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InfralinePlus
The Complete Energy Sector Magazine for Policy and Decision Makers
November 2016 | Volume 5 | Issue 07
InfralinePlus
Contents
Editors Letter
3
Cover Story 33
Climate Change: Is India ready to move
away from coal?
On October 2, 2016, India made a strategic
decision to move away from coal as a source
of electricity in the long run by ratifying the Paris
Agreement on Climate Change. The deal aims to
cut greenhouse gas emissions by shifting away
from fossil fuels to limit global warming to well be-
low 2C compared with pre-industrial times. How-
ever, considering the fact that India is one of the
fastest growing economies in the world and more
31
than 300 million people are yet to receive power,
the decision to ratify the Agreement has raised
a question mark on the long term strategy of the
4 country to tackle the vital issue of energy security.
Power Coal
6 22
News Briefs p6 News Briefs p22
In Conversation: Yoshiaki Inayama, Managing Director, Expert Speak: Anil Attavar, Director, Way 2 India p25
Toshiba JSW Power Systems Pvt Ltd p10
In Depth: Lack of coal demand poses fresh challenge
In Conversation: PK Ranade, Chairman and Managing to the Government p28
Director, AMTL p13
Statistics p31
In Depth: India needs to invest in Smart grid to be a
low-carbon economy P16
Statistics p20
Expert Speak/Interview
Indias electricity generation for the month and 2014-15 is 9.3% compared to 4.6% for
of September rose about 2.1% year-on-year electricity procured from utilities, according
compared to flat growth in the month of to the Economic Survey notes released in
August compared with last year, shows data February 2016. Indias power demand is
from Central Electricity Authority (CEA). unlikely to grow beyond 6-7% over FY20,
This rise in generation, however, does not according to a MotilalOswal Securities.Indias
necessarily reflect a rise in demand for the power generation had remained flat year-
sector, which is hurt by over-capacity and a on-year in August hurt by improved rainfall,
lack of demand from distribution companies which slowed demand across the agriculture
(discoms). The slight rise in generation in sector. This has led to the overall sectors
September is not indicative of any rise in plant-load factors (PLFs) to decline by about
demand, said a brokerage analyst. The 2.1% 4.4% to 42.7% from same period last year, an
rise by itself does not mean anything, its a customers, who will pay on time. And this Emkay Global Financial Services Ltd report
marginal number. The basic problem still also impacts the volume growth, he said. said. With power deficit falling, merchant
remains that with the industry having shifted The compound annual growth rate (CAGR) of power tariffs are also down 23% year-on-year
to captive, there is a serious crisis of credible captive power generation between 2006-07 to Rs2.16 per unit.
November 2016
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In a first major hydro investment deal and business. As per the agreement, the
between Nepal and Bangladesh, the two electricity produced from Sunkoshi river
countries have signed an agreement to would be evacuated to Bangladesh via
build two hydroelectric plants capable India through the BBIN economic corridor.
of generating over 1,600 megawatts Minister Thakali signed the agreement
of electricity in Nepal. Commerce after the Bangladeshi side expressed
Minister Romi Gauchan Thakali and his interest to invest in Nepals hydropower
Bangladeshi counterpart Tofail Ahmed sector, said Ravi Shanker Sainju, joint
signed the pact. The proposed projects secretary at the Commerce Ministry, who
are 1,110MW Sunkoshi II and 536MW had accompanied the minister to Dhaka.
Sunkoshi III located at Sunkoshi river Earlier, the Department of Electricity
in central Nepal. Both the countries have Development (DoED) had assumed the
agreed to develop the projects under responsibility of conducting the feasibility
the BBIN (Bangladesh, Bhutan, India, study of both the projects spread across
Nepal) initiative which was signed by four Kavre, Ramechhap, Sindhupalchok and
countries to facilitate the regional trade Sindhuli districts.
November 2016
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InConversation
Efficiency improvement of thermal,
nuclear expansion key for future
Yoshiaki Inayama, Managing Director, Toshiba JSW Power
Systems Pvt Ltd, feels that despite the surge in renewable energy
capacity, thermal sector will continue to maintain the lead in
Power Generation. Further, use of super critical technologies
would benefit India in providing more reliable and affordable
power. Excerpts:
InConversation
Transmisison, and Distribution with subcritical steam turbines and Supercritical and Ultra supercritical
applications of technologies in all generators at Anpara B thermal power Turbine and Generator with unit
that compliment each domain would plant. Today, Toshiba JSW Power capacities in the range of 250MW
help in overcoming technological Systems Pvt ltd (TJPS), with its to 1000MW, has already established
bottlenecks and reduce the losses and state-of-art manufacturing facility at itself as a dominant player in the
this lost energy will be available to Chennai to manufacture Subcritical, supercritical steam turbines and
the consumers. generators (STG) in the 800MW
In addition to that, carbon dioxide category in India, having won orders
emission reduction will be one Carbon dioxide for ten sets in all.
of the most important issues for emission reduction In line with the Groups Make in
power sector in India. In order to India commitment and its business
will be one of the
respond this challenge, efficiency strategy to keep the high quality
improvement of thermal, stability most important equipment cost competitive, TJPS
improvement of renewable energy issues for power recently shipped its first Made in
and nuclear expansion will be keys sector in India. In India steam turbine generator. The
for future. Toshiba can provide 800-megawatt steam turbine generator
solution for this challenge. order to respond this (STG) for Unit 2 of the Kudgi Super-
The other area which needs to be challenge, efficiency critical Thermal Power Station in
addressed is infrastructure which improvement of Karnataka state is Toshibas first
needs to be available for rapid large-scale generation system to be
development of Projects and also for
thermal, stability manufactured and assembled with
effective operations. improvement of locally procured parts and systems,
renewable energy and and tested in India. Toshiba JSW
Please share your presence in is geared up to contribute to the
12 nuclear expansion will
the power sector in India. governments goal to provide 24x7
Toshiba has a pedigree of over 60 be keys for future. electricity for residential, industrial,
years of expertise in power and a Toshiba can provide commercial, and agriculture use for
strong lineage of association with solution for this the next India.
India, entering the thermal power
market by supplying two 500MW challenge
For suggestions email at feedback@infraline.com
November 2016
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InConversation
India to be a strong growth
driver in global energy demand
Advance Metering Technology Limited (AMTL) is on a growth
path. The Noida-based company recently formed a strategic
tie-up with Grasslin Gmbh a subsidiary of US electrical product
MNC Intermatic Inc to bring energy efficient technologies in
India. Speaking to InfralinePlus, AMTLs Chairman and Managing
Director, P. K. Ranade, talks of why India is expected to be a
big market for energy efficient technologies in future and the key
growth drivers. Excerpts:
InConversation
stations, in machine controls or specific footprints, rising income and smart lighting industry. The Unnat Jyoti by
solutions such as swimming pool or city development are some of the Affordable LEDs for All (UJALA)
sprinkler system controls. Similarly, key triggers for the growth of LED scheme which aims at replacing all
light controls offer the highest pos- inefficient bulbs with energy-efficient
sible degree of functionality, switch lamps has been instrumental in
separately for the desired situation in There is no doubt that bringing about this change.
residential, office, commercial and India has witnessed a AMTL has been developing its
industrial buildings and outdoors and stellar growth in the portfolio of LED products and has been
at the same time ensure noticeably active in the B2B segment so far. Retail
improved energy efficiency.
LED market in the last has been a part of our plans and we will
few years. A strong be introducing products in the market
India is projected to become the government support as a part of our retail expansion.
largest market for LEDs in India.
Please share your outlook and
coupled with introduc- AMTL also has presence in
growth plans in this regard. tion of innovative LED generation of renewable energy.
There is no doubt that India has lighting products by Please outline your existing
witnessed a stellar growth in the manufacturers has portfolio and growth plans in this
LED market in the last few years. A regard.
strong government support coupled resulted in reduction in AMT currently owns and operates
with introduction of innovative LED prices of these prod- 11.7 MW of wind power.This supplies
lighting products by manufacturers ucts, thereby offering energy to the state grid. We are cur-
has resulted in reduction in prices rently evaluating options for expansion
of these products, thereby offering
consumers with more either via a greenfield project in Solar
consumers with more options to options to choose from or Wind or a strategic acquisition of an 15
choose from depending on their needs depending on their existing project.
and preferences. Increasing focus on
energy efficiency to reduce carbon
needs and preferences For suggestions email at feedback@infraline.com
November 2016
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InDepth
India needs to invest in smart grid
to be a low-carbon economy
16
Existing distribution grid infrastructure is primarily designed for one-way flow of electricity
Smart grid systems can help integrate multiple, variable renewable energy sources
By Team InfralinePlus
Indias journey from an ageing trans- infrastructure to develop smart solu- energy sources by 2030; electric
mission & distribution (T&D) to a tions to resolve Indias energy woes, vehicles (to combat air pollution); and
smart grid-enabled network infrastruc- and address troublesome issues such 24x7 power supplies to all citizens
ture can have several enabling drivers. as massive transmission and distri- (Power for All scheme).
Clearly transition from conventional bution losses and power thefts. Smart The challenges of climate change
to renewable generation will throw up grids are crucial to some of the key and the continued growth of elec-
radically new challenges. Identification projects of the Government of India tricity demand (albeit at tepid growth
of the appropriate new technologies (GoI): 100 Smart Cities; 175 GW of rate) are putting increasing stress
and move to actualisation of the same installed renewable energy generation on the Indias electricity network
will be the need of the hour. capacity by 2022; cumulative 40% of infrastructure. The existing distri-
Smart Grids are a key enabling the total generation from renewable bution grid infrastructure is primarily
November 2016
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InDepth
connectivity is neither feasible nor cost options like solar home lighting also to commercial loads like mills
effective. Therefore, off-grid solutions systems and off-grid lighting and oil presses.
like Decentralized Distributed Gener- products, mini-grids (depending on 5. RE mini-grid developers have
ation (DDG) facilities stand as an ideal their size) can provide electricity strong incentives to pursue
mode for supply of electricity. to not only residential loads like demand-side management, to
DDG can be based on either lighting and phone charging, but keep capital cost of generation
conventional or renewable sources equipment low.
and is usually implemented in remote In some states with 6. Development and operation of
villages where connectivity to the its unique geography mini-grids can create local jobs.
grid is not feasible or cost effective. and the current state The development of a fully-fledged,
DDG enables electricity generation at low-carbon economy with increasing
the local level using locally available
of economy and vil- deployment of renewable sources
resources ensuring reduced dependence lage habitations, grid will require changes to the existing
on external resources. Local distribution connectivity is neither transmission and distribution infra-
networks or mini-grids are set up over feasible nor cost ef- structure. Smart technologies will be a
a cluster of villages and powered by fective. Therefore, vital component of this transformation.
a local generating plant which may off-grid solutions like Increasingly, consumers expect reliable
be based on conventional fuels such supply, clean energy, responsive
as diesel, natural gas, fuel oil or on
Decentralized Distrib- service, new facilities and cost effi-
renewable energy such as wind energy, uted Generation (DDG) ciency from their utilities. Smart grids
solar energy, hydro power, and biomass. facilities stand as an can enable all that and more.
RE mini-grids have distinct advan- ideal mode for supply
tages over central grid extension and of electricity
other decentralized energy options For suggestions email at feedback@infraline.com
19
in providing access to reliable and
affordable electricity.
1. Compared to central grid
extension, RE mini-grids can be
less expensive due to lower capital
cost of infrastructure (depending
on distance) and lower cost of
operation by avoiding transmission
and distribution losses.
2. In countries with power shortages,
electricity supply through the
central grid, especially in rural
areas, may not be reliable. In such
regions, RE mini-grids that can be
designed and operated effectively,
can be more reliable than the
central grid in providing electricity
access and can ensure local energy
security.
3. Mini-grid developers have the
potential to access capital beyond
the traditional power sector, and
may be able to provide quicker
access to electricity than central
grid extension that may be prone
to bureaucratic hurdles and slow
implementation.
4. Unlike other decentralized energy
November 2016
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StatisticsPower
State/Utilities wise Cross Subsidy Surcharge for 2016-17 (September, 2016)
S. No. Name of State Name of Discom Category of consumers Cross Subsidy Surcharge (CSS)
HT-I Industry (11 kV) 1.66 INR/kWh
HT-II - Others (11 kV) 2.03 INR/kWh
HT-I Industry (33 kV) 1.44 INR/kWh
TSNPDCL
HT-II - Others (33 kV) 1.78 INR/kWh
HT-I Industry (132 kV and above) 1.34 INR/kWh
HT-II - Others (132 kV and above) 3.55 INR/kWh
1 Telangana
HT-I Industry (11 kV) 1.65 INR/kWh
HT-II - Others (11 kV) 2.03 INR/kWh
HT-I Industry (33 kV) 1.48 INR/kWh
TSSPDCL
HT-II - Others (33 kV) 1.81 INR/kWh
HT-I Industry (132 kV and above) 1.35 INR/kWh
HT-II - Others (132 kV and above) 1.77 INR/kWh
CESU EHT 143.58 p/kWh
CESU HT 95.58 p/kWh
NESCO EHT 126.03 p/kWh
NESCO HT 65.82 p/kWh
2 Odisha
WESCO EHT 126.68 p/kWh
WESCO HT 83.45 p/kWh
SOUTHCO EHT 191.03 p/kWh
SOUTHCO HT 141.02 p/kWh
EHT General 180 p/kWh
EHT Commercial 210 p/kWh
HT-I Industry (B) 50 p/kWh
3 Kerala KSEB
HT II General (A) 10 p/kWh
HT II General (B) 180 p/kWh
HT-IV Commercial 230 p/kWh
HT industry 0.93 INR/kWh
Bulk Supply (other than DS) 1.54 INR/kWh
4 Haryana DHBVN & UHBVN Railways (Traction) 0.12 INR/kWh
LT Industry 0.57 INR/kWh
NDS (HT) 1.46 INR/kWh
20 5 Gujarat UGVCL, MGVCL, PGVCL & DGVCL HT Category 1.45 INR/kWh
89 paise/kWh
(85 paise/kVAh for Large Supply General
Large supply
Industry and 87 paise/kVAh for Large
Supply PIU/Arc Furnace industry)
92 paise/kWh
Domestic supply
(85 paise/kVAh)
6 Punjab PSPCL
107 paise/kWh
Non-Residential supply
(98 paise/kVAh)
55 paise/kWh
Bulk supply
(52 paise/kVAh)
82 paise/kWh
Railway Traction
(80 paise/kVAh)
LIP - EHV 0.18 INR/kWh
LIP - 33 kV 0.13 INR/kWh
LIP - 11 kV 0.05 INR/kWh
ML - EHV 0.15 INR/kWh
7 Rajasthan AVVNL, JVVNL & JDVVNL ML - 33 kV 0.09 INR/kWh
ML - 11 kV 0.02 INR/kWh
NDS - EHV 0.49 INR/kWh
NDS - 33 kV 0.43 INR/kWh
NDS - 11 kV 0.36 INR/kWh
Rs. 1.16 per kWh (which is 90% of the
For 220 kV/132 kV consumers
computed value of Rs. 1.29 per kWh)
8 Chhattisgarh CSPDCL
Rs. 1.21 per kWh (which is 90% of the
For 33 kV consumers
computed value of Rs. 1.34 per kWh).
Joint Electricity
Regulatory Com- HT & EHT 0.22 INR/kWh
mission
DNH Power Distribution
9 For the State of
Corporation Limited
Goa and Union
Industry
Territories,
Gurgaon
For 132 kV consumers Rs. 0.69/kWh
For 33 kV consumers (other than HTSS) Rs. 0.78/kWh
SBPDCL
For 11 kV consumers (other than HTSS) Rs. 0.77/kWh
For HTSS consumers (33 kV& 11 kV) Rs. 0.40/kWh
10 Bihar For 132 kV consumers Rs. 0.69/kWh
For 33 kV consumers (other than HTSS) Rs. 0.78/kWh
NBPDCL For 11 kV consumers (other than HTSS) Rs. 0.79/kWh
For HTSS consumers (33 kV& 11 kV) Rs. 0.40/kWh
November 2016
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S. No. Name of State Name of Discom Category of consumers Cross Subsidy Surcharge (CSS)
LT-II: Non-Domestic/Commercial 2.54 INR/kWh
LT-III: Industrial 1.15 INR/kWh
LT-VII: General 0.49 INR/kWh
LT-VIII: Temporary Supply 3.1 INR/kWh
HT-I(A): Industrial 2.39 INR/kWh
HT-I(B): Ferro-alloys 0.29 INR/kWh
SPDCL HT-II: Others 4.6 INR/kWh
HT-III: APTs, BSTs and Rly. Stns. 2.53 INR/kWh
HT-IV(A):Lift Irrigation 1.29 INR/kWh
HT-IV(B):Composite Water Schemes 0.11 INR/kWh
HT-V: Railway Traction 1.21 INR/kWh
HT-VI: Townships & Colonies 0.27 INR/kWh
HT-VIII: Temporary 3.97 INR/kWh
11 Andhra Pradesh
LT-II: Non-Domestic/Commercial 2.79 INR/kWh
LT-III: Industrial 0.60 INR/kWh
LT-VII: General 0.00 INR/kWh
LT-VIII: Temporary Supply 2.42 INR/kWh
HT-I(A): Industrial 2.07 INR/kWh
HT-I(B): Ferro-alloys 0.12 INR/kWh
EPDCL HT-II: Others 4.22 INR/kWh
HT-III: APTs, BSTs and Rly. Stns. 2.36 INR/kWh
HT-IV(A):Lift Irrigation 1.88 INR/kWh
HT-IV(B):Composite Water Schemes 0.91 INR/kWh
HT-V: Railway Traction 1.22 INR/kWh
HT-VI: Townships & Colonies 0.63 INR/kWh
HT-VIII: Temporary 0.00 INR/kWh
HT I (A): HT - Industry (Express Feeder) 1.49 INR/kWh
MSEDCL
HT I (B): HT - Industry (Non-Express Feeder) 1.09 INR/kWh
HT I: HT-Industry 0.2 INR/kWh
12 Maharashtra R-Infra
HT II : HT- Commercial 1.19 INR/kWh
HT I: HT-Industry 0.81 INR/kWh
Tata Power
HT II : HT- Commercial 1.12 INR/kWh
Large Industrial Power Supply EHT Consumers 1.95 INR/kWh
Large Industrial Power Supply HT 2 Consumers 2.05 INR/kWh
Irrigation & Drinking Water Supply Category - EHT
2.56 INR/kWh
Consumers
13 Himachal Pradesh HPSEB
Irrigation & Drinking Water Supply Category - HT 21
1.83 INR/kWh
Consumers
Bulk Supply Category - EHT Consumers 2.59 INR/kWh
Bulk Supply Category - HT Consumers 2.01 INR/kWh
HV-1 (Supply at 11 kV) 2.8 INR/kWh
HV-1 (Supply above 11 kV) 2.16 INR/kWh
HV-2 (Supply at 11 kV) 1.05 INR/kWh
DVVNL, MVVNL, PuVVNL, PVVNL HV-2 (Supply above 11 kV ) 0.63 INR/kWh
HV-3 (Supply above 11 kV ) 1.52 INR/kWh
HV-4 (Supply at 11 kV) 2.17 INR/kWh
HV-4 (Supply above 11 kV ) 2.36 INR/kWh
14 Uttar Pradesh HV-1 (Supply at 11 kV) 3.04 INR/kWh
HV-1 (Supply above 11 kV) 2.57 INR/kWh
KESCO
HV-2 (Supply at 11 kV) 1.2 INR/kWh
HV-2 (Supply above 11 kV ) 1.26 INR/kWh
HV-1 (Supply at 11 kV) 4.84 INR/kWh
HV-1 (Supply above 11 kV) 4.40 INR/kWh
NPCL
HV-2 (Supply at 11 kV) 2.97 INR/kWh
HV-2 (Supply above 11 kV ) 2.82 INR/kWh
HT industrial consumers Rs. 0.47/kWh
15 Uttarakhand UPCL
Non-domestic consumers Rs. 0.74/kWh
16 Jammu & Kashmir JKPDD Nil
Industry (Injection & Drawal Voltage 230 kV) 350.69 (Paise/kWh)
Railway traction (Injection & Drawal Voltage 230 kV) 312.99 (Paise/kWh)
Government Educational Institution Etc. (Injection &
262.61 (Paise/kWh)
Drawal Voltage 230 kV)
17 Tamil Nadu TANGEDCO
Pvt. Educational Institutions etc. (Injection & Drawal
304.29 (Paise/kWh)
Voltage 230 kV)
Commercial and Other (Injection & Drawal Voltage
523.28 (Paise/kWh)
230 kV)
HT-2a (66 kV & above) 118 Paise/unit
HT-2a (HT level-11 kV/33kV) 86 Paise/unit
HT-2b (66 kV & above) 253 Paise/unit
HT-2b (HT level-11 kV/33kV) 222 Paise/unit
BESCOM, HESCOM, MESCOM, HT-2c (66 kV & above) 128 Paise/unit
18 Karnataka
GESCOM & CESC HT-2c (HT level-11 kV/33kV) 96 Paise/unit
HT-4 (66 kV & above) 45 Paise/unit
HT-4 (HT level-11 kV/33kV) 14 Paise/unit
HT-5 (66 kV & above) 709 Paise/unit
HT-5 (HT level-11 kV/33kV) 677 Paise/unit
19 Assam APDCL HT II Industry category 0.54 Rs/kWh
EHT 1.9 INR/kWh
20 Meghalaya MePDCL
HT 1.75 INR/kWh
November 2016
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Jindal Steel and Power Ltd (JSPL) has as metallurgical coal, has risen by more
reopened its mines in Mozambique from 1 than 150% since August. JSPL expects
October as the price of coking coal, used access to own coking coal will also give
in steel production, has surged because of its steel output a competitive edge. India
supply cuts in China. The company, which has no coking coal reserves and the entire
is in the process of selling some of its requirement is imported from markets
assets in the power sector to reduce over such as Australia, Canada and Africa. While
Rs40,000 crore of debt, expects the rise ago period, mainly on account of nearly flat the increase in the price of coking coal in
in coking coal prices to help improve the demand for steel and high financing costs. world markets is welcome news for miners,
performance of its mining operations in Ravi Uppal, managing director and group passing on the increased cost of coal may
the second half of the year. JSPL, which chief executive officer of JSPL, said its not be easy for domestic steel producers in
has mining, steel, power and construction unit JSPL Minerale Mozambique LDA has the face of cheap steel imports from China
businesses, had reported a consolidated restarted mining operations at the Chirodzi and from countries with which India has
loss of Rs1,082 crore for the June quarter, Mines in Tete Province in Mozambique as free-trade agreements such as Japan and
double the loss it had reported in the year the global price of coking coal, also known South Korea.
November 2016
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World Coal Association exhorts India for sustainable use of cleaner coal
The World Coal Association (WCA) has technologies to reduce emissions. For the
urged India to work towards deployment international coal community, India is of
of cleaner coal. The global industry high strategic importance and therefore,
association for coal has said that in order WCA has decided to convene its annual
to support a sustainable development board meeting in New Delhi, this year.
of the resource, the worlds third largest According to the guidance given by the
energy consumer, India, will require partnership with Coal India, NTPC, and International Energy Agency (IEA), by
financial, technological and other support other public and private enterprises. As 2040, Indias energy consumption will
internationally. Benjamin Sporton, Chief India is going to rely on coal to power up surpass that of the Organisation for
Executive, WCA, said: We are excited its economy in the decades to come, I Economic Cooperation and Development
to be in India and have come here to think it is important to look for ways to (OECD) Europe, and would be rapidly
observe and take back key insights. As mine coal in a sustainable, efficient and approaching that of the US. Like other
an international organization, we can safe manner, as well as look for ways to countries before it, the countrys economic
support the sustainable development of utilize it through modern high-efficiency, growth will be still largely powered by
Indias coal, mining and power sectors in low-emission (HELE) power generation coal.
November 2016
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A coal boom in Asia could destroy any boom Kim describes as a disaster has been
chances of meeting global climate goals, quietly enabled by the International Finance
World Bank Group President Jim Yong Kim Corporation (IFC), the private sector arm of
pronounced recently said. If all the new coal the World Bank Group. After two years of sift-
plants on the books earlier this year were ing through a commercial banking database,
constructed especially in Asia it would be researchers found the IFC has financial ties
impossible to stay below two degrees, he to 41 new coal projects launched since 2013.
said, referring to the temperature change tar- These projects include highly controversial
get set in the Paris Agreement. Slowing the power plants like the Mahan plant in India,
growth of coal fired power plants is perhaps the proposed Lanao Kauswagan power
the most urgent task for global leaders try- station in the Philippines and the Rampal
ing to curb climate change, Kim said, empha- coal plant in Bangladesh, each of which has
sizing the need for a greener finance sector. rare circumstances. Meanwhile, according prompted protests by local activists who fear
Since 2013, the World Bank Group limited to a report led by US-based NGO Inclusive the projects will cause severe environmental,
its own financing of new coal projects to Development International, the Asian coal social and human rights problems.
November 2016
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ExpertSpeak
Oxygenation, Bioremediation set to
play significant role in water treatment
Anil Attavar, Director, Way 2 India, feels that as India moves
ahead on its plans on urbanisation, water treatment will be
a key concern. The country is grappling with the problems
encountered in maintaining, preserving and nurturing
water bodies that are under the onslaught of urbanization
and industrialization in the cause of economic growth. In
this regard, oxygenation and bioremediation can play an
important role in mitigating these problems.
ExpertSpeak
InDepth
Lack of coal demand poses fresh
challenge to the Government
28
SEBs of Maharashtra, Gujarat and Tamil Nadu have become power surplus
Around 21-22 GW of coal-based generation capacity is currently stranded without a PPA
By Team InfralinePlus
The Indian government seems to have Owing to the bad financial health of the advent of the Ujwal Discom Assurance
backtracked on its initial target of DISCOMs, states have been resorting Yojana (UDAY). UDAY seems a more
increasing 1bn coal production, seeing to power cuts and load shedding and comprehensive scheme than any other
the lack of demand from all sectors, prefer to buy cheaper power from the past schemes as it talks about bringing
including the power sector. India had Power Exchanges (PXs). The state efficiency and transparency in the
initially planned to increase its domes- DISCOMs have failed to sign long workings of DISCOMs. Various state
tic coal production to 1bn tonnes by term power purchase agreements (LTP- generating companies (GENCOs) have
2020 in light of the ever-increasing de- PAs) since 2013 and the recent trend been requesting Coal India (CIL) to stop
mand from the power sector, especially indicates that the market is slowly but the coal supply for their power plants
from the Independent Power Producers surely shifting to short term power due to less demand from the state and
(IPPs). However, the demand from purchase planning. their respective DISCOMs.
the power sector has declined signifi- Due to increase in DISCOM losses Coal Indias expansion plants are
cantly over the past one year, due to over the past two years, there have part of Indias overall efforts to ensure
falling demand from state electricity been definitive steps undertaken by energy security by cutting crude oil
distribution companies (DISCOMs). the Ministry of Power (MoP) with the imports by 10 percentage points over the
November 2016
www.InfralinePlus.com
Coal Demand-Supply/
Power Purchase
Agreements/Stranded
Capacity: A conundrum!
Several state DISCOMs are already
facing financial stress due to accu-
mulated losses to the tune of INR 3.8
Lakh Crores (as on March, 2015) and
increasing @ 12% p.a. as reported by the
ministry. Such financial stress does not
allow DISCOMs to make fresh power
purchases and prevents them from float-
ing new tenders for Long Term Power
Purchase Agreements (LTPPA) for ther-
next six years the country now imports mal power which will have a negative
80% of the crude oil requirement and Over the past four impact. Backing down long term thermal
boosting production of natural gas. The years, PPAs of only 12 firm must run power for accommodating
demand for coal from the power sector infirm power is unsustainable technically
GW have been signed
has seen tremendous decline in the and financially and will be a big chal-
past one year. Government has set the under the competitive lenge for system operators to deal with.
2016-17 coal production target for Coal bidding route (Case 1 Over the past four years, PPAs of 29
India at 598 MT. While the production bids). Leading state only 12 GW have been signed under the
has been increasing continuously there competitive bidding route (Case 1 bids).
has not been many takers of coal. Coal
electricity boards Leading state electricity boards (SEBs)
demand has remained subdued during (SEBs) of Maharashtra, of Maharashtra, Gujarat and even Tamil
2016-17. Gujarat and even Tamil Nadu have become power surplus and
Despite being a regional energy may not require additional contracts
giant, India has a low per-capita
Nadu have become for the next couple of years. Other
consumption (1075 kilowatt hours power surplus and may utilities who need power are taking full
(kWh) per person per year) compared not require additional advantage of the prevailing low spot
to China (4,034 kWh per person) and power prices in exchanges (less than
contracts for the next
the US (13,532 kWh per person). The INR 2.5/unit), rather than entering long-
low per-capita energy consumption in couple of years term contracts. Currently, around 21-22
India is primarily due to the fact that GW of coal-based generation capacity
a vast majority of population does not inability to access sufficient energy is is stranded without a PPA. The plant
have access to modern energy sources one of the reasons for the low levels of load factor (PLF) of the existing coal-
to deliver basic energy needs. One development in some regions, as energy based capacity for private independent
in four Indians does not have access deprivation has significant health, power producers with a contract was
to electricity; about two-thirds of the social, environmental and economic less than 60% in FY 2015-16 and has
population use traditional biomass implications. The government is relying been consistently hovering well below
for cooking. Energy poverty the on coal-fired power plants to reduce 60% during 2016-17 (up to September
2016). While Coal Indias stellar per-
King Coal! formance over the past two years has
Indias dependence on coal can be seen in its electricity generation mix. As of September taken away fuel-related worries to some
2016, 187 GW (approximately 61% of the total installed capacity) came from coal-powered extent, legacy issues such as new coal
thermal generation. The balance consists of a combination of hydro (15%), other fossil
fuel (9%) nuclear (2%) and non-hydro renewable energy sources (13%). In recent years,
block auctions at aggressive prices still
Indias electricity sector has grown at a rapid pace. Installed generation capacity has haunt some generators.
grown phenomenally post-independence from some 1.4 GW in 1948 to about 306 GW by Further, there is a huge amount of
September 2016. generation capacity lying undispatched
November 2016
www.InfralinePlus.com
InDepth
due to unavailability of coal which is it difficult to sign Fuel Supply Agree- before 2020, there are several private
due to the policy that only plants with ments (FSAs), despite constant prodding sector plants that are facing financial
long term contracts will get coal linkage, by the government. It had struggled to issues leading to delays in or stoppage
thereby rendering installed transmission accept the FSA obligations even in case of the construction work.
capacity underutilised. On the other of power plants with long-term PPA In 2013, apart from identifying plants
hand, state distribution companies and slated to be commissioned before for short-term supply contracts, CIL
are not pursuing long term contracts March, 2015. The government at that was also issued a presidential directive
resulting in a Catch-22 situation for the time identified two groups of plants with to sign FSAs with certain power plants
generation and transmission capacity an aggregate capacity of 14,600 MW holding valid LoAs. For this purpose,
addition and a utilization mismatch. and asked CIL to supply fuel to them on a list of power plants totalling around
a short-term MoU basis as they lacked 78,000 MW capacity was finalized by
Historical and future trend LoAs from the company. Although, the Central Electricity Authority (CEA)
Coal has always been the mainstay most of the central sector plants in this and approved by Cabinet Committee on
of the Indian power sector and it is a category are likely to be commissioned Economic Affairs (CCEA). However,
view shared by most policymakers that only about 58,000 MW of this capacity
it must remain the primary source of The dominance of coal has been commissioned till date with
electricity generation for at least the around 54,000 MW having long-term
next three to four decades. This view
in Indias energy con- PPAs and are therefore eligible to draw
is based on the belief that a centralised sumption basket can coal from CIL under FSAs.
electricity system based on an ever- be attributed to its ex- Amid an improving trend in
expanding coal power generation base domestic coal production and the mea-
will ensure energy security, provide af-
tensive use in produc- sures being taken by CIL to augment
fordable energy for all and, importantly, ing electricity in the domestic coal output, the dependence
30 address the issue of energy scarcity in country. Coal powered on coal imports is likely to remain
India. The dominance of coal in Indias high in the near to medium term (till
thermal power plants
energy consumption basket can be at- FY19) and moderate gradually after
tributed to its extensive use in produc- (TPPs) account for that, due to the overall challenges in
ing electricity in the country. Coal 70% of total electricity coal mine development along with risk
powered thermal power plants (TPPs) generated in the coun- of delays in ramping up of coal output
account for 70% of total electricity by the allottees of schedule II and
generated in the country and represents
try and represents 61% schedule III mines.
61% of the installed power capacity. of the installed power
The current scenario contrasts with capacity Conclusion
the one in 2013 when CIL was finding The financial position of state power
distribution companies (DISCOMs)
Figure 1: Coal Indias growth production and offtake levels during
is being cited as a key impediment to
last five years (in %) w.r.t to demand from the power sector
demand growth. Over-investment in
CIL's growth production and offtake/consumption transmission is desirable for a country
by power utilities (FY11-FY16) like India because the sources of
Year-on-year growth (in %) energy lie either in the central/eastern
coal belt or hydro resources in north
Coal consumption by power while demand centers are in the plains
8.8
utilities: 530.4 MT (15-16) 8.6
of north, west and south. Stranded
7.4
6.9 Coal consumption by power power capacities of 22-28 GW
utilities: 545.9 MT (15-16)
(industry estimates) may have to wait
Coal consumption by power
3.8 utilities: 489.4 MT (13-14) 3.8 for 2-3 years for securing PPAs. During
2.1 2 2.3 the present period, both government
0.01 1.1 1.4
and industry are relying on UDAY
FY11 FY12 FY13 FY14 FY15 FY16 scheme for the demand to pick up and
Production Offtake
kick-start the growth in the sector.
Source: Coal India (CIL), Central Electricity Authority (CEA), media reports For suggestions email at feedback@infraline.com
November 2016
www.InfralinePlus.com
StatisticsCoal
Power Generation - Role of Coal (Aug16)
Note(*): 1. Receipt, consumption and coal stock includes coal from all sources.
2. Specific coal consumption calculated as per April-August Generation & Consmn. Figs provided by CEA.
StatisticsCoal
Indonesian Coal Prices - HBA - FY 2016-17 (till Oct16)
16-Apr 52.32 55.87 57.84 52.29 43.06 43.25 41.6 33.45 30.87
16-May 51.2 54.66 56.7 51.26 42.16 42.44 40.89 32.88 30.35
16-Jun 51.81 55.32 57.32 51.82 42.65 42.88 41.28 33.19 30.63
16-Aug 58.37 56.61 58.53 52.9 43.61 43.74 42.04 33.8 31.18
16-Sep 63.93 68.45 69.61 62.87 52.45 51.6 48.99 39.43 36.18
16-Oct 69.07 74.01 74.82 67.55 56.6 55.3 52.26 42.07 38.53
16-Aug 67.4 66
CoverStory
Climate Change: Is India ready
to move away from coal?
33
Make in India and Digital India to lead to a significant increase in electricity demand
Need to expedite capacity addition in hydro, nuclear and gas-based generation
By Team InfralinePlus
On October 2, 2016, India made a strate- people are yet to receive power, this generating capacities if its electricity
gic decision to move away from coal as development has also triggered a debate demand spikes.
a source of electricity in the long run by on how it will impact Indias long term According to BP Statistical Review,
ratifying the Paris Agreement on Climate strategy to address energy security. India witnessed 5.3 per cent increase in
Change. The deal, approved by nearly The pace of reduction in Indias emissions in 2015 -- the highest in the
200 countries in Paris last December, carbon intensity has slowed in the past world. India is apparently banking on
aims to cut greenhouse gas emissions decade due to heavy dependence on renewable capacity to meet its electricity
by shifting away from fossil fuels to coal to meet electricity requirement. requirement and not much attention is
limit global warming to well below But by signing up to the Paris climate being paid to harnessing potential of
2C compared with pre-industrial times. pact, the country has taken on binding cleaner and reliable energy sources like
However, considering the fact that India commitments to reduce emissions, hydro, gas and nuclear, which does not
is one of the fastest growing economies which means in the future it cannot fall seem to be a credible strategy to ensuring
in the world and more than 300 million back on the dirty fuel to fire its new countrys long-term energy security.
November 2016
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CoverStory
India has committed to reduce its because the country faced domestic cent in 2012. That slowed the pace
emissions by 33 to 35 per cent over shortage of uranium and was barred of reduction in the countrys carbon
the baseline of 2005 by 2030 under from accessing international market for intensity (emissions per unit of GDP).
the Paris climate agreement. Power the fuel. While harnessing hydropower According to BP Statistical Review,
sector accounts for 35-40 per cent of resources has always been a tricky prop- Indias coal consumption grew by 4.8
the countrys total emissions. India has osition for the country given the risks per cent in 2015 and accounted for
targeted to raise share of renewable involved in it, domestic gas shortages 58 per cent of the countrys primary
energy in its power mix to 40 per undermined the prospect of generation energy consumption. India also
cent by 2030. However, as we know, capacity addition based on the clean fuel. accounted for more than 10 per cent of
capacity utilisation of renewable power The net result was that India added coal- global consumption during the year.
plants is much lower at 15-16 per cent based generation capacity at a frantic According to a study undertaken
compared to conventional generating pace of capacity from 1990 onward in by the Global Commission on the
stations which can be easily run at the absence of credible alternatives. Economy and Climate, the pace of
80-90 per cent plant load factor (PLF). According to official data, the share decline in Indias energy intensity in the
That means a 100 MW solar plant will of coal in Indias total primary energy 2000s worked out to 2.7 per cent, which
generate the same quantum of elec- rose from 33 per cent in 1990 to 45 per was higher than the 1.5 per cent median
tricity as a 20 MW conventional plant. pace of energy intensity decline across
If the Indian economy gets back to Capacity utilisation all countries in this period. But Indias
the trajectory of 9-10 per cent annual of renewable power energy intensity fell at a slower pace of
GDP growth, electricity consumption 1.9 per cent between 2006 and 2013.
could see a sharp increase. Then getting
plants is much lower According to the International Energy
additional conventional capacity in at 15-16 per cent com- Agency, Indias per capita energy
time to meet power requirement might pared to conventional consumption is just a third of global
34 prove challenging. Building hydel generating stations average and 24 crore people still lack
and nuclear power plants takes time. access to electricity. Besides, the Modi
Developing natural gas-based gen-
which can be easily run governments flagship programme like
eration capacity is also not an option at 80-90 per cent plant Make in India and Digital India are also
given the domestic shortage of the fuel load factor (PLF). That expected to lead to a significant increase
and the issues of affordability involved means a 100 MW solar in the countrys electricity demand. So
in using imported LNG. If India tries to there is a tremendous scope for increase
add coal-fired capacity, it could run the
plant will generate in Indias electricity consumption. That
risk of defaulting on emission reduction the same quantum of could have serious implications for the
commitments. electricity as a 20 MW countrys energy intensity if India does
Prior to 2007, nuclear capacity conventional plant not shift to conventional but cleaner
addition was not an option for India energy sources like hydropower, nuclear
and gas-based plants.
According to the IEA, Indias
energy consumption would more than
double by 2040, accounting for 25
per cent of increase in global energy
consumption. Strong growth in Indias
manufacturing and an additional 58
crore consumers will boost electricity
demand by 4.9 per cent per year,
reaching almost 3300 TWh in 2040.
Installed capacity will surge to nearly
1 100 GW in 2040 about the same as
Europes current capacity, the IEA says
in its World Economic Outlook 2015.
According to analysts, energy
intensity of GDP is also affected by broad
structural changes in the economy. The
November 2016
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CoverStory
levying cess on coal as environment million tonnes, say experts. targets and compliance with policies
cost of the dirty fuel. Finance Minister The Central Electricity Authority such as Renewable Purchase Obli-
Arun Jaitley doubled the cess on coal to announced plans in May 2016 to close gation (RPO). According to analysts,
Rs 400 a tonne in the budget 2016-17. up to 37GW of obsolete coal plants Indias renewable targets are ambitious
Jaitley justified the increase as a way based on outdated subcritical technology and delivery on ground in terms of
to internalise some of the cost exter- about 20 per cent of Indias installed new deployment has gathered consid-
nalities that result from the use of coal. coal-fired power generation capacity. erable pace. The ambitious targets are
This is a significant cost increase for Our first concern is emissions ... We now further backed by Indias global
coal-fired power plants, with the revised also want plants to be more efficient in commitment under a formal multi-
cess amounting, for example, to about 10 use of resources, the CEA had said. national agreement. Despite several
per of the price of 6,000 Kcal/kg GCV India has also signed pact to strengthen key concerns that remain, this should
imported coal, say analysts. The money cooperation with Japan in advanced help focus government policies for the
is used by the government to finance ultra supercritical coal technology. sector, attract domestic and interna-
capacity addition in renewable power. tional capital into the sector and assure
The government has also offered Strong growth in growth for all stakeholders.
incentives to replace more than 25 year renewables
old, obsolete sub-critical units with As part of its Intended Nationally Conclusion
supercritical technology based plants Determined Contributions (INDCs), Analysts feel that clean coal technolo-
in a bid to bring down emissions of India has committed that at least 40 per gies can help resolve Indias dilemma
coal-fired plants. As of today, more cent of its installed power generation over usage of coal. However, India has
than 90 per cent of Indian coal plants capacity will be non-fossil fuel to make a timely decision on whether
use sub-critical boiler technology with based by 2030. The current number it should wait for commercialisation
operating efficiencies close to 30 per is 30 per cent, if hydro and nuclear of advance super critical technology
cent. India has committed to ramping power are included. A big share of or should it work on more credible 37
up its currently low penetration of High the commitment will be achieved, if option of expediting capacity addition
Efficiency Low Emission (HELE) tech- India meets its 175 GW of renewable in hydropower, nuclear and gas-based
nologies such as super-critical and ultra power capacity target by 2022. The big generation to ensure long-term security
super-critical boilers, which can increase imponderable here is Indias insistence of electricity supply.
efficiencies to as high as 46 per cent. that it will achieve the targets only if Even if India gets advanced ultra-
Every percentage point increase in developed countries give it money and supercritical technologies in a couple
boiler efficiency results in a 2.5 per discounts on new technology. of years and starts their large-scale
cent reduction in GHG emissions. Experts say that ratification of deployment, there is no guarantee
If half of Indias coal boilers were climate accord would attract a much that it will be able to make intended
HELE-based by 2030, this could lead larger global scrutiny on the countrys reductions in power sector emission
to avoided emissions of roughly 400 ability to achieve yearly renewable while also adding coal-fired generation
capacity freely.Anyway, this tech-
nology will be costly and put upward
pressure on electricity tariff if deployed
on a massive scale.
So, it would be advisable for the gov-
ernment to promote capacity addition in
hydropower and nuclear. The gov-
ernment can build roads and highways
to help in expeditious harnessing of
hydro resources in remote and inac-
cessible areas.To ensure expeditious
capacity addition in nuclear, the gov-
ernment can think of roping in private
sector participation, which would entail
amending the existing law.
The central government will invest Rs 15,000 up to 72 per cent. Pradhan said that efforts
crore to increase the capacity of Panipat were being made to have the downstream
refinery from existing 15 million tonnes of petro chemical hub in Haryana so as to
(MT) to 25 mt to create huge employment attract maximum investment in the state.
opportunities, Union Minister Dharmendra This would attract about 100 big or small
Pradhan has said. Also, an ethanol plant industries thus generating maximum revenue
would be set up at a cost of Rs 500 crore and employment in the state, he said. The
by the Indian Oil Corporation in Panipat to Union Minister also appreciated the state
generate alternative fuel from agricultural government for digitization of ration cards
residue which would boost agriculture sector, under public distribution system, which
the Petroleum Minister said. The Union revealed that five lakh beneficiaries were
Minister said that the expansion of refinery would also help in raising quality of fuel in getting dual benefit of both subsidised LPG
would raise specifications of fuel quality from the country by the year 2020, he said. As per and kerosene.This has saved Rs 100 crore
BS-4 to BS-6. This would not only create scientific research, he said that ethanol made subsidy being granted by the Centre to
employment opportunities for the people, but from crop residue can produce fuel or energy Haryana government, he pointed out.
November 2016
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OIL achieves all-time highest natural gas production during 2015-16 fiscal
Oil minister Dharmendra Pradhan recently national seismic programme, we are carrying
launched the national seismic programme to out a reassessment of hydrocarbon data of
carry out assessment of unappraised areas existing sedimentary basins. The third big
across the country for potential oil and natural thing is the single platform where all the data
gas reserves. The massive 2D seismic survey, is being brought together, or the national data
which will cost the government more than Rs repository, which we will be dedicating to the
5,000 crore, has been launched on Mahanadi nation very soon, the minister said. Pradhan
basin (onshore) in Odisha. Our governments said he was hopeful the survey work would
is giving a lot of focus to hydrocarbon data. eventually lead to enhanced exploration and
Pradhan said at the launch at Tarang village. production (E&P) activities in Odisha. Work
As much as 48% of the Indian sedimentary in most parts of the country while Oil India on such surveys in these parts in the 80s had
basin remains unappraised, and there has Ltd will undertake the project in northeastern even resulted in some evidence of onland gas
been no major finding in new sediments in states. NSP will cover an estimated 48,243 findings, he said. The presence of gas has
the last 25 years, he added. ONGC will carry line kilometre, covering 26 sedimentary been established about 30 km offshore of
out the national seismic programme (NSP) basins divided into 11 units. In addition to the Dhamra in a discovery by Reliance in the past.
November 2016
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Singapore joins IEA as Southeast Asia oil demand set to rise 80% by 2040
Singapore joined the International Energy creating across the world, said Fatih Birol,
Agency (IEA) as an association country. The executive director of the IEA. The Interna-
island state, which is the Southeast Asian tional Energy Agencys objective is to ensure
hub of the oil trade, is the fourth country to reliable, affordable and clean energy and
join the influential agency as an association help member countries handle disruptions in
country after China, Indonesia and Thailand. oil supply. Singapore is the fourth country to
Singapore has key strategic importance made up of 29 member countries which are join the IEA under the association country
in the energy sector as energy demand in net oil importers and have committed to a initiative after China, Indonesia and Thailand
the region is expected to rise by 80 percent demand-restraint programme for reducing last November. As an Association country,
in the next 20 odd years, driven by robust national oil consumption by up to 10%. We Singapore will work with the IEA on a broad
population growth and economic expansion. are going to create different programs and range of energy security issues. To become
The inclusion of Singapore in the IEA also activities with Singapore in order to make the a full member, countries should be net oil
marks the rising importance of Asia in the decision makers in this region understand the importers with a crude reserve that is equiva-
global economy and energy landscape. The benefits of using energy more efficiently and lent to around 90 days of the previous years
IEA, an autonomous group set up in 1974, is the opportunities that renewable energies are average net oil imports.
November 2016
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ExpertSpeak
Mundra LNG Terminal: Indias
next energy gateway
Anil Joshi, President, GSPC LNG Ltd., feels that given Indias global
commitment to reduce carbon emissions, the country will have to
significantly increase the share of natural gas in the energy basket.
The state of Gujarat has emerged as the natural gas capital in India,
and the upcoming 5-MMTPA LNG Terminal at Mundra, shall further
add to this landscape.
Indias GDP is poised to grow between India where natural gas business
7.5 to 8% in the coming few years. A and infrastructure is thriving
country aspiring towards tremendous across the entire value
growth needs a lot of infrastructural sup- chain with
port in terms of power, energy, roads, exploration Moving
ports etc. Infrastructural support is key blocks, LNG towards gas-
to growth that can never be discounted import based economy Anil Joshi, President, GSPC LNG Ltd.
41
in any growing economy like ours. terminals by increasing the
In Paris 2015 UNFCCC, 196 and share of Natural eliminates the requirement of break-
countries came together to deal with developed Gas can help water. The location of the Mundra Port
the issue of climate change. World gas India meet its is well placed for bringing the LNG
leaders pledged to cut carbon emissions transmission objective vessels especially in view of the short
to restrict the increase in global and distribution distance for voyages from the Middle
average temperature below 2C. At this business. Gujarat East and African LNG exporting coun-
forum, India has committed to reduce with its vast coastline (1600 kms) tries. This provides immense opportu-
its emissions intensity of its GDP by 33 already has two fully operational nity for LNG import at this terminal,
to 35 per cent by 2030 from 2005 level. LNG import terminals (Dahej and with savings in LNG transportation
Moving towards gas-based economy by Hazira) as well as an excellent cost. Further, the Mundra Port is well
increasing the share of Natural Gas can network of pipelines and inter-pipeline connected with the vast hinterland of
help India meet its objective. Recent connectivity. western and northern Indian states,
initiatives of MoPNG like #Gas4India which have huge potential for demand
also aim to increase the share of Strategic advantage of regasified LNG.
Natural Gas in Indias Energy Basket GSPC LNG Limited (GLL) is set-
from current level of 6.5% to 15%. ting up a 5-MMTPA LNG Terminal at Components and facilities
As of August 2016, Indias Natural Mundra, Kutch. Mundra port offers a Mundra LNG terminal is aimed to
Gas (NG) consumption was around 140 strategic location as it is an all weather import LNG to meet the growing
MMSCMD. For the first time, the share operating port with natural draft suit- energy demand. The LNG terminal will
of Regasified LNG (RLNG) stood more able for 24x7 safe berthing of all size comprise of receiving, storage and re-
than domestically produced NG. The LNG vessels. The port already has gasification facilities of LNG with state
additional gas demand in the economy operational facilities for all the requi- of the art technology. Mundra Terminal
is constantly being met through higher site services for LNG ship pilotage, project has been conceptualized to be
levels of imported LNG, making India berthing and un-berthing. No capital developed in three phases. In the Phase-
the 4th largest importer of LNG. or maintenance dredging is envisaged I, single jetty with unloading facilities,
The state of Gujarat has already for the project. The Gulf of Kutch acts two LNG storage tanks and regasified
emerged as the natural gas capital of as a natural shelter for the port and LNG send out capacity of 5 MMTPA
November 2016
www.InfralinePlus.com
ExpertSpeak
This shall provide unhindered access to consortium of Toyo Engineering company having vast experience in
to natural gas markets of western and India Limited & Toyo Engineering executing international LNG projects.
northern India. Corporation (Japan), and Sea water Since the start of construction of the
The project is implemented intake & outfall facilities to Coastal terminal in August 2014, Mundra LNG
through different packages, namely Marine Construction & Engineering Terminal has achieved many significant
Storage Tanks, Regas facilities, Sea Limited (COMACOE), while marine milestones progressively. GLL has
water intake & outfall, and Marine facilities are being undertaken given highest priority to safety and
facilities to optimize costs, through separately. EPCC Contractors for quality in the works. All the packages
seamless integration of different LNG storage tanks and Regasification of the project are in advanced stages of
facilities by managing interfaces facilities are leading global contractors construction and the terminal shall be
among Engineering, Procurement, and have executed similar LNG completed by next year.
Construction and Commissioning projects in India. Globally LNG industry is at cross
(EPCC) Contractors at different stages GLL has appointed Whessoe roads today. A lot of projects are
of the project life cycle. Engineering Ltd, UK as its Project getting commissioned; increasing
EPCC contracts were awarded Management Consultant (PMC). global supply of LNG. Spot LNG
for Storage Tank facilities to IHI Whessoe Engineering Ltd, UK is prices have reduced significantly
Corporation, Regasification facilities a globally acclaimed engineering in line with oil price crash and
with the availability of abundant
The project is implemented through different supply of LNG. In addition to
conventional LNG, many countries
packages, namely Storage Tanks, Regas facilities, are experimenting with Small Scale
Sea water intake & outfall, and Marine facilities to LNG concept and foraying the usage
optimize costs, through seamless integration of of LNG as marine bunker fuel, road
transport fuel etc. This is indeed a
different facilities by managing interfaces among moment of reckoning for Indias LNG
43
ExpertSpeak
Natural gas infrastructure
requires cautious approach
Dr. U.D. Choubey, Director General, SCOPE, feels that even
though natural gas is the future for energy sector, it is important to
ensure that the infrastructure creation for the same is not done in a
haphazard manner. Realistic demand and supply estimates should
be taken into account toa void excessive capacity which can lead to
be a drain for the companies.
km of pipeline depending upon size). LNG exporters. As of January 2016, and of course political unrest in key
Any unplanned investment on creating the nominal liquefaction capacity exporting nations.
pipeline infrastructure as a result would stood at 301.5 MTPA. This is likely
lead to blockage of investment and a to increase by 141.5 MTPA given Regasification terminals
drain on resources of the company(s). the plants under construction are With respect to regasification, the
Hence, in order to start with any commissioned. The capacity utilisation global capacity as of 2015 stood at
fresh investment in infrastructure, it of liquefaction stood at approximately 757 MTPA (IGU World LNG report
should be based on realistic supply and 50%. The world has seen more or less 2016) and new capacities are being
demand of natural gas and, above all, flat capacity utilisation from previous planned to be added very shortly. 55
a firm gas supply contract on back- year primarily due to global fall in gas MMTPA new regasification capacities
to-back basis. Optimal utilisation of prices, diversion of export of LNG by were under construction for the quarter
infrastructure would lead to recovery countries for domestic consumption ended 31st March 2016. However, the
of cost of pipeline and in turn ensure utilization levels for the receiving LNG
maximum utilisation of infrastructure. terminals at world level stands low and
This would lead to win-win situation
In order to start with is not more than 40% in any case. The
for all parties involved- seller, utility any fresh investment utilization levels have remained flat
provider and buyer. in infrastructure, it during 2014 and 2015 primarily due
should be based on to diversion of domestic production
LNG liquefaction and by many countries for self-use by
gasification facilities realistic supply and the country and falling price of gas
It would not be an exaggeration to say demand of natural gas internationally.
that LNG has driven globalisation by and, above all, a firm At present, India is the 13th largest
connecting distant markets thereby gas consumer and 5th largest LNG
making natural gas accessible even
gas supply contract importer in the world. India has four 45
to resource deficient/ absent areas. on back-to-back basis. LNG terminals with a total regasifi-
Hence, at present, LNG is the driving Optimal utilisation of cation capacity of about 33 MT of
force behind the worlds energy map. which only 24.5 MT is operational
infrastructure would (Petroleum Ministry). However, oper-
With the growing dependence on
natural gas, LNG presents itself as lead to recovery ating LNG gasification terminals are, by
a viable alternative. As per IGU, the of cost of pipeline and large, being operated on their full
global LNG trade reached 244.8 MT and in turn ensure capacity. Crowding of regasification
in 2015-16 earmarking the said year terminals is likely to put pressure not
as a historical period for LNG trade. maximum utilisation of only on utilisation levels but also on
As of 2015-16, there are 33 LNG infrastructure returns of investment in constructing
importing countries as against only 17 the terminal. Construction of LNG
terminal entails a heavy capital expen-
diture of approx. INR 6,000 crores (for
5 MMTPA LNG receiving capacity).
Hence, the same should be done after
giving serious consideration of all
related factors such as sourcing and
supply of regasified LNG to consumers.
Utmost care would be required
when we go for long term tie-up for
imported LNG in the country. High
price tie-up, unpredictable falling
price of gas and affordability of
consumers in India (which is yet to
see mature market of gas) may create
serious problems in times to come
and hence it would be difficult for the
utility provider to find takers in the
November 2016
www.InfralinePlus.com
ExpertSpeak
Indian market for imported LNG if it existence of the company. The only high capital expenditure for the same
is tied-up at high price on long-term olive line being the country as energy is equally irrational. Utility providers
basis. In such a case, take or pay deficient and consumers/ government create facilities at their own cost and
liability on the utility service provider may, under compulsion, be required to capitalise the infrastructure as project
may be very high, adversely affecting consume high priced LNG to produce investment in the financials. Any unde-
the economic health of the company. essential input for economic growth, be rutilization of the utility whether being
To avoid any such situation, there it power, fertilisers and others. pipeline, LNG or regasification terminal
should be firm gas supply contracts on would result in loss to the utility
back-to-back basis from suppliers to Way Forward provider and hence negative return on
transporter and to end-users. Though natural gas is the future for investment. This would lead to financial
Market intelligence and researchers energy sector, it should be ensured and resource loss to the company(s) and
have larger role in LNG trade as the that the infrastructure creation for the the country as well.
price of gas has been highly buoyant. same is not done in an unplanned way. Excessive infrastructure not aligned
Long term tie-ups of LNG at higher Arguments can be presented against with realistic demand and supply can
price may create enormous problems this point by pleading that a develop- lead to be a drain for the companies
for company(s) as marketing of high ing country like India needs to develop and hence it is imperative that natural
price gas would be difficult. Liability infrastructure in order to create demand gas infrastructure is built in a planned
under take or pay may create for gas. Contradicting this thought way with back-to-back firm contracts.
liquidity problems for the utility may not be completely rationale but At least two of the loose ends must
company which may affect the very expecting individual companies to incur be tied up with firm contracts from
source of gas to transporter and again
Utility providers create facilities at their from transporter to end users. If we
do not evolve a clear policy, we shall
own cost and capitalise the infrastructure
46 be building yet another Taj Mahal
as project investment in the financials. Any and discussing strategic sale (or even
underutilization of the utility whether being closure) of the financially stressed
pipeline, LNG or regasification terminal would sick PSE in next five to ten years time.
Humko kitne Taj Mahal Hai Aur
result in loss to the utility provider and hence Banane?
negative return on investment
For suggestions email at feedback@infraline.com
November 2016
www.InfralinePlus.com
ExpertSpeak
Oil & gas companies need to
develop a risk analytics engine
Neeraj Gupta, Director, iEnergy Innovations Pvt. Ltd., feels that
oil and gas is a high-risk industry and hence requires timely risk
mitigation to avert crisis. As a solution, he recommends that oil and
gas companies should adopt a step-by-step approach to build a
decision support enabled risk framework.
Majority of the oil & gas enterprises -- Over 90% did not have any enter-
implement ERM (Enterprise Risk prise risk monitoring dashboards
Management) as a compliance Board and CEO give utmost
requirement. It means they will importance to the following factors:
develop risk registers and governance -- Measure performance against the
framework but lacks a robust day key risk indicators
to day monitoring and integrated -- Periodic mea-
reporting and alerts framework. surement for Neeraj Gupta, Director, iEnergy Innovations
47
Oil Pvt. Ltd.
The ultimate objective of any ERM appropri-
& gas com- tional, financial and legal
framework is to mitigate risk before ateness
panies should 3. Develop key risk indices and
it happens, avoid black swans and -- Deviation
adopt a step-by-step control measures
identify some of the uncontrollable from a
approach to build a 4. Transform it into a decision
risks, monitor them on day to day basis risk per-
decision support support system using analytical
and implement ERM as a decision formance
enabled risk engines
support system. The root cause plan
framework Risk Taxonomy is an important
analysis reports of some the recent -- Periodical
disasters in oil industry also point review of risk stepping stone in the entire risk
towards this by stating that risk control governance policy, framework. It is not possible to
failure is one of the primary reasons. controls, and mitigations build a high rise building on a weak
Risk Management has to be integrated -- Evaluate changes in internal or foundation and same is true for a risk
in day to day business activities of a external environment management program. A risk taxonomy
company. Its ultimate objective is to -- Monitor risk progress report an outlines are risk categories, their
maximize shareholders value. variance following the policies drivers, key performance areas and
Based on some secondary research it -- Periodic review of risk control risk indices across entire organization.
can be said that framework robustness Post taxonomy creation, it is important
-- Over 80% use industry trends and -- Use structured scientific and ana- identify inter-relationships across risk
peer analysis to identify risks lytical tools sub-categories and drivers. There is no
-- Over 80% values importance of As a result, following step-based point in having a thousand risk indices
internal audit reports approach needs to be considered in when all of them are related to each
-- Over 70% think key risk indices order to facilitate transition from an other. All risk drivers which are related
and performance indicators are elementary risk control framework to a to each other should be part of same
same more robust one. risk indices. At a board level it is not
-- Over 80% believes there is a lack of 1. Build the Risk Taxonomy advisable to have more than ten risk
integration is the key issue 2. Develop inter-relationships between indices at the maximum.
-- Nearly 40% have some unstructured various risk drivers across different Even tree methodologies were
risk taxonomy in place risk domains like strategic, opera- used to develop relationships between
November 2016
www.InfralinePlus.com
ExpertSpeak
49
InDepth
Fourth consecutive reduction
in Natural Gas price
50
Gas prices have been reduced by nearly 50% in the past two years
Biggest beneficiary of this price cut is CGD sector which has higher exposure to retail
By Team InfralinePlus
Recently domestic natural gas price has Previous to this, the domestic gas of Oil and Natural Gas Corporation
been cut to $2.50 per million British prices was reduced by 20 per cent in (ONGC) on an annual basis. The
thermal unit for the period of October April 2016. The prices have reduced current price reduction would hit its
1, 2016 to March 31, 2017 from the by nearly 50% in the past two years revenue by about Rs 1, 000 crore.
previous price of $3.06 which is since new gas pricing formula has been All gas of ONGC as well as that of
reduction by 18 per cent. The price cut introduced. ONGC is the countrys Oil India Ltd and private sector RILs
is in line with the fall in gas prices over biggest gas producer, accounting for KG-D6 block is sold at the formula
the reference period July 2015 to June some 60% of the 90 million standard approved in October 2014. This formula,
2016. This is the fourth consecutive cubic meters per day current output. however, does not cover gas from fields
reduction since the implementation Every dollar dip in gas price results like Panna/Mukta and Tapti in western
of the domestic gas pricing formula. in about Rs 4,000 crore hit in revenue offshore and Ravva in Bay of Bengal.
November 2016
www.InfralinePlus.com
Gas Price ($ per million British thermal unit (mmBtu)) New domestic gas pricing
policy 2014
With the cut in domestic gas prices, to Rs 1.5 per standard cubic meter in Gas is one of the cleanest fuels with
relative attractiveness of downstream price of PNG for domestic customers less carbon dioxide per joule deliv-
companies - which are involved in and Rs 0.8-1.7 per kg cut in CNG ered than either by coal or oil and far
distribution of gas over the upstream prices. Following this price cut, MGL fewer pollutants than other hydro-
companies which are involved in reduced CNG price by Rs 1.60 per kg carbon fuels. The share of gas in the
production of gas are likely to accen- and the price of piped gas has been energy basket of the country figures
tuate as this help in earnings growth reduced by Rs1.01 per unit (standard poorly compared with the global
of downstream companies such as 51
Indraprastha Gas (IGL), Mahanagar
Gas (MGL), Gujarat Gas and GAIL. The biggest beneficiaries of this price cut are
This price cut puts further pressure on city gas distribution (CGD) companies which
finances of upstream producers such
have higher exposure to retail. As price reduction
as ONGC, Oil India, and RIL who do
not find the current rate incentivizing will help in improving gas consumption and
enough to invest more in oil and gas increasing conversion to CNG-driven vehicles.
hunt. These upstream companies are These CGD companies tend to retain a portion of
expected to report subdued revenue
from gas. It is assumed that every $0.5
the price cut, which improves operating margin
drop in gas price reduces earnings of
ONGC and Oil India by 5-6%. ONGC
had earlier requested the government to
relook at the gas price formula as this
does not leave them with any money
to carry out more projects and makes
exploration unviable.
The biggest beneficiaries of this
price cut are city gas distribution
(CGD) companies which have higher
exposure to retail. As price reduction
will help in improving gas con-
sumption and increasing conversion
to CNG-driven vehicles. These CGD
companies tend to retain a portion
of the price cut, which improves
operating margin. The price cut
should result in a reduction of Rs 0.5
November 2016
www.InfralinePlus.com
InDepth
Global Benchmarks for current share of 6.5% in next three According to the formula approved
Domestic Gas Price to four years. This is to promote a in October 2014, the domestic gas
Calculation gas-based economy, which is part of price is calculated as the weighted
the nations commitment to cut carbon average price of four global bench-
emission levels. Indian Government marks the US-based Henry Hub,
has undertaken various initiatives and Canada-based Alberta gas, the
policy interventions across the natural UK-based National Balancing Point
gas value chain, which can shape the (NBP), and Russian gas. While Henry
nations natural gas future. Hub has a weight of 38.1 per cent in
Pricing of gas is a politically the pricing formula, NBP accounts
sensitive issue as it is a key input in for 42.9 per cent, Alberta Hub 4.9 per
important sectors such as fertilizer cent and Russian gas 14.1 per cent.
and power. Keeping in view market- Europe and Russia jointly account for
determined pricing for gas can be the 57 per cent of the weight and a steep
best policy going forward in order decline in prices in these two regions
to ensure greater investment, com- will influence domestic rates substan-
petitiveness and transparency in the tially. Amusingly, the pricing guide-
sector, the new domestic gas pricing lines do not take into account the
average of 23.8%. The Government policy was approved by the Cabinet price of gas imported. The formula
is aiming to raise the share of gas in Committee of Economic Affairs on mandates a price revision once every
the energy basket to 15% from the 18th October 2014. six months.
I) Gross Production :
A) Onshore:
(i) Assam / Arunachal Pradesh 265.63 255.11 259.31 273.59 264.21 262.29014 520.73
(iv) Tamil Nadu 84.33 78.02 74.59 74.49 77.95 75.160096 162.35
(vii) West Bengal, MP, Jharkhand (CBM) 37.24 42.65 43.67 46.86 48.24 47.816 79.89
Onshore Total (A) 786.67 787.72 738.42 783.37 779.67 765.212417 1574.38
II) Net Production 2400.7 2573.6 2513.4 2621.3 2578.59 2503.13987 4974.3
Oil India Limited 3.4 3.2 0.3 0.3 0.3 1.6 1.6 1.6
Private/Joint Ventures 11.7 11.3 0.9 0.9 0.9 5.8 5.5 5.4
Total Crude Oil 33.8 33.1 2.7 3 2.6 16.8 18.3 16.2
India has assured the World Trade the WTO three years ago for the domestic
Organisation (WTO) that future Indian content requirements under the JNNSM.
solar programmes will comply with It subsequently won the case as India
the multilateral bodys rules on the was not able to prove that the sourcing
sourcing of local equipment. India hopes of the equipment was part of government
to continue with the present set of procurement where there were no
provisions in the ongoing second phase restrictions on localisation. New Delhi said
of its Jawaharlal Nehru National Solar while it did not agree with all the findings,
Mission (JNNSM), but introduce WTO it would inform the DSB of its intentions
compliance from the third phase onwards. to implement the ruling within 30 days, as
The assurance was given at a meeting of per WTO rules. BRICS countries needed
the multilateral bodys Dispute Settlement to jointly figure out how to continue with
Body (DSB), which adopted the Appellate local sourcing policies without flouting
Bodys findings that Indian norms for cells and modules were inconsistent with WTO rules.
mandatory domestic sourcing of solar WTO rules. The US had dragged India to
November 2016
www.InfralinePlus.com
PM Narendra Modi said to plan $3.1 billion boost for Indias solar factories
Prime Minister Narendra Modis the country by 2026. The policy, which is
government is planning a 210 billion-rupee being developed by the ministry in charge
($3.1 billion) package of state aid for of renewable energy and industrial policy,
Indias solar panel manufacturing industry. along with the NitiAayog government
Modi wants to raise renewable capacity to research group, will be presented to the
175 gigawatts by 2022 from 45 gigawatts Finance Ministry within a month before
at present. In addition to meeting its own going to the cabinet for final approval.India
energy targets, which Bloomberg New has become one of the biggest clients of
Energy Finance estimates may cost $200 Chinese photovoltaic manufacturers and in
billion, India wants to emulate industrial the absence of its own domestic capacity
developments in neighboring China, that reliance could potentially grow. In the
where solar manufacturers have created part of Modis Make in India campaign, first six months of 2016, India imported
a world-leading export industry. The is intended to create 5 gigawatts of 18 percent of Chinas production worth
Prayas program (Pradhan MantriYojana photovoltaic manufacturing capacity from $1.1 billion, according to Bloomberg New
for Augmenting Solar Manufacturing), 2019 and build 20 gigawatts of projects in Energy Finance.
November 2016
www.InfralinePlus.com
Chhattisgarh will procure additional power energy sources. The agency will be installing
from renewable energy sources to the tune of a total of 10,000 submersible and surface
approximately 700 MW by FY 2018. With this, solar photo voltaic (SPV) irrigation pumps in
the average power purchase cost for Chhat- farm lands soon across the State. The SPV
tisgarh State Power Distribution Company Pumps shall be provided with lightening and
Ltd (CSPDCL) based on the above power over voltage protection. The principal aim in
availability will increase from 2.58 Rs/kWh this protection is to reduce the over voltage
in FY 2015-16 to 3.12 Rs/kWh in FY 2018. to a tolerable value before it reaches the
The rates have been derived based on cost PV or other sub-systems components. The
of power at existing rates and considering no source of over voltage can be lightening or
escalation in power purchase cost since it is any other atmospheric disturbance, officials
passing through for the distribution company. informed. Notably, the State government has
Notably, Chhattisgarh Renewable Energy ing infrastructure for solar power generation already commenced preparation for setting
Development Agency (CREDA) has invested which had resulted in 40 MW of electricity up 51,000 solar powered irrigation pumps in
Rs400 crores during last 11 years in develop- being generated from non conventional a span of two-and-half-years in the State.
November 2016
www.InfralinePlus.com
A two-stage draft amendment to the Electric- The amendment is set for review by the
ity Act aimed at opening Taiwans renewable Legislative YuanTaiwans highest lawmaking
energy market and putting in place related bodybefore year-end. Lin Chuan-neng, direc-
regulatory and management measures was tor-general of the MOEAs Bureau of Energy,
approved Oct. 20 by the Executive Yuan. Dur- said liberalizing Taiwans renewable energy
ing the first stage, the nations energy industry market is key to fostering the emergence of a
will transform into a decentralized, localized viable green power industry. The government
and community-based one characterized by will maintain this momentum by implement-
a thriving green power production sector. The ing policies spurring private participation
second stage, which is to be implemented and investment, as well as streamlining
step-by-step, will see renewable and tradi- production and supply. According to Lin, the
tional generation facilities selling electricity to business unitsone for power generation and amendment is not expected to affect the rate
public power utilities, and consumers select- the other for delivery, distribution and sales for average electricity power consumption
ing their providers. Requiring state-owned is another central plank in the legislation per household, currently calculated at 330
Taiwan Power Co. to establish two separate proposed by the Ministry of Economic Affairs. kilowatt-hour by Taipower.
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ExpertSpeak
Energy storage to play key
role in grid stabilization
Prashant Panda, President, Solar Business, ACME Solar, feels
that as India expands its power capacity addition, both thermal
and renewable, it will need energy storage solutions to guard
against challenges arising out of grid stability. According to
Panda, Energy Storage can play key role in grid stabilization
through operations such as Frequency response, peak shaving
and time shifting.
response, peak shaving and time which could become not just a back-up power source that is
shifting. a major requirement used only when grid is not available.
Energy forecasting which could with increased level Storage element is not going to be
become a major requirement with operated in floating applications as
increased level of Renewable can
of Renewable can it is being used presently with the
be made possible by having ESS be made possible conventional storage technologies.
in place. Apart from the large scale by having ESS in However, Energy storage unit is
grid level storage systems, equal place. Apart from the subjected to a daily cycling when it is
importance has to be given towards used in conjunction with renewable
distributed storage systems at
large scale grid level sources or Electric Vehicles. This
residential and micro grid level that storage systems, brings a challenge of cyclic life for an
can also bring energy independence equal importance has energy storage unit. ESS shall have
to individual users. to be given towards the capability to be used either as an
Another important segment where Energy source for applications such
energy storage brings value is EV
distributed storage as grid and also as power source for
to building or EV to Grid. With systems at residential applications as in Electric Vehicle.
aggressive plans across the world to and micro grid level In this context, we see Lithium ion
introduce Electric Vehicles (EV), this that can also bring battery clearly emerging as a favorable
segment is going to clearly influence choice. Growing use of Lithium
the Energy storage markets. Energy
energy independence Battery in Electric vehicle is driving
storage uses various methods to to individual users the demand worldwide and bringing
store excess energy to be used at a its cost down. Benefits out of Electric
later time which in turn allows the depends primarily on the source of Vehicle industry can be utilized for
energy providers to balance between energy and the intended use. There Grid scale storage also.
the demand and supply. A number are a lot of competing technologies It is very important for the country
of devices and media are used to that are available to store the energy. to initiate few pilot projects, gain
store energy, while their selection However, it is important to choose a experience to deal with the grid scale
November 2016
www.InfralinePlus.com
ExpertSpeak
storage systems. Though large scale frame regulations and policies around falling in line with the Governments
storage systems are already installed this segment. vision of creating smart cities. While
and operational in countries like It has also been observed that there are handful of applications and
Germany and Japan, we do not have distributed energy storage systems numerous advantages with Energy
any thing operational in India. While are already being considered for Storage solutions, it is important for
it is helpful to learn from what has ancillary services, particularly as a the authorities and industry to clearly
been installed already elsewhere in Primary Control Reserve, in some define the use cases, frame guidelines
the world, it is important to establish countries like Germany. This gives an and standards so that the segment can
proof of concepts in India. This helps additional facility for individuals to grow as an organized segment.
the industry to learn what challenges participate in ancillary services. This Realizing this impending need
are there in Indian context and also needs a smart grid to be available, of Energy Storage, ACME has
already installed Lithium Ion battery
Though large scale storage systems are already based Energy storage systems, and
established working examples in
installed and operational in countries like various segments like rural micro
Germany and Japan, we do not have any thing grids, Renewable integration at high
operational in India. While it is helpful to learn altitude areas and building solu-
tions. It is also giving that extra
from what has been installed already elsewhere push towards localizing PCS, EMS
in the world, it is important to establish proof and battery assembly in India under
of concepts in India. This helps the industry Make in India initiative.
to learn what challenges are there in Indian
context The views in the article of the author are personal
62 For suggestions email at feedback@infraline.com
November 2016
www.InfralinePlus.com
InDepth
RPO compliance by Obligated
Entities need of the hour
63
A total of 9 states out of 16 reported a compliance level of less than 70 per cent last year
Questions of capital costs and consumer level prices need to be answered
By Team InfralinePlus
Ministry of New and Renewable Energy Honble Supreme Court (SC) of India of 9 states out of 16 including Uttar
(MNRE) along with all the State Renew- while upholding the applicability of Pradesh, Bihar, Madhya Pradesh and
able Development Agencies are speedily RPO regulations, put a greater thrust on Delhi reported a compliance level of
moving towards achieving the target of the fundamental duties of the citizens of less than 70 per cent (RPO compliance)
175 GW of grid connected RE power by India enshrined under the Constitution and have not met even half of their
2022 as part of Indias global commit- of India to protect and improve the RPO targets in the past two years. More
ments to the United Nations Framework natural environment (Hindustan Zinc recently, state electricity regulatory
Convention on Climate Change (UN- Ltd. vs. Rajasthan Electricity Regulatory commissions (SERC) in states such
FCCC) to combat climate change. Commission case). The SC empha- as Maharashtra and Tamil Nadu have
The Renewable Energy Certificate sized the impacts of global warming recently amended solar RPO norms
(REC) scheme in India aims to boost and securing environment for larger with upward revision and extension in
energy generation from renewable public interest in the realm of Article trajectory period. SERC in Tamil Nadu
sources and enable states (state dis- 51A(g) & Article 21 of the Constitution, has significantly increased solar RPO
tribution companies, DISCOMs) to provisions of Electricity Act, 2003, the norm from 0.5 per cent in 2015-16 to
cost-effectively meet their renewable National Electricity Policy of 2005 and 5 per cent in 2017-18, while SERC in
purchase obligations (RPOs), set by the National Tariff Policy of 2006. Maharashtra has gradually increased the
respective State Electricity Regulatory As per a study conducted by Indian RPO norm from 0.5 per cent last fiscal
Commissions (SERCs). Last year, the Energy Exchange (IEX) last year, a total to 3.5 per cent in 2019-20 fiscal.
November 2016
www.InfralinePlus.com
InDepth
Conclusion
Energy policy development in India at
present is focused largely on improving
energy security in the country. With a
large proportion of the population still
not having proper access to electric-
ity, the countrys large dependency
on imported fuel and economic and
social impacts due to climate change
has driven the Government of India to
identify measures for harnessing renew-
able energy (RE) and energy efficient
measures for improving the countrys
energy security and efficiency. RPO
compliance by Obligated Entities (DIS-
COMs, CPPs, Open Access Consumers)
is the need of the hour to bring liquidity,
fresh investments and ultimately for the
promotion of a comprehensive market,
which will allow the government to
achieve its objective of declaring India
as a green powered economy in near
foreseeable future.
StatisticsRenewableEnergy
1) Programme/ Scheme wise Physical Progress in 2016-17
FY- 2016-17
Cumulative Achievements
Sector Achievement (April -
Target (as on 30.09.2016)
September, 2016)
I. GRID-INTERACTIVE POWER (CAPACITIES IN MW)
Wind Power 4000.00 1305.50 28082.95
Solar Power 12000.00 1750.38 8513.23
Small Hydro Power 250.00 49.40 4323.35
BioPower (Biomass &
Gasification and Bagasse 400.00 51.00 4882.33
Cogeneration)
Waste to Power 10.00 7.50 115.08
Total 16660.00 3163.78 45916.94
II. OFF-GRID/ CAPTIVE POWER (CAPACITIES IN MWEQ)
Waste to Energy 15.00 2.24 162.40
Biomass(non-bagasse)
60.00 0.00 651.91
Cogeneration
Biomass Gasifiers 2.00 0.00 18.15
-Rural
8.00 2.40 166.64
-Industrial
Aero-Genrators/Hybrid systems 1.00 0.20 2.79
SPV Systems 100.00 48.13 361.98
Water mills/micro hydel 1 MW + 500 Water Mills 0.10 MW + 100 Water Mills 18.81
Total 187.00 53.07 1382.68
III. OTHER RENEWABLE ENERGY SYSTEMS
Family Biogas Plants (in Lakhs) 1.00 0.17 48.72
Source: MNRE
66
Through PXIL
Buy Bid Sell Bid MCP MCV
Month of
REC Type (No. of (No. of (INR / Certificate) (No. of certificate)
Auction
certificates) certificates) Qty. (MWH)
Non Solar 98048 4743346 1500 98048
October 2016
Solar 15676 1347938 3500 15676
Source: PXIL
OffBeat |ExpertSpeak
Delhi Metro: A road map to
sustainable transport
The Delhi Metro which is the worlds 12th largest metro
system in terms of both length and number of stations
is leading the way in sustainable transport. In this article,
Harveen Kaur, PhD Scholar, University of Delhi, discusses
various green and sustainable initiatives taken by Delhi Metro
and how it can serve as a role model for public transport
across the country.
Since metro transport systems are network has now crossed the bound-
quite capital-intensive projects, the en- aries of Delhi to reach Noida and
vironment sustainability of such sys- Ghaziabad in Uttar Pradesh, Gurgaon
tems is an important issue that needs and Faridabad in Haryana. It is
to be explored. This article examines important to highlight that Delhi
the sustainable approaches (conserv- Metro is the First metro
ing resources, energy security, and en- train system in the Harveen Kaur, PhD Scholar, University of Delhi
68 ergy efficiency) and green initiatives world to receive Delhi
taken by Delhi metro to build a low the Envi- metro Road map towards
carbon and an environmental friendly ronmental has been com- sustainable development
rail transport in India. Standard mitted towards the The DMRC contributes positively
ISO 14001 objectives spelt out towards Sustainable development
About Delhi Metro Project EMS under the National of India. The project activi-
The Delhi Metro Rail Corporation during the Solar Mission and ties thereby contribute towards
(DMRC) is headquartered in New construction sustainable use of sustainable development of the
Delhi, India. It was registered (in the phase itself. solar energy country.
year 1995) under Companies Act 1956 It has created
with equal equity participation from local skilled and DMRCs Solar Initiative
the Government of the National Capital semi-skilled employment opportunities Delhi metro has been committed to-
Territory of Delhi (GNCTD) and the for number of people in the capital. wards the objectives spelt out under the
Central Government. The Delhi Metro
has been instrumental in escorting Key highlights of Delhi Metro:
masses as a means of urban transporta- It carries 2.7 Million passengers a day
tion in India. Delhi Metro introduced
It is known to be most energy intensive (energy is being used for traction,
high-class, comfortable, air-condi-
i.e., for carrying passengers and maintaining conditioned air in the
tioned and environmentally sustainable
services for the first time in India and coaches) but very sustainable transport system
completely revolutionized the mass 56 % of energy is consumed by traction and the remaining 44 % by other
transportation scenario not only in the services
National Capital Region but in the The concern for sustainability is manifested in its Mission and Culture
entire country. DMRC today stands out statement itself i.e. to make Delhi Metro self-sustainable and during con-
as an outstanding example of Green struction it should neither cause inconvenience nor endanger public life
Metro over globe. nor should their work lead to ecological or environmental degradation.
Presently, the Delhi Metro network According to a study, Delhi Metro has helped in removing about 3.9 lakh
consists of about 213 Km with 160
vehicles from the streets of Delhi.
stations along with seven lines. The
November 2016
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DMRCS SUSTAINABLE POLICIES AT A GLANCE study for installing solar panels on the
Foot Over Bridges (FOBs) providing
connectivity to the commuters across
the National Highways has also been
Quality undertaken. It has already commis-
Policy
sioned 3 MW Solar Power Plants and
Waste aims to achieve 20 MW by 2017 and
Water
Managem 50 MW by 2021.
Policy
ent Policy
DMRCs Water Conservation
Initiative
S us tainable Delhi Metro is taking all possible
Policies of measures to rationalize its use of water
DMR C
Environmental Solar and recycle and reuse water as much
Policy policy as possible. In order to streamline the
water conservation measures of the
organization, a detailed water policy
has been put in place since 2013. In ad-
Swacch Energy dition to this, in 2014-15, Delhi Metro
Metro Manageme
also added 99 Rain Water Harvesting
Compaign nt Policy
pits at 37 locations with capacity of
990 CuM. Rain water harvesting struc-
tures have been installed at elevated
National Solar Mission and has been used for the lighting and other auxiliary stations, viaducts and depots. 69
proactively working towards sustain- requirements of the station and depot
able use of solar energy to harness buildings. In total, DMRC has so far Rain Water Harvesting
electricity for its operations. It has set commissioned solar power facilities Structures at Shastri Park
up roof top solar power plants at many with generation capacity of approx. Depot
of its stations. It has installed nine 2,800 kWp with plants at Dwarka Sec-
new solar power generation facilities tor 21, Anand Vihar, Pragati Maidan,
in the stations and the depot of the Metro Enclave, Yamuna bank station,
Badarpur Faridabad Metro corridor Yamuna bank depot, Faridabad RSS,
for partial fulfillment of the energy ITO, Ajronda depot and the Faridabad
requirements. The power generated is metro stations. In addition to this, the
OffBeat | ExpertSpeak
OffBeat | ExpertSpeak
Conclusion
Delhi Metro is committed to energy
conservation, environment protection
and sustainable development which
is visible from its positive approaches
and efforts. It can be concluded that
every passenger who chooses to use
Metro instead of car/bus contributes
in reduction of emissions (approx. 100
gm of carbon-Co2for every trip of 10
km and therefore, becomes party to the
reduction in global warming). It has
set a bench mark performance against
worlds best Metros. In addition, DMRC
Source: http://www.delhimetrorail.com/greeninitiative.aspx
has taken initiatives for intermodal
last mile connectivity like Feeder Bus
Reduction in GHG Emission Had the Metro not been there, these Service, Grameen Seva from Metro
initiative people would have travelled by cars, Stations, Bicycle Service and Battery
Currently, about 25 lakh people travel buses, two- and three-wheelers, which Operated Taxis from stations.
by the Metro, which is a non-polluting would have resulted in higher emis- The views in the article of the author are personal
and an environment friendly system. sion of greenhouse gases. Thus, Delhi For suggestions email at feedback@infraline.com
November 2016
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Ratings agency CRISIL estimates the are expected to fare better in UDAY
aggregate gap or loss of power distribution implementation and likely to be the biggest
companies (discoms) in the 15 states that beneficiaries. UP, Bihar and Jammu &
have joined the Ujwal Discom Assurance Kashmir are expected to be laggards. These
Yojana (UDAY) would more than halve to three states would account for almost
28p a unit by 2018-19. The gap, calculated two-thirds of the gap in FY19. Concerted
as average revenue realised minus average effort by them will be critical to narrowing
cost of supply, was 64p a unit in FY16. feeder separation, feeder and distribution the future gap. CRISIL says the energy
Consequently, aggregate losses of these transformer metering, and a poor record requirements of discoms are expected to
discoms are seen declining by 46 per cent, on other efficiency parameters. Also, with increase at a compound annual rate of
to Rs 20,000 crore from Rs 37,000 crore elections due in some within 12 months, seven per cent by FY19, compared with
now. The gap will still be well above the their room to raise rates is restricted. around four per cent till FY16. New signing
nil envisaged under UDAY, as some states Cross-subsidisation is also high. Says of long-term power purchase agreements
with very high aggregate technical and Gurpreet Chhatwal, business head, large (PPAs) seems unlikely, with 25,000 Mw of
commercial losses arent well prepared to corporates, at CRISIL: Rajasthan, capacities with already-signed PPAs to be
reduce it. The reasons include inadequate Haryana, Chhattisgarh, and Uttarakhand operational by FY19.
A sharp increase in coking coal prices in Chinas Shanxi province, that reduced
since August 2016 could squeeze Indian supply, and a number of unplanned mine
steelmakers profitability and deepen their outages in Australia also supported the
financial risks, Fitch Ratings said. The risk, price rise. Increase in raw material costs
according to Fitch, will increase if high cok- for Indian steel producers could shrink
ing coal prices persist and domestic steel margins, if the cost rise is not passed on to
demand growth remains weak. Leverage consumers. For example, we estimate that
for producers such as Tata Steel and JSW a $ 50 per tonne increase in Tata Steels
Steel jumped in the financial year ending coking coal cost in 1QFY17 would have
March 2016, mainly due to poor profit- reduced consolidated EBITDA by around
ability, and sustained pressure on margins according to data from The Steel Index. 35%, if all else stayed the same. Similarly,
would hamper financial risk mitigation. A 125% hike in process. Prices rallied fol- JSW Steels 1QFY17 consolidated EBITDA
Prices for hard coking coal for export by lowing Chinas decision to limit coal mines would have fallen by around 25%. The
Australia as of 30 September 2016 were operating days to 276 a year, from 330 impact of higher coal costs would be offset
$100 per tonne higher than the average to restructure the sector and improve its if we assume price realisations for the two
in the quarter ended June 2016 (1QFY17), profitability. Others issues such as flooding companies were 5%-10% higher.
November 2016
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People in News
Cyrus Mistry removed as Tata Sons chairman, Ratan Tata returns New CMD for TSNPDCL
comprising Ratan Tata, Venu Srinivasan,
Amit Chandra, Ronen Sen and Kumar Bhat-
tacharyya was given the mandate of finding
a replacement for Mistry, 48, who became
chairman of the $103 billion conglomerate
in December 2012, at the end of Tatas over
two-decade tenure at the top. The board
was given four months to complete the task.
In the interim, the board has requested me
to perform the role of chairman and I have The Telangana Government recently
The board of Tata Sons Ltd has replaced agreed to do so in the interest of and reassur- appointed A. Gopal Rao as Chairman and
Cyrus P. Mistry as chairman, less than four ance to the Tata group, Ratan Tata, 78, said. Managing Director of Northern Power
years after he took the helm, and named his The development, which portends at least Distribution Company of Telangana Lim-
predecessor Ratan Tata interim chairman short-term turmoil, comes at a time when ited (TSNPDCL) Warangal. He will relieve
for four months.Tata Sons in its collective the conglomerate, whose business interests the incumbent K. Venkata Narayana from
wisdom and on the recommendations of the range from tea to telecom and salt to soft- the post. According to the orders issued
principal shareholders decided that it may be ware services, has been trying to recast or by in-charge Principal Secretary (Energy)
appropriate to consider a change for the long- dispose of the key UK steel business, which it Sunil Sharma, the appointment has been
term interest of Tata Sons and Tata group, acquired in a $12.9 billion purchase of Corus made following the resignation submit-
a spokesperson said.A selection committee Group Plc. in 2007 under Ratan Tata. ted by Mr. Narayana on health grounds.
from EY, had resigned following Mistrys Engineers (TCE), a wholly owned subsidiary
74 ouster as chairman of Tata Sons.The exit of Tata Sons. Under Rajan, the group had
of an HR head from an organization, which announced 27 weeks maternity leave policy,
is undergoing turbulence following the six months paid adoption leave and 15 days
sudden ouster of its chairman, can hit the paid paternity leave, in addition to other
morale of its people. For the Tata Group, policies around diversity and inclusion. Pad-
which employs over 6,60,000 people, manabhans experience in the field of HR
Padmanabhans appointment is thus critical comes mainly from a stint he served in Tata
at this juncture. Padmanabhan, who chairs Consultancy Services (TCS) as HR director.
the Tata Business Excellence Group, or His career with the Tata Group at senior
In a quick move to perhaps assuage anxiet- TBExG (earlier Tata Quality Management executive positions began with TCS in 1982,
ies among employees following the spat Services), had kick-started the process of and spans over 33 years. He was executive
between Ratan Tata and Cyrus Mistry, the taking the group towards overall business director (operations), Tata Power Company
Tata Group has appointed S Padmanabhan, excellence from the initial focus on quality. since 2008, and was responsible for the
a stalwart within the Tata ecosystem, as TBExG had set itself a target of enabling at profitable and sustainable operations of all
the new group chief of HR (CHRO). This least 25 Tata companies to achieve industry thermal and hydro generation plants across
was after Tata Groups former CHRO, N S leadership by 2025. Padmanabhan is also India and transmission and distribution
Rajan, who was brought in three years back chairman on the board of Tata Consulting systems in Mumbai.
Kind Regards,
Ruchi Sharma
(AVP Business Development)
Tel: +91-120-6799126 (D) / +91-120-6799100 (B), +91-95606 26529 (M)
Fax: +91-120-6799101; Email: ruchi.sharma@infraline.com Follow us:
Date of Publishing: 10th of the Month
RNI No: DELENG/2012/45441 Post Regd. No.: DL(ND)-11/6184/2016-18
Post Date: 10th & 12th of the Month
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