Infraline PLUS

June 2012 Volume 1 | Issue 2 | `100 This Issue is Complimentary www.InfralinePlus.
com
The ComPleTe energy SeCTor magazIne for PolICy and deCISIon makerS
GET, sET, Go
LN Mittals oil refinery in Punjab gets started
?A Gone In
WhIff
Indias Political Plight
To side with the powerful USA or choose Iran instead
Depleting gas supplies leave power plants in the lurch
Director, Essar Power on the challeges of power infrastructure
Coal Minister Sriprakash Jaiswal on the fiasco about coal blocks allocation
Should diesel be deregulated? Our expert view
AK Agarwal on PFCs new subsidiary to fund RE projects
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InfralinePlus
The Complete Energy Sector Magazine for Policy and Decision Makers
June 2012 | Vol 1 No 2
Editors Letter
We are here again with the second edition of InfralinePlus. Since we launched the magazine, nothing much has changed in the Energy sector, the bottlenecks that derail the infrastructural growth do not seem to vanish any time soon. But we, at Infraline, have already initiated a process that we want the government to adopt empowerment. We have made a humble beginning to empower the team leads to take their own decisions. As the citizens of this country, we are doing what we want our government to do on a larger canvass. In this issue, we offer the challenges that lie before power producers. Expecting huge gas output, both public and private companies had installed capacities to generate power. With gas output diminishing, some of the plants face shut down. Uncertainty looms large both in the minds of domestic and foreign investment in the sector. In the month gone by, we also witnessed power utilities locking horns with Coal India over the penalty clause suggested in the new fuel supply agreement. Power companies feel the penalty clause that has been introduced may not ensure sufficient coal supplies. The quantum of penalty imposed on the coal supplier, may not serve the purpose. We also bring you excerpts of an informal chat with Coal Minister Sriprakash Jaiswal. The minister shares the concerns of the government in handling the shortage of coal in the country. Despite having adequate coal resources, Indian industries have to import coal to meet up the shortage. The Association of Power Producers has often raised voice seeking the coal sector deregulation. The government the behemoth that it is - always needs lot of time of time to take decisions. In most of the cases decision comes when the damage crosses the saturation point! Our team has decoded the draft of surplus coal policy and tried to explain whether the government is batting for the public sector. A picture speaks a thousand wordsdont skip our photo-feature on Tata Power into the business of lighting bulbs since 1911. Here, we must put on record that we did not expect the acknowledgement and support that we have got from the industry, academia and the government. The suggestions and criticism will only help us improve with every edition and serve you better. (This is Yogeshs last note before the magazine went into print)
Editorial
Yogesh Garg, Editor Alok Sharma, Assistant editor Pallavi Chakravorty, Assistant Chief-sub editor Desk Archana Khatri Das, Rewriter Analysts Raeesa Zeb Debjit Das News Team Pankaj Bhagat Shivangie Shrivastava Design Team Gopal Thakur, Art Director
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Periodicity of its Publication : Monthly Printers Name: Mr Yogesh Garg Nationality Indian Address 14-D, Atmaram House, 1, Tolstoy Road New Delhi - 110001 Publishers Name Nationality Address Mr Yogesh Garg Indian 14-D, Atmaram House, 1, Tolstoy Road New Delhi - 110001 Mr Yogesh Garg Indian 14-D, Atmaram House, 1, Tolstoy Road New Delhi - 110001
YOGESH GARG CEO and Editor InfralineEnergy Research and Information Services He may have left us but his dream of serving the large existing clientele of the company shall be fulfilled by the team he built. We thank the readers for their massive interest and confidence in the product. We shall all strive to fulfill our founders dream and belief. - Team Infraline
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Editors Name Nationality Address Printed at Address
M/s. International Print-O-Pac Limited B-206, Okhla Industrial Area, Phase-I, New Delhi - 110 020 Name and address of individuals who own the newspaper and partners or shareholders holding more than one percent of the total capital Owner: M/s Infraline Technologies (India) Private Limited, 14-D, Atmaram House, 1, Tolstoy Road, New Delhi - 110001 Shareholders holding more than one percent of total Capital of the owner Company 1. Mr Yogesh Garg, 60, Siddhartha Enclave, New Delhi - 110014 2. Ms Shashi Garg, 60, Siddhartha Enclave, New Delhi - 110014 I Yogesh Garg hereby declare that the Particulars given above are true to the best of my knowledge and belief. Sd Yogesh Garg Signature of the Publisher
June 2012 www.InfralinePlus.com
Contents
Editors Letter
InfralinePlus
1 4
Power Plants Getting Gas Bumps
Cover Story
Paucity of natural gas supply leaves power plants in a fix. Big players like GAIL and NTPC stall upcoming power projects, expansion plans.
4
Power
Coal
20
Adieu...
News Brief p8 In Conversation: KVB Reddy, Director, Essar Power Ltd. p10 Expert Speak: Ashok Kumar Khurana, Director General, Association of Power Producers p12 Expert Speak: Neeraj Pathak, Head of a HR Consultancy firm p14 Statistics p18
News Brief p20 In Depth: Surplus coal policy moots selling of surplus coal to CIL at production cost p22 In Depth: CILs move to shift from UHV to GCV pricing draws flak p24 In Conversation: Union Minister of Coal, Sriprakash Jaiswal p28 Statistics p30
To the one who started it all We pour our hearts out for Yogesh Garg, Editor of InfralinePlus and CEO of Infraline Energy, whose untimely death is yet to sink in...
Oil and Gas
32
Renewable
News Brief Expert Speak: Udai S. Mehta
52
p52
Plus- Photo Essay

Through the lens: Tata Powers various power projects across India p58
News Brief p32 In Conversation: President, Perma Pipe Inc., Fati Elgendy p34 In Depth: LN Mittals Punjab oil refinery finally gets started p36 Expert Speak: Aabhas Pandya, an industry veteran and senior journalist p38 Expert Speak: Rahul Kashyap, head of a consultancy company p41 Expert Speak: Dr. Prasoon Dwivedi, University of Petroleum and Energy Studies, Dehradun p44 News Analysis p49 Statistics p50
COVER DESIGN: GOPAL THAKUR
Associate Director, CUTS & Gaurav Shukla, Research Assistant In Conversation: AK Agarwal, Executive Director, Renewable Energy, PFC Statistics p54 p56 p53
58
Obituary
A thorough professional and a humble individual Yogesh will indeed be missed

The information about the sad and tragic death of Yogesh came as a bolt from the blue. In fact, at that very moment I was trying to speak to him on his mobile phone when one of my colleagues informed me that the news was appearing on one of the TV Channels. I knew Yogesh for a few years when I was in the Ministry of Power, but I came to know more of him when I left the Government in January 2007. Yogesh met me within a few weeks, sometime in the month of February, 2007 with the suggestion that the organization which he had set up, viz. Infraline Energy could contribute more to the energy sector. We, during these discussions, came out with the conclusions that (a) Infraline Energy could facilitate a monthly Round Table to discuss on various energy issues which I should moderate, and (b) I should contribute a write up on a weekly basis on energy issues to be published on the Infraline Energy website. Both these initiatives worked well. Deliberations in the Round Tables covered extensively all the areas of energy and mostly with very specific conclusions and recommendations. Similarly, the weekly articles focused on each element of energy, analyzed policy initiatives, implementation strategy etc. and came out with suggestions and remedial actions. As a matter of fact, both these initiatives worked as the most important catchment area for my third book Energy Security and Climate Change. My interactions with Yogesh were always focused at doing something which should be of interest for the Indian energy sector. In fact, he suggested to me to form a company which should focus exclusively on Energy Policies and should conduct studies and research and could aim at becoming the think tank for various authorities and agencies for formulation and review of energy policies. Because of various preoccupations I could not do that, I wish I could have done it. His ability to organize an institution, build up the team and motivate people was remarkable. Equally remarkable was his humility. The professionals in the energy sector will miss him a lot.
By R.V. Shahi Former Secretary, Ministry of Power
CoverStory
Dwindling Gas Plays Extinguisher to Power Projects

GAIL had announced to invest `59 billion to set up five gas-based power units Only 18.10 million standard cubic meters a day of gas was supplied to power firms in FY12
Gas based power producers in india are now spending sleepless nights. already disturbed with inadequate coal supplies, most of these companies were banking on gas and had planned huge capacity addition coupled with investments to develop gas-based power generation units. but thanks to the continuous fall in domestic gas production, power companies like Lanco, GVK and Essar are having a tough time. the pain is not limited to private players, instead the paucity of natural gas in india is also hurting plans of state-owned companies like National thermal Power Corporation (NtPC) and Gas authority of india Limited (GaiL-india) who were gearing up to add gas-based power generation capacity. in an attempt to diversify its business model and get a foothold in indias fast-expanding power sector, GaiL had planned to set up five gas-based power units in usar, Maharashtra, Dibiyapur, uttar Pradesh, Vijaipur, Madhya Pradesh and in Kashipur and Haridwar in uttrakhand with an investment of `59 billion. However, now uncertainty looms over its projects in the absence of gas supplies. NtPC, indias largest power producer by capacity, has also slowed plans to expand the capacity of its gasbased power plants, Minister of State for Petroleum and Natural Gas r.P.N. Singh recently said in a written reply in the lower house of Parliament.
Singh said that due to the drop in natural gas production in the country, indian power stations received only 18.10 million standard cubic meters a day of gas supply during the financial year ended March 2012, against a committed volume of 28.90 million
standard cubic meters every day. Private power producer Lanco has also warned the government that any further reduction in natural gas supplies would lead to shutting down of power plants. the company has also written to Pulok Chatterji, Principal Secretary
to the Prime Minister, saying it was neither technically nor financially viable for units to operate at such low Plant Load Factor (PLF) or capacity and will shut down if there was any further cut in supplies. there are various such capacities private as well as public - which are ready but not running due to shortage of fuel. another such example is the Delhi
Both NTPC and GAIL have stalled a number of their gas-based power projects due to poor gas supplies
governments much talked about new gas-based bawana power plant which is almost ready, but not running. the
plant, with a total capacity of 1,500 MW, is crucial to feed the burgeoning citys ever-growing demand for power that touched a staggering 5,100 MW last summer. the Central Electricity authority has projected Delhis power demand to rise to 8,700 MW by 2017. However, according to reports, the `45 billion bawana power plant, which was designed to meet such demand is currently producing merely about 300
Generation Loss due to shortage of gas supply during 2011-2012

S. No Name Of Power Station Installed capacity @ (MW) Gen. loss due to short supply of gas as reported (MUs) 0 0 0 0 0 2.09 0 714.49 593.33 1661.26 2971.17 194.02 0 194.02 3165.2 0 141.14 0 249.42 0 390.56 0 0.52 21.84 224.45 246.81 0 155.23 137 0 0 292.23 77.56 27 0 S. No Name Of Power Station Installed capacity @ (MW) 58.5 90 387.5 4182.12 100 180 280 280 108 108 160 515 655 1147.5 2477.5 464 220 208 455.4 445 366 350 220 370 119.8 330.5 52.8 3601.5 24.5 24.5 6211.5 16926.27 Gen. loss due to short supply of gas as reported (MUs) 0 0 104.55 1034.15 403.16 29 432.16 432.16 141.7 141.7 549.77 0 0 921.96 1471.73 960.34 0 435.39 860.97 488.09 0 757.77 565.38 409.07 0 0 9.14 4486.15 124.76 124.76 6224.34 10855.84
CENTRAL SECTOR 1 Faridabad CCPP 2 Anta CCPP 3 Auraiya CCPP 4 Dadri CCPP Sub Total (NR) 5 Gandhar CCPP 6 Kawas CCPP 7 Ratnagiri CCPP I 8 Ratnagiri CCPP II 9 Ratnagiri CCPP III Sub Total (WR) 10 Kathalguri CCPP 11 Agartala GT Sub Total (NER) Total (CS) STATE SECTOR 12 I.P CCPP . 13 Pragaticcgt-III 14 Pragati CCPP 15 Dholpur CCPP 16 Ramgarh CCPP Sub Total (NR) 17 Dhuvaran CCPP 18 Hazira CCPP 19 Utran CCPP 20 Uran CCPP Sub Total (WR) 21 Karaikal CCPP 22 Kovikalpal CCPP 23 Kuttalam CCPP 24 Narimanam GPS 25 Valuthur CCPP Sub Total (SR) 26 Lakwa GT 27 Namrup CCPP 28 Namrup ST
431.59 419.33 663.36 829.78 2344.06 657.39 656.2 740 740 740 3533.59 291 84 375 6252.65 270 750 330.4 330 113.8 1794.2 218.62 156.1 518 672 1564.72 32.5 107 100 10 186.2 435.7 120 95 24
Baramura GT Rokhia GT Sub Total (NER) Total (SS) PVT SECTOR 31 Vatwa CCPP 32 Trombay CCPP Sub Total (WR) Total (PVT S) PVT IPP SECTOR 33 Rithala CCPP Sub Total (NR) 34 Baroda CCPP 35 Essar CCPP 36 Peguthan CCPP 37 Sugen CCPP Sub Total (WR) 38 Gautami CCPP 39 Gmr Energy Ltd Kakinada 40 Godavari CCPP 41 Jegurupadu CCPP 42 Konaseema CCPP 43 Kondapall 1 Extn CCPP 44 Kondapalli CCPP 45 Peddapuram CCPP 46 Vemagiri CCPP 47 Karuppur CCPP 48 P Nallur CCPP . 49 Valantarvy CCPP Sub Total (SR) 50 Dlf Assam GT Sub Total (NER) Total (Pvt IPP S) Grand Total
29 30
@ Installed capacity is as on last day of the year.
CoverStory
MW. reports suggest the completed first phase of the unit could have produced at least 750 MW had there been enough gas to fire its furnaces. the main cause of the whole fiasco is the dwindling output from reliance industries D6 block in the Krishna Godavari basin due to geological issues involving its deepwater gas reservoir. reliance and its partner bP Plc are conducting extensive reservoir studies to find a way to raise production in D6. With KG D6 field output witnessing a sharp fall from 61.5 mn cubic meters per day to 32.66 mn cubic meters a day over two years, the government has now made a pro-rata cut in gas supplies to 25 power plants who were allocated gas from KG basin fields. besides, plants, currently operating at less than 38 per cent of their capacity because of the supply reduction, may face further cuts in fuel supplies.
6
as per projections, gas production is likely to dip by 15.03 million cubic meter per day in 2012-13 and by an additional 3.42 million cubic meter per day dip in 2013-14 as against the availability of 42.67 mmscmd gas in 2011-12. Over concerns that paucity of natural gas would have a telling effect on the future of the electricity generation sector, the power ministry has asked project developers not to plan their gas-based projects till 201516. it said that the oil ministry has not given any projection on the availability of the feedstock fuel for 2014-15 and 2015-16. the country is estimated to have added fresh capacity of 53,922 MW during the Xi Five-year Plan period, which ended in March, more than twice the amount of 21,180 MW, added during the X Plan. but all the
new plants are working below capacity because they are not getting enough coal or gas. While power producers are forced to depend on expensive imported gas to save some of their investments, it has led to increase in cost of power. the rupee depreciation has also had a direct increase of 35% on the cost of gas-based power, thereby increasing power tariffs by around 44 paise per kilowatt hour. to tackle the problem of scarcity of fuel at gas-based power stations, private power firms have urged the government to pool domestic and imported natural gas. the industry is of the view that the biggest challenge before power projects developers is to secure adequate and appropriately priced fuel to keep the power costs affordable.
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Power Generation Loss during the year 2011-12

S. No Name Of Power Station Installed Capacity @ (MW) Located In The State Gen (MUs) Gen Loss due to short supply of Gas as reported (MUs) 0 0 0 0 0 2.09 0 714.49 593.33 1661.26 2971.17 194.02 0 194.02 3165.2 0 141.14 0 249.42 0 390.56 0
CENTRAL SECTOR 1 Faridabad CCPP 2 Anta CCPP 3 Auraiya CCPP 4 Dadri CCPP Sub Total (NR) 5 Gandhar CCPP 6 Kawas CCPP 7 Ratnagiri CCPP I 8 Ratnagiri CCPP II 9 Ratnagiri CCPP III Sub Total (WR) 10 Kathalguri CCPP 11 Agartala GT Sub Total (NER) Total (CS) STATE SECTOR 12 I.P CCPP . 13 Pragati CCGT-III 14 Pragati CCPP 15 Dholpur CCPP 16 Ramgarh CCPP Sub Total (NR) 17 Dhuvaran CCPP
431.59 419.33 663.36 829.78 2344.06 657.39 656.2 740 740 740 3533.59 291 84 375 6252.65 270 750 330.4 330 113.8 1794.2 218.62
Haryana Rajasthan Uttar Pradesh Uttar Pradesh Gujarat Gujarat Maharashtra Maharashtra Maharashtra Assam Tripura
3067.72 2694.6 3878.62 5376.07 15017.01 3684.07 3638.4 2950.5 4846.46 3822.12 18941.55 1765.17 666.12 2431.29 36389.85 1243.72 331.38 2560.05 2253.77 536.79 6925.71 1008.7
Delhi Delhi Delhi Rajasthan Rajasthan Gujarat
S. No
Name Of Power Station
Installed Capacity @ (MW)
Located In The State
Gen (MUs)
Hazira CCPP 156.1 Gujarat 907.62 Utran CCPP 518 Gujarat 2987.98 Uran CCPP 672 Maharashtra 4668.78 Sub Total (WR) 1564.72 9573.08 21 Karaikal CCPP 32.5 Puducherry 251.46 22 Kovikalpal CCPP 107 Tamil Nadu 705.75 23 Kuttalam CCPP 100 Tamil Nadu 413.29 24 Narimanam GPS 10 Tamil Nadu 0 25 Valuthur CCPP 186.2 Tamil Nadu 1114.56 Sub Total (SR) 435.7 2485.06 26 Lakwa GT 120 Assam 771.99 27 Namrup CCPP 95 Assam 565.73 28 Namrup ST 24 Assam 0 29 Baramura GT 58.5 Tripura 357.62 30 Rokhia GT 90 Tripura 419.1 Sub Total (NER) 387.5 2114.44 Total (SS) 4182.12 21098.29 PVT SECTOR 31 Vatwa CCPP 100 Gujarat 459.26 403.16 32 Trombay CCPP 180 Maharashtra 1567.9 29 Sub Total (WR) 280 2027.16 432.16 Total (PVT S) 280 2027.16 432.16 PVT IPP SECTOR 33 Rithala CCPP 108 Delhi 241.83 141.7 Sub Total (NR) 108 241.83 141.7 34 Baroda CCPP 160 Gujarat 668.74 549.77 35 Essar CCPP 515 Gujarat 135.89 0 36 Peguthan CCPP 655 Gujarat 3067.07 0 37 Sugen CCPP 1147.5 Gujarat 7592.16 921.96 Sub Total (WR) 2477.5 11463.86 1471.73 38 Gautami CCPP 464 Andhra Pradesh 2898.67 960.34 39 Gmr Energy Ltd - Kakinada 220 Andhra Pradesh 1200.03 0 40 Godavari CCPP 208 Andhra Pradesh 1282.46 435.39 41 Jegurupadu CCPP 455.4 Andhra Pradesh 2833.49 860.97 42 Konaseema CCPP 445 Andhra Pradesh 2266.22 488.09 43 Kondapalli Extn CCPP 366 Andhra Pradesh 2203.54 0 44 Kondapalli CCPP 350 Andhra Pradesh 2030.94 757.77 45 Peddapuram CCPP 220 Andhra Pradesh 1318.82 565.38 46 Vemagiri CCPP 370 Andhra Pradesh 2066.81 409.07 47 Karuppur CCPP 119.8 Tamil Nadu 797.1 0 48 P Nallur CCPP . 330.5 Tamil Nadu 1526.19 0 49 Valantarvy CCPP 52.8 Tamil Nadu 377.51 9.14 Sub Total (SR) 3601.5 20801.78 4486.15 50 DLF Assam GT 24.5 Assam 0 124.76 Sub Total (NER) 24.5 0 124.76 Total (PVT IPP S) 6211.5 32507.47 6224.34 GRAND TOTAL 16926.27 92022.77 10855.84 @ Installed capacity is as on last day of the year. * Normative gas requirement at 90 % PLF taking GCV of gas=9000k.Cal/SCM (except for Ramgarh CCGT for which GCV is 4150 kCal/ SCM), station heat rate - 2900 k.Cal/kWh for open cycle and 2000 k.Cal/kWh for combined cycle and is as on last day of the year. MUs - Million Units MMSCMD - Million Standard Cubic Meters per Day HSD - High Speed Diesel
18 19 20
Gen Loss due to short supply of Gas as reported (MUs) 0.52 21.84 224.45 246.81 0 155.23 137 0 0 292.23 77.56 27 0 0 0 104.55 1034.15
NewsBriefs | Power
NTPC - CIL To sign new FSA on 2009 terms NTPC and Coal India have agreed to sign new fuel supply agreements (FSA) on 2009 terms. Only one clause is to be changed, by NTPC, that is the trigger for incentive and penalty. Coal India has agreed to this condition. The Coal Ministry has directed Coal India to sign it. Adani Groups 1,000-km Power Transmission system kick starts The Adani Group dedicated to the nation its first private sector high voltage direct current (HVDC) power transmission system, providing coalfired thermal electricity generated at Adani Power Ltds (APL) Mundra facility in Gujarat to Mohindergarh in Haryana, a distance of 1,000 km. APL has commissioned 500 kiloVolt system that has a 2,500 MW of transmission capacity. Cash-strapped SEBs Govt mulls a new restructuring package Government is mulling a new restructuring package in order to rescue the already in the red state electricity boards from further financial deterioration. The package is currently being discussed between the Finance Ministry, Power Ministry and the Planning Commission and is expected to be unveiled in a couple of months time. Empee Group Mega TPP of up to 1,320 MW in TN Chennai-based Empee Group of Companies is planning to set up a mega thermal power project of up to 1,320 MW in Tamil Nadu with an investment of around `6,500 crore. With the increased tariff for electricity, the company sees a growth opportunity in the power sector. Plans are on the cards to commence work on the plant in the next six months and complete the project in the next three years. BHPV BHEL Merger cleared BHEL board finally clears the merger of Bharat Heavy Plate and Vessels (BHPV) with Bhartat Heavy Electricals Ltd. The longawaited clearance has brought joy to employees of the BHPV, which is coming out of the red after being made a subsidiary of the BHEL in 2010. Since then the merger has been pending. Ontarios IESO Goes Live with MetricStream solution The Ontarios Independent Electricity System Operator (IESO) in North America has gone live with Bangalore-based MetricStreams Enterprise GRC Platform. MetricStream will automate implementation and monitoring of compliance to electric reliability standards set by the North American Electric Reliability Corporation (NERC) and the Northeast Power Coordinating Council (NPCC). NTPC Plans ` 210 bn investment this fiscal NTPC expects to almost double investments for expansion activities at `21,000 crore in the current fiscal. The state-run company had spent about `11,000 crore in 2011-12. NTPC, which has an installed generation capacity of 37,514 MW, is looking to increase the capacity in the coming years, especially with thermal power projects. Discoms sink States skirt sharp tariff hikes Power sector losses are accumulating as states continue to follow a cautious and staggered approach on tariff hikes despite the hefty increase in electricity purchase costs in recent years. Several states have started assessing their discoms annual revenue requirements (ARR) over the past few years. In most cases, tariff hikes have followed, though they are often far below requirements. World Bank `130 bn for power generation in NE World Bank would give `13,000 crore for infrastructrual development of power generation facilities in the North East which would be executed by Power Grid Corporation of India (PGCIL). The PGCIL is building an 800 KV substation in Arunachal Pradesh and another substation at Byrnihat in Meghalaya, which is nearing completion. Pooling of gas with RLNG Opposed by the major power producers Major power producers in the private and public sector, including Tata Power, NTPC, Torrent Power and Mahagenco, have opposed the proposal floated by the Association of Power Producers (APP) to pool domestic gas with RLNG (regasified liquefied natural gas), on the ground that this would lead to higher tariffs.
NTPC and ABB $33 mn order to strengthen Indian power grid ABB Ltd won an order worth around $33 million from NTPC Limited, Indias largest power company, to build two substations in the western Indian state of Maharashtra. The substations will facilitate transmission of electricity from new power generation plants being constructed in the region.
12th Plan Period 85,000 MW capacity addition planned The projected power demand of 1,354.87 billion units by 2017 will be met as 85,000 MW capacity addition is planned during the 12th Plan. The 18th Electric Power Survey (EPS) report estimated the energy requirement in the terminal year of 12th Plan period (201217) at 1,354.874 billion units. The actual energy shortage was 8.5 per cent and peak demand shortage was 10.3 per cent.
Your vision is now our vision ...

I was one of the many who saw his passion for work, relentless working hours and meticulous working style with attention to the slightest of the details. His enthusiasm in all facets of life shall remain unmatched. The day seems incomplete without his motivation and those never ending brain storming sessions. There are not many like him and its certain that God only takes the best. I found Yogesh synonymous with Energy and Enthusiasm, a man with a very Clear Vision. He had the vigour and capacity to think equal to a hundred minds put together. His presence was the single driving force behind what InfralineEnergy is today. Yogesh, you will be remembered for your enthusiasm towards work, excitement for Infraline Quiz and being DJ at the Cricket Stadium. You were full of life with a smile on your face. We miss you and we will take Infraline to new heights as you are with us always. My Boss and his passion will always with me. A man of integrity, he touched my life over the years, and had a generous heart. He never asked anyone to do anything he would not do himself. He put in many 16 hour days and nothing ever slowed him down.
- Ashit Sengupta & Prerna Singh -Ruchi Sharma
- Ashish Madhav
Thanks Yogesh for being a part of our lives and we will truly fulfill your vision.
Infraline Family
Sky was never the limit for Yogesh. There is no middle path for Yogesh as he believed that there always exists the A firebrand... thats what Yogesh was. A man with an right path. His words like either you convince me or get enviable stock of energy, and an infectious smile... He had convinced was the mantra for his success. I have never clear goals and defined ways to achieve them. Indeed, he seen a CEO like Yogesh who was easily approachable had a lot to imbibe from. I hope we do justice to his legacy. at any point of time. He always listened to all despite - Pallavi Chakravorty his busy schedules and proposed efficient solutions to difficult problems. A bundle of knowledge - Yogesh - was ever willing to - Radha Krishna Tripathy share what he already knew. He used to say that we all make mistakes but once corrected, it should not be repeated. A Famous quote by US President sums up Yogeshs aura Though he hardly made mistakes but whenever he did, - If your actions inspire others to dream more, learn more, he would readily accept and take a corrective measure and do more and become more, you are a leader. That is what expected others to learn through his experiences. He is the Yogesh did to his Infraline Family. Whatever limited Only One & nobody can replace him. Many thoughts interaction I had with him, I could make out that he was are there in my mind but I feel its apt to refer to him as the a Power House. Could drive 100 people with his energy, finest Mentor ever. do 1000 things at the same time and be an inspiration for - Neeru Puri one and all. - Manoj Narang Full of life, super energetic and always willing to try new things is how we all will remember Yogesh (He always Yogesh was highly talented and always full of energy. discouraged us whenever anybody addressed him as Sir). A fast growing entrepreneur for his age and achieved Infraline was his heart and soul and we were his family. so much. He always led from the front and set He wore many hats-sometimes he would play a mentor, friend or guide. Exuding positivity Yogesh would always examples for others. - Q A Nasir encourage people at Infraline to believe in themselves and gave enough room to make them realize their potential. The One Man Army Yogesh possessed every virtue On a personal note, I would always cherish the beautiful one could think of. Dedication, top editorial thoughts, memories spent with him. creativity,out of box solutions and much more. He was - Sarika Bhasin actively involved with the functioning of each and every department of Infraline Energy. Writing about him is both easy yet difficult because there - Gopal Thakur is an ocean of thoughts in our minds, full of the memories he has left us with. Though the association with him does Yogesh was the epitome of energy and enthusiasm and the not go long back, the kind of energy and exuberance within hardest working soul that many of us will ever know in our him to advance in life was so overwhelming that I believe lives. But the most special thing about Yogesh is that he we all have started envisioning or rather living it. I still feel transcended the borders of work and touched our lives in him as a driving force to consistently improve. a very special way. Most of our thought processes became He will always live in our hearts. attuned to his way and before we could realize he had left a - Shruti Gupta bit of himself with all of us -Raeesa Zeb For me he was more of a mentor and a teacher and much less of a boss. He was a teacher who taught us how to push I joined as a fresher in Infraline and during my last two limits and overcome our weaknesses. His never ending years, I think I learned a whole new life through him. One excitement and spirit was an inspiration and driving force of the things I would like to mention is that he never said no for one and all. He was one man I would always look up to in any situation. In any situation, he could come up with whenever there is any difficulty; I knew he would act as a various alternatives and resolve it. A true visionary- 2 years savior and he did every single time. He was a real hero. ago he showed me a picture of the organization, and today - Komal Sharma we are way ahead of that. Although he is no more with us physically, but will always be in my heart as a mentor and Yogesh Sir was extremely helpful towards me & my teacher for life. family. He will always live in our hearts.
- Debjit Das - Ashok Kumar -Raushan Kumar
InConversation
Heat of import duty hike in power sector will be on end-consumer
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Power infrastructure in the country is under unrelenting pressure to perform and meet the demands of a growing economy. Speaking with infralinePlus, KVB Reddy, Director, Essar Power Ltd. spoke at length about the challenges the industry is facing in an effort to metamorphose itself from a caterpillar into a butterfly
How do you foresee Essar Powers future growth in the light of issues such as FSA, environmental clearances and Coal Ministrys proactiveness on block development front? Essar is on track to commission 6,700 MW of power by 2014 as against the target of 9,670 MW. Due to the issues raised above, we have deferred implementation of three projects aggregating 2,970 MW subject to achievement of critical
milestones. these projects include a 1,320 MW imported coal project at Salaya (Jamnagar) and a 600 MW petcoke cum imported coal project at Salaya (Jamnagar). What is the situation on the supply side of raw material and power equipment? How do you see BHELs stand, where it wants the government to impose 21% import duty on power equipment, even when it is not capable of meeting the demand on its own. the delays in environmental approvals are affecting mining in domestic captive coal blocks. While the go, no-go classification has been done away with, industry is still awaiting actual clearances like forest approval, environment approval etc to come through. as such, the industry continues to reel under a severe
shortage of coal, the situation has been further compounded by change in mineral export laws in countries such as, indonesia and australia, which has steeply increased the cost of imported coal. We feel that development of the power sector is critical for India, and any duty which significantly increase the cost of equipment, would be detrimental to projects and increase price of electricity to end-consumers. Also, with domestic manufacturers of equipment unable to meet the demand of projects in time, putting any curbs in import of equipment is not justified. Has the situation on the human resource front improved for domestic power producers because of downturn in the developed world? the requirement of manpower for the
power sector is largely local, while there is a challenge in hiring skilled manpower even in india, there is no impact of global recession. What are your views on surplus coal supplies? Even when the Planning Commission had proposed to allow it considering the wider benefits, Coal Ministry seems to oppose the idea, as it would throw open a bigger challenge for Coal India and the Ministry. the reserves of Essars captive mines are just adequate for our own power plants and there will be no surplus coal available for us. Is importing coal a feasible solution for meeting fuel supplies for power generation? indias power deficit is significant and will continue unless the installed capacity and output grows adequately to bridge the gap. this will require
both domestic and international coal based projects the latter, though more expensive, is required particularly, as current regulatory environment is hampering full utilisation of domestic coal resources. Is the target to set up about 78,000 MW capacity in the current Five Year Plan an achievable target? Currently, the concern is both, on the supply and the demand side. On the supply side, poor availability of fuel (both coal and gas), transmission capacity bottlenecks, slow pace of obtaining statutory approvals for land acquisition, are key factors affecting capacity creation. Several projects at the development
Availability of debt capital at reasonable cost is critical for any business, particularly infrastructure, as debt typically finances 75% of the project cost
stage are being deferred/ kept on hold due to the above mentioned reasons. Significant rise in the interest rates in the last three years has also affected fund raising. Availability of plentiful debt capital at reasonable cost is critical for any business, particularly infrastructure, as debt typically finances 75% of the project cost. The current state of capital markets is also not conducive to raising equity, funding new projects has become extremely challenging. On the demand side, absence of tariff reforms have led to high losses and financial stress for distribution companies, which are the main bulk procurers of power. While default situations are currently moderate, poor cash flows are affecting ability of distribution companies to off-take power, which is creating additional uncertainty for capacity creation. While the governments target and the actual capacity addition achieved in the past year is laudable, the challenges faced by the industry will make the target achievement much more difficult. However, we remain optimistic that the government is cognizant of these factors and is taking active steps to address them.
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For full version of the interview, visit www.infraline.com For suggestions email at feedback@infraline.com
InConversation
Importing coal to meet supply deficit is a short-term solution

Ashok Kumar Khurana, Director General of association of Power Producers (aPP) feels that importing coal to plug deficit can only be a short term solution and does not address the larger problems like, constraints in blending of imported and domestic coal or inland transportation. in an interview with infralinePlus, he reiterated that the longterm solution for bridging the gap in demand and supply of coal lies in deregulation of the sector.
you see coal imports affecting The widening gap between the bottom-line of the power demand and supply of coal is companies? pressing for higher imports. By Since retail tariff of power is regulated, what percentage do you expect and considering the increase in share Indias coal import growing in of imported coal likely over the near the short term? Where do you future, it has become essential to see coal prices moving in the devise a uniform coal price pooling same period? solution encompassing the entire coal indias coal imports will keep rising fired generation base. this is expected in near future considering sluggish to help the power companies absorb growth in domestic coal production the additional cost of imported coal, and the problems that coal-based and avoid the situation of only certain power plants are facing. While the projects being affected due to the price Working Group on Power for 12th impacts of imported coal. a mechanism Plan has estimated that imports will also needs to be formulated to rise to 213 metric tonne by allow pass-through of the 2016-17, as per the recent A additional cost of power studies, it appears that progressive generated through technical constraints in policy on surplus coal is imported coal, and blending and logistical needed to enhance without these measures, it constraints of inland domestic coal will be difficult for power transportation may production from companies to safeguard limit imports to a lesser allotted captive their bottom-line and might amount. Looking at blocks. lead to generation capacity the volatile conditions remaining stranded, or working of international coal at sub-optimal levels at a time of rising trade and resource power deficit in the country. nationalism being exhibited by major suppliers, What is the impact of recession it is very difficult to predict the impact on coal prices. However, in the western world? Has the situation of human growth sentiments are presently resource front improved for weak due to recessionary trends domestic power producers and the moment the demand picks because of downturn in the up the prices are likely to show an developed world? upward trend again. Factors such as inflation, weakening demand profile and progressively There is a significant difference increasing current account deficit- all in the prices of domestic and have put pressure on the rupee; this has imported coal and to add to the adversely affected the indian power woes, the power sector in the sector as imported coal and gas prices country is regulated. How, do
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are denominated in uS$. On the human resource front, there has not been much change. Reportedly, the industry has suggested the government to set up power plants in the coastal belt, which would be fuelled by imported coal. Subsequently, Centre may mandate seven-eight states to buy power from those plants to ease out burden on individual power units. It is also expected to help in reducing transportation cost for inland power units. What are your views on the same and do you feel such an idea could be implemented in India where States oppose every move of the Centre? this idea is not feasible as one cannot compel anyone to buy power from specific plants in the current deregulated power market where power procurement through competitive bidding is the mandated option of buying power. You must be aware that the industry has also said that it would ask the government to facilitate overseas (coal, coking coal mines) acquisition by initiating government-togovernment talks. Arent we late, as most countries had started this practice long back? China already controls huge resources in Africa. Do you see this plan meeting a success? there are still good resources available in emerging destinations such as Mozambique, etc. industry players themselves have been active in securing overseas fuel sources. However, from the industrys point of view, augmenting domestic coal production remains an important concern. Looking at the increasing current account deficit and resource nationalism, imported coal can, at
best, be a medium-term option. in the long term, we need to augment the domestic coal production by opening up the coal sector. How do you see the power companies growth in the light of issues such as FSA, environmental clearances and Coal ministrys pro-activeness on block development front? in the short term, these issues are going to impact adversely. However, looking at the demand and supply position, and demographic profile, the indian economy will continue to grow and so will the power sector. these issues will soon settle down and in the long term the power sectors fundamentals are strong.
on power equipments will lead to longer lead times, overall delays and consequently significant cost overruns. thus, the demand is completely wrong and while it seeks to protect the industry, it will adversely impact the consumers who would have to pay more for the power consumed. Are state governments (especially non-Congress) cooperative in giving state level clearances in the light of political developments such as NCTC and RSF where the two are opposed to each other? No comments. What are your views on surplus coal supplies? Even when the Planning Commission had proposed to allow it considering the wider benefits, Coal ministry seems to oppose the idea as it would throw open a bigger challenge for Coal India and the Ministry? A progressive policy framework on surplus coal is an imperative to enhance domestic coal production from allotted captive blocks. This will bridge the widening coal deficit by deploying advanced recovery techniques and increased capital expenditure. Looking at the increasing current account deficit of the country, logistical constraints involved with inland transportation of coal from port to demand centers, and technical limitations on quantum of blending of imported coal for plants originally designed for domestic coal, it may not be possible to meet the coal deficit entirely through the import of coal. Thus, the need of the hour is to augment the domestic coal production by all means necessary, so that the growth envisaged for the 12th Plan is not impeded by lack of fuel to power Indias generating stations.
Imposition of additional import duty on power equipment will lead to longer lead times, overall delays and consequently significant cost over-runs.
What is the situation on the supply side power equipments? How do you see BHELs stand, where it wants the government to impose 21% import duty on power equipments even when it is not capable of meeting the demand on its own? the domestic equipment manufacturers are already overburdened with existing orders and are not in a position to meet the demand of the power project developers. On the other hand, while the arun Maira Committee recommended an import duty of 14% on power equipment, depreciation of the indian rupee has already led to an implicit duty of more than 15-17% on such equipment since early 2010. imposition of additional import duty
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Infraline follows the practice of formulating a Research Report Calendar detailing research subjects along with methodologies likely to be taken up in a given calendar year. Each research topic is subjected to different filters like relevance, impact, shelf life of the analysis and value add to the industry. In this context, we have prepared the following list of published reports for the year 2011 -2012 and upcoming reports for the year 2012.
PUBLISHED REPORTS
Report Topic Report Type Sector Launch Date
July-12 July-12 July-12 July-12 July-12 July-12 June-12 April -12 March-12 March-12 March-12 March-12 March-12 Feb-12 Jan-12 Nov-11 Nov-11 Oct-11 Sep-11 Sep-11 Aug-11 Aug-11 Aug-11 Aug-11 Jun-11 Jun-11 May-11 Jan-11 Sep-10
Price (`)
75,000 1,00,000 1,00,000 75,000 75,000 1,00,000 35,000 50,000 50,000 40,000 50,000 50,000 50,000 1,00,000 50,000 50,000 50,000 1,00,000 50,000 1,00,000 50,000 50,000 30,000 50,000 50,000 50,000 50,000 75,000 50,000
Mining Equipment Market in India 2012 Market Research Series Mining Power Backup Solutions Market Research Series Power Power Sector Opportunity Mapping for Indian States Indexing Series Power Iron Ore Outlook 2050: Resource Mapping, Benchmarking Strategic Business Insight Mining & Global Sourcing Opportunities Benchmarking Indian Solar PV Module Manufacturers & Benchmark Report Series Renewable International Suppliers Evaluating the Emerging Global LNG Markets Assessing Business Report Series Oil & Gas the Impact on LNG Sourcing Options for India Indian Coal Outlook 2020: Block-wise Supply Estimation & Non-traditional Sourcing Strategies under Transforming Outlook Report Series Coal Policy Regime Renovation and Modernisation of Power Plants in India: Business Report Series Power USD 6.5 Billion Opportunity Solar Power Outlook: 2017 and Beyond - Marching Business Report Series Renewable Towards Grid-parity Investment in Indian Roadways - An Opportunity Untapped Business Report Series Infrastructure Merchant Power Plants in India: Evaluating the Business Report Series Power Business Case Power market dynamics in India: Envisioning the $5.5 Business Report Series Power billion opportunity Steam Coal Imports Sourcing Options, Business Report Series Coal Prices & Economics Switchgear Market in India 2011 Market Research Series Power Energy Efficiency in India: $16 Billion Opportunity Business Report Series All Power Procurement in India : Analysis The Need Business Report Series Power for Smart Planning City Gas Distribution in India: Demystifying the Business Report Series Oil & Gas Opportunity, Growth and Investment Potential Benchmarking Indian BTG Market Benchmark Research Series Power Proposed Thermal Power Projects 2011 Business Report Series Power Diesel & Gas Engines Market in India-2011 Market Research Series Oil & Gas Fuel for Power Generation in India: Options and Business Report Series Power Consequences Natural Gas Market in Gujarat: Assessing the progress Business Report Series Oil & Gas and prospects Wind Power Outlook in India: 2015 Business Report Series Renewable Captive Coal Mining in India - Trends, Investments & Business Report Series Coal Competitive Bidding Directory on Upcoming Renewable Power Plants: Business Report Series Renewable Understanding Future Dynamics Evaluating the attractiveness of business opportunity in Business Report Series Renewable Biomass Power in India Global Coal Acquisitions and Imports: Opportunities and Business Report Series Coal Sustainability Assessment for India Shale Gas: An Unconventional Energy Source Potential Business Report Series Oil & Gas and prospects in India Coal Washeries in India: A $5 billion Opportunity Business Report Series Coal
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For more details, visit
http://www.infraline.com/Store/Books-and-Reports.htm
ExpertSpeak
Energy Sector struggles to employ a committed workforce

Tough on-site working conditions and lack of long-term commitment in prospective candidates is making it tough for the human resources recruiters to identify quality talent pool for energy sector companies. Neeraj Pathak, who is leading a human resource consulting company discusses at length the problems that power sector companies have to deal with on a regular basis.
Human resource opportunity in an industry is essentially dependent on one key factor, the rate at which that particular industry has the potential to grow. Energy sector companies, be it thermal, hydro electric, wind, small hydro, biomass, and waste to electricity, nuclear and solar energy, the rapid growth witnessed in all is likely to offer immense employment and growth opportunities in the near future. However, there are challenges for which there are no concrete solutions yet. that includes human resources. Mckinsey in its report titled: Powering india: 2017 categorically states: if india continues to grow at an average rate of 8 per cent for the next 10 years, the countrys demand for power is likely to soar from around 120 GW at present to 315 to 335 KW by 2017, 100 GW higher than present estimates. Four key factors will drive this demand; indias manufacturing sector is likely to grow faster than in the past. Domestic demand will increase more rapidly as the quality of life for more indians improve. about 125,000 villages are likely to core technical jobs associated with get connected to indias electricity power. Majority wanted to work in it grid. Currently, blackouts and load companies. a Power companys core shedding artificially suppresses strength is not sales & marketing but demand; this demand will be sought operations, which is a pure technical as revenue potential by power job (a lot of slog) and this acts as a distribution companies. deterrent to a lot of young population the picture appears beautiful to work in the sector. and full of potential but has serious Challenge remains on the demand challenges in hand for which finding side as well, because power companies a practical, real time answer is a huge have a very stringent hiring process challenge particularly for recruiters. which is primarily based on strong the most basic expectation that power technical knowledge. they simply companies have from future cannot afford to be flexible on recruits is core domain The the deliverables. knowledge, long-term basic Oil and Gas: With the commitment and expectation that power companies government allowing the conviction have from future foreign investment in oil to work in recruits is core domain and gas, this sector is tough physical knowledge, long-term lucrative as well as far conditions. commitment and the as business potential is With students conviction to work in tough conditions. concerned. but it grapples getting access to with similar Hr issues which comfortable and glitzy employment opportunities in tier a cities and other metros, it is very difficult to procure quality talent pool for power plants. their mindset is focused on not just to earn good money but also be able to spend it on a weekend at the best of restaurants or visiting the local malls. Whereas, a typical power industry job would require people to slog it out at plants which are located outside cities and thus have very little or no access to the glam quotient associated with metros. in fact, when i visited a few college campuses to evaluate and hire candidates for our clients belonging to both it and Power Companies, it was disheartening to know that just 10% of the candidates wanted to get into
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ExpertSpeak
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primarily revolve around: average aging workforce which is expected to retire in near years, requirement for skilled and specialised work force and tough work conditions. it becomes all the more peculiar because the high level of technical domain expertise required makes the availability of courses in esteemed institutes like the iits and some Nits more difficult. this is a clear indication of the situation wherein private colleges keep themselves focused on more popular courses like it, iteS, etc. Manpower deficit leads to huge losses for companies because it results in delayed projects, cost overruns and as a result financial intuitions and lenders on those projects also make things difficult for the oil companies. in times to come, it will be noticed that Employment opportunities in sectors, power as well as oil & gas will essentially be driven by research and Development. the challenge here is not so much from sales & marketing perspective but hiring and retention of good and technically strong people. in fact, in one of my conversations with the Head of a private oil refining company, i was astonished on hearing that both Power and Oil & Gas industry have traditionally been male dominated and the situation continues to be the same with the majority of workforce being men. Maybe it is the roughshod associated with a typical field job that dissuades them from
pursuing them as career options. the bigger challenge is people join oil & gas companies for financial gains but that motivates them only till
The bigger challenge is people join oil & gas companies for financial gains but that motivates them only till a certain period of time or age. Once that drive goes down, it is very difficult to keep them motivated
a certain period of time or age. Once that drive goes down, it is very difficult to keep them motivated and hence the challenge for the Hr head is to not let negativity affect the employee in his functioning. the most critical and core areas of operations like, installation, construction, commissioning and service jobs in these industries faces enormous Hr challenges, from not getting trained employees to people willing to change jobs frequently. referring specifically to solar
industry, it faces Hr issues on all fronts. ranging from technology to sales & marketing, there is an enormous dearth of quality candidates on all fronts. i would sum up the situation thus: there is a market and future for power and oil & gas but they face challenges like r&D, lack of human resources as major ones. So, what is the way forward? it is as follows: leadership development is the key for these industries to grow on a sustainable basis. it is important that people are groomed within organisations and provided appropriate training and leadership skills at regular intervals. Hr heads of organisations should ensure employees are overall satisfied. it is not necessary that just monetary rewards like holiday packages, promotions, etc. can be effective in retaining top talent; it is a well established fact that non-monetary rewards can be just as effective as monetary ones to retain good talent. the 12th five year plan (2012-17) has projected to create more than than 6 lakh jobs in the power sector. Of these, 85% will be primarily based on technical knowledge. a lot of power projects will be taken up by private companies as well, hence the employment opportunities will be available in abundance. it seems this is just a beginning.
Great Eastern Energy Corporation Ltd. (GEECL) is the Pioneer in the field of Coal Bed Methane (CBM) in India. GEECLs first CBM block is the Raniganj (South) block (210 sq. km) in the Damodar Valley, West Bengal with an estimated Gas-in-Place of 2 TCF. GEECL commercialised CBM for the first time in India in 2007. GEECL was awarded a second block at Mannargudi, Tamil Nadu, situated at the southern part of India under CBM IV in 2010. The Block spreads over an area of 667 sq. km. The CBM resource of the block is estimated at 0.98 TCF as per the Directorate General of Hydrocarbons (DGH).
Upstream
GEECLs pioneering effort is helping in maintaining the ecological balance in West Bengals coal bearing areas where methane gas is escaping into the atmosphere and damaging the ozone layer. It will result in the demethanation of coal-beds and avoidance of methane emissions into the atmosphere. GEECL has laid its own dedicated pipeline which runs through the heart of the Asansol-Durgapur Industrial belt, supplying CBM gas to various industrial consumers in the Asansol-Durgapur area. We also supply CNG via cascades to vehicles through a franchisee agreement with Indian Oil Corporation Limited (IOCL) and Bharat Petroleum Corporation Limited (BPCL). GEECL is also involved in various CSR activities in AsansolDurgapur area for the benefit of the people and has undertaken number of initiatives, including sponsorship of medical camps, sporting events, health initiatives, etc. GEECL became the first CBM Company in India to receive the Quality, Health & Safety and Environment certification (ISO 9001:2008, OHSAS 18001:2007, ISO 14001:2004) by TUV NORD CERT GmbH for its operations in the Raniganj (South) block and for its Corporate Office at Gurgaon. Our Vision: To maximise the Economic Recovery of the Reserve, whilst Maintaining International Quality, Health, Safety & Environmental Standards. Corporate Office: Signature Towers - A, 14th Floor, South City, NH-8, Gurgaon - 122 001, Haryana, India
Midstream
Downstream
Regd. Office: M-10, ADDA Industrial Estate, Asansol - 713 305, West Bengal, India info@geecl.com, www.geecl.com
StatisticsPower
Comparison of Actual Generation and Targets set for Gas-based Power Plants in 2011-12
Gt Plant MoniSector March 2011 April 2010-March 2011 March 2012 April 2011 - March tored 2012 Capacity Target GeneTarget GeneTarget GeneTarget Generation ration ration ration (MW) (MU) (MU) PLF (MU) (MU) PLF (MU) (MU) PLF (MU) (MU) PLF Plants Having Gas Allocation From KG D6 Block Anta CCPP 419.33 CS 266 225 72.23 2800 2488 67.73 256 242 77.6 2846 2694 73.14 Auraiya CCPP 663.36 CS 280 374 75.75 4400 4369 75.19 366 235 47.61 4267 3877 66.54 Dadri CCPP 829.78 CS 485 466 75.47 5500 5400 74.29 422 484 78.46 5386 5375 73.74 Faridabad CCPP 431.59 CS 263 285 88.88 2900 3155 83.46 260 301 93.66 2844 3068 80.92 Gandhar CCPP 657.39 CS 397 291 59.60 4400 4058 70.47 330 315 64.46 4062 3681 63.74 Kawas CCPP 656.20 CS 392 305 62.44 4400 3882 67.54 354 424 86.92 4063 3636 63.08 Ratnagiri CCPP I 740.00 CS 267 313 56.87 3200 4148 63.99 264 403 73.23 3159 2934 45.14 Ratnagiri CCPP II 740.00 CS 266 365 66.36 3200 3136 48.37 264 405 73.6 3159 4911 75.55 Ratnagiri CCPP III 740.00 CS 267 312 56.75 3200 4593 70.85 264 80 14.54 3159 3879 59.68 Dholpur CCPP 330.00 SS 189 210 85.45 2247 1995 69.01 192 174 70.98 2100 2255 77.79 Dhuvaran CCPP 218.62 SS 134 115 70.57 1531 891 46.54 85 84 51.64 1000 1005 52.36 Hazira CCPP 156.10 SS 105 81 69.94 1180 1023 74.80 102 71 61.31 1150 907 66.15 Hazira CCPP Ext 351.00 SS 0 0 0.00 0 0 0.00 131 0 0 513 0 0 I.P CCPP . 270.00 SS 133 114 56.93 1500 1368 57.85 118 67 33.29 1549 1246 52.54 Pragati Ccgt-III 500.00 SS 502 4 0.97 1920 6 0.56 484 40 10.74 1810 318 7.25 Pragati CCPP 330.40 SS 144 60 24.37 2400 2336 80.70 208 221 89.85 2400 2557 88.11 Uran CCPP 672.00 SS 410 441 88.28 4800 5587 76.62 410 365 72.97 4800 4669 79.1 Utran CCPP 518.00 SS 253 262 67.96 2959 2947 64.95 246 184 47.68 2900 2990 65.71 Baroda CCPP 160.00 PS 111 26 22.09 1258 844 60.18 96 19 15.72 1120 669 47.58 Essar CCPP 515.00 PS 170 76 19.84 2000 1444 32.00 142 8 2.17 1700 144 3.19 Gautami CCPP 464.00 PS 207 268 77.60 2439 3331 81.95 282 162 46.84 3300 2893 70.98 Gmr Energy Ltd 220.00 PS 115 114 69.65 1350 960 49.84 0 74 45.31 0 1201 62.14 -Kakinada Godavari CCPP 208.00 PS 115 111 71.67 1367 1464 80.37 137 105 67.7 1600 1282 70.19 Jegurupadu 455.40 PS 260 253 74.69 3000 3094 77.56 262 211 62.39 3087 2828 70.7 CCPP Konaseema 445.00 PS 199 199 60.02 1941 2350 66.44 258 140 42.33 3070 2260 57.81 CCPP Kondapalli Extn 366.00 PS 163 198 72.86 1545 2044 70.09 212 117 43 2441 2203 68.52 CCPP Kondapalli CCPP 350.00 PS 210 157 60.35 2500 2134 69.59 213 187 71.74 2202 2031 66.05 Peddapuram 220.00 PS 121 116 70.97 1445 1427 74.06 134 75 46.1 1600 1282 66.35 CCPP Peguthan CCPP 655.00 PS 447 248 50.85 4889 3667 63.92 306 196 40.19 4300 3072 53.39 Rithala CCPP 108.00 PS 48 20 38.05 244 89 57.50 82 19 23.8 475 241 29.55 Sugen CCPP 1147.50 PS 513 693 81.22 6031 8217 81.74 510 498 58.39 7818 7592 75.32 Trombay CCPP 180.00 PS 129 140 104.34 1509 1569 99.49 132 136 101.73 1513 1568 99.15 Vatwa CCPP 100.00 PS 69 38 50.87 780 671 76.54 65 26 34.45 671 458 52.11 Vemagiri CCPP 370.00 PS 205 228 82.73 2430 2816 86.87 234 124 44.95 2800 2065 63.54 Sub-Total 15187.67 7834 7110 87265 87504 7821 6194 88864 81791 Plants - Gas/Liquid Fuel - Not Located On HBJ Pipeline Agartala GT 84.00 CS 55 56 89.14 611 644 87.53 56 58 92.05 611 666 90.28 Kathalguri CCPP 291.00 CS 149 185 85.59 1700 1834 71.94 145 145 66.82 1725 1765 69.06 Maithongt (LIQ.) 90.00 CS 0 0 0.00 0 0 0.00 0 0 0 0 0 0 R. Gandhi CCPP 359.58 CS 96 211 79.01 2100 1903 60.41 196 104 38.76 2134 713 22.57 (LIQ.) Baramura GT 58.50 SS 17 30 69.32 188 226 50.07 23 31 71.34 271 359 69.78 Basin Bridge GT 120.00 SS 13 33 37.09 150 52 4.93 0 0 0 0 30 2.81 (LIQ.) Haldia GT (LIQ.) 40.00 SS 0 0 0.00 0 0 0.00 0 0 0 0 0 0 Karaikal CCPP 32.50 SS 23 13 52.81 255 195 68.65 23 23 96.03 257 256 89.53 Kasbagt (Liq. 40.00 SS 0 0 0.00 0 0 0.00 0 0 0 0 0 0 Kovikalpal CCPP 107.00 SS 57 63 79.55 644 664 70.81 47 65 81.65 538 708 75.33 Kuttalam CCPP 100.00 SS 60 0 0.00 682 173 19.70 43 0 0 509 413 47.05
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GT Plant
Lakwa GT Namrup CCPP Namrup ST Pamporegps (LIQ.) Ramgarh CCPP Rokhia GT Valuthur CCPP Cochin CCPP (LIQ.) Goa CCPP (LIQ.) Karuppur CCPP P Nallur CCPP . Valantarvy CCPP Sub-Total Total
MoniSector March 2011 April 2010-March 2011 March 2012 April 2011 - March tored 2012 Capacity Target GeneTarget GeneTarget GeneTarget Generation ration ration ration (MU) (MU) (MU) (MU) (MU) (MU) (MU) (MW) (MU) PLF PLF PLF PLF 120.00 SS 88 67 74.61 877 766 72.89 84 63 71.11 822 762 72.33 95.00 SS 43 52 74.04 491 509 61.13 48 50 70.1 555 566 67.79 24.00 SS 8 0 0.00 85 21 10.03 0 0 0 0 0 0 175.00 SS 0 0 0.07 0 14 0.92 0 3 2.62 0 9 0.57 113.80 90.00 186.20 174.00 48.00 119.80 330.50 52.80 2851.68 18039.35 SS SS SS PS PS PS PS PS 63 30 99 75 27 61 213 26 1203 9037 30 38 65 78 27 52 216 31 1247 8358 35.78 56.05 47.01 60.24 75.88 58.15 87.73 79.12 710 336 1229 800 330 735 2259 325 14507 101773 301 444 548 223 292 820 2494 370 12493 99997 30.21 56.25 33.58 14.63 69.51 78.17 86.15 80.03 43 37 63 61 25 65 180 34 1173 8994 39 41 36 0 0 82 234 32 1006 7200 46.49 61.28 25.79 0 0 92.38 95.2 81.97 489 424 700 362 536 421 1083 49 53.63 53.21 66.2 3.19 60.19 75.75 52.57 81.45
300 254 731 797 2500 1526 409 378 13337 11289 102201 93080
Note: The Table Excludes Generation From Units Below 25 Mw.
Total Coal Import by Power Utilities during 2011-12 Figures in Million Tonnes (MT)
Annual target of Receipt at TPSs during imported coal April 2011 to February 2012 Power Plants Designed on Indigenous Coal 1 HPGCL 1.450 1.213 2 RVUNL 1.450 0.973 3 UPRVUNL 1.080 0.000 4 MPGCL 0.800 0.348 5 Torrent AEC 0.500 0.268 6 GSECL 1.480 0.593 7 Maha Genco 3.350 2.101 8 Reliance 0.600 0.754 9 AP Genco 1.600 1.395 10 TNEB 1.800 2.833 11 KPCL 0.900 1.139 12 DVC 1.730 0.000 13 CESC 0.500 0.180 14 WBPDCL 1.000 1.027 15 NTPC 15.450 11.246 16 NTPC (JV) Ind Gandhi 0.300 0.274 17 Reliance ROSA 0.300 0.781 18 NTPC SAIL Power Co 0.300 0.082 19 TATA (Maithon RB) 0.210 0.000 20 CSEB 0.200 0.000 Sub Total 35.000 25.207 Power Plants Designed on Imported Coal 21 Trombay 2.800 2.315 22 JSW Energy 6.300 5.542 23 Adani Power 5.000 6.444 24 Uduppi 4.200 1.464 25 Mundr Aumpp 1.700 0.000 Sub Total 20.000 15.765 Total 55.000 40.972 S. No. Board/Utility Receipt at TPSs during March, 2012 0.008 0.000 0.000 0.052 0.000 0.060 0.403 0.028 0.293 0.285 0.135 0.000 0.000 0.007 0.821 0.000 0.102 0.097 0.000 0.000 2.291 0.252 0.641 0.844 0.159 0.000 1.896 4.187 Available at Port Total Prorata receipt %
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0.000 0.000 0.000 0.000 0.000 0.017 0.000 0.009 0.000 0.069 0.000 0.000 0.137 0.000 0.158 0.000 0.000 0.000 0.000 0.000 0.390 0.000 0.000 0.000 0.000 0.000 0.000 0.390
1.221 0.973 0.000 0.400 0.268 0.670 2.504 0.791 1.688 3.187 1.274 0.000 0.317 1.034 12.225 0.274 0.883 0.179 0.000 0.000 27.888 2.567 6.183 7.288 1.623 0.000 17.661 45.549
84 67 0 50 54 45 75 132 106 177 142 0 63 103 79 91 294 60 0 0 80 92 98 145 39 0 88.000 82.000
NewsBriefs | Coal
FSA With 18 power plants Coal India has so far signed pacts with 18 power plants for supply of the fuel, amid electricity producers reservations about certain clauses of the revised fuel supply agreement, including those related to penalty. CIL has entered into fuel supply pacts with Reliance Power for its Rosa Power project, Lanco Anpara Power, Bajaj Hindustan and CESC, among others. SECL To look into request of DD International The MoC has received a request from DD International for clubbing its 15,000 tpa linkage with the LoA for 15,000 tpa and treat the kiln capacity as 1x30,000 tpa instead of 2x15,000 tpa. Accordingly, the MoC has asked SECL to send an inspection team to visit the unit physically and submit a report to the Ministry at the earliest. Legacy Iron to acquire six coal tenements in Queensland Legacy Iron, the Australian arm of state-owned NMDC is set to acquire six coal tenements in Queensland. The move to acquire coal assets is part of its strategy to become strong in steel making related fields. The company will pay Australian $6 million via staged payments to Subiaco capital, Velarium Holdings and Sara Bella Energy as cash payment and refundable deposit. PTC India Eyes coal block in Indonesia, again PTC India Ltd has revived its plans to acquire small coal mine in Indonesia. This would be the companys fourth attempt, as previous projects were not given a go-ahead by its board. It is trying to rope in a partner, which may be an Indian player or local company in Indonesia. PTC India wants to bring the coal to India for selling it to power plants. It has earmarked `300 cr for acquiring coal asset. CIL-Govt of Limpopo Pact to develop coal mines in SA Coal India (CIL) has signed a pact with government of Limpopo, South Africa for jointly identifying, exploring and developing coal mines. In order to execute the pact, it would be required to set up a subsidiary of the PSU firm in South Africa. In this JV, CIL will have majority share while the public enterprise of Limpopo will have at least 26% stake. NTPC $15 bn to secure overseas coal supplies NTPC plans to spend as much as `82, 521 crore over a decade to secure overseas coal supplies as prices of the fuel tumbled to a 19-month low. The utility may sign five or 10year contracts for the first time to import as much as 150 million MT of coal. Production constraints at state monopoly Coal India Ltd. are forcing the New Delhi-based generator to step up purchases abroad. Odisha Govt - MCL aid to develop coalfields infrastructure With a host of virgin coal blocks allocated to state PSUs and private entities in Odisha, the state government has sought the participation of Mahanadi Coalfields Ltd to develop common infrastructure and building of rail-road corridors. The CMPs and transport corridors to evacuate coal are being planned for Talcher and Ib valley coalfields in the state. Mahagenco rapped for delay in developing captive coal blocks State power utility Mahagenco has been issued show cause notices for inordinate delay in developing captive coal blocks allotted to it. Timely work on the blocks would have ensured proper supply of coal for four of the seven thermal power stations in the state, which are currently facing huge shortage of coal, hampering power generation and also leading to losses. Jharkhand Clears power and mining projects Recently Jharkhand government has cleared three joint venture proposals for development of high grade coal blocks. The coal blocks will be developed by Jharkhand State Mineral Development Corporation in association with Jindal Steel and Power Limited, Orissa Manganese and consortium of Coal Engineering and AMR Construction. CRISIL Consultant to determine reserve price of coal blocks The Government has finalised rating agency Crisil as a consultant, which would fix the methodology to determine the reserve price of 54 coal blocks, which the Ministry of Coal plans to auction during this fiscal. The Ministry, which has almost finalised the rules for bidding of blocks, had decided to go in for the competitive bidding route, in order to bring in greater transparency in the process. ICVL CIL plans to quit CIL is to write to the Coal Ministry stating its decision to quit ICVL, a special purpose vehicle formed to acquire mines abroad. The pull-out move was approved by CIL board. The Coal Ministry after receiving a letter from CIL, stating its decision to walk out of ICVL, will make recommendations to the Steel Ministry and seek its permission to exit ICVL. RPower Asks CAG to drop audit note Reliance Power Ltd (RPL), facing allegations of having received undue benefits in the surplus coal diversion issue, has requested the national auditor Comptroller and Auditor General of India (CAG) to drop its observations on the matter. The governments latest decision not to review an earlier approval given to the company to divert surplus coal from Sasan project has reaffirmed the permission.
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InDepth
Surplus Coal Policy: Is government batting for PSU?

The draft policy moots selling of surplus coal to CIL at production cost The coal so transferred would be sold by CIL through an e-auction
Coal india Limited, the worlds largest coal producer is facing an uphill struggle to meet the domestic coal demand. Sensing the maharatna companys predicament, it appears that government is now attempting to help the public sector undertaking through the blocks allocated to private firms. the government is working on a policy on surplus coal, and it may do just that. after all, these blocks originally belonged to Coal india, so what is the harm in routing surplus coal to the company, opined a senior official from the Coal Ministry. as per the policy, which is underway, private companies will be asked to sell the surplus coal produced in mines allocated for captive use to CiL at production cost, or without any margin. any surplus coal produced shall be transferred to the nearest CiL subsidiary. the price payable by CiL to the allocatee would be either the cost of production or the notified price of CiL for the corresponding grade of coal, whichever is lower, a draft policy floated by the coal ministry for interministerial consultations, said. Now, the catch in the policy is that, the government may impose a policy guideline mandating captive mining companies to sell the surplus coal to the public sector company without any profit. the policy, if implemented, would work towards discouraging companies to produce more than what they need for captive consumption. industry experts, however, see the move as regressive. at a time, when the gap between coal output and demand is
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The catch in the draft is that, the government may impose a policy guideline mandating captive mining companies to sell the surplus coal to the PSU without any profit
Once implemented, the new policy would pave the way for the government to fast-track progress of its Ultra Mega Power Plants (UMPP) programme, under which it wants to award at least 13 UMPPs to private developers
rising, the government should work towards encouraging companies to boost output rather than penalising them for efficiency. Nonetheless, companies do need permission, if they intend to mine more than what was permissible in the lease agreement. Our biggest concern (by allowing private companies to enter commercial sale of coal) is private companies with captive mines may produce surplus output to garner profits. if this happens, it would circumvent the existing law that which does not allow these to profit through coal sales, said a senior coal ministry official. the draft policy statement said that the coal so transferred would be sold by CiL through an e-auction. under the e-auction, coal is sold at spot market price. around 10 per cent Finance Minister Pranab Mukherjee. of the total coal produced by CiL, One may assume that the new which accounts for over 80 per cent of policy will not affect the permission the domestic coal production, is sold already given for use of reliances through e-auction. any surplus coal Sasan uMPP incremental coal for produced/generated (from the captive its Chitrangi Project. However, the mines).... shall be transferred to nearest application of reliance Power to use Coal india (CiL) subsidiary....(and) surplus coal from blocks allocated to shall be disposed by e-auction by the the tilaiya (in Jharkhand) uMPP will CiL, it said. be processed under the new policy on a committee of Secretaries will surplus coal. be asked to give its recommendation, the draft also recommends followed by inter-ministerial penal action, including coal block discussions. the Cabinet Committee cancellation, against companies, which on Economic affairs (CCEa) is have been allotted captive blocks, are expected to take a call after that. found selling coal. any attempt to sell it is clear that the new policy will be coal along with rejects shall amount implemented prospectively, a senior to breach of law as well as breach coal ministry official opined. of terms and conditions of an empowered group of The allocation/mining lease/ ministers (EGoM), in draft also FSa...and the company its meeting last month recommends attempting to do so decided to stick to penal action, inshall invite penal an earlier decision cluding coal block action, including where the government cancellation, against cancellation of allowed reliance companies, which have allocation and/ Power to use surplus been allotted captive or termination of coal produced from blocks, are found selling coal. mining lease/FSa, the mines allotted for the document said. Sasan project in Madhya Since 1973, coal mining has Pradesh to its Chitrangi project remained the exclusive domain nearby. the EGoM is headed by
of the public sector. Coal Mines Nationalisation act came into force in early 70s. However, later, through a series of amendments to the act, the government had allowed private companies to mine coal for specified captive use in end-use projects. as of now, 28 (operational) captive mines contribute about 35 million tonnes of the total 530 million tonnes of coal produced in the country. Once implemented, the new policy would pave the way for the government to fast-track progress of its ultra Mega Power Plants (uMPP) programme, under which it wants to award at least 13 uMPPs to private developers. according to the policy guidelines, incremental coal produced from captive mines should be sold by a private developer to the nearest Coal india mine at a transfer price set by the government. incidentally, another legislation, the Commercialisation of Coal Mining bill, which is aimed at allowing private companies into commercial sale of coal has been gathering dust since 2000.
For suggestions email at feedback@infraline.com
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InDepth
Disquiet over Coal Pricing

Move to switch over to GCV pricing may lead to a gradual rise in coal prices to global levels Imported coal has low toxic elements that makes it less polluting
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Coal india Limiteds (CiL) move to shift from useful Heat Value (uHV) to Gross Calorific Value (GCV) grading and pricing has drawn a lot of opposition from coal consumers. its not so much the fear of rise in prices, but the absence of infrastructure to implement the framework that caused major concerns. the shift was intended to encourage coal producing companies to boost production of superior grades of coal. india is the only major coal producing country that did not follow the GCV system. the move to switch over to GCV
At present, the average price of Indian coal is 30-60 percent lesser than global prices, and a move to GCV will affect the power sector adversely
pricing is likely to lead to a gradual rise in coal prices to international levels. at present, the average price of indian coal is 30-60 percent lesser than the international price, and a sudden move
to GCV will affect the power sector and other consumer industries adversely, and therefore it should be done in a phased manner. Since 1970s, indian coal is classified on the basis of uHV, which is based on ash and moisture content of coking coal, in line with the centers directives. CiL has been advocating a changeover to GCV-based sales since 1998. Each such attempt the previous being in 2008 has faced with severe opposition, in particular from the power sector, which anticipated a pricing motive behind the move.
an insight into the comparison of quality and price differential of indian and imported coal would explain why the move to GCV attracted criticism. CiL worked on the recent move on the recommendation of the tL Shankar Committee in 2010, and the integrated Energy Policy document of the Planning Commission.
Table 1: Indian Coal Vs Imported coal

Country Moisture Content (%) 6-11 10-12 7-15 8-9 1-18 Ash Content (%) 6-17 4-12 8-12 12-15 9-34 Sulphur Content (%) 0.3-0.8 0.1-0.95 0.3-0.8 0.45-0.55 0.2-0.8 Calorific Value (Kcal/ Kg) 6000-7200 4100-6700 6500-7000 5850-6500 3500-5000 Volatile Matter (%) 14-36 28-42 24-32 23-25 11-38
Australia Indonesia China South Africa India

Source: Infraline Analysis
Quality and price differential of Indian and imported coal

Most of indian coal comes from open cast mines, making it difficult for miners to keep the quality consistent.
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industrial application seeks better coal quality. the imported coals have low toxic elements like mercury, lower silica and alumina content, thus it is less polluting and advantageous for industrial applications vis--vis indigenous coal. On an average, the coal from the overseas destination has a 30-40 percent higher calorific value compared to indian coal. a comparison of the energy price of the pit head Grade E coal produced by Northern Coalfields Limited (NCL) of CiL and the indonesian and South african coals on an equated energy basis reveals the disproportionate price disparity in the domestic and international coal. Grade E coal from NCL is an overall representative of CiLs total coal production having weighted average GCV of 4704 kcal/kg. there is a sharp contrast in the price of indian and
imported coal, which can be seen in Figure 2. CiL is attempting to reduce the gap between international coal price and domestic coal which is about 75 percent in certain coal varieties like C, D and part of E grades.
The Delayed Move

Since 1990s, CiL has been trying to shift to the GCV system, but the move did not get materialised, mainly due to protest from the power sector. under GCV, coal is categorized into 17 grades instead of seven under uHV method, with GCV ranging from 2,200 Kcal/kg to 7,000 Kcal/Kg. the internationally-accepted grading and pricing GCV policy measures the amount of heat liberated from carbon and hydrogen in the coal when heated. Due to the high ash content in indian coal, the uHV mechanism is followed that takes into account the heat trapped in ash. typically in indian coal, GCV is 25 percent higher than uHV. india
is the only major coal producing country, globally that does not follow the GCV system. the uHV pricing, does not take environmental cost into consideration. boilers of thermal power plants are designed to use low ash content coal and the use of low-grade coal affects the performance of the boiler. the GCV based pricing is an internationally accepted benchmark and technology driven. it incentives the use of washed coal in thermal power plants, thus minimising the adverse impact on the environment. CiL has continually kept grade adjusted prices of its coal at discounted rate with respect to imported coal in the past. in Fy 2010, it gave a discount of about 57 percent with respect to the global prices. indian government is considering pricing the domestic coal at par with international coal. Keeping the indigenous coal at some price parity with imported coal will reduce losses and add to revenues of
InDepth
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indigenous producers. the changing trend of pricing indian coal at par with international coal can be seen from in Figure 3. CiLs stand, that the changeover from uHV to GCV system is revenue neutral, is not correct. the revised system would result in an increase in the cost of coal by 50 percent to 180 percent, depending upon the coal grade and the mine concerned. Mr alok Perti, Secretary Ministry of Coal (MoC) at infralineEnergys annual Summit on Overseas Coal in india, 2012, said that the coal prices in the country increased, because earlier pricing of the mineral was on the cost plus basis and not the calorific value; but the need to link the prices to calorific value led to the price increase. N.C. Jha, former Chairman and Managing Director of Coal india also said that, delinking local prices from global rates would help offset a projected 12.5 percent rise in prices. the new pricing is based on the weighted average price of coal for the erstwhile uHV-based grades, which have been suitably extrapolated for the GCV slabs on the basis of price per million calorie for various grades so as to bring about a revenue neutrality as a whole, said Mr Jha. He also said that despite the change in pricing method, CiL will continue to offer between 25 to 77 percent discount to power
sector customers, and 25 to 66 percent discount to others. the new regime would generate additional revenue of about `28, 000 crore. However, as per CiL, the new pricing is not only revenue neutral in total, but for some of its subsidiary, will lead to losses. Mr N.C. Jha, stated that the worst affected mine would be the Western Coal fields (WCL). under the new policy it is assumed that WCL will incur a loss of `450 crore. to set off these losses, CiL will charge 10 percent more than the rest of the subsidiaries. the earlier move of CiL to levy extra six percent on the coal from Eastern Coalfields Ltd (ECL), as it is a sick subsidiary and listed with the board for industrial and Financial restructuring, was also withdrawn. instead, only customers of WCL will have to pay 10 percent extra.
Consumers Concerns?
the announcement of new pricing regime led to huge protests from consumers including power, cement and steel companies that expected the coal prices to go up. the Coal Consumer association of india (CCai) said that it is not against the GCV system; however the move could have been executed after correcting the prevailing inconsistencies. CiL should maintain international standards which the firm is not following. before, CiL finalises
the new regime, it should note that the ash and moisture content of indian coal is quiet high as compared to coal from South africa, indonesia and other countries. Hence, CiL should also give 100 per cent washed coal, which currently stands at about 10 percent of total supply. besides, as per reports, the size of CiL coal varies which is not in case of imported coal. Further, CiLs coal also contains bulk impurities such as shale, stones, boulders, etc which are absent in imports. the CCai demanded a temporary rollback of the decision. the association envisages the minimum coal price hike of five percent, which could even go up to 168 percent. this would result in an adverse spillover effect on the related sectors. the cost of cement would increase by `8 to `10 per bag. Fuel cost for cement and steel plants could also increase up to 70 percent. raw material cost for sponge iron could increase up to 15 percent. the cost of power generation could increase 35 percent, and would therefore put additional burden on the state distribution utilities, which are unable to fully recover the increasing cost of generation by way of tariff which is subject to regulatory bodies. the Ministry of Power (MoP) urged MoC to hold a meeting of stakeholders to have a comprehensive view on the matter and create requisite technical and legal framework, before coal companies switchover to the GCV based coal grading and pricing regime. the power ministry reiterated that adoption of GCV system needs to be preceded by the prerequisites in line with the international practice. these include availability of sized coal (-50 MM), sampling at unloading point (power utility end), third party sampling, adoption of auto-mechanical sampler, bOM calorimeter and disincentive/penalty for supplying coal below the specifications. For fixing the price of coal as per the GCV regime, other coal quality parameters like ash,
iM, tM, VM, fixed carbon, sulphur, size of coal should also be specified in addition to GCV. MoP requested MoC to issue instructions to CiL to put the implementation of GCV based pricing system in abeyance till the CiL and its subsidiary companies meet the essential prerequisites, such as supply sized coal and improved and automated sampling techniques, in line with the international practice. Declaration of GCV should be done through a scientific way, based on actual calorific value verified through proper sampling of each rake of coal. the power utilities are of the view that a Coal regulatory authority should be set up. this is essential before implementing the GCV based pricing
mechanism on a trial basis for three months. a Coal regulatory authority rather than CiL should be responsible and regulate the shift to GCV regime. till then the present system of uHV based pricing shall continue. the india Coal Merchant association also supports setting up of a Coal regulatory authority, which should not only for the pricing issues but also to look into the coal supply and quality concerns.
The Road Ahead

CiL has given in to the pressure from the consumer industries and rolled back the price hike that came into effect after the company shifted to the new coal pricing mechanism based on GCV.
Table 2: Impact on coal price due to CIL move to change over from s UHV to GCV based pricing
S. No GCV Band New Price Ash % UHV (ADB) Pit head Grade UHV Ash RoM price % for non coking coal (INR/ton) Power utilities 4900 A >6200 <15 Old Price Pit head Increase RoM price (Power for non utilities) coking coal (INR/ton) Power Abso% utilities lute 3690 1210 32.79 3690 3690 B C 5600 6200 4940 8600 4200 4940 3360 4200 2400 3360 15-19 3590 19-24 1050 1050 D E 24-29 880 29-35 730 730 F 35-42 570 570 570 G 1300 2400 42-50 430 430 1000 770 540 2940 1890 1180 1160 950 400 310 60 200 190 27.10 20.87 15.04 280.0 180.0 134.09 158.9 130.14 70.18 54.39 10.53 46.51 44.19
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Above 7000 6700 7000 6400 6700 6100 6400 5800 6100 5500 5800 5200 5500 4900 5200 4600 4900 4300 4600 4000 430G 3700 4000 3400 3700 3100 3400 2800 310C 2500 2800 2200 2500
<8.80 12-9 15-12 17-15 20-17 23-20 26-23 30-26 33-30 36-33 39-36 42-39 45-42 49-45 52-49 55-52 58-55
6416-6830 4690 6002-6416 4460 5726-6002 4130 5312-5726 3990 4898-5312 2940 4484-4898 2060 3832-4484 1890 3518-3932 1680.00 3104-3518 970.00 2690-3104 880.00 2276-2690 630.00 1862-2276 630.00 1310-1862 620.00 896-1310 484-896 62-482 620.00 550.00 480.00
While the company will continue with GCV based grading of the mineral, it will not link the prices with international rates. as per MoC, an assessment will be made for coal pricing. after a trial period of three months, the results would be assessed, if CiL has a loss or if profit rises, suitable action will be taken. Coal Minister Sriprakash Jaiswal stated that the proposed GCV based mechanism was aimed at bringing more efficient grading and pricing system. Mr. N.C. Jha, addressing the concerns regarding the high ash and moisture content and inconsistent quality in CiLs coal compared to international coal said, for that we have kept band of 300 kcal for each band of grades, while, price for international coal changes in narrow band of 50 kcals. to conclude, the stakeholders are not against the GCV pricing mechanism, but have not been able to take the inconsistencies in implementation of the new pricing regime in stride. Lack of proper legal framework, the infrastructure inadequacies, lack of appropriate coal quality standards are the major concerns, observed actually resisting the needed price decision. if only CiL could address these concerns in the assessment quarter of JanuaryMarch, 2012. it is ironical that even after the deregulation of coal prices, after conformance of Colliery Control Order, 2000, the price increase by CiL, has been less than inflation on yearly basis. During the ten-year period from January 2000 to January 2010 saw a 4.9 percent increase in coal prices by CiL, which is lower than the inflation rate prevailing over the same period. the point is that the coal prices of CiL are significantly lower than the landed cost of imported coal in india. Further, the prices do not reflect the market price for coal at a domestic or international level. Sooner or later the shift to GCV pricing is there to make its way in the indian coal scenario.
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Source: ICMW
InConversation
We followed the law in coal block allocation: Jaiswal

Following the draft report by the Comptroller and auditor General on coal blocks being allocated to firms without bidding, the opposition stalled the functioning of the Parliament several times demanding discussion and tabling of the report. union Coal Minister Sriprakash Jaiswal, who is at the helm of affairs in the ministry, spoke to infralinePlusalok Sharma and categorically denied the charge, saying that the ministry did not deviate from the rules and regulation meant for block allocation.
Sir, the CAG draft report has raised significant questions on the process of allocating coal blocks between 2004-2009. According to the draft report the firms had made staggering gains worth Rs. 10.67 lakh crore. Please throw light on the issue. the report is yet to be tabled in the Parliament, so it would not be fair to jump the gun before the report is made public. However, i want to clarify that there was no foul play in allocating the blocks. the government followed all necessary procedures. it placed advertisements in newspapers for allocation of coal blocks and invited applications. When interested parties applied, the ministry consulted concerned state governments before giving away the blocks to the firms. the coal blocks were allocated through a screening committee headed by Coal Secretary. One also has to understand that the dynamics of the (coal) sector have changed over the past few years. Coal commands premium now but it was not the case earlier... that time when the blocks were given (without auction) there was not much demand... naturally, there was not much value. But, what is the rationale in inviting bids for coal blocks now? See, one has to wait for the right time to go for a change (in the process). in mid 2000, there were not many companies interested in acquiring coal blocks. Even if we had gone in for the bidding, i would not assume that investors would have come forward With so much of perceived value in the blocks, bidders will come. Does government foresee a better price for itself while auctioning coal blocks. allocation of coal blocks was never looked upon as a potential source for generating revenue for the Central Government. the intent of the government was to induce rapid development of infrastructure which was so very essential to keep the economy on a high growth trajectory. Hence the question of maximizing revenue does not arise at all. the idea of introduction of bidding cropped up only in the wake of increasing demand for captive coal blocks and the consequent necessity of putting in place a process which is demonstrably more transparent.
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as the economy grew in size, the demand for coal also grew, particularly due to expansion in the energy sector. it was felt that Coal india Ltd alone would not be able to meet the growing demand and, therefore, the option of giving a bigger role to the private sector was explored. What are the measures that the government plans to follow in ensuring that the blocks are given to serious players only? Given the increasing gap in demand and supply of power, there is a need to ramp up coal output. the government has already issued show cause notices to a number of firms that were sitting on the blocks. We have asked those firms to explain as to why was investment not made towards developing the block. after carefully going through the responses, the ministry will take a call on de-allocation of the blocks. the government has already incorporated bank guarantee clause, to inject seriousness among the bidders. Going forward, no company will be allowed to sit idle on the resources.
Coal commands premium now but it was not the case earlier... That time when the blocks were given (without auction) there was not much demand
With finite natural resources and coal companies facing issues of strikes, monsoon and naxal problems, how would government ensure optimum output from existing mines. (Smiles) unfortunately, the government has not found any solution against the monsoon. but we are working towards acquiring mines overseas to boost the supplies. We are planning to set up a fund to help public sector companies in acquiring coal assets overseas. though, Coal india Ltd (CiL) has surplus resources for investing outside, we feel that the government should provide additional financial support in buying stake in large assets outside the country. Here, i would also want to add that
the boards (of PSu companies) need to be proactive as any delay in reaching a may result in losing the opportunity. There are many power producers including state-owned NTPC, which is not comfortable with the penalty clause in fuel supply agreement. Is there any scope to change the penalty clause, as companies believe that it is biased towards Coal India. Not everybody has a problem. Some companies have already signed FSas with Coal india. However, we are trying to address their issues. if required we may re-work on the penalty clause. but, i believe Coal india will be able to supply raw material to companies as per their agreement. What is the progress on coal regulatory bill? Cabinet discussed the issue and it was then decided that Empowered Group of Ministers should look into the concerns. Once EGoM discusses the issue, we may then proceed further.
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StatisticsCoal
State-wise status of coal resource position of the country from April 2010-April 2011
State (1) Assam Andhra Pradesh Jharkhand Bihar Madhya Pradesh Chhattisgarh Maharashtra Orissa Sikkim As on Proved (2) (3) Gondawana Coalfields 1/4/2010 0 1/4/2011 0 1/4/2010 9,257 1/4/2011 9,297 1/4/2010 39,633 1/4/2011 39,761 1/4/2010 0 1/4/2011 0 1/4/2010 8,505 1/4/2011 8,871 1/4/2010 12,441 1/4/2011 12,879 1/4/2010 5,360 1/4/2011 5,490 1/4/2010 21,507 1/4/2011 24,492 1/4/2010 0 1/4/2011 0 1/4/2010 866 1/4/2011 866 1/4/2010 11,753 1/4/2011 11,752 1/4/2010 109,320 1/4/2011 113,408 1/4/2010 1/4/2011 1/4/2010 1/4/2011 1/4/2010 1/4/2011 1/4/2010 1/4/2011 1/4/2010 1/4/2011 1/4/2010 1/4/2011 31 31 349 465 89 89 9 9 478 594 109,798 114,002 4,204 Resources (million tonne) Indicated (4) 3 3 9,730 9,728 30,992 32,591 0 0 11,267 12,192 30,230 32,390 2,984 3,094 32,074 33,987 58 58 196 196 13,030 13,132 130,564 137,371 40 40 33 43 16 16 0 0 89 99 130,653 137,470 6,817 Inferred (5) 0 0 3,029 3,029 6,338 6,584 160 160 2,216 2,063 4,011 4,011 1,965 1,949 12,726 10,680 43 43 0 0 5,071 5,071 35,559 33,590 19 19 3 3 471 471 307 307 799 800 36,359 34,390 -1,969 Total (6) 3 3 22,016 22,054 76,964 78,936 160 160 21,988 23,126 46,682 49,280 10,308 10,533 66,307 69,159 101 101 1,062 1,062 29,853 29,955 275,444 284,369 0 90 90 385 511 576 576 315 315 1,367 1,493 276,810 285,862 9,052
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Uttar Pradesh West Bengal Gondawana Coalfield Tartiary Coal Fields Arunachal Pradesh Assam Meghalaya Nagaland Tertiary Coalfields India Increase / Decrease (-) In Resources Due To Exploration In 2010-11
Source: Geological Survey of India. Data may not add up to respective total due to rounding off.
Inventory of geological resources of coal by type as on April 1, 2010 and 2011

Type of Coal (1) Prime Coking As on Proved (2) 01/04/2009 01/04/2010 01/04/2011 01/04/2009 01/04/2010 01/04/2011 01/04/2009 01/04/2010 01/04/2011 01/04/2009 01/04/2010 01/04/2011 01/04/2009 01/04/2010 01/04/2011 (3) 4,614 4,614 4,614 12,448 12,573 12,573 482 482 482 88,175 92,129 96,333 105,720 109,798 114,002 Reserve (MT) Indicated (4) 699 699 699 12,064 11,940 12,001 1,003 1,003 1,003 109,804 117,012 123,768 123,570 130,654 137,471 Inferred (5) 1,880 1,880 1,880 222 222 222 35,819 34,257 32,287 37,921 36,359 34.389 Total (6) 5,313 5,313 5,313 26,393 26,393 26,454 1,707 1,707 1,707 233,798 243,398 252,388 267,211 276,811 285,862
Estimated Coal Demand and Availability Position During 2012-13 (figures in million tonne)
S. No 1.1 Description Coal requirement for plants designed on indigenous Coal Coal requirement for plants designed on imported coal Total Coal availability from indigenous sources From CIL sources From SCCL From captive mines Total coal availability from indigenous sources Shortfall of indigenous coal (1.1 - 2.4) 347 33 25 405 2012-13 488
Medium Coking Blendable/ Semi Coking Non Coking (Including High Sulphur) Total*
1.2
24
1.3 2. 2.1 2.2 2.3 2.4
512
3.
83
*Including Sikkim
Company-wise details of coal production during the XI Plan and projection for XII Plan
Company 2006-07 Actual 30.47 24.21 41.32 52.16 43.21 88.50 80.00 1.05 360.92 37.71 1.77 7.04 17.61 5.79 430.84 2007-08 Actual 24.06 25.22 44.15 59.62 43.51 .93.79 88.01 1.10 379.46 40.60 2.02 7.21 21.17 6.54 457.00 2008-09 Actual 28.14 25.51 4S43.24 163.65 44.70 101.15 96.34 1.01 403.74 44.54 1.84 7.28 29.87 5.49 492.76 2009-10 Actual 30.06 27.51 47.08 67.67 45.74 108.01 104.08 1.11 431.26 50.43 3.30 7.21 35.03 5.77 533.00 2010-11 Actual 30.81 29.04 47.52 66.25 43.65 112.71 100.28 1.06 431.32 51.33 1.81 7.03 34.60 6.97 533.06 2011-12 Target Anti 33.00 30.00 51.00 68.50 45.50 112.00 106.00 1.00 447.00 51.00 3.55 8.40 38.25 5.80 554.00 31.00 30.20 49.00 68.50 43.80 113.75 103.00 0.75 440.00 51.00 17.75 36.15 544.90 XII Plan 2012-13 2016-17 Target Target 33.00 45.00 31.001 37.00 55.00 92.00 70.00 82.00 45.00 45.00 117.00 145.00 112.00 167.00 1.10 2.00 464.10 615.00 5.3.10 57.00 18.00 39.f0 574.40 23.00 100.00 795.00
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ECL BCCL CCL NCL WCL SECL MCL NEC CIL: SCCL Other Public Sector# Private-IISCO Captive* Meghalaya Grand Total:
# Includes IISCO, DVC, JSMDCL & JKML% APMDTCL * Includes B-EMTA, ICML, JSPL, Hiandalco, Monnet, BLA, CML, Panem, PEL & INL.
Plan-wise Areas Covered Under Regional and Detailed Exploration

Plan Prognosticated Covered potential coal by regional bearing area exploration (sq. km) 15079 8526 17303 10535 17303* 11992 17619* 14013 (17303 + 316**) 18279 % Remaining to Covered be covered by detailed by regional exploration exploration 6553 4824 6768 5048 5311 5568 3606 7188* (770+2836***) 4226 (1430+2836***) % Proved Indicated Inferred (MT) (MT) (MT) 70.443 87.319 95.866 114.00 89.750 109.378 119.769 137.47 Total (MT)
End of VIII Plan End of IX Plan End of X Plan End of XI Plan Beginning of XII Plan
56 60 69 79
56 48 46 51
41.761 201.954 37.41 7 234.114 37.666 253.301 34.39 285.86****
*Tentative Estimate, **Addl. Area identified during X Plan, *** Includes 2836sq km area under CBM Blocks, ****Around 10.87Bt of coal has been extracted from 1950 to 2010-11 from these resources, + Does not include area covered by detailed exploration by captive block allocattees.
NewsBriefs | Oil & Gas

OIL AND GAS Steep rise in petrol prices Petrol in Delhi will now cost `73.18 a litre with the public sector oil marketing companies raising the prices by `7.54 a litre. This is the steepest increase that the country has seen. Though petrol prices were deregulated in June 2010, there is an artificial control in place. This is evident by the fact that the increase came just a day after the Budget session of Parliament ended. Natural gas from Turkmenistan $13 per million British thermal unit India will pay close to $13 per million British thermal unit for natural gas it will buy from Turkmenistan through a pipeline passing through Afghanistan and Pakistan, almost three times the rate government has fixed for domestic gas producers. The higher rate agreed is in contrast to the stand Oil Ministry had taken in stonewalling a request from RIL and its partner BP . Government says NO to oil PSU buying ADBs stake in Petronet LNG The Oil Ministry has refused permission to oil PDUs for acquiring Asian Development Banks stake in Petronet LNG Ltd so as to keep the nations largest liquefied natural gas importer a private company. The ADB on August 23 last year offered to sell its 5.2 per cent stake in PLL, in which GAIL, IOC, BP and ONGC hold 12.5 per cent stake each. India-US LNG imports Taking energy cooperation forward, India and the US are discussing import of LNG from the US. The US currently has a surplus, while India has a deficit, with many of its gasbased power plants languishing. At a recent meeting between the two countries, the US delegation made a presentation on oil and gas markets, including the impact of LNG and shale gas on gas markets. KG-D6 Centre to appoint arbitrator Refusing to buy the argument by RIL on the KG-D6 block cost recovery issue, the Petroleum and Natural Gas Ministry has directed the DirectorateGeneral of Hydrocarbons (DGH) to take necessary action as per the notice served on RIL. The government has moved ahead on the issue of appointing an arbitrator for the case. Falklands India decides to invest in oil fields Britain and Argentina have been feuding over the sovereignty of the Falkland Islands for 180 years. Now, an outside player has decided to take the plunge on what might be there under the stormy southern Atlantic waters and invest India. Indias OVL is now in talks to buy 25 percent of two exploration blocks in the Falklands offshore waters. ONGC To get into LNG marketing ONGC has drawn up plans to enter the marketing and re-gasficiation of LNG and into the City Gas Distribution (CGD) business. The company feels that the share of natural gas in Indian primary energy basket is expected to increase from 11 per cent to 20 per cent by 2025. Dependence on imported LNG is set to increase substantially. Mozambique bidding war BP and Videocon Industries big gainers BP and Videocon Industries are turning out to be big gainers in the bidding war between Thailands biggest oil explorer PTT Exploration and Production and British oil giant Shell Plc for the stake held by Cove Energy in the prospective gas block in Mozambique. Since January this year, their assets have soared by `24,000 crore. South China Sea ONGC pulls out Indias decision to pullout from certain oil blocks claimed by Vietnam in the South China Sea is to benefit Sino-India ties. China had raised objections to Indian oil exploration projects in the region. Amid tensions between China and Philippines, Indias non-involvement in the South China Sea would be beneficial to both the regional security and Sino-Indian relations. BPCL Beating refiners on African exploration BPCL is the bestperforming energy stock on the MSCI AC Asia Pacific Index this year and analysts say its foray into exploration in Africa to counter refining losses may mean theres more growth to come. Bharat Petroleums 54 percent surge this year makes it the only refiner among the top 10 gainers on the MSCI AC Asia Pacific Index and the best performer on Indias 50-share Nifty Index. Kerala Land for LNG power plant Government of Kerala and Petronet LNG Limited, promoters of the LNG terminal coming up on Puthuvype island, are learnt to have reached an understanding on land for an LNG-based power generation facility. The government had identified 50 acres for the project, which proposed setting up a 1,250 MW plant. IGL vs PNGRB Regulator submits its case The Petroleum and Natural Gas Regulatory Board asserting its right to frame regulations, in order to protect the interest of consumers, stood by its April 9 order cutting down, with retrospective effect, the network tariff and compression charges for CNG (compressed natural gas) distributed by Indraprashta Gas Limited (IGL) in Delhi and adjoining areas.
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InConversation
Exploiting heat to move crude through pipelines

Perma-Pipe inc., a leading North american manufacturer of pre-insulated district heating and cooling piping systems entered india in 2008. Since then there has been no looking back as the company has managed to make a firm ground for itself here. President Fati Elgendy, seen as a turnaround artist, who has been with the company for more than 32 years, spoke to infralinePlus about his vision for the companys india arm and its prospects in the country.
Given the dependence on oil and gas for a countrys economic growth, where do you see India standing at this point in time? India is diversifying its sourcing of oil and gas, exploring for its own resources, both onshore and offshore, as well as modernizing, updating and upgrading its offshore flow lines and transportation lines. What are the challenges before Indian companies that wish to go for pipeline insulation? Is cost a concern, keeping in view the state-owned oil marketing companies dependence on the government for is the best solution for heavy crude subsidies? In the wake of high transportation. It is efficient, longglobal crude prices, are margins lasting and environment friendly. Of also a matter of concern? course, economic concerns are part of Insulation and, sometimes, heat every decision making process in India tracing a pipeline is utilised for or in any other country, but we have flow assurance. Heavy crude is very been very successful when given the viscous and cannot be pumped from opportunity to demonstrate one location to another unless heated our solutions. and insulated. There are other Our methods and technologies for technology make the pipes Are more heavy crude transportation corrosion procompanies such as heated tanker trucks tected, insulated and which are very expensive, installed, which is why willing keeping in mind the current they are the safest and to go for insulation? state of road infrastructure the most economical bet for heavy crude What kind of in the country. Also, some transportation. safety cover chemical additives can be used would your to decrease the oil viscosity and, technology provide hence, improve its flow ability. Our in oil and gas transportation and solution for providing how financially viable will it be? long-term, We are experiencing some success dependable in the Indian market and getting a and qualitylot of enquiries about insulation. We insulated have served major Indian oil & gas (and companies from within and outside sometimes of India. Our technology provides heated) long-lasting and long-term solutions pipelines for heavy crude transportation. We also supply solutions to most international and multinational oil companies in the Gulf of Mexico, Latin America, West Africa, Middle East and now, in India. Our
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afford heaters and air conditioners. Till now, these needs were met with split units and central air conditioning. However, district cooling and heating save approximately 50% of the power requirement, they are easier to maintain and economical. We believe that this nascent market will grow and prosper. Our goal is to serve diverse market segments, and train and keep the best Indian talent gainfully employed. We strongly believe that business is people. Hire the best, train them, respect them and give them room to grow and prosper because if you take care of your people, they will take care of you. Your company has tie-ups with few private Indian companies. How do you propose to move forward? Do you have plans to get associated with state-run firms? Are government policies conducive to the segments growth, or there is a need for policy reforms? We would like to stay independent but work with every reputed Indian firms and work towards providing a one stop shop for all customer needs. Currently, we are not looking for tie-ups, however, we never say never, so we will carefully evaluate every opportunity for collaboration presented to us in due time. Any plans for a tie-up with any marketing firm? Also, besides insulation, are there any other products that you might offer to Indian companies? Insulating pipes for transporting fluids underground and above ground is our core business. We have over 50 years of experience in this field and we want to continue to offer the same in years to come.
35
technology make the pipes corrosion protected, insulated and installed, which is why they are the safest and the most economical bet for heavy crude transportation. What kind of growth opportunities do you foresee in the sector? Are you also mulling over tie-ups in the Indian market? We have just started our fully-owned facility in India as we see a significant opportunity in providing insulated pipeline solutions for heavy crude and sulfur transportation, in the nuclear industry as well as in the district heating and cooling markets here. With the Indian economy growing at a steady pace, a larger segment of the middle class would be able to
The company also provides a complete line of heat-traced process piping systems for freeze protection, temperature maintenance, heat up and reheat.
InDepth
Mittals Punjab Dream comes true, Oil Refinery gets started

Commissioned `21,500 crore in a refinery project in Bhatinda, Punjab in a JV with HPCL Refusing to give up, Mittal awaits approvals to his `1.1 lakh crore steel plants for India
Meet india born billionaire, Lakshmi Narayan Mittal or LNM -- as he is popularly known as within his company, owner of the worlds largest steel making company, arcelor Mittal. L N Mittal was in india recently for commissioning of his `21,500 crore refinery project in bhatinda, Punjab. the refinery is a joint venture between Mittal Energy investments and stateowned refiner Hindustan Petroleum Corporation Ltd (HPCL). plant in Karnataka is 6 mtpa, and the Just a day after the announcement cumulative investments in setting up of the JV by Prime Minister Dr of these three plants is a whopping Manmohan Singh (on april 28), `1,10,000 crore. came the news from London that Despite such huge investment Mittal has retained the crown of commitments, Mittal has not been able britains wealthiest man. and this to progress much in these projects. was despite his personal worth sliding Land acquisition and procedural delays by 4.8 billion pounds to 12.7 billion have hampered Mittals ambitious pounds last year. plans in india. the Nri billionaire the annual list of the richest earners refuses to give up hope and expects was published this april by british the approvals to come soon. For him, Prime Minister, David Cameron. the the india story is intact and is list is based on identifiable wealth, definitely not over. including land, property and It in a recent other items such as, art, took us over interaction with racehorses or significant 600 approvals media persons shares in publicly for commissioning in New Delhi, quoted companies, the Bhatinda refinery Mittal had but does not include project and although said, Whether bank accounts. With we dealt with three it is political a personal wealth states, this project uncertainty or the of uS$20.7 billion, stands commistalk of a policy Mittal is also the sioned, paralysis, india richest asian as well as - LN Mittal will continue to grow indian. He is counted as because this is a country the second wealthiest man in with tremendous potential and Europe, and the sixth wealthiest aspiring youth, who are looking to the man in the world. world to make a difference. the steel king is currently However, its not that these working on multiple plans for india. procedural delays do not bug him. as From interests in the oil and gas sector any other businessman, he too gets to the three steel projects in india -affected by such delays. i am a little one each in Jharkhand, Odisha bit concerned and do feel bad when and Karnataka. Each of the delays take place but i am not giving two steel plants in Jharkhand up now, he had said this in his recent and Odisha will be set up media interaction. as integrated steel plants, Mittals oil and gas foray wasnt each with a capacity of 12 either an opportunity that was offered million tonne per annum. to him on a platter. being a landlocked the capacity of the steel
36
refinery, the project had inherited disadvantages compared to other coastal refinery projects of reliance, Essar and others. Mittal, who has been waiting for over five years now to get regulatory and land approvals for his steel projects said, it took us over 600 approvals for commissioning the bhatinda refinery project and although we dealt with three states, this project stands commissioned ahead of our steel projects that were planned much before.
With a personal wealth of US$20.7 billion, Mittal is also the richest Asian as well as Indian
Every project has its own problems and we have to address each project differently. Just because the refinery project happened first, i cant say this project is better or worse than my other steel projects, he had added. On the slow pace of his steel
A view of Guru Gobind Singh Refinery petro-chemical plant, a joint venture of HPCL-Mittal Energy Limited, in Bhatinda
Energy Invested `21,500 crore in the Bhatinda refinery project in Punjab as JV with state-owned Hindustan Petroleum (HPCL) `4,000 crore -- Mittals share of investment already gone in commissioning Bhatinda refinery Joint venture companies with ONGC and ONGC Videsh to explore oil and gas in India and abroad; started in Nigeria but no substantial progress on ground. Got an exploration block with HPCL in the NELP-7 round of bidding Looking at fresh exploration opportunities with HPCL To expand the refinery to 11.5 mtpa in the first phase and go to 18 mtpa subsequently
projects, Mittal had said, My projects are not happening does not mean that the country doesnt need steel. While back in 2009, the company had changed tactics in Jharkhand by Steel announcing that it would try and set up smaller 3 million tonne steel Billion plants instead of Investment comone 12 mt plant for mitted in setting up three steel projects speedy execution. a smaller steel plant would mean the requirement of land and iron ore would go down Million tonnes substantially. Capacity of steel plants each in However, it Jharkhand and Odisha has not yielded results so far as the companys project has run into resolute tribal resistance. in Million tonnes Odisha, there has Capacity of steel plant in Karnataka been hardly any movement and the
1100
12 6
Mou has also lapsed, pending renewal. the companys best bet so far is in the proposed 6 million tonne steel plant in Karnataka where there is some progress on land acquisition. However, following a Supreme Court judgment, iron ore mining is banned in the state. Only state run National Mineral Development Corporation (NMDC) is allowed mining and that too is capped. as a result, steel plants in the state like JSWs Vijayanagar facility, are suffering. in the changed circumstances, arcelorMittals `30,000 crore project does not appear viable as without captive iron ore and coal, it would not be able to produce steel competitively. So, while Mittal continues to struggle for clearances for his steel projects, he is also open to new investments in the energy space that includes taking up joint exploration and production projects along with HPCL within the country by bidding into NELP rounds as also scouting for investments in projects overseas.
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Indian Coal Outlook 2020

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ExpertSpeak
De-regulation of Diesel: Who will bite the bullet?

Diesel prices have become a burning issue in todays inflation hit economy. It has left the government in a catch 22 situation, whether to continue subsidising and keep incurring losses or deregulate prices. Aabhas Pandya, an industry veteran analyses the complex issue.
ask any economist on the need for diesel price deregulation and its a no brainer. Diesel prices must be benchmarked to international prices, pat comes the reply. ask the same question to any politician and even hint of a diesel price deregulation will be met with stiff resistance. Caught between the need for sound economics and better fiscal management on one hand, and myopic populism on the other, diesel price deregulation has become a political hot potato. Some of the more pragmatic politicians admit in private that its time the exchequer puts an end to subsidising oil products that cost a bomb to import because subsidies mean the end consumer doesnt realise the true value of the product. indias oil imports for the last financial year that ended on March 31 were a staggering $155.64 bln, up 47% on year. bulk of this jump in cost came from a spurt in global oil prices with indian basket of crude oil averaging $111.89 per barrel in 2011-12 compared with $85.09 a year ago. thanks to the spurt in prices even as domestic prices were controlled, state-owned oil marketing companies - indian Oil Corporation Ltd, bharat Petroleum Ltd, and Hindustan Petroleum Corporation Ltd - incurred a payout for the government is a massive 16% of its total fiscal deficit of `5.22 tn in 2011-12. While petrol prices were decontrolled with much fanfare, even those have not been raised due to political compulsions. the government too had taken an in principle decision to deregulate diesel prices but needless to say, that announcement is in deep, deep freeze. OMCs are currently incurring a gross revenue loss of `13.65 on every litre of diesel sold. So, in the light of massive drain of finances, which can be productively used elsewhere by both the government and upstream oil companies, should this system of subsidies be dismantled? the answer is neither a straight yes nor a straight no. indian economy is
Diesel, and other oil products price deregulation has been an albatross around the neck of successive governments. None of the governments have had the courage to take tough decisions
39
gross revenue loss or under-recoveries of `1.38 trillion on diesel, cooking gas, and kerosene. Of this, diesel alone accounted for nearly `760 billion. this gross revenue loss is being met by upstream oil companies like Oil and Natural Gas Corp Ltd (ONGC), which give discount to OMCs on purchase of crude oil, and the government. according to reports, for 2011-12, the government will end up paying `835 bn to OMCs while upstream companies will pay the remaining `550 bn. to put it in perspective, `835 bn
ExpertSpeak
40
somewhat unique with its predominant agrarian set up and where diesel is used in abundance to power both tractors and water boosting pumps. again, bulk of the commodities in india is transported through trucks and other commercial vehicles and they too guzzle a lot of diesel. Clearly, the life of the common man is intrinsically linked to the fuel and thus, it is no surprise that politicians of all hues want to steer clear of this vexed issue. Given the huge price gap between diesel and petrol cars, sales of the former have shot up significantly and that is only adding to the demand for the fuel. Global oil prices are likely to stay elevated and may even rise as and
Some of the more pragmatic politicians admit in private that its time the exchequer puts an end to subsidising oil products that cost a bomb to import.
when global economy revives. thus, these levels of subsidy payouts are surely not sustainable and must end. While there is a need to free prices of oil products, the need is to do it in a gradual manner so that the impact is felt only over a period of time. For a start, the government needs to identify the needy and those living
155.64
$ Billion
Indias imports for the last financial year ended March 31
2.6
Trillion
Cumulative subsidy borne by Government owned companies
below the poverty line so that they continue to get compensated even as diesel prices are deregulated in a phased manner. a beginning has been made by running pilot projects in some states where cash subsidy on kerosene and fertilisers is directly transferred to the beneficiary. While many families below the poverty line may not be using diesel directly, a mechanism can perhaps be worked out where certain part of the population is paid subsidy linked to hike in diesel prices. Similarly, the government has been planning subsidy support for farmers using water pump sets that run on diesel. Here though, the government needs to tread with caution because farmers in some states of the country are prosperous and can afford to pay the market price for the fuel. third, there is a need to levy higher tax on diesel vehicles, especially cars and sports utility vehicles. there was lot of buzz of a higher levy in the budget for 2012-13 but eventually the finance ministry seemed to have buckled under pressure from car companies. Diesel, and other oil products price deregulation has been an albatross around the neck of successive governments. None of the governments have had the political courage to take tough decisions, communicate to the people in an effective manner and plan it in such a way that the blow is softened. While the current government too has been emphasizing the need for decontrol, whether it too has the political gut to take this unpopular step is a million dollar question. However, its evident that someone now has to bite the bullet or oil prices may end up lighting up the fiscal deficit.
The views in the article of the author are personal For suggestions email at feedback@infraline.com
ExpertSpeak
To be US ally or Mullahs last best friend? India needs to think

for the current imbroglio. as early as in March 2005, uS secretary of state Condoleezza rice had publicly expressed concerns over indias energy ties with iran. it seems to have been lost in time. Let us try to analyse why india should or should not continue importing oil from iran at the cost of inviting sanction from the uS. the strongest argument coming in favour of not toeing the uS line is hinged on indias sovereign right the multi-billion dollar question raging to an independent foreign policy. from the far East to the very West is that india should not buckle under whether india will side with its new american pressure. this and powerful ally, the united States of is followed by america or will New Delhi become The another domestic Mullahs last best friend. strongest political the latter term has been used argument coming in favour of point in case provocatively by the Wall Street not toeing the US line that any Journal against india, which has is hinged on Indias publicly not appeared as a fanatic sovereign right to friend in Washingtons proposed oil an independent sanctions against tehran. foreign policy any decision by the Government of india must be objective, dispassionate and fair to indian needs decision and aspirations both immediate and against iran long term. would not go down Split between two friendly nations, well with the large Shia its a very tough tightrope that india has Muslim population in to walk. if the July 1, 2012 deadline is india. real, time too is running very fast for the political New Delhi. the iran riddle, however, arguments of this nature hasnt really come as a surprise as the have sought to project uS Secretary of State Hillary Clintons india in poor light visit to india seems to suggest or the right since it decision makers in the establishment attained would like us to believe. it has been brewing for quite a while and if the bureaucrats and policy framers did not formulate a response for this situation, none but they are to be blamed squarely
Rahul Kashyap heads a consultancy company, which advises companies on various issues including conflict management. Before starting the consultancy firm he was heading media division at Greenpeace India. Kashyap explores the pros and cons of Oil diplomacy on Indias ties with the US, and Iran.
independence. the country has done only too well to reject these as flimsy. indias sovereignty and refusal to have given in to big powers at the worst of times should be not only a reminder for those having interest in denigrating india but force them now to give up issuing such certificates to a world power like New Delhi. as far as the Shia Muslim connect is concerned, the indian democracy has shown enough maturity, strength and resilience in the past. the responsibility now lies more with the political class especially ruling Congress-led uPa in not sparking a controversy where none exists for petty electoral gains. the economic reasons favouring continued oil trade with iran are perhaps more sound. the foremost being the current isolated situation of iran will allow india to negotiate crude oil at the cheapest possible rate. Facing international ostracisation and economic strangulation, tehran would be only too willing for any breather in the current situation that it finds itself in. iran has also expressed its willingness to enter into rupee trade with india. this proposal appears to benefit india.
41
ExpertSpeak
42
However, the fact remains that indian efforts to correct huge trade imbalance with iran failed in the past. indias exports touched just 10 per cent of its imports from the islamic state. as China invariably is part of any economic discourse, it features in the iran tangle too. it is very likely that beijing will continue importing oil from iran. being a permanent member of the Security Council gives the Communist state a stick to beat the uS with, using this leverage and economic advantages in the current situation, China will get a relative economic advantage over india. interestingly however, China, along with russia that has presumably good ties with iran, has itself ramped up its supplies from Saudi arabia. in a bid that appeared he was playing to the iranian galleries while addressing media along with Clinton, indias External affairs Minister SM Krishna spoke about the religious, cultural and civilisational links india has with the Gulf region. this is also the root of the sentiments against iran in india. the first and foremost argument coming in favour of discontinuing or reducing oil trade with iran is that india should this is as a payback time. iran has in the past never cared for indias sensitivities and indulged in unrelenting attacks on indian interests. tehran always voted
to ignore this. according to the visiting in favour of Pakistan in the united american Secretary of State, india is Nations and repeatedly raised the ante beginning to feel the impact as she on the Kashmir issue in the name of blamed iran for an attack on an israeli islam. this, despite New Delhi having diplomat in the national capital in never embarrassed iran on prickly February this year. issues like state of minorities in the Historically, indias oil supply is country, womens rights, censorship limited to select geographies and one human rights violations, etc. of the reasons that she has not been the argument that a nuclear iran will able to take strong positions in the result in instability in the Persian Gulf past with regards to countries in the region is indeed a strong one. it will Gulf. Diversification of oil supplying be even more disturbing than a nuclear countries would reduce dependence capable Pakistan especially as it is on the current suppliers and crisis likely to be more rogue with the newly situations can be met better in the acquired weapon. future. Oil related arm twisting may instability in the Gulf region would become a thing of mean large scale evacuation of The argument that a the past. Some petro indian working in nuclear Iran will result experts have West asia, more in instability in the pointed out that than it had to in Persian Gulf region with Shale oil that the iraq wars. is indeed a strong would come from this is not only a argument. new sources like costly affair but Canada, reliance would result in lost would be the biggest beneficiary as opportunities and immediate loss of it has the refining technology for the remittances from the expats there. same. Even at the risk of sounding there is also a likelihood that pro-reliance, the fact also remains that iran will try to polarise countries the indian company has suffered as it on religious lines, fomenting antihas had to stop export of oil products americanism that has the potential to to iran, which had once crossed a reach indian shores. there is every billion dollar mark. possibility that jihadist elements would by siding with the uS-led feel bolstered and terror attacks may international community, india will see a further rise. india cannot afford be able to avoid economic sanctions. as recession refuses to give way, the real fear of losing a large market opportunity should be able to force Government indias national economic interest should be the guiding force while taking decision on the matter of oil trade with iran. While many raise eyebrows over nuclear power plants in india after the tragedy in Japan, the investments are only looking up. During the american leaders visit to india, both Krishna and Clinton welcomed the talks between uS companies and Nuclear Power Corp. of india Ltd for setting up new atomic power plants here.
Prime Minister Manmohan Singh suggests to US secretary of state Hillary Clinton that India cannot lose sight of its energy security needs. Though it wants Iran to fulfill international obligations.
as a blessing in disguise, siding with the uS would speed up oil exploration in the indian Ocean closer home. Many geologists believe there is a strong likelihood of oil being discovered off the indian shores. uS firm anadarko and italys Eni are to be roped in for the purpose. the countrys focus on energy independence would perhaps be the best thing to happen as an outcome of the current situation. So far, india has focused on imports for its energy needs even as the deficit kept increasing in the power thirsty nation on the high economic development course. the lopsided policy did not allow the Government push that was needed for development of renewable and other clean and alternative energy sources like solar and wind that could have easily provided for the household needs as well as fed into the grid. the need of the hour would be for the think tanks to re-strategise on how to reduce the energy gap and reduce foreign dependence. With little time for india to take a decision in this regard, a stark reflection of its current position appears by the fact that as Hillary Clinton was pressuring india into reducing oil imports from iran, a delegation from the Gulf nation concluded a deal on
importing sugar, rice and soybean that would be essential during the time of the economic squeeze that the uS has planned on it. Faced with dealing with two friendly countries having frosty ties with each other, indian can turn this into a golden opportunity of peace. as the negotiations with iran dont seem headed anywhere in the absence of a credible interlocutor, New Delhi appears to be rightly placed for this role. india appears better placed than all P5 +1 (permanent members of the uN Security Council and Germany) in tehran seeing reason and abandon pursuit of nuclear weapons. and undertone was perhaps there when Krishna told Clinton that he favoured a peaceful and negotiated settlement of issues relating to irans nuclear programme. if india can achieve this, nothing can get better for world peace otherwise, it just might join the larger, saner voice that the uS is leading with april already showing 34 per cent decline in crude oil import from iran to 269,000 barrels per day (bpd) from 409,000 bpd in March. in april 2011, the import from iran was about 449,000 bpd.
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ExpertSpeak
Energy efficiency, a distant dream for Indian Refineries

Studies show that efficient use of energy could be the largest and the most profitable way to reduce costs. Oil refineries, which spend a considerable amount on energy, however, have not been able to achieve energy efficiency. Dr. Prasoon Dwivedi, Associate Professor & Head, Centre of Excellence for Energy Economic Research, University of Petroleum and Energy Studies, Dehradoon, talks about the gaps in energy efficency in oil refineries
Prior to the industrial revolution, people depended primarily on the renewable sources of energy; animal power, human labour, wind and biomass combustion, etc. With the development of the steam engine at the birth of industrial revolution, the use of coal followed by other fossil fuel contributed to profound changes in production processes and other related activities. the industrialisation along with the growth of population results in high dependence of energy. as per the statistics, india depended on 70% of imported oil and gas of the total consumption of oil and gas in the year 2005. it is well known that the domestic natural energy resources (conventional sources) are at the peak and is going to deplete in the near future. the recent supply disruptions in the international crude oil market followed by the escalating prices of crude oil have prompted policy makers in oil importing countries to face the challenge of coping with higher oil in which oil refining industry being a capital and lucrative industry has its own position. the oil refining industry in india provides inputs to virtually any economic sector including transport and chemical, to name a few. an oil refinery spends about 58% of their operating costs on energy, which makes it an important opportunity for cost reduction. Studies show that efficient use of energy could be the largest and the most profitable way to reduce costs. it proves that there is a huge techno-economic opportunity for the cost-effective energy investments in the industrial sectors. prices. the degree to which oil the emissions in oil price influence such economies What refineries also make depends mainly on the energy may come energy efficiency policies adopted, pricing as a surprise an attractive mechanism implemented, Organizational opportunity structure of the energy markets barriers also play an to reduce the and the degree to which the important role in imemissions and international price changes pending the energy operating costs. are transmitted. india is also a efficiency drive in the industry. the governmental victim of higher oil prices in the policies in energy international market due to its high efficiency has made dependence on petroleum imports. the indian oil refineries a designated the increasing demand for petroleum consumer resulting in energy products for electricity generation, efficiency measure to improve the transportation, industrial production competitiveness through increased and domestic needs has made the energy efficiency and reduced indian economy more vulnerable to environmental impact. oil price shocks. Studies have showcased that the costthe manufacturing industry efficient energy conservation measures accounts for about 75% of the worlds are not always implemented, implying yearly coal consumption, 20% of the existence of an energy efficiency global oil consumption, and 44% of gap, explained by the existence of the worlds natural gas consumption. barriers to energy efficiency. the so Furthermore, the manufacturing called energy efficiency barriers or gap industry also uses 42% of all is also used to describe the profitable electricity produced. the industrial/ efficient technologies that fail to achieve manufacturing sector is one of the market success. major consumers of energy in india
45
ExpertSpeak
specific person or committee dealing with energy and energy manager lacks influence, lack of staff awareness, time and other priorities, employees in companies do not want to change the way they work.
Random Barriers
External agencies, which includes difficulty in obtaining finances for energy efficiency projects, government does not give sufficient financial incentives to become energy efficient, environmental policies and legislation relating to energy are weak, authorities are not strict in enforcing environmental regulations; other barriers, which includes benefits of implemented energy efficiency measures are not quantifiable. although, various institutional and policy measures have been taken to promote energy efficiency in the country like setting up bureau of Energy Efficiency (bEE) and Energy Conservation act, Energy Conservation award, Energy Education and Nodal Officer award, etc. but still, few more measures should be taken to improve the energy efficiency. these measures may broadly cater to three large areas related with technological, social and policy areas and behavioral areas in the refinery industry in india. the study has recognised the organisational barriers as an important factor which is impending the energy efficiency drive in the industry. in this context, there is a need to develop the skill set among refinery employees so that energy efficiency can be ensured at the grass root level. therefore, government should do the training Need assessment (tNa) related with energy efficiency in refineries and should impart trainings in the refinery industry. So, that gap can be merged between the policy making and policy implementation.
46
a study was conducted at university of Petroleum and Energy Studies, Dehradun, uttarakhand, india, to identify various barriers that hinder the implementation of energy efficiency measures in indian refineries. Survey was done from about 200 energy managers of various refineries; energy auditors, employees of various refineries and academicians. the study has brought to light various barriers that prevent the implementation of energy efficiency measures in refineries, which can be classified as assignable barriers and random barriers. the variables which are in control of the organisation/ refinery are called assignable barriers and which are not in control of the organization/ refinery are called random variables. these identified barriers are as follows
The emissions in oil refineries also make energy efficiency an attractive opportunity to reduce the emissions and operating costs.
used being cheap, lack of budget funding & capital, cost required for identifying opportunities, analysing cost effectiveness and tendering, cost incurred due to production disruption/ hassle/ inconvenience, other priorities for capital investments; Organisational barriers (which includes organisational structure and long decision chains, low priority given to energy management, there is a lack of coordination between departments, companies culture does not encourage staff to give suggestions for improvement, energy objectives are not integrated into operating, maintenance or purchasing procedures, lack of policies, procedures and systems), managerial/ employee barriers, which includes management finds production more important and is concerned about time required to improve energy efficiency, management believe there is no/ little scope for improvement, there is no
Assignable Barriers
technological barriers, which includes technology being inappropriate in the site, possible poor performance of equipment, technical risks such as risk of production disruptions, difficulty in accessing external technical information and expertise; Financial barriers, which includes energy
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NewsAnalysis
Fuel Price shock unleashed, more in the offing

the last petrol price hike that created a commotion across the country became just more hard-hitting with the element of steepness in it that stunned the country. burning of effigies, protest marches by consumers, the aam aadmi rhetoric by politicians -- is the usual scenario which is witnessed after most of the fuel price hikes. it is time that the common man or aam aadmi begins to take the fuel price hike in his stride. Clearly, there seems to be more fuel shocks in the governments stock that are waiting to hit the hapless consumer. after the petrol price increase in May, the sharpest hike ever, the government may soon up the prices of the three regulated petroleum products, diesel, kerosene and LPG. Despite protests opposing the recent hike of `6.28 per litre of petrol, the Empowered Group of Ministers, headed by Pranab Mukherjee, is likely to meet soon to hike prices of subsidised fuels diesel, kerosene and LPG -- in the country. the state-owned oil marketing companies, that are free to revise prices of petrol, argue that the recent increase has been necessitated to offset the impact of rising international product price and weakening rupee over the past few months. in fact, indian Oil, the biggest oil retailer in the country, said an additional increase of `1.50 per litre is required to cover the under-recovery of `1,056 crore incurred by the company so far in the current fiscal on sale of petrol below market prices. the government is also backing
A slice of public protest against the steepest petrol price hike ever
the argument and has ruled out any possibilities of an immediate rollback of the hike in petrol prices, putting an end to all speculations. Petroleum Minister S. Jaipal reddy said the government would watch the situation for a few days before making any further changes in the price of auto fuel. However, reddy said the government plans to work out a mechanism in consultation with states to lower the prices. i have spoken to finance minister Pranab Mukherjee. We both have decided to consult state governments on petrol. State governments have to sacrifice something, centre needs to sacrifice something, reddy told reporters in a recent press meet. States charge value added tax (Vat) on petrol, which is levied on an ad-valorem basis. So, with every price hike a cascading impact comes in the form of higher Vat. For instance, while the oil companies recently raised prices by `6.28 per litre, the actual increase in Delhi was well over `7.50 a litre. Most
states levy Vat in the range of 20-30 per cent. in absolute terms, the current Vat on petrol in West bengal is `16.08 per litre and `14.78 in tamil Nadu. by contrast, the central government levies a specific excise duty of `14.78 per litre. Even though the government decontrolled prices of petrol in June 2010, companies have been unable to pass on the required increases on a regular basis due to political pressure. the three state-owned oil retailers indian Oil Corp, bharat Petroleum Corp and Hindustan Petroleum Corp had last increased petrol prices in the first week of November 2011. after that the companies, in fact, slashed prices of the fuel on two different occasions. the current trend again points to a possible marginal drop when prices come up for review during the next fortnight. However, reddy maintains that the companies will take a view only after watching the international product prices and currency situation for some time.
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StatisticsOil & Gas

Source-wise Natural Gas Supply (2009-10 to 2011-12) in MMSCMD
Source ONGC OIL Panna Mukta Tapti Other JVs Long Term R- LNG Spot R- LNG KG-D6 Total
Source: Industry, Infraline Research
2009-10 49.06 6.61 14.41 4.42 23.7 8.65 41.38 148.23
2010-11 50.16 5.42 12.01 4.13 26.7 8.34 55.35 162.11
2011-12 50.88 6.6 11.9 3.4 25.13 21.2 47.2 166.31
Sector-wise Natural Gas Consumption (2009-10 to 2011-12) in MMSCMD

Sector Power Fertiliser LPG + Other Liquid HC Refineries + Petrochem City gas/ CNG (D+T+I&C) Steel Others* Total
Source: Industry, Infraline Research
50
2009-10 60.49 37.37 6.46 18.93 9.48 7.13 8.37 148.23
2010-11 63.59 38.52 6.83 20.16 13.3 8.03 11.68 162.11
2011-12 61.4 37.7 7.2 25.5 13.9 7.21 13.4 166.31
*Others include (Court mandated customers, customers with consumption less than 50,000 SCMD, internal P/L line pack and other smaller industries)
Growth in Natural Gas Supplies Y-o-Y (2010-11 & 2011-12)
Projection of Crude Oil Production in XIIth Plan (in MMT)

ONGC OIL Pvt./JV Total 2012-13 25.045 3.92 13.34 42.305 2013-14 28.27 4.00 13.30 45.57 2014-15 28.002 4.06 12.70 44.762 2015-16 26.286 4.16 12.10 42.546 2016-17 25.456 4.20 11.50 41.156 Total 133.059 20.34 62.94 216.339
Source: Industry, DGH
Projection of Natural Gas Production in XIIth Plan (in BCM)

ONGC OIL Pvt/JV Total 2012-13 25.266 3.30 23.71 52.276 2013-14 25.472 3.80 32.38 61.652 2014-15 26.669 4.00 39.4 70.069 2015-16 28.215 4.27 40.43 72.915 2016-17 38.676 4.45 41.46 84.586 Total 144.298 19.82 177.38 341.498
Source: Industry, DGH
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Total Projected Crude Oil & Natural Gas Production in India during XIIth Five Year Plan
NewsBriefs
Government Policy Auction or award offshore wind farms The government has initiated the process of putting in place a policy to auction, or award, offshore wind farms in a way that could be similar to the auction of oil and gas blocks. The ministry of new and renewable energy has constituted an inter-ministerial panel of secretaries, to frame policy guidelines, approve and oversee execution projects and identify private or public sector partners. DVC To replicate Gujarats solar plant New and Renewable Energy Minister Farooq Abdullah said that Gujarats solar power plant atop a water canal has shown the nation the way and it will be replicated by Damodar Valley Corporation. DVC has over 2,000 km of canal network on which it wants to mount solar panels that can generate up to 1,000 MW of electricity. Five biomass Projects Haryana to invest `2.3 billion The Haryana Government would set up five biomass projects costing `230 crore to generate about 51 MW of power for which it has signed n Memorandum of Understanding (MoU) with four companies. Two of these projects would soon be completed. The state government had set up four Micro-Hydro power projects which have started generation Suzlon 138 MW wind power project for S. Africa The Suzlon Group will commission a 138-MW wind power project for the South African Government. The bid project was submitted by Cennergi under the second window of the Request for Bids for the Independent Power Producers Programme. The project will come up in Eastern Cape. Cennergi chose to use 66 of Suzlons 2.1-MW turbines for the project. The project is expected to start in 2013. Welspun 500 MW solar power projects by 2016-17 The Welspun group plans to put up 500 MW of solar photovoltaic capacity by 2016-17, the rating agency CARE has said. Last week Welspun successfully bid for a 125 MW solar energy project in a tender floated by the Madhya Pradesh Government, quoting a tariff of `8.05 a unit. ReNew Power To invest $1.1 bn in Indian wind energy ReNew Power Limited, has announced plans to invest `6,000 crore (over $1.1 billion) to set up 1,000 MW of wind energy projects across the country. The company has sold a majority stake to Goldman Sachs in 2011 for `1,000 crore. ReNew Power recently commissioned its first wind energy project with 25.2 MW of capacity.
GAIL Makes foray into wind energy GAIL (India) is all set to establish a firm hold in the green energy sector and plans to set up 100 MW wind energy generation project (WEG) in Tamil Nadu and Karnataka and six other states at a cost of `620 crore. The company is setting up another 14 MW WEG project in Gujarat partly for captive use in the State and party for sale to the State utility. RE installations India targets to double by 2017 India plans to more than double its amount of clean power generation capacity to almost 53,000 MW by 2017 under the latest five year plan. Over the coming period, the nation plans to add 15,000 MW of wind farms, 10,000 MW of solar power, 2,700 MW of power based on biomass and biofuels, and 2,100 MW of small hydroelectric projects. MNRE Sets up special solar energy council Ministry of new and renewable energy has constituted solar energy industry advisory council (SEIAC) to advice it on various technology related matters, attracting investments across the value chain, suggest steps required to encourage R&D and drive down costs and make the Indian solar industry globally competitive. Anand Mahindra, vice-chairman and MD, M&M, will be its chairman.
Gamesa India to manufacture 850 KW wind turbines Gamesa India will soon become the manufacturing hub for the 850-KW wind turbines for its Spanish parent. The Indian subsidiary will also look to export the 850-KW turbines to North Africa and UK. With Gamesa India having set up a manufacturing facility to make the turbines, the Spanish parent plans to stop making this class of turbines and producing higher capacity turbines. Husk Power Systems Project Alstom grants Euros 90,000 Alstom disbursed a Euro 90K grant to a husk power systems project for a green project in India which aims to minimize water usage by over 80% and save 150,000 tonne of CO2 by 2014. Alstom announced launch of Dry Gasifier project in India in collaboration with Husk Power Systems(HPS)-USA, one of the worlds lowest cost providers of biomass based renewable energy equipment. M&B Switchgear Gets Indias first solar REC The countrys first solar Renewable Energy Certificates were issued. NSE and BSE-listed M and B Switchgear Ltd was issued 249 RECs by the National Load Despatch Centre in New Delhi. RECs are generation-based certificates awarded to those generating electricity from renewable sources such as wind, biomass, hydro and solar, if they opt not to sell the electricity at a higher tariff.
52
ExpertSpeak
Getting it Right about Green Energy

Udai S. Mehta Associate Director, CUTS and Gaurav Shukla, Research Assistant, CUTS write on the importance of adapting to renewable energy. They also highlight the findings of a survey by their organisation on the awareness of clean energy in India
the renewable energy industry in india is evolving fast as globally high crude oil prices and dwindling domestic coal and gas resources have brought the issue of energy security under focus. as the scope of clean and green energy is expanding, certain mistaken notions linked to renewable energy are becoming clearer. a recent survey conducted by CutS international as part of an on-going project, Demand Side Management & renewable Energy in india: Capacity building of CSOs, which was implemented in West bengal and Gujarat, has revealed encouraging results. More than 680 consumers out of 1,000 respondents expressed their willingness to shift to renewable energy sources and were ready to pay an extra amount up to five to ten percent, if provided with uninterrupted and reliable electricity supply. this was a significant finding, as it is a popular misconception that indian electricity consumers are cost sensitive and not willing to pay extra for improved services. the willingness to pay is linked to the level of awareness, which was quite impressive. More than 90 percent respondents have heard of renewable energy or clean energy. Out of this 90 percent, close to 100 to 94 percent of the respondents, respectively in Gujarat and West bengal, were aware of solar energy. the awareness on wind and hydro energy was less compared to solar energy, that showed a distributive pattern of renewable energy resources. Gujarat has more potential than West bengal for wind energy; therefore, awareness level in Gujarat was 18 percent more than West bengal. Similarly, awareness of hydro energy in West bengal was 38 percent more than the awareness level of Gujarat. the survey strengthens the argument that solar energy has become a synonym of renewable energy and thus, there is a need to create more awareness about other sources of renewable energy. Further, the issue of climate change has become quite important and the CutS survey revealed high awareness among the respondents on climate change. it is interesting to note that while the media, academia, etc. are trying to challenge and debate the validity and implications of climate change, 85-90 percent respondents in both the states accepted that climate change is happening and that it will affect the evolution of future generations. 79 and 64 percent in Gujarat and West bengal respectively, considered it as the most important issue compared to other contemporary issues which the world is facing today. thus, it is quite evident from the survey findings that majority of the respondents were aware of issues such as climate change, renewable energy, etc. Despite high level of awareness regarding renewable energy amongst people, why are renewable energy and energy efficiency not getting the expected growth so far in india? it has been observed that there is a wide gap between awareness and
Udai S. Mehta speaks on...
practice across all the stakeholder categories. Policies and regulations are being framed without any inputs from the consumers. there seems to be a general lack of motivation among consumers to adopt rE and EE. EE tends to cost a fraction as compared to setting up of new power plants, but unless proper incentives and market mechanisms are put in place, it would be difficult to expect majority of the consumers to adopt rE and EE. the survey clearly indicates that though india has made impressive strides in generating awareness and perception towards clean energy, the real challenge lies in maintaining this momentum and concentrate on deployment in the years to come. Civil society organisations could play a vital role in the transition towards sustainable energy. they can ensure that regulators take steps to implement ambitious clean energy programmes and ensure transparent and socially beneficial clean energy development in india.
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InConversation Our hitch to fund Solar projects stems from panels lifespan in Indian conditions
Power Finance Corporation has stepped into financing green energy projects, and has even formed a subsidiary for the purpose. Speaking with infralinePlus, AK Agarwal, Executive Director, renewable Energy at the company, shared PFCs vision and concerns in rE financing.
What is the constitution of PFCs renewable energy portfolio at present? PFCs rE portfolio consists of around 500 MW small hydro, 330 MW biomass, 170 MW Wind and around 55 MW of Solar PV Projects. What is the total value of PFCs Renewable Energy portfolio? Our rE portfolio is about `3,000 crore, and out of that small hydro is the biggest component. What are the parameters for determining viability of a project? We assess the commercial and technical feasibility to determine the financial viability of the project. While looking at the commercial viability, we measure the risk profile of the project covering power sale arrangements, tariff admissible, tieup of various inputs, reliability of insolation data. the second is the life of the solar panels in indian conditions. When we finance a project, we need a reasonable amount of authenticity. as for the wind projects, Centre for Wind Energy technology provides authentic wind profile and helps in computation of possible generation and revenue potential of any wind project. Now, it is understood that The US EXIM Bank has a de facto they have also been given policy of funding only bigger the task by the ministry operations, say 25 MW plants Our to do the insolation rather than 1-2 MW ones. RE portfolio is data studies. in the Do you have a similar about `3,000 absence of such preference? crore, and out of data, it is difficult in solar we fund even 1 MW that small hydro to reliably establish project, but for other rE is the biggest the generation Projects we are not funding component. from a Solar Project. below 5 MW. However, we the financials from understand that rE Projects are any project depend on the generally smaller in size and require generation, which is why these are early quick financial closure. Considering days in the financing of solar projects. this, PFC has formed a subsidiary for funding rE projects. Right now, are you relying on the third-party verification of Do you think insolation data? there is a there is more than one source available degree of for insolation data, but all of them rely skepticism mainly on satellite data, however, wide in lending variations are observed in these data. to solar the data measured on actual site would projects in only extend authenticity which is not India? available for most of the sites currently. there are two basic issues Do you think the wear-and-tear in supporting and the life-span of cells is an solar projects. issue in India? One is the india is a tropical country with a lot of suspended dust particles in the atmosphere. the generation in this condition needs to be watched. the clearances, permissions, contractual arrangements, land, etc. We prefer the module meets the iEC standards. Further, we also like to manufacture whose technology is proven, their modules are installed, and are under operation somewhere so as to have a performance record.
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degradation of Solar Cells/ Modules is a major area of concern under indian conditions during the entire project life. We will be in a position to know about this after a few years of operation of the Solar Plants being installed in india. Does it make business sense for players with substantial equity to quote tariffs at very low rates? it may not be prudent to fund the entire project cost through equity since equity is normally costlier than loan. it is more so when very low tariff is quoted for solar project. it may be alright to declare financial closure through equity so long as the requirement is to be met. Do you see industry achieving the target of 1000 MW set under National Solar Mission by 2013? right now we do not see any such eventuality. Three major issues project developers have with local financing are the cost of funds, short tenure, and a mandate for a debt-equity ratio vis--vis comparable foreign projects. What are your thoughts on it? the area of concern in any solar project, as explained earlier, do not allow a loan tenure of more than 10-12 years, excluding the construction period and 6 months moratorium, DE ratio of more than 70:30. PFC considers a rebate of 25 bps in the interest rate of all rE projects including solar projects. What about grid parity for solar generated power? From various analysis carried out it is expected that the price of solar energy would gradually fall and grid parity can be expected sometime between 201517. Once grid parity is achieved, solar projects will really pick-up. So, where do you see solar tariffs settling this year?
the tariff quoted for JNNSM batch ii projects, though on the lower side may be considered to be feasible by 2013. Leaving out JNNSM projects, which states in your view are model states for financiers? Our thinking is that we should fund solar projects currently in that State only where discoms are having cash profit.
Currently, we are appraising even 100 MW Solar thermal Project and 25 MW Solar PV Project. What do you think of the REC mechanism? Are lenders reluctant to fund projects taking this route? though rEC is a good mechanism, lenders may not be in a position to accept it presently for funding purpose since it is untested and rPO is not enforceable. How long do you think trading in RECs will pick up? trading under rEC mechanism has started. the rPOs are still not mandatory. there are indications that the rPOs would become mandatory and would have stringent panel provisions thereby enhancing the marketability of rECs. Once this happens, trading would pick up. Talking of the wind sector government has suspended the subsidy support. How do you see the sector performing in the coming days? Subsidy support has neither been confirmed nor withdrawn. Further, generation from wind is approaching grid parity. We see a good potential of capacity addition in wind. Do you think India will generate a major amount of its energy from renewable in the near future? We expect substantial amount of capacity addition through rE Projects in the 12th Five year Plan. Are you financing any major offgrid projects in solar? till now we have not funded any off grid projects in Solar. the major risk in funding of grid solar project is uncertainty in revenue stream.
PFC would continue to fund all projects in the power sector; the funding of RE Projects where quick financial closure is required would be done by its subsidiary
You will be setting up a new company for disbursal of loans for renewable projects. What is the need for such an agency? PFC is organised to fund large projects where loan size is also big. renewable Projects are normally small loans. in order to take care of such requirement of rE Projects and also to have focused approach considering the ambitious plan of Government of india for rE Projects, PFC decided to have a separate subsidiary for funding rE Projects. Is your focus shifting towards renewables? PFC would continue to fund all projects in the power sector as it is doing now, and the subsidiary has been set up for funding rE Projects, where quick financial closure is required. Further, we also hope to get cheaper funds so as to extend our loan to rE Projects at competitive rates. Going forward, would you gravitate towards funding bigger projects in solar too, instead of the 1-10 MW range?
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StatisticsRenewableEnergy
State-wise status of Projects Allocated under JNNSM (As on May 11, 2012)
S. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 State / UT Andhra Pradesh Chhattisgarh Delhi Gujarat Haryana Jharkhand Karnataka Madhya Pradesh Maharashtra Orissa Punjab Rajasthan Tamil Nadu Uttar Pradesh Uttarakhand West Bengal Total Capacity (MW) 21.8 4 2.5 654.8 7.8 4 9 2 20 13 9 197.5 15 12 5 2 979.4 1. 2. 3. 4. 5. 6. 7. Andhra Pradesh Chhattisgarh Gujarat Haryana Maharashtra Uttrakhand West Bengal Total
State-wise Biodiesel Installed Production Capacity, May 2012

S. No. State Installed capacity (tonnes per day) 2510 13 60 30 210 50 500 3373
State-wise Wind Power Potential of India

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S. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. State States/UTs Andhra Pradesh Gujarat Karnataka Kerala Madhya Pradesh Maharashtra Rajasthan Tamil Nadu West Bengal* Orissa Andaman & Nicobar Arunachal Pradesh* Assam* Chhattisgarh* Himachal Pradesh* Jammu & Kashmir* Lakshadweep Manipur* Meghalaya* Nagaland* Sikkim* Uttarakhand* Uttar Pradesh* Total
*Wind potential is yet to be validated with measurements
Installed capacity (tonnes per day) Installable Potential (MW) 5394 10609 8591 790 920 5439 5005 5374 22 910 2 201 53 23 20 5311 16 7 44 3 98 161 137 49130
Month-wise Solar/Non-solar REC inventory report since inception

Month, Year Mar, 2011 Apr, 2011 May, 2011 June, 2011 July, 2011 Aug, 2011 Sept, 2011 Oct, 2011 Nov, 2011 Dec, 2011 Jan, 2012 Feb, 2012 Mar, 2012 Apr, 2012 May, 2012 Total Opening Balance 0 108 4351 14119 24824 36480 43197 71447 102487 132657 109091 39915 34463 38545 89688 REC Issued 532 4503 28270 27090 30224 31813 74612 126544 135697 88055 102348 200736 203819 122369 30236 1206848 REC Redeemed 424 260 18502 16385 18568 25096 46362 95504 105527 111621 171524 206188 199737 71226 0 1086924 Closing Balance 108 4351 14119 24824 36480 43197 71447 102487 132657 109091 39915 34463 38545 89688 119924
REC Trading Volume and Price at PXIL report

Date of Auction Mar11 Apr11 May11 June11 July11 Aug11 Oct11 Nov11 Dec11 Jan12 Feb12 Mar12 Apr12 REC Type Solar Non Solar Solar Non Solar Solar Non Solar Solar Non Solar Solar Non Solar Solar Non Solar Solar Non Solar Solar Non Solar Solar Non Solar Non Solar Solar Non Solar Solar Non Solar Solar Non Solar Buy Bid (No. Sell Bid (No. of certificates) of certificates) 3025 324 0 0 0 4500 0 10000 0 14766 0 38101 0 33869 2 20882 5 21179 18113 1007 28933 3319 51401 225 26813 0 274 0 565 0 5322 0 3183 0 9800 0 8155 0 3201 0 30317 0 14336 6072 0 19045 0 7405 0 26842 MCP (Rs./ Certificate) 0 2225 0 0 0 1500 0 1500 0 1550 0 1710 0 3000 0 2800 0 2950 3051 0 3051 0 3100 0 2201 MCV (No. of certificate) 0 274 0 0 0 4500 0 483 0 3900 0 3000 0 3201 0 9373 0 5679 6064 0 15706 0 7383 0 8949
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PhotoEssay
TATA Power: The growth story continues...

tata Power started its operations in 1911 as tata Hydroelectric Power Supply Company. Five years later i.e. in 1916 the company was merged with the andhra Valley Power Supply Company. today it has an installed capacity of over 5,000 MW with presence in thermal, hydro, solar and wind besides operations in transmission and retail.
The company is working towards adding 8,500 MW by the end of the current financial year, of which 5,050 MW would come from plants in Mundra and Maithon. Tata Powers current generation capacity is 5,297 MW, out of which about 22 percent comes from clean sources.
To add 8,500 MW capacity by the end of the current financial year.
to minimise revenue losses, the company has started trials of blending low-grade coal, and initial reports suggest blending up to 50 per cent is feasible. the measures taken to rein in leakages should help keep a check on losses. the second unit of Maithon and Mundra are expected to be commissioned in the June and September quarters. in January this year, tata Power commissioned a 25 MW solar power project in Mithapur, Gujarat. the
company plans to set up 300 MW of solar power capacity by 2017. it is also looking at solar rooftops on buildings. On wind front, it currently has an installed capacity of 375 MW, and it plans to add 150 MW every year till fiscal 2015. tata Power is developing the 236 MW Dugar Hydro Power project in Himachal Pradesh in partnership with S N Power, Norway. it is also developing power from waste gases generated during steel-making.
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the company is going for a five-fold growth in near future and would commission the first ultra Mega Power Project in the country besides a slew of mega projects that are under implementation. as far as its thermal power projects are concerned, tata Power has plants located in trombay (Mumbai), Mundra (Gujarat), Jojobera and Maithon both in Jharkhand, Haldia in (Wb) and belgaum (Karnataka). Hydro stations are in the Western Ghats (Maharashtra) and wind farms in ahmednagar, Supa, Khanke, brahmanwel, Gadag, Samana and Visapur. as compared to its peers, tata Power is the only company that enjoys near perfect security in terms of raw material linkage. For coal supplies, the company has access to over 100 million tonne through bumi resources. it also sources coal from Mandakini (Odisha) and tubed (Jharkhand). it has a significant international presence through its equity stakes in coal mines in indonesia and clean energy projects in bhutan and indonesia.
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PhotoEssay
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1. 2. 3. Trombay unit - The lifeline of Mumbai. Working for the vision - To be the most admired and responsible integrated Power Company with a global footprint. Mumbai Unit - Lighting the bulbs in the commercial capital of India. Tata Power is erecting Mundra UMPP through its wholly-owned subsidiary Coastal Gujarat Power Ltd. Located in the Kutch district of Gujarat, the project consists of five units, each of 800 MW which will generate saleable power of 3,800 MW to be supplied to five states - Gujarat, Maharashtra, Rajasthan, Haryana and Punjab. Maithon Power is a 74:26 joint venture between Tata Power and Damodar Valley Corporation. The JV is implementing a 2x525 MW coal-fired power project in Jharkhand. Tata Power commissions 25 MW Solar Project in Mithapur, Gujarat. Took a big leap in enhancing its Solar Energy Portfolio by setting up one of the largest solar project in the country. The 4,000 MW Mundra UMPP is the first of the UMPPs, which heralds the entry of 800 MW super critical boiler technology in India which is environment friendly and efficient. Thanks to the plant at Trombay, Tata Power has been in the forefront to supply uninterrupted quality power to the city of Mumbai and nearby areas. A vigilant Tata Power employee poses for a photograph.
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June 2012 Volume 1 | Issue 2 | `100 This Issue is Complimentary www.InfralinePlus.

Depleting gas supplies leave power plants in the lurch

Director, Essar Power on the challeges of power infrastructure

Should diesel be deregulated? Our expert view

AK Agarwal on PFCs new subsidiary to fund RE projects

GREEN INFRA AT THE FOREFRONT OF POWERING INDIA NATURALLY

June 2012 | Vol 1 No 2

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

Editors Name Nationality Address Printed at Address

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Oil and Gas

Plus- Photo Essay

A thorough professional and a humble individual Yogesh will indeed be missed

By R.V. Shahi Former Secretary, Ministry of Power

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Dwindling Gas Plays Extinguisher to Power Projects

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Generation Loss due to shortage of gas supply during 2011-2012

@ Installed capacity is as on last day of the year.

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Power Generation Loss during the year 2011-12

Delhi Delhi Delhi Rajasthan Rajasthan Gujarat

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Name Of Power Station

Installed Capacity @ (MW)

Located In The State

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Your vision is now our vision ...

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Heat of import duty hike in power sector will be on end-consumer

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Importing coal to meet supply deficit is a short-term solution

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For more details, visit

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Energy Sector struggles to employ a committed workforce

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Note: The Table Excludes Generation From Units Below 25 Mw.

84 67 0 50 54 45 75 132 106 177 142 0 63 103 79 91 294 60 0 0 80 92 98 145 39 0 88.000 82.000

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Surplus Coal Policy: Is government batting for PSU?

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Disquiet over Coal Pricing

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Table 1: Indian Coal Vs Imported coal

Australia Indonesia China South Africa India

Quality and price differential of Indian and imported coal

The Delayed Move

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The Road Ahead

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We followed the law in coal block allocation: Jaiswal

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Inventory of geological resources of coal by type as on April 1, 2010 and 2011

1.3 2. 2.1 2.2 2.3 2.4