rampal coal plant in Bangladesh, each of which has prompted protests by local activists who fear the projects will cause severe environmental, social and human rights problems.

November 2016 www.InfralinePlus.com

ExpertSpeak Oxygenation, Bioremediation set to play significant role in water treatment Anil Attavar, Director, Way 2 India, feels that as India moves ahead on its plans on urbanisation, water treatment will be a key concern. The country is grappling with the problems encountered in maintaining, preserving and nurturing water bodies that are under the onslaught of urbanization and industrialization in the cause of economic growth. In this regard, oxygenation and bioremediation can play an important role in mitigating these problems. A country can afford to neglect its water sources only at its own peril. The overall scenario in Indian water sector demands state of the art wastewater treatment technology, achieving best results with ease of operation, economy and safety. Water, one of the most important substances on earth, sustains life. Natural resources like rivers, lakes, tanks, ponds and such other water bodies play a significant role in our lives. The burgeoning population of our country is increasing pressure on the environment – water in particular - and the primary concern is to conserve and preserve, in good condition, this most precious natural resource. Rapid urbanization is creating tremendous stress on existing infrastructure. India is in dire need of water management, with 17% world population against 4% water availability. Increase in water treatment facilities using efficient water treatment technology is the only option. Most of the water bodies in our cities and towns are in a state of neglect (see photographs). Many water bodies which were flourishing - and attracted people a few decades ago are in despicable condition, shunned by general public - and are causing health and hygiene problems resulting in several diseases and ailments.

Oxygenation and Bioremediation It is in this backdrop that oxygenation and bioremediation can prove to be an effective method to treat Anil Attavar, Director, Way 2 India and preserve water stagnating in Rapid lakes, tanks, The treatment involves oxyurbanponds and genation or bioremediation, or a ization is other such combination of both, depending creating trecountless on the quality of the water to be mendous stress water bodtreated. The primary application on existing ies in our in the treatment of wastewater is infrastructure cities, towns achieving 100% DO (Dissolved and villages. Oxygen). By achieving this, the The technology BOD (Biological Oxygen Demand)and has been accepted COD (Chemical Oxygen Demand) are and shortlisted by National Mission for reduced, enabling the slurry’s microbes Clean Ganga, for its Namami Gange and solids to exist in a balanced atmoproject. This technology is all set to sphere resulting in a neutral effluent. play a significant role in water treatOne of the most significant conment, as the country’s water experts tributors to quality of life is air that grapple with the problems encountered does not stink, and the SAR reactor in maintaining, preserving and nurturcan achieve this with minimum fuss. ing water bodies that are under the The process of treatment is simple. The onslaught of urbanization and indusstagnant water is treated by aeration, trialization in the cause of economic in which nano bubbles carry oxygen growth. While the aerator alone would to the water, achieving full aeration in need to be imported (being patented), one pass through the unit. Given the all other components of the system simplicity of the equipment, very little would be procured locally, to maxioperator training is required. Fish can mize indigenization and give a fillip thrive and foul odours are removed, to the Government of India’s ‘Make in eliminating negative community India’ initiative. impact. The operation can if required,

November 2016 www.InfralinePlus.com

ExpertSpeak

Dead Fish at Ulsoor Lake, Bengaluru

be monitored remotely, using wireless communication systems. The equipment comprises broadly, an aerator, a pump and a blower, apart from an electrical panel, switches and interlocks. Efficiency of aeration depends on bubble size and consistency. Smaller the bubbles, more efficient the transfer of oxygen. Nano and micro size bubbles are produced consistently, and much more efficiently than traditional aeration devices. Traditional aeration devices like fountains, sprays and sprinklers are grossly inefficient due to the large particlesize, having a small surface area, leading to less absorption of oxygen. Moreover, the droplets of water fall locally in the immediate vicinity of the fountain or the spray, and homogenous oxygenation is not

A picture of neglect

The advantages to the user are manifold. The equipment requires very little maintenance, as there are no moving parts, adding to the safety of the operating personnel, during operation. Constructed with stainless steel and high density polyurethane, possibility of corrosion, abrasion and contamination do not exist. The simplicity of the equipment leads to requirement of very little operator training

achieved. Additionally, the power consumption is very high as more power is required to throw water into the air than the other way round. In SAR aerator, the aerator internally disperses air immediately, reaching up to 130% of oxygenation through nano and microbubble contact with the water in the SAR Aerator. Full aeration is achieved in one pass through the SAR Unit. The aerator achieves high throughput as the water is fully aerated, passing through the aerator in fractions of a second. The process requires very low input pressures of water and air while achieving high throughput capacity. Immediate and consistent oxygenation of the entire water mass is achieved while being distributed throughout the water mass. The small size of the aerator requires minimum footprint and the equipment can be very easily retrofitted. The advantages to the user are manifold. The equipment requires very little maintenance, as there are no moving parts, adding to the safety of the operating personnel, during operation. Constructed with stainless steel and high density polyurethane, possibility of corrosion, abrasion and contamination do not exist. The simplicity of the equipment leads to requirement of very little operator training. The process eliminates anaerobic conditions and removes foul odours, thus avoiding negative community impact. The system finds application in areas of aeration, flocculation and bio-remediation. The process can be monitored remotely using wireless communication systems. The technology also finds application in Bio-Remediation. Pollution has been occurring in nature since the beginning of time, and nature, has, in the past, been able to mitigate pollutionâ&#x20AC;&#x2122;s detrimental effects by producing an offsetting set of circumstances so as to naturally control the pollution. A â&#x20AC;&#x153;babbling brookâ&#x20AC;? undergoes natural bioremediation. The

November 2016 www.InfralinePlus.com

physically abused, have lasted over nine years of continuous use.

Case study - Calgary Airport

A SAR 100 GPM Aerator

Before: (using a traditional venture aerator)

After: (using SAR Aerator after 30 days of operation)

“babbling” occurs when small waterfalls, stones or any obstruction in the flow break up the water into droplets exposing the water surface to air. These droplets absorb oxygen from the air. Microorganisms (bacteria) of all kinds live in the water. They need oxygen to live. As long as the brook is babbling, the water is being oxygenated, and the bugs can live. These bugs eat the pollutants in the water. Without such babbling or movement of water, the oxygen is not replenished. Without oxygen the bugs die and the pollutants build up, creating a high BOD (Biological Oxygen Demand) which results in stagnation and odour, and contaminating drinking water sources. For the first time, by using this technology,large volumes of water can be bio-remediated. 10 EBRs, which fit into a 10 foot by 10 foot space can oxygenate, add bacteria and nutrients, to 20,000

gallons of water per minute. Applications for this technology are endless as bacteria “eat” all sorts of pollution. Installation of the aerator requires no special skills other than a qualified electrician. Each unit comes skid mounted with an electrical panel containing all the relevant breakers, switches and communication devices. The assembly requires no special skills. Since there are no moving parts to the aerator itself, service is extremely easy. The only service required for the aerator itself is occasional cleaning of the internal liner. This requires removal of the liner, replacing it with a clean one and putting the unit back into use. This operation takes approximately 15 minutes. If continuous operation is required, a second liner should be on hand for immediate replacement. The stainless steel liners are cleaned periodically, and if not

Several case studies are available, prominent being the Calgary Airport case where ethylene glycol, used for de-icing aircraft during cold weather, was accumulated in a pond upwind of the main terminal, causing the pond to become anaerobic in spring, emanating foul odours. Removal of ethylene glycol entails very expensive chemical and mechanical methods like ozone treatment and distillation. It was therefore necessary to introduce a bacterium which secreted surfactants in order to produce a froth cap on the pond. An “oil eating” bacteria was introduced into the liquid flow of the aerator through a dosing pump, and a froth cap was produced. The odour emitting from the pond was eliminated. The froth cap covered the entire oil slick. When the froth cap was pushed aside where the oil slick had been, there was no longer an oil slick. Professors of Biology at the University of Calgary concurred that the oxygenation of the froth cap would greatly enhance bioremediation, as the largest inhibitor to aerobic bacteria bioremediation is – simply - lack of oxygen. Thus, SAR aeration, in conjunction with aerobic bacteria addition, results in consumption of organic compounds by forming a froth cap, which is the most effective method of distributing bioremediation bacteria on bodies of water. This technology has also been extremely useful in addressing odour problems in mushroom farms, resulting in the added advantage of huge savings in power costs, due to reduced power consumption. Apart from thousands of dollars save in power, millions of dollars would have been spent had the mushroom company been forced to relocate due to negative community impact caused by its activities. The views in the article of the author are personal For suggestions email at feedback@infraline.com

November 2016 www.InfralinePlus.com

InDepth

Lack of coal demand poses fresh challenge to the Government

►►SEBs of Maharashtra, Gujarat and Tamil Nadu have become power surplus ►►Around 21-22 GW of coal-based generation capacity is currently stranded without a PPA By Team InfralinePlus

The Indian government seems to have backtracked on its initial target of increasing 1bn coal production, seeing the lack of demand from all sectors, including the power sector. India had initially planned to increase its domestic coal production to 1bn tonnes by 2020 in light of the ever-increasing demand from the power sector, especially from the Independent Power Producers (IPPs). However, the demand from the power sector has declined significantly over the past one year, due to falling demand from state electricity distribution companies (DISCOMs).

Owing to the bad financial health of the DISCOMs, states have been resorting to power cuts and load shedding and prefer to buy cheaper power from the Power Exchanges (PXs). The state DISCOMs have failed to sign long term power purchase agreements (LTPPAs) since 2013 and the recent trend indicates that the market is slowly but surely shifting to short term power purchase planning. Due to increase in DISCOM losses over the past two years, there have been definitive steps undertaken by the Ministry of Power (MoP) with the

advent of the Ujwal Discom Assurance Yojana (UDAY). UDAY seems a more comprehensive scheme than any other past schemes as it talks about bringing efficiency and transparency in the workings of DISCOMs. Various state generating companies (GENCOs) have been requesting Coal India (CIL) to stop the coal supply for their power plants due to less demand from the state and their respective DISCOMs. Coal India’s expansion plants are part of India’s overall efforts to ensure energy security by cutting crude oil imports by 10 percentage points over the

November 2016 www.InfralinePlus.com

the energy deficit and lift people out of energy poverty.

Coal Demand-Supply/ Power Purchase Agreements/Stranded Capacity: A conundrum!

next six years – the country now imports 80% of the crude oil requirement – and boosting production of natural gas. The demand for coal from the power sector has seen tremendous decline in the past one year. Government has set the 2016-17 coal production target for Coal India at 598 MT. While the production has been increasing continuously there has not been many takers of coal. Coal demand has remained subdued during 2016-17. Despite being a regional energy giant, India has a low per-capita consumption (1075 kilowatt hours (kWh) per person per year) compared to China (4,034 kWh per person) and the US (13,532 kWh per person). The low per-capita energy consumption in India is primarily due to the fact that a vast majority of population does not have access to modern energy sources to deliver basic energy needs. One in four Indians does not have access to electricity; about two-thirds of the population use traditional biomass for cooking. ‘Energy poverty’ – the

Over the past four years, PPAs of only 12 GW have been signed under the competitive bidding route (Case 1 bids). Leading state electricity boards (SEBs) of Maharashtra, Gujarat and even Tamil Nadu have become power surplus and may not require additional contracts for the next couple of years inability to access sufficient energy – is one of the reasons for the low levels of development in some regions, as energy deprivation has significant health, social, environmental and economic implications. The government is relying on coal-fired power plants to reduce

King Coal! India’s dependence on coal can be seen in its electricity generation mix. As of September 2016, 187 GW (approximately 61% of the total installed capacity) came from coal-powered thermal generation. The balance consists of a combination of hydro (15%), other fossil fuel (9%) nuclear (2%) and non-hydro renewable energy sources (13%). In recent years, India’s electricity sector has grown at a rapid pace. Installed generation capacity has grown phenomenally post-independence from some 1.4 GW in 1948 to about 306 GW by September 2016.

Several state DISCOMs are already facing financial stress due to accumulated losses to the tune of INR 3.8 Lakh Crores (as on March, 2015) and increasing @ 12% p.a. as reported by the ministry. Such financial stress does not allow DISCOMs to make fresh power purchases and prevents them from floating new tenders for Long Term Power Purchase Agreements (LTPPA) for thermal power which will have a negative impact. Backing down long term thermal firm must run power for accommodating infirm power is unsustainable technically and financially and will be a big challenge for system operators to deal with. Over the past four years, PPAs of only 12 GW have been signed under the competitive bidding route (Case 1 bids). Leading state electricity boards (SEBs) of Maharashtra, Gujarat and even Tamil Nadu have become power surplus and may not require additional contracts for the next couple of years. Other utilities who need power are taking full advantage of the prevailing low spot power prices in exchanges (less than INR 2.5/unit), rather than entering longterm contracts. Currently, around 21-22 GW of coal-based generation capacity is stranded without a PPA. The plant load factor (PLF) of the existing coalbased capacity for private independent power producers with a contract was less than 60% in FY 2015-16 and has been consistently hovering well below 60% during 2016-17 (up to September 2016). While Coal India’s stellar performance over the past two years has taken away fuel-related worries to some extent, legacy issues such as new coal block auctions at aggressive prices still haunt some generators. Further, there is a huge amount of generation capacity lying undispatched

November 2016 www.InfralinePlus.com

InDepth

due to unavailability of coal which is due to the policy that only plants with long term contracts will get coal linkage, thereby rendering installed transmission capacity underutilised. On the other hand, state distribution companies are not pursuing long term contracts resulting in a Catch-22 situation for the generation and transmission capacity addition and a utilization mismatch.

Historical and future trend

Coal has always been the mainstay of the Indian power sector and it is a view shared by most policymakers that it must remain the primary source of electricity generation for at least the next three to four decades. This view is based on the belief that a centralised electricity system based on an everexpanding coal power generation base will ensure energy security, provide affordable energy for all and, importantly, address the issue of energy scarcity in India. The dominance of coal in India’s energy consumption basket can be attributed to its extensive use in producing electricity in the country. Coal powered thermal power plants (TPPs) account for 70% of total electricity generated in the country and represents 61% of the installed power capacity. The current scenario contrasts with the one in 2013 when CIL was finding

it difficult to sign Fuel Supply Agreements (FSAs), despite constant prodding by the government. It had struggled to accept the FSA obligations even in case of power plants with long-term PPA and slated to be commissioned before March, 2015. The government at that time identified two groups of plants with an aggregate capacity of 14,600 MW and asked CIL to supply fuel to them on a short-term MoU basis as they lacked LoAs from the company. Although, most of the central sector plants in this category are likely to be commissioned

The dominance of coal in India’s energy consumption basket can be attributed to its extensive use in producing electricity in the country. Coal powered thermal power plants (TPPs) account for 70% of total electricity generated in the country and represents 61% of the installed power capacity

Figure 1: Coal India’s growth production and offtake levels during last five years (in %) w.r.t to demand from the power sector CIL's growth production and offtake/consumption by power utilities (FY11-FY16) Year-on-year growth (in %) Coal consumption by power utilities: 530.4 MT (15-16)

7.4

Coal consumption by power utilities: 489.4 MT (13-14)

3.8 0.01

2.1

FY11

1.1 FY12

6.9

2.3

2 FY13 Production

8.8

Coal consumption by power utilities: 545.9 MT (15-16)

3.8

1.4

FY14 Offtake

Source: Coal India (CIL), Central Electricity Authority (CEA), media reports

8.6

FY15

FY16

before 2020, there are several private sector plants that are facing financial issues leading to delays in or stoppage of the construction work. In 2013, apart from identifying plants for short-term supply contracts, CIL was also issued a presidential directive to sign FSAs with certain power plants holding valid LoAs. For this purpose, a list of power plants totalling around 78,000 MW capacity was finalized by the Central Electricity Authority (CEA) and approved by Cabinet Committee on Economic Affairs (CCEA). However, only about 58,000 MW of this capacity has been commissioned till date with around 54,000 MW having long-term PPAs and are therefore eligible to draw coal from CIL under FSAs. Amid an improving trend in domestic coal production and the measures being taken by CIL to augment domestic coal output, the dependence on coal imports is likely to remain high in the near to medium term (till FY19) and moderate gradually after that, due to the overall challenges in coal mine development along with risk of delays in ramping up of coal output by the allottees of schedule II and schedule III mines.

Conclusion

The financial position of state power distribution companies (DISCOMs) is being cited as a key impediment to demand growth. Over-investment in transmission is desirable for a country like India because the sources of energy lie either in the central/eastern coal belt or hydro resources in north while demand centers are in the plains of north, west and south. Stranded power capacities of 22-28 GW (industry estimates) may have to wait for 2-3 years for securing PPAs. During the present period, both government and industry are relying on UDAY scheme for the demand to pick up and kick-start the growth in the sector. For suggestions email at feedback@infraline.com

November 2016 www.InfralinePlus.com

StatisticsCoal Power Generation - Role of Coal (Aug’16) (Apr-Mar) (Apr-Mar) (2015-16) (2014-15) (Prov.)

FY. 16-17 Aug-16

FY. 15-16 Growth

Aug-15

Apr-Aug’16 (Prov.)

AprAug’15

Abs.

%age

1. Power Generation (In Billion Units) Total

1048.673

1107.386

95.261

95.12

486.442

460.266

26.18

5.70%

Hydel

129.244

121.341

17.738

17.779

63.652

67.659

-4.01

-5.90%

Thermal

878.32

943.407

72.929

73.515

403.856

373.097

30.76

8.20%

Coal based

800.334

861.714

65.839

66.854

368.384

340.304

28.08

8.30%

Oil

1.407

0.394

0.009

0.033

0.132

0.174

-0.04

-24.10%

Gas T.

41.075

47.053

4.403

3.854

20.995

17.802

3.19

17.90%

Lignite

35.504

34.246

2.678

2.774

14.345

14.817

-0.47

-3.20%

Nuclear

36.102

37.292

3.515

2.834

15.873

16.269

-0.4

-2.40%

Import (Bhutan)

5.008

5.245

1.08

0.992

3.06

3.242

-0.18

-5.60%

64.25

62.28

52.03

58.1

59.28

60.74

-1.46

-2.40%

II. PLF % Cumulative Thermal Coal based

63.86

51.72

57.91

59.04

60.39

-1.35

-2.20%

Lignite

75.23

70.93

61.43

63.62

66.67

70.73

-4.06

-5.70%

Nuclear

80.74

73.65

81.73

65.91

74.79

76.65

-1.86

-2.40%

III. Specific Coal Consumption* (Kg/KWH)

0.671

0.645

0.685

0.67

0.66

0.675

-0.02

-2.20%

385.393

409.132

27.3

30.2

157.8

160

-2.2

-1.40%

IV. Coal Despatches(ln MT) CIL SCCL

39.175

47.332

3.661

4.043

18.81

19.433

-0.62

-3.20%

Total

424.568

456.464

30.961

34.243

176.61

179.433

-2.82

-1.60%

INDIGENOUS

451.158

480.948

33.328

36.067

192.822

187.761

5.06

2.70%

IMPORT

91.288

80.716

5.116

6.868

28.877

34.804

-5.93

-17.00%

TOTAL

542.446

561.664

38.444

42.935

221.699

222.565

-0.87

-0.40%

Coal Consumn.*(ln MT)

531.477

545.674

42.911

43.562

232.018

217.959

14.06

6.50%

VI. Coal Stock (In MT)*

(As on 1.04.14)

(As on 01.04.15)

(As on 01.08.16)

(As on 01.08.15)

(As on 01.04.16)

(As on 01.04.15)

20.082

26.104

30.256

30.417

38.875

26.104

12.77

48.90%

(As on 01.04.15)

(As on 01.04.16)

(As on 01.09.16)

(As on 01.09.15)

(As on 01.09.16)

(As on 01.09.15)

26.104

38.875

28.424

30.082

28.424

30.082

-1.66

-5.50%

6.022

12.771

-1.832

-0.335

-10.451

3.978

V.Coal Receipt * (In MT)

VII. Decr./lncr.

Note(*): 1. Receipt, consumption and coal stock includes coal from all sources. 2. Specific coal consumption calculated as per April-August Generation & Consmn. Figs provided by CEA. 3. Coal stock is for Power plants monitored by CEA on daily basis.

November 2016 www.InfralinePlus.com

StatisticsCoal Indonesian Coal Prices - HBA - FY 2016-17 (till Octâ&#x20AC;&#x2122;16) Month

HBA 6322 kcal/kg (USD/ton)

HPB MARKER (kcal/kg GAR) (USD/Ton) Gunung Bayan I

Prima Coal

Pinang Coal

Indominco IM East

Melawan Coal

Envirocoal

Jorong J-1

Ecocoal

7000

6700

6150

5700

5400

5000

4400

4200

16-Apr

52.32

55.87

57.84

52.29

43.06

43.25

41.6

33.45

30.87

16-May

51.2

54.66

56.7

51.26

42.16

42.44

40.89

32.88

30.35

16-Jun

51.81

55.32

57.32

51.82

42.65

42.88

41.28

33.19

30.63

16-Jul

62.42

63.97

57.8

47.95

47.6

45.45

36.57

33.64

16-Aug

58.37

56.61

58.53

52.9

43.61

43.74

42.04

33.8

31.18

16-Sep

63.93

68.45

69.61

62.87

52.45

51.6

48.99

39.43

36.18

16-Oct

69.07

74.01

74.82

67.55

56.6

55.3

52.26

42.07

38.53

FOB Thermal Coal Prices - Australia & South Africa - FY 2017

Month

Australia (FOB Newcastle 6700 kcal/kg) (USD/Ton)

South Africa (FOB Richards Bay 6000 kcal/kg) (USD/Ton)

16-Apr

50.8

52.7

16-May

51.2

53.7

16-Jun

53.4

57.3

16-Jul

62.3

62.5

16-Aug

67.4

16-Sep

72.9

67.4

November 2016 www.InfralinePlus.com

CoverStory

Climate Change: Is India ready to move away from coal?

►►Make in India and Digital India to lead to a significant increase in electricity demand ►►Need to expedite capacity addition in hydro, nuclear and gas-based generation By Team InfralinePlus

On October 2, 2016, India made a strategic decision to move away from coal as a source of electricity in the long run by ratifying the Paris Agreement on Climate Change. The deal, approved by nearly 200 countries in Paris last December, aims to cut greenhouse gas emissions by shifting away from fossil fuels to limit global warming to “well below” 2C compared with pre-industrial times. However, considering the fact that India is one of the fastest growing economies in the world and more than 300 million

people are yet to receive power, this development has also triggered a debate on how it will impact India’s long term strategy to address energy security. The pace of reduction in India’s carbon intensity has slowed in the past decade due to heavy dependence on coal to meet electricity requirement. But by signing up to the Paris climate pact, the country has taken on binding commitments to reduce emissions, which means in the future it cannot fall back on the dirty fuel to fire its new

generating capacities if its electricity demand spikes. According to BP Statistical Review, India witnessed 5.3 per cent increase in emissions in 2015 -- the highest in the world. India is apparently banking on renewable capacity to meet its electricity requirement and not much attention is being paid to harnessing potential of cleaner and reliable energy sources like hydro, gas and nuclear, which does not seem to be a credible strategy to ensuring country’s long-term energy security.

November 2016 www.InfralinePlus.com

CoverStory

India has committed to reduce its emissions by 33 to 35 per cent over the baseline of 2005 by 2030 under the Paris climate agreement. Power sector accounts for 35-40 per cent of the country’s total emissions. India has targeted to raise share of renewable energy in its power mix to 40 per cent by 2030. However, as we know, capacity utilisation of renewable power plants is much lower at 15-16 per cent compared to conventional generating stations which can be easily run at 80-90 per cent plant load factor (PLF). That means a 100 MW solar plant will generate the same quantum of electricity as a 20 MW conventional plant. If the Indian economy gets back to the trajectory of 9-10 per cent annual GDP growth, electricity consumption could see a sharp increase. Then getting additional conventional capacity in time to meet power requirement might prove challenging. Building hydel and nuclear power plants takes time. Developing natural gas-based generation capacity is also not an option given the domestic shortage of the fuel and the issues of affordability involved in using imported LNG. If India tries to add coal-fired capacity, it could run the risk of defaulting on emission reduction commitments. Prior to 2007, nuclear capacity addition was not an option for India

because the country faced domestic shortage of uranium and was barred from accessing international market for the fuel. While harnessing hydropower resources has always been a tricky proposition for the country given the risks involved in it, domestic gas shortages undermined the prospect of generation capacity addition based on the clean fuel. The net result was that India added coalbased generation capacity at a frantic pace of capacity from 1990 onward in the absence of credible alternatives. According to official data, the share of coal in India’s total primary energy rose from 33 per cent in 1990 to 45 per

Capacity utilisation of renewable power plants is much lower at 15-16 per cent compared to conventional generating stations which can be easily run at 80-90 per cent plant load factor (PLF). That means a 100 MW solar plant will generate the same quantum of electricity as a 20 MW conventional plant

cent in 2012. That slowed the pace of reduction in the country’s carbon intensity (emissions per unit of GDP). According to BP Statistical Review, India’s coal consumption grew by 4.8 per cent in 2015 and accounted for 58 per cent of the country’s primary energy consumption. India also accounted for more than 10 per cent of global consumption during the year. According to a study undertaken by the Global Commission on the Economy and Climate, the pace of decline in India’s energy intensity in the 2000s worked out to 2.7 per cent, which was higher than the 1.5 per cent median pace of energy intensity decline across all countries in this period. But India’s energy intensity fell at a slower pace of 1.9 per cent between 2006 and 2013. According to the International Energy Agency, India’s per capita energy consumption is just a third of global average and 24 crore people still lack access to electricity. Besides, the Modi government’s flagship programme like Make in India and Digital India are also expected to lead to a significant increase in the country’s electricity demand. So there is a tremendous scope for increase in India’s electricity consumption. That could have serious implications for the country’s energy intensity if India does not shift to conventional but cleaner energy sources like hydropower, nuclear and gas-based plants. According to the IEA, India’s energy consumption would more than double by 2040, accounting for 25 per cent of increase in global energy consumption. Strong growth in India’s manufacturing and an additional 58 crore consumers will boost electricity demand by 4.9 per cent per year, reaching almost 3300 TWh in 2040. Installed capacity will surge to nearly 1 100 GW in 2040 – about the same as Europe’s current capacity, the IEA says in its World Economic Outlook 2015. According to analysts, energy intensity of GDP is also affected by broad structural changes in the economy. The

November 2016 www.InfralinePlus.com

income elasticity of demand for energy tends to vary with income per capita. This elasticity – the percentage change in per capita energy consumption for a given change in per capita GDP – tends to rise as countries go from low income to middle-income status, they add. To keep carbon intensity from rising, India will have to expedite harnessing nonrenewable sources of cleaner energy too, which would help reduce the country’s coal-generated electricity.

Paris Agreement not to jeopardise India’s energy security plans

On the other hand, some experts believe that signing of the Paris Protocol will notpose threat to India’s energy security. Climate control, it is claimed, is not an impeding factor for coal-based power plants. Rather it is the sluggish growth of manufacturing sector. Even if the growth manufacturing sector picks up, the idle capacity of current installed total capacity will be sufficient to meet the requirement. India has an installed capacity of 3 lakh MW and another 1.75 lakh MW is to be added from the renewable sector by 2020-22. Currently India is using just around 1.5 lac MW with major coal based power plants operating at around 40% Plant Load Factor. As of now, manufacturing sector is not picking up and that is the cause of more than half of installed capacity lying idle. Further, the existing capacity plus the capacity from renewable shall be together around 5 lac MW by 2020-22, and looking at the growth pattern of Indian manufacturing sector, even at the peak performance of this sector under Make in India push, India shall be using just around 3.5 lac MW, leaving again surplus capacity unused. Considering a 7% GDP growth y-o-y, the requirement in 2022 would still be around 400 GW, leaving further a surplus of 100 GW, which the Government is already planning to export to neighboring countries.

The Paris Agreement • The agreement calls on countries to combat climate change and to accelerate and intensify the actions and investments needed for a sustainable low carbon future. Specifically, it seeks to limit global temperature rise to well below 2 degrees Celsius, and to strive for 1.5 degrees Celsius. • Developed countries are expected to come up with $100 billion in climate financing each year, with half of that going to help countries adapt to green energy and the other half to mitigating the effects of climate change. • The agreement will enter into force 30 days after at least 55 countries, accounting for 55 per cent of global greenhouse gas emissions, deposit their instruments of ratification or acceptance with the United Nations • India accounts for 4.1 percent of global emissions and is the world’s third largest emitter of greenhouse gases • India has not agreed to cap or cut its emissions outright like some countries, but will boost its use of “green energy” and reduce its emissions relative to its gross domestic product by up to 35 percent by 2030 from 2005 levels

India’s nuclear generation capacity is 5,780 MW, which works out to 1.8 per cent of its total installed capacity including renewable energy. The government had planned addition of 5,300 MW nuclear capacity during the current 12th Five year plan (April 2012- March 2017). Against that, it has added just 1,000 mw as of August 2016 Experts also feel that role of technology will be critical in addressing India’s climate change goals. It is claimed that as a policy, from 14th plan onwards, all power plants based on coal shall be following the super critical/ ultra-super critical technology which almost nullifies the emissions as it increases efficiency by 8-10 percent vis-a-vis sub critical sets and drastically reduces the amount of coal to be burned.

Nuclear push required

India’s nuclear generation capacity is 5,780 MW, which works out to 1.8 per cent of its total installed capacity

including renewable energy. The government had planned addition of 5,300 MW nuclear capacity during the current 12th Five year plan (April 2012March 2017). Against that, it has added just 1,000 MW as of August 2016. India has chalked out ambitious plan to meet 25 per cent of its electricity from nuclear plants by 2050, which appears to be an optimistic target given the public resistance against nuclear power. Acquiring land for nuclear plants is also not going to be easy as there is no consensus on amendments proposed by the Modi government in the land acquisition act passed by the previous UPA regime. The land acquisition bill tabled by the Modi government in parliament provides certain exemptions for five categories of projects from going through the process of getting consent of 80 percent of land owners when land is acquired for private projects, and the consent of 70 percent of land owners is obtained when land is acquired for public-private partnership projects. These changes were introduced in the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. However, consent of landowners is not required for government projects. Nuclear power projects require significant areas of land due to the additional requirement of a 1.5-km exclusion zone around the plant in

November 2016 www.InfralinePlus.com

CoverStory

India. According to the Atomic Energy Regulatory Board (AERB) code, an area in the radius of 1.5 km, called exclusion zone, around the reactors is established where no human habitation is permitted. This area forms the part of the project and included in the land acquired. The future of nuclear energy in India hinges on the outcome of parliamentary debate over the bill. Should it be passed, it will boost NPCIL plans of developing nuclear energy parks that could each supply 10 GW of power. On the other hand, failure in passing the bill could badly undermine the prospects of nuclear power in the country, say analysts. There has been significant opposition and local protests to the government plans of land acquisition to develop these nuclear energy parks, potentially delaying their development and forcing the Nuclear Power Corporation to search for alternative locations. Indian Prime Minister, Narendra Modi’s trip to the US in June cleared the hurdles for Westinghouse to building nuclear reactors in India. NPCIL and Westinghouse signed a deal to set up six AP 1000 nuclear reactors in India. The AP 1000 is Westinghouse’s flagship new-generation PWR with a net electrical output of 1,100 MW. The project site has been shifted to Kovvada, Andhra Pradesh, after the original site selected in Gujarat met with protests and faced delays. Contracts between NPCIL and Westinghouse are likely to be finalised by 2017 while engineering and site design work will begin immediately. An inter-agency committee has been set up to work out financing structure for the reactors. US-based Exim Bank will provide financing for the project. But costs of reactors to be purchased from the US have yet to be finalised. Indian private sector can play an important role in ramping up nuclear generation capacity through supply of components, equipment and works contracts. However, it is barred by law from participating in the capacity addition.

Hydropower capacity addition remains slow

The share of hydropower in India’s power mix has come down to 14 per cent from 40 per cent in 1960 and is expected to fall further in coming days due to slow pace of capacity addition. The private sector which bagged majority of new hydel projects in the past is unable to undertake capacity addition. So there is a pile-up of languishing hydel projects. Most of the unrealised hydropower potential is located in areas which are inaccessible due to lack of physical infrastructure. The previous UPA government had taken initiatives to build roads and highways to expedite harnessing of hydel projects in Arunachal Pradesh. It had also mooted the idea of hydropower purchase obligation to promote hydel power. But UPA lost power before these initiatives could come to fruition. The Modi government has yet to come out with policies that would expedite harnessing of hydropower resources. India has potential to generate nearly 1.5 lakh MW electricity from hydro resources. Against that, it has so far harnessed just 42,000 MW. The government has envisaged adding 10,897 MW capacity based on hydropower during the current Plan. Against that, it had added just 3,996 MW as of August 2016.

Bleak outlook on Natural Gas

India has nearly 25,000 MW capacity based on natural gas. However, due to domestic gas shortages, these plants are operating at less than half of their installed capacities. These plants are also unable to use imported LNG because of affordability issues. The demand-supply gap for gas is projected to further widen in coming years as industrialisation picks up pace. In such a scenario, investors are unlikely to bet on gas-based generation capacity. Government has implemented a scheme for utilisation of gas based power generation capacity in the country through supply of spot RLNG (e-bid RLNG) but PLF still remains very low. However, if LNG prices rise again, the government could find it difficult to implement the scheme which requires subsidy payout.

Coal-fired generation dominant

Coal-fired plants account for over 60 per cent of India’s total installed generation capacity. In terms of generation, coal-based plants contribute about 75 per cent of country’s total electricity consumption despite drastic fall in their average PLF. As the power sector is the biggest contributor to country’s emissions, the government has started

November 2016 www.InfralinePlus.com

levying cess on coal as environment cost of the dirty fuel. Finance Minister Arun Jaitley doubled the cess on coal to Rs 400 a tonne in the budget 2016-17. Jaitley justified the increase as a way to internalise some of the cost externalities that result from the use of coal. This is a significant cost increase for coal-fired power plants, with the revised cess amounting, for example, to about 10 per of the price of 6,000 Kcal/kg GCV imported coal, say analysts. The money is used by the government to finance capacity addition in renewable power. The government has also offered incentives to replace more than 25 year old, obsolete sub-critical units with supercritical technology based plants in a bid to bring down emissions of coal-fired plants. As of today, more than 90 per cent of Indian coal plants use sub-critical boiler technology with operating efficiencies close to 30 per cent. India has committed to ramping up its currently low penetration of High Efficiency Low Emission (HELE) technologies such as super-critical and ultra super-critical boilers, which can increase efficiencies to as high as 46 per cent. Every percentage point increase in boiler efficiency results in a 2.5 per cent reduction in GHG emissions. If half of India’s coal boilers were HELE-based by 2030, this could lead to avoided emissions of roughly 400

million tonnes, say experts. The Central Electricity Authority announced plans in May 2016 to close up to 37GW of obsolete coal plants based on outdated subcritical technology – about 20 per cent of India’s installed coal-fired power generation capacity. “Our first concern is emissions ... We also want plants to be more efficient in use of resources,” the CEA had said. India has also signed pact to strengthen cooperation with Japan in advanced ultra supercritical coal technology.

Strong growth in renewables

As part of its Intended Nationally Determined Contributions (INDCs), India has committed that at least 40 per cent of its installed power generation capacity will be non-fossil fuel based by 2030. The current number is 30 per cent, if hydro and nuclear power are included. A big share of the commitment will be achieved, if India meets its 175 GW of renewable power capacity target by 2022. The big imponderable here is India’s insistence that it will achieve the targets only if developed countries give it money and discounts on new technology. Experts say that ratification of climate accord would attract a much larger global scrutiny on the country’s ability to achieve yearly renewable

targets and compliance with policies such as Renewable Purchase Obligation (RPO). According to analysts, India’s renewable targets are ambitious and delivery on ground in terms of new deployment has gathered considerable pace. The ambitious targets are now further backed by India’s global commitment under a formal multinational agreement. Despite several key concerns that remain, this should help focus government policies for the sector, attract domestic and international capital into the sector and assure growth for all stakeholders.

Conclusion

Analysts feel that clean coal technologies can help resolve India’s dilemma over usage of coal. However, India has to make a timely decision on whether it should wait for commercialisation of advance super critical technology or should it work on more credible option of expediting capacity addition in hydropower, nuclear and gas-based generation to ensure long-term security of electricity supply. Even if India gets advanced ultrasupercritical technologies in a couple of years and starts their large-scale deployment, there is no guarantee that it will be able to make intended reductions in power sector emission while also adding coal-fired generation capacity freely.Anyway, this technology will be costly and put upward pressure on electricity tariff if deployed on a massive scale. So, it would be advisable for the government to promote capacity addition in hydropower and nuclear. The government can build roads and highways to help in expeditious harnessing of hydro resources in remote and inaccessible areas.To ensure expeditious capacity addition in nuclear, the government can think of roping in private sector participation, which would entail amending the existing law. For suggestions email at feedback@infraline.com

November 2016 www.InfralinePlus.com

NewsBriefs | Oil & Gas OMC’s losses on subsidized sales to fall 30 per cent to Rs 19,100 crore

The Gross Under-Recoveries of Oil Marketing Companies (OMCs) on subsidized sales of petroleum products is likely to fall 30 per cent to Rs 19,100 crore in the current financial year from Rs 27,570 crore last fiscal. The estimated reduction in losses is based

on an average Indian basket crude oil price of $45 per barrel and a Rupee-Dollar exchange rate of 68 for the full financial year 2016-17. “Apart from lower crude oil prices, the GURs would fall due to the steps taken by the government like Direct Benefit Transfer for domestic LPG (DBTL), leading to the cancellation of 35 million fake accounts, surrender of LPG subsidy by 10 million customers under the GiveItUp campaign and a gradual monthly increase in prices of kerosene and LPG,” said K Ravichandran, Senior Vice President at research and ratings agency ICRA. He added any sharp recovery in crude oil prices would be the primary sensitivity for GURs going forward.

Pradhan pitches for subsidy withdrawal on petro products

Making a case for free market economy to boost investments, Oil Minister Dharmendra Pradhan has said the market price of petroleum products should be commensurate with production rate to augment output and subsidies on such items must be for poor households only. “The market price should be near to production price. We have to adopt a market mechanism. Government should not control prices (of petroleum products),” the minister said. The minister was also of the view that freeing price of petroleum products is necessary to boost the investors’ confidence and increase private players’ participation in energy sector. He suggested that the without removing subsidies India

cannot augment production of petroleum products in the country. He also stressed that the subsidies should be targeted and should not be available to everybody for increasing investors confidence. At present, the government still provides subsidy on kerosene and cooking gas (LPG).

National Govt to part-finance GAIL’s Rs 13,000-crore pipeline project

The government has agreed to partly fund the Rs 13,000-crore natural gas pipeline from Jagdishpur in Uttar Pradesh to Haldia in West Bengal, state- owned gas utility GAIL India has said. The government will provide Rs 5,176 crore or about 40 per cent of the project cost after the state-owned gas utility found it difficult to commercially justify the huge investment of Rs 12,940 crore in absence of either a firm source of gas supply or customers. “The ministry of petroleum and natural gas vide letter dated October 7, 2016 has communicated the Cabinet Committee on Economic Affairs (CCEA) approval for 40 per cent capital grant (limited to Rs 5,176 crore) of the total estimated project cost of Rs 12,940 crore to GAIL for the execution of JagdishpurHaldia/Bokaro-Dhamra natural gas pipeline projects,” it said. The 2,539-km long pipeline from Jagdishpur in Uttar Pradesh to Haldia in West Bengal and also Bokaro in Jharkhand and Dhamra in Odisha will be completed by 2020.

Centre to invest Rs 15,000 crore to expand Panipat refinery The central government will invest Rs 15,000 crore to increase the capacity of Panipat refinery from existing 15 million tonnes (MT) to 25 mt to create huge employment opportunities, Union Minister Dharmendra Pradhan has said. Also, an ethanol plant would be set up at a cost of Rs 500 crore by the Indian Oil Corporation in Panipat to generate alternative fuel from agricultural residue which would boost agriculture sector, the Petroleum Minister said. The Union Minister said that the expansion of refinery would raise specifications of fuel quality from BS-4 to BS-6. “This would not only create employment opportunities for the people, but

would also help in raising quality of fuel in the country by the year 2020,” he said. As per scientific research, he said that ethanol made from crop residue can produce fuel or energy

up to 72 per cent. Pradhan said that efforts were being made to have the downstream of petro chemical hub in Haryana so as to attract maximum investment in the state. This would attract about 100 big or small industries thus generating maximum revenue and employment in the state, he said. The Union Minister also appreciated the state government for digitization of ration cards under public distribution system, which revealed that five lakh beneficiaries were getting dual benefit of both subsidised LPG and kerosene.This has saved Rs 100 crore subsidy being granted by the Centre to Haryana government, he pointed out.

November 2016 www.InfralinePlus.com

NewsBriefs | Oil & Gas Indian Oil to lay India’s longest LPG pipeline

State-owned Indian Oil Corp (IOC) plans to lay the nation’s longest LPG pipeline from Gujarat coast to Gorakhpur in eastern Uttar Pradesh to cater to growing demand for cooking gas in the country. IOC plans to import LPG at Kandla in Gujarat and move it through the 1,987 kilometer pipeline to

Gorakhpur via Ahmedabad (in Gujarat), Ujjain, Bhopal (in Madhya Pradesh), Kanpur, Allahabad, Varanasi and Lucknow (in Uttar Pradesh). The pipeline will carry 3.75 million tons per annum of LPG. LPG will be fed into the pipeline at Kandla port as well as IOC’s Koyali refinery in Gujarat. This will be the biggest LPG pipeline in the country. GAIL currently operates a 1,415-km line from Jamnagar in Gujarat to Loni near here. The line carries 2.5 million tons of LPG annually. GAIL also has a 623-km Vizag-Secunderabadpipeline. IOC also has a 274-km pipeline from Panipat in Haryana to Jalandhar. “The demand for LPG is increasing consistently in recent year.

Niti Aayog rejects Oil Min’s Rs 10K crore demand to build new reserves The government’s think-tank NitiAayog has shot down petroleum ministry’s demand for nearly Rs 10,000 crore of public money for building more strategic crude oil reserves as the proposal strays from the agreed plan to rope in private sector investments for crude storage beyond the existing 5 million tonnes. While pointing out that there was neither plan fund allocated for the project nor any funding tie-up for it from other resources, NitiAayog said that during the preparation of the 12th Five Year Plan the ministry had agreed to private sector involvement in building and operating strategic storage. “There is significant interest in global

crude oil majors to create storages to secure markets and also on arbitrage on fluctuating prices. As regards energy security, as long as the crude is stored on our mainland, we will always have the first right,” it commented on the proposal.

National

Rosneft sign agreements to acquire 98 percent in Essar Oil

Essar Energy Holdings Limited, the exploration and refining arm of Essar Energy, and Mauritius based Oil Bidco Limited — the controlling shareholders of Essar Oil Limited (EOL)announced that they have entered into separate definitive agreements for the sale of 98% of EOL. The first sale and purchase agreement envisages the sale of 49% to Petrol Complex Pte. Ltd and the second envisages the sale of the remaining 49% to Kesani Enterprises Company Limited at a valuation of Rs 72,800 crore. An additional Rs 13,300 crore ($2 billion) will be paid for the acquisition of Vadinar Port, which has world-class storage and import/export facilities. The all-cash deal encompasses EOL’s 20 million tonne refinery in Gujarat, India, and its pan-India retail outlets. The closing of the Transaction is conditional upon receiving requisite regulatory approvals and other customary conditions. The Parties expect to obtain the relevant approvals before the end of this year. “Indian markets will witness robust demand growth for petroleum products in the long term.

OIL achieves all-time highest natural gas production during 2015-16 fiscal Oil minister Dharmendra Pradhan recently launched the national seismic programme to carry out assessment of unappraised areas across the country for potential oil and natural gas reserves. The massive 2D seismic survey, which will cost the government more than Rs 5,000 crore, has been launched on Mahanadi basin (onshore) in Odisha. “Our government’s is giving a lot of focus to hydrocarbon data.” Pradhan said at the launch at Tarang village. As much as 48% of the Indian sedimentary basin remains unappraised, and there has been no major finding in new sediments in the last 25 years, he added. ONGC will carry out the national seismic programme (NSP)

in most parts of the country while Oil India Ltd will undertake the project in northeastern states. NSP will cover an estimated 48,243 line kilometre, covering 26 sedimentary basins divided into 11 units. “In addition to the

national seismic programme, we are carrying out a reassessment of hydrocarbon data of existing sedimentary basins. The third big thing is the single platform where all the data is being brought together, or the national data repository, which we will be dedicating to the nation very soon,” the minister said. Pradhan said he was hopeful the survey work would eventually lead to enhanced exploration and production (E&P) activities in Odisha. “Work on such surveys in these parts in the 80s had even resulted in some evidence of onland gas findings,” he said. The presence of gas has been established about 30 km offshore of Dhamra in a discovery by Reliance in the past.

November 2016 www.InfralinePlus.com

NewsBriefs | Oil & Gas Shell said to consider sale of US$1b Malaysia LNG stake

Royal Dutch Shell Plc is considering a sale of its stake in a Malaysian liquefied natural gas export plant, which could fetch more than US$1 billion (RM4.19 billion). Shell is gauging interest in its 15 per cent stake in MLNG TigaSdn, which owns an LNG terminal in Sarawak on the island of Borneo. The sale may draw interest from private-equity firms.

Malaysia’s state-owned Petroliam Nasional Bhd, which holds 60 per cent of MLNG Tiga, has pre-emptive rights on the stake. The disposal is part of the Anglo-Dutch energy giant’s plan to raise US$30 billion from asset sales in the three years through 2018 to help cut borrowings after its acquisition of BG Group Plc prompted Fitch Ratings Ltd to lower its credit rating. The company’s total debt ballooned to US$90.3 billion at the end of June, from US$52.9 billion a year earlier, data compiled by Bloomberg show. “The pressure is on Shell to slim down its global footprint following the BG acquisition,” Saul Kavonic, a Perth-based analyst at energy consultancy Wood Mackenzie Ltd, said.

Iran to invite foreign companies to bid on oil and gas

Iran will invite foreign companies to bid for oil and gas projects for the first time since last year’s landmark nuclear deal with world powers, the Oil Ministry said recently. The ministry did not say how many projects would be involved but said they include exploration and production in oil and gas fields. It will be the first time Iran offers an international tender for oil and gas projects since the nuclear deal went into effect in January. The ministry’s website said foreign companies should submit their applications by Nov. 19, and that successful companies would be announced on Dec. 7. Iran had previously said that priority for exploration and production for foreign companies would be given to

neighboring countries with which it shares border fields. The country has 28 joint offshore and onshore gas and oil fields with those countries. Iran has already upgraded its model for oil contracts, allowing for a potential full recovery of costs over almost two decades.

International Pakistan’s LNG imports set to surge to 3bcf/day by 2018

Pakistan, largely dependent on imported fuels for its energy needs, will be importing a cumulative of 3.0 billion cubic feet (bcf) per day of liquefied natural gas (LNG) by 2018 to bridge the demand supply gap, which has already crossed 4.0 bcf mark. The country’s current natural gas production is around 4.0 bcf/day, while the demand had crossed already crossed 8.0 bcf/day mark, said ShahidKhaqanAbbasi, minister for Petroleum & Natural Resources. “One LNG terminal is already operational, while another would be ready by January 2017 and third by July 2017, while two private sector terminals would be operational by 2018,” Abbasi said. He said the country is already importing 0.6 bcf of LNG, another 0.6 bcf will come by January 2017 to be followed by 0.6 bcf in July 2017, taking the LNG imports to 1.8 bcf per day. As two private sector terminals would be commissioned in 2018, the country’s total gas imports would reach 3.0 bcf per day.

Singapore joins IEA as Southeast Asia oil demand set to rise 80% by 2040 Singapore joined the International Energy Agency (IEA) as an association country. The island state, which is the Southeast Asian hub of the oil trade, is the fourth country to join the influential agency as an association country after China, Indonesia and Thailand. Singapore has key strategic importance in the energy sector as energy demand in the region is expected to rise by 80 percent in the next 20 odd years, driven by robust population growth and economic expansion. The inclusion of Singapore in the IEA also marks the rising importance of Asia in the global economy and energy landscape. The IEA, an autonomous group set up in 1974, is

made up of 29 member countries which are net oil importers and have committed to a demand-restraint programme for reducing national oil consumption by up to 10%. “We are going to create different programs and activities with Singapore in order to make the decision makers in this region understand the benefits of using energy more efficiently and the opportunities that renewable energies are

creating across the world,” said Fatih Birol, executive director of the IEA. The International Energy Agency’s objective is to ensure reliable, affordable and clean energy and help member countries handle disruptions in oil supply. Singapore is the fourth country to join the IEA under the association country initiative after China, Indonesia and Thailand last November. As an Association country, Singapore will work with the IEA on a broad range of energy security issues. To become a full member, countries should be net oil importers with a crude reserve that is equivalent to around 90 days of the previous years’ average net oil imports.

November 2016 www.InfralinePlus.com

ExpertSpeak

Mundra LNG Terminal: India’s next energy gateway Anil Joshi, President, GSPC LNG Ltd., feels that given India’s global commitment to reduce carbon emissions, the country will have to significantly increase the share of natural gas in the energy basket. The state of Gujarat has emerged as the natural gas capital in India, and the upcoming 5-MMTPA LNG Terminal at Mundra, shall further add to this landscape.

India’s GDP is poised to grow between 7.5 to 8% in the coming few years. A country aspiring towards tremendous growth needs a lot of infrastructural support in terms of power, energy, roads, ports etc. Infrastructural support is key to growth that can never be discounted in any growing economy like ours. In Paris 2015 UNFCCC, 196 countries came together to deal with the issue of climate change. World leaders pledged to cut carbon emissions to restrict the increase in global average temperature below 2°C. At this forum, India has committed to reduce its emissions intensity of its GDP by 33 to 35 per cent by 2030 from 2005 level. Moving towards gas-based economy by increasing the share of Natural Gas can help India meet its objective. Recent initiatives of MoPNG like #Gas4India also aim to increase the share of Natural Gas in India’s Energy Basket from current level of 6.5% to 15%. As of August 2016, India’s Natural Gas (NG) consumption was around 140 MMSCMD. For the first time, the share of Regasified LNG (RLNG) stood more than domestically produced NG. The additional gas demand in the economy is constantly being met through higher levels of imported LNG, making India the 4th largest importer of LNG. The state of Gujarat has already emerged as the natural gas capital of

India where natural gas business and infrastructure is thriving across the entire value chain with exploration Moving blocks, LNG towards gasbased economy import by increasing the terminals share of Natural and Gas can help developed India meet its gas objective transmission and distribution business. Gujarat with its vast coastline (1600 kms) already has two fully operational LNG import terminals (Dahej and Hazira) as well as an excellent network of pipelines and inter-pipeline connectivity.

Strategic advantage GSPC LNG Limited (GLL) is setting up a 5-MMTPA LNG Terminal at Mundra, Kutch. Mundra port offers a strategic location as it is an all weather operating port with natural draft suitable for 24x7 safe berthing of all size LNG vessels. The port already has operational facilities for all the requisite services for LNG ship pilotage, berthing and un-berthing. No capital or maintenance dredging is envisaged for the project. The Gulf of Kutch acts as a natural shelter for the port and

Anil Joshi, President, GSPC LNG Ltd.

eliminates the requirement of breakwater. The location of the Mundra Port is well placed for bringing the LNG vessels especially in view of the short distance for voyages from the Middle East and African LNG exporting countries. This provides immense opportunity for LNG import at this terminal, with savings in LNG transportation cost. Further, the Mundra Port is well connected with the vast hinterland of western and northern Indian states, which have huge potential for demand of regasified LNG.

Components and facilities Mundra LNG terminal is aimed to import LNG to meet the growing energy demand. The LNG terminal will comprise of receiving, storage and regasification facilities of LNG with state of the art technology. Mundra Terminal project has been conceptualized to be developed in three phases. In the PhaseI, single jetty with unloading facilities, two LNG storage tanks and regasified LNG send out capacity of 5 MMTPA

November 2016 www.InfralinePlus.com

ExpertSpeak

(peak capacity of 6.25 MMTPA) are being executed. The Phase-II of project envisages one additional LNG storage tank and enhancing regasified LNG send out capacity to 10 MMTPA (peak capacity of 12.5 MMTPA). The ultimate phase envisages addition of one additional jetty with unloading facilities, three LNG storage tanks and augmentation of regasified LNG send out capacity to 20 MMTPA. In the current phase of project being developed, the 5 MMTPA LNG terminal has 1 Km long jetty designed for handling LNG tankers of sizes 75,000 M3 to 260,000 M3, two full containment LNG storage tanks of net capacity 1,60,000 M3 each, facilities for LNG regasification, and fiscal metering. Terminal is designed considering several different operation scenarios i.e. send-out without LNG ship unloading, send-out with LNG ship unloading, minimum send-out with and without ship unloading. The process and equipment are designed for nominal send-out of 5 MMTPA with a peak at 125% of the nominal send-out to cater peak load. The Terminal has two LNG storage tanks of full containment type and tank boil-off rate is 0.08% per day. The storage tanks consists of primary inner container of 9% nickel steel mounted in a secondary pre-stressed concrete steel-lined outer tank and a reinforced concrete domed roof and a support deck suspended from the outer container roof over the inner container. The tank bottom, annular space and suspended deck are insulated in order to limit the ambient heat ingress. Tank filling lines are designed for LNG unloading rates of 15000 m³/h through both top and bottom filling pipes. The process facilities include regasification system, unloading system and BOG handling system. Open Rack Vaporisers (ORV) uses seawater as its heat source to convert LNG into natural gas. Heat from the seawater for vaporisation of LNG is

In the current phase of project being developed, the 5 MMTPA LNG terminal has 1 Km long jetty designed for handling LNG tankers of sizes 75,000 M3 to 260,000 M3, two full containment LNG storage tanks of net capacity 1,60,000 M3 each, facilities for LNG regasification, and fiscal metering free of cost. ORVs have lower carbon foot-prints owing to no CO2 emission for regasifying the LNG. ORVs require lesser space compared to alternative regasifcation equipments and saves land cost for the project. The LNG unloading facility is designed for LNG unloading rates of 15000 m³/h. LNG unloading facility comprise of four 20” unloading arms with emergency release coupling. Three arms shall be used for LNG unloading and One unloading arms shall be used for vapour return to the vessel. Two BOG compressors

are installed considering the LNG unloading rate of 15000 m³/h and minimum send-out rate requirements. These two BOG reciprocating compressors can be operated as per the capacity modulation requirements i.e. 25/50/75/100%. In order to serve customers not connected with natural gas pipeline, this terminal has LNG truck loading facility consisting of a single truck loading bay with provision for future expansion to 4 loading bays. The terminal is self sufficient for requisite utilities to run LNG terminal i.e. Nitrogen generation and storage, Plant & instrument air system, fully equipped fire fighting system including fire-water tanks & fire station, diesel storage and distribution system, 6.6 KV emergency diesel generator having capacity to run the terminal at 25% load in case of power failure. Electrical power supply to the terminal is through two 66kV dedicated transmission lines sourced from different sub-stations to meet the power demand in case of failure of any of supply line.

Strong connectivity with pipeline grid The Mundra LNG terminal shall be connected with the existing natural gas grid of GSPL which is also connected to all major pipelines in India.

November 2016 www.InfralinePlus.com

This shall provide unhindered access to natural gas markets of western and northern India. The project is implemented through different packages, namely Storage Tanks, Regas facilities, Sea water intake & outfall, and Marine facilities to optimize costs, through seamless integration of different facilities by managing interfaces among Engineering, Procurement, Construction and Commissioning (EPCC) Contractors at different stages of the project life cycle. EPCC contracts were awarded for Storage Tank facilities to IHI Corporation, Regasification facilities

to consortium of Toyo Engineering India Limited & Toyo Engineering Corporation (Japan), and Sea water intake & outfall facilities to Coastal Marine Construction & Engineering Limited (COMACOE), while marine facilities are being undertaken separately. EPCC Contractors for LNG storage tanks and Regasification facilities are leading global contractors and have executed similar LNG projects in India. GLL has appointed Whessoe Engineering Ltd, UK as its Project Management Consultant (PMC). Whessoe Engineering Ltd, UK is a globally acclaimed engineering

The project is implemented through different packages, namely Storage Tanks, Regas facilities, Sea water intake & outfall, and Marine facilities to optimize costs, through seamless integration of different facilities by managing interfaces among Engineering, Procurement, Construction and Commissioning (EPCC) Contractors at different stages of the project life cycle

company having vast experience in executing international LNG projects. Since the start of construction of the terminal in August 2014, Mundra LNG Terminal has achieved many significant milestones progressively. GLL has given highest priority to safety and quality in the works. All the packages of the project are in advanced stages of construction and the terminal shall be completed by next year. Globally LNG industry is at cross roads today. A lot of projects are getting commissioned; increasing global supply of LNG. Spot LNG prices have reduced significantly in line with oil price crash and with the availability of abundant supply of LNG. In addition to conventional LNG, many countries are experimenting with Small Scale LNG concept and foraying the usage of LNG as marine bunker fuel, road transport fuel etc. This is indeed a moment of reckoning for Indiaâ&#x20AC;&#x2122;s LNG industry. GLL aims and aspires to be ready with its infrastructure to serve the nation. For suggestions email at feedback@infraline.com

November 2016 www.InfralinePlus.com

ExpertSpeak

Natural gas infrastructure requires cautious approach Dr. U.D. Choubey, Director General, SCOPE, feels that even though natural gas is the future for energy sector, it is important to ensure that the infrastructure creation for the same is not done in a haphazard manner. Realistic demand and supply estimates should be taken into account toa void excessive capacity which can lead to be a drain for the companies.

The global energy sector has experienced a paradigm shift over past two decades. 21st century witnessed natural gas as a green alternative to oil and it was exploited extensively for commercial use. It helped development of the economy but has become a matter of concern that the share of natural gas in the energy mix in India has come down from 11% in 2009-10 to 6% as of now. Therefore the projected share of natural gas increasing to 20% by 2030 attracts uncertainty if not impossibility. It is a paradox, rather ironical fact, that all projections whether supply or demand of natural gas has not met reality in the past. Total demand of natural gas in India in 2012-13 was projected at 242.66 MMSCMD, going up to 378.06 MMSCMD in 2016-17. This needs to be examined in the light of the present supply-demand scenario. Also, the demand for natural gas in India alone has been pegged at 746 MMSCMD by 2029-30 (â&#x20AC;&#x2DC;Vision 2030â&#x20AC;&#x2122; Natural Gas Infrastructure in India, Report by Industry Group for PNGRB). Further, on supply side it has been projected at 384 MMSCMD in 2018-19, which is more than 100% of the present supply, that too within less than two year period. Exaggerated supply and demand projections are not achievable in the near future.

Key elements of natural gas infrastructure consist of pipelines for transportation of gas from source and distribution of natural gas It is to various imperative end users that natural gas and also infrastructure is creation built in a planned of R-LNG way with backterminals. to-back firm It is also contracts integrated with creation of user facilities. All these activities are highly capitalintensive and high-risk areas. Even though our country has recognised the need for investing in a strong natural gas infrastructure so as to develop free flow transmission and distribution of natural gas across the country, past experience shows that the investment has taken the nature of unplanned expenditure leading to blockage of funds and under-utilisation of the natural gas infrastructure. As of 31st March 2016, India has around 17,000 kms of pipeline with capacity to carry 390 MMSCMD (data by PPAC) of natural gas. However, the average flow of gas as of now is around 132 MMSCMD. This implies that on an average, the pipelines capacity is being utilised to the extent of 35%-40% at

Dr. U.D. Choubey, Director General, SCOPE

the maximum. Key reasons for the above are shortage in source of gas and also price sensitivity of demand of gas. Proper coordination between source, transportation and users require improved and coordinated approach. There are three players involved in monetisation of gas through pipeline. They are - supplier of gas from source, the transporter and the buyer (i.e. the end user of gas). Therefore, there must be a firm gas supply/ purchase contract on back-to-back basis i.e. between supplier and transporter as well as transporter and end user. But off late, the practise has undergone a shift. Pipelines are being constructed in absence of any firm purchase supply contract with the end users resulting in underutilisation of the laid down pipelines. This results in loss to the utility provider as its investment is irrecoverable due to underutilization. It needs caution in creating further infrastructure. Construction and execution of pipelines entails heavy capital outlay (around INR 3- 5 crores per

November 2016 www.InfralinePlus.com

km of pipeline depending upon size). Any unplanned investment on creating pipeline infrastructure as a result would lead to blockage of investment and a drain on resources of the company(s). Hence, in order to start with any fresh investment in infrastructure, it should be based on realistic supply and demand of natural gas and, above all, a firm gas supply contract on backto-back basis. Optimal utilisation of infrastructure would lead to recovery of cost of pipeline and in turn ensure maximum utilisation of infrastructure. This would lead to win-win situation for all parties involved- seller, utility provider and buyer.

LNG liquefaction and gasification facilities It would not be an exaggeration to say that LNG has driven globalisation by connecting distant markets thereby making natural gas accessible even to resource deficient/ absent areas. Hence, at present, LNG is the driving force behind the worldâ&#x20AC;&#x2122;s energy map. With the growing dependence on natural gas, LNG presents itself as a viable alternative. As per IGU, the global LNG trade reached 244.8 MT in 2015-16 earmarking the said year as a historical period for LNG trade. As of 2015-16, there are 33 LNG importing countries as against only 17

LNG exporters. As of January 2016, the nominal liquefaction capacity stood at 301.5 MTPA. This is likely to increase by 141.5 MTPA given the plants under construction are commissioned. The capacity utilisation of liquefaction stood at approximately 50%. The world has seen more or less flat capacity utilisation from previous year primarily due to global fall in gas prices, diversion of export of LNG by countries for domestic consumption

In order to start with any fresh investment in infrastructure, it should be based on realistic supply and demand of natural gas and, above all, a firm gas supply contract on back-to-back basis. Optimal utilisation of infrastructure would lead to recovery of cost of pipeline and in turn ensure maximum utilisation of infrastructure

and of course political unrest in key exporting nations.

Regasification terminals With respect to regasification, the global capacity as of 2015 stood at 757 MTPA (IGU World LNG report 2016) and new capacities are being planned to be added very shortly. 55 MMTPA new regasification capacities were under construction for the quarter ended 31st March 2016. However, the utilization levels for the receiving LNG terminals at world level stands low and is not more than 40% in any case. The utilization levels have remained flat during 2014 and 2015 primarily due to diversion of domestic production by many countries for self-use by the country and falling price of gas internationally. At present, India is the 13th largest gas consumer and 5th largest LNG importer in the world. India has four LNG terminals with a total regasification capacity of about 33 MT of which only 24.5 MT is operational (Petroleum Ministry). However, operating LNG gasification terminals are, by and large, being operated on their full capacity. Crowding of regasification terminals is likely to put pressure not only on utilisation levels but also on returns of investment in constructing the terminal. Construction of LNG terminal entails a heavy capital expenditure of approx. INR 6,000 crores (for 5 MMTPA LNG receiving capacity). Hence, the same should be done after giving serious consideration of all related factors such as sourcing and supply of regasified LNG to consumers. Utmost care would be required when we go for long term tie-up for imported LNG in the country. High price tie-up, unpredictable falling price of gas and affordability of consumers in India (which is yet to see mature market of gas) may create serious problems in times to come and hence it would be difficult for the utility provider to find takers in the

November 2016 www.InfralinePlus.com

ExpertSpeak Indian market for imported LNG if it is tied-up at high price on long-term basis. In such a case, “take or pay” liability on the utility service provider may be very high, adversely affecting the economic health of the company. To avoid any such situation, there should be firm gas supply contracts on back-to-back basis from suppliers to transporter and to end-users. Market intelligence and researchers have larger role in LNG trade as the price of gas has been highly buoyant. Long term tie-ups of LNG at higher price may create enormous problems for company(s) as marketing of high price gas would be difficult. Liability under “take or pay” may create liquidity problems for the utility company which may affect the very

existence of the company. The only olive line being the country as energy deficient and consumers/ government may, under compulsion, be required to consume high priced LNG to produce essential input for economic growth, be it power, fertilisers and others.

Way Forward Though natural gas is the future for energy sector, it should be ensured that the infrastructure creation for the same is not done in an unplanned way. Arguments can be presented against this point by pleading that a developing country like India needs to develop infrastructure in order to create demand for gas. Contradicting this thought may not be completely rationale but expecting individual companies to incur

Utility providers create facilities at their own cost and capitalise the infrastructure as project investment in the financials. Any underutilization of the utility whether being pipeline, LNG or regasification terminal would result in loss to the utility provider and hence negative return on investment

high capital expenditure for the same is equally irrational. Utility providers create facilities at their own cost and capitalise the infrastructure as project investment in the financials. Any underutilization of the utility whether being pipeline, LNG or regasification terminal would result in loss to the utility provider and hence negative return on investment. This would lead to financial and resource loss to the company(s) and the country as well. Excessive infrastructure not aligned with realistic demand and supply can lead to be a drain for the companies and hence it is imperative that natural gas infrastructure is built in a planned way with back-to-back firm contracts. At least two of the loose ends must be tied up with firm contracts from source of gas to transporter and again from transporter to end users. If we do not evolve a clear policy, we shall be building yet another ‘Taj Mahal’ and discussing strategic sale (or even closure) of the financially stressed sick PSE in next five to ten years time. “Humko kitne Taj Mahal Hai Aur Banane?” For suggestions email at feedback@infraline.com

November 2016 www.InfralinePlus.com

ExpertSpeak

Oil & gas companies need to develop a risk analytics engine Neeraj Gupta, Director, iEnergy Innovations Pvt. Ltd., feels that oil and gas is a high-risk industry and hence requires timely risk mitigation to avert crisis. As a solution, he recommends that oil and gas companies should adopt a step-by-step approach to build a decision support enabled risk framework. Majority of the oil & gas enterprises implement ERM (Enterprise Risk Management) as a compliance requirement. It means they will develop risk registers and governance framework but lacks a robust day to day monitoring and integrated reporting and alerts framework. The ultimate objective of any ERM framework is to mitigate risk before it happens, avoid black swans and identify some of the uncontrollable risks, monitor them on day to day basis and implement ERM as a decision support system. The root cause analysis reports of some the recent disasters in oil industry also point towards this by stating that risk control failure is one of the primary reasons. Risk Management has to be integrated in day to day business activities of a company. Its ultimate objective is to maximize shareholderâ&#x20AC;&#x2122;s value. Based on some secondary research it can be said that -- Over 80% use industry trends and peer analysis to identify risks -- Over 80% values importance of internal audit reports -- Over 70% think key risk indices and performance indicators are same -- Over 80% believes there is a lack of integration is the key issue -- Nearly 40% have some unstructured risk taxonomy in place

-- Over 90% did not have any enterprise risk monitoring dashboards Board and CEO give utmost importance to the following factors: -- Measure performance against the key risk indicators -- Periodic meaNeeraj Gupta, Director, iEnergy Innovations surement for Oil Pvt. Ltd. appropri& gas comtional, financial and legal ateness panies should 3. Develop key risk indices and -- Deviation adopt a step-by-step control measures from a approach to build a 4. Transform it into a decision risk perdecision support support system using analytical formance enabled risk engines plan framework Risk Taxonomy is an important -- Periodical stepping stone in the entire risk review of risk framework. It is not possible to governance policy, build a high rise building on a weak controls, and mitigations foundation and same is true for a risk -- Evaluate changes in internal or management program. A risk taxonomy external environment outlines are risk categories, their -- Monitor risk progress report an drivers, key performance areas and variance following the policies risk indices across entire organization. -- Periodic review of risk control Post taxonomy creation, it is important framework robustness identify inter-relationships across risk -- Use structured scientific and anasub-categories and drivers. There is no lytical tools point in having a thousand risk indices As a result, following step-based when all of them are related to each approach needs to be considered in other. All risk drivers which are related order to facilitate transition from an to each other should be part of same elementary risk control framework to a risk indices. At a board level it is not more robust one. advisable to have more than ten risk 1. Build the Risk Taxonomy indices at the maximum. 2. Develop inter-relationships between Even tree methodologies were various risk drivers across different used to develop relationships between risk domains like strategic, opera-

November 2016 www.InfralinePlus.com

ExpertSpeak Fig 1, Identifying risk Inter-relationships (Boleslaw et.al 2015)

Fig 2, Developing Risk event tree

Fig 1, Identifying risk Inter-relationships (Boleslaw et.al 2015)

Diagram (Fig 2.1) shows how key risk indices were prioritized and converted into a decision support system.

It is recommended that oil & gas companies adopt a step-bystep approach to build a decision support enabled risk framework. There is a need to develop a comprehensive taxonomy across four areas of risk i.e. strategic, operational, financial and compliance and map it across all the business units of an organization. It is the foundation of the entire risk framework triggers events of a particular risk, assigning a likelihood percentage based on number of similar events in the past (Fig 2.0). Even tree helped in prioritization of key risk indices as once you complete your analysis, one can easily find out the top five or ten indices that have relatively more chance of occurring and not necessarily based on past events but also on the existing processes as well. It is recommended that oil & gas companies adopt a step-by-step approach to build a decision support enabled risk framework. -- Develop a comprehensive taxonomy across four areas of risk i.e. strategic, operational, financial and compliance and map it across all the business units of an organization. It is the foundation of the entire risk framework. -- Explore inter-connectivity between various risk drivers identified in taxonomy to create a risk

November 2016 www.InfralinePlus.com

Fig 2.1, Decision Model for Risk Control Framework

Companies need to perform regular monitor of key risk indices. Frequency of monitoring may vary. E.g., for high risk field operations, all compliance data should be monitored on daily (or even hourly, if required). And a probabilistic consequence analysis should be performed. For other strategic decisions like bidding decisions, cost and schedule simulations can be used whenever required connectivity map. It helps in identifying the common risk drivers affecting multiple risks to avoid duplication of monitoring efforts across multiple business units. -- Use existing key performance indices to derive key risk indices. Event tree should be used in order

to assign weightages by looking at historical data or susceptibility of a business unit based on annual probabilistic analysis performed. -- Develop synergies with other existing data systems (ERP, SCADA etc.) to have one version of truth. These systems or other

historical data can be used to build analytical engines. -- Perform regular monitor of key risk indices. Frequency of monitoring may vary. E.g., for high risk field operations, all compliance data should be monitored on daily (or even hourly, if required). And a probabilistic consequence analysis should be performed. For other strategic decisions like bidding decisions, cost and schedule simulations can be used whenever required and a probabilistic estimate may be obtained using previous risk drivers or new compliance requirements. For suggestions email at feedback@infraline.com

November 2016 www.InfralinePlus.com

InDepth

Fourth consecutive reduction in Natural Gas price

►► Gas prices have been reduced by nearly 50% in the past two years ►► Biggest beneficiary of this price cut is CGD sector which has higher exposure to retail By Team InfralinePlus

Recently domestic natural gas price has been cut to $2.50 per million British thermal unit for the period of October 1, 2016 to March 31, 2017 from the previous price of $3.06 which is reduction by 18 per cent. The price cut is in line with the fall in gas prices over the reference period July 2015 to June 2016. This is the fourth consecutive reduction since the implementation of the domestic gas pricing formula.

Previous to this, the domestic gas prices was reduced by 20 per cent in April 2016. The prices have reduced by nearly 50% in the past two years since new gas pricing formula has been introduced. ONGC is the country’s biggest gas producer, accounting for some 60% of the 90 million standard cubic meters per day current output. Every dollar dip in gas price results in about Rs 4,000 crore hit in revenue

of Oil and Natural Gas Corporation (ONGC) on an annual basis. The current price reduction would hit its revenue by about Rs 1, 000 crore. All gas of ONGC as well as that of Oil India Ltd and private sector RIL’s KG-D6 block is sold at the formula approved in October 2014. This formula, however, does not cover gas from fields like Panna/Mukta and Tapti in western offshore and Ravva in Bay of Bengal.

November 2016 www.InfralinePlus.com

Gas Price ($ per million British thermal unit (mmBtu)) 6 5

5.05

4.66 3.82

3.06

2.5

2 1 0 1st Nov 2014 - 31st 1st April 2015 - 30th 1st Oct 2015 - 31st 1st April 2016 - 30th 1st Oct 2016 - 31st March 2015 Sep 2015 March 2016 Sep 2016 March 2017 Gas Price ($ per million British thermal unit (mmBtu))

With the cut in domestic gas prices, relative attractiveness of downstream companies - which are involved in distribution of gas over the upstream companies â&#x20AC;&#x201C; which are involved in production of gas are likely to accentuate as this help in earnings growth of downstream companies such as Indraprastha Gas (IGL), Mahanagar Gas (MGL), Gujarat Gas and GAIL. This price cut puts further pressure on finances of upstream producers such as ONGC, Oil India, and RIL who do not find the current rate incentivizing enough to invest more in oil and gas hunt. These upstream companies are expected to report subdued revenue from gas. It is assumed that every $0.5 drop in gas price reduces earnings of ONGC and Oil India by 5-6%. ONGC had earlier requested the government to relook at the gas price formula as this does not leave them with any money to carry out more projects and makes exploration unviable. The biggest beneficiaries of this price cut are city gas distribution (CGD) companies which have higher exposure to retail. As price reduction will help in improving gas consumption and increasing conversion to CNG-driven vehicles. These CGD companies tend to retain a portion of the price cut, which improves operating margin. The price cut should result in a reduction of Rs 0.5

to Rs 1.5 per standard cubic meter in price of PNG for domestic customers and Rs 0.8-1.7 per kg cut in CNG prices. Following this price cut, MGL reduced CNG price by Rs 1.60 per kg and the price of piped gas has been reduced by Rs1.01 per unit (standard

cubic metres) in Mumbai. This is the first big drop in CNG and piped gas price in recent years. The reduction in natural gas prices would help stimulate the gas share in the energy basket as discounted gas would mean lower raw material cost for compressed natural gas (CNG) and piped natural gas (PNG) to households and would translate into reduction in retail prices.This will also benefit the government since it will lower the fertiliser subsidy burden.

New domestic gas pricing policy 2014 Gas is one of the cleanest fuels with less carbon dioxide per joule delivered than either by coal or oil and far fewer pollutants than other hydrocarbon fuels. The share of gas in the energy basket of the country figures poorly compared with the global 51

The biggest beneficiaries of this price cut are city gas distribution (CGD) companies which have higher exposure to retail. As price reduction will help in improving gas consumption and increasing conversion to CNG-driven vehicles. These CGD companies tend to retain a portion of the price cut, which improves operating margin

November 2016 www.InfralinePlus.com

InDepth Global Benchmarks for Domestic Gas Price Calculation

average of 23.8%. The Government is aiming to raise the share of gas in the energy basket to 15% from the

current share of 6.5% in next three to four years. This is to promote a gas-based economy, which is part of the nation’s commitment to cut carbon emission levels. Indian Government has undertaken various initiatives and policy interventions across the natural gas value chain, which can shape the nation’s natural gas future. Pricing of gas is a politically sensitive issue as it is a key input in important sectors such as fertilizer and power. Keeping in view marketdetermined pricing for gas can be the best policy going forward in order to ensure greater investment, competitiveness and transparency in the sector, the new domestic gas pricing policy was approved by the Cabinet Committee of Economic Affairs on 18th October 2014.

According to the formula approved in October 2014, the domestic gas price is calculated as the weighted average price of four global benchmarks — the US-based Henry Hub, Canada-based Alberta gas, the UK-based National Balancing Point (NBP), and Russian gas. While Henry Hub has a weight of 38.1 per cent in the pricing formula, NBP accounts for 42.9 per cent, Alberta Hub 4.9 per cent and Russian gas 14.1 per cent. Europe and Russia jointly account for 57 per cent of the weight and a steep decline in prices in these two regions will influence domestic rates substantially. Amusingly, the pricing guidelines do not take into account the price of gas imported. The formula mandates a price revision once every six months.

Concerns on new gas pricing policy Despite the perceived benefits of the new gas pricing policy, there are several concerns that come along with it. The first is to do with how the formula is constructed. The price in India is pegged on the benchmark prices of the previous year, and takes effect after a time-lag of a quarter. For example, the price applicable in the period April 1-September 30, 2016 was based on the average benchmark prices over January-December 2015. This means India’s gas prices follow the global cues with a good time-lag of six months. Another important concern with the price of domestic gas being pegged to global benchmarks is that any gains could be offset by losses on account of the Rupee movement. According to various research agencies, almost 6 per cent depreciation of the Rupee over April-September 2015 will mean the net impact of the fall in the price of gas will actually be significantly lower. For suggestions email at feedback@infraline.com

November 2016 www.InfralinePlus.com

StatisticsOil & Gas Natural Gas Production in India, 2016-17 (As on September, 2016) State

April

May

June

July

August

September

Total

(i) Assam / Arunachal Pradesh

265.63

255.11

259.31

273.59

264.21

262.29014

520.73

(ii) Rajasthan

118.84

120.09

112.2

116.48

111.99

103.103864

238.93

(iii) Gujarat

125.81

113.11

107.34

126.28

129.83

132.694574

238.92

(iv) Tamil Nadu

84.33

78.02

74.59

74.49

77.95

75.160096

162.35

(v) Andhra Pradesh

55.03

57.67

68.32

75.66

77.280003

112.7

(vi) Tripura

99.79

121.08

116.65

119.53

120.04

114.68374

220.87

(vii) West Bengal, MP, Jharkhand (CBM)

37.24

42.65

43.67

46.86

48.24

47.816

79.89

Onshore Total (A)

786.67

787.72

738.42

783.37

779.67

765.212417

1574.38

B) Offshore:

1701.4

1868.37

1816.32

1874.42

1846.25

1787.070596

3569.77

Total (A+B)

2488.1

2656.1

2598.4

2704.7

2674.15

2600.099013

5144.2

II) Net Production

2400.7

2573.6

2513.4

2621.3

2578.59

2503.13987

4974.3

I) Gross Production : A) Onshore:

Consumption of Natural Gas in the domestic market (As on September, 2016) Month

April

May

June

July

August

Sept

Total

Natural Gas (including CBM)

2400.66

2573.61

2513.42

2621.31

2578.59

2503.14

15191.44

LNG Import

2142.02

2081.67

1908.49

1960.19

2144.19

2374.65

12722.29

Total

4542.68

4655.28

4421.91

4581.5

4722.78

4877.79

27913.73

Domestic Crude Oil Production (September, 2016) (Million Metric Tonnes) September Details

2014-15

2015-16 (P)

April-September

2015 (P)

2016 (Target)

2016

2015 (P)

2016

Target)*

2016 (P)

ONGC

18.6

18.5

1.5

1.8

1.5

9.3

11.2

9.1

Oil India Limited

3.4

3.2

0.3

1.6

Private/Joint Ventures

11.7

11.3

0.9

5.8

5.5

5.4

Total Crude Oil

33.8

33.1

2.7

2.6

16.8

18.3

16.2

Condensate

3.7

3.8

0.3

1.9

Total (Crude + Condensate) (MMT)

37.5

36.9

2.9

18.7

18.3

18.1

Total (Crude + Condensate) (Million Bbl)

274.7

270.8

22.3

21.4

136.9

133.9

132.4

1.9

November 2016 www.InfralinePlus.com

StatisticsOil & Gas Refineries Installed capacity and crude oil processing (September,2016) (MMTPA / MMT) Crude Oil Processing Company IOCL

HPCL HMEL

Installed Capacity 1.4.2016)

2014-15

5.9

Koyali (1965)

13.7

Haldia (1975)

7.5

Mathura (1982)

Refinery

BORL

2015-16 (P)

April-September

2015 (Actual)

2016 (Target)

2016(P)

2015 (Actual)

2016 (Target)

2016 (P)

6.5

0.5

3.2

3.1

3.3

13.3

13.8

1.1

6.5

7.2

7.3

7.7

7.8

0.5

0.6

0.7

3.8

8.5

8.9

0.7

0.6

0.7

4.3

4.4

4.6

Panipat (1998)

14.2

15.3

1.3

1.1

1.2

7.4

7.6

7.7

Guwahati (1962)

0.9

0.1

0.08

0.07

0.52

0.5

0.44

Digboi (1901)

0.7

0.6

0.04

0.06

0.05

0.28

0.3

0.25

Bongaigaon(1979)

2.4

0.2

1.3

1.2

Paradip (2016)

1.8

1.1

0.4

3.6

2.8

IOCL TOTAL

69.2

53.6

4.4

5.3

27.3

31.9

31.7

Mumbai (1954)

6.5

7.4

0.7

0.6

3.7

4.1

Visakh (1957)

8.3

8.8

9.2

0.8

0.7

4.3

4.4

7.3

10.7

0.9

0.8

0.9

5.5

4.7

5.5

Barauni (1964)

Bathinda (2012) HPCL-TOTAL

BPCL

September

23.8

23.5

27.9

2.4

2.1

2.3

13.5

Mumbai (1955)

12.8

13.4

1.2

6.5

7.1

Kochi (1966)

9.5

10.4

10.7

0.9

5.5

5.3

5.5

Bina (2011)

6.2

6.4

0.6

0.3

0.5

2.9

3.3

27.5

29.4

30.5

2.5

2.4

2.6

15.1

15.9

BPCL-TOTAL

November 2016 www.InfralinePlus.com

NewsBriefs | Renewable

International

Renewable energy project returns face counter party risks

Falling component prices and project costs may have vindicated renewable energy developers’ bets on low tariffs. But their returns are seeing risk from an unexpected quarter---power distribution companies or discoms, the buyers of renewable energy. The weak financial health of discoms is

constraining the credit profile of renewable energy developers, raising debt costs and crimping potential returns for project developers, ratings agency India Ratings and Research said. According to India Ratings, discoms in Madhya Pradesh, Rajasthan, Maharashtra and Tamil Nadu, which have large installed renewable energy capacities and more in the pipeline, are taking more than four to eight months to release payments. Maharashtra State Electricity Distribution Co. Ltd is said to have delayed payments to wind projects by about a year. The payment delays and uncertainties are raising the credit risk profile of the developers, driving up the finance costs.

Govt gives 600 MW stranded power projects second wind A clutch of wind power units with a combined capacity of 600 MW that has never been put to use for the want of long-term buyers have been offered a ray of hope by the government, by allowing them to participate in the first ever auction for wind power. As the government is set to invite tenders for 1 gigawatt (GW) of wind power in order to help states without natural wind advantage meet non-solar renewable purchase obligation, along with the potential investors, these existing units can also bid. This is a break from convention as usually auction for long-term power purchase agreements — which has so far happened only in the thermal power sector — is confined to new players, not existing ones. These wind

power units in crisis had come up on promises by some states that the power would be purchased by them on a long-term (20-25 years) basis. But that was not to be and investments of Rs4,000 crore are on the verge of being declared non-performing assets.

National

Solar module exports rises 116 percent in April-July

Indian exports of solar modules and cells rose 116% during April-July 2016 and touched $41 million. During that same period India imported modules and cells worth $580 million, up 52 % compared to the same four-month period (April-July) of 2015. China is the single largest exporter of solar modules and cells to India, accounting for 82% of India’s total solar imports. Malaysiais the second largest exporter to India, accounting for a 12% share of India’s overall imports. “Currently, United States accounts for only 1% of India’s total solar imports and it remains to be seen if imports from U.S. will increase after the recent ruling from the World Trade Organization (WTO) is enforced, which found India’s domestic content requirement discriminatory against U.S. manufacturers,” said Priyadarshini Sanjay, managing director Mercom Communications India. The United Kingdom imported the largest amount of Indian solar modules and cells, accounting for 34.1% of India’s total solar export.

India says future phases of solar mission will be WTO compliant India has assured the World Trade Organisation (WTO) that future Indian solar programmes will comply with the multilateral body’s rules on the sourcing of local equipment. India hopes to continue with the present set of provisions in the ongoing second phase of its Jawaharlal Nehru National Solar Mission (JNNSM), but introduce WTO compliance from the third phase onwards. The assurance was given at a meeting of the multilateral body’s Dispute Settlement Body (DSB), which adopted the Appellate Body’s findings that Indian norms for mandatory domestic sourcing of solar

cells and modules were inconsistent with WTO rules. The US had dragged India to

the WTO three years ago for the domestic content requirements under the JNNSM. It subsequently won the case as India was not able to prove that the sourcing of the equipment was part of government procurement where there were no restrictions on localisation. New Delhi said while it did not agree with all the findings, it would inform the DSB of its intentions to implement the ruling within 30 days, as per WTO rules. BRICS countries needed to jointly figure out how to continue with local sourcing policies without flouting WTO rules.

November 2016 www.InfralinePlus.com

NewsBriefs | Renewable Government takes up Rs 1,000 crore slum lighting project

The Centre may spend Rs 1,000 crore in subsidies to offer a new solar lighting solution to one crore families living in shanties and slums where rooms are poorly lit all through the day. The ministry of new and renewable energy has already committed Rs 500 crore for the two-year project while

another Rs 500 crore is under consideration, said S P Gon Chaudhuri, chairman of Kolkata-based Renewable Energy College that invented the sunlightcapturing gadget. Installed on the rooftop, the gadget sends sunlight into rooms where even windows don’t let in sunlight during the day, using a special dome and a reflective cylinder. In night the gadget falls back on batteries charged with solar panels to light LED bulbs installed in homes. Poor families can buy this gadget for Rs 1,100 after subsidy. If the government approves the additional subsidy of Rs 500 crore, then the cost of the gadget for the poor will come down to Rs 600, Chaudhuri said.

India witnessed $16 billion shortfall in renewable energy investments in 2015

India needs a total annual investment $26 billion to achieve its targeted renewable capacities and meet committed reduction in emissions. In comparison, the investment made into the renewable sector in India was $10 billion in 2015 – a shortfall of $16 billion. According to data compiled by the Institute of Energy Economics and FinancialAnalysis, India’s electricity generation from renewable sources is estimated to be 17 per cent and is projected to rise to 25 per cent by 2022, and an impressive 40 per cent by 2030. As part of its targets, India aims to reduce its emissions intensity by 33-35 per cent over the 2005 levels, by 2030. In 2014, it announced aggressive renewable energy

addition targets – aiming to increase the installed renewable energy capacity, including large hydro, to 225GW from 97GW in August 2016.This transition would require an additional investment of $128 billion, or an annual investment of $21 billion.

National MNRE to seek Cabinet nod to classify hydro power as renewable

New & Renewable Energy Ministry will seek Cabinet approval to a proposal to reclassifying large hydro power plants as renewable projects, a move which can help India achieve clean power capacity of 230 GW by 2022. “I have a study carried out by Power Secretary and his team which demonstrates that except 4-5 countries almost universally in the world, hydro power (large project) is considered renewable. We are almost on the verge of finalising that report, which should shortly be taking up to the Cabinet (for approval),” Power, Coal, Mines and New & Renewable Energy Minister Piyush recently said. Removing the distinction between small project (up to 25 MW) and large hydro project can help India projecting that its installed renewable energy capacity would be 230 GW by 2022. Goyal further said, “I do believe that hydro power of all sizes and shapes should be considered part of renewable energy.”

PM Narendra Modi said to plan $3.1 billion boost for India’s solar factories Prime Minister Narendra Modi’s government is planning a 210 billion-rupee ($3.1 billion) package of state aid for India’s solar panel manufacturing industry. Modi wants to raise renewable capacity to 175 gigawatts by 2022 from 45 gigawatts at present. In addition to meeting its own energy targets, which Bloomberg New Energy Finance estimates may cost $200 billion, India wants to emulate industrial developments in neighboring China, where solar manufacturers have created a world-leading export industry. The Prayas program (Pradhan MantriYojana for Augmenting Solar Manufacturing),

part of Modi’s “Make in India” campaign, is intended to create 5 gigawatts of photovoltaic manufacturing capacity from 2019 and build 20 gigawatts of projects in

the country by 2026. The policy, which is being developed by the ministry in charge of renewable energy and industrial policy, along with the NitiAayog government research group, will be presented to the Finance Ministry within a month before going to the cabinet for final approval.India has become one of the biggest clients of Chinese photovoltaic manufacturers and in the absence of its own domestic capacity that reliance could potentially grow. In the first six months of 2016, India imported 18 percent of China’s production worth $1.1 billion, according to Bloomberg New Energy Finance.

November 2016 www.InfralinePlus.com

NewsBriefs | Renewable

International

Chandigarh, Himachal, Uttarakhand to get cheapest power, Gujarat to costliest

Residents of Chandigarh, Himachal Pradesh, Puducherry and Uttarakhand will be able to buy solar poweratRs 3 per unit – the lowest tariff in India – from panels installed on their rooftops without having to shell out

a penny. The solar panels will be set up by third parties, which will sell power at these prices in the two states and two Union Territories. The Solar Energy Corporation of India, a government-owned company that has the mandate to develop the renewable energy sector, had sought bids for setting up 200 MW of solar panels on rooftops in the country to sell power to residents of buildings. Bids in Himachal and Uttarakhand and the Union Territories of Chandigarh and Puducherry were the cheapest, while they were the costliest in Gujarat. The subsidy is to the extent of Rs 52.5 per watt of installed capacity for the special category states, including the four regions.

Kerala to tap renewable energy to increase power production Annually spending a whopping Rs 6,000 crore to purchase power from outside, Kerala has decided to step up power generation through renewable energy sources like solar and windmill, a state minister has announced. State Minister for Electricity KadakampallySurendran said in three years the state will generate 600 MW power through solar projects. “Sixtyfive per cent of the annual power requirements of the state is sourced from outside the state and with the Centre coming out with new rules that 85 per cent of the power generated in a state has to be utilised in the state, we will now have to think of alternate sources. And the best bet is going to be solar and windmill,” said Surendran. “A 200

MW solar park is getting ready in Kasargode district and by January next year the first phase of 30 MW will become ready. We have identified a suitable land also in Kasargode district and the proposal is to set up another 200 MW solar park.”

States

Jharkhand loses steam for solar power purchase agreements

Developers who won an auction of solar project contracts in Jharkhand are still waiting for the state’s government-run electricity distributor to sign power purchase agreements (PPAs), six months after they emerged the successful bidders. The March auction, with contracts for 1,200 MW of projects in 45 places up for grabs, was one of the largest single auctions to have ever been held in the country. Companies that won the projects are waiting for the Jharkhand BijliVitaran Nigam to sign the PPAs which they will need to arrange funds from lenders and other sources. “We have submitted all the necessary documents but PPAs have not been issued,” said one of the developers. The auction saw winning tariffs between Rs 5.08 and Rs 7.95 per kwH. This was fairly high compared with auctions in other states, where the winning tariffs this year were Rs 4-5 per kwH. Solar radiation in Jharkhand is relatively low and land prices high, which prompted the cautious, high bids, developers claimed.

Chhattisgarh to procure 700 MW renewable energy by 2018 Chhattisgarh will procure additional power from renewable energy sources to the tune of approximately 700 MW by FY 2018. With this, the average power purchase cost for Chhattisgarh State Power Distribution Company Ltd (CSPDCL) based on the above power availability will increase from 2.58 Rs/kWh in FY 2015-16 to 3.12 Rs/kWh in FY 2018. The rates have been derived based on cost of power at existing rates and considering no escalation in power purchase cost since it is passing through for the distribution company. Notably, Chhattisgarh Renewable Energy Development Agency (CREDA) has invested Rs400 crores during last 11 years in develop-

ing infrastructure for solar power generation which had resulted in 40 MW of electricity being generated from non conventional

energy sources. The agency will be installing a total of 10,000 submersible and surface solar photo voltaic (SPV) irrigation pumps in farm lands soon across the State. The SPV Pumps shall be provided with lightening and over voltage protection. The principal aim in this protection is to reduce the over voltage to a tolerable value before it reaches the PV or other sub-systems components. The source of over voltage can be lightening or any other atmospheric disturbance, officials informed. Notably, the State government has already commenced preparation for setting up 51,000 solar powered irrigation pumps in a span of two-and-half-years in the State.

November 2016 www.InfralinePlus.com

NewsBriefs | Renewable IEA set to raise solar forecast

Historically conservative in its forecasting for the growth of renewable energies, the IEA appears to be ready to put an end to that trend with its upcoming World Energy Outlook report. The agency has revealed that estimates for solar and wind

installations will be significantly increased in the report, as it tries to accurately reflect the renewed global efforts to cut carbon emissions. The IEA has underestimated growth in the renewables sector for over ten years, which has seen a fair amount of criticism aimed at the agency, which acts as the world’s number one energy forecaster. However, its annual mid-term report, which is due at the beginning of November, will increase previous estimates, and should hopefully more accurately reflect the genuine outlook for the sector. The main reason for the change in the forecast is the recent developments in energy policies around the world.

Wind could supply fifth of world electricity by 2030

Wind power could supply as much as 20 percent of the world’s total electricity by 2030 due to dramatic cost reductions and pledges to curb climate change, the Global Wind Energy Council (GWEC) said in a report. If last year’s Paris climate accord leads to a worldwide commitment to the decarbonization of the electricity sector, total wind power capacity could reach as much as 2,110 gigawatts (GW) by then, nearly five times its current level, the industry group said. Such an increase in capacity would involve annual investment of 200 billion euros ($224 billion) and would reduce carbon dioxide emissions by more than 3.3 billion tonnes per year, it said. It forecast that China’s share of the total would reach 666.5 GW, more than quadru-

pling its current capacity. The group said total global wind power installations stood at 433 GW by the end of last year, up 17 percent from a year earlier, and are set to rise by around 60 GW in 2016. Much of the increase was driven by China, which accounted for 145.4 GW at the end of 2015, 33.6 percent of the total.

International Brazil ready to help Pakistan in generating renewable energy

Brazil Ambassador Claudio Raja Gabaglia Lins has said that Brazil was meeting 42 per cent of its energy needs through renewable resources and was ready to help Pakistan in generating energy through wind, solar, ethanol, biomass and other sources. Brazil was seventh largest economy of the world and second largest in Latin America and Pakistan could achieve beneficial results for its economy by enhancing cooperation with Brazil. The ambassador said that Brazil had achieved robust growth in agriculture and livestock sectors and Pakistan could improve its agriculture productivity by increasing cooperation with Brazil in this particular field. Many Pakistani products have excellent potential in Brazilian market and Pakistani businessmen should step up efforts to promote trade with Brazil, he added. He said that promoting direct contacts between the private sectors of both countries was the best approach to explore all untapped areas of potential cooperation.

Taiwan moves toward opening renewable energy market A two-stage draft amendment to the Electricity Act aimed at opening Taiwan’s renewable energy market and putting in place related regulatory and management measures was approved Oct. 20 by the Executive Yuan. During the first stage, the nation’s energy industry will transform into a decentralized, localized and community-based one characterized by a thriving green power production sector. The second stage, which is to be implemented step-by-step, will see renewable and traditional generation facilities selling electricity to public power utilities, and consumers selecting their providers. Requiring state-owned Taiwan Power Co. to establish two separate

business units—one for power generation and the other for delivery, distribution and sales— is another central plank in the legislation proposed by the Ministry of Economic Affairs.

The amendment is set for review by the Legislative Yuan—Taiwan’s highest lawmaking body—before year-end. Lin Chuan-neng, director-general of the MOEA’s Bureau of Energy, said liberalizing Taiwan’s renewable energy market is key to fostering the emergence of a viable green power industry. “The government will maintain this momentum by implementing policies spurring private participation and investment, as well as streamlining production and supply.” According to Lin, the amendment is not expected to affect the rate for average electricity power consumption per household, currently calculated at 330 kilowatt-hour by Taipower.

`3600

`4140

`2820 `18000

`12000 `16200

`11400

503011022657 ING Vysya Bank Ltd. Connaught Palace, New Delhi - 110001

Account No.: Bank: Bank Branch:

110064003

NEFT Code:

`1200 `2400 `3600

cOver price

Branch

Bank .........................................................................................................

Dated ........................................................................................................

Cheque/DD no .........................................................................................

Delhi/NCR)

Private Limited. (Please add `20/- extra for cheques from outside

Kindly Draw the cheque/DD/PO in favor of Infraline Technologies (India)

By Cheque/dd/po

Open access subscripTiOns `3240 `6300 `9180

YOu paY resTricTed access subscripTiOn `1080 `2100 `3060

SofT Copy SuBSCripTion cOver price

provide your deTailS (in CapiTal leTTerS)

VYSA0005030

(for RTGS):

IFSC Code

Infraline Technologies (India) Pvt. Ltd.

Account Name:

making payment through nefT

`14400

`10200

1 Year 2 Years 3 Years

Term (Years)

co. seal & signature

Infraline Technologies (India) Private Limited Infraline Knowledge Tower, A-31, Sector 3, Noida-201301 Tel: +91-120-679 9125 (D); +91 120 6799100 (B); Fax: +91 120 679 9101, Email: sneha.pandey@infraline.com

To Subscribe: please fill in all the details mentioned in the order form and mail it to us at the below mentioned address. You can also fax us the order form if purchased through credit card/net banking on +91 120 6799101

place:

date:

4-5 weeks for processing your magazine subscription request. copies will be sent by ordinary post/courier. (Rs. 30/- per month for courier charges to be added for subscription outside Delhi/NCR) infraline will not be responsible for postal delay, transit losses or mutilation of copies. For soft copy subscription there are two types of access (a) restricted access - One user id and password will be provided and the user will not have any access to copy and download the content (b) Open access- One user id and password will be provided for registered multiple users and the users will have access to copy and download the content. no cancellation will be entertained after payment has been received and no refund shall be paid. please mention your name and address on the reverse of your dd/cheque. in case of online payment through debit or credit card rs. 33/- will be added to the total payable amount all disputes are subject to the exclusive jurisdiction of courts in new delhi only.

Terms and Conditions: in hard copy subscription one copy is provided for one subscription and five copies are provided for five subscriptions. please allow us

Mr/Ms............................................................................... Organization ....................................................... Designation ................................................................. Address ............................................................................................................................................................. ........................................................................................................................................... City..................................................................... State............................................................................... Pin Code ............................... Email ................................................................. Mobile ....................................................................................................... Phone (Off) ................................................................................................. Phone (Resi) ........................................................................... Date of Birth ...........................................................................

Card No. ........................................................................ Card Expiry date............................................................ Name (as appears on card) .......................................... ....................................................................................... Date ............................................................................... Signature .......................................................................

In case of online payment through debit or credit card Rs. 33/will be added to the total payable amount

please charge my credit/debit card

paymenT opTionS

`3060

`2100

`5850

`2400

`5250

3 Years

`6000

2 Years

`1440

`1200

1 Year

`1080

cOver price YOu paY (delhi ncr) YOu paY (OTher ciTies) cOver price YOu paY (delhi ncr) YOu paY (OTher ciTies)

One subscripTiOn

Five subscripTiOns

pleaSe TiCk ď&#x192;ž SCheme of your ChoiCe

hard Copy SuBSCripTion

Term (Years)

Subscribe Now!

Subscribe to infralineplus Magazine! Stay updated with the current industry trends and scenario through widely read interviews, articles and points of view by the industry stalwarts, policy and decision makers in the energy and infrastructure sector.

The CompleTe energy SeCTor magazine for poliCy and deCiSion makerS

Magazine SubScription forM

November 2016 www.InfralinePlus.com

ExpertSpeak

Energy storage to play key role in grid stabilization Prashant Panda, President, Solar Business, ACME Solar, feels that as India expands its power capacity addition, both thermal and renewable, it will need energy storage solutions to guard against challenges arising out of grid stability. According to Panda, Energy Storage can play key role in grid stabilization through operations such as Frequency response, peak shaving and time shifting.

Today, we can witness the change in the countryâ&#x20AC;&#x2122;s power sector. India is expected to have surplus power supply in financial year 2016-17 with the continuous addition of new power generating sources including renewable sources and also an improved supply of coal to thermal power plants which have a lionâ&#x20AC;&#x2122;s share in total power generation scenario of our country. However, a large populace of the country is still bereft from continuous supply of electricity and load shedding is still a perennial problem in many areas. Many rural localities are still waiting to be connected to the main Grid. But with the impetus being given by the government, to 24/7 supply to all, these ills will soon be overcome. When we look back and see the transformation in the sector in the last decade where the country was reeling under severe power crisis and the spot price of power at exchanges touched a new height and the current scenario where the cost of power procurement at exchanges is cheapest of the entire available power supply contract chain. India has an installed power capacity of more than 305 GW, of which renewable energy has a share of more than 14%. At current pace,

India seems to be on track to achieve its ambitious target of having 40% of the power genGrid eration from stability renewable becomes a major sources by issue when there is substantial addition 2030. of energy through The renewable game sources changer for this transformation can be grouped into three broad categories. First, the improved supply of fuel to thermal power plants with an increase of around 11% in coal production and the reverse auction of gas supply through price pooling of domestic produced gas and imported LNG to the once idle gas-based plants to generate power at affordable price. Second, the addition of new capacity in both thermal and renewable energy sectors by giving clearances to Mega/ Ultra Mega thermal power projects and setting national goal of having 175 GW of installed renewable energy capacity by 2022. And third, by policy and regulatory support, where distribution companies which were making high losses can make a turnaround by reducing their

Prashant Panda, President, Solar Business, ACME Solar

financing cost to reduce the debt burden and make more investments in upgradation of infrastructure for transmission and distribution of power, and purchase more power from renewable energy sources to fulfill their renewable purchase obligation under the new National Electricity Policy. ACME has been an industry leader in solar power generation with an operational capacity of 514 MW and more than 1.1 GW of power project under various stages of construction and implementation in different parts of the country. We have committed to the Government at the Re-invest 2015 to develop 7500 MW of Solar Projects during the five year period of 2015-19. Besides, generating 12000 Million Units of green and clean power annually, these projects will also create employment for nearly 4000 persons, directly and indirectly and prevent Carbon Emissions of around 10000 MT per year.

November 2016 www.InfralinePlus.com

Today ACME is recognized as the leading solar power developer in India and expanding rapidly for global footprint. We have been able to add nearly 1100 MW of new Solar Projects through bidding in various tenders since Aprilâ&#x20AC;&#x2122;2015.

Energy storage technology Energy Storage is one of the key focus areas of ACME and we are developing various customized solutions to meet application specific requirements. Growing level of integration of Renewable energy sources on to the main Grid and given their intermittent nature makes it imperative to bring in Energy Storage solutions (ESS) in Indian context. Grid stability becomes a major issue when there is substantial addition of energy through renewable sources, which are intermittent in nature. Energy Storage can play key role in grid stabilization through operations such as Frequency response, peak shaving and time shifting. Energy forecasting which could become a major requirement with increased level of Renewable can be made possible by having ESS in place. Apart from the large scale grid level storage systems, equal importance has to be given towards distributed storage systems at residential and micro grid level that can also bring energy independence to individual users. Another important segment where energy storage brings value is EV to building or EV to Grid. With aggressive plans across the world to introduce Electric Vehicles (EV), this segment is going to clearly influence the Energy storage markets. Energy storage uses various methods to store excess energy to be used at a later time which in turn allows the energy providers to balance between the demand and supply. A number of devices and media are used to store energy, while their selection

Energy forecasting which could become a major requirement with increased level of Renewable can be made possible by having ESS in place. Apart from the large scale grid level storage systems, equal importance has to be given towards distributed storage systems at residential and micro grid level that can also bring energy independence to individual users depends primarily on the source of energy and the intended use. There are a lot of competing technologies that are available to store the energy. However, it is important to choose a

right solution for right application. Energy storage in this context is not just a back-up power source that is used only when grid is not available. Storage element is not going to be operated in floating applications as it is being used presently with the conventional storage technologies. However, Energy storage unit is subjected to a daily cycling when it is used in conjunction with renewable sources or Electric Vehicles. This brings a challenge of cyclic life for an energy storage unit. ESS shall have the capability to be used either as an Energy source for applications such as grid and also as power source for applications as in Electric Vehicle. In this context, we see Lithium ion battery clearly emerging as a favorable choice. Growing use of Lithium Battery in Electric vehicle is driving the demand worldwide and bringing its cost down. Benefits out of Electric Vehicle industry can be utilized for Grid scale storage also. It is very important for the country to initiate few pilot projects, gain experience to deal with the grid scale

November 2016 www.InfralinePlus.com

ExpertSpeak

storage systems. Though large scale storage systems are already installed and operational in countries like Germany and Japan, we do not have any thing operational in India. While it is helpful to learn from what has been installed already elsewhere in the world, it is important to establish proof of concepts in India. This helps the industry to learn what challenges are there in Indian context and also

frame regulations and policies around this segment. It has also been observed that distributed energy storage systems are already being considered for ancillary services, particularly as a Primary Control Reserve, in some countries like Germany. This gives an additional facility for individuals to participate in ancillary services. This needs a smart grid to be available,

Though large scale storage systems are already installed and operational in countries like Germany and Japan, we do not have any thing operational in India. While it is helpful to learn from what has been installed already elsewhere in the world, it is important to establish proof of concepts in India. This helps the industry to learn what challenges are there in Indian context

falling in line with the Governmentâ&#x20AC;&#x2122;s vision of creating smart cities. While there are handful of applications and numerous advantages with Energy Storage solutions, it is important for the authorities and industry to clearly define the use cases, frame guidelines and standards so that the segment can grow as an organized segment. Realizing this impending need of Energy Storage, ACME has already installed Lithium Ion battery based Energy storage systems, and established working examples in various segments like rural micro grids, Renewable integration at high altitude areas and building solutions. It is also giving that extra push towards localizing PCS, EMS and battery assembly in India under â&#x20AC;&#x153;Make in Indiaâ&#x20AC;? initiative.

The views in the article of the author are personal For suggestions email at feedback@infraline.com

November 2016 www.InfralinePlus.com

InDepth

RPO compliance by Obligated Entities need of the hour

►► A total of 9 states out of 16 reported a compliance level of less than 70 per cent last year ►► Questions of capital costs and consumer level prices need to be answered By Team InfralinePlus

Ministry of New and Renewable Energy (MNRE) along with all the State Renewable Development Agencies are speedily moving towards achieving the target of 175 GW of grid connected RE power by 2022 as part of India’s global commitments to the United Nations Framework Convention on Climate Change (UNFCCC) to combat climate change. The Renewable Energy Certificate (REC) scheme in India aims to boost energy generation from renewable sources and enable states (state distribution companies, DISCOMs) to cost-effectively meet their renewable purchase obligations (RPOs), set by respective State Electricity Regulatory Commissions (SERCs). Last year, the

Hon’ble Supreme Court (SC) of India while upholding the applicability of RPO regulations, put a greater thrust on the fundamental duties of the citizens of India enshrined under the Constitution of India to protect and improve the natural environment (Hindustan Zinc Ltd. vs. Rajasthan Electricity Regulatory Commission case). The SC emphasized the impacts of global warming and securing environment for larger public interest in the realm of Article 51A(g) & Article 21 of the Constitution, provisions of Electricity Act, 2003, the National Electricity Policy of 2005 and the National Tariff Policy of 2006. As per a study conducted by Indian Energy Exchange (IEX) last year, a total

of 9 states out of 16 including Uttar Pradesh, Bihar, Madhya Pradesh and Delhi reported a compliance level of less than 70 per cent (RPO compliance) and have not met even half of their RPO targets in the past two years. More recently, state electricity regulatory commissions (SERC) in states such as Maharashtra and Tamil Nadu have recently amended solar RPO norms with upward revision and extension in trajectory period. SERC in Tamil Nadu has significantly increased solar RPO norm from 0.5 per cent in 2015-16 to 5 per cent in 2017-18, while SERC in Maharashtra has gradually increased the RPO norm from 0.5 per cent last fiscal to 3.5 per cent in 2019-20 fiscal.

November 2016 www.InfralinePlus.com

InDepth

RE Targets for 2022 in capacity terms: RE Source

Solar

Wind

Small Hydro

Biomass

Total

Capacity in MW

99,533

60,000

5,000

10,000

174,533

Domestically, there are questions of capital costs and consumer level prices that need to be answered. The government’s ballpark figure suggests that $100 billion of investment would be required to meet this solar power capacity addition. Another number being bandied out is INR 10 Lakh Crore of investment for 100 GW of solar and 60 GW of wind power capacity addition by 2022 Current context

India’s renewable energy (RE) generation capacity is around 43 GW (8.5 GW - solar, 28 GW - wind, 4.3 GW - smallhydro and 4.8 GW - biomass). There is increasing realization that RE can be a major contributor in India’s future energy mix. (Total installed capacity, as of September 30 2016: 306 GW; Coal: 187 GW, Gas: 24 GW, Nuclear: 5.7 GW, Hydro: 44.2 GW, RES: 43.1 GW) Domestically, there are questions of capital costs and consumer level prices that need to be answered. The government’s ballpark figure suggests that $100 billion of investment would be required to meet this solar power capacity addition. Another number being bandied out is INR 10 Lakh Crore of investment for 100 GW of solar and 60 GW of wind power capacity addition by 2022. This does not include large costs of providing grid evacuation and stability for the intermittent power supply.

Renewable energy provisions in the revised Tariff Policy: Provisions related to Solar RPO Under the amended provisions of the National Tariff Policy (Para 6.4 1(i)), it is stated that “Long term growth trajectory of Renewable Purchase Obligations (RPOs) will be prescribed by the Ministry of Power in consultation with MNRE” and “within the percentage so made applicable, to start with, the SERCs shall also reserve a minimum percentage for purchase of

Renewable Purchase Obligation (RPO): “8% of total consumption of electricity, excluding hydro power, shall be from solar energy by March 2022” To further support the ambitious of 100 GW solar by 2022, the amendment proposes an increase in solar RPO to 8%. The increase could potentially support 80 GW of capacity addition between FY 2016-2022 assuming an annual average electricity demand growth of 8%. The present RPO regulations (EA 2003 and NTP 2006) require RPO estimations to be based on consumption, which might have issues with the RPO implementation. The amendment needs to address the contradictions with EA, 2003. The amendment also exempts electricity sourced from hydro sources from RPO obligations. How the DISCOMs will get impacted is yet to be understood. Also, it may trigger another issue for discoms under Ujwal Discom Assurance Yojana (UDAY) scheme.

solar energy from the date of notification of this policy which shall be such that it reaches 8% of total consumption of energy, excluding Hydro Power, by March 2022 or as notified by the Central Government from time to time.” The calculation is based on certain assumptions on capacity utilization factor (CUF) including rooftop solar and growth in the total energy consumption. This may further change depending on the actual growth in the total consumption of energy in the respective States. However, the order titled “Guidelines for long term RPO trajectory of Renewable Purchase Obligations (RPO) for non-solar as well as solar” (dated

State-wise Solar RPO requirement (as on 2021-22) State

Andhra Pradesh Arunachal Pradesh Assam Bihar Chhattisgarh Delhi Goa Gujarat Haryana Himachal Pradesh Jammu & Kashmir Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Manipur Mizoram Meghalaya Nagaland Odisha Punjab Rajasthan Sikkim Tamil Nadu Telangana Tripura Uttarakhand Uttar Pradesh West Bengal Chandigarh Daman & Diu Dadar & Nagar Haveli Puducherry Total

Solar RPO Required (2021-22) (%) 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8%

Solar RPO Required (2021-22) (MW) 5357 42 801 2969 2171 1870 369 9403 4030 521 1319 500 5961 1429 5636 12611 118 76 182 60 2200 3917 6556 5 8903 4457 123 561 13248 4603 50 189

502

229 100,000

Source: Ministry of New and Renewable Energy (MNRE)

July 22, 2016) enlists the yearly RPO trajectory for both non-solar and solar power purchase from the current year till 2018-19. For non-solar, the targets are from 8.75 per cent to 10.25 per cent and solar is 2.75 per cent to 6.75 per cent during same period. The target is to reach 17 per cent of total energy consumption as listed above.

Challenges REC mechanism essentially seeks to address the mismatch between availability of RE sources and the requirement of the obligated entities to meet their renewable purchase obligation across

November 2016 www.InfralinePlus.com

states. However, experiences of REC transactions in the past two years have indicated that the some of the impediments faced by the mechanism are due to procedural shortcomings in the existing mechanism. RPO compliance is the biggest challenge facing the mechanism. State owned DISCOMs are mostly absent from the market; most of the participating DISCOMS, though small, are mostly private. Lack of compliance and price uncertainty has also resulted in lenders shying away from financing REC based projects. The main problem is that though there is enough supply of RECs in the energy exchanges, there is not enough demand as states are not forcing their utilities and industries to meet their RPOs. The trading has been lackluster as there is no urgency for states to buy REC until the end of the fiscal year in March when they must meet their compliance targets. This delay has led to low trading of REC, which has made price discovery difficult.

Conclusion Energy policy development in India at present is focused largely on improving energy security in the country. With a large proportion of the population still not having proper access to electricity, the country’s large dependency on imported fuel and economic and social impacts due to climate change has driven the Government of India to identify measures for harnessing renewable energy (RE) and energy efficient measures for improving the country’s energy security and efficiency. RPO compliance by Obligated Entities (DISCOMs, CPPs, Open Access Consumers) is the need of the hour to bring liquidity, fresh investments and ultimately for the promotion of a ‘comprehensive market’, which will allow the government to achieve its objective of declaring India as a ‘green powered’ economy in near foreseeable future. For suggestions email at feedback@infraline.com

Present Scenario of REC market No. of REC Redeemed Opening Balance (A)

REC Issued (B)

RECs Redeemed through Power Exchanges (C)

RECs retained by RE Generators (D)

Total E=(C+D)

Closing Balance (F=A+B-E)

15926429

883041

193619

31129

224748

16584722

522245

225293

36150

261443

16845524

613071

319312

33484

352796

17105799

582625

960041

39019

999060

16689364

779010

401939

36707

438646

17029728

616491

676737

42330

719067

16927152

March, 2016

16927152

1005441

1266385

74240

1340625

16591968

April, 2016

16591968

367123

316110

52224

368334

16590757

May, 2016

16590757

687577

181941

30094

212035

17066299

June, 2016

17066299

508895

468441

2213

470654

17104540

July, 2016 August, 2016 Total

17104540

139609

272980

13615

286595

16957554

8456

16966010

710320

16321073

Month, Year

September, 2015 October, 2015 November, 2015 December, 2015 January, 2016 February, 2016

33287083

15610753

Table 1: REC Summary from Sep’15 to Aug’16 Source: Renewable Energy Certificate Registry of India website

November 2016 www.InfralinePlus.com

StatisticsRenewableEnergy 1) Programme/ Scheme wise Physical Progress in 2016-17 FY- 2016-17 Sector

I. GRID-INTERACTIVE POWER (CAPACITIES IN MW) Wind Power 4000.00 Solar Power 12000.00 Small Hydro Power 250.00 BioPower (Biomass & Gasification and Bagasse 400.00 Cogeneration) Waste to Power 10.00 Total 16660.00 II. OFF-GRID/ CAPTIVE POWER (CAPACITIES IN MWEQ) Waste to Energy 15.00 Biomass(non-bagasse) 60.00 Cogeneration Biomass Gasifiers 2.00 -Rural 8.00 -Industrial Aero-Genrators/Hybrid systems 1.00 SPV Systems 100.00 Water mills/micro hydel 1 MW + 500 Water Mills Total 187.00 III. OTHER RENEWABLE ENERGY SYSTEMS Family Biogas Plants (in Lakhs) 1.00

Cumulative Achievements (as on 30.09.2016)

Achievement (April September, 2016)

Target

1305.50 1750.38 49.40

28082.95 8513.23 4323.35

51.00

4882.33

7.50 3163.78

115.08 45916.94

2.24

162.40

0.00

651.91

0.00

18.15

2.40

166.64

0.20 48.13 0.10 MW + 100 Water Mills 53.07

2.79 361.98 18.81 1382.68

0.17

48.72

Source: MNRE

2) REC Trading Volume and Price for October 2016 Through IEX REC Type Solar Non-Solar

Buy Bids

Sell Bids

(Rec) 19,932 157,273

(Rec) 2,300,940 8,269,834

Cleared Volume (Rec) 19,932 157,273

Cleared Price (Inr/Rec) 3,500 1,500

No. of Participants 477 847

Month of Auction October 2016

Source: IEX

Through PXIL REC Type

Buy Bid (No. of certificates)

Sell Bid (No. of certificates)

MCP (INR / Certificate)

MCV (No. of certificate) Qty. (MWH)

Month of Auction

Non Solar Solar

98048 15676

4743346 1347938

1500 3500

98048 15676

October 2016

Source: PXIL

3). Commissioning Status of Grid Connected Solar Power Projects as 30-09-2016 Sr. No. 1 2 3 4 5 6 7 8

State/UT Andhra Pradesh Arunachal Pradesh Bihar Chhattisgarh Gujarat Haryana Jharkhand Karnataka

Total cumulative capacity till 31-03-16 (MW) 572.97 0.27 5.1 93.58 1119.17 15.39 16.19 145.46

Capacity commissioned in 2016-17 till 30-09-16(MW) 374.08 85 34.88 17.14 143.67

Total cumulative capacity till 30-09-16 (MW) 947.05 0.27 90.1 128.46 1136.32 15.39 16.19 289.13

November 2016 www.InfralinePlus.com

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 27

Kerala Madhya Pradesh Maharashtra Odisha Punjab Rajasthan Tamil Nadu Telangana Tripura Uttar Pradesh Uttarakhand West Bengal Andaman & Nicobar Delhi Lakshadweep Puducherry Chandigarh Daman & Diu J&K Himachal Pradesh Mizoram Others data from rooftop division cumulative TOTAL

13.05 776.37 385.76 66.92 405.06 1269.93 1061.82 527.84 5 143.5 41.15 7.77 5.1 14.28 0.75 0.03 6.81 4 1 0.2 0.1 58.31

42.61

13.05 810.37 385.76 66.92 571.2 1294.6 1555.41 961.79 5 143.5 41.15 11.77 5.1 23.87 0.75 0.03 6.81 4 1 0.2 0.1 100.92

1863.33

8626.18

34 166.14 24.67 493.59 433.95

4 9.59

6762.85

Source: MNRE

4. State-Wise Waste Generation, Collection and Treatment Details S.No.

States

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34

Andaman & Nicobar Andhra Pradesh & Telangana Arunachal Pradesh Assam Bihar Chandigarh Chhattisgarh Daman Diu, & Dadra Delhi Goa Gujarat Haryana Himachal Pradesh Jammu & Kashmir Jharkhand Karnataka Kerala Lakshadweep Madhya Pradesh Maharashtra Manipur Meghalaya Mizoram Nagaland Orissa Puducherry Punjab Rajasthan Sikkim Tamil Nadu Tripura Uttar Pradesh Uttarakhand West Bengal Total

Source: CPCB Report

Quantity Generated (TPD) 70 11500 110 650 1670 340 1896 85 8390 183 9227 3490 300 1792 3570 8784 1576 21 5079 26,820 176 268 552 270 2460 495 3900 5037 49 14532 407 19180 1013 8674 1,43,449

Collected (TPD)

Collected %

Treated (TPD)

Treated %

70 10656 82 350 NR 330 1704 85 7000 182 9227 3440 240 1322 3570 7602 776 4298 14900 125 199 276 186 2107 495 3853 2491 49 14234 407 19180 1013 7196 1,17,644

100 93 82 54 NR 97 90 85 83 99 100 99 80 74 100 87 49 0 85 56 71 74 50 69 86 100 99 49 100 98 100 100 100 83 -

5 9418 74 100 NR 250 168 Nil 4150 182 1354 570 150 320 65 2000 470 802 4700 98 Nil 18 30 Nil 32 490 0.3 1607 Nil 5197 Nil 1415 32,871

7 82 74 15 NR 74 9 0 49 99 15 16 50 18 2 23 30 0 16 18 0 37 0 7 1 0 1 10 1 11 0 27 0 16 -

November 2016 www.InfralinePlus.com

OffBeat |ExpertSpeak

Delhi Metro: A road map to sustainable transport The Delhi Metro – which is the world’s 12th largest metro system in terms of both length and number of stations – is leading the way in sustainable transport. In this article, Harveen Kaur, PhD Scholar, University of Delhi, discusses various green and sustainable initiatives taken by Delhi Metro and how it can serve as a role model for public transport across the country.

Since metro transport systems are quite capital-intensive projects, the environment sustainability of such systems is an important issue that needs to be explored. This article examines the sustainable approaches (conserving resources, energy security, and energy efficiency) and green initiatives taken by Delhi metro to build a low carbon and an environmental friendly rail transport in India.

About Delhi Metro Project The Delhi Metro Rail Corporation (DMRC) is headquartered in New Delhi, India. It was registered (in the year 1995) under Companies Act 1956 with equal equity participation from the Government of the National Capital Territory of Delhi (GNCTD) and the Central Government. The Delhi Metro has been instrumental in escorting masses as a means of urban transportation in India. Delhi Metro introduced high-class, comfortable, air-conditioned and environmentally sustainable services for the first time in India and completely revolutionized the mass transportation scenario not only in the National Capital Region but in the entire country. DMRC today stands out as an outstanding example of Green Metro over globe. Presently, the Delhi Metro network consists of about 213 Km with 160 stations along with seven lines. The

network has now crossed the boundaries of Delhi to reach Noida and Ghaziabad in Uttar Pradesh, Gurgaon and Faridabad in Haryana. It is important to highlight that Delhi Metro is the First metro train system in the Harveen Kaur, PhD Scholar, University of Delhi Delhi world to receive metro the EnviRoad map towards has been comronmental sustainable development mitted towards the Standard The DMRC contributes positively objectives spelt out ISO 14001 towards “Sustainable development under the National EMS of India”. The project activiSolar Mission and during the ties thereby contribute towards sustainable use of construction sustainable development of the solar energy phase itself. country. It has created local skilled and DMRC’s Solar Initiative semi-skilled employment opportunities Delhi metro has been committed tofor number of people in the capital. wards the objectives spelt out under the

Key highlights of Delhi Metro: ▪▪ It carries 2.7 Million passengers a day ▪▪ It is known to be most energy intensive (energy is being used for traction, i.e., for carrying passengers and maintaining conditioned air in the coaches) but very sustainable transport system ▪▪ 56 % of energy is consumed by traction and the remaining 44 % by other services ▪▪ The concern for sustainability is manifested in its Mission and Culture statement itself i.e. to make Delhi Metro self-sustainable and during construction it should neither cause inconvenience nor endanger public life nor should their work lead to ecological or environmental degradation. ▪▪ According to a study, Delhi Metro has helped in removing about 3.9 lakh vehicles from the streets of Delhi.

November 2016 www.InfralinePlus.com

DMRC’S SUSTAINABLE POLICIES AT A GLANCE

Quality Policy Waste Managem ent Policy

Water Policy

S us tainable Policies of DMR C

Environmental Policy

Swacch Metro Compaign

National Solar Mission and has been proactively working towards sustainable use of solar energy to harness electricity for its operations. It has set up roof top solar power plants at many of its stations. It has installed nine new solar power generation facilities in the stations and the depot of the Badarpur – Faridabad Metro corridor for partial fulfillment of the energy requirements. The power generated is

study for installing solar panels on the Foot Over Bridges (FOBs) providing connectivity to the commuters across the National Highways has also been undertaken. It has already commissioned 3 MW Solar Power Plants and aims to achieve 20 MW by 2017 and 50 MW by 2021.

DMRC’s Water Conservation Initiative Solar policy

Energy Manageme nt Policy

used for the lighting and other auxiliary requirements of the station and depot buildings. In total, DMRC has so far commissioned solar power facilities with generation capacity of approx. 2,800 kWp with plants at Dwarka Sector 21, Anand Vihar, Pragati Maidan, Metro Enclave, Yamuna bank station, Yamuna bank depot, Faridabad RSS, ITO, Ajronda depot and the Faridabad metro stations. In addition to this, the

Delhi Metro is taking all possible measures to rationalize its use of water and recycle and reuse water as much as possible. In order to streamline the water conservation measures of the organization, a detailed water policy has been put in place since 2013. In addition to this, in 2014-15, Delhi Metro also added 99 Rain Water Harvesting pits at 37 locations with capacity of 990 CuM. Rain water harvesting structures have been installed at elevated stations, viaducts and depots.

Rain Water Harvesting Structures at Shastri Park Depot

S OC IAL INDIC ATOR It has increased employment opportunities for semiskilled, skilled labour and professionals in the Delhi Metro Rail Corporation (DMRC) in various capacities . The project activity thus contributes to social well being

E C ONOMIC INDIC ATOR It has reduced total energy consumption because of the increased efficiency achieved through regenerative brakes system . It also reduces the dependence of host country on imported fossil fuels. The job opportunities generated by the project activity also helps in improving the economic status of those recruited for the project activity. E NVIR ONME NTAL INDIC ATOR It regenerates electricity which aids in reduction of CO 2 emitted to the atmosphere . The project activity has also resulted in reducing SOx emissions and associated environmental degradation. Replacing an equivalent amount of grid electricity by regenerated electricity, results in fossil fuels conservation and increased availability of power from the northern grid for other needful purposes . TE C HNOLOG IC AL INDIC ATOR The technology being used in the project activity is environmentally safe and sound technology for the application. The project activity by providing an environmental friendly technology for the Delhi Metro Rail System in the country would serve as an example for other upcoming metros in the country.

Source: http://www.delhimetrorail.com/ watermanage.html

Currently DMRC has 84 rain water harvesting structures with 464 pits which have a total capacity of 8607.08 cum. In the FY 2016-17, DMRC had planned to install 24 new RWH systems with 107 pits with a total capacity of 1350 cum. DMRC is also exploring more possibility of minimizing fresh water consumption by treating and reusing the waste water. Waste water treatment is an important initiative to be taken for the

November 2016 www.InfralinePlus.com

OffBeat | ExpertSpeak Installation of Solar Panels by Delhi Metro

betterment of the society and for future generations. Treating waste water and reusing the treated water is an important part of water conservation effort. Waste water treatment is a process, wherein the contaminants are removed from waste water to produce effluent suitable for reuse or discharge in waste water drain. It has installed Sewage Treatment Plants (STP) and Effluent Treatment Plants (ETP) in depots & colonies resulting in reuse of water for horticulture and flushing of toilets.An Effluent Treatment Plant treats the waste water to remove any toxic and non-toxic materials or chemicals from the waste water. A Sewage Treatment Plant (domestic waste water treatment) removes contaminants from waste water and household sewage. Five depots of DMRC (namely Sarita Vihar, Shastri Park, Yamuna Bank, Sultanpur and Khyber Pass along with the residential colonies at Shastri Park, Sarita Vihar and Yamuna Bank) have been equipped with these plants.

DMRC has also taken a new step towards recycling of waste water by installing bio-digester tanks. In bio-digester tank, a consortium of anaerobic bacteria acts as inoculum (seed material) to the bio-digester and converts the organic waste into methane and carbon dioxide.

DMRC’s initiative for Conservation of Ecology DMRC has a policy to plant 10 saplings for every tree that it removes. In order to ensure that the correct type of saplings are planted and maintained, DMRC has engaged the services of Forest Department, Govt. of Delhi. All the expenses for this are borne by DMRC. In order to further expand the green cover in the National Capital, DMRC handed over a land area measuring 15 hectares (near Shastri Park) to the Forest department for plantation activities. In addition, DMRC has also tied up with a non-governmental organi-

Tree Plantations done by DMRC

Source: http://www.delhimetrorail.com/enviroment.aspx

Waste water treatment is an important initiative to be taken for the betterment of the society and for future generations. Treating waste water and reusing the treated water is an important part of water conservation effort. Waste water treatment is a process, wherein the contaminants are removed from waste water to produce effluent suitable for reuse or discharge in waste water drain zation- ‘Sustainable Green Initiative’ for carrying out plantation drives in different parts of the city. DMRC plans to plant over 25,000 saplings voluntarily in the years to come. Tree plantation by DMRC has potential capacity to sequester approximately 5,500 t of CO2 and produce 12,400 t of O2 per year.

Tree Plantation Data for DMRC Construction Phase 1, 2&3 Conservation of Ecology Trees Trees Trees Transfelled/cut Planted planted 31855 344251 6636 Source: http://www.delhimetrorail.com/ otherdocuments/cop21.pdf

Going Green Initiative for Buildings - Green Metro ‘Green Buildings’ are known to be most environmentally efficient buildings. In India, Indian Green Building Council (IGBC) certifies building as a Green Building. Until now, there was no norm in place that could certify a Mass Rapid Transit System (MRTS) to be green. In order to develop a rating

November 2016 www.InfralinePlus.com

Initiatives to Conserve Ecology

Sources: http://www.greening.in/2013/05/delhi-metro-celebrates-world.html

Concept of Green Building

system applicable to all metros, DMRC and IGBC joined hands and came up with a Green Certification norm for the very first time in the world, for rating a MRTS to Green Standards. This MRTS Rating System was launched by IGBC on 4th September 2014 exclusively for Green certification of Metro System. All the upcoming Metro stations under the Delhi Metro as part of its third phase are designed and being constructed as ‘Green Buildings’ with specific provisions for the conservation of energy as well as better CO2 saving, water saving and waste management arrangements. These station buildings have following specific features: ▪▪ Reduced Heat Island Effect: The roofs of the stations are either finished with high reflective

▪▪

materials or/and landscaped with vegetation. Landscape Plant Species: The plant species used for the landscaping (wherever possible) of the stations are either native or adaptive which consume less water and help in increased water efficiency of the building. Insulated Building Envelope: To reduce heat gains in the stations and improve energy efficiency, the walls, roof and windows are insulated. Adequate Fresh Air: The Metro stations are being designed to provide adequate fresh air as per ASHRAE 62.1-2004 through ventilation system. Low VOC Paints: To reduce

In order to develop a rating system applicable to all metros, DMRC and IGBC joined hands and came up with a Green Certification norm for the very first time in the world, for rating a MRTS to Green Standards. This MRTS Rating System was launched by IGBC on 4th September 2014 exclusively for Green certification of Metro System the adverse health effect and improve quality of indoor air, only Low VOC paints, adhesives and sealants are being used in the buildings. ▪▪ Water Efficient Fixtures: Low water consuming fixtures like Dual-flush WC, low flow taps etc are installed at the stations. ▪▪ Energy Efficient Equipments: All the lift and escalators are equipped with Variable Voltage Variable Frequency drives which consume less energy compared to conventional lift & escalators. Faridabad metro stations have received highest green building rating and awarded the highest possible rating (platinum) for adherence to green building norms, by the Indian Green Building Council (IGBC), which has devised a rating mechanism for Metro stations and buildings on a scale of platinum, gold, silver etc for following the green building specifications. Two new recently opened Metro stations of Delhi in Phase 3 – Janpath and Mandi House, have also been awarded the highest possible rating (platinum) for adherence to green building norms, by the Indian Green Building Council (IGBC).

November 2016 www.InfralinePlus.com

OffBeat | ExpertSpeak Operations in Green Building

Source: www.masterspmc.com

Green House Emissions from different Modes of transport at glance

Metro has been certified by the United Nations (UN)under the Kyoto Protocol as the First Metro Rail and Rail based system in the world which will get Carbon Credits for reducing Green House Gas Emissions as it has helped to reduce pollution levels in the city by 6.3 lakh tons every year henceforth helping in reducing global warming. It has earned carbon credits worth about Rs.47 crore annually for the next seven years and with the increase in number of passengers, this figure shall increase. No other Metro in the world could get the Carbon Credit for the above because of the very stringent requirement of the United Nations Body to provide conclusive documentary proof of reduction in emissions. It is difficult to give documentary proof of the difference of energy consumption of two scenarios, i.e. “With Metro and Without Metro”. Today about 18 lakh people travel in the city’s Metro Rail system which is completely nonpolluting and environment friendly and, but for the Metro these people would have traveled by cars, busses, two/three wheelers etc which would have resulted in emission of green House Gases such as CO2, CO, HC, NOx, PM and SO2.

Conclusion

Source: http://www.delhimetrorail.com/greeninitiative.aspx

Reduction in GHG Emission initiative Currently, about 25 lakh people travel by the Metro, which is a non-polluting and an environment friendly system.

Had the Metro not been there, these people would have travelled by cars, buses, two- and three-wheelers, which would have resulted in higher emission of greenhouse gases. Thus, Delhi

Delhi Metro is committed to energy conservation, environment protection and sustainable development which is visible from its positive approaches and efforts. It can be concluded that every passenger who chooses to use Metro instead of car/bus contributes in reduction of emissions (approx. 100 gm of carbon-Co2for every trip of 10 km and therefore, becomes party to the reduction in global warming). It has set a bench mark performance against world’s best Metros. In addition, DMRC has taken initiatives for intermodal last mile connectivity like Feeder Bus Service, Grameen Seva from Metro Stations, Bicycle Service and Battery Operated Taxis from stations. The views in the article of the author are personal For suggestions email at feedback@infraline.com

November 2016 www.InfralinePlus.com

Reports & Studies Discom losses to halve by FY19: CRISIL Ratings agency CRISIL estimates the aggregate ‘gap’ or loss of power distribution companies (discoms) in the 15 states that have joined the Ujwal Discom Assurance Yojana (UDAY) would more than halve to 28p a unit by 2018-19. The gap, calculated as average revenue realised minus average cost of supply, was 64p a unit in FY16. Consequently, aggregate losses of these discoms are seen declining by 46 per cent, to Rs 20,000 crore from Rs 37,000 crore now. The gap will still be well above the ‘nil’ envisaged under UDAY, as some states with very high aggregate technical and commercial losses aren’t well prepared to reduce it. The reasons include inadequate

feeder separation, feeder and distribution transformer metering, and a poor record on other efficiency parameters. Also, with elections due in some within 12 months, their room to raise rates is restricted. Cross-subsidisation is also high. Says Gurpreet Chhatwal, business head, large corporates, at CRISIL: ‘’Rajasthan, Haryana, Chhattisgarh, and Uttarakhand

are expected to fare better in UDAY implementation and likely to be the biggest beneficiaries. UP, Bihar and Jammu & Kashmir are expected to be laggards. These three states would account for almost two-thirds of the gap in FY19. Concerted effort by them will be critical to narrowing the future gap.’’ CRISIL says the energy requirements of discoms are expected to increase at a compound annual rate of seven per cent by FY19, compared with around four per cent till FY16. New signing of long-term power purchase agreements (PPAs) seems unlikely, with 25,000 Mw of capacities with already-signed PPAs to be operational by FY19.

BRICS need additional $51 billion annually to meet renewable targets

BRICS countries will require additional annual investment of $51 billion on average to meet their current renewable energy capacity addition targets, says a report. The Institute for Energy Economics and Financial Analysis (IEEFA) said that overall nearly $10 billion would need to come in annually from public

finance institutions to channelize sufficient private funds to meet the renewable energy capacity targets of BRICS nations. Brazil, Russia, India, China and South Africa make up the grouping. “The current renewable energy targets of BRICS countries require an additional annual investment of USD 51 billion on average, which highlights the gap that may be filled by blended finance mechanisms,” IEEFA said. IEEFA said there are pockets in the renewable energy space such as residential rooftop segment that are riskier and less attractive for private investments and entities like the New Development Bank (NDB) can play a crucial role

in catalysing funds. Overall, BRICS countries have announced targets to add renewable capacity of nearly 500 GW over time horizons ranging from 2020-2030. “Meeting these targets would require an annual investment of around $ 177 billion. In comparison, the investment in the renewable sector in BRICS countries in 2015 was $126 billion, leaving an average shortfall of USD 51 billion,” the report said. With respect to India, IEEFA said the country requires around $26 billion each year to meet its renewable capacity targets by 2022, including $5 billion annually to build a smart grid to handle higher production from renewable sources.

Increased coke prices to hurt steel makers: Fitch A sharp increase in coking coal prices since August 2016 could squeeze Indian steelmakers’ profitability and deepen their financial risks, Fitch Ratings said. The risk, according to Fitch, will increase if high coking coal prices persist and domestic steel demand growth remains weak. Leverage for producers such as Tata Steel and JSW Steel jumped in the financial year ending March 2016, mainly due to poor profitability, and sustained pressure on margins would hamper financial risk mitigation. Prices for hard coking coal for export by Australia as of 30 September 2016 were $100 per tonne higher than the average in the quarter ended June 2016 (1QFY17),

according to data from The Steel Index. A 125% hike in process. Prices rallied following China’s decision to limit coal mines’ operating days to 276 a year, from 330 to restructure the sector and improve its profitability. Others issues such as flooding

in China’s Shanxi province, that reduced supply, and a number of unplanned mine outages in Australia also supported the price rise. Increase in raw material costs for Indian steel producers could shrink margins, if the cost rise is not passed on to consumers. For example, we estimate that a $ 50 per tonne increase in Tata Steel’s coking coal cost in 1QFY17 would have reduced consolidated EBITDA by around 35%, if all else stayed the same. Similarly, JSW Steel’s 1QFY17 consolidated EBITDA would have fallen by around 25%. The impact of higher coal costs would be offset if we assume price realisations for the two companies were 5%-10% higher.

November 2016 www.InfralinePlus.com

People in News Cyrus Mistry removed as Tata Sons chairman, Ratan Tata returns

The board of Tata Sons Ltd has replaced Cyrus P. Mistry as chairman, less than four years after he took the helm, and named his predecessor Ratan Tata interim chairman for four months.“Tata Sons in its collective wisdom and on the recommendations of the principal shareholders decided that it may be appropriate to consider a change for the longterm interest of Tata Sons and Tata group,” a spokesperson said.A selection committee

comprising Ratan Tata, Venu Srinivasan, Amit Chandra, Ronen Sen and Kumar Bhattacharyya was given the mandate of finding a replacement for Mistry, 48, who became chairman of the $103 billion conglomerate in December 2012, at the end of Tata’s over two-decade tenure at the top. The board was given four months to complete the task. “In the interim, the board has requested me to perform the role of chairman and I have agreed to do so in the interest of and reassurance to the Tata group,” Ratan Tata, 78, said. The development, which portends at least short-term turmoil, comes at a time when the conglomerate, whose business interests range from tea to telecom and salt to software services, has been trying to recast or dispose of the key UK steel business, which it acquired in a $12.9 billion purchase of Corus Group Plc. in 2007 under Ratan Tata.

New CMD for TSNPDCL

The Telangana Government recently appointed A. Gopal Rao as Chairman and Managing Director of Northern Power Distribution Company of Telangana Limited (TSNPDCL) Warangal. He will relieve the incumbent K. Venkata Narayana from the post. According to the orders issued by in-charge Principal Secretary (Energy) Sunil Sharma, the appointment has been made following the resignation submitted by Mr. Narayana on health grounds.

Tata Group appoints Padmanabhan as HR head

In a quick move to perhaps assuage anxieties among employees following the spat between Ratan Tata and Cyrus Mistry, the Tata Group has appointed S Padmanabhan, a stalwart within the Tata ecosystem, as the new group chief of HR (CHRO). This was after Tata Group’s former CHRO, N S Rajan, who was brought in three years back

from EY, had resigned following Mistry’s ouster as chairman of Tata Sons.The exit of an HR head from an organization, which is undergoing turbulence following the sudden ouster of its chairman, can hit the morale of its people. For the Tata Group, which employs over 6,60,000 people, Padmanabhan’s appointment is thus critical at this juncture. Padmanabhan, who chairs the Tata Business Excellence Group, or TBExG (earlier Tata Quality Management Services), had kick-started the process of taking the group towards overall business excellence from the initial focus on quality. TBExG had set itself a target of enabling at least 25 Tata companies to achieve industry leadership by 2025. Padmanabhan is also chairman on the board of Tata Consulting

Engineers (TCE), a wholly owned subsidiary of Tata Sons. Under Rajan, the group had announced 27 weeks maternity leave policy, six months paid adoption leave and 15 days paid paternity leave, in addition to other policies around diversity and inclusion. Padmanabhan’s experience in the field of HR comes mainly from a stint he served in Tata Consultancy Services (TCS) as HR director. His career with the Tata Group at senior executive positions began with TCS in 1982, and spans over 33 years. He was executive director (operations), Tata Power Company since 2008, and was responsible for the profitable and sustainable operations of all thermal and hydro generation plants across India and transmission and distribution systems in Mumbai.

Tata veteran S Ramadorai resigns from NSDA, NSDC Tata veteran S Ramadorai has resigned as chairman of the government’s skill development agencies — NSDA and NSDC — sparking speculation that he might be headed back to India’s largest conglomerate. Rohit Nandan, vice-chairman of the governing body and secretary, ministry of skill development and entrepreneurship, has been appointed interim head of the National Skill Development Agency till a full-time chairman is appointed. The

former Tata Consultancy Services (TCS) chief was appointed chairman of the skill development agencies in May 2013 with a Cabinet rank. He is also the chairman of Tata Institute of Social Sciences and AirAsia India.His resignation triggered talk that he might be headed back to the Tata Group where a search committee is looking for a full-time chairman after the board of Tata Sons ousted its first nonfamily chairman, Cyrus Mistry, last month.

ial! r T e Fre lable Avai

Oil & Gas Knowledgebase Salient Features of the Oil & Gas Knowledgebase

Oil & Gas Prices Coverage

 300+ Oil Gas Block Profiles  80+ Gas-Crude-Product Pipelines Profiles  LNG Terminal-ShipmentCommercial Information  Refinery Project Status, Expansion Plans, Processing Units, Production  200+ Oil Gas Project Information  Integrated Search Options for Refinery, Pipelines and Oil Gas Blocks  Updated Active and Historical Tenders Information for Oil Gas Projects

Subscription Includes  Complimentary Daily Morning & Afternoon Newsletter  Dedicated Analyst Support  Weekly Knowledgebase Snippets  Global & Domestic Tenders  Unlimited Access to Knowledgebase  White Papers

Kind Regards, Ruchi Sharma (AVP– Business Development) Tel: +91-120-6799126 (D) / +91-120-6799100 (B), +91-95606 26529 (M) Fax: +91-120-6799101; Email: ruchi.sharma@infraline.com

Date of Publishing: 10th of the Month Post Date: 10th & 12th of the Month

RNI No: DELENG/2012/45441

Post Regd. No.: DL(ND)-11/6184/2016-18

Knowledgebases Infraline knowledgebases are a massive compendium of in-depth and exclusive information on the latest news, players, project details, tenders, and other key topics spanning across the different segments in the energy and infrastructure verticals Know more

Power Sector

Coal Sector

More than 2000+ project profiles with updated status on project cost and expenditure, detailed overview of the Indian power sector, including its evolution, latest status, recent happenings, policy changes, and a glimpse of key statistics related to the sector, demand-supply, installed capacity, features like PLF/Generation, monthly transmission etc.. Know more

Overview of Indian Coal Sector providing insights to the current status, latest developments, sector performance, landed price of imported coal at different ports, details & trends of coal resources, production, despatch, off-take, stocks & demand supply, regulations & guidelines for captive mining, etc.. Know more

Oil & Gas Sector

Informative one stop solution to Oil and Gas sector providing overview of Ministry, Regulatory and Industrial bodies. Key highlights of oil and gas sector covering laws, union budget, policies and amendments by MoPNG. Real time content coverage on more than 300 Oil Gas blocks; 80+ gas-crude-product pipelines; LNG terminal-shipment-commercial information; refinery project status, expansion plans, processing units and production and around 200 Oil Gas project information. Keeping track of Industry trends, market intelligence and analysis Know more

Renewable Sector Detailed profile of 13000+ power projects of renewable sector (solar I wind I SHP I bioenergy), data on JNNSM’s policies & guidelines, targets, achievements, bidding document and the phase – wise implementation status of the mission. All important statistics on RE sector performance, annual and cumulative capacity additions, physical and financial targets, cost structure and information on various funding options of Indian renewable sector. Know more

Roads Sector

Detailed overview of the Indian road sector, including its present status, recent developments and future outlook, exhaustive details of programmes and schemes initiated by government, state wise funds allocated/grants in aid, financial targets under different programmes and schemes and the comprehensive coverage of proposed, under implementation and operational projects. Know more For any further information, kindly contact us on the below mentioned coordinates: Kind Regards, Ruchi Sharma (AVP– Business Development) Tel: +91-0120-6799126 (D) / +91-0120-6799100 (B), +91-95606 26529 (M) Fax: +91-0120-6799101; Email: ruchi.sharma@infraline.com