July 2016

Volume 5 | Issue 3 | `100

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The Complete Energy Sector Magazine for Policy and Decision Makers

Power tariff hike :

Time running out for
the Government

Rising oil prices Time to give

spell end of dream hydro power a
run for refiners? serious look

Anil Sardana Rajendra P. Ritolia Arun Gupta NSN Murty

Managing Director and CEO Advisor, Swaymbhu Natural Managing Director Director and Leader, Smart Cities
Tata Power Resources Pvt. Ltd
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InfralinePlus
The Complete Energy Sector Magazine for Policy and Decision Makers
July 2016 | Volume 5 | Issue 03

Editors Letter Editorial

Shashi Garg, Editor
The debt restructuring scheme Ujjwal Discom Assurance
Yojana (UDAY) announced by the government in
November 2015 to bail out the power distribution News Team
companies now faces the litmus test as electoral politics Chetan Gupta
is expected to be a major deterrent when it comes to
implementing a power tariff hike a crucial component
of the package. While this may come as good news Analyst
for consumers, it does not augur well for state-owned Mohd. Arif
discoms as they will continue to be dependent on subsidy.
To make matters worse, the Centre has doubled cess
on coal to Rs 400 per tonne, which will add to discoms Content Consultant
power procurement cost. Moreover, states will not get any share in proceeds collected News Monster
through levy of cess as the same is not part of the Centres divisible pool of taxes. As a
result, the gap between the average cost of supply and the average revenue realisation
of discoms is estimated to be around 27 per cent on average and over 35 per cent in
the worst off states like Uttar Pradesh and Rajasthan. This translates into an average
tariff hike of close to 20 per cent across the country. If electoral calculations are indeed Business Development
going to be a factor in power tariff hikes, it looks unlikely that discoms will fulfill their
commitment to bridge the revenue deficit anytime soon, let alone become profitable. Manoj Narang, Director
Tel.: 0120-6799106 (D)
On the other hand, the coal sector seems to be having a problem of plenty. Concerned
over mounting stocks at Coal India and falling offtake by large consumers, the Coal Email: manoj.narang@infraline.com
Ministry has directed government-owned and operated thermal power producers
to stop all coal imports and instead source feedstock from the domestic miner.
However, what represents a completely different scenario; many power plants across
Uttar Pradesh, Maharashtra and West Bengal have asked CIL and its subsidiaries to Advertisement
stop coal supplies, citing reasons like high stock at sites and backing down of power Anshul Sharma
demand by host states and their discoms.
Tel.: 0120-6799136
While the government may have decided to restrict imports of coal, there is no Mobile: +91 9953848494
escaping global market forces when it comes to the oil and gas sector. Just when the 1
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refiners were enjoying a dream run due to falling crude prices, an increase in prices
seems to have halted their march. In view of rising oil prices, experts project that
annual domestic demand growth for petroleum products in FY16 could moderate to
5.5 per cent, sharply down from 10.9 per cent in FY16. However, even a 5.5 per cent Circulation & Subscription
growth in demand for petroleum products would yield decent profits. A rebounding
economy could also create additional demand for petroleum products. Sneha Pandey
Tel.: 0120 6799125/100
Coming to energy efficiency, India continues to find novel ways to ensure sustainable
Email: sneha.pandey@infraline.com
use of its fossil fuels. The ministry of mines has recently introduced a concept of
Star Rating system to make mining sustainable. This system will be applicable
to all major mineral mines in the country as a gauge of the eco-friendly measures
adopted by them. This is really an encouraging initiative as in past the extraction of
mineral reserves has always resulted in varying degrees of environmental resource Form IV
degradation and social impacts, including displacement. Periodicity of its Publication: Monthly
Similarly, the Wind sector is also gearing for a sea change with the government likely Printers / Publishers /
Mrs Shashi Garg
to introduce competitive auctions for wind farms this fiscal year in a bid to fulfill goal for Editors / Owners
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achieving 60 GW of wind power capacity by 2022. This will bring a fresh ray of hope for
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 July 2016
www.InfralinePlus.com

InfralinePlus

Contents
Editors Letter
1

Cover Story 34
Electoral compulsions force states to go
slow on power tariff hike
The Centres plan to revive state power sector
and ensure 24X7 electricity supply by 2018-
19 faces threat of derailment with power
discoms going slow on tariff hikes. Meanwhile,
increased burden of coal cess has added to
discoms cost of power procurement. Utilities
are required to bridge their cost-revenue gap
by 2018-19 as per their commitment under
the UDAY scheme. But the way they are

34
going about this work does not inspire much
confidence
2

Power Coal
4 21
News Briefs p4 News Briefs p21
In Conversation: Anil Sardana, Managing Director and Expert Speak: Rajendra P. Ritolia, Advisor, Swaymbhu
CEO, Tata Power p8 Natural Resources Pvt. Ltd p24

In Depth: Time to give hydro power a serious look P11
In Depth: Exchange of energy saving certificates to
open up energy efficiency market P15
Financial Results: Q4 and Annual results announced
P18
Statistics p19
In Depth: Coal pile up forces developers to issue
curtailment notices to Coal India p26
In Depth: Mining to become sustainable with Star
Ratings P29
Financial Results: Q4 and Annual results announced
P31
Statistics p32

Topics Covered Topics Covered

Coal distribution
T&D losses
Coal production and demand
Hydro projects
Quality measurement
Energy efficiency
 July 2016
www.InfralinePlus.com

Oil and Gas Renewable

39 53
News Briefs p39 News Briefs p53
Expert Speak: Vijay S Laghate, Management In Conversation: Arun Gupta, Managing Director, NTL
Consultant p42 Group p58
In Depth: Rising oil prices spell end of dream run for In Conversation: NSN Murty, Director and Leader,
refiners? p46 Smart Cities, PwC p60
Financial Results: Q4 and Annual results announced In Depth: India needs competitive bidding in wind
p50 energy to reach 60 GW p62
Statistics p51 Statistics p66

Topics Covered Topics Covered

Refining prospects Lighting industry
3
Fertiliser production Smart city development
LNG demand Wind energy projects

Expert Speak/Interview

Anil Sardana Vijay S Laghate

Managing Director and CEO, Management Consultant
Tata Power Off Beat
68
In Depth: Green roads: Use of plastic for construction
gathers steam

Reports & Studies

71
People in News
Arun Gupta
Managing Director,
NSN Murty
Director and Leader, Smart Cities,
72
NTL Group PwC
 July 2016
www.InfralinePlus.com
NewsBriefs | Power National
Government extends timeline for states to join UDAY scheme
Government has extended the timeline for
states to join UDAY scheme, meant for the
revival of debt-laden discoms, and issue
bonds for paying a major part of their out-
standing debt during the fiscal ending March
2017. This will facilitate all states who want
to benefit from the scheme and could not
CERC to appoint in house consultants in areas of economic & evolving power market
The Central Electricity Regulatory
Commission (CERC), which is responsible
for tariff fixation among other things, plans
to engage consultants to assist in areas
4 of economic and evolving power market.
CERCs move is crucial when the power
sector is evolving and the present policy
approach mainly aims at moving from cost
plus tariff to competitive bidding basis
tariff, appropriate regulatory framework
for mobilising investments, and developing
electricity markets. However, the cost plus
tariff will continue to be important as the
assets covered by this regime are of large
value. The consultants are expected to do
economic analysis and research related to
Power demand bodes well for NTPCs metrics
According to the latest available generation
data from the Central Electricity Authority
(CEA), the PLF (plant load factor) of NTPCs
overall wholly owned thermal capacity was
75.5% in May 2016 (vs 76.1% in April 2016
and 76.4% in May 2015). NTPCs wholly-
owned coal-fired PLF was 81.2% in May
2016 vs 81.5% in April 2016 and 81.8% in
May 2015. Six plants (12.1GW) were in the
incentive zone (i.e. >85% PLF) in May 2016
vs. ten plants (24.2GW) in April 2016 and
seven plants (15.4GW) in May 2015. PLF at
Mauda-I was 55.4% vs. 66.7% in April 2016,
as one of the units was partially shut due
to a low schedule; however, the PLF is still
robust relative to FY16 PLF of 21%. PLF at
join or issue bonds to pay off discoms debt
due to various reasons such as elections and
regulatory approvals. Under UDAY, states
were required to join the scheme last fiscal
and issue bonds to pay off discoms 50 per
cent debt in 2015-16. They were expected
to issue bonds to pay off additional 25 per
cent of discoms debt in the current fiscal.
However, some states could not join the
scheme and others could not issue bonds
due to delay in regulatory approvals or other
reasons like elections. With this decision,
these state would be able issue the bonds
to pay of 75 per cent of state discoms dur-
ing the current fiscal itself. Last fiscal, the
states issued bonds worth Rs 1 lakh crore to
pay off their discoms debt.
tariffs, markets, fuel availability and open
access. They will also have to prepare
weekly, monthly, and annual reports on
short-term transactions of electricity as part
of market monitoring.
sequential dip in PLF, primarily on the back
month. According to the CEA, all-India coal-
RPower to get Rs 113-crore
compensation from Tilaiya UMPP
power buyers
Reliance Power is in the process of
receiving Rs 113 crore as compensation
from the power procurers of Tilaiya ultra
mega power project as well as nearly
Rs 600 crore of bank guarantees stuck
with the procurers. However, around Rs
200 crore of bank guarantees remains
stuck with the Coal Ministry after a
fresh show-cause notice was issued
to Reliance Power on why the amount
should not be deducted. On June 21,
the Coal Ministry issued a show-cause
notice to Reliance Power for deducting
the bank guarantee due to delay in
development of the Kerandari B & C coal
blocks given to the companys erstwhile
Tilaiya ultra mega power project. After
termination of the power purchase
agreement (PPA) for the Tilaiya UMPP
last year, Reliance Power had written to
the Coal Ministry for release of the bank
guarantee given for the Kerandari B & C
coal blocks.
Barh-II normalized to 69% vs. low of 47%
in April 2016, Rihand and Vindhyachal saw a
of annual maintenance of 500MW at Rihand
+ 210MW in Vindhyachal for part of the
fired PLF was 62.1% in May 2016 (vs. 66.9%
in April 2016) and 64.5% during 2MFY17. All-
India electricity demand grew by 6.6% y-o-y
in May 2016 after a strong double-digit y-o-y
growth in the previous three months 12.1%
in February 2016, 12.6% in March 2016 and
15.1% in April 2016. For 2MFY17, electricity
demand is up 10.7% y-o-y, which bodes well
for NTPCs operational/financial metrics.

Centre to review discoms turnaround efforts
The government is set to review how power
distribution companies bailed out through
a debt restructuring in 2015-16 have cut
power theft and improved bill collection
efficiency, once the first set of data on their
operational performance arrive. Monitoring
performance is crucial: states which fail to
Electricity for all: States up additional capacity, but low demand keeps them stressed
With the government pushing for additional
electricity capacity addition and power
minister Piyush Goyal saying that all
villages would be electrified by the end of
2016 much before the previous deadline
of May 2017 when it comes to newly
installed capacity, some states have clearly
taken a lead. According to the state-wise
installed capacity data released by the
Reserve Bank of India, while a total of
52,801 megawatt of additional capacity
was installed over the last two years (after
the NDA government came to power) six
states alone contributed to more than 50
per cent of this capacity addition. With an
additional installed capacity of 5,700 MW,
India says ready to supply more electricity to Nepal
Expressing its readiness to provide
additional 120 MW of electricity to Nepal
through the Muzaffarpur-Dhalkebar trans-
border transmission line, India has called
on Nepal to complete the construction of
a sub-station at Dhalkebar at the earliest.
During a meeting of the Joint Steering
Committee (JSC) in New Delhi, the Indian
side accepted the request from the Nepali
side to export more electricity to Nepal.
According to Nepali officials, India said it
is ready to export additional electricity to
Nepal but stressed on the need to construct
a sub-station at Dhalkebar at the earliest,
without which additional power cannot
be supplied to Nepal. Nepal is currently
Decks cleared for 4000 MW Bihar
turn around their power utilities despite the
debt restructuring under the Ujwal Discom
Assurance Yojana (UDAY) will have to
show the firms losses as state debt in their
budgets from 2018-19. Distribution firms
in Rajasthan and Uttar Pradesh have taken
strict measures to improve performance.
Cutting the salaries of engineers for failing
to contain power theft and incentivizing
reduction in power theft by providing unin-
terrupted power supply in areas where theft
is reported to be low are among the steps
taken. Losses from power theft and inef-
ficiency in bill collection, known as technical
and commercial losses, are reported every
quarter. In some states, such losses are as
high as 35% of the total units supplied.
Chhattisgarh emerged as the top state,
both in absolute and in percentage terms of
capacity addition.
July 2016
www.InfralinePlus.com
National
Mega Power Limiteds Banka
Thermal Power Plant
With a view to making the state
self-dependent on power, decks are
being cleared for the establishment of
4000 MW thermal power plant, a joint
venture of Bihar Mega Power Limited
(BMPL) and Power Finance Corporation
Limited (PFCL), a Government of
India Undertaking, in Banka district.
In all probability, desolate wasteland
land would be utilized for the thermal
power plant instead of cultivable land,
the process of which is underway. The
project will immensely benefit the state
and region on the power front which
includes electricity availability and 5
employment. Out of the total production,
the states share would be 50%, which
means 2000 MW would be supplied
to Bihar. Whereas 1000 MW would
be supplied to Jharkhand, 600 MW to
UP and 400 MW to Karnataka on its
commissioning in 2021. The Ultra Mega
Power Project (UMPP) will be come up
near Kakwara village under Katoria block
in Banka district.
importing 80 MW of electricity through the
Muzaffarpur-Dhalkebar transmission line.
Nepal plans to import 600 MW of power
from India through the transmission line
that was jointly inaugurated by Prime
Minister KP Sharma Oli and his Indian
counterpart Narendra Modi on February
21 during PM Olis visit to India. The Nepal
Electricity Authority has already awarded
a contract for the construction of a sub-
station at Dhalkebar, but it is yet to be
completed. During the meeting, the Indian
side also enquired about preparations on the
part of the Nepali side to import electricity
from Nepal after 2019.
 July 2016
www.InfralinePlus.com
NewsBriefs | Power States
Delhi government threatens to cancel licence of power distribution companies
The Delhi government is considering
revoking the licences of BSES discoms
due to their dismal performance. In a
meeting with CEOs of the companies, Chief
Minister Arvind Kejriwal had warned that
government will take strict action if their
Cabinet panel to review power purchase pact in Kerala
The Cabinet subcommittee constituted for
reviewing the controversial decisions made
at the fag end of the previous governments
tenure is scrutinising the proposed power
purchase agreement between the Kerala
6 State Electricity Board (KSEB) and a
subsidiary, Reliance Energy Limited in Kochi.
The proposed pact had triggered a row as it
was feared to incur heavy loss to the board.
As per the proposal, the board was expected
to renew a pact it had signed with Bombay
Suburban Electricity Supply (BSES) Kerala
Power Limited on May 3, 1999, for 10 more
years. The board turned down the proposal
on the premise that it was financially
unviable. The board is the only client of
UP wants 100 percent coal linkage for thermal power plants
In the backdrop of Uttar Pradesh Inc
complaining about steep power tariffs, the
state government has urged the Centre to
increase the coal linkage for its thermal
power plants from 65% to 100%. The
government said enhancing coal linkage
would benefit power plants both in the
state sector and those operated by private
companies viz. Reliance Power, Bajaj
Hindusthan, Lanco, Jaypee etc, which were
set up after 2009 under a special package.
The government claimed ramping up coal
linkage to 100% would reduce the per unit
cost of energy generation and thus eliminate
accumulated losses of the state power
distribution companies (discom). According to
performance does not improve. Power
Minister Satyendar Jain had written to
Anil Dhirubhai Ambani Group chairman
Anil Ambani, recently, over atrocious
performance and the unprecedented
power outages across the national capital.
Jain also had asked him to come down to
the city for a meeting, alleging that the
discoms that supply power to nearly 70
per cent of the city have started fudging
data to show improvement following stern
warnings from the government. BSES
entities BRPL (BSES Rajdhani Power
Limited) and BYPL (BSES Yamuna Power
Limited) supply electricity to around 12 lakh
and 16 lakh customers respectively.
the naphtha-based power station with an
annual generating capacity of 1,100 million
units. After drawing about 70 per cent of the
power generated at the station in 2003 and
2004, the board had consistently reduced its
dependency and had not tapped the source
for long.
National
Maharashtra: New law to curtail
exodus from State power grids
Concerned over industrial units moving
out of its electric grids, the state
government has decided to enact a
legislation regulating large users from
buying cheaper power from the open
market. The move is likely to spark
a controversy since it also envisages
imposing a heavy duty on industries
that choose to abandon the government
grid and move to an Open Access
mechanism. Under the Electricity Act,
2003 the Open Access system allows
large users of power, typically with a
load of 1 MW and above, to buy cheaper
power from the open market. Minister
for Energy Chandrashekhar Bawankule
said the Maharashtra government
is likely to incur losses of about Rs.
5,000 crore following the decision of
as many as 500 major industries to
move out of the state-run Maharashtra
State Electricity Distribution Company
(Mahavitaran) grid.
officials, discoms were reeling under losses
and for making additional coal available
to power plants at reasonable costs was
imperative to reducing cost of generation. In
March 2016, Coal India Limited (CIL) had
increased coal prices by Rs 170 per tonne.
Besides, additional levies of Rs 24 per tonne
and Rs 200 per tonne were imposed as coal
royalty and clean energy cess respectively.
These factors had contributed to the increase
in energy costs, since coal availability and
prices have a direct bearing on the cost of
generation. Earlier, UP had made budgetary
provisions of nearly Rs 40,000 crore to issue
bonds to discoms under Ujjwal Discom
Assurance Yojna (UDAY).

Pakistan on track to end power shortages within two years
Pakistan could end energy rationing
within two years, the Asia Development
Bank (ADB) country director for Pakistan,
adding weight to government claims that
they will end frequent outages in time
for the 2018 elections. Analysts say if
Prime Minister Nawaz Sharifs government
Private power firms to play greater role in Indonesia
Indonesian President Joko Widodo has
reiterated the governments intention for
private investors to play a greater role in his
administrations ambitious 35,000 megawatt
(MW) electricity procurement program after
state-owned power company PLN declined
to work on some of the projects assigned to
it. Jokowi mentioned geothermal and micro
hydro as the main types of power generators
in which private companies can invest,
although according to the development plan,
hydroelectric plants should be mostly built
by PLN for a total capacity of 1,389 MW,
while the private sector, independent power
producers (IPP), would only be responsible
$3.3bn joint venture launched to tackle Africas power shortage
Africa Finance Corporation (AFC), a
Nigeria-based finance specialist and
South African institutional investor Harith
General Partners have announced the set
up of a joint venture that will pool USD
3.3 billion in assets to supply power to
over 30-million people across ten African
countries. The merged companys more
than 1,500 megawatts of capacity either
installed or under construction, would make
it the continents seventh biggest electricity
generator if it was a country. Currently, there
are about two dozen countries in Africa
with an average power capacity of 200
megawatts each leaving some 620 million
people without electricity. The partnership
manages to eradicate load-shedding, the
electricity rationing system which leads
to several hours of scheduled outages
every day, it would significantly boost
his chances of securing another term
in office. Pakistans economy has been
hobbled by energy shortages over the past
decade, with businesses saying they deter
foreign investment and hurt productivity.
Electricity shortages were among the main
election issues in the 2013 poll won by
Sharif. ADB is lending Pakistan more than
$1 billion over five years as part of efforts
to end Pakistans chronic energy crisis and
implement reforms such as privatising
parts of the sector and improving
transparency.
for 582 MW. His directive came as PLN and
the Energy and Mineral Resources Ministry
are having disagreements over several
projects and pricing policies.
the largest and best structured renewable
held within one consolidated joint venture,
July 2016
www.InfralinePlus.com
International
CASA-1,000 power project: European
firms vying to set up converter stations
Three well-reputed European companies
have submitted bids and expressed
interest in setting up converter stations
in Tajikistan and Afghanistan for
transmitting electricity under the Central
Asia South Asia (Casa) 1,000 power
supply project that will link the two
regions through an energy corridor. The
three companies that responded to the
invitation for fresh bids are Switzerland-
based ABB, Germanys Siemens and
Alstom of France, which have expressed
interest in setting up two converter
stations in Tajikistan and Afghanistan.
The number of converter stations has 7
been reduced from three to two which
will bring down cost of the project. Bids of
these companies are being evaluated and
no decision on the award of contract has
been taken so far. Earlier, the joint working
group and the Intergovernmental Council
of the Casa-1,000 project met in Almaty
in April 2016, where they examined the
sole bid received for establishing three
converter stations.
underlines increasing efforts by private
investors to combine portfolios of African
plants and grids across several countries,
both to make them more financially flexible
and in response to the scale of the regions
power deficit as cities and populations
expand. As a result of this merger, some of
and conventional electricity projects in
Africa during the last decade will now be
alongside the requisite development
experience and expertise as well as equity
capital for similar future projects, said
Harith CEO Tshepo Mahloele.
 July 2016
www.InfralinePlus.com

InConversation
Reasonable tariff hike need
of the hour
After coming into power in May 2014, the NDA government
has taken various measures to address bottlenecks impacting
viability of the electricity sector and restore investors confidence.
However, demand for electricity still remains sluggish. Power
plants are operating at low PLFs, leaving a significant capacity
unutilised. In an interview to Infraline Plus, Anil Sardana,
Managing Director and CEO, Tata Power, shares his suggestions
to make the power sector vibrant. Excerpts:

Demand for electricity has been
sluggish in recent years. How do
you see power demand growth in
the medium term?
A recent assessment conducted by the
8 Ministry of Power has concluded that
to keep investing in the sector so that
energy is readily available when the
country becomes energy hungry in
2019-2020 and beyond. Indias long-
term energy demand is expected to be Anil Sardana, Managing Director and CEO,
the highest in the world. By 203035, Tata Power

India wont need any new power plants
for the next three years as it is flush
with generation capacity. According to
the government, the country has power
plants with capacity to generate 300
GW. These are operating at 64% capac-
ity because of poor off-take by discoms.
Indias per capita power consumption
of 1,000 KW hour is one third of the
global average. If we have to improve
power consumption, it is the distribution
sector that has to ensure that it caters
to consumers on a 24x7 basis. It is the
distribution business which has the re-
sponsibility to make sure that industries
set up upstream investments in manu-
facturing and create more jobs. If that
doesnt happen, the per capita power
consumption increase is doubtful.
It is predicted that demand for
electricity is likely to pick up after
2019 as the Ujwal DISCOM Assurance
Yojana (UDAY) scheme and village
electrification programmes start
yielding results. However, given the
fact that power plants take a long time
to be commissioned, it is important
energy demand in India is projected
to be the highest among all countries
according to the 2014 energy outlook
report by British oil giant, BP. Another
study suggests that if India grows at
an average rate of 8% for the next 10
years, the countrys demand for power
is likely to soar to around 315 to 335
GW by 2017. Therefore, despite the
fact that present generation capacity
is seemingly enough to take care of
our current electricity requirement,
investment in the sector is key to being
prepared for the future.
What are the key factors that you
think will drive power demand
growth in coming years?
The power needs of the country are
being met adequately as per statistics
available from various government
authorities. However, the countrys per
capita consumption still hovers around
1000kwh/per person/per year. This is
one third of global average. As of FY
2015-16, India declared a peak power
shortage of only 4,208 MW. Eyeing a
target demand of power supply of 335
GW, India will require a generation
capacity of approximately 440 GW.
This implies that we need to have an
annual addition of 20 to 40 GW. This is
a challenge to sustain.
The domestic coal shortages were
addressed during the year. However
there are several generating stations
which have to either import or buy under
e-auction to meet their requirements as
they are not being allocated coal. This
resulted in increasing non-utilisation of
assets that are already built and would
distract new capacity additions.
Another major challenge in the
sector is the shortage of natural gas.
This shortage has stranded gas-based
power projects with a combined
capacity of around 18,903 MW,
accounting for about 9 per cent of total
generation capacity. There is a need to
evolve a robust energy security policy
for the country so that guidance can be
given to all State Regulatory commis-
sions to plan bulk supply procurement

in line with basket of fuels that meets
Indians energy security needs.
Besides fuel, slow pace of distri-
bution reforms is another key concern.
Power distribution still remains a
segment that needs immediate policy
reforms and a combination of tariff
increases to reflect the increasing cost
of fuels & depreciating rupee, compe-
tition & open access and enforcement
of the obligation to service going
forward. The distribution segment
caters to 200 million consumers with a
connected load of 400 GW, comprising
one of the largest customer bases in
the world. However, high financial
losses of the discoms are hampering not
just the electricity distribution but are
almost becoming a question mark for
generation capacity addition in India.
Also, creation of Regulatory Assets in
the books of a distribution company is
another serious development and has
dried up ability of discoms to source
incremental bulk power. The Central
Government has however invested
tremendous efforts through UDAY
scheme, and it is hoped that State Elec-
tricity Boards should be able to tide over
the crisis of Discom in next few years.
Another key impediment to growth
of the power sector is the commitment
of states to support the developers in
obtaining clearances, land acquisition
free of encumbrances, etc. Without
states engagement, developers would
find it difficult to bring to fruition their
investments.
Do you think the government
is going slow on coal sector
reforms? Can the target of 1.5
billion tonne of coal production
by 2019 be achieved without
private participation in
commercial coal mining?
Rationalisation of existing coal linkages
to optimise distances for rail movement
has been an issue we have been talking
about. The new government also laid
emphasis on focusing on enhancing
Setting up power plants
is capital intensive
and there is usually a
high gestation period
associated with com-
missioning a plant. High
domestic interest rates
are a challenge for proj-
ect developers. For this
reason, large capacity
addition by companies
is known to have been
financed using interna-
tional financing sources
coal-linkages across the country. The
government, on its part, needs to take
measures to develop a conducive and
enabling policy framework by introduc-
ing an independent coal regulator to
oversee mine planning and develop-
ment, adherence to investment plans and
compliance with production schedule to
finally, building a road map to introduce
commercial mining.
The plant load factor (PLF) of
coal-fired plants has been low in
recent years. How do you see it?
India has many coal fired power plants,
which have been operational for
decades now. The efficiency and plant
load factor (PLF) has been deteriorat-
July 2016
www.InfralinePlus.com
ing. It is being debated that perhaps
the reason for the low PLF could be
reflective of the paradigm shift in the
power generation basket in India and
the increased share of renewables in
the energy kitty.
How easy it is to mobilize funds
for power project financing at 9
present?
Setting up power plants is capital
intensive and there is usually a high
gestation period associated with
commissioning a plant. High domes-
tic interest rates are a challenge for
project developers. For this reason,
large capacity addition by companies
is known to have been financed using
international financing sources like
IFC and US EXIM bank. For projects
with international loans, the principal
and interest payments are to be made
in the currency of the loan and due to
weakening Indian rupee the cost of
funds becomes high. In many cases,
this nullifies the cost advantage project
developers hoped to enjoy by opting
for a lower non-Indian cost of capital.
As far as projects involving the
REC mechanism are concerned, both
international and national banks are
unwilling to lend. Of course, with
renewable energy, because of the
importance attributed to RE capacity
addition by the government there are
several schemes and programmes
 July 2016
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InConversation
which provide financial assistance to
project developers. Moreover, devel-
opment of decentralized renewable
solutions and off-grid technology is
making development of RE capacity
commercially viable without the
need for subsidies. Given the scale of
Indias peaking power requirement
and the absence of any other com-
mercial solution, it is an ideal setting
to encourage decentralized renewable
solutions coupled with storage.
World Bank report says
investment in public-private
partnership (PPP) infrastructure
projects in 2015 was the lowest
in last ten years. Does it reflect
private sectors waning interest
in PPP model and if so, what are
the main causes?
We believe PPP model is a great model
for bringing in distribution reforms in
10 the country. PPP Model in the distri-
bution of electricity encompasses all
functions and obligations relating to
distribution of electricity in a license
area. The concessionaire, selected
through competitive bidding, would be
responsible for maintenance, operation
and up-gradation of the distribution
network and for supply of electricity
to the regulated consumers. Reduc-
tion of AT&C losses, improvement in
quality of power supplied, strengthen-
ing of distribution network, improved
customer satisfaction and introduction
of competition through open access
are some of the salient features of
this model. A successful execution
of Public Private Partnership can be
seen through the functioning of the
Tata Power Delhi Distribution Lim-
ited (TPDDL). The organization is a
joint venture between the Tata Power
Company and the Government of Delhi
and has bought tremendous value by
bringing down AT&C losses to less
than 10% from 52% in record time.
Further, in Gujarat, the PPP concept
for providing boost to the rooftop solar
programme is a successful example in
order to achieve the targets and ensure
capacity addition within city limits.
across the country, unhindered
The government has proposed
to set up faster dispute
resolution mechanism including
renegotiation of power purchase
agreement (PPA) to boost
confidence of private players.
How do you see it?
Risk associated with fuel cost fluctua-
tions is increasingly becoming prob-
lematic for parties to PPAs. Therefore it
is encouraging to see that the govern-
ment is considering setting up faster
dispute resolution mechanism includ-
ing renegotiation of PPAs. Relooking at
PPAs is important when the viability of
a project itself is questionable. Such a
move will be in keeping with the objec-
tive of both the National Electricity
Policy and the Tariff Policy which is to
ensure financial viability of the sector.
This means that if the circumstances
demand, necessary interventions may
be made by the various authorities to
achieve the object of the policies.
Are you satisfied with power
tariff hikes announced by
discoms post UDAY?
The discoms need to stay visible after
UDAY and hence reasonable tariff hike
is a need of the hour.
How far away is India from
the situation where electricity
transfer can happen seamlessly
by transmission bottlenecks and
restrictions from discoms?
The power transmission sector in the
country has seen robust capacity addi-
tion in 2015-16. As per the CEA, be-
tween April15 to November15 at an all
India level 15,721 Ckms of transmission
lines have been added in the +/- 500 KV
HVDC, +/- 800 KV HVDC, 765 KV,
400 KV and 220 KV voltage level. As
on September 30, 2015, total transmis-
sion lines added (AC and HVDC) is
3,29,158 ckms. Target for March 31,
2017 is 3,64,921 ckms. In comparison,
in the complete financial year 2014-15
around 18,000 ckms of lines were added
at the 220 kV and above voltage levels.
The present government is com-
mitted to removing the bottlenecks in
electricity generation, transmission and
distribution. Issues high on the govern-
ments agenda include turning around
state power distributors, ensuring
affordable supply of coal and natural
gas, expanding renewable energy
capacity and taking electricity to the
remaining over 18,000 un-electrified
villages by 1 May 2018. Given the
political will to reform the sector,
the time when electricity transfer can
happen seamlessly is not far away.
For suggestions email at feedback@infraline.com

InDepth
Time to give hydro power a
serious look
India has the potential to build hydel projects worth 1.5 lakh MW
Private players lack the wherewithal to handle new hydel projects needing high capital expenditure
By Team InfralinePlus
The share of hydropower continues to
fall in Indias power consumption as
majority of new hydel projects remain
grounded while thermal generation
capacity is being added at a brisk pace.
This is an alarming trend given that
hydropower is not just a clean source
of energy but also well-suited for meet-
ing peak-hour electricity requirement.
What is most disconcerting is the dry-
ing up of new projects for central hydro
PSUs who have traditionally handled
such projects. Private players have
bagged majority of new hydel projects
but are unable to implement them due
to various constraints.
What has led to this situation is
upfront premium charged by states
for allocation of new hydel projects.
Since central PSUs are not allowed
to pay such premium, they stay away
from bidding for hydel projects. But
July 2016
www.InfralinePlus.com
11
private players lack the wherewithal
to handle these projects which need
high capital expenditure and also
pose implementation challenges due
to involvement of geological and
hydrological surprises.
Another problem hampering
harnessing of hydro resources is the
fact that hydel projects are mostly
located in remote and inaccessible
areas which lack connectivity.
 July 2016
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InDepth
Transporting machinery and
manpower to these areas is often quite
challenging. Land acquisition hurdles
and environmental clearance issues
have further complicated the situation
for hydropower developers. Land
acquisition hurdles, environmental
clearance issues, lack of long-tenure
financing and reluctance of states
to commit power off-take are the
biggest impediments to the growth of
hydroelectricity, said Ashok Khurana,
director general, Association of Power
Producers, a body of private power
companies.
Declining share of hydro a
concern
From 50.62 per cent in 1962-63, the
share of hydropower has now fallen to
15.2 per cent and could dip below 10
per cent coming years. The Parliamen-
tary Standing Committee on Energy
has expressed concern over the falling
12
share of hydropower in countrys elec-
tricity consumption. India has the po-
tential to build hydel projects worth 1.5
lakh MW. Besides, there is additional
potential of 96,000 MW pump storage
projects. Against that, only 43,000 MW
has been added. The share of private
sector in hydropower generation stands
at a meagre 7.43 per cent.
When asked by the House panel
about the low share of private sector
in hydropower generation, the Union
power ministry said: Hydropower
power development involves large
capital investment and has a longer
gestation period than other types
of power projects (Thermal/Wind/
Solar). These projects also involve
risk and challenges during execution
that is, geological risks due to young
From 50.62 per cent in
1962-63, the share of
hydropower has now
fallen to 15.2 per cent
and could dip below 10
per cent coming years.
The Parliamentary
Standing Committee on
Energy has expressed
concern over the falling
share of hydropower
in countrys electricity
consumption. India has
the potential to build
hydel projects worth
1.5 lakh MW
Himalayan mountains, remote
locations and poor infrastructure,
adverse weather conditions, local
issues, environment and forest issue,
land acquisition problems, natural
calamities like flash floods, cloud burst,
earthquake, etc.
The panel has made a strong pitch
for discontinuing this practice of
premium payment for allocation of
hydel projects so that PSUs could
come forward to implement such
projects. Power Minister Piyush
Goyal has admitted that uncertainties
are keeping investors away from
hydel projects. Many hydel power
projects are facing hurdles, resulting
in long delays and stoppage of works,
Goyal recently told the Lok Sabha.
Private players have bagged a large
number of projects allocated by
Arunachal Pradesh and other states
in the past decade but unable to
execute them for lack of financing
or due to other constraints. NHPC
has come forward to buy these
stranded projects but it wants private
developers to take a dent for deals to
go through.
Slow capacity addition
India added 108 GW of new genera-
tion capacity in the last five years,
which has led to power deficits declin-
ing from 12.2 per cent of peak demand
in 2001-02 to 2.6 per cent in 2015-
16. However, deficits are again seen
rising in coming years, with forecast
by consulting firm PWC showing that
demand will continue to outpace sup-
ply until 2022.
Another alarming thing is the
drastic fall in plant load factor (PLF)
of thermal power plants. Further,
as per PWC analysis, considering
an energy elasticity of 0.8, India is
estimated to require about 7 per cent
annual growth in electricity supply to
sustain a GDP growth of 89 per cent.
For the country to achieve its target
of 1,800 unit per capita consumption
and electricity access for 300 million
 July 2016
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people by 2034, it will require an

additional power supply capacity of
450 GW.
Currently, Indias power
generation landscape has largely
been dominated by coal-based
generation, accounting for nearly
70 per cent of the total installed
capacity and over 80 per cent of
the total units generated in the
country. This higher dependency on
thermal generation sources poses a
serious threat to energy security in
terms of fuel availability, long-run
economic viability and environmental
sustainability, PWC has warned.
According to another report from
Crisil, about 46,000 MW coal-
based capacity remains stranded
due to fuel shortage, creating a big
headache for banks which have lent attract private investment. In a bid to
to these projects. Thus, availability According to another incentivise purchase of hydropower,
of reliable, affordable and sustainable report from Crisil, the New Tariff Policy has exempted
electricity is an essential requirement about 46,000 MW coal hydel projects from compliance 13
for propelling the India growth story with RPO. Accordingly, solar power
and all potential sources of energy
based capacity remains purchase obligation for a state will be
will need to be tapped to meet the stranded due to fuel calculated after deducting its hydro-
envisaged demand and ensure its shortage, creating power capacity.
energy security. Hydropower, with an Hydel projects have a special type
abundant potential of around 148 GW,
a big headache for of tariff framework in which tariff is
can substantially contribute towards banks which have higher in the first year and it gradually
meeting the energy needs of the lent to these projects. falls as loan is repaid and depreciation
country, says PWC. Thus, availability of comes down. Because of high tariff in
India has been slow in harnessing initial years, states have been reluctant
its hydro resources for electricity reliable, affordable to buy power from hydel projects. In
generation. It has utilised about and sustainable a bid to overcome this problem, the
28 per cent of 1.45 lakh MW electricity is an government has given developers the
hydropower potential compared with flexibility to modify the depreciation
69 per cent in Canada and 48 per cent
essential requirement rate so that tariff is either flat or it
in Brazil. The Union power ministry for propelling the India increases as time passes. Meanwhile,
has envisaged capacity addition of growth story the power ministry has set up two
10,897 MW based on hydropower sub-committees to examine the overall
during the current Twelfth Fie-year legal and regulatory framework of
Plan (April 2012-March 2017). Measures taken by hydropower.
Against that, only 3,793 MW has Government The ministry is also working on
been added till the end of March The government has increased financial a takeout financing scheme to revive
2016, which is nearly one-third of allocation and it also plans to set up a stalled under-construction projects. In
the targeted capacity addition. This is dedicated hydropower development India, water is a state subject and there is
in line with the trend in hydropower fund to improve the investment attrac- a lot of litigation going on over sharing
capacity addition during the Eleventh tiveness of the sector. The government of water from inter-state rivers. Because
Five-year Plan when just 40 per cent has also extended cost-plus regime of litigation, it is not possible to harness
of the targeted capacity was added. for hydel projects till 2022 in a bid to generation potential of these rivers.
 July 2016
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InDepth
Harnessing generation potential
of a river requires consent of
states that would impacted by the
particular project. This is a time-
consuming process that hinders
integrated river basin development
for hydropower projects. A large
number of hydropower projects are
held up due to inter-state disputes
on water sharing. The Sutlej-Beas
dispute between Punjab and Haryana
and the Mullaperiyar Dam conflict
between Kerala and Tamil Nadu
are some of the examples of water-
sharing disputes between states. The
dispute between Assam and Arunachal
Pradesh on the division and utilisation
patterns of the Brahmaputra river is
another example.
However, now political consensus
seems to be gradually emerging
over bringing water within Centres
ambit on realisation that inter-state
14 differences over water-sharing from
common rivers could create situation of
civil wars if left to fester.
Policy ideas like Hydropower
Purchase Obligation and differential
tariff for hydel projects mooted by
the Union power ministry have failed
to gain traction due to opposition
from several states, especially those
who lack hydropower potential. For
example, Chhattisgarh and Odisha,
both of which heavily rely on thermal
power, have stated their difficulties
in complying with such a policy.
Others have opposed the policy on
the ground that they are already hard-
pressed to comply with Renewable
Purchase Obligation. The Land
Acquisition Act of January 2014 is an
Harnessing generation
potential of a river
requires consent of
states that would
impacted by the
particular project. This
is a time consuming
process that hinders
land. On the other hand, according to
integrated river basin
development for hydro
power projects. A large
number of hydro power
projects are held up
due to inter-state
disputes on water
sharing
attempt to address some of the social
inequities in the existing framework
of land acquisition. However, some
changes were proposed in the Act
through the New Land Acquisition
Bill 2015 to make land acquisition
acceptable for both land owners and
developers.
Way forward
But some issues need to be addressed
to smoothen land acquisition process
for hydel projects. For one, resettle-
ment and rehabilitation (R&R) provi-
sions are not mandatory in the case of
private purchase of land of less than
100 acres in rural areas and 50 acre in
urban areas. These provisions enable
the developer to buy land in multiple
parcels of less than 100 acre and avoid
R&R in acquisition of agricultural
experts, instead of addressing issues
related to responsible development
and benefit sharing, the Social Impact
Assessment processes sometimes
cause delays.
However, the New Land
Acquisition Bill has sought the
exemption of SIA for critical
infrastructure projects which may
benefit the developer but can also cause
delays due to protests from NGOs and
local people. Public sector companies
do not require any public consent
for acquiring land which gives them
advantage over private investors and
could also lead to protests, causing
delays for projects undertaken by the
public sector.
The New Land Acquisition Bill
aims to sort out this issue by allowing
exemption for both public and private
developers. However, the acquisition
process needs to be strengthened to
prevent misuse of land by private
entities, says PWC.
For suggestions email at feedback@infraline.com

InDepth
Exchange of energy saving certificates
to open up energy efficiency market
Draft regulations issued by CERC to trade energy certificates
Market price to be discovered through bidding at power exchanges
By Team InfralinePlus
Energy is of strategic importance
for any nation, particularly because
of economic growth, escalating
population and commitments for
inclusive socio-economic develop-
ment. Recognizing the formidable
challenges of meeting the energy
needs, providing adequate and varied
energy of desired quality to users in a
sustainable manner and at reasonable
costs and improving efficiency has
become a significant issue for India.
In order to cater to these challenges,
the Government has undertaken a two-
pronged approach. On one hand, on
the generation side, the Government is
promoting greater use of renewable in
the energy mix mainly through solar
and wind and at the same time shifting
towards supercritical technologies for
coal-based power plants. On the other
hand, efforts are being made to ef-
ficiently use the energy in the demand
side through various innovative policy
July 2016
www.InfralinePlus.com
15
measures under the overall ambit of
Energy Conservation Act 2001.
The Energy Conservation Act (EC
Act) was enacted in 2001 with the goal
of reducing energy intensity of Indian
economy. The EC Act laid down the
footing of energy efficiency in India
by providing a legal mandate for the
implementation of energy efficiency
measures. Bureau of Energy Efficiency
(BEE) was set up as the statutory body
at the central level to facilitate the
 July 2016
www.InfralinePlus.com

InDepth

implementation of the EC Act. In June energy saving and avoidance of CO2 cement, fertilizer, textile, pulp and
2008, the Central Government released for public benefit. A key premise of the paper, chloralkali and aluminum along
the National Action Plan on Climate scheme is to incentivize the industry to with the specific energy reduction
Change (NAPCC) which in turn achieve improved energy efficiency, as targets assigned to each of these.
released eight Missions, one of which compared to defined SEC improvement The instruments which have
was the National Mission for Enhanced targets, in a cost-effective manner. emerged for improving the overall
Energy Efficiency (NMEEE). PAT scheme establishes a market energy in recent times are energy
NMEEE laid emphasis on pro- to achieve dual objectives of financial saving certificates (ESCerts). ESCerts
moting innovative policies and incentives, thereby reducing cost are issued by an authorized body to
regulatory regimes for creating and and compliance of energy efficiency designated consumers after guaran-
sustaining markets for energy effi- targets, through certification of energy teeing that a stipulated amount of
ciency to be achieved in a time bound savings that can be traded. The indus- energy savings has been achieved and
schedule. One of the initiatives under trial units in the eight sectors whose has entered the Indian Energy Effi-
the NMEEE was the introduction of energy consumption are exceeding a set ciency mandate. The PAT Rules specify
the Perform Achieve and Trade (PAT) threshold level are chosen as the des- that transactions of ESCerts issued
Scheme which is a market based ignated consumers. The PAT scheme to eligible entities have to be done
mechanism to help improved energy covers such 478 designated consumers through the Power Exchanges. Since
efficiency in energy intensive sectors, in the eight sector that are thermal the power exchanges are regulated
thereby contributing to substantial power stations, iron and steel plants, by CERC so the Ministry of Power
advised CERC to issue necessary
As per draft regulations, Bureau of Energy Regulations / Orders/Guidelines for
development of market of ESCerts
Efficiency will act as the administrator of
and facilitate its trading / exchange on
16
ESCerts and shall coordinate with the Power Power Exchanges.
Exchanges, disseminate relevant market The Commission has proposed to
information to stakeholders, issue a detailed make Central Electricity Regulatory
Commission (Terms and Conditions for
procedure of eligible entities, exchange, Exchange of Energy Savings Certifi-
transfer, banking, ensure exchange of ESCerts cates), Regulations, 2016 to facilitate
in a transparent manner and registry for smooth the trading mechanism of ESCerts
on the Power Exchanges. Accord-
interface for exchange of ESCerts ingly, draft regulations to define the
framework of exchange of ESCerts
on the Power Exchanges have been
notified. As per draft regulations,
Bureau of Energy Efficiency (BEE)
will act as the administrator of ESCerts
and shall coordinate with the Power
Exchanges, disseminate relevant
market information to stakeholders,
issue a detailed procedure of eligible
entities, exchange, transfer, banking,
extinguishment of ESCerts, ensure
exchange of ESCerts in a transparent
manner and registry for smooth
interface for exchange of ESCerts.
The reduction targets shall be set by
the Government in consultation with
BEE under section 14 (a) of the Energy
Conservation Act 2001.
CERC would function as the market
regulator and shall be responsible to
 July 2016
www.InfralinePlus.com

in registration process including

A Snapshot to draft Central Electricity Regulatory
crediting of ESCerts to DCs after
Commission (Terms and Conditions for Exchange of Energy approval from MoP, coordinate and
Savings Certificates) Regulations, 2016 disseminate information with DCs,
yy Eligible entities-Designated consumers as notified by BEE Power Exchanges, BEE and CERC,
yy Nodal Agency for registration of ESCerts- POSOCO develop methodology for settlement
yy Trading platform-Power Exchange of trades with all operating power
yy Denomination of ESCerts-1 MToE of energy saved exchanges, tracking transactions
yy Pricing of ESCerts-Purely market determined price, no floor and & ownership of ESCerts, handling
forbearance price being proposed redemption and record keeping of
banking of ESCerts. POSOCO will
approve the procedure for interface directions to the Bureau in regard to also provide assistance in devel-
activities between Power Exchanges the discharge of its functions related to opment of IT platform along with
and registry, administrator and registry, exchange of ESCerts. guidance on hardware infrastructure
and registry and designated Consumer Considering POSOCOs expe- for maintaining database and records
in pursuance of the Energy Conser- rience with regard to REC trading, it of trading of ESCerts and prepare the
vation Rules. CERC is also vested with has assigned the function of registry draft procedure in accordance with
power to monitor the operations and of ESCerts trading for the exchange draft Regulations 6 (a) for approval
performance of Power Exchanges with of ESCerts on the Power Exchanges. of the Commission.
regard to exchange of ESCerts, issue POSOCO will provide assistance The draft regulations clearly
state the possibility of new
exchange-based products following
The draft regulations clearly state the possibility consultation with BEE and approval
of new exchange-based products following of CERC. Frequency of the trading 17
consultation with BEE and approval of CERC. sessions shall be monthly. Eligible
entities that may be in addition to the
Frequency of the trading sessions shall be defined designated consumers will
monthly. Eligible entities that may be in addition not be able to place sell bids for more
to the defined designated consumers will not be than the ESCerts available in their
registry accounts.
able to place sell bids for more than the ESCerts The draft regulations do not
available in their registry accounts mention any price or price band
for the ESCerts. Each ESCert is
equivalent to one metric ton of
oil equivalent of energy (MTOe)
consumed. Also the designated
consumer would be issued ESCerts
in electronic form. The market
price shall be as discovered
through the process of bidding at
power exchanges. There exists an
enormous potential in India as far
as achievement of energy efficiency
is concerned and it is up to the
Indian policy makers, regulators and
obligated entities to ensure that India
realizes this potential to the fullest.
This initiative has the potential to
open up energy efficiency market
among energy intensive industries.

For suggestions email at feedback@infraline.com

 July 2016
www.InfralinePlus.com
FinancialResults
Tata Power Q4 net doubles to Rs 360 crore
Tata Powers net rose sharply by 126 per
cent to Rs 360.25 crore for the quarter
ended March 31, 2016, due to strong
operational performance, against Rs 159.14
crore of the corresponding quarter last year.
Total income from operations increased by
18 per cent to Rs 9,375.16 crore against Rs
7,907.64 crore. The revenue from power
business surged to Rs 7,025.14 crore against
Rs 5,996.54 crore, a 17 per cent increase
while the revenue from coal business
Reliance Power Q4 net up 16% at Rs 320 crore
Reliance Power reported 15.8 percent rise
in consolidated net profit at Rs 320.16
crore for the fourth quarter ended March
18 31, 2015-16 on the back of higher power
generation. It had posted net profit of Rs
276.47 crore in the January-March quarter
of 2014-15. Its income from operations of
company during the quarter increased to
Rs 2,604.85 crore, as against Rs 1,635.61
crore in the year-ago period. The Anil
Ambani group firm posted a net profit after
taxes, minority interest and share of profit
of associates of Rs 1,361.94 crore for the
entire 2015-16 fiscal as compared to Rs
1,028.32 crore for the year ended March
31, 2015. Total income increased from Rs
7,202 crore for the year ended March 31,
2015 to Rs 11,038.50 crore for the year
ended March 31, 2016. R-Power said the
GVK Power Q4 loss widens to Rs 408 crore
GVK Power and Infrastructure reported
widening of consolidated net loss to Rs
407.70 crore for the March quarter. The
company had posted a net loss of Rs
108.66 crore in the January-March period
of 2014-15 fiscal. However, net sales
increased to Rs 1,081.16 crore in the same
quarter of 2015-16 fiscal as against Rs
846.30 crore in the year-ago period. Total
expenses rose to Rs 969.37 crore compared
with Rs 634.22 crore in the same period
a year ago. The figures of last quarter
increased by eight per cent to Rs 2,023.75
crore against Rs 1,873.11 crore. The board
of directors has recommended dividend of
Rs. 1.30 per share. The company proposes
to increase non-fossil sources at 30-40 per
cent by 2025, up from its earlier target of 20
per cent, and has set a target of 20,000 Mw
of total capacity. CEO and MD Anil Sardana
said, The Companys relentless focus on
operational improvements have shown great
results. All our subsidiaries and plants have
shown strong performance despite very
challenging circumstances. Also Appellate
Tribunal for Electricity decision is a welcome
development & we hope that Central
Electricity Regulatory Commission (CERC)
would help resolve the impending issue
of fuel-under recovery at CGPL (Mundra
UMPP) soon.
3,960 MW Sasan UMPP in Madhya Pradesh
generated 31,261 million units operating
at availability of 90 percent. The captive
coal mines of Sasan UMPP produced 17.02
million tonnes of coal. The company said
its 1,200 MW Rosa power plant in Uttar
Pradesh generated 7,060 million units
operating at availability of 93 percent.
The 600 MW Butibori Power Plant in
Maharashtra generated 4,022 million units
operating at availability of 97percent, the
company said.
for the current year and previous year are
the balancing figures between the audited
figures in respect of the full financial year
Jaiprakash Power Q4 loss at Rs 353
crore
Jaiprakash Power Ventures Ltd
reported a net loss of Rs.352.85 crore
for the quarter ended March against
Rs.141.54 crore a year ago. Net sales
for the quarter fell 26.62% from a year
ago to Rs. 669.01 crore. The figures of
the current quarter are not comparable
with figures of the last year as the
company sold its 300 MW Baspa and
1091 MW Karcham Wangtoo HE Plant
on 1 September 2015 to JSW Energy
Ltd. The finance cost of the company
fell 32.3% to Rs.463.25 crore. Currently,
the company has aggregate power
generation capacity of 2220 MW which
comprised hydro and thermal. The
company said its results were impacted
on the non availability of coal in its
1320 MW Jaypee Nigrie Super Thermal
Power Plant due to pending final tariff
determination which restricted the op-
erations as long term power purchase
agreements are yet to be tied up. The
company also said that the generation
of Bina thermal power plant has been
adversely affected due to backdown
instructions from state load dispatch
center from time to time due to lower
demand of power. Besides, the Vishnu-
prayag HE plant was shut down for 20
days in the quarter due to maintenance
of transmission towers.
ended March 31, 2016, and March 31,
2015, and the unaudited published year-
to-date figures up to December 31, 2015,
and December 31, 2014, it added. The
unaudited consolidated published results
year-to-date figures up to the third quarter
ended December 31, 2015, and December
31, 2014, were not subject to limited
review, however, the unaudited standalone
results were subject to limited review, the
company said.
 July 2016
www.InfralinePlus.com

StatisticsPower
List of Under Construction Thermal Power Projects in the country with Anticipated
Commissioning date in 2017
Sl. No. State Project Name / Impl. Agency Unit No Cap. (MW) ACD*
CENTRAL SECTOR
U-2 250 17-Mar
1 Assam Bongaigaon TPP/NTPC
U-3 250 17-Jun
U-1 660 17-Apr
2 Bihar Barh STPP-I /NTPC U-2 660 17-Nov
U-3 660 18-May
U-1 250 16-Apr
U-2 250 17-Mar
3 Bihar Nabi Nagar TPP / JV of NTPC & Rly.
U-3 250 17-Jul
U-4 250 17-Oct
U-1 660 17-Jun
4 Bihar New Nabi Nagar TPP /JV of NTPC & BSPGCL U-2 660 17-Dec
U-3 660 18-Jun
U-1 800 16-Dec
5 Chhattisgarh Lara TPP / NTPC
U-2 800 17-Jul
U-1 800 16-Mar
6 Karnataka Kudgi STPP Ph-I/ NTPC U-2 800 17-Jan
U-3 800 17-Apr
U-3 660 16-Jun
7 Maharashtra Mouda STPP Ph-II/ NTPC
U-4 660 17-Feb
U-1 660 17-Apr
8 Maharashtra Solapur STPP/ NTPC
U-2 660 17-Aug
U-1 800 17-Jun
9 MP Gadarwara TPP/ NTPC
U-2 800 17-Dec
U-1 500 17-Nov
10 TN Neyveli New TPP/ NLC
U-2 500 18-May
11 Tripura Agartala /NEEPCO St-1 25.5 16-Feb
12 UP Unchahar -IV/ NTPC U-6 500 17-Nov
U-1 660 17-Apr
13 UP Meja STPP/ JV of NTPC & UPRVUNL
U-2 660 17-Oct
STATE SECTOR
1 AP Rayalaseema TPP St-IV / APGENCO U-6 600 17-Apr
U-8 250 16-Dec
2 Bihar Barauni TPS Extn./ BSEB
U-9 250 17-Apr
U-3 660 17-Dec
3 Odisha Ib valley TPP / OPGCL
U-4 660 18-Jun
U-5 660 17-Feb
4 Rajasthan Chhabra TPP Extn. / RRVUNL
U-6 660 18-Dec 19
U-7 660 17-Apr
5 Rajasthan Suratgarh TPS/ RRVUNL
U-8 660 17-Jul
U-1 270 17-Nov
U-2 270 18-Jan
6 Telangana Bhadradri TPP / TSGENCO
U-3 270 18-Mar
U-4 270 18-May
PRIVATE SECTOR
U-1 660 17-Dec
1 AP Bhavanapadu TPP Ph-I / East Coast Energy Ltd.
U-2 660 18-May
U-3 600 17-Apr
U-4 600 17-Aug
2 Chhattisgarh Akaltara TPP (Naiyara) / KSK Mahandi Power Company Ltd.
U-5 600 17-Dec
U-6 600 18-Apr
U-3 660 17-Sep
3 Chhattisgarh Lanco Amarkantak TPP-II / LAP Pvt. Ltd.
U-4 660 17-Dec
U-1 270 17-18
4 Jharkhand Matrishri Usha TPP Ph-I / Corporate Power Ltd.
U-2 270 17-18
U-1 660 17-Jun
5 Maharashtra Lanco Vidarbha TPP / LVP Pvt. Ltd.
U-2 660 17-Sep
U-2 270 16-Mar
U-3 270 16-Dec
6 Maharashtra Nasik TPP Ph-I / Ratan India Nasik Power Pvt. Ltd.
U-4 270 17-Feb
U-5 270 17-Apr
7 MP Niwari TPP / BLA Power Ltd. U-2 45 17-18
U-1 525 16-Oct
8 Odisha Malibrahmani TPP / MPCL
U-2 525 17-18
U-1 150 16-Jul
9 WB India Power TPP / Haldia Energy Ltd. U-2 150 16-Nov
U-3 150 17-Mar
* ACD: Anticipated Commissioning Date

Volume of Short-Term Transaction of Electricity (Regional Entity*- Wise) (MUs), April 2016
Through Bilateral Through Power Exchange Through DSM with Regional Grid
Name Of The State/Ut/
Import (Over Export (Under Total Net***
Other Regional Entity Sale Purchase Net** Sale Purchase Net** Net**
Drawl) Drawl)
Punjab 51.6 10.88 -40.72 91.24 171.91 80.67 42.23 64.57 -22.34 17.61
Haryana 71.05 290.08 219.03 150.94 216.29 65.35 28.86 90.65 -61.79 222.59
Rajasthan 206.18 1.97 -204.21 128.81 388.28 259.47 48.75 55.84 -7.09 48.18
Delhi 137.31 39.55 -97.75 55.63 80.52 24.89 26.99 23.63 3.36 -69.51
Uttar Pradesh 2.88 247.15 244.27 0 166.05 166.05 73.07 84.73 -11.66 398.66
Uttarakhand 0.2 189.11 188.91 0 209.17 209.17 25.08 26.33 -1.25 396.84
Himachal Pradesh 91.32 1.55 -89.77 90.36 65.97 -24.39 53.97 10.48 43.48 -70.67
J&K 71.4 17.05 -54.36 13.84 37.34 23.5 0 0 0 -30.85
Chandigarh 0 0 0 2 9.27 7.27 17.32 2.1 15.22 22.49
Mp 152.39 17.3 -135.09 323.99 13.89 -310.1 22.52 69.99 -47.47 -492.66
Maharashtra 5.57 522.65 517.08 81.21 176.7 95.49 34.86 116.64 -81.78 530.8
 July 2016
www.InfralinePlus.com

StatisticsPower
Through Bilateral Through Power Exchange Through DSM with Regional Grid
Name Of The State/Ut/
Import (Over Export (Under Total Net***
Other Regional Entity Sale Purchase Net** Sale Purchase Net** Net**
Drawl) Drawl)
Gujarat 297.51 47.88 -249.63 190.96 395.12 204.16 58.25 44.11 14.14 -31.33
Chhattisgarh 0 301.7 301.7 55.22 18.69 -36.53 45.55 45.63 -0.07 265.1
Daman and Diu 0 0 0 0 38.57 38.57 6.33 4.06 2.28 40.85
Dadra & Nagar Haveli 0 46.24 46.24 0 0 0 1.07 10.21 -9.15 37.09
Andhra Pradesh 85.36 144.72 59.36 7.51 237.93 230.42 45.65 30.99 14.66 304.44
Karnataka 0 23.8 23.8 0 103.49 103.49 71.41 34.28 37.13 164.43
Kerala 0 58.84 58.84 3.8 51.06 47.26 65 2.73 62.27 168.37
Tamil Nadu 0 78.44 78.44 0 19.06 19.06 31.69 82.82 -51.13 46.37
Pondicherry 0 0 0 0 0 0 2.25 6.53 -4.28 -4.28
Goa 0 20.02 20.02 3.47 8.65 5.18 34.44 3.76 30.68 55.88
Telangana 14.83 802.75 787.92 22.29 114.8 92.51 22.83 52.2 -29.37 851.06
West Bengal 22.79 872.16 849.37 55.42 128.88 73.46 35.46 20.94 14.52 937.35
Odisha 38.34 131.35 93.01 65.35 11.32 -54.03 42.45 16.58 25.88 64.86
Bihar 0 195.9 195.9 0 437.56 437.56 105.69 42.7 62.99 696.45
Jharkhand 0 143.16 143.16 0 29.15 29.15 80.71 9.89 70.82 243.14
Sikkim 0 0 0 6.38 0 -6.38 3.09 8.08 -5 -11.38
Dvc 116.75 0 -116.75 129.4 0 -129.4 20.3 49.97 -29.67 -275.82
Arunachal Pradesh 0 0 0 0.6 6.11 5.51 12.46 3.64 8.82 14.33
Assam 0 57.47 57.47 71.99 32.12 -39.87 29.83 23.07 6.75 24.36
Manipur 0.29 3.47 3.17 11.54 1.71 -9.83 2.95 10.5 -7.55 -14.2
Meghalaya 9.2 19.04 9.84 7.91 6.07 -1.84 5.72 7.62 -1.9 6.1
Mizoram 0 0 0 8.46 0 -8.46 3.83 2.73 1.1 -7.36
Nagaland 0 0 0 0 8.27 8.27 5.41 5.69 -0.28 7.99
Tripura 0.37 3.38 3.01 23.4 7.14 -16.25 18.89 5.13 13.76 0.52
Ntpc Stations-Nr 0 0 0 0 0 0 42.43 42.79 -0.36 -0.36
Nhpc Stations 0 0 0 42.21 0 -42.21 5.58 74.71 -69.13 -111.34
Njpc 0 0 0 13.66 0 -13.66 2.91 8.86 -5.94 -19.6
Ad Hydro 2.52 0 -2.52 24.19 0 -24.19 1.4 2.33 -0.93 -27.65
Karcham Wangtoo 27.65 0 -27.65 57.24 0 -57.24 5.44 2.87 2.58 -82.32
Shree Cement 141.44 0 -141.44 46.43 0 -46.43 3.25 1.22 2.03 -185.84
Lanco Budhil 0 0 0 1.47 0 -1.47 1.6 0.36 1.24 -0.23
Malana 0.06 0 -0.06 1.6 0 -1.6 0.43 0.18 0.25 -1.41
Uri-2 0 0 0 0 0 0 0.11 1.62 -1.51 -1.51
Ntpc Stations-Wr 0 0 0 0 0 0 70.75 108.11 -37.36 -37.36
Jindal Power 183.9 0 -183.9 182.32 0 -182.32 4.53 10.48 -5.95 -372.17
Lanko_amk 4.37 0 -4.37 0 0 0 0.08 4.16 -4.08 -8.44
Nspcl 20.59 0 -20.59 0 0 0 3.87 6.78 -2.9 -23.49
Acbil 9.09 0 -9.09 42.77 0 -42.77 3.65 0.97 2.67 -49.19
20 Balco 0 0 0 89.53 0 -89.53 30.42 3.17 27.26 -62.28
Rgppl(Dabhol) 0 0 0 0 0 0 2.94 3.53 -0.6 -0.6
Cgpl 0 0 0 0 0 0 12 13.79 -1.8 -1.8
Dcpp 2.38 0 -2.38 83.03 0 -83.03 2.55 5.61 -3.07 -88.48
Emco 0 0 0 0 0 0 1.83 1.49 0.34 0.34
Vandana Vidyut 0 0 0 0 0 0 0 0.03 -0.03 -0.03
Essar Steel 0 28.91 28.91 0 309.66 309.66 21.96 23.2 -1.24 337.33
Ksk Mahanadi 0 0 0 0 0 0 1 4.34 -3.35 -3.35
Essar Power 4.51 0 -4.51 0 0 0 3.89 0.02 3.87 -0.64
Jindal Stage-Ii 26.5 0 -26.5 32.13 0 -32.13 0 0 0 -58.63
Db Power 336.04 0 -336.04 99.19 0 -99.19 4.12 3.42 0.71 -434.51
Dhariwal Power 0 0 0 40.55 0 -40.55 0.34 0.91 -0.56 -41.11
Jaypee Nigrie 0 0 0 112.54 0 -112.54 9.59 6.53 3.07 -109.47
Dgen Mega Power 0 0 0 0 0 0 2.5 0 2.5 2.5
Gmr Chhattisgarh 89.62 0 -89.62 46.72 0 -46.72 5.76 1.84 3.92 -132.42
Korba West Power 156.66 0 -156.66 114.91 0 -114.91 8.5 2.74 5.76 -265.81
Mb Power 0 0 0 15.81 0 -15.81 10.17 2.41 7.76 -8.05
Spectrum 0 0 0 28.37 0 -28.37 0.23 0 0.23 -28.14
Ntpc Stations-Sr 0 0 0 0 0 0 32.23 15.12 17.11 17.11
Lanko Kondapalli 245.68 0 -245.68 0 0 0 0.81 0 0.81 -244.86
Simhapuri 130.15 0 -130.15 25.26 0 -25.26 2.3 2.09 0.2 -155.21
Meenakshi 56.21 0 -56.21 125.44 0 -125.44 1.78 0.3 1.49 -180.16
Coastgen 220.3 0 -220.3 17.1 0 -17.1 10.87 2.27 8.61 -228.8
Thermal Powertech 281.84 0 -281.84 0.99 0 -0.99 1.56 3.08 -1.52 -284.34
Il & Fs 0 0 0 4.15 0 -4.15 5.22 1.92 3.3 -0.86
Ntpc Stations-Er 0 0 0 0 0 0 98.95 15.65 83.29 83.29
Sterlite 71.94 0 -71.94 148.45 0 -148.45 60.12 1.67 58.45 -161.95
Maithon Power Ltd 0 0 0 3.79 0 -3.79 5.09 6.19 -1.1 -4.9
Adhunik Power Ltd 139.5 0 -139.5 30.74 0 -30.74 10.17 1.12 9.04 -161.2
Chuzachen Hep 0 0 0 25.41 0 -25.41 1.91 5.48 -3.57 -28.99
Rangit Hep 0 0 0 0 0 0 0.66 2.16 -1.5 -1.5
Gmr Kamalanga 358.99 0 -358.99 19 0 -19 10.22 2.83 7.39 -370.61
Jitpl 289.99 0 -289.99 380.4 0 -380.4 15.08 7.69 7.38 -663
Teesta Hep 0 0 0 0 0 0 0.1 8.91 -8.82 -8.82
Dagachu 12.9 0 -12.9 0 0 0 2.54 0.19 2.35 -10.55
Jorethang 0 0 0 13.43 0 -13.43 2.06 1.91 0.16 -13.27
Nepal(Nvvn) 0 53.53 53.53 0 0 0 0 0 0 53.53
Neepco Stations 0 0 0 21.93 0 -21.93 2.98 19.36 -16.38 -38.32
Ranganadi Hep 0 0 0 8.11 0 -8.11 0 0 0 -8.11
Doyang Hep 0 0 0 0.18 0 -0.18 0 0 0 -0.18
Loktak 0 0 0 0 0 0 0.39 0.88 -0.49 -0.49
Total 4188.16 4370.08 181.92 3500.78 3500.78 0 1653.76 1506.14 147.62 329.54
Source: Nldc

* in case of a state, the entities which are selling also include generators connected to state grid and the entities which are buying also include open access consumers.
** (-) indicates sale and (+) indicates purchase,
*** Total net includes net of transactions through bilateral, power exchange and DSM

NewsBriefs
| Coal National
Coal India Ltds first tranche of linkage auction registers low booking
Coal Indias (CILs) first tranche of linkage
auction for the non regulated sponge iron
sector posted a booking of 2.05 million tonne
against the offer of 3.78 million tonne. The
Ministry seeks Cabinet nod for new bidding papers for coal UMPPs
The power ministry has sent a note to the
Cabinet seeking its approval for the new
bidding document for domestic coal-based
ultra mega power projects (UMPPs).
The new bidding document will replace
the old standard bidding document for
the 4,000 MW power projects. The new
bidding document looks at forming two
special purpose vehicles (SPVs) for a UMPP
instead of one as mentioned in the earlier
document. In his 2015 Budget speech,
Finance Minister Arun Jaitley had proposed
to set up five new UMPPs of 4,000 MW
each in the `plug-andplay mode. At
present, the government is eyeing UMPPs
at Bedabahal in Odisha, Banka in Bihar
and Cheyyur in Tamil Nadu.While the first
Coal India Unions call for cess to fund pensions
Coal Indias pension fund is at risk and
set to deplete in five years and workers
have demanded that the government
levy a cess on every tonne of coal sold
as well as increase its contribution which
is capped at Rs 27 per employee. Even
Rs 1 cess on every tonne of coal sold will
raise the pension fund size by at least Rs
50 crore every year. This would double to
Rs 100 crore by 2020 and help adequacy,
said S Q Zama, general secretary, AITUC.
An actuarial study shows that the fund
would run into a negative balance because
outgo on account of pension is higher than
inflow into the fund. The gap will increase
booking has been done for a contract period
of 5 years, which can be extended to 10 years
with mutual agreement between supplier and
the taker. The first tranche of auction was a
low key affair since booking was much lower
than that was offered. Sponge iron plants
across at present draw around 8 mt per
annum from CIL. While the offer was less
than 50% than that of the general demand,
booking was even lower. Besides CIL could
get only 1% premium on the floor price of
coal per tonne. Although the average auction
price per tonne is yet to be worked out coal
price across grades for non regulated sector
is 120% of the notified price of coal for the
regulated sector.
two are based on domestic coal, the third
will operate on imported coal. Differences
between the coal and law ministries over
allocation of mines might delay the award
process of the projects.
July 2016
www.InfralinePlus.com
National
India wants states to buy local coal
but no import curbs planned
The government has asked states to
buy coal from Coal India Ltds growing
stockpiles but wont place curbs on
imports. Coal India, the worlds largest
miner of the fuel, has boosted output
at a record pace over the past two
years, aided by faster environmental
and other clearances under Prime
Minister Narendra Modis government.
Though an age-old coal shortage has
now turned into a surplus, demand
has not grown as fast as expected,
leading to massive mounds of unsold 21
coal and generating speculation
among some industry officials that
the government would introduce some
kind of curbs on imports to help Coal
India out. According to Coal Secretary
Anil Swarup, the fuel was a key raw
material for various industries and the
government was not considering import
curbs, though it did want state power
generators to buy coal locally, given the
production surge.
every year as more people retire and will
deplete in five years. The pension fund
receives money from contribution made
by existing Coal India employees. It also
earns interest from instruments that the
fund managers invest in apart from a small
contribution by the Centre. At present
the fund supports about 4.70 lakh lakh
former Coal India employees. But only
about 4.39 lakh employees of Coal India
contribute to the fund. A very high rate of
retirement at around 17,000 every year has
led to a situation where lesser number of
employees are supporting a larger number
of pensioners for the last few years.
 July 2016
www.InfralinePlus.com
NewsBriefs | Coal National
Indian utilities April-May coal imports down 19.6 percent on year
Indian power utilities imported around 12.3
million mt of thermal coal in April-May,
down 19.6% from the corresponding months
Delhi discoms in face-off with NTPC over coal quality
Delhis power distribution companies are
headed for a face-off with the National
Thermal Power Corporation (NTPC) over
the price of the power supplied to them.
BSES Yamuna, BSES Rajdhani and Tata
22 Power Delhi have filed a petition with the
Central Electricity Regulatory Commission
in which they have claimed that NTPC is
charging them more for the coal than its
low quality warranted. NTPC has refuted
the allegations, but admitted concerns
over the quality of the coal supplied. The
NTPC plants at Badarpur and Dadri supply
around 1,500 MW of power to Delhi. These
thermal plants use coal supplied by Coal
India Limited. According to the petition, the
coal supplied to these plants is stated to
Meghalaya seeks exemption from coal mining law
The Meghalaya cabinet has urged the central
government to exempt the state from the
purview of the Coal Mines (Nationalisation)
Act, 1973, following the National Green
Tribunals ban on rat-hole coal mining in the
state. The cabinet has mandated the states
mining and geology department to take up
with the central government to exempt coal
mining in Meghalaya from the purview of
the Coal Mines (Nationalisation) Act, 1973,
Chief Minister Mukul Sangma said. Section
3 of the Coal Mines (Nationalisation) Act,
1973, states that the right, title, interest
of the owners in relation to the coal mines
shall vest absolutely with the central
Karnataka to ink pact with TS for
7 million tonnes of coal
last year, according to the latest data
released by the Central Electricity Authority.
Of the total, 4.4 million mt was imported by
25 utilities for blending with domestic coal
while 7.9 million mt was imported by nine
utilities for plants based on imported coal.
The data also showed 19 utilities did not
import any coal in the first two months of
the current 2016-17 fiscal year. Adani Power
imported the highest volume at around 2.6
million mt, followed by Tatas Mundra ultra
mega power plant at 1.6 million mt. On a Keeping in mind the increased coal
monthly basis, utilities imported 6.2 million requirements of the Raichur Thermal
mt of coal in May, down 12.7% from the Power Station (RTPS) and the Yermarus
same month a year ago. Thermal Power Station (YTPS), the State
government has planned to make an
agreement with Telangana State (TS).
G. Kumar Naik, Managing Director of
Karnataka Power Corporation Ltd. (KPCL)
said that the pact would ensure the
supply of around 7 million tonnes of coal
annually. At present, KPCL is purchasing
4-5 million tonnes of coal from Singareni
Collieries Company Ltd., a company jointly
owned by the Telangana government
and the Union government. The pact
will help meet our coal requirements
as the commercial power generation in
YTPS will soon start. Besides, we are also
have a calorific value of around 5,000 kcal, purchasing coal from West Bengal and
but the power generated is equivalent to Odisha as well, he said. Naik said that
that produced by combusting a lower-grade the KPCLs units had generated about
3,000-kcal coal. This is contrary to norms, 25 per cent of the power that Karnataka
where slippage in coal quality permitted is consumed in the last April and May by
just 100-150 kcal. running its units at optimum level.
government. Following the National Green
Tribunals ban on rat-hole coal mining in the
state, the Meghalaya government has taken
up with the central government its bid to
invoke Para 12 A (b) of the Sixth Schedule
through a Presidential notification to exempt
the state from the central law. We have
had several discussions on this issue since
last year and we have almost completed it.
Therefore, the cabinet has mandated the
mining and geology department to take
up the issue and expedite the process of
getting the state exempted from the Coal
Mines (Nationalisation) Act, 1973, the chief
minister said.

NewsBriefs
| Coal National
Indonesia chooses gas over coal in latest 10-year electricity plan
Indonesia has cut domestic coal
consumption targets in its latest 10-year
electricity development plans, to bring
the power sector in line with the countrys
Philippine power supply jeopardized by Indonesian ban
Indonesias decision to stop coal imports
to the Philippines could spell problems
for the local power industry that relies
on coal-fired power plants to supply
electricity, the Department of Energy
(DOE) said. The Philippines is heavily
reliant on Indonesia for coal for power
plants and this could spell danger in
relation to the countrys energy supply,
Energy Secretary Zenaida Monsada
said. Indonesian Foreign Minister Retno
Marsudi extended the moratorium on
coal shipments to the Philippines until
there was a guarantee for security from
the Philippine government. The decision
to extend the moratorium was made
after the latest kidnapping by Abu Sayyaf
BHP Billiton steps up coal output, slices costs, eyes acquisitions
Top global miner BHP Billiton outlined
plans to boost coal output by 8 percent
over the next three years while slashing
costs, and said it would only consider
premium, lowest-cost assets for any
acquisitions. BHP Billiton, the worlds top
exporter of coking coal used in steelmaking
and also a producer of energy coal, is in
the enviable position of running profitable
coal mines at a time when more than half
the worlds coal mines are losing money.
It remains optimistic about the long-term
prospects for its coal business based on
the quality of its coal, its low costs and
growth prospects in China, India and
carbon emissions goals laid out at the
COP21 meeting in Paris last year. While
expected, the cuts will disappoint the
countrys coal miners eyeing a forecast
domestic consumption boost to offset
slower growth in China and tougher global
competition. The country is largely turning
to natural gas as a replacement. Indonesia
previously targeted increasing coal usage
to about 64 percent of the energy mix by
2024 but now it aims for coal to contribute
half of the energy mix by 2025, down from
about 57 percent this year, under the plan
released late last week by the energy
ministry.
bandits of several Indonesians sailors
on board a coal tugboat in the Sulu Sea.
Indonesia supplies 70 percent of the coal
used by the Philippines, equivalent to 15
million tons worth around $800 million
in2015.
Southeast Asia, but said markets would
be challenging in the short to medium-
term. We have the portfolio of assets best
placed to meet this future demand, BHP
Billiton Minerals Australia president Mike
July 2016
www.InfralinePlus.com
International
Rampal coal power project in
Bangladesh poses risks to Indian
Exim Bank
The proposed Rampal coal power plant in
Bangladesh will push up electricity rates
in the country and it poses specific risks
to the Indian Exim (Export-Import) Bank
according to experts. EXIM bank is looking
to extend a loan to this project. While the
Rampal project would expose all project
promoters and consumers to financial risk,
it poses specific risks to the Indian EXIM
Bank. The Rampal project would constitute
a large chunk of EXIM Banks loan book, it
would put the EXIM Banks international
fund-raising capacity at risk and the very
coal-fired nature of the project would cre- 23
ate refinance risk for the EXIM Bank. Ana-
lysts feel that the project is being designed
around outdated supercritical technology
and is being heavily subsidised by the
Indian and Bangladeshi governments. It is
claimed that the revenue requirements of
the Rampal plant would require tariff levels
that are 32 per cent higher than the current
average cost of electricity production in
Bangladesh and will therefore increase
electricity rates in Bangladesh.
Henry said. Making life harder for its rivals,
BHP increased its forecast for coking coal
output for the current year, ending June
30, by 6 percent to 42.5 million tonnes,
and said it plans to hike production to 46
million tonnes in 2018. It also aims to slice
costs by $600 million over the next year
by getting more out of its trucks, wash
plants, and workers, and negotiating better
deals on parts and equipment. That would
help cut its coking coal costs to 9 percent
over the next year to $52 a tonne. That
compares with coking coal prices which
averaged more than $90 a tonne in the
June quarter.
 July 2016
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ExpertSpeak
Time to revisit coal distribution
policy
Rajendra P. Ritolia, Advisor, Swaymbhu Natural Resources
Pvt. Ltd a wholly owned subsidiary of India Power Corporation
Limited - feels that Coal India is on track to achieve the daunting
target of 1 billion tonne of coal production by 2020 given the
multiple initiatives taken by the Government in the coal sector.
However, he feels that it is high time that all consumers should
be treated equally and there should be no place for preferential
pricing in coal.

Out of Indias total installed capacity resolving issues by helping in land

of 250 Gigawatt (GW) of electricity,
even in the best of times, only 160
GW is produced, primarily due to
fuel shortages as coal is the mainstay
24 for a majority of these power plants.
Over 15 billion units of electricity
have been lost thanks to non-
availability of coal over the last two
fiscals, precipitating a peak deficit of
15 per cent.
Lets take stock of the overall
scenario and try to put our finger
on the problem. Coal production
was stagnant from 2011 to 2014
and thereafter, showed significant
improvement, with a quantum jump
of 9% in 2015-16. The government
has ambitious plans to produce 1
billion tonnes of coal by CIL and 0.5
billion tonnes by other companies
to touch 1.5 billion tonnes by
2020. It is not a daydream that CIL
can achieve 1 billion tonnes by
observing the proactive measures
taken by the central government
in land acquisition, R&R, forest &
environment clearances, etc.
Here, state governments are the
major beneficiaries in terms of local
employment in case a mine becomes
operational in their state, by way
of increase in tax revenue, and
hence are showing keen interest in
acquisition and rehabilitation and
resettlement.
The way the Coal
Ministry is
Rajendra P. Ritolia, Advisor, Swaymbhu Natural
working as Domestic Resources Pvt. Ltd
seen in the coal prices Scanned by CamScanner
auctioning major power plants have more than
should be
and sufficient coal stocks (34 mt, the
allocation
revised to make highest ever), enough for 24 days
of coal it on par with consumption. The pithead stocks
blocks, international at CIL mines increased to 53 mt
and the coal prices and power generators declined to lift
follow-up made coal as their coal yards are already
in monitoring the full. Lack of evacuation is one of
achievement of milestones, one can the reasons for CIL pegging down
be reasonably confident that non-CIL production during 2015-16 and also in
companies also will achieve the 0.5 April 16.
billion tonnes by 2020 as planned. So, what lies in store? Based on
Also, there are many large mines the Paris Declaration (COP21), the
of 5-15 MPTA production capacity government of India has drawn up an
and plans are being implemented by ambitious plan of setting up 175 MW
NTPC, WBPDCL, OPGC, CSPDCL, capacity in the new and renewable
Mahagenco, PSPSCL, KPCL and other energy sector by 2022 (solar-100 GW,
state government power and minerals wind-60 GW, biomass-10 GW, small
development corporations to leverage hydro projects-5 GW). The plan is
those. The speed of laying new rail to increase the contribution of power
lines at high-traffic patches gives us the from renewable to 40% by 2030 from
confidence that the logistics bottlenecks the present level of 13%, reducing the
will be resolved soon, paving the way dependency on fossil fuels, in turn
for CIL to achieve the targeted coal helping reduce the effect of green-
production. house gases.
With an increase of around 50 For an ambitious country like
million tonnes in 2015-16, presently, India to achieve the planned growth
 July 2016
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of 8%, to fulfil the dreams of its production has increased so much, on fulfil partial requirement of all by giving
citizens for 24X7 power and power the other hand, the fact is in 2015-16, some preference to certain priority
to all, for rapid industrialisation the quantum of coal imports were 220 sectors. To supply coal to desperately
and to make the vision of Make In mt, about one-third of the countrys needy consumers, e-auction sale at a
India a success, coal should be used production. There are buyers in the 30% higher price was introduced.
full-throttle now. All power plants country for which coal is not available In the present situation, where
constructed should work with full and there is surplus coal where buyers coal is surplus for all consumers,
PLF and there should be no shortages are not visible. the private sector, public sector,
in supply. The New Coal Distribution IPP & CPP, power & non-power,
There is a fallacy in the system, Policy (NCDP) 2007 was formulated cement, sponge iron, etc should be
though. On the one hand, we are when demand for coal was high and treated equally. There should not be
saying CIL is not able to sell coal production was low. It envisages deferential or preferential pricing to
because there is surplus coal as distributing the available coal to all to anyone. Further, the domestic coal
prices should be revised to make
it on par or less than international
On the one hand, we are saying CIL is not able coal prices. In that scenario, the
to sell coal because there is surplus coal as Indian coal consumer would not
production has increased so much, on the other think of importing coal. So, the
time is now ripe to revisit NCDP
hand, the fact is in 2015-16, the quantum of coal 2007 and to promulgate a new Coal
imports were 220 mt, about one-third of the Distribution Policy to keep the Indian
countrys production. There are buyers in the coal consumer with the Indian coal
producer.
country for which coal is not available and there
25
is surplus coal where buyers are not visible The views in the article of the author are personal
For suggestions email at feedback@infraline.com
 July 2016
www.InfralinePlus.com

InDepth
Coal pile up forces developers to
issue curtailment notices to Coal India

26

CIL would have to ensure a minimum sales offtake of 660-MMT during the current year
Combined stocks have fallen below 32 MMT for the first time since early January

By Team InfralinePlus

Concerned over mounting stocks at
Coal India Limited (CIL) and falling
offtake by large consumers, the Coal
Ministry has directed government-
owned and operated thermal power
producers to stop all coal imports
and instead source feedstock from
the domestic miner. However, what
represents a completely different
scenario, many power plants across
Uttar Pradesh, Maharashtra and
West Bengal have asked CIL and its
subsidiaries to stop coal supplies,
citing reasons like high stock at sites
and backing down of power demand
by host states and their distribution
companies (discoms).
Thermal power plants that had
issued so-called stop supply notices
include the countrys largest thermal
power producer, NTPC Limited, as
well as GMR, Haryana Power Gen-
eration Company (HPGCL), Uttar
Pradesh Rajya VidyutUtpadan Nigam
Limited (UPRVUNL) and Damodar
Valley Corporation (DVC). NTPC
thermal power plants in Farkka (West
Bengal), Tanda and Unchhahar (Uttar
Pradesh) have also asked CIL for
stoppage of coal supply.
With pithead stocks forecast to
mount to 90-million tons by the end of
current year, CIL would have to ensure

a minimum sales offtake of 660-million
tons during the current year, which in
the current market situation was not
considered feasible. The curtailment of
coal supplies to thermal power plants
coupled with rising pithead stocks
would hasten the downward revision of
CILs production target.
Incidentally, Uttar Pradesh gov-
ernment has urged the Centre to
increase the coal linkage for its
thermal power plants from 65% to
100% as it would benefit power plants
both in the state sector and those
operated by private companies viz.
Reliance Power (Rosa TPP), Bajaj
Hindustan (Lalitpur TPP), Lanco
(Anpara TPP), Jaypee (Prayagraj TPP)
etc, which were set up after 2009. The
state government claims ramping up
coal linkage to 100% would reduce the
per unit cost of energy generation and
thus eliminate accumulated losses of
the state power discoms.
Combined stocks of thermal coal at 101 Indian pow-
er plants have fallen below the 32 million mt level
for the first time since early January, with stocks at
31.8 million mt, down 5.2% month on month in June.
Stocks have fallen 18.7% from the record high of
39.14 million mt on April 4.The volume of imported
coal on the stock also continued to drop
Figure 1: Coal Indias growth production and offtake levels
during last five years (in %)
CIL's growth production and offtake (FY11-FY16)
Year-on-year growth (in %)
7.4
3.8
2.1 2
1.1
0.01
FY11 FY12 FY13
Production
Source: Coal India (CIL), media reports
Combined stocks of thermal coal
at 101 Indian power plants have fallen
below the 32 million mt level for the
first time since early January, with
stocks at 31.8 million mt, down 5.2%
month on month in June, according to
data available with Central Electricity
Authority (CEA). Stocks have fallen
18.7% from the record high of 39.14
million mt on April 4.The volume
of imported coal on the stock also
continued to drop, falling below the 2
million mt mark for the first time since
February 4. Imported coal stock levels
were at 1.95 million mt Wednesday,
13.9% lower than a month ago and
42.4% down compared with the same
time last year.
Significantly, in a more drastic step
to reduce coal imports, the Indian gov-
ernment has scrapped plans for the con-
struction of at least four large thermal
power plants categorised as ultra-mega
thermal power plants with aggregate
8.8
8.6
6.9
3.8
2.3
1.4
FY14 FY15 FY16
Offtake
July 2016
www.InfralinePlus.com
generating capacity of 16 GW. The
four proposed plants to be located in
the states of Chhattisgarh, Karnataka,
Maharashtra and Odisha would
together have required 46-million tons
a year of coal, half of which would
have been sourced through imports.
Domestic coal production on
a sky high
During the last fiscal, CIL ramped
up its coal production to 538 million
tonne while the offtake was 534 million
tonne, which the company said in its
annual result is a record. Coal availabil-
ity at power plants sites is at a record
high of 28 days. CIL plans to achieve
one billion tonne of coal production
in five years. Government has set the
2016-17 coal production target for Coal
India at 598 MT. While the production
has been increasing continuously there
has not been many takers of coal. Coal
demand has remained subdued; it did 27
not increase as per the increase in the
production. CIL has achieved 8.6% in-
crease in production this year so far vs
an average of 1-3% production growth
between 2009-10 & 2013-14. Coal pro-
duction grew by 6.9% in 2014-15.
At the same time, electricity demand
from financially beleaguered discoms
has not shown similar corresponding
increase. The peak deficit between
power demand and supply during last
year was 3.2 per cent. The government
in its estimates expects it to come down
to 2.5 per cent in the current year.
CIL had a good year on the pro-
duction and offtake (sales volume)
front. Production and offtake growth
for fiscal year 2016 were 8.6% and
8.8%, respectively. It may have missed
its targets but FY16 growth is the
highest in at least the past six years.
Weak demand from the power sector,
subdued price realizations and lack of
price hikes are some factors that have
kept sentiment muted for the stock.
There are several factors at play: finan-
cially crippled distribution companies
(referred to as discoms) and a patchy
 July 2016
www.InfralinePlus.com
InDepth
economy has resulted in slowing power
Coal quality concerns to be addressed with latest initiative
demand growth.
At a time when the demand for coal
remains weak, the government believes
that there is still scope for more supply.
The government now wants to reduce
the imports of coal even further. With
floating bonds under Ujwal Discom
Assurance Yojana (UDAY) scheme,
the government expects discoms to
break-even soon. The government is
confident that the scheme will further
help boost demand for coal.
As the coal plant construction boom
from five years ago fizzles out, leaving
tens of thousands of megawatts of
underutilized or stranded coal plants
dotting the landscape, the government Coal imports decline amid increased domestic production
is hoping that the ever-increasing
volumes of coal will find a home some-
where, anywhere before even more
mines are forced to have regulated
production.
28 Although in the short term the case
for Australian coal in India may be
weakening due to the current global
At a time when the demand for coal remains
weak, the government believes that there
is still scope for more supply. The govern-
ment now wants to reduce the imports of coal
even further. With floating bonds under UDAY
scheme, the government expects discoms to
break-even soon.
CSIRs laboratory - Central Institute of Mining and Fuel Research (CIMFR),
Dhanbad, Jharkhand has signed a Memorandum of Understanding (MoU)
with the Coal India Limited, Singareni Collieries Company Limited (SCCL)
and power utilities for quality monitoring of coal supplied to power stations in
India. Under this MoU, the CSIR-CIMFR will make use of its knowledge base
support in maintaining the quality of coal at national level for the entire power
sector. It is estimated that about 300 million metric tons of coal samples
would be analysed for quality per year. The contract value of the project is
minimum around INR 250 crore per annum.
The move is expected to improve performance of power plants and
reduce emission as efficient power generation will result in less pollutants
at generation stage. It will also help the coal-based thermal power plants
to adhere to strict emission norms, notified last year by the environment
ministry, to deal with air
Coal imports declined by 4.9 per cent to 35.85 million tonnes (MT) in April-
May due to increased production by Coal India Limited. In 2015-16, Coal
India (CIL) achieved a record production of 536 MT, which was 42 MT more
than the previous fiscal.
Its production grew 8.5 per cent year-on-year. CIL was, however, eyeing 550
MT output. The output target is fixed at 598 MT for this fiscal.
economic slowdown, India will have
to rely on imported coal at least in
the immediate future to increase its
economic growth. This is reflected in
the case of Adani, which is trying to
develop a huge Carmichael coal mine
in Queensland to supply India with
thermal coal.
For suggestions email at feedback@infraline.com

InDepth
Mining to become sustainable
with Star Ratings
Ratings to be based on implementing the Sustainable Development Framework
To help in obtaining faster clearances from various regulatory bodies
By Team InfralinePlus
The ministry of mines has recently
introduced a concept of Star Rating
system for mining leases. The rating
system was apprehended by mining
advisory and monitoring agency Indian
Bureau of Mines (IBM) several years
ago. This system will be applicable to
all major mineral mines in the country
as a gauge of the eco-friendly measures
adopted by them. This is really an
encouraging initiative as in past the
extraction of mineral reserves has
always resulted in varying degrees of
environmental resource degradation
and social impacts, including
displacement. The Indian mining sector
has been facing stark criticism on
several matters relating to the efficient
performance vis--vis sustainable
development.
According to this system a star
rating on a scale of 1 to 5 will
July 2016
www.InfralinePlus.com
29
be awarded to the mining leases
depending upon the efforts and
initiatives taken while implementing
the Sustainable Development
Framework (SDF) which includes
addressing social impact of
resettlement and rehabilitation,
among others. SDF provides guidance
to mining lease holder to improve
performance on environmental,
social aspects and provides a
 July 2016
www.InfralinePlus.com

InDepth

common benchmark against which been designed for the assessment of
operations can be evaluated in terms the SDF implementation in the mining
of comparative performance on lease based on the parameters shown
sustainable development norms. in the figure:
The template assesses implemen-
Performers to be incentivised tation of SDF in the mining lease
The star rating scheme is designed to based on the management of impact on
have a built in compliance mechanism forests and environment by carrying
for environment and forest safeguards out scientific and efficient mining,
and will help in recognizing good per- addressing social impacts of our
formers in the sector while encourag- resettlement and rehabilitation require-
ing all mining lease holders to strive ments for taking up mining activities,
for excellence. All mining leases local community engagements and
which have been operational for more welfare programmes, steps taken for
than 180 days in the year of reporting progressive and final mine enclosure,
would require the mining leaseholder and adoption of international standards.
to submit details as per the standard Star Rating system would begin
template. A standard template for the with self-certification under which
evaluation of operational parameters the mine-lease holders have to fill up
for mines, has already been formu- the details on an online portal which
lated. The evaluation template has is developed by IBM with the help of
All mining leases which have been
30
operational for more than 180 days in the
year of reporting would require the mining
leaseholder to submit details as per the
standard template. A standard template for
the evaluation of operational parameters for
mines, has already been formulated
Figure1: Evaluation Parameters for Start Rating to access
implementation of the SDF
The management of impact by carrying out
scientific and efficient mining
Addressing social impacts of our resettlement
and rehabilitation requirements for taking up
mining activities,
Local community engagements and welfare
programmes,
Steps taken for progressive and final mine
enclosure
Adoption of international standards
NISG. Based on this, a provisional
Star Rating would be awarded to the
mining lease. The lease scoring a per-
centage between 90 -100 will get five
star rating whereas if it scores between
25 50 percent it will get lowest one
star rating. A third-party evaluation
would be facilitated by the government
with the help of reputed organizations
and after the completion of the entire
procedure, the final ratings would be
given. If the information provided
is found to be incorrect during the
inspection, the lessee will be penalized.
Ministry has proposed that those
mines which secures low star rating
of one or two stars would be given a
specific timeframe to improve mining
practices and in the case of failure
to adhere to the timeline, the mine
would be forced to close down. The
rating system in future may be useful
in obtaining faster clearances from
various regulatory bodies.
This system can only be made suc-
cessful if it will be implemented effec-
tively. Certain things which requires
immediate attention is formulation
of detailed framework on monitoring
mechanism. Considering more than
2400 existing major mineral mines it
is imperative for ministry to provide
detailed methodology on the process
of cross verifying the self- certified
details of each mine. As it is a compre-
hensive exercise in itself to cross check
each parameter of every mine to make
Star Rating System more reliable
and authenticated otherwise whole
objective of this will be dissolved.
An alternative approach which can
be followed to address this concern
is to appoint certified organization
to undertake the audits of the mines
and cross check the self-certified
ratings. This will decrease the burden
on the Government bodies. IBM can
do random checks and if finds any
ambiguity in line with the rating can
panelize the auditing organization.
For suggestions email at feedback@infraline.com

FinancialResults
Coal India Q4 profit flat at Rs 4,248 crore
Coal India (CIL) reported a flat fourth
quarter with profit after tax at Rs 4,247.92
crore, against Rs 4,238.54 crore during
the year-ago period. CIL reported a
Neyveli Lignite profit drops 34 % in Q4 to Rs 446 crore
Neyveli Lignite Corporation Ltd (NLC)
posted a net profit of Rs 446.24 crore
for the quarter ended March 31, 2016
as compared to Rs 676.81 crore for the
quarter ended March 31, 2015. Total
income increased to Rs 1,964.58 crore
for the quarter ended March 31, 2016
from Rs 1,858.88 crore for the quarter
ended March 31, 2015. The net profit was
impacted by non-stabilisation of operation
of newly commissioned Units of TPS- II
Expansion resulting in an under recovery
of capacity charges (operating loss) to the
tune of Rs 244.08 crore and due to rain
Gujarat Mineral Development Corporation reports 78% fall in Q4 net profit
Gujarat Mineral Development Corporation
posted a fall of 78.30% in its net profit
at Rs 50.99 crore for the quarter ended
March 31, 2016 as compared to Rs 234.95
crore for the same quarter in the previous
year. Total income of the company has
decreased by 12.98% at Rs 388.51 crore
for quarter under review as compared to
Rs 446.48 crore for the quarter ended
March 31, 2015. For the year ended March
31, 2016, the company has posted a fall
of 52.04% in its net profit at Rs 239.96
crore as compared to Rs 500.32 crore
for the same period in the previous year.
Total income of company decreased by
14.63% at Rs 1333.74 crore for year under
3.99 per cent year-on-year rise in its net
profit to Rs 14,274.29 crore for 2015-16,
compared with Rs 13,726.61 crore in
2014-15. Although production jumped 9.01
per cent Y-o-Y to 538.75 million tonne
and offtake increased 9.22 per cent Y-o-Y
to 534.49 MT in FY16, the net profit was
not commensurate with these figures.
CILs total income from operation for the
quarter remained flat at Rs 21,402.75
crore, compared with Rs 21,339.55 crore
during the corresponding period of FY15.
For FY16, income from operations grew
5.04 per cent Y-o-Y to Rs 75, 644.27
crore from Rs 72,014.62 crore in FY15.
The operational profit for the quarter
dipped more than 8 per cent Y-o-Y to Rs
4,839.19 crore from Rs 5,2 66.83 crore
and flood in November / December 2015,
the company suffered a power generation
July 2016
www.InfralinePlus.com
during the same period last fiscal. For
the year, the operational profit remained
almost flat at Rs 15,839.84 crore against
Rs 15,015.60 crore in FY15. Profit before
tax for the quarter fell 9 per cent Y-o-Y
to Rs 6,328.67 crore from Rs 6,991.44
crore during the same period a year ago.
However, for the year, PBT remained
flat at Rs 21,589.09 crore, against Rs
21, 583.92 crore last year. Other income
(including dividend from subsidiaries)
stood at Rs 14,215.17 crore in the March
quarter. Coal India also announced a
nearly 6.3 per cent increase in coal prices
and will earn an additional revenue of
around Rs 3,234 crore during the
current fiscal.
loss of 763.72 million units resulting in a
consequential loss of estimated revenue
of around Rs 409.73 crore. These factors
attributed to reduction in net profit to Rs 31
1,204.15 crore (after adjusting exceptional
item of expenditure of Rs 28.38 crore)
in 2015-16 as against Rs 1,579.68 crore
(including exceptional item of revenue of
Rs 345.57 crore) in 2014-15. Total revenue
of the company for 2015-16 rose to Rs
7,194.20 crore as against Rs 6,796.97
crore of in 2014-15 registering a positive
growth of 5.84 per cent.
review as compared to Rs 1562.32 crore
for the period ended March 31, 2015. For
the year ended March 31, 2016, on the
consolidated basis, the company has
posted a fall of 51.86% in its net profit
after taxes, minority interest and share of
profit of associates at Rs 241.17 crore as
compared to Rs 500.94 crore for the same
period in the previous year. Total income
of company has decreased by 14.91% at
Rs 1347.35 crore for year under review
as compared to Rs 1583.53 crore for the
period ended March 31, 2015.
 July 2016
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StatisticsCoal
FOB Thermal Coal Prices - Australia & South Africa - (May 2015 - May 2016)
Australia (FOB Newcastle South Africa (FOB Richards
Month
6700 kcal/kg) (USD/Ton) Bay 6000 kcal/kg) (USD/Ton)

May-15 60.4 61.88

Jun-15 58.84 60.96

Jul-15 59.13 57.05

Aug-15 58.57 54.36

Sep-15 54.75 51.43

Oct-15 52.16 49.81

Nov-15 52.6 53.3

Dec-15 52.1 50

Jan-16 49.8 49.9

Feb-16 50.7 51.5

Mar-16 52.1 53.2

Apr-16 50.8 52.7

May-16 51.2 53.7

32

Indonesian Coal Prices - HBA - May 2015 - May 2016

HBA 6322 HPB MARKER (kcal/kg GAR) (USD/Ton)
Month kcal/kg Gunung Prima Pinang Indominco Melawan Enviro- Jorong
(USD/ton) Ecocoal
Bayan I Coal Coal IM East Coal coal J-1

7000 6700 6150 5700 5400 5000 4400 4200

May-15 61.08 65.36 66.72 60.27 50.14 49.55 47.18 37.96 34.88

Jun-15 59.59 63.75 65.21 58.91 48.94 48.48 46.23 37.19 34.19

Jul-15 59.16 63.28 64.77 58.52 48.59 48.17 45.95 36.97 34

Aug-15 59.14 63.26 64.75 58.5 48.58 48.15 45.94 36.96 33.99

Sep-15 58.21 62.25 63.81 57.65 47.82 47.48 45.35 36.48 33.56

Oct-15 57.39 61.36 62.98 56.91 47.16 46.89 44.83 36.06 33.19

Nov-15 54.43 58.16 59.98 54.21 44.77 44.76 42.95 34.54 31.83

Dec-15 53.51 57.16 59.04 53.37 44.02 44.1 42.36 34.07 31.41

Jan-16 53.2 56.82 58.73 53.09 43.77 43.88 42.16 33.91 31.27

Feb-16 50.92 54.36 56.42 51.01 41.93 42.24 40.71 32.73 30.23

Mar-16 51.62 55.11 57.13 51.65 42.5 42.74 41.16 33.09 30.55

Apr-16 52.32 55.87 57.84 52.29 43.06 43.25 41.6 33.45 30.87

May-16 51.2 54.66 56.7 51.26 42.16 42.44 40.89 32.88 30.35
 July 2016
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Production Performance of CIL & its Subsidiaries (FY-2017) (Unit - MT)

16-Apr 16-May
FY 17
Target Achievement % Ach. Target Achievement % Ach.

ECL 3.65 2.65 73 3.57 3.17 89

BCCL 3.2 2.98 93 3.2 3 94

CCL 4.8 4.06 85 3.9 4.48 115

NCL 6.76 6.62 98 6.98 7.03 101

WCL 3.32 2.66 80 3.48 2.84 82

SECL 11.13 10.27 92 11.51 11 96

MCL 11.56 10.84 94 11.95 11.05 92

NEC 0.07 0.01 17 0.05 0.02 38

CIL 44.48 40.09 90 44.64 42.58 95

33
 July 2016
www.InfralinePlus.com
CoverStory
Electoral compulsions force states
to go slow on power tariff hike
34
As of May only 16 out of 29 states have issued tariff orders for 2016-17
States to save Rs 1.8 lakh crore in UDAY, lose Rs 1.2 lakh crore due to coal cess
By Team InfralinePlus
The Centres plan to revive state
power sector and ensure 24X7
electricity supply by 2018-19 faces
threat of derailment with power
distribution companies (discoms)
apparently going slow on tariff
hikes. Meanwhile, increased burden
of coal cess has added to discoms
cost of power procurement. Utilities
are required to bridge their cost-
revenue gap by 2018-19 as per
their commitment under the UDAY
scheme. But the way they are going
about this work does not inspire much
confidence that discoms would fulfil
their commitment.
Significantly, UDAY is the third
bail-out of state power sector since
2001. In 2012, the then UPA gov-
ernment brought Rs 1.9 lakh crore-
Financial Restructuring Plan (FRP)
when discoms hit the financial
wall. It looked like the FRP would
prove the last bail-out. But when the
moratorium on debt repayment under
the financial package ended in April
2015, discoms were again left gasping
for breath.
The outstanding debts of discoms
surged to Rs 4.43 lakh crore in 2014-15
from Rs 2.40 lakh crore in 2011-12.
The situation was so bad that the
Reserve Bank of India (RBI) had to
raise concern over signs of financial
stress in the state power sector.
The government maintains that
there are provisions in UDAY to
punish states for non-compliance.
But will the Centre invoke provi-
sions is a billion dollar question given
its political implications. Anyway,
governments keep changing in states.

There might be a new government
tomorrow which would say it should
not be penalised for the failure of its
predecessor, say analysts.
It would be noteworthy that in 2012,
the then UPA government too used
the same logic to justify brought FRP.
When states need money, they agree to
all conditions attached by the Centre.
After bail-out, they just slip into
business-as-usual mode. That is the
long and short of it. No doubt, many
states have not increased tariff to cover
cost. To offset the adverse impact,
UDAY has an inbuilt mechanism to
insulate discom finances through state
budget. However, its implementation
is yet to be tested on the ground, says
Ashok Khurana, director general, Asso-
ciation of Power Producers.
State Electricity Regulatory Com-
missions (SERCs) in 16 out of 29
states have issued tariff orders so far
for FY2017 which implies a modest
progress in terms of issuance of tariff
orders for the year. The extent of
average tariff hike, based on the
tariff orders issued in 16 states,
is at a moderate 5 per cent for
FY2017, says ICRAs May update
on state power sector. The update
further says, It is a matter of
concern that distribution utilities
in large states such as Rajasthan,
Tamil Nadu and West Bengal are
yet to file tariff petitions for
FY2017, let alone secure issuance
of tariff orders.
Power sector reforms are politi-
cally difficult to implement. Analysts
say the real test of UDAY scheme will
be in an election year. So, if discoms
cannot go for adequate tariff hike in
2016-17, they are unlikely to do so in
2017-18 and 2018-19. Governments
ambitious discom revival scheme,
UDAY is based on three basic ele-
ments one time debt restructuring,
time bound tariff reforms and opera-
tional efficiency improvement. Not
doing the latter two would mean, in a
few years there will be again financial
Significantly, the Cen-
tre has doubled cess
on coal to Rs 400 per
tonne, which will add
to discoms power pro-
curement cost. States
are expected to save
Rs 1.8 lakh crore over
next three years if they
properly implement
UDAY scheme. But on
the other hand, they
would lose Rs 1.2 lakh
crore over the same
period on account of
increased coal cess
distress in discoms, like it has hap-
pened in the past. said Debasish
Mishra, Partner at Deloitte Touch
Tohmatsu India LLP.
ICRA adds that the limited tariff
hike allowed by SERCs against the
proposed tariff revision of 5-33 per
cent in petitions by utilities in most of
the states can be attributed to factors
such as allowed fixed costs being
lower than projected level; power
purchases allowed in line with
approved loss reduction trajectory
coupled with lower per unit power
July 2016
www.InfralinePlus.com
purchase rate in some states as well as;
and allowed true up expenses for the
past period being lower against the
projected level in some cases.
Coal cess to add to
discom woes 35
Significantly, the Centre has doubled
cess on coal to Rs 400 per tonne, which
will add to discoms power procure-
ment cost. Moreover, states will not get
any share in proceeds collected through
levy of cess as the same is not part of
the Centres divisible pool of taxes.
States are expected to save Rs 1.8
lakh crore over next three years if they
properly implement UDAY scheme.
But on the other hand, they would lose
Rs 1.2 lakh crore over the same period
on account of increased coal cess.
So, it is clear the Centre will take
away more than half of the potential
savings expected to states from imple-
mentation of the UDAY scheme. While
banks have taken haircuts by agreeing
to the UDAY package, the Centre alone
will benefit from cess.
Slow on tariff hike
Out of 16 states which have issued tariff
petitions for 2016-17, Bihar and Odi-
sha have not raised tariff. Gujarat has
lowered tariff by 1.3 per cent. Andhra
Pradesh and Arunachal Pradesh have
gone for a nominal tariff hike of less
 July 2016
www.InfralinePlus.com
CoverStory
than 1 per cent. Tariff hike by other 10
states varies between 3 to 9 per cent,
barring Chhattisgarh where the SERC
has approved a steep tariff hike of
15.7 per cent for the year in order to
provide mainly for the past year true-up.
The picture on increase in power
purchase costs approved by SERCs
across the 16 states where tariff orders
have been issued is mixed. While 9
regulators have approved 2-17 per
cent increase in power purchase costs,
for the remaining six states this varies
between 1 to 11 per cent. The increase
in approved power purchase costs
by SERCs is 6 per cent for Andhra
Pradesh, 13 per cent for Chhattisgarh,
9 per cent for Karnataka, 10 per cent
for Madhya Pradesh and 8 per cent for
Uttarakhand.
On the other hand, reductions in
power purchase cost approved by
SERCs are 1 per cent in Bihar, 7 per
36 cent in Himachal Pradesh, 4 per cent
in Odisha, 2 per cent in Manipur and
8 per cent in Nagaland. The overall
subsidy dependence for the state owned
distribution utilities is estimated at Rs.
75,700 crore, an increase of 7 per cent
against the previous fiscal and the
same is estimated to account for nearly
19 per cent of the revenue requirement
approved for the utilities for the fiscal.
The increase in subsidy can be mainly
attributed to the increase in subsidy
approved for the discoms in Bihar,
Karnataka and Maharashtra.
Further, discoms subsidy depen-
dence in other states such as
Andhra Pradesh, Gujarat, Haryana,
Madhya Pradesh, Punjab, Rajasthan,
Tamil Nadu, Telangana and Uttar
Pradesh continues to remain signif-
icant owing to the highly subsidised
The picture on increase
in power purchase costs
approved by SERCs
across the 16 states
where tariff orders have
been issued is mixed.
While 9 regulators have
approved 2-17 per
cent increase in power
purchase costs, for the
remaining six states this
varies between 1 to 11
per cent. The increase
in approved power pur-
chase costs by SERCs
is 6 per cent for Andhra
Pradesh, 13 per cent for
Chhattisgarh, 9 per cent
for Karnataka
or free power supply to agriculture
consumers and to some sections of
domestic consumers in these states.
That leaves discoms financially
vulnerable as they critically depend
on timely payment of subsidy by state
government. Given the past trend of
delayed reimbursement of subsidy by
state governments, it is a worrying situ-
ation for discoms.
The fuel and power purchase cost
adjustment (FPPCA) framework has
not been implemented in states such
as Tamil Nadu, Uttar Pradesh and
Rajasthan despite the fact that timely
pass-through of variations in power
purchase costs to consumers continue
to be critical for the financial health
of discoms. Further, there has been a
significant lag in recovery of FPPCA
in many other states. What is more,
the principles of recovery under FPPCA
vary across the states in terms of the
time lag for recovery, ceiling, power
purchase sources allowed for recovery,
etc, analysts have pointed out.
SERCs in 6 states have approved
procurement from short - term sources
estimated to comprise less than 5 per
cent of the overall power requirement.
Of the six states, SERCs in Andhra
Pradesh and Karnataka have
approved a nominal procurement
from the short-term market at a
ceiling price of Rs 5.17 and Rs 4.50
per unit, respectively.
The SERC in Uttarakhand
approved the shortfall in power
availability to be met through an
optimal combination of long term,
medium term and short term sources.
Other states such as Goa, Arunachal
Pradesh and Nagaland have also
approved procurement from short-term
sources at pre determined prices.
On the positive side, discoms have
been able to source electricity under the
short-term route at a lower cost. This is
also evident from the average winning
bid tariff quoted in the reverse auction
for procurement of short-term power
held by the distribution utilities of

Bihar, Kerala and Uttarakhand, which
remained in the range of Rs. 2.59- 3.54
per unit in most of time blocks bid for,
which is lower than the average tariff
of Rs 4.14.3 per unit under bilateral
sale route over the past 2-3 years.
Discoms combined losses have
reached Rs 3.8 lakh crore as at the end
of September 2015 and their total out-
standing debts are estimated at Rs 4.43
lakh crore. The Centre brought UDAY
scheme last November to provide relief
to discoms reeling losses. State govern-
ments are required to take over three-
fourths of discoms pending debts. In
return, banks will lower interest rates
by 5-6 per cent on these debts.
The RBI has issued bonds worth
nearly Rs 1 lakh crore in 2015-16 on
behalf of states which signed on the
dotted line to avail the benefits of the
UDAY scheme. Additional bonds of Rs
1.5-1.75 lakh crore may be issued in the
current fiscal, according to Union Power
Minister Piyush Goyal. Meanwhile, the
Union Cabinet has extended the cut-off
for joining the scheme by one year to
March 31, 2017, which will allow some
more states to avail the benefits.
UDAY bonds issued by
states in 2015-16 (Rs crore)
States UDAY bonds
UP 24,332
Rajasthan 37, 350
Chhattisgarh 870
Punjab 9,860
J&K 2,140
Bihar 1, 554
Jharkhand 5,553
Haryana 17,300
Total 98,960
Source: RBI, figures rounded off
Implementation remains
the key
Industry experts say that the Centres
scheme for turning around discoms
may have generated hope and debate
about the financial viability of these
Discoms combined
losses have reached Rs
3.8 lakh crore as at the
end of September 2015
and their total outstand-
ing debts are estimated
at Rs 4.43 lakh crore.
The Centre brought
UDAY scheme last No-
vember to provide relief
to discoms reeling loss-
es. State governments
are required to take over
threefourths of discoms
pending debts
state-owned companies, but imple-
mentation is the key to achieving the
success. Discom losses have grown
substantially since the first bailout of
2001, which can be attributed primar-
ily to inadequate tariff increases,
poor power purchase planning, lack
of timely subsidy payments, and
inefficiencies in metering and billing,
sayanalysts.
Reckless funding by banks to
loss-making discoms supported such
malpractices until bailouts became
inevitable. Given their economic,
social and political importance, and the
July 2016
www.InfralinePlus.com
threat to the banking sector, discoms
cannot be allowed to fail. Hence,
another bailout became unavoidable
just three years after the previous
effort, analysts say pointing to the
launch of UDAY scheme by the Modi 37
government in 2015.
Proponents of UDAY argue that
under previous schemes, no mecha-
nisms existed to check unsustainable
borrowing, which was a major reason
for ballooning losses. UDAY rec-
ognises this, and future losses are
permitted to be financed only via
discom bonds guaranteed by state
governments. Besides, the scheme
places a limit on working capital
loans at 25 per cent of the previous
years revenue. They also point out
that future losses are to be taken over
by respective state governments in a
graded manner -- 5 per cent of losses
in 2017-18, 50 per cent by 2020-21,
and so on. Loopholes of the previous
schemes have been taken care of in
UDAY, they contend.
To reduce discom inefficiencies,
past schemes imposed certain condi-
tions. Ensuring regular tariff setting,
energy auditing of feeders, metering
of distribution transformers (DT) and
elimination of revenue gaps were
conditions in 2001. Besides these, FRP
conditions included allowing fuel cost
 July 2016
www.InfralinePlus.com

CoverStory

adjustment in final tariffs, reduction
in short-term power purchase, liqui-
dation of regulatory assets and ensuring
advance payment of subsidies.
Targeting to make all discoms
profitable by 2018-19, analysts point
out, UDAY also imposes certain condi-
tions. Loss reduction is to be aided
by circle-wise targets, feeder and DT
metering, and upgrade or replacement
of transformers. Regions with sus-
tained loss reduction are to be incen-
tivised by increased hours of supply.
Other ongoing government initiatives,
including those to reduce coal costs
and ease transmission constraints, are
also being touted to bring down expen-
diture, they say. But unfortunately, they
point out, the scheme has not laid down
a specific performance-monitoring
and compliance mechanism. Although
UDAY lacks penalties, it incentivises
compliance by additional funding in
38 sector programmes and discretionary
allocation of power and coal.
Industry experts argue that in the
absence of a strong, publicly acces-
sible monitoring mechanism that
would include supervision of lending
by banks, performance-improvement
targets are unlikely to be met. Analysts
also contend that reliable and quality
supply is essential to break the vicious
cycle of low revenue recovery, inad-
equate investment in network and poor
supply. The power ministry should
create a compliance system similar to
the one for monitoring progress of the
PFA programme, they say.
separate content and carriage busi-
nesses to facilitate implementation
of open access provisions. But the
proposed change law could also spark
migration of well-paying customers
from discoms network, which could
adversely affect the latters finances.
In such a scenario, discoms will
face the stark choice of going for a
sharp hike in electricity tariff or put
increased financial burden on state
governments. While the first option
is politically difficult to implement,
choosing the second alternative could
put discoms finances in a precarious
situation.
Targeting to make all
discoms profitable by
2018-19, analysts point
out, UDAY also imposes
certain conditions. Loss
reduction is to be aided
by circle-wise targets,
feeder and DT metering,
and upgrade or replace-
ment of transformers.
Regions with sustained
loss reduction are to
be incentivised by in-
creased hours of supply.
Tariff reforms should allow
discoms to charge prices that reflect
cost of delivery, including a return on
capital. If this is not done, discoms
will always remain in a financial
mess. If the states are unwilling to
swallow this bitter pill, this scheme
will fail like the FRP. It is therefore
encouraging to see that the central
government has linked availability of
various central government funding
programmes to successful implemen-
tation of UDAY. Also, participating
states will be provided with additional
coal supplies, point out analysts.
The low tariff hike in 2016-17 is
attributed to the fact that 2016 was an
election year, with polls announced
by the Election Commissioner in five
states and one Union Territory. But
then, next year too we have elec-
tions due in three crucial states UP,
Punjab and Gujarat- and then again in
2018, more states will go to polls. And
then we will have General Elections
in 2019. If electoral calculations are
indeed going to be a factor in power
tariff hikes, it looks unlikely that
discoms will fulfil their commitment
to bridge the revenue deficit anytime
soon, let alone become profitable.
For suggestions email at feedback@infraline.com

Litmus tests awaits for

UDAY
The real test of UDAY will be in elec-
tion years, when successful elimination
of revenue gaps would necessitate an
average tariff hike of about 30 per cent
for consumers in Rajasthan and UP. In
these circumstances, if restrictions on
lending by banks for funding losses
will be adhered to has to be seen.
The Union Power Ministry
has moved legislative proposal to

NewsBriefs | Oil & Gas National
Govt plans to set up petrochem hubs around 22 oil refineries
The government announced its plans to set
up petrochemical complexes around all 22
refineries across the country which would
help generate one crore jobs and boost the
Panel begins work on preparing blueprint for refinery exports
An expert panel has begun work on drafting
blueprint for raising Indias oil refining capacity
by 2040 with a view not just meeting demands
of the fast expanding economy but also to
capture export market. The 12-member
Working Group for preparing Approach Paper
for enhancing refining capacity by 2040 held
its first meeting on June 27. The panel began
work by asking public and private sector
refiners to present their plans for capacity
expansion and asked for domestic demand
assessments to be made. The panel headed
by Additional Secretary in the Oil Ministry and
include directors of refineries at Indian Oil
Corp (IOC), Bharat Petroleum Corp Ltd (BPCL)
and Hindustan Petroleum Corp Ltd (HPCL).
IndianOil, OIL and BPRL sign agreement with Rosneft of Russia
An Indian consortium led by Indian Oil
Corporation Limited (IndianOil), Oil India
Limited (OIL) and Bharat Petro Resources
Limited (BPRL) has signed the definitive
agreement to acquire up to 23.9% shares
from Rosneft Oil Company (Rosneft), NOC
of Russia in JSC Vankorneft, a company
organised under the law of the Russian
Federation, which is the owner of Vankor
and North Vankor Field licences. The
acquisition is subject to relevant Board,
government and regulatory approvals and
is expected to close by September 2016.
Presently Rosneft Oil Company holds 85%
shares while ONGC Videsh Ltd (through
July 2016
www.InfralinePlus.com
Essar to develop 8 tcf of shale gas
reserves
sectors growth. Union Minister Ananth
Kumar asked the chemical industry not
to just rely on the government incentives
but become competitive while assuring
companies of providing common facilities
for those setting up brownfield clusters.
He called upon the industry to become
competitive in feed stock, procurement of
natural gas and production of end-products
for doubling the sectors growth to USD 400
billion by 2021. The proposed petrochemical Essar Group plans to develop its eight
complexes would not just be confined to trillion cubic feet (tcf) of shale gas
Gujarat, Maharashtra, Andhra Pradesh, reserves at its Raniganj (East) Block in
Odisha and parts of Tamil Nadu, but would West Bengal after it gets more clarity
be set up in other states as well. on the governments Hydrocarbon
Exploration Licensing Policy (HELP). We
have informed the government about
the in-place shale gas resources of
around 8 tcf underneath the CBM play
in the Raniganj (East) block, at least 3
tcf of which can be recoverable, Manish
Maheshwari, CEO-E&P, Essar said. We
will develop the shale gas once we get
clarity from the government on pricing 39
and other guidelines under HELP. Essar
currently produces one million scmd
(standard cubic metres per day) from
its Coal Bed Methane (CBM) Block in
Raniganj, making it the countrys largest
unconventional gas player. Shale gas
It would also comprise of representatives of got covered under the March 2016 HELP
private sector Reliance Industries and Essar policy and the guidelines are under
Oil besides managing directors of Numaligarh formalisation for blocks which covers
Refineries Ltd, Mangalore Refineries Ltd and both conventional and unconventional
Chennai Petroleum Corp Ltd (CPCL). under the same acreages.
its subsidiary) holds 15% shares in JSC
Vankorneft. Vankor field, located in East
Siberia, is Russias second largest field by
production and accounts for around 4% of
Russian production and currently producing
oil at a level of approximately 422,000 bopd.
It is the largest of the fields, discovered
and commissioned in Russia during the last
twenty five years and is located in the North
of Eastern Siberia in Turukhansk District of
the Krasnoyarsk Territory 142 km away from
Igarka town. The recoverable resources of
the Vankor field as of 01.01.2016 stood at
361 million tonnes of oil and condensate and
138 bcm of gas.
 July 2016
www.InfralinePlus.com
NewsBriefs | Oil & Gas National
Fuel consumption grows 6.7 percent in May, import dependence goes up to 81.9 percent
Indias fuel consumption grew 6.7% in May
over that a year ago, reflecting greater use of
cars and increased air traffic in an expanding
economy, while crude oil production fell
GAIL awards Rs 550-cr contracts for Urga Ganga pipeline
GAIL India Limited has awarded Rs 550
crore worth of contracts for laying part of
Urga Ganga gas pipeline from Phulpur in
Uttar Pradesh (UP) to Haldia in West Bengal
40 (WB). Pipe contracts have been awarded
to four companies for a 341 km stretch,
GAIL said. The Line Pipes for which the
orders have been placed will be used in the
Phulpur-Dobhi (Bihar) section of the pipeline,
it said. Orders for the pipes have been placed
on Jindal Saw, MAN Industries (India),
Essar Steel India and Chinas Zhongyou BSS
(Qinhuangdao) Petropipe Co Ltd. The 1,681
km Phulpur-Haldia/Dhamra pipeline will be
completed in three phases at a cost of Rs
12,000 crore and cover eastern UP, Bihar,
IOC plans 33 percent rise in annual capex
Indian Oil Corporation (IOC) said it would
increase its yearly investment from the
current Rs 14,000-15,000 crore to about
Rs 20,000 crore over the next five to seven
years. This would cover new projects
and expansion of existing ones. It also
confirmed participation in two projects, an Rs
80,000-crore mega refinery in Maharashtra
and revival of three fertiliser units, with
other state enteprises, at a cost of Rs 15,000
crore. Over the next five to seven years, the
company would invest around Rs 1.2 lakh
crore, of which Rs 30,000-35,000 crore
would be in petrochemicals. The latter
now contributes nearly 30 per cent of their
3.3%, increasing import dependence to 81.9%
from 81.3%. In May, India consumed 9.4%
more diesel and 16.7% more petrol than
it did a year ago, the latest data released
by the oil ministrys Petroleum Planning &
Analysis Cell shows. Aviation turbine fuel
consumption grew 20% as lower prices and
holiday travels boosted air traffic. Except for
kerosene and naphtha, the consumption of
all other petroleum products went up during
the month. Domestic output of oil and gas,
however, did not pick up. In May, local crude
oil production declined 3.3% to 3.1 million
metric tonnes from a year ago. Natural gas
production fell 6.9% to 2,656 million metric
standard cubic meters.
a joint venture between state-owned
companies in India. MGLs IPO witnessed
Jharkhand, Odisha and WB. The first phase
at a project cost of Rs 3,200 crore will cover
755 km and include Phulpur-Mani, Mani-
Gorakhpur, Mani-Varanasi, Mani-Dobhi, Dobhi-
Silao, Silao-Patna and Silao- Barauni sections.
Mahanagar Gas subscribed 65 times
The Rs 1,000-crore initial public of-
fering (IPO) of shares of Mahanagar
Gas Limited (MGL) garnered nearly 65
times subscription, highlighting investor
appetite for primary market offerings
continues to be robust. The 17.34-million
share offering attracted over a billion
bids, worth around Rs 47,000 crore. MGL,
Gail India and BG Asia Pacific Holdings
(formerly British Gas Asia Pacific), is
one of the largest city gas distribution
strong demand across investor seg-
ments. The qualified institutional buyer
(QIB) segment was subscribed around
73 times, high networth individual (HNI,
or rich) segment saw a whopping 192
times subscription, while the retail (small
investor) category saw nearly six times
more demand than the shares on offer.
Analysts said the companys attractive
valuations compared to peers and growth
opportunities in the underpenetrated city
gas distribution space attracted investors
towards the IPO.
Ebitda. The other area, on which it is also
betting highly, is liquefied natural gas (LNG).
IOCs new Rs 5,000-crore LNG terminal at
Ennore would go on stream by 2018 and the
company is still looking for a strategic partner.
Inventory loss was Rs 15,000 crore in 2014-
15 and Rs 9,000 crore in 2015-16. In the
current quarter, the company is not expecting
any loss. IOC and other oil public sector units
are looking at setting up a mega refinery with
60 million tonnes per annum capacity. The
Maharastra Government had offered land and
IOC was evaluating it. The refinery would
require around 5,000 acres and the state has
offered the land on the Konkan coast.

NewsBriefs | Oil & Gas International
Private equity warms up to oil deals with $1 trillion warchest
The worlds private equity funds, with a
cash pile of around $1 trillion, are stepping
up their interest in the oil and gas industry,
with almost a half expecting to buy assets
in the sector over the next year, a survey
U.S. court strikes down Obama fracking rules for public lands
A federal judge has struck down the
Obama administrations rules for hydraulic
fracturing on public lands, a victory for oil
and gas producers and state regulators
who opposed the rules as an egregious
overreach. The ruling, which the White
House vowed to appeal, halts the
administrations efforts to address what
it sees as safety concerns in the industry
and reverses what producers had seen as
a first step toward full federal regulation
of all fracking activity. The U.S. Interior
Departments Bureau of Land Management
(BLM) lacked Congressional authority to set
fracking regulations for federal and Indian
lands, U.S. District Judge Scott Skavdahl
Nigeria seeks $40-$50 billion in oil investment as output rises
Nigeria is seeking $40 billion to $50 billion
in investment in oil projects as the OPEC
producer said it raised crude output to as
much as 1.9 million barrels a day recently.
The African producer signed a potential
deal for $8.5 billion of investment with
China North Industries Group Corp. The
countrys crude output should rise to
2.2 million barrels a day next month if
repairs to a pipeline are completed, he
said. Low oil prices, which have fallen
by more than half in the past two years,
are forcing some of the worlds largest
drillers to seek investment to maintain
and expand output. Saudi Arabias Deputy
showed. Funds appetite for investments
in the sector fell sharply after the start
of the oil price route two years ago. But
recent signs of a rebound, coupled with
abundant assets around the world, are
turning the tide, advisory firm EY said in
a survey of 100 private equity (PE) firms.
Around 43 per cent of the firms said they
were planning acquisitions by the first
half of 2017 and 25 per cent before the
end of the year. PE firms, which typically
seek high returns on investment, have
a warchest of around $971 billion. The
expected pickup in activity, however, is
likely to vary by region.
in Wyoming ruled. BLMs rules, issued in
their final form in March 2015, would have
required companies to provide data on
chemicals used in hydraulic fracturing and
to take steps to prevent leakage from oil and
gas wells on federally owned land.
buyers for 19.5 percent of Rosneft PJSC.
July 2016
www.InfralinePlus.com
Canada oil sands output to grow 42
percent by 2025
Canadas oil sands production will grow by
42 percent to 3.4 million barrels per day
by 2025, most of which will come from
the expansion of existing facilities rather
than new projects, analysts at IHS Energy
noted. The million-barrel-per-day increase
in output over the next nine years is less
than what IHS would have estimated be-
fore the collapse in global oil prices. Low
crude prices have forced producers such
as Cenovus Energy and Royal Dutch Shell
to slam the brakes on sanctioning new oil
sands plants, while all projects currently
under development will be completed by 41
2018. Future growth will have to come
from so-called brownfield expansions
where costs have come down as a result
of lower construction activity, improved
operating efficiencies and cheaper natural
gas. We expect oil sands producers to
focus future investments in the coming
years onto their most economic projects
- which we expect to be expansions of
existing facilities, said Kevin Birn, director
for IHS Energy.
Crown Prince Mohammed bin Salman
said in April the government plans to list
less than 5 percent of the state producer
known as Saudi Aramco, which could turn
the worlds biggest oil exporter into the
largest publicly traded firm with a value
in the trillions of dollars. Russia is seeking
Militant attacks earlier this year reduced
Nigerias oil production to 1.3 million
barrels from from 2.2 million a day.
 July 2016
www.InfralinePlus.com

ExpertSpeak
Energy Maharatnas foray into fertiliser
production to bailout defunct units
Vijay S Laghate, a Pune-based Management Consultant, hails
the decision of public sector companies to diversify into the
manufacturing of fertiliser. The move, Laghate feels, will help
revive defunct fertiliser units and will also aid expansion of new
modernplants.

Major public sector units operating in
the energy space - Coal India, NTPC,
IOC and Gail - are diversifying into
the manufacturing of fertiliser Urea,
an item important for food security.
They will help two non-operational
public sector fertiliser companies to
set up new modern plants at closed
42 sites (Table 1). This is a matter of some
cheer as the last urea plant was set up
more than 15 years ago.
This movement into an unfa-
miliar business area is occurring after
operating fertiliser companies did not
respond to tenders floated in late 2015
to revive Barauni, Gorakhpur and
Sindri units. The Maharatnas will have
to grapple with economic policy issues,
before taking up the challenge of retail
marketing in rural areas.
The annual urea output of each
plant will be about 1.25 mil mts,
based on ammonia plant 2,200 mtpd
plus urea 3,850 mtpd. Feedstock
will be natural gas, and investment
about ` 5,500 to 6,000 crores for
each plant. The exception is Talcher,
which will start from coal, make
additional products, and
Vijay S Laghate, Pune-based Management
cost about ` 9,000 Consultant
crores. Projects The
will be imple- key ques- five plants, plus one brownfield
mented through tion is how unit being set up in private
Special global prices of sector by Chambal Fertilisers,
Purpose gas and urea will can substitute present imports.
Vehicles. move in the next The source of natural gas will
few years be LNG and domestic gas, such
Current as ONGCs Daman fields. Gas
scenario will reach the three eastern units by
Presently, domestic Gails Phulpur - Haldia - Dhamra
production of urea is around 22 mil pipeline, whose Phases 1 and 2 are to
mts, and imports 8 mil mts. These be completed as per the commission-

Table 1
Fertiliser PSU Location Partners for Revival

Hindustan Fertiliser Corporation

Barauni (Bihar) Indian Oil Corporation
(HFC)

1. Gorakhpur (UP) National Thermal Power Corporation

2. Sindri (Jharkand) Coal India Ltd

Fertiliser Corporation of India (FCI) 3. Ramagundam National Fertilizers Limited, Engineers India
(Telangana) Limited

Rashtriya Chemicals & Fertilizers Ltd, Coal India

4. Talcher (Odisha)
Limited, Gas Authority of India Ltd.
 July 2016
www.InfralinePlus.com

ing schedule for the urea plants. The

cost of these two phases is ` 8,785
crores, out of ` 12,210 crores for the
entire pipeline. Interestingly, Gail
has sought budgetary support for the
entire pipeline, implying apprehen-
sions over capacity utilization. Total
investment on 6 plants plus pipeline
will be about ` 40,000 crores.
Urea business operates under a
subsidy regime. All urea, whether
domestically produced or imported,
must be sold to farmers at a Gov-
ernment determined Maximum Retail
Price. For manufacturers, Government
calculates the rate per metric tonne
that they require to earn a fair return
on investment, after covering costs. It them to be commissioned before
pays as subsidy the difference between
Urea business operates October 2019. The Policy prescribes a
this rate and the MRP. The present under a subsidy regime. formula to determine the rate payable
MRP of ` 5,360 per mt is roughly one All urea, whether to manufacturers for urea made from
fourth the required rate for existing domestically produced gas having a delivered price of $ 6.5 /
manufacturers, who depend on or imported, must be mmbtu or more. The rate has a linkage
subsidy for the balance (Table 2). It is to import price of urea. The Policy
doubtful if any industrial item is sold
sold to farmers at a initially guaranteed buyback of the
43

at such a deep discount to the actual
cost of production!
As MRP is much below import
price, subsidy is also paid on imports.
Government controls the quantum
of imports, looking at the supply
- demand situation. Imports are
canalised through designated public
sector companies. The new units will
be governed by the New Investment
Policy 2012 for Urea, which requires
Government determined entire output for 8 years from start of
Maximum Retail Price. production, by which time investors
For manufacturers, would be expected to repay all loans
Government calculates and recover their investment.
The Policy attracted about 15
the rate per metric applications for brownfield / green-
tonne that they require field plants. As this was more than
to earn a fair return required, Government had to determine
on investment, after selection criteria. Then it was realised
that global urea prices were softening,
covering costs
and the guaranteed buyback clause

Table 2 Subsidy data for National Fertilisers Ltd (2nd largest urea manufacturer in India)
2010-11 2011-12 2012-13 2013-14 2014-15 Change over
period

Sales of Urea in mil mt 3.359 3.389 3.162 3.687 3.679 10% increase

Average MRP of Urea ` per mt 5,310 5,335 5,360 5,360 5,360 1% increase

Sales of Urea ` crores 5,559 7,112 6,595 7,931 8,399 51% increase

- Of which Subsidy ` crores 3,840 5,363 5,020 6,048 6,461 68% increase

Subsidy as share of Sales 69% 75% 76% 76% 77%

Basis: Annual reports
 July 2016
www.InfralinePlus.com

ExpertSpeak

could create a heavy subsidy burden.

In October 2014, this clause was
removed. The result was that only one
existing company, Chambal Fertilisers,
went ahead with its proposal. And there
were hardly any bidders in 2015 for the
revival tenders of FCI and HFC.
The apprehension was whether
domestic production from new units can
compete with imports. At the present
delivered pool price of gas of around
$ 6.5/ mmbtu, the Policy formula
indicates that revival units will receive $
305 to 335 pmt of urea. But, today India
is importing urea at $ 216 pmt on cfr
basis - a full $ 100 less. If the same situ-
ation prevails in 2019 when the six new
units come on stream, then accepting
7.5 mil mtpa from them will be more
expensive than importing urea by $ 750
million, or roughly ` 5,000 crores in For the Maharatnas investments to be afloat after
a year. As buyback is not guaranteed, 5 years, gas prices should remain low, and urea
Government will be within its rights prices should rise. Domestic gas supply is likely to
44 to exclude the higher cost supply from be limited, as the present domestic price level of
the new plants when determining the
quantity of urea to be imported. If that
$ 3 / mmbtu does not encourage development of
happens, the units will have to stop pro- petroleum resources with more than modest level
duction, which will wreck their finances. of difficulty
The concern is reinforced by the fact
that a Government committee to study next few years. For the Maharatnas continue to have a significant share,
de-canalisation of urea imports was investments to be afloat after 5 years, which will prevent the pooled price
formed in March 2016. Financial closure gas prices should remain low, and urea from going any lower than today. Urea
for the new units may run into problems. prices should rise. Domestic gas supply prices globally are expected to remain
is likely to be limited, as the present soft, as capacity addition continues,
Challenges faced by domestic price level of $ 3 / mmbtu especially in cheap feedstock regions
Maharatnas does not encourage development of around the world. China is a major
The key question is how global prices petroleum resources with more than exporter to India; the bulk of its huge
of gas and urea will move in the modest level of difficulty. LNG will urea capacity has production cost

Table 3 Subsidy Arrears for Fertiliser Industry

Figs in ` crores 2011-12 2012-13 2013-14 2014-15 2015-16 * Change over period

Subsidy Released 73,791 70,592 71,251 72,070 72,438 -

Carry Forward Unpaid 22,200 31,579 40,341 40,500 56,000 152 %

Subsidy Dues

Arrears as % of Budget 30% 45% 57% 56% 77% 156%

Basis: Expenditure Budgets vol 1, and Indian Journal of Fertilisers, Feb 2016 * Revised Estimate
 July 2016
www.InfralinePlus.com

Table 4 Subsidy arrears for National Fertilisers Ltd

Figs in ` crores 2011-12 2012-13 2013-14 2014-15 2015-16 * Change over period

Subsidy Arrears ` crores 1,497 2,334 3,039 4,538 4,975 232% increase

- As ratio to Urea sales 27% 33% 46% 57% 59%

- As ratio to Urea subsidy 39% 44% 61% 75% 77%

Source: Annual Reports

below $ 200 pmt today, because coal subsidy. Because of insufficient passed. Working capital requirements
prices are at historical lows. Ironically, budgetary allocation, subsidy funds balloon in the second half of the year,
the six new units being added in India get exhausted by September or so. raising interest costs - which are not
will themselves contribute to the global Arrears in 2015-16 climbed to ` reimbursed.
surplus, and dampen global prices. Any 56,000 crores, which were as high Subsidy arrears for National
special dispensation to the new units as 77% of the Budget estimate of Fertilisers Ltd, a PSU that makes
to overcome these concerns may be ` 72,438 crores (Table 3). Subsidy almost exclusively urea, were 77% of
viewed as discrimination. on urea produced during October its expected subsidy for 2014-15; they
Another challenge for the Maha- to March period is paid sometime jumped 3.3 times in five years (Table 4).
ratnas is the delayed payment of April onwards after Central Budget is The new units will be more
vulnerable, as their subsidy
requirements will be more because 45
The subsidy system does not reimburse marketing of their high capital cost. The uneven
margin charged by suppliers of natural gas; it has cash flow will affect timely payment
of interest and loan instalments.
also not implemented Cabinet approval for higher Curtailing production in an attempt
reimbursement of fixed costs. Hopefully, the entry to reduce costs is not an option:
of Maharatnas will resolve such issues, and not ammonia - urea plants are best
operated nonstop 24 x 365 (or more)
create more
at full capacity.
Further, the subsidy system does
not reimburse marketing margin
charged by suppliers of natural gas;
it has also not implemented Cabinet
approval for higher reimbursement
of fixed costs. Hopefully, the entry of
Maharatnas will resolve such issues,
and not create more.
The fundamental question is the
price to be paid for self reliance in
urea. A large part of urea applied
on farms goes un-used. Investments
for improving the usage efficiency
of urea and other fertilisers, and in
agricultural infrastructure, will reduce
the quantum of urea needed to raise
agricultural production to meet future
nutrition needs of the country.
For suggestions email at feedback@infraline.com
 July 2016
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InDepth
Rising oil prices spell end
of dream run for refiners?

46

Domestic demand for petroleum products to decline from 10.9 in FY15 to 5.5 percent in FY16
IOC reported record profit of Rs 10,399 crore in FY16, almost double of previous year

By Team InfralinePlus

Indian refiners had a dream run in
2015-16 due to the strong demand
for petroleum products, with private
player Reliance Industries Ltd and
state-owned Indian Oil Corporation
both reporting record profits on the
back of strong Gross Refining Margins
(GRMs). The strong demand for petro-
leum products in 2015-16 was fuelled
by the drastic fall in prices. However,
with oil prices rising, the demand for
petroleum products is expected to mod-
erate in coming days. Brent oil prices
held near 50 dollar a barrel in early
trading on June 3 despite Organisa-
tion of Petroleum Exporting Countries
(OPEC) failing to agree on production
targets. The benchmark price had hit
the low of 27.67 dollar per barrel at one
point early this year.
In view of rising oil prices, experts
project that annual domestic demand
growth for petroleum products in FY16
could moderate to 5.5 per cent, sharply
down from 10.9 per cent in FY16,
potentially impacting refiners GRMs.
Brokerage firm CIMB has said the
high profits of state-owned oil mar-
keting companies in 2015-16 were
largely driven by strong GRMs which
may not sustain. We view the FY16
oil marketing companies GRM levels
as exceptional and expect sustainable
margins to be significantly lower, says
CIMB in a note. In fact, Singapore
GRMs in FY17 to date have averaged

5 dollar per bbl compared to 7.7 dollar
bbl in FY16, the note added.
However, even a 5.5 per cent
growth in demand for petroleum
products would yield decent profits.
A rebounding economy could also
create additional demand for petroleum
products. Indian economys strong per-
formance in the fourth quarter suggests
that the recovery is taking hold, which
augurs well for the growth prospects of
petroleum products.
In addition, a rising oil price also
creates possibility of windfall gain
for refiners. Coming back to refiners
strong financial performance in FY16,
IOC reported record profit of Rs 10,399
crore, which was nearly double what
the company earned in the previous
year. IOCs profit could have been even
higher but for heavy inventory losses
that it suffered in the fourth quarter.
IOC reported GRM of 5.06 dollar per
barrel in2015-16, sharply up from
the meagre 0.27 dollar a barrel in the
previous year.
Two other state-owned refiners,
BPCL and HPCL, too saw their GRMs
rise sharply in 2015-16. For example,
BPCLs GRM nearly doubled to 6.59
dollar per bbl in 2015-16, from 3.62
dollar per bbl in the previous year.
HPCL reported GRM of 6.68 dollar
per bbl in 2015-16, compared to 2.84
dollar per bbl in the preceding year,
registering more than two-fold increase
in profitability.
FY16 was a great year for private
player RIL too, which exports bulk
of its petroleum products. It reported
GRM of 10.8 dollar per barrel, the
highest in last seven years.
IOC reported record
profit of Rs 10,399
crore, which was nearly
double what the com-
pany earned in the pre-
vious year. IOCs profit
could have been even
higher but for heavy
inventory losses that it
suffered in the fourth
quarter. IOC reported
GRM of 5.06 dollar per
barrel in 2015-16, sharp-
ly up from the meagre
0.27 dollar a barrel in
the previous year
July 2016
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Amid recovery of Indian economy,
domestic demand for petroleum
products has picked up. The demand
for petroleum products grew at the
impressive rate of 10.9 per cent in
2015-16, sharply up from 4.5 and 0.9
per cent respectively in 2014-15 and
2013-14.
Thanks to reforms undertaken by
the NDA government to deregulate
retail pricing of diesel and to better
target LPG subsidies, state-owned
oil marketing have seen significant
improvement in their cash flows.
Meanwhile, low oil prices have also
reduced their borrowings and interest
costs. As a result, these companies are
now flush with funds.
Riding high on the demand growth
for petroleum products, public sector
refiners are investing big time in
capacity expansion. IOC, BPCL and
HPCL have together decided to put up
a 60 million tonne per annum capacity 47
refinery in Maharashtra on the west
coast. Talks are underway with the state
government for allotment of a suitable
land for the envisaged coastal refinery.
It is not just refiners who are betting
on the long-term growth prospect
of petroleum products in the Indian
market. International energy think-
tanks too are projecting bullish growth
prospects for the Indian refining sector.
India likely to zoom past
Japan in energy consumption
India is soon likely to overtake Japan
as the second-largest oil consuming
economy in Asia, says Oxford Institute
for Energy Studies (OIES). Part of this
demand growth has come from the ef-
fects of a low oil price, it adds.
The global price downturn, which
began in June 2014, halved the oil
import bills of the largest oil importing
economies, bringing substantial fiscal
improvements. This implies potential
longer-term effects for economic
growth: for instance, a 10 per cent
decrease in oil prices is estimated to
raise growth in oil-importing countries
 July 2016
www.InfralinePlus.com
InDepth
by 0.1 to 0.5 per cent, depending on the
share of oil imports in GDP, says OIES
48 in its recent report titled Indias Oil
Demand: On the Verge of Take-off?
Apart from the effects of the oil
price decline, Indias GDP growth is
estimated to have overtaken Chinas
in 2015 (7.2 per cent growth for India,
as opposed to 6.9 per cent for China)
and is forecast to remain relatively
high in 2016, with Chinas economy
readjusting to a new normal of lower
growth. Improvements in macro-
economic and fiscal indicators (for
instance, a historically low current
account deficit at around 1.6 per cent
of GDP as of late 2015) suggest that
Indias GDP growth could continue
on a relatively high path, subject to its
ability to carry out structural reform.
This has significant long-term implica-
tions for the countrys oil demand, the
report stated.
Gulf countries national oil com-
panies are eyeing stakes in Indias
state-owned refining and oil marketing
companies, given the prospect of
strong growth in the petroleum product
market here. India too is eager to
involve them. If this possibility materi-
alises, it would go a long way towards
Gulf countries national
oil companies are
eyeing stakes in Indias
state-owned refining
and oil marketing
companies, given the
prospect of strong
growth in the petroleum
product market here.
India too is eager to
involve them. If this
possibility materialises,
it would go a long
way towards boosting
Indias energy security
boosting Indias energy security.
Global energy consulting firm Mck-
insey & Company sees a lot of comple-
mentarities between energy-guzzling
India and oil-exporting Gulf countries
and has advised mutual investments
in each others oil sector including
refining. Make joint complementary
investments across upstream and
downstream, including Middle Eastern
investments in Indian refining and
petrochemicals, Indian upstream
investments in the Middle East, rec-
ommends the international consulting
firm in its recent report India: Towards
Energy Independence 2030. Obvi-
ously, there is a tremendous scope of
cooperation with Gulf countries in the
energy sector.
IEA sees huge unrealised
demand growth potential
Indias per capita oil consumption
remains relatively low in comparison
to both the worlds largest consuming
economies and to other non-OECD
countries. The wealthiest 10 per cent of
its population accounts for a quarter of
household energy expenditure. Further-
more, household expenditure on energy
is two and a half times higher in urban
areas than in rural areas, with the most
affluent sectors of the urban population
spending around eight times as much as
the poorest, whereas in rural areas the
most affluent only spend four and a half
times as much as the poorest, according
to the International Energy Agency.
The drop in oil prices (the price of
the Indian crude oil basket has fallen
from 109 dollar per barrel in June 2014
to 25 dollar per barrel in January 2016)
has been sufficient to increase afford-
ability for a whole new segment of
the growing middle class population.
The effect of prices is reflected in both
higher consumption of fuels as well
as a switch away from bio-energy and
kerosene towards commercial fuels
such as LPG, says OIES.
Strong growth in vehicle
sales
Meanwhile, growth in sales of
passenger vehicles in India was the
fastest among the eight largest auto
markets in the world in the first 11
months of 2015 as vehicle purchases
slowed in China and declined in Japan
and the US. With 7.64 per cent of
annual growth in 2015, India led the
top eight markets as the countrys
economy bottomed out and public
investment improved market conditions

for domestic auto firms during 2015.
The pace of growth made India the
worlds fifth largest passenger vehicle
market by volume, surpassing Brazil.
Growth in India was fuelled by positive
customer sentiment in cities, gradual
pickup in the economy and hope that
the economy will do much better in the
coming quarters, say experts.
Moodys bullish on prospects
of Indian refining sector too
Projecting Indian economys growth
at 7 per cent in the current fiscal and
7.5 per cent in the next one, Moodys
Investors Service today said GDP
growth and low oil prices will lead to
higher fuel consumption over the next
18 months. We expect the Indian econ-
omy to grow at a faster pace, with GDP
growth for the fiscal year ending March
2016 at 7 per cent and 7.5 per cent for
the following year, it said in a report
titled Refining and Marketing - Asia
Outlook Stable on Modest EBITDA
Growth, Easing Supply Overhang.
Significantly, provisional data
released by the Central Statistical
Organisation showed that Indias
GDP grew at a pace of 7.6 per cent in
2015-16, higher than what Moodys
projected in the recent report. Anyway,
the international credit ratings agency
said that improving economic growth
along with low oil prices will support
higher consumption of refined
petroleum products in India over the
next 18 months.
In addition to low oil prices, struc-
tural and policy driven changes are
underway which are resulting in surge
in Indias oil demand. Indias per capita
oil consumption has increased as a
The pace of growth
made India the worlds
fifth largest passenger
vehicle market by
volume, surpassing
Brazil. Growth in India
was fueled by positive
customer sentiment in
cities, gradual pickup
in the economy and
hope that the economy
will do much better in
the coming quarters,
say experts
July 2016
www.InfralinePlus.com
result of the increased affordability of
oil in various uses for a large section
of population, who could not afford it
previously. This is all becoming visible
in the motorization of the economy,
says Petroleum Planning and Analysis
Cell (PPAC) in a recent update.
Further, governments target of
increasing the manufacturing share of
GDP to 25 per cent by the beginning
of the next decade from roughly 16 per
cent at present, could lead to higher
consumption in manufacturing. Gov-
ernments move to locally manufacture
would help infrastructure sectors such
as power, roads, ports, oil and gas,
PPAC said.
As the government focuses on
developing Industrial corridors and
smart cities, there would be more
industrial development and fuel con-
sumption in the country. The role of
transport sector and trend of motori-
sation is a key factor affecting the 49
consumption of fuels. Governments
road construction programme aiming
to construct 30 km of highway roads
per day augurs well for fuel demand,
especially diesel, say experts.
For suggestions email at feedback@infraline.com
 July 2016
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FinancialResults
Higher transmissions, better margins boost GAIL Q4 net
GAIL (India) Ltd reported a 50.6 per cent
increase in net profit for the fourth quarter
of FY16, on higher transmissions and bet-
ter gas trading margins. Net profit for the
quarter stood at `770 crore, compared to
`511 crore in the corresponding quarter last
year. However, net sales fell 18.3 per cent to
`11,627 crore (`14,235 crore) due to a fall in
petrochemicals and LPG realisations. Pet-
GSPC posts net loss of Rs 804 crore in FY16
Gujarat State Petroleum Corp (GSPC)
incurred a net loss of Rs 804.42 crore in the
fiscal year ended March 31 as it wrote off
exploration expenditure. GSPC, an unlisted
50 Gujarat government entity, did not provide
corresponding numbers for 2014-15.
The loss in 2015-16 was mainly due to
extraordinary items such as writing-off of
exploration expenditures and impairment
carried out in accordance with account-
ing standards, GSPC said. As much as Rs
1,181.62 crore was attributable to these
extraordinary items. The company wrote
off an amount of Rs 686.88 crore pertaining
to domestic exploration activities while an
amount of Rs 97.39 crore was written off
as diminution in investment in its subsidiary
GSPC JPDA that was partner in an Austra-
lian Block, it said. GSPC owns the Krishna
Godavari basin Deendayal gas block where
IGL records net profit of Rs 464.13 crores in FY16
Indraprastha Gas Limited (IGL) the
supplier of Compressed Natural Gas
(CNG) and Piped Natural Gas (PNG) in the
National Capital Territory of Delhi, Noida,
Greater Noida & Ghaziabad announced its
Q4 results and audited financial results for
2015-16. In Q4 of 2015-16, the companys
net profit for the quarter increased from
Rs. 95.88 crores in corresponding period
last year to Rs 107.64 crore in FY16
showing an increase of 12%. During this
period, IGL registered a turnover of Rs. 976
rochemical prices during the quarter were
down 25 per cent while LPG prices were
40 per cent lower. That has impacted the
overall net sales. However, there was higher
transmission of gas and gas trading margins
were better, which is why net profit has
increased, said BC Tripathi, Chairman and
Managing Director of GAIL (India). On the
operational front, Tripathi said the Jagdish-
pur-Haldia pipeline has now been renamed
to Phulpur-Dhamra-Haldia. This pipeline
will be over 2,000 km long and require over
`12,000 crore of investment, he added. The
project will be completed in three phases. In
the first phase, expected to be completed by
December 2018, eastern Uttar Pradesh and
Bihar will be connected in a 750-km stretch
costing close to `3,200 crore.
it has sunk in USD 3.6 billion and taken
about Rs 19,500 crore of debt. It started
test production from the block in 2014 but
is yet to begin commercial output. The
company recorded income from operations
of Rs 10,607.30 crore on a standalone basis
as against Rs 10,946,30 crore in the previ-
ous year. The decrease in total revenues
and operating profits compared to previ-
ous year is mainly attributable to heavily
skewed margins in the gas trading segment
due to global meltdown in crude prices
during the year, said J N Singh, Managing
Director, GSPC.
crore as compared to Rs. 1007 crore in the
corresponding period last year. However,
there has been an overall sales volume
growth of 8% over the corresponding
quarter in the last fiscal, with CNG sales
Petronet LNG Q4 net dips 20 percent
on adjusting tax
State-run natural gas importer Petronet
LNG reported a 20 percent decline in
net profits for the fourth quarter ended
March 2016 caused by reversal of tax
expenses. The company posted a net
profit of Rs.239 crore for the previous
quarter, compared to the profit of
Rs.300 crore in the corresponding
quarter of 2014-15. The net profit
figure of the quarter is not comparable
with the net profit of the corresponding
quarter. However, the profit before
tax figures are comparable, Petronet
director (Finance) R.K. Garg said. Total
income of the company during the
quarter also fell 15 percent to Rs. 6,065
crore, as compared to Rs.7,161 crore in
the corresponding quarter of 2014-15.
For the full fiscal 2015-16, Petronets
net profit rose by 3.6 percent to Rs.914
crore, as compared to Rs.882 crore in
the previous fiscal. Total income for the
fiscal dropped 31 percent to Rs.27,303
crore, from Rs.39,655 crore in the
previous financial year. Petronet - a
joint venture promoted by GAIL, Oil and
Natural Gas Corp, Indian Oil and Bharat
Petroleum - operates a 10 million tonne
per annum (mtpa) liquefied natural gas
(LNG) terminal at Gujarats Dahej and a
5 mtpa terminal at Keralas Kochi.
volume growing by 5% and PNG sales
volume growing by 9%. The companys
gross turnover has grown to Rs. 4052
crores in FY 16 from Rs. 4048 crores in FY
15. However, the net profit in FY 16 showed
a decline of 5 % from Rs 437.73 crores in
FY 15 to Rs. 416.2 crores in FY 16 due to
lower realisations and overall increase in
cost. During 2015 - 16, total sales volume
grew by 4% over the previous year with
both CNG as well as PNG segments
recording 4% volume growth.
 July 2016
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StatisticsOil & Gas

Company wise monthly crude oil production (As on May, 2016) (TMT)
Target May (Month) April-May (Cumulative)
Oil Company
2016-17 % over % over
2016-17* 2015-16 2016-17 2015-16
(Apr-Mar) * last year last year

Target Prod. Prod. Target Prod. Prod.

ONGC 22393.4 1857.45 1888.3 1905.15 99.12 3654.51 3690.06 3720.49 99.18

OIL 3280.1 267.5 271.4 284.99 95.23 527.8 532.81 565.7 94.19

PSC Fields 10839.3 924.19 918.61 994.38 92.38 1827.78 1812.51 1923.72 94.22

Total 36513 3049.1 3078.3 3184.5 96.66 6010.1 6035.4 6209.9 97.19

Oil India Limited : Production & Sales of Crude & Natural Gas ( 2014-16)

2015-16 2014-2015
Production
Q1 Q2 Q3 Q4 Full year Q1 Q2 Q3 Q4 Full year
Crude Oil (MMT)
OIL 0.834 0.808 0.797 0.771 3.21 0.833 0.868 0.867 0.828 3.396
JV 0.005 0.005 0.005 0.005 0.02 0.008 0.007 0.007 0.006 0.028
Condensate 0.003 0.005 0.004 0.005 0.017 0.003 0.004 0.004 0.005 0.016
Total (incl. JV) 0.842 0.818 0.806 0.781 3.247 0.844 0.879 0.878 0.839 3.44
Gas (BCM)
OIL 0.642 0.702 0.776 0.718 2.838 0.677 0.694 0.687 0.664 2.722 51
JV 0 0 0 0 0 0 0 0 0 0
Total (incl. JV) 0.642 0.702 0.776 0.718 2.838 0.677 0.694 0.687 0.664 2.722
O+OEG (MMT) 1.484 1.52 1.582 1.499 6.085 1.521 1.573 1.565 1.503 6.162
2015-16 2014-2015
Sales
Q1 Q2 Q3 Q4 Full year Q1 Q2 Q3 Q4 Full year
Crude Oil (MMT)
OIL 0.836 0.801 0.795 0.767 3.199 0.826 0.85 0.859 0.824 3.359
JV 0.006 0.005 0.005 0.005 0.021 0.008 0.007 0.006 0.005 0.027
Condensate 0.003 0.004 0.005 0.005 0.017 0.003 0.004 0.004 0.005 0.016
Total (incl. JV) 0.845 0.81 0.805 0.777 3.237 0.837 0.861 0.869 0.835 3.402
Gas Sales (BCM)
OIL 0.502 0.565 0.652 0.595 2.314 0.548 0.559 0.549 0.526 2.181
JV 0 0 0 0 0 0 0 0 0 0
Total (incl. JV) 0.502 0.565 0.652 0.595 2.314 0.548 0.559 0.549 0.526 2.181

Month Wise Crude Oil Processed by Refineries (2016-17) (As on May, 2016) (TMT)
Oil Companies April May Total
Indian Oil Corporation Ltd.(Iocl)
Iocl-Koyali, Gujarat 1215 1240 2455
Iocl-Mathura, Uttar Pradesh 797 814 1611
Iocl-Panipat, Haryana 1316 1386 2702
Iocl-Haldia, West Bengal 692 713 1406
Iocl-Barauni,Bihar 559 577 1136
Iocl-Guwahati,Assam 75 73 148
Iocl-Digboi,Assam 52 46 98
Iocl-Bongaigaon,Assam 212 215 426
Iocl-Paradip,Odisha 394 538 933
Iocl Total 5313 5602 10915
 July 2016
www.InfralinePlus.com

StatisticsOil & Gas

Oil Companies April May Total
Hindustan Petroleum Corporation Ltd.(HPCL)
HPCL-MUMBAI, MAHARASHTRA 714 725 1439
HPCL-VISAKH, ANDHRA PRADESH 804 815 1619
HMEL-GGSR, BATHINDA, PUNJAB 920 945 1865
HPCL-TOTAL 2438 2485 4923

Bharat Petroleum Corporation Ltd (BPCL)

BPCL-MUMBAI, MAHARASHTRA 1146 1169 2315
BPCL-KOCHI, KERALA 895 933 1828
NRL-NUMALIGARH, ASSAM 217 238 455
BORL-BINA 534 617 1150
BPCL-TOTAL 2791 2957 5748

Chennai Petroleum Corporation Ltd (CPCL)

CPCL-MANALI, TAMILNADU 821 807 1628
CPCL-NARIMANAM, TAMILNADU 56 50 105
CPCL-TOTAL 877 856 1733

Oil & Natural Gas Corporation Ltd.(ONGC)

ONGC-TATIPAKA, ANDHRA PRADESH 7 6 13
MRPL-MANGALORE, KARNATAKA 1166 1232 2398
ONGC TOTAL 1173 1239 2412

Reliance Industries Ltd. (RIL)

52 RIL, JAMNAGAR, GUJARAT 2732 2856 5588
RIL-(SEZ), JAMNAGAR, GUJARAT 3115 2183 5297
RIL TOTAL 5846 5039 10885

ESSAR OIL LTD., VADINAR, GUJARAT 1719 1779 3497

GRAND TOTAL 20157 19955 40112

Consumption of Petroleum Products (May, 2016) (TMT)

May April-May
Product
2015-16 2016-17 Growth (%) 2015-16 2016-17 Growth (%)
(A) Sensitive Products
SKO 577.1 530.4 -8.1 1,144.90 1,046.50 -8.6
LPG 1,496.60 1,607.40 7.4 2,976.20 3,208.20 7.8
Sub Total 2,073.70 2,137.80 3.1 4,121.10 4,254.70 3.2
(B) Major Decontrolled Products
Naphtha 1,239.70 1,147.80 -7.4 2,182.10 69.3 4
MS 1,834.10 2,082.40 13.5 3,617.60 4,078.20 12.7
HSD 6,435.10 6,958.40 8.1 12,922.00 13,729.90 6.3
Lubes + Greases 235.3 279.2 18.7 508 532.9 4.9
LDO 24.5 36 46.6 50.2 69.8 39.1
FO/LSHS 535.1 625.8 17 1019.6 1253.5 22.9
Bitumen 574.1 614.7 7.1 1122.1 1241.3 10.6
ATF 500.8 563.8 12.6 994.7 1118.8 12.5
Sub Total 11,378.70 12,308.10 8.2 22,416.30 24,293.70 8.4
Sub - Total (A) + (B) 13,452.40 14,445.90 7.4 26,537.40 28,548.40 7.6
(C) Minor Decontrolled Products
Pet. Coke 1,554.10 1,591.50 2.4 2,679.80 3,169.70 18.3
Others 521.4 535.3 2.7 1,025.40 1,041.00 1.5
Sub Total 2,075.40 2,126.80 2.5 3,705.20 4,210.70 13.6
Total 15,527.80 16,572.70 6.7 30,242.60 32,759.10 8.3

NewsBriefs | Renewable International
India to get over $1 billion from World Bank for Modis solar goals
The World Bank said it would lend India
more than $1 billion for its huge solar
energy programme, after Prime Minister
Narendra Modi sought climate change
funds from its visiting head. Modi is banking
on Indias 300 days a year of sunshine
to generate power and help fight climate
change rather than committing to emission
cuts like China. The World Bank loan is the
Renewable energy set to get a separate power trading market
With the increasing share of renewable energy
in the grid and its likelihood to disturb existing
power systems, the government is preparing
a separate power trading platform for clean
energy. The platform will be jointly developed
by MNRE and Power Trading Corporation
of India (PTC), a public-private venture for
power trading. This would help states buy,
sell and trade renewable-based power. This
is likely to help states which have surplus
renewable energy generation to sell and the
ones which want to meet their renewable pur-
chase obligation (RPO) would get a platform
to buy as is need is basis. As mandated under
the National Tariff Policy, states would have to
meet part of energy requirement from renew-
Tata Powers arm acquires 30 MW solar project in Maharashtra
Tata Powers 100% subsidiary Tata Power
Renewable Energy (TPRE) has won 30
MW solar gird connected PV project in
Maharashtra under the National Solar
Mission. TPRE has received the letter of
intent to develop the project and it will
sign a 25-year power purchase agree-
global lenders biggest solar aid for any
country and comes as India has set a goal
of raising its solar capacity nearly 30 times
to 100 gigawatts by 2020 and is attracting
mega investment proposals from top
companies and institutions. Prime Minister
Modis personal commitment toward
renewable energy, particularly solar, is the
driving force behind these investments,
World Bank President Jim Yong Kim said.
India is the largest client of the World
Bank, which lent it around $4.8 billion
between 2015 and 2016. Modis office said
he told Kim about the need for climate
change financing for countries like India
that are consciously choosing to follow an
environmentally sustainable path.
able energy sources. RPO, launched in 2010,
makes it obligatory for distribution companies,
open-access consumers and captive power
producers to meet part of their energy needs
through green energy.
ment with NTPC Vidyut Vyapar Nigam Ltd.
TPRE CEO and ED said: This is the third
LoI received by TPREL in recent months
and brings our solar bid wins to 145 MW.
Receiving this LoI for 30 MW of non-fossil
fuel energy will further add to our total
generation capacity, thereby, significantly
increasing our green footprint. This move
is in line with the government set target
of 100 GW from solar energy by 2017, he
said. We will continue to grow our capac-
ity through organic and inorganic means
over the next few years to contribute to
Tata Powers aggressive target of 20,000
mw of total capacity by 2025, he added.
July 2016
www.InfralinePlus.com
National
India plans to add 10 GW of renewable
micro- & mini-grids
The MNRE has announced plans to
set up 10 GW of renewable energy
capacity through the implementation
of micro- and mini-grids. The plan
calls for setting up small-scale solar,
wind, hydro and biomass projects.
According to the proposal, mini-grids
will be linked to an installed capacity
of more than 10 kW, while a micro grid
will have projects with a capacity of
less than 10 kW. At an average plant 53
size of 50 kW, the government expects
that 500 MW would be commissioned
through 10,000 projects in the first
go. The government targets 10 GW of
operational capacity over the next 5
years. The micro- and mini- renewable
energy grid plan will provide huge
support to the government plans to
provide electricity access to every
household in the country by 2019. Last
mile connectivity through conventional
technology and measures may not be
the most time and financially efficient
method. This is where independent
small-scale renewable energy grids
come in. The capital investment for
such projects will be very low, and
results would be delivered in a short
period of time. Additionally, the main
transmission network will also be
shielded from the potential adverse
impacts of the intermittent injection
of renewable energy. India has a very
ambitious renewable energy target
of 175 GW of operation capacity by
March 2022. To achieve this target,
the government is working on multiple
fronts.
 July 2016
www.InfralinePlus.com
NewsBriefs | Renewable National
I Squared Capitals Amplus Energy acquires SunEdisons roof-top solar assets
US private equity (PE) firm I Squared
Capital-owned roof-top solar power
platform Amplus Energy Solutions Pvt.
Ltd has acquired American solar power
developer SunEdison Inc.s roof-top solar
power assets in India. We have concluded
India and UK join hands to work as R&D partners in Solar Alliance
Union Minister for Science & Technology and
Earth Sciences, Dr. Harsh Vardhan led the
Indian delegation at the 5th Indo-UK Sci-
ence and Innovation Council Meeting (SIC)
held at London in June. After the event, Dr.
54 Harsh Vardhan stated that India and UK have
agreed to work together in two major initia-
tives in the fields of Solar Energy and Nano
Material Research, inter alia. The SIC is the
apex body which oversees the entire gamut
of the India-UK science, technology and
innovation cooperation and meets once in two
years. The last meeting of the SIC was held
in New Delhi in November 2014 during which
both countries had launched the Newton-
Bhabha Programme to support the bilateral
NHPC plans 600 MW solar project at Koyna dam in Maharashtra
State-run National Hydroelectric Power
Corporation (NHPC) is planning to set up a
600-MW solar power project at the Koyna
hydel power complex in Maharashtra as
part of an initiative to expand its solar
MNRE to set up one lakh family type
the sale of SunEdisons roof-top solar
assets, which marks the first effective
sale of SunEdisons assets in India, said
Sanjeev Aggarwal, managing director
and chief executive at Amplus. The US
solar energy company initiated the sale
of its Indian assets after ballooning debt
led it to file for Chapter 11 bankruptcy
protection on 22 April. In its bankruptcy
filing, the company said it had assets of
$20.7 billion and liabilities of $16.1 billion
as of 30 September 2015. Amplus has
acquired around 7 megawatts (MW) of
SunEdisons roof-top assets, which gives
the firm access to new marquee clients,
said Aggarwal.
Science & Technology cooperation. Currently,
the value of investment in Indo-UK research
and development cooperation from multiple
Indian and UK agencies exceeds 200 million
pounds of co-funding.
portfolio. The company is already carrying
out the feasibility and financial viability
study for the project, wherein it plans to
set up floating solar panels with pumped
storage system, a senior company official
said. We want to expand our solar portfolio
and we are continuously looking out for
opportunities. We are looking at setting up
a floating solar project of around 600 MW
at the Koyna complex in Satara district of
Maharashtra, NHPC Technical Director
Balraj Joshi said. The Koyna project, run by
the Maharashtra State Electricity Board, is
the largest completed hydroelectric power
plant in the country with a total capacity of
1,960 MW.
biogas plants in FY 2016-17
With an objective to provide clean
gaseous fuel for cooking and organic
bio-manure as a by-product, the
Ministry of New and Renewable Energy
(MNRE) has allocated to the States /
UTs an annual target of setting up one
lakh family size biogas plants (1 m3
to 6 m3capacity) for the current year,
2016-17. This will result in a likely
saving of about 21,90,000 LPG cooking
cylinders annually, besides providing
biogas plant processed bio-manure to
reduce and supplement use of chemical
fertilizers. There would be saving of
about 10,000 tonnes of urea equivalent.
The average envisaged saving of
emissions through carbon dioxide and
methane into the atmosphere would
be about 4,50,000 tonnes and about
2,50,000 tonnes respectively, that
would help in reducing the causes
of climate change. The MNRE is
implementing a National Biogas and
Manure Management Progamme
(NBMMP) for setting up family type
biogas plants in the country. The
objective of the scheme is to provide
clean gaseous fuel for cooking and
organic bio-manure as a by-product
in the form of biogas plant left over
slurry, which contains higher values of
Nitrogen, phosphorus and potassium
(N, P&K). NBMMP also helps in
mitigating drudgery of women in rural
and semi-urban areas by saving in their
time both in collection of firewood,
making cattle dung cakes and cooking.

NewsBriefs | Renewable International
To meet renewable energy targets, states to buy wind power from TN
The Tamil Nadu government is set to make a
tidy profit through the sale of wind power, with
power distribution companies in other states
seeking Tamil Nadu Electricity Boards (TNEB)
aid to bail them out of their renewable power
purchase obligation (RPO). The RPO stipulates
Mumbai-Nagpur E-Way to be first solar highway?
The state-run Maharashtra State Road
Development Corporation (MSRDC) will
make chief minister Devendra Fadnavis
pet project, Mumbai-Nagpur Super
Expressway, the first solar highway of
the country. The MSRDC is considering
paving the 744-km-long Expressway with
solar panels along the entire stretch,
which will not only generate solar power
for the whole Expressway but also for
the neighbouring villages parallel to the
alignment of the proposed E-way. The
pre-feasibility report for the Expressway
prepared by the MSRDC, and submitted
to the Union ministry of environment,
forest and climate change (MoEFCC), has
proposed non-conventional energy sources
Delhi revisits solar policy
Weeks after Delhis solar policy was
approved, the Aam Aadmi Party (AAP)
government has gone back to review
the same. It is learnt that the clause of
installing solar panels in all government
buildings is being revisited by the power
department. While the policy makes it
mandatory for all government buildings
to install solar plants on their rooftops
within a period of three years, it is the
size of a rooftop which is being intensely
discussed. The approved policy states
that all government buildings with a
minimum shadow-free rooftop area of
50 sqm must generate 5 kW or 15 per
July 2016
www.InfralinePlus.com
States
Tepid response to auction for solar
that 0.16-0.25% of the total power generation projects in Gujarat
of a state (differing from state to state) should
be met from renewable energy sources. Of
more than 10 states that have not met their
RPO, four have sought the help of Tamil Nadu,
which has the maximum installed renewable
power generation capacity. It is reliably learnt
that Tangedco is likely to sell about 1,000MW
wind power to Uttarakhand, to start with, at
4.1 per unit. Tangedco, which purchases wind
power at 3.35 per unit from private generation
firms, will earn a profit of 75 paise per unit by
selling the power. According to the Electricity
Act 2003, each state has to meet a percent-
age of power generated in the state annually Winning bids for solar projects in
through renewable power like wind and solar. Gujarat remained stuck at Rs 4.43 per
unit, the reserve price set for most of
the recent auctions in India, suggesting
that prices may have bottomed out.
The contracts were awarded on the
basis of the least subsidy sought.
The auction conducted by the Solar
Energy Corporation of India for 160
MW of projects at the Charanka Solar
Park in Gujarat (four projects of 40 55
MW each), was won by state-owned
Gujarat Industries Power Co, which got
80 MW, Mahindra Renewables, which
got 40 MW, and Orange Renewables.
With all bids quoting the same tariff,
like wind and solar panel as proposed the winners were decided on the
infrastructure along the alignment of the basis of the least subsidy or viability
Expressway. According to MSRDC officials, gap funding. The Ministry of New and
several international institutions have also Renewable Energy provides VGF up to
proposed to install solar panels on the Rs 1 crore per MW to solar developers.
Mumbai-Nagpur Expressway.
cent of the sanctioned load. Various
departments have suggested that the
minimum shadow-free rooftop area be
increased as many believe that 50 sqm is
too small a space for a solar plant to feed
15 per cent of the electricity consumption
of the building, said a senior official. It is
because of this that the policy is yet to be
notified. However, the power department,
which prepared the final solar policy
after the Dialogue and Development
Commission of Delhi came up with its
draft, opines that the clause must stay. A
50-sqm shadow-free space is enough to
produce 4-5 kW of solar power.
 July 2016
www.InfralinePlus.com
NewsBriefs | Renewable International
Solar power could account for 13% of world electricity generation by 2030
Solar power generation could grow from
2% of the global total to 13% by 2030,
according to a new report from the
China to generate a quarter of electricity from wind power by 2030
China is on track to generate more than a
quarter of its electricity from wind power
by 2030, and the figure could rise to nearly
a third with power sector reforms, a new
study has found. Within 14 years, more
56 new generating capacity mostly clean
energy will come online in China than
currently exists in the whole of the US,
further cementing the countrys image as
a burgeoning green giant. Valerie Karplus,
a co-author of the study published in
the journal Nature Energy and assistant
professor at MIT, said that Beijing wanted
to increase its wind capacity by a factor of
between three and five before 2030. China
is now the worlds wind energy leader by a
fairly large margin, she said. The countrys
Abu Dhabis Masdar picked to build solar plant in Dubai
A Masdar-led group won the bidding
to build a solar-power plant in Dubai
to produce what could be the worlds
cheapest electricity generated from the
sun. The consortium is set to complete the
800-megawatt power project by 2020, the
head of utility Dubai Electricity & Water
Authority said. Spanish renewable energy
developers Fotowatio Renewable Ventures,
a unit of Saudi Arabian conglomerate Abdul
Latif Jameel, and Gransolar Group are
part of the venture, DEWA said. Dubai, the
second-largest sheikhdom in the United
Arab Emirates, is adding solar capacity
to diversify its energy mix and help meet
International Renewable Energy Agency
(IRENA). The solar industry is poised for
a massive expansion, according to IRENA,
as highlighted in a new report published
recently. Specifically, the report concludes
that solar could generate 13% of the
worlds electricity by 2030, with capacity
growing to sit somewhere between 1,760
GW and 2,500 GW, up from only 277 GW
today. Recent analysis from IRENA
finds that cost reductions for solar will
continue into the future, with further
declines of up to 59% possible in the next
ten years, said Adnan Z. Amin, IRENA
Director-General.
145GW of installed wind capacity last year
eclipsed both Europe and the US, even if
not all of it is yet grid-connected. By 2030,
renewables are slated to generate a fifth of
Chinas primary energy needs.
benchmark now globally, Saji Sam, a
growing demand for electricity. The
Masdar project will generate electricity
at 2.99 cents per kilowatt-hour, DEWA
US, Canada, Mexico to pledge to
generate half of overall electricity from
clean energy by 2025
The United States, Canada and Mexico
have promised to generate half their
overall electricity from clean energy
by 2025. We believe it is an aggressive
goal, but that it is achievable continent-
wide, Brian Deese, senior advisor to
US President Barack Obama, said. In
2015, clean energy wind, solar and
hydropower, plus nuclear power
accounted for 37 per cent of the three
countries electricity. In the United
States, the regions largest electricity
producer by far, clean energy currently
generates around a third of total output,
putting it behind Canada but ahead of
Mexico. The rise in the coming years will
be principally driven by renewables and
energy efficiency, Deese said. In Canada,
hydropower generates some 59 per cent
of electricity and nuclear power another
16 per cent.
Chief Executive Officer Saeed Mohammed
Al Tayer said. This project has set a
partner at consultants Oliver Wyman, said.
The direction now is for lower cost in
solar projects. That will help renewables
take a bigger share of the energy mix. The
price bid for the project would undercut
the cost of power generated from coal.
Its 15 percent lower than the previous
record for solar power set in Mexico in
April, according to Bloomberg New Energy
Finance. The consortium will seek financing
for the project, Masdar CEO Mohammad
Jameel Al Ramahi said.
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InConversation
Low cost of LED bulbs not
viable in open market
Arun Gupta, Managing Director, NTL Group, talks to
InfralinePlus on the various issued being faced by the LED
lighting industry in India and his outlook on future growth in this
segment. Excerpts:
Please share your outlook on the
LED industry in India. How has
the industry changed in the last
few years?
We are already witnessing spiralling
growth in the LED lighting industry.
The current value of LED lighting mar-
ket in India is Rs 4000 crore, we are
expecting it to reach Rs 21000 crore
58 by year 2020. The industry is likely to
grow at a CAGR of 50% in the next
5 years. The demand is likely to be
increased majorly in outdoor (street
& road) lighting. Consumer segment
is already gaining momentum and
consumer in general is choosing LED
bulbs as a preferred mode of lighting,
especially in the urban areas. The LED
lamps demand has sky-rocketed due
to the increased focus of the govern-
ment to provide sustainable lighting
solutions and this has further fuelled
the adoption of LED on the grass root
level. Also, the industry is witnessing
great demand in commercial projects &
offices and which is expected to touch
bigger heights in the coming days.
With the growth, the lighting industry
has changed drastically too. From a
handful of manufacturers, suddenly
there is an explosion in the number of
brands across the board. There is also
a sizeable Chinese import segment that
has come up. The certifications that have
been put in place have tried to put a stop
to quality issues and we are hopeful that
the industry will witness consolidation,
where only the quality conscious will
survive and thrive.
Please share your existing
presence in the LED segment
in terms of existing facilities,
distribution network and
investments.
We are already on the growth path and
by the end of this year; our installed
capacity will be in excess of 5 Mn
units per month. However, we are
continuously evaluating the market and
whenever we see an opportunity we are
open to ramping up further. NTL Lem-
nis facilities are located across three
locations in Noida (Uttar Pradesh),
Dehradun and Roorkee (Uttarakhand).
In December 2014, we launched
our complete range of over 250 LED
products for the retail market. We are
increasing our footprint on a daily basis
and the response to our offerings has
been very heartening. The end users are
very appreciative of our range and we
hope to become a preferred brand of
choice in the coming years.
From our current group turnover of
just over Rs.600 crore, we are expecting
that our group sales turnover will
reach around Rs 1500-2000 crore by
FY2019-20. NTL Lemnis is expected
to contribute around Rs. 500 crore by
2019-20. We are hopeful to control at
least 5% of the LED market in India and
targeting revenue of around 25% from
the LED business by FY2019-20.
Arun Gupta, Managing Director, NTL Group
In which segment do you see
maximum growth industrial,
residential, street lighting?
Globally - Residential, architectural
and outdoor lighting are the key
applications that are leading the
LED lighting growth charts. Among
all applications, it is the residential
lighting segment which has
dominated the global LED lighting
market with Residential applications
accounting for over 40% share.
Architectural lighting is another
important parameter for growth of
the LED lighting market followed by
outdoor applications.
In India, it is Government schemes
that are leading the demand in the
residential segment. The increased
focus of the government to provide
sustainable lighting solutions espe-
cially in the lamp category are further
expected to fuel the adoption of LED
at the grass root level. The indoor
lighting segment is expected to show
significant growth in the long run.
In the immediate future, Outdoor

lighting will provide impetus to demand
for LED lighting and solutions, again
backed by Government focus on it. Con-
sumer segment is also starting to gain
momentum and consumer in general is
getting aware of benefits that can accrue
through adoption of this technology.
Also, the industry is witnessing renewed
demand in commercial projects &
offices and which is expected to grow,
as the real estate industry comes out of
the throes of a slump.
How has the Government push
LED to growth of LED industry in
India, in terms of demand, supply
and pricing?
The Government sector is the single
largest user for LED lights in India
today. Apart from the large scale street
lighting projects, increasing usage of
LED lights for in-cabin lighting as well
as the lighting of railway stations, etc.
has contributed to the Government
sector being the single largest adopter
and growth trigger. PMs domestic
efficient lighting programme is a very
good initiative which will propel the
early adoption of LED bulbs by the
consumers. The Government is taking
all the possible steps to ensure that it
gets adopted, including subsidizing the
costs to a great extent and offering low
EMI schemes for even the balance cost.
DELP scheme is helping consumers
shift from current traditional source
of lighting to LED, which not only
helps save electricity, but also creates
a movement towards green sources
of lighting. More than 10 crore
LED lamps have been distributed in
India till date and the government is
planning to distribute 77 crore LEDs
in the next three years. DELP scheme
has actually made mass manufacturing
a reality in India.
The Government sector
is the single largest user
for LED lights in India
today. Apart from the
large scale street light-
ing projects, increasing
usage of LED lights for
in-cabin lighting as well
as the lighting of railway
stations, etc. has con-
tributed to the Govern-
ment sector being the
single largest adopter
and growth trigger
July 2016
www.InfralinePlus.com
The Modi Government has also
taken steps and committed to installing
LEDs for domestic and street lighting
in 100 cities. The government is also
mandating that the state governments
need to change street lighting to LED
lights over the next few years. India has
27.5 million street lights. This change
will save more than 5,000 MW of
electricity consumption over a period of
three years. Many states have already
started to replace the old street lights.
The price of LED bulbs has seen
a drastic decline in last few
years. Do you feel price of LED
bulb is expected to go down
further?
DELP has added tremendous value to
the industry, by promoting this energy
efficient and green technology, and
by building mass volume & demand,
the economies of scale have started to
come in, leading to drastic reduction
in costs. However, this is true only of
59
Government projects with its direct
distribution, where the costs have come
down. In the market, due to the added
distribution and marketing costs, the
pricing is not likely to lessen. The Gov-
ernment has brought down the costing
drastically, which is unviable in the
open market, because it is detrimen-
tal to the distribution and sales of the
brand operations in the country.
What are the issues facing this
industry at present? What are
your suggestions?
The biggest challenge today facing
LED industry is the mushrooming of
low quality production units. Chinese
imports are another issue more from
the perspective of issues related to sub-
standard quality and costing rather than
anything else. I believe that mandatory
BIS certifications will check this to a
large extent. Consolidation will be on
the cards and only those with quality
focus will survive.
For suggestions email at feedback@infraline.com
 July 2016
www.InfralinePlus.com

InConversation
Attractive PPP model not enough to
ensure private participation in Smart Cities
The NDA government has envisaged building 100 Smart Cities
over next five years. It has approved outlay of Rs 48,000 crore
for funding these projects. These projects are to be developed
through PPP model and there are also plans to mobilise funds
through municipal bonds. However, given the estimated fund
requirement of over 150 billion dollar, mobilising adequate
financing could still be a tremendous challenge for selected
cities. Anyway, private sector participation cannot be taken for
granted. NSN Murty, Director and Leader, Smart Cities, PwC,
tells Infraline Plus what needs to be done to attract private
participation and how adequate funding can be mobilised for
these projects. Excerpts:

NSN Murty, Director and Leader, Smart Cities,

60 Can India mobilise adequate
funds through public-private
partnership and municipal
bonds to finance smart city
projects?
The funds available through Central
and State Government Grants and
Schemes are limited and hence there
was a strong emphasis on improving
the internal fiscal efficiency of the
city (by improvements in property
tax collection and levy of cess/fee
for services offered) and creation
of an enabling environment (public
procurement reforms) for private
sector participation. Both these
provide positive sentiment to the
private sector and help in quality
participation.
Cities like Pune, Bhubaneswar,
Bhopal and Indore have designed
projects that are financeable and
attractive for private sector par-
ticipation. Whereas cities like
Ahmedabad and Chennai are also
looking at raising capital through
municipal bonds for investment in the
city projects.
What are the other options that
can be tapped to raise funds?
Can stock markets be tapped for
raising money to finance smart
city projects?
Cities participating in the Smart
Cities Mission have evaluated
several financing options such as
Convergence Funding from AMRUT,
SBM, IPDS, FAME, Smart City
Fund, State Schemes, Value Capture
Financing, savings through energy
efficiency and property tax collection
improvements, levies and green cess
and creation of financially viable
public-private partnership (PPP)
based projects. There is a focus on
creating an enabling environment to
attract the private sector investment
in the city but it is not the only mode
of financing. Under the smart cities
mission, Cities are supposed to form
Development Corporations and ,at a
later date, to have the flexibility to
dilute the government equity up to
49%. But as of now, most of the cities
have envisaged a 100% government
owned entities.
PwC
Only a handful of municipalities
in India are credit-rated.
Given that, how realistic is
the municipal bond option
forfinancing smart city
projects?
Ministry of Urban Development has
already made it mandatory for all the
cities to go for credit-rating and they
need to work on the fiscal situation
to improve this rating. Some cities
have a very strong credit rating. For
example, Ahmedabad has AA from
CARE Rating and the corporation
has envisaged that a part of the
Rs 439 crore required for projects
will be raised through Municipal
Bonds. Bhubaneswar has also
identifiedmunicipal bond as source
of finance post credit risk assessment.
So cities have a strong intent
to look at municipal bonds market
and have realised the importance
of good credit rating. The work
has alreadystarted to address this
requirement.

Do you think the existing PPP
model is attractive enough
for investors or more needs
to be done?
An attractive PPP model is not enough
for the private sector, there is also a
need to address several open-ended
challenges such as well-documented
role, scope, rights and assets library
that will be monetised and serviced,
payment model based upon Escrow
Account, assurance of fulfilment of
City/State obligation towards the proj-
ect in terms of asset or rights alloca-
tion and/ or linking of fund/ revenues
and keeping the project clear of any
political risks.
A proper and time-bound imple-
mentation of these recommenda-
tions will make the projects and city
attractive for private sector partici-
pation and investment.
Given that private investors
experience of PPP model
in India has not been very
encouraging, how realistic is
this option for funding smart
city projects?
Smart Cities Mission focus is on
providing a conducive environment
for private sector participation in the
government projects. With the strong
commitment from Central Government
and positive intent of the cities,
private sector is looking forward to
participation in these projects but
with a caveat that they look forward
to translation of these Smart City
Proposal reforms commitment into
action during implementation phase.
An attractive PPP model
is not enough for the
private sector, there is
also a need to address
several open-ended
challenges such as
well-documented role,
scope, rights and as-
sets library that will be
monetised and serviced,
payment model based
upon Escrow Account,
assurance of fulfilment
of City/State obligation
towards the project
July 2016
www.InfralinePlus.com
How is the scope for attracting
Foreign Direct Investment into
smart city projects?
Several countries and international
firms have shown keen interest in
India Smart Cities Mission. USA has
adopted the cities Visakhapatnam,
Ajmer and Allahabad, UK is focused
upon Amravati, Indore and Pune.
Similarly, France is going to support
the transformation of Chandigarh,
Nagpur and Pudducherry and Ger-
many is going to provide support to
Kochi, Bhubaneswar and Coimbatore.
Specifically, the selected cities
will gain from the experience of the
European economies in the following
domains: affordable housing, solid
waste management, security, edu-
cation, healthcare, traffic management
and parking.
This would also mean support
to these cities in making processes
simple yet robust to ensure hassle free 61
investment by firms from respective
countries. So in the coming days,
we will see lot of international firms
engaging directly with the cities to par-
ticipate in their Smart City Projects.
For suggestions email at feedback@infraline.com
 July 2016
www.InfralinePlus.com
InDepth
India needs competitive bidding
in wind energy to reach 60 GW
62
Reverse bidding mechanism used successfully for lower solar tariffs under JNNSM
Globally competitive bidding increasingly being implemented with success
By Team InfralinePlus
The Ministry of New and Renewable
Energy (MNRE) will likely introduce
competitive auctions for wind farms
this fiscal year in a bid to fulfil central
governments goal for achieving 60
GW of wind power capacity by 2022.
This will bring a fresh ray of hope for
Independent Power Producers (IPPs)
in wind sector. Earlier in March, it was
reported that investment of INR 4,000
crore in wind energy projects was on
the verge of becoming non-performing
assets (NPAs), as over 550 MW of
projects that were ready to gener-
ate electricity were stranded because
a state utility refused to sign power
purchase agreements (PPA) or issue
commissioning certificates.
The auctions for power-purchase
agreements are meant to stimulate
investment that has not been flowing
fast enough to reach the target. In 2016,
wind sector managed to achieve 3,460
MW capacity and expectations of
around 4,500MW next year, achieving
all that the national renewable energy
programme aspires forprivate-sector
led, domestic manufacturing and com-
petitive tariff. At the same time, number
of projects are struggling to find
buyers, and utilities are reluctant to buy
renewable power, which is more costly
than what coal power plants generate.
Wind energy sector is facing head-
winds in the near term arising out of
the substantial reduction in preferential
tariff for new wind energy projects to
be commissioned in Madhya Pradesh.
In Maharashtra, the sector is facing
challenges of slowdown in signing
of fresh power purchase agreements
(PPAs) and reported delays in pay-
ments by state-owned utility Maha-
rashtra State Electricity Distribution
Co. Ltd. (MSEDCL).

Current Scenario
In the wind sector, India has progressed
significantly in the past decade,
with the installed capacity having
nearly doubled between 2008 and
2014. The growth so far has largely
been attributed to two central policy
instruments which have supplemented
the Feed-in-Tariffs (FiTs) set by the
states: Accelerated Depreciation (AD),
a tax-saving benefit, and Generation
Based Incentive (GBI), which results in
increased revenues for wind projects.
State-level tariffs are determined
on a cost-plus basis which may result
in inefficient cost of generation, due to
asymmetric information on market and
technology conditions. This can result
in difficulty in realistically bench-
marking input assumptions such as
Capacity Utilization Factor (CUF), thus
resulting in a higher price to be paid by
the consumer and inefficient utilisation
of the finite resource. Improvements in
technology, such as benefits accruing
from installing taller turbines with
larger rotor diameters, are not captured
in the actual performance or indexing
parameters that are used to calculate
the costs.
Cut in AD levels post March
2017
The wind energy sector might take a
major hit post 2017, with the Budget
capping the accelerated depreciation
tax benefit at a maximum of 40 per
cent from April 2017. The sector had
enjoyed accelerated depreciation (AD)
of 80 per cent under the Income Tax
Act. Of the 26,777.45 MW (as of May
31 2016) of wind power in the country,
around 70 per cent is built on AD. Rest
are independent power projects, whose
share has increased over the years.
Most of these projects get a generation-
based incentive of 50 paisa per unit of
power produced, introduced in 2011
Union Budget.
The AD incentive has been primarily
responsible for driving the development
of approximately 27 GW of installed
wind capacity in India as of the end of
State-level tariffs are
determined on a cost-
plus basis which may
result in inefficient cost
of generation, due to
asymmetric information
on market and technol-
ogy conditions. This
can result in difficulty
in realistically bench-
marking input assump-
tions such as Capacity
Utilization Factor, thus
resulting in a higher
price to be paid by the
consumer
July 2016
www.InfralinePlus.com
March 2016. By early 2022, another
33 GW of wind capacity is anticipated
according to government targets. (A
separate Generation-Based Incentive,
or GBI, was introduced in 2010 to
increase the investor base, since the AD
provision is not available to Foreign
Direct Investment. The GBI also was
suspended in 2012 but re-enacted a
year later.) Meeting this ambitious goal
will require an unprecedented pace of
wind power development, amounting
to over 5 GW of new capacity per year,
compared to 1.5 to 2.0 MW/year over
the last two years.
The reduction in AD to 40% from
80% earlier will likely see higher tariff
for solar and wind energy for devel-
opers to realise acceptable return on
investment. This would also dissuade
smaller, non-power companies from
investing in the sector, thus reducing
competition.
63
Reverse Bidding for Wind
Energy: Current Scenario
The reverse bidding mechanism has
been used to successfully lower the
price of electricity generation from
solar technologies under the Jawa-
harlal Nehru National Solar Mission
(JNNSM). While there are issues still
prevalent in the actual completion of
projects, it has proved to be effective
for lowering price. The reverse bidding
scheme resulted in reductions of 39%
and 50% in Batch 1 and Batch 2 of
JNNSM respectively, from the starting
tariffs benchmarked by Central Electric-
ity Regulatory Commission (CERC).
The moderate success of the reverse
bidding mechanism in JNNSM, some
states (such as Karnataka, Rajasthan,
and Madhya Pradesh) have attempted
to discover the least price for wind
generation through reverse bidding and
bid bonds, and the use of fixed tariffs to
inform the bidding process.
However, they have been met with
limited success. For instance, Karnataka
was the first state to initiate an auction
for the process ofwind energy project
 July 2016
www.InfralinePlus.com
InDepth
allocation. However, it was stayed
due to a petition filed by a number
of stakeholders, on the grounds that
the Appellate Tribunal for Electricity
(APTEL) didnot had the legal compe-
tence required to direct state regulatory
commissions to issue guidelines for
competitive bidding for the pro-
curement of energy from renewable
sources. It was decided that states could
proceed with conducting auctions only
after the Centre issued guidelines as per
the Electricity Act of 2003.
But the guidelines for competitive
bidding in wind sector were not intro-
duced at that time. It is widely expected
that Solar Energy Corporation of India
(SECI), which is the governments
implementing agency for renewable
projects will bring out tenders in this
fiscal year for auction of wind farms.
Need for Competitive
64 Auctions: Global Experience
In the global context, competitive
bidding as a mechanism for allocating
renewable energy capacity is increas-
ingly being implemented with varying
degrees of success. Some developing
countries that have conducted auctions
for Renewable Energy (RE) include
Brazil, China, Morocco, Peru and
South Africa. As a procurement mecha-
nism, reverse auctions are specifically
considered to be effective in increas-
ing cost efficiency and discovering the
least price for generating electricity
from a particular technology, due to
their competitive nature.
In auction-based mechanisms, both
price and quantity are determined
in advance of building the projects
through a public bidding process.
Because of this characteristic, auc-
tions can be more effective than pure
tariff or quantity instruments, pro-
viding stable revenue guarantees for
project developers (similar to the FiT
mechanism), while at the same time
ensuring that the renewable generation
target will be met precisely (similar
to an Renewable Purchase Obligation
Growth in different types of renewable energy policies
(2005-2015)
Number of countries with renewable energy policies, by type
(2005-2015)
FiT RPO Auction-based (Tendering)
65
60
50
30 30 30
20
10 5
2005 2010 2015
Source: International Renewable Energy Agency (IRENA, 2014)
Fig.1: Growth in different types of renewable energy polices (2005-2015)
Source: International Renewable Energy Agency (IRENA, 2014)
(RPO)). The bidding process allows Way forward
for price discovery, and, with sufficient Renewable energy auctions play an
competition, the auction outcome can important role in the new genera-
be cost-effective. tion of policies due to their ability to
Although auctions have proven to support deployment while increasing
be strong mechanisms for ensuring transparency and fostering competi-
market efficiency as well as economic tion, resulting in lower prices. Auctions
efficiency (as they minimise the level are flexible in their design, allowing
of subsidy required), they have been the possibility to combine and tailor
criticised for their higher transaction different design elements to meet
costs, both for auctioneers and deployment and development objec-
bidders. This could limit the entry of tives. Therefore, one of the mecha-
small/new players and result in cases nisms strengths is its ability to cater to
of subpar performance in deployment different jurisdictions reflecting their
rates (i.e., delayed or cancelled economic situation, the structure of
constructions). Still, auctions have their energy sector, the maturity of their
become the most preferred renewable power market and their level of renew-
energy support mechanism in an able energy deployment.
increasing number of countries. To sum up, an inadequate design of
Renewable energy auctions have auctions may result in low effectiveness
gained popularity as an instrument in renewables deployment and in not
to support renewable energy achieving the targets. There are some
deployment and have been adopted options to prevent this from happening,
by more than 60 countries by early but policymakers have to realise that
2015, up from 6 in 2005 (as shown all options have trade-offs, for instance
in the figure below). They have higher costs or a lower number of
become increasingly successful and eligible bidders. The design and choice
sophisticated in their design and of instrument should be decided above
many lessons can be learnt from the all by the specific context in which the
vast pool of country experiences in auction takes place.
terms of attracting a large number of
players, increasing competition and
ensuring lower costs. For suggestions email at feedback@infraline.com
 Renewable eneRgy
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 July 2016
www.InfralinePlus.com

StatisticsRenewableEnergy
1. Programme/ Scheme wise Physical Progress in 2016-17 (& during the month of May, 2016)
FY- 2016-17 Cumulative Achievements
Sector
Target Achievement (as on 31.05.2016)
I. Grid-Interactive Power (Capacities In Mw)
Wind Power 4000.00 106.40 26932.30
Solar Power 12000.00 559.78 7568.64
Small Hydro Power 250.00 1.80 4280.25
BioPower (Biomass & Gasification and Bagasse
400.00 0.00 4831.33
Cogeneration)
Waste to Power 10.00 0.00 115.08
Total 16660.00 670.98 43727.60
II. Off-Grid/ Captive Power (Capacities in Mweq)
Waste to Energy 15.00 0.00 160.16
Biomass(non-bagasse) Cogeneration 60.00 0.00 651.91
Biomass Gasifiers 2.00 0.00 18.15
- Rural
8.00 0.00 164.24
- Industrial
Aero-Genrators/Hybrid systems 0.30 0.00 2.69
SPV Systems 100.00 2.07 325.40
Water mills/micro hydel 1.00 0.00 18.71
Total 186.30 2.07 1341.26
Iii. Other Renewable Energy Systems
Family Biogas Plants (in Lakhs) 1.10 0.00 48.55
Source: MNRE

2. REC Trading Volume and Price for February 2016

66 Through IEX
Buy Bids Sell Bids Cleared Volume Cleared Price No. of Month of
REC Type
(REC) (REC) (REC) (INR/REC) Participants Auction
Solar 35,649 2,869,142 35,649 3,500 525
June 2016
Non-Solar 350,362 8,745,523 350,362 1,500 941
Source: IEX

Through PXIL
MCV
Buy Bid Sell Bid MCP
REC Type (No. of certificate) Month of Auction
(No. of certificates) (No. of certificates) (INR / Certificate)
Qty. (MWH)
Non Solar 67064 4441681 1500 67064
June 2016
Solar 15366 672116 3500 15366
Source: PXIL
 July 2016
www.InfralinePlus.com

3. Commissioning Status of Grid 4) Categorization of Solar Parks based on progress

Connected Solar Power Projects
(as on 31-05-16) Sl. Capacity
Category Name of Solar Parks
No. (MW)
Sr. State/UT Total cumulative
No. capacity till 31-05- 1. Ananthapuramu Solar Park in Andhra Pradesh 1500
16 (MW)
Category 2. Kurnool Solar Park in Andhra Pradesh 1000
1 Andhra Pradesh 864.192 A: Solar 3. BhadlaPh-II Solar Park, Rajasthan 680
Parks
2 Arunachal Pradesh 0.265
where 4. Solar Park in Uttar Pradesh 600
3 Bihar 5.1 work is
going on 5. Pavagada Solar Park, Karnataka 2000
4 Chhattisgarh 93.58 site 6. Rewa Solar Park, Madhya Pradesh 750
5 Gujarat 1120.363 7. Kasargode Solar Park, Kerala 200
6 Haryana 15.387 8. Kadapa Solar Park in Andhra Pradesh 1000
7 Jharkhand 16.186 9. Anathapuramu II Solar Park in Andhra Pradesh 500
8 Karnataka 146.462 10. Solar Park in Arunachal Pradesh 100
9 Kerala 13.045 11. Radhnesada Solar Park, Gujarat 700
10 Madhya Pradesh 780.37 12. Solar Park in Haryana 500
11 Maharashtra 385.756 13. Neemuch-Mandsaur Solar Park in MP 500
12 Odisha 66.92 Category 14. Agar-Shajapur Solar Park in MP 500
B: Solar
13 Punjab 430.063 Parks 15. Chhattarpur Solar Park in MP 500
67
14 Rajasthan 1285.932 where
16. Rajgarh-Morena Solar Park in MP 500
work will
15 Tamil Nadu 1267.414 start in 3 17. Solar Park in Maharashtra by Pragat Akshay Urja 500
months
16 Telangana 785.843 time 18. Solar Park in Maharashtra by MAHAGENCO 500
17 Tripura 5 19. Solar Park in Maharashtra by M/s K P Power 500

18 Uttar Pradesh 143.495 20. Solar Park in Odisha 1000

19 Uttarakhand 41.145 21. Bhadla III Solar Park in Rajasthan 1000

20 West Bengal 7.772 22. Bhadla IV Solar Park, Rajasthan 500

21 Andaman & Nicobar 5.1 23. Phalodi-Pokaran Solar Park in Rajasthan 750

22 Delhi 14.28 24. Fatehgarh Phase 1B Solar Park, Rajasthan 421

23 Lakshadweep 0.75 25. Solar Park in Assam 69

24 Puducherry 0.025 26. Solar Park in Chhattisgarh 500

25 Chandigarh 6.806 27. Solar Park in Himachal Pradesh 1000

Category
26 Daman & Diu 4 C: Solar 28. Solar Park in Jammu and Kashmir 100
Parks 29. Solar Park in Meghalaya 20
27 J&K 1
where
28 Himachal Pradesh 0.201 work may 30. Solar park in Nagaland 60
not start in
29 Mizoram 0.1 3 months 31. Solar Park in Tamil Nadu 500
time 32. Gattu Solar park in Telangana 500
30 Others(PSU/ 58.311
channel partner )
33. Solar Park in Uttarakhand 500
under Rooftop
34. Solar Park in West Bengal 500
TOTAL 7564.863

Source: MNRE Source: MNRE

 July 2016
www.InfralinePlus.com

OffBeat
Green roads: Use of plastic for
construction gathers steam
Plastic adds to the longevity of roads by making them water resistant and
also increase the resistance
States like Maharashtra have already taken the lead in use of plastic

68

By Team InfralinePlus

With the Government making it
mandatory for road developers to use
waste plastic along with bituminous for
road construction, the states have now
started to follow suit. The Maharashtra
government recently decided to use
plastic waste along with tar to improve
the durability and longevity of asphalt
roads and reduce soil pollution.
As per the plan approved by the
state, initially, municipal corporations
with a population of over 5 lakh and
municipal councils having a popu-
lation of over 2 lakh will be required to
include plastic waste for building roads
in 50-km radius. For every 100 kg of
tar used to build asphalt roads, 3 to 6
kg of plastic will be mixed in it.
Why plastic?
India generates close to 56 lakh tonne
of plastic waste annually. According to
a study by the Central Pollution Control
Board, 60 large cities in India generate
over 15,000 tonne of plastic waste every
day. Delhi generates close to 7,000
tonne of waste every day, of which over
10 per cent is pure plastic but cannot be
disposed even by waste-to-energy plants
because of environmental reasons.
Apart from being effectively
utilised, use of plastics has some
inherent advantages. Plastic adds to
the longevity of roads by making
them water resistant and also increase
the resistance of roads to change in
weather. By making use of plastics
mandatory in road construction, the
government expects this measure to
 July 2016
www.InfralinePlus.com

Guidelines on use of plastics for road construction Further, it has been found that
modification of bitumen with shredded
In November 2015, the Government had made it mandatory for road waste plastic marginally increases
developers to use waste plastic along with bituminous for road con-
the cost by about Rs. 2500 per tonne.
struction to overcome the growing problem of disposal of plastic waste
However this marginal increase in the
in Indias urban centres.
cost is compensated by increase in
Road developers to use waste plastic along with hot mixes for con- the volume of the total mix, thereby
structing bitumen roads within 50 km of periphery of any city that has a resulting in less overall bitumen
population of over five lakh. content, better performance and envi-
In case of non-availability of waste plastic, the developer has to seek ronmental conservation with usage of
the road transport & highways ministrys approval for constructing only waste plastic.
bitumen roads.
State governments and rural development ministry to be encouraged to Challenges
make use of plastic waste mandatory in construction of roads The reintroduction of plastics into the
The following types of waste plastic can be used in the construction of environment can have its consequences.
rural roads: Old or poorly built roads are likely to
Films ( Carry Bags, Cups) thickness up to 60micron (PE, PP and PS) shed plastic fragments into the soil and
eventually waterways when they dete-
Hard foams (PS) any thickness
riorate as a result of photodegradation,
Soft Foams (PE and PP) any thickness. which causes plastics to break down
Laminated Plastics thickness up to 60 micron (Aluminum coated when exposed to environmental factors
also) packing materials used for biscuits, chocolates, etc., such as light and heat. These minute

bring down the cost for road devel- 69

opers, from about Rs 10 crore for one With so many projects underway, the Indian
km of road length at present. government is looking to a range of alternative
A recent road safety report by the materials to lower costs. The Delhi-Meerut
World Health Organization (WHO) Expressway, for example, which is currently
found that 17% of the worlds traffic under construction, may use unsegregated trash
fatalities occur in India, with crum-
bling roads partly responsible for the
from one of the capitals overflowing landfills to
high death toll. With so many projects build its base and embankments
underway, the Indian government is
looking to a range of alternative mate-
rials to lower costs. The Delhi-Meerut
Expressway, for example, which is
currently under construction, may use
unsegregated trash from one of the
capitals overflowing landfills to build
its base and embankments.
The potholes are major cause
of health issues particularly during
monsoon. Most of the roads get
damaged due to various reasons.
According to experts, the plastic layer
can save the roads from damaging and
causing major bad patches as well. If
this method can resolve the potholes
issue, then experts feel that the state
governments should make it mandatory
to use the waste plastic in road con-
struction across the state.
 July 2016
www.InfralinePlus.com

OffBeat

Advantages of plastic tar road According to experts,

A well constructed plastic tar road will result in the following advantages: the plastic layer can
Strength of the road increased (Increased Marshall Stability Value) save the roads from
Better resistance to water and water stagnation damaging and causing
No stripping and have no potholes. major bad patches as
Increased binding and better bonding of the mix. well. If this method can
Increased load withstanding property( Withstanding increased load resolve the potholes
transport)
issue, then experts
Overall consumption of bitumen decreases.
feel that the state
Reduction in pores in aggregate and hence less rutting and raveling.
governments should
Better soundness property.
make it mandatory to
Maintenance cost of the road is almost nil.
use the waste plastic
The Road life period is substantially increased.
in road construction
No leaching of plastics.
across the state
No effect of radiation like UV.

Some other examples of plastic roads...

Jamshedpur in India is noteworthy for laying down miles of road with plastic waste. Jamshedpur Utility and Ser-
vices Company (JUSCO), a subsidiary company of Tata Steel provides and maintains municipal services in Tata
70 command area of the city. Using bitumen (asphalt) technology on waste plastic, ranging from polythene bags to
biscuit packets, the people in the city have constructed miles of road. Plastic is collected from across the city and
brought to 10 collection centers. The waste is then broken down by shredding it to 1/16th before processing it
further. The initiative, which started out as a pilot project, is now being replicated to other areas as well
A concept called PlasticRoad by VolkerWessels in the Netherlands aims to build roads entirely from recycled
plastic that has been salvaged from oceans and incineration plants
In Texas, recycled plastic soda bottles are used to create pins to stabilize the roads and lessen the incidence of
cracks and buckling, thereby making the roads last longer. Not only is this a cheaper fix, but it is one that will last
years longer than more traditional solutions.

plastic particles called microplastics act

like magnets for pollutants like poly-
chlorinated biphenyls (PCBs) and can
have an impact on their surroundings.
However, for now, the bigger chal-
lenge for plastic roads is execution.
This initiative requires strong inter-
vention from the government to
succeed. Tamil Nadu was the first state
in India to actively develop a cottage
industry around shredded plastic. Most
plastic shredders are women who buy
subsidized shredding machines and sell
their finished product for a small profit.
Job creation for waste pickers and
small entrepreneurs is an added benefit
of the roads.

For suggestions email at feedback@infraline.com


Reports & Studies
India to influence global energy markets: IEA
India will turn a global player in the energy
market during the next 25 years, exerting its
influence on its various aspects, including
renewable energy and energy efficiency,
International Energy Agencys (IEA) deputy
executive director Paul Simons said. IEA
sees India as the global player for the next
25 years in energy. They will have impact
on everything that is done whether it is oil,
gas renewables or energy efficiency. What
is done here in India affects the global
environment, said Simons. Renewables and
high-efficiency technologies will be critical
to success. There is a tremendous amount
5,000 jobs affected by diesel vehicles ban in Delhi-NCR, says Siam
The ban imposed on diesel cars and SUVs of
engine capacity 2,000cc and above in Delhi-
NCR by the Supreme Court has impacted
about 5,000 jobs in the automobile sector,
according to the industry body Siam. It also
said the ban, which is in effect since De-
cember 16, has resulted in production loss
Tenders for rooftop projects to boost solar sector: Report
The recent tenders issued by the Solar
Energy Corporation of India (SECI) for 500
MW rooftop solar PV projects is likely to
give a boost to the sector, which will also be
helped by falling costs and increase in retail
tariffs, a report said. The tenders are likely
to help the domestic rooftop solar power ex-
pansion programme, according to the report
by ratings agency Icra. It added that the
sector is likely to get a further boost due to
the falling capital cost of solar projects and
the trend of increase in retail tariffs, which is
making rooftop solar competitive for some
consumer categories. Given that existing
grid connected solar rooftop capacity is
at 166 MW as of February 2016, tendered
of entrepreneurial talent in this country as
well as abroad in partnerships. That will
need to be harvested, he added. Simons by 2022. Still, coal is expected to remain
also said that looking at the magnitude of
energy expansion required, Indias relations
of around 11,000 units. production loss
due to the ban of these vehicles in NCR from
December 16, 2015 to April 30, 2016 has
resulted in 11,000 vehicles, which translates
to impact on approximately 5,000 jobs in
the industry, Society of Indian Automobile
Manufacturers (Siam) said in a written
submission to the Supreme Court. Giving
a ground level impact of the apex courts
restrictions, it further said if extended
across the country, it (the ban) would lead to
a loss of production of one lakh vehicles over
the same period and would have impacted
47,000 jobs. Stating that no dealer is finan-
cially capable of indefinitely holding such
large stocks of 2,000 cc and above diesel
passenger vehicles and SUVs, it said: The
banned stocks had to be transferred to non-
capacity by SECI implies a significant jump,
Icra Ratings Senior Vice President Sabya-
sachi Majumdar said. He, however, noted
that implementation of such projects by the
bidders in the stipulated timeline remains
July 2016
www.InfralinePlus.com
with its bilateral and multilateral partners
will be extremely important. As per IEAs
India energy outlook, energy use in the
country has almost doubled since 2000, but
per capita consumption is still only around
a third of the global average and some 240
million people have no access to electricity.
Prime Minister Narendra Modi-led National
Democratic Alliance (NDA) government
has set a target of 24x7 Power for All and
set a renewable power target of 175 GW
the backbone of Indias power sector and is
expected to witness huge growth.
NCR dealers for disposal. Opposing levy of
environmental compensation charge (ECC)
on diesel vehicles, the automobile industry
body said it could result in permanent
job loss of a significant number of indus-
try employees and the problem becomes
manifold if such measure gets extended to
other parts of the country beyond NCR. As 71
there are several PILs filed for banning of
four-wheeler diesel passenger vehicle and
registrations are pending in different high
courts in the country, Siam apprehended
that a replication of the Supreme Court ban
to across the country could result in a huge,
prejudicial adverse impact on manufacturing
and direct and indirect employment on a pan
India basis.
critical, given the clause of liquidated dam-
age for delays in place. Further, the ability to
maintain the operating performance within
the stipulated parameters remains crucial
for the bidder, both for recovery of subsidy
as well as performance bank guarantee
from SECI, Majumdar said. The tender
for these 500 MW rooftop PV projects is
through a mix of two routes -- the Capex
route (300 MW) and RESCO (Renewable
Energy Service Company) route (200 MW).
The successful bidders are also eligible for
subsidy support from the Ministry of New
and Renewable Energy (MNRE). For both the
Capex and RESCO models, the bidders are
to be selected through competitive bidding.
 July 2016
www.InfralinePlus.com
People in News
SoftBank president Nikesh Arora resigns
India-born SoftBank president and COO
Nikesh Arora has resigned from the
company with effect from June 22 but will
stay in advisory role for a year. SoftBank
Group Corp (SBG) announces the resignation
of Nikesh Arora, representative director,
SunEdison CEO Ahmad Chatila resigns from bankrupt renewables giant
72
Ahmad Chatila, chief executive officer
(CEO) of bankrupt clean-energy giant
Parth Jindal appointed MD of JSW Cement
Parth Jindal, son of Sajjan Jindal,
Chairman, JSW Group, has been appointed
as Managing Director of JSW Cement.
He will be assisted by Anil Kumar Pillai
as CEO. He is expected to take over as
Managing Director of JSW Cement in July.
The company is building a 2.5-million-tonne
cement grinding unit at Salboni in West
Bengal. Parth, 25, who was an Economic
Analyst of JSW Steel, has shown keen
interest in growing the cement business
and was instrumental in convincing
the group to invest Rs 800 crore in the
grinding unit at the site where the work on
president & COO, from the position of
representative director and director of
SBG with the expiration of the term of
office at the conclusion on of the 36th
Annual General Meeting of Shareholders,
SoftBank said in a statement. The meeting
will be held on June 22. The difference of
expected timelines between the two leads
to Aroras resignation from the position of
representative director and director of SBG
with the expiration of the term of office
and his next steps, the Japanese firm said.
Arora, who was being seen as the successor
to SoftBank chairman and CEO Masayoshi
Son, said he plans to support the group for
a year and hence continuing as advisor.
Arora, who is the representative director,
president and COO of SBG currently, will
assume an advisory role, effective July 1.
SunEdison Inc., has resigned. SunEdison
appointed John Dubel, the companys
chief restructuring officer since late April,
to replace Chatil. Dubel joined SunEdison
shortly after it filed for bankruptcy protec-
tion, listing $16.1 billion in liabilities. Cha-
tila was the architect of a massive clean-
power buying-binge. In a two-year period,
SunEdison bought wind and solar farms on
every continent except Antarctica, creat-
ing the worlds biggest renewable-energy
developer. SunEdison relied on cheap debt
from lenders and financial engineering to
fuel its growth.
a 10-million tonne integrated steel plant
with an investment of Rs 35,000 crore
Nalin Sharma to lead build-out of
Ecoppias Asian operations
Ecoppia, global leader in robotic cleaning
for large scale solar PV sites, has begun
building its Indian and Asian operations,
starting with hiring a new VP for the
region, Nalin Sharma. The announce-
ment follows a recently signed partner-
ship agreement with Fortune 500 OEM
Sanmina Corporation to produce up to
a GW worth of robots at a new facility
in southern India. Sharma is a veteran
of the Indian solar industry and brings
many years of management experience
to the role. He was an early employee and
head - channel partnership at SunEdison
Asia, spearheaded channel strategy at
Tata Power Solar and more recently was
vice president - Solar at RattanIndia. He
started his career with BPCL, a Global
Fortune 500 energy company, where
he was responsible for annual revenues
of $76 million. Based in Delhi, Sharma
joins Ecoppia at a pivotal moment for the
companys growth. With demand soaring,
Sharma will be tasked with scaling up
business primarily in India, while growing
existing accounts in the region with some
of the Indias largest energy players.
was stopped due to delay in allocation
of raw material linkages. He started off
as an economist and later went to Japan
on six months training with partner JFE.
Back home, Harvard educated Parth
worked in the human resources, legal and
marketing divisions, and was entrusted
with chalking out a strategy to turnaround
the loss-making pipe and plate mills in the
US. It did not take much time for Parth
to convince the infrastructure focused
company to diversify into funding internet
and technology focused start-ups with a
venture capital fund of Rs 100 crore.
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