Powertodayapril2016

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April 2016  Vol.8  No.8

Rural electrification programmes have proved big, expensive, and geographically and institutionally complex in India, but they are giving large benefits as the experience shows

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INSIDE Legalese – Bankruptcy Power Point – Rural Electrification

FEATURE Balance of Plant

New Winds, New Life

EDITORIAL

POWER TODAY

™

The MegaWhat of the Power Industry

Chairman, Editorial Advisory Board Sumit Banerjee Sumit@ASAPPinfoGLOBAL.com Executive Editor BS Srinivasalu Reddy Reddy@PowerToday.in

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The Last Mile Run for Indian Electricity As part of his vision to make 24 hours electricity to be made available to everyone in India, our Prime Minister wants all the remaining 18000 villages to be electrified in 1000 days. This is a highly laudable initiative, and is surely achievable, if it is executed in accordance with a sensible plan. The numbers stack up like this: around 12000 villages remain to be powered, of which, roughly 8000 will be connected to the grid, and others will be electrified in off-grid mode. The timeline for completion has been advanced to FY 17, and a significant number of these villages, so far, suffering from “poverty of electricity”, lie in the states of Odisha, Assam, Bihar and Jharkhand. Which brings us to the strong connect between access to energy and Human Development.

In one of our earlier issues, while discussing Paris COP 21, we said in these columns, “… we are sobered by the fact that 1.3 billion people in our global community are without access to electricity in this twenty first century, and of these, 300 million reside in India. Yes, there have been positive changes over the years, and humanity has decidedly made progress, but this abject situation in the context of sweeping modernity all around us, this stark contrast between development and lack of it, makes for a profoundly disturbing statement”. A 2005 study (By Chi Seng Leung and Peter Meisen) conducted with data of 40 countries, has statistically shown a strong correlation between HDI and per capita power consumption. In fact, all the three elements on which HDI is computed, viz., Life expectancy, Education and GDP per capita, demonstrated discernible patterns of inter-dependence with growth of electricity consumption. Although there have been some studies questioning if such correlation can mean causative relationship (i.e., does poverty of power cause lack of development, or vice versa), the bottom line is that there can be no arguments against prioritising on “access to electricity for all”. So, we are on track here, and therefore we fully support this “better late than never” kind of initiative, and wish this project Godspeed.

However, the last mile is always very tough; in this case, the challenges come in the shape of terrain, accessibility, consumer density, sustainability/ maintainability, etc., not the least of which is finances. About these challenges, the Economist had written in 2010, that 85 per cent of the people without electricity live in rural areas, and extending energy grids into these areas is expensive: the United Nations estimates that an average of $35 billion-40 billion a year needs to be invested until 2030 so everyone on the planet can cook, heat and light their premises, and have energy for productive uses such as schooling. On current trends, however, the number of “energy poor” people will barely budge, and 16 per cent of the world’s population will still have no electricity by 2030, according to the International Energy Agency.

It is in this context that ‘bottom up solar cooperative models’, can help overcome the obstacles, somewhat similar to the way in which mobile/ cellular telephony brought about a communication revolution in the developing world, without waiting for the traditional telephony infrastructure to spread.

Village cooperative based off-grid micro-solar power solutions can do wonders in letting our remote villages evolve energy solutions from within, rather than waiting for the grid. What is needed is improvements in power storage systems and cooperative financial business models. This is already happening.

Enjoy reading. Please send us your feedback at Sumit@ASAPPmedia.com

Sumit Banerjee Chairman, Editorial Advisory Board www.PowerToday.in

contents 28

COVER STORY

24

INTERACTION T&D “India’s transmission grid is smart, but discoms don’t math up” Rathin Basu, Managing Director, Alstom India T&D Limited CABLES “Future potential of cable industry is in Indian projects” Manish Bhatt, Chief Executive Officer, Shilpi Cable Technologies Limited

Illuminating Villages

Rural electrification programmes have proved big, expensive, and geographically and institutionally complex in India, but they are giving large benefits as the experience shows.

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LEGALESE

42

FEATURE BALANCE OF PLANT

Insolvency and bankruptcy code: Resolving the NPA crisis

Interviews Dr. A K Verma IFS, Joint Secretary, Ministry of Power, GoI

Rajkumar S Biradar, Executive Engineer-2, EMC, Energy Department, Karnataka Jaideep N. Malaviya, Chief Executive Officer, Malaviya Solar Energy Consultancy Prasad Chaporkar, Head– International Business, Waaree Energies Limited

40 70

BoP, the consolidator!

Considering Rs 2.5 crore per MW worth business opportunities in Balance of Plant (BoP) packages, it is expected that the consolidation activities likely to be around the corner.

Interviews SK Kodandaramaiah, Director - Business Development, Power Mech Projects Limited

POWER POINT Rural Electrification – A dream that must come true

EVENT REVIEW 3rd Annual Equipment Awards & CEO Forum

6 POWER TODAY APRIL 2016

Mahadevan Viswanathan, Director - Business Development & Materials Management, Thyssenkrupp Industries India Pvt. Ltd www.PowerToday.in

contents 52

CASE STUDY – RE

36

EVENT REPORT

59

RENEW

MEE-SME, Dubai

Cover Story - Wind

New winds, new life

A humongous target to achieve, India’s 175 GW renewable dream will fall short, if the government fails to incorporate the “vayu” form of energy, in addition to its “surya namaskar” propaganda.

Rural Electrification in Chattisgarh

Chattisgarh has tried, tested and proved solar microgrids to be the most successful means of remote area electrification.

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ANALYSIS – BUDGET 2016-17

Big push to Nuclear “LEGALESE” Legal issues are an inseparable part of today’s business environment. While ethical and governance issues are yet evolving, it is necessary for everybody to be legally correct while perpetuating his/her business. In our efforts to continuously update you on subjects of relevance in your day-to-day business environment and to equip you with appropriate responses to upcoming challenges in the power sector, we are introducing a new column titled “Legalese”. Through this column, we hope to bring to you thought-provoking points of view from experts in the field every month, going forward. We do hope that you will come to like this space, and we shall look forward to receiving your feedback as we move ahead.

NEXT ISSUE The May 2016 issue will focus on Boilers & Turbines and Coal in Power, while its Renew section will cover Hydropower.

8 POWER TODAY APRIL 2016

NEWSLINE ......................................................................10 PRESS RELEASE .............................................................22 RENEW NEWS ................................................................66 RENEW PROJECTS ........................................................68 POWER PROJECTS ........................................................69 POWER STATS ..............................................................71 MARKET SNAPSHOTS..................................................72 POWER PEOPLE ............................................................74

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NEWSLINE the state would spend `37,938.46 crore to add 5,880 MW.

PROJECTS Telangana to add 5880 MW new capacity

Contact: Telangana State Government Tel: 040-23454664 Website: http://www.telangana.gov.in/

Tata Power named world’s most ethical company

Telangana Energy Minister Jagadish Reddy informed the State Legislative Assembly that the state would get an additional power of 5,880 MW by 2018-19.

Replying to a question raised during Question Hour, the minister said that the state has taken up generation capacity addition comprising 5880 MW Thermal by GENCO and 360 MW Hydel in the next three years by TSGENCO, apart from about 2500 MW of solar power in the private sector,1800 MW by SCCL and 4000 MW by NTPC to meet the future power requirement in the state. Overall,

Ethisphere Institute, the global leader in defining and advancing the standards of ethical business practices, recognised Tata Power as the world’s most ethical company in 2016. This is the third consecutive time that Tata Power has won this accolade, underscoring the organisation’s commitment towards promoting ethical business standards and practices.

The honour recognises those companies that positively impact the way businesses are conducted by nurturing a culture of ethics and transparency at every level.

Essel Infra wins `8,500-cr transmission project Essel Infrastructure has bagged

To meet the state’s power requirement in May and June, the Odisha government is planning to loan 200 MW power from North Indian states through power banking. Power banking is a cashless operation through which Odisha will return equal amounts of power during monsoons to the respective states.

Odisha is currently getting 100 MW from Delhi and an additional 400 MW in the evening from Punjab. The state gets 1,200 MW from hydro projects, 350 MW from IB Thermal Power Plant, Banharpalli, Jharsuguda, 380 MW from Talcher Thermal Power Station, Talcher, 580 MW from central share and 700 MW from independent power producers.

Contact: Secretariat, Government of Odisha Tel: +91-674-2392870,2323074 Website: http://www.odisha.gov.in/portal/default.asp

Contact: Essel Infra Projects Limited Tel: +91-22-71084444 Website: http://esselinfraprojects.com/index.php

APTL’s premium bid to win project in Rajasthan

Contact: Tata Power Tel: +9122 6665 8282 Website: http://www.tatapower.com/

Odisha state plans to borrow 200 MW power

1 0 POWER TODAY APRIL 2016

the power transmission project to connect the nation’s power grid to the southern region. Power Finance Consulting Corp had put the 765 kV power transmission corridor for bidding at `8,500 crore.

Essel Infra, Sterilite Grid, Adani Power, Reliance Power and stateowned PowerGrid Corp. were among the bidding competitors.

Essel Infra quoted the winning amount of `383.4 crore per annum, which will be a levelised tariff for 35 years. The project would be established on a build, own, operate and maintain basis.

In a first-of-its-kind move, Adani Power Transmission Ltd. (APTL) quoted a premium amont to grab the Suratgarh-Bikaner Intrastrate Transmission Line project in Rajasthan. APTL bid 20 per cent lower than Rajasthan Rajya Vidyut Prasaran Nigam’s (RRVPN), prescribed unitary charge, and would pay the difference as premium to the RRVPN. This is the first ever case of premium bidding in power transmission projects, Generally, companies quote a higher amount than the unitary charge, the difference of which is paid by the state government as viability gap funding.

Contact: Adani Power Tel: +91 79 2555 7555 Website: http://www.adanipower.com/

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NEWSLINE increased to 1,700 units from 600 units in 2004.

POLICY DELP gets a new face in ‘UJALA’

Contact: Energy Department, Govt. of Chhattisgarh Tel: +91-771-2510793 Website: http://www.cspdcl.co.in/CSEB/ (S(zgsoxsml1bhv2ndnzriwly31))/frmHome.aspx

MP power tariff slashed to 12%

Union Power Minister Piyush Goyal announced the name UJALA for the LED based Domestic Efficient Lighting Programme (DELP). UJALA stands for Unnat Jyoti by Affordable LEDs for All, and is being implemented by Energy Efficiency Services Limited (EESL).

Launched by the Prime Minister in 2015, UJALA (DELP then) is successfully implemented across 12 states in India namely Rajasthan, Maharashtra, Karnataka, Kerala, Uttar Pradesh, Himachal Pradesh, Delhi, Andhra Pradesh, Puducherry, Jharkhand, Bihar and Uttarakhand. EESL has already distributed 7.47 crore LED bulbs across the country resulting in energy savings of over 2.66 crore kWh every day.

Contact: Energy Efficienct Services Limited Tel: +91-120-4908000 Website: http://www.eeslindia.org/Home. aspx?ReturnUrl=%2f

Total electrification in Chhattisgarh by 2018

Contact: Energy Dept, Govt, of MP Tel: +91-755-2441424 Website: http://www.mpenergy.nic.in/index.html

6493 villages electrified under DDUGJY A record 323 villages had been electrified across the country under the Deen Dayal Upadhyaya Gram Jyoti Yojana, from 6th March

to 13th March, 2016, while 314 villages were electrified in the week before.

A total of 6493 villages have been electrified since April 2015. Of the remaining 11,959 villages 8,219 will be electrified through the grid, 3,267 through off-grid solutions and 473 through the state government.

Contact: Government of India Website: https://india.gov.in/

Manufacturing of Atomic plant components localised India’s Department of Atomic Energy (DAE) signed a Programme of Action (PoA) for the localisation of atomic plant components with Russia’s Atomic Energy Corporation. Under the PoA, both sides would execute time-bound specific steps towards finalising the details, in consultation with Russian Technology Providers and Indian manufacturers for commencement of localisation in India.

Currently, the nuclear power plants at Kudankulam are being set

Raising of resources to fund Nuclear Insurance Pool

Chhattisgarh would achieve the target of complete electrification by 2018. Chief Minister Raman Singh informed the Legislative Assembly that an action plan has been prepared to electrify the remaining 1,080 villages in the next two years. He further added that over 7,800 hamlets across the state require electrification as well, which the state government also aims to achieve by 2018.

The per capita power consumption of the state has 1 2 POWER TODAY APRIL 2016

The Madhya Pradesh (MP) government’s announcement to slash power tariff to 12 per cent from the current 15 per cent on usage of 200 units or more, came as a huge relief to the domestic consumers as well as the industry.

Consumers will now get a rebate of 15 to 17 paise per unit.

Industries consuming hightension power have also been given a relief by reducing tariff to a welcome 9 per cent from the current 15 per cent. The State Power Minister Rajendra Shukla hopes that this would encourage investment and raise production in the state.

M/s General Insurance Corporation of India (GIC-Re), along with several other Indian Insurance Companies, has launched the India Nuclear Insurance Pool (INIP) with a capacity of `1,500 crore to provide insurance to cover the liability as prescribed under Civil Liability for Nuclear Damage (CLND) Act 2010.

The extent of suppliers’ liability is as stipulated in Sec.17 of CLND Act, 2010 and explained in Rule 24 of the CLND Rules, 2011. As per Section 6(2) of the CLND Act 2010, the liability of NPCIL, as the operator, for a nuclear incident will be Rs. 1500 crore.

Contact: General Insurance Corporation of India Tel: +91 22 2286 7000 Website: http://gicofindia.com/index.php?lang=en

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NEWSLINE up in cooperation with Russia, wherein the construction, equipment erection and commissioning are in the Indian scope, while supply of major equipment is in the Russian scope.

DAE is planning to progressively increase the share of indigenous supplies in future units to be set up at Kudankulam.

Contact: Department of Atomic Energy Tel: +91-22-22022543 Website: http://dae.nic.in/

RIL’s arbitration may hinder its discoveries In order to incentivise gas production from deep sea and other difficult reservoirs, the government has announced a new pricing policy that will link the price of gas from these fields to landed import rates of fuel oil. The policy can potentially benefit Reliance Industries Limited’s (RIL) eight discoveries with reserves of 2.53 trillion cubic feet of gas. RIL may not be able to enjoy the benefits though, unless it drops its arbitration against the government’s power to fix prices.

However, any new discovery by RIL will not be barred from this pricing policy.

Contact: Reliance Industries Ltd. Tel: +91-22-2278 5000 Website: http://www.ril.com/

Global oil price drop, a windfall for India The collapse in global oil prices has proved to be a windfall gain for India, making room for more spending on goods and services, according to the International

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Monetary Fund (IMF). It further stated that the oil price drop has, in fact, ushered a sharp decline in inflation.

In its latest report, the IMF projected India’s GDP growth from 7.3 per cent in the current fiscal year to 7.5 per cent in the next, despite uneven economic recovery.

penalty should be a two sided affair in the PPP model, making the public body liable to fines as well, since partnership is sharing both profits and losses.

Contact: International Monetary Fund Website: http://www.imf.org/external/index.htm

In a written reply to the Rajya Sabha, The Minister of State (IC) for Petroleum & Natural Gas, Dharmendra Pradhan announced the implementation of Direct Benefit Transfer (DBT) in Kerosene w.e.f. 1st April, 2016. 33 districts across Chattisgarh, Haryana, Himachal Pradesh, Jharkhand, Madhya Pradesh, Maharashtra, Punjab, Rajasthan and Gujarat fall under the scheme.

As part of this scheme, implementing states will enjoy fiscal incentives equivalent to 75 per cent of subsidy saved in the first two years, 50 per cent saved in the third year and 25 per cent saved in the fourth year. The Ministry is also in touch with other states to promote the scheme.

Coal linkages to private companies As per New Coal Distribution Policy (NCDP), 2007, Standing Linkage Committee (Long-Term) [SLC (LT)] is authorized to recommend the Letters of Assurance (LOAs) for supply of coal. Based on the SLC (LT)’s recommendation, 177 LOAs have been issued to various power plants so far, including Central/ State Government Sector as well as private power producing companies, covering capacity of 108,000 MW. Of this 108,000 MW capacity, the competent authority in 2013 had approved signing of Fuel Supply Agreements (FSAs) in respect of 78,000 MW capacity power plants which have been commissioned or are likely to be commissioned by 31st March.

Contact: Ministry of Coal Tel: +91-11-23384884 Website: http://coal.nic.in/

PPP framework needs to be reoriented Minister of State (IC) for Power, Coal and New & Renewable Energy said that there is a need to reorient the entire framework of Public Private Partnership (PPP).

Addressing the Happening Haryana Global Investors Summit at Gurgaon, he talked about adding a people’s perspective to the framework, essentially making it Public Private People Partnership (PPPP).

Goyal further suggested that

Contact: Government of India Website: https://india.gov.in/

DBT scheme for kerosene

Contact: Government of India Website: https://india.gov.in/

Haryana to join UDAY scheme Haryana is soon going to join the Union government’s Ujwal Discom Assurance Yojana (UDAY) scheme for restructuring the debt of the state’s power distribution companies (discoms). The state’s discoms have a total debt of `34,500 crore, of which the state government would take over `25,000 crore in two tranches.

Haryana has the highest aggregate technical and commercial losses in India at 30-33 per cent, followed by Rajasthan.

This move from the Haryana government came a week after Punjab joined the UDAY scheme.

Contact: Government of Haryana Website: http://www.haryana.gov.in/home.html APRIL 2016 POWER TODAY 15

NEWSLINE increase in payment of compensation against land.

COAL CIL may not be as rich as is thought to be

Contact: Coal India Limited Tel: +91-11-22018457 Website: https://www.coalindia.in/

10 coal blocks considered for commercial mining by May ’16

The state-owned Coal India Limited’s (CIL) hefty bank balance of nearly `60,000 crore as carried in the company’s consolidated balance sheet has fascinated successive governments for long. They have repeatedly advised CIL to part with the money in form of attractive dividends. However, a close look at the accounts will reveal that CIL is currently left with `20,000 crore only as actual cash balance, including around `8,000-9,000 crore for working capital after paying off the year’s dividends. In fact, it does not have enough funds to carry out its capex plans, which include opening new mines, expansion projects, railways and a 1,000-MW solar generation project.

Contact: Coal India Limited Tel: +91-11-22018457 Website: https://www.coalindia.in/

CIL subsidiaries pay `1,160 cr for land Around `1,159.96 crore has been paid by the subsidiaries of Coal India Limited (CIL) for acquiring land for mining in different parts of the country. Union Coal Minister Piyush Goyal said in Lok Sabha that `840.68 crore was paid as compensation by CIL in 2013-14.

He emphasised the government’s commitment to rehabilitate displaced people and clear long pending cases, which he cited as the prime reason for the 38 per cent 1 6 POWER TODAY APRIL 2016

downward trend that began in July and lasted until January.

Contact: Secretary, Ministry of Coal Tel: 011-23384884 Website: http://coal.nic.in/

CIL may miss target by 10-15 MT

To ensure uninterrupted coal supply to small scale factories that cannot procure from Coal India Limited (CIL), the coal ministry is contemplating allocating 8-10 blocks to state-run undertakings, which can then sell coal to these factories.

The state undertakings will be free to set their own pricing.

However, the pricing mechanism, basis and the extent of state government’s intervention is not clear. The scheme will likely be rolled out by May 2016.

The state-run Coal India Ltd. (CIL) is likely to miss its production target of 550 million tonne (MT) for the financial year 2015-’16 by 10-15 MT, due to slump in demand.

According to coal secretary Anil Swarup, the demand slump is due to the financial condition of discoms, which are not picking up power, thereby affecting the coal off-take.

He said that producing 550 MT would be difficult, given the circumstances, but the PSU would be able to produce anywhere between 535 and 540 MT.

Contact: Ministry of Coal Tel: 011-23070522 Website: http://coal.nic.in/

Contact: Secretary, Ministry of Coal Tel: 011-23384884 Website: http://coal.nic.in/

Coal imports inch up in Feb

OPGC seeks bridge coal linkage

India’s coal imports inched up by 1.7 per cent in February, the first rise in eight months, as told to Reuters by Coal Secretary Anil Swarup. However, he also suggested that it could well be a temporary increase due to deals signed earlier.

Imports increased to 16.79 million tonnes from 16.51 million tonnes a year ago, ending a

Odisha Power Generation Corporation Ltd. (OPGC) has urged the Ministry of Coal (MoC) to provide bridge coal linkage of 16.9 million tonne (MT) every year for four years.

The linkage would help bridge the gap between synchronisation of the ongoing 1320 MW expansion plan in Manoharpur and coal

Green nod to CIL’s 22 mining projects

Around 22 mining projects of Coal India Ltd. (CIL) have received green clearance in 2015-16. The government has set a production target of 550 million tonne in the ongoing fiscal year for CIL. The government had earlier stated that it is determined to enhance coal production by expediting environmental and forest clearance, as well as by urging the states and the Railways to aid in land acquisitions and transportation, respectively.

Contact: Coal India Limited Tel: +91-11-22018457 Website: https://www.coalindia.in/en-us/home.aspx

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NEWSLINE production from its allocated blocks on the dip side of Manoharpur. Both the blocks have been allocated to Odisha Coal and Power Ltd. (OCPL), a 51:49 joint venture (JV) between OPGC and Odisha Hydro Power Generation Corporation (OHPC).

The expansion plan, costing ` 11,547 crore, is expected to be commissioned by the end of 2017-18, but production would only begin in March 2019 and achieve peak capacity by March 2022.

Contact: Odisha Power Generation Corporation EPBAX: 91-674-2303765 / 2303766 Website: http://www.opgc.co.in/

Govt earns `726 cr from coal block auction The government has generated a revenue of `726 crore from the auction of 31 coal blocks. Coal and Power Minister Piyush Goyal said in a written reply to the Lok Sabha, the estimated revenue which would accrue to the coal-bearing states concerned from the allotment of 43 coal mines and auction of 31 coal mines, during the life of mine or lease period, is `196,698 crore and `148,276 crore respectively.

Contact: Ministry of Coal Tel: 011-23070522 Website: http://coal.nic.in/

CIL stops production at several mines Coal India Limited (CIL) has halted production at several mines owing to surplus stocks at all thermal power plants in the country. The coal stocks now stand at 84 million tonne (MT), with 48 MT at various CIL mines and another 36 MT at power plants.

Ironically, despite the surplus coal situation in India, around 57,000 MW of thermal units are starving for coal since they don’t have a supply contract with CIL. Contact: Coal India Limited Tel: +91-11-22018457 Website: https://www.coalindia.in/

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No hike in tariff due to doubled coal cess According to Union Power Minister Piyush Goyal, the budgetary announcement of doubling coal cess will not lead to hike in power tariffs since power distribution companies (discoms) will benefit from Ujjwal Discom Assurance Yojna (UDAY). It is estimated that discoms will save around `1.8 lakh crore in the next three years under the UDAY scheme.

UDAY is aimed at reviving debt-ridden discoms by letting states take 75 per cent of the debt and issue bonds to pare loans, while the discoms will issue state guaranteed bonds for remaining loans to repay the debt.

Contact: Ministry of Coal Tel: 011-23070522 Website: http://coal.nic.in/

Arun Jaitley’s budget announcement of increasing the cess on coal from `200 to `400 per tonne, as it is likely to make solar power an even more competitive alternative.

The increase in cess would translate to an increase in coal power costs by `0.20 per unit. As such, the price of solar power has dropped well below `5 per unit, which compares well with the new coal price. It is also estimated that the move might enhance the corpus of National Clean Environment Fund by around `14,000 crore a year.

Contact: Ministry of Finance Tel: 011-23094595 Website: http://finmin.nic.in/

MoC focuses on starting production in auctioned mines

Doubling of coal cess welcomed by SPD Solar power developers (SPD) have welcomed Finance Minister

Highest coal production growth in two decades

In his Budget speech for 2016-17, Union Finance Minister Arun Jaitley said that the country has witnessed highest coal production growth in over two decades. The present government has achieved the highest ever capacity addition in generation and the highest ever increase in transmission lines and LED bulb distribution.

The steps to enhance dry fuel output has lead to a record 9.8 per cent growth in Coal India’s production, consequently reducing fossil fuel imports. Around 83 per cent of the capacity addition target of 88,537 MW for 12th Plan period has already been achieved.

Contact: Ministry of Finance Tel: 011-23094595 Website: http://finmin.nic.in/

The Ministry of Coal (MoC) is taking various steps to resolve issues related to auctioned mines and allotted blocks, and bring them to production. Prime Minister Narendra Modi had earlier asked MoC to strongly focus on starting production in auctioned and allotted mines by tracking land transfer, mining leases and clearances among others, in coordination with state governments.

Coal Secretary Anil Swarup had earlier said that around 15 more auctioned coal mines would begin production by March 31, taking the total number of producing mines from eight to 23.

Contact: Ministry of Coal Tel: 011-23070522 Website: http://coal.nic.in/

APRIL 2016 POWER TODAY 17

NEWSLINE

FINANCE Punjab’s free power bill is `40,538 cr

The Punjab government has spent `40,538 crore in providing free power to farmers and other beneficiaries since 2002-03. The power subsidy allotted to Punjab under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in 2002-03 was `950 crore, which went up to 5,908.75 crore in 2015-16.

In the past 13 years, Punjab State Electricity Regulatory Commission (PSERC) has approved a subsidy of of `44,698.86 crore, and the government paid `40,538.58 crore towards it. The government’s free power scheme is being condemned by industrialists and economists who are raising concerns about the impact it can have on the state’s finances.

Contact: Punjab State Electricity Regulatory Commission Tel: +91-172-2645164, 65, 66 Website: http://www.pserc.nic.in/

NTPC moves SC against discom National Thermal Power Corporation (NTPC) moved the Supreme Court (SC) to urge distribution company (discom) BSES Rajdhani to clear its dues of `720 crore, pending since October, 2015. In its application to the apex court, NTPC said that the discom should face proceedings for violating judicial orders directing 1 8 POWER TODAY APRIL 2016

the company to pay current dues on time.

Earlier in July 2014, NTPC had served BSES with a disconnection notice on the grounds that the power utility owed it `400 crore.

The SC had then restrained NTPC from disconnecting power supply to BSES, in view of the discom’s petition alleging illegal decisions of the Delhi Electricity Regulatory Commision and Delhi Government for its predicament.

However, the top court had urged the BSES to pay current dues on time.

Contact: National Thermal Power Corporation Tel: +91-11-24360100 Website: http://www.ntpc.co.in/

MeECL owes NEEPCO `441 cr In what can be termed as a sorry state of affairs, the Meghalaya Energy Corporation Limited (MeECL) owes over `440 crore to North Eastern Electric Power Corporation Limited (NEEPCO), which if uncleared may result in NEEPCO regulating power supply to the State from April 1, 2016.

MeECL has unpaid dues of around `300 crore and surcharge amount of `141 crore. NEEPCO

had agreed to waive 60 per cent of the surcharge, on the condition that MeECL clears the dues in three installments, which however did not happen.

Contact: North Eastern Electric Power Corporation Limited Website: http://neepco.gov.in/neepco/

Power utility debt costly for Rajasthan Taking over the debt burden for three discoms in the state under Ujjwal Discom Assurance Yojna (UDAY) has proved costly for Rajasthan, spiking the state’s fiscal deficit of 2015-16 to `67,350 crore – more than thrice the projection made at the start of the year.

Under the UDAY scheme, Rajasthan took over `60,500 crore of debt incurred by its discoms, the bulk of which is accounted for in the current fiscal and the rest in the next. The state will raise funds through UDAY bonds to retire the utility debt.

Contact: Finance Department, Government of Rajasthan Email: rajfd@rajasthan.gov.in Website: http://www.finance.rajasthan.gov.in/

`1,600-cr gas subsidy auction on March 15 State-owned NTPC, Essar Power, GMR and Tata Power are among the power producers

Competitive bidding route to boost IR power savings

Indian Railways (IR), after having adopted competitive bidding route for buying electricity, is expecting annual savings of `3,000 crore starting 201617. The route was adopted last year, before which IR used to buy directly from state-owned discoms charging commercial rates.

Earlier, the Central Electricity Regulatory Commission (CERC) had conferred IR with a deemed licensee status, which further helped IR by exempting it from cross-subsidy surcharges, levied by states on consumers buying electricity from outside the state.

Contact: Indian Railways Website: http://www.indianrailways.gov.in/

www.PowerToday.in

competing to get `1,600 crore of government subsidy to procure costlier imported gas for their stranded units.

State-run MSTC Ltd. will conduct the auction on March 15, for subsidy support for buying 10 million standard cubic metres per day of gas, which can support 24 GW of generation.

The subsidy is being accommodated under the government’s Power System Development Fund (PSDF) scheme started last year to revive the gas-based capacity of 24,150 MW. It includes 14,305 MW of stranded gas-based power projects and 9,845 MW of domestic gasbased power projects.

Govt to allocate `3k cr/year to boost N-power

At an international conference on the rule of law for supporting the 2030 development agenda, Union Home Minister Rajnath Singh said that the government plans to allocate `3,000 crore anually to come up with a comprehensive plan spanning 15-20 years that would augment nuclear power generation.

The Nuclear Power Corporation of India had stated earlier that it aims to create about 14,500 MWe of installed capacity by 2024. While six nuclear power reactors with a total capacity of 4,300 MWe are already under construction, more indigenous reactors are expected to come up in Haryana, Madhya Pradesh and Rajasthan. Also, Russia has agreed to build two more 1000 MWe reactors at Kudankulam.

Contact: Nuclear Power Corporation of India Tel: +9122-22182171, 22182177 Website: http://www.npcil.nic.in/

Contact: MSTC Limited Tel: 011-2321 4201, 2321 3945 Website: http://www.mstcindia.co.in/

CG sells T&D business for EUR 115 mn Engineering firm Crompton Greaves (CG) sold its international transmission and distribution (T&D) business to First Reserve international for EUR 115 million or about `851 crore.

In a release to the exchanges, CG explained that the sale will enable the company to reduce debt and focus on its faster growing Indian businesses.

The international business had been a pain point to the company, with its total outstanding loans amounting to `1,600 crore – the company’s net debt is `900 crore. Consequently, CG’s valuations were seen to have taken a knock.

Contact: Crompton Greaves Tel: +91 22 2423 7777 Website: http://www.cgglobal.com/index.aspx

www.PowerToday.in

Interest rate cut will kick-start the economy: Siemens Engineering and capital goods giant, Siemens is bullish on the Indian economy in the long term, having committed to invest `1 billion and add 4,000 jobs to its existing workforce of 16,000.

Sunil Mathur, CEO, Siemens India said that the Budget and other policy actions are all set to kickstart the economy and an interest rate cut right now will go a long way in expediting the process.

The government maintained a status quo on fiscal deficit, making a case for interest rate cut by the Reserve Bank of India (RBI). Market players are hoping that a rate cut could come ahead of the annual statement in April. RBI’s benchmark repo rate is at 6.75 per cent, and analysts expect a 25-50 basis points reduction.

Contact: Siemens India Tel: +91 22 3967 7000 Website: http://www.siemens.com/entry/in/en/

NDB to begin funding of projects The New Development Bank (NDB) set up by the BRICS (Brazil, Russia, India, China, South Africa) countries will approve one project from each member nation, and subsequently finalise about 10 to 15 projects, mostly green energy ventures.

According to KV Kamath, President, NDB, the initial funding for the projects will be confined to the BRICS countries who have submitted a number of projects for consideration – mainly infrastructure and green energy projects. The bank’s founding members have already brought in a capital of $1 billion as initial contribution.

Contact: New Development Bank Email: info@ndbbrics.org Website: http://ndbbrics.org/

APRIL 2016 POWER TODAY 19

NEWSLINE

OIL & GAS OVL to buy 35% additional stake in Vankor

India in talks with Middle East on OFF scheme India is in talks with UAE and a few other Middle East countries regarding oil-for-food (OFF) scheme, which will allow the countries to exchange crude oil for food. India is the world’s third biggest crude oil consumer, sourcing almost 80 per cent of its crude oil from overseas, a majority of which is met through shipments from the Middle East.

Contact: Ministry of Petroleum and Natural Gas Website: http://www.petroleum.nic.in/

IOC’s sales price slump to multi-year low ONGC Videsh Ltd. (OVL), along with Indian Oil Corporation (IOC), Oil India (OIL) and Bharat Petroleum Corporation Ltd. (BPCL), plans to buy an additional 35 per cent stake in Russia’s Vankor oil field in Siberia for nearly $3 billion. OVL had agreed to buy 15 per cent stake in Vankor oil field from Russia’s oil major Rosneft for $1.26 billion on Semptember 4 last year. While the deal is yet to be signed, Rosneft now seems agreeable to selling additional 35 per cent in Vankor to Indian firms.

Contact: ONGC Videsh Limited Website: http://www.ongcvidesh.com/

Traders have raised concerns on Indian Oil Corp’s (IOC) decision to sell up to 51,000 tonne of naphtha for late March to early April at staggering discount levels not seen in many years.

IOC sold up to 24,000 tonne of naptha for March 28 to April 3 to Thai firm PTT at discount in the high teens level to its own price formula on a free-on-board (FOB) basis. Another 27,000 tinne for March 28-30 was sold to Japanese firm Itochu at a discount of about $7 a tonne to the same formula.

Traders said that such high discounts were hurting the Indian

refiners as well as traders selling cargoes on a cost-and-freight basis.

Contact: Indian Oil Corporation Tel: +91-22-2644700 Website: https://www.iocl.com/

Cabinet decision hits Essar Essar Oil faced a significant setback after Cabinet Committee on Economic Affairs (CCEA) decided to return Essar’s Ratna and R-series oil and gas fields to state-run Oil and Natural Gas Corporation (ONGC), the original licensee. The fields located off the Mumbai coast were awarded to a consortium of Essar Oil and Oil Pacific UK 20 years ago. However the projects languished and no formal production sharing contract was signed due to differences over royalty rates and other issues.

Contact: Essar Oil Tel: +91-22-6733 5000 Website: http://www.essaroil.co.in/

Licence extension for 28 oil and gas fields

New pricing formula for difficult gas finds

Aiming to attract more investments in the oil and gas sector, the government announced a new pricing formula for underdeveloped gas discoveries in difficult areas. The move is expected to result in 85 per cent jump in rates and help monetise `1.80 lakh crore of inert finds. While giving nod to pricing freedom subject to a cap for gas produced from High Pressure High Temperature, deepwater and ultra deepsea areas, the Cabinet also approved replacing the controversial Production Sharing Contract (PSC) with simpler revenue¬sharing regime for all future field auctions.

Contact: Ministry of Petroleum and Natural Gas Website: http://www.petroleum.nic.in/

2 0 POWER TODAY APRIL 2016

The Cabinet approved extending licences of 28 small-and-mediumsized oil and gas fields. Production sharing contracts (PSCs) for as many as 28 fields, including western offshore Panna/Mukta and Tapti oil and gas fields operated

by BG Group of UK, are due for extension till economic life of the asset.

Although Cairn India’s Rajasthan block apparently qualifies for the PSC extension, it has not been considered by the policy. The PSC for the block www.PowerToday.in

NEWSLINE RJ-ON-90/1 expires in May 2020 and Cairn had sought an extension of 10 years.

Contact: Ministry of Petroleum and Natural Gas Website: http://www.petroleum.nic.in/

Pradhan Mantri Ujwala Yojana greenlit The Cabinet approved a `8,000-crore scheme to provide cooking gas (LPG) connections free of cost to women members of below poverty line (BPL) families.

The Cabinet, headed by Prime Minister Narendra Modi, approved Pradhan Mantri Ujwala Yojana (PMUY) with an outlay of `8,000 crore for three years.

A sum of `2,000 crore has been set aside in this year’s Budget to meet the initial cost of providing the LPG connections, which will benefit about 1.5 crore households below the poverty line in 2016-17.

Contact: Ministry of Petroleum and Natural Gas Website: http://www.petroleum.nic.in/

Indian Oil announces INDMAX unit for NE

INDMAX technology is more competitive and highly suitable for heavy feed contaminated with metals. INDMAX of 0.1 million metric tonne per annum (MMTPA) capacity was setup at Guwahati Refinery as the pilot project. The Indian Oil Board has now approved setting-up of INDMAX FCC Unit including LPG Treatment of 0.740 MMTPA at its Boanaigaon Refinery.

Contact: Indian Oil Corporation Tel: +91-22-2644700 Website: https://www.iocl.com/

ONGC plans production sharing with Schlumberger, others Oil and Natural Gas Corporation (ONGC) plans to revive its depleting oil fields by collaborating with service providers like Schlumberger who will have a share in incremental production instead of claiming an outright fee. Schlumberger has entered into a preliminary agreement to work on an old ONGC field in Assam. The firm is currently studying the field data and if convinced of augmenting production, it will sign a deal.

Halliburton and a few other service providers have also expressed interest in this model that ONGC plans to extend to more onshore fields.

Contact: Oil & Natural Gas Corporation Tel: 0135-2793959 Website: http://www.ongcindia.com/wps/wcm/ connect/ongcindia/home/

Indian Oil has announced an Indane Maximisation (INDMAX) unit at Boinagon Refinery in alignment with The Hydrocarbon Vision 2030 for North-East (NE) which aims at doubling oil and gas production, making clean fuels accessible, fast tracking projects, generating employment opportunities and promoting cooperation with neighbouring countries. www.PowerToday.in

HPCL to invest `45,000 cr in infra expansion Hindustan Petroleum Corp Ltd. (HPCL) plans to invest `45,000 crore by 2020 in the capacity expansion of its Mumbai and Visakhaptnam refineries, as well as in augmenting its marketing infrastructure. The state-run oil marketer will invest `21,000 crore in capacity expansions, `9,000 crore in marketing infrastructure, and `14,000 crore in joint venture

refinery projects, natural gas business and upstream oil exploration. `4,199 crore would go into the capacity expansion of its Mumbai refinery from 6.5 million tonne per annum (MTPA) to 9.5 MTPA, while `17,000 crore would go in expanding the Visakhapatnam refinery to 15 MTPA from the current 8.

Contact: Hindustan Petroleum Corp Ltd. Website: http://www.hindustanpetroleum.com/

Amul starts bio-CNG generation plant

Amul Dairy has become the first in India’s food industry to start a fully automated bio-CNG generation and bottling plant to utilize energy from its plant’s waste. Earlier, Amul used to flare the biogas into the atmosphere by burning it, releasing significant amounts of the harmful carbon dioxide and hydrogen sulphide.

However, as part of its green initiative, Amul decided to reutilize the biogas and adopted the medium pressure swing adsorption (MPSA) technology to convert biogas into bio-CNG. Contact: Amul Dairy Tel: +91 2692 256124 Website: http://www.amuldairy.com/

APRIL 2016 POWER TODAY 21

CORPORATE UPDATES

PRESS RELEASES HONEYWELL PARTNERS WITH INDIAN MANUFACTURER Honeywell has entered into a supply agreement and technology license with the Indian manufacturer Navin Fluorine International Limited (NFIL), to produce Honeywell Solstice®yf, an automobile refrigerant with a global warming potential of less than 1. NFIL will manufacture Solstice yf in India, exclusively for Honeywell. Small-scale production is expected to begin by the end of 2016.

Honeywell and its key suppliers are investing around $300 million to increase the global production capacity for Solstice yf.

OVER 300 DELEGATES PARTICIPATE IN 6th WPCC

The 6th World PetroCoal Congress 2016, organised by Energy and Environment Foundation at New Delhi, India, during February 15-17, 2016, received a participation of 323 national and international delegates from Australia, Belgium, Canada, Hong Kong, Singapore, South Africa, UK, and USA. Bringing together leading international and domestic players, policy makers, government officials and technocrats on a common platform, the congress deliberated on the topic, “Petroleum-Coal-Gas: Ensuring Sustainability”. The main focus was to identify new fossil fuels, encourage cleaner fuel use and nurture closer networking among the various agencies handling different fuels to synergise and streamline their operations.

OMRON LAUNCHES TOTAL TAMPER DETECTION SOLUTION Omron, a leading sensing & control technologies company, announced the launch of its Total Tamper Detection Solution at the India Smart Grid Week 2016. It is being touted as a first of its kind solution developed to address the national level concerns of power theft in the electricity sector.

Conceptualised in association with Tata Power Delhi Distribution Limited, the endeavour is visualised as a milestone in enabling the Smart Grid initiative of the Government of India. “Omron’s security sensor for the smart meters is multi-functional, imparting a unique artificial intelligence to the meter by detecting all kinds of tampering,” Vinod Raphael, Country Business Head, Omron Electronic and Mechanical Components business division in India said.

IPCL JOINS HANDS WITH ENGIE India Power Corp. Ltd. (IPCL) entered into an agreement with ENGIE on 25th February, 2016 to acquire shares of Meenakshi Energy Private Limited (MEPL), which has a coal-based thermal power plant in Nellore, Andhra Pradesh. The plant has an installed capacity of 300 MW, with an additional 700 MW capacity currently under construction.

In addition, IPCL finished construction of the critical 220 kV DC transmission line from Mangalpur to JK Nagar substation in the Asansol-Ranigunj area, where the company has a power distribution licence. The system augmented IPCL’s receiving capacity by about 250 MVA and also connected IPCL’s network to the national grid.

PT 2 2 POWER TODAY APRIL 2016

www.PowerToday.in

100 95 75

25 5 0

INTERACTION T&D

“India’s transmission grid is smart, but discoms don’t math up” Rathin Basu, Managing Director, Alstom India T&D Limited Are you exploring any options in the smart grid segment?

We are extremely strong in smart grid. It is something which is not understood, and therefore, you may have 100 definitions of smart grid.

India’s transmission grid is the smartest in the world. This is the single largest synchronised grid of the world of 290,000 MW. It runs on the one load dispatch centre at Katwaria Sarai was built by us. Such a large synchronised grid is not present in China or USA. India’s transmission grid is smart. However, it is just the opposite in case of discoms and that is a pity. I do not want to say that we have all the core technologies in distribution, but lack in effective management.

But yes,

2 4 POWER TODAY APRIL 2016

distribution has been neglected. If distribution gets the same technology that we have put in transmission then it is not a herculean task, we have it all here, we have localised; the only thing that is missing is management. If that is taken care of then our T&D would be smart too, which would go a long way in the realisation of the smart cities vision. We can never make a city smart when we don’t have 24/7 electricity. Calling a city smart while half the city is blacked out won’t help in any way.

On black outs, to what extent the repeat of 2012 kind of black outs can be avoided?

Two things happened. Yes. it is the worst black out in the world. But there are pros and cons. The con is that it is the worst black out and happened for a very funny reason which I do not want to mention right now. Good thing was that thanks to the smart transmission grid technology, the network came back to life in less than 8 hours. California took 72 hours!. So, not everything is bad.

As long as the grid is not mismanaged, because some state chief minister says you cannot cut my power supply even if I overdraw, everything should be fine.

Overdraws are literally impossible. No

state can overdraw just by making some calls; so we have those disciplines now. In addition, the grid frequency band has been narrowed.

One cannot theoretically say that it will not happen again, but the condition is much better now.

What is the outcome of Acquiring of Alstom by GE in terms of products and services?

We have a complete portfolio of products of the former Alstom and since the GE Group acquired the energy business last summer, which includes former group, power and renewable, we have also included GE’s energy connection businesses, all its major product technologies and solutions to be able to formally say that we have arrived with our full bouquet of products.

What are the latest advancements in technology. We do know that technological advancements are happening , but what is next?

What are the technologies that will benefit India?

In India, we have 290,000 MW, or 290 GW of capacity. But if you see the actual utility from the low dispatch centre is between 140,000 and 145,000 MW, which is just 50 per cent usage of the installed base.

One of the reasons is that the electricity power flow between different regions of India are not fluid, there are different constraints today. It is measured by power grid by a terminology called ‘Interregional Power Transfer Capability’.

Today, we have around 46,000 MW, which is too small if you see the ratio, while in reality it is operating at www.PowerToday.in

INTERACTION T&D 25,000 MW. It is like highway. Like highways, we need a lot of high power corridors which will carry power from one region to another in a big way. For example, connectivity with south India was not there till the end of 2013. Even today the theoretical connection is around 4,000 MW, while the need is 15,000 MW, which means we will need another 2-3 years before South comes to that. Similar is the case with connectivity between north, east and west India. We have a separate power corridor for every region, which has to be eliminated. The current national target is around 64-68,000 MW by 2017, when we complete the 12th plan.

That way, what will be the rope of HVDC and 1200 kV transformers?

A lot of HVDCs are in the pipeline. The plan is to take this to 128,000 MW by 2022 and by then we can expect the national power capacity to be around 400 GW. Until 2022 bulk power transfer from one region to another will be primarily dependent on the 765 kV

transformer backbone which has been just built. There will be lot of sub-stations of that voltage, further strengthening the backbone and HVDC corridors for power. These are the two things from 2016 you will see a lot of in the next 6 years. The 1200 kV transformer was done more on an experimental basis. But you cannot implement that in applications because it is such a huge highway; you cannot have that corridor without proper power flow. Typically, 1200kV line should be able to transport 10,000-12,000 MW. The equivalent for 765 kV is 4,000 MW and HVDC is 6,000 MW. We need that kind of power to transmit on 1200 kV. Today you don’t see that kind of power generation, generation has slowed down. It is coming up in renewables, but renewables have different challenges. 1200kV would be commercially viable when the grid will be of 400,000-500,000 MW. Till then, we have to be on 765 kV and HVDC, and air-insulated switchgear (AIS). to more and gas-insulated switchgear (GIS), because of more land pricing, and HVDC mainly

for bulk and the righter way to be narrower.

T&D industry is suffering because of discom losses...

Is there any actual change in mindset in the whole sector after m’UDAY’ or does it still have to change further?

It has to change, because you cannot afford losing Rs 80,000 -90,000 crore on discoms every year.

On this count, why this privatisation of circles either through distribution franchising licensing is not happening? Do you think there is not enough political will?

I would say that distribution franchise is not the only solution to make discoms profitable because we have19 or 20 discoms that are doing well, and they do not have any franchise. So basically, I agree there needs to be a strong political willpower to make sure that our discoms do not lose money, and that they can provide electricity 24/7. It will empower quality and it will collect money for electricity. So, if a section of the society has to be served under a subsidy, the government has to fund it, not the discoms. All you need to provide is good quality electricity at a reasonable price.

PT

– BS Srinivasalu Reddy www.PowerToday.in

APRIL 2016 POWER TODAY 25

INTERACTION CABLES

“Future potential of cable industry is in Indian projects” Manish Bhatt, Chief Executive Officer, Shilpi Cable Technologies Limited Just coming to China and India, China is maturing from youngest population to old population now.

They are losing some competitive advantage in manufacturing.

Whether India is in a position to capture that, particularly in your sector?

I think I would say more than young or old, it is the kind of projects that make the difference. If you take the government’s the key projects, be it smart city, power to everyone by 2020, housing for everyone, the whole focus is on infrastructure. For our industry, that is the potential.

Power for everyone, for example, holds an immense opportunity for all of us, and I do not know if we have the capacity in the short run to even deliver the kind of ambition this

government is exhibiting. So, we are very hopeful about all these projects, which sound great. We also understand the kind of work that will go behind them, but they have to come on ground, they still haven’t.

So we are hoping that they come and we have a great opportunity lying ahead of us. As Shilpi, we would be participating in each of these key initiatives whether it is railways or defence, we have products to supply to all these segments.

What is the uniqueness of your products? I am finding that every product is tested for one lakh iterations or 10,000 operations.

This process might be there with others. How will this reinforce your brand in B2C? Our USPs include our end-to-end product range, our solution-oriented approach in B2B. For example, we don’t just sell components, we partner with them and offer them comprehensive solutions. In B2C also, we are trying to offer end-toend solutions. Second is, we are trying to implement our learning from B2B across the B2C businesses as well. For example, if you take our telecommunication segment, it is highly innovationoriented. We were the first one to bring in RF, aluminium RF cable and today, but for Airtel, everyone uses aluminium. We have a lot of innovations

2 6 POWER TODAY APRIL 2016

starting with application to the product quality. In auto, we have to deliver the products just in time, so a lot of effort goes in for ensuring that the product does not fail. We have implemented all those processes in B2C as well.

You do not have too many joint ventures with multinationals. That means do you rely on inhouse R&D, customer feedback and addressing their concerns?

We have a good in-house R&D facility, with ten people. Besides, we have been talking to IITs for various technology developments. So, there is an in built focus and energy. But wherever we feel that we are lacking, or see no point in wasting efforts, we are establishing joint ventures. So, for telecom antennas we have joined hands with Eyecom for getting technology. We want to be at the top of the technology today.

There are a couple of open debates - in India, we have a lot of people and cost of labour is also very low. Whether human resources can be a substitute for technology or technology will be a substitute for human resources?

I strongly believe it is the market forces that will decide. So there is, for example, harness business, where one would definitely like to have a lot of manpower. We deploy almost 700-800 people in our harness manufacturing facility, and as your business grows, manpower grows and you are competitive because that’s the way to go with that business. But in www.PowerToday.in

INTERACTION CABLES cable manufacturing, if you deploy the same, you will be out of the market. So, it doesn’t matter what you think, it is the market economics which will drive.

To what extent have we adopted standardisation and global benchmarks in these areas and to what extent is an unorganised structure is able to survive?

I was at Saudi Arabia and visited the market and saw all LED bulbs are of Chinese make, but no one wants to buy them. That is the dichotomy. Chinese products have an image of lacking in longevity, which goes against the products, but the prices are so attractive that customers are still willing to buy them. However, I am sure that once the customers come across frequent failures, their opinion will change. I think it will take some time, but a quality product will always have a sustainable growth in long term.

Even in India the share of branded market is increasing. If you notice, demand for quality and branded products is on the rise, generally.

How do you tell customers that they are good vis a vis not good? This is the brand which does that.

What are the verticals you are present in, and what are the unique features of your products?

Shilpi Cables Technologies was started in 2006 by the promoters who had been into cable manufacturing for the last 40 years.

We started with our Radio Frequency (RF) cable and we entered the telecommunications segment and mostly we were a B2B company, so we chose various verticals and started specialising in them. In the first vertical, telecom, today we supply complete RF solutions either for external coverage or for internal, in-building solutions. We supply whole equipment to all the operators, including Airtel, Vodafone, Idea and Reliance Jiyo, for their networks.

And today we have a large share in all operators. Second, we have www.PowerToday.in

“If you notice, demand for quality and branded products is on the rise, generally. How do you tell customers that they are good vis a vis not good? This is the brand which does that.” interest in automobile segment. In the automobile segment, we make that small harness and we supply wires for the main harness. Today we have a reasonable share in two-wheeler market and we are in various stages of approval in the four wheeler segment, which is almost 45 per cent. Third is, our white goods segment where we supply the power cord and harnesses. Then we have enamel copper, which goes into all the segments involving a motor or transformer. We make both aluminium and copper enamels. So, this is the B2B portfolio for us. And of course, we sell copper conductors, the wire manufacturing is a different process phenomenon.

Apart from that, two years ago, we have also entered B2C with an objective of providing a comprehensive range of solutions for household electricals, with a brand called ‘Safe’, which we launched at ELECRAMA. Now, we have introduced all kinds of wires and

multi-core, communication cables.

So we have full range of cables. We also have the devices for wire devices, modular switches and safety devices like MCB, RCCBs and distribution boards.

Actually in B2B segment, you seem to be a supplier for many global brands. Are there any hints from them for supplying international factories or something like that?

I had been with the auto parts manufacturing association entourage to Japan, where 21 CEO’s represented India. We visited Suzuki, Nissan and various other plants.

Those players who are still not present in India have set up their sourcing base in India. Everywhere we went, their CMDs came and met us, because there is a huge respect for India’s auto-component manufacturing industry. So, there is a huge requirement. There are two ways in which the export market is getting addressed now. One is, the OEM’s themselves are going to export. So, all the OEM’s are setting an export hub in India. Secondly, they are putting their purchase set-up here, so they can source for other locations. So definitely with this kind of confidence in them for good quality at a reasonable price, I think we have a great future.

PT – BS Srinivasalu Reddy APRIL 2016 POWER TODAY 27

COVER STORY

ILLUMINATING VILLAGES

Rural electriďŹ cation programmes have proved big, expensive, and geographically and institutionally complex in India, but they are giving large beneďŹ ts as the experience shows.

I

ndia has always had a large rural economy with most of the people eking out their living from these areas and as such, since independence successive governments have tried to improve rural infrastructure, including that of power connectivity. Though a lot is said to have been achieved on several fronts in several villages mostly those are closer to urban centres, a lot is yet to be achieved to give real impetus to the rural economy. Electrification of villages and hamlets closer to urban conglomerates have happened decades back as they are accessible to cities through roads and rail networks. However, the same is not true with villages at far flung

2 8 POWER TODAY APRIL 2016

places, particularly those in hilly and forest areas.

Remote villages are becoming even more remote, in the wake of rampant migration of people to urban centres for various reasons, including in search of employment. Such villages or hamlets are the most neglected on many infrastructure metrics, thus affecting their livelihoods. Village electrification of these remote, hilly and forest areas seems to be the only solution for bringing these islands of darkness into the country’s economic and social mainstream.

Several studies conducted across India and abroad found that rural electrification has a strong

and robust impact on both economic and educational outcomes. The gain in total income due to electrification could be as much as 30 per cent, according to some studies. Electricity also leads to a significant improvement in study time and educational performance for children in rural households.

Rural electrification is rightly considered to be the backbone of the rural economy, for it can open up innumerable possibilities of developmental activities, including improvement in health and education, communication and leads to overall economic development through creation of employment by encouraging www.PowerToday.in

COVER STORY investments in cottage and agrobased industries and adoption of improved means of farm production, through irrigation.

While the need for rural electrification was recognised in 1950s, the first major initiative was the establishment of Rural Electric Corporation (REC) in 1969. Under various schemes implemented since then and up to September 30, 2015, works in 1,11,060 unelectrified villages and intensive electrification of 3,26,958 partially electrified villages have been completed and 223.99 lakh free electricity connections have been provided to BPL households, according to the government data.

As on April 1, 2015, a total of 18,452 villages were not electrified. By September 30, 2015, six states viz., Andhra Pradesh, Arunachal, Gujarat, Punjab, Telangana and Uttarakhand were fully electrified, while states like Uttar Pradesh, Bihar, Madhya Pradesh and Chhattisgarh were leading the pack with at least 1000 villages each yet to be electrified.

REDEDICATION The Prime Minister Narendra Modi in his Independence Day address to the Nation last year has announced that the remaining villages will be electrified within the next 1000 days, which ends on May 1, 2018. This announcement spurred the government machinery in general and the Ministry of Power officials in particular into action with a renewed vigour to accomplish the target well in advance. As on April 1, 2015, a total of 18,542 villages were lacking electricity connectivity. Taking cue from this announcement, Finance Minister Arun Jaitley provided Rs 8,500 crore for the year for Deendayal Upadhayaya Gram Jyoti Yojna (DDUGJY) and Integrated Power Development Scheme (IPDS), the nodal schemes implementing this initiative. www.PowerToday.in

Sanction Details of Un-electrified Villages

• All 18452 Villages have been sanctioned including in-principle sanction • States to indicate if any village/villages left un-sanctioned

State

Villages Sanctioned Grid

ALL INDIA

Off-Grid

Total

14813

3639

18452

1

Odisha

3199

275

3474

2

Assam

2371

521

2892

3

Bihar

2699

48

2747

4

Jharkhand

2116 *

409

2525

5

Arunachal Pr.

402

1176

1578

6

Uttar Pr.

1491

38

1529

7

Chhattisgarh

504

576

1080

8

Meghalaya

700

212

912

9

Rajasthan

343

152 *

495

10

Madhya Pr

293

179

472

11

Manipur

276

276

12

J&K

134

134

13

Nagaland

82

82

14

Uttarakhand

15

Mizoram

16

Karnataka

17

Himachal Pr.

35

35

18

Tripura

26

26

19

West Bengal

22

22

ALL India

61 *

15

58

58

1

14813

76

38

3639

39

18452

* Including 796 villages under State Plan (Jharkand 637, Rajasthan 152, Uttrakhand 7)

Traditional connectivity to remote locations fraught with difficulties APRIL 2016 POWER TODAY 29

COVER STORY

“INTERVENTIONS IMPROVED IMPLEMENTATION SIGNIFICANTLY” Dr. A K Verma | IFS, Joint Secretary, Ministry of Power, GoI What are the strategies in rural electrification that have paid off in the recent past?

The Ministry of Power and Rural Electrification Corporation (REC), after consultation with state governments, have formulated the roadmap and strategy to electrify the remaining un-electrified villages on mission mode under Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY). The key initiatives taken up under the scheme to ensure electrification of all remaining villages within the given time frame includes, (i) Deployment of qualified engineers ‘Gram Vidyut Abhiyanta’ (GVA) at District / Block level (ii) 12 stage milestones-based monitoring

with defined timelines (iii) Off-grid solutions for villages in difficult/ far-flung/ hilly areas and (iv) Regular review and monitoring by REC, the Ministry of Power and the Cabinet Secretariat.

GVAs deployed at block/ district levels are conducting extensive field visits and updating near real-time progress along with photographs for individual milestones achieved for a village using the latest Information Technology (IT) tools. To ensure transparency and dissemination of information to public at large with regard to process and progress on electrification of these villages, a Mobile App (‘GARV’ – Grameen Vidyutikaran

18452 Un-electrified Villages: State-wise Scope & Achievement (as on 13.03.2016) All 18452 Villages to be electrified by Dec. 2016 & out of these, 6479 electrified.

3 0 POWER TODAY APRIL 2016

App) has been launched. The progress on village electrification along with requisite date and photographs is updated by the GVAs while carrying out field visits on a day-to-day basis. This App is being extensively utilised by all the stakeholders (GVAs, DISCOMs, State Govt., REC, the Ministry of Power etc.) for regular review and monitoring.

With these interventions, progress on village electrification has improved significantly as compared to yesteryears. We intend to continue with this strategy in future also, focusing on rigorous field level monitoring and real time updating using IT tools.

(For full interview, log on to www.powertoday.in)

Ratul Puri, Chairman of Hindustan Powerprojects Pvt Ltd appreciated the Finance Minister Arun Jaitley’s plan on 100 per cent electrification of villages across the country, stating that it would increase demand for power and would further boost investments. “This proposal of rural electrification has raised the bar of expectations amongst Indians, be it at the receiver’s end or that of the service providers, this is a bucket full of expectations and hopes,” said Puri while reacting to the budget. This, along with UDAY could drive a significant change in the Indian power sector, he feels.

VP Mahendru, Chairman, Eon Electric Ltd said, “The www.PowerToday.in

COVER STORY

“39 UN-ELECTRIFIED REMOTE VILLAGES TO BE POWERED BY SOLAR” Rajkumar S Biradar, | Executive Engineer-2, EMC, Energy Department, Karnataka Did you try to adopt any renewable technologies to address electrification of rural or remote areas? What were the outcomes and how do you want to adapt them in the current scenario?

Yes. Presently all 39 unelectrified villages in the State which are located in remote forest area are proposed to be electrified through stand alone solar system. At present, the tender is under process.

What are the problems in reaching power to remote areas through traditional means and that of rooftop/field-based solar or other renewable sources?

The Main problems are: 1. Obtaining Forest Clearance.

2. High cost of the project.

3. Maintenance.

proposal to provide 100 per cent village electrification by May 1, 2018, is indeed very welcome as it is in line with the nation’s overall vision to provide 24X7 electricity.”

CHANGING WINDS The Ministry of Power, in an office memorandum issued on Dec 3, 2015, notified that the proposal for subsuming Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) into the newly introduced scheme called, Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY), had received the presidential assent.

“RGGVY as approved by CCEA for continuation in the 12th and 13th plans will get subsumed in the www.PowerToday.in

How many villages or hamlets are yet to be electrified in the state and by when you are planning to achieve electrification of all these villages?

At present, there are 39 un-electrified villages in the State. 30 villages under HESCOM are proposed for electrification through stand alone system under DDUGJY Scheme and remaining 09 villages (6 in CESC and 3 in MESCOM) are proposed for electrification under DDG scheme.

What are the strategies that have paid off and what are the ones that have failed to give expected outcomes in rural electrification in the past? What are the latest trends or technologies you would like to

DDUGJY as a separate rural electrification component (component III above) for which CCEA has already approved the scheme cost of Rs 39,275 crore, including a budgetary support of Rs 35,447 crore. This outlay will be carried forward to the new scheme of DDUGJY in addition to the outlay indicated in para 2 above,” read the notification.

The new government’s scheme made the basic difference in the pace of implementation of the scheme putting it in a ‘Mission Mode’, which has picked up over the last one year. A total of 323 villages have been electrified across the country under DDUGJY during the week ending March 13,

adopt in the years to come?

Karnataka is one of the leading states in the country, which has successfully implemented the RGGVY scheme.

What is the pace of implementation of rural electrification initiatives over the last five years and what are your future plans?

Rural Electrification intiatives over last five years: 1. Rajiv Gandhi Grameen Vidyutikaran Yojana 11th Plan: The Scheme was implemented from 2006-07 and under this scheme 16 unelectrified villages, 3714 habitations and 2,66,075 BPL households have been provided with electricity at free of cost.

(For full interview, log on to www.powertoday.in)

2016. Piyush Goyal, Minister of State (Independent Charge) for Power, Coal and New & Renewable Energy, cited it as the highest ever for a week.

“The pace of rural electrification has been accelerated and the results are coming fast. We have been able to electrify 6,397 un-electrified villages (as on March 11, 2016) which is more than the cumulative achievement of past three years,” said Dr. A K Verma IFS, Joint Secretary, Ministry of Power, in an exclusive interview to Power Today.

DDUGJY aims at separation of agriculture and non-agriculture feeders; strengthening and augmentation of sub-transmission APRIL 2016 POWER TODAY 31

COVER STORY

“POWER ALL ISLANDS WITH SOLAR, WITH BATTERY BACKUP” Jaideep N. Malaviya | Chief Executive Officer, Malaviya Solar Energy Consultancy To what extent renewable energy sources are being used in electrification of rural/ remote villages and hamlets and what have been your experience?

In my opinion the focus of solar PV power is shifting more to urban and semi-urban classes and there are reasons to accept as solar power is almost at par with grid based power. Under such circumstance, the village/ rural electrification is merely meant to fulfil social obligations.

may not fetch from a villager to make business sense.

state of the art storage batteries.

To what extent renewable energy sources can be used in electrification of rural/ remote villages and hamlets and what are the technologies that would be of help in addressing cost, security, 24-hour supply and other issues?

What is the kind of financial support available to the states in implementing DDUGJY/ RGGVY for EPC contractors and service providers from renewable energy sources?

What kind of incentives will encourage you to promote renewable sources of energy in remote areas?

Infrastructure is costly, besides the cost to be realised

Solar PV in decentralised well as in hybrid mode, with diesel generator is the best option to provide assured power.

However, new storage technologies developed need to be adopted in order to store the daylight for further use in dark hours. My safe bet would be powering all the islands of India 100 per cent through solar using

and distribution infrastructure in rural areas including metering of distribution transformers feeders/ consumers; and rural electrification as per CCEA approval dated August 1, 2013 for completion of the targets laid down under RGGVY for 12th and 13th Plan (2017-22). However, later, the scheme was expedited and the official deadline was advanced to May 1, 2018, in line with the PM’s wishes.

The scheme also tweaked the funding mechanism for rural electrification projects vis a vis RGGVY. RGGVY, which was launched in April 2005, used to provide a Central grant of 90 per cent, while the remaining 10 per cent was provided as a loan from REC to the states. Under DDUGJY,

the Centre’s grant is about 60 per cent, discoms’ contribution 10 per cent, loan component is 30 per cent and additional grant for milestone achievement is 50 per cent of loan component (or 15 per cent of the project cost), taking the maximum Central grant component to 75 per cent for the state. It created a new category called Special Category of States (All North Eastern states and including Sikkim, J&K, Himachal Pradesh and Uttarakhand), which are eligible for Central grant up to 90 per cent.

The new Rural Electrification Policy also changed the definition of electrified villages. According to REP, a village would be classified as electrified based on a Certificate issued by the Gram Panchayat, certifying that - a) Basic

What are the problems in reaching power to remote areas through traditional means and that of rooftop/field-based solar or other renewable sources?

3 2 POWER TODAY APRIL 2016

The need of the hour is to first create sufficient manpower for upkeep and maintenance before renewable energy is to be taken to rural areas.

Unless the system does not operate trouble-free for 10 years the economics do not work, whatever be the scheme.

infrastructure such as distribution transformer and distribution lines are provided in the inhabited locality as well as a minimum of one dalit basti/ hamlet where it exists; and b) Electricity is provided to public places like schools, panchayat office, health centres, dispensaries, community centres etc.; and c) The number of households electrified are at least 10 per cent of the total number of households in the village.

ACHIEVEMENT Of the 18,452 inhabited unelectrified villages brought under DDUGJY, 6,479 villages were electrified during 2015-16 (up to March 13, 2016), bringing the un-electrified villages down to 11,973, according to the figures www.PowerToday.in

COVER STORY

“MICROGRIDS AT SLOW PACE DUE TO FINANCIAL, OPERATIONAL CHALLENGES” Prasad Chaporkar | Head–International Business, Waaree Energies Limited What are the problems in reaching power to remote areas through traditional means and that of rooftop/field-based solar or other renewable sources?

Connecting remote villages in difficult terrain that too in a country as big as India by conventional electricity grid is always a challenge. A decentralised distribution of electricity is a fast and sustainable approach in providing electricity to the millions presently deprived of it.

Despite the advantages of micro-grids for communities, micro-grids in India have been scaling up at a slow pace mainly due to financial and operational challenges in developing a

provided in the presentation made

by Dr Dinesh Arora, IAS, Executive Director, REC on March 15, 2016. However, not all electrified villages are getting quality power and it is estimated that nearly one-third of the population may be facing underelectrification, accessing less than 50kWh of electricity per month/household.

Of the un-electrified villages, 8,060 are to be electrified through grid and 3,433 are to be electrified through off-grid, while 480 villages are to be electrified under state plans. REC is also confident that the target of electrification of 7000 un-electrified villages set for 2015-16 would be achieved by March-end, and electrification of all the remaining 11,973 unelectrified villages by December www.PowerToday.in

functional commercial model. An ideal model would be one that generates sufficient revenue from end-users to cover upfront capital expenditures and also ongoing maintenance costs, while delivering a financial return. If we talk about the individual rural household who aspires to have access to power by installing a household solar system, high initial capital cost is a major deterrent.

To what extent renewable energy sources can be used in electrification of rural/ remote villages and hamlets and what are the technologies that would be of help in addressing cost, security, 24 hour supply and

2016. The scheme is also expected to help in expediting the process of providing 24x7 ‘Power for All’ by 2019 as envisaged by the current government.

“The key initiatives taken up under the scheme to ensure electrification of all remaining villages within the given timeframe, includes, (i) Deployment of qualified engineers ‘Gram Vidyut Abhiyanta’ (GVA) at Lighting up lives

other issues?

The Jawaharlal Nehru National Solar Mission (JNNSM) Phase-II has envisaged to give a major thrust to off-grid solar power applications in areas where grid has not reached, or the areas where electricity supply is poor. It is estimated that more than 300 million of our fellow citizens are still living off the grid and even in places where there is access to the grid, there are frequent outages. This unfulfilled demand for electricity presents a big opportunity for off-grid renewable energy solutions, in particular, solar based systems and decentralised renewable energy systems.

(For full interview, log on to www.powertoday.in)

District / Block level (ii) 12 stage milestones-based monitoring with defined timelines (iii) Off-grid solutions for villages in difficult/ far-flung/ hilly areas and (iv) Regular review and monitoring

by REC, the Ministry of Power and the Cabinet Secretariat,” said Verma.

During the 11th plan period (2007-12), under RGGVY, Karnataka has electrified 16 un-electrified villages, 3714 habitations and 2,66,075 BPL households free of cost. Under the 12th plan it is targeted to electrify 1,30,785 below poverty line (BPL) households.

Presently, 14,216 BPL households have been provided with electricity, while the other works are in progress. For the areas where electrification is not possible from conventional grid, the Centre APRIL 2016 POWER TODAY 33

COVER STORY under Decentralised Distributed Generation (DDG) of RGGVY has sanctioned 93 projects in the state for electrification of habitations through off-grid solutions.

“Electrification of 9 unelectrified villages, 144 hamlets and 3993 BPL households under this scheme is in progress,” said Rajkumar S Biradar, Executive Engineer-2, EMC, Energy Department, Karnataka.

PROBLEMS OF REACH Connecting remote villages in difficult terrain that too in a country as big as India by conventional electricity grid is always a challenge. Reaching the requisite equipment like poles transformers and conductors to the remote and difficult terrains like snow-bound hills or deep forest and erecting them through traditional means would be a challenge.

Biradar of Karnataka has identified obtaining forest clearance, high cost of the project and maintenance as the main problems for installation and execution of projects in difficult terrains.

“In case of rooftop/ field-based solar or other renewable sources, maintaining these systems on a sustainable basis in long term is something that needs to be tackled adequately. Requisite service centres and training local youth for maintaining such systems can help in this regard,” said Verma.

Electrification of Villages in FY 2015-16 • 6479 villages (92%) electrified upto 13.03.2016 against targeted 7000.

State

Target

Balance

1

Odisha

1563

1175

388

2

Uttar Pradesh

1314

1228

86

3

Assam

900

798

102

4

Manipur

174

70

104

5

Chhattisgarh

400

328

72

6

Jharkhand

700

674

26

7

Madhya Pradesh

225

193

32

8

Uttarakhand

32

-

9

Meghalaya

28

1

10

Himachal Pradesh

20

-

11

Rajasthan

151

147

12

Karnataka

5

-

13

Tripura

13

9

4

14

West Bengal

9

8

1

RENEWABLES The government had initiated rural electrification projects using renewable sources such as solar PV, biomass, small hydro power in early 1980s, with focus on street lights and solar lanterns, to start with. Evolution of renewable energy technologies and products over the last three decades have enabled renewable energy based rural electrification using solar lighting products, DC and AC mini-grids, smart micro-grids, and eventually grid interactive microField-based solar plant

3 4 POWER TODAY APRIL 2016

Achievement

27 4

and mini-grids, which can complement the grid extension programme or as standalone generating units.

Renewable energy based decentralised systems offer unique advantages like faster implementation and reliable electricity supply; utilisation of locally available resources to bring in energy security and energy independence; pollution free and sustainable; and reduced T & D losses. Many private companies have deployed mini-grids and micro grids in rural India.

It is not just providing connectivity, the technology used must be able to address cost, security and 24-hour supply concerns of the prospective user.

Considering all these factors Jaideep N. Malaviya, Chief Executive Officer, Malaviya Solar Energy Consultancy says, “Solar photo voltaic (PV) in decentralised as well as in hybrid mode with diesel generator is the best option to provide assured power. However, new storage technologies developed need to be adopted in order to store the www.PowerToday.in

COVER STORY daylight for further use in dark hours. My safe bet would be powering all the islands of India 100 per cent through solar using the state-of-the-art storage batteries.”

Even the state governments are considering going solar in remote villages. Responding to a query, Biradar said, “Yes. Presently all the 39 un-electrified villages in Karnataka, which are located in remote forest areas are proposed to be electrified through standalone solar systems. At present, the tender is under process.”

Even the Centre proposes to electrify about 3500 villages located in remote areas through renewable technologies, mainly Solar PV. Imparting some flexibility to the concept, the Centre is adopting both standalone systems for individual households as well as Solar PV-based generation system with mini-grid depending upon number of households in a village and their spatial distribution.

“Renewable energy based projects for these villages have been sanctioned this year under Decentralized Distributed Generation (DDG) component of DDUGJY and electrification of 180 un-electrified villages with off-grid solar power systems has been completed by March 11, 2016,” Verma said.

AFFORDABILITY However, experts feel that some of the renewable energy sources may not be commercially viable as yet. “Solar infrastructure is costly, besides the cost to be realised may not fetch from a villager to make business sense,” said Malaviya.

Prasad Chaporkar, Head– International Business, Waaree Energies Limited concurs with Malaviya’s view, when he says “Despite the advantages of microgrids for communities, they have been scaling up at a slow pace, mainly due to financial and operational challenges in www.PowerToday.in

developing a functional commercial model. An ideal model would be one that generates sufficient revenue from end-users to cover upfront capital expenditures and also ongoing maintenance costs, while delivering a financial return.”

Though some private players have entered village electrification in the past, barring a few, these models are yet to become commercially viable and sustainable.

and find it difficult to make both ends meet. Thus, electricity connectivity is of secondary importance for most of them, so subsidising not just the capital cost, but usage with a consumption cap is an essential component as is done now. This makes it impossible private players to make inroads into this segment in the near future, except as service providers.

However, expansion of electricity coverage will have significant developmental benefits

Are the dark days over?

CONCLUSION Rural electrification programmes have proved big, expensive, geographically and institutionally complex in India, but they are giving large benefits as the experience shows. Despite the path being strewn with several difficulties, India has embarked upon this challenge in right earnest. The scheme’s implementation is in the last lap, if I may say so.

And evolution of renewable technologies and particularly solar power available at grid parity prices, village electrification has assumed the centre stage as an idea whose time has come.

But the field realities may be different in this developing country where still over one-third of the population live below poverty line

ensuring a semblance of equitable growth. For rural electrification to be achieved in a sustainable way, we need a clear focus on creation of income generation activities in rural areas.

Power consumption is highly correlated to human development.

In the recently published Human Development Report 2015, India has been placed at 130th position in the 2015 Human Development Index (HDI) among 188 countries.

That reflects a sorry state, whatever the underlying parameters are. Village electrification is a pre-condition for increasing India’s position in HDI. The next step is ‘Power for All’, that is targeted for 2019. Let’s hope for the best.

PT – BS Srinivasalu Reddy APRIL 2016 POWER TODAY 35

EVENT REPORT MEE-SME

DUBAI WITNESSES WORLD’S BIGGEST POWER EVENT Power Today is proud to be the Media Partner for the Prestigious twin events of MEE & SME

H

is Highness Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and the Minister of Finance and Industry of the UAE, has officially opened the 3-day, 41st edition of Middle East Electricity (MEE) on March 1, 2016, alongside partner event Solar Middle East, at the Dubai World Trade Centre.

Low oil prices have failed to

3 6 POWER TODAY APRIL 2016

dent the global power industry’s confidence in the region, and the record-breaking 2016 edition of MEE validates the opportunities in the region’s power markets despite the low oil price environment.

Market research specialist Ventures Onsite estimate that the GCC will require about USD50 billion of investment in new power generating capacity to meet

demand arising from demographic and economic growth. Currently, the total value of power projects in the GCC is USD247 billion.

The 41st edition of MEE occupied 65,000 sqm of exhibition space, a growth of 4,000 sqm from the 2015 edition. Apart from 81 per cent repeat business, a testament of the show’s long-standing appeal to the industry’s key players, MEE 2016 also hosted 300 new-to-theshow companies.

Anita Mathews, Group Director of Informa Industrial Group, the organiser of Middle East Electricity, said: “Middle East Electricity continues to maintain its growth in spite of the challenging market conditions we are all currently facing. The exhibition has grown by 7 per cent this year compared to 2015, and exhibitor presence from countries such as Germany, Turkey, China and Saudi Arabia is on the rise.”

Co-located with Middle East Electricity is Solar Middle East (SME), the most comprehensive gathering of solar technology suppliers in the region. Opening its doors for the fourth time this year, the 2016 edition of SME is expected to be the most successful yet.

SME 2016 has seen a

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EVENT REPORT MEE-SME

phenomenal 57 per cent increase in exhibitor numbers, and a 45 per cent increase in exhibition floor space since last year which is indicative of the progress and growth of the regional solar market. The event provides the ideal meeting place for solar industry professionals from across the globe, as well as opportunities for visitors to learn about the latest technologies, developments and trends in the solar energy industry.

Over the next three days, MEE 2016 provided a distinctive platform for more than 1,500 exhibitors from 62 countries to showcase their products and services, network and develop long-term business partnerships with buyers from the Middle East region, Asia, Africa and Europe.

Middle East Electricity and Solar Middle East 2016 were held under the patronage of His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai.

SOLAR ME TO NEW BOUNDARIES Solar Middle East, which opened yesterday (1 March) at the Dubai World Trade Centre, has seen its exhibitor numbers

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increase by over half since 2015, and is matched with a 45 per cent increase in exhibition floor space, indicative of the progress and growth of the regional solar market.

With growth comes international innovation, as well as opportunities for visitors to learn about the latest technologies, developments and trends in the solar energy industry. First time exhibitors KiloWatt Labs, who have offices in both Dubai and New York, are showcasing the world’s first energy server, the Centauri, which enables 24-hour power from 100 per cent renewable energy sources.

A plug-and-play architecture that accepts multiple energy inputs from both renewable and non-renewable sources, it smartly manages distribution of these

energy inputs and delivers stable and reliable electricity, 24 hours a day. The Centauri can be deployed from kilowatts to megawatts and has a designed life of 20 years.

Chip Seibert, Chairman and President at KiloWatt Labs, believes that their products can provide very high quality power anywhere, including remote locations - an issue prevalent in the Middle East region; “We are so pleased to be a part of Solar Middle East this year.

With deep roots in the Emirates, we are proud to offer our latest series of ground breaking products, including the world’s first nonchemical battery.

The Sirius battery charges in less than 30 seconds, lasts for more than 1,000,000 charging cycles and can scale from small consumer applications to large utility storage solutions.

We also released the Centauri Energy Server, an energy management system that provides very high quality power anywhere, including remote locations, in a scalable, modular system that we are able to offer at a very affordable price. Coupled with the Sirius battery, we offer a very rugged system that will overcome any

APRIL 2016 POWER TODAY 37

EVENT REPORT MEE-SME challenges this region presents.”

Another first time exhibitor is Microtron Technologies, an international energy technology development company, who are showcasing their latest range of solar powered quick charging electric vehicles. One of the more unusual vehicles they are showcasing is the ‘Rick-e’, a solar power electric rickshaw. Using a state-of-the-art Ultra-Capacitor hybrid battery, the Rick-e can travel 150km carrying 5 passengers off a charging time of only 16-30 seconds.

SME also offered a series of workshops, taking place on 3 March, giving visitors the chance to gain a certificate of participation and, post-event, add CPD accreditation points to their engineer licences. Led by Kris Sutton, and instructor at the Solar Energy Institute, the two workshops will cover utilityconnected Solar Electric System Design, and battery-based Solar Electric System Design.

Middle East Electricity and Solar Middle East 2016 were held under the patronage of His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai.

3 8 POWER TODAY APRIL 2016

Opening times are from 10:00am to 6:00pm daily.

U.S. EXHIBITORS AT MEE 2016 Against a dynamic backdrop of heightened environmental pressures, energy security risks and the global trend toward renewables, the United States of America is looking to power up new business opportunities at Middle East Electricity (MEE) March 1-3 at the Dubai World Trade Centre.

The U.S. presence at MEE, featuring such industry leaders as Eaton Corporation (Booth S3B10), Governors America Corp.

(Booth: S3D29), The H-J Family of Companies (Booth S3B20) and Ametek Power Instruments (Booth 5B10), is organized by Kallman Worldwide, Inc., the official U.S. Representative of the show, in partnership with the U.S. Department of Commerce.

The centerpiece of this national effort, the nearly 500 sqm (gross) U.S. International Pavilion, is a primary destination for buyers looking for an efficient way to meet U.S. companies, and an on-site business hub for U.S. exhibitors looking to maximise their exposure and impact at the event.

“When the United States commits to exhibit at MEE, we’re saying we believe in the power of this event to attract real business prospects and customers. The steady growth and diversification of this show speaks for itself,” said Kallman Worldwide President and CEO, Tom Kallman. “As the organiser of the U.S International Pavilion, our team is proud to help our exhibitors capitalise on this influential business event to

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EVENT REPORT MEE-SME grow their share of the regional marketplace, and further extend our nation’s global power industry leadership.”

In addition to organizing the national Pavilion, Kallman Worldwide is promoting all U.S. exhibitors with its “Ask America First” on-site advocacy campaign.

The message will be placed prominently around the U.S. International Pavilion, integrated into hospitality events during the

show and promoted in social media (follow on Twitter @kallmanEWC).

“The United States exhibits at MEE because it’s one of the world’s most innovative power industry suppliers, but that’s no guarantee that buyers will look to work with U.S. companies over others here,” said Kallman. “As the organizer of the U.S. International Pavilion, we have a responsibility to advocate not only for our exhibitors, but for our nation in this highly competitive global marketplace. We want every visitor to ‘Ask America First’ at MEE, and to be assured that America is listening.”

MEE–CZECH OFFICIAL PARTICIPATION Czech Republic was presented for the second time under the auspices of the Ministry of Industry and Trade of the Czech Republic at the Middle East Electricity 2016 – the global exhibition of power generation, transmission & distribution.

The event was held from 1 to 3 March 2016 in Dubai World Trade Centre. The Czech official stand was located in Concourse 2, Stand no. CB45. Here, alongside with the Electrical and Electronic Association of the Czech

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Republic, nine Czech exhibitors will participate: CAG Electric Machinery, CzechInvest, ELCOM, Elko EP, ETD Transformátory, Kabelovna KABEX, OEZ, SALTEK and VYRTYCH. Trade Relations: Total trade exchange between the Czech Republic and the UAE is the second largest in the Middle East region, after Israel. As regards the volume of exports of Czech Republic, however, the UAE ranks first place in this region. Very important is also the fact that globally the UAE occupies fourth place in the Czech Republic’s exports to non-European countries (after the US, China and Japan). Exports to the UAE, however, is done mainly through private distributors or in the form of subcontracts.

The potential for business cooperation between the Czech Republic and the United Arab Emirates will continue to grow with regard to long-term growth of their economies.

They offer opportunities for closer economic cooperation, such as manufacturing coproduction, cooperation in research and development as well as cooperation in the field of security and defense.

PT

APRIL 2016 POWER TODAY 39

POWER POINT - empowers you to form an informed viewpoint on Power

RURAL ELECTRIFICATION

A DREAM THAT MUST THAT COME TRUE

A

DREAM O

ver 300 million Indians are deprived of uninterrupted electricity supply more than 65 years after independence. In the Union Budget, the government has announced 2018 as the year by when all Indian villages will be fully electrified. While the electrification drive will take more than just willingness, the target is ambitious yet praiseworthy.

While India has progressed gradually since the economic liberalization in the last 25 years, there is much that needs to be done to bridge the inequity between its haves and have nots. Electrification of villages is directly related to the strength of a nation’s economy and economic equity. Electricity is the backbone of infrastructure and industrialization which create educational and economic opportunities which, in turn, bridge

4 0 POWER TODAY APRIL 2016

MUST

COME

TRUE

the existing inequity or at least reduce the widening gaps. But there are several reasons why Indian villages continue to remain alien to uninterrupted energy, a fundamental human need of our times.

EXPERIENCE & CHALLENGE The challenge of electrification is manifold. Thousands of Indian villages are located in diverse, remote and desolate terrains which are difficult to connect with the grid infrastructure. In challenging terrains like the deserts, the Himalayas and other hilly regions in the north eastern states, despite no major paucity of funds, setting up grids has been considered a feat.

While the state governments in these regions have done a commendable job, the lack of support from nature itself has proved a dampener. The other major issue is the cost. The

most marginalized rural families cannot afford electricity even at subsidized or cross subsidized rates of Rs 3-4 per unit of electricity. The number of farmers who have ended their lives due to crop failure or inability to pay the debt is alarming.

Expecting these strata of the society to pay for electricity price is unreasonable. Farmers in the country’s most backward regions are indebted and are struggling to make a living out of their primary source of livelihood – agriculture – let alone the ability to pay electricity bills.

Ironically, these are also the causes which have left the state distribution companies (SEBs) heavily indebted and a state of disarray.

CAN RENEWABLE ENERGY HELP? Rural India is hugely dependent on grid connectivity for access to electricity. A large number of rural www.PowerToday.in

POWER POINT - empowers you to form an informed viewpoint on Power Indians, regardless of grid connectivity, continue to rely upon diesel and other sources of fossil fuels for energy. This is neither economically nor ecologically sustainable. This, coupled with excessive expansion and usage of land for agricultural purpose is causing threat to ecology in the form of pollution, rapid desertification etc. It is therefore imperative that rural India is provided with cheap, clean and sustainable energy which offers a longer term solution to their woes.

Unfortunately, India’s immense potential of generating power from solar panels mounted on rooftops remains largely underexplored.

Given that India has over 300 sunny days in a year and abundant rooftop space, especially in the rural landscape, much of its potential remains untapped. Of the ambitious 100 GW solar power target set by the Jawaharlal Nehru National Solar Mission, India aims to achieve 40 GW through rooftop solar installations by 2022. The country currently has about 300 MW installed rooftop capacities a fraction of which are located in the hinterlands. Rural India is reportedly known to have seldom used renewable energy as a primary source of energy except in regions where small hydro projects and biogas are naturally advantageous.

India is however adding rooftop capacities rapidly due to declining cost of technologies and batteries, encouragement from government and private sector and suitable policy measures. The opportunity to expand the country’s target of 175 GW of renewable energy can come from its rural heartlands.

FINANCIAL SUPPORT & STABILITY The government, private and non government sectors have taken several noteworthy efforts in the past to ensure ceaseless electricity supply through small hydro, biogas www.PowerToday.in

and rooftop solar power projects.

Under the government’s Deendayal Updhyay Gram Jyoti Yojana rural electrification drive is in full swing and till March 2016, 6493 villages have been electrified. The government aims to electrify the remaining 18,452 villages in next 1000 days, by May 2018. More than one third of the remaining villages are currently in geographically challenging regions and hence grid solutions here are out of reach. It is commendable that the government is providing funding to implement this scheme, is reviewing the progress on a monthly basis and monitoring the electrification process Gram Vidyuta Abhiyanta. Interestingly, the private sector and NGOs have also taken numerous initiatives to power homes in desolate Himalayan terrain using rooftop solar systems.

THE WAY FORWARD Private developers, too, have several opportunities in electrifying rural India, especially since rooftop solar is proving to be a viable, long-term solution. In the last few years, banks and microfinance

institutions have opened up significantly to fund rooftop solar projects in rural India. All that the villages need are training, quality developers and EPC contractors.

Moreover, incentives on solar modules and cheaper storage solutions could fast-track the electrification process and deliver unprecedented economic opportunities that a vast section of our population has been deprived of for a long time. Robust net metering systems would help villagers sell the excess electricity in the state grid which will transform them into net producer from consumer of energy.

This will invariably metamorphose rural India from a power deficit to power surplus stature. Above all, this ecosystem will provide the village folks a sustainable, long-term livelihood and create economic opportunities.

PT

-Vineet Mittal, Vice Chairman, Welspun Renewables

APRIL 2016 POWER TODAY 41

FEATURE BoP

BoP, THE CONSOLIDATOR!

Considering Rs 2.5 crore per MW worth business opportunities in Balance of Plant (BoP) packages, it is expected that the consolidation activities are likely to be around the corner.

A

few BoP players suggested that the recent trend from generation companies to award contracts on a single point source is likely to push big BoP players to look for more consolidation or partnering in the equipment business. However, 4 2 POWER TODAY APRIL 2016

there is a twist in offing.

Enticed by pro-development plans of the current government, power sector became a new darling of investors, at least on the paper!

The gap between India’s low per capita consumption of 1000/kWh and global benchmarks gave a

feeling of an assured return over a long period, drawing the attention of investors.

In India, as far as power sector is concerned, what can be a bigger opportunity than the envisaged 30,000 MW of capacity addition with 40 super critical thermal units www.PowerToday.in

FEATURE BoP

in the pipeline. Although, these opportunities are far-fetched and unlikely to come on stream not sooner than next fiscal, it is expected that business opportunities worth `2 crore per MW will be available in the form of BoP packages. The packages that www.PowerToday.in

include site civil works, erection, testing and commissioning of various mechanical works as part of BoP segment.

According to Mahadevan Viswanathan, Director Business Development & Materials Management,

Thyssenkrupp Industries India Pvt. Ltd most of the upcoming power generation plants will be adopting EPC/BoP mode to execute their projects, therefore we see tremendous opportunity for BoP systems.

He added: “Considering the present market conditions, we as an EPC company sees huge potential in this segment and are confident of our capabilities to execute large sized BoP projects.”

To this, SK Kodandaramaiah, Director - Business Development, Power Mech Projects Ltd predicts Rs 2.5 crore per MW business opportunities in overall BoP packages which are made up of three major components.

To begin with, he further explains, in the civil and structure package, there are opportunities worth Rs one crore per MW. Whereas, in packages like equipment supply and installation, mainly related to material handling, coal handling, ash handling, balance mechanical packages and electrical system installation and miscellaneous work, the opportunities may be worth Rs 1 to 1.2 crore per MW. Look closer, the government of India’s project monitoring group (PMG) in its latest update on its portal has sorted out issues of power projects worth Rs 4 lakh crore. An achievement in itself !

And are leaving no stone unturned to resolve issues of power projects worth more than Rs 6 lakh crore.

A mammoth opportunity and task set out for the next few years!

Hence, judging by this scenario, there is a probability of more consolidation than mergers and acquisition.

IS CONSOLIDATION IN THE OFFING? The power sector’s BoP segment is more vulnerable than it pretends to and, has been stuck with the syndrome of single point contract APRIL 2016 POWER TODAY 43

FEATURE BoP

“WE HAVE AN ORDER BOOK OF AROUND `3,500 CR” SK Kodandaramaiah | Director - Business Development, Power Mech Projects Limited With the government’s push towards more power generation, what kind of opportunity do you see for balance of plant system and are these opportunities enough to sail through?

In India, as far as power sector is concerned, what can be a bigger opportunity than the envisaged 30,000 MW of capacity addition with 40 Super Critical thermal units in the pipeline.

Since we are catering to site civil works, erection, testing and commissioning of various mechanical works for BoP area, I am optimistic that around Rs 2 crore per MW business opportunity will be there in the future.

As a company, we look for opportunities in three to four core areas apart from the main plant installation works. And, these include civil work, coal and ash handling work, and water system jobs are also very attractive business opportunities for us.

If you look at the overall BoP packages and subsequently the opportunities, they are made up of three major components. To begin with, in the civil & structure package, we think there are opportunities worth Rs 1 crore per MW. Whereas, in packages like equipment supply and installation, mainly related

awarding strategy adopted by power generation companies.

Ironically, to break this syndrome, the only option that can be considered by BoP players could be consolidation than mergers 4 4 POWER TODAY APRIL 2016

to material handling, coal handling, ash handling, balance mechanical packages & electrical system installation and miscellaneous work, the opportunities may be worth Rs 1 to 1.2 crore per MW.

Could you tell us about your expertise in this BoP space and which are the projects that the company is currently undertaking?

At present, we have an orde rbook of around Rs 3,500 crore, considering our present offerings in the main plant and BoP segments. Considering our expertise in this field, we are already working on 5-6 projects where we are providing our knowledge base on the main plants and balance of plant related to civil and structural works.

We are presently working on a civil and structural package for 500 MW Unchahar Project worth Rs 336 crore in the main plant and BOP areas. In addition, we are on the verge of completion of Rs 172 core worth package for the 2X800 MW Yarmaras project in Karnatataka.

Apart from these two, we are also working on the 2x660 MW project in Suratgarh, Rajasthan, which is around Rs 182 crore. We are also working on a couple of

and acquisition.

When put forth this question, a section of the BoP players tried to dodge it first, and then, being vocal requesting anonymity. However, some suggested to understand why

projects at Kothagudam in Telengana, and Namrupin, Assam.

Apart from these projects, we are also working on structural packages for the main plant for six projects. We also have expertise in the installation of coal handling packages and cooling water piping system. This also contributes to the stream of our company’s total revenue.

Therefore, even when our interest lies mainly in the main plant area, where we can expect some market growth, we are as well focusing to improve our position in the BoP business.

What are the possible key drivers for BoP market, specific to your expertise?

Our basic expertise is the site installation and project work. As of today we are not into engineering and into major procurement. Our expertise is in construction and ETC. In future, we may intend to take up the complete BOP work.

Therefore, what we are able to do in the main plant construction, we can also replicate the same in the balance of plant. The skills, the expertise, the resources and the type of inputs which are required are more or less similar.

(For full interview, log on to www.powertoday.in)

the current scenario is likely to lead to consolidation. According to major BoP players, at present, power producers/ owners prefer to order power plants on a single point responsibility basis, which www.PowerToday.in

FEATURE BoP enables them to eliminate multiple interface points and coordination.

Also, the overall liability to execute the BoP package within the specified time schedule solely rests on a single party. This is precisely the key factor why owners prefer the BoP mode.

To cite an example, NTPC has changed its contracting philosophy, or rather strategies. With a number of projects lined up by the powerful PSU, they have adopted two types of strategies: One, to award a contract at a single point responsibility and the other is package-wise. The main motto to adopt such strategies are definitely due to compulsion of timely completion of projects. As a matter of fact, NTPC has recently come out with a few tenders on this format are 4X1,000 MW ultra mega power plant in Pudimadaka, a 2X800 MW in Telengana and 4X600 MW in Bareilly.

Meanwhile, following suit, the same strategies have been adopted by other players too. And, taking a lead from NTPC, the Neyveli Lignite Corporation Ltd too is coming up with a package in Ghatampur, Uttar Pradesh, which is a 3X660 MW project.

However, S Ramakrishnan, Executive Director- Business Development, IVRCL, has a

www.PowerToday.in

different point of view on consolidation. His views suggest that the obvious threat will come from none other than Indian market itself. “…any consolidation in India, by an Indian company, considering the current order book position will not look positive and reduced the operation costs,” he says.

But there is a risk that global players can manage to take. While consolidating with a global player, an Indian company in the BoP space can support the global player in terms of providing engineering support, licensing, local procurement, equipment procurement, etc., in India. And, positively, the global companies can outsource relatively cheaper services of the Indian BoP players in their projects in Eurpoean,

African and American market.

This will also help Indian BoP players to make inroads in the highly distanced market.

Undoubtedly, many Indian manufacturers and EPC solution providers are geared up to provide BoP systems for large capacity plants, but only a few of them are well equipped with in-house manufacturing capacity like Thyssenkrupp, L&T, BGR Energy, McNally Bharat, BHEL, to name a few.

Another possible reason is the limited presence of reputed vendors in the ash handling segment, which corners nearly 10 per cent of the total BoP package contract, there have been remarkable developments and increased demand in the market, which has helped several companies who are well equipped with the technology to meet their revenues and increase their capacities.

It is expected that these propositions can lead to consolidation in the BoP space.

DEFICIENCIES Meanwhile, there have been instances in the past where plant commissioning has been held up due to deficiencies in BoP systems.

And to some extent the BoP players do agree with these allegations.

However, in response, the BoP players categorically attribute this primarily to delusion of prequalification requirements. The

APRIL 2016 POWER TODAY 45

FEATURE BoP

“WE ARE PRIMARILY TARGETING MARKETS LIKE MALAYSIA, INDONESIA” Mahadevan Viswanathan | Director - Business Development & Materials

Management, Thyssenkrupp Industries India Pvt. Ltd Technically, BoP works account for approximately 45-50 per cent of the total project costs.

Within this which are the segments dominates the sector?

Yes, BoP does account for approximately 45-50 percent of the total project costs. Within the BoP system, the coal handling plant (CHP) accounts for almost 30 per cent of the total BoP, while civil and E&I account for another 40 per cent. Balance packages like ash handling, water systems, induced draft cooling towers, etc., account for the remaining 30 per cent of the total BoP.

What are the possible key drivers for the BOP market in general and specific to your expertise?

At present, power producers/ owners prefer to order power plants on a single point responsibility basis, which enables them to eliminate multiple interface points and co-ordination. Also, the overall liability to execute the BoP package within the specified time schedule solely rests on a single party. This is precisely the key factor why owners prefer the BOP mode.

Undoubtedly, many Indian

BoP players also raised concern over many smaller vendors, without any expertise, entered the market on a project-to-project basis with consortium arrangementseements and eventually faced with delays 4 6 POWER TODAY APRIL 2016

manufacturers / EPC solution providers are geared up to provide BoP systems for large capacity plants, but only a few of them are well equipped with in-house manufacturing capacity like Thyssenkrupp Industries India.

What is the potential for imported equipment in BoP segments?

Having executed numerous EPC power plant projects ourselves, we believe that Indian manufacturers are very capable to supply large sized power plants. The import content for the BoP segment is limited to only a few equipments and items. China is supported by a strong base in BTG package segment as they have the ability to supply boilers and turbines at cost effective rates and assure a timely delivery. However, in BoP segment China stands with relatively low scope due to reliability and sustainability, which the Indian manufacturers have been offering regularly.

Is the BoP industry adhering to the inclusion of technological advanced mechanisation, making it BoP work simpler and easier?

There are many new

in delivery.

Explains Mahadevan Viswanathan of Thyssenkrupp, “The main input required to run the plant is controlled by BoP package vendor (i.e. coal and water), if they delay the erection

technological innovations which are currently under development and are scheduled to be introduced effectively. Each certified BoP package vendor has his expertise, technical knowhow and R&D centre. Many things should be taken into consideration while executing the BoP package like system and layout optimization without compromising the technical requirements.

For example, zero water discharge, i.e. successful reutilisation of water as the input source should be undertaken.

Reduction in guarantee power consumption which will reduce the working cost should be maintained.

Which are the developed markets as of now?

We foresee a huge potential for coal handling plants in Malaysia and South East Asian countries. We have successfully executed projects in these countries and are in the process of setting up our 5th coal handling plant, all of them having a capacity of more than 2X700 MW. Bearing in mind the above opportunities, we are primarily targeting markets like Malaysia, Indonesia etc.

and commissioning process then the entire plant cannot be commissioned within the set time.”

However, alternate source of water can be arranged with tankers. Nonetheless, coal handling plant plays a crucial role in www.PowerToday.in

FEATURE BoP running the plant in-time.

Presently, the owners, i.e. the EPC contractors, have introduced stringent liability clauses and increased the percentage of liquidated damages in order to curtail any misuse by the BoP package vendor and to reduce the effects on the overall plant completion schedule.

In-addition to that, the BOP package vendor has to give a Bank Guarantee for the required work.

With such norms and stricter guidelines, timely completion can be achieved.

execution of coal, ash handling packages and civil works. Because, the products which cater to coal and ash handling are not standardised. These products are highly customised, and need to include project-based specifics, and then re-engineering, if required.

And, this is where it leads to delays. So, if the implementation process in coal and ash handling improves, most of the projects can be commissioned on time.

For timely completion of mechanical and electrical works,

project effectively and reliably.

Effective communication with various package vendors with a clear-cut scope division is important for efficient and timely completion of BoP projects. This in turn helps to bring down the delays and costs.

Considering today’s scenario, the best practice is the integrated approach towards executing a BoP package. To avoid delay in BoP package execution, the authorities should fix stringent qualification requirement, as there is a lot of

the key civil inputs have to be made available. This is easier said than done, since many civil inputs depend on the equipment layout, soil conditions and the key mechanical input data and there can be problems in interfacing the same. The skill lies in proper interfacing the key inputs for engineering of civil works.

competition in the civil work package of BoP. In India, there are many players who do not have the capability to take up the BoP packages, but still they bid for it and win the contract.

This is mainly because, Indian market is a cost-driven, where a bidder with low pricing are always preferred. But, in this exercise, the authorities are forgetting that with low pricing, the bidder is tempted to compromise on quality and delivery parameters, which may hamper the entire project execution. This, in turn, leads to cost escalation due to delays in the overall execution of projects.

This kind of practice needs to be checked.

PT

CHALLENGES Since most of the power projects are handled by public sector companies, it is the decision-

making process which prevents these companies to appoint a bidder or a vendor with the criterion of successful and timely execution of a work and the price levels should be made to commensurate with the service or delivery.

Whereas, a private developer can take a call and can pay a premium on pricing to get the work done in a qualitative manner. So, once there is improvement in the basic structure of bidding, then we can witness a drastic change in implementation of BoP packages which can bring in substantial improvement in the execution amd commissioning of power projects.

Meanwhile, other areas that need to be improved for timely project completion is proper www.PowerToday.in

BEST PRACTICES An appropriate geographical survey of the local condition and soil investigation must be conducted diligently. Long and strong associations with the sub-vendor’s/ sub-suppliers/ contractors with good payment terms and conditions along with proper account closing can help any BoP contractors execute any

– Rahul Kamat APRIL 2016 POWER TODAY 47

ANALYSIS BUDGET 2016-17

Big PUSH TO

Nuclear

The Finance Minister has stopped short of making too populist announcements, and stuck to striking a balance between short-term growth and sustainable economic gains.

T

he Union Finance Minister Arun Jaitley has turned his focus on to nuclear energy as a source of power generation in a bid to diversify the power sources, in his Budget 2016-17, presented on February 29, 2016. This will be in addition to the renewable energy initiatives announced a few months back.

“The Government is drawing up a comprehensive plan, spanning next 15 to 20 years, to augment the investment in nuclear power generation. Budgetary allocation up to Rs 3,000 crore per annum, together with public sector investments, will be leveraged to facilitate the required investment for this purpose,” said the finance minister.

4 8 POWER TODAY APRIL 2016

Key Takeaways: • Budgetary outlay in Power Sector, increased over previous budget • Allocation of 3000 cr/annum for Nuclear Power, will help boost the sector • Fund Allocation in DDGJY & IPDS increased from Rs 4500 cr to Rs 8500 cr.

• Focus on MSME, Entrepreneurs & start-ups to help Electrical Equipment manufacturers • Allocates Rs 1,700 cr for setting up of 1500 training institutes • Clean Environment Cess hiked from Rs 200/ tonne to Rs 400/ tonne Babu Babel, president, Indian Electrical and Electronics Manufacturers’ Association (IEEMA) said, “The budget is in continuation of Government’s commitment to provide 24 X 7 Electricity For All, with increased allocation in the power sector. The focus on augmenting Nuclear Power with an allocation of INR 3000 crores is a

welcome step and reflects the government’s intent to achieve the right fuel balance.”

By February-end, the installed nuclear power capacity in the country comprises twenty one reactors with a total capacity of 5,780 MW. Out of these twenty one reactors, one reactor Rajasthan Atomic Power Station-1 (RAPS) (100 MW) is under extended shutdown www.PowerToday.in

ANALYSIS BUDGET 2016-17 for techno-economic assessment on continuation of its operation.

The remaining twenty reactors with a capacity of 5,680 Mw were in operation.

The budgetary outlay for power sector has been hiked over the previous budget. “With a budgetary outlay of Rs 79,884 crore to the power sector in the new Budget there is an increase over previous year. The electrical industry is hopeful that the Government will take all steps to ensure that there is full utilisation of funds allocated”, Babel added.

The industry welcomed the Government’s commitment to achieve 100 per cent village electrification by May 1, 2018. A fund allocation of Rs 8,500 crore was allocated, out of which Rs 3,000 crore and Rs 5,500 crore was allocated to Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) and Integrated Power Development Scheme (IPDS) respectively.

Of the 18,452 inhabited unelectrified villages brought under DDUGJY, 6,479 villages were electrified during 2015-16 (up to March 13, 2016), bringing the un-electrified villages down to 11,973, according to Dr Dinesh Arora, IAS, Executive Director, REC. Hike in Clean Environment

Cess from Rs 200 per tonne to Rs 400 per tonne is another major decision announced in the budget impacting the power sector. This scheme is renamed as ‘Clean Environment Cess’ in the budget. It is levied on coal, lignite and peat. The other major proposals in the budget include achievement of 100 per cent village electrification by May 1, 2018, tweaking excise and basic customs duties to promote renewable energy sources.

India’s power generation is predominantly driven by coal, which is considered to be a source of high pollution, at present. It corners about 70 per cent of the power generation capacity, while the renewable energy inputs could contribute only 30 per cent. Nuclear energy’s share is barely 2 per cent at 5.7 GW (1 gigawatt equals 1000 megawatts) of the installed capacity of 288 GW in the country at end-January 2016.

Commenting on the budget proposals pertaining to power sector, Manish Aggarwal, Partner and Head of Energy and Natural Resources, KPMG in India, said, “The budget refrained from big bang measures and focused on consolidation to achieve ‘energy security’ for the Country.

Intent to have a ‘comprehensive generation plan’ over next 15 to 20

Illuminated rural household

www.PowerToday.in

Skill Development

years for nuclear power brings this important resource to mainstream focus apart from Renewables, which is good as it would remove India’s ‘fascination with single fuel’ and bring a holistic view required to achieve energy security. “ There was a sharp reaction from the industry on the doubling of clean environment cess to Rs 400 per tonne in the budget, with most of them feeling that it will have adverse impact on power sector.

“The increase in coal cess will improve relative attractiveness of renewables, but increase the overall cost of power for utilities by approximately Rs 10,000 crore, thus impacting retail tariffs and utility financial health,” said Anish De, Partner Infrastructure and Government Services, KPMG in India in a statement. The net rise in cost of power is expected to be roughly 12 to 16 paise per unit.

However, Shirish Garud, Director and Senior Fellow Energy and Environment Technology Development Division, The Energy and Resources Institute, exudes hope, “It (the cess) would further include an umbrella of projects under the fund and would provide a significant boost to the research and development and other clean energy development activities.”

Substantial emphasis is given to Stand up & Start Up India in the budget to make seeding of entrepreneurship a reality.

The proposal to increase the Presumptive Taxation Scheme for MSMEs from Rs one crore to Rs two crore will bring big relief to a large number of assesses in the MSME category.

APRIL 2016 POWER TODAY 49

ANALYSIS BUDGET 2016-17 Sunil Misra, Director General, IEEMA said, “The budget addresses Skill Development and new job creation, with 1500 multi-skill training institutes proposed to be set up under Pradhan Mantri Kaushal Vikas Yojana, across the country with an amount of Rs 1,700 crore. Moreover, the proposal to set up a National Board for Skill Development Certification in partnership with the industry and academia is encouraging, which will train one crore youth over the next three years, further benefitting the

depreciation of 20 per cent on new machinery being extended for power transmission as well.

Reduced accelerated depreciation for solar and wind sectors may affect these sectors adversely where increased depreciation being set off against other profitable businesses was one of the prime incentives for investors.”

Excise duty on carbon pultrusions used for manufacture of rotor blades, and intermediates, parts and sub-parts of rotor blades for wind operated electricity generators were reduced from 12.5 Kudankulam nuclear power plant

manufacturing sector. This will also result in uniformity of growth and development across the country.”

For renewables, the reduction of accelerated depreciation is expected to be a negative that will cause wind tariffs in particular to go up for projects set up after March 2017. All in all, it is a mixed bag and the measures appear to be aimed more at shoring up government finances.

Hemal Zobalia, Partner, Deloitte Haskins & Sells LLP said, “The long standing issue on availability of incentive to power transmission companies is answered with additional 5 0 POWER TODAY APRIL 2016

per cent earlier to 6 per cent. Excise duty on Unsaturated Polyester Resin (polyester based infusion resin and hand layup resin), Hardeners/Hardener for adhesive resin, Vinyl Easter Adhesive (VEA) and Epoxy Resin used for manufacture of rotor blades, and intermediates, parts and sub-parts of rotor blades for wind operated electricity generators were increased to 6 per cent, from nil earlier.

“Changes in customs and excise duty rates to improve competitiveness and boost the domestic manufacturing has been seen as a welcome move by the industry. As a company which

operates in the manufacturing sector, we believe that through this, there will be a spurt in the spirit of entrepreneurship, giving boost to the home-grown industries,” said Manish Goel, Managing Director, Shilpi Cable Technologies Limited Service tax on services provided under Deen Dayal Upadhyay Grameen Kaushalya Yojana and services provided by assessing bodies empanelled by Ministry of Skill Development & Entrepreneurship are proposed to be exempted in the budget. “This would help in bring down the cost of skill development services.

Similarly, service tax on rural electrification has also been removed,” said Garud.

The budget is also expected to give a boost to PV manufacturing activity in the country, thus promoting the growth of indigenous solar manufacturers as new manufacturing companies incorporated on or after March 1, 2016 are to be given an option to be taxed at 25 per cent plus surcharge and cess provided they do not claim profit linked or investment linked deductions and do not avail of investment allowance and accelerated depreciation.

However, Manish Aggarwal expressed disappointment no concrete measures to resolve stressed assets issue directly have been announced in the budget.

Expectation was to have a ‘specialised turnaround stressed fund’.

Though budget reiterated the intent to resolve commercial disputes, and talked of having guidelines for ‘re-negotiation of PPPs’, and enhanced power of institutions under the SARFEASI Act, these may not lead to faster resolution of stressed asset problem in short term, Aggarwal added.

PT

– BS Srinivasalu Reddy www.PowerToday.in

” CASE STUDY RE

ELECTRIFICATION IN

CHATTISGARH

Chattisgarh has tried, tested and proved solar microgrids to be the most successful means of remote area electrification.

T

he tiny state of Chattisgarh, rich in minerals, has more than 43 per cent of as forest area, where safety concerns prevent grid electrification. This made it ideal for the authorities to explore solar photo voltaic (PV) technology since the Electricity Act 2003 allows distribution of electricity in villages without formal permission of State Electricity Boards. The state agency, CREDA obtained the list of un-electrified villages from Chattisgarh State Electricity Board and installed stand alone solar home lighting systems in 500 villages through 100 per cent subsidy program. The system comprised of PV modules, cables, an inverter, a battery and two 11 Watt CFLs. A survey in 2004 showed that of the 617 solar modules installed in tribal hostels, ashrams and primary health centers, nearly 500 were stolen.

This prompted CREDA to explore alternative methods and finally opted for solar PV microgrids. The cost of setting up a microgrid (PV power system and transmission cables) per household is Rs 25,000/as against a home-lighting system that costs Rs 14,000/-. Although a microgrid is costlier compared to a home lighting system they prevent theft and require minimal maintenance, hence the capital funds invested is protected.

Secondly, they increased the size of a single module from 50 Wp to

5 2 POWER TODAY APRIL 2016

75 Wp. Due to increased size and heavy it was virtually difficult to steal this size of module.

villages and tribal hostels in the state would have solar power for basic lighting needs.

REMARKABLE TESTIMONIAL

COMMENDABLE MAINTENANCE SET-UP

The success story of village electrification through microgrid PV was shared with the then Chief Minister of the state in the year 2005, while on his visit to a village in Bastar district. He called a school girl and asked her since kerosene light was already available does she really feel the need for a solar powered lamp.

The girl boldly replied “Sir, take this lantern and try reading. For better visualisation, I need to be very close to it and the hazardous smoke that emanate penetrates my lungs. I am really concerned about my health. So for me, to live long, solar PV light is a boon to me”.

Immediately, the Chief Minister declared that all un-electrified

Annual Maintenance Contracts (AMC) for Cluster based service delivery of PV microgrids No. of Villages / cluster

15

No. of Customers/Village

50

Total No. of Customers/cluster

750

Collection per Customer (Rs)

30

-Through CREDA (Rs)

25

-Direct (Rs)

5

Total collection/ cluster/ month (Rs)

22,500

Total AMC collection / cluster (Rs)

2,70,000

Table 1: Expenditure on maintenance of PV microgrids by CREDA

Underlying the fact that maintenance would be imperative to ensure trouble-free working of the microgrid systems CREDA envisaged a three-tier system. An operator was chosen from each solar-powered village to clean solar modules every day and report any faults to the respective nominated cluster technician. For this, he charges Rs 5 from each house a month. For regular maintenance of batteries and inverters and for fixing technical problems, the operator directly receives a payment of Rs 30 per household per month from the state government. This is equivalent to the subsidy that the Chhattisgarh government provides to families below the poverty line (BPL) families in grid-connected areas for availing one kWh per day.

Table-1 below gives the annual expenditure on maintenance

by CREDA. CREDA also enrols an operation and maintenance contractor, who appoints a cluster technician for every 10-15 villages. Each technician earns Rs 4,000/- and if desires a two wheeled motorbike it is provided in easy instalments of Rs 1,000/per month. The technician is also www.PowerToday.in

CASE STUDY RE

RAVANA – CASE OF SUCCESS STORY A visit to village Ravana about 100 km from the capital city of state Raipur revealed immense satisfaction of the villagers. Two positive outcomes of the success are increased literacy and safety from wild animals.

Prior to solar lights, the village would plunge to darkness and kerosene lamp did not provide sufficient illumination to the children. Most essentially, the noxious smoke posed health hazard. As a result the dropouts from school was very high and most of them would leave studies when they attained the age of 12 years. A school teacher cites the reason that as the child progress to a higher grade, the syllabus increases and the limited supply of kerosene and poor light would not help them complete

paid a fixed monthly fee as given in Table-2.

The third tier is managed by CREDA, which monitors all installations through monthly reports and replaces equipment in case of major breakdowns.

This record is maintained by uninterrupted scheduled power supply has not only minimised cases of stealing or selling solar panels, it has fuelled the commercial demand for solar systems in the region. CREDA

the studies and they would also confine to their houses by 6 pm when it gets dark. The school, usually, gets over by 3 pm and the child has to immediately do home work before darkness sets in. This was stressful to the student and was the major cause for opting out of school. Also it deprived the child of any play and socialising activities. With the availability of lights until late evening thanks to solar PV system it has lead to sharp rise in literacy rates.

has devised the structure of maintenance such that the solar PV system provides uninterrupted power and in case any light fuses there are sufficient lamps kept in stock with each technician. The technician is given a free hand for replacements for defunct lamps and spares need not wait for formal permission.

There are more than 1,400 operators at different locations maintaining solar PV systems.

75 technicians and about 60

Nos.

Rate (INR)

Rate (INR)

Technician

1

4000

4000

Helper

1

2000

2000

Conveyance

1

2000

2000

Others

1

1000

1000

Operators

15

500

7500

Monthly expenses

16,500

Yearly expenses

1,98,000

There are even testimonials of students achieving top ranks equivalent to urban students and has made easier for them to pursue higher studies.

Prior to commissioning of solar PV lights wild animals like leopards would haunt this village and take away children but the illumination from solar power has scared wild animals.

National Mineral Development Corporation (NMDC) had worth Rs 1.35 billion funds to be spent under Corporate Social Responsibility (CSR). CREDA officials approached NMDC officials for their support to solar PV projects to provide basic power to villages, who readily agreed to share their CRS funds for electrification as it meets their social goals.

supervisors are also engaged to undertake any kind of repairing work of invertors and other electronics. CREDA has trained more than 500 persons for installations and maintenance of Solar systems. There are 20 service centres of various manufacturers in the state spread across state to report any defects in functioning of the systems.

Another cause of the success of the program is that systems purchased are from those manufacturers who have at least one office in the state. This ensured less downtime in case of system failures, since majority of the manufacturers prime manufacturing bases are located 1,000 kilometers away from the state.

PT - Jaideep N. Malaviya, CEO, Malaviya Solar Energy Consultancy

Table-2: Annual expenses on service and maintenance per cluster www.PowerToday.in

APRIL 2016 POWER TODAY 53

LEGALESE BANKRUPTCY

Insolvency and bankruptcy code:

Resolving the NPA crisis

The proposed code is a step in the right direction to bring about clarity in the legal framework and certainty and predictability in restructuring of debt and insolvency.

T

he one thing, which is commonly heard in the corridors of the financial world, is the looming concern as regards the huge NPA that banks are currently saddled with. Long drawn processes pertaining to insolvency has taken a toll on the credit realization in the country. The level of NPAs is alarming, unmanageable and stalling the growth of the credit market. This situation has arisen largely due to lack of robust legal and regulatory framework supporting a clear and cohesive action with respect to restructuring; debt recovery and security enforcement; and insolvency. Timely resolution of these matters are essential for easy access to credit. Without a healthy 5 4 POWER TODAY APRIL 2016

credit market, Make in India may not be realised to its optimum.

With an objective of an overhaul and providing the required impetus to the credit market, the task to draft a suitable legal framework was assigned last year to the Bankruptcy Law Reforms Committee (Committee) chaired by Dr. T K Viswanathan. The committee submitted its report in November 2015, along with an Insolvency and Bankruptcy Code.

This proposed code was tabled before the Lok Sabha in the winter session.

EXISTING LEGAL FRAMEWORK Restructuring A revival and rehabilitation (R&R) of industrial corporates is required to be implemented under

Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) by Board for Industrial and Financial Reconstruction (BIFR). A company can make reference for R&R under SICA, when it is deemed to be a sick company, i.e., the net worth of the company is entirely eroded.

In connection with this reference, BIFR appoints an operating agency who presents an R&R scheme.

The BIFR has power to either approve the R&R scheme or recommend winding up as per the Companies Act. Even before the industrial borrower becomes ‘sick’, the lenders can consider debt restructuring for any corporate under the mechanisms prescribed

by Reserve Bank of India (RBI), namely, Corporate Debt www.PowerToday.in

LEGALESE BANKRUPTCY Restructuring (CDR) and Joint Lenders Forums (JLF) mechanisms. More recently, the RBI has permitted the lenders to acquire control of the debtor at the discretion of the lenders under a new framework commonly known as Strategic Debt Restructuring (SDR).

Recovery of Debt and Security Enforcement The lenders can initiate recovery of their debt by approaching the Debt Recovery Tribunals (DRTs) under the Recovery of Debt Due to Banks and Financial Institutions Act, 1993 (DRT Act). Further, the secured creditors have been granted the right to enforce security without intervention of court under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). For any issue arising under the SARFAESI Act, the DRT is the forum for adjudication. However, the remedies under the DRT Act and the SARFAESI Act are only available to the banks and notified financial institutions. Other creditors can only file civil suits in civil courts for recover of debt and enforcement of securities.

WINDING UP A liquidation/winding up of a company is governed by the Companies Act under the jurisdiction of the relevant High Court. A winding up petition under the Companies Act can be filed by any stakeholder for various reasons including debt default.

ISSUES WITH THE EXISTING LEGAL FRAMEWORK The separate laws and the existence of various judicial forums for considering matters of restructuring, debt recovery and www.PowerToday.in

winding up have given rise to multitude of issues. Two major issues being conflict of laws and multiplicity of proceedings result in undue delays in recovery and liquidation. While the banks and financial institutions initiate recovery under the DRT Act and the SARFAESI Act, other creditors file summary suits and winding up petitions. Also, certain earnest attempt of restructuring under BIFR, CDR and JLF get impacted if the debt recovery and winding up proceedings run in parallel.

The reasons of the conflicts between SICA and debt recovery laws stem from the objectives of these laws. The primary objective of SICA is revival and rehabilitation of sick industrial companies. The DRT Act and the SARFAESI Act have been enacted with main objectives of assisting the lenders for expeditious recovery of debts and enforcement of security interest. Section 22 of the SICA provides for moratorium on all legal proceedings. Thus, under SICA, the revival of sick company takes precedence over debt recovery rights of creditors.

Similarly, Section 34 of the DRT Act gives overriding effect to it over other legislations.

Thus, the scheme of SICA and the scheme of the DRT Act and the SARFAESI Act work in opposite d i re c t i on s, often raising

questions of interplay and giving rise to conflict. The interplay of these provisions came for adjudication recently in 2014 before the Supreme Court in KSL Industries vs. Arihant Threads Ltd . In this Supreme Court observed that in the event of conflict between overriding provision of Section 22 of the SICA which purports to make proceedings for recovery of the debt against the sick company untenable and Section 34 of the DRT Act, the provisions of SICA shall prevail.

This was decided on the consideration that R&R efforts should take priority over the recovery of debts.

SICA provides moratorium on all other legal proceedings once the reference is accepted by BIFR. However, under second proviso to Section 15 of SICA, the reference to BIFR cannot be made if the secured creditors have initiated action under the SARFAESI Act. Further, under third proviso to Section 15 of SICA, the reference which is pending can be abated if 75% of the secured creditors resolve so to initiate action under the SARFAESI Act. It is to be noted that there is no specific equirement of approval of 75% of the secured creditors under the said second proviso of Section 15. However, in Asset Reconstruction Co. India P. Ltd vs. Shamken Spinners Ltd , the Delhi High went a step further to interpret that the approval of 75% of the secured creditors will also apply if the reference to BIFR is to be prevented under the second proviso.

While, both DRT Act and the SARFAESI Act have been enacted to provide debt recovery rights to the lenders, the issues have arisen if two proceedings can be carried on simultaneously or if withdrawal of proceedings under the DRT Act is a condition precedent to taking recourse under the SARFAESI Act. While considering this issues, in APRIL 2016 POWER TODAY 55

LEGALESE BANKRUPTCY Digivision Electronics Ltd. vs.

Indian Bank , the Madras High Court held that as per Section 19 (1) of the DRT Act, the secured creditor is required to withdraw application pending before DRT to initiate action under the SARFAESI Act. However, in Transcore vs. Union of India , the Supreme Court took the opposite view holding that ‘the remedies of enforcement of security interest under the SARFAESI Act and the DRT Act are complementary to each other and there is no inherent or implied inconsistency between

these two remedies. Therefore, the doctrine of election of one proceeding over another has no application in this case.’

Whilst the informal restructuring under CDR, JLF and SDR finds support from the RBI as the same is implemented as per the guidelines prescribed by RBI, the success of the same often becomes difficult in scenarios where legal proceedings for debt recovery and winding up are initiated by other stakeholders including nonparticipating lenders.

It can thus be said that the restructuring exercise and recovery of debts including insolvency proceedings are required to be dealt holistically.

The separate laws and legal forums 5 6 POWER TODAY APRIL 2016

give rise to friction between these proceedings, which promotes obstructionism by parties with vested interest and lead to undue delays in implementation. Further, availability of multiple remedies for different stakeholders give rise to multiplicity of proceedings, where one proceeding tend to work against another proceeding i.e. winding up and debt recovery. In an attempt to deal with these issues, it is proposed to replace the existing formal restructuring and insolvency framework with the Proposed Code.

PROPOSED INSOLVENCY AND BANKRUPTCY CODE The entire foundation of the Proposed Code is on two pillars i.e. insolvency resolution process (IRP) and liquidation process. IRP refers to an attempt at restructuring of debt where the creditors and debtor negotiate the possibility of restructuring of debt and viability of the debtor’s business as going concern.

This is akin to CDR/JLF framework of RBI in terms of process, but different for its requirement of mandatory participation of all creditors. If the negotiation process does not culminate in a concrete restructuring plan within 180 days,

the debtor becomes subject to liquidation. The period of 180 days can be further extended by 90 days.

Thus, the sword of liquidation is always hanging over the debtor if the debtor does not come to terms with the creditors.

The IRP can be initiated by a financial creditor, an operational creditor or by the debtor itself by making an application to the Adjudicating Authority.

A restructuring process can be fairly concluded if the business of the debtor is not affected by external factors. For this, the Proposed Code prescribes a declaration of moratorium, which prohibits any institution or continuation of litigation against the debtor, mandates maintenance of status quo of the assets by the debtor and requires the creditors to refrain from enforcing any security interest. During the resolution period, the entire management of the debtor and custody of the assets of the debtor are placed in the hands of a resolution professional to ensure the protection of the assets of the debtor. Thus, all secured creditors are required to make an attempt to find out solution before they resort to enforcement of their security.

The proposed code is a step in the correct direction to bring about clarity in the legal framework and to bring out certainty and predictability in processes involved in restructuring of debt and insolvency. In our view, certain aspects which require consideration to bolster the Proposed Code are discussed below.

UNIFIED LAW The Proposed Code provides for a law for a restructuring mechanism and liquidation process and a special adjudication forum. The legal framework for security enforcement and recovery of debt will continue to be governed under the SARFAESI Act and the DRT Act, where DRTs will www.PowerToday.in

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LEGALESE BANKRUPTCY be adjudication forums. Winding up for various reasons except for debt default will continue to be governed by the Companies Act, 2013. The three aspects namely (i) restructuring; (ii) debt recovery and enforcement of security; and (iii) liquidation have to be dealt cohesively and not in a manner that leads to interpretational issues arising out of interplay of one enactment vis-a-vis the others and give rise to multiplicity of legal proceedings before different forums.

A restructuring and insolvency law may not function well where conflicts between the recovery of debt and the insolvency resolution are considered by separate forums under different laws. Though, the Proposed Code contemplates the recognition of moratorium under the DRT Act and the SARFAESI Act by way of necessary amendments thereto Such amendments may not be sufficient for resolution of friction between laws and forums, where different forums have separate mandates and their ways often cross each other.

Therefore, in our view, we need a composite law governing the restructuring; debt recovery and security enforcement; and liquidation including a common forum to address these issues.

Infact, the DRT Act, the SARFAESI Act and winding up provisions of the Companies Act, 2013 should be subsumed under the Proposed Code.

NCLT AS ADJUDICATION FORUM It is proposed that National Company Law Tribunal (NCLT) should play the role of the Adjudicating Authority for corporates’ insolvency. NCLT will be set up as adjudication forum for various subject matters under the Companies Act, 2013 which are currently handled by Company Law Boards (CLB). Liquidation/ 5 8 POWER TODAY APRIL 2016

winding up is only one of them.

Further, NCLT will also be vested with jurisdiction over LLPs under the Limited Liability Partnership Act, 2008. Considering this and the number of matters already pending before the CLB, it is fair to assume that NCLT would be burdened with a lot of work. It may be therefore be advisable to establish an adjudication forum which exclusively deals with restructuring, credit recovery and insolvency matters and achieves expertise without any hangover of the past.

timeline for disposal of such appeals. Though the Supreme Court cannot be made subject to a timeline due to its power under the Constitution of India, the NCLAT’s appellate power can be mandated to adhere to strict timelines for adjudication on appeals which will go a long way in substantially reduction of the time period for recovery and liquidation.

TIME-BOUND DISPOSAL OF APPEALS

creditors’ rights and larger economic interest of revival of viable businesses. While viable business should not be allowed to be stripped and fragmented, the creditors cannot be left to suffer fools. The level of coherence between the legal frameworks for recovery, restructuring and liquidation determines such efficiency.

The Proposed Code prescribes strict timelines for insolvency resolution process. The insolvency resolution process and liquidation process will be supervised by NCLT. The appeals from any order of NCLT will lie in National Company Law Appellate Tribunal (NCLAT) and then, in the Supreme Court. It is well known that the security enforcement and winding up matters usually become subject to appeals which take years to be discharged. Appellate forums are often used as delay tactics by estranged management to derail the entire recovery process. The Proposed Code does not put any

CONCLUSION An efficient law on recovery and insolvency requires to strike a balance between enforcement of

PT

Authors: Ajay Shaw is a Partner while Ashish Pahariya is a Manager with DSK Legal, Advocates and Solicitors.

The views expressed in this article are their own. Authors can be reached at ajay.shaw@dsklegal.com and ashish.pahariya@dsklegal.com.

www.PowerToday.in

Sustainable energy and more...

New winds, New life

A humongous target to achieve, India’s 175 GW renewable dream will fall short, if the government fails to incorporate the “vayu” form of energy, in addition to its “surya namaskar” propaganda.

INSIDE ●

Renew Updates

RENEW COVER WIND ENERGY

A humongous target to achieve, India’s 175 GW renewable dream will fall short, if the government fails to incorporate the “vayu” form of energy, in addition to its “surya namaskar” propaganda.

S

mart grid is an evolving set of various technologies, especially information and communication technologies, working together to improve the present grid. Being an evolving technology, it is difficult to define it. A number of renowned organisations working towards the development of smart grid have defined it as an electricity network that can intelligently integrate the actions of all users connected to it, in order to efficiently deliver sustainable, economic and secure electricity supplies.

In a recent development, investment worth Rs 4,000 crore in wind energy is on the brink of becoming non-performing assets, as over 550 MW of projects that are ready to generate electricity are stranded because a state utility has refused to sign power purchase agreements (PPA) or issue

6 0 POWER TODAY APRIL 2016

commissioning certificates.

So far, the concept is new, and the potential of such projects has so far remained untapped in the country. Though as a concept, repowering in India has been around for two decades, the economic benefits are still on the drawing boards and nobody is willing to experiment with the technology. However, this untapped area in wind energy is likely to create immense opportunities, provided necessary, there’s a back-up plan from the government.

Now, considering India’s target of 60 GW of installed wind energy capacity by 2022, the current government is looking to push the industry towards more efficient and larger capacity wind turbines.

And, according to them it is achievable with the concept of repowering.

The Ministry of New &

Renewable Energy, in March announced a draft policy for repowering of old wind turbines.

The policy essentially calls for replacement of all wind turbines with a rated capacity of less than 1 MW. According to the ministry, majority of the wind turbines installed prior to 2000 are of capacity less than 500 kW and represent an estimated 3 GW capacity. (Refer Classification of installed WTGs) The draft policy includes attractive incentives for project developers willing to replace old turbines. The Indian Renewable Energy Development Agency (IREDA) shall provide loans to such developers at an additional interest rate rebate of 0.25 per cent.

The projects shall also be eligible for accelerated depreciation, a tax incentive available to project developers. (Refer Proposed www.PowerToday.in

RENEW COVER WIND ENERGY

“WIND ENERGY IS AN ATTRACTIVE PROPOSTION FOR IPPS” Tulsi Tanti, Chairman, Suzlon Group What has been the growth trend in demand for wind energy equipment over the last two years in India?

The global renewable energy sector has witnessed rapid growth in the last decade, driven by 3 key factors - widespread deployment of renewable energy technologies at increasingly competitive costs, efficiency brought in by hi-tech products driven by new age technology and new business models for distributed generation and services. Driven by the vision to mitigate climate change, world leaders are championing the cause of energy security, affordable energy and energy accessibility for all. The situation in India is no different.

The government has set targets of 175GW of renewable energy by 2022, of which wind will constitute 60GW. We have also committed, at COP21, to the targets of 30 per cent to 35 per cent carbon emission reduction and contribution of renewables

Framework for Re-powering Project Implementation) The state governments shall also be responsible for the smooth transition of the project during the repowering process by providing transmission infrastructure.

Project developers shall also be provided with additional land, if required, for repowering the existing projects. The project developers shall also be exempted from any penalties for reduced or no sale of electricity during the www.PowerToday.in

to be 40 per cent of the energy mix by 2030. All this has led to an increased demand on renewable, especially wind which has been the primary source of renewable energy until now.

There has been a 30 per cent year on year growth in wind installations and this will only increase with the annual target of 5,000 MW required to meet the larger goals set by the government. Most of the wind energy supply chain has already been indigenised to India. This means that our demands will be met by local production. At the same time, we are looking to increase exports as a primary activity under the Make in India initiative. The industry has already witnessed high technology advancement as we strive for higher generating products. An increasing number of IPPs have also invested in the sector, which is a clear indicator of its attractiveness. All these developments point to strong growth in the demand for wind

repowering period.

Meanwhile, the state utilities shall be mandated to procure a set minimum percentage of power from the new turbines; any additional power, resulting from the higher efficiency turbines, shall be eligible for sale to the utilities at prevailing feed-in tariff rates or to commercial and industrial consumers.

To give a ball park figure, a repowering project may roughly cost Rs 7-8 crore per MW. Therefore,

energy equipment as well as the potential that exists to meet this demand.

What are the emerging trends in wind energy equipment technologies?

We are witnessing a lot of innovations in wind energy technology as a result of this.

The drivers of this innovation remain maximising wind energy generation with limited resources and reducing the cost of energy. The latest movement has been towards taller towers – the taller the towers, the higher the reach and the stronger the wind. But taller towers have limitations such as excessive weight, which leads to logistical and installation problems.

Hence, the technology of the hybrid tower such as Suzlon’s S97 120m wind turbine generator (WTG) combines a lattice tower base with a tubular tower top, connected by a unique transition piece.

(For full interview, log on to www.powertoday.in)

if repowering is planned for minimum 2-3 GW, then the cost incurred may be in the range of Rs 14,000-24,000 crore. As per industry estimates, the repowering trend in India could translate into the sales of over Rs 19,000 crore for repowering companies for a repowering potential of 1.5-2 GW. With an estimated payback period of less than four years, this seems to be a valuable proposition which has fueled a number of wind Independent Power Producers APRIL 2016 POWER TODAY 61

RENEW COVER WIND ENERGY

Classification of installed WTGs (< 1 MW) by turbine capacity size

(IPPs) to buy old wind farms at attractive valuations, keeping in mind the land and existing evacuation infrastructure.

There are ~18,500 WTGs with installed capacity of <1 MW. 6539

1560 MW

6042

4920 MW

2258 MW

REPOWERING POTENTIAL The average capacity utilisation factor (CUF) for wind energy in India is around 20 per cent. CUF of a generator is the actual average output divided by the installed capacity. One reason for the lower CUF for wind energy is the poor grid management in the State. If a wind turbine’s output is forced to be curtailed, particularly in the windy season, the CUF would go down considerably.

Another reason is that most of the old Wind Energy Generators (WEGs) installed a few years back, are having very low capacity factor. For instance, in Tamil Nadu, almost 50 per cent of the existing WEGs installed are having lower CUF of around 15 to 17 per cent.

With the improvement in grid management and addition of modern WEGs as also replacing the old WEGs through re-powering scheme, the CUF for wind energy will certainly go up in India.

For 25 GW of installed capacity through a wind turbine generation in India, currently there are approximately 36,000 numbers of wind turbines. The capacity of

No of WTG

3535 460 460 MW

1325

402 MW

847

253 < 200

200‐250

250‐400

400‐500

500‐750

750‐1000

WTG Capacity range (in kW) 9

these wind turbines ranges from 225 kW to 2,000 kW each. Out of these, a large area is covered by more than 8,500 small wind turbines (< 500 kW capacity). The number of WTGs installed before 2002 stands at approximately 4,400 (amounting to approximately 1.38 GW of installed capacity) while the number before 1997 stands at approximately 2,663 (amounting to approximately 0.69 GW of installed capacity).

The concept of repowering has potential in the regions which have rich wind resources. States like Karnataka, Tamil Nadu and Maharashtra have more potential as of today for repowering. Experts suggests that with the help of advanced technology that we have

now, repowering can double the generation of the current power generated. (Refer Repowering potential estimate for major wind rich states of India) Says KR Nair from Indian Wind Power Association, “The repowering of old machines may result in doubling the installed capacity and tripling the energy output of an area.” He further suggests: “Hence, the State should provide additional evacuation facilities as the current grid facilities are mostly designed only to support the existing generation capacity and require upgradation.”

Current repowering solutions target old WTGs with a capacity of 500 kW or less. Therefore, the number of WTGs that can be

Proposed Framework for Re-powering Project Implementation Design (WRPD)

• Identify Re- I l i Powering area • Prepare Pre- Feasibility Report (PFR) • Seek consent of at least 70% existing WTGs • Submit PFR to Nodal Agency for approval • Submit to MNRE upon Nodal Agency approval

• Seek grant from MNRE for DPR • Undertake detailed study and DPR preparation • Layout, evacuation, techno commercial feasibility • Submit DPR to MNRE for approval

Conceptualise (WRPD) 6 2 POWER TODAY APRIL 2016

•MNRE approval upon scrutiny • Utility consent for evacuation arrangement • Competitive Bidding process by MNRE •Bidding documentation • Selection of WRPI for implementation

Approval & WRPI selection

Implementation (WRPI) • Implementation Agreement with Nodal Agency • Establish PPA & offtake arrangements • Acquire assets & land rights • De-commission WTGs, upgrade Pooling S/S and install WTGs • Commission & avail Incentive

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Repowering potential estimateCOVER for majorWIND ENERGY RENEW wind rich states of India repowered stands at 2,663 if WTGs older than 1997 are targeted, and at 4,400 if WTGs older than 2002 are targeted with Tamil Nadu and Gujarat, being the maximum contributors, followed closely by Andhra Pradesh, Maharashtra, Rajasthan and Karnataka. Those WTGs which have a capacity of 500 kW or less, but have not completed 10 years since commissioning is not assumed to be available for repowering as yet.

Repowering potential in wind rich states Potential Capacity for repowering in this FY (2015) (MW)

Wind Power projects commissioned prior to 2000 and turbine capacity < 1 MW Wind Power projects commissioned prior to 2010 and turbine p y < 1 MW capacity

4,041

1495

1222

1102

744 145.5 Tamil Nadu

Potential capacity in next 10 years ( 2015-2025 )(MW)

Gujarat

66

3 Rajasthan

Maharashtra

1162 24 Karnataka

Source: Indian wind power directory 2014

¾

21

227

Madhya Pradesh P d h

85

355

Andhra Pradesh

Potential business opportunities for repowering are plenty.

¾ Long term repowering program with h continuity off policy l & regulatory l regime would ld b be necessary

TECHNOLOGY TO THE RESCUE There have been significant reliable and have scaled up in size improvements in technology on to multi -mega watt power ratings.

Wind Energy Generators (WEG) to Since the new windy sites produce electricity from Wind. The available in India are having low improvements also include wind, these technological designing of taller towers and advancements can and have helped longer and lighter blades with a installation of wind energy high rotor diameter. projects in those areas, effectively.

As the power of wind is directly Apart from the development of proportional to the swept area of WEG, the technological the blades, an increase in rotor advancements have also been made diameter results in capturing more in the development and operation energy particularly in low windy of wind farms more efficient and areas. A taller tower also ensures profitable. Further research efforts capturing of higher and steadier are on to address the challenges to wind resources. The combination greater use of wind energy, of taller tower and large rotor particularly from the low windy diameters have been vital in areas in India. bringing down the cost of To this, Tulsi Tanti, generation of wind energy and also Chairman, Suzlon Group has a improved the wind turbine different opinion. According to availability, utilisation and capacity factors over the past three him, most of the wind energy supply chain has already been years. So, the modern WEGs are Identifying key challenges in Repowering indigenised to India. This means increasingly cost effective, more Modifications to PPA

Feasibility of evacuation infrastructure

Disposal/ Market of used turbines

Issue of land ownership hi

Issue of turbine ownership

ChallengesRepowering

Regulatory treatment of additional capital cost

Stakeholder consultation provided useful insights into above key considerations.

16

that our demands will be met by local production. At the same time, we are looking to increase exports as a primary activity under the Make in India initiative.

He added, “The industry has already witnessed high technology advancement as we strive for higher generating products. An increasing number of IPPs have also invested in the sector, which is a clear indicator of its attractiveness. All these developments point to strong growth in the demand for wind energy equipment as well as the potential that exists to meet this demand.”

CHALLENGES FOR REPOWERING Ownership of windfarm with multiple wind turbine owners in given wind farm is an issue. It is expected that all parties or WTG owners may not be willing to opt for repowering. Another threat to this untapped potential is most of the old wind projects are connected to 11 KV line (particularly in TN), which poses as the major hurdle for any repowering initiative.

However, one must not forget the biggest impediment of repowering can be land, as multiple ownership of land for given a wind farm poses another challenge for such projects. Also, optimal micro-siting for repowered site require unhindered access and

18

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APRIL 2016 POWER TODAY 63

RENEW COVER WIND ENERGY planning flexibility to land site.

Meanwhile, speaking to a few industry players, they raised a few concerned over offtake arrangements. They suggested that retaining earlier offtake arrangements (sale to Discom or captive) and identifying off-takers for excess generation. The players also raised an important issue of tariff and incentives. According to them, existing tariff is too low as the power purchase agreements (PPAs) are over 20 years with perpetual nature with no termination clause. And the important part is, according to the experts, tariff is unviable for repowering projects. Meanwhile, since a utility is in a secured PPA with the developer at a much lower cost, it would not allow prior termination of PPAs to enable repowering. (Refer identifying key challenges in repowering)

IMPLICATIONS ON CAPTIVE GENERATORS Post repowering, when the actual capacity as well as the aggregate energy yield would increase by around 2 to 3 times the present quantum; the consumer may not be able to consume 51 per cenr of the aggregate energy generated in such a plant. As a result the consumer may lose the captive status, which could result in levy of additional cross subsidy surcharge on the entire

Key highlights in MNRE’s draft policy

• All the wind turbine generators with the capacity of 1MW or below would be eligible for repowering.

• The Policy offers incentives in form of an additional interest rate rebate of 0.25 per cent over existing rebate available to the new wind projects by IREDA. • Secondly through benefits like Accelerated Depreciation or GBI that would be made available to the repowering project.

• The power generated corresponding to average of last three years’ generation prior to repowering would continue to be procured on the terms of existing PPA. • Augmentation of transmission system from pooling station onwards to be carried out by the respective STU. • During the period of execution of repowering, wind turbines would be exempted from not honoring the PPA for the non-availability • Similarly, in case of repowering by captive user they will to be allowed to purchase power from grid during the period of execution of repowering. consumption of the consumer.

In the present legal framework, such captive generators would not take up repowering due to the minimum consumption criteria.

Further, it may be noted that early development of wind sector has led to multiple WTG owners at a windfarm site. Repowering project could include multiple wind projects, captive or otherwise.

All the project owners may or may not participate as wind repowering project.

Repowering could reduce number of turbines, but it may not be possible to evolve an arrangement with exact replacements. Further, it is possible that repowering is undertaken by one dominant investor and existing captive

project owners may become minority stakeholders. As a result, the repowering project may or may not be able to meet criteria of 26 per cent ownership in such repowered project.

POWER TODAY SUGGESTIONS: • There exist multiple options for offtake. Viz.a) Sale to Discom b) Captive model C) Sale to any 3rd Party by open access route and combination to be allowed.

• Existing off-take to be protected at least for residual life period.

• FIT for wind shall prevail. But to continue the tariff of old PPA, a certain incentive over and above the FITwould be required for the developer.

• In case of captives, attractive wheeling and banking provision needs to be brought in.

• Utility off-take as per old PPA rates to continue for balance tenure of existing PPA. • New PPA shall cover the new FIT for additional generation through repowering.

• Formation of SPV with equity participation.

• The evacuation infrastructure has to be upgraded to 66 KV. • Lease of land or right to use land on the footprint basis in favor of SPV. PT – Rahul Kamat

6 4 POWER TODAY APRIL 2016

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NEWSLINE BIL bags 30-MW Solar Project

RENEW

Bhageria Industries Limited (BIL) has won a 30-MW solar power project from Solar Energy Corporation of India (SECI). The project will be installed at Ahmednagar District, Maharashtra, and is expected to be completed by the first quarter of 2017. The project will be executed on turnkey basis, with BIL commissioned to operate and maintain the plant for 25 years.

Gamesa wins maiden solar order in SL

Contact: Bhageria Industries Limited Tel: +91-22-40436666 Website: http://www.bhageriagroup.com/

Welspun adds 4 MW solar capacity

The global renewable energy major, Gamesa, has bagged a new solar order of 20 MW from Lagufs Power Limited in Sri Lanka, in Baruthankanda Village, Hambantota Province. Under the contract, Gamesa will provide turnkey EPC solutions, including engineering and design, supply of Gamesa Electric inverters, erection and commissioning of the 20 MW PV solar plant.

Already a leading wind player in Sri Lanka, Gamesa hopes to become a complete renewable energy player in the country with this solar order. The plant is expected to commence operations

by October 2016.

Welspun Renewables, India’s largest solar energy generator, has expanded its solar capacity in Punjab by 4 MW. The latest addition came soon after the commissioning of its 32 MW Bathinda solar project, which is Punjab’s largest solar photovoltaic plant.

The two projects combined together are expected to feed 54.37 million units of clean energy to Punjab’s grid anually.

Consequently, Welspun Renewables will be offsetting 1,481,525 tonne of Carbon Dioxide emissions over the next 25 years.

Contact: Gamesa India Tel: +91 44 3924 2424 Website: http://www.gamesacorp.com/en/

Contact: Welspun Renewables Tel: +91-011-66034600 Website: http://www.welspunrenewables.com/

Jaipur Railway Station harnesses solar power

Jaipur Railway Station is now one of the few railway stations in India that harness solar power for their operations. The energy harnessed from the solar panels are expected to help the railway station save `7.2 lakh on power bills, annually. Moreover, it is projected to reduce 500 tonne of carbon footprint within two years.

The North Western Railway (NWR) has been making significant efforts to reduce its carbon footprint by encouraging renewable energy generation in several of its divisions, including Ajmer, Abu Road, Jaipur and Rewari. NWR is saving `77 lakh on power bills and fuel and is expected to save `4.5 crore in the coming years.

Contact: North Western Railway Website: http://www.nwr.indianrailways.gov.in/index.jsp

6 6 POWER TODAY APRIL 2016

RPI partners HE for 150-MW solar project Rays Power Infra (RPI) has partnered with Hilliard Energy (HE) to jointly develop 150-MW solar power project, entailing an investment of $130 million (about `870 crore).

The first phase entails the setting up of a 10-MW solar project, expected to be commissioned in April at Kalwajurthy, Telangana.

The power generated will be sold to discoms at a tariff of `6.55 per unit for 25 years. Both the partners are hoping to achieve a target of 150 MW within 12 months.

Contact: Rays Power Infra Tel: +91-40-40000334 Website: http://www.rayspowerinfra.com/

Banks, NBFCs to finance 76,000MW CE projects

Public and private banks as well as non-banking finance companies (NBFCs) have committed to finance clean energy (CE) projects of 76,532 MW, with an outlay of `3.82 lakh crore. As on December 31, 2015, these banks and financial institutions have supported projects of 25,318 MW capacity worth `63,473 cr, New and Renewable Energy Minister Piyush Goyal said in a written statement to the Lok Sabha.

According to the statement, efforts are being made to mobilise funds for the renewable energy sector from multilateral and bilateral banks like The World Bank, Asian Development Bank, National Development Bank and Contact: Ministry of New and Renewable Energy Website: http://www.mnre.gov.in/ www.PowerToday.in

NEWSLINE 5,700-MW solar capacity to be added by FY17 According to a study by rating agency ICRA, around 5,700 MW of solar capacity is expected to be added during 2016-17. It also said that the capacity addition, including PV and grid connected projects, is expected to reach 2,700 MW in 2015-16.

However, the actual capacity addition would depend on timliness in awarding of projects under state and central government policies, and the subsequent signing of power purchase agreements (PPAs) with the discoms, the report said.

Ever since the adoption of competitive bidding in 2015, tariff competitiveness of solar power has significantly improved, the viability of which hinges on optimal debt structuring and competitive funding costs.

a statement that it has committed an investment of $150 million in the Indian renewable energy sector, It further added that over the next 3-4 years, it will use its commitment to target hydro, solar, wind and geothermal power assets with investments likely to take the form of select partnerships with leading Indian renewable energy companies.

The Suzlon Group is planning a `1,200-crore investment to take up a 3,000 MW solar, wind and hybrid power project in Telangana. In his keynote address at VCCircle’s Partners Summit, Telangana’s IT, Urban Development and Municipal Administration Minister KT Rama Rao assured of the state government’s full support to Tulsi Tanti, Chairman, Suzlon Group, regarding the organisation’s expansion plans in the state.

Contact: Suzlon Group Tel: +91-20-670 22000 / 613 56135 / 672 02500 Website: http://www.suzlon.com/

CDPQ, Canada commits $150 mn to renewable energy in India Caisse de depot et placement du Quebec (CDPQ), Canada’s institutional fund manager, said in www.PowerToday.in

Contact: Mercom Capital Group Email: info@mercomcapital.com Website: http://mercomcapital.com/

TPREL to buy Indo Rama arm

Contact: Caisse de depot et placement du Quebec Tel: +1 514 842-3261 Website: http://cdpq.com/en

Mercom: 100% growth in solar installations in 2016 Mercom Capital Group, a global

Contact: ICRA Limited Tel: +91-124-4545300 Website: http://www.icra.in/

3,000-MW power plant to be set up in Telangana

under development, while about 8.4 GW projects are expected to be auctioned off over the next few months.

clean energy communications and research firm, forecasted that the solar installations in India would double up to 4 GW in the calendar year 2016. It is an almost 100 per cent YoY growth from the 2015 figure of 2,133 MW. However, there are currently just over 10 GW of solar projects

Tata Power Renewable Energy Ltd. (TPREL) has signed an agreement with Indo Rama Renewables Ltd. (IRRL) to acquire its subsidiary Indo Rama Renewables Jath Ltd. (IRRJL).

IRRJL owns a 30 MW wind farm in Sangli district, Maharashtra.

With this acquisition, the total generation capacity of Tata Power will increase to 9,130 MW, and its operational wind power capacity to 570 MW, with its wind turbines located across five states.

Contact: Tata Power Renewable Energy Ltd. Tel: +91 226665 8282 Website: http://www.tatapower.com/

MP solar project to light cheap power

Madhya Pradesh (MP) might produce the cheapest solar power in the world at the world’s biggest solar power project coming up in Rewa.

Rewa Ultra Mega Power Limited, a joint venture between Solar Energy Corporation of India and MP Urja Vikas Nigam, is likely to float tenders soon after completing formalities and inking a pact with Delhi Metro Rail Corporation that will be the biggest buyer. The developers of this project can enjoy attractive loans from World Bank, with the Clean Technology Fund’s loan coming with an interest of just 0.25 per cent per annum.

Contact: Madhya Pradesh Urja Vikas Nigam Tel: +91-755-2556566 Website:http://www.mprenewable.nic.in/

PT

APRIL 2016 POWER TODAY 67

RENEWABLE PROJECTS Sr. No. Company Name Project Title / Details

Location

1

GMR Hyderabad The company has International commissioned a 5 MW solar Airport Ltd power plant near the airport for its captive consumption. The plant has started generating around 25,000 units per day of pollution free energy.

Hyderabad Telangana

NA

S.G.K Kishore, CEO, 3rd Floor, Shamshabad Hyderabad 500409, Tel: 040-67394099

2

Gujarat Power Corporation Limited (GPCL)

GPCL is the nodal agency for the development of solar parks in Gujarat. The Government of Gujarat has identied a land parcel of 1,500 hectare near Radhanesda village of Vav taluka in Banaskantha district for setting up a 750 MW solar park.

Banaskantha district Gujarat

NA

Rajendra Mistry, Chief Project Officer, Block No. 8, Sixth Floor, Udhyog Bhavan, Sector 11, Gandhinagar-382011, Gujarat.

Tel: 079â&#x20AC;&#x201C;23251255-60

3

JBM Group

Bhiwani district The company is setting up a Haryana 20MW solar power plant at Barwa in Bhiwani district. Total land area of the plant is 90 acre.

The commissioning is targeted

by April 2016.

120

Poonam Gandhi, Assitant Manager (Corp Comm), Plot No.9, Institutional Area, Sector 44, Gurgaon-122003, Haryana.

Tel: 0124-4674500, 4674550

4

Kerala State Electricity Board (KSEB)

Plans to set up solar power Kozhikode Kerala plant at Thalakkulathur under its Renewable Purchase Obligation (RPO) project. The work is likely to start soon.

4.68

Suku. R, CE (Renewable Energy and Energy Savings), Vydyuthi Bhavanam, Pattom, Thiruvananthapuram695004, Kerala.

Tel: 0471-2447404

5

New Mangalore Port Trust

The port trust plans to set up 4 MW solar power plant. The commissioning is targeted by July 2016.

Mangalore Karnataka

NA

K Aleshappa, Superintending Engineer (Electrical & Electronics), Panambur, Mangalore-575010, D.K. District, Karnataka, Tel: 0824-2407259, 2408200

6

Neyveli Lignite Corporation Ltd (NLC)

Plans to set up a 50-MW solar power plant in Andaman and Nicobar Islands.

Andaman & Nicobar Islands

NA

P. Selvakumar, Director (Projects & Planning), Block - 1, Neyveli - 607801, Cuddalore Dist, Tamilnadu, Tel: 04142-252384

7

NTPC Ltd

Setting up 2,250 MW solar power plant in Andhra Pradesh.

Andhra Pradesh

NA

Deepna Mehta, DGM-Corp Comm, NTPC Bhawan, Scope Complex, 7, Institutional Area, Lodi Road, New Delhi- 110003. Delhi. deepna.mehta@gmail.com, Tel: 011-24387195, 24368283

6 8 POWER TODAY APRIL 2016

Budget (Rs Cr)

Contacts

www.PowerToday.in

POWER PROJECTS Sr. No.

Company Name Project Title / Details

1

Bharat Heavy Electricals Limited (BHEL)

The company has successfully Lalitpur Uttar synchronised two 660 MW Pradesh supercritical units at Lalitpur STPP (3 x 660 MW) in UP. The units are successfully operating at maximum load as permitted by the grid. One more 660 MW unit at Lalitpur is in advanced stage of commissioning. It is likely to be commissioned in March 2016.

5600

1) Surinder Singh, GM (Lalitpur), Lalitpur Super Thermal Power Project, LALITPUR Village Mirchwara, P.O. Buragaon, Tehsil Mahroni, Distt. Lalitpur, Uttar Pradesh.

M: 8400600421

2

Department of Energy/Power, West Bengal

Plans to set up pumped storage system at Turga in Purulia district.

11000

Dr A N Biswas, Special Secretary, Department of Power & NES, Bidyut Unnayan Bhaban, 5th Floor 3/C LA Block Sector-III, Bidhanagar, Kolkata-700098, West Bengal.

Tel: 033-23355646

3

Karnataka Power Corporation / Bharat Heavy Electricals Ltd

Raichur District Yermarus Thermal Power Station (YTPS) is being set up Karnataka in joint venture. The project was commissioned in March 2015.

The trial run is expected soon.

NA

Laxman T Kabade, Chief Engineer (Electrical), Raichur Power Corporation Ltd., Shakthinagar-584170.

Raichur District, Tel: 08532-246116

4

Kerala State Electricity Board (KSEB)

The electricity board plans to add 18 sub-stations and 367 circuit kms of power lines during 2016-17.

Kerala

NA

James M. David, CE (Transmission North), Vydyuthi Bhavanam, Pattom, Thiruvananthapuram695004, Kerala.

Tel: 0471-2514424/2514633

5

Krishnapatnam Power Corporation

Hyderabad-based CVR group company plans to build 2780 MW (3x660 MW and 1x800 MW) capacity of thermal power projects in Tamminapatnam Mommidi revenue panchayat villages, near Krishnapatnam Port in SPS Nellore District, Andhra Pradesh.

Nellore District Andhra Pradesh

NA

Plot No. 379, Road No. 10, Jubilee Hills, Hyderabad 500033, Andhra Pradesh.

Tel: 040-23339990

6

Mahanadi Coalfields Ltd

Plans to set up 1,600 MW super Sundargarh district critical thermal power project in Odisha Sundargarh district of Odisha.

NA

Samantaray, Deputy GM, G-3, Gadakana, Mancheswar railway Colony, Bhubaneswar-751017, Odisha. Tel: 0674- 2748042

7

Ministry of Power

Plans to auction three projectsâ&#x20AC;&#x201D; Multiple Cheyyur in Tamil Nadu, Bedabahal in Odisha and Tilaiya in Jharkhand. Revised bidding documents. The inter-ministerial consultations on preparation for revised bidding documents will be sent for the Cabinet nod.

www.PowerToday.in

Location

Purulia District West Bengal

Budget (Rs Cr)

80000

Contacts

Anoop Singh Bisht, Under Secretary, R.No-26, Shram Shakti Bhavan, Rafi Marg New Delhi-110001 Delhi, Tel: 011-23766236

APRIL 2016 POWER TODAY 69

EVENT REVIEW EI AWARDS

3rd Annual Equipment India Awards & CEO-FORUM

The winners: (L-R) A Krishnakumar, Sunil Sapru, Abhijit Gupta, Ramesh Palagiri, Pratap Padode, Raghav Chandra, Nitin Lall, Amit Bansal, Jasmeet Singh, S Manjunath, and DR Vishawanatha.

T

he prestigious 3rd Annual Equipment India Awards hosted by ASAPP Info Global Group was sponsored by HPCL; the event associate was Hire My Machine; VDMA-Indo German Federation was the supporting partner and the associate partners were Construction Federation of India, National Highway Building Federation, Off Highway Research,

and the magzines CONSTRUCTION WORLD and INFRASTRUCTURE TODAY. Initially, the participants networked and discussed matters of mutual interest. Thereafter, they assembled at the impressive FICCI Commission Hall Auditorium.

Pratap Padode, Managing Director, ASAPP Info Global Group,

CEO FORUM: (L-R) Raman Aggarwal, Anand Sundaresan, Vijay Sharma (moderator), VB Gadgil, and Rajesh Nath.

7 0 POWER TODAY APRIL 2016

kicked off the proceedings for the evening. Delivering his welcome address to the gathering of over 100 dignitaries of industry professionals, he recounted the journey of EQUIPMENT INDIA, over the past nine years and the spirit of the publication to celebrate and felicitate the best performers of the construction equipment industry even under trying times. “These moments are to be treasured because they pave the way for future victories,” he said. He went on to talk about the smart cities initiative, which in turn will grow India in the future.

While addressing the US delegation, he mentioned that India is a country of innovative “Jugad” where users deploy simple equipment like backhoe loaders beyond the imagination of the manufacturers and achieve the desired objectives He then paved the way for the CEO FORUM. PT www.PowerToday.in

POWER STATS Peak Demand and Peak Met (Provisional) State/ System / Region Chandigarh Delhi Haryana Himachal Pradesh Jammu & Kashmir Punjab Rajasthan Uttar Pradesh Uttarakhand Northern Region Chhattisgarh Gujarat Madhya Pradesh Maharashtra Daman & Diu Dadra & Nagar Haveli Goa Western Region Andhra Pradesh Telangana Karnataka Kerala Tamil Nadu Puducherry Lakshadweep # Southern Region Bihar DVC Jharkhand Odisha West Bengal Sikkim Andaman-Nicobar # Eastern Region Arunachal Pradesh Assam Manipur Meghalaya Mizoram Nagaland Tripura North-Eastern Region All India

(Figures in MW net)

February 2016 Requirement Availability

April 2015 to February 2016

Surplus / Deficit (-)

Requirement

Availability Surplus / Deficit (-)

(MU) 197 3,849 6,799 1,457 2,397 5,974 10,190 13,463 2,034 41,547 3,932 12,745 10,130 19,015 301 726 428 45,110 7,104

(MU) 197 3,845 6,799 1,457 2,034 5,974 10,190 12,558 1,964 39,842 3,564 12,735 10,124 18,994 301 726 428 45,070 7,104

(MU) 0 -4 0 0 -363 0 0 -905 -70 -1,705 -368 -10 -6 -21 0 0 0 -40 0

(%) 0.0 -0.1 0.0 0.0 -15.1 0.0 0.0 -6.7 -3.4 -4.1 -9.4 -0.1 -0.1 -0.1 0.0 0.0 0.0 -0.1 0.0

(MU) 342 5,846 9,113 1,488 2,544 10,852 10,961 16,988 2,034 54,474 3,932 14,495 10,902 20,973 307 740 583 48,640 7,104

(MU) 342 5,846 9,113 1,488 2,158 10,852 10,961 14,503 2,034 50,622 3,757 14,448 10,902 20,594 307 740 552 48,199 7,104

(MU) 0 0 0 0 -386 0 0 -2,485 0 -3,852 -175 -47 0 -379 0 0 -31 -441 0

(%) 0.0 0.0 0.0 0.0 -15.2 0.0 0.0 -14.6 0.0 -7.1 -4.5 -0.3 0.0 -1.8 0.0 0.0 -5.3 -0.9 0.0

6,398

6,398

0

0.0

6,854

6,849

-5

-0.1

9,971 3,710 14,176 322 8 37,053 3,289 2,219 1,020 4,055 7,374 109 40 17456 139 1,333

9,397 3,706 14,171 322 8 37,053 3,289 2,219 1,020 4,055 7,374 109 32 17456 135 1,327

-574 -3 -5 0 0 0 0 0 0 0 0 0 -8 0 -4 -6

-5.8 -0.1 0.0 -0.1 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -20 0.0 -2.9 -0.5

9,971 3,762 14,176 368 8 37,801 3,735 2,814 1,151 4,055 7,905 109 40 18,076 139 1,491

9,397 3,706 14,171 350 8 37,053 3,484 2,794 1,127 4,055 7,885 109 32 17,972 135 1,378

-574 -56 -5 -18 0 -748 -251 -20 -24 0 -20 0 -8 -104 -4 -113

-5.8 -1.5 0.0 -4.9 0 -2.0 -6.7 -0.7 -2.1 0.0 -0.3 0.0 -20 -0.6 -2.9 -7.6

158

158

0

0.0

168

167

-1

-0.6

322 101 119 227 2,401 142,146

322 99 118 227 2,328 140,346

0 -2 -1 0 -73 -1,800

0.0 -2.0 -0.8 0.0 -3.0 -1.3

400 102 140 300 2,573 153,366

377 101 138 269 2,356 148,463

-23 -1 -2 -31 -217 -4,903

-5.8 -1.0 -1.4 -10.3 -8.4 -3.2

# Lakshadweep and Andaman & Nicobar Islands are stand-alone systems, power supply position of these, does not form part of regional requirement and availability.

D:\PSP Master\2015-16\PSP\Provisional\Complete\PSP Dec15 Provisional NOTE: Cumulative figures for Andhra Pradesh includes the figures of undivided Andhra Pradesh (including Telangana area) for the period Apr-May, 2014.

Cumulative figures of Telangana are w.e.f. Jun 2014 due to bifurcation of Andhra Pradesh into Andhra Pradesh and Telangana w.e.f. June, 2014.

Source: Central Electricity Authority www.PowerToday.in

APRIL 2016 POWER TODAY 71

MARKET SNAPSHOT Daily trades at the Indian Energy Exchange: Date: 19-02-2016 To 18-03-2016 Date

Purchase Bid (MWh)

Sell Bid (MWh)

MCV (MWh)

Cleared Volume (MWh)

MCP (`/MWh)

19-02-2016 20-02-2016 21-02-2016 22-02-2016 23-02-2016 24-02-2016 25-02-2016 26-02-2016 27-02-2016 28-02-2016 29-02-2016 01-03-2016 02-03-2016 03-03-2016 04-03-2016 05-03-2016 06-03-2016 07-03-2016 08-03-2016 09-03-2016 10-03-2016 11-03-2016 12-03-2016 13-03-2016 14-03-2016 15-03-2016 16-03-2016 17-03-2016 18-03-2016

115042.57 122081.87 109357.65 127236.87 132836.36 126988.54 125326.63 118101.51 118791.32 107165.91 105680.81 120317.70 125778.42 129961.19 123282.00 120863.61 127770.27 125996.95 119712.19 121719.01 128471.26 118109.19 117266.99 124264.76 131669.12 128213.93 154018.86 157015.00 147782.54

180018.15 179582.82 178055.22 170990.57 184776.69 175753.49 165340.20 164672.16 170583.01 186629.95 154983.50 152883.86 157568.80 170957.17 182358.07 190375.36 205122.98 173022.35 170161.85 190395.29 181265.22 167483.00 146504.85 175379.78 159474.55 167188.25 135310.23 146784.21 141970.63

98880.93 101213.23 89999.20 103881.51 109349.86 110542.01 109758.84 105796.66 103366.13 97486.50 93601.04 97228.81 99312.09 105995.29 100895.31 101715.45 107771.46 108814.63 103306.76 101522.94 108505.21 92837.94 99090.23 112221.96 115613.07 116626.56 114048.67 122002.15 116311.15

97455.69 95619.85 88556.71 94318.70 108467.27 110235.55 107837.07 91534.43 98860.27 95279.15 93142.19 82535.50 99234.93 105587.15 98361.75 101301.23 107228.96 103809.75 91078.58 101205.36 100475.62 90476.61 90138.39 100916.37 111503.99 109856.85 108638.30 104040.44 92842.95

2236.09 2277.39 2165.52 2437.68 2342.83 2407.90 2502.80 2522.64 2439.23 2266.38 2528.21 2486.40 2471.60 2409.61 2308.58 2203.09 2208.35 2363.03 2277.36 2254.75 2340.36 2355.17 2657.69 2420.58 2482.71 2463.18 3210.91 2907.73 2967.82

Summary

Purchase Bid (MWh)

Sell Bid (MWh)

MCV (MWh)

Cleared Volume (MWh)

MCP (`/MWh)

Total Max Min Average

3630823.03 157015.00 105680.81 125200.79

4925592.21 205122.98 135310.23 169848.01

3047695.59 122002.15 89999.20 105092.95

2880539.61 111503.99 82535.50 99328.95

3210.91 2165.52 2445.37

Daily prices are simple average of non-zero prices in (24*4) no of 15 minutes time block of respective day.

Daily volume is the sum of volume in (24*4) no of 15 minutes time block of respective day.

Date: 19-02-2016 To 18-03-2016 MCV: Market Volume MCP: Market Clearing Price

7 2 POWER TODAY APRIL MARCH2016 2016

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POWER PEOPLE KVB REDDY GETS ADDITIONAL CHARGE OF CEO AT ESSAR POWER MP KVB Reddy, CEO, Essar Power, has been conferred with the additional and direct charge of Essar Power MP Ltd. as the Chief Executive Officer (CEO). Essar Power MP owns and operates a 1,200 MW (2x600 MW) power plant in Singrauli district of Madhya Pradesh, which Reddy has been assigned to. The plant is backed by a captive coal mine in Tokisud, Jharkhand, which the company won in a recent coal auction.

On his new role, Reddy said, “My immediate focus will be to make the plant fully operational and ramp up its capacity. I am confident that with the backing of the Tokisud coal mine, I will be able to achieve this objective.”

With a formidable experience of over 32 years in the power industry, Reddy has been involved in executing all the power projects of Essar, having joined the company in 1995.

UC MISRA ELECTED ITMA PRESIDENT UC Misra, Director, Prime Meiden Ltd.(a JV of Prime Group and Japan’s Meidensha Corp.), was elected All India President of Indian Transformer Manufacturers Association (ITMA) in its Annual General Meeting held on 25th February, 2016. Misra is also the Chairman of Prime SD Engineering Consultants Ltd., another Prime Group subsidiary.

An Electrical Engineering graduate, Misra has over 44 years of experience in the power sector. Before joining Prime Group six years ago, Misra had served as the Chairman of Bhakra Beas Management Board (BBMB), and as the Director of Power Grid Corporation India Ltd. He has to his credit, the experience of managing large projects related to construction, operation and maintenance in the power sector.

Also a senior member of the Institute of Electrical and Electronics Engineers (IEEE), USA, Misra has attended a number of international seminars and workshops, including the Advanced Management Programme conducted by International School of Business, Kellogg, USA.

7 4 POWER TODAY APRIL 2016

HAIL APPOINTS SURESH SENAPATY AS CHAIRMAN Honeywell Automation India Limited (HAIL) announced Suresh Senapaty’s appointment as its Additional Director (Non-Executive, Independent), and as Chairman of its Board of Directors.

Contributing to HAIL’s overall strategy and providing counsel on corporate governance will be Senapaty’s primary responsibilities.

With proven industry experience of over three decades in finance, governance and strategy, Senapaty is a key industry voice in advocacy relating to accounting and corporate law with regulators, government and policy stakeholders. He has held key leadership and board positions at several Wipro companies, having previously led Wipro’s finance function across its IT, consumer care, infrastructure engineering and healthcare businesses.

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Regd. No. MCE/158/2016-2018. Licensed to Post without Prepayment MR/Tech/WPP-257/East/2016 Posted at Patrika Channel Sorting Office, Mumbai - 400 001. on 2nd & 3rd of every month. RNI No. MAHENG/2008/26968. Date of Publication 2nd of every month ISSN 2277-6478

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