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InfralinePlus Aug2016
InfralinePlus Aug2016
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The Complete Energy Sector Magazine for Policy and Decision Makers
August 2016 | Volume 5 | Issue 04
On the other hand, power sector stands to benefit if is brought under the ambit
of GST. It is estimated that a GST rate of 18 per cent for the power sector could
result in 15-20 per cent reduction in retail tariff. Further, a cut in power cost will also
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improve payment by end-consumers and reduce incentive for theft and losses.
This will also help distribution utilities to reduce their problem of revenue deficit. Ashwini Solomon
The GST will also facilitate seamless movement of goods across various States Tel.: 0120-6799157/100
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Apart from GST, the Government has also provided policy push which is beginning Circulation & Subscription
to bear fruit. In the coal sector, the Governments decision to allow flexibility in
utilisation of domestic coal has been well accepted. Flexibility in optimal use of Sneha Pandey
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Such flexibility will be able to leverage coal to electricity conversion, efficiency of
equipments as well as transportation cost optimization, thereby benefiting the
entire industry.
Similarly, the Government has come out with a draft National Wind-Solar Hybrid Form IV
Policy to promote large grid connected wind-solar PV system. This is aimed at Periodicity of its Publication: Monthly
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InfralinePlus
Contents
Editors Letter
1
Cover Story 35
GST: A mixed bag for energy, infra
sectors
History was made on 3rd August, 2016, with
India taking a giant leap towards a single
unified market after the Rajya Sabha approved
the Goods and Services Tax (GST) a reform
considered almost three decades back.
Taxation experts say that the GST will transform
the Indian economy by giving rise to a common
market and reduce the cascading effect of tax
on the cost of goods and services.
2
35
Power Coal
4 20
News Briefs p4 News Briefs p20
Expert Speak: Satyajit Ganguly, Managing Director, In Conversation: Salil Garg, Director-Corporate Ratings,
ONGC Tripura Power Company Ltd p8 India Ratings p23
In Depth: Govt seeks transmission push with private Expert Speak: Ramakrishnan M, Vice President and
participationP10 Mayank Taneja, Senior Analyst, The Smart Cube p25
In Depth: Water management for thermal plants need of In Depth: Coal linkage auction for non-regulated sector
the hour P14 gathers steam p27
Expert Speak/Interview
Power Grid Corporation has approved power projects in Chhattisgarh and other
investment of Rs 2,731 crore in various generation projects in Western region at
projects, including setting up of a an estimated cost of Rs 333.17 crore with
transmission system for solar park at commissioning schedule progressively by
Bhadla in Rajasthan for Rs 1,429.38 crore. March, 2019. The company will also invest
The board of the company approved in transmission system strengthening
as many as 11 proposals in its meeting associated with Mundra Ultra Mega Power
held on July 20. The transmission Project (Part-B) at an estimated cost of
system for solar park at Bhadla in Rs 300.94 crore, with commissioning
Rajasthan at an estimated cost of Rs schedule of 29 months. The projects also
1,429.38 crore with commissioning include Western Region Strengthening
schedule of 30 months from the date Scheme XVI at an estimated
of investment approval is among the investment cost of Rs 150.99 crore, with
approved proposals. The investment commissioning schedule of 24 months
approval also include transmission from the date of investment approval.
system strengthening for independent
August 2016
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National
Nationwide powermen strike on Sept 2 against Electricity (Amendment) Bill Piyush Goyal inducts Urban Vidyut
Abhiyantas to monitor Integrated
of the energy sector even as they labeled the Power Scheme
Bill as anti-people. The powermen had earlier
sought discussion on the modified Electricity
(Amendment) Bill with all the stakeholders
for an amicable settlement of the issues.
The meeting at New Delhi was attended by
the representatives of Electricity Employees
Federation of India, Indian National Electric-
ity Workers Federation, All India Federation
of Electricity Employees, All India Power
Public sector power employees have an- Engineers Federation (AIPEF), TNEB Work-
nounced a nationwide strike on September ers Union, All India Power Mens Federation Union Power Minister Piyush Goyal
2 over the Electricity (Amendment) Bill. In a (AIPF) and All India Federation of Diploma recently inducted Urban Vidyut
meeting held recently, National Co-ordination Engineers. AIPEF Chairman Shailendra Abhiyantas (UVAs) to monitor the
Committee of Electricity Employees and Dubey said NCCOEEE resolution mentioned implementation of the Integrated
Engineers (NCCOEEE) flayed the Centre for that the central government was playing hide Power Development Scheme (IPDS).
allegedly failing to address the burning issues and seek on the Electricity (Amendment) Bill. The Minister said the UVAs will take
the work on a mission mode, similar
Centre asks States to offer power to industries at fixed rates to the Grameen Vidyut Abhiyantas
deputed for the Deen Dayal Upadhyay
The Centre has asked all States to offer Gram Jyoti Yojana. Goyal further said
power to industries at a fixed rate for they will upload their reports on the
a fixed period to attract investments. implementation of the scheme on
Power Minister Piyush Goyal said in Lok the URJA mobile application of the
Sabha that the country was producing Ministry of Power in an effort to increase 5
sufficient power and hence efforts should transparency. Some of the UVAs will be
be made by state governments to attract inducted in the State power distribution
industries by offering uninterrupted power. companies. These UVAs have an
Industries need uninterrupted power. If experience of 3-15 years in project
we can guarantee power, investment will management/distribution franchisee/
come for industries. Therefore, I would infrastructure sector. The IPDS is part
like to request all members to persuade as per information reported by the States of the Ministry of Powers efforts to
their respective state governments to to Central Electricity Authority, energy ensure 24x7 electricity availability to
offer regular power to industries for a shortage at all-India level was reduced to all by 2022 and has a total outlay of Rs
fixed rate like Rs. 4, Rs. 4.5 or Rs. 5 per 2.1 per cent during 2015-16 which is the 65,424 crore.
unit for 10 or 15 years, he said. Goyal said lowest in last two decades.
No final decision on scrapping SPVs for four UMPPs
No final decision has been taken to UMPPs, namely Sasan in Madhya Pradesh,
scrap special purpose vehicles set up Mundra in Gujarat, Krishnapatnam in
for four ultra mega power projects in Andhra Pradesh and Tilaiya in Jharkhand,
Maharashtra, Odisha, Karnataka and have already been transferred to the
Chhattisgarh. No final decision has developers, he said. Out of the four
been taken to wind up the four special awarded UMPPs, two namely Mundra and
purpose vehicles (SPVs), Power Minister Sasan are in operation, the minister said.
Piyush Goyal said in a reply to the Lok The minister said 6x660 mw Sasan UMPP
Sabha. Activities in the ultra mega power in Madhya Pradesh, which was awarded
projects (UMPPs) -- Maharashtra, Odisha and transferred to Reliance Power in
(second additional UMPP), Karnataka and 2007, is fully commissioned. The 5x800
Surguja in Chhattisgarh -- are stuck due mw Mundra UMPP in Gujarat, which was
to various reasons, including agitation set up for these UMPPs. According to the awarded and transferred to Tata Power in
by local people and non-identification of minister, the Chhattisgarh government 2007, also stands fully commissioned,
a suitable site. Goyal added that around has said it in not keen on setting up he added.
Rs 96.82 crore has been spent by SPVs of 4,000-mw UMPP in the state. Four
August 2016
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With the Punjab Assembly poll round the to Rs 6,364 crore this year. Announcing
corner, the PSERC has brought relief for the detailed power tariff order, Punjab
the 85 lakh power consumers in the state. State Electricity Regulatory Commission
For a second consecutive year, the power (PSERC) chairman DS Bains said the
tariff for the year 2016-17 has been left decision to not increase the tariff was
unchanged. The state electricity regulatory not based on political considerations, but
commission has also announced a number because the state was power surplus
of sops for two important categories of and thus, there was no need to burden
consumers a portion of agriculture pump the consumers. Bains in fact projected
set consumers get free replacement of the state power utility to have a revenue
their pumpsets, while all categories of surplus of Rs 165.94 crore. He said the
industrial consumers will get a relief of Rs PSPCL would save a total of Rs 270 crore
0.36- Rs 0.11 per unit in power tariff. The consumers has remained unchanged, this year Rs 120 crore through interest
new rates will be applicable from August although the power subsidy bill of the payment and Rs 150 crore towards bringing
1. The power tariff for the domestic, non- Punjab State Power Corporation Limited down transmission and distribution losses
residential consumers and bulk supply will swell from Rs 5,600 crore last fiscal to 14.5 per cent by the end of this fiscal.
August 2016
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International
France and Ireland eye 1 billion euro power link by 2025 China stakes a strong claim in the
Greek electricity landscape
from Britain via Northern Ireland but is
looking for ways to increase its electricity
supplies. The planned 600-km link will run
between Brittany and the south coast of
Ireland. The (interconnector) will improve
security of supply on the island of Ireland
and increase competition, driving down
prices for customers, Fintan Slye, EirGrid
Chief Executive said. French average spot
prices on power exchanges were around
France and Ireland plan to build a 1 30 percent cheaper than those in Britain The strong presence of Chinese firms
billion euro ($1.10 billion) cable which last year, according to data from French came as a surprise in the tender
would allow electricity to flow between power grid operator RTE. If built, the for the concession of 24 percent of
the two countries by 2025, Irelands 700 megawatt (MW) sub-sea cable could power grid operator ADMIE, given
grid operator said as French President transport enough electricity to power that the interest of both Italys Terna
Franois Hollande visited the country. around 450,000 homes, Eirgrid said. and Frances RTE had been taken for
Ireland currently imports electricity granted. China entered the race for a
stake in the Greek grid through two
World Bank stops funding worlds biggest power plant plan giants, the State Grid Corporation of
China (SGCC) which was also present
The World Bank has suspended funding in the first tender for 66 percent of
to help develop a $14 billion hydropower ADMIE and China Southern Power
project in the Democratic Republic of Congo, Grid, which was not expected to weigh in
a stage in what could become the worlds as it does not fulfill the basic condition
biggest power plant, after a disagreement of the tender for participating in the 7
with the nation over implementation European interconnection system of
plans. The announcement to halt financing ENTZO_E. It is learnt that the latter
the Inga 3 project followed the Congos Chinese company has expressed an
decision to take the project in a different interest in entering a consortium with
strategic direction to that agreed between one of the other companies that fulfill
the World Bank and the government in the conditions. Government sources
2014, the Washington-based lender said hydropower project which would produce describe the Chinese interest as very
in a statement. The World Bank agreed to 44,000 megawatts. Inga 3 alone would significant and associate it with Beijings
$73 million in technical assistance for the produce at least 4,800 megawatts, almost strategy to acquire stakes in energy
first phase of the $100 billion Grand Inga double Congos current installed capacity. infrastructure projects in Europe.
Russia and Bangladesh sign $11.38 billion loan deal for nuclear plant
ExpertSpeak
Need to fast track GNA mechanism for devel-
opment of Inter-State Transmission Systems
Satyajit Ganguly, Managing Director, ONGC Tripura Power Com-
pany Ltd, outlines the challenges being faced by the power trans-
mission industry and why it makes sense to expedite implementa-
tion of the GNA mechanism in India.
requirement and get the ISTS built that despite such blanket approval, power purchases by DISCOMs are
for it. Drawing entities will also be the transmission network has not been few and far) and then apply for LTOA/
allowed to import power beyond built in an optimum manner until today. MTOA/STOA. It gives them some time
GNA subject to the margins. The Congestion is commonplace and not an and advantage in managing cash-flow
transmission premium will be shared exception specifically in inter-regional better before the commercial operation
amongst the GNA holders. In addition, corridors between NEW and SR, WR of the unit. With the implementation of
discoms will be able buy cheap and NR, S1 and S2 and ER and NR. The GNA, the generators will be forced to
power with certainty through the intra-regional corridors are equally con- apply for GNA immediately which will
PX where the competition is intense gested in W3 region and N3 region etc. start the fund outflow much before the
thereby benefitting the consumers. Therefore generators would like to commercial operation thereby ham-
get a guarantee from CTU that once pering the cash-flow balance.
Concerns they pay GNA along with counter- Lastly, GNA (Import/export
While the concept is designed to parties, their contract will be scheduled requirement) should be assessed by
derive all the benefits associated with without any congestion in ISTS, the States at least 4-5 years in advance
POC tariff, there are certain issues failing which a penal amount equal to and STUs of respective state should
which need to be safeguarded so that three-fourth of the contract value may be the nodal agency for assessment in
it remains win-win for all the stake- be recovered from CTU. Similarly, gen- line with Section 39 of the Electricity
holders. The success of the GNA erators connected to STU system may Act. But whether such arrangement
would be contingent upon the success like to get a guarantee from STU with under federal structure is maintainable
rate of actual scheduling of contracts similar penal provision. and whether CERC/SERC/CTU would
undertaken by sellers with buyers Secondly, some DISCOMs have take responsibility is something that
spread across the country with minimal filed petitions highlighting various only time can tell. This is a very crucial
congestion. The guidelines delineated operational/implementation issues of point as more and more States are
in NEP 2005 should be adhered to: POC and are not paying transmission implementing coercive measure to 9
Network expansion should be planned charges in line with POC. If those force IPPs to remain connected with
and implemented keeping in view an- issues are not resolved immediately STU only as embedded customers. In
ticipated transmission needs that would it would be difficult to ensure that such a scenario, development of STU
be incident on the system in the open DISCOMs pay their share of GNA corridor is paramount for developing
access regime. Prior agreement with charges, which may put the entire competitive power-market.
beneficiaries would not be a precon- concept in jeopardy.
dition. CTU/STU should undertake Third, presently, generators apply Summary
network expansion in consultation with for connectivity to start with much GNA is a market friendly transmission
stakeholders and take up execution before the synchronization and are service product which is intended to im-
after regulatory approval. permitted to arrange for tie-up with prove system reliability and to remove
It may be inferred from the above beneficiaries with ease (as long-term congestion. It will extend full benefit of
PoC transmission pricing, free from pan
caking of charges. It would also help
generators as it does not require identi-
fication of target region or beneficiaries
at the time of seeking access. However,
its success would be contingent upon
the beneficiary DISCOMs seeking
GNA as per their load demands. The
details regarding the term of payment
and the time of payment would have
be addressed separately and adequately
to ensure that neither generator nor
beneficiaries are burdened right from
the beginning.
InDepth
Govt seeks transmission push
with private participation
10
Policy reforms and increased confidence of lenders have made power transmission attractive
NITI Aayog has set a target of adding 51,400 ckm transmission line in 2016-17
By Team InfralinePlus
India is one of the few countries where the seventh five-year Plan, this is the investment destination. There have
the power transmission sector has been highest net addition of CKM under any been suggestions that foreign investors
opened up for private participation five-year plan. may get to own power transmission
and has garnered significant interest Policy reforms and increased lines in India as the government
from private players. The recent policy confidence of lenders have made the is looking at monetising the assets
reforms in distribution segment (UDAY power transmission sector in India by offering equity to international
scheme for discoms) and the push attractive for the private sector. The pension funds aimed at mopping up
for renewable energy can be seen as improved pace of project implemen- INR 10,000-12,000 crore investments.
the drivers for fast implementation of tation and stable realisation from The proposal will aim at unlocking
transmission lines during the Twelfth investment have transformed this value of the existing power trans-
Plan (2012-2017) at 21,912 circuit sector from what was earlier described mission lines to generate revenues that
km (ckm) as on May 31, 2016. Since as a stressed sector to a new promising can be re-invested in strengthening
August 2016
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transmission system and other infra- buyers, who expect gains from the Aravali Transmission Service Co.
structure projects. governments attempts to plug power Ltd. Both are subsidiaries of GMR
Even as the market opportunity for leakage and attract investments. Infrastructure.
private sector in transmission business Adani Transmission Ltd, Indias
has improved, strict qualifying require- largest private power transmission Historical trend
ments in recent tenders have ensured company is said to be in talks to buy Transmission infrastructure is the back-
that the most competent bidders are in a 74% stake in Maru Transmission bone for the operation of a competitive
the fray. This has improved credibility Service Co. Ltd and a 49% stake in electricity market. Development of the
and attractiveness for private sector transmission system must match with
with core competency in transmission the generating capacity on one side
Even as the market
and will ensure that bids are not and growing demand on the other with
aggressive and projects are completed
opportunity for private flexibility for generators to switch from
in time. A total of 13 projects went sector in transmis- one drawing entity (Discom or Con-
under tariff-based competitive bidding sion business has sumer) to another and vice versa for the
during 2015-16 at a cumulative esti- improved, strict quali- drawing entity to switch from one gen-
mated cost of INR 18,300 crore. Three fying requirements in erator to another. While transmission
projects each were won by Sterlite as a segment accounts for only about
recent tenders have
Grid, Essel Infra, Adani Power and 8% of the total costs of the power value
state-owned Power Grid Corporation
ensured that the most chain, it makes the real Umbilical cord
of India (PowerGrid). One was won by competent bidders are of power, without which all invest-
Kalpataru Power. in the fray. This has ments in power sector become fruitless.
Apart from buying operational improved credibility With Open Access now being more im-
assets, more companies are looking and attractiveness for portant than ever before, transmission
to bid for projects in 2016-17, both is not only an enabler for power but
private sector with core 11
for PowerGrid EPC (engineering, also is the multiplier of a competitive
procurement, construction) projects
competency in trans- power market as well as basic param-
as well as for the PPP-BOT (public- mission and will ensure eter of power price sensitivity.
private partnership on built, operate, that bids are not ag- In recent years, investment in trans-
transfer) projects. Power transmission gressive and projects mission networks have lagged the curve
companies with assets that are up are completed in time vis-a-vis investments in generation. The
and running are seeing interest from accepted thumb rule is that for devel-
opment of a robust power system, every
unit currency invested in generation,
shall be followed by an investment of
0.5 unit in transmission. This ration of
1:0.5 has not been respected in Indian
power investment scenario.
In the 11th plan, which saw the real
burst of generation investments, the
ratio stood at 1:0.3. While generation
grew by 55%, transmission growth
was stunted at 27% only, leaving
large deficit to be filled in 12th plan.
This deficit moves the ratio to 1:0.6
or even more. The expected fund
requirement for meeting 12th plan
generation targets of about 88 GW
is about INR 4.8 lakh Crores, which
means the transmission sector would
need investments of about INR 3 lakh
Crores. Against this, government has
kept transmission investment target
August 2016
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InDepth
Fig.1: Net addition of transmission lines (in ckm) over at INR 2.09 lakh Crores only, thus
successive five-year plans compounding the existing investment
gap in transmission.
Transmission Lines Addition While there has been a marked
Over Successive Five Year Plans increase in the growth of the central
21912
sector transmission system and trans-
21351
19969 formation capacity during the previous
17636
17393 (XI) and the current (XII) five-year
13626 plans, transmission congestion in some
parts of the grid as evident in the last
few years, underlines the need for
emphasis on the development of ade-
quate transmission system, especially
at the intra-state level and its coordi-
VII Five Year Plan VIII Five Year Plan IX Five Year Plan X Five Year Plan XI Five Year Plan XII Five Year Plan nated planning and development with
(1985 -1990) (1992 -1997) (1997 -2002) (2002 -2007) (2007 -2012) (2012 -2017)
As of May 2016 the inter-state transmission system.
Net Addition in Circuit Kilometers India faces irregular power avail-
Source: Ministry of Power ability across states. Some states in
the northern and western parts of the
country have surplus power, while
While there has been a marked increase in the some states in the south face shortages.
growth of the central sector transmission sys- The central government, which has
tem and transformation capacity during the pre- made boosting power generation a key
policy priority, is looking to supply
12 vious (XI) and the current (XII) five-year plans, adequate power at affordable prices,
transmission congestion in some parts of the with the aim of doubling electricity
grid as evident in the last few years, underlines generation to two trillion units by 2019.
the need for emphasis on the development of The centre has set a target of bringing
adequate transmission system 24x7 power for all by fiscal 2019.
Future trends
Private sector investment in green energy corridor projects To meet the governments target of
providing 24x7 power to all, govern-
The green corridor, a INR 40,000 crore transmission network for renewable
ments think tank NITI Aayog has
energy, was envisaged by state-owned Power Grid Corporation in 2011. The
set a target of adding 51,400 ckm
project was divided into two parts to speed it up. PowerGrid is setting up the
transmission line in 2016-17, 82 per
first corridor connecting states rich in renewable energy. Work is also on for a
cent more than what was achieved in
second corridor connecting solar parks in Andhra Pradesh, Madhya Pradesh,
2015-16. In order to provide fillip to
Karnataka, Rajasthan and Gujarat.
the transmission segment, the gov-
Rajasthan, Karnataka, Gujarat and Andhra Pradesh will issue their tenders
ernment may soon invite bids from
later this year. These projects are expected to be awarded through transparent
private and public companies for
bidding to speed up transmission for upcoming solar parks. The move is in
interstate power transmission projects
line with the governments plan to open up power transmission to private
through reverse electronic auction on
investment. Adani Power, Sterlite Power, Essel Infra and Tata Power are likely to
build-operate-own (BOO) basis for 35
bid for these projects.
years. The proposal for separation of
The decision to adopt the tariff-based competitive bidding (TBCB) route for
planning function from PowerGrid has
new solar parks means the private sector would be allowed to compete for
also been mooted amid rising con-
21 prospective solar parks. It seems essential to ensure power evacuation
cerns on conflict of interest and level
infrastructure to the investors in solar projects. It takes 3-6 years for the
playing field for private companies as
developers to commission transmission lines while the solar project can be
the state-run company is involved in
ready in six months. Private participation will ease the burden on the government
planning the transmission system and
(PGCIL) to commission transmission projects in a limited time.
participates in the bidding as well.
August 2016
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Industry concerns
India is one of the few countries where the transmission segment of the power sector has been opened up for private
participation and has garnered significant interest from private players. The private developers however, face a number of
challenges in implementing transmission projects awarded under the competitive bidding route, which include:
- Delays in securing clearances under Section 164 and Section 68 of Electricity Act 2003;
- Delays in securing transmission license from the Appropriate Commission;
- Delays and cost escalation in securing Right of Way (ROW) clearance;
- Delays in acquiring forest land due to differing dispensations for Central Transmission Utility (CTU) vis-a-vis private
developers;
- Fixed quoted tariff for 35 years creates challenges due to long gestation period of the transmission projects leading to
cost and time overruns.
In contrast, the Central Transmission Utility (CTU) under cost plus regime does not face most of these challenges as:
- It has automatic clearance under Section 164 and Section 68 of the Electricity Act 2003 being deemed as a central
project;
- It is a deemed licensee;
- It has the power to pay double compensation for the forest land and acquire it without any procedural issues, being
deemed a central project;
- The tariff determination for projects executed by the CTU is under cost plus regime which allows any cost escalation
to be passed through the tariffs although there is a sunset clause which mandates competitive bidding for all future
projects.
InDepth
Water management for thermal
plants need of the hour
14
Total freshwater consumption of coal plants in India estimated at 4.6 bcm meters per year
Dedicated targets for reduction in freshwater consumption need to be set for thermal plants
By Team InfralinePlus
Despite the central governments on coal-based thermal power, to save volumes of water for their operations.
determination to increase domestic coal water and prevent power outages. Water is mostly consumed for cool-
production up to 1bn tonne by 2019, ing, with additional water going into
the power sector faced a new foe, water Thermal power sector: A scrubbing the air pollutants from power
scarcity. A lack of cooling water for water guzzler? plant emissions and handling coal ash.
coal-based power plants in Karnataka, Coal power plants are one of most A Greenpeace India analysis of
Maharashtra and West Bengal led to water-intensive industrial users of fresh a report released in March this year
repeated shut downs and curtailment in water across the world and in India. estimates that the total freshwater
electricity generation.The water crisis The water consumption of coal power consumption of coal power plants in
has once again highlighted the urgency plants has not received sufficient at- India is 4.6 billion cubic meters per
of shifting to a diversified energy tention, even during a drought affected year. This is enough to meet the basic
model that reduces Indias reliance year. Coal power plants require large water needs of 251 million (25.1 crore)
August 2016
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people. This figure will more than The water available in Indias most Such abnormally low levels of
double if all proposed plants are built. important reservoirs now stands at water have already affected electricity
According to the report, the water merely 29% of total storage capacity potential and generation, particularly
consumption for solar and wind of 45.8 billion cubic metres, the latest at hydropower projects. The electricity
energy is negligible in comparison to numbers released by the Central generation from Tehri hydro power
coal and the governments ambitious Water Commission (CWC) reveals. project stood at 205 million units
175 GW target for wind and solar The commission monitors live water (MUs) on March 10 compared with
energy holds the key to securing storage status of 91 big reservoirs that 1,921 MU at full reservoir level,
both water and electricity supplies have a holding capacity of 150 BCM, according to data available with
in water stressed regions. The total which is 62% of the total storage Central Electricity Authority (CEA).
capacity of power plants operating in capacity in India. Out of these, 37 res- On March 10 last year, the energy
Maharashtra which use fresh water in ervoirs have the capacity of generating content was 386 MUs in the dam on
cooling towers and cooling ponds is more than 60 MW of hydropower. the Bhagirathi River in Uttarakhand
14,660 MW while these coal power in the Himalayas.The situation is even
plants altogether consume about 350 worse in some other dams. The energy
million cubic metres of water each The total capacity of content at the SardarSarovar dam
year. On the other hand, the total power plants operating on the Narmada River, the countrys
capacity of power plants in Madhya in Maharashtra which largest in central India, stood at 95
Pradesh which use fresh water in use fresh water in cool- MU on March 10 against 1,818 at full
cooling towers is 9344 MW and these ing towers and cooling reservoir level. It was 288 MU on
coal-based power plants altogether the same date last year, according to
consume about 222 million cubic
ponds is 14,660 MW CEAs data.
metres of water each year. while these coal power
It is estimated that power plants of plants altogether con- Treatment of sewage water 15
National Thermal Power Corporation sume about 350 million for TTPs: An alternative?
(NTPC) at Farraka (West Bengal), cubic metres of water Given the increasing competition for
Adani Power at Tiroda (Maharashtra), each year. On the other water for different uses like agriculture
GMR at Warora (Maharashtra), and domestic supply, it is clear that
MAHAGENCO at Parli(Maharashtra)
hand, the total capacity such problems are likely to increase in
and the Karnataka Power Corporation of power plants in Mad- the future. The government of India has
(KPCL) at Raichur(Karnataka) were hya Pradesh which use also recognised the seriousness of the
the worst affected, losing about INR fresh water in cooling issue and has started taking steps to ad-
2,400 crore in revenues due to the towers is 9344 MW dress it. The one measure that it seems
shutdowns. to be relying upon in a big way is to
require thermal power plants to use
Figure-1: Generation and Revenue Losses from Coal-based treated sewage rather than fresh water.
power plants (due to water scarcity) (for the period between In the amendments to the National
January 1, 2016 and May 21, 2016) Tariff Policy (2006) notified by the
Ministry of Power (MoP) on Janu-
KPCL (Raichur) Generation and Revenue Losses from Coal-based ary 28, 2016, there is a provision that
Generation and Revenue Losses
power plants (due tofrom
waterCoal-based
scarcity) power
plants (due
MAHAGENCO (Parli)to water scarcity)
now requires that the thermal power
plant(s) including the existing plants
GMR (Warora) located within 50 km radius of sewage
Total generation loss: 6,828 MUs
Total revenue loss: INR 239,004 lacs (INR 2390 crore) treatment plant of any municipality/lo-
Adani Power (Tiroda)
cal bodies/similar organisation shall
NTPC (Farakka) mandatorily use treated sewage water
produced by these bodies
NTPC Adani Power MAHAGENCO
(Farakka) (Tiroda)
GMR (Warora)
(Parli)
KPCL (Raichur) Governments directive to use
Generation Loss (MUs)
recycled sewage water by power
1,119 570 480 4,529 130
Revenue Loss (in INR Lakhs) 39183 19958 17136 158,516 4,211
plants will call for an investment of
up to INR 32,000 crore to meet the
Source: Greenpeace Report (June 2016) requirement of 80 GW capacities of
August 2016
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InDepth
This summer has already seen temporary shut downs of KPCLs Raichur power plant and NTPCs Farakka plant due
to lack of water. MAHAGENCOs Parli power plant has been shut since July 2015 due to lack of water. Five years earlier
Maharashtras state-owned utility, MAHAGENCO, had shut down several units of the 2340 MW Chandrapur Thermal Power
Station due to the impact of drought. The construction of NTPCs Solapur power plant in Maharashtra has been delayed
due to huge question marks about where the plant will get water to run on. Water scarcity could severely undermine the
plants financial viability.
Water crisis in Maharashtra had been precipitated as Dhapewada dam, the water source for 3,300 MW Tiroda power
plant of Adani Power, had almost gone dry. The only way to increase water level in this dam is to get water released from
Bawanthadi dam in Madhya Pradesh (MP) having capacity of 217 million cubic metres (mm3). The states share is 50%.
Tiroda plant supplies 2,400 MW on an average to Maharashtra State Electricity Distribution Company Limited (MSEDCL).
At present, the discom has 1,700 MW surplus power during night hours and 1,000 MW extra power during day hours.
Closure of Tiroda plant could lead to shortage of 700 MW during night and 1,400 MW during day. MSEDCL would have
had to buy additional power from open market. If power was not available at affordable rates, then MSEDCL would have
gone in for load shedding. Closure ofTiroda plant would burden MSEDCL with INR 233 crore as the company would have
to pay capacity charges to Adani as per the power purchase agreement (PPA).
Given the precarious water situation in large parts of India, the fact that generating electricity from coal requires significant
quantities of water is a clear financial risk multiplier. Financial risks from water scarcity could range from physical constraints,
where plants will experience water shortages leading to shutdowns, to regulatory risks with increased constraints on water
use, the restriction or cancellation of permits and tighter technological requirements to curtail water use. Civil unrest
because of the conflict between power generators and local farming communities over access to water will further reduce
companies social license to operate, and bring reputational damage to financiers of new coal projects. This could result
16 in abrupt policy changes, as policy makers realise that water consumption based on existing policies is unsustainable.
hurdle it was a couple of years ago. available in which water is replaced not possible for power plant operators
Coal India (CIL) has cranked up with condenser cooling systems based to expect water availability at current
production, and inventories held on air. levels in the future. Deploying a water
by power producers are at a record The projected water scarcity in management strategy today would
high. The bigger resource crunch future will potentially cripple power help companies mitigate the impact of
today is water. The water needed in plant operations resulting in revenue upcoming water scarcity and ensure
ash-handling systems and cooling losses running into several crores on sustainability of their operations, in
plants could easily create acute a daily basis. The future situation is the long term.
local shortages, which would in turn alarming, considering that 2/3rd of Water management needs to become
lead to power plants being turned the current and planned capacities an integral factor in planning of future
off and electricity prices spiking. fall in water stressed regions. Hence, strategic initiatives. For existing
Power Ministry is preparing a the risks to operations due to water plants, dedicated targets for reduction
national roadmap for setting up water scarcity would impair the viability in freshwater consumption need to be
reprocessing facilities, which could of power plant operations. Power set, with clear timelines for short-term
marginally increasepower tariff. plants, who have historically treated and long-term measures. Water-shed
The power plants require water for a water availability as a given, need to management plan could be combined
critical plant operation condenser hence radically overhaul their current with CSR activities to implement water
cooling. But, today, technologies are approach to water management. It is conservation measures for other users
in the watershed. The power plant
Coal India has cranked up production, and must prepare a scenario analysis to
develop a contingency plan to deal with
inventories held by power producers are at a exigencies like regulatory disruptions or
record high. The bigger resource crunch today physical shortages. For future capacity
is water. The water needed in ash-handling additions, location planning must 17
incorporate potential water risks in
systems and cooling plants could easily create the decision making process. Potential
acute local shortages, which would in turn lead measures that can be incorporated for
to power plants being turned off and electricity some of the under construction plants
also need to be assessed.
prices spiking
For suggestions email at feedback@infraline.com
August 2016
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StatisticsPower
Trends in Production of Primary Sources ofEnergy in India(2014-15)
Natural Gas Electricity*
Coal (Million Lignite (Million Crude Petroleum
Year (Billion Cubic Hydro &
Tonnes) Tonnes) (Million Tonnes)
Metres) Nuclear (GWh)
2005-06 407.04 30.23 32.19 32.2 1,18,818
2006-07 430.83 31.29 33.99 31.75 1,32,304
2007-08 457.08 33.98 34.12 32.42 1,37,344
2008-09 492.76 32.42 33.51 32.85 142576
2009-10 532.04 34.07 33.69 47.5 1,25,316
2010-11 532.69 37.73 37.68 52.22 1,40,524
2011-12 539.95 42.33 38.09 47.56 1,63,000
2012-13 556.4 46.45 37.86 39.83 1,46,497
2013-14 565.77 44.27 37.79 35.41 1,69,076
2014-15(P) 612.44 48.26 37.46 33.66 1,65,346
Growth rate of 2014-15 over
8.25 9 -0.87 -4.94 -2.21
2013-14(%)
CAGR 2005-06 to 2014-15(%) 4.17 4.79 1.53 0.44 3.36
(p): provisional
* Thermal electricity is not a primary source of energy
18
Trends in Installed Generating Capacity of Electricity in Utilities and Non-utilities in
India from2005-06 to 2014-15 (in Mega Watt )
Utilities Non-utilities
As on Grand Total
Thermal * Hydro Nuclear Total Total
Growth rate of 2014-15 over 12.37 1.82 20.92 10.79 5.68 10.04
Actual power supply position of various States during the year 2015-16
Region / State Requirement Availability (MU) Surplus(+) / Deficit(-)
/ System (MU) (MU) (MU) (%)
Chandigarh 1,607 1,607 0 0
Delhi 29,626 29,583 -43 -0.1
Haryana 47,506 47,437 -69 -0.1
Himachal Pradesh 8,821 8,758 -63 -0.7
Jammu & Kashmir 16,572 14,037 -2,536 -15.3
Punjab 49,687 49,675 -12 0
Rajasthan 67,417 67,205 -212 -0.3
Uttar Pradesh 106,350 93,033 -13,317 -12.5
Uttarakhand 12,889 12,675 -214 -1.7
Northern Region 340,475 324,009 -16,466 -4.8
Chhattisgarh 25,650 25,310 -340 -1.3
Gujarat 103,544 103,540 -4 0
Madhya Pradesh 62,375 62,375 0 0
Maharashtra 141,817 141,361 -456 -0.3
Daman & Diu 2,337 2,337 0 0
Dadra & Nagar Haveli 5,925 5,925 0 0
Goa 5,120 5,119 -1 0
Western Region 346,767 345,967 -800 -0.2
Andhra Pradesh 50,437 50,366 -71 -0.1 19
Karnataka 64,302 60,971 -3,331 -5.2
Kerala 23,318 23,194 -124 -0.5
Tamil Nadu 97,277 96,586 -690 -0.7
Telangana 50,254 49,948 -307 -0.6
Puducherry 2,437 2,429 -8 -0.3
Lakshadweep 48 48 0 0
Southern Region 288,025 283,494 -4,532 -1.6
Bihar 23,960 23,658 -302 -1.3
Damodar Valley 18,437 18,234 -203 -1.1
Corporation
Jharkhand 7,735 7,560 -174 -2.3
Odisha 26,763 26,600 -163 -0.6
West Bengal 47,359 47,194 -165 -0.3
Sikkim 399 399 0 -0.1
Andaman & Nicobar 240 180 -60 -25
Eastern Region 124,653 123,646 -1,007 -0.8
Arunachal Pradesh 625 591 -35 -5.5
Assam 8,762 8,271 -491 -5.6
Manipur 840 810 -30 -3.6
Meghalaya 1,832 1,724 -108 -5.9
Mizoram 471 455 -16 -3.3
Nagaland 755 738 -16 -2.2
Tripura 1,202 1,146 -57 -4.7
North-Eastern Region 14,488 13,735 -752 -5.2
All India 1,114,408 1,090,851 -23,557 -2.1
August 2016
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CAG suspects 1st e-auction of coal blocks was rigged with multiple biddings
Multiple bids by corporate groups made firewalls against the probability of price-
through joint ventures or group arms rigging or cartelisation from then on. The
may have limited the competition for government has been looking at barring
11 coal mines auctioned in the first two multiple bids by any corporate group to
rounds in March 2015, according to curtail the probability of price rigging or
the federal auditors report on the first cartelisation, which the coal ministry then
e-auction of natural resources conducted believed had led to wide variation in the
by the Modi government. The auction winning bids described as outliers in
was conducted after the Supreme Court the first round of mine auctions for power
cancelled allotment of 204 blocks in 2014. plants. These outliers had prompted the
The Comptroller and Auditor Generals ministry to put under the scanner bids
(CAG) report supports the suspicion that for several blocks and finally reject the
the government itself had developed winning bid of Naveen Jindal group firm
after the first two rounds of bidding, for Gare Palma IV/2&3 blocks.
prompting the coal ministry to put up
August 2016
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NewsBriefs
| Coal National National
Coal linkages: Captive power segment comes to CILs rescue Green panel gives nod to MCLs
coal washery project in Odisha
International
captive power segment. Excepting the small the backdrop of a one per cent reduction The Centres green panel has recom-
offerings of a Western coalfields mine, the in coal-based power generation during the mended environment clearance to state-
rest of the coal offered in the first three days month as hydro-electricity was available at owned Mahanadi Coalfields Ltd (MCL)
found buyers. In a majority of the cases, a cheaper rate. to establish a 10 million tonnes per
annum capacity coal washery in Talcher
Kerala makes fresh bid for coal block allocation district in Odisha. Coal India arm MCL
has proposed setting up of Jagannath
Four years after it lost a claim on the Coal Washery with 10 million tonnes per
Baitarani West coal block in Orissa, the annum (MTPA) capacity in an area of 30
state is making a fresh bid for coal block hectare at Hensmul village in Talcher
allocation. The State Government has district. MCLs coal washery proposal
requested the Centre to allocate it a was taken up for discussion in the recent
new coal block for power generation. A meeting of the Expert Appraisal Com- 21
tentative plan is to use the coal to fuel mittee (EAC) set up under the Union
a power plant that would be established Environment Ministry. As per the rule, the
jointly by Kerala and Odisha in Odisha. ministry gives final green clearances to
The Union Power Minister said the states the projects based on the EAC recom-
request would be considered when it mendations. Among conditions specified,
submits concrete plans for a (power) Corporation and the Gujarat Power MCL has been asked to set up the wash-
project. According to top officials, the Corporation Ltd, was allocated the 602 ery as per the project report submitted to
state is gunning for a coal block with million tonne Baitarani West coal block the committee. It has been told to trans-
reserves of 200 million tonnes. In in Talcher, Odisha. The next year, they port raw coal through pipe-belt conveyor,
July 2007, the Kerala State Electricity floated an SPV - Baitarani West Coal and clean coal and rejected ones by rail
Board, along with Odisha Hydro Power Company Ltd - to mine the block. with wagon loading through silo.
Mahanadi Coalfields Ltd (MCL) would degrade the environment unless adequate
complete work on a separate, dedicated coal measures are taken to curb pollution. Be-
transportation coal corridor in the coal-rich sides taking action for regulatory compliance
Talcher region by March 2017. The align- of the stipulations of consent order, MCL
ment of the coal corridor would be such that being one of the major stakeholders of these
it passes through the coal mining blocks two areas needs to take some additional
but avoids the populated areas of the coal steps for improvement of overall environ-
bearing region. MCL has already commenced mental scenario of the areas. On ground-
work on the corridor. In the existing coal water and its recharge potential, it was
transportation road of 35 km length from decided that MCL should take expeditious
Hingula to Pawitra Mohan Chowk in Talcher action to start survey work by CSIR-National
area, MCl would deploy road sweepers MCLs jurisdiction and have been classified as Geophysical Research Institute (NGRI),
and water sprinkling system on the routes critically polluted areas of Odisha. Since MCL Hyderabad during post monsoon period and
passing through the populated areas. Both operates numerous coal mines in this belt, ensure that the report preparation by NGRI
Talcher and Ib valley coalfields are under such large scale mining has the potential to is completed by July-2017.
August 2016
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Bangladesh has awarded a USD 5 billion project. The MoU paves the way for the
project to build a 1,320-megawatt coal- Malaysian consortium to finance and build
fired power plant to Malaysia. The decision the power plant in Maheshkhali, Coxs
was conveyed by visiting Bangladesh Bazar, Bangladesh with the Bangladesh
State Minister for Power, Energy and Power Development Board (BPDB). The
Mineral Resources, Nasrul Hamid, to Prime Malaysian consortium and BPDB would
Minister Najib Razak. Special Envoy for have equal equity shareholding in the
Infrastructure to India and South Asia S. power plant with a concession period of 21
Samy Vellu, said Najib has expressed the to 25 years. Samy Vellu said if the parties
governments gratitude to the Bangladeshi decided to go ahead with the project after
government for awarding the project on a consortium will implement the project but the completion of the feasibility study, they
government-to-government understanding. it will do a feasibility study first, he said. In will form a joint venture (JV) company and
Its final. The Bangladesh Cabinet made 2014, Malaysia and Bangladesh signed a conduct international tender to appoint the
the decision to award the project to the government-to-government memorandum engineering procurement and commission
Malaysian Government. Now, a Malaysian of understanding (MoU) to implement the (EPC) contractor for the project.
August 2016
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InConversation
Discoms unable to cater to
latent demand
After the Modi government came into power in May 2014, India
has seen dramatic improvement in generation, pushing electricity
shortfall to all-time lows. This turnaround was made possible by
increased production of coal. Coal availability has improved to
the extent that now the government is looking at exporting coal to
deal with rising stocks at mines. However, the moot question is,
how sustainable is this situation? As economic growth picks up
momentum and flows of investment into governments flagship
programmes like Make in India become stronger, electricity
demand too would go up. In such a scenario, will electricity
supply be able to keep pace with demand? In an interview to
Infraline Plus, Salil Garg, Director-Corporate Ratings, India
Ratings, fields questions about the medium-term electricity
supply challenges. Excerpts:
Salil Garg, Director-Corporate Ratings, India
Ratings
23
The central electricity authority the discoms are unable to cater to the already exporting electricity to Bangla-
(CEA) says India will become latent demand. Over the medium term, desh where potential exists for further
power surplus by end of this the demand is expected to catch up increase in volumes. There was a talk of
fiscal. How sustainable will with supplies. electricity export to Pakistan as well but
be this projected situation that has other geopolitical implications.
of excess power given the The government says it could
governments strong focus on export surplus coal. Do you think Do you think electricity demand is
manufacturing sector? India will find buyers for its high growing at a healthy pace? How
India has seen rapid growth in power ash content coal? Anyway, will is your medium-term outlook on
generation capacity in the past 5 years this strategy make sense for power demand growth?
because of investments in the sector India which has been undertaking Electricity demand is indeed growing
from 2006-2007 onwards. As a result, huge imports to meet domestic at a healthy pace though the bulk of the
almost 100,000 GW of new capacity coal deficit? Would India not increased demand is coming from the
has been added in the past five years. benefit more if it exports domestic segment. The slowdown in
This capacity has helped reduce the electricity instead of coal? industrial growth has, however, subdued
power deficits which is visible in CEA The government is hopeful of finding demand growth from the industry. As
data. Many states are reporting very buyers for Indian coal. It may sound we know, electricity demand in this
low or nil deficits. Therefore, CEA far-fetched but small quantities of country is also a function of effective
could be technically right in saying that Indian coal could get exported in the intermediation by the discoms. The
India will become power surplus by the near term while India would still be discoms have not been able to service
end of this fiscal. However, this will importing coal at some other locations demand fully due to their poor financial
not capture the latent demand in the as boiler designs and other economic status, thus there is a huge latent
system and scheduled load shedding by considerations will prevent complete demand in the sector. In the medium
the discoms. The surplus power situ- import substitution. Export of electric- term, electricity demand will still remain
ation will continue as long as the coal ity is an option but such exports are robust and could outstrip the GDP
supplies remain robust and as long as possible to limited geographies. India is growth. In case the discoms are able
August 2016
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InConversation
to improve their financial capabilities very difficult, even achieving 1 billion but nuclear power will face difficulties
under Mission UDAY, there is a tonne will have serious challenges. One in gaining critical mass India, mainly
possibility of consistent double-digit also has to look at the demand. due to long gestation period, high cost
demand growth over the next 3 years. and concerns over fuel availability.
Do you think India should use Thus, coal will remain the dominant
Do you think time has come nuclear power instead of coal- fuel in India for power generation
for the government to open up fired generation given the even if further investments in coal
commercial coal mining for growing global concern over remain muted.
private sector? Is the goal of emissions? Or do you think clean
producing 1.5 billion tonne of coal technologies will show the Should India provide additional
coal by 2019-20 achievable? way in coming days? incentives to promote usage of
Globally coal mining is largely in the Theoretically, nuclear fuel has an edge LNG in electricity generation?
domain of coal mining companies over coal from emissions perspective Use of LNG for electricity generation is
instead of the captive users. Commer- not economical and is possible only with
cial mining companies are expected to India has not seen very the help of subsidies. It is not possible
have the technical capabilities to mine to have a large capacity based on an im-
coal economically and also manage
effective results from ported fuel which is highly price sensi-
the market risks. India has not seen allocating mines to the tive and needs constant government sup-
very effective results from allocating end users. Opening of port. This is not a viable business model
mines to the end users. Opening of the the coal to commercial from the point of view of investors and
coal to commercial mining involves users. At a time when LNG prices are
a deeper dialogue with the stakehold-
mining involves a deep- benign, there is no interest to invest in
ers especially from the regulatory and er dialogue with the gas-based power generation. Making the
24 environmental perspective. Given the stakeholders especially existing gas-based investments viable is
present state of affairs, a rapid action is from the regulatory and a challenge at the moment.
not expected on this front.
As far as growth in coal output is
environmental perspec- How far solar and wind
concerned, the last two years have tive. Given the present electricity can help India in
been very successful but it is difficult state of affairs, a rapid meeting its energy demand
to maintain high rates of output growth action is not expected given the intermittent nature of
over a long term. The target of 1.5 renewable?
billion tonne by 2019-20 appears to be
on this front India has declared very ambitious tar-
gets for solar, wind power generation
but even after achieving these targets,
renewable will remain less than 10%
of the total electricity produced in the
country. Yes, solar and wind pose grid
stability issues which will hopefully get
resolved with the help of advancements
in technology. Also, the renewables
will meet part of the incremental elec-
tricity demand and garner a large chunk
of investments in the sector. However,
we have seen that there are other
challenges in the renewable electricity
space including availability of capital
and poor financial health of counterpar-
ties. As a result, investors are cautious
at this moment.
ExpertSpeak
Coal: Darker days ahead
for India?
In this article, Ramakrishnan
M, Vice President and Mayank
Taneja, Senior Analyst, the
Smart Cube, assesses the
current supply demand scenario
of coal in India and examines
the path chosen by the Indian
government while answering
questions on the governments
long-term strategyis India
aiming to become a net exporter
of coal by 2020, is privatisation
on the cards and the forecast
price trend. Ramakrishnan M, Vice President, the Smart Cube Mayank Taneja, Senior Analyst, the Smart Cube
25
Coal India Declining coal (consumed by power plants Hence, Indias coal production target
Limited (CIL), global coal primarily in West Bengal, Bihar has been set at 1.5 billion MT
the largest prices and reduced and Jharkhand) by 130%net (1 billion MT to be achieved by the
coal miner shipping rates have increase stood at ~6.3%. The CIL) by 2020.
globally, made imported coal announcement came amid With the above targets in mind,
contributes declining prices globally due the government passed the Coal
~82% to In-
cheaper than to increased output and low Mines Special Provisions Bill and
dias total coal domestic coal demand. Moreover, in June 2016, the Mines & Minerals Development
production. Dur- ~12 power stations across UP, and Regulation (MMDR) bill in
ing FY20152016, Maharashtra and West Bengal asked March 2016. It can now allow private
the state-led company produced ~536 the CIL to stop further supply due to companies to mine and sell coal in the
MT of coalan 8.5% Y-o-Y increase. extensive stockpile. This has raised open market. In addition, the state-run
However, the commoditys demand did eyebrows at the strategy pursued by CIL is ramping up operations and
not report a similar trend, with demand the state-owned miner, or indirectly, increasing production. To achieve the
from the power sector (the largest the Indian government. 1-billion MT mark, the company aims
consumer of coal) witnessing a decline. to invest INR 57,000 crore during
During FY20142015, the countrys The Government way 20152020.
power plants operated at 65% capac- Privatisation, reduced
ity, posting the lowest plant load factor dependence on import Uncertainty Prevails Price
since 1990. To achieve its goal of 100% rural Outlook and Challenges
While the gap between supply and electrification, the Indian government Ahead
demand should have led to a decline plans to introduce reforms in the coal With the production ramp-up, the
in coal prices, in May 2016, CIL industrythe countrys largest source government has been successful
raised the prices of low-grade coal of electricity. The aim is to make India in reducing imports so far. During
(consumed by a majority of the power self-sufficient in terms of coal produc- FY20152016, imports declined
plants in the country) by 1319% and tion, i.e., reduce dependence on im- ~15% Y-o-Y, and thus helped gener-
reduced those of higher grades of ports to zero by the end of this decade. ate savings of ~INR 28,000 crore in
August 2016
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ExpertSpeak
foreign exchange. Further, in April states prefer importing coal, instead commodity to increase consumption.
and May 2016, coal imports posted of purchasing it domestically. Low A majority of the companys labour
Y-o-Y declines of ~15% and ~19%, demand from the power sector, (60%) goes into the production of the
respectively. The government expects clubbed with the above factors, has latter, the cost of which is difficult to
to save ~INR 30,000 crore during resulted in extensive stockpile at recover on account of very few takers
FY20162017. CIL mines, despite the government in India. In addition, the companys
However, declining global coal encouraging states to buy the plans to invest in hi-tech machinery
prices and reduced shipping rates commodity domestically, and forced and technology to improve efficiency,
have made imported coal cheaper the government to postpone its while ramping up production, are not
than domestic coal, especially in current plans of auctioning mines to being received well by labour unions
coastal statessuch as West Bengal. private and foreign companies. (which fear huge job losses).
Further, due to the increase in While the CIL has hiked the Amid the challenging and dynamic
prices by the CIL, along with rising prices of low-grade coal, it has scenarios prevailing in the domestic
surcharges, taxes and transport costs, dropped those of high grades of the as well as the global coal market,
the Indian government is taking
Due to the increase in prices by the CIL, along numerous measures such as priva-
with rising surcharges, taxes and transport tisation, accelerated infrastructure
development and faster approvals
costs, states prefer importing coal, instead of to create a favourable position for
purchasing it domestically. Low demand from India in the global coal landscape.
the power sector has resulted in extensive However, it remains to be seen as to
stockpile at CIL mines, despite the government what all measures will work for the
encouraging states to buy the commodity Indian market.
26 domestically, and forced the government to
postpone its current plans of auctioning mines The views in the article of the author are personal
For suggestions email at feedback@infraline.com
August 2016
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InDepth
Coal linkage auction for Non-Regulated
sector gathers steam
27
CIL to auction coal linkages for an annual contracted quantity of 23.25 MTPA
Coal linkages for sponge iron sector conducted, cement sector in action
By Team InfralinePlus
Battling all odds, the Government has 2007. The linkage would be for five Bidders will have to execute
fast tracked the auction of coal linkages years, while there is an exit clause in separate FSAs for each Lot where they
for the non-regulated sector. The Gov- the agreement where the consumers can emerge as Successful Bidders. Lot
ernment had earlier conducted auction exit after two years without giving any shall mean a specified quantity of coal
of coal linkages for the sponge iron sec- penalty. The Agreement (FSA) shall be belonging to a particular grade which
tor and has now kicked off the bidding executed between the Successful Bidder is to be offered for sale and which may
process for the cement sector. Notably, and the relevant Subsidiary in respect of be dispatched by road or by rail. Each
this is the first time coal linkages are be- the Allocated Quantity within 30 days of Lot will contain only one Grade and
ing e-auctioned. Earlier, the fuel supply receipt of the Performance Security; and will also have a pre-identified Sec-
agreements were governed by the New submission of the documents specified ondary Source. Each Lot will have a
Coal Distribution Policy of October in Scheme Document. specified mode of dispatch i.e. road or
August 2016
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InDepth
rail. Bidders will have to off-take coal Sub Sector Offered Quantity (Mt) Allocated Quantity (Mt)
from Lots via the specified mode of
dispatch only. Players with large NCRs Sponge Iron 3.78 2.098
and located at Pit head will control the Cement 2.15 1.29
ascent in price, and overall the outcome CPP 17.52 To be allocated
of auctions. 0.30 (Left out from
Steel Coking Coal To be allocated
Tranche I)
Auction for sponge iron 0.30 (Left out from
sector Others To be allocated
Tranche I)
Coal India has secured a booking of Sub Sector Offered Quantity (Mt) Allocated Quantity (Mt)
about 2.05 million tonnes (mt) against
the offer of 3.78 mt in the first tranche use plant. In February, 2016, the Cabi- of non-regulated sector maturing in
of linkage auction for the non-regulated net Committee on Economic Affairs FY2016 onwards and 25% of incre-
sponge iron sector. The auction was (CCEA) approved that all allocations mental CIL/SCCL production during
conducted in 18 slots spanning six of coal linkages/Letter of Assurance FY2016 over FY2015. FSA tenure may
days. There were no bidders in some (LoAs) for non-regulated sector shall be as decided by MoC, subject to a
of the slots while only in three slots, henceforth be auction-based. As per maximum tenure of 15 years.
the booking exceeded the offer amount CCEA decision, proportion of coal al- Separate quantities are to be ear-
and hence attracted a premium over the location between power and non-power marked for sub-sectors. It has been
notified price in such cases. sector was pegged at 75% and 25%, decided to conduct the current auction
respectively. Bidders with tapering of coal linkages under non-regulated
Key provisions linkages are allowed to participate in sector (Tranche I) under the following
Linkages are assured supply commit- the linkage auction. sub-sectors: Cement (excluding its
28 ments from Coal India Limited (CIL) Total quantity earmarked for CPPs), Sponge Iron (excluding its
and Singareni Collieries Company Ltd Tranche-I is 23.25 mtpa. Quantity for CPPs), all Captive Power Plants
(SCCL) to a company that has an end- Tranche-I shall be aggregate of FSAs (CPPs), Steel (Coking Coal), all EUPs
that do not fall as mentioned above
In February, 2016, the Cabinet Committee on are included in Others sub-sector
[excluding Fertilizer (urea) sector].
Economic Affairs (CCEA) approved that all A bidder must be a consumer of
allocations of coal linkages/Letter of Assurance coal engaged in the Specified End
(LoAs) for non-regulated sector shall henceforth be Use and should be the owner of the
auction-based. As per CCEA decision, proportion Specified End Use Plant for which it
of coal allocation between power and non-power is submitting the Bid. Bidders shall
sector was pegged at 75% and 25%, respectively not have been convicted for wrongful
utilization of coal by the Central
Bureau of Investigation or any other
governmental authority or statutory
or judicial body. The Specified End
Use Plant for which the Bidder is
submitting the Bid should have com-
menced commercial operations as on
the date of issuance of this Scheme
Document and should have a Nor-
mative Coal Requirement of not less
than 4200 TPA.
Auction methodology shall be
Non Discriminatory Ascending Clock
Auction. In this system auctioneer
increments the premium on electronic
platform till demand supply equi-
librium is established. Bidder will have
August 2016
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InDepth
Flexibility in utilisation of domestic coal
to bring down cost of power generation
30
To reduce cost of power generation by 40-50 paise per unit; savings of Rs 25,000 crore PA
To help in better utilization and consumption of domestic coal by the industry
By Team InfralinePlus
Coal is the primary source of power dent on timely availability of coal and utilization of domestic coal by the
generation in our country. Broadly transportation distance of coal from generation utilities for reducing power
coal-based thermal power plants can mine to generating station. Presently, purchase cost of state-owned distri-
be categorized as Pit Head based on one hand, there are efficient power bution utilities. This initiative paves
plants, which are situated near coal plants faced with a shortage of coal way for optimal use of domestic coal
Mines, and Load centre based plants and on the other hand other plants are in efficient power plants as well as
situated near load centres. Depending running way below capacity. lowers the cost of electricity. It is also
upon the technology, thermal power The Union Cabinet on May 4, in line with the UDAY scheme which
plant has different efficiency levels for 2016 has approved a proposal to relax envisages liberally allowing of coal
conversion of coal to electricity. The norms for utilisation of domestic coal swaps from inefficient plants to effi-
cost of generation of power is depen- with an objective of allowing optimal cient plants and from plants situated
August 2016
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Average cost of supply for a discom at varying levels of mix of coal based generation
in procurement and average distance for coal transportation
Average cost of supply
Average distance for coal transportation (KM)
per unit sold (Rs/unit)
InDepth
StatisticsCoal
Trends in Consumption of Energy Sources inIndia(FY06 - FY15)
Coal# Lignite Crude Oil** Natural Gas(Billion Electricity*
Year
(Million Tonnes) (MMT) CubicMetres) $ (GWh)
Trends in Industry wise Consumption of Raw Coal in India(FY06 - FY15) (Million tonnes)
Fertil-
Elec- Steel & Sponge
Year Cement Paper Textile izers & Brick Others * Total
tricity Washery Iron
chemicals
1 2 3 4 5 6 7 8 9 10=2 to 9
2005-06 306.04 19.66 14.97 2.77 0.29 - - - 51.85 395.59
2006-07 321.91 17.3 14.71 2.5 0.3 - - - 63.08 419.8
2007-08 350.58 16.99 15.27 2.64 0.37 - - - 67.72 453.57
2008-09 377.27 16.58 13.12 2.16 2.53 - - - 77.52 489.17
2009-10 390.58 16.45 14.66 2.34 0.27 - - - 89.5 513.79
2010-11 395.84 17.26 15.08 2.43 0.28 - - - 92.58 523.47
2011-12 437.67 47.86 26.36 2.03 0.26 21.69 2.82 0.13 69.36 608.17
2012-13 485.47 51.7 31.79 2.12 0.3 20.9 2.86 2.01 116.24 713.39
2013-14 493.25 53.05 32.46 1.91 0.36 18.49 2.64 4.01 133.19 739.34
2014-15(p) 527.1 66.37 37.95 1.54 0.42 14.68 2.69 0.11 169.46 820.31
Distribution (%) 64.26 8.09 4.63 0.19 0.05 1.79 0.33 0.01 20.66 100
Growth rate of 6.86 25.11 16.91 -19.15 16.39 -20.64 2.05 -97.18 27.23 10.95
2014-15 over
2013-14(%) CAGR 5.59 12.94 9.75 -5.71 3.82 -9.3 -1.17 -3.26 12.57 7.57
2005-06 to 2014-
15(%)
(P): Provisional
* Includes Sponge Iron, colliery consumption, jute, bricks, coal for soft coke, fertilisers & other industries consumption.
@ From 1996-97 and onwards Cotton includes Rayon also.
August 2016
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StatisticsCoal
Monthly Coal Production during FY12 to FY17 (Million Tonnes)
Month 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12
April 40.35 48.87 45.38 43.52 41.46 39.84
May 42.58 49.23 45.58 43.23 44.09 40.76
June 42.27 46.49 43.75 40.42 41.36 38.5
July 42.27 42.34 39.94 39.27 38.71
August 43.63 43.46 38.38 35.84 32.37
September 44.95 43.97 41 35.76 29.53
October 53.33 49.73 42.73 44.26 39.66
November 56.59 54.62 47.71 46.17 47.56
December 61.95 58.37 54.23 53.69 52.78
January 62.89 58.08 57.13 56.47 54.29
February 60.12 58.34 52.26 50.75 55.1
March 69.41 69.2 65.3 64.06 63.62
Total (Apr-Mar) 125.65 637.87 609.18 565.85 553.18 532.72
April 16 52.32 55.87 57.84 52.29 43.06 43.25 41.6 33.45 30.87
May 16 51.2 54.66 56.7 51.26 42.16 42.44 40.89 32.88 30.35
Jun 16 51.81 55.32 57.32 51.82 42.65 42.88 41.28 33.19 30.63
August 2016
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CoverStory
GST: A mixed bag for energy,
infra sectors
35
By Infraline Bureau
History was made on 3rd August, 2016, Compliance, Credit Utilization and the overall economy will definitely get
with India taking a giant leap towards Reporting leading to a complete a boost from the implementation of the
a single unified market after the Rajya overhaul of the current indirect tax GST, impact on different sub-sectors in
Sabha approved the Goods and Ser- system, says consulting firm EY. It adds the energy sector will not be uniform.
vices Tax (GST) a reform considered GST will have a far-reaching impact on Renewable sector will feel the pinch
almost three decades back. Taxation almost all the aspects of the business when the country shifts to the GST even
experts say that the GST will transform operations in the country, for instance, as there is no consensus over bringing
the Indian economy by giving rise to a pricing of products and services; supply oil, gas and electricity within the ambit
common market and reduce the cascad- chain optimization; IT, accounting and of the proposed indirect tax reform.
ing effect of tax on the cost of goods tax compliance systems. Conventional power producers,
and services. Economists say that implementation however, expect significant gains
Specifically, the proposed reform of GST could add 1 to 1.5 per cent to from the implementation of the GST.
will impact the Tax Structure, Tax Inci- GDP, supporting the ongoing economic Currently, the power sector is subject
dence, Tax Computation, Tax Payment, recovery that remains fragile. While to multiple taxes on capital goods and
August 2016
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CoverStory
should benefit local manufacturing by (PPAs) in India include a change in willingness to buy more solar power at
providing them with a level playing law clause, wherein, any impact due higher tariffs will also be affected and
field against imports. to change in law is passed through to could pose another short-term chal-
Currently, VAT and/or a CST is appli- power procurers. However, there is no lenge for the sector.
cable on sale of equipment within India. precedence or a process in place for Similarly, cost of wind power will
Several states including Uttar Pradesh calculating the pass through impact go up by 11-14 per cent, depending
(UP) and Rajasthan have completely of such a change for bidding based on whether equipment are procured
waived off VAT, normally around 14 solar project. This uncertainty will be within or outside home state. Cur-
per cent for solar equipment, and most a cause of concern for the investors, rently, wind power equipment are
other states have set it around the 5 per say analysts. Post implementation of exempted from additional excise duty
cent. Excise duty on manufacturers is GST, power distribution companies and special additional duty. However,
also waived off for items such as solar when GST comes into effect, IGST of
module mounting structures. As all these 20 per cent along with additional tax of
exemptions go away and VAT, CST and Currently, VAT and/or 1 per cent will be applicable on inter-
excise duty get replaced with GST, the a CST is applicable on state procurement of wind equipment.
project cost will certainly increase. sale of equipment within However, for intra-state procurement,
However, a part of this increase only 20 per cent IGST will be appli-
will be offset as a pass through will be
India. Several states cable on wind power equipment.
allowed on the GST paid at the time including Uttar Pradesh Service tax which is currently
of import and savings on multiple (UP) and Rajasthan applicable at 14.5 per cent would be
taxes and duties along the value chain, have completely waived replaced by GST of 20 per cent. Lev-
Bridge-to-India says. elised tariff could go up to nearly Rs
off VAT, normally around
The magnitude of actual cost 7.5 a unit from the current level of Rs
increase will depend on the applicable 14 per cent for solar 6.58 a unit. 37
GST rate and the procurement pattern. equipment, and most
The ministry of new and renewable other states have set Power and coal sector to
energy (MNRE) estimates the cost it around the 5 per reap benefits
increase to be in the range of 12-16 Power companies have made a strong
per cent for a GST rate of 20 per cent.
cent. Excise duty on case for the inclusion of power, coal
Now the question is how do devel- manufacturers is also and natural gas in the GST regime to
opers manage the risk of GST being waived off for items subsume multiple taxes and thereby
implemented when they are bidding for such as solar module reduce the cost of power projects and
projects and signing PPAs? mounting structures the per-unit tariff. They say the power
Most power purchase agreements transmission & distribution (T&D) sec-
tor should be granted the infrastructure
industry status and that all related tax
benefits available to other infrastruc-
ture sectors be extended to this sector.
Industry players say even though
generation is exempt from CENVAT,
excise and value-added tax, taxes on
power generation equipment and other
inputs are included in the cost of power.
The overall impact of present taxation
regime at both Central and state levels
leads to higher price of power.
A power sector analyst explained
that taxes on domestic coal are at 27-28
per cent while on domestic natural gas
it is at 19 per cent. Besides, service
tax is levied at 14.5 per cent on input
service availed such as engineering,
August 2016
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CoverStory
CoverStory
be made eligible for deemed export for any services provided between service. This is a welcome move and
benefits, say experts. group companies, such as royalty for should provide certainty on taxability
Free of cost (FOC) supplies by access to global brand, group company of the construction sector, says Anita
project owners to contractors appears cost allocations, etc, it needs to be Rastogi, Partner-Indirect Tax, PwC.
to be liable to GST. Thereafter, the demonstrated that the transaction is at The concern is however from the as-
contractor may need to include value arms-length. If this cannot be demon- pect of valuation as currently no deduc-
of such free supplies in the value of strated, the value will be determined tion is provided under GST for value
his services, thereby increasing the tax based on the GST valuation rules, that of land, or no abatement/ composition
incidence, especially in scenarios where is, based on services of like kind and is provided. This may lead to signifi-
the project owner is not eligible to take quality, or the cost of providing the cant increase in tax burden, especially
credit, or where the contractor avails services, including profit. if such services are taxed at Standard
any exemption. Else, the FOC supplies Implementing these provisions GST rate (which is expected to be 18
would create a cash flow issue, warn may be challenging to implement in per cent), she adds.
experts. Project cost may be impacted respect of cross-border transactions, as Even if such services are subjected
due to GST credit restrictions in many it may not be feasible for the resident to lower tax rate (expected to be
sectors, depending upon the end use. entity to obtain the value of similar around 12 per cent) considering that
Place of provision for services in there is additional tax incidence in the
relation to immovable property would In case of infrastructure form of Stamp duty on value of land/
be location of the immovable property. immovable property, it would need to
There may be possible issues
projects, Indian entities be evaluated whether the tax incidence
where a single contract is entered into do procure significant would be higher than the current
for provision of services related to amount of services, regime (in absence of any deduction).
immovable properties across two or especially pertaining Additionally not all expenses incurred
40 more states. For example, in case of to technical know-how, are allowed as credits and this restric-
highway construction services, railway tions under credit rules could have sig-
track laying project, typically a single
designs from their nificant adverse impact on Real Estate
contract may be entered into with parent companies. industry. The industry was expecting a
the vendor, for which consolidated Under the GST Model much more liberal credit regime where
invoices may be raised at one location. Law, the concept of it could get the credit of the con-
Such a contract may involve execution struction services acquired in relation
valuation for services
across multiple states. to commercial property which would
Under the current regime, contractors in related party be subsequently leased, Rastogi says.
are required to segregate contract values transactions has been However, the draft law could be
(for sale of goods) for the purpose of introduced interpreted to mean that there may
determining VAT/ CST liability in dif- not be any credit available either to a
ferent states. However, considering that services, or to provide the details of contractor or the developer involved
there would be no distinction between their cost of supply of services, to in construction of immovable property
goods and services under the GST substantiate that the price is at arms (whether sold as underconstruction
regime, the same would need to be done length. Additionally, the Model GST property or leased). This does not
for services as well, and hence, there Law provides that if there is a reason seem to be the intent of the lawmaker
may be a requirement for the vendor to doubt the accuracy of the transaction and hence would need significant
to raise separate invoices, for which value declared by the supplier, then the revision, experts point out. Consid-
separate contracts may also be required, authorities can determine the trans- ering the absence of valuation rules and
warn tax consultants. action value as per the GST valuation the restrictions under credit rules, the
In case of infrastructure projects, rules. Such an unfettered power to proposed law as it stands today could
Indian entities do procure significant question the transaction value can lead have a negative impact on the industry,
amount of services, especially per- to litigation, warns PwC. says PwC. It now remains to be see
taining to technical know-how, designs when the GST bill will be passed and
from their parent companies. Under the Real estate to see in what form.
GST Model Law, the concept of valu- additional tax burden
ation for services in related party trans- The Model GST Law specifies that
actions has been introduced. Therefore, works contract would be taxed as a For suggestions email at feedback@infraline.com
August 2016
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India and the US have decided to and gas. Over the last decade, several
forge closer institutional and technical areas of cooperation, such as technology
co-operation in the energy sector for for production from marginal fields,
re-assessment of conventional and shale structures, developing gas pipeline
unconventional hydrocarbon reserves network, improving refinery efficiency etc.
in India, including its offshore areas. Oil had been identified. GAIL has contracted
minister Dharmendra Pradhan discussed 5.8 million tonne per year of liquid gas
the contours of a way forward during his from shale gas projects in the US, from
meeting with US energy secretary Ernest where delivery is expected to start from
Moniz in Washington. The two ministers 2017-end. Other Indian companies have
reviewed bilateral energy cooperation, also invested in shale oil and gas projects
especially in oil and gas sector, between of petroleum storage. The bilateral energy in the US. GAIL has 20% equity in Eagle
the two countries. The two sides also cooperation between the two countries Ford basin; Indian Oil and Oil India have
decided to share new technologies in had started in the form of an energy 10% equity in Niobrara basin project.
development of biofuel and development dialogue in 2005, which also includes oil
August 2016
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Reliance Industries and its partner BP plc of producing 8.7 mmscmd. Currently, RIL-BP
UK have invested over Rs 4,500 crore in the are in the process of sidetracking (drilling)
flagging eastern offshore KG-D6 block to two of their existing wells and drilling away
maintain gas output at current level despite from the water to increase recovery of gas.
the steep natural decline that has set in the Side-track campaign has also been initiated
seven-year old fields. RIL-BP are currently in MA field. Sources said the existing and
producing from Dhirubhai-1 and 3 gas field enhanced production from these fields only
and MA oil and gas field, three of the over get the price as per the formula that was
one-and-half dozen discoveries made in the approved in November 2014. Price according
Bay of Bengal Block KG-DWN-98/3 or KG- to this formula currently is USD 3.06 per
D6. The fields, which began gas production million British thermal unit and is expected
in April 2009, hit a peak output of 69.43 on steep natural decline and RIL-BP have to be revised lower in October 2016. At
million standard cubic meters per day in spent over Rs 4,500 crore arrest the decline these prices, leave alone new investment,
March 2010 before water and sand ingress and continue to increase the ultimate even the base business will struggle to yield
shut down well after well. The fields are recovery of gas. The block is currently any profits, they said.
August 2016
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InDepth
A long road ahead for CBM
to be a potential star
44
By Team InfralinePlus
Indias Coal Bed Methane resources It is also way above the 2015-16 which is similar to the levels for Con-
are said to have the potential to provide CBM production level of a mere ventional Onshore, Shallow Offshore,
as much as 28 BCM, or about 76 mil 0.4 BCM, or just above 1 mil sm3/ and Deep Offshore. Only Shale Gas is
sm3/day, of natural gas by 2040. That is day (Table 1). Reaching even this significantly higher (Table 2).
almost as much as the 2015-16 domestic low level has taken 8 years to reach, Clearly, CBM has a long journey
production of natural gas of 32 BCM, or after production of CBM started in ahead to reach its full potential. A lot
88 mil sm3/day. This future projection 2007-08. of exploration still needs to be done.
for CBM is given in the India Energy The IE Outlook document According to the Directorate General
Outlook document brought out by the bases its optimism for CBM on its of Hydrocarbons, the prognosticated
International Energy Agency in Dec estimate that, at end of 2014, Indias CBM resources in the country are
2015, with inputs from various interna- Remaining Recoverable Reserves about 2,600 BCM, spread across 12
tional and Indian government agencies. (RRR) of CBM were 1,230 BCM, states of India, over 26,000 sq.km of
August 2016
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InDepth
to extract CBM from its coal mines, under exploration, or from the yet to objections, and enable CBM explo-
subject to complying with various pro- be awarded blocks, or from the coal ration to commence.
cedures applicable to CBM activities. blocks that CIL may explore for CBM. Another crucial aspect is sale
CIL may extract CBM prior to coal They could also be from some of the price. Present policy allows CBM
mining operations, or do both activities blocks that have been relinquished. producers the price under the
simultaneously. Some blocks are given up because Domestic Pricing Guidelines of
of poor prospectivity for CBM. October 2014, which is USD 3.06/
Way forward Changes in technology or data analysis mmbtu (GCV) for April to Sep-
From the foregoing, it is seen that four may bring these blocks back into the tember 2016. The exception is
blocks together are able to produce reckoning - as often happens in the GEECL, whose PSC allows it to
about 8 mil sm3/d on long term basis. Exploration business. Other blocks charge higher prices: its average
So, the output of 76 mil sm3/d pro- may have been given up for non-CBM price for FY 2016 was $ 10.26/
jected in the IE Outlook would require reasons, such as lack of permission mmbtu, compared to $11 plus for
about 32 more similar blocks. These from various authorities. A change the previous two years. It may be
could be from the blocks presently in perspective may be able to resolve noted that the DGHs Hydrocarbon
E&P Activities Report for 2014-15
Another crucial aspect is sale price. Present policy indicates that CBM requires higher
breakeven price than conventional
allows CBM producers the price under the Do-
gas. The Indian Energy Outlook also
mestic Pricing Guidelines of October 2014, which assumes higher price realisation for
is USD 3.06/ mmbtu (GCV) for April to September CBM. In sum, unlocking the potential
2016. The exception is GEECL, whose PSC allows of CBM requires a lot more work
it to charge higher prices: its average price for FY on the ground, as well as a review
2016 was $ 10.26/ mmbtu, compared to $11 plus onpricing. 47
for the previous two years
For suggestions email at feedback@infraline.com
August 2016
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InDepth
LNG imports critical to rescue
gas-based capacity
48
Power and fertilizer sector are the leading end users of natural gas in India
Indo-Australian sub group to help in supplying cheap LNG for power plants
By Team InfralinePlus
With natural gas accounting for just will push up LNG terminal capacity to to their high efficiency, low gestation
about 9% of its overall energy mix, In- 47.5 million metric tonne per annum period, environmental factors, and
dia is trying hard to increase domestic (mmtpa) by 2022 from the current 21.3 requirement of less water and land
production. Indias Liquefied Natural mmtpa, according to the Ministry of compared to other fuel based power
Gas (LNG) sector is undergoing a ma- Petroleum and Natural Gas (MoPNG). plants. Various other policies such
jor transformation as it is set to occupy The power sector is the leading as recent updates in Gas Allocation
a crucial part in the countrys energy end user of natural gas in India along Policy have also been implemented
portfolio after the central government with the fertilizer sector and consumes to encourage use of gas in different
approved the use of imported gas for nearly one third of the total natural gas end user segments. Other policies that
power generation and fertilizer produc- produced in the country. Moreover, are expected to have a positive impact
tion. Now, Indias plans to set up new central government is increasing its on the countrys LNG market include
terminals and expand existing facilities focus on gas based power projects due E-bid RLNG for smoothing the supply
August 2016
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of imported spot RLNG to power Figure 1: Grid Connected Gas-based Power Plants:
plants and fertiliser industries. Ownership, Consumption and Plant Load Factor (PLF)
25 24
InDepth
Plans to shelve gas-based power plants along DMIC? and trade nearly 50 million tonnes,
accounting for about a sixth of global
The central government is said to have asked the state governments of
trading volume. Global output capacity
Madhya Pradesh, Maharashtra and Gujarat, along the Delhi-Mumbai Industrial
is expected to rise by half by 2020,
Corridor (DMIC) to consider using land allotted for five gas-based power
potentially adding some 150 million
plants to set up industrial areas or renewable energy projects following the
tonnes of LNG to the market.
non-availability of gas.
Increasing focus on expansion
The gas-fired projects, each with capacity of 1,000-1,200 MW, were to come of gas pipeline infrastructure in the
up in Madhya Pradesh, Maharashtra and Gujarat as part of the corridor. country, rising demand for natural
The gas-based power projects in the DMIC were to come up at Indapur in gas from power and industrial sectors
Pune (Maharashtra), Ville Bhagad in Raigad (Maharashtra), Vaghel in Patan and favourable government policies
(Gujarat), Rajpur-Shahpur in Mehsana (Gujarat) and Chainpura Industrial makes LNG a commercially viable
Area in Guna District (Madhya Pradesh). and suitable fuel for various end users
in India. As a result, LNG demand is
sell power from the plant commis- forecast to witness robust growth over
sioned in October 1997. Increasing focus on the next 5-10 years in India and project
expansion of gas developers will have an abundant
Spot purchase replacing pipeline infrastructure supply to run their plants not just at
term contracts in the country, rising 25-30% Plant Load Factor (PLF) but at
Mideast Gulf states are among the the required optimal levels of 80-85%.
demand for natural
worlds largest LNG producers and The uncertain future of Indian
Middle Eastern and Indian buyers
gas from power and domestic gas production has cascading
are turning away from term contracts industrial sectors and effects on the overall role of gas in the
50 to the spot market to procure gas for favourable government countrys energy sector. The impacts
power generation and fertilizer and policies makes LNG a have already been felt in the power
chemical production. The ability of commercially viable and sector where the PLF of gas-fired
buyers in the Middle East and India suitable fuel for various plants during the year averaged only
to import gas from around the world 18.64% in May last year and more
has encouraged growth in the regions
end users in India. As recently at 23.73% (May 2016) due to
spot LNG trade. Cargoes from a range a result, LNG demand unavailability of gas. As the economy
of traditional suppliers have moved is forecast to witness expands and industries and households
to the region, as has gas from some of robust growth over the increase their consumption of natural
the newest LNG producers, including next 5-10 years in India gas, the dependence on imported LNG
coal-bed methane operations in Austra- will only increase since the domestic
lia and one of the first exports from the worlds top LNG trader after buying output has been declining for years.
new US liquefaction plant at Sabine BG Group, expects to produce around
Pass on the Gulf coast. Shell, the 30 million tonnes of LNG this year For suggestions email at feedback@infraline.com
August 2016
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Total installed solar power generation concessional loan of USD 500 million,
capacity in the country touched 7,805 Clean Technology loan of USD 120 million
MW mark by June-end this year and Clean Technology Fund grant of USD
with Rajasthan topping the charts five million to State Bank of India for the
with 1,294.60 MW. Tamil Nadu and grid connected rooftop solar projects. As
Chhattisgarh followed Rajasthan with on June 30, 2016, estimates show that
grid connected solar power generation states will invest Rs 6,254 crore on solar
capacity of 1,267.41 MW and 1,123.36 power projects in the current fiscal, Goyal
MW respectively as on June 30, 2016, said. The estimated investments by states
New and Renewable Energy Minister on solar projects was Rs 18,113 crore in
Piyush Goyal said in a written reply to 2015-16 and Rs 6,672 crore in 2014-15.
Lok Sabha. In another reply, the Minister Government has planned to add over
said the government has taken several 10,000 MW of solar power generation
initiatives to achieve this target. He capacity during the current fiscal.
further said the World Bank has approved
August 2016
www.InfralinePlus.com
The ministry of new and renewable adequate land in many states. In Bengal,
energy has agreed on a proposal by solar around 300 acre of land is required for the
power expert SP Gon Chaudhuri to have necessary solar installations to gener-
land-neutral solar power installations ate the power but scarcity of land is the
on water bodies. There is a major dearth main hindrance, he said. The solar power
of adequate land in states like Bengal, expert said that to make up the unavail-
Bihar, Odisha and Assam to generate solar ability of land, floating solar panel instal-
energy to meet Indias target of 60,000 lations on water bodies is the only option.
MW of land-based solar energy under It is found that around 3 lakh MW of
the National Solar Mission by 2022. The solar power could be generated by tapping
National Institute of Solar Energy along around 10-15% of waterbodies. States like
with the city-based NB Institute of Rural stadiums to install floating solar panels in Bengal, Bihar, Kerala, Odisha and Assam
Technology headed by Gon Chaudhuri will Bengal. We expect the study to start off are the most potential ones for develop-
conduct a study to identify water bodies after the monsoons, Gon Chaudhuri said. ing land-neutral solar power technology,
and huge structures like rail stations and The problem is the non-availability of he said.
August 2016
www.InfralinePlus.com
With Karnatakas ambitious project of be placed before the cabinet for approval
harnessing 400MW of power through shortly. A total of 1.8 crore sqft warehouse
grid-connected rooftop solar plants rocked space will be available for installing
by scams, the government has come up photo-voltaic solar panels. Spread across
with an uncommon solution to fast-track 193 places across the state, while 1 crore
the project: Install solar power plants on sqft is readily available to start rooftop
rooftops of warehouses. Were lagging projects, the remaining 80 lakh sqft is
behind in meeting the 2018 deadline; under construction and will be readied
we have hardly managed to harness shortly. The cost of the warehouse solar
5MW of solar rooftop power so far. The projects is around Rs 1,200 crore. The
warehouses (godowns used for storing idea of using warehouses for solar power
agricultural commodities), operated by the to generate 162MW of solar power from generation was mooted by senior KAS
Karnataka State Warehousing Corporation these warehouses on the public private officer Rajesh Gowda, who moved out
(KSWC) and spread across the state, will partnership (PPP) model, officials said. as the managing director of KSWC, to
now have solar power plants. We hope A proposal to this effect is expected to promote clean energy.
August 2016
www.InfralinePlus.com
China has launched a risk alerting system to year, official data shows. However, a national
prevent further investments in wind power average of 26 percent of wind power gener-
generation in certain locations, after large ated in the first quarter of 2016 was wasted.
amounts of power were wasted due to inad- Jilin, Gansu and Xinjiang provinces were the
equate power transmission infrastructure. worst offenders with about half of their wind
The National Energy Administration (NEA) power generation wasted while Ningxia and
has given a red alert, or the highest warning, Heilongjiang lost a little more than one-third
to five provinces where new construction of their wind power, according to the NEA.
approvals and access to grid connections We estimate that over the course of the first
will be put on hold. Among the restricted six months, 4.2 billion kilowatt hours of wind
regions are Jilin and Heilongjiang in northeast user has seen a surge in new installations and solar power has been wasted, which is
China, along with Gansu, Ningxia and Xinjiang in the last decade, with 136 gigawatts of equivalent to New Zealands electricity use in
province in western China, all with high installed capacity as of May. Wind genera- the whole year of 2015, said Peng Peng, an
concentration of wind farms but only limited tion capacity increased by 32 percent during analyst with the Chinese Renewable Energy
grid connectivity. The worlds top wind power January to May against the same period last Industries Association.
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InConversation
LED market size in India to
reach Rs 21,600 crore by 2020
India is all set to become the biggest market for LED lighting in
the world, thanks to the regulatory and policy initiatives taken by
the NDA government as well as the path breaking work done by
Energy Efficiency Services Limited (EESL) - a Joint Venture of NTPC
Limited, PFC, REC and POWERGRID. Saurabh Kumar, Managing
Director, EESL, shares his vision on the energy efficiency industry in
India and what lies in store in the future. Excerpts:
Please share your outlook on the technology in India and fostered its
LED lighting industry in India, in subsequent demand in the country.
terms of market size, demand When we started out, LED bulbs were
and growth potential. quite expensive compared to CFLs
A phenomenal growth has been regis- or incandescent bulbs, each bulb
tered in the Indian LED market since was somewhere around Rs. 300-350. Saurabh Kumar, Managing Director, EESL
58 the launch of the UJALA programme Moreover selling a comparatively
as it has created demand for afford- costlier lighting option i.e. LED in a demand of 3,365 MW and is helping
able LED bulbs in the country. As price sensitive market such as India reduce over 37,296 tonnes of CO2
per estimations, the market size of was a challenge. EESL overcame emissions per day. With a vision of
the Indian LED industry will reach as this challenge with bulk procure- including 100 cities under the UJALA
high as Rs. 21,600 crore by the year ments from LED manufacturers in the scheme, EESL has now successfully
2020. In the year 2013, out of the country and benefitted from volume spread to more than 125 cities and will
Rs. 13,000 crore turnover of Indias discount. Interestingly, within one cover the whole country by 2019.
lighting industry, LED industry stood year of running this scheme, due to
at Rs. 1,925 crore. The UJALA pro- bulk procurements from indigenous What are the savings envisaged
gramme has played a significant role manufacturers the prices of LED due to the LED bulb program of
in creating awareness about LEDs in plummeted to about Rs. 55 per bulb. the Government in terms of peak
every nook and corner of the country This way we were able to effectively demand and reduction in carbon
and made the LED lighting technol- implement Government of Indias footprint?
ogy more popular in India. idea of efficient lighting throughout As already stated, with the distribu-
the country. tion of over 13 crore LED bulbs, the
Please outline the challenges country is saving 4,60,43,066KWh
in promoting LED as an energy Please update on the UJALA of energy every day. Avoiding peak
efficient source of lighting in scheme and progress achieved demand of 3,365 MW, it is further
India. How can we overcome so far. reducing over 37,296 tonnes of CO2
these? Under UJALA scheme, we have emissions per day.
The biggest roadblocks in LED light- distributed to over 13 crore LED bulbs
ing adoption in India have already in India, which are leading to energy What other initiatives are being
been taken care of by EESL. Prob- savings of about 4,60,43,066 KWh implemented by EESL towards
lems and bottlenecks are now not as every day. The total estimated cost sav- energy efficiency?
dominating as they used to be about ings per day through the distribution is Following are some other initiatives:
one year ago. EESL effectively cre- about INR 18,41,76,523. The scheme National Energy Efficient Fan Pro-
ated awareness of energy saving LED has further successfully avoided a peak gramme (NEEFP): National Energy
August 2016
www.InfralinePlus.com
Efficient Fan Program (NEEFP) was with street lights which consume less ones at its own cost ,i.e., without any
implemented by EESL for consum- energy, illuminate only the path- investment from Urban Local Bodies
ers under demand side management, ways, reduce light trespass and have (ULBs). The new lights being put
with the aim of benefitting the people improved colour rendering index. A in place consume less energy, have
from all socio-economic bands. Under way forward was planned and EESL drastic colour rendering index and
NEEFP, EESL aims to replace 35 began replacing the conventional illuminate only the focused area.
crore inefficient regular ceiling fans street lights with new energy efficient The street light contracts that EESL
across households with BEE 5 Star enters into with ULBs or municipali-
rated efficient ceiling fans by 2018. Under NEEFP, EESL ties is typically of a 7-year duration,
With the intent to give a significant wherein EESL not only guarantees a
thrust to the expansion of market for
aims to replace 35 minimum energy saving (usually of
efficient fan technologies in India, crore inefficient regular 50%) but also provides free replace-
EESL through its procurement of fans, ceiling fans across ments and maintenance of lights at
has brought the price of a fan down by households with BEE no additional costs to the municipal-
33 per cent to Rs. 955, when com- 5 Star rated efficient ity. In this scheme, EESLs invest-
pared to the market price. ment is recovered through the long
Streetlight National Programme ceiling fans by 2018. terms energy savings resulted by the
(SLNP): Street lights in India were With the intent to give new street lights. More than 878,319
recognised as the second most po- a significant thrust inefficient street lights have already
tential group resulting in significant to the expansion of been replaced with LED lights across
energy savings. The conventional the nation and work is in progress
lighting is not only a burden on
market for efficient fan wherein EESL has signed MoUs, en-
current energy production but the technologies in India, tered into agreements for SLNP with
insufficient lighting levels and bad EESL through its pro- state governments. The overall energy 59
colour rendering indices is a public curement of fans, has savings estimated from the completed
problem. It has been theoretically cities is about 318829.79 kWh per
stated that if illuminated street light
brought the price of day. The combined reduction of CO2
structures are visible from the sky, it a fan down by 33 per emissions taken from completed
is nothing more than light pollution cent to Rs. 955, when ULBs of different states is about 264
in the night sky. Here, the concept of compared to the mar- tonnes. EESLs business model for ef-
dark sky initiative was imbibed and ficient street lighting benefits munici-
ket price
research was carried out to come up palities by reductions in energy and
maintenance costs.
Agriculture Demand Side
Management (AgDSM): Indias
agricultural sector takes about 18%
of the total national electricity
consumption. As per the Central
Electricity Authority (CEA), there
are about 20.27 million pump sets
installed in agricultural sector. As
electricity supply is inconstant in the
rural regions, the farmers frequently
have to spend money on pump
repairs. This results in adoption of
rugged, locally manufactured pumps,
which are highly inefficient. The
average efficiency of existing in-
efficient pump sets is in the range of
20% - 30% whereas efficiency range
of new star rated Energy Efficient
August 2016
www.InfralinePlus.com
InConversation
Pump sets (EEPS) is 40% - 50%. no upfront cost to farmers and farmers, but also holds the potential
Therefore, there is a need to tap utilities and there is free repair and of transforming into a big business
the huge energy savings potential maintenance during project period. opportunity, where investments
promised in agriculture pumping EESL recovers costs from DISCOM can be recovered through monetary
sector. Under AgDSM proposition, through the annual energy savings energy savings.
replacement of inefficient agricultural achieved and there is reduction in EESLs Buildings Efficiency
pump sets is done with BEE star power purchase costs, peak load Programme: The way to sustainable
rated energy efficient pump sets to and load-shedding to DISCOMS. future lies in having smart infra-
reduce the energy consumption. It This opportunity not only reduces structure, that consumes less energy
has been experienced that the simple the costs of Government and the yet works better than the existing
payback period in these projects is setup. It has been estimated that on
2-3 years and total project duration an average, a building wastes about
EESL began installing
is 4-5 years. Here, EESL enters 30% of energy and if nothing was
into an understanding with the energy efficient lighting ever done to improve its efficiency,
farmers and DISCOMs to provide in government build- there is lot of room to bring about
with free BEE star labled pump set ings which not only a big change. What if we devise
and later recovers its investment methods to secure the 30% energy
resulted in improving
through received energy savings. loss in buildings and not let it go
Under AgDSM, about 4,423 pump the overall energy con- waste? The obtained savings can be
sets have already been replaced sumption but also gave used to add to the energy production
in Andhra Pradesh and Karnataka a better lighting output. and help to realise the dream of 24
combined. The AgDSM initiative X 7 uninterrupted power supply. In
This project is driven
has resulted in estimated savings of a fresh move to initiate this change,
about 229.7 lakh kWh of electricity by the inculcation of Government of India appointed EESL
60
per annum. In the above regions of Buildings Manage- to not only help make the existing
Andhra Pradesh and Karnataka, it ment Systems or the buildings energy efficient but also
was noted that well designed and improve their overall energy perfor-
BMS, which provides
targeted DSM programmes have mance. To start with, EESL began
proven to set examples and can be a comprehensive view installing energy efficient lighting
replicated at a large scale. The EESL into buildings energy in government buildings which not
model for Agricultural Demand Side consumptions through only resulted in improving the overall
Management (AgDSM) is beneficial energy consumption but also gave a
data driven live reports
for customers because there is better lighting output. This project is
driven by the inculcation of Buildings
Management Systems or the BMS,
which provides a comprehensive
view into buildings energy con-
sumptions through data driven live
reports. The BMS is supported by a
user-friendly software system that
exhibits energy trend analysis and
helps to optimize energy management
strategies to further reduce the
operational costs. EESLs buildings
programme has successfully been
completed at Niti Ayog, Shram
Shakti Bhawan, India Habitat Center,
UPSC building, IP Bhawan along
with others. Currently, work is being
carried out in more than 18 buildings
to make them more energy efficient.
August 2016
www.InfralinePlus.com
It was observed that on an average, Efficient Fan Program (NEEFP), was However, do you feel the same
EESL has successfully received implemented for consumers under has happened in the open
energy savings of about 19% on bills demand side management, with the market? Has the benefit of
with its completed buildings projects. aim of benefitting the people from all price reduction reached the end
socio-economic bands. Under NEEFP, consumer?
Please elaborate on your plans EESL aims to replace 35 crore inef- Before the initiation of LED bulbs
on energy-efficient fans. What ficient regular ceiling fans across under UJALA scheme the penetration
progress has been achieved households with BEE 5 Star rated of LEDs, the most efficient lighting in
under this initiative? efficient ceiling fans by 2018. With the market was less than 1%. How-
EESLs fan distribution scheme is the intent to give a significant thrust ever after the tremendous success of
also going on in Andhra Pradesh and to the expansion of market for effi- the scheme the penetration now raised
UP and we have huge distribution tar- cient fan technologies in India, EESL to 15-18%. The LED programme un-
gets in both the regions. With over 32 through its procurement of fans, has der UJALA is the largest in the world
million fans sold every year at a 20% brought the price of a fan down by 33 and the success of the programme is
annual growth rate, ceiling fans are per cent to Rs. 955, when compared visible through the daily uptake of our
one of the most economical options to the market price. LED bulbs which is now 350,000 to
(as and when compared to the Air 400,000. Government of India created
Conditioning Units). Reports suggest The price of LED bulbs has a conducive regulatory institutional
that almost every electrified house- come down drastically due to framework for fostering Energy Ef-
hold in India has at least one unit the Governments strong push ficiency initiatives. Under regulatory
for their summers. National Energy towards energy efficiency. perspective EESL was set up as the
market aggregator. LED has become
popular to the extent that small scale
Before the initiation of LED bulbs under UJALA LED industries have come up in India. 61
scheme the penetration of LEDs was less than Their prices are today as low as Rs.
1%. However after the tremendous success of the 65-75 per LED bulb. This model
scheme the penetration now raised to 15-18%. which is fundamental to National LED
programmes holds promise for other
The LED programme under UJALA is the largest appliances as well. Having said that
in the world and the success of the programme is need of the hour is to replicate the
visible through the daily uptake of our LED bulbs LED model to other appliances which
which is now 350,000 to 400,000 will help us achieve a higher scale and
I am glad to say that EESL is already
moving towards that.
InDepth
Coming together of solar and wind:
Govt announces draft Hybrid policy
62
By Team InfralinePlus
Indias Intended Nationally Determined meet those targets includes a National cum- demonstration project of 25 KW
Contributions (INDC) document to Wind-Solar Hybrid Policy, which capacity will be installed at the wind
United Nations Framework Convention aims to encourage new technologies turbine test station of National Institute
on Climate Change at Paris (COP21) involving combined operation of of Wind Energy (NIWE) at Kayathar,
last year signified a 2030 target to wind and solar plants. In June, 2016, Tootikudi District, Tamil Nadu. Under
achieve about 40% cumulative electric the Ministry of New and Renewable the programme, MNRE provides
installed capacity from non-fossil fuel Energy (MNRE), Government of Central Financial Assistance (CFA)
based energy resources, with the help India, had issued a draft national wind to community users for installation
of technology transfer and low cost in- solar hybrid policy with a target of of such systems. The total installed
ternational finance. Accompanying this implementing 10 GW of such hybrid capacity as on March 31, 2016 is 2.69
is a domestic goal to achieve 175 GW capacities by FY 2022. MW. There are 6 small wind turbine
of installed generation capacity through MNRE is also implementing a manufacturers and 9 models empan-
renewable energy (RE) sources by 2022. programme to promote the instal- elled under this programme. These pro-
The slew of measures the central lation of small wind energy and hybrid grammes have been highly successful
government is planning to undertake to systems (SWES). The first-such pilot- in the US and EU countries.
August 2016
www.InfralinePlus.com
Both Solar and wind sector than the transmission capacity/grid in the draft policy, given the eligibility
are complimentary connectivity allowed/sanctioned for of hybrid RE to meet the renewable
The draft policy comes in the wake of existing wind/solar project, according purchase obligation norms (RPO, both
how recent studies have revealed that to the draft policy, placing the onus of solar and non-solar) by the obligated
wind and solar projects can comple- size restrictions on the utility owner entities as well as continuation of
ment each other by minimizing the rather than on the government, which is all other policy & financial benefits
variability of the power output and responsible for transmission capacity. which are currently made available
easing pressure on the grid. The policy This will ensure that no augmentation to existing wind & solar projects. For
aims to encourage new technologies of transmission capacity is required, new hybrid wind-solar projects, the
and methodologies for such hybrid according to the policy statement. draft policy proposes to provide the
systems. Superimposition of wind and Policy & regulatory support is also developer with the option of using the
solar resource maps shows that there proposed towards the hybrid projects hybrid power for captive use, third
are large areas where both wind and so- party sale or sale to state electricity
lar have high to moderate potential. Ex- distribution utilities at prices deter-
isting wind farms have scope of adding
The draft policy comes mined by the state electricity regu-
solar PV capacity and similarly, there in the wake of how latory commissions for the project.
may be wind potential in the vicinity recent studies have The policy states, In case of
of existing solar PV plant... Suitable revealed that wind and new wind-solar hybrid projects, the
policy interventions are required not developer have option to use the
only for new wind-solar hybrid plants solar projects can com- hybrid power for captive use or third
but also for encouraging hybridization plement each other by party sale or may sell the hybrid
of existing wind and solar plants, the minimizing the variabil- power to Distribution Company (ies)
draft policy added. at a price determined by the respective
The main aim of the policy is to lay
ity of the power output SERC for that hybrid power project. 63
a framework for promoting large grid and easing pressure The hybrid power so purchased by
connected wind-solar PV system. This on the grid. The policy Distribution Company may be used
will be helpful for creating optimal and to offset both solar and non-solar
efficient transmission infrastructure
aims to encourage RPO. The hybrid power may be pro-
and land, reducing the variability in new technologies and cured through a transparent bidding
renewable power generation to achieve methodologies for such process under different mechanisms.
better grid stability. The hybrid power hybrid systems Parameters that may be considered
injected in to the grid will not be more for bidding could be total capacity
delivered at grid interface point, CUF
and unit price of electricity.
InDepth
StatisticsRenewableEnergy
Programme/ Scheme wise Physical Progress in 2016-17 Commissioning Status of Grid
(During the month of June, 2016) Connected Solar Power Projects
(as on 30-06-16)
FY- 2016-17 Cumulative
Total com-
Achievements
Sector Achieve- Sr. missioned
Target (as on State/UT
No. capacity till
ment 30.06.2016) 30-06-16 (MW)
I. GRID-INTERACTIVE POWER (CAPACITIES IN MW) 1 Andhra Pradesh 878.97
2 Arunachal Pradesh 0.27
Wind Power 4000.00 373.95 27151.40 3 Bihar 45.10
4 Chhattisgarh 93.78
Solar Power 12000.00 1031.48 7805.34 5 Gujarat 1,123.36
Small Hydro Power 250.00 30.32 4304.27 6 Haryana 15.39
7 Jharkhand 16.19
BioPower (Biomass & Gasification 400.00 29.50 4860.83 8 Karnataka 153.32
and Bagasse Cogeneration) 9 Kerala 13.05
10 Madhya Pradesh 790.37
Waste to Power 10.00 0.00 115.08
11 Maharashtra 385.76
Total 16660.00 1465.25 44236.92 12 Odisha 66.92
13 Punjab 520.70
II. OFF-GRID/ CAPTIVE POWER (CAPACITIES IN MWEQ) 14 Rajasthan 1,294.60
15 Tamil Nadu 1,267.41
Waste to Energy 15.00 0.00 160.16
16 Telangana 795.84
Biomass(non-bagasse) 60.00 0.00 651.91 17 Tripura 5.00
Cogeneration 18 Uttar Pradesh 143.50
19 Uttarakhand 41.15
Biomass Gasifiers 2.00 0.00 18.15 20 West Bengal 11.77
- Rural 21 Andaman & 5.10 65
8.00 0.00 164.24
- Industrial Nicobar
22 Delhi 23.87
Aero-Genrators/Hybrid systems 0.30 0.00 2.69 23 Lakshadweep 0.75
24 Puducherry 0.03
SPV Systems 100.00 3.40 325.40
25 Chandigarh 6.81
Water mills/micro hydel 1.00 0.00 18.71 26 Daman & Diu 4.00
27 J&K 1.00
Total 186.30 3.40 1341.26 28 Himachal Pradesh 0.20
III. OTHER RENEWABLE ENERGY SYSTEMS 29 Mizoram 0.10
30 Others(PSU/chan- 100.92
Family Biogas Plants (in Lakhs) 1.10 0.00 48.55 nel partner )under
Rooftop
Source: MNRE
TOTAL 7805.21
Source: MNRE
REC Trading Volume and Price for July 2016
Through IEX
Buy Bids Sell Bids Cleared Volume Cleared Price No. Of Month of
REC Type
(REC) (REC) (REC) (INR/REC) Participants Auction
Solar 23,944 2,036,891 23,944 3,500 565
July 2016
Non-Solar 139,250 7,287,207 139,250 1,500 953
Source: IEX
Through PXIL
MCV
Buy Bid Sell Bid MCP
REC Type (No. of certificate) Month of Auction
(No. of certificates) (No. of certificates) (INR / Certificate)
Qty. (MWH)
Non Solar 95757 5637674 1500 95757
July 2016
Solar 14029 1447749 3500 14029
Source: PXIL
August 2016
www.InfralinePlus.com
StatisticsRenewableEnergy
State-wise and Agency-wise Physical Targets under National Biogas and Manure Management Programme
(NBMMP) for the year 2016-17 for Family Type Biogas Plants (in Nos)
[* Subject to refund of outstanding amount of previous years lying with the State Govt. ]
[** Target not considered due to accounts from the year 2007-08 to 2014-15 are pending for settlement] [Targets to BDTCs considered as decided in the
Progress Review Meeting held under the Chairmanship of Secretary, MNRE on 29.03.2016 at MNRE, New Delhi]
[Note: Not exceeding the targets over 10% of the total as given in the last column]
[# For KVIC. Mumbai national target 8000 (6500 (5700 Gen.+800 NEZ) and 1500 SCP target}]
Source: MNRE
August 2016
www.InfralinePlus.com
OffBeat
Prime Minister Narendra Modis
Cabinet gets some new faces
19 new faces inducted in the Union Council of Ministers of which 17 are
from BJP
Five ministers tendered their resignation to Prime Minister Narendra Modi
67
By Team InfralinePlus
In a significant move, Prime Minister, Pradesh and Ramdas Athawale There is also fresh, young talent in
Narendra Modi, in July 2016, brought from Republican Party of India Apna Dals Anupriya Patel, 35, and
about a major reshuffle in the portfolio (Athawale) the Mansukh Mandaviya, who has
of Cabinet Ministers. The list of newly appointed worked in the agriculture sector in
Nineteen new faces have been ministers of state includes three Gujarat.
inducted in the Union Council from Uttar Pradesh, four from Five ministers tendered their
of Ministers by Prime Minister Rajasthan, three from Gujarat, resignation to Prime Minister
Narendra Modi, of which 17 two from Maharashtra (excluding Narendra Modi. They include
are from BJP, and two are Javadekar), two from Madhya Nihalchand, Ram Shankar Katheria,
representatives of allies -Anupriya Pradesh and one each from Sanwar Lal Jat, Manuskhbhai D
Patel from Apna Dal in Uttar Uttarakhand and Assam. Vasva and M K Kundariya.
August 2016
www.InfralinePlus.com
OffBeat
Supreme Courts order on revision of tariff under PPA positive for Gencos: ICRA
that are uncontrollable. While these orders the Gujarat Urja Vikas Nigam (GUVNL). TIL
are a positive development for the indepen- operates two small hydro power projects of 3
dent power producers, it is assumed that tar- MW and 2.6 MW, while JPPPL operates a 10
iff re-determination or compensation-related MW biomass-based power project in Gujarat.
issues are unlikely to be resolved quickly. Supreme Court has also recently refused
Further, orders issued by power regulators - to stay proceedings by Central Electricity
whichever way they may favour - are likely to Regulatory Commission (CERC) in case of
70 be contested and Supreme Court has noted in tariff compensation matter for Coastal Gu-
one of the cases that the final orders issued jarat Power (CGPL) and Adani Power (APL).
by the regulators shall be subject to scrutiny, This is a positive for these power producers,
Sabyasachi Majumdar, Senior Vice President, given that CERC is currently evaluating tariff
ICRA believes that the recent Supreme ICRA said. On July 5, 2016, Supreme Court compensations, post APTELs order dated
Court orders upholding statutory powers of upheld an order issued by Appellate Tribunal April 7, 2016. The tribunal had directed CERC
state power regulators to review tariffs of for Electricity for re-determination of tariff to assess the extent of the impact of force
power purchase agreements is a positive de- by Gujarat Electricity Regulatory Commis- majeure events on the projects of APL and
velopment for generation entities. This would sion in case of power purchase agreements CGPL and provide them such relief as may
cover generation companies that are in dis- signed by IPPs - Tarini Infrastructure (TIL) be available under the respective power
pute with buyers over tariff review for events and Junagadh Power Projects (JPPPL) with purchase agreements.
A wind energy start-up landscape study by ers and acquisitions in power sector had also
Traxcn has revealed that top investors bet on increased 1.5 times in India during the first
start-ups that are focused on power genera- half of 2016, according to EY. There were 17
tion, and then manufacturing. The study has deals worth $1.6 billion during the January-
also revealed that start-ups based in India May period compared to 15 deals worth
comprised 50 percent of start-ups across the $601million in the year-ago period. Greenko
world that received top investments in July Energy Holdings ($230 million), ReNew Power
2016. Power generation start-ups attracted Ventures ($265 million), Tata-owned Welspun
the highest investment - worth $7.08 billion, Renewables ($617 million) were cited among
while manufacturing received a total invest- the firms that received top investment since
ment of $1.68 billion over the last few years. category, Hyderabads Greenko Group ($737 2015. Traxcn, the research firm that curates
This trend in the start-up ecosystem coincides million) and ReNew Power Ventures ($655 and monitors start-up investments, also noted
with the governments target of generat- million) ranked first and second, respectively, that the average ticket size of investments
ing 175 MW of energy by 2022 out of which among the most funded companies. Suzlon per year was highest in 2016 at $115 million,
60 MW (or 34.3 percent) would be derived ($552 million) topped the manufacturing though 2015 saw the highest total funding in
from wind energy. In the power generation companies that raised funding last year. Merg- the sector at $2.7 billion worldwide.
August 2016
www.InfralinePlus.com
Investments to the tune of more than report said. The government would need
Rs 10 lakh crore would be required in to take steps to promote smooth land
coal mining and allied sectors like power, acquisition, easy availability of water,
steel and cement to achieve the target augment infrastructure for logistics,
of 1.5 billion tonnes of coal production by develop coal washeries, capacity building
2019-20, according to the latest PwC-ICC and skill development to provide the
report. India has set an ambitious target support system for developing a cohesive
of 1.5 billion tonnes (BT) of domestic environment for achieving the target, it
coal production by FY 2020 and will need said. Additionally, focused efforts are
huge investments adding up to more than required from all stakeholders, especially
Rs 10 lakh crore in coal mining and its governments, industry players, investors,
allied sectors like power, steel, cement, funding agencies and infrastructure
infrastructure for logistics, and coal developers, it added.
washeries for achieving this goal, the
August 2016
www.InfralinePlus.com
People in News
Utpal Bora made OIL chief amid Assam field auction protests Rani Singh Nair appointed CBDT
chairperson
India chairman comes amid mounting
protest from the BJPs allies against the
auction of 12 small discovered oil and gas
fields in Assam as part of the Centres
plan to attract private investments for
developing 67 such discoveries across the
country. These discoveries were made by
state-run ONGC and OIL, who returned
the fields because restrictive condition
made them commercially unviable. These
conditions have been relaxed for the
auctions. Bora is at present an executive Senior Indian Revenue Service (IRS)
director with ONGC and runs the flagship officer Rani Singh Nair has taken over as
The government has appointed Utpal explorers Mehsana field in Gujarat. It is the new chairperson of Central Board of
Bora as the full-time chairman of Oil companys largest onland asset with 1,552 Direct Taxes (CBDT), the policy-making
India Ltd after a gap of more than a operational oil and gas wells that produce body of the Income Tax department under
year, during which the countrys second- 6,000 tonnes of oil per day and 5.3 lakh the Union Finance Ministry. Her predeces-
largest oil producer has seen a steady cubic metre gas a day. sor Atulesh Jindal, who was appointed
decline in output. The appointment of Oil CBDT chief in February this year, retired
recently. Nair, a 1979-batch IRS officer of
D Rajkumar appointed CMD of BPC the Income Tax cadre, worked as member
(Legislation and Computerisation) at
(CMD) of Bharat Petroleum Corporation. CBDT. An order of her appointment was
Rajkumar is, at present, working as Man- issued by the Appointments Committee
72 aging Director of Bharat Petro Resources of Cabinet, headed by Prime Minister
Ltd, a unit of BPCL focused on exploration Narendra Modi. For Nair, who will be in
and production. He has been appointed to office till 31 October, an important task
the posts for five-year term, an order is- would be to oversee effective execution
sued by the Department of Personnel and of the ambitious one-time domestic black
Training (DoPT) said. Rajkumar will take money disclosure programme, also called
over the charge on or after October 1, 2016 the Income Declaration Scheme (IDS).
after retirement of BPCLs current chief S IDS is set to close on 30 September. Nair
Varadarajan in September. BPCL is a state has been instrumental in framing the pro-
refiner and retailer. cedures and protocols that led to the roll-
out of IDS on 1 June 2016. The scheme
Technocrat D Rajkumar has been appoint- aims at bringing undisclosed income and
ed as Chairman and Managing Director assets into the tax net.
In a major reshuffle at the secretarial of Civil Aviation, has been moved to the
level of the Central government, senior Ministry of Labour and Employment as
IAS officer Aruna Sharma will take Officer on Special Duty. She will take
charge as Secretary of Ministry of Steel, charge as Secretary after the incumbent
while Aruna Sundarajan will take over Shankar Agarwal retires. Sathiavathys
as Secretary, Ministry of Electronics replacement in the Directorate General
and Information & Technology. In other of Civil Aviation has not been announced.
changes, Bhanu Pratap Sharma, Secretary, Dinesh Singh, Special Secretary,
Department of Health and Family Welfare Ministry of Statistics and Programme
has been moved to the Department of Implementation, has been moved to
Personnel and Training as Secretary. AK Department of Land Resources as Officer
Dubey, Special Secretary, Ministry of Coal charge as Secretary after the incumbent on Special Duty. Singh will take over as
will join the Department of Youth Affairs Rajiv Gupta retires. Further, M Sathiavathy, Secretary once the incumbent VS Madan
as Officer on Special Duty and will take Director General, Directorate General retires.
Exclusive Information Covered in
the recent past:
Monthly Trend Analysis and YoY Growth
Regarding Production of Coal by CIL & SCCL
Monthly Indias Coal & Coke Import Summary
Monthly Trend Analysis and YoY Growth
Regarding Offtake & Despatch Performance of
CIL & SCCL
Spot E-Auction Prices and Allotment
Detailed Profiling of Coal Blocks Covering Data
on Geological Reserves, Lease Area, Clearances,
Coal Extracted etc
Coal Sector
Knowledgebase
The Coal Knowledgebase has comprehensive coverage of 200+ coal block profiles, allocation and
de-allocation status, coal import data (port/country/type wise), coal production statistics, coal
pricing. It also provides latest information on Coal India Limited and its subsidiaries, coal washeries,
regulations, fuel supply agreements, spot and forward E-auction, Offtake/Dispatch of coal and
demand supply
For any further information, kindly contact us on the below mentioned coordinates:
Ruchi Sharma, AVP - Business Development
Phone: +91 120 6799126, Mobile: +91 9560626529
Email: ruchi.sharma@infraline.com
RNI No: DELENG/2012/45441