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April 2017

Volume 5 | Issue 12 | `100

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The Complete Energy Sector Magazine for Policy and Decision Makers

Digital Transformation
beckons Indias energy landscape

Amendments to Mega Power Small hydro projects


Policy to bring much needed need special
relief to private developers treatment

Alok Perti Suyash Gupta Yogendra Prasad Mahadevan Anand


Former Coal Secretary Director General Former chairman Managing Director
Government of India Indian Auto LPG Coalition NHPC ANDRITZ HYDRO Pvt Ltd
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The Complete Energy Sector Magazine for Policy and Decision Makers
April 2017 | Volume 5 | Issue 12

Editors Letter Editorial


Shashi Garg, Editor
Indian energy landscape is undergoing a tectonic
shift thanks to the pressures of urbanization, rapid
expansion of renewable-based capacity as well News Team
as various other energy efficiency measures being Ashok Kumar
taken by the Government. All of this has created a
new ecosystem, wherein every element must fall in
place to ensure a smooth transition. This is where the Analyst
importance of digitization cannot be overstated. Kalyan Verma
As India marches ahead on aggressive power
capacity addition through renewables and distributed
generation, it needs to be fully prepared as well as equipped to address
Content Consultant
challenges arising from grid instability. Data collection and exchange are growing
News Monster
exponentially and managing this data will be critical for the country, for there are
both threats as well as opportunities. The solution to this lies in digitization and
this is where the country will have to invest heavily to leapfrog into Era 4.0.
Today, the country has reached at the point of transition to a new era where
power generated from clean sources will be at a premium, networks will need to Business Development
be flexible to the incorporation of new low-carbon technologies and customers
Manoj Narang, Director
will demand greater insight and control over their own consumption with greater
Tel.: 0120-6799106 / 100
use of Information and Communication Technology (ICT), more than ever before.
Email: manoj.narang@infraline.com
Expanding the use of smart grid technologies will also be instrumental as India
strives to rapidly increase generation from variable renewable sources. We feel
it is high time that the country embraces the digital revolution for sustainable
use of its energy.
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Talking of capacity addition, India brought a major policy reform in March
by amending the Mega Power Policy. This is indeed a welcome move and it Ashwini Solomon
couldnt have come at a better time given the rising number of Non Performing Tel.: 0120-6799157/100
Assets in the power sector which, as per reports, has crossed a mammoth Mobile: +91 9811708110
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cord among investors.
Having said that, the country needs to utilise its natural resources judiciously.
This is where we must accelerate exploration of Underground Coal Gasification
(UCG). This technology can play a crucial role in harnessing energy given Circulation & Subscription
the huge coal reserves and particularly low and deep seated coal resources Sneha Pandey
in India. Due to increasing gas prices and limited availability of natural gas in Tel.: 0120 6799125
regional consumer markets, investments in coal gasification technology is the Email: sneha.pandey@infraline.com
need of the hour.
India must also promote its other sustainable source of energy Hydro power.
The New Hydro Power Policy is expected to bring much needed relief for hydro
power developers who have been intending to develop mega hydro projects. Form IV
The Government is also keenly working towards reducing the cost of generation Periodicity of its Publication: Monthly
from hydel sources which augurs well for the sector. At the same time, adequate Printers / Publishers /
Mrs Shashi Garg
attention must also be given to develop pumped storage hydroelectric projects Editors / Owners
which can go a long way in meeting power requirement during day time when Nationality Indian
power frequency is high. Simultaneously, India must harness Small Hydro Address
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April 2017
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InfralinePlus

Contents
Editors Letter
3

Cover Story 34
Digital transformation beckons
Indias energy landscape
The development of a fully-fledged,
low-carbon economy with increasing
deployment of renewable sources
will require changes to the existing
transmission and distribution
infrastructure. Smart technologies
will be a vital component of this
transformation. Increasingly,
consumers expect reliable supply,

34
clean energy, responsive service, new
facilities and cost efficiency from their
utilities. Smart grids can enable all that
4 and more.

Power Coal
6 18
News Briefs p6 News Briefs p18
In Conversation: Mahadevan Anand, Managing Expert Speak: Alok Perti, former coal secretary,
Director, ANDRITZ HYDRO Pvt. Ltd p10 Government of India p22
In Depth: Amendments to Mega Power Policy to bring In Depth: Commercial coal mining talks gather steam
much needed relief to private developers p12 once again p25
Statistics p16 In Depth: Underground Coal Gasification: India needs
to probe further p29
Statistics p32

Topics Covered Topics Covered


Hydro power policy Coal mining
Thermal capacity Coal transportation
Non Performing Assets Underground coal
April 2017
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Oil and Gas Renewable


41 56
News Briefs p41 News Briefs p56
In Conversation: Suyash Gupta, Director General Expert Speak: Yogendra Prasad, former chairman,
Indian Auto LPG Coalition p44 NHPC p61
In Depth: Marketing and pricing freedom to give CBM In Depth: Small hydro projects need special treatment
producers a leg-up p46  p63
In Depth: Petchem manufacturers on capacity Statistics p66
expansion overdrive p50
Statistics p54

Topics Covered Topics Covered


Petroleum demand Small hydro
Alternate fuels Carbon emissions 5

Petrochemical growth Financial incentives

Expert Speak/Interview

Mahadevan Anand, Alok Perti,


Managing Director, Former Coal Secretary,
ANDRITZ HYDRO Pvt. Ltd Government of India

Off Beat
Port sector on cusp of explosive growth 68
Reports & Studies
71
People in News
Suyash Gupta,
Director General,
Yogendra Prasad,
Former Chairman,
73
Indian Auto LPG Coalition NHPC
April 2017
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NewsBriefs | Power National


19 states under Uday invoked tariff revisions Finance ministry pulled up for
slashing power funds
for electricity distribution companies of
India (DISCOMs) launched by Power
Minister Piyush Goyal in November 2015.
The revival roadmap is through allowing
the concerned state governments to take
over 75 percent of their debt and pay back
the lenders by selling bonds. Discoms were
allowed to issue bonds for the remaining 25
per cent of their debt. Uday has put a target
of 15 per cent for aggregate technical and
commercial (AT&C) losses and presently
About 19 of the total 22 states that have three of the 16 states on which information
joined the Ujwal DISCOM Assurance Yojana is available have a number of less than 15
(UDAY) programme has invoked revisions per cent, the report added.Four states, At a time when the Centre has given
in the tariff structures till December 2016, Bihar, Jharkhand, Manipur and J & K have a commitment to provide electricity
said a report by CARE Ratings.Uday is the losses of over 30 per cent while UP is close access to all households of the country
financial turnaround and revival package to this mark at 29.3 per cent. and 24x7 uninterrupted power supply,
a high-level parliamentary panel
Government falls way short of renovation and maintenance targets has pulled up the finance ministry
for initiating budgetary cuts in the
The renovation and modernisation of ailing allocations to the power ministry. At
thermal power plants under the 12th Five the same time, the power ministry has
Year Plan has been severely affected by been advised to use funds allotted to
poor financial condition of state utilities it as per their original demand so that
6 as a mere 4,702.26 MW capacity could be targets are fulfilled. The parliamentary
modernised against the planned target of committee on energy has noted that
around 30,000 MW for the period 2012-17. against Rs 22,770 crore sought by the
Higher project cost of more than 1.5-2.0 power ministry for the forthcoming
crore/MW made companies apprehensive financial year (2017-18), the finance
to go ahead with the renovation and ministry allotted it only Rs 13,880 crore.
maintenance (R&M) exercise. The poor The Centre had sought Rs 12,600 crore
financial conditions of utilities on account 2,230 MW capacity, while the central for its most prestigious scheme of rural
of higher outstanding from the discoms utilities modernised or took life extension electrification (Deen Dayal Upadhyaya
had been another cause of concern. State for 17 power units or 2,472.26 MW capacity Gram Jyoti Yojana). However, it received
utilities undertook modernisation or life as of December 31, 2016, as per the Central only Rs 4,841 crore from the finance
extension for 15 power units of around Electricity Authority Report. ministry for 2017-18.

China poses security threat in power sector

A bid by Chinese, state-owned companies Grid International (HK Company Ltd.), a


to enter Indias power transmission sector subsidiary of state-owned China Southern
has raised national security concerns in Power Grid Co Ltd., has partnered with
Indian power gear circles. Local power gear CLP India Private Ltd. to build power
makers lobby group, the Indian Electrical transmission networks in India. Several
Equipment Manufacturers Association Chinese firms are gearing up to participate
(IEEMA), has raised a red flag over the in bids invited by Central sector and State
issue. IEEMA has cautioned against the sector utilities for establishment, operation
associated risks if Chinese firms are and maintenance of transmission lines for
allowed to bid and operate transmission periods ranging from 25 to 35 years.In
projects in India.After entering the bids called for the inter-state transmission
consumer goods and power generation system projects involving investments
equipment market in India, Chinese firms worth more than Rs 3,000 crore, China
are now eyeing the nascent transmission Southern Power has submitted qualification
sector where multi-billion dollar contracts documents to build, own and operate power
are up for grabs.China Southern Power transmission networks in India.
April 2017
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NewsBriefs | Power National


Kudankulam becomes second nuclear plant to generate 1,000 Mw power BHEL forays into power project
development
was learnt that both the units will generate
more than 1,800MW till mid-April when Unit
1 will be shut down for re-fuelling though
Unit 2 will continue power generation. Tamil
Nadu will get around 1,000MW from both
the units.We have a achieved a milestone
with Unit 2 early morning today as it touched
1,000MW. Since August last year, the unit has
been generating power at various capacities
and after reaching near full capacity, tests
were undertaken and the reactor was re-
Unit 2 of Kudankulam nuclear power plant started. Since then it has been generating
reached its full capacity of 1,000MW recently, power, site director Hari Narayan Sahu said. Bharat Heavy Electricals Limited (BHEL)
becoming the second nuclear reactor in The unit will undergo further tests but will has commenced commercial operation
the country to generate 1,000MW. Unit 1 keep generating power. Meanwhile, Unit 1 will of its first 800 MW unit highest-rating
which was re-started after maintenance reach the maximum capacity of 1,000MW coal-based supercritical thermal power
also touched 800MW at the same time. It and continue till mid April. plant. The milestone was achieved for
the first unit of the 2x800 MW Yeramarus
5-yr old power plants to be turned into super critical plants: Piyush Goyal thermal power station of Raichur Power
Corporation Limited (RPCL), in Raichur
All power plants, which are over 25 years district of Karnataka. Significantly, the
old, will be phased out and converted into commercial operation of this unit also
super critical plants to augment generation marks BHELs foray as a developer into
capacity and reduce pollution, Power Minis- the field of power generation. Karnataka
ter Piyush Goyal said. Goyal told Lok Sabha Power Corporation Ltd. (KPCL) and BHEL 7
that these old power plants of NTPC, which are the main equity partners of RPCL, the
together produced around 11,000 MW power, owner and operator of this power plant.
will be phased out gradually and converted BHEL did complete design, engineering,
into super critical plant.Such plants are manufacture, supply, erection and
six to eight time less pollutant and will be commissioning of this state-of-the-art
able to generate more power, he said. Goyal improve utilisation of the stranded gas based supercritical project on turnkey basis. It
said during 12th Plan till September 2016, power generation capacity in the country, the has supplied all the critical equipment
a total of 3,000 MW of inefficient thermal Centre has sanctioned a scheme supported like boiler, turbine and generators,
generating capacity has been retired, which with Power System Development Fund for electrical, key packages of balance
will result in better utilisation of more ef- utilisation of gas based power generation of plant, and has also carried out the
ficient plants. The Minister said to revive and capacity for 2015-16 and 2016-17. associated civil works.
NTPC clocks highest-ever annual gross power generation of 263.95 BU

NTPC and its group companies collectively solar generation of NTPC touched maximum
achieved highest ever cumulative gross of 2.353 million units on March 12. NTPC, the
generation of 263.95 billion units during countrys largest power utility contributed
current year surpassing previous annual 24 % of countrys generation. NTPC is the
best of 263.42 billion units recorded in FY-16. third largest power company in terms of
Generation of the group registered an annual coal based power generation capacity, 2nd in
growth of 4.71% over last year.NTPCs pit capacity utilisation, 3rd in machine availabil-
head coal stations, with total capacity of ity and 7th in terms of electricity generation.
25840 MW, recorded capacity utilisation of NTPC has total installed capacity of 48,188
95.71% on that day and cumulative monthly MW from its 19 coal based, 7 gas based, 10
capacity utilisation of 91.4% for March-17. As Indias largest power station having capac- solar PV, one hydro and 9 subsidiaries and
many as 29 units of NTPC coal plants have ity of 4760 MW, achieving highest ever day joint venture power stations. The company
generated at a capacity utilisation level of generation of 114.254 million units at full has capacity of over 23,000 MW under imple-
more than 100% on that day.NTPC stations capacity utilisation. Mouda Thermal Power mentation at 23 locations across the country
have continued excellent performance in station also recorded highest ever day gen- including 4300 MW being undertaken by joint
the current month with Vindhyachal station, eration of 31.2 million units on March 9, and venture and subsidiary companies.
April 2017
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NewsBriefs | Power States


Discoms owe Rs 4,911.07 crore to Delhi govts power companies: CAG Tamil Nadu seeks Rs 17K crore from
Centre for power infra boost
crore recoverable from discoms adversely
affected the cash flow of IPGCL and PPCL
and the companies had to resort to heavy
short term borrowings. The report found
that out of planned commissioning of six
power plants of 3,340 MW capacity by the
end of 12th five-year plan, only 1,500 MW
PPS-III, Bawana has been commissioned
while other projects have been held up due
Apex auditor CAG has pointed to to non-availability of either gas or land. It
outstanding dues of Rs 4,911.07 crore also highlighted deficiencies in capacity Tamil Nadu Electricity Minister P Than-
owed to the Delhi governments power addition programmes, excess consumption gamani met the Union Minister for Power
generation companies by private discoms, of fuel, non-achievement of generation Piyush Goyal recently, pushing various
forcing them to resort to heavy short term targets and plant load factor norms, by demands that included the release of Rs
borrowings. The performance audit report the two power generation companies 17,000 crore to carry out improvement
of CAG tabled in the Delhi Assembly today during the period 2011-12 to 2015-16. works in a bid to make Chennais infra-
stated Outstanding dues of Rs 4,911.07 structure cyclone and flood resilient. The
conversion of 230 kV overhead transmis-
Tangedco cuts losses by Rs 2,000 crore in one year
sion lines to 230 kV underground cables
Tangedcos losses have come down by and the conversion of existing Distribu-
nearly Rs 2,000 crore over the past year, tion Transformer structures to Ring
the discom having ended this financial Main Units (RMUs) in the city were also
year with a loss of Rs 3,675.76 crore. It included in the estimate sought to be
has seen a 5% increase in sale of power given either as grant or as soft loan. The
8 due to which the revenue has increased minister also brought up the longstand-
by Rs 2,000 crore and the cost of fuel has ing demand for allocation of the entire
also reduced due to availability of local 2000 MW, the total capacity of Unit 3
coal. The financial position of the discom is and Unit 4 of the Kudankulam Nuclear
considerably better after a record loss of power project, for Tamil Nadu. As per the
Rs 13,500 crore in 2013-14. With the debts existing arrangement, Kerala, Karnataka
being taken over by the government under with a loss of Rs 6,374.17 crore in 2016-17. and Puducherry are also allocated power
the Uday scheme, the discom is hopeful of But due to better fuel price and sale of from the project. The reason was Tamil
a break-even in 2017-18, mainly due to the power, our loss has come down by half Nadu going to extraordinary lengths to
interest cost coming down. In our budget of what we had anticipated, a Tangedco ensure the smooth commissioning of the
estimates we thought we will end the year official said. power project.

Discoms in Odisha owe about Rs 7,000 crore to Gridco

Operating in losses for four consecutive years, following revocation of distribution licences of
the state-owned bulk power trading utility the Anil Ambani-led Reliance Infrastructure
Grid Corporation of Odisha Limited (Gridco) Limited by the Odisha Electricity Regula-
has outstanding receivables of more than Rs tory Commission (OERC). While bulk of the
7,000 crores from the four power distribution supply power bills of four discoms stood at Rs
companies (discoms) operating in the state. 3,320.26 crore, the outstanding loan including
Bulk of this outstanding dues are pending the interest has swelled to Rs 2,343.59 crore
against the Central Electricity Supply Utility till the end of last year. The net worth of the
(Cesu), currently managed by the Odisha company has turned negative. Gridco reported
Electricity Regulatory Commission (OERC). a loss of Rs 1455.49 crore in 2013-14, Rs
The company owes Rs 2592.94 crore to Grid- 109.74 crore in 2014-15 and Rs 392.30 crore
co as on December 30, 2016. The three other Company of Orissa Limited (Southco)have in 2015-16. An inter-state trading license is a
discomsNorth Eastern Electricity Supply to pay Rs 1,410.41 crore, Rs 1,777.71 crore prerequisite for trading of power outside the
Company of Orissa Limited (Nesco), Western and Rs 1089.27 crore respectively. These state. The negative net worth of the company
Electricity Supply Company of Orissa Limited three discoms are now functioning under has rendered it ineligible for obtaining such
(Wesco) and Southern Electricity Supply the supervision of Gridco since March 2015 license, according to sources.
April 2017
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NewsBriefs | Power International


Fiji Parliament passes Electricity Bill
IFC invests $100m in Pakistan hydro plant
project finance engagement with China
Three Gorges Corporation (CTGC), one
of the worlds largest renewable power
companies. In 2015, IFC acquired a 15
per cent stake in China Three Gorges
South Asia Investment Limited, CTGCs
renewable energy platform company
The International Finance Corporation is in Pakistan, to help develop a series of
investing $100m in a 720 MW hydropower renewable energy projects in the country.
plant in Pakistan. The IFC, which is part of Pakistan has been suffering from a severe The Fiji governments next step to divest
the World Bank Group, says the Karot run- power deficit resulting in load shedding shares in Fiji Electricity Authority and
of-river project is one of the largest private of over six hours per day on average, to have an independent regulator was
sector renewable energy projects in the hampering the countrys economic growth taken as the Electricity Bill was passed
country and is needed to help address and development. The Karot plant, which in parliament. The Electricity Bill is
severe power shortages and spur growth. should be operational in five years, is
a result of governments intention to
IFCs support for the $1.7bn project on expected to generate 2970 GW/h of net
corporatise FEA and create a company
the Jhelum River marks the IFCs first energy annually.
that will be registered under the
Australia floats $1.5 billion hydro upgrade to help plug power gap Companies Act 2015. Attorney General
The Australian government may spend Aiyaz Sayed-Khaiyum said the company
up to A$2 billion ($1.5 billion) to expand a will subsequently be partially divested.
huge hydro power scheme to help solve an Under the Electricity Act 1966, the
energy crisis, although the main owners of FEA is currently enjoying monopolistic
the dam have yet to be consulted. The idea status in the retail, transmission and
was floated by Prime Minister Malcolm 9
distribution of electricity in Fiji. FEA
Turnbull as the country looks to plug a gap also performs regulatory functions of
in power and gas supplies that has already
approval of licences and compliance
led to blackouts and outages across the
with safety standards. The new law also
eastern half of the country. Australia is
has regulatory reform in the electricity
on track to become the worlds largest of the Snowy Hydro scheme could power
exporter of liquefied natural gas (LNG), yet the equivalent of 500,000 homes and meet industry of Fiji. Sayed-Khaiyum said given
its energy market operator has warned of a demand in peak periods in the eastern states, the proposed partial divestment, it is not
domestic gas crunch from 2019 that could Energy Minister Josh Frydenberg said. The appropriate for the company to regulate
trigger industry supply cuts and broad power plan so far is just for a feasibility study to be the electricity industry or to issue
outages. The 2,000 megawatt expansion completed by the end of this year. electricity related licences.

Indonesia adds 500 MW into electricity grid from new mobile power plants

President Joko Jokowi Widodo recently capital of Pontianak, whose new MPP
inaugurated the operation across the can generate up to 100 MW of electricity.
archipelago of eight gas-based mobile The current government is aiming to
power plants (MPP) with a total capacity exponentially increase the amount of
of 500 megawatts (MW). Each of the eight power available to the nation by 2019
power plants has an electricity production through an ongoing program to generate
capacity of between 25 MW and 100 an additional 35,000 MW of electricity.
MW. They are located in Lombok in West The project is basically a continuation
Nusa Tenggara, Bangka Island, Lampung of the attempt by then president Susilo
in South Sumatra, Pontianak in West Bambang Yudhoyono during his first
Kalimantan, Bengkalis in Riau Islands, presidential term in 2005 to generate an
Belitung Island and Nias and Medan in additional 10,000 MW of electricity to
North Sumatra. Some of them have been keep the reserve margins the difference
operating since last year. Mempawah, between capacity and peak demand
home to some 250,000 people, is located within the International Energy Agencys
next to the West Kalimantan provincial recommended level of 20 to 35 percent.
April 2017
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InConversation
We are open to acquisitions in
the Indian hydro power market
With the new hydro policy expected to be finalised soon, the sector
is abuzz with new opportunities for developing mega projects. It is
felt that while enough attention is being given to renewable energy,
the hydro sector also needs to up the ante when it comes to
meeting Indias energy needs. In this regard, InfralinePlus speaks
to Mahadevan Anand, Managing Director, ANDRITZ HYDRO Pvt.
Ltd - a global supplier of electromechanical systems and services
for hydropower plants - on the challenges being faced by the hydro
sector and the companys growth plans.

How was Andritzs growth at the moment but we have our eyes
performance last year in India as open. A very important milestone was
well as globally? achieved in 2016 with the synchronis-
Mahadevan Anand, Managing Director, ANDRITZ
Andritz has shown a steady and continu- ing of all 6 units of 200 MW of the HYDRO Pvt. Ltd

10 ous growth in India for the last couple Teesta III hydro project in Sikkim
of years. In spite of a complete slack in which added 1200 MW to the national our leading position in this space. The
the power sector, we managed to book grid. Andritz is proud to be the core policy will surely bring in much needed
some good orders from the India region contractor for this important project. relief for hydro power developers who
as well as the South East Asian markets. have been intending to develop mega
Looking at the anticipated orders ex- What are the companys growth hydro projects.
pected in 2017, we are also enhancing plans for India? What will be its While Andritz has already contributed
our capacity and increasing manpower. major focus areas for the next with supplies aggregating over 22,000
Globally too there is a slump in the 2-3 years? MW in India and Asia, we are clearly
hydro markets but the Andritz Group Andritz is planning to double its focussing on clean green renewable
has outshined in the pulp and paper order intake in the coming 1-2 years energy specifically in the hydro power
segment. Additionally, the company by focussing on key markets. We are domain and continue to sustain our
has made important acquisitions in readying a work force of over 1500 leading position in the market.
China. Further, slow markets and com- skilled employees to tackle the ambitious
petitors that are aggressively reducing growth plans. We will continue to focus What are some of the most
their costs force us to have a close eye on the hydro market and high capacity promising and emerging
on maintaining our competitiveness. multi-purpose projects. Additionally, we technologies for the hydro power
The acquisition of companies with are ready to increase our efforts in the air segment? What are some of the
complementary products has been key pollution control segment, which has just new solutions that Andritz plans
for Andritzs global success. However, begun to take-off in India. Looking at the to offer to the market?
in India, with our existing state-of- Indian market in totality, we may also Global technology providers like An-
the-art manufacturing set-up, we are bring in more products and technology in dritz focus and invest huge amounts on
also looking at expanding these units diversified areas. R&D. We have developed technology
by increasing the bays, which could We are eagerly waiting for Indias in plant automation, turbine efficien-
happen as early as Q1 2018. beleaguered hydro sector to pick-up cies, created a complete water-to-wire
We are also open to acquisitions in the speed and with the much awaited solution for hydro project developers
Indian market for specific products Hydro Policy which is expected within and also are the first foreign company
which is very preliminary to talk about 2017, we would be keen to continue to set up an advanced coating facility in
April 2017
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India for under water parts to increase up steam but hopefully the trending The government is considering
plant life. levelised tariffs could end in a bubble several ideas to reduce the cost
Another important and critical area burst. We expect initiatives like UDAY, of power generation from hydel
is the complete operation and mainte- Make in India, RPO and HPO to come sources, including the possibility
nance of hydro plants which we are now to aid in putting greater thrust in Indias of gradual escalation of tariffs.
actively involved. We also undertake power sector. Your views?
annual maintenance contracts for the This is a very crucial issue today.
plants limited to the power house. The government intends to bring Hydro power projects under imple-
Further, we now have the complete hydro power under the ambit of mentation for the last couple of years
expertise in the service & rehabilitation renewable energy, along with have faced inherent delays leading to
of hydro power plants. While we now small hydro. How will it impact tariffs reaching as high as Rs. 5.5-6.5/
have this diversified portfolio, we have the sectors growth? unit. Such uneconomic values make
also broad based our manufacturing the entire proposition unviable for
capacity to address the mini hydro While we are expecting commercial use. Front loading of
market by being capable of manufac- equity could be one way to reduce
turing and supplying turbines from 300
the government in tariffs, introduction a minimum 15%
kW to 800 MW unit size in India. India to revive the through HPO, lower interest rates and
hydro market, foreign tax holidays are other ways to help
What are your expectations on companies like Andritz reduce the saleable tariffs of hydro
equipment orders in the hydro who are perfect projects. There are discussions on
power segment in the next one- examples of Make in these issues, which we hope will fruc-
two years? tify in the coming months.
While we are expecting the govern-
India are not allowed
ment in India to revive the hydro a free hand at bidding More than 6,000 MW of hydro 11
market, foreign companies like Andritz for projects through projects in India are currently
who are perfect examples of Make in the G2G bilateral route. stressed. How has the slowdown
India are not allowed a free hand at The preference is in the hydro sector in last few
bidding for projects through the G2G mainly given to certain years impacted the sectors
bilateral route.The preference is mainly growth. Has financing been a
given to certain government-owned
government-owned concern?
equipment suppliers, which nullifies equipment suppliers, I would rather say that the hydro sec-
the very purpose of Make in India. which nullifies the very tor is in coma rather than a slowdown.
We are however hopeful that projects purpose of Make in We have not seen any new projects
totalling near 3000-4000 MW could be India come up in the last 4-5 years. In spite
tendered in the coming one-two years of over 83,000 MW of untapped
in the Indian market. There are talks of the new Hydro Pow- hydro potential in the country, we
er Policy and bringing all hydropower have utilized less than 10% of this
What is your outlook for the projects under the ambit of renewable potential. The hydro share in India
power sector in India in the next energy (RE). This if implemented, has been dwindling constantly for the
few years? would extend the benefits of RE to last 10 years. Today hydro contrib-
With the focus shifting to environ- all hydropower projects including utes to about 14% against the thermal
mental concerns, coal is surely not the subsidies (Rs. 1.5 to 20 Crore/MW), figure. Secondly, there has been no
solution for the future. Renewable en- tax benefits and power off-take (RE fresh infusion of equity in projects and
ergy like solar and wind are not alone defined projects get preferential sale debt financing has almost come to nil.
capable of justifying power demands of power). This in particular is aimed These negative traits continue because
for the country. The only alternative at bringing relief to private develop- of project cost overruns coming from
is from hydro power which is a clean ers. This will work absolutely fine if geological problems, untimely clear-
energy source. Unless the policy mak- hydropower comes under the RE ambit ances, debt ridden IPPs and no clear
ers take cognisance of its importance, especially considering the fact that the mandate from policy makers.
we do not expect any big developments share of RE has increased over 14%
to come by. Solar power is picking from a mere 3% share in 2005. For suggestions email at feedback@infraline.com
April 2017
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InDepth
Amendments to Mega Power Policy to bring
much needed relief to private developers

12

Amendments will help avoid potential stressed assets worth INR 1.5 lakh crore
To bring down power tariff for making electricity more affordable for consumers

By Team InfralinePlus

Cast your mind back to start of the new inadequate fuel supply and aggressive Krishna-Godavari (KG) basin, even
financial year in April 2015 and we bidding to win projects. Out of this 46 after the introduction of scheme to
were informed about the time ticking GW, about 36 GW were coal-based bail out these projects through PSDF.
bomb in the Indian banking sector. This projects within which tariff under- Loans to these projects were said to
bomb was referred to the rising number recovery has impacted 20 GW of ca- be around INR 1.5-2 lakh crore, with
of Non-Performing Assets (NPAs) in pacities, while the rest were said to be about two-thirds lent by public sector
the infrastructure sector, especially reeling because of inadequate feedstock banks. Of these loans, as much as INR
power. According to a CRISIL report and poor electricity offtake by state 75,000 crore of loans or nearly 15%
released in 2015, power projects with distribution companies (DISCOMs). of aggregated debt to power generation
around 46 GW capacity were said The remaining 10 GW of gas-based companies are still at risk of becom-
to facing viability issues due to lack projects have become unviable because ing delinquent in the medium term.
of long-term purchase agreements, of dwindling fuel supplies from the Fast forward to the new financial
April 2017
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year (April 2017) and post con-


Fiscal, duty exemptions under Mega Power Policy
stant discussions at inter-ministerial
levels, it seems there is relief in the (a) Zero Customs Duty: In terms of the notification of the Government of India
offing for private power developers dated 1st March, 2002, the import of capital equipment would be free of
and developers of so-called mega customs duty for these projects.
power projects. The government will (b) Deemed Export Benefits: Under Chapter 8(f) of the Foreign Trade Policy,
bring changes to the Mega Power Deemed Export Benefits is available to domestic bidders for projects both
Policy (MPP) which is expected to under public and private sector on following the stipulations prescribed
help projects worth over 30,000 MW therein.
thermal capacity avail the benefits
of mega status. The amendments avail the benefits of the policy. With
will help avoid potential stressed
This initiative besides the host states where 15 projects are
assets worth INR 1.5 lakh crore. This addressing concerns said to be located, demanding that 35%
initiative besides addressing concerns of the banking sector of the electricity be allotted to them,
of the banking sector stakeholders will stakeholders will the developers were unable to meet the
also bring down the power tariff for also bring down the 85% competitive bid criteria. This is
making electricity more affordable power tariff for making likely to be reduced to 65% which
for domestic as well as industrial and will benefit projects with a capacity of
commercial consumers. Thermal power
electricity more 22,000 MW.
plants of over 1,000 MW and hydel affordable for domestic Another policy change that is
projects of over 500 MW currently as well as industrial and expected to help the developers, relates
enjoy mega power project status that commercial consumers. to releasing the bank guarantee furnished
gives them exemption from excise Thermal power plants by them in proportion to the percentage
duty besides lower customs duty and of over 1,000 MW and of capacity signed up by them through 13
deemed export benefits. long-term PPAs. Earlier, the bank
hydel projects of over guarantee was released only after 85%
Salient features of current & 500 MW currently enjoy capacity had been tied up for sale.
likely amendments to Mega mega power project Through the amendments to the
Power Policy status policy, tying of untied capacities is
It is proposed to extend the Mega expected to improve power availability
Power Policy benefits in proportion to of a plants capacity through tariff- and ensure cash flows to these projects,
the extent of signed Power Purchase based competitive bidding in order to bringing relief to banks and financial
Agreements (PPAs) as provided in Tar-
iff Policy 2006 once the threshold ca- Figure 1: Evolution of Mega Power Policy
pacity of the Provisional Mega project
gets commissioned and also extend the 2014 - Policy amended and mandating
time period for Provisional Mega proj- developers to tie up at least 65 percent
of installed capacity/net capacity through
ects to get final Mega Status from 36 competitive bidding and 35 per cent
under regulated tariff of host state under
months to 60 months. The government long term PPAs

may also grant additional 60 months to


such projects where equipment has not 2006 - Post Finance Ministry's
notification (Department of 2017 - New amendments to
been imported yet in order for them to Revenue), import of capital
equipment to be free of
include a tax holiday for 10 years
and a waiver from customs duty
avail fiscal benefits. customs duty for mega power
projects 2009 - New Mega Power
on equipment imports. Also
proposed to extend the time
Over the last 2-3 years, states have Policy was unveiled with an
objective to increase power
period for provisional mega
projects to get final Mega Status
not called for competitive bidding availability, reasonable tariffs
and increased fiscal benefits
from 36 months to 60 months
and also to sign PPAs
due to poor financial health of their for developers

respective DISCOMs and of lack of


demand prompting a discussion on the 1995 - Introduction of
Mega Power Policy to
need to make the changes to the policy. incentivise capital
expenditure into large
The policy currently requires the power projects

developer to have long-term PPAs for


65 (host state obligation) - 85 percent Source: Ministry of Power (MoP)
April 2017
www.InfralinePlus.com

InDepth

institutions that have extended loans to and some of them were taking too capacity/net capacity through com-
such projects. long for finalizing the bids that were petitive bidding and 35 per cent under
received at that time. The developers regulated tariff of host state under
Evolution of Mega Power had requested that any power project long term Power Purchase Agreement
Policy: 1995 - Present tying up the long term PPA of their (PPA) with DISCOMs/State designated
The Mega Power Policy was intro- part capacity be given Mega benefits agency to avail benefits under the
duced in November 1995 for provid- proportionately. In other words, if any policy. The amendment had provided
ing impetus to development of large developer was able to achieve less this dispensation would be one time
size power projects in the country than 85% power tie up, they can be and limited to 15 projects which are
and deriving benefit from economies extended mega benefits in the pro- located in the states having mandatory
of scale and quick capacity addition. portion of the tied up PPA. host state power tie up.
Under Mega policy, fiscal benefits in In 2012, a list of 111 power projects,
the form of zero duty imports, income with a total capacity of 167 GW was NPAs in the power sector:
tax waiver etc., were extended to the frozen to enjoy mega power project An assessment
certified Mega power projects. status. Out of these, 25 were provi- While the gross NPAs in the sector
The Policy was amended in 2009 sional mega projects of independent had increased from 1.3 percent to 4.4
to make it liberal and operationally power producers (IPPs). As per the percent in financial year 2015-16, the
more effective. Amended Mega Policy original guidelines, no greenfield stressed assets as measured by gross
allowed the developers to tie up all project was to be given the mega status NPAs and restructured standard assets
power to even one state and as per after July 2012. The policy was later continue to remain steady, close to 14
National Electricity Policy they could amended in 2014 mandating developers percent last year. According to a data
also sell power upto 15% outside to tie up at least 65 percent of installed published by the Reserve Bank of
the long term PPA. Thus, the policy
stipulated that the private power
14
companies must tie up only 85% of
The Mega Power Policy was introduced in
power of the plant with DISCOMs / November 1995 for providing impetus to
State designated agencies through tariff development of large size power projects in the
based competitive bidding. country and deriving benefit from economies of
Based on the representation from
the industry that there had been delays
scale and quick capacity addition. Under Mega
in signing of PPA through competitive policy, fiscal benefits in the form of zero duty
bidding (which is mandatory for imports, income tax waiver etc., were extended
grant of mega power status), MoP to the certified Mega power projects
in consultation with Department of
Revenue, issued guidelines for issuance
of Provisional Mega Certificate where
the projects undertake to sign long term
PPA of at least 85% of plant capacity
within 36 months from the date of
issuance of such Provisional Mega
certificate, to enable the developers
to continue with the execution of the
project and tie up PPAs in that three
year period with an undertaking to that
effect backed by bank guarantee.
Developers had also represented that
even if they had commission the plant
they were unable to get the benefits of
Mega Policy as they were unable to
tie up 85% power through competitive
bidding because not many states are
calling bids for procurement of power
April 2017
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Table: Stranded Capacity without PPAs capacities (10,000 MW) without PPAs
will be exposed to the vagaries of the
Under-
Commissioned Total Capacity short-term electricity market.
States Construction
Capacity (MW) (MW) The Ujwal Discom Assurance
Capacity (MW)
Yojana (UDAY), launched by the
Chhattisgarh 4636 990 5626
government for financial turnaround
Madhya Pradesh 1824 1200 3024 and revival of power distribution com-
Odisha 1315 - 1315 panies, will have definite impact on
Maharashtra 3098 1080 4178 the buying capacity of the distribution
utilities. But thats going to be more
Himachal Pradesh 1174 244 1418
long term and sustainability would
Sikkim 96 535 631 depend on the overall turnaround of
Uttarakhand - 76 76 the distribution segment.
Andhra Pradesh 1150 2020 3170
Gujarat 945 945 Way forward
Recent trends indicate that short term
Tamil Nadu 942 150 1092
(including day ahead) prices have
Karnataka 980 980 remained lower in comparison to the
Rajasthan 120 120 prices under LTPPAs. With the onset
Uttar Pradesh 198 198 of ambitious renewable energy (RE)
programme in the country, DISCOMs
Gas-based projects 5000 5000
will now have to tie-up significant por-
Total (in MW) 21280 6493 27773 tion of the RE capacity in order to fulfil
Source: Motilal Oswal Securities Limited (MOSL) document their renewable purchase obligations 15
(RPOs). This leaves very little scope
India (RBI) last year, the infrastructure for developers to sign LTPPAs (based
sectors share in gross non-performing Constraints of power on thermal power) with utilities.
assets of banks was 13.90 per cent in purchase agreements The policy decision is expected to
June 2016, higher than 12.69 per cent (PPAs) as well as fuel be welcomed by the promoters of the
in December 2015, and the power sec- supply agreements mega power projects as most of their
tors contribution to these numbers was projects have seen a sharp increase in
5.97 per cent in June 2016.
(FSA) are majorly re- cost because of execution delays, non-
Constraints of power purchase stricting these plants availability of fuel and depreciation of
agreements (PPAs) as well as from approaching the the rupee. However, a lot will depend
fuel supply agreements (FSA) are power market and find- on how Power Ministrys flagship
majorly restricting these plants from ing buyers. Further, scheme, UDAY, will help in complete
approaching the power market and revival of distribution segment which
finding buyers. Further, coal linkages
coal linkages are given in turn will allow DISCOMs to sign
are given to power plants on the basis to power plants on the PPAs going forward.
of Long Term PPAs signed by them. basis of Long Term With the increasing adoption of
However, since the past 2-3 years there PPAs signed by them renewable power (particularly solar) and
has been little or no activity on the growing preference for competitively
part of the DISCOMs to issue fresh though power generation has increased bid merchant contracts mean the thermal
tenders for long term PPAs (LTPPAs) and there is new installed capacity of power industry can no longer have
with power producers setting up power 12,000 MW, lack of power purchase the luxury of stable long-term PPAs.
plants under Case-1 Bidding. power agreements continues to keep However, with states adopting UDAY
Power plants are generally built on plant load factor at its lowest. There wholeheartedly and with amendments
a 70:30 debt equity ratio and if plant has been an increase in private sector to the mega power policy, the light is
load factor falls below 65 per cent capacities without PPAs in the last finally beginning to appear at the end of
return on investment falls to such a three years. If PPA signing does not tunnel for private sector developers.
low level that it becomes difficult for commence soon, by the end of fiscal
the company to service its debt. Even of 2018, nearly 15% of private sector For suggestions email at feedback@infraline.com
April 2017
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StatisticsPower
Performance of Coal/Lignite Based Thermal Power stations during 2002-03 to 2014-15
Sp. Sec. Fuel
Sp. Coal oil cons. Partial Loss (%) due to
Capacity Generation PM Op.Av. Aux. (ml/ kWh)
Year PLF (%) FO (%) cons. (kg/
(MW) (MU) (%) (%) Cons (%)
kWh) Equipment LSD/ RSD
etc. (%)
2002-03 61152 383379 72.34 8.3 9.87 81.83 9.55 0.71 0.68 9.55 1.57
2003-04 62727 398412 72.96 8.59 9.48 81.93 9.91 0.7 2.3 9.09 1.98
2004-05 64646 415484 74.82 8.23 8.84 82.93 8.57 0.71 1.37 8.35 0.92
2005-06 66449 426138 73.71 9.48 8.74 81.78 8.44 0.7 1.77 7.08 2.1
2006-07 67596.5 451480 77.03 8.43 8.14 83.72 8.29 0.72 1.89 6.15 1.02
2007-08 70569.5 475552 78.75 7.5 7.71 84.76 8.17 0.73 1.4 6.3 0.52
2008-09 74914.5 498019 77.22 5.66 9.29 85.05 8.33 0.74 1.93 8.21 0.27
2009-10 80439.5 535433 77.53 6.05 8.85 85.1 8.34 0.72 1.51 7.57 0.46
2010-11 86137 553696 75.08 5.83 10.32 83.85 8.49 0.72 1.85 9.88 1.43
2011-12 97768 606684 73.32 5.93 11.46 82.61 8.44 0.72 1.83 8.34 1.09
2012-13 118024.5 689036 70.13 5.71 13.59 80.69 8.15 0.7 - 9.8 0.88
2013-14 132624.5 792477 65.56 5.02 17.64 77.35 8.16 0.69 - 8.96 3.16
2014-15 147297 878320 64.29 4.66 19.05 76.29 8.02 0.68 - 9.41 2.22

Details of energy shortage in the country during last two decades (FY1992 to FY2016)
Requirement Availability Shortage
16 Year
(MU) (MU) (MU) (%)
1991-92 2,88,974 2,66,432 22,542 7.8
1992-93 3,05,266 2,79,824 25,442 8.3
1993-94 3,23,252 2,99,494 23,758 7.3
1994-95 3,52,260 3,27,281 24,979 7.1
1995-96 3,89,721 3,54,045 35,676 9.2
1996-97 4,13,490 3,65,900 47,590 11.5
1997-98 4,24,505 3,90,330 34,175 8.1
1998-99 4,46,584 4,20,235 26,349 5.9
1999-00 4,80,430 4,50,594 29,836 6.2
2000-01 5,07,216 4,67,400 39,816 7.8
2001-02 5,22,537 4,83,350 39,187 7.5
2002-03 5,45,983 4,97,890 48,093 8.8
2003-04 5,59,264 5,19,398 39,866 7.1
2004-05 5,91,373 5,48,115 43,258 7.3
2005-06 6,31,554 5,78,819 52,735 8.4
2006-07 6,90,587 6,24,495 66,092 9.6
2007-08 7,39,343 6,66,007 73,336 9.9
2008-09 777,039 691,038 86,001 11.1
2009-10 830,594 746,644 83,950 10.1
2010-11 861,591 788,355 73,236 8.5
2011-12 937,199 857,886 79,313 8.5
2012-13 995,557 908,652 86,905 8.7
2013-14 10,02,045 9,59,614 42,431 4.2
2014-15 10,68,923 1,030,785 38,138 3.6
2015-16 11,14,235 10,90,713 23,522 2.1
April 2017
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Average Power Purchase Cost (APPC) Details for different States/Discoms for
FY15 & FY16
State Discom APPC for FY16 APPC for FY15
BYPL - 3.78
Delhi BRPL - 4.19
TPDDL 4.12 4.09
SBPDCL 3.9 3.9
Bihar
NBPDCL 3.9 3.88
Jharkhand JBVNL 4.14 3.98
West Bengal WBPDCL 4.24 4.14
Chhattisgarh CSPDCL 3.09 -
Madhya Pradesh MP Discoms 3.53 3.16
MSEDCL - 3.75
Maharashtra R-Infra 4.14 4.51
BEST - 5.52
Haryana Haryana Discoms - 3.71
Kerala KSEB - 3.39
Tamilnadu - 2.62
BESCOM 3.89 -
Karnataka
GESCOM 2.83 2.38
17
AP AP Discoms 3.6 -
UK UPCL 2.61 2.51
J&K J&KPDCL 3.6 3.52
Goa Goa Discom 3.66 3.9
Telangana Telangana Discom 3.88 -
Meghalaya 2.48 2.49
Punjab 2.25 2.39
Himachal Pradesh 2.25 2.19
PVVNL - 4.41
Uttar Pradesh
NPCL 5.03 4.59
PGVCL 4.15 4.13
DGVCL 3.76 -
Gujarat
MGVCL 3.76 -
UGVCL 3.76 -
April 2017
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NewsBriefs | Coal National


Coal supplies to power plants to depend on PPAs Indias coal reserves could remain
unused in future: Piyush Goyal

net Committee on Economic Affairs (CCEA)


is likely to consider the new coal contracts
policy for power plants in its next meeting.
The clause was required to ensure misuse of
coal. However, private power companies call
the clause unfair as discoms have not been
floating power requirement tenders regularly.
They say the proposed auctions will put win-
Power companies that win coal contracts with ning companies at a disadvantage when they
the Coal India Ltd (CIL) in the forthcoming compete for bagging power supply tenders Indias vast coal reserves could remain
auctions will have to ensure that they sign floated by state distribution companies. As per unused in future, thanks to the expected
long and medium-term contracts for power the proposed policy, the government will auc- mega shift towards clean energy genera-
supply with discoms within two years. Coal tion coal for companies that have the letters of tion sector, the countrys power, coal, re-
supplies to the power plants will start only assurance (Lo-As) for coal signed by state-run newable energy and mines minister Piyush
after they sign the power contracts. The Cabi- Coal India with power plant developers. Goyal said.In the evolving world energy
scenario, it is quite possible that Indias
Indias coal imports for blending halve in current financial year coal reserves remain unused in the times
to come as we would be shifting towards
Coal imports by power utilities for blend- cleaner energy technologies like solar and
ing with domestic coal have halved during wind, among others, Goyal said. He added
April 2016 and January 2017 against the the policies followed by the previous gov-
previous corresponding period on account ernment have led to wastage of precious
of more coal being made available by Coal foreign exchange reserves over the years in
18 India.According to data compiled by the coal importing coal and feeding domestic power
ministry, between April 2016 and January plants, overlooking the reserves the coun-
2017, power utilities imported 16.6 million try has. Goyal said the country has seen a
tonnes of coal against 31.6 million tonnes huge ramp up in the production of domestic
during the corresponding period in 2015-16. was imported against 146.12 million tonnes coal in the last 3 years -- to the tune of
The quantity of coal imported by the power during the same period in 2015-16. Total coal more than 100 MT -- but the quantity of
utilities in 2015-16 had decreased to 37.1 imports in 2015-16 was 199.9 million tonnes coal produced this year is less as compared
million tonnes from 48.5 million tonnes in as compared to 217.8 million tonnes in to the previous two years. The country has
2014-15.In fact, total coal imports have 2014-15.Over the last several months, Coal the ability to produce more coal but it is
been consistently reducing over the last India jacked up production and has managed held back by market forces and that means
three years. Between April and December to ease supplies. This resulted in transition India will have sufficient coal in coming
of 2016-17, 144.87 million tonnes of coal from a coal deficit scenario to a surplus one. years and imports would not rise, he added.

Centre warns Odisha of moving away coal production as MCL miss target

The Centre has warned Odisha that Coal be contributed by MCL.There were serious
India will have to move away its production problems, like relief and rehabilitation (R&R)
from the state if the government there does in MCL, the Secretary said, adding that he had
not improve law and order situation and ac- rushed a team of officials, including additional
cused it of being very casual. Coal Secretary secretary, Coal, to Odisha to take stock of the
Susheel Kumar said that the production of situation. In MCL because of R&R issues
Mahanadi Coalfields Ltd (MCL), a Coal India not do it (improve the law and order situation) they (protesters) come and stop production....
arm, has been hit due to sporadic stoppage then we will move away from Odisha. We you reach a stage when you have to proceed,
of work at some mines due to protests and will leave Odisha and do more production crack new ground. That can only be possible
it may miss the output target by 20 million from somewhere else in the next year, the if the people who are living there are shifted
tonnes this financial year. Mahanadi Coalfields secretary asserted.Moving away implies that to some other place. They (the villagers) are
Ltd. (MCL) is targeting production of around Coal India will reduce the target of MCL and not shifting, Kumar said.Coal India which
167 million tonnes (MT) in 2016-17. Odisha raise the target of some other subsidiary. Coal accounts for over 80 percent of the domestic
government is also very casual.... I conveyed India targets a production of 598 MT in the coal production is eyeing one billion tonnes
it to Chief Secretary (of Odisha) that if you do current fiscal of which 167 million tonnes will output by 2020.
April 2017
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NewsBriefs | Coal National


India has 80 million tonne of coal stocks at power plants and mines Competition Commission
imposes Rs 591 crore penalty on
Coal India, three subsidiaries
in meeting its coal demand, said Piyush
Goyal, minister for Power, Coal, Renewable
Energy and Mines in a written reply in Parlia-
ment. The coal stock with thermal power
plants as on 28 February was 26.15 MT
(equivalent to 17 days requirement). Further,
the vendible stock with Coal India Ltd (CIL)
was 54.85 MT, a coal ministrys statement
India had total coal stocks of a whopping 80 said quoting Goyal. The minister also added
million tonne (MT) at its power plants and the government has taken steps to increase Fair trade regulator Competition
coal mines put together at the end of Febru- the domestic production including efforts to Commission of India has imposed a
ary, thanks to the ongoing slump in the de- expedite environment and forest clearances, penalty of Rs 591 crore on Coal India Ltd
mand for power from distribution utilities and pursuing with states for assistance in land for imposing unfair and discriminatory
the low capacity utilization of thermal power acquisition and coordinated effort with Rail- conditions on fuel supply agreements
stations.India is currently facing no difficulty ways for movement of coal. signed with power producers.It is
ordered that the fuel supply agreements
Satellites being used to check illegal mining shall be modified in light of the
observations and findings recorded in
Satellites are being used for surveillance
the present order. For effecting these
aimed at checking illegal mining in the coun-
modifications in the agreements, CIL
try and the data is quickly passed on to the
shall consult all the stakeholders, the
state governments for action, the government
commission in a 56 page order said.
told the Lok Sabha. The Ministry of Mines,
The order comes on complaints from 19
through Indian Bureau of Mines (IBM), has
Maharashtra State Power Generation
developed the Mining Surveillance System
Company and the Gujarat State
(MSS) in collaboration with the Ministry of
Electronics and Bhaskaracharya Institute in reply to questions.He said a user-friendly Electricity Corporation against Coal
of Space Applications and Geo-Informatics mobile app has been developed for MSS India and its subsidiaries -- Mahanadi
(BISAG) to use the space technology to which is used by the inspecting officials of the Coalfields, South Eastern Coalfields and
check illegal mining, Minister for Mines Piyush state governments to submit their geo-tagged Western Coalfields. The total penalty is 1
Goyal said. MSS uses the Satellite Remote inspection reports.Using this mobile app, the per cent of Coal Indias average turnover
Sensing Technology together with Informa- citizens can also report unusual mining activ- in the last three years which is Rs 5.9
tion Technology. MSS is a transparent and ity which is likely to be illegal mining, thus lakh crores. The state-owned miner has
bias-free system having a quick response time making it a participative and citizen-centric been directed to deposit the penalty
and capability of effective follow-up, he said monitoring system, the minister said. amount within 60 days.

NTPC okays Rs 3,000 crore investment for Talaipalli coal mining project

State-run power giant NTPC has approved greater self reliance on coal will go
investment of Rs 3,004 crore for Talaipalli a long way in ensuring the sustained
Coal Mining Project which has an growth of power generation.NTPC has
estimated 18 million tonnes per annum been allotted coal blocks namely, Pakri-
capacity in Chhattisgarh.In line with Barwadih, Chatti-Bariatu, Kerandari,
the Corporate Disclosure requirements, Dulanga, Talaipalli and Chatti-Bariatu
we wish to inform that the Board of (South), Banai, Bhalumunda and Mandakini
Directors of the Company has accorded B. These mines have total geological
investment approval for Talaipalli Coal reserves of around 7.15 billion tonnes.
Mining Project (18 Million Tonnes per These blocks have production potential of
annum) at an appraised current estimated 107 MMTPA catering to requirement
cost of Rs 3,004 crore, NTPC Ltd said in of 20,000 MW. Pakribarwadih has block
a statement.According to the statement, area of 46.26 sq km and mine capacity
coal mining is integral to NTPCs fuel of 18 MTPA with mineable reserve of
security strategies. NTPC realises that 641 MMT.
April 2017
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NewsBriefs | Coal International


Chinas Jan-Feb coal output dips despite push to raise supplies Mitsubishi says it may sell stakes
in Australia thermal coal mines

reversing tough measures to cut the countrys


reliance on fossil fuels. Miners produced
506.78 million tonnes of coal in January and
February, the National Bureau of Statistics
said. That compares with 513.5 million tonnes
in the first two months of 2016 and 546.5
million tonnes in 2015.The Statistics Bureau
provided information for January and February
together to smooth the impact of the Lunar
New Year holiday, and did not give a separate
monthly breakdown. In November, the govern-
Chinas coal output fell 1.7 percent in the first ment lifted a limit on the number of days ther- Japanese trading company Mitsubishi
two months of the year, even after Beijing mal coal miners can operate each year, in a bid Corp may sell stakes in Australia thermal
urged miners to ramp up output to replen- to meet surging demand from utilities during coal mines as it presses on with a switch
ish supplies during the cold winter months, the months-long winter heating season. to core assets such as coking coal after
slumping to its first-ever annual loss last
U.S. coal exports and imports decline in 2016 year, a spokesman said on. The Nikkei
business daily reported that Mitsubishi is
The United States remained a net exporter looking to unload its 31.4 percent stake
of coal in 2016, exporting 60.3 million in the Clermont mine, and may also sell
short tons (MMst) and importing 9.8 stake in the Hunter Valley operation. The
MMst. U.S. coal exports fell for the fourth firm plans to raise its stake in Canadas
consecutive year, down 13.7 MMst from Montney shale gas field, buying more
20 2015, with 2016 exports less than half shares from partner Japan Oil, Gas and
of the record volume of coal exported in Metals National Corp.We are considering
2012 (125.7 MMst). Slow growth in world all options including selling a stake in
coal demand combined with supplier the Clermont coal mine and we have
competition was the primary factors hired Rothschild as financial advisor for
contributing to the decline in U.S. coal coal-exporting countries such as Australia, the deal, a spokesman said. Mitsubishi
exports. U.S. coal exports declined through Indonesia, Colombia, Russia, and South is also considering whether or not to sell
most of 2016 despite mid-year increases Africa. Nearly 80% of the coal exported its 32.4 percent stake in Hunter Valley
in international coal prices. Lower mining by the United States in 2016 went to 10 thermal coal mine in Australia after
costs, cheaper transportation costs, and countries. Declining exports to 9 of those its partner Rio Tinto decided to sell its
favorable exchange rates continue to 10 countries accounted for two-thirds of Australian coal assets to Chinas Yancoal,
provide a market advantage to other major the total drop in U.S. exports. the spokesman said.

Indonesia port graft investigation disrupting coal shipments

Indonesia is cracking down on corruption area to pay extra fees to load ships. One coal
and widespread graft at some of its top coal mining company had been asked by steve-
export hubs, disrupting shipments to destina- dores to pay 3 billion rupiah ($225,000) per
tions across Asia. Indonesia is the worlds month in illegal fees based on tonnage. Such
top exporter of thermal coal, still the main fees had been charged on shipments since
feedstock for global power generation. Inter- last year and that police estimated Komura
ruptions to coals output and shipment can had amassed several hundred billion rupiah
impact seaborne prices of the fuel as well as from the illegal charges. Transportation Minis-
wholesale electricity markets. The investiga- ter Budi KaryaSumadi said in the ministry
tions are targeting port operations along the (Komura) office, a Transportation Ministry statement he had asked police not to hesi-
large anchorage area off Samarinda in East statement said, based on allegations of tate in cracking down on all forms of illegal
Kalimantan, delaying ships waiting to load blackmail, corruption, money laundering, and fees.The crackdown follows coal shipment
new supplies from the regions mines. Police thuggery. East Kalimantan Police said that disruptions that occurred last month, when
initially raided four port facilities, including the authorities were targeting stevedores that authorities put up road blocks in investigations
Samudra Sejahtera Stevedores Cooperative were asking coal companies in the Mahakam that prevented workers from accessing ports.
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March 2017
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ExpertSpeak
Need to fast track modernization of coal
transportation to improve productivity
In this article, Alok Perti, former coal secretary, Government of
India, talks of the need to improve and modernize coal transporta-
tion infrastructure in India to increase coal production. Perti feels
that while there is still scope for improvement in movement of coal
by rail, especially in the major potential coal producing areas, there
is also a need for coal companies to set up modern coal handling
plants along with adequate coal washing facilities.

Coal production in India has been quantities are transported by belts and
constantly increasing with demand and rope conveyors. Table 1.0 provides
this has had a fall-out on the methods details of the trends noticed in the past
of transportation being employed by the several years in coal movement.
coal companies and the coal users. In It can be seen that the maximum
1973 when coal mining was national- increase has been in road transport.
ized, the production was about 80 It has almost doubled Alok Perti, former coal secretary, Government
of India
million tons and this was mainly from in the last ten
22 underground mines located in parts of years. Rail rake loading per day would mean
West Bengal and erstwhile Bihar. The movement Establishment transportation of one million tons
famous mines of Jharia and Raniganj has of adequate annually. A truck is expected to
are in these areas. With exploration, improved coal washing transport anything between 10 to
increasingly more and more areas were significantly 20 mts, depending on the capacity.
brought under mines. The main areas in the last
facilities is For transporting,one million tons of
where coal was found are in the Gond- four years. imperative coal by road would require anything
wana belt which spreads over large Movement between 50,000 to 100,000 truck
portions of the states of Jharkhand, through MGRs loads. Moving coal in bulk through
Odisha, Chhattisgarh, Madhya Pradesh, has been more or less road transport will lead to excessive
Uttar Pradesh, West Bengal and Maha- steady. This is because MGRs caters air pollution and extensive damage to
rashtra. Some coal is also found in the to only pithead power stations and roads. For supply to power stations and
North Eastern states but the origin of establishment of such power stations large steel plants, the mode of transport
this is different. Moving this mineral have considerable gestation periods. should be rail and only small consign-
out to the users requires an elaborate While the number of such power ments should move by road. Unfortu-
transport infrastructure both for rail as utilities is increasing, the coal supply nately in India, coal movement by road
well as road. These coal bearing areas does not seem to reflect this increase is increasing much more rapidly than
in the country have unfortunately not in demand. These figures are related to rail. The mail reason for this is the lack
been the focus areas for development of the movement of coal from the mine of proper infrastructure for moving coal
good infrastructure, as a result when the lease areas of CIL and SCCL against by rail.
demand for coal grew rapidly mainly linkages and movement of coal by other
for power generation, movement of coal private and public sector companies Inadequacy of rail
to utilities became a major hurdle. from their captive mines or against infrastructure
e-auction. Normally, a railway rake will The main method of transportation
Trends in movement of coal be transporting 3600 mts, except in the is the railways. Coal mining is being
Coal is being moved from the mines to North East where coal transport is still expanded by Central Coalfields Ltd
the end users by various means. Rail is being done through meter gauge rail (CCL), Mahanadi Coalfields Ltd
the dominant means followed by road lines. If we presume that loading will (MCL), Eastern Coalfields Ltd (ECL),
and MGR (merry go round). Small be on an average 300 days, then one South Eastern Coalfields Ltd (SECL)
March 2017
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Table 1.0: Trends in movement of coal (2006-07 to 2015-16) completed in the next 2-3 years.
CIL had initiated these proposals
YEAR RAIL ROAD MGR BELT ROPE
some 10years ago and this excessive
2006-07 202.7 81.5 87.9 7.13 6.33 delay had resulted in the company
2007-08 212.8 101.7 90.0 7.4 6.5 suppressing its production despite
2008-09 226.24 118.3 92.8 15.94 8.83 having the necessary environment and
2009-10 236.47 127.6 97..4 13.5 4.77 forest clearances. Expansion projects
of coal mines were also held up due to
2011-12 249.3 148.33 86.8 13.1 3.7
lack of EC and Forest clearance. This
2012-13 276.1 142.4 94.6 13.14 3.2 combined effect of lack of rail infra-
2013-14 273.3 146.9 88.6 19.7 2.9 structure in critical areas and delay in
2014-15 296.8 150.6 93.52 23.45 2.83 awarding EC and forest clearances for
2015-16 313.1 151.9 98.2 28.14 2.43 expansion projects resulted in slow
growth of coal production.
and Northern Coalfields Ltd (NCL).As from Panchayats under the provisions
far CCL and ECL are concerned, the of the Forest Rights Act is also quite Coal handling: Lack of
North Karanpura area has the potential troublesome. Invariably, the quorum modern technology in mines
to enhance annual production by about required for holding these panchayat- Besides the need to have a good and
70-80 million tons. In the master plan sabhas was easily fulfilled and hence modern infrastructure of railway in the
prepared by CIL, there is a proposal meeting had to be convened by the col- coal mining areas, it is also necessary
to build a rail network in the area to lectors repeatedly for this purpose. to have rapid loading systems to ensure
evacuate the mineral. Since this area The third critical area is the Mand- bulk movement of coal to large users.
is densely forested, the Ministry of Raigarh area in South Eastern Coal- A power plant of 1000 MW should get
Environment did not give clearance for fields Ltd. Here, the initiative taken by about 4.0 to 4.5 million tons annually 23
forest diversion for several years and as the state government to team up with to be able to operate efficiently at 85%
a result coal production had to be sup- CIL and the Ministry of Railways to PLF. This would mean that such a power
pressed. In addition, this area also had expedite the implementation of the plant should be receiving on an average
insurgent activities which restrained project helped to move faster. IRCON of 4.0 rakes per day. Today, we are think-
the establishment of rail infrastruc- was given the responsibility for both ing of mega plants of capacities of 4000
ture. Subsequently, the Ministry of project formulation and execution. to 6000 MW. Getting 16 rakes of coal
Railways had to re-align the railway The project envisages construction of every day would demand a very efficient
line squirting the forest. Finally, the about 60kms of rail line in a large coal highly-automated system to unload and
clearance was accorded in 2012 and the bearing land area which has a huge convey to the boiler of the power station.
work was to be started. This a project potential to produce about 70 million Similarly, mines producing 10 million
to establish about 60 kms rail line. The tons of coal annually. The project is tons and above would require a rapid
MOEF & CC later imposed a restric- now progressing and is expected to be loading system. Conventionally, the
tion of rail movement during night in
the area. It is not known whether this
has been lifted. The work on this sector
has been initiated and is progressing
well. It is still a single line, though this
will require strengthening if the full
potential of the area is to be exploited.
Similarly, the Talcher and Ib valley
areas of MCL have additional potential
of producing about 80-100 million tons
annually. Here again there are rail lines
proposed. The progress has been tardy
mainly because it was taking years to
get environment and forest clearances.
Land acquisition in this area was also
difficult. The procedure of getting NOCs
March 2017
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ExpertSpeak

coal companies had been loading coal Conditions imposed by MoEF to environmentally sensitive areas.
in rakes at railway sidings which meant on movement of high ash coal Subsequently, in 2012 this limit was
initial movement from mine to rail- Most Indian coal as we know has very proposed to be brought down to 500
way siding by truck or tipper and then high quantities of ash. Ash content kms. This should have been achieved
either manual loading or with mechani- in most of the coal in India is around by 2014-15 but because of lack of ad-
cal shovels. This is a time consuming 40% and in some places even as high equate coal washing facilities this date
process limiting the loading capacity. In as 52%. MOEF & CC had imposed a has been extended repeatedly. The coal
newer mines the coal is being crushed at restriction on movement of high ash companies are trying to set up a good
the mine-pit and transported by con- coal stipulating that coal of less than number of washeries but unfortunately
veyor to the silo for rapid loading. Lack 34% ash will be allowed movement the process of tendering has been such
of such modern facilities for transporting beyond 1000 kms from the coal mines. that in each case it is taking consider-
coal within the mines not only limits Further, no movement of coal having able time to place orders. In some cases
the loading capacities but gives ample more than 34% ash can be allowed the matter has also been challenged
opportunity to unscrupulous transport- in courts. However, the end result is
ers to pilfer the coal. Except in Northern In newer mines the that such a stipulation will put severe
Coalfields Ltd such facilities are not coal is being crushed restriction on the movement of coal
adequately available and the progress at the mine-pit and if adequate facilities for washing are
of establishing them is dismally slow not established. With the current level
despite the urgent need to do so.
transported by conveyor of production, there will be need to
There is the classic case of a very big to the silo for rapid beneficiate about 250-270 million tons
mine in SECL where even the Ministry loading. Lack of such of coal and the present capacity includ-
of Environment, Forest and Climate modern facilities for ing the private sector is just about 130
Change had given an ultimatum that million tons which is running at sub-
transporting coal
24 if a proper coal handling plant is not optimal efficiency (less than 50%).
established they would be constrained within the mines not
to close the mine. Putting up a modern only limits the loading Way forward
system of coal handling can help to capacities but gives The improvement in movement of coal
increase the speed of loading of railway ample opportunity by rail has been noticeable and despite
rakes and also provide the necessary very good progress there is need for
arrangement required for installation
to unscrupulous further improvement. Firstly, there is
of auto analyzers needed to measure transporters to pilfer need to strengthen the rail infrastructure
the calorific value and hence determine the coal. Except in in the three potential coal producing ar-
the quality. Unfortunately, despite the Northern Coalfields Ltd eas to a level that is adequate to handle
coal company being flushed with funds, such facilities are not the increased production. There may
the enthusiasm to set-up modern coal be need to have double or triple lines
handling plants is lacking.
adequately available in these areas. The Eastern Rail Freight
Corridor being constructed will be a
great boon for coal movement from the
eastern region to northern India, once it
is operational and connected to the rail
networks in the major coal producing
areas. The coal companies also need to
improve their internal arrangements by
setting up modern coal handling plants
in at least most large mines having
capacities of over 5 million tons. Fur-
ther, to be able to meet the requirement
of the MOEF&CC, the establishment
of adequate coal washing facilities is
imperative.
The views in the article of the author are personal
For suggestions email at feedback@infraline.com
April 2017
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InDepth
Commercial coal mining talks
gather steam once again

25

To contribute 500 million tonne annually to cater to the demand from other sectors
Peak deficit expected to come down to 2.5 per cent in the current year

By Team InfralinePlus

The clamor for introducing commercial government has decided to open com- some for sectors other than power,
coal mining in India is picking up once mercial mining of coal after more than like cement, and four for commercial
again, with government said to be de- a year of deliberations. The coal blocks mining, it was recently announced by
veloping a framework document which allotted to states last year under the the coal secretary.
is expected to be published for public new auction process were for captive With the amended Coal Mines
comment before the end of the current usage only and auction for commercial (Special Provisions) Act, 2015
financial year. This will likely pave the mining was not permitted. already in play after being passed in
way for inviting private sector min- Next year (2017-18) in the coal Parliament, mining and sale of coal is
ers to bid for coal blocks to be put up sector, we will allocate 25 mines. open for private companies as well.
for auction exclusively for such use in Of these, two will be allotted and 23 The idea of commercial mining has
the next financial year (2017-18). The auctioned, some for coking coal and been gaining ground because private
April 2017
www.InfralinePlus.com

InDepth

sector/ mining operators have not Figure 1: Overall scenario for commercial coal mining
been able to achieve much even after
they were allotted blocks either on
Commercial
nomination basis or through auction mining and sale of
Post auction of The government is
last year. In fact, several operators have cancelled coal now finalising
coal is now
mines for end use, terms such as
not even been able to start production allowed under the
the government eligibility criteria
new Coal Mines
from blocks that are ready to produce. (Special
now mulling to and whether and
Since nationalisation of coal blocks award mines for how to set up
Provisions) Act,
market sale of coal revenue sharing.
in 1973, commercial coal mining has 2015
remained a monopoly of state-run
behemoth Coal India. India sits on
reserves of 301.56 billion tonnes and contribute 500 million tonne annually Will coal giants romance
annually produces roughly over 500 to cater to the demand from other to the idea?
million tonnes. The great majority of sectors/end use. Coal Indias (CIL) This move is likely to attract coal block
the output is produced by the public output has shown an impressive bids from Indian conglomerates such
sector monopoly, Coal India Ltd growth rate in recent months, but there as the Adani Group and GVK, but the
(CIL), practically the only producer of are still challenges to contend with. government should open up the sector
commercial coal. Lack of modern technology, issues quickly for leading world players, such
The decision to open up coal with manpower, land acquisition as BHP Billiton, Rio Tinto, Anglo-
mining to private companies is aimed and problems with environmental American and Peabody Energy to
at enhancing domestic production of clearances need to be addressed if the come in and do commercial mining.
coal to 1.5 billion tonnes/year by 2020. country is going to get anywhere close These companies have far greater
Commercial mining is expected to to its ambitious target. resources and access to technologies
26 to produce coal in a much cleaner and
Since nationalisation of coal blocks in 1973, efficient way. Over the past decade it
has been alleged that we do not have
commercial coal mining has remained a monopoly the technology, capability and capacity
of state-run behemoth Coal India. India sits on to do underground coal mining. This is
reserves of 301.56 billion tonnes and annually where the bigger companies can help
produces roughly over 500 million tonnes. The us, and this will also help us in cutting
great majority of the output is produced by the down our carbon footprints. But there
public sector monopoly, Coal India Ltd, practically are challenges in that too. Coal prices
are at multi-year lows amid global
the only producer of commercial coal oversupply, and foreign companies
have faced obstacles to investing in
India, such as problems in getting land
and environmental approvals. Some
private companies also worry that the
best quality mines would be left for
Coal India.
The challenge would be the
involvement of CIL (which controls
more than 80 percent of the nations
production) and how will the private
players respond to such competition
from the coal giant. It is expected that
large mines would allow commercial
miners to achieve economies of scale,
allowing them to compete with the
only commercial producer, CIL.
However, blocks would first be offered
to state government-owned entities so
April 2017
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It is expected that the investments and efficiencies that come with


this will help to address the shortages and efficiency problems.

Rationale for In particular, it is expected that such a regime would be the best
way to attract international best practices and technology to the
commercial countrys coal mining.
coal mining? It appears that this has been the experience in countries like Indonesia
where coal production has gone up rapidly after opening up the sector
to private participation, though questions have been raised about the
social and environmental sustainability of such an approach.

that they could commercially mine the An even bigger challenge lies in the Rationale for commercial
dry fuel and sell it in the open market. fact that the government will have to coal mining
It is expected that private miners will offer mines with reserves of more than Increasing coal imports have not only
be given the next chance. This may 1 billion metric tons to enable scale affected the countrys trade deficit
scupper the competition and put off of operation and use of technology and energy security, but also resulted
several biggies such as Adani Mining, and allow investors complete pricing in an increase in power generation
Jindal, GVK and GMR. freedom. costs. In turn, this has led to some
contractual disputes about who 27
Increasing coal imports have not only affected will bear the increased the cost of
power generation, due to ambiguities
the countrys trade deficit and energy security, in policies such as the New Coal
but also resulted in an increase in power Distribution Policy (NCDP). This
generation costs. In turn, this has led to some uncertainty about fuel supplies
contractual disputes about who will bear the and power generation cost has also
increased the cost of power generation, due to resulted in a significant amount of
ambiguities in policies such as the New Coal stranded power generation capacity.
Distribution Policy Is the timing right?
India has an ambitious plan to double
its coal production to 1.5 billion tonnes
a year by 2020, as part of governments
push to bring power to 300 million
people who lack proper access to elec-
tricity, and give a boost to manufactur-
ing and is to open up commercial coal
mining to private companies for the
first time in four decades, with the aim
of shifting the worlds third-biggest
coal importer towards energy self-
sufficiency.
However, the million-dollar
question that prevails - that by
introducing commercial coal mining,
is the government ignoring the current
scenario of demand-supply mismatch
in the coal sector. The country has
April 2017
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InDepth

turned surplus and exploring export plants in 2022-27. This may lead to plan, CEA estimates new coal-based
options as demand has lagged rise in significant demand-supply mismatch capacity requirement of 44,085
production and dispatch. in future. As per the records available MW in 2022-27. Since, 50,025 MW
While the production has been with Ministry of Coal (MoC) and of coal power projects already in
increasing continuously there has Coal India (CIL), supply of coal to different stages of construction and
not been many takers of coal. Coal the power sector by state-owned CIL likely to yield benefits in 2017-22,
demand has remained subdued; it did saw a fall of 6 per cent at 33.7 million CEA does not foresee any immediate
not increase as per the increase in the tonnes in November 2016. The supply requirement for fresh capacity
production. CIL has achieved 8.6% of coal by CIL in April-November addition from coal-based source up
increase in production this year so period of the ongoing fiscal also to 2027. Seeing the muted demand
far vs an average of 1-3% production dropped by 4 per cent to 250.7 MT. from DISCOMs owing to recurring
growth between 2009-10 & 2013-14. Based on demand projections financial troubles and increasing
Coal production grew by 6.9% in done in the draft national electricity preference towards buying power
2014-15. through the exchange route, it will
At the same time, electricity demand become impossible for the government
from financially beleaguered state While the production to auction all the cancelled coal blocks
electricity distribution companies has been increasing while also factoring in the record
(DISCOMs) has not shown similar continuously there production by CIL.
corresponding increase. The peak has not been many
deficit between power demand and takers of coal. Coal Conclusion
supply during last year was 3.2 per Pricing under commercial coal mining
cent. The government in its estimates
demand has remained and valuations of coal blocks at
expects it to come down to 2.5 per cent subdued; it did not the time of auction will be crucial,
28 in the current year. increase as per the since India has not yet established a
The government is not keen increase in the produc- coal regulator, which is essential in
on revising the coal production tion. CIL has achieved any free pricing regime. Harnessing
target despite a Central Electricity 8.6% increase in pro- Indias coal potential is constricted
Authority (CEA) report not foresee by political and socio-environmental
any immediate requirement for
duction this year so far factors. Despite the advancements in
fresh capacity addition from coal- vs an average of 1-3% technology, it has failed to develop
based source up to 2027. Given the production growth adequate transportation infrastructure
massive capacity addition plans in between 2009-10 & to swiftly move coal freight. In
the renewable sector, CEA estimates 2013-14 addition, substantial coal deposits lie
there is no requirement for new coal under Indias already shrinking forest
cover, which houses endangered
species and a large tribal population.
While the government needs to
fast-track other sources of energy
such as renewables, LNG and shale,
Indias dependence on coal means
it must find ways to ramp up coal
production. Commercial mining in the
coal sector should be one of the more
viable solutions but surely not the
only one. It is safe to say that talk for
commercial coal mining is once again
gathering steam. However, seeing the
phenomenal rise of renewable energy
sector in India, this steam may fizz
out soon.

For suggestions email at feedback@infraline.com


April 2017
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InDepth
Underground Coal Gasification:
India needs to probe further

29

Huge potential for coal gasification globally given its wide applications
CMPDI has identified 7 blocks for development of UCG technology in India

By Team InfralinePlus

Having signed the Paris Agreement is Underground Coal Gasification can convert much of this stranded coal
on climate change last year, India (UCG). into syngas without having to mine it
has committed to cut down its carbon Coal is the paramount source of can then be used to produce power and
emissions significantly by 2030. energy globally including in India. other useful products.
However, at the same time, it cannot A substantial amount of the worlds UCG uses a similar process as
afford to compromise on energy coal resources are deeply sited to be surface gasification and it allows
security, which is a key component mined by traditional methods. It is not countries that are endowed with
for economic growth. To resolve technically feasible or economically coal to fully utilize their resource.
this dilemma, the country needs viable to mine all coal resources and In UCG, the actual process takes
to explore all possible options for this is where UCG finds its usefulness. place underground, generally below
generating energy. One such option Gasification that occurs underground 1,200 feet. The underground setting
April 2017
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InDepth

provides both the feedstock source as & Technology (S&T) pilot project at factors including coal type, operating
well as pressures. The main difference Merta Road Lignite Deposit was taken pressure andtemperature, water
between the two gasification up by the CIL/CMPDI for ascertaining ingress to the process, and the type
processes (surface gasification and the techno-economic viability of the of oxidant used (air or oxygen). The
UCG) is that in UCG the cavity project. However, on apprehension consequential syngas after cleaning
itself becomes the reactor so that of contamination of groundwater, the can be used either as raw material for
the gasification of coal takes place project could not be pursued further. synthesis of liquid fuels and chemicals
underground instead of the surface. UCG is a method of extraction including fertilizer/urea or as a fuel for
In order to provide energy security of energy from coal or lignite electricity generation.
UCG is envisaged in the country. In resources which are regarded as
India, the work related to development uneconomical to work through Policy framework
of UCG was initiated in early 80s conventional mining methods. In In December 2015, the central
by Coal India and Oil and Natural this method coal is converted into government approved a policy
Gas Corporation (ONGC) separately a combustible gas in-situ through framework for development of
with Soviet Experts. While CIL/ a physico-chemical process. The underground coal gasification in coal
CMPDI activities were confined produced syngas is a mixture and lignite bearing areas in India. The
to the coal seam having shallow of hydrogen, carbon monoxide, approved policy is broadly on the
occurrence, ONGC took up the studies methane, carbon dioxide and higher lines of existing policy for Coal Bed
in areas having occurrence of coal/ hydrocarbons. The composition of Methane development on revenue
lignite in deeper horizon. A Science the gas produced depends on many sharing basis is adopted for offering
the blocks through competitive
CMPDI is the nodal agency for all business relat- bidding. Subsequently, the Central
ed proposals and regulations related to UCG. It is Mine Planning and Design Institute
(CMPDI) has identified 7 blocks (5
30 also identified for conducting the bidding process Lignite & 2 Coal) for development of
and evaluation of bids. CMPDI, on two occasions UCG technology in India (Table 1.0)
had invited tenders from interested companies CMPDI is the nodal agency for
for operationalization of UCG projects earlier, all business related proposals and
however owning to various issues in absence of regulations related to UCG. It is also
any clear policy on UCG these were annulled identified for conducting the bidding
process and evaluation of bids.
CMPDI, on two occasions had invited
tenders from interested companies for
operationalization of UCG projects
Electricity earlier, however owning to various
issues in absence of any clear policy on
UCG these were annulled. Availability
of large amount of cheap natural

Usage
gas, the danger of contamination of
underground water, non-availability of
Further suitable drilling technology, and failure
Fertilizer
of processed
to produce
chemicals
to administer proper control over
gasification process are some of the

Syngas reasons which are becoming hurdle in


the process of making UCG as popular
fuel. However, with the efforts put in
by many countries over the years, the
technology of UCG has matured for
Transporta commercial application.
tion fuels In January 2016, an Inter-
Ministerial Committee (IMC) under the
chairmanship of Additional Secretary
April 2017
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Table 1.0: Blocks identified by CMPDI for development


of UCG
S. No. Name of Lignite Blocks Type of Block Location of Block Benets of UCG
1 Sindhari West Lignite Barmer,Rajasthan No need for coal Mining,
2 ChoklaNorth Lignite Barmer,Rajasthan handling and transportation
No need for disposing of
3 Nimbalkot Lignite Barmer,Rajasthan ash or slag
4 Nagurda Lignite Barmer,Rajasthan Signicantly lower capital
cost for project
5 Dungra Lignite Surat,Gujarat development
6 Yellendu (Dip Side) Coal

7 Bandha-Singrauli Main Basin Coal

(Coal) was constituted for identification selection of suitable consultancy non-mined coal seams using injection
of areas to be offered, deciding organization for technical evaluation of of oxidants, and bringing the product
about blocks to be put to bidding or blocks for examining their suitability gas to surface through production wells
awarding to PSUs on nomination for undertaking Underground Coal drilled from the surface. The syngas
basis, proposing mechanism for Gasification (UCG) projects through eliminates surface damage and solid
bidding process and other related global bidding for UCG development. waste discharge, and reduces sulfur
matters. Recently CMPDI, on behalf dioxide (SO2) and nitrogen oxide
of MoC (Ministry of Coal) has invited Process of UCG (NOx) emissions in comparison to
an Expression of Interest (EoI) for The process of UCG is carried out in traditional coal mining and processing.
Underground combustion produces 31
There is a huge potential for coal gasification NO2 and SO2 and lowers emissions,
including acid rain. These kind of
globally, as the technology enables production initiatives can bolster Indias efforts to
of fuels and feedstock for many applications meet its clean energy commitments.
such as transport, chemicals production, heat India has pledged to reduce its
emissions intensity of its gross
and power generation. Even low grade coal can
domestic product by 33-35% by 2030
be used for gasification; the technology is of compared with 2005 levels.
primary interest in many regions There is a huge potential for coal
gasification globally, as the technology
enables production of fuels and
feedstock for many applications such
as transport, chemicals production,
heat and power generation. Even low-
grade coal can be used for gasification;
the technology is of primary interest
in many regions. Underground coal
gasification technology can play a
crucial role in harnessing energy given
the huge coal reserves and particularly
low and deep seated coal resources in
India. Increasing gas prices and limited
availability of natural gas in regional
consumer markets are driving factors
for investments in coal gasification
technology.

For suggestions email at feedback@infraline.com


April 2017
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StatisticsCoal
Production and Despatch of Coal - FY12 to FY16 (Provisional & Actual)
Production [Million Tonnes] Despatch [Million Tonnes]

Year Type of Data Non- Non-


Coking Coking
Coking Coal Total Lignite Coking Coal Total Lignite
Coal Coal
Coal Coal
Provisional 51.654 488.286 539.94 43.105 51.528 483.624 535.152 42.5
2011-12 Actual 51.66 488.29 539.95 42.332 51.723 483.576 535.299 41.883
Change(A-P) 0.01 0 0 -1.79 0.38 -0.01 0.03 -1.45
Provisional 51.834 505.873 557.707 46.598 55.212 514.555 569.767 46.312
2012-13 Actual 51.582 504.82 556.402 46.453 55.859 511.277 567.136 46.313
Change(A-P) -0.49 -0.21 -0.23 -0.31 1.17 -0.64 -0.46 0
Provisional 56.818 508.948 565.766 44.271 58.302 512.949 571.251 43.897
2013-14 Actual 56.818 508.947 565.765 44.271 58.464 513.596 572.06 43.897
Change(A-P) 0 0 0 0 0.28 0.13 0.14 0
Provisional 57.451 554.984 612.435 48.257 56.614 551.016 607.63 46.941
2014-15 Final 57.446 551.733 609.179 48.27 56.438 547.334 603.772 46.954
Change(A-P) -0.01 -0.59 -0.53 0.03 -0.31 -0.67 -0.63 0.03
2015-16 Provisional 60.887 578.347 639.234 43.843 59.213 572.956 632.169 42.212
N.B1: P = Provisional Data; F = Final Data; D = Differences between the Final Data and the Provisional Data.
N.B2: The difference between the final and provisional figures is in general negligible and less than 0.5.
32
Inventory of Geological Reserve of Coal
Reserve (Million Tonnes)
As on Type of Coal
Proved Indicated Inferred Total
Prime Coking 4,614 698.71 0 5,313
Medium Coking 13,389 12,114 1,879 27,382
1/4/2015 Semi Coking Coal 482.16 1,004 221.68 1,708
Non - Coking 1,13,129 1,29,425 29,639 2,72,193
Total * 1,31,614 1,43,241 31,740 3,06,596
Prime Coking 4,614 699 0 5,313
Medium Coking 13,303 11,867 1,879 27,049
1/4/2014 Semi Coking Coal 482 1,004 222 1,708
Non - Coking 1,07,509 1,28,937 31,047 2,67,494
Total * 1,25,909 1,42,506 33,148 3,01,564
Prime Coking 4,614 699 0 5,313
Medium Coking 13,269 11,893 1,879 27,041
1/4/2013 Semi Coking Coal 482 1,003 222 1,707
Non - Coking 1,04,816 1,29,037 30,999 2,64,852
Total * 1,23,182 1,42,632 33,100 2,98,914
Prime Coking 4,614 699 0 5,313
Medium Coking 12,837 11,951 1,880 26,669
1/4/2012 Semi Coking Coal 482 1,003 222 1,707
Non - Coking 1,00,211 1,28,515 31,081 2,59,807
Total * 1,18,145 1,42,169 33,182 2,93,497
April 2017
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List of Major Global Coal Traders


Sl No Coal Traders
1 GLENCORE
2 NOBLE GROUP
3 VITOL GROUP
4 TRAFIGURA
5 Global Coal
6 Global Coal Traders
7 MERCURIA ENERGY GROUP LTD
8 LOUIS DREYFUS HIGHBRIDGE ENERGY LLC
9 BULK TRADING SA
10 Phoenix Global DMCC
11 FLAME SA
12 Jera Trading
13 PSM Energy
14 Devi Group of Companies
15 KTC group
16 PEABODY ENERGY
17 Tata International Limited
18 China Shenhua Energy Company Limited
19 CEMEX 33
20 Swiss Singapore Overseas Enterprises Pte Ltd (SSOE)
21 RWE Supply & Trading

Overburden Removal of CIL and subsidiaries during 2015-16


(Figures in Million Cubic Metres)
Company 2015-16 2014-15 (% of Growth)
ECL 119.219 94.047 26.77
BCCL 148.591 103.901 43.01
CCL 106.778 97.378 9.65
NCL 338.089 210.614 60.53
WCL 155.146 122.914 26.22
SECL 175.367 158.268 10.8
MCL 98.414 89.221 10.3
NEC 7.304 10.185 -28.29
CIL 1,148.91 886.528 29.6
April 2017
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CoverStory
Digital transformation beckons
Indias energy landscape

34

To increase efficiency, reliability & sustainability of power grid and systems


DISCOMs to make major investments in big data opportunities in next 5 years

By Infraline Bureau

Increasing urbanisation, rapid capac- leaving a considerable population Infrastructure companies in Asian
ity addition in the renewable energy without reliable access to electricity. countries have the advantage to leapfrog
segment, energy efficiency measures & The development of a fully-fledged, ahead of those in the developed econ-
trading and electric vehicle programme low-carbon economy with increasing omies given the increasing investments
are some of the important factors that deployment of renewable sources in greenfield projects in these countries.
will bring a comprehensive change in will require changes to the existing Hence, these countries are expected to
the energy landscape in India in the transmission and distribution infra- have fewer legacy issues pertaining to
next 10 years. Indias rapidly growing structure. Smart technologies will be a outdated systems, processes, techno-
economy has fueled an intensifying vital component of this transformation. logical capabilities, etc., which will have
demand for energy. India is now the Increasingly, consumers expect reliable to be addressed in the wake of techno-
fourth-largest generator of electricity supply, clean energy, responsive logical advancements.
after Japan, United States and China service, new facilities and cost effi- Digital innovations have already
though still comparatively low energy ciency from their utilities. Smart grids begun to transform the energy industry
access rate of 81% (World Bank, 2015) can enable all that and more. all around the world. They help open the
April 2017
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way for multi-directional energy flows in sources. Smart grid systems can help Digital revolution for
the grid, for real-time demand adjustment integrate multiple, variable renewable utilities: Opportunities
in response to supply patterns, for energy sources by directing the power The one important thing to remem-
creating a suitable energy mix from dif- efficiently to electricity end users. ber what is happening on the power
ferent sources and more. Together, these Particularly, in the context of recent network at all stages of the value chain
changes brought about through digital initiatives such as Digital India and will only grow stronger, and the need
innovation will increase the efficiency, Smart City, consistent power supply is to support a variety of data streams
reliability, and sustainability of the power a basic requirement. from the field and route them efficient-
grid and other systems. ly, is only going to grow exponentially
Indias journey from an in future.
Enabling drivers for digital ageing transmission & As consumers become more mobile,
revolution: Smart Grids distribution (T&D) to connected via social media and more
Indias journey from an ageing trans- conscious of their energy needs, they
mission & distribution (T&D) to a
a smart grid-enabled are beginning to expect more from their
smart grid-enabled network infrastruc- network infrastructure energy experience than just keeping the
ture can have several enabling drivers. can have several en- lights on. Utilities/ distribution com-
Clearly transition from conventional abling drivers. Clearly panies (DISCOMs) face a key choice
to renewable generation will throw up of where and how quickly they should
transition from con-
radically new challenges. Identification transition from the traditional and clas-
of the appropriate new technologies ventional to renewable sical to smart technologies.
and move to actualisation of the same generation will throw As more distributed, renewable
will be the need of the hour. up radically new chal- energy is integrated into the grid,
The challenges of climate change lenges. Identification and as the sector learns to cope with
and the continued growth of electricity two-way power flows, the utility
of the appropriate new 35
demand (albeit at tepid growth rate) will face new safety and protection
are putting increasing stress on Indias technologies and move challenges. Add to that the addi-
electricity network infrastructure. The to actualisation of the tional two-way data flows that will
existing distribution grid infrastructure same will be the need accompany dynamic pricing (time of
is primarily designed for one-way flow of the hour day pricing), and the interaction of
of electricity and limited consumption that price signal with a future home
in the home. With the growing imple-
mentation of large-scale, intermittent Figure 1: Opportunities for a utility driven by digital
renewable energy generation, distributed revolution
generation and electric vehicles, the
operational limits of the network as it is
currently designed will be reached.
The country is now at the point
of transition to a new era where
power generated from clean sources
(renewable energy) will be at a
premium, networks will need to be
flexible to the incorporation of new
low-carbon technologies and customers
will demand greater insight and control
over their own consumption with
greater use of Information and Com-
munication Technology (ICT), more
than ever before.
Expanding the use of smart grid
technologies will also be instrumental
as India strives to rapidly increase
generation from variable renewable Source: McKinsey & Company
April 2017
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CoverStory

energy management system that Figure 2: Emerging themes under Internet of Things
allows customers to shed load and (IoT) for Utilities
shift their peak.
The future of demand response is
well on its way and with so many smart
Smart Grids
grid projects envisioned in the country
and further advancements in field of
information & communication tech- Digital Billing Smart Homes
nology (ICT), this will soon become a
reality. The question that begs: are Indian
Utilities/ DISCOMs/ other agencies
Emerging
prepared for this paradigm shift? Themes for
The utility will want to understand Digital Utilities
Connected
Data Security
precisely how much load is being shed, Buildings

both on individual feeders and in the


aggregate. Ideally these data flows,
like those for AMI and Distribution
Big Data and Mobile
Automation, would use the same Advanced Interactive
communication network, which is the Analytics Services

backbone AMI support infrastructure.


Management of that communication
Source: McKinsey & Company
network will become crucial to the
DISCOMs business in future.
36 Automated Distribution Man- Electricity generation plants, oil refineries, and
agement Systems (ADMS), Outage manufacturing facilities are large, distributed
Management Systems (OMS), complexes. These involve intricate operations and
Geographic Information Systems
(GIS)for network management, the
need to be continuously monitored and controlled
transition from Automated Meter by the system operators to ensure efficiency.
Reading (AMR) to Advanced Metering Technological advancement, during the last few
Infrastructure (AMI), and the inte- decades, has made it possible to command and
gration of these with SCADA (Super- control these operations remotely through Indus-
visory Control and Data Acquisition),
all require a different skill set from the
trial Control Systems (ICS), designed to support
electrical engineers of decades past industrial processes
who are at the middle management
level running DISCOMs today, and system, plus the commercial aspects generation of electricity networks will
will retire before the Ujwal Discom of customer-focused energy sales and be essential.
Assurance Yojana (UDAY) scheme collection of revenue, as well as man-
reaches maturity stage. agement of personnel and finance. Digital revolution for
To accomplish such large scale DISCOMs under the UDAY scheme utilities: Threats
capacity addition and improvement face a daunting task in improving effi- Electricity generation plants, oil refin-
of operational performance, trained ciency and consumer service levels, if eries, and manufacturing facilities are
manpower would be required at every they are to meet their operational effi- large, distributed complexes. These
stage of design, planning, engineering, ciency targets. Over the next five years, involve intricate operations and need
procurement, handling and storing, DISCOMs will make major invest- to be continuously monitored and con-
management of inventories and spares, ments in big data opportunities. To trolled by the system operators to en-
construction, commissioning and oper- be useful, stored data must be readily sure efficiency. Technological advance-
ation & maintenance of power plants. accessible and must produce actionable ment, during the last few decades,
There is also the associated operation information for all departments. In- has made it possible to command and
and upkeep of the soon-to-be auto- house capacity at the DISCOMs to control these operations remotely
mated transmission and distribution manage the data analytics of the next through Industrial Control Systems
April 2017
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Table 1: Use of ICT in Smart Grid Functioning


How an intelligent communications
Primary How the smart grid affects
Description of Functions infrastructure enables and
Function these functions
amplifies the smart grid impact
Generation
Load control and Economical load dispatch The smart grid helps with Economic load dispatch during
dispatch scheduling and optimization the scheduling of committed unforeseen events warrants
help to select the right generating units so as to meet the robust real-time communication
dispatch for the right load at required load demand at minimum infrastructure between the demand
the right time, reducing the operating cost while satisfying and generation functions
cost of generation (startup, all units and system equality and
operations, and wind down) inequality constraints
Load shaping Shaping the load during Demand-side management Load shaping with DSM involves
peak demand times reduces helps to manage and accurately reliable communication between
the idle and standby estimate demand to as to meet AMI and CIS (customer information
generating capacity demand without extra generation systems) and generation functions
Distributed, The integration of micro- The smart grid enables distributed Infrastructure is needed to confirm,
renewable grids as well as customer generation and automated analyze, and dispatch available load
generation premises with the utility adjustment of feed-in tariff regulation to distribution generation sources
infrastructure to receive premiums in the case
of forced switch-off of distributed-
generation asset for balancing
Generation Diagnoses and maintenance The smart grid helps asset Data from utilities need to be
equipment of the generation equipment management and conditioning in transferred to the generation
maintenance reduces faults and prevents preventive maintenance. It also control center for better equipment
their propagation helps accessing newly sensed conditioning and monitoring 37
data
Distribution
Transmission- Energy management Automatic regulation of load tap Substation automation results in
grid monitoring systems and transmission changer and capacitor banks for two-way communication between
and control SCADA for data acquisition voltage regulation. transmission SCADA equipment and
needed for the following the energy management system.
Wide-area phasor management
functions: 1) outage
and control for grid optimization Communication between
management, 2) Volt/VAR
and control. transmission and generation units is
management, 3) state
necessary for automatic generation
estimation, 4) network Volt/VAR management using
control.
sensitivity analysis, 5) capacitor switches and controls.
automatic generation control,
and 6) phasor data analysis.
Maintenance The transmission control Automated operations eliminate Real-time communication between
of transmission center is the first line of human interventions in fault primary and backup transmission
control center defense for transmission prevention, detection, isolation, control center, transmission,
fault detection and and correction generation, and distribution units
prevention is necessary for control center
operations.
Security technology deployment
provides for secure data sharing
between transmission and other
utility functions.
Equipment Maintenance of transmission The smart grid helps asset Data from transmission equipment
maintenance equipment, including management and conditioning for need to be transferred to the
breakers, relays, switchers, preventive maintenance generation control center for
transformers, and regulators, better equipment conditioning and
prevention of faults monitoring
Source: White Paper on The Smart Grid Vision for Indias Power Sector by PA Consulting Group, USAID
April 2017
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CoverStory

(ICS), designed to support industrial Getting familiar with Internet of Things (IoT)
processes. The largest subgroup of ICS
is SCADA systems. Over time, the ICS Internet of Things is an emerging paradigm of internet connected things that
have evolved from isolated systems to allows the physical objects or things to connect, interact and communicate
open architectures; highly interconnect- with one another similar to the way humans talk through web in todays
ed with other corporate networks and environment. It connects systems, sensors and actuator instruments to the
the Internet. This has increased their broader internet.
vulnerability to computer network- IoT is not just about connecting machines, devices and appliances, but
based attacks. Therefore, the protection also allows the things to communicate, exchange control data and other
of these information networks becomes necessary information while executing applications towards machine goal.
as important as protecting all the con-
stituents of critical infrastructure. How IoT impact industries?
According to a report by WIPRO o Energy & Electrical Power
Technologies on Facing the reality The major area where IoT deals with energy management systems is the
of cyber threats in the power sector smart grid. IoT extends the benefits of smart grid beyond the automation,
(2013), it highlighted that traditionally distribution and monitoring being done by the utilities. The task of the IoT in
transmission sub-sector has faced the
the field of electrical energy include:
brunt of majority of the attacks aimed
at power systems. It also pointed out Advanced Metering Infrastructure (AMI)
that, with increased use of ICT, power SCADA (Supervisory Control and Data Acquisition)
systems have become increasingly Smart Inverters
complex and interconnected. Today Remote control operation of energy consuming devices
the role of information technology and
telemetry have increased substantially Smart grid
38
in the distribution and generating o Manufacturing and Industries
sectors, making them integrated, and IoT deals with real-time optimization of production and supply chain
thereby exposing the entire value chain networks in a manufacturing industry by networking sensors, actuators,
of the power sector to cyber threats.
control systems and machinery together. In case of process industries, it
Going into 2017, the threats to these
automates the process controls, service information systems and operator
sub-sectors due to the use of ICS
tools using digital controllers in order to achieve enhanced productivity
have been demonstrated through the
and safe distribution system. The tasks of Industrial Internet of Things (IIoT)
examples of Stuxnet (said to be worlds
include:
first digital weapon - a 500-kilobyte
computer worm discovered during Real-time monitoring and control of processes
investigation at Natanz uranium Deploying smart machines, smart sensors, and smart controllers with
enrichment plant in Iran) and more proprietary communication and internet technologies
recent power grid failures in Ukraine Maximize safety, security and reliability through high precision automation
due to repeated software hacks. and control
An attack on a smart grid/other
o Home and Building Automation
power system has the potential to
breach the privacy of the consumers to IoT devices are used to monitor and control electronic, electrical and
cause blackouts, overloads, device mal- mechanical systems in homes and buildings in order to improve convenience
functions, data tampering, or even cata- and safety. The tasks of IoT in this domain include:
strophic cascading effects that could Smart lighting by adapting ambient conditions based switching
bring down the existing infrastructure. Web application and mobile apps enabled wireless and internet connected
Hence, in the era of smart technologies lights
coupled with an aim of an overall
Smart appliances management and control
digitisation of the energy sector and as
the government and private enterprises Intrusion detection systems, alarm systems and surveillance systems
invest heavily in digital technologies, Safety systems such as smoke and gas detection
they must continue to implement a Home entertainment management such as video, audio and projectors
robust cyber security infrastructure.
April 2017
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operations of the Indian grid - the fifth


largest in the world.
Today, power plant operators are
increasingly looking at digital solu-
tions to simplify and automate decision
making in power plants in order to
optimize performance and asset avail-
ability. The most important function
to identify optimization opportunities
and track improvements is in the IoT
itself. Under IoT, smart appliances are
embedded with sensors and are inter-
connected. Data is collected through
the sensors and transmitted to the grid.
However, as sensors and data
processing becomes cheaper every
day, we will see more availability
Digital revolution in of data, and the expectation is that it
renewables & energy With strong anticipated will be processed in near-real-time. In
efficiency growth comes the addition to analyzing data for learning,
By early 2017, investors in various challenge of scaling near-real-time analytics allows power
fields have grabbed the opportunity to plant operators to react quickly to
mainstream into clean energy business
operational excellence avoid problems, address them before
and convert those opportunities and maintaining they become serious, offer help or 39
into reality, simultaneously. Several profitability. simply better prepare in advance for an
developing countries have envisioned Companies seek emerging issue to reduce its impact.
a green economy going forward, with We can take an example of a wind
improved methods to
electricity generated from renewable farm in this case. A sensor that col-
energy (RE) sources dominating the
manage much larger lects real-time data from turbines that
fuel mix in their total energy mix. India capacities, with many is quickly analyzed and turned into
is no different from others, with its more physical assets, actionable insights is a key compet-
commitments to the United Nations located in widely itive advantage. Operators are already
Framework on Climate Change using advanced sensors to continually
distributed and remote
(UNFCCC) and an aim to generate assess acceleration, temperature and
about 40% cumulative electric power areas which make it vibration. Extracting data from wind
installed capacity from non-fossil rather more difficult turbines uncovers trends for per-
fuel based energy resources by 2030 formance optimization to increase pro-
with an equal importance on energy and remote areas which make it ductivity and predictive maintenance
efficiency schemes through National rather more difficult. to minimize downtime.
Action Plan on Climate Change Moreover, the availability of Apart from wind/solar generators,
(NAPCC) and Perform Achieve and solar and wind energy is largely the implementing institutions such as
Trade (PAT) scheme of the Bureau of determined by the weather conditions, State Load Dispatch Center (SLDC),
Energy Efficiency (BEE) under the and therefore characterised by Regional Load Dispatch Center
Ministry of Power (MoP), Government strong variability. As a result, power (RLDC), National Load Dispatch
of India (GoI). generation from these sources cannot Center (NLDC) and Regional Power
However, with strong anticipated easily be matched to the electricity Committee (RPC) need to be geared
growth comes the challenge of scaling demand, like power generated from up with adequate infrastructure and
operational excellence and maintaining conventional plants such as coal-fired trained manpower. Implementation of
profitability. Companies seek improved units and gas stations. Integration of full-fledged Scheduling mechanism and
methods to manage much larger large amount of fluctuating RE in the Settlement system within the States has
capacities, with many more physical grid is a serious technical challenge been long pending and it will bring in
assets, located in widely distributed for grid managers to ensure smooth synergy and optimization.
April 2017
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CoverStory

S ynthes is S implifies
G IS different types of R eveals s patial
patterns
confirmation of
geos patial data obs ervation by others

Government of India has embarked Other technologies for 2015), the renewable sources of elec-
on an ambitious mission to integrate Smart Utilities tricity generation are being explored
100 GW of solar power and 60 GW (i) Geographic Information Systems and promoted all throughout the
of wind power by 2022. For this to (GIS) world, including India. As a result
become a reality there is an urgent GIS is a suite of software tools for of this, the share of wind & solar in
need to adopt path breaking measures mapping and analyzing data which the total installed capacity is going to
in the Grid operation. Extending is geo referenced (assigned a specific go up. Geospatial technologies will
real time SCADA data from the location on the surface of the Earth, have a very critical role to play in this
Renewable Generators would provide otherwise known as geospatial data). evolving scenario. Also, the off-grid
Situational awareness to the System The real power of GIS is through and decentralised distributed gen-
Operators about the ramp events. eration (DDG) projects are gathering
Establishment of Renewable Energy With the view to combat pace in India. Not only these projects
Management Centers (REMC) would take some load off the grid, but also
facilitate trading of RE sources (market
climate change effects facilitate rural electrification drives.
participation) across the states. through large scale de-
With the view to combat climate ployment of renewable Conclusion
change effects through large scale energy projects, one India today is in a strong position for
40 deployment of renewable energy of the most effective an advanced smart grid infrastructure.
projects, one of the most effective A few factors are in the countrys favor
solutions to address the lack of
solutions to address include growing pressure to improve
scheduling/high intermittency the lack of scheduling/ transmission efficiencies, increased
while allowing scale up of these high intermittency while emphasis on power cost management
technologies is the use of energy allowing scale up of and reliability, increasing adoption of
storage technologies. Energy storage renewable energy, including captive
these technologies is
options need to be explored and a micro-installations in industrial and resi-
significant push towards the R&D of the use of energy stor- dential spaces, which require options for
these technologies is required. Energy age technologies feeding electricity back into the grid and
storage not only provides means to rapid IT infrastructure growth across the
absorb higher penetration of variable using spatial and statistical methods country, including broadband access.
wind and solar photovoltaic (PV) to analyze attribute and geographic Smart Grids with automation, inte-
generation into the electricity system, information. GIS applications enable grated controls, and new technologies
it also helps in effective utilisation of the storage, management, and analysis such as connected sensors can help in
transmission and distribution assets of large quantities of spatially distrib- faster restoration of electricity after
(T&D) assets, provides competitive uted data. outages, efficient power transmission,
frequency regulation service (grid (ii) Geospatial Technology reduced management expenses and inte-
ancillary service) ad enables the Currently geospatial data and tech- gration of energy systems that are run on
thermal generation plants to operate nology are used tactically by electric both conventional & non-conventional
more efficiently. power utilities all around the world for energy sources. Utilizing the IoT & ICT,
It is expected that, IoT along with many purposes including asset man- the stakeholders could pave the way for
smart metering, cloud computing, and agement, outage management, disaster greater grid automation as well as more
wireless connected sensors could not management, renewable energy, rural efficient energy management and overall
only help the consumer to produce, use electrification planning, energy density digitisation of the Indias energy sector
and efficiently manage power supply mapping, etc. and bringing the country very much on
but in case of extra generation, also With increased emphasis on par with developed economies.
supply it back to the grid which will reducing carbon emissions post
further monetise the consumer. UNFCCC Paris Convention (December For suggestions email at feedback@infraline.com
April 2017
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NewsBriefs | Oil & Gas National


Frances GDF to exit Petronet by selling entire 10percent stake Centre made Rs 1.99 lakh crore from
levies on petrol, diesel in 2015-16

the stake to Petronets principal promoters


-- GAIL India Ltd, Oil and Natural Gas Corp
(ONGC), Indian Oil Corp (IOC) and Bharat
Petroleum Corp Ltd (BPCL). We have been
informed by GDF International, which is
holding 10 percent equity share capital in
the company, that they proposed to divest
their entire shareholding in the company,
Petronet said. Petronet said GDF Inter-
Frances GDF International plans to sell national has also sent a communication The massive jump in excise duty on
its entire 10 percent stake, worth over Rs to each of the promoters offering a first petrol and high speed diesel helped
2,900 crore, in Petronet LNG Ltd. GDF, a right of purchase/refusal in relation to the the government mop up nearly 40% of
unit of French energy giant Engie SA, has proposed sale of 10 percent equity shares its indirect tax kitty from the two auto
written to Petronet -- Indias biggest im- in the company in the same proportion in fuels in 2015-16, compared to 34% in
porter of liquefied natural gas -- expressing which the promoters are holding equity the previous financial year. A study by
its desire to exit the company. It has offered shares in the company. the Comptroller and Auditor General
(CAG) showed that Union excise duty
ONGC arm OPal starts exports from Rs 30,000 crore Dahej plant to Singapore collection shot up almost 70% from
Rs 1.69 lakh crore during 2013-14 to
ONGC Petro Additions (OPaL) has begun Rs 2.87 lakh crore in 2015-16, with a
exports to Singapore and intends to float majority of the contribution being from
a tender soon for exporting more products petrol, diesel, cigarettes and gutka. The
to other countries. The first consignment indirect tax kitty includes duties from
of butadiene was shipped to Singapore, customs, central excise and service 41
and the company wants to export more tax.Excise revenue from petroleum
products benzene, etc. to other coun- products, which made up for 52% of col-
tries as well for which it will be floating lections in 2013-14, went up to almost
tenders, Opal chief executive K Satyanara- 69% during 2015-16 as the government
yana said. The Rs 30,000-crore OPal plant resorted to a massive increase in levies
is the first one set up under the petroleum, Gujarat State Petroleum Corporation. This in the wake of falling global prices.The
chemicals and petrochemicals invest- plant was commissioned by Prime Minister central excise duty on petrol and high
ment region (PCPIR) in the Dahej SEZ, Narendra Modi on March 7. Satyanarana speed diesel increased from Rs 1.2 per
under which it has to export 50 per cent of said this is the single largest petrochemi- litre and Rs 1.46 per litre to Rs 8.95 per
production. The city-based OPal is a joint cals plant in the country and is working at litre and Rs 7.96 per litre respectively
venture promoted by ONGC, GAIL and full capacity now. during the last two financial years.

OIL signs MoU with Houston Univ to augment reserves base

Oil India Limited (OIL) has signed an MoU help in more oil recovery from the oilfields,
with the University of Houston in a bid to Pradhan said. The major focus of the MoU
augment its reserves base and maximise is collaboration in the areas of improved
recovery from its ageing oilfields. The MoU oil recovery and enhanced oil recovery
was inked in the presence of Petroleum (EOR) for augmenting the production from
and Natural Gas Minister Dharmendra matured fields, improvement in drilling
Pradhan. The MoU was signed by Utpal and well intervention practices, seismic
Bora, CMD, OIL, and University of Houston interpretation and reservoir characterisation
(UH), represented by Chancellor and studies, and unconventional hydrocarbon
President Renu Khator. Terming the MoU studies. It is believed that this collaboration
as historic, Pradhan said this will go a long will help OIL to further consolidate and
way for the pilot study of CO2 capture ahead for oil and gas sectors growth, upgrade the various initiatives the company
technology application in Assam oil fields. Pradhan said. If there is (a) good strategy, has undertaken to improve production
Innovation, institutional hand-holding innovative technology and willpower, a and contribute significantly to the energy
and scientific temperament is the way good ecosystem can be formed that will security of the country.
April 2017
www.InfralinePlus.com

NewsBriefs | Oil & Gas National


ONGC puts on production two oil wells discovered in Assam GAIL to invest Rs 1,750 crore on gas
distribution network

we have done reserve accretion 10 Million


metric tones in Assam. We have made two
good discoveries Sufayan and Dayalpur.
We getting production of 50 tones per day
from these fields and the overall production
of Jorhat asset have increased from 350
tones per day to 400 tones per day.He
added, As soon as we discovered these two
fields we put them on production. We are
working on the development plan of these State-run gas company GAIL (India)
ONGC has put to production two fields and production will further increase. Ltd has committed an investment
discoveries it has made in Jorhat district From the two assets of Jorhat and Assam of Rs 1,750 crore to build a City
in Assam in 2016-17. After almost three in this fiscal year we have a target of Gas Distribution (CGD) network in
years this is ONGCs biggest discovery in production of .96 Million Metric Tonnes Bhubaneswar and Cuttack. Of the
Assam.Director (Onshore) of ONGC, Ved (MMT) which we will achieve, already we envisaged investment, Rs 1,000 crore
Prakash Mahawar said, After three years have achieved 98 percent of the target. would be spent on Bhubaneswar while
the remaining Rs 750 crore has been
Oil field leases may be extended 4 years before expiry set aside for Cuttack. Gas distribution
to households in the twin-city region is
The government will extend the lease expected to be a reality by December
for oil or gas fields four years before the 2019 or early 2020.The Jagdishpur-
initial 20-year term expires, failing which Haldia-Bokaro-Dhamra natural gas
an extension plea would be deemed to pipeline being built by GAIL would
42 have been rejected, says a draft proposal be the feeder line for gas supplies
on the new exploration policy aimed at in Odisha. This pipeline is being
eliminating extension uncertainties faced constructed at a cost of Rs 13,000
by contractors. Billionaire Anil Agarwal- crore, of which Rs 4,000 crore is being
owned Cairn India has been lobbying spent in Odisha. In two to three years,
the government for years to extend the entire pipeline would be constructed
the contract to operate the oil and gas direct the government to quickly decide and commissioned, said A K Singh,
block in Barmer, Rajasthan, by 10 years on an extension. The draft rules, when executive director, GAIL (India) Ltd.
after the initial 20-year agreement runs formalised, will not apply to the Barmer In Odisha, the 2,619-km Jagdishpur-
out in 2020. Cairn contributes nearly block but will end the kind of uncertainty Haldia-Bokaro-Dhamra natural gas
30% of Indias domestic output and has Cairn faces today for blocks awarded pipeline would have a network of 762
urged the court for more than a year to under the new exploration policy. km, covering 13 districts.

ONGC to invest Rs 21,500 crore in Indias deepest gas discovery by 2023

State-owned ONGC will invest over Rs Tapas Kumar Sengupta said.ONGC plans
21,500 crore to develop Indias deepest to drill nine wells on the discovery that
gas discovery by 2022-23, helping it lies in water depths of 2,400-3,200 metres
more than double output from its prime and will produce a peak output of 19
KG basin block.Oil and Natural Gas Corp million standard cubic metres per day. The
(ONGC), which had last year firmed up an company had previously decided to develop
investment of Rs 34,012 crore in bringing other discoveries in KG-D5 block and leave
to production 10 oil and gas discoveries in the UD-1 find in the same block for a later
its Bay of Bengal block KG-DWN-98/2 (KG- date as it thought there was no technology
D5), plans to invest another Rs 21,528.10 available to produce gas from such water
crore in developing the ultra-deepsea UD-1 depths.Sengupta said that there are
find.We have submitted to the Directorate consultants who have showed to ONGC that
General of Hydrocarbons a declaration of the field development plan, by end-2017 and discoveries deeper than UD-1 have been put
commerciality (DoC) for the UD-1 find. We hope to bring the discovery to production to production in recent times, particularly in
will submit a final investment plan, called by 2022-23, ONGC Director (Offshore) Gulf of Mexico.
April 2017
www.InfralinePlus.com

NewsBriefs | Oil & Gas International


Cambodia to revise oil contract, paving way for first oil Chevrons $1 billion sale of China oil
fields stalls

Khmer Basin, after Kris Energy Ltd became


the sole stakeholder last year. Cambodia
has struggled to develop oil fields in the Gulf
of Thailand, as few companies are willing to
invest in the area following the 2014 global
oil price slump. Kris Energy hopes to begin
initially producing around 8,000 barrels per
day of low-sulfur oil early next decade. But
it first needs to find a partner to back the
Cambodia will sign a revised production development, which is estimated at below
sharing contract soon with Singapore-listed $200 million.Were not in a rush to farm Chevron Corp.s sale of its stakes in
explorer Kris Energy to develop an offshore things out. What we are looking for are good Chinese offshore oil fields operated by
field that could finally produce the countrys credible and stable partners that can share state-owned CNOOC Ltd. has stalled.
first oil after years of delays. Cambodia is the risk and cost of the project, said Kelvin Bids that Chevron received for its
revising some fiscal terms in the 2002 con- Tang, KrisEnergys chief operating officer interests in three fields in Chinas Bohai
tract for the Cambodia Block A field in the and president of its Cambodia operations. Bay didnt meet its expectations it is
learnt. Chevron had aimed to sell the
Big oils plan to buy into the shale boom assets for as much as $1 billion. The
U.S. oil and gas explorer is considering
Exxon Mobil Corp., Royal Dutch Shell keeping the Bohai Bay holdings for now.
Plc and Chevron Corp., are jumping into The assets had drawn interest from
American shale with gusto, planning to Chinese suitors including AAG Energy
spend a combined $10 billion this year, Holdings Ltd., Brightoil Petroleum
up from next to nothing only a few years Holdings Ltd. and Shanghai-traded Meidu 43
ago. The giants are gaining a foothold in Energy Corp. Oil majors such as Royal
West Texas with such projects as Bongo Dutch Shell Plc and BP Plc have been
76-43, a well which is being drilled 10,000 looking to shed overseas assets to focus
feet beneath the table-flat, sage-scented on their home markets. Chevron, based in
desert, and which then extends horizontally San Ramon, California, has said it wants
for a mile, blasting through rock to capture into billions, Bongo 76-43 is financed by to raise as much as $10 billion from asset
light crude from the sprawling Permian Shell. If the big boys are successful, theyll sales this year and it agreed in December
Basin. While the first chapter of the U.S. scramble the U.S. energy business, boost to sell Asian geothermal assets to Ayala
shale revolution belonged to wildcatters American oil production, keep prices low, Corp. Shell is considering a sale of its
such as Harold Hamm and the late Aubrey and steal influence from big producers, stake in a Malaysian liquefied natural gas
McClendon, who parlayed borrowed money such as Saudi Arabia. export plant.

Deloitte forecasts about $55 a barrel oil prices to average in 2017

According to the most recent forecast weve seen for some time. And with
from financial advisory firm Deloitte, reductions in operating costs that
oil costs ought to average around $55 companies have realized in the last
US a barrel in 2017 for West Texas year or two, there are more plays that
Intermediate, which ought to be sufficient are going to be economic. According
for some thinned down Alberta producers to Deloittes outlook, the OPEC consent
to work beneficially.Its significantly to limit production is one variable
better than what the average was through affecting everything, except that single-
last year, which is bringing some optimism handedly isnt probably going to build
into the sector, said Andrew Botterill costs generously at any point in the near
with Deloittes resource evaluation and future.Its going to take some time for
advisory group. Obviously, it isnt at a people to really see how many barrels are
level thats going to allow all producers going to leave the system with the OPEC
to produce all of their inventory, Botterill cuts, Botterill said.
added. But it certainly is better than
April 2017
www.InfralinePlus.com

InConversation
Massive shale gas output from US
has spurred growth in LPG market
Suyash Gupta, Director General, Indian Auto LPG Coalition
(IAC) shares his views on the auto LPG market in India,
global trends and what India needs to do to tackle the
growing menace of air pollution. Excerpts:

Please highlight the recent On account of this, industry has


developments in the Indian auto already seen an increase in the sales
LPG market. volumes. Industry-wide monthly sales
500+ cities in the country are covered jumped from around 26 thousand
with around 1100 auto LPG filling tonnes in the month of October 2016 to
stations. More than half of these are over 30 thousand tonnes in December
owned by Public Sector through IOC, 2016, thus registering a 16% growth.
HPC, BPC. In the private sector, Owing to these radical changes,
Suyash Gupta, Director General, Indian Auto LPG
companies like Reliance, Total Oil, industry is expected to close this fiscal Coalition (IAC)
Aegis, and SHV - SuperGas have taken year with an overall growth of more
44 up lead in setting up these stations. than 4% over the last year. notable to mention here that more than
About 25 lakh vehicles in the country 40% of the four wheeler vehicle cars in
are estimated to be running on LPG How auto LPG is helping as Turkey run on LPG.
today. Most of these vehicles are a step- forward to a cleaner It is a low hanging fruit in terms of
aftermarket conversions with less than transport fuel and helping in the fact that all other similar cleaner
20 % accounting for OEM Models. tackling pollution? fuels need huge amount of capital
Auto LPG for the past several years Auto LPG is the worlds 3rd most investment as well as a gestation period
has been about 40% of the price of selling automotive fuel after petrol running into several years to build
petrol. While this made it significant and diesel. More than 26 Million pipeline and related infrastructure,
cheaper than petrol, yet its running cost vehicles run on auto LPG globally, whereas an Auto LPG station can be set
was higher than that of diesel. However consuming more than 26 million up in as quickly as over a 60 to 90 day
with effect from October 1, 2016, the tonnes of LPG. Auto LPG is a low period, thus providing an immediate
PSUs radically cut down the pricing of hanging fruit with extremely clean relief and impacting urban air quality.
auto LPG to around 50% of the price of emissions. LPG has 22 percent lower
petrol. This effectively made it not just CO2 than petrol, 96 percent lesser In the wake of rising prices of
50 % cheaper than petrol but cheaper NOx than diesel and 68 percent lesser petroleum, what is the future of
than diesel as well in terms of running than petrol, and PM - 120 times lower auto LPG as the future fuel of
costs and comparable to CNG. emission than diesel. India?
For a city like Lucknow, the It also provides tremendous On account of the massive shale gas
running cost of petrol vehicle (with an opportunity to avoid usage of high outputs coming from the US, LPG
estimated mileage of 14.3 km/ litre), polluting carcinogenic diesel-fuelled market globally has seen a major
comes out to be Rs. 5.11 per km, for cars for personal and public transport. growth. LPG prices have come down
diesel vehicle, running cost comes That Auto LPG has helped various from being at around $1200/tonne to
out to be Rs. 3.45 per km, for CNG Governments globally to tackle air about $500/ tonne.
vehicle, the running cost comes out quality issues and emerges from the With the shale impact expected to
to be Rs. 2.69 per km, whereas, for fact that several similar counties like continue, LPG prices are expected
an LPG vehicle it is even cheaper and Turkey and Korea are one of the to remain at lower levels in the
comes out to be Rs. 2.58 per km. biggest users of LPG globally. It is foreseeable future.
April 2017
www.InfralinePlus.com

India is projected to be one for a country like India which produces based power plants. Electric vehicle
of the biggest car markets in most of its electricity from coal- may ultimately be more pollutant
India in future. Please provide than gaseous fuel. To adopt any fuel
suggestions on reducing India needs to adopt strategy the government really needs to
vehicular pollution in India. What formulate a judicious mix of all cleaner
are the advantages of auto LPG
the right mix of cleaner fuel available. LPG offers one such
as a fuel in comparison to others fuels. While bio fuels solution which is available immediately
like biofuels and upgraded look great on paper, yet
emission norms like BS-IV? availability of the same What are the key issues being
India needs to adopt the right mix of shall always remain a faced by the auto LPG industry in
cleaner fuels. While bio fuels look India? What are your suggestions
great on paper, yet availability of the
challenge particularly to address the same?
same shall always remain a challenge on account of Indias One of the key issues is differential
particularly on account of Indias efforts to ensure pricing on various grades of
efforts to ensure availability of food for availability of food LPG, which results in diversion
masses at lower prices. Any increase in on subsidized domestic LPG to
for masses at lower
demand of bio fuel shall undoubtedly automotive usage. Secondly, there
impact prices. prices. Any increase is a need for OEMs to push LPG
Meanwhile in terms of the much in demand of bio fuel variants.
talked Electric vehicles, Government shall undoubtedly
needs to realise and consider the total impact prices For suggestions email at feedback@infraline.com
well-to-wheel emissions, particularly

45
April 2017
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InDepth
Marketing and pricing freedom
to give CBM producers a leg-up

46

India holds worlds fourth largest coal reserves


CBM is being seen as an alternative source for boosting countrys energy security

By Team InfralinePlus

Indias natural gas demand is projected production from domestic sources CBM blocks have been relinquished
to outpace supply in the foreseeable falls below projection. Coal bed by operators.
future, which means dependence methane (CBM), an unconventional Even a big upstream player like
on imported LNG would go up. As gas, can help in mitigating countrys ONGC has struggled to produce
per one estimate, LNG imports will natural gas shortages, thereby putting CBM. The upstream major was
rise by nearly five times in 2029- a check on rise of LNG imports. awarded 9 CBM blocks. But it has
30 from the level of 2012-13. The However, extracting CBM has proved relinquished 5 of these blocks. Given
incremental demand for imported more difficult than conventional gas. difficulties in mining CBM, the
natural gas could further rise if Consequently, as many as 18 out of 33 International Energy Agency (IEA)
April 2017
www.InfralinePlus.com

is not very bullish on unconventional Analysis Cell notified prices or selling tion difficult, risky and costly. Even its
gas addressing Indias energy prices, whichever is higher. ventilation to atmosphere adds green
security concerns. In this context, In 2014, the new domestic natural house gas causing global warming.
the significance of the governments gas pricing guidelines also included However, CBM is a remarkably clean
recent decision to allow marketing CBM blocks, which resulted in CBM fuel if utilized efficiently. CBM is a
and pricing freedom to CBM gas gas beyond this date to be priced clean gas having heating value of ap-
producers cannot be overstated. at natural gas rates. Consequently, proximately 8500 KCal/kg compared
Specifically, the Union cabinet has contractors who had discovered to 9000 KCal/kg of natural gas.
allowed CBM contractors freedom CBM reserves started going slow on India holds worlds fourth
to sell their production at a price production plans. After announcement largest coal reserves and it is not
discovered though arms length of new pricing policy, these contractors surprising that CBM is being seen
transactions. Of course, the contractors are now expected to expedite as an alternative source for boosting
will have to follow transparent development work to bring their output countrys energy security. As per
procedures for price discovery. In case, to the market as soon as possible. estimate by the Directorate General
there is no third party buyer available of Hydrocarbons, India has 92 trillion
for CBM production, a possibility that CBM potential in India cubic feet (tcf) of CBM reserves spread
cannot be ruled out given the poor CBM is generated during coalifica- across 12 states.
pipeline network in the country, the tion process which gets adsorbed on The government formulated CBM
contractor can sell gas to its affiliates. coal at higher pressure. However, it is policy in 1997. Under the policy, four
Royalty and other dues will be payable a mining hazard. Presence of CBM in rounds of CBM bidding rounds have
on the basis of Petroleum Planning and underground mines makes coal extrac- been implemented by the petroleum
ministry, which led to award of 33
CBM blocks with estimated reserves of
The Union cabinet has allowed CBM contractors 62.4 tcf. Of this, only 9.9 tcf has been 47
freedom to sell their production at a price established as Gas in Place (GIP).
discovered though arms length transactions. Two CBM blocks in West Bengal
Of course, the contractors will have to follow by GEECL and Essar Oil, one in
Jharkhand operated by ONGC and
transparent procedures for price discovery. In one in Madhya Pradesh operated RIL
case, there is no third party buyer available for are producing CBM. Four blocks, one
CBM production, a possibility that cannot be in west Bengal and two in Jharkhand
operated by ONGC and one in
ruled out Chhattisgarh-MP operated by RIL are
in development phase and are likely
to start CBM production soon. India
produced 1.07 million standard cubic
meter per day (mmscmd) CBM gas in
2015-16.
In India Energy Outlook 2015, the
IEA acknowledged that as a country,
India has large unconventional
hydrocarbon resources, including
CBM. Although private companies
such as RIL and Essar are already
engaged in the development of CBM,
commercial development is a long way
ahead, the agency said.

Challenges in harnessing
CBM potential
India faces serious challenges in
harnessing potential due to the
April 2017
www.InfralinePlus.com

InDepth

difficulty of land acquisition, high is a significant expense compared to integrated gas pipeline infrastructure
cost of disposing water released from that of conventional development due is needed to ensure expeditious
CBM blocks, poor infrastructure to to the presence of high total dissolved harnessing of CBM reserves.
evacuate gas and the cumbersome solids (TDS) and salinity. Sustaining CBM production is a
procedures for obtaining statutory Petroleum mining lease and key challenge. Due to their geological
clearances. Due to large number of petroleum exploration licence are makeup, CBM formations can offer
required wells for efficient drainage issued by state governments on highly variable production and two
of CBM, land acquisition challenges the recommendation of the central wells drilled in close proximity can
are severe. CBM blocks in Jharkhand, government. This mechanism often see radically different productivity
Chhattisgarh and Madhya Pradesh are leads to delay. Getting clearances for rates. Indian coal is also of a relatively
mostly in remote and primarily tribal starting mining is another big challenge low grade. Because of this, its lower
area. In addition, poor land record for operators. Operators need to obtain porosity and permeability can be a
and multiple holdings also complicate as many as 30 clearances before they challenge to production.
challenges of land acquisitions. can start CBM mining. A house panel recently queried the
CBM wells produce large volumes Most of CBM blocks are located petroleum minister about availability
of water during the initial period to in remote and inaccessible areas of gas transport infrastructure in areas
lower the pressure in the coal seams which lack industrial activity. That where CBM blocks fall. In reply
till the critical adsorption pressure and means gas production cannot be the minister said, CBM produced
as the quantities of produced water consumed locally. Nor is there pipeline from these blocks are being sold off
decline the gas production increases. infrastructure in these areas to transport to customers in the vicinity of these
Cost to dispose of the produced water gas to consumption centres. So, producing blocks. In Jharia CBM
block, CBM produced is being sold
off by filling CBM in cascades and
Sustaining CBM production is a key challenge. transported on trucks. In Raniganj
48
Due to their geological makeup, CBM East CBM block, contractor (Essar
formations can offer highly variable production Oil Limited) has constructed pipelines
and two wells drilled in close proximity can see from Gas Collecting Station/Gas
Gathering Station to individual
radically different productivity rates. Indian coal vendors. Similarly, operator of
is also of a relatively low grade. Because of Raniganj South CBM Block GEECL
this, its lower porosity and permeability can be has built pipelines from its GCS/GGS
to individual customers. Reliance
a challenge to production Gas Pipeline Limited (RGPL), one
of the subsidiary of RIL is laying
around 300 KM of natural gas
pipeline from Shahdol in Madhya
Pradesh to Phulpur in Uttar Pradesh to
transport gas from RILs CBM blocks
(Sohagpur East and West).
Due to serious challenges in
extracting CBM gas in India, the
International Energy Agency has
said that CBM might not contribute
more than 31 per cent of its total gas
production by 2040. Developing gas
transportation infrastructure has proved
a mammoth challenge for policy
makers. Industry remains reluctant to
invest in pipeline infrastructure due
to low and geographically uneven
demand for LNG whose spot prices are
highly volatile.
April 2017
www.InfralinePlus.com

In Union Budget 2014, the 36-47 per cent, to this demand in removed, the PNGRB report said.
government announced the the projected period. The share of The PNGRB report also touched on
construction of an additional 15,000 the fertilizer sector in overall gas the controversial issue of gas pricing,
km of gas pipelines on a public-private consumption in the country is expected saying the government had to make
partnership (PPP) basis along with to go down from 25 in 2012-13 to 15 investment in the upstream and mid-
viability gap funding (VGF). However, per cent in 2029-30 owing to higher stream gas sectors attractive to meet
the work on the project is moving growth in other sectors. The report growing demand.
at a slow speed. In this context, the forecast 7.2 per cent annual growth in The investment and infrastructure
industry has suggested that Carrier gas supplies reaching 400 mmscmd required for developing a CBM block
First, Commodity Later policy should by fiscal 2021-22 and 474 mmscmd is not at par with conventional natural
be followed for the development of in fiscal 2029-30. On the other hand, gas. Drilling of natural gas well
the domestic gas market. In a survey supply from domestic sources is approximately till 3000 meter-depth
conducted by consulting firm PwC projected to rise from 101.11 mmscmd nominally costs $8 million. However,
recently, respondents overwhelmingly in fiscal 2012-13 to 156.7 mmscmd the nominal cost of drilling a CBM
supported the idea of Carrier First, in fiscal 2016-17 and 230 mmscmd in well is $1.2 million.
Commodity Later policy. fiscal 2029-30. Due to low productivity large
As per estimates of a study The PNGRB report was critical of number of CBM wells are required to
commissioned by Petroleum and the current government policy that be drilled against single conventional
Natural Gas Regulatory Board, India determines priority in gas allocations hydrocarbon well to produce the
will have to import as much as 214 and the volumes supplied. The Gas same quantity of gas. Natural gas
mmscmd of LNG in 2029-30. Utilization Policy creates artificial produced from a conventional well
Gas-based power generation is demand and discourages new suppliers is produced at high pressure whereas
expected to contribute the highest, and hence needs to be progressively CBM produced at surface is at much
lower pressure. Therefore, there 49
The investment and infrastructure required is a need for higher compression
stages at the Gas Collecting Station/
for developing a CBM block is not at par with Gas Gathering Station. Moreover,
conventional natural gas. Drilling of natural condensates and water often
gas well approximately till 3000 meter-depth accompany Natural gas during its
production. In CBM operations, water
nominally costs $8 million. However, the has to be continuously dewatered from
nominal cost of drilling a CBM well is the coal seams to increase the CBM
$1.2 million production.
CBM operations work on a marginal
scale of economics in comparison
to conventional natural gas where
margins are high and so is the period
of production. The producing life of a
CBM well is up to 15 years however
the average producing life of a natural
gas well is 20 to 25 years.
In view of the above-mentioned
challenges, the marketing and pricing
freedom granted by the government
for CBM is expected to go some way
in boosting investors confidence.
However, more needs to be done. Land
acquisition and clearances are two
areas wherein investors need a helping
hand from the government.

For suggestions email at feedback@infraline.com


April 2017
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InDepth
Petchem manufacturers on
capacity expansion overdrive

50

Petrochemical products fetch better margins compared to fuels


Petrochemical industry constrained by inadequate domestic availability of natural gas

By Team InfralinePlus

Keen to tap the growing demand for dition. What is supporting this trend petrochemical project in its Kochi
petrochemical products, domestic is the fact that petrochemical products refinery. The company expects to
refiners are investing big time to build fetch better margins compared to fuels, complete the refinery expansion by the
petchem production facilities even experts add. end of FY17 and to start operations
as other manufacturers are unable to Leading players like RIL, Indian in 2017. RIL recently commissioned
utilise their existing capacities due to Oil, BPCL and HPCL have invested the first-phase of paraxylene (PX)
weak demand. According to experts, as heavily in petrochemical production production facility at Jamnagar.
margins fall due to growing competi- capacity expansion in recent years. The private refiner hopes to become
tion, domestic refiners are increasingly For example, state-owned refiner worlds second second-largest PX
pursuing integration of refining with BPCL is investing Rs 4,600 crore producer after the commissioning the
petrochemical business for value ad- to build a propylene derivative full capacity.
April 2017
www.InfralinePlus.com

State-owned Gail India and HPCL Table 1 India: global rank in polymer consumption (1988)
have together planed a Rs 30,000- Country Polymer consumption (mt)
crore petchem unit in Andhra Pradesh. US 16.6
Indian Oil plans to invest Rs 34,000 Japan 6.4
crore in its Paradip petchem complex Germany 4.3
in Odisha by 2021. Earlier, the oil China 3.7
PSU spent more than Rs 14,000 crore Italy 3.1
to build naphtha cracker facility at its CIS 2.4
Panipat refinery. France 2.4
Experts say that with shrinking UK 2.2
refining margins, it has become Taiwan 1.9
almost inevitable to look for value Korea 1.8
added opportunities to be integrated India 1.6
in the complexes through petro-
Source: CPMA
chemical integration. The fact that
most of the petrochemical produces of 81,000 tonnes annually. It has
invite a higher degree of margin The fact that most 70 per cent equity in a joint venture
vis--vis the fuels, there is a strong of the petrochemical company, Brahmaputra Cracker
case for integration between refinery and Polymer (BCPL), at Dibrugarh,
produces invite a
and petrochemical complex, wherein, Assam. GAIL also has stake in
both feed as well as energy inte- higher degree of ONGC Petro additions (OPaL)
gration can be exploited for soliciting margin vis--vis the new petrochem project at Dahej, to
higher revenues, they add. fuels, there is a strong produce high and low density poly-
GAILs plant at Andhra Pradesh is ethylene, or PE, (HDPE and LLDPE) 51
part of a plan to expand its presence case for integration and polypropylene.
in petrochemicals. The unit will have between refinery and Although India imports certain
three feeds naphtha, ethane and petrochemical complex, categories of petrochemicals, it is also
propane. Naphtha will be supplied an exporter of some. RIL and IOC
from the Visakhapatnam refinery of
wherein, both feed have been exporting petrochemicals
HPCL, through a 150-km pipeline. as well as energy for some time now. GAIL entered
The ethane and propane feeds will integration can be the overseas market for the first time
be imported via the Kakinada port. this year with about 7,500 tonnes of
exploited for soliciting
The complex will produce a million polymer exports so far to Bangladesh,
tonnes of ethylene with derivatives, higher revenues Nepal, Vietnam and China. GAIL
to go into manufacturing of deter-
gents, paints and coatings, cosmetics
and textiles. A detailed feasibility
report is under work.
GAIL and HPCL joined hands after
HPCLs plans to team with Frances
Total, the Lakshmi N Mittal Group and
Oil India for a 15-million tonne a year
unit at Visakhapatnam was put on the
back burner because of viability issues.
The two companies are now in talks to
bring in a third partner. There are also
plans to import ethane from the US for
the plant.
GAIL has interest in three pet-
rochem plants, including its own
complex at Pata in Uttar Pradesh
that has been expanded to a capacity
April 2017
www.InfralinePlus.com

InDepth

Table 2 India: global rank in polymer consumption (2000) will reverse. Indian players are almost
Country Polymer consumption (mt) doubling total PE capacity, which
remained 2.9 million tonnes a year over
US 27.3
those five years, the report says. RIL,
China 14.4 GAIL, IOC and Haldia Petrochemicals
Japan 9.1 (HPL) are key PE players in India.
Germany 6.4 HPL was operating at lower utilisation
Korea 4.7 due to working capital funding issues,
the report said.
Italy 4.7
In 1988, India was the tenth largest
France 4.1 consumer of polymers in the world.
UK 3.5 However, because of robust growth in
India 3.4 demand, India is now worlds largest
Brazil 3.4 producer of polymers. Its demand grew
by 14 per cent between 2000 and 2015.
Taiwan 3.3
India has currently excess PE production
Source: CPMA capacity. However, with domestic
demand growth at more than 10 per cent
produces HDPE and LLDPE. They annually and capacity addition unable
account for 88 per cent of Indias total According to a recent to keep pace, the country will have to
PE consumption. HDFC Securities import PE from 2019.
report, PE consumption PE is primarily used in packaging
Demand supply scenario like plastic bags, plastic films, geo mem-
According to a recent HDFC Securities
in India grew at a branes, containers including bottles,
52
report, PE consumption in India grew compounded annual etc. Demand for polypropylene (PP), a
at a compounded annual growth rate growth rate (CAGR) of thermoplastic polymer, too is growing
(CAGR) of seven per cent in the five seven per cent in the at a brisk pace. During 2016-21, PP
years ended 2015. However, produc- demand is projected to grow by 11.8
five years ended 2015.
tion grew only a five per cent yearly. per cent. However, capacity addition
This has made India a net importer of However, production is expected to keep pace with demand,
PE. The import share in total consump- grew only a five per meaning India will continue to have
tion has increased from 14 per cent in cent yearly. This has surplus production during this period.
FY08 to 42 per cent in FY15. made India a net PP is used in a wide variety of applica-
However, over the next two to three tions including packaging and labeling,
years, the demand-supply scenario
importer of PE textiles -- ropes, thermal underwear and
carpets --, stationery, plastic parts and
Table 3 India: global rank in polymer consumption (2015) reusable containers of various types,
laboratory equipment, loudspeakers and
US 38.9
automotive.
China 31.3 Purified terephthalic acid (PTA) is
India 12.5 a raw material used in making high-
Japan 11.5 performance multi-purpose plastics
such as polybutyl terephthalate(PBT),
Germany 9.4
polyethylene terephthalate(PET), and
Korea 7.4
polytrimethylene terephthalate (PTT).
Italy 6.8 Domestic PTA demand is projected to
Brazil 6.7 grow by 7.7 per cent annually in period
CIS 6.2 up to 2021. India is a net exporter of
PTA and it is projected to have surplus
France 6.1
capacity in coming years.
UK 5.2
India is a net importer of PVC, or
Source: CPMA styrene. The domestic demand-supply
April 2017
www.InfralinePlus.com

gap is expected to widen in the period Projections: polyethylene production capacity, demand,
running up to 2021 as annual con- surplus or deficit (kt)
sumption rises by 9.75 per cent. India Production
had PVC shortfall of 146 kilo tonne Year Demand Surplus or deficit
capacity
in 2016, which is projected to go up
2016 4,980 4,421 559
to 2980 kilo tonne in 2021 as demand
2017 5355 4793 562
outpaces supply.
2018 5355 5209 146
Inadequate availability of 2019 5355 5681 -326
natural gas a concern 2020 5355 6199 -844
The Indian petrochemical industry is 2021 5355 6755 -1400
constrained by inadequate domestic
Source: Industry
availability of natural gas, which is
used as a feedstock in addition to naph- Projections: polypropylene production capacity, demand,
tha by the industry. In that context, the surplus or deficit (kt)
governments decision to halve import
Production
duty on LNG is expected to some way Year Demand Surplus or deficit
capacity
towards addressing domestic industrys
2016 5047 4108 939
feedstock concerns. Petrochemical
plants using naphtha as feedstock face 2017 5115 4497 618
fluctuations in their profitability due to 2018 5815 5405 410
volatile nature of the naphtha market. 2019 5815 5405 410
Analysts say Indian companies should 2020 6315 5936 379
import naphtha from West Asia under 2021 6815 6515 300 53
long-term contract to avoid
Source: Industry
price uncertainty.
Meanwhile, RILs revenue from
Projections: PTA production capacity, demand, surplus or
petchem business during October-
December 2016 increased by 17.8 to Rs deficit (kt)
22,854 crore ($ 3.4 billion), primarily Production
Year Demand Surplus or deficit
due to increase in prices across polymers capacity
and polyester chain. Petrochemicals 2016 7075 5319 1756
segment EBIT increased sharply by 2017 7400 5678 1722
25.5 per cent to Rs 3,301 crore ($ 486 2018 7400 6047 1353
million), supported by favorable product 2019 7700 6431 1269
deltas and marginal volume growth,
2020 8900 6878 2022
according to the company.
2021 8900 7362 1538
PP and HDPE prices showed
marginal increase of 1 per cent on a Source: Industry
sequential basis whereas PVC prices
increased by 12 per cent. PP delta growth slowed down due to demoneti- polymers, driven by a strong pull from
strengthened on account of softness in zation of old currency notes announced the multilayer film, HM pipe, HD
propylene prices due to ample supply by Prime Minister Narendra Modi raffia and monofilament segments. PP
after the restart of cracker units post on November 8. However, demand demand was 5 per cent higher, aided
maintenance shutdown. PE delta is expected to revive as the effects of by consumption from raffia packaging,
softened with a firm naphtha price demonetisation are absorbed and the fibre filament and appliances sector.
environment. PVC deltas strengthened economy readjusts to the new normal. PVC demand witnessed a marginal
amid increasingly stringent environ- In the third quarter, domestic growth rate of 1 per cent due to lower
mental regulations impacting coal- polymer demand was 5 per cent higher demand on account of seasonality and
based production inChina. compared to the same period last year. high rural exposure.
During the October-December 2016 PE demand witnessed the highest
quarter, the pace of domestic demand growth rate of 8 per cent among all For suggestions email at feedback@infraline.com
April 2017
www.InfralinePlus.com

StatisticsOil & Gas


Coal Bed methane (CBM) gas development in India (February, 2017)
Prognosticated CBM resources 92 TCF
Established CBM resources 9.9 TCF
Total available coal bearing areas 26,000 Sq. KM
Exploration initiated 17,200 Sq. KM
Blocks awarded 33 Nos.
Production of CBM gas February, 2017 45.51 MMSCM
Production of CBM gas-Cumulative April 2016-February, 2017 519.739 MMSCM

Refineries: Installed capacity and crude oil processing (MMTPA / MMT)


Crude oilprocessing
Installed
Com- 2014- 2015- February April-February
Refinery capacity
pany 15 16 2016 2017 2015-16 2016-17
(1.4.2016) 2017 2016-17
(Actual) (Target) (Actual) (Target)
Barauni (1964) 6 5.9 6.5 0.5 0.5 0.5 6 5.7 6
Koyali (1965) 13.7 13.3 13.8 1.2 1 1 12.6 12.3 12.8
Haldia (1975) 7.5 7.7 7.8 0.6 0.6 0.6 7.1 7.1 7
Mathura (1982) 8 8.5 8.9 0.7 0.6 0.7 8 7.9 8.4
Panipat (1998) 15 14.2 15.3 1.3 1.2 1.2 13.9 13.9 14.2
IOCL
Guwahati (1962) 1 1 0.9 0.04 0.08 0.07 0.8 0.9 0.8
54 Digboi (1901) 0.7 0.6 0.6 0.04 0.05 0.04 0.5 0.6 0.5
Bongaigaon(1979) 2.4 2.4 2.4 0.2 0.2 0.2 2.2 2.2 2.3
Paradip (2016) 15 - 1.8 0.5 1 0.9 1.3 8.9 7
IOCL TOTAL 69.2 53.6 58 5.1 5.2 5.3 52.5 59.3 58.9
Manali (1969) 10.5 10.2 9.1 0.9 0.5 0.4 8.2 8.9 9
CPCL CBR (1993) 1 0.5 0.5 0.05 0.05 0.04 0.5 0.5 0.5
CPCL-TOTAL 11.5 10.8 9.6 0.9 0.5 0.5 8.7 9.4 9.5
Mumbai (1955) 12 12.8 13.4 1.1 0.7 0.9 12.2 12.5 12.9
BPCL
Kochi (1966) 9.5 10.4 10.7 0.9 1.3 1.1 9.8 10.7 10.7
BORL Bina (2011) 6 6.2 6.4 0.5 0.5 0.5 5.8 5.5 5.7
Numaligarh (1999) 3 2.8 2.5 0.2 0.2 0.2 2.3 2.4 2.5
NRL
BPCL-TOTAL 30.5 32.2 33 2.7 2.7 2.7 30 31.1 31.8
ONGC Tatipaka (2001) 0.1 0.1 0.1 0.007 0.004 0.007 0.06 0.04 0.08
Mangalore (1996) 15 14.6 15.5 1.3 1.3 1.2 14 14 14.5
MRPL
ONGC TOTAL 15.1 14.7 15.6 1.3 1.3 1.2 14.1 14 14.6
Mumbai (1954) 6.5 7.4 8 0.7 0.5 0.7 7.2 7.1 7.7
HPCL
Visakh (1957) 8.3 8.8 9.2 0.8 0.7 0.8 8.4 8.2 8.5
Bathinda (2012) 9 7.3 10.7 0.7 0.7 0.8 9.8 8.6 9.8
HMEL
HPCL- TOTAL 23.8 23.5 27.9 2.2 1.9 2.3 25.4 23.9 26
Jamnagar (DTA)
33 30.9 32.4 2.6 2.6 2.5 29.6 29.6 30
(1999)
RIL*
Jamnagar (SEZ)
27 37.2 37.1 3 3 2.9 33.9 33.9 34.1
(2008)
EOL Vadinar (2006) 20 20.5 19.1 1.7 1.7 1.6 17.3 18.6 19.2
All India 230.1 223.3 232.9 19.5 18.8 19.1 211.5 219.9 224.1
* RIL target for 2016-17 is previous year crude processing.
April 2017
www.InfralinePlus.com

StatisticsOil & Gas


LPG consumption (Thousand Metric Tonne)
February April-February
LPG category 2014-15 2015-16
2016 2017 Gr (%) 2015-16 2016-17 Gr (%)

1. PSU Sales :

LPG-Packed Domestic 16,040.40 17,181.70 1519.4 1574.1 3.6 15571.8 17206.3 10.5

LPG-Packed Non-Domestic 1,051.00 1,464.40 136 157.2 15.6 1322.3 1629.8 23.3

LPG-Bulk 315.7 317.2 24.4 28.7 17.4 283.2 336.1 18.7

Auto LPG 163.8 170.9 14.2 13.7 -3.4 156.3 152.5 -2.4

Sub-Total (PSU Sales) 17,570.90 19,134.20 1,694.00 1,773.80 4.7 17,333.60 19,324.70 11.5

2. Direct Private Imports 429.2 489 53.3 35.5 -33.3 437.5 341.7 -21.9

Total (1+2) 18,000.10 19,623.20 1,747.30 1,809.30 3.5 17,771.10 19,666.40 10.7

Status of PNG connections, CNG stations and CNG vehicles across India (Nos.)
PNG connections
CNG No. of CNG
stations vehicles
Domestic Industrial Commercial
State Entity operating Geographical region
55
As on As on As on As on As on
1.3.2017 1.3.2017 1.3.2017 1.3.2017 1.3.2017

Haryana City Gas, Sonepat, Faridabad,


Haryana 31 52,599 240 163 1,25,227
Adani . Gurgaon

Andhra Bhagyanagar Gas


Kakinada, Vijayawada 12 3,534 0 41 15,666
Pradesh Ltd

Bhagyanagar Gas
Telangana Hyderabad 24 2,321 5 23,545
Ltd

Tinsukia, Dibrugarh,
Assam Assam Gas Co. Ltd Sibsagar, Jorhat, 0 29,965 400 1,000 0
Golaghat

Gandhinagar, Mehsana,
Sabarkantha, Nadiad,
Sabarmati Gas Ltd,
Halol, Hazira, Rajkot,
Gujarat Gas Ltd,
Khambhat, Karjan-
Adani Energy Ltd ,
Palej, Valsad, Navsari,
Vadodara Gas Ltd,
Gujarat Surendernagar, Vadodara, 380 16,41,340 4,256 14,718 10,5,937
Hindustan Petroleum
Ahmedabad, Surat,
Corporation Ltd,
Ankleshwar, Bharuch
Charotar Gas
& surrounding areas,
Sahakari Mandal Ltd
Bhavnagar, Jamnagar,
Vapi, Anand

Dewas, Vijaipur, Indore


Madhya Aavantika Gas Ltd,
including Ujjain, Gwalior, 23 10,560 88 56 22,765
Pradesh GAIL Gas Ltd
Pithampura *

Rajasthan GAIL Gas Ltd Kota 3 157 16 1 5,550


April 2017
www.InfralinePlus.com

NewsBriefs | Renewable National


Solar park tenders, power purchase on hold as Rewa bids disrupt market Germany extends assistance to Indias
in Gujarat, Bhadla in Rajasthan and Kadapa energy efficiency programme
in Andhra Pradesh. It is learnt that the
tenders had been put on hold after solar
tariffs declined to a levelised Rs 3.3 per
unit at the Rewa solar power park. At the
Bhadla solar power park, the portion of
the project to be built by domestic content
has been scrapped. The cost of solar
power has fallen so low that we now have
The low bid received for the Rewa solar to rethink the process. The reason for Germany will provide additional funding
park in Madhya Pradesh has jolted shelving the domestic content requirement of 200 million euro to Indias energy
the market in many ways. While most is in line with the effort to bring down the efficiency programme, taking its total
states are rethinking their tenders, many cost, said an SECI executive. One reason commitment to the green initiative to
have gone slow on buying solar power for the Rewa park receiving low bids is 600 million euro. At German Embassy
contracted at higher rates. Solar Energy Madhya Pradesh has provided assurances (in Delhi), the German Development Bank
Corporation of India (SECI) has extended over power offtake and offered a sovereign (KfW) signed -- on behalf of the Federal
the deadline for three solar parks, Charanka guarantee in case of purchase default. Ministry for Economic Cooperation and
Development (BMZ) -- a loan agreement
Make in India: Renewable Energy sector sees fast growth with Energy Efficiency Services Ltd (EESL)
over Euro 200 million (Rs 1,400 crore), a
India is making giant leaps in the statement by German Embassy said. With
renewable energy sector. In 2016-17 the loan agreement signed in the presence
financial year, renewable power projects of German Ambassador Martin Ney, the
output rose by 26%, which makes Indias total German commitment for better
56 renewable energy sector as the fastest energy efficiency in India stands at 600
growing in the world. Indian is expected million euro (Rs 4,200 crore). State-run
to be the third biggest solar market from EESL uses the funds to invest in energy
2018 onwards after China and United efficiency measures in various sectors like
States of America. Being the 5th largest domestic households, public buildings,
power generation portfolio in the world, street lighting, water supply and other
Indias renewable energy contribution 2022 from 45 at present. This will include public facilities, agriculture and industry.
stands at 44.8 GW, which includes 27.4 GW 100GW of solar power and 60GW from It also provides related services to clients
of wind power and 8.06 GW of solar power Wind power. National Resource Defense for successful implementation of projects.
installed capacity. Under the Make in India Council estimates that more than 1 million The programme thus contributes to a
campaign, Prime Minister Modi aims to full time equivalent jobs will be created by more efficient use of energy and therefore
raise the renewable capacity to 175 GW by the Solar Industry alone, by 2022. reduces greenhouse gas emissions.

NTPC installs Indias largest floating solar PV plant in Kerala

NTPC recently started power generation from alternative to conventional ground mounted
Indias largest floating solar power plant at photo-voltaic systems which are land inten-
Kayamkulam in Kerala. The 100 kWp floating sive. It has various benefits like conserving
solar generation plant, largest of its kind in water through reduction of evaporation,
India, was indigenously developed as a part increased generation due to cooling effect on
of Make in India initiative, at Rajiv Gandhi the panels and requires lesser installation
Combined Cycle Power Plant (RGCCPP) in time than conventional land mounted ones,
Keralas Kayamkulam district. Solar panels NTPC said. Installation potential of such
mounted on floating boards that hold them in type of systems in India is huge because of
place saves land usage and has been found Engineering & Technology (CIPET), Chennai abundance of water bodies, within NTPC, the
to be efficient than the ones installed on land. and a patent has been applied for. The system potential is about 800 MWp in various reser-
These floating platforms were indigenously was installed by Swelect Energy Systems Ltd, voirs in existing stations.Particularly in Kerala,
developed by NTPC Energy Technology Re- Chennai with support from NETRA & NTPC due to availability of water bodies and lack of
search Alliance, the R&D arm of NTPC Ltd, in Kayamkulam station in a short span of 22 presence of enough land, this type of system
collaboration with Central Institute of Plastic days.Such systems are fast emerging as an has a great potential, it said.
April 2017
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NewsBriefs | Renewable International National


Solar capacity grows over 3 folds to 10K MW in three years Inox Wind looks to sell its stake in new
at Bhadla in Jodhpur, Rajasthan. Bright project
Future: India has crossed 10,000 MW of
Solar power capacity. More than 3 times
increase in less than 3 years, Power, Coal,
Mines, New & Renewable Energy Minister
Piyush Goyal said. India solar power
generation capacity stood at 2,650 MW on
May 26, 2014. As much as 14,000 MW (or
14 gigawatt) of solar projects are currently Inox Wind Infrastructure Services Ltd.,
Indias solar power generation capacity under development and about 6 GW is to one of the four winners of the first wind
has crossed 10,000 megawatt (MW), a be auctioned soon. In 2016, about 4 GW power auction held in October, is already
more than three-time jump in less than of solar capacity was added, the fastest looking to sell a stake in the 250 MW proj-
three years as government pushes for pace till date. According to power ministry ect it was awarded. Several buyers have
renewable energy sources to meet galloping estimates, another 8.8 GW capacity is likely shown interest, with ReNew Power, which
demand. The milestone came as NTPC Ltd to be added in 2017, including about 1.1 GW lost out in the auction, close to clinching
commissioned a 45 MW solar power project of rooftop solar installations. a deal. Inox won the bid quoting a tariff
of Rs 3.46 per unit, lower than the prevail-
India forecasted to become worlds 3rd largest solar market in 2017 ing wind tariff, which varies between Rs
4 and Rs 6 across wind producing states
Taiwan based market researcher that is fixed by each states power regula-
EnergyTrend has predicted that India to tor. Mytrah Energy (India), Green Infra
become the 3rd largest solar market in the Wind Energy and Ostro Kutch Wind also
world in year 2017. EnergyTrend expects won 250 MW each, with an identical tariff.
that India to add at least 10 gigawatts Re-New Power had bid at Rs 3.47 per unit.
to its domestic PV installations in 2017. Although the auction was formally noti- 57
While China remains the largest regional fied last October, the bids were opened
market, its domestic PV installation target only late in February. Since then, Inox
for this year is slightly lower than last Winds parent company Inox Renewables
years according to the latest government is said to have decided to move out of de-
announcement, said EnergyTrend analyst veloping wind farms and concentrate on
Celeste Tsai. As for the second-place its core business of manufacturing wind
U.S., the countrys current political climate still maintains strong demand for PV power generating equipment. In early
is not conducive to the growth of its PV products, it has the potential to overtake March, Inox Renewables sold its entire
market. At the same time, Japan will Japan to become the worlds third largest portfolio of wind farms of about 260 MW
continue to lower its feed-in tariff rates solar market by taking at least 14% of the to Chennai-based Leap Green Energy Pvt.
over the next few years. Because India years total PV demand. for an undisclosed sum.

Suzlon to increase R&D focus

Renewable solutions company, Suzlon, We are industry leaders particularly in


has invested close to $250 million in the aerodynamic technology which is one of our
last five years towards R&D and plans biggest USP. We have our R&D centres in
to continue investing in this space with Germany, Netherlands, Denmark and India.
an aim to reduce the cost of energy Last year, we established a Blade Science
further by 20-25 per cent in the next five Centre in Vejle, Denmark, which will work
years. The companys annual capex is on the development of aerodynamics, pitch
in the range of Rs 300-400 crore each control systems, smart controls and new
year, which is spent on maintenance and its plant load factor and stabilise the structures. The companys new area-
R&D of current and future products. The grid in India. The company is envisioning Wind-Solar Hybrid solution is expected to
company is focusing on lowering the gigawatt size projects supported by leverage the complementary generation
Levelised Cost of Energy (LCoE) by 20 increasing digitisation and best-in-class cycle of wind and solar. This enables better
per cent in the next five years with new service. Talking about the companys utilisation of the existing grid and also
turbines, more efficient turbines to make R&D strengths, Tulsi Tanti, chairman and helps to save land and power evacuation
previously unviable sites viable, increasing managing director, Suzlon Group, said, infrastructure costs.
April 2017
www.InfralinePlus.com

NewsBriefs | Renewable International States


Karnataka mulls competitive bidding for wind power
Two solar plants come up in
commissions, and these feed-in tariffs have Andamans, to replace 47 MW of
diesel-run capacity
ruled around Rs 4.50 a kWhr. Tamil Nadu,
the windiest state, pays Rs 4.16 a kWhr.
However, in the countrys first tariff-based
auctions, held last month, the market-
determined tariffs slid to as low as Rs 3.46
a kWhr. This has come as an eye-opener
to State governments, who now see an
opportunity in competitive bidding to procure
power cheaper. Karnatakas Energy Minister
After the success of the recent central DK Shivakumar said that the State is
government-sponsored auction of wind working on a plan to auction wind capacity. Authoritys plans to set up Solar Photo-
power capacity, Karnataka is looking to Shivakumar ruled out opening signed power voltaic (SPV) power plants in two sites
do the same. Wind power companies have purchase agreements for re-negotiations. of Andaman and Nicobar Islands are
always sold energy at rates fixed by the We cant do that, he said, but observed that currently underway. As per reports, two
respective State electricity regulatory feed-in tariffs would have a natural death. power plants have battery storage of upto
25 MW, which is just half of the islands
present operational generation capacity.
Telangana set to lead India in solar power generation by year-end
The project is aimed at replacing 47 MW
Energy minister G Jagadishwar Reddy of diesel-run generation capacity that pro-
said that Telangana is set to become the vides electricity to the habitable parts of
biggest solar power generating state in the archipelago of over 572 islands in the Bay
country by the end of this year. Currently, of Bengal, near the 10 MW of renewable
Rajasthan, which generates 1,300 MW solar generation that is at present operational
58 power, tops the list. As of now, Telangana there. In the meantime, the Centre took
expects to have an installed capacity of countrys solar power generation capacity
1,456 MW of solar power by April this year to next level few days back by install-
and that is expected to touch 2,000 MW power generation, he said that TSGenco is ing Indias largest Solar PV Plant at
by the end of this year. The state has set studying the viability at Kaleshwaram lift Kayamkulam, Kerala. The setting up of the
itself a goal of generating 5,000 MW of irrigation project. He also said that the lower plant is a huge step in achieving the goal
electricity from solar power in the next Jurala Hydro Electric project with 240 MM of affordable 24X7 power as it is expected
few years, he said. Reddy said that China (6x40 MW) was commissioned in October to generate about 100 KWP power. India,
built hybrid generating stations combining 2016 and Pulichintala hydro power project in last few years has made significance
hydel and solar units but to generate one in September 2016 and the remaining progress in renewable sector and hopes
mega watt in this manner, would require three units would be completed in 2017-18 to provide round the clock power supply to
an investment of Rs 20 crore. On hydel financial year. all citizens of the country.

Arunachal to relook hydropower policy

Small hydropower projects in Arunachal hydropower policy. The Chief Minister is


Pradesh are facing delays in execution the minister in-charge of hydropower and
with some being stalled for almost a is keen to give it a fresh impetus. There
decade. In all, there are nearly 140 is a list of 10 large projects which have
hydropower projects (large and small) in been identified in conjunction with Ministry
the State stuck in the long development of Power which are tracked regularly but
period that were allotted after policies we will have to find innovative solutions
came out in 2007-2008. The delay has to overcome the challenges of financial
also been prolonged due to regulatory closure, he said. There are 95 allotted
changes from the Ministry of Environment small hydropower projects with capacities
and Forests, including the introduction of less than 100 MW in the State. Of these,
of Basin study, which mandates that the 17 have been in the works since 2007 with
entire river should be studied as a whole some yet to receive the Central Electricity
before proceeding with a project. State Kundra said that Arunachal Pradesh is Authority of Indias techno economic
Commissioner (Power and Finance) Ashish going to take a fresh look at the prevailing clearance.
April 2017
www.InfralinePlus.com

NewsBriefs | Renewable International


Tunisia to invest $1 billion in renewables in 2017
Worldwide solar power growth
in 2017, the Ministry added. Under new increased by 50 percent in 2016
plans, Tunisia has committed to generating
30 per cent of its electricity from renewable
energy sources in 2030. Last year, a total
of 579 gigawatt hours (GWh) of renewable
electricity was produced in the country, with
a combined capacity of 342 MW. The initial
phase of the 1,000 MW of installations has
According to the Energy General Direction of already begun. In the second phase of its
the Tunisian Ministry of Energy and Mines, energy strategy, the nation intends to install New reports from SolarPower Europe
650 MW of the total 1,000 MW will come 1,250 MW between 2021 and 2030. The show that solar power had a very good
from solar photovoltaic (PV) power, with news follows the findings from a recent year last year. Worldwide, installed solar
the remaining 350 being supplied by wind report stating the entire Middle East and power capacity grew by an amazing 50
energy. At the same time, the private sector North Africa (MENA) have more than 5.7 percent in 2016, with the largest growth
plans to invest a further 600 million into the gigawatts (GW) of solar energy capacity in occurring in the U.S. and China. The total
development of renewable energy capacity the pipeline. amount of solar capacity added last
year was more than 76 gigawatts (GW),
South Australia plans 100MW battery, dispatchable renewables while 2015 saw 50 GW installed. The
total global solar power capacity is now
In a major energy strategy upheaval, the about 305 GW, a major leap from the 50
South Australian government is providing GW installed worldwide a mere 7 years
significant funding to support energy storage ago. The U.S. and China both doubled
projects, starting with a 100MW grid- the amount of solar power they added in
connected battery that will be the largest 2015, leading all other countries in solar
in the country. The aim is to modernise the growth. China added 34.2 GW and the 59
states grids and help support the increasing U.S. added 14 GW. Europe, however, saw a
penetration of renewable energy capacity. 20 percent downturn in growth compared
Blackouts in the region caused a vicious to the previous year, but there was
nation-wide debate about what had caused still progress. Europe has now passed
the power cuts last year, with the matter provide free of cost if not commissioned its goal of 100 GW of installed power,
still unsettled in some quarters. South within a 100 days of being asked. Following reaching 104 GW. The UK led Europe with
Australias new plan was announced just this, John Grimes, CEO of the Australian almost 30 percent growth, but the pace
a few days after Tesla chief Elon Musk Energy Storage Council, said that the state of growth has stalled there compared
confirmed via Twitter that his company government has been at pains to stress to past years thanks to the removal of
could solve South Australias grid crisis that there will be an open, competitive subsidies and incentives for residential
with a 100MW battery, which he would tender process to build the 100MW project. solar installations and solar farms.

Three solar thermal plants in Chile could generate electricity 24 hours a day

The Chilean government recently gave heat exchanger, where it will lend its heat
the go-ahead on a massive solar thermal to water to create a super-heated steam.
plant that is expected to produce That steam is used to move a traditional
electricity 24 hours a day, seven days a steam turbine to create electricity.
weeka considerable feat for a plant that Because the molten salt will stay hot for
depends solely on solar energy. The plant, hours in its thermal storage tankeven
proposed for a site in Chiles Tamarugal throughout the night or during a cloudy
province, would consist of three 150 morningthe molten salt is said to store
megawatt solar thermal towers, which that thermal energy. SolarReserve, the
become heated as mirrors placed around US-based company that proposed this
each tower reflect sunlight onto it. That project, has also proposed two othersa
heat is transferred to molten salt, which nitrate thats kept at a balmy 1,050 260 MW, 24-hour plant near the city of
circulates through the plant during the day degrees Fahrenheit (566 degrees Celsius), Copiap in the Atacama Region of Chile,
and is stored in tanks at night. The salt, a is used as a heat transfer fluid. As energy as well as a 390 MW, 24-hour plant in the
mixture of sodium nitrate and potassium is needed, the salt can be dispatched to a Antofagasta Region.
April 2017
www.InfralinePlus.com

ExpertSpeak
Increasing supply of renewable energy to
help replace carbon-intensive energy sources
Yogendra Prasad, former chairman, NHPC, makes a strong case for
promoting renewable energy in India. According to him, deployment
of renewable energy will not only help reduce green house emission,
but will also lead to significant opportunities for job creation.

Everyone knows that today power carbon-intensive energy sources


sector is the most important sector for significantly in the world. Generating
economical growth and prosperity of electricity from renewable energy
any nation. Human activity is overload- rather than fossil fuels offers sig-
ing the atmosphere with carbon dioxide nificant public health benefits. The air
and other global warming emissions and water pollution emitted by coal
which trap heat steadily, drive the and natural gas plant is linked to
planets temperature and creates sig- breathing problems, neurological
nificant harmful impacts on our health, damage, heart Yogendra Prasad, former chairman, NHPC
environment and climate. Electricity attack and
production accounts for more than 50% cancer etc. It is Greater job creation in
60 of global warming emissions with the Replacing essential to renewable
majority generated by coal-fired power fossil simultaneously Jobs and other economic benefit
plants in the world. Natural gas plants fuel with are very high in developing renew-
develop pumped
produce more than 10% total emissions renewable able energy systems in comparison
approximately in the world. In contrast energy has
storage of coal and gas-fired systems. Fos-
to this, most renewable energy sources been found hydroelectric sil fuel technologies are typically
produce very little global warming to reduce projects mechanical and capital intensive, the
emissions. According to data aggre- premature renewable energy industry is more la-
gated by International Panel of climate mortality and lost bour intensive. Based on this, on aver-
change, life cycle global warming work days. It reduces overall health age, more jobs are created for each unit
emissions associated with renewable care cost. The aggregate national of electricity generated from renewable
energy including manufacturing, instal- economic impact associated with these sources than from fossil fuels. The
lation, operation and maintenance and health impacts of fossil fuel is sig- technical potential of each renewable
dismantling etc. are minimal. Com- nificantly high. Wind, solar and hydro energy source is based on their overall
pared with natural gas, which emits electric system generate electricity with availability given certain technological
CO2 between 0.6 to 2 Pounds Carbon no associated air pollution emissions. and environmental constrains. How-
dioxide equivalent/kWh and coal The geothermal and biomass energy ever, it is important to note that all of
which emits CO2 between 1.4 to 3.6 systems emit some air pollution but the technical potential cannot be tapped
pounds equivalent/kWh, wind emits 02 total air emissions are generally much due to conflict in land acquisition as
to 04 pounds of C02/kWh, Solar 0.07 lower than those of coal and natural well as higher short term cost of the
to 0.2 pounds CO2/kWH, Geothermal gas-fired plants. In addition, wind resources. In adding to this, there may
0.1 to 0.2 pounds/kWh and Hydro 0.1 and solar energy require essentially be some limitation in transmitting all
to 0.5 pounds CO2/kWh. Renewable no water to operate and hence do not the power to be generated as well as
electricity generation from biomass can pollute water resources at all. As such, several hindrances by the local people
have a wide range of global warming they do not interfere with agriculture, and other hurdles.
emissions depending on the references drinking water systems or other As on date, renewable energy which
and method of harvesting. important water needs. In contrast, has been developed is a tiny fraction of
Increasing the supply of renewable fossil fuel can have a significant impact its total potential available for elec-
energy would allow us to replace on water resources. tricity worldwide, but numerous studies
April 2017
www.InfralinePlus.com

have shown that renewable energy are also getting royalties based on In contrast, fossil fuel prices are
can be rapidly deployed to provide a the project annual revenue. Similarly, varying dramatically on upper side.
significant share of electricity needs of farmers and rural land owners can also With development of more solar and
the world. The jobs directly created in generate new sources of supplemental wind power project the only problem
the renewable industries and growth in income by producing feedstock for bio- is that in day time the power frequency
the renewable industry creates multiple mass power generation. goes high due to more power generation
effects. For example, industries in in the power system that the demand
renewable industries supply chain of Affordable power which is detrimental for safety of
benefits to unrelated local business With the development of renewal generators life of generating plants for
with benefit from increase of household energy, electricity can be provided which it is essential for us to develop
and business incomes. In addition to poor population of the country by simultaneously the pumped storage
to creating new jobs, the renewable stabilizing the prices of energies in hydroelectric projects for which lot of
energy offers important economic local future. The costs of renewable tech- potential is there in the country and
benefits to the people. Local gov- nologies are declining steadily and projects are also identified by Central
ernment collect property and income have been projected to drop in future. Electricity Authority (CEA). There is
taxes and other taxes from renewable For example, the average price of solar lot of shortage of power during peak
energy project owners. These revenues panel has dropped almost sixty percent hours during morning and evening
can help support vital public services approximately since 2011. The cost of for which storage typed hydroelectric
especially in rural communities where generating electricity from wind has projects must be developed to balance
projects are often located. Owners of dropped 20% in last five years. Cost the frequency as per grid code of
the land on which wind project are of renewable energy could decline Government of India. For this, lot of
built often receive lease payments on further in future with the enhancement potential is available in the country and
very high side in comparison to their of technologies. In hydro projects, after details of which are available withCEA.
agricultural products per megawatt commissioning the projects, the cost of (Yogendra Prasad has worked in the 61
of installed capacities. Local people energy declines day-by-day. post as CMD of NHPC, SJVPC and as
Chairman of NHDC and Uttrakhand
In addition to creating new jobs, the renewable Jal Vidhyut Nigam Limited. He has also
worked as honorary Vice Chairman
energy offers important economic local benefits
of International Hydro Association,
to the people. Local government collect property National Hydro Association, President
and income taxes and other taxes from renew- of Central Board of Irrigation &
able energy project owners. These revenues can Power, and Special Advisor (Energy) to
help support vital public services especially in ru- Govt. of Uttarakhand).
ral communities where projects are often located. The views in the article of the author are personal.
For suggestions email at feedback@infraline.com
April 2017
www.InfralinePlus.com

InDepth
Small hydro projects need
special treatment

62

SHPs projects are economical source of electricity, entitled to fiscal sops


India has estimated potential to generate 20,000 mw power from small hydro projects

By Team InfralinePlus

The Union power ministry is plan- quite slow due to challenges like scale, undermining growth prospects of
ning to come out with a new national geological and hydrological risks SHP projects.
hydropower policy in 2017-18, which involved in building hydel projects, The Centre has mooted radical
would incentivise large hydel projects which often lead to undue delays and policy changes in the existing hydro
at par with small hydropower projects cost escalation in project costs. That policy as it tries to push hydel gener-
(with capacity of up to 25 mw). The in turn makes tariff unpredictable. ation as a counterbalance to the massive
envisaged policy will definitely help That is the reason power distribution deployment of renewable capacity such
in expeditious harnessing of Indias companies are reluctant to sign long- as solar and wind. Since India does not
unutilised hydropower potential esti- term power purchase agreements with have much fuel for gas-based power
mated at above 1 lakh mw but it could hydropower projects. plants, there is now a policy push to the
also undercut prospects of small hydel In contrast, SHPs projects are hydro sector as hydel generation can
projects (SHPs) which need differential an economical source of electricity be ramped up and down, depending on
treatment to compete with large ones. because they are entitled to fiscal sops availability of electricity from solar and
India has nearly 43,000 mw like renewable energy plants. If the wind projects.
installed capacity based on large distinction between SHPs and large There will be a major thrust on
hydel projects against the potential hydel projects goes away, the latter hydro sector by different ways to
to generate 1.5 lakh mw electricity. would become commercially more bring down cost of electricity from
The pace of capacity addition remains attractive as they enjoy economies of this renewable source, power minister
April 2017
www.InfralinePlus.com

Piyush Goyal said recently. Hydro Since overhead engineering costs get India has estimated potential to
power is also renewable energy. We minimised and development costs spread generate 20,000 mw power from
are working on a position paper after over multiple units, the cost of such small hydro projects. It had targeted
studying all international experiences, systems is improved. While synchronous to harness at least 7,000 mw capacity
we will look very seriously to see generators capable of isolated plant by the end of March 2017. But actual
whether these should be categories as operation are often used, small hydro capacity addition was just 4,300 mw,
renewable power, Goyal said. plants connected to an electrical grid far less than the target.
system can use economical induction The comptroller and general (CAG),
Advantages of small hydro generators to further reduce installation which recently audited small hydel
SHP plants have certain inherent advan- cost and simplify control and operation. scheme, found glaring irregularities
tages over large hydro and other power in implementation of these projects
projects. For example, they can generate Policy interventions in areas ranging from preparation of
clean energy at a competitive cost and The recent amendments by the Central feasibility studies states to approval
have features that make them suitable for Electricity Regulatory Commission to detailed project reports in states
meeting electricity requirements during like Himachal Pradesh and Arunachal
peak hours. They are less affected by SHP plants have certain Pradesh. In certain cases, project devel-
rehabilitation and resettlement (R&R) inherent advantages opers struggled to obtain environment
problems vis--vis large hydro power over large hydro and clearance and acquire land, which led
plants and can meet the power require- them to finally abandon allotted projects.
ments of remote and isolated areas.
other power projects. The CAG report observed delays
Small hydro can be further subdi- For example, they can and problems in conducting feasibility
vided into mini hydro, usually defined generate clean en- studies for identifying potential sites
as less than 1,000 kW, and micro hydro ergy at a competitive for setting up Small Hydro Power
which is less than 100 kW. Micro cost and have features projects, which was a critical planning 63
hydro is usually the application of that make them suitable activity for development of small hydro
hydroelectric power sized for smaller for meeting electricity power. In Himachal Pradesh 37 consent
communities, single families or small letters were issued but the IPPs did not
enterprise. SHP plants may be con-
requirements during submit any DPR even after five years.
nected to conventional electrical distri- peak hours. They are And out of 88 DPRs submitted by
bution networks as a source of low-cost less affected by rehabil- Himurja to the Department of Energy
renewable energy. Alternatively, small itation and resettlement for technical approval, none had been
hydro projects may be built in isolated (R&R) problems approved and the IPPs had not sub-
areas that would be uneconomical to mitted feasibility study reports for 78
serve from a network, or in areas where (CERC) in grid code are a positive projects allotted to them.
there is no national electrical distri- for SHP plants with less than 10 MW Further, due to delays and problems
bution network. capacity. As per the amendments, re- in according technical approvals to
Since SHPs usually have minimal newable energy power plants including DPRs, allotment of projects, acquiring
reservoirs and civil construction work, SHPs with installed capacity of less land and obtaining forest and envi-
they are seen as having a relatively than 10 MW will be treated as must ronmental clearances, several projects
low environmental impact compared run and will not be subjected to merit could not be taken up and completed
to large hydro projects. Small hydro is order dispatch principles. in time. In Arunachal Pradesh, the state
often developed using existing dams Also, the allowed variation of up government had entered into agreement
or through development of new dams to 30 per cent of the schedule and the with private developers for setting
whose primary purpose is river and lake burden of applicable Unscheduled up 52 small/mini/micro hydro power
water-level control, or irrigation. Many Interchange (UI) charges to be shared projects of 714 MW but none had been
companies offer standardized turbine among system users on an all-India commissioned. Similarly, in Chhat-
generator packages in the approximate basis and not on project developers tisgarh the state nodal agency sanc-
size range of 200 kW to 10 MW. These and permission to fine-tune schedules tioned 50 SHP projects of 612 MW but
water to wire packages simplify the (based on the forecast) as close as three none had been commissioned.
planning and development of the site hours before the actual generation The national auditor recommended
since one vendor looks after most of the should facilitate further integration of that the nodal agency, Ministry of New
equipment supply. SHP projects. and Renewable Energy (MNRE), must
April 2017
www.InfralinePlus.com

InDepth

ensure that pre-requisites such as land


and statutory clearances are obtained
before release of central financial assis-
tance to developers in order to avoid
time and cost overruns. It also recom-
mended that the MNRE should focus
on reviewing SHP projects that are
held up or are under performing to find
solutions to the problems hindering the
completion of these projects.
Audit also found delays and problems
in conducting feasibility studies for iden-
tifying potential sites for setting up SHP
projects, which was a critical planning
activity for development of small hydro
Power. In Himachal Pradesh 37 consent
letters were issued but the IPPs did not
submit any DPRs even after five years. Presently, SHPs account for 10 per cent of Indias
Approved projects could not be com- total renewable power generation capacity. This
pleted for various reasons such as negli- share can go up if problems facing SHP develop-
gence of contractors, midway changes in ers are addressed by the government. But SHP
design, etc. This led to significant time
and cost overruns. In Bihar, 15 projects
projects, especially those in remote areas face in-
had not been commissioned even after a frastructural bottlenecks in power evacuation. The
64
delay of 37 to 88 months and incurring single biggest challenge is the construction risk
an expenditure of Rs 128 crore, the audit
report said. SHP is likely to go up significantly, not attractive enough for developers.
Audit also observed deficiencies in given the support now available from Timely revision of power tariffs
post-commissioning maintenance of improved fiscal and regulatory mea- by regulators to ensure that the tariffs
the projects. Test check revealed that sures. India has targeted to meet 40 per fully cover the capital costs likely to be
60 projects in five states were shut cent of its electricity requirement from incurred by developers would remain
down, under repair and maintenance non-fossil sources by 2030. critical for the viability of SHP plants.
or working below capacity, resulting Presently, SHPs account for 10 per The lack of consistency in SHP tariff
in loss of power generation, revenue cent of Indias total renewable power norms across states hinders invest-
losses, unfruitful expenditure on out of generation capacity. This share can go ments in the sector with several states
order plants, wasteful expenditure on up if problems facing SHP developers having tariffs which do not ensure
abandoned plants, etc. are addressed by the government. adequate returns on investments.
There were instances of non- But SHP projects, especially those in Besides, Renewable Purchase Obliga-
recovery of liquidated damages, remote areas face infrastructural bottle- tions regulations also vary from state to
environmental dues, commitment fees, necks in power evacuation. The single state, said power sector experts.
diversion of funds, excess payments biggest challenge is the construction Apart from being an economical
to developers, non-revision of tariffs, risk, given that most SHP projects are source of electricity, SHP projects
etc. There were also deficiencies in located in remote, hilly/mountainous can also cater to Indias peak power
monitoring and evaluation of projects regions with severe infrastructural demand a potential that must be
by MNRE and state agencies. constraints, says Icra. tapped given the difficulty of ramping
But experts are optimistic that The locational hurdles also serve to up gas-bed generation capacity. The
demand for power from SHPs would prolong the gestation period and push government must provide a differ-
remain strong given the Narendra Modi up the per-MW capital costs even as ential treatment for SHP projects if it
governments reliance on non-fossil the power evacuation and transmission wants this potential to be harnessed
fuel generated electricity to drive the facilities at the sites remain inadequate. expeditiously.
Indian economy. According to credit Further, the preferential tariff being
rating agency Icra, the demand for offered to developers in some states are For suggestions email at feedback@infraline.com
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April 2017
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StatisticsRenewableEnergy
Programme/ Scheme wise Physical Progress in 2016-17 (Cumulative upto the month
of February, 2017)
FY- 2016-17 Cumulative Achievements
Sector Achievement (April
Target (as on 28.02.2017)
- February, 2017)

I. GRID-INTERACTIVE POWER (CAPACITIES IN MW)

Wind Power 4000.00 2373.90 29151.29

Solar Power 12000.00 2803.77 9566.66

Small Hydro Power 250.00 73.15 4346.85

BioPower (Biomass & Gasification and 400.00 157.00 8182.00


Bagasse Cogeneration)

Waste to Power 10.00 7.50 114.08

Total 16660.00 5415.32 51360.88

II. OFF-GRID/ CAPTIVE POWER (CAPACITIES IN MWEQ)

Waste to Energy 15.00 5.57 164.45

Biomass(non-bagasse) Cogeneration 60.00 0.00 651.91

Biomass Gasifiers
2.00 0.00 18.34
-Rural
66
-Industrial 8.00 4.30 168.54

Aero-Genrators/Hybrid systems 1.00 0.29 2.98

SPV Systems 100.00 131.91 438.95

Water mills/micro hydel 1 MW + 500 Water Mills 0.10 MW + 100 Water Mills 18.81

Total 187.00 142.17 1463.98

III. OTHER RENEWABLE ENERGY SYSTEMS

Family Biogas Plants (in Lakhs) 1.00 0.42 49.52

REC Report March 2017


Indian Energy Exchange

Cleared Volume Cleared No. Of


Year | Month Type Buy Bids (REC) Sell Bids (REC)
(REC) Price(Rs/REC) Participants

Solar 112,445 3,871,976 112,445 3,500 622


March2017
Non-Solar 572,357 9,370,586 572,357 1,500 627

PXIL

Buy Bid (No. of Sell Bid (No. of MCP (Rs. / MCV (No. of certificate)
Year | Month Type
certificates) certificates) Certificate) Qty (MWH)

Solar 31,177 1,139,108 3,500 31,177


March'2017
Non-Solar 316,346 3,267,336 1,500 316,346
April 2017
www.InfralinePlus.com

State Wise & Source Wise Renewable Energy Generation for the month of February,
2017 (All fig. in MU)
Name of State/ Total
Wind Solar Biomass Bagasse Small Hydro Other
UT/ Organisation Generation
Chandigarh 0.00 0.45 0.00 0.00 0.00 0.00 0.45
Delhi 0.00 0.26 0.00 0.00 0.00 11.32 11.58
Haryana 0.00 3.08 14.80 0.00 10.75 0.00 28.63
HP 0.00 0.00 0.00 0.00 83.42 0.00 83.42
J&K 0.00 0.00 0.00 0.00 20.78 0.00 20.78
Punjab 0.00 80.13 36.84 39.77 12.43 17.40 186.57
Rajasthan 353.29 183.69 19.08 0.00 1.51 0.00 557.58
Uttar Pradesh 0.00 29.04 15.39 575.85 2.71 6.34 629.32
Uttarakhand 0.00 3.17 0.00 22.22 24.60 0.00 49.99
NTPC-Dadri, Fbd, Un-
0.00 10.68 0.00 0.00 0.00 0.00 10.68
chahar, Sing.& Bhadla
Oil India Ltd 12.37 2.11 0.00 0.00 0.00 0.00 14.47
Total NR 365.66 312.61 86.11 637.84 156.20 35.07 1593.48
Chhattisgarh 0.00 11.19 108.22 0.00 1.62 0.00 121.03
NTPC Raj garh
0.00 7.43 0.00 0.00 0.00 0.00 7.43
(Chhattigarh)
Gujarat 550.71 152.19 1.92 0.00 3.36 0.00 708.18
Madhya Pradesh 251.73 127.10 3.20 0.00 19.40 3.62 405.06
Maharashtra 245.26 52.93 50.44 234.59 79.34 0.00 662.57
Dadra and Nagar Haveli 0.00 0.15 0.00 0.00 0.00 0.00 0.15
Daman & Diu 0.00 1.60 0.00 0.00 0.00 0.00 1.60 67
Total WR 1047.70 352.60 163.78 234.59 103.73 3.62 1906.02
Andhra Pradesh 221.50 163.58 30.11 24.62 20.58 0.68 461.08
Telangana 13.41 162.32 19.02 21.37 3.93 7.69 227.74
Karnataka 353.43 82.78 15.39 53.84 82.78 30.30 618.51
Kerala 3.42 2.74 0.00 16.58 0.00 0.00 22.74
NTPC Ramagundam 0.00 40.55 0.00 0.00 0.00 0.00 40.55
Tamil Nadu 480.85 196.87 21.70 50.63 1.57 0.00 751.60
Lakshadweep 0.00 0.20 0.00 0.00 0.00 0.00 0.20
Puducherry 0.00 0.04 0.00 0.00 0.00 0.00 0.04
Total SR 1072.61 649.07 86.21 167.04 108.85 38.67 2122.46
Andaman Nicobar 0.00 0.39 0.00 0.00 1.07 0.00 1.46
Bihar 0.00 11.86 0.00 35.38 1.28 0.00 48.52
Jharkhand 0.00 3.25 0.00 0.00 0.00 0.00 3.25
Orissa 0.00 18.86 0.00 0.00 7.82 0.00 26.68
Sikkim 0.00 0.00 0.00 0.00 1.50 0.00 1.50
West Bengal 0.00 1.51 0.00 117.39 11.95 0.00 130.85
DVC 0.00 0.01 0.00 0.00 9.29 0.00 9.30
NTPC Andman/Talcher 0.00 1.64 0.00 0.00 0.00 0.00 1.64
Total ER 0.00 37.52 0.00 152.78 32.91 0.00 223.21
Arunachal Pradesh 0.00 0.01 0.00 0.00 0.03 0.00 0.03
Assam 0.00 2.85 0.00 0.00 1.35 0.00 4.20
Manipur 0.00 0.01 0.00 0.00 0.00 0.00 0.01
Meghalaya 0.00 0.00 0.00 0.00 2.33 0.00 2.33
Mizoram 0.00 0.00 0.00 0.00 4.00 0.00 4.00
Nagaland 0.00 0.00 0.00 0.00 2.58 0.00 2.58
Tripura 0.00 0.00 0.00 0.00 3.01 0.00 3.01
NEEPCO 0.00 0.62 0.00 0.00 0.00 0.00 0.62
Total NER 0.00 3.48 0.00 0.00 13.30 0.00 16.78
All India Total 2485.97 1355.28 336.10 1192.25 414.99 77.36 5861.95
April 2017
www.InfralinePlus.com

OffBeat
Port sector on cusp of explosive growth
New model concession expected to go a long way in improving
investment sentiments
Sagarmala project could lead to annual logistics cost savings of close
to Rs 35,000 crore

68

by Team InfralinePlus

As Indias international trade picks up has decided to halve the timeframe will hold 51 per cent equity until 3
pace after nearly two years free fall, for implementation of its flagship years after Commercial Operation Date
entailing increased flow of cargoes, the Sagarmala project, which envisages (COD) and 26 per cent thereafter for
pace of capacity addition in the domes- port-led development model to boost another 3 years. Hence, the private party
tic port sector is likely to quicken in exports. Countries like the US, Korea would be free to exist after 6 years from
coming days. Also bolstering sentiments and China have reaped huge benefits COD. The concessionaire may approach
about the port sector is the governments from this model of growth. However, the Concessioning Authority to waive
plan to increase its exports to $900 bil- the success of the project critically the equity holding requirement during
lion by 2020 from nearly $260 billion hinges on private participation. the second 3 year term if performance
in 2015-16. On the import side, Indias In this context, the governments parameters have been achieved during
fast-growing demand petroleum con- recent move to de-risk private investors the first three year period.
sumption means higher crude oil import. through introduction of a new model The new MCA is also aimed at
Indian ports handle about 90 per concession is also expected to go a long facilitating availability of low cost
cent by volume and 70 per cent of way towards improving investment long term funds to concessionaire so
value of the countrys export-import sentiments about the sector. The revised as to improve the financial viability
cargo. Meanwhile, the government MCA has provides that concessionaire of the projects and is based on the
April 2017
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Model Tripartite Agreement approved Rating agency recently said in an in cargo handled by the non-major
by Department of Economic Affairs. update, The Indian port sector is at ports was 4.9 per cent compared to
Under this agreement, the conces- a crossroads. Relatively untapped all 1 per cent decline of recorded in the
sionaire can issue bonds on completion these decades as far as its potential to corresponding period of previous year.
of one year of operation for refinancing contribute to economic development is Over the medium to long term, the
of debt, which will help in optimising concerned, it is poised for the big leap outlook for cargo growth continues to
project financing costs. over the next decade, if only the Union be strong, driven by domestic require-
The new agreement also provides governments ambitious roadmap ments, said analysts.
for compensating developers for all translates into change at the ground, The installed capacity of the ports
unforeseen changes in law except nay, port level. has gone up to 1716 million tonne
imposition of new direct tax. It also In FY16, major ports, with a per annum (mmtpa) in 2015-16 from
has provisions for a mid-term review volume of 606 million tonnes, regis- 1312 mtpa in 2012-13 and is projected
by a Review Board at the end of 15 tered moderate 4 per cent growth over to reach 1897 MTPA by the end of
years from COD to arrive at required the previous fiscal, largely due to a the 2016-17. Similarly, cargo traffic
mitigation measures. The triggers and slowdown in coal imports. A decline of handled by the ports has increased to
nature and quantum of mitigation mea- 22 per cent in iron-ore cargo volumes 1072 mt in 2015-16 from 934 mt in
sures will be as per guidelines issued 2012-13 and is expected to hit 1133
by the Government in this regard. The installed capacity mt by the end of 2016-17. Major ports
Presently, revenue share is payable added a record 94 MTPA capacity
on Gross Revenue, calculated as per
of the ports has gone in 2015-16, which took aggregate
tariff ceilings even if concessionaire up to 1716 million capacity to 965 MTPA from 871 MTPA
has to allow discount to keep the tonne per annum (mmt- at end of the preceding fiscal.
charges competitive. With a view to pa) in 2015-16 from
have a balanced risk allocation, the 1312 mtpa in 2012-13 National perspective plan on 69
new MCA provides that concessionaire and is projected to Sagarmala project
will be entitled to approach Port to con- Meanwhile, the government has
sider and approve discounts on ceiling
reach 1897 MTPA by unveiled national perspective plan on
traffic and revenue share will be paid the end of the 2016-17. its ambitious Sagarmala project which
on the approved discounted tariff of the Similarly, cargo traffic envisages port-led industrialisation and
approved revenue share. Cargo storage handled by the ports economic development of the country
charges will be excluded while com- has increased to 1072 and make Indian exports competitive. In
puting Gross Revenue for the purpose mt in 2015-16 from 934 a major boost to port-led development
of Revenue Sharing. model, the government has decided to
The Union cabinet has also
mt in 2012-13 and is reduce timeframe of its ambitious Sagar-
approved shipping ministrys proposal expected to hit 1133 mt mala project by half. Following Prime
to replace the Major Port Trusts Act, by the end of 2016-17 Minister Narendra Modis intervention,
1963 with the Major Port Authorities it has been decided to finish Sagarmala
Bill, 2016, which will allow PPP was another factor behind the subdued project in five years instead of 10 years
operators to fix tariff based on market performance. But industry sources to create 1 crore jobs, shipping minister
conditions. An independent Review said that cargo throughput at the major said at the maiden Maritime India
Board has been proposed to be created ports in the current fiscal has increased, Summit. The programme could lead to
to carry out the residual function of driven by a five-fold increase in iron annual logistics cost savings of close to
the erstwhile TAMP for Major Ports, ore cargo volumes. Rs35,000 crore, he added.
to look into disputes between ports The volume of seaborne cargo This plan is based on four stra-
and PPP concessionaires, to review traffic handled by ports is mainly tegic levers - optimising multi-modal
stressed PPP projects and suggest mea- shaped by the levels and changes in transport to reduce cost of domestic
sures to review stressed PPP projects both the global and domestic activity. cargo, minimising time and cost of
and suggest measures to revive such Cargo traffic at Indias 12 major ports export-import cargo logistics, lowering
projects and to look into complaints during first six months (April-Sep- costs for bulk industries by locating
regarding services rendered by the tember) of 2016-17 was 315.42 million them closer to the coast, and improving
ports and private companies operating tonnes, registering growth of 5.2 per export competitiveness by locating dis-
within the ports would be constituted. cent over the previous year. The growth crete manufacturing clusters near ports.
April 2017
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OffBeat

The Sagarmala project is an amalga-


mation of 150 projects categorised
into port modernisation, connectivity,
port-led industrialisation and coastal
community development, with the gov-
ernment planning to invest Rs 12 lakh
crore under various programmes.
Under the port modernisation
drive, 53 projects are expected to be
undertaken to ensure the port han-
dling capacity is increased by 1,000
mmtpa, which includes 6 new mega
port projects. Projects under this sub-
category are expected to come at an
investment of $15 billion. Similarly, in
Under the port modernisation drive, 53 projects
the connectivity category, $30 billion
investment is projected for 10,000
are expected to be undertaken to ensure the port
km of new connectivity infrastructure handling capacity is increased by 1,000 mmtpa,
projects as well as 7 new dry ports. which includes 6 new mega port projects.
Under port-led industrialisation, 27 Projects under this subcategory are expected to
industrial clusters will be developed come at an investment of $15 billion. Similarly, in
with estimated investment of $15 the connectivity category, $30 billion investment
billion. The Sagarmala project is
70
is projected for 10,000 km of new connectivity
expected to give a big boost to the
Make in India programme.
infrastructure projects as well as 7 new dry ports
The clusters will have industries
Challenges in implementing through various initiatives like award
from the energy, bulk materials as
Sagarmala project of new projects, bringing in clarity on
well as discrete manufacturing seg-
But challenges in implementing the tariff front, increase in the autonomy
ments, all of which will be able to use
Sagarmala project are just as formi- of major ports, plans for Sagarmala
high-quality infrastructure which is
dable, with as much as Rs 4 lakh crore and other connectivity related projects,
fully integrated with the corresponding
of investment needed in infrastructure. to revive non-functional ports, to
ports. A separate perspective plan for The project would be successful only if encourage coastal shipping and to
the CEZs and a detailed master plan the private sector chips in with its share improve the logistics modal mix.
for major ports are also being worked of investment. And this is not likely But experts said that the near-to-
out. Successful implementation of to happen unless the structural and medium term outlook for the port sector
Sagarmala can be a game-changer in systemic issues hindering growth are remains subdued because of uncertainty
terms of savings, employment gen- resolved, said analysts. over particular cargo categories like
eration, and value creation. Studies Jaideep Ghosh, Partner & Head of imported coal, due to narrowing domestic
have shown than the Sagarmala project Transport, KPMG, said, The overhaul demand-supply gap following the
would help in bringing down logistics of Indias port infrastructure was long increase in coal production by Coal India.
costs for domestic manufacturers, overdue. The Sagarmala initiative is On the other hand, iron ore export
thereby improving competitiveness of quite grand in its scope though it might volumes could improve to some extent,
Indian exports. be too ambitious to implement in a on low base, due to export contract of
In India, there are a large number of decades time. It seems a better idea to NMDC, elimination of export duty on
coal-based power plants located 800- develop port-based clusters on a pilot low grade iron ore and restarting of
1,000 km away from mines. Coal trans- basis at one or two places before the plan mining operations in Goa - as has been
portation costs for such projects via rail is implemented at a pan-India level. evident in the five month volumes in
or road alone account for up to 35 per According to Icra, the Centre has FY2017, where iron ore volumes have
cent of power generation cost. Coastal shown strong intent to develop port witnessed a jump.
shipping can bring down coal transpor- infrastructure and has been addressing
tation costs by up to 60-80 per cent. the constraints faced by the sector For suggestions email at feedback@infraline.com
April 2017
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People in News
B P Kanungo appointed RBI Deputy Governor
PESB recommends N B Gupta as
for three years. The Appointments Com- PFCs Director-Finance
mittee of Cabinet (ACC) has approved his
appointment to the post with effect from
the date of taking over the charge on or af-
ter April 3. He has been appointed in place
of R Gandhi. The ACC has also named
Dilip S Shanghvi as Member, Western
Local Board of RBI. The appointment of
Shanghvi, the promoter of Sun Pharma-
ceutical Industries Limited, to the post is
for a period of four years. Kanungo was
B P Kanungo has been appointed Deputy in March last year appointed as executive
Governor in Reserve Bank of India (RBI) director in the central bank.

Power Secretary P K Pujari gets additional charge of DoT Secy The Public Enterprises Selection Board
(PESB) has recommended Naveen
Power Secretary Pradeep Kumar Pujari Bhushan Guptas name for the post
has been given the additional charge of director finance at Power Finance
of the post of Secretary, Department Corporation. At present Gupta is
of Telecommunications (DoT). The general manager finance at PFC. PESB
move comes after former Telecom had shortlisted 13 candidates for the
Secretary J S Deepak was named Indias post eight from PFC, two from NTPC,
next Ambassador to the World Trade one each from BSNL, SECI and the
Organisation (WTO).The competent department of expenditure. PFC is into
authority has approved assignment of financing power projects as well as 71
additional charge of Secretary, DoT to transmission projects. The company is
Pujari with immediate effect. Pujari is a planning to tap a significant portion of
1981 batch IAS officer of Gujarat cadre. the Rs 6 lakh crore investment that is
Deepak, a 1982 batch IAS officer from likely to go into the renewable sector
Uttar Pradesh cadre, was on March 1, in India.
shifted from the Telecom Ministry and
made Officer on Special Duty in the
Commerce department.

Ex-MNRE Secy Upendra Tripathy to be ISA Director General

Former New and Renewable Energy solar resource rich countries jointly by
Secretary Upendra Tripathy has been Indian Prime Minister Narendra Modi and
appointed as the full-time interim Director French President Francois Hollande in
General of International Solar Alliance. the presence of the then UN Secretary
Piyush Goyal, Union Minister for Power, General Ban Ki Moon on the first day of
Coal, New and Renewable Energy and the Paris Climate Conference or CoP21.
Mines, and Ms Segolene Royal, Minister The ISAs mission and vision is to provide
for Environment, Energy and Marine a dedicated platform for cooperation
Affairs, Government of France, jointly among solar resource rich countries where
decided to appoint Upendra Tripathy, as the global community including bilateral
the Interim Director General (IDG) of the and multilateral organisations, corporates,
International Solar Alliance (ISA) on a industry, and stakeholders can make a
full-time basis. Tripathy was secretary positive contribution to assist and help
Ministry of New and Renewable Energy achieve the common goals of increasing
from April 1, 2014 until October 31, 2016. and union governments in India for use of the solar energy in meeting energy
Tripathy is an Indian Administrative the last 36 years. The International needs of prospective ISA member
Service (IAS) officer of Karnataka Cadre. Solar Alliance (ISA) was launched on countries in a safe, convenient, affordable,
He has worked with local, provincial November 30, 2015 as a coalition of the equitable and sustainable manner.
April 2017
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People in News
Dharmesh Arora appointed managing director of FAG Bearings India
Oil Ministry brings Shazia Ilmi on
effective March 6, 2017. Arora is currently the EILs board
president and CEO of the Schaeffler Group,
a leading global integrated automotive and
industrial supplier, in India (the parent com-
pany of FAG Bearings India), a position that
he will continue to hold. He will also continue
to be the managing director of INA Bearings
India, another group company of Schaeffler
in India. FAG Bearings India together with
INA Bearings India and LuK India forms the
Schaeffler Group in India. Arora replaces Ra-
Dharmesh Arora has been appointed as the jendra Anandpara, who has decided to leave
managing director of FAG Bearings India the company for personal reasons.

Maninder Singh Juneja appointed as MD & CEO of NBHC


State-run Engineers India Ltd said that
National Bulk Handling Corporation (NBHC), Shazia Ilmi Malik has been appointed
Indias leading provider of integrated as additional director (non-official
commodity and collateral management part-time independent). Ministry
services of agri-commodities has announced of Petroleum and Natural Gas has
appointment of Maninder Singh Juneja as approved the appointment of Ilmi from
the managing director and CEO. Juneja March 27, 2017 to January 30, 2020 or
joined True North (erstwhile India Value till further order, whichever is earlier,
Fund Associates) in December 2016 as the company said in a BSE filing.
72 the managing director which owns 100 According to the statement, her inter-
per cent of NBHC. Juneja takes reins banking policies paradigm is creating new se relationship between the directors of
from Anil Choudhary, founder MD & CEO, opportunities in terms of being able to serve Engineers India Ltd is NIL. Earlier, Ilmi
NBHC, who will continue to associate with farmers. I look forward to participating in was appointed as a brand ambassador
NBHC as an executive vice-chairman in the this exciting journey where I can take NBHC for the Prime Ministers Swachh Bharat
company. Juneja was previously associated forward, build synergies and craft linkage Mission programme. She is also a
with ICICI Bank as senior general with other financial services, create value, member of the Film Certification
manager. The changing agriculture and Juneja said. Appellate Tribunal.

Major bureaucratic reshuffle in central government, 16 Joint Secretaries appointed

As many as 16 Joint Secretaries have been and Empowerment. He is at present Financial


appointed in different central government Commissioner, Employees State Insurance
departments as part of mid-level bureau- Corporation (ESIC) under the Ministry of
cratic reshuffle effected in March. Of the Labour and Employment. Sandhya Shukla, an
total bureaucrats, only six are from Indian officer of Indian Audit and Accounts Service,
Administrative Service (IAS) and rest from will be new Financial Commissioner, ESIC.
other central services like Indian Revenue Venudhar Reddy Nukala, an IIS officer, has
Service (IRS) and Indian Information Service been appointed as JS, Department of Invest-
(IIS), among others. Anita Karwal, a 1988 appointed as JS in Department of Animal ment and Public Asset Management. IRS
batch IAS officer of Gujarat cadre, has been Husbandry, Dairying and Fisheries. He is a officer Ruby Srivastava will be Director (Fi-
appointed Joint Secretary in Department of Bihar cadre IAS officer. Ashok K R Parmar, nance), Nuclear Power Corporation of India
School Education and Literacy. Shri Prakash, will be new JS in I and B Ministry in place of Ltd. Niva Singh and Vandita Kaul will be Joint
an officer of Central Secretariat Service, will Singh. Parmar is a 1992 batch IAS officer of Secretaries in Ministry of Minority Affairs and
be JS in Home Ministry, an order issued by Jammu and Kashmir cadre. Manoj K Pingua Department of Financial Services, respective-
Personnel Ministry said. Aparna S Sharma, has also been appointed JS in the same min- ly. Raman Kant Mishra, an officer of Indian
also from the same service, will be JS, istry. He is at present Joint Secretary, Minis- Forest Service, has been named as Additional
Department of Chemicals and Petrochemi- try of Tribal Affairs. U Venkateswarlu, a 1986 Director General, National Museum under the
cals. Mihir K Singh has been moved out of batch IAS officer of Tripura cadre, has been Ministry of Culture. Chandrakar Bharti, will be
Information and Broadcasting Ministry and appointed JS, Department of Social Justice JS, Department of Defence Production.
April 2017
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Reports & Studies


EU must shut coal plants by 2030 to meet climate pledge: Study

said recently. The goal set at the December budget by 85 percent by then if it continues
2015 Paris conference to maintain average with current emissions rates at coal plants.
temperature increases to less than two It said there were 315 coal plants across
degrees Celsius (3.6 degrees Fahrenheit) the 28-nation bloc, and that 11 newly an-
over pre-industrial levels requires the nounced plants would raise EU emissions
gradual closure of EU coal plants, Climate to almost twice the levels required to limit
Analytics said. The long-term temperature temperature rises. We find the cheap-
goal adopted under the Paris agreement... est way for the EU to make the emissions
requires a rapid decarbonisation of the cuts required to meet its Paris Agreement
global power sector and the phase out of commitments is to phase out coal from the
the last unabated coal-fired power plant electricity sector, and replace this capacity
in the EU by around 2030, the report said. with renewables and energy efficiency
Climate Analytics estimated that the EUs measures, said Paola Yanguas Parra, a
The European Union must close all 315 of carbon budget, which is how much carbon lead author of the report. Parra said Ger-
its coal-fired power plants by 2030 in order dioxide it can emit to stay under two de- many and Poland had the most work to do
to meet its commitments under the Paris grees Celsius, is at 6.5 giga tonnes by 2050. as they were together responsible for 54
climate agreement, a research institute The institute said the EU will exceed the percent of emissions from coal.

IIT Bombay: Chennai and Mumbai have high wind energy potential
Of the six cities studied by Indian Institute demand scenario in the major cities, said
of Technology, Bombay researchers, Chennai Prof. Subimal Ghosh from the Department
and Mumbai seem to have the highest poten- of Civil Engineering, IIT Bombay, and one of
tial to harvest wind energy during the time the authors of the paper. Our study tries to
when the wind energy potential is very high answer the question if possible extraction of
(active period) during the monsoon period. wind energy in the six cities can be relied on 73
Compared with these two cities, Indore, to meet the additional power demand during
Ahmedabad and Kolkata have less potential prolonged dry spells in the monsoon season.
to harvest wind energy; Delhi has the least Mumbai and Chennai have predominantly
potential. The results were published in the higher-than-average wind energy potential
journal Meteorology and Atmospheric Phys- during the active period compared with the
ics. The researchers studied the strength of energy potential during the active period also break periods. In the case of Delhi, besides
southwest wind during the time of the mon- coincides with more rainfall; there is less that the likelihood of wind energy potential
soon and called the period when the wind rainfall and less wind energy potential during being above average is much less, a large
energy potential is high, the active period and the break period. The idea behind the study number of high-rise buildings further damp-
the period when the wind energy potential was know what the implications of the active ens the prospects of efficient wind energy
is low, the break period. The high wind and break periods would have on energy extraction.

Renewable energy expansion cannot deliver Paris climate goals


Expansion of renewable energy cannot by it- tools to track progress, especially at the coun-
self stave off catastrophic climate change, sci- try level. To provide a better toolkit, Peters
entists have warned. Even if solar and wind ca- and colleagues broke down the energy system
pacity continues to grow at breakneck speed, it into half-a-dozen indicators -- GDP growth,
will not be fast enough to cap global warming energy used per unit of GDP, CO2 emissions
under two degrees Celsius (3.6 degrees Fahr- per unit of energy, share of fossil fuels in the
enheit), the target set down in the landmark energy mix, etc. Wind and solar alone are not
2015 Paris climate treaty, they reported in the sufficient to meet the goals, Peters said. The
journal Nature Climate Change. The rapid bottom line, the study suggests, is how much
deployment of wind, solar and electric cars Earth is overheating mainly due to the burning carbon pollution seeps into the atmosphere,
gives some hope, lead author Glen Peters, of oil, gas and especially coal to power the and on that score renewable have -- so far
a researcher at the Center for International global economy. Barely 1C (1.8F) of warming -- barely made a dent. Investment in solar and
Climate and Environmental Research in Oslo, so far has already led to deadly heat waves, wind has soared, outstripping fossil fuels for
Norway, said. But at this stage, these tech- drought and super storms engorged by rising the first time last year. And renewables share
nologies are not really displacing the growth seas. The 196-nation Paris Agreement set a of global energy consumption has increased
in fossil fuels or conventional transportation. collective goal to cap warming, but lacks the five-fold since 2000.
April 2017
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Reports & Studies


UDAY has been successful in restoring financial health of power distribution cos: Report

objective of restoring financial health be similarly restructured shortly.These


of DISCOMs by transferring almost 75 measures alone are expected to reduce
percent of their debt to the state govern- annual aggregate interest cost burden by
ments and reducing interest cost burden Rs 160 billion (USD 2.4 billion) (down 65
on the remaining 25 percent debt, a Bridge percent). More importantly, apart from the
to India report says. DISCOMs were under one-off financial engineering exercise, a key
heavy burden and their financials were in a difference of UDAY over previous restructur-
mess back in 2015 with aggregate debt of ing schemes is that it is designed to reduce
Rs 4.3 trillion (USD 65 billion) and annual incentives for state governments to meddle
losses of Rs 600 billion (USD 9 billion) at the in power pricing and DISCOM operations,
end of March, 2015. Out of the total debt of the report says. All ongoing financial losses
Rs 3.8 trillion (USD 58 billion) attributable of the DISCOMs must be funded directly by
The Ujwal DISCOM Assurance Yojana to the 26 UDAY states and union territories, the respective state governments instead
(UDAY) scheme for financial and operational 61 percent has been already transferred of commercial borrowings. If this aspect is
reform of power distribution companies to state governments and/or refinanced in enforced in principle, we believe that it will
(DISCOMs) has been undeniably suc- the form of state government guaranteed break the cycle of financial boom and bust
cessful in achieving its most important bonds. Another 10 percent is expected to for DISCOMs forever.

China, India led slowdown in coal power development, says report


Chinas clampdown on new coal December, said no further coal power
projects and reluctance by backers capacity beyond that currently under
to provide further funds in India are construction will be needed until at least
mainly responsible for last years 2027. In China and India, 68 gigawatts
drop in the amount of coal-powered of construction is frozen at more than
74 generation capacity under development, 100 project sites, according to the
environmental groups said in a report. report. The research also found that coal
Greenpeace, the Sierra Club, and plant retirements are taking place at an
CoalSwarm found global pre-construction unprecedented pace, with 64 gigawatts
planning fell 48% and new construction of retirements in the past two years,
starts dropped 62% last year compared mainly in the European Union and the US.
with 2015, according to the report, titled Meanwhile, the report identified 10 hot
Boom and Bust 2017: Tracking The Global according to the report. In India, the spot countries including Turkey, Indonesia,
Coal Plant Pipeline. China last year ministry of power said in June that the Vietnam and Japan, that have failed to
imposed restrictions on further expansion country had enough coal-fired plants develop their renewable-energy sectors in
of coal-power capacity amid increasingly to meet demand through 2019, while a step with their peers while continuing to
low utilization rates at existing plants, draft National Energy Plan, released in build and plan new coal plants.

Indian gas prices far below average production cost: Icra


The new natural gas prices for producers addressed on a priority in order to incentivise
in India are well below the average cost of domestic production and balance the interest
production, rating agency Icra has noted. of upstream producers with consumers,
The government had recently marginally the report said. As per the new gas pricing
cut the natural gas price paid to producers formula approved in October 2014, gas prices
to $2.48 per million British thermal unit are to be revised every six months. The
(mbtu) effective for six months from April price was $5.05 per mbtu when the formula
1. With the latest marginal fall from $2.50 was first applied in November 2014. The
per mbtu for the second half of 2016-17, the government has, however, raised the ceiling
domestic price is now well below the average price for gas exploration in difficult areas like
cost of production for many producers for a deep seas which are unviable to develop as
sustained period, leading to losses, which has impact on the gas producers, Icras Senior per the existing pricing formula. The cap for
forced the industry to seek a floor price, Icra Vice-President K. Ravichandran said. The the April 1, 2017 to October 31, 2017 period
said in a report. The material appreciation issue of such low prices for a sustained period will be $5.56 per mbtu, up from $5.3 per
in the Indian rupee against the US dollar, making exploration and production unviable, mbtu, which could incentivise development of
if it sustains, would have a further adverse even for benign geologies, would have to be such projects, Icra said.
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