December 2016

Volume 5 | Issue 8 | `100

www.InfralinePlus.com

The Complete Energy Sector Magazine for Policy and Decision Makers

Rise of Donald Trump to

change global energy dynamics

Thermal power developers Need to link domestic

feel the stress over coal pricing with
plunging financials international market

Rajiv Agrawal Sandeep N Gupta Prafulla Pathak Sukhdeep Brar

Secretary, Indian Captive Power G.M., Business Development, Secretary General Former IAS officer
Producers Association Linde Engineering India Pvt. Ltd Solar Energy Society of India World Bank official
 Intelligent Transport System
A Game Changer

on 18th January, 2017

The aim of the conference is to explore possible ITS implementations and
opportunities in the region to provide solution to various Road Traffic Control,
Railways, Aviation & Maritime issues.
Intelligent transport systems vary in technologies applied, from basic management systems
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and information systems. Additionally, predictive techniques are being developed to allow
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We have now decided to introduce an intelligent traffic system under the new Motor Vehicle Act. The
new statute is likely to be passed during the coming winter session of Parliament Nitin Gadkari

Media Partner

To know more, please contact:

Rahul Tandon, Email: rahul.tandon@whizabstracts.com, +91-9811442305 (M)
InfralinePlus
The Complete Energy Sector Magazine for Policy and Decision Makers
December 2016 | Volume 5 | Issue 08

Editors Letter Editorial

Shashi Garg, Editor
History was made on November 9th with two major
developments shaking the world. While their epicenters
were at New Delhi and Washington DC, the tremors were News Team
felt across the globe. On November 8, India decided to Chetan Gupta
demonetize Rs 500 and Rs 1000 currency notes in a
proactive move to weed out black money and corruption
as well as to put an end to illegal funding of cross-border Analyst
terrorism. As Prime Minister, Narendra Modi, announced
Mohd. Arif
this move, hours later, another history was made, but
this time across the border Election of Donald Trump
as the President of USA. Both these developments will
have an important bearing on the future. While demonetization will seek to revive the Content Consultant
domestic economy by cleansing it of black money, the rise of Donald Trump to the News Monster
US Presidency will have a significant impact on global economy and will also add a
new spin to energy dynamics.
With Trumps rise to the helm, there is an increasing skepticism over the future
of renewable energy across the world given his strong views on global warming,
which he described as an expensive hoax. There are fears that it may derail the
fragile global progress to tackle climate change and risk undermining the growth of Business Development
green energy worldwide. On the other hand, fossil fuels may get a new lease of life, Manoj Narang, Director
with Trump claiming to access $50 trillion in untapped shale, oil and natural gas
Tel.: 0120-6799106 / 100
reserves, plus hundreds of years in clean coal reserves in USA. We will have to wait
for some time to see how his energy policy unfolds. Email: manoj.narang@infraline.com
Back home, demonetization has impacted one and all. Infact, financial experts are
of the view that, in the long term, demonetization will lead to a spurt in economic
activity, which will in turn push GDP growth to 10%. Further, it is likely to destroy
about Rs 4 lakh crore worth of cash held in black money and fake currency, which Advertisement
constitute about 12% of the black economy in India, which will add to economic Ashwini Solomon
growth. Energy and infrastructure sector is not expected to face the brunt of this
move in any major way. Tel.: 0120-6799157/100
Mobile: +91 9811708110
The power sector, however, is grappling with a major issue due to the rising incidence 3
of stressed assets. Despite the coal block auctions and a pick-up in pace for Email: ashwini.solomon@infraline.com
clearances, developers have been unable to revive plans and take up new projects. advertising@infraline.com
Several equipment manufacturers are hamstrung as most developers are dealing with
stretched balance sheets and banks are jittery about potential bad assets from the
sector. Low asset utilization is making it difficult for power producers to service debt.
Circulation & Subscription
Nonetheless, there have also been quite a few positives. The oil and gas sector
finally saw some action this month, with the Government deciding to auction small Sneha Pandey
oil fields. Nearly 73% of contract area under offer received bids, with 42 firms placing Tel.: 0120 6799125
bids for 34 contract areas out of 46 total areas on offer. The move is significant as Email: sneha.pandey@infraline.com
production of hydrocarbon from these fields would help India cut down imports to
the tune of Rs 3,500 crore annually.
In the coal sector, the Governments decision to adopt technology to check rising
incidence of illegal mining is a welcome move. Illegal mining in India has become
a menace and can be a major hindrance for the government to achieve its targets. Form IV
In this regard, the Mining Surveillance System (MSS) was recently launched which Periodicity of its Publication: Monthly
uses automatic remote sensing detection technology to check illegal mining. It is Printers / Publishers /
Mrs Shashi Garg
Editors / Owners
imperative that this technology is implemented across the country at the earliest.
Nationality Indian
While India has made rapid progress in the renewable energy sphere, the rooftop 14-D, Atmaram House, 1, Tolstoy Road
solar segment continues to lag behind. As India embarks on its ambitious program Address
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or shareholders holding more than one percent of the total capital Owner:
M/s Infraline Technologies (India) Private Limited, 14-D, Atmaram House,
SHASHI GARG 1, Tolstoy Road, New Delhi - 110001
Managing Director and Editor Shareholders holding more than one percent of total Capital of the
InfralineEnergy Research and Information Services owner Company
1. Mrs Shashi Garg, 60, Siddhartha Enclave, New Delhi-110014
2. Abhav Garg, 60, Siddhartha Enclave, New Delhi-110014
Registered Office Branch Office
I Shashi Garg hereby declare that the Particulars given above are true to
14th Floor, Atmaram House, Noida the best of my knowledge and belief.
1, Tolstoy Road, New Delhi - 110001 A-31, Sector 3, Noida Sd
Email: business@infraline.com Tel.: 0120-6799100 Mrs Shashi Garg
Signature of the Publisher
 December 2016
www.InfralinePlus.com

InfralinePlus

Contents
Editors Letter
3

Cover Story 31
US elections: Rise of
Donald Trump to change
global energy dynamics
Donald Trump remains an unknown
quantity and nobody knows exactly
what his energy policy will be like.
However, if his campaign rhetoric
is anything to go by, Trump presi-
dency could prove to be a boon for
fossil fuel consumers. Trump has
said he is in favour of removing oil-

31
sector regulations, opening federal
land to drilling, while pledging to
support the coal industry.
4

Power Coal
6 19
News Briefs p6 News Briefs p19
Expert Speak: Rajiv Agrawal, Secretary, Indian In Depth: Need to link domestic coal pricing with
Captive Power Producers Association p10 international market p22
In Depth: Thermal power developers feel the stress In Depth: Curbing illegal mining: India explores use of
over plunging financials p13 satellite-based Mining Surveillance System p26
Statistics p17 Statistics p29

Topics Covered Topics Covered

Captive power plants Theft of coal
Stressed power assets Coal surveillance technology
Power transmission Coal pricing
 December 2016
www.InfralinePlus.com

Oil and Gas Renewable

36 48
News Briefs p36 News Briefs p48
Expert Speak: Sandeep N Gupta, General Manager, Expert Speak: Prafulla Pathak, Secretary General,
Business Development, Linde Engineering India Solar Energy Society of India p53
Pvt. Ltd p39
Expert Speak: Sukhdeep Brar, former IAS officer and
In Depth: Govt moves ahead with auction of small oil World Bank official p55
fields p41
In Depth: Solar Rooftop a vital cog in governments
In Depth: Moving towards Methanol Economy key to push for 100 GW solar capacity p58
reduce oil dependence p43
Statistics p61
Statistics p46

Topics Covered Topics Covered

Oil exploration Price parity
5
Improving refinery margins Pollution control
Alternate fuels Solar rooftop

Expert Speak/Interview Event-Focus

63
International Shale Gas and Oil Workshop - 2016

Rajiv Agrawal Sandeep N Gupta

Secretary, Indian Captive Power G.M.- Business Development,
Producers Association Linde Engineering India Pvt. Ltd.

Off Beat
Demonetization impact positive for energy and
infrastructure sector
67
Reports & Studies
73
People in News
Prafulla Pathak
Secretary General
Sukhdeep Brar
Former IAS officer and
74
Solar Energy Society of India World Bank official
 December 2016
www.InfralinePlus.com
NewsBriefs | Power National
PowerGrid to set up energy highways to meet demand growth
Power Grid Corporation of India Limited
(PGCIL) is planning to build energy
highways across the country to meet a
projected growth in demand and ease the
load on the national grid. The highways
include 11 high-capacity corridors, each with
a capacity of about 4,000 Mw, and three
BHEL bags export orders from Togo, Benin
State-run power equipment maker BHEL
has expanded its footprint in the international
market by securing export orders for supply
of industrial motors to the African nations
6 of Togo and Benin. Scancem International
DA, Norway (Heidelberg Cement group) has
placed the order for the motors for their ce-
ment plants, Ciments Du Togo S.A. &Cimbenin
S.A, Benin. The motors will be manufactured
and supplied by BHELs Bhopal unit. BHEL has
been present in the African continent almost
since its export journey commenced 45 years
back and has references today in almost half
of the African continent. The company has
recently built 500 MW Kosti Thermal Power
Plant - the largest in Sudan. The plant was
Slow progress in commissioning private sector hydro projects
Indicating slow progress in commissioning
of hydro power projects by the private
sector, only 3,269 megawatts of capacity
has been operationalised so far out of the
overall plans for 38,039 MW across the
country. As many as 120 hydro projects
with a total capacity of 38,039 MW
were conceived by the private sector but
unfortunately 3,269 MW could be made
operational. These 20 operational hydro
power projects with generation capacity of
3,269 MW include even small hydro power
units of above 3 MW. As per the CEA data,
19 private sector hydro power projects
having a total capacity of 4,555 MW are
under construction while there are 22
high-capacity HVDC (high-voltage, direct
current) systems (6,000 Mw each). The
central transmission utility will also develop
eight inter-state transmission systems
(ISTS) or green energy corridors to help
the renewable energy sector. The ones to
come up first would be to connect the solar
power parks in Rajasthan, Madhya Pradesh,
Karnataka, Andhra Pradesh and Gujarat.
PGCIL is constructing the first phase of
green corridors connecting renewable-
rich states. The investment planned for
these projects is Rs 1.12 lakh crore, with
the energy highways costing Rs 58,000
crore and the HVDC systems Rs 12,000
crore each. The cost of the ongoing green
corridors is Rs 18,000 crore.
inaugurated by President of Sudan Omer
Hassan Ahmed El-Basheer. The project came
close on the heels of the successful commis-
sioning of BHELs 28 MW Nyaborango Hydro
project in Rwanda, 2x20 MW Steam Turbine
and Generators for cogeneration application at
Tendaho Sugar Factory in Ethiopia.
projects with 15,058 MW capacity whose
detail project reports (DPR) were approved
Power generation up 6.5 percent at
632.11 BU in Apr-Sept this fiscal
Power generation in the country
recorded a growth of 6.5 per cent in
April-September period this fiscal at
632.11 billion units (BU) compared to
year ago period. Electricity generation
during the current year was more as
compared to previous year. The power
generation including from renewable
sources during April to September, 2016
was about 632.11 BU as against 593.68
BU during the same period last year
showing a growth of 6.5 per cent, Power
Minister Piyush Goyal recently stated in
written reply to Lok Sabha. According
to the reply, 681.09 BU were available
against the power demand of 686.09
BU during the April-October period this
fiscal recording a deficit of 0.7 per cent.
In 2015-16, this deficit was 2.1 per
cent. Similarly, against the peak power
requirement of 1.59 GW, as much as
1.56 MW was available in April-October
period, resulting in peak power deficit
of 1.6 per cent. Last fiscal, peak power
deficit was 3.2 per cent.
by the authority. At present, the CEA is
examining DPR of six hydro power projects
having capacity of 3,317 MW while reports
of 16 such projects of 5,338 MW capacity
were returned to private players for
resubmission. Private players are still
preparing DPR of 31 hydro power projects
having a total capacity of 6,502 MW.
According to Power Minister Piyush Goyal,
the reasons for delay in respect of hydro
projects under construction in private
sector mainly include law and order
issues, rehabilitation and resettlement,
natural calamities, geological surprises,
environmental clearances, financial
constraints, etc.

NewsBriefs | Power National
CERC for change in power transmission bid rules
To expedite development of the power
transmission network and avoid delay, the
Central Electricity Regulatory Commission
(CERC) has emphasised to the Power min-
istry the need to give out large projects,
instead of breaking these into parcels. This
comes in the wake of increasing numbers
of petitions, arguing over the dates of
NTPC-BHEL power gear unit finally up, but downsized
After eight years, many twists and turns
and delays, the Rs 6,000-crore joint venture
between two public-sector majors
NTPC and BHEL to manufacture power
equipment has finally got into production
mode at Mannavaram in Chittoor district
of Andhra Pradesh. The NTPC-BHEL
Power Projects Limited (NBPPL), whose
foundation was laid by former Prime
Minister Manmohan Singh on September
1, 2010, has seen an investment of Rs
363.94 crore, in what is termed as Phase-I,
and got into commercial production in
mid 2015. Perceived as the first major
manufacturing unit in the public sector that
would be a game-changer in the backward
Private capacity accounts for 41 percent of total power generation in India
Favourable government policies have boosted
private investments in power generation over
the last decade and resulted in significant
capacity additions, according to FICCI.
From 17 GW in 2006-07, private capacity has
moved up to 124 GW in 2015-16, constituting
41 percent of the total generation portfolio of
302 GW in the country. To examine the busi-
ness environment in which the commissioned
plants are being operationalised and the new
capacities in pipeline to be mainstreamed,
FICCI took up a unit-wise analysis of the
project shelf of base load generation taken up
by independent power producers (IPPs) with
coal as fuel. Constraints of power purchase
agreements (PPA) as well as fuel supply
commissioning, incentives and the delays.
As there is no benchmark for implementa-
tion of a project, the network operator also
misses on the chance to earn incentives
for early commissioning. Suggesting a way
forward, CERC said large projects, not
components of large projects, should be
awarded. In the case of a new transmis-
sion network, splitting into components
and award through tariff (rate)-based
competitive bidding (TBCB) complicates
the execution. Therefore it is advisable to
identify the entire network for develop-
ment through TBCB, instead of compara-
tively smaller elements, commissioning of
which depends upon commissioning of all
upstream/downstream elements.
Rayalaseema region of Andhra Pradesh, the
project was sanctioned in 2007 and a JV
agreement signed on December 17, 2007.
After initial fast-track moves, it ran into
rough weather.
agreements (FSA) are majorly restricting
these plants from approaching the power
market and finding buyers, the study reveals.
An aberration is that while investments have
been made in new generating assets, the IPP
industry stands fragmented in various capac-
December 2016
www.InfralinePlus.com
Canada back as partner in civilian
nuclear programme after 42 years
Canada has agreed to help modernise
Nuclear Power Corporation of India
Ltd (NPCIL), a development that
comes 42 years after it withdrew from
Indias civilian nuclear programme
in the wake of the nuclear tests
done by the country. It is learnt that
Canadian firms could produce nuclear
reactor components in India following
discussions between the two sides at
the recently conducted fourth round
of India-Canada Nuclear Cooperation
Agreement Joint Committee meeting
in Ottawa. The two sides also explored 7
investments in the civil nuclear
sector under PM Narendra Modis
Make in India initiative. Canada
had withdrawn from Indias civilian
nuclear programme after Pokhran-I
test in 1974 reportedly involving
CANDU (Canada Deuterium Uranium)
reactors operational in the country.
Subsequently Nuclear Suppliers Group
(NSG) was formed in reaction to Indias
nuclear tests.
ity compartments according to their FSA
and PPA status with limited or no market
access. The study also shows that 46 GW out
of installed capacity of 71 GW of coal-based
IPP plants are in operational stress attribut-
able largely to absent FSA and PPA, but also
to financial and regulatory issues. Taking
together the commissioned and pipeline
projects of private developers as at August
2016, aggregate coal-based capacities
without FSA and PPA are seen to be in the
range of 26-28 GW and 41-43 GW, respec-
tively. Market corrections are necessary to
optimally utilise these generating assets and
avoid stress on the banking system by ensur-
ing the operational cash flows.
 December 2016
www.InfralinePlus.com
NewsBriefs | Power States
T&D losses in Andhra Pradesh dip to 9.98 per cent
Energy utilities of Andhra Pradesh, making
rapid strides on various fronts, achieved
yet another distinction by bringing down
the transmission and distribution (T&D)
losses to a record 9.98 per cent, lowest in
the country, in the first half of the current
fiscal. The state currently boasts of a zero
deficit in energy availability and has been
successfully implementing 247 Power
ADBs $48 million loan to help Assam improve power distribution
Asian Development Bank (ADB) will provide
the second tranche loan of USD 48 million to
Assam to help the state expand and upgrade
its power distribution system. This is the
second tranche loan of the USD 300 million
8 multi-tranche financing facility for the As-
sam Power Sector Investment Programme
that was approved by the ADB Board in
July 2014. The project will help Assam to
enhance capacity and efficiency of its power
distribution system to improve electricity
service to end users. An agreement regard-
ing the second tranche was signed between
ADB and the Union Government recently to
help Assam continue its drive to improve
access to efficient and reliable power. In
No Chhattisgarh power till March-end
Availability of power purchased from
Chhattisgarh is unlikely for the rabi crop as
second phase of laying electric cables from
Dichpally to Maheshwaram is going to be
extend till March-end stretching beyond
the deadline. It may be recalled that Chief
Ministers of Telangana and Chhattisgarh
on November 3, 2014 inked a pact on
supply of 1000 mw to Telangana by
Chhattisgarh. Telangana power distribution
companies on September 22, 2015 entered
into power-purchase agreement with the
Chhattisgarh counterparts. The major
impediment in executing the agreement
was lack of electric lines. They should
be laid from Wardha in Maharashtra to
for All since September 2014. The state
annually consumes 50,000 million units of
power with the cost of service pegged at
Rs 5.33 a unit but the demand is expected
to increase exponentially due to increased
industrialisation. As metered sale of power
rose by one per cent from 72 per cent last
year, power utilities could save Rs 270
crore annually. Early this month, the World
Bank ranked Andhra Pradesh as the best
state in the country in implementing energy
efficiency and conservation measures. The
Power Transmission Corporation of AP has
brought down T&D losses from 12.6 per cent
in 2014-15 to 10.60 per cent in 2015-16 and
now to 9.98 per cent in the F1 of 2016-17
financial year.
the first tranche, ADB had provided loan of
USD 50 million in February last year. The
project, which is expected to be completed
by December 2019, will help APDCL add an
additional substation capacity, expand and
improve medium voltage network.
Telangana via Chhattisgarh. Soon after
the agreement, work relating to laying
cables from Chhattisgarh to Dichpally in
J&K fails to meet deadline for
achieving 1st milestone under UDAY
Jammu and Kashmir Government has
failed to meet the deadline for achieving
the first milestone fixed by the Union
Power Ministry under its Ujwal DISCOM
Assurance Yojana (UDAY) Scheme
as feeder metering has yet not been
completed particularly in rural parts
of the State. Moreover, the Power
Development Department has not
ensured compliance to the directives
of State Electricity Regulatory
Commission (SERC) on furnishing action
plan for implementation/achievement
of operational milestones agreed to by
it in a Memorandum of Understanding
(MoU) signed with the Government
of India. The J&K Government had
entered into an MoU with the Union
Ministry of Power on March 15, 2016
under UDAY Scheme for operational
and financial turnaround of the States
Power Development Department. Under
the scheme, the PDD has committed
to achieve 11 operational milestones
within the timelines fixed by the
Ministry of Power.
Nizamabad district commenced. It will
conclude by January second week. The
second phase work of laying the cables
from Dichpally to Maheshwaram in Ranga
Reddy district should be completed by
March, but are likely to be extended till
March-end. The current demand for power
134 million units is likely to increase
to 200 million units during the January-
March period. NTPC produces 20 million
units and SCCL 16 million units. Non-
conventional energy sources to contribute
35 million units to the state, which is to get
22 million units from Andhra Pradesh. The
surge in demand is likely to be up by 50 per
cent in near future.

NewsBriefs | Power International
Over 17,000MW to be generated under China-Pakistan Economic Corridor projects
As many as 17,045 megawatts of energy
will be generated through energy projects
spreading all across under the China-
Pakistan Economic Corridor (CPEC). These
energy projects initiated under the CPEC
project would not only help overcome the
existing energy crisis faced by Pakistan
Chinese power generators face tougher times as deregulation sparks competition
Ongoing deregulation in Chinas electricity
market has heightened price competition
and squeezed profitability among the
nations power generators amid capacity
oversupply but they have yet to feel the
full force of market-based pricing due to
the absence of a spot market. National
Energy Administration chief engineer Han
Shui recently said that the regulator aims
to complete the revamp of transmission
and distribution tariffs by the end of next
year, and will start trial spot market
power trading by the end of 2018 and fully
operate it in 2020. It also plans to finish
work related to the opening of the retail
market to new players after state-run
Indonesia takes steps to increase power capacity by 6 GW
Indonesian state-owned Perusahaan
Listrik Negara (PLN) is attempting
to improve the countrys ability to
meet increasing economic demand for
electricity by getting stalled power
projects off the ground. 34 power plant
projects worth in the region of $828.8m
have been held up for the last seven
years. The projects were part of former
president Susilo Bambang Yudhoyonos
administrations fast track programmes
and account for 627.8 MW in capacity. 11
of the plants are coal-fired and PLN have
decided to convert many of these to gas-
fired power as they are quicker to build.
The other 17 will continue as planned and
but would produce surplus electricity for
benefit of the country. As many as 1,100
MW electricity generated through these
projects would be included in the national
grid by 2016. During the year 2017 about
1,650 MW electricity would be included
in the national grid system while projects
of 3,270 MW capacity would become
operational by 2018. The additional projects
of 2,250 MW capacity would be completed
after 2018. Currently work on 1,320 MW
coal-fired power project Sahiwal is in
progress and work on 1,320 MW Port Qasim
Coal project is also going on which would
generate 660MW electricity by 2017 while
the remaining 660 MW would be ready for
consumption by 2018.
monopolies are broken. It is the clearest
timetable yet for deregulation in the
highly regulated electricity market since a
blueprint was outlined in 2002.
Widodos ambitious program to procure
within the International Energy Agencys
recommended level of 20 to 35 percent.
the remaining six will be taken over and
continued by PLN through engineering,
procurement and construction (EPC)
contracts. Apart from handling the
December 2016
www.InfralinePlus.com
China starts to build its first
floating nuclear power reactor for
deployment off coast
China has started to build its first
floating nuclear power reactor, which
it plans to deploy off its coast by the
end of the decade. State-controlled
China General Nuclear Power Group
(CGN) has begun construction of the
ACPR50S reactor, and will acquire the
reactor pressure vessel that encloses
the reactor core from Dongfang Electric.
The 200-megawatt reactor will help
power offshore facilities in Chinas open
sea and island reefs, CGN said, adding
that offshore energy supply is an issue
that China has to overcome in order to
9
become a naval power. The ACPR50S
project was approved by the National
Development and Reform Commission,
the countrys state economic planner,
earlier this year, together with plans for
China National Nuclear Corps ACP100S
floating reactor and China Shipbuilding
Industry Corps proposal to turn an
offshore military nuclear facility into a
floating power station for civilian use.
stalled projects, PLN has been tasked
with completing President Joko Jokowi
an additional 35,000 MW by 2019. The
35,000 MW project succeeds the 10,000
MW policy launched by Yudhoyono during
his first presidential term in 2005, to
keep reserve margins the difference
between capacity and peak demand
As the nation is at risk of a power crisis
should the level decline to below 20
percent, Jokowi has taken the initiative
to boost power capacity to accommodate
higher economic growth.
 December 2016
www.InfralinePlus.com

ExpertSpeak
Proposed amendments to electricity rules
discriminatory to captive power generation
On October 6, 2016, the Ministry of Power sought public com-
ments on the proposed amendments to Electricity rules 2005.
In this article, Rajiv Agrawal, Secretary, Indian Captive Power
Producers Association (ICPPA), analyses how these changes are
discriminatory to captive power generation (both coal and renew-
able power); negates the legislative intent and spirit of Electricity
Act 2003 and its policies (i.e. competition in power sector and
greater role for CPP & group CPP), and also re-define proviso of
companys Act. He feels that these are clearly aimed at forcing
CPPs to close down or reduce generation forcing them to draw
power from IPPs and DISCOMs

Who wants these invidious and hence most lucrative for

changes?
Subsequent to restricting open access at
10
state level, the proposed amendments
are aimed at closing down all group
CPPs and hamper flexibility to mange
business (owning CPP) on account of
the following reasons:
After explosive unplanned growth
of IPPs, the national PLF is hov-
ering around 50-60%. This problem
of Excess power gets com-
pounded by addition of renewable
solar power on war-footing (mostly
as IPP). Current economic slow-
down and subdued power demand
has increased the pain.
Summation of all state and central
taxes and new Environment Cess
(of Rs.400 PMT) makes it 100% tax
on billing price of CIL coal (mostly
available G10 grade). This makes
the power very costly for nation and
increases the losses for DISCOMs
(T&D and free power).
Even under proposed GST regime,
coal is not only clubbed with Luxury
and Sin goods, but additional non-
vatable Cess is proposed that will
not allow power cost reduction.
Industrial power tariff is highest
DISCOMs and IPPs Rajiv Agrawal, Secretary, Indian Captive Power
which are under Producers Association (ICPPA)
Proposed
pressure to
amendments
search new defined by the following criteria:
aimed at closing
industrial It should have Captive
customers.
down all group CPPs consumption of minimum 51%
Thus, they and hamper flex- of produced power (not related to
consider it ibility to mange capacity).
as a threat business In case of Group CPP, all
when industries captive consumers should have
produce own power minimum 26% share in the Group
using CPPs and Group CPPs as per CPP.
Electricity Act & policies. Further, in case of association of
For example, a company has mul- persons the power consumption
tiple business lines at one location and should be in proportion to their share-
drawing power from a CPP. Today, it holding (within +/- 10% variation).
can de-merge one product line (with Explanation 1(c) to Rule 3(2) Own-
CPP) into new company and can ership of power plant set up by a
continue to draw power as Group CPP. body corporate shall mean equity
However, after this amendment, if you share capital with voting rights.
convert a CPP in group CPP, you either If any part of condition is not
end up paying cross-subsidy to get complied, cross subsidy surcharge (as
power from CPP or operate it at partial penalty) has to be paid on the entire
capacity or close down CPP. power consumed on captive basis.
Affected parts of Electricity Amendments and their
Rule 2005 implications
In simple words, a unit is defined as Following are the amendments
CPP / CGU if its primary purpose under consideration along with their
is to supply power for captive use as implications:

1. The provision of power con-
sumption in proportion to
share-holding is applicable to
association of persons. After
amendment, it will also be appli-
cable to SPV, body corporate,
partnership firm etc.
The amendment is trying to regu-
larize APTEL decision {Kadodara
Power Private Limited v. GERC
[2009 ELR (APTEL) 1037] but
challenged in Supreme Court} that
treat SPV registered as Company
to be treated as association of
persons and treated power not
consumed in proportion to share-
holding and levy penalty on entire
captive generation. How SPV, a
legal person itself can be asso-
ciation of persons?
The rule is trying to re-define
legislatures. If a SPV is registered
under Companies Act, how it can
be interpreted as Association of
Persons that are defined under
Societies Act 1860?
2. Rule 3(1)(a): If power is consumed
by Captive USER over and above
51%, it should also be in proportion
of their share-holding
Even if a single user (and not all
users together) will use power from
balance 49% power, penalty may
have to be paid by all users even for
first 51% power consumed
During private discussions,
authorities admit that if more
industries keep getting power
from Group CPP as its member
lucrative revenue to DISCOMs gets
hampered.
If Group CPP sells power in open
market beyond 51%, DISCOM still
earns Cross-subsidy surcharge
without doing anything. However,
if the power beyond 51% is given
to Group CPP member, no Cross
Subsidy is payable and DISCOM
perceives it as a business loss
It is a serious issue that even after
investing in a group CPP, its member
have to buy power from the unit
If Group CPP sells
power in open market
beyond 51%, DISCOM
still earns Cross-
subsidy surcharge
without doing anything.
However, if the power
beyond 51% is given
to Group CPP member,
no Cross Subsidy is
payable and DISCOM
perceives it as a busi-
ness loss
by paying cross-subsidy surcharge,
else you lose status of CPP
It also means that the amendment
will change Major-Purpose of
captive Generation as selling
power beyond 49% in place of
captive-use
3. Explanation 1(c) to Rule 3(2)
Definition of Ownership has been
modified to mean the paid up equity
share capital with full right such as,
value of shares, sharing of profit
and dividends, capital appreciation,
voting rights, transfer of shares etc.
There is no need to re-define the
term ownership defined by a
specific legislature Companies Act.
December 2016
www.InfralinePlus.com
By adding a few words in the rules
in place of explicitly explaining
each word (that may need a full
book volume) the amendment will
create more ambiguity than can be
imagined
The manner in which companies
11
should be constituted and made
to function is being dictated by
electricity rules which is diluting
the rights otherwise available under
the Companies Act
Redefining full paid up: Under
the Companies Act, a Co. has right
to issue either fully or partially
paid up shares. Company can make
a call (in future) on the unpaid
capital as committed in documents
filed before issue of share. Thus
inclusion of condition of full paid
up share curbs the right to freedom
to run a company and may also
require Co. to go against docu-
ments before issue of shares
Redefining rights such as value
of shares: all rights available to
26% shareholders will accrue to the
captive consumers irrespective of
the value at which the shares have
been subscribed to or acquired by
them. The value of a company is
never constant and the equity alone
doesnt provide funding for the
entire project.
 December 2016
www.InfralinePlus.com
ExpertSpeak
Given that the cost of setting up
power projects is high, captive
users would have to make a sub-
stantial lump sum contribution to
the capital of the CPP owner at
the time of becoming member of
Group CPP.
Due to large scale NPA in power
sector, funding for power projects
has dried-up. Hence it will prevent
a small & medium captive con-
sumer to access Captive power
Redefining full rights such as...
sharing of profits and dividends:
under the Companies Act each
shareholder has rights for different
category of shares issued based
on funding needs of the company.
These rights get restricted by
lenders and shareholders discretion
to run the business.
Full rights for transfer of share:
Companies act regulate the right
12 to transfer shares. More over full
rights to share transfer to an entity
other than power consumer, may
make the whole CPP lose its status
Proposal is contrary to logic
accepted by Power Ministry
Two years back, during a joint meeting
between ICPPA and Ministry of Power,
the Government provided the follow-
ing logic and assured to remove criteria
related to power consumption in
proportion to share-holding. However
in place of Ease of Doing Business
the proposed amendments create more
rigid approach towards CPPs. Follow-
ing are the main issues:
It is against natural justice because
if one member of Group CPP fails
to draw power, other members
have to pay penalty (cross subsidy
charge) even if they continue to
draw allocated power
It is against freedom to do
business because it is beyond
Power Ministry should
abandon the proposed
changes to Electricity
rules, remove the con-
dition of proportionate
power consumption
for all categories of
consumers and seek
to reduce coal cost by
waiving off 100% taxes
and apply only 5% mini-
mum GST slab so that
the losses for DISCOM
are minimized
even imagination that business
fluctuation will be only within +/-
10%. During sagging economy or
changed market demand, if plants
operate at much lower capacity
a group-CPP member may draw,
just a fraction of power (allotted in
proportion to shareholding).
It is forcing CPP to operate at
partial load causing national waste
and losses to the CPP
Example:
E1: Three units A, B & C have 19%,
31% and 50% (5MW, 8MW &
13MW) shareholding within 26%
and draw 26 MW power (52%)
out of 50 MW capacity.
E2: Balance 24 MW power is given
to anyone including fluctuating
demand from A, B & C.
E3: Market of Cs products crashes
to just half and need only 7 MW
power.
E4: To supply total 20 MW (5 A + 8
B + 7C) and still maintain 51%
Captive Criteria, the Group-CPP
has to reduce production by 11
MW from 39MW.
E5: However, the new share of A, B
& C within 51% power is 25%,
40% & 35% means they are not
drawing power in proportion to
their shareholding and will have to
pay penalty (equal to cross-subsidy
surcharge)
Way forward
Keeping all these points in mind,
the Power Ministry, in the right
earnest, should abandon the proposed
changes to Electricity rules, remove
the condition of proportionate power
consumption for all categories of
consumers and seek to reduce coal
cost by waiving off 100% taxes and
apply only 5% minimum GST slab
so that the losses for DISCOM are
minimized.
The views in the article of the author are personal
For suggestions email at feedback@infraline.com
 December 2016
www.InfralinePlus.com

InDepth
Thermal power developers feel
the stress over plunging financials

13

Around 17 GW of power projects, faces high debt risk, says Crisil

15% of private capacities to be exposed to vagaries of short-term market for lack of PPAs

By Team InfralinePlus

Despite euphoria surrounding renew-
able energy and new schemes an-
nounced by the government, the coun-
trys struggle to provide adequate power
to an aspiring 1.27 billion population
which is going to increase significantly
by 2030, continues. The sector has been
grappling with issues related to fuel
supply availability (both coal and gas),
weak demand led by the financial woes
of discoms, aggressive bidding, and
distressed financials of several Indepen-
dent Power Producers (IPPs).
The coal block auction and a
pick-up in pace for clearances could
have made a case for developers to
revive plans and take up new projects.
But several equipment manufacturers
are hamstrung as most developers are
dealing with stretched balance sheets
and banks are jittery about potential
bad assets from the sector. According
to a data published by the Reserve
Bank of India (RBI), the infrastructure
sectors share in gross non-performing
assets of banks was 13.90 per cent in
June 2016, higher than 12.69 per cent
in December 2015, and the power sec-
tors contribution to these numbers was
5.97 per cent in June 2016.
 December 2016
www.InfralinePlus.com

InDepth

Even though power generation has

increased, lack of power purchase
agreements (PPAs) continues to keep
plant load factor at its lowest. Low
asset utilization is making it difficult
for power producers to service debt.
Lack of power demand from indus-
tries is causing ready capacities not
being able to find long term buyers
and sell at abysmally low prices at
the power exchange. There is a huge
amount of generation capacity lying
undispatched due to unavailability of
coal which is due to the policy that
only plants with long term contracts
will get coal linkage, thereby ren-
dering installed transmission capacity
under-utilised. On the other hand,
state electricity distribution companies
(DISCOMs) are not pursuing long There has been an increase in private sector
term contracts resulting in a Catch-22 capacities without PPAs in the last three years.
situation for the generation and
transmission capacity addition and a If PPA signing does not commence soon, by
14 utilization mismatch. the end of FY 16-17, nearly 15% of private
The total installed capacity is 307 sector capacities (20-25 GW) without PPAs will
GW (approx.) as on October, 2016
while, the peak demand is 153 GW.
be exposed to the vagaries of the short-term
Power generation units in India are electricity market
running below capacity as DISCOMs
shy away from buying more power. fuel-related worries to some extent, little scope for developers to sign
According to data published by the legacy issues such as new coal block LTPPAs (based on thermal power)
Central Electricity Authority (CEA), auctions at aggressive prices still haunt with utilities.
Indias thermal power plant load factor some generators.The uncertain future The Ujwal Discom Assurance
(PLF), slipped to 52.03% in August this of Indian domestic gas production has Yojana (UDAY), launched by the
year, its lowest in over a decade and cascading effects on the overall role government for financial turnaround
has been consistently hovering below of gas in the countrys energy sector. and revival of power distribution com-
60%. There has been an increase in The impact has already been felt in the panies, will have definite impact on
private sector capacities without PPAs power sector where the PLF of gas- the buying capacity of the distribution
in the last three years. If PPA signing fired plants during the year averaged utilities. But thats going to be more
does not commence soon, by the end of only 18.64% in May last year and more long term and sustainability would
FY 16-17, nearly 15% of private sector recently at 23.73% (May 2016) due to depend on the overall turnaround of the
capacities (20-25 GW) without PPAs unavailability of gas. distribution segment.
will be exposed to the vagaries of the Recent trends indicate that short
short-term electricity market. term (including day ahead) prices have Huge chunk of capacity at
Power plants are generally built on remained lower in comparison to the risk
a 70:30 debt equity ratio and if plant prices under LTPPAs. With the onset According to a CRISIL report, around
load factor falls below 65 per cent, of ambitious renewable energy (RE) 17 GW of power projects, includ-
return on investment falls to such a programme in the country, DISCOMs ing those facing the consequences of
low level that it becomes difficult for will now have to tie-up significant aggressive bidding for coal supplies
the company to service its debt. While portion of the RE capacity in order or huge cost overruns, and those with
Coal India Ltds stellar performance to fulfil their renewable purchase gas-supply issues, are projects where
over the past two years has taken away obligations (RPOs). This leaves very the debt at risk is the highest today. The
 December 2016
www.InfralinePlus.com

rating agency believes that such proj- Likely scenario of transmission projects expected to bid
ects are not expected to turn viable in (under tariff-based competitive bidding route)
the long run even if they are structured
States Commissioned Capacity Under-Construction Capacity Total
under the 5:25 (asset restructuring
Chhattisgarh 4636 990 5626
scheme) of the RBI.
Cost overrun for projects include Madhya Pradesh 1824 1200 3024
factors such as delay in execution Odisha 1315 - 1315
caused by the following, i) land acqui- Maharashtra 3098 1080 4178
sition ii) securing required clearances Himachal Pradesh 1174 244 1418
especially related to forest and envi- Sikkim 96 535 631
ronment as well as iii) EPC contractors, Uttarakhand - 76 76
[b] exposure to INR-USD exchange Andhra Pradesh 1150 2020 3170
rate volatility especially for projects Gujarat 945 945
using imported BTG equipment and [c] Tamil Nadu 942 150 1092
delay in securing funding for the cost
Karnataka 980 980
overruns (both debt and equity) thereby
Rajasthan 120 120
increasing the pre-operative expenses
Uttar Pradesh 198 198
component (primarily interest during
construction). Gas-based 5000 5000
projects
While the gross NPAs in the sector
Total 21280 6493 27773
have increased from 1.3 percent to 4.4
percent in financial year 2015-16, the Table: Stranded Capacity without PPAs
Source: Motilal Oswal Securities Limited (MOSL) document
stressed assets as measured by gross
NPAs and restructured standard assets 15
continue to remain steady, close to 14 While the gross NPAs in the sector have increased
percent. Constraints of PPAs as well from 1.3 percent to 4.4 percent in financial year
as fuel supply agreements (FSA) are 2015-16, the stressed assets as measured by
majorly restricting these plants from
approaching the power market and
gross NPAs and restructured standard assets
finding buyers. Further, coal linkages continue to remain steady, close to 14 percent.
are given to power plants on the basis Constraints of PPAs as well as FSA are majorly
of Long Term PPAs signed by them. restricting these plants from approaching the
However, since the past 2-3 years there power market and finding buyers
has been little or no activity on the
part of the DISCOMs to issue fresh
tenders for long term PPAs (LTPPAs)
with power producers setting up power
plants under Case-1 Bidding.
Denial of open access through
high cross subsidy surcharge (CSS)
also affects power generators who
are unable to sell power through open
access to consumers. This inhibits fresh
investments in new generation capac-
ities. Captive power units with surplus
power similarly have no incentive to
sell. Power surplus areas stay stranded
from power deficit areas, lesser quan-
tities of electricity are transacted than
the market clearing equilibrium and
long term prices of electricity and/or
power cuts keep rising.
 December 2016
www.InfralinePlus.com
InDepth
Compliance with new
emissions norms may
increase woes
Coal-based thermal plants in the
country may have to spend massive
amounts over the next two years for the
technical upgrades to meet the stringent
and ambitious emission norms notified
by the ministry of environment and
forests and climate change (MoEFCC)
recently. However, domestic financial
institutions are already facing massive
accumulation of non-performing assets
(NPAs) on account of the power sector,
and are unlikely to lend given the
uncertainties involved.
The technical feasibility of
retrofitting plants remains questionable,
which may make scrapping of old
plants more viable than upgrading
them. Additionally, the power industry
and regulators would have to deal
with the expenditure involved in the
consequent tariff hikes. Although the
16
additional cost for the comprehensive
environmental upgrade may be
considered as Change in Law and
may be allowed to be a pass-through,
the power producers feel that as UDAY
scheme itself entails timely tariff
increases, further spike in costs would
be stoutly resisted by the consumers.
The new laws on emissions have
drawn distinctions between plants com-
missioned before 2003, those that came
up between 2003 and 2016 and the ones
going to be commissioned in 2017. The
emission standards have been made
progressively stringent for newer plants,
thus elevating the cost for them.
Coal-based thermal
plants in the country
may have to spend
massive amounts over
the next two years for
the technical upgrades
to meet the stringent
and ambitious emis-
sion norms notified
by MoEFCC recently.
However, domestic
financial institutions
are already facing
massive accumulation
of NPAs on account of
the power sector
Renewables plays its part!
The central governments push for
renewable energy capacity addition
(proposed 175 GW by 2022) and the
states obligation to include solar in
their total energy mix is driving long-
term contracts to solar. It is noteworthy
that all long-term contracts spanning
more than 25 years, were all signed
by solar power companies in 2015-16
and up to in the second quarter of the
current fiscal year (FY 2016-17).
Coal-powered thermal power plants
account for 70% of total electricity
generated in the country and represents
61% of the installed power capacity.
Till the thermal generating capacity
utilisation improves to 80-85%, PLF
levels (to the existing 60% PLF level)
and the existing untied capacities are
contracted, its unlikely that there will
be any private sector interest in the coal-
based thermal generation sector. With
the increasing adoption of renewable
power (particularly solar) and growing
preference for competitively bid
merchant contracts mean the thermal
power industry can no longer have the
luxury of stable long-term PPAs.
For suggestions email at feedback@infraline.com
 December 2016
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StatisticsPower
DDUGJY Progress Report of Village Electrification as on 31.10.2016
Village Electri- Cumulative Mode of Electrification
Un-elec- Un- Unin-
Cumulative Vil- fication During Village Electri- Under Under
trified electrified Through habited
lage Electrified 2016-17 (Upto fied (As on DDUGJY/ State
Sl. Region/ villages villages off-Grid Villages
31.10.2016) 31.10.2016) RGGVY Plan
No. States/UTs
As on 31.03.2016 As on 31.10.2016
No. No. % No. No No. No. No. No. No.
Northern Region (NR)
1 Chandigarh 0 5 100 0 5 0 0 0 0 0
2 Delhi 0 103 100 0 103 0 0 0 0 0
3 Haryana 0 6642 100 0 6642 0 0 0 0 0
4 Himachal 34 17848 99.81 27 17875 7 7 0 0 7
Pradesh
5 Jammu&Kashmir 107 6230 98.31 5 6235 102 102 0 0 0
6 Punjab 0 12168 100 0 12168 0 0 0 0 0
7 Rajasthan 332 42944 99.26 183 43127 149 39 45 0 65
8 UttaraKhand 76 15669 99.52 3 15672 73 54 19 0 0
9 Uttar Pradesh 224 97589 99.77 131 97720 93 42 0 9 42
Subtotal (NR) 773 199198 896.7 349 199547 424 244 64 9 114
Western Region (WR)
10 Chhattisgarh 675 18892 96.55 116 19008 559 102 457 0 0
11 Daman & Diu 0 19 100 0 19 0 0 0 0 0
12 D & N Haveli 0 65 100 0 65 0 0 0 0 0
13 Goa 0 320 100 0 320 0 0 0 0 0
14 Gujarat 0 17843 100 0 17843 0 0 0 0 0
15 Madhya Pradesh 258 51674 99.51 133 51807 125 29 53 0 43
16 Maharashtra 0 40956 100 0 40956 0 0 0 0 0 17
Subtotal (WR) 933 129769 696.1 249 130018 684 131 510 0 43
Southern Region (SR)
17 Andhra Pradesh 0 16158 100 0 16158 0 0 0 0 0
18 Karnataka 39 27358 99.86 7 27365 32 23 9 0 0
19 Kerala 0 1017 100 0 1017 0 0 0 0 0
20 Lakshadweep 0 6 100 0 6 0 0 0 0 0
21 Puducherry 0 90 100 0 90 0 0 0 0 0
22 Tamil Nadu 0 15049 100 0 15049 0 0 0 0 0
23 Telangana 0 10128 100 0 10128 0 0 0 0 0
Subtotal(SR) 39 69806 699.9 7 69813 32 23 9 0 0
Eastern Region(ER)
24 A & N Island @ 0 341 86.11 0 341 0 0 0 0 0
25 Bihar 993 38080 97.46 258 38338 735 735 0 0 0
26 Jharkhand 1775 27717 93.98 529 28246 1246 760 398 64 24
27 Odisha 2210 45452 95.33 424 45876 1786 1353 0 0 433
28 Sikkim 0 425 100 0 425 0 0 0 0 0
29 West Bengal 14 37449 99.96 0 37449 14 14 0 0 0
Subtotal(ER) 4992 149464 572.8 1211 150675 3781 2862 398 64 457
North-Estern Region(NER)
30 Arunachal 1404 3854 73.3 171 4025 1233 273 960 0 0
Pradesh
31 Assam 1950 23422 92.31 789 24211 1161 570 591 0 0
32 Manipur 201 2178 91.55 37 2215 164 164 0 0 0
33 Meghalaya 911 5548 85.9 657 6205 254 239 15 0 0
34 Mizoram 42 662 94.03 22 684 20 20 0 0 0
35 Nagaland 82 1318 94.14 22 1340 60 60 0 0 0
36 Tripura 17 846 98.03 6 852 11 11 0 0 0
Subtotal(NER) 4607 37828 89.14 1704 39532 2903 1337 1566 0 0
Grand Total 11344 586065 2955 3520 589585 7824 4597 2547 73 614
The figures are based on the data available on DDUGJY website (Except Union Territories).
55 Villages un-electrified as per Census 2011 are in encroached forest area and cannot be electrified as per the Supreme Court order @ (accordingly total has
been shown)
 December 2016
www.InfralinePlus.com

StatisticsPower

Plant Availability Factor of NTPC Thermal Power Plants: FY17 (Till Oct16)
FY17
Sl.
Power Plants Region Cumula-
No. Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16
tive FY17
1 ANTA Gas Power Plant 66.17 95.22 92.269 97.679 93.601 96.954 94.901 90.97
2 AURAIYA Gas Power Plant 97.73 95.71 96.821 97.679 97.719 96.237 96.465 96.91
3 DADRI Gas Power Plant 96.54 93.65 95.173 96.95 91.735 96.951 96.661 95.38
4 DADRI Thermal Power Station 105.66 104.74 104.736 104.736 104.389 105.103 106.037 105.06
5 DADRI-II Thermal power Station 55.56 103.38 103.243 103.387 103.225 101.735 104.916 96.49
6 RIHAND Super Thermal Power Station 79.62 66.55 48.151 78.536 90.328 96.878 98.148 79.74
7 RIHAND-II Super Thermal Power Station NR 99.7 101.21 99.052 100.708 90.254 96.899 92.976 97.26
8 RIHAND-III Super Thermal Power Station 94.57 100.96 85.208 100.763 95.128 97.293 51.797 89.39
9 SINGRAULI Super Thermal Power Station 51.2 84.65 98.519 100.154 86.826 85.175 89.527 85.15
10 UNCHAHAR-I Thermal Power Station 79.13 91.7 91.423 91.357 96.395 70.967 61.616 83.23
11 UNCHAHAR-II Thermal Power Station 56.98 92.6 104.644 104.497 104.507 104.575 104.762 96.08
12 UNCHAHAR-III Thermal Power Station 104.47 104.66 104.657 104.657 104.657 104.657 104.76 104.65
13 JHAJJAR (Indira Gandhi STPP) 66.16 81.58 100.071 97.554 97.909 100.128 95.367 91.25
14 Korba Super Thermal Power Station 96.54 90.88 96.6302 76.8652 97.16 96.15 93.79 92.57
15 Vindhyachal Super Thermal Power Station-I 78.58 82.26 96.3408 97.4018 93.85 91.63 91.81 90.27
16 Vindhyachal Super Thermal Power Station-II 95.48 94.23 93.1265 57.2697 49.39 76.9 93.95 80.05
18 17 Vindhyachal Super Thermal Power Station-III 101.32 100.95 97.349 98.58 98.15 78.1 67.5 91.71
18 Kawas Gas Power Station 74.65 93.48 98.8953 100.29 100.04 98.84 100.54 95.25
19 Gandhar Gas Power Station 97.01 96.19 96.1843 98.79 97.91 98.72 74.58 94.2
20 Singrauli Super Thermal Power Station-II 100.53 95.81 100.3006 99.1868 61.01 100.29 100.41 93.93
WR
21 Korba Super Thermal Power Station-III 99.77 99.23 99.9851 100.131 98.94 100.86 82.04 97.28
22 NTPC-SAIL Power Company Ltd (Bhilai) 84.45 93.09 91.9493 94.9876 95.3 94.25 94.37 92.63
23 Sipat Super Thermal Power Plant Stage-I 94.11 98.91 95.754 70.1914 100.22 96.81 75.81 90.26
24 Ratnagiri Gas and Power Private Ltd 0 0.25 0.043 1.3524 3.33 7.44 5.62 2.58
(Dabhol)
25 Vindhyachal Super Thermal Power Station-IV 95.38 100.97 100.9443 95.277 96.47 96.56 95.5 97.3
26 Mauda Super Thermal Power Station 99.67 95.41 99.7859 85.539 85.61 100.08 98.39 94.93
27 Farakka Super Thermal Power Plant Stage- 34.84 75.28 97.28 93.38 95.97 91.34 93.48 83.08
I&II
28 Farakka Super Thermal Power Plant Stage-III 97.81 99.78 99.7 97.72 96.95 99.86 100.01 98.83
29 Kahalgaon Super Thermal Power Station 89.68 98.64 98.13 97.84 91.22 75.75 96.83 92.58
Stage-I ER
30 Kahalgaon Super Thermal Power Station 97.72 97.68 98.24 72.34 99.39 93.84 98.42 93.95
Stage-II
31 Talcher Super Thermal Power Station Stage-I 96.32 97.77 92.15 97.91 95.65 94.36 87.53 94.53
32 Barh Super Thermal Power Station Stage-II 50.85 82.5 80.9 90.18 83.21 44.94 87.61 74.31
33 Ramagundam Super Thermal Power Station 99.45 99.51 83.219 78.632 82.062 100.466 98.195 91.65
Stage - I & II
34 Ramagundam Super Thermal Power Station 102.19 102.16 102.229 100.407 97.336 101.44 60.808 95.22
Stage - III
SR
35 Talcher Super Thermal Power Station Stage-II 96.98 95.87 93.404 97.806 82.003 71.657 77.845 87.94
36 Simhadri Stage-II 99.47 100.26 100.264 100.213 100.264 100.986 101.319 100.4
37 Vallur - NTECL Vallur STPS (1500MW) 68.64 65.23 56.453 58.121 87.766 93.318 69.457 71.28

NewsBriefs | Coal National
Coal imports decline 14 pc to 16 MT in October
Coal imports fell 13.7 per cent to 15.59
million tonnes (MT) in October due to
higher prices of the fossil fuel in the
international market. The country had
imported 18.08 MT of coal in October
last year, mjunction services, an online
Govt backs use of drones in mining operations
The Union mines ministry is exploring
possibilities of use of drones (unmanned
aerial vehicles) in different mine related
functions including, exploration, surveillance,
regulation and operation of mines, managing
waste dumps and post mining reclamation
of land. To achieve successful applications
of drones, the ministry has asked PSUs
National Mineral Development Corporation
(NMDC), Steel Authority of India Ltd (SAIL),
National Aluminium Company (Nalco),
Rashtriya Ispat Nigam Ltd (RINL) and
Hindustan Copper Ltd (HCL) - to exploit
the new technology. State government
organisations, Indian Bureau of Mines
(IBM) and the Geological Survey of India
(GSI) can also bank on drone technologies.
Stocks pile up with Coal India as 15 power plants didnt lift fuel
As many as 15 power plants did not lift
any coal from Coal India in September,
foregoing the 2.6 million tonnes of stock
they were supposed to lift from the
state-run monopoly miner and resulting in
thermal power plants across the country
receiving delivery of only 80% of the coal
allotted to them during the month. This
in turn reduced stocks at various power
plants, specially the ones near coal mines.
A number of them did not lift their full
quota of coal despite stocks falling down
to five days, or critical stock position, ac-
cording to Central Electricity Authoritys
definition. Plants in Gujarat, Rajasthan,
procurement and sales platform floated
jointly by SAIL and Tata Steel, said. It
further said that total imports of 15.59
MT in October also include 10.34 MT of
non-coking fuel and 3.54 MT of coking coal.
Coal imports (all type of coals) in October
2016 stood at 15.59 million tonnes MT
(provisional) against 18.09 MT in October
2015 and 15.55 MT in September 2016,
it said. Coal imports in October remained
almost flat compared to September as
Indian buyers continued to delay their
purchases, expecting prices in international
markets to soften, mjunction CEO Vinaya
Varma said.
Though originated in military applications,
the use of drones is vastly expanding in
commercial, scientific, recreational and
other applications. With civilian drones now
largely outnumbering military drones, the
ministry is considering using them for mine
related applications.
Madhya Pradesh, Haryana and Punjab
have not been lifting their full quota for
several months in a row although their
December 2016
www.InfralinePlus.com
Coal India raises auction aim to
stave off imports
Coal India has dramatically increased
the target for selling coal through
auction to 120 million tonnes (mt)
this financial year, which it hopes
will help in import substitution and
meet electricity needs. Last year, the
miner had sold 66 mt of coal through
auction. Coal secretary Anil Swarup had
previously indicated that next financial
year onwards, government-owned
power plants would go for 10 per cent
domestic coal and private players will
be encouraged to use more local fuel.
Coal India has been auctioning 10 mt
of coal (8 mt for regulated sector and 19
2 mt for non-regulated sector) every
month through auction to meet power
demands of entities including power
plants that either dont have fuel supply
agreements with the state-owned coal
miner or have lost their mines due to
a Supreme Court order. This financial
year, realisations so far have been 22 per
cent higher than the notified price. Last
financial year, realisations were 33 per
cent higher than the notified price.
stocks have dwindled to five days in some
cases. According to Coal India, power
producers, both near and away from coal
mines, are not lifting their full quota of
coal each month because they are now as-
sured of railway rakes and coal availability
whenever required, unlike in the past when
availability of both were uncertain for
major part of the year. At the time when
coal and rakes were not available freely,
the Central Electricity Authority had
stipulated that all power stations stock
coal that would support generation for 15
days in a row. Critical and super critical
stocks were also defined at that time.
 December 2016
www.InfralinePlus.com
NewsBriefs | Coal National
Odisha coal to be used in Maha, Guj power plants
Union minister for road transport and
shipping Nitin Gadkari said surplus coal
mined in Orissa can now be supplied to
power plants in western states like Gujarat
and Maharashtra. If we can transport
surplus coals from Orissa (through Paradip
Rising coal production in India may push up atmospheric CO2 levels
With its plans double its coal production by
2020, India is likely to be the engine that
drives global carbon dioxide pollution over
the next few years. Global carbon dioxide
production has virtually remained unchanged
20 at about 36.4 billion tonnes a year for the
last three years. Global carbon dioxide emis-
sions from fossil fuels and industry grew
at over 3% per year in the 2000s. Growth
slowed in the 2010s and has levelled off in
the last three years, according to annual
analysis of trends published by the Global
Carbon Project in the journal Earth System
Science Data. The study attributes the drop
and levelling off in the amount of carbon di-
oxide produced globally to a sharp slowdown
in Chinese coal consumption since 2012 and
Piyush Goyal says 83 cancelled coal mines allocated so far
The Ministry of Power, Coal, New and
Renewable Energy and mines announced
that 83 coal mines have been allocated
to be used for Power, Steel, Cement and
Captive Power Production as well as for
sale of coal. 31 coal mines out of the
83 have been allocated through auction.
These mines will be used for specified
end-uses other than power such as Iron &
Steel, Cement and Captive Power Plants
have been clubbed as Non-Regulated
Sector, said Piyush Goyal, Minister of
Power, Coal, New and Renewable Energy
in a written reply to a question in Rajya
Sabha. The government has so far
port) via sea route to western parts of the
country like Maharashtra and Gujarat for
their power plants, we can save Rs 10,000
crore per year and due to this power tariffs
in Gujarat and Maharashtra is likely to come
down by 50-60 paise per unit, he said. The
minister was referring to the ambitious
Sagarmala project which mulls using sea
routes to transport raw materials and
other commodities from surplus states to
different parts of the country by connecting
major and minor ports. While claiming
that Paradip port possesses the greatest
potential in the country, he said It can
become the biggest port of the world.
reductions in US coal consumption making
important contributions in single years, par-
ticularly 2012, 2015, and 2016. Indias emis-
sions grew at over 5 per cent in 2015, which
happened on the back of a strong decade of
growth of around 6 per cent per year.
successfully auctioned 22 coal mines to
the non-regulated Sector and nine coal
Tamil Nadu to stop using foreign
coal, save Rs 400 crore
Tangedco is all set to stop importing coal
for all its thermal units in Tamil Nadu.
With the stoppage of import, the discom
will save at least 400 crore per annum.
This follows Centre agreeing to increase
the coal allocated to fire Tangedco
thermal units. As of now Tangedco is
importing coal from Indonesia. The
Centre has agreed to supply the extra coal
from Jharkhand coal mines and it will be
easy for the discom to evacuate the coal
through rail. The Union coal ministry has
initiated talks with Railways to allocate
extra rakes for Tamil Nadu. The Centre
has also agreed to increase coal alloca-
tion to Tangedco for the new thermal
projects too. There was a concern over the
quality of coal from western coal mines
near Nagpur in Maharashtra. The Centre
agreed to allocate coal from western coal
mines instead of Ib Valley in Odisha. But,
as in Ib Valley , the quality from western
coal mines is poor. Due to this Tangedco
asked Centre to ship coal from Jharkhand
or Singareni, which has been accepted.
mines for specified end use power under
the provisions of the Coal Mines (Special
Provisions) Act, 2015. The Minister
further elaborated that out of the 17 coal
mines auctioned, mining operations have
commenced in 10 schedule II mines. The
Supreme Court had earlier cancelled 204
coal mines due to irregularities in awarding
the coal mines by the government. All the
mines currently being auctioned off by the
government are a part of the cancelled
group. 9.56 million Tonnes of coal have
been produced from these coal mines
after re-allocation and starting of mining
operations, the minister added.

NewsBriefs | Coal International
Canada speeds up plan to phase out coal power, targets 2030
Canada will speed up plans to virtually
eliminate traditional coal-fired electric-
ity by 2030, a stance contrasting sharply
with that of U.S. President-elect Donald
Trump, who has pledged to revive the sec-
tor. Canadas Liberal government ran on a
platform to do more for the environment.
China to cap coal at 55 percent of total power output by 2020: NEA
China aims to cap coal-fired power capacity
at 1,100 gigawatts by 2020, higher than the
current ceiling but accounting for less of
the countrys total power supply, as the top
global energy market seeks to increase the
use of cleaner renewable fuels. Announcing
its five-year plan for the power industry,
the National Energy Administration (NEA)
said China aimed to have 2,000 gigawatts
of electricity generating capacity by 2020,
of which at least 320 gigawatts, or 16
percent, would come from solar and wind
power and 110 gigawatts from natural
gas. That would bring China much more in
line with current power generation mixes
in the United States and the European
Union, where installed renewable capacity
Indonesian ITMs Jan-Sep coal production falls, cuts 2016 output target
Indonesian thermal coal miner Indo Tam-
bangraya Megah said that its production and
sales over January-September fell to 19
million mt and 20.1 million mt respectively.
It also cut its output target for 2016, citing
weather disruptions. Over January-Septem-
ber 2015, ITM produced 21.5 million mt of
thermal coal and sold 20.9 million mt. Aver-
age selling price over January-September
slumped 18% to $47.50/mt from $57.70/mt
a year ago. However, in the July-September
quarter, the average selling price rose 12%
to $49.90/mt from $44.70/mt in April-June.
Thermal coal prices have surged in the lat-
ter half of the year, driven mainly by Chinese
Its coal-cutting plan would help it meet
the emissions reduction targets of the Paris
agreement, which Parliament ratified last
month. Canadian Environment Minister
Catherine McKenna said Canadas coal
regulation, which accelerates an exist-
ing timetable, will take into account the
positions of provinces, some of which have
resisted federal plans to counter climate
change. The government will support the
transition by using the Canada Infrastruc-
ture Bank public-private funding mecha-
nism. Four provinces still burn coal for
electricity: Alberta, Saskatchewan, Nova
Scotia and New Brunswick.
- excluding hydro-power - stands at around
22 percent and 10 percent, respectively. As
part of its long-term plan to shift to clean
power, the NEA said China will eliminate
or delay at least 150 gigawatts (GW) of
coal-fired power projects between 2016
and 2020.
demand and supply tightness in various
producing regions. The thermal coal market
continued to remain tight in Q3, driven by
lower domestic supply in China and wet
season in Indonesia, ITM said in its latest
December 2016
www.InfralinePlus.com
Rich countries told to shut coal
plants by 2030 to save climate:
report
Rich countries must close all their
coal-fired power plants by 2030 to have
a chance of holding global warming
to tolerable levels, a report from an
environmental research group said.
China would have to phase out the
most polluting fossil fuel by 2040
and the rest of the world by 2050,
according to climate analytics, a
Berlin-based non-profit that is studying
how nations can meet the emissions
goals they agreed at United Nations
talks in Paris last year. The findings 21
illustrate the difficulty in achieving
the UN goal of holding global warming
to well-below 2 degrees Celsius (3.6
degrees Fahrenheit). The world already
has 8,175 coal plants and is building
another 733, providing about 40 of all
electricity. Pollution from coal plants
could create 2.5 times more carbon
dioxide emissions than allowed by
scenarios consistent with 2 degrees of
warming, the report said.
quarterly report. We believe coal price is
continuing to increase during this last quar-
ter of 2016. Higher-than-expected rainfall
impacted production, the company said,
adding that production was now targeted
at 26.2 million mt and sales were expected
to be about 27.1 million mt for the full year.
ITM, which counts China, Japan, Indonesia
and India among its major buyers, said
99% of its target sales volume for 2016 had
been sold. The company operates six min-
ing concessions in East, South and Central
Kalimantan provinces, producing coal with
heating value ranging from 4,400 to 6,300
kcal/kg gross as received.
 December 2016
www.InfralinePlus.com

InDepth
Need to link domestic coal
pricing with international market

22

Linking domestic prices with global market could deprive CIL of its profits
Private players unlikely to show interest unless coal pricing is linked to international indices

By Team InfralinePlus

India must reform its coal sector if it
has to secure long-term energy supplies
for its fast-growing economy. The first
step would be to align domestic coal
prices with the international market.
Niti Aayog has suggested correcting the
mismatch in the draft National Energy
Policy. But unfortunately, the suggestion
is being opposed by the coal ministry.
Analysts have been pointing out that
supply of thermal coal to the power
sector at discounted prices by Coal
India discourages usage of imported
fuel, thereby putting undue burden on
Indian railways which is tasked with
transporting coal within the country.
Earlier, Montek Singh Ahluwalia,
deputy chairman to the erstwhile
Planning Commission, too had made
a strong pitch in 2013 for removing
the disparity between domestic and
international coal market prices.
However, consensus could not be
evolved on this matter
The coal ministry has said linking
domestic coal prices with global
market could deprive CIL of the flex-
ibility to maximise its profits. While
the PSU supplies coal to the power
sector at concessional prices, it charges
higher prices from non-priority sector
customers. Besides, it also sells 10-12
per cent of its annual coal production

via e-auction which fetches it higher
margins and helps maximise profits.
Unwilling to lose control of coal
pricing, coal minister Piyush Goyal
has raised reservations over the draft
National Energy Policy. The lack of
consensus between the Centre and the
coal ministry has delayed the policy.
CIL produces more than 80 per
cent of countrys coal. The National
Energy Policy drafted by Niti Aayog is
aimed at curbing imports by increasing
production of renewable energy in the
country fivefold to 300 billion units
by 2019 and tripling coal production
to 1.5 billion tonnes. Coal imports are
envisaged to come down by 10 per cent
by 2022 and by 50 per cent by 2030.
We should try to align the domestic
coal price to the international price.
If you do not do that, the coal prices
would certainly go up...And that is an
important issue that we have to face,
Ahluwalia had said while addressing
a KPMG Energy Conclave. Because
of the cheaper domestic supply, the
demand is higher and it is distorting
the market. We solve that problem by
pooling coal, he had added.
As per an estimate, CILs average
production cost is Rs 900-2,000 a
tonne. The average sale price of CILs
coal is Rs 1,400 a tonne. If transpor-
CIL produces more
than 80 per cent of
countrys coal. The
National Energy
Policy drafted by Niti
Aayog is aimed at
curbing imports by
increasing production
of renewable energy
in the country fivefold
to 300 billion units
by 2019 and tripling
coal production to 1.5
billion tonnes
tation cost is added, at a rail charge
from Rs 1,000 to Rs 2,000 a tonne, the
delivered cost of CIL coal works out to
Rs 2,400-3,400 per tonne.
Analysts say that the rail transit
cost for every tonne per km is the
same for both imported and domestic
coal, but because of higher heating
value, the imported fuel has the edge.
Coal sold by CIL is lower grade, with
a value of 3,500 to 5,500 kcal while
imported coal has one of 5,550 to
6,500 kcal. The ash content is also
low at two per cent in imported coal
December 2016
www.InfralinePlus.com
whereas in domestic produce, it is 25
per cent. So, 25 per cent less imported
coal would be required to generate 1
unit of electricity.
It would be advisable to set up
imported coal-based power plants
in areas away from coal mines,
especially at locations in coastal
areas. That would release pressure
on railways. But developers tend to
prefer domestic coal for its better
cost economics.
Unless, domestic coal pricing is
linked to the international market,
opening coal sector for commercial
mining to private players would not
be possible. While providing inputs
to Niti Aayog, Pune-based Prayas, a
think-tank, has said there has to be
clarity whether opening up the coal
sector would only be to introduce
more players into mining operations
or whether it is also to move towards
competitive markets. 23
Prayas argues that if it is the
former, then there is a need for an
empowered and enlightened regulator
who can determine prices for various
coal consumers and also an objective
and transparent method to allocate
the resource among many applicants.
If it is the latter, there is a need for
a market design. It should be noted
that even in the auction process,
the actual end-user of coal from
a block may be different from the
block winner due to the possibility of
arrangements and diversions that
is provided for, the non-government
organisation has said.
Prayas has further said that coal
from other sources such as imports
should also be factored into devising
policies to deal with pricing and allo-
cation. Either approach would require
the setting up of an effective regulatory
framework, it has added.
India is aspiring for 10 per cent
annual GDP growth over the long-term.
To sustain this growth rate, power
sector will have to grow at least by 8
per cent. In the foreseeable future, coal
 December 2016
www.InfralinePlus.com
InDepth
is likely to continue to dominate Indias
energy mix. So, the coal sector must
be reformed and pricing be determined
based on market forces rather than
through regulations.
According to an analysis by PwC,
a consultancy firm, nearly 87 per
cent of Indias proved coal reserves
and majority of the present coal
production is concentrated in the
three eastern states of Odisha, West
Bengal and Jharkhand and two central
region states of Madhya Pradesh and
Chhattisgarh. While 49 per cent of
the coal-based installed capacity is
in the northern and western region,
a geographical mismatch remains
between the demand and supply
centres of coal.
The production targeted by CILs
subsidiaries in FY 2020 shows that
93 per cent of CILs production will
remain concentrated in the eastern
24 and central region. Further, more than
80 per cent of the mines auctioned or
allocated are in these regions. In FY
2020, the northern and western regions
are expected to emerge as major
centres of electricity demand. That
would call for a commensurate increase
in coal transportation infrastructure if
domestic coal remains the sole choice
for power developers.
Overutilisation of railways existing Private sector participation is
lines has been a big hindrance to needed in commercial coal mining
timely transportation of coal to power to ensure modernization of mining
plants in the western region and other practices and technology and adequate
areas far away from mines. To avoid investment in coal washeries. However,
congestion on the railway networks private players are unlikely to show
in these regions, the government will interest unless coal pricing is linked to
have to promote usage of imported coal international indices.
for power generation in such regions
and areas. House panel too supports
linking domestic coal
Even a parliamentary prices with global market
panel has supported Even a parliamentary panel has
supported the idea of linking
the idea of linking do- domestic coal prices with the global
mestic coal prices with indices and opposed CILs practice
the global indices and of raising price to maximise profits.
The standing committee on coal and
opposed CILs prac- steel led by Kalyan Banerjee in 2014
tice of raising price to said that CILs board should review
maximise profits. The domestic coal prices in consonance
with changes in international market
standing committee
prices, which should be done both in
on coal and steel led cases of increase as well as decrease in
by Kalyan Banerjee in international prices.
2014 said that CILs For example, the committee
recommended that coal price hikes
board should review should not be driven only by the
domestic coal prices motive of profit maximisation and
in consonance with investments in future projects should
not be a factor for determination of
changes in interna- coal prices. The panel had noted that
tional market prices the requirement of additional resource
mobilisation for fresh investments in
new coal projects and modernization
of existing mines for augmentation
of production to achieve planned
production target was also added as a
factor for determining the coal prices
by coal PSUs.
In that context, the committee
said it was not convinced with the
argument put forward by the CIL that
investment in the new projects is one
of the factors in coal price fixation.
The panel said it failed to understand
as to how CIL and its subsidiaries can
add estimated cost of a future project
which has not yet started and may take
years together to complete in fixing
coal prices which ultimately put extra
burden on consumers.

The committee felt that considering
investments in future projects as one of
the factors for determining coal price
is against the sound principles of logic
and economics and recommended that
such cost estimations for new projects
be kept out for fixation of coal price
so as to secure the interest of common
consumers.
It took the view that CIL and its
subsidiaries should raise prices only
to the extent necessary to match cost
increases. It also lambasted CILs
practice of charging 30 per cent higher
prices to the consumers in sectors other
than power and fertilisers, calling it
discriminatory. It underscored the need
for a regulatory mechanism for coal
sector. In absence of a regulator, the
central government should constitute a
coal pricing regulatory committee with
adequate representation of all stake-
holders, the panel said.
The committee emphasised the
need for rationalisation of rail freight
rates for coal transport. It suggested
that the coal ministry and CIL explore
alternate modes for transport of coal.
Coal producers should adopt additional
efforts including austerity measures to
reduce production costs, it said.
On e-auction of coal, the panel
said it only benefits big traders and
cartels. It recommended an increase in
transparency in the e-auction process
It is clear that there
is a strong case for
linking domestic
coal prices with
the international
market. Given the
political consensus
over the issue, there
is not much merit
in coal ministrys
opposition to Niti
Aayogs suggestion.
The coal ministry is
supposed to protect all
stakeholders interests
and not just that of CIL
December 2016
www.InfralinePlus.com
and minimising the quantity of coal
sold through e-auction. The committee
noted that the same grade of coal is
being sold at different prices for some
of the CIL subsidiaries even after
adoption of a new classification and
pricing system. It asserted that uniform
prices for same grade are essential
and suggested that CIL formulate a
National Policy for Coal Prices appli-
cable to all its subsidiaries.
It is clear that there is a strong case
for linking domestic coal prices with
the international market. Given the
political consensus over the issue, there
is not much merit in coal ministrys
opposition to Niti Aayogs suggestion.
The coal ministry is supposed to
protect all stakeholders interests and
not just that of CIL which has been
mandated to mine coal that basically
belongs to the people of this country.
Prime Minister Narendra Modi has to
take a final call in this matter and the 25
industry hopes he will go with Niti
Aayogs suggestion.
For suggestions email at feedback@infraline.com
 December 2016
www.InfralinePlus.com

InDepth
Curbing illegal mining: India explores use of
satellite-based Mining Surveillance System

26

MSS aims to establish a regime of responsive mineral administration

Haryana, Telangana and Chhattisgarh selected for a pilot launch

By Team InfralinePlus

Indian government plans to ramp up
mining activities across the country and
intends to increase output by around
20% per year to increase the sectors
share in the countrys gross domestic
production. Illegal mining in India
has become a menace and can be a
hindrance for government to achieve
its targets. Illegal mining often occurs
when there is mining without a license
or outside the leased boundaries or
more than a permissible amount of
mineral extraction. Few lease holders
continue mining activity even without
renewing their license. This also comes
under ambit of illegal mining.
Illegal mining activities rose
primarily due to high demand which
also pushed up the prices of minerals.
Because of this pressure of demand and
prices, suboptimal deposits have also
become attractive
The National Mining Tribunal
ensures that the grant of the concession
is done according to the law of the land.
While it is not exactly a monitoring
body, it will oversee the management of
the process. Courts, the Lokayukta and
other institutions are also in place to
supplement these efforts.
Mining Surveillance
System launched
With objective to curb illegal mining
activity and ensure sustainable utilisa-
tion of the countrys mineral resources,
Mining Surveillance System (MSS),
which is developed under the Digital
India Programme, was launched on

Activities
Constitutes
Illegal
Mining
October 15, 2016. MSS is a satellite-
based monitoring system which aims
to establish a regime of responsive
mineral administration, through public
participation, by reporting instances
of illegal mining through automatic
remote sensing detection technology.
The remote sensing technology-
based monitoring system enables
mining areas to be monitored regularly
in an effective manner having quick
response time with follow up mech-
anism in place wherein action taken on
triggers is followed-up at various levels
like DMG, State Mining Secretary,
State Office and Headquarters Office of
IBM and Ministry of Mines.
It is an unbiased, independent and
transparent monitoring mechanism
in which public has been provided
an access to the system. This system
has deterrence effect i.e. surveillance
mechanism from the sky. This system
will initially generate a trigger for
any illegal mining activity within a
region of 500 metres around the mining
leases boundary in case of major min-
erals, including iron ore and bauxite.
Prior to MSS, the monitoring of
illegal mining activity was based on
local complaints and unconfirmed
information and there was no robust
mechanism to monitor the action taken
December 2016
www.InfralinePlus.com
The remote sensing
technology-based
monitoring system
enables mining areas to
be monitored regularly
in an effective manner
having quick response
time with follow up
mechanism in place
wherein action taken
on triggers is followed-
up at various levels
like DMG, State Mining
Secretary, State Office
on such complaints. Ministry of Mines, and Headquarters
through Indian Bureau of Mines (IBM),
has developed this in coordination with
Office of IBM and
Bhaskaracharya Institute for Space Ministry of Mines
Applications and Geo-informatics 27
(BISAG), Gandhinagar and Ministry of globally using space technology.
Electronics and Information Tech- For the purpose of this system the
nology (MEITY). It is one of the first Khasra maps of the mining leases
kind of surveillance systems developed have been geo-referenced. The
How MSS works?
Khasra maps of the mining leases have been geo-referenced
Geo-referenced mining leases are superimposed on the latest
satellite remote sensing scenes obtained from CARTOSAT &
USGS
System checks a region of 500 meters around the existing
mining lease boundary to search for any unusual activity
Automatic software leveraging image processing technology
will generate automatic triggers of unauthorized activitie
Triggers will be studied at a Remote Sensing Control Centre of
IBM and then transmitted to the district level mining officials
for field verification.
 December 2016
www.InfralinePlus.com
InDepth
geo-referenced mining leases are
superimposed on the latest satellite
remote sensing scenes obtained from
CARTOSAT and USGS. The system
checks a region of 500 meters around
the existing mining lease boundary to
search for any unusual activity which
is likely to be illegal mining. Any
discrepancy found is flagged-off as a
trigger. Automatic software leveraging
image processing technology will
generate automatic triggers of
unauthorized activities.These triggers
will be studied at a Remote Sensing
Control Centre of IBM and then
transmitted to the district level mining
officials for field verification.
A check for illegality in operation
is conducted and reported back using
a mobile app. A user-friendly mobile
app has been created which can be used
by these officials to submit compliance
reports of their inspections. The mobile
app also aims to establish a participative
28
monitoring system where the citizens
also can use this app and report unusual
mining activity. An executive dashboard
has been designed under MSS to work
as a decision support system.
Using this dashboard, officials can
track the current status of mapping of
the mining leases, reasons for triggers,
the status of inspections related to
triggers generated, the penalty levied
etc. for all major mineral mining leases
across the country.The process is
underway to launch a similar system
for minor minerals in coalition with
the State Governments. Haryana,
Telangana and Chhattisgarh have been
selected for a pilot launch. Karnataka,
which reported large instances of
illegal mining in the past, stands to gain
tremendously from this technology.
Presently there are total 3,843 mining
leases of major minerals in the country,
of which 1,710 are working and 2,133
non-working mines. Most working
mines have been digitized. Efforts are
going on to complete digitization of
The mines ministry is
now exploring the use
of unmanned aerial
vehicles, or drones,
to curb instances of
illegal mining. The
ministry has told
state governments
to explore the use of
drones to check illegal
mining, as officials
crackdown on an
activity that has led to
deforestation and the
use of child labour
non-working mines and it is expected to
be completed in the next three months.
In an another initiative to tighten
illegal mining, the mines ministry is
now exploring the use of unmanned
aerial vehicles, or drones, to curb
instances of illegal mining. The
ministry has told state governments
to explore the use of drones to check
illegal mining, as officials crackdown
on an activity that has led to defores-
tation and the use of child labour.
With the help of this they can also
monitor whether reclamation has been
done as committed when a mine is
closed, and calculate the extent of the
green cover. Drones are increasingly
being used around the world to check
illegal activities and to survey damage
to the environment. In Panama,
indigenous people are using drones to
monitor deforestation on their lands.
In India, Uttarakhand began using
drones recently to check illegal quar-
rying, while western Maharashtra has
recently deployed drones to check
illegal sand mining.
Drones alone wont stop illegal
mining or prevent worker abuses.
There needs to be a proper mechanism
to monitor all activities and subsequent
action needs to be taken after reporting
any illegal activities.
For suggestions email at feedback@infraline.com
 December 2016
www.InfralinePlus.com

StatisticsCoal
Coal Sector Performance Summary during Apr-Oct16
Coal Production by CIL (Million Tonnes)
Monthly Cumulative
Month Growth
Target Actual Achievement Target Actual Achievement
(MoM)
Apr-16 44.48 40.09 - 90% 44.48 40.09 90%
May-16 44.64 42.58 6% 95% 89.12 82.93 93%
Jun-16 43.31 42.72 0% 99% 132.43 125.65 95%
Jul-16 40.29 36.74 -14% 91% 172.72 162.38 94%
Aug-16 40.89 32.43 -12% 79% 213.61 194.82 91%
Sep-16 41.51 35.24 9% 85% 255.11 230.06 90%
Oct-16 51.88 43.51 23% 84% 306.99 273.59 89%

Coal Production by SCCL (Million Tonnes)

Monthly Cumulative
Month Growth
Target Actual Achievement Target Actual Achievement
(MoM)
Apr-16 4.94 4.45 - 90% 4.94 4.45 90%
May-16 5.04 4.91 10% 97% 9.98 9.35 94%
Jun-16 4.9 4.76 -3% 97% 14.87 14.11 95%
Jul-16 4.19 3.83 -19% 92% 19.06 17.94 94%
29
Aug-16 3.99 4.22 10% 106% 23.05 22.16 96%
Sep-16 3.97 4.02 -5% 101% 27.02 26.18 97%
Oct-16 4.41 4.7 17% 107% 31.42 30.84 98%

Coal Dispatch by CIL (Million Tonnes)

Monthly Cumulative
Month
Current Year Previous Year Growth (YoY) Current Year Previous Year Growth (YoY)
Apr-16 42.46 43.52 -2.46% 43.55 40.7 7%
May-16 45.53 43.8 4% 88.23 87.32 1%
Jun-16 44.96 42.07 7% 133.19 129.39 3%
Jul-16 41.47 40.91 1% 174.66 170.3 3%
Aug-16 36.72 40.64 -10% 211.38 210.93 0%
Sep-16 37.74 40.44 -7% 249.11 251.36 -1%
Oct-16 43.04 44.43 -3% 292.16 295.8 -1%

Coal Dispatch by SCCL (Million Tonnes)

Monthly Cumulative
Month
Current Year Previous Year Growth (YoY) Current Year Previous Year Growth (YoY)
Apr-16 4.64 4.6 0.83% 4.6 4.27 8%
May-16 4.91 4.89 0% 9.55 9.5 1%
Jun-16 4.47 4.43 1% 14.01 13.91 1%
Jul-16 3.99 5.07 -21% 18 18.99 -5%
Aug-16 4.44 4.87 -9% 22.44 23.86 -6%
Sep-16 4.11 4.5 -9% 26.55 28.35 -6%
Oct-16 4.68 4.76 -2% 31.22 33.1 -6%
 December 2016
www.InfralinePlus.com

StatisticsCoal

Coal Dispatch by CIL to Power Sector (Million Tonnes)

Monthly Cumulative
Month
Current Year Previous Year Growth (YoY) Current Year Previous Year Growth (YoY)
Apr-16 30.788 32.839 -6% 30.788 32.839 -6%
May-16 33.365 33.124 1% 65.335 66.311 -1%
Jun-16 31.857 31.744 0% 97.693 98.352 -1%
Jul-16 31.498 30.984 2% 131.104 129.679 1%
Aug-16 26.48 30.25 -12% 157.15 160.22 -2%
Sep-16 27.11 30.62 -11% 184.99 190.63 -3%
Oct-16 31.66 34.51 -8% 216.59 225.13 -4%

Coal Dispatch by SCCL to Power Sector (Million Tonnes)

Monthly Cumulative
Month
Current Year Previous Year Growth (YoY) Current Year Previous Year Growth (YoY)
Apr-16 3.822 3.659 4% 3.822 3.659 4%
May-16 4.132 3.994 3% 7.986 7.512 6%
Jun-16 3.849 3.59 7% 11.835 11.242 5%
Jul-16 3.398 4.147 -18% 15.15 15.39 -2%
Aug-16 3.66 4.04 -9% 18.81 19.43 -3%

30 Sep-16 3.41 3.61 -6% 22.22 23.04 -4%

Oct-16 4 3.9 3% 26.62 26.94 -1%

State-wise coal production of CIL- FY14 to FY17 (Oct16) (in MT)

2016-17
STATE (APR-OCT) 2015-16 2014-15 2013-14
(Prov.)
West Bengal 11.691 23.718 21.652 20.43
Jharkhand 55.508 113.675 108.521 98.26
Chhattisgarh 65.334 124.206 115.192 110.143
Orissa 74.68 137.901 121.379 110.439
Madhya Pradesh 43.412 87.892 76.403 73.59
Maharashtra 14.94 38.187 35.354 34.175
Uttar Pradesh 7.876 12.689 14.957 14.721
Assam 0.127 0.486 0.779 0.664
CIL 273.568 538.754 494.238 462.422

CoverStory
US elections: Rise of Donald Trump
to change global energy dynamics
Trump presidency could prove to be a boon for fossil fuel consumers
May prove counterproductive to climate change efforts, feel experts
By Team InfralinePlus
Donald Trump remains an unknown
quantity and nobody knows exactly
what his energy policy will be like.
However, if his campaign rhetoric is
anything to go by, Trump presidency
could prove to be a boon for fossil fuel
consumers. Trump has said he is in
favour of removing oil-sector regula-
tions, opening federal land to drilling,
and has vowed to revive a major trans-
Canadian and trans-US oil pipeline
project while pledging to support the
coal industry. He has also promised
to follow protectionist policies to stop
offshoring of American jobs. If he does
so, he could risk starting trade war with
China and tip the world economy into
a recession. That would hit oil demand
and lower prices. India would benefit in
such a scenario.
The Joint Comprehensive Plan
of Action, as the Iran nuclear deal is
titled, has not been ratified by the US
Congress. It has been brought into
force through an executive order by
President Obama. Trump could rescind
December 2016
www.InfralinePlus.com
31
that. The fall-out would be messy, but
it can be done, at least in theory, say
geopolitical experts.
Currently, Organisation for
Petroleum Exporting Countries (OPEC)
is trying to hammer out an output
pact, but Saudi-Iran regional rivalry is
coming in the way. If America scraps
Iran nuclear pact, sanctions will kick in
again on the Persian nations oil export,
which would instantly take 1 million
barrels per day of oil out of the market.
That would be enough to set the oil
 December 2016
www.InfralinePlus.com
CoverStory
market on fire. Needless to say, India
would be hit hard.
If Trump does not annul the Iran
nuclear pact but stops implementing
it, the remaining sanctions will not
be lifted. Banks and re-insurance
companies will still drop Iran
like a hot potato, impacting its oil
export. Important Asian buyers were
threatened in the past with the loss of
access to the US banking system to
persuade them to cut their purchases
of Iranian oil. This tactic could work
again, say analysts. Indian oil com-
panies like ONGC Videsh, which have
exposure to the Iranian hydrocarbon
sector, could feel the heat if nuclear
sanctions are re-imposed on Iran.
That would also impact Indias energy
security quest.
Trump has also promised to bail
out the US coal industry which is
reeling under demand loss due to shift
32 of electricity generators to natural gas
which has become cheaper in the wake
of shale revolution. If he keeps his
promise and withdraws laws crippling
the coal industry, the shift towards
natural gas could reverse. That could
in turn force gas producers to look
at export option, which would put
downward pressure on world LNG
market, a scenario that should benefit
energy-starved countries like India.
However, since it takes time to build
infrastructure to enable LNG export,
there is not likely to be much impact in
the medium term.
Trump may not be a staunch sup-
porter of renewable energy like his pre-
decessor Barack Obama, but he cannot
stop the march of solar energy which
is running on its own steam. However,
US banks and financial institutions
may not be as keen to finance overseas
clean energy projects as they were
under Obama administration. The fund
may be diverted to finance infra boom
envisaged by Trump.
India, which has been getting
generous funding from US for its 1
Trump has also prom-
ised to bail out the US
coal industry which is
reeling under demand
loss due to shift of
electricity generators
to natural gas which
has become cheaper
in the wake of shale
revolution. If he keeps
his promise and with-
draws laws crippling
the coal industry, the
shift towards natural
gas could reverse
lakh MW solar energy programme,
could feel the squeeze as a fall-out
of the regime change in America.
However, industry experts feel it is too
early to say how world energy market
will react under Trump presidency.
It is too early to predict the effect
of Trump presidency on the global
energy scenario. But if the campaign
pronouncements are indicators, he is
going to encourage domestic oil and
gas industry in the US, which will add
to the oversupply situation and keep
the prices in a range, said Debasish
Mishra, Partner at Deloitte Touch.
Dollar play
If America turns protectionist, dollar
could lose its safe-haven status and
weaken. And if sustained, a weaker
dollar should improve the competitive
position of US coal and LNG produc-
ers in international markets. It should
also be good news for net energy
commodity importers such as India.
The dollar is, no doubt, the currency
of international energy commodity
trade. For both net energy commodity
importing countries and net exporters,
changes in the value of the dollar have
major impacts; for the former on the
relative value of their energy imports,
and for the latter on the relative value
of their revenues.
However, the dollar is no ordinary
currency; it is the worlds reserve cur-
rency. If the global economic outlook
is negative, investors tend to move
into dollar assets as a safe haven. This
creates an inverse correlation between
the dollar and energy commodity
prices. In other words, if the economic
outlook is poor, the dollar tends to rise
as commodity prices fall, analysts say.
Conversely, in a more positive
macroeconomic environment, wherein
demand for energy commodities
increases, investors seek riskier,
higher-yielding assets and the dollar
tends to weaken at the same time that
energy commodity prices increase,
they add. But this is a correlation

rather than causal effect. A crisis of
confidence in the dollar, perhaps the
result of the election of Donald Trump
to the US presidency, could upset
this relationship, just as the 2008/09
financial crisis wrecked then prev-
alent assumptions about the relative
behaviour of different asset classes
with systemic effects.
If the credit worthiness of the US
government becomes doubtful, the
dollar becomes a riskier asset, raising
the question of where funds would seek
safe haven Asia or Europe? The
answer to this would determine relative
buying power and thus impact global
trade flows in energy commodities
between the Atlantic and Pacific basins,
feel analysts.
Implications for global
crude oil market and India
If Hillary Clinton would have won
the US presidential election, offshore
exploration could have been restricted
to the Gulf of Mexico and onshore to
private land. But Trump is for stepping
up exploration to create domestic self-
sufficiency in oil and create more jobs.
So the oil industry has every reason
to cheer Trumps victory. He has even
threatened to block oil import from
Saudi Arabia. During his campaign he
vowed to secure US energy inde-
pendence from our foes and the oil
cartels, while also creating complete
American energy independence.
For its part, Saudi Arabia has
promised to engage with the US
unprovoked by Trumps rhetoric. Saudi
Arabias oil minister Khalid Al-Falih,
also the chairman of Aramco, has fired
back, At his heart president-elect
Trump will see the benefits of Saudi oil
imports and I think the oil industry will
also be advising him accordingly that
blocking trade in any product is not
healthy. The US is sort of the flag-
bearer for capitalism and free markets,
Al-Falih added.
He further stated, The US con-
tinues to be a very important part of a
If Hillary Clinton would
have won the US presi-
dential election, off-
shore exploration could
have been restricted
to the Gulf of Mexico
and onshore to private
land. But Trump is for
stepping up explora-
tion to create domestic
self sufficiency in oil
and create more jobs.
So the oil industry has
every reason to cheer
Trumps victory
global industry that is interconnected,
that is dealing with a fungible com-
modity which is crude oil. So having
equalisation through free trade is very
healthy for oil. The Saudi oil min-
ister added that Saudis are waiting for
Trumps presidency, as his presidential
campaign had amounted to 50,000
feet announcements (description of a
situation that provides no details) that
may change.
Despite the domestic shale oil
boom, which has made the US the third
largest global crude oil producer, the
country still relies heavily on Saudi
crude imports. Saudi Arabia is the
December 2016
www.InfralinePlus.com
largest Middle Eastern oil supplier
to the US with an 11 per cent market
share and has also invested heavily in
the American refineries to help lock
in that supply. Around 31 per cent of
all US oil imports are from OPEC
members, while Canadian oil imports
have a 41 per cent share. There is 33
another reason why Trumps rhetoric
may not find traction most of US
refineries are configured to process
heavy and cannot absorb domestic
shale oil which is lighter.
The above analysis shows that
Trump may have to do a lot of
re-thinking on his outlook on the
oil industry and may not be able to
carry out threat which is likely to be
counter-productive for US refiners.
According to analysts, a Trump
presidency that is pro-business will
encourage oil development, permit
pipelines, reduce corporate profit
taxes and generally make US oil more
competitive. At first glance, weaker
post-election oil prices may appear
to encourage an OPEC deal but that
may not be the case. The oil cartel
is working to get members agree on
production cut. However, analysts say
that the fear of losing market share
could stop the OPEC from taking
action. If OPEC were to cut back
on production and raise oil prices,
that would only strengthen the US
oil sector, intensifying competition
 December 2016
www.InfralinePlus.com

CoverStory

with an industry that now has the full

backing of the president and a Repub-
lican congress, said analysts.
India, which meets 80 per cent of its
crude oil requirement through imports,
stands to benefit from depressed inter-
national oil prices. With Trump threat-
ening to tighten screws on Iran, internal
dynamic of the OPEC could change. As
we know, there is no love lost between
Saudi Arabia and Iran, the former
would benefit from re-imposition of
trade sanctions on Iran.
The outcome of the US election
adds to the challenges for the oil
exporters because it will likely lead
to weaker economic growth in an
already fragile global economy. And
that means additional pressure on oil
demand, feel analysts who foresee
the global economy losing ground
under Trump presidency. OPEC too
has hinted that it expects oil to remain
34 weak in coming days due to worries
about the global economy and uncer-
tainty about Trumps policies for the
Middle East.
Analysts feel that even if the OPEC
agrees on output cut, it may not be
able to support depressed oil market. If
Trump abandons Iran nuclear deal, Iran
would retaliate and abandon its own
commitments in a reciprocal response.
Life would also become difficult for
Americans in Iraq, a close Iranian ally.
In such a scenario, Saudi Arabia would
ironically become Americas best
friend overnight. Should the president-
elect remove the burden from Saudi
Arabia to cut its own production by as
much as 1 million barrel per day and
shift it to Iran, whose output would
be forcibly cut, the Saudis would not
only preserve their market share, but
also enjoy the spectacle of crude prices
surging back, say experts.
So, it is unclear if Trump would
enjoy being perceived as a hardliner
on Iran, yet one who indirectly helps
support the nation that has been the
most vocal supporter of the Clintons,
Saudi Arabia. Any escalation between
India, which meets 80
per cent of its crude oil
requirement through
imports, stands to
benefit from depressed
international oil prices.
With Trump threatening
to tighten screws on
Iran, internal dynamic of
the OPEC could change.
As we know, there is no
love lost between Saudi
Arabia and Iran, the
former would benefit
from re-imposition of
trade sanctions on Iran
the Trump administration and Iran
would send oil prices higher. While
such a scenario would be welcome by
the US oil industry, fuel consumers
could be hit hard as they would have
to shell out for every litre of petrol.
It could pose a serious dilemma for
Trump.
Trump has promised to double US
economic growth but also pledged
protectionist trade policies which will
have hugely negative implications for
Indian and other energy-deficient Asian
countries, given how much their GDP
is tied to trade with the US. Hence it is
negative for growth and oil demand, at
least due to the uncertainty that Trump
creates, believe naysayers.
Implications for LNG
market
Even as many Trump policy propos-
als remain vague and ill-defined, it
seems certain that his administration
will encourage increased US natural
gas production, both onshore and
offshore. Analysts say Trump will
open up new leases for shale and oil
drilling in Alaska while also confirming
the divisive KeyStone XL pipeline. It
seems likely that Trump will confirm
the North Dakota Access pipeline, cur-
rently held up by strong protests, thus
kick-starting production in the Bakken.
Trump holds personal investments in
Energy Transfers Partners and Phillips
66, both sponsors of the project.
This, together with the greater crude
piped in from Alberta, will improve the
supply side of crude oil. However, the
likely emphasis of Trumps policies on
domestic, rather than international con-
siderations could end up complicating
the overall impact of these develop-
ments. His vow to carry out a trade
war with China, as well as his calls for
heavy tariffs on imported goods and
for US energy independence, could
limit US access to export markets

and reduce the competitiveness of US
energy products.
That is where things get compli-
cated for LNG, say analysts. Federal
clearance is needed to approve
additional LNG export terminals,
and an expansion in American LNG
export capacity would need at least
some cooperation from the federal
government. Other oil and gas experts
believe the impact of Trumps policies
may be minimal. According to them,
rhetoric on the campaign trail is not
always a great indicator of actual
policy plans. Certainly Trumps
confusion over what LNG is does not
generate confidence. But if Trump is
serious about putting America first
and concentrates on domestic demand
rather than exports, LNG exports
could be hit.
Implications for renewable
energy
Trump has said he wants to scale back
federal spending on clean energy,
including R&D for wind, solar, nuclear
power, and electric vehicles. This
would require Congress nod, but it is
hardly impossible, say analysts. India,
which has targeted to add 1 lakh MW
capacity based on solar by 2022, (175
GW overall) has been getting generous
fund from US financial institutions. If
renewable energy goes off US adminis-
trations radar and Trump unveils ambi-
tious infra spending plans, financing
coming into Indias solar sector could
dry up, say analysts.
Trump has also vowed to withdraw
the US from Paris climate pact. If he
carries through on the threat, developed
countries may not keep their com-
mitment to provide 100 billion dollar
per year funding from 2020 to help
developing countries mitigate impact
of climate change. Developed countries
already seem to be dragging their feet
on this issue. US withdrawal could
provide them the pretext to back out of
the commitment. That would hurt the
fight against climate change.
Donald Trumps promise to revive coal
Trump has also vowed
to withdraw the US
from Paris climate pact.
If he carries through on
the threat, developed
countries may not keep
their commitment to
provide 100 billion
dollar per year funding
from 2020 to help
developing countries
mitigate impact of
climate change
December 2016
www.InfralinePlus.com
We hope constraints in shale
exploration and clean coal technologies
will be taken care of under the new
president, said UD Choubey, director
general, SCOPE and former CMD,
Gail India.
However, if the recent comments
of Amos J. Hochstein, Special Envoy,
Bureau of Energy Resources at the US
Department of State, are anything to go
by, very little will change between the
two countries as far as energy relations
are concerned. According to Hochstein
coal is being discarded by power manu-
facturers not because of government
regulations but due to the changes in
technology. On the President-elect
mining in the U.S. and leave the Paris
climate agreement, Hochstein said,
Very little will change. Coal is not
coming back in the U.S. regardless of
what Republicans say.
Coal will remain a major part of 35
Indias energy mix, which is true when
Obama is President, which will be true
when Donald Trump will be President.
But it was not President Obama who
set the target of 175 GW of renewable
energy for India, it was PM Modi. I
dont see that changing, he said.
Similarly, Dilip Kumar Jena, a
senior energy analyst at PwC, feels,
Clean coal technologies may move to
our priority list if we desire to utilise
our coal resources, referring to the
change of guard in the US.
From the above analysis, it is clear
that it is too early to say how far Trump
will go in carrying out his threats on
immigration and trade war with China.
Analysts warn against reading too
much into Trumps rhetoric. Even if he
wants, Trump cannot defy reality which
has a way of asserting itself, analysts
add. Trumps world views are likely
to be tempered by economic reality,
though it is clear that he will be a
champion of drilling at home to create
jobs for his political constituency.
For suggestions email at feedback@infraline.com
 December 2016
www.InfralinePlus.com
NewsBriefs | Oil & Gas National
ONGC seeks complete autonomy on pricing of natural gas to boost output
State-run Oil and Natural Gas Corporation
(ONGC) is seeking total pricing freedom for
natural gas produced in the country, argu-
ing it would help boost local output and de-
velop India into a vibrant gas market. We
are making the case before the government
KG gas penalty: Reliance Industries sends arbitration notice to govt
Reliance Industries (RIL) and its foreign
partners the UKs BP and Canadas Niko
Resources have sent a notice of arbitra-
tion to the government contesting the
36 Centres demand of November 3 seeking
to recover from them $1.552 billion in the
aggregate, for exploiting natural gas that
migrated to their KG-D6 block from state-run
ONGCs adjacent asset. On November 3, after
receiving the governments demand for $1.55
billion, RIL had said that it proposes to invoke
the dispute resolution mechanism in the pro-
duction sharing agreement and issue a notice
of arbitration to the government. RIL remains
convinced of being able to fully justify and
vindicate its position that the governments
GAIL scraps $7 billion Make in India LNG carrier tender
After dragging for more than two years,
state-owned gas utility GAIL India Ltd
has scrapped a $7 billion tender for hiring
newly built ships to ferry LNG from US after
bidders did not agree to Make-in-India
terms. GAIL, which was forced by the Oil
Ministry to add the Make-in-India condition
to its tender, will now hire the ships from the
global spot or current market to transport
liquefied natural gas (LNG). Two Japanese
bidders -- a consortium of Mitsui OSK Lines
(MOL)-Nippon Yusen Kabushiki Kaisha (NYK
Line) and Mitsui & Co and a consortium
comprising Mitsubishi Corporation-Kawasaki
Kisen Kaisha Ltd (K Line) and GasLog, had
that the gas prices could be deregulated,
Chairman Dinesh Sarraf recently said.
Some regulatory mechanism can be put in
place to protect the interest of the consum-
ers. But let the prices be deregulated. Let
it be determined by the buyers and sellers
collectively through the market forces.
With this ONGC has given a new thrust to
the demand from Reliance Industries, BP
Plc, and other private sector gas producers
in the country to free up pricing. The gov-
ernment has kept a lid on prices through
a formula worked out two years ago that
aligns local with international rates, and a
gas allocation policy that prioritises sectors
for receiving local supply.
to September 15, 2015. It called the sale
off apparently because it could not find
claim is not sustainable. The petroleum min-
istry, in letter sent to the firms on November
3 with details of how the amount has been
computed, directed the explorers to pay the
amount in the next 30 days, failing which the
ministry shall be constrained to take steps
for recovering the unpaid government dues.
with the condition that one of the three
sought several deviations from the tender
conditions, which were not agreeable
to GAIL. In the tender, GAIL sought to
time-charter nine newly built LNG ships of
a cargo capacity of 150,000-180,000 cubic
RILs partner Niko puts KG-D6 stake
for sale
Reliance Industries partner Niko
Resources of Canada has put on sale its
10 per cent stake in the flagging KG-D6
gas block off the east coast. Financially
strained Niko had in February last year an-
nounced plans to sell its 10 per cent stake
in the KG-DWN- 98/3 or KG-D6 block to
pay off $340 million debt. It had planned
to sell off the interest by April 30, 2015
but later extended it to May 31 and then
a buyer. The firms interim Chief Execu-
tive Robert Ellsworth said the company
had re-launched the sales process for its
interest in the D6 Block due to favourable
developments with respect to natural
gas pricing applicable to the companys
undeveloped deep-water fields. While gas
from existing producing fields are priced
at a rate equivalent to the price prevailing
in gas surplus economies such as Russia,
the US and Canada, the government has
given pricing freedom subject to a cap for
undeveloped gas finds in deep-sea blocks.
meters to LNG it has tied up from Sabine
Pass and Cove Point LNG projects in US,
with supplies slated to start from December
2017. Bids were sought in lots of three,
ships will be built at an Indian shipyard. It
is learnt that Indian shipyards neither had
technology or experience of building the
highly specialised LNG ships, the bidder
sought sovereign performance guarantee for
the ones built in India. After postponing the
deadline thrice, GAIL had in February last
year scrapped the tender to hire nine LNG
carriers to ferry gas from the US, with a
caveat that three of them be made in India.

NewsBriefs | Oil & Gas National
PETRONAS looks to expand its business in India
PETRONAS, Malaysias national oil com-
pany, is committed to explore business
growth opportunities across all segments
of the oil and gas value chain in India,
said President and Group CEO, Datuk Wan
Zulkiflee Wan Ariffin. India has always
been an important market for PETRONAS
Iran overtakes Saudi Arabia as top oil supplier to India
Iran overtook political rival Saudi Arabia
as Indias top oil supplier in October,
shipping data showed, just ahead of
a producers meeting this month to
hammer out the details on output cuts
aimed at reining in a global glut. Iran
used to be Indias second-biggest oil
supplier, a position it ceded to Iraq after
tough Western sanctions over its nuclear
development programme limited Tehrans
exports and access to finance. But Indias
oil imports from Iran have shot up this
year after those sanctions were lifted in
January. In October they surged more
than threefold compared with the same
month last year, rising to 7,89,000 barrels
Rs 1,864 crore Petrochem Park gets Kerala nod
The Kerala government has issued an
order granting in-principle nod for Kerala
Industrial Infrastructure Development
Corporation (Kinfra) to set up a petro-
chemical park in Kochi. The next step is to
procure 600 acres from FACT complex at
Ambalamugal in Kochi for the project. The
decision regarding this is pending for Union
ccabinet approval, said M Beena, managing
director of Kinfra. The estimated project
cost is Rs 1,864 crore, including the cost
of land and internal infrastructure, which
will be provided by Kerala Infrastructure
Investment Fund Board (KIFB) in loan.
Kochi already has a large refinery, fertiliser
as we see great potential to grow further
with our partners and customers, said Wan
Zulkiflee. As part of its business strat-
egy, PETRONAS will continue to invest in
expanding its capacity in commodity chemi-
cals and refined products, and enhance its
product offerings to include differentiated
and specialty chemicals for its customers
worldwide. India, one of the most competi-
tive economies and the fourth largest LNG
market in the world, also presents vast
potential for PETRONAS. Wan Zulkiflee said
PETRONAS is keen to explore opportunities
in the Indian LNG market and is working
to establish a liaison office to help grow its
business in the country.
per day (bpd), according to ship tracking
data and a report compiled by Thomson
Reuters Oil Research and Forecasts. That
compares to 6,97,000 bpd supplied last
month by Saudi Arabia.
government for final approval, said Kinfra
structure facilities required to be created
and chemical factories, a bulk terminal
and International Container Transhipment
Terminal, besides the LNG Terminal & Gas
Pipeline Network being established. The
project assumes significance in view of the
December 2016
www.InfralinePlus.com
Six more states keen to implement
DBT in kerosene: Government
After Jharkhand, six more states
including Gujarat and Maharashtra have
evinced interest to implement direct
benefit transfer (DBT) in kerosene. In
October, Jharkhand became the first
state to roll out DBT in kerosene even as
all states were asked to implement the
same. ...State governments of Gujarat,
Madhya Pradesh, Chhatisgarh, Mahar-
asthra, Rajasthan and Himachal Pradesh
have indicated their willingness to imple-
ment DBT in kerosene, Minister of State
for Food, PDS and Consumer Affairs C
R Chaudhary said in a written reply to
the Lok Sabha. Under the DBT scheme, 37
kerosene is sold to PDS beneficiary at
non-subsidised rates and the applicable
subsidy is directly transferred into their
bank accounts. Replying to a query on
government reducing allocation of PDS
kerosene, the Minister said that the quota
of PDS kerosene is rationalised based
on various factors like increase in domes-
tic LPG/PNG connections, non-lifting of
PDS kerosene quota by concerned states
among others.
proposed expansion of BPCL, and proxim-
ity to port and natural gas infrastructure.
The detailed project report (DPR) for the
proposed park will be sent to the state
official, KN Srekumar. The corporation
would also explore the possibility of getting
central funding for the project. Infra-
include internal roads, drainages, water
treatment plants, internal water supply
system, internal electrification, common
sewage treatment plants, common effluent
treatment plants, rain water harvesting and
solid waste management.
 December 2016
www.InfralinePlus.com
NewsBriefs | Oil & Gas International
Shell considering selling its Iraq oil assets as part of $30 bn programme
Royal Dutch Shell is considering selling out
of its oil fields in Iraq as part of its global
$30 billion asset disposal programme. Shell
is seeking to slim down its vast oil and gas
portfolio following the $54 billion acquisition
of BG Group in February, which transformed
it into the worlds top liquefied natural gas
trader. With oil prices having slumped since
U.S. is a net exporter of natural gas for first time in nearly 60 years
The U.S. has become a net exporter
of natural gas, further evidence of the
how the domestic oil and gas boom is
reshaping the global energy business.
38 The U.S. has exported an average of
7.4 billion cubic feet a day of gas in
November, more than the 7 billion cubic
feet a day it has imported, according to
S&P Global Platts. Exports also topped
imports for a few days in September. It
has been nearly 60 years since the U.S.
last shipped out more natural gas than it
brought in annually, according to the U.S.
Energy Information Administration. The
milestone comes less than a year after
restrictions on most crude oil exports
BP buys stake in Enis giant Zohr gas field offshore Egypt
BP has agreed to buy 10 percent of Enis
Shorouk concession offshore Egypt, which
includes the giant Zohr gas field, for $375
million, joining other oil majors in increas-
ing bets on the growing gas market. The
deal gives Eni much-needed cash as part
of its 5 billion euro divestment plan to
continue investing and paying dividends
despite weak oil prices. The companies
also agreed BP could purchase another 5
percent of the field before the end of next
year, when the Zohr field is slated to start
production, under the same terms and
that BP would reimburse Eni around $150
million in past expenditure. Zohr, discov-
2014 the company wants to focus on busi-
ness areas with the highest returns such as
LNG and deepwater oil production in Brazil
and the Gulf of Mexico. The Anglo-Dutch
company, which has been present in Iraq for
over a century, has found only limited finan-
cial benefits in recent years from its involve-
ment in Iraqs oil production, where it is paid
in crude oil but has limited say on production
strategy, the sources said. However, Shell
continues to see value in developing its gas
business in Iraq and is not interested in
selling those interests. Iraq accounted for
around 4.4 percent of Shells total oil and
gas production in 2015, according to its 2015
annual report.
were lifted, allowing tankers of crude to
be freely shipped overseas for the first
time nearly half a century, and together
they mark a significant and potentially
permanent change in the way U.S. energy
flows around the world.
ered by Eni last year, has an estimated
850 billion cubic meters of gas in place.
It will help plug Egypts acute energy
shortage and save the country billions
Singapore readies up to $1.1 bln in
loans for oil & gas-linked firms
Singapore plans to offer financial as-
sistance to its liquidity-hit marine and
offshore engineering companies that could
help them raise as much as S$1.6 billion
($1.1 billion) in loans. The two-year down-
turn in oil prices has forced several firms,
including oilfield services firm Swiber,
oil and gas service provider Swissco
Holdings Ltd and container ship owner
Rickmers Maritime, to seek restructuring
of their debt. Billions of dollars have been
wiped off the market value of the sectors
listed companies and thousands of jobs
have been axed in the worst-hit area of
Singapores slowing economy. Many of the
companies in the affected sectors have
not been able to issue debt or get bank
loans. Singapores Ministry of Trade and
Industry (MTI) said the loans it is organis-
ing will be available from next month and
could catalyse about S$1.6 billion in total
financing to the sector over the next year.
The MTI said it will introduce a scheme
allowing affected companies to borrow up
to S$5 million for up to six years.
of dollars in hard currency that would
otherwise be spent on imports. Once an
energy exporter, Egypt has turned into a
net importer because of declining oil and
gas output and increasing consumption.
It is trying to encourage quicker develop-
ment of recent discoveries to fill its energy
gap as soon as possible. A run of big gas
finds off the Egyptian coast have made
the country a top destination for energy in-
vestment even as firms seek to save cash
to handle low oil prices better. The deal
deepens BP and Enis partnership in Egypt,
where they announced a significant gas
discovery in the East Nile Delta in June.
 December 2016
www.InfralinePlus.com

ExpertSpeak
Integration of refinery with petrochemicals
can improve margins
Sandeep N Gupta, General Manager, Business Development, Linde
Engineering India Pvt. Ltd., feels that in todays hyper-competitive
and volatile environment, integration of refinery with petrochemicals
offers an important opportunity to hedge Gross Refining Margins
(GRMs). Further, an integrated petrochemical refinery not only has
flexibility in feedstock supply, it can adjust its product slate as per
market needs.

Globally, the change witnessed in utilities, offsite &infrastructure. The

energy landscape started from de- basic petrochemicals that are produced
coupling of crude oil and natural gas in such complexes are ethylene, pro-
pricing due to economical extraction pylene, benzene, toluene,
of Shale gas in 2008 and most re- xylenes. The
cently, crude oil price oscillations that demand of these Degree Sandeep N Gupta, General Manager- Business
Development, Linde Engineering India Pvt. Ltd.
have sent shock waves across world. building blocks of inte-
Companies have been scouting for in India has gration between unique opportunity to integrate their
refinery and 39
a business model that can help them been growing refining business with petrochem-
remain on positive side of cash flows. and driven
petrochemicals icals which is supported by rising
Time tested approach of Integrating by robust
varies from demand and GRM economics.
region to
refineries with petrochemicals for GDP that has
region
improving GRMs has been making led in increased Role of Petrochemicals
news again. consumption of Petrochemical capacity build up
petrochemicals. in India is driven by supply gap in
The Focus Thus, together with clean fuel regula- Indian market and availability of
Cursory review of literature reveals tions, refiners in India are having a feedstocks such as naphtha. While
that in a hyper-competitive and volatile
environment, integration of refinery India : Key Petrochemicals (2011-16)
with petrochemicals offers entire value Product Demand Multiplier Trade Insights
chain as opportunity ladder to hedge Polymers PE 1.6 Temporary Exporter
GRMs.The vagaries of inter-connected PP 1.7 Net Importer
economies make every refiner suscep-
PVC 1.5 Net Importer
tible to shocks that cannot be predicted.
PS 2.0 Net Importer
Companies like BASF have con-
sistently kept themselves ahead of Aromatics PX 2.0 Net Importer
curve and have been able to maintain PTA 1.8 Temporary Exporter
their global rankingsmainly driven by MEG 1.6 Temporary Importer
their verbund approach. It has helped PET 2.4 Net Exporter
BASF unleash value of each molecule Rubber PBR 1.5 Net Importer
by benefits arising out of integration. SBR 1.5 Net Importer
Integrating refinery with petro- NBR 1.5 Net Importer
chemicals has plenty of advantages like
BUTYL 1.5 Net Importer
enhancement in operational efficiency,
EPDM 2.9 Net Importer
higher returns on assets due to increased
streams integrationand optimization of (Ref: CPMA)
 December 2016
www.InfralinePlus.com
ExpertSpeak
coal to chemicals route has lately
picked up, its viability is more centred
in Chinadue to coal monetization of
stranded reserves.
Companies operating non-inte-
grated petrochemical complex have
been confronted by persistent issues
on feedstock quality and quantity.
However, an integrated petrochemical
refinery not only has flexibility in
feedstock supply, it can adjust its
product slate as per market needs.
Meeting environmental regulations
like aromatics and benzene content in
gasoline are easy if it is an integrated
complex. For example, extraction
of BTX from a refinery cut into
reformate stream clubbed with pygas
from refinery, justifies business case
for a large scale BTX extraction unit.
Leveraging and optimizing utilities,
offsite and infrastructure also has
positive impact on Capex as against
establishing separate facilities for
40
a standalone refinery or petchem
complex.
When close to 40 to 45% of project
costs are on account of utilities
and off-sites, integration helps in
achieving better return on investment.
Integration Petrochemicals Production
Low to If % of Crude throughput used towards petrochemicals is < 10
moderate to 15%, integration regarded is low to moderate and hence will
have low to moderate GRMs only
High If % of Crude throughput that is used towards petrochemicals
is > 15% but less than 30%, it is regarded as reasonably high
level of integration. Such a complex has above average GRM.
Petrochemical In case, petrochemicals production far exceeds fuels that
Refinery are generated in a refinery, issues around product slate,
flexibilityand type of crude processed play an important role in
deciding the GRM of such a complex.
Petrochemical capacity build up in India is
driven by supply gap in Indian market and
availability of feedstocks such as naphtha. While
coal to chemicals route has lately picked up,
its viability is more centred in Chinadue to coal
monetization of stranded reserves. Companies
operating non-integrated petrochemical
complex have been confronted by persistent
issues on feedstock quality and quantity
A refinery can reprocess by-products / Integration is the buzz word;
various streams from a petrochemical however, degree of integration
complex like pyrolysis, petcoke, between refinery and petrochemicals
etc., as it helps augment value to low varies from region to region. There
revenue streams. are three main considerations while
firming up the degree of integration
mainly capex, demand/supply scenario
and technology options. Integrated
complexes can be roughly classified in
3 categories depending upon the per-
centage of crude oil that is processed
for petrochemical production:
Key role is played by technologies
in refinery integration with petro-
chemicals including steam cracking
of naphtha; catalytic reforming of
aromatics and refinery fluidized cata-
lytic cracking under different severity
modes. Integration is only achievable
if all the factors that are important can
be simulated and aligned withfactual
data on a dynamic basis. A toolbox of
technologies must be applied when
integration efforts are driven towards
higher levels of sophistication.
For suggestions email at feedback@infraline.com

InDepth
Govt moves ahead with
auction of small oil fields
134 e-Bids received for 34 contract areas, 120 for onland and 14 for offshore
Bidding took place in a challenging global market environment and price volatility
By Team InfralinePlus
In line with vision for reduction of
Indias oil imports by 10% by 2022,
Ministry of Petroleum of Natural Gas
announced Discovered Small Field
(DSF) Bid Round 2016 on in May
2016, offering 46 contract areas across
9 sedimentary basins, for development.
Of these, 26 are onland, 18 shallow
water and 2 deepwater fields. The fields
on offer were discovered by state-run
ONGC and Oil India Limited (OIL).
Directorate General of Hydrocarbons
(DGH), the technical arm of the Ministry
of Petroleum and Natural Gas, invited
bids through International Competitive
Bidding mechanism for these areas
which hold 625 Million Barrels of
Oil and Oil Equivalent Gas in-place
volumes, spread over 1500 sq. Km.The
discovered small field policy provides
for uniform licence for exploration and
production of all forms of hydrocarbon,
easy-to-administer revenue-sharing
model, and marketing & pricing
freedom for the crude oil and natural
gas produced. Further, the contractor
will have the rights for exploration
throughout the contract period.
December 2016
www.InfralinePlus.com
41
In order to promote new companies
to enter the E&P sector, bidders
who didnt have any exploration
and production industry experience
were also allowed. However bidder
was required to have an adequate net
worth. The net worth of the bidder
should be equal to or more than its
share of the value of the biddable work
programme commitment cumulated
across all its bids. Companies,
either alone or in association with
unincorporated or incorporated joint
ventures, may bid for one or more
 December 2016
www.InfralinePlus.com
InDepth
contract areas. Domestic companies, Discovered Small Fields on offer
including NOCs were permitted to bid. Basin Contract Fields
Participation by foreign companies areas
was permitted up to 100%. Cambay 5 5
The last round of auction under the Cauvery 2 2
New Exploration and Licensing Policy KG (on land) 7 8
was conducted in October 2010 when Assam-Arakan 9 13
Rajasthan 2 2
the crude oil price bench-marked to the
Vindhyan 1 1
Indian basket was $81 a barrel. Despite
Onshore 26 31
smaller contract areas on offer in the
Mumbai 13 27
DSF Bid Round, the response from offshore
private companies was overwhelming; Kutch offshore 2 2
around 37 private sector players KG (offshore) 5 7
submitted e-bids as against 27 private Offshore 20 36
companies, during NELP-IX.
DGH received 134 e-Bids for Snapshot of bids received
the 34 contract areas under the Total Contract Areas
Discovered Small Fields (DSF) Bid Total 46
Round 2016. Out of the total 134 Onland 26
e-bids received, 120 e-bids were Offshore 20
received for onland areas and 14
e-bids were received for offshore The bidding process has failed to
areas. The fields hold an in place grab interest from major global players
42 reserves of 48 million tonnes of oil, even as state-run Oil and Natural Gas
17.85 mt in onland blocks and 30.19 Corporation (ONGC) too decided to
mt on offshore blocks and over 38 stay away from the ongoing auctions.
billion cubic metres of gas reserves, For the current round, only five foreign
7.20 bcm in onland blocks and 31.18 companies showed up.
bcm in offshore areas. As many as 42 The bid round took place in a
companies individually or as member challenging global market environment
of the bidding consortium participated when the oil and gas prices have
in the bid round submitting 120 bids been volatile and the investment in
for about 70 per cent area for the exploration & production sector has
Discovered Small Fields. All the 26 seen substantial decline. Despite the
onland contract area received e-bids challenges, the response to DSF Bid
while 8 out of 20 offshore contract round has been very favorable and
areas have received e-bids. exceeded expectations of all experts. It
South Patan-DSF in Gujarat has not only attracted the interest of oil
received highest 19 bids. Among and gas companies but also attracted
the major companies that submitted the interest of the first time investors in
its bid include state-run Indian Oil E&P sector.
Corporation Ltd, Cairn India Ltd, The bidder with the highest total
Oil India, GAIL India, Bharat Petro number of development or appraisal
Resources Ltd, Adani Welspun wells will be assigned 20 points and
Exploration and Hindustan Oil the other bidders will be assigned
Exploration Company. One of the points on a pro-rata basis. Bidders
richest people in India, Dilip Shanghvi will bid the percentage share of the
of Sun Pharma too submitted a bid revenue offered to the government
through Sun Petrochemicals and at the two revenue points namely,
Subhash Chandras Essel Group also lower revenue point (LRP) which is
entered into the sector through Essel less than or equal to 0.0100 million
Group Middle East. USD per day and the higher revenue
Oil initially in place Gas initially in place
(MMt ) (BCM)
1.38 0.03
0.41 0.04
0.03 0.74
16.03 5.79
- 0.1
- 0.51
57 7.21
27.02 27.95
2.61 0.11
0.56 3.12
30.19 31.18
Bids received for (No. of Total Number of
Contract Areas) e-Bids
34 134
26 120
8 4
point (HRP) equal to or more than
1 million USD per day. The bidder
with the highest net present value
(NPV) of revenue share offered to the
government will get 80 points. For
calculating the NPV price, production
scenarios have been provided in the
notice inviting offers (NIO).
Once a bidder is declared
successful it has to coordinate with the
NOC in order to obtain the Petroleum
Mining Lease (PML) or Petroleum
Exploration Licence (PEL), as the
case may be, the same in its name.
The companies that win onshore
fields must start production within
three years, while those that win
shallow water and deep water blocks
must start production in four and six
years, respectively. The contract will
be valid for 20 years from the date
on which the PML/PEL, as the case
may be, is transferred to the bidder.
On mutual agreement, the contract
duration can be extended by another
10 years. The government reserves
the right to terminate the contract if
production ceases for over one year at
any instance.
For suggestions email at feedback@infraline.com

InDepth
Moving towards Methanol Economy
key to reduce oil dependence
Methanol can replace crude oil and natural gas to meet energy needs
India has large reserves of coal which can be gasified to make methanol
By Team InfralinePlus
The central Government has initiated
work on moving India towards a Metha-
nol Economy in future. An international
seminar was organised in September
2016 by NITI Aayog, along with Depart-
ment of Science and Technology, TIFAC,
Ministry of New and Renewable Energy,
the Methanol Institute (USA), and Cata-
lytic Think Tank (Bengaluru). The con-
ference was attended by the Ministers for
Petroleum & Natural Gas, for Shipping,
Road Transport and Highways, and for
Railways. NITI Aayog has constituted
a Methanol Committee, headed by its
Member, V K Saraswat, to evolve a road
map document for India to adopt Metha-
nol and DME as a transportation fuel
in road transportation, shipping and rail
network, as well as a chemical feedstock
and for power generation. It is therefore
useful to understand this concept.
Since oil and gas will sooner or
later get exhausted, there is need to
create an alternative, which should
ideally be carbon negative / neutral.
One such alternative was proposed
by Professors George Olah, Alain
Goeppert and GK Surya Prakash, in
their seminal book Beyond Oil and
Gas: The Methanol Economy.
December 2016
www.InfralinePlus.com
43
With an 80.8% import dependency
in petroleum products in 2015-16, India
is not far from the stage of Beyond Oil
& Gas. Our petroleum resources are
limited. The double digit GDP growth
that everyone in India desires will raise
import dependency significantly, reduce
national energy security, and draw down
forex reserves. The Methanol Economy
has the potential to address these issues.
It seeks to replace crude oil and natural
gas by methanol to meet our needs for
energy and petrochemicals. The special
feature about methanol is that it can be
made from conventional fossil sources
 December 2016
www.InfralinePlus.com
InDepth
as well as from renewable feedstocks.
Methanol thus offers a transition
mechanism that gradually reduces
dependency on petroleum. Importantly,
the Methanol Economy is expected to
be carbon neutral / negative.
Adequate availability of
methanol required
In order to implement a Methanol
Economy, a few conditions need to be
fulfilled. First, adequate quantity of
Methanol should be available. Sec-
ond, a nationwide distribution setup is
required. Third, the vehicles and other
equipment should be compatible with
Methanol. Naturally, techno-commer-
cial viability is essential. The Govern-
ment has formed Expert Groups under
the aegis of the NITI Aayog for such
evaluation. The Department of Science
and Technology is also supporting
related research proposals.
As regards availability of methanol,
44
a new approach is proposed. Production
from Indias few small methanol plants
is not enough even to meet the routine
domestic demand; the shortage of
Natural Gas in India prevents additions
to production capacity. However, India
has large reserves of coal, which can be
gasified to make methanol, as is done in
a big way in China. Another feedstock is
pet coke, which is available in sig-
nificant quantities from many refineries.
These have the potential to produce
several million tonnes of methanol, and
put us firmly on the path to a Methanol
Economy. Today, technologies are
available for handling the high ash
content of Indian coal; the Methanol
Committee proposes to set up a small
scale demonstration project to convert
such coal into methanol.
There is a possibility that the
proposed new coal / pet coke
based methanol plants may not be
competitive with imports, which are
usually from plants enjoying huge
economies of scale and cheap gas as
feedstock. If so, then investments in
large methanol plants may be delayed
until the economics is favourable. In
the interim, the technology and other
aspects need to be fully developed, to
ensure quick implementation.
Methanol can be made, via the inter-
mediate stage of bio-gas, from a variety
of renewable feedstocks that contain
carbon, such as bio-mass, municipal
solid waste, sewage, etc. Biogas, which
is mainly methane, is often burnt for
heating, or for power generation. In
future, this bio-gas could be converted
to methanol, with suitable technologies.
India produces about 1 billion tonnes
of non-edible bio-mass consisting of
There is a possibility
that the proposed new
coal / pet coke based
methanol plants may
not be competitive
with imports, which
are usually from
plants enjoying huge
economies of scale and
cheap gas as feedstock.
If so, then investments
in large methanol
plants may be delayed
until the economics is
favourable
agricultural & forestry residues such as
straw, rice husks, coconut shell, sug-
arcane tops. Some of this can converted
to bio-gas / methanol, without affecting
food supply. In addition to creating
employment, many activities requiring
energy will be facilitated, boosting the
rural economy, and changing the socio-
economic landscape.
Another major source of bio-gas is
food waste generated at restaurants,
commercial complexes, marriage
halls etc. This can be collected, con-
verted into bio-gas through anaerobic
digestion, purified, and supplied to
industrial customers. Similarly, the
organic part of Municipal Solid Waste
in some cities can be converted into
bio-gas, from which electricity is
generated. The huge quantities of
municipal sewage from towns and
cities can also provide several thousand
MW of power. These activities - in
operation in a few cities - will make a
sea change when expanded nationwide.
In sum, there is enormous potential
to make the required methanol from
existing renewable sources. An even
more interesting possibility is the
synthesis of methanol by combining
hydrogen obtained by electrolysis of
water with carbon dioxide collected
from industrial sources. A small plant
in operation in Iceland could be the
forerunner to larger plants.

Nationwide distribution setup
required
We may now turn to the second neces-
sary condition, namely distribution set
up. This is readily met, as the great ad-
vantage of Methanol is that it is a liquid
that can be easily transported and stored,
similar to petrol. The third condition,
of equipment compatibility, is also not
a major issue. Methanol is described as
an excellent fuel substitute for internal
combustion engines and diesel engines.
Though methanol has half the energy
content of petrol, its octane number is
higher. In India, two wheeler vehicles
are easiest to convert to methanol.
Industry statistics show that one third of
the 70 mil mts of methanol sold in 2015
was used for energy and fuel uses, with
China being the leader. Many provinces
in China blend methanol into petrol,
ranging from 10% to 100%. Since meth-
anol burns cleanly with no particulate
emissions, this step improves air quality
in cities-much desired in India too. Aus-
tralia, which is rich in natural gas but not
in crude, is examining options to blend
methanol (and ethanol plus methanol)
into gasoline. Such blends are popular
for racing cars in USA. Israel, which
has large off shore gas reserves, has set
a draft standard for 15% methanol blend
with gasoline. It appears that countries
having resources to make methanol
adopt it as a fuel to reduce their import
bills. The European Union permits upto
3% methanol blend in gasoline.
Methanol can be chemically con-
verted to Di Methyl Ether (DME), which
is a clean, colourless gas that is easy to
liquefy and transport. As it burns cleanly,
it is promoted for use as an automotive
fuel, for electric power generation, and
in domestic applications such as heating
and cooking. DME is safe - it has long
been used in aerosols by the personal
care industry. As its properties are
similar to LPG, DMEs main use is for
blending with LPG. The largest producer
is China. Technologies for producing
DME are under study by Indian Institute
of Petroleum and IIT Roorkee, with Aus-
tralian research organisations. The use of
DME in engines is under intensive study
at the IIT Kanpur. As DME can sub-
stitute diesel, heavy duty trucks running
Methanol can also serve
as a fuel to generate
electricity in fuel cells,
which can be 2-3 times
as efficient as an
internal combustion
engine. In Denmark,
such methanol powered
fuel cells are used to
extend the range of
battery powered electric
vehicles; some petrol
stations now offer
methanol to fill up such
vehicles
December 2016
www.InfralinePlus.com
on DME as fuel are under development
in China. Similarly, passenger cars are
being developed in Europe. California
(USA) has approved the use of DME as a
vehicle fuel.
Methanol can also serve as a fuel
to generate electricity in fuel cells,
which can be 2-3 times as efficient
as an internal combustion engine. In
Denmark, such methanol powered fuel
cells are used to extend the range of
battery powered electric vehicles; some
petrol stations now offer methanol
to fill up such vehicles. International
automotive companies are conducting
trials for passenger vehicles.
As a fuel for ships, methanol offers
advantages over existing options. As
India seeks to develop coastal shipping
and inland waterways, this is an area of
interest. The railway network can use
methanol, for both static and dynamic
applications. Methanol is also used as
a clean cooking fuel, alone or blended
with ethanol; such stoves would greatly
45
reduce indoor pollution for the large
part of Indias population that cooks
with wood / charcoal. Both methanol
and DME may be used in existing gas
turbines for electric power generation.
The diesel gen sets used for cell phone
towers are potential conversion targets.
Methanol is also used to manufacture
bio-diesel from vegetable oils.
Proven technologies exist for con-
verting methanol to gasoline, as well as
to ethylene and propylene, the two most
important petrochemicals. Thus, the bulk
polymers of polyethylene and poly-
propylene, which are in short supply in
India, can be made with local feedstocks.
One concern is that methanol has
been implicated in many cases of spu-
rious liquor. This aspect will have to be
dealt with, for example by an additive
that gives it a bitter taste. In conclusion,
the Methanol Economy encourages
development of alternate energy sources,
will help reduce energy import bill, as
also meet climate change obligations.
For suggestions email at feedback@infraline.com
 December 2016
www.InfralinePlus.com

StatisticsOil & Gas

Industry Sales Trend Analysis (Provisional): April-October 2016 (000 MT)
October April-October
Product
2015-16 2016-17 Growth (%) 2015-16 2016-17 Growth (%)

(A) Sensitive Products

SKO 575.7 380 -34 3,999.50 3,458.70 -13.5

LPG 1,688.10 1,859.70 10.2 10,906.90 12,083.80 10.8

Sub Total 2,263.80 2,239.70 -1.1 14,906.40 15,542.40 4.3

(B) Major Decontrolled Product

Naphtha 1,087.20 1,106.10 1.7 7,712.00 7,830.50 1.5

MS 1,850.50 2,106.20 13.8 12,550.90 13,967.30 11.3

HSD 6,347.30 6,672.80 5.1 42,573.20 43,938.40 3.2

Lubes+Greases 241.1 285.6 18.5 1,922.00 2,031.70 5.7

LDO 36.1 42.8 18.7 229.6 262.6 14.4

FO/LSHS 5,26.0 587.8 11.7 3,632.20 4,253.10 17.1

Bitumen 519.6 444.1 -14.5 2,963.60 3,074.40 3.7

ATF 533.9 586.7 9.9 3,540.40 3,935.90 11.2

Sub Total 11,141.70 11,832.10 6.2 75,123.90 79,293.90 5.6

46 Sub - Total (A) + (B) 13,405.50 14,071.80 5 90,030.30 94,836.30 5.3

(C) Other Minor Decontrolled Products

Petcoke 1,522.80 1,837.40 20.7 10,206.00 14,427.00 41.4

Others 535.8 578 7.9 3,700.60 3,922.70 6

Sub Total 2,058.60 2,415.40 17.3 13,906.60 18,349.70 31.9

Total 15,464.10 16,487.20 6.6 103,936.90 113,186.00 8.9

Natural Gas at a Glance (October, 2016) (MMSCM)

October April-October
2015-
Details 2014-15 2016 2016
16 (P) 2015 2016 2015 2016
(Target) (Target)

(a) Gross Production 33,657 32,249 2,795 2,759 2,755 19,244 19,237 18,479

- ONGC 22,023 21,177 1,838 1,951 1,943 12,676 12,744 12,627

- Oil India Limited (OIL) 2,722 2,838 254 256 246 1,598 1,770 1,720

- Private / Joint Ventures (JVs) 8,912 8,235 702 704 566 4,969 4,723 4,132

(b) Net Production (Excluding 32,693 31,138 2,705 2,671 18,551 17,863
flare gas and loss)

(c ) LNG Import 18,536 21,309 1,908 2,262 11,928 14,915

(d) Total Consumption (In BCM) 51,229 52,448 4,612 4,933 30,479 32,777

(e ) Total Consumption (In BCM) 51.23 52.45 4.61 4.93 30.48 32.78

(f) Import Dependency based on 36.18 40.63 41.36 45.86 39.13 45.5
Consumption (C/d*100)
 December 2016
www.InfralinePlus.com

Refinery-wise Crude Capacity Utilization (October, 2016) (OOO Tonnes)

October, 2016 Cumulative (April - October)
2016-17
Name of Undertaking/Unit Prorated % Utilisation
Actual Crude Prorated % Utilisation
Installed of Installed Actual Crude
Throughput Installed of Installed
Capacity Capacity Throughput
Capacity Capacity
A. Public Sector 11471 11845.62 103.27 79189 79212.25 100.03
1. IOC, Guwahati 85 72.22 84.97 586 508.39 86.76
2. IOC, Barauni 510 481.32 94.38 3518 3824.31 108.71
3. IOC, Gujarat 1164 1134.24 97.44 8032 8409.4 104.7
4. IOC, Haldia 637 678.9 106.58 4397 4720.86 107.37
5. IOC, Mathura 679 804.47 118.48 4690 5417.03 115.5
6. IOC, Digboi 55 51 92.72 381 301.82 79.22
7. IOC, Panipat 1274 1301.8 102.18 8795 9042.84 102.82
8. IOC, Bongaigaon 200 211.97 105.99 1378 1447.88 105.07
9. IOC, Paradip 1274 806.83 63.33 8795 3603.39 40.97
Total IOC 5877 5542.75 94.31 40572 37275.92 91.88
10. BPCL, Mumbai 1019 1244.67 122.15 7036 8312.75 118.15
11. BPCL, Kochi 807 975.46 120.88 5570 6484.96 116.43
Total BPCL 1826 2220.13 121.58 12605 14797.71 117.4
12. HPCL, Mumbai 552 720.12 130.46 3811 4839.19 126.98
13. HPCL, Visakh 705 803.63 113.99 4866 5201.77 106.9
Total HPCL 1257 1523.75 121.22 8677 10040.96 115.72
14. CPCL, Manali 892 939.42 105.32 6156 6234.84 101.28 47
15. CPCL, CBR 85 46.38 54.57 586 321.87 54.93
Total CPCL 977 985.8 100.9 6742 6556.71 97.25
16. NRL, Numaligarh 255 197.12 77.3 1759 1440.68 81.9
17. MRPL, Mangalore 1274 1368.89 107.45 8795 9051.32 102.91
18. ONGC, Tatipaka 6 7.18 119.69 39 48.95 125.51
B. Joint Venture Sector 1274 1426.13 111.94 8795 10200.69 115.98
19. BORL, Bina 510 610.13 119.63 3518 3883.41 110.39
20. HMEL, GGSR, Bhatinda 764 816 106.81 5277 6317.28 119.71
C. Private Sector 6795 7757.53 114.17 46904 53116.63 113.25
21. RIL, Jamnagar 2803 2756.66 98.35 19348 19321.92 99.87
22. RIL, SEZ 2293 3223.7 140.59 15830 21507.95 135.87
Total RIL 5096 5980.36 117.35 35178 40829.87 116.07
23. EOL, Vadinar 1699 1777.17 104.6 11726 12286.76 104.78
TOTAL(A+B+C) 19540 21029.27 107.62 134888 142529.56 105.67

Crude Oil Production (October, 2016) (In TMT)

Target October (Month) April-October (Cumulative)

Oil
2016-17 2016-17 2015-16 % over 2016-17 2015-16 % over
Company
(Apr-Mar) Target Prod. Prod. last year Target Prod Prod. last year

ONGC 22766 1898.46 1872.31 1909.35 98.06 13074.54 12901.2 13150.2 98.11

OIL 3480 290.09 275.62 265.95 103.64 1909.01 1880.4 1915.61 98.16

PSC Fields 10839.32 921.3 902.94 976.52 92.47 6389.48 6332.9 6766.18 93.6

Total 37085.32 3109.85 3050.87 3151.82 96.8 21373.03 21114.5 21832 96.71
 December 2016
www.InfralinePlus.com
NewsBriefs | Renewable National
Solar tariff slumps to all-time low at Rs 4 a unit
The solar power tariff slipped to an all-
time low of Rs4 per unitthe maximum
ratefixed under the tender floated for
750 megawatt (MW) solar power projects
at Bhadla solar park in Rajasthan. Solar
Energy Corp. of India (SECI) recently
Govt plans to boost setting up of biomass power plants
There is a renewed interest in biomass
power plants, which can not only generate
electricity but also help dispose of in a
carbon-neutral manner agriculture waste,
48 burning of which in Punjab and Haryana is
partly blamed for the alarming levels of
pollution Delhi is experiencing. Minister of
New and Renewable Energy Piyush Goyal
held a meeting of top officials recently to
consider increasing incentives to boost this
segment. We are thinking of a scheme to
encourage setting up of biomass plants
using agricultural waste, but I cannot say
anything more at the moment, said Santosh
Vaidya, joint secretary at the Ministry of
New and Renewable Energy (MNRE). The
Govt to promote solar powered charkhas, rickshaws
The government is looking at promoting
solar powered charkhas as well as
rickshaws in the country and has invited
views from stakeholders on design and
costing of the products. Ministry of
New & Renewable Energy (MNRE) is
considering to promote Solar Powered
Charkhas and Solar Rickshaw under off
grid and decentralised solar programme.
Suggestions are invited from the
stakeholders on...Technical specifications,
MNRE said. Since charkhas are being
mainly operated in rural areas which dont
have assured electric supply, the use of
solar energy could be thought of. The use
finalised a tender issue for the 750 MW
solar Photovoltaic (PV) projects in Bhadla
solar park, Rajasthan, at a record low
tariff for power sale of Rs4 per unit with
viability gap funding (VGF) support. The
government has fixed solar power tariff at
Rs4 per unit as the benchmark rate for all
tenders in the states where solar tariff has
been discovered at up to Rs4.50 per unit
in various auctions, said SECI manag-
ing director Ashvini Kumar. About the
specific tender of the 750 MW solar power
projects, Kumar said, This auction will be
completed in one and a half months. Now,
Rs 4 per unit is the benchmark. The tariff
can be lower than this rate also as it de-
pends on the bidders to quote the price.
government already provides financial as-
sistance of Rs 20 lakh per MW for setting
up biomass power plants, and Rs 15 lakh
per MW for co-generation projects by sugar
mills (using sugarcane waste left over after
juice extraction).
in villages, solar energy could be easily
of solar energy can usher in a new era
of spinning. Since the charkha is a small
Centre to constitute panel to examine
renewable energy absorption issues
Based on a suggestion from the Tamil
Nadu government, the Union Power
Ministry will constitute a committee to
look into issues related to integrating
renewable energy into the grid. There
was a record evacuation of wind energy
in Tamil Nadu last year, contributing to
over 40 per cent of the grid capacity.
While that was heartening, it had its own
downside and challenges of integrat-
ing renewable energy into the grid,
according to Rajeev Ranjan, Additional
Chief Secretary (Energy), Tamil Nadu.
Challenges Tamil Nadu being a pioneer
in wind energy has its own problems
and challenges in making the grid
stable. There are technical aspects as
to how much renewable energy can be
absorbed into the grid without distur-
bances, he said. The state load dispatch
centre is facing difficulty in managing
the grid because of fluctuatitons in wind
power generation. We need to back
down lot of conventional sources of
power, said Ranjan.
machine, it is feasible to operate the
charkha using solar energy. A commercially
viable solar system for the operation of
8-10 spindles charkha has been developed
by many institutions. The technology
is now well proven. To revive the large
numbers of charkhas going out of operation
harnessed. Solar charkha kit attachment
has been developed to operate the existing
8-10 spindle charkhas which are normally
used for manual operation in practice. A
motorised mechanism ensures an even
power supply, which in turn ensures a
better quality of yarn.

NewsBriefs | Renewable International
India and US launch $95 million clean energy projects
The US recently announced two financial
projects worth USD 95 million in India to
bring more energy-efficient appliances to
rural sector, as part of its efforts to continue
the global transition to zero-and-low carbon
energy sources. The US has committed USD
70 million in Overseas Private Investment
Railways sets target of utilising 10percent of energy needs from renewables
The Railways has set a target of utilising at
least 10 per cent of its energy needs from re-
newable sources and has accordingly planned
to set up separate solar and wind power
plants over the next four years. Railway Min-
ister Suresh Prabhu said that Railways being
a significant consumer of energy, identifying
cost-effective options to achieve and realise
an energy system with least environmental
impacts is essential. Vision 2020 document
of the Indian Railways states that the key
target is to utilise at least 10 per cent of its
energy requirement from renewable sources.
As a part of this, Indian Railways has planned
to set up 1000 MW solar power plant and
about 200 MW of wind power plants by 2020
across Zonal Railways & Productions Units,
Indias solar power generation capacity at 8.7 GW: Piyush Goyal
Addition of 1,964.76 MW in the first seven
months of the current fiscal has taken the
total solar power generation capacity in
the country to 8,727.62 MW, Parliament
was recently informed. As on October
31, 2016, Solar Energy Projects with an
aggregate capacity of over 8727.62 MW
have been installed in the country, New
and Renewable Energy Minister Piyush
Goyal said in written reply to Lok Sabha.
In another reply, the minister stated that
1,964.76 MW of solar power generation
capacity has been added in the country
till October end of this financial year.
During last fiscal, 3,018.88 MW of solar
Corporation (OPIC) financing for renewable
energy projects in India; and announced to
launch a USD 20 million partnership with the
philanthropic sector to bring more efficient
appliances to rural Indian villages. The USD
75 million OPIC financing is for a utility-scale
PV project in Telangana. It is sponsored by
ReNew Power Ventures. This commitment
represents the rapid mobilisation of financing
under a USD 250 million facility to support up
to 400 MW of new solar power projects in In-
dia across multiple states, the White House
said. Further the OPIC and Indian Govern-
ment will this week formally launch a USD
20 million distributed solar facility in partner-
ship with leading philanthropies, it said.
Solar power capacity tendered, state
new & renewable energy and mines,
an official statement said. The Ministry said its
first major feat was achieved in Harnessing
Green Energy on Railways when a 10.5 MW
capacity wind power plant was set up in 2009
by Integral Coach Factory (ICF), Chennai- the
first green production unit of the Railways.
connected rooftop solar programme. He
200 million World Bank financing for
power generation capacity was added in
the country. Goyal said the World Bank
has recently approved a total amount of
December 2016
www.InfralinePlus.com
National
Renewable energy capacity increased
by 14,300 MW in the last two years
A capacity of 14,300 megawatt (MW)
of renewable energy has been added
during the last two and half years in
the country. The ministry of new &
renewable energy today announced
that 5,800 MW of solar power, 7,040
MW of wind power, 530 MW of small
hydro power and 930 MW of Bio-
power has been added to the grid
connected renewable power in the
past two years. The progress and
overall achievement made under Wind
Power, Solar Power, Solar Roof Top, 49
policies etc were satisfactory, said
Piyush Goyal, minister for power, coal,
in a written reply at the Rajya Sabha.
The government has amended the
tariff policy for strong enforcement of
renewable purchase obligation (RPO)
and for providing renewable generation
obligation (RGO) to meet its ambitious
renewable goals.
USD 625 million consisting of World Bank
loan of USD 500 million, Clean Technology
Fund (CTF) loan of USD 120 million and
a CTF grant of USD 5 million for grid-
said his ministry has also submitted a
proposal to the Finance Ministry for USD
internal infrastructure development of
solar parks. He also informed the House
that an agreement for the rooftop loan
was signed between the World Bank and
the State Bank of India on June 30, 2016.
Under this agreement the World Bank loan
is taken by the SBI.
 December 2016
www.InfralinePlus.com
NewsBriefs | Renewable International States
Chhattisgarh aims 1/3rd of Indias power generation target in 12th Plan
Chhattisgarh is aiming to achieve one-third
of the national power generation target of
90,000 MW through commissioning of various
projects during the 12th five-year Plan. Chhat-
tisgarh will procure additional power from
renewable energy sources to the tune of ap-
Jharkhand close to signing PPAs for 1.1 GW of solar after delay
Jharkhand may sign power purchase agree-
ments (PPAs) for a total of 1.1 GW solar
projects soon. These solar projects were
originally auctioned during early 2016 but were
stalled due to differences between the state
50 power distribution company and developers
over the quoted tariff. According to inputs
received by Mercom Capital Group from
Jharkhand Renewable Energy Development
Agency (JREDA), the budgetary support to
fund difference of the cost of solar power and
the weighted average pooled power cost has
been approved and the PPAs are expected to
be signed around the third week of December.
According to reports Jharkhand recently
passed legislation allowing the acquisition
of tribal land for public service purposes. As
Telanganas solar power generation capacity reaches 3,800 Megawatt
Telangana has so far commissioned 3,800
Megawatt (Mw) of solar power and 100 MW
of wind power. The solar policy of the state
has been widely received and there was
tremendous response to the tenders floated
for 2,500 MW solar power. So far, 100 MW
wind power has been commissioned and
nine more locations have been identified to
take up wind power projects, Arvind Kumar,
Principal Secretary (Industries, Commerce
and Energy), of Telangana said. The NITI
Ayog official recently met Kumar to discuss
the integration of renewable energy into
electricity grid by promoting coordination
between the Centre and states. They also
proximately 700 MW by FY 2018,. With this the
average power purchase cost for Chhattisgarh
State Power Distribution Company Ltd (CSPD-
CL) based on the above power availability will
increase from 2.58 Rs/kWh in FY 2015-16 to
3.12 Rs/kWh in FY 2018. The rates have been
derived based on cost of power at existing
rates and considering no escalation in power
purchase cost since it is passing through for
the distribution company. Notably, Chhattis-
garh Renewable Energy Development Agency
(CREDA) has invested Rs 400 crores during
last 11 years in developing infrastructure for
solar power generation which had resulted in
40 MW of electricity being generated from non
conventional energy sources.
renewables come under public services, this
legislation comes as a relief to developers and
resolves problems relating to land acquisi-
tion. Small project developers are the worst
affected with earnest money deposits still
frozen and not expected to be released until
PPAs are signed.
ment is planning to actively encourage re-
City and NIMZ. Kumar asked the NITI
discussed interventions required to promote
India as a renewable energy investment
destination for achieving national renew-
All agri pumps in Maharashtra to run
on solar in next 3 years
In the next three years all the agri-
culture pumps in Maharashtra will
run on solar energy. A scheme to save
1000 mega watt energy through solar
energy is likely to be placed before the
government soon, noted State energy
minister Chandrashekhar Bawankule.
Bawankule further said the state has
a very good opportunity in the field of
green & unconventional energy sector.
Till now there was no policy in the
field of unconventional energy sector.
The government is now deciding policy
in this sector. Earlier, unconventional
energy was being produced, but no
agreements took place in regards to
its purchase. The present government
decided on PPP model and has entered
into agreement to purchase 380 mega-
watt energy. Electricity is now available
at cheaper rates in open market, hence,
wind energy is costing high and its sale
is affected, Bawankule said.
able energy targets. NITI Aayog has been
assigned the task of promoting India as a
renewable energy investment destination so
that its target of achieving 175 GW can be
met by 2022. Kumar said the State Govern-
newable energy and go for Hybrid (wind and
solar) generation in the Hyderabad Pharma
Aayog to look into infrastructure constraints
and suggest models which would encourage
renewable energy and serve as a sustain-
able model for discoms. Jain said the NITI
Aayog would assist the States in achieving
their renewable energy targets.

NewsBriefs | Renewable International
Vietnam and Indonesia eyeing 10 GW of solar PV
Southeast Asia in many peoples eyes
would appear to be the perfect place for
solar market development, with excellent
solar resources, a growing need for
electrification and close proximity to Asian
solar manufacturers. It looks as if the
China scales back solar, wind ambitions as renewables cool
China, the worlds biggest clean-energy
investor, lowered its solar and wind power
targets for 2020, a reflection of how
record installations of renewables have
overwhelmed the ability of the nations
grid to absorb the new electricity. China
is now aiming for 110 gigawatts of solar
power by 2020, a 27% reduction from
an earlier target. The nation reduced
its goal for wind power by 16% to 210
gigawatts. While China has poured
billions of dollars into clean energy in
recent years, the ability to deliver the
newly-generated electricity from where
its produced to where its needed has
lagged. The mismatch has left solar and
wind capacity sitting idle in some parts of
More than $274B worth of climate-smart investments up for grabs in Indonesia
A new study by the World Banks Interna-
tional Finance Corporation (IFC) revealed
that the Paris Agreement climate change
pact has opened up $23 trillion of opportuni-
ties in climate-smart investments in emerg-
ing markets from now to 2030. IFC has esti-
mated over $274 billion worth of investment
opportunities in Indonesia for climate-smart
projects in a variety of sectors, including
renewable energy and urban infrastructure.
Investment in renewable energy accounts
for almost $23 billion by 2030, with under
half of this [$9.3 billion] for biomass, and
the other half for geothermal energy [$10
billion] and small hydropower [$3 billion],
governments of Vietnam and Indonesia may
also both be on board to grow the industry,
as they each eye 5 GW of installed PV by
2020. Indonesia had already made a pledge
of 5 GW of solar PV to be installed over the
next 2-3 years in a decree earlier in the year;
however, this had been thrown into doubt
with the sacking of the countrys Energy and
Mineral Resources Minister Arcandra Tahar.
The new report suggests that there is still
plenty of political will to see this pledge
through, and that Vietnam also wants to put
an emphasis on solar development. The great
driver behind these targets is the obligation to
build green energy capacity in the countries
after the Paris climate agreement.
the country, hurting companies such as
China Longyuan Power Group Corp. and
China Datang Corp. Renewable Power Co.
The global large solar energy valuation
peers index, which counts many Chinese
manufacturers among its 20 members,
has slumped 42% this year.
IFC said in the report. Meanwhile, with
the population of the country expected to
grow beyond 300 million by 2030, climate
resilient buildings should also be growing in
relation, especially in urban areas such as
Jakarta, Riau, Banten, Yogyakarta and West
Java. The low-carbon buildings sector in
December 2016
www.InfralinePlus.com
Sri Lanka to set up 60 mini solar plants
by competitive tender
Sri Lankas will call open tenders for
private investors to set up 60 solar
power plants of with a capacity of one
MegaWatt each, following a successful
tender for wind power which slashed
costs, Deputy Power Minister Ajith
Perera said. Sri Lankas state-run Ceylon
Electricity Board, has been paying as
much 23 rupees per kilowatt hour as
feed-in tariffs after the renewable
businesses lobbied the regulator,
justifying various costs. The renewable
lobby is so powerful in Sri Lanka that it
had lobbied and received higher prices for
small power plants made with domestic 51
material, critics say. Considering the
interest shown by investors, we will
call open tenders to set up 60, one
MegaWatt solar plants distributed
around the country, as soon as the
cabinet (of ministers) gives approval,
Deputy Minister Perera said. The most
important aspect in this is that to reduce
corruption fraud and we are going to
call competitive tenders to establish the
(feed-in) tariff, he said.
Indonesia should grow as a result of new
green building codes and energy efficiency
incentives, representing a $23.2 billion
investment opportunity by 2020, while the
transport and waste sectors are expected to
require $250 billion in investment com-
bined, the report said. With this finding,
IFC believes that now is the best time for
investors to bet money on climate-smart
projects, particularly as smart policies are
on the rise while the price of clean technolo-
gies decline. As Indonesia aims to generate
23 percent of energy consumption through
renewables by 2025, the outlook for invest-
ment in this sector seems bright.
 Magazine SubScription forM
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 December 2016
www.InfralinePlus.com

ExpertSpeak
Stand-up Solar India!
Prafulla Pathak, Secretary General, Solar Energy Society of
India, discusses the concept of Stand-up Solar India, which is
solar sector generation which is independent of grid or conven-
tional power. According to Pathak, under this measure, the island
areas can be hooked to solar power generation and storage
systems have a major role to play in this.

It was almost seven years back when
the Ministry of New and Renewable
Energy was working on the proposed
solar mission. In those days, the pa-
rameter for measuring solar power was
introduction of MW unit in solar power
generation, along with other calcula-
tion. This situation had a backdrop of
shortage of conventional power in the
country, where load shedding was a
regular feature. So much so that the
prime purpose of implementing solar
PV technology was planned in terms of
solar PV-based electricity generation.
The electricity so generated from solar
power was mainly available during 9
AM to 4 PM in India. It had the advan-
tage of minimising the base load and
peak load gap during the first part of
peak load schedule of the day.
The results of load shedding, in
other words shortage of power, has
resulted in the unit cost of the power
available in those days market, power
exchange, was to the tune of 8-9 Rs/
unit. Though the quantity of electricity
available in such a mode was very less,
but in the situation of non-availability,
this was advantageous in relation to
these rates and those offered by state
distribution utilities in respective states.
The investors and solar power
developers sensed the opportunity.
The easy installation relative to
conventional/thermal power and
smaller period of installation was on
the advantageous side, and when you
are in distress, a small chance to get
rid and becoming safe is a huge
opportunity.
Recent
scenario Support
In the last for non-
5-6 years, sunny part of the
solar day can be taken
industry care of by storage
has begun
systems
to develop
multi fold. The
parameter of this
energy has changed from MW to GW.
This enhancement has been due to the
support provided by the Government by
way of policy and prime sector. The unit
cost of the sector has dropped from Rs
15-18 to Rs 4.5 to 5 in last few years.
There are various factors which
added to the flavour and the unit cost of
conventional power and solar power are
coming closer with each passing day.
The competitive and reverse bidding
opened a gateway of new concepts.
At the same time, traditional Indian
investors sensed danger. The limit
of taking risk was crossed by global
investors. However, till today the
parameter is Achieving Grid parity.
There are debates on whether the grid
parity has been achieved or not?
Five years back or so, the total
Installed capacity of the country was
140 GW wherein the contribution of
solar was less than one GW. Since
Prafulla Pathak, Secretary General, Solar Energy
Society of India
then, the solar sector has grown 53
almost 5-6 times and is expected
to grow further. Today, the installed
capacity of the country in power sector
has crossed 300 GW figure, while solar
capacity has crossed 10 GW, which
indicates that the gap is reducing.
At this juncture, discoms have to
worry about the technical and com-
mercial losses and their recovery. To add
to this, subsidies to the needy section and
charging this to the relatively stronger
sector is the model accepted and in use
everywhere. This makes the discom
power costly for one section of society.
Whereas solar sector has the
advantage of generating and dis-
tributing power at the very point of
requirement, the conventional area
has to sustain huge losses, which in
turn costs the last mile customer. As
such, the incoming solar installations,
if set up at the remote and rural belts,
where the transmitting and distributing
the power incur losses, then discoms
can minimise losses and solar power
generators can offer the power without
additional cost of transmission and
distribution charges, or levies for
 December 2016
www.InfralinePlus.com

ExpertSpeak

technical losses as well as commercial power generators. The support for non- is in multiple of half MW or below.
losses. Then the incoming installations sunny part of the day can be taken care The increased quantum of solar power
on account of solar power, which are of by storage systems, which are in the generation in operation may have such
ten times of todays total installation, pipeline for solar sector. independent supply locations, which
can easily be accommodated. Here, the discoms will have the are standalone and sustainable. Only
advantage of not supplying to far away then, the advantage to solar sector and
Stand-up solar India area and as it is not supplying to this conventional sector can be achieved.
Stand-up solar India can be termed as virtual island, will result in reduction Otherwise, solar power generation will
solar sector generation which is inde- in technical loss, area being away from have to face the problem of compe-
pendent of grid or conventional power. load/generation centre. The power or tition with already installed units.
The virtually island areas, may be to the energy spared this way can be utilised When we are planning these new
tune of 5/10/25/50 MW of Taluka and in areas which pays them a higher rate. setups, only then do we have a chance
beyond, can be straight away hooked Such type of virtual islands getting to set up differently.
up to solar power generation. This part, supply from the solar power generators Stand-up solar India can also be
which was otherwise regularly under and an assured power storage system can built to supply to small level industry
supply from discom, which is far away be put in operation at multiple locations. units. These units today have to pay
from load centres or generation centres, Such solar power generation can tariff at higher levels. Solar power can
be independently handled by the solar also be rooftop based, if the power load be made available at reasonable tariff
to such state industrial corporations at
Whereas solar sector has the advantage of individual locations. If the state indus-
trial corporations have industry setup,
generating and distributing power at the very
not running 24 hours or only running
point of requirement, the conventional area has in day times, then such locations can
54 to sustain huge losses, which in turn costs the have power at the tariff offered by
last mile customer. As such, the incoming solar local solar power developer. Stand-up
turns out to be independent on its own
installations, if set up at the remote and rural and functioning. On the same line,
belts, where the transmitting and distributing solar power developers independent of
the power incur losses, then discoms can conventional system and discoms in
particular can be developed.
minimise losses and solar power generators can
offer the power without additional cost The views in the article of the author are personal
For suggestions email at feedback@infraline.com

ExpertSpeak
India needs resilient energy
systems to tackle air pollution
Sukhdeep Brar, a former IAS officer of 1979 batch, recently
retired from the World Bank. In this article, she talks about the
grave issue of air pollution in Indian cities and offers solutions to
address the same.
Half of the worlds 20 most polluted
cities are in India, according to a World
Health Organisation (WHO) report.
However, it is not just cities like Delhi,
Mumbai, Bangalore, etc. that are threat-
ened by over-exploitation and pollu-
tion; even smaller cities like Gwalior,
Allahabad, Patna, Ludhiana, Kanpur,
Patna are showing alarming levels of
air pollution today. With very rapid
urbanisation, India has entered its most
energy-intensive phase of economic
growth. The demand for energy and
its consumption will continue to grow
leading to greater emissions. Central as
well as state governments will need to
reconcile their strategies of economic
development and protection of envi-
ronment with those of improving air
quality. Strong political intervention
will be required to combat the problem.
Coordinated efforts between the center
and state governments and between
various agencies will be critical. For ex-
ample, the decongestion of the National
Capital Region (NCR), and enforce-
ment of uniform green regulations, can
only be implemented with coordination
among the three states.
A national monitoring index for air
quality that has been put in place by
the government is an important step
forward. Along with this a compre-
hensive plan to manage dust and
stringent regulations for vehicular
emissions must be employed. Ensuring
a better last-mile connectivity and
greater usage of public transport
systems can have significant
impact on reducing
vehicular pol-
lution, but Renewables
currently can only
they fall diversify the
far short supply mix and not
in both be the backbone
quantity source of the
and quality Indian energy
to provide a system
serious alter-
native to the affluent car owners.
Dust, due to the unbridled con-
struction and digging activities that
by pass regulations and fail to manage
dust at construction sites, contributes
an estimated 38 per cent to Delhis pol-
lution load. This can easily be managed
with a dust management plan that is dili-
gently enforced with strict penalties for
violators. Local air pollution can also
be checked by introducing mechanized
cleaning of roads at night as against
the present somewhat obsolete practice
of manual cleaning that aggravates air
pollution. Also, Indian cities should
focus on decentralised environment
management protocols which mean that
localities/colonies should have their
own air pollution management plans
with active public participation. Most
cities in the world with better air quality
have such protocols at the local level.
December 2016
www.InfralinePlus.com
55
Sukhdeep Brar, a former IAS officer and World
Bank official
Burning of agricultural waste in
Punjab, especially paddy stubble,
which is an illegal practice is another
major sources of air pollution in the
NCR (and, of course, to a much greater
extent in Punjab) in the winter months.
Traveling through Punjab in November
is like moving through dense fog with
very low visibility. It is estimated that
every year over a million hectares of
paddy stubble are torched in Punjab
and that that this releases approxi-
mately 12 megatons of Carbon Dioxide
into the atmosphere. During this
season, recent NASA satellite images
seem to show large chunks of the
Punjab agricultural region to be on fire.
Impact analysis
Air pollution and smoke has regional
and global ramifications because it
has no boundaries. It is a severe health
hazard causing respiratory problems
and allergies. It also reduces visibility
on the roads resulting in traffic ac-
cidents and loss of life. Not only is air
 December 2016
www.InfralinePlus.com

ExpertSpeak

pollution a serious health hazard, but

it has long term negative impact on
agricultural productivity due to increas-
ing levels of carbon in the soil. With
the practice of leaving land fallow or
using animal manure almost defunct,
there are no options for regeneration of
the soil. While the focus has been on
paddy burning, a drive through Punjab
in March-April will show that farmers
are now also taking to burning wheat
stubble. Farmers are unaware of the
impact of this practice on their own
health and the fertility of their land,
they cannot be expected to know of
the much larger impact on air quality
across and beyond the states borders.
Although the practice of stubble
burning has been banned by the gov-
ernment, yet it goes on unabated. The farmers has not borne fruit due to the
farmer is constrained by both time and While the focus has lack of an economically viable alter-
capital. There is a very short window been on paddy burn- native. Since this is both an urgent and
of time between the rice harvest and ing, a drive through a complex problem, the government
preparing the land for wheat planting. needs to adopt a multi-pronged
56
Burning is fast, it is cheap, it kills
Punjab in March-April approach to addressing it. For starters,
weeds and pests and, most importantly, will show that farmers it should introduce and pilot the Happy
there is no viable alternative to burning. are now also taking to Seeder technology by selecting a
burning wheat stubble. scalable pilot project area. It should
Possible solutions provide free or subsidized service for
There are options that exist that need to
Farmers are unaware direct seeding and establish a central
be explored on scale and with immediate of the impact of this pool of tractors and Happy Seeders or
effect. The government must introduce practice on their own a similar alternative technology. Hiring
these options on an urgent basis. First, health and the fertility of local tractor owner operators and local
the farmers need access to access to ma- tractor drivers could have the added
chinery that farmers can rent to plough
their land, they cannot benefit of generating the much needed
the stubble back into the soil. This be expected to know of employment for rural youth in Punjab.
practice would recycle precious nutrients the much larger impact The subsidy can be gradually phased
back into the soil. There are peak periods on air quality across out as the economic benefits become
- lasting no more than a few weeks - apparent and the cost of technology
during which this can be done. The ma-
and beyond the states comes down due to the economies of
chinery, therefore, has to be available in borders scale and competition.
adequate numbers to allow for farmers It is important to rope in existing
to clear the fields and ready them for the traditional methods and has been found local knowhow, and strengthen
next sowing. Since farmers do not have to also improve yield. Again, high extension services through available
the capital to buy expensive machinery it initial cost is the main drawback to its resources such as Punjab Agriculture
should be available to rent. widespread adoption. This is more so University extension staff. Once
Then there are other technology where farm holdings are small. The farmers see the benefits from the new
options that also exist. One such is Government must take the lead and process versus the harmful effects of
the Happy Seeder, a tractor drawn perhaps collaborate with industry to stubble burning, they will be weaned
implement that allows direct seeding of provide this service to the farmers. away from this harmful practice. It
wheat into rice residues. In trials, it has The ban on stubble burning and must be understood that the farmer
been found to be more economical than efforts to generate awareness among in Punjab is under heavy economic
 December 2016
www.InfralinePlus.com

pressure as is evident from the over another. Instead, the role the sources of energy be fully exploited.
increasing numbers of farmer suicides different fuels can play at different That India should aggressively
in the state. Therefore, without an stages of development needs to be pursue opportunities in renewable
enabling government intervention, the further examined. In the short term, energy is not in doubt. What must be
farmer is in no economic condition to to provide energy and not hinder eco- stressed, however, is that with elec-
introduce and adopt solutions that place nomic growth, coal will be the most tricity making up only a fifth of useful
an additional financial burden on him. critical fuel, particularly if the highest energy consumed, for renewables to
Biomass plants using paddy stubble priority is providing electricity to make a significant contribution, any
profess to provide an economically all. But if India is to build an energy policy on the upstream side should go
viable option to burning but they are infrastructure that is commensurate hand in hand with initiatives to electrify
too few in number. Costs of transpor- with its ambitions to limit greenhouse end-use technology. Even at this point,
tation are high. Farmers need to invest gas emissions, it must now begin to renewables can only diversify the
in balers. The long term commercial expand its natural gas infrastructure. supply mix, and not be the backbone
viability of biomass plants as sources Natural gas is by far the most credible source of the Indian energy system.
of electricity has not been established. clean source of energy that provides For delivering energy to non-urban
Government must continue to explore an option of a cheap, efficient and consumers, recent policies have focused
new technologies and Punjab will serve a safe fuel. Not only will this gas on solar technologies as a source of
as an excellent starting point. provide the heat for a multitude of electricity. This is encouraging, but
The problem of air quality in key industrial processes, but its role the scale of the residential sector again
India is also a problem of its energy as baseload capacity will be essential calls for a multipronged approach. India
systems. The challenge, in reality, is in what will potentially be the worlds cannot expect to electrify every single
building a resilient energy system. third largest power consumer. Only household using solar photovoltaics.
The answer for our policy-maker through building this guaranteed So, it must take into account the role
is not picking one source of energy baseload capacity can renewable of traditional biomass, now dominant. 57
Numerous technologies now enable
In the near future, the focus should be on the more efficient and safer burning of
these fuels. In the near future, the focus
shifting the population away from burning should be on shifting the population
traditional biomass on open fires and away from burning traditional biomass
implementing what is a relatively short-term on open fires and implementing what is
solution - the use of cleaner cook stoves and a relatively short-term solutionthe use
of cleaner cook stoves and other cleaner
other cleaner burning fuels. burning fuels. This in turn buys the time
to fully understand the economics and
technical challenges of a large-scale
solar photovoltaic roll-out.
In transportation, increasing vehicle
efficiency by 1% a year can be a
solution, but one of the more pro-
ductive solutions could be reducing the
distance to be travelled (through better
urban planning) and from modal shifts
(shifting more people and freight from
the roads onto railways, for example).
Better infrastructure planning has
the added benefit of enabling faster
penetration of technologies that rely
heavily on good infrastructure, such as
electric vehicles.

The views in the article of the author are personal

For suggestions email at feedback@infraline.com
 December 2016
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InDepth
Solar Rooftop a vital cog in governments
push for 100 GW solar capacity
58
India has added 513 MW of rooftop solar capacity over the past 12 months
At current rate, India to reach just one third of its 40 GW target by 2022
By Team InfralinePlus
While conceptualizing ideas for new
capacity generation, perhaps, it is
now increasingly being kept in mind
that financing new coal fired plants is
more difficult than cleaner technolo-
gies especially since it takes longer
to build coal and gas plants. The easy
transformation of such projects into
stranded assets is a phenomenon that
emerging economies with a vigorous
power generation plan may want to
avoid. Getting back to the question of
core reasons for the investment shift
from developed to developing econo-
mies, it is seen that the lowered costs of
wind and solar technology in the recent
past have made it easier to commit to
projects in emerging economies with a
rich resource base. To illustrate this, we
have the case of Photovoltaics (PVs)
in India, wherein the capital costs for
projects relating to PV has become one
of the cheapest in the world.
Apart from promoting the ground
mounted solar PV projects, the
Jawaharlal Nehru National Solar
Mission (JNNSM) also has a mandate
to encourage the rooftop solar
segment. Under Phase I of JNNSM,
a separate scheme called Rooftop
PV and Small Scale Solar Generation
Program (RPSSGP) was implemented
for developing solar PV projects
with maximum capacity of 2 MW
as rooftop or, small scale ground
mounted solar projects.
Government aims to achieve a
target of 40 GW of solar power from
SPV rooftop system out of the total
expected target of 100 GW solar
capacity by 2022. The Ministry of
Finance (MoF) has issued an advisory
 December 2016
www.InfralinePlus.com

to all public-sector banks to encourage

home loan/ home improvement
loan seekers to install SPV rooftop
systems and include the cost of
such equipment in their home loan
proposals.

Current Scenario
By October end, Indias installed
capacity in the solar rooftop segment
crossed 1 GW. India has added 513
MW of rooftop solar capacity over the
past 12 months reaching total installed
capacity of 1,020 MW. Around 22% of
capacity addition in solar rooftop has
been done under OPEX model where a
Source: Solar Rooftop Policy Coalition report

Table 1: Net Metering Regulations in States (for solar rooftop projects)

State Regulation Other Details
Haryana Haryana Solar Policy 2016 A solar rooftop owner may enter into PPA with the licensee or go for third party sale
through Open Access.
Electricity generated shall be cumulatively capped at 90% of electricity consumption
by the consumer at the end of settlement period.
Surplus energy injected by the consumer shall be carry forward to the next billing 59
period as an Energy Credit.
Uttar UPERC (Rooftop Solar Grid Consumers availing Net Metering shall be allowed to apply for Gross Metering within
Pradesh Interactive System Gross/ Net the same premises.
Metering) Regulations, 2015 Excess Energy shall be carried forward to the next Billing Period as Electricity Credit
but within the settlement period.
At the end of each settlement period, any electricity Credit, shall be paid at the rate of
INR 0.50/kWh by the Distribution Licensee or as notified by the commission from time
to time.
Rajasthan RERC (Connectivity and Net Maximum Installed Capacity shall not exceed 80% of the sanctioned connected load/
Metering for Rooftop and Small Contract Demand.
Solar Grid Interactive Systems) Excess Electricity injected shall be paid by the Distribution Licensee at Feed-in-Tariff in
Regulations, 2015 (OR) RERC the next Billing Period (For above 50 Units)
Net Metering Regulations, 2015
Maharashtra MERC (Net Metering for Net Metering arrangement, solar rooftop project connected to the Distribution
Roof-top Solar Photo Voltaic Transformer shall not exceed 40% of its Rated Capacity.
Systems) Regulations, 2015 However, Distribution Licensee may allow above 40%, after considering the detailed
Load Study.
Net unadjusted Credited Units at the end of the Financial Year shall be purchased by
the Distribution Licensee at its Average Cost of Power Purchase as approved by the
commission for that year.
Electricity Consumption in any time block shall be first compensated in the same time
block in the Billing Cycle.Any excess Energy shall be treated as energy is injected in
the Off-Peak Hours.
Solar Energy generated by the eligible consumer under these regulations shall not be
eligible for REC.
Madhya MPERC (Grid Connected Net Distribution Licensee may offer the Net Metering Arrangement to the Eligible
Pradesh Metering) Regulations, 2015 Consumer, in case the cumulative capacity at the particular distribution transformer
(DT) shall not exceed the target capacity of 10 MW.
The cumulative capacity shall not exceed 15% of Peak Capacity of the Distribution
Transformer.
Net unadjusted Credited Units at the end of the Financial Year shall be purchased by
the Distribution Licensee at its Average Cost of Power Purchase as approved by the
commission for that year.
Source: State Development Agencies (SDAs), Websites of State Electricity Regulatory Commissions (SERCs)
 December 2016
www.InfralinePlus.com
InDepth
third-party project developer finances
and installs the system on rooftop
owner/consumers premises and sells
all power output to him under a long-
term agreement.
This fiscal year, about 1 GW of
rooftop installations is likely to be added.
The Government is providing subsidies
to both individual household consumers
and housing societies. Rooftop instal-
lations do come with their share of
roadblocks, including lack of space in
rooftops, insufficient storage technology
as well as net metering systems.
With a business as usual (BAU)
approach, India is set to reach just one
third of its 40 GW by 2022 rooftop
solar target. India approved the 40
GW rooftop target last year as part
of its overall 100 GW solar target.
However, the report Unleashing
Private investment in Rooftop Solar in
India claims that India is currently on
60 a trajectory of reaching just 13.5 GW
of rooftop solar by 2022, however,
aggressive market support could help
India double its rooftop installation
trajectory to 26 GW by 2022.
Progress on Net-Metering
Policy
The implementation of net-metering
regulations varies widely across states,
which is a key regulatory concern for
the solar rooftop PV segment. 25 states
have formally adopted net metering
policy, meanwhile net metered rooftop
solar is now viable for commercial and
industrial consumers in 7 states without
subsidy, with more reaching tariff par-
ity each year as solar costs come down
and tariffs rise globally.
The effective implementation of net
metering would thus require support
from state electricity distribution com-
panies (DISCOMs), overall consis-
The report Unleashing
Private investment
in Rooftop Solar in
India claims that
India is currently on a
trajectory of reaching
just 13.5 GW of
rooftop solar by 2022,
however, aggressive nected electricity customers in India
market support could
help India double its
rooftop installation
trajectory to 26 GW
by 2022.
tency in net metering regulations across
the states, as well as upgradation of
the infrastructure by the DISCOMsto
effectively integrate the surplus power
exported by the consumers to the grid.
But the largest barrier to a more
widespread uptake remains the upfront
cost of a system, despite massive price
reductions in the last three years. What
if the customer payment of upfront
capital cost can be completely avoided?
What if a customer can get the full
benefit of the solar energy units from
a solar rooftop PV system, without
having to pay for the system?
It is third party ownership (TPO)
along with power purchase agreement
(PPA) that can remove the barrier.
Financing of the system can come into
the picture if there is a good PPA to
show the commercial lender. Financial
innovation and changing consumer
preferences are likely to put solar
rooftop PV panels within the com-
fortable reach of millions of grid-con-
in the next 12-36 months, primarily in
the commercial and industrial (C&I)
category.For rooftop installations by
C&I segments, no subsidy support
is provided by MNRE and thus no
domestic content requirement will be
applicable. However, with the fall in
PV module price levels and improved
cost competitiveness of solar PV
energy (at about INR 4.34/kWh), the
rooftop segment remains economically
feasible for C&I customer segments.
Today, the DISCOMsin India are
relatively comfortable operating an all
one-way traffic delivery service for
electricity, where every hypothetical
delivery truck is discom-owned. Elec-
trons flow one way and money flows
the other way. But once rooftop PV
gets into the picture on a large scale,
energy will flow in two directions
along the lines and through substations
and transformers that were designed for
one-way traffic.
For suggestions email at feedback@infraline.com
 December 2016
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StatisticsRenewableEnergy
1) The State/UT-wise and year-wise targets and achievements of family type biogas plants set up under
the National Biogas and Manure Management Programme (NBMMP) during 12th Five Year Plan (up to
31.10.2016).

2012-13 2013-14 2014-15 2015-16 2016-17

Sl. Achieve-
Name of State Achieve- Achieve- Achieve- Achieve-
No. Target Target Target Target Target ment (upto
ment ment ment ment
31.10.2016)
1 Andhra Pradesh 15800 16145 17000 16052 10440 10555 10200 10343 10200 3537
2 Arunachal Pradesh 100 190 100 0 50 3 50 0 100 0
3 Assam 7000 7397 6000 6000 7500 7500 7600 7600 9000 4720
4 Bihar 0 300 0 2 0 1 0 3 0 0
5 Chhattisgarh 4000 3933 3600 3911 4000 2736 4150 2213 3050 333
6 Goa 100 58 100 59 100 12 100 78 100 26
7 Gujarat 5000 5623 3500 2367 4000 1349 3800 1595 2500 522
8 Haryana 1500 1303 1500 1325 1700 1008 1650 790 1000 169
9 Himachal Pradesh 300 362 350 321 250 154 230 114 150 44
10 Jammu & Kashmir 200 290 150 15 100 28 100 84 100*** 0
11 Jharkhand 500 641 300 0 100 54 100 142 200 21
12 Karnataka 12000 13671 10300 10503 15500 9198 16000 7049 10000 1833
13 Kerala 3700 3991 3125 3547 4000 2971 4000 2642 2850 549
14 Madhya Pradesh 12000 11946 10000 9146 10400 7673 10700 6796 8000 1386
15 Maharashtra 16000 19023 12600 13443 14400 14825 14660 14577 14500 5125
16 Meghalaya 500 670 500 0 250 0 250 0 200 0 61
17 Mizoram 1000 500 1000 250 500 260 500 280 500 58
19 Nagaland 500 750 500 254 300 250 300 0 300 0
20 Odisha 7000 7002 6500 1774 5100 4145 5100 2930 4000 403
21 Punjab 10000 12127 8700 9400 10250 7856 10650 4281 5000 1032
22 Rajasthan 500 530 400 754 1100 1013 1050 568 1000 220
23 Sikkim 200 251 200 158 200 139 200 170 250 0
24 Tamilnadu 1000 1321 1100 843 500 579 450 308 300 42
25 Telangana 0 0 0 0 9900 9900 9900 9099 12300 3541
26 Tripura 500 219 500 110 400 40 350 165 400 40
27 Uttar Pradesh 2500 3923 2900 2002 1800 1417 1750 1239 1100 382
28 Uttarakhand 1100 1831 1150 1006 900 937 960 1454 1400 660
29 West Bengal 12000 1380 0 298 0 279 0 185 0 0
30 Puducherry 0 0 0 0 0 0 50 0 0 0
31 KVIC 20000 * 13925 * 6260 * 6200 * 8000# 874
32 BDTC, IIT 0 0 0 0 0 0 0 0 500 0
Guwahati
33 BDTC, IIT Delhi 0 0 0 0 0 0 0 0 500 0
34 BDTC, UAS, 0 0 0 0 0 0 0 0 1000 0
Bangalore
35 BDTC, PAU, 0 0 0 0 0 0 0 0 1500 45
Ludhiana
TOTAL: 135000 115377 106000 83540 110000 84882 111000 74705** 100000 25562**

Source: MNRE

[* KVIC achievements are included in the States achievements.]

[** Figs. are being firmed up.]
[# For KVIC, Mumbai, national target 8000 {6500 (5700 Gen.+800 NEZ) and 1500 SCP target}]
[*** Subject to settlement of outstanding amount of previous years lying with the State Govt. ]
 December 2016
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StatisticsRenewableEnergy
2) REC Trading Volume and Price for November 2016
Through IEX
Buy Bids Sell Bids Cleared Volume Cleared Price No. Of Month of
REC Type Participants Auction
(REC) (REC) (REC) (INR/REC)
Solar 25,003 2,204,844 25,003 3,500 477
November 2016
Non-Solar 150,050 8,120,951 150,050 1,500 813
Source: IEX

Through PXIL

Buy Bid Sell Bid MCV

MCP Month of
REC Type (No. of (No. of (No. of certificate)
(INR / Certificate) Auction
certificates) certificates) Qty. (MWH)
Non Solar 111007 5553204 1500 111007 November
Solar 16826 1746236 3500 16826 2016
Source: PXIL

3) State-wise Solar power capacity addition achieved during last five years and current year up to
31.10.2016
Installed Installed Installed Installed Installed Installed
S. Capacity during Capacity during Capacity during Capacity during Capacity during Capacity during
State
No. 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
(in MW) (in MW) (in MW) (in MW) (in MW) (in MW)
1 Andaman & 0 5 0 0 0 0
Nicobar Islands
62 2 Andhra Pradesh 19.75 1.6 108.69 126.77 435.11 395.08
3 Arunachal Pradesh 0 0 0 0 0.24 0
4 Assam 0 0 0 0 0 10
5 Bihar 0 0 0 0 5.1 90
6 Chandigarh 0 0 2 2.5 2.31 0
7 Chhattisgarh 4 0 3.1 0.5 85.98 34.98
8 Daman & Diu 0 0 0 0 4 0
9 Delhi 0.4285 0 2.14 0.32 8.82 9.59
10 Gujarat 598.89 253.01 58.5 83.65 119.12 19.01
11 Haryana 7.8 0 2.5 2.5 2.59 2
12 Himachal Pradesh 0 0 0 0 0.2 0
13 J&K 0 0 0 0 1 0
14 Jharkhand 4 12 0 0 0.19 0.65
15 Karnataka 3 5 17 46.22 68.24 194.62
16 Kerala 0 0 0 0 13.02 0
17 Lakshadweep 0 0 0 0 0 0
18 Madhya Pradesh 2 35.215 309.85 205 217.79 35.01
19 Maharashtra 16 80 149.25 82.23 25.01 0.3
20 Mizoram 0 0 0 0 0.1 0
21 Odisha 13 0 17.5 2.26 35.16 0
22 Puducherry 0 0 0 0 0 0
23 Punjab 7 0 7.52 168.75 219.79 166.14
24 Rajasthan 192.5 355.25 178.95 228.85 327.83 31.23
25 Tamil Nadu 0 0 81.76 54.12 919.24 493.59
26 Telangana 10 2.055 0 61.25 360.8 435.95
27 Tripura 0 0 0 5 0 0
28 Uttar Pradesh 12 5 3.7 42.16 72.24 0
29 Uttarakhand 5 0 0 0 36.15 0
30 West Bengal 1 0 5 0 0.56 4
31 Others(PSU/ 0 0.01 0 0 58.31 42.61
channel partner )
under Rooftop

Source: MNRE

Event-Focus
International Shale Gas and
Oil Workshop - 2016
By Mohd. Arif, Analyst, Infraline Energy
Considering the significance of shale
gas/oil exploration and management
in India, Pandit Deendayal Petroleum
University (PDPU), under the aegis of
Directorate General of Hydrocarbons
(DGH), organized a conference on
The International Shale Oil/Gas
Workshop on October 6, 2016 at
PDPU, Gujarat. The conference, in as-
sociation with the PDPU SPE Student
Chapter, was sponsored by Oil India
Limited (OIL) with Infraline Energy
as knowledge partner and DEW as
Media Partner. The symposium was a
maneuver to bridge the gap between
the shale exploration and management
in India and the important facets that
functionaries need to consider for the
robust phrasing of shale policy.
Session I- Exploration and
Exploitation of Shale Gas/Oil
Speakers: Mr. B.S. Dhannawat,
Shale Gas COD, ONGC; Mr. Gregory
Wrightstone, Wrightstone Energy
Consulting, USA; Dr. Rakesh Walia,
Geoconsulting Business Manager &
Country Manager, CGG India; Prof.
Subhash Shah, Emeritus Professor,
University of Oklahoma
Key discussion points:
There is a difference in opinion
about shale reserves in India. For
December 2016
www.InfralinePlus.com
63
example, ONGC estimates 34 tcf
of shale gas in Damodar basin
alone where it has drilled first
shale gas pilot wells and gas flow
to the surface was established from
Barren Measure shale formation
in well RNSG-1 whereas,
Schlumberger estimates shale gas
reserves in India of about 600-
2000 tcf
Four basins have been prioritized
for having shale potential by ONGC
namely, Cambay, KG, Cauvery and
A&AA
In Indian basins, kerogen is
dominantly type III and there have
been continuous interactions with
 December 2016
www.InfralinePlus.com
Event-Focus
international domain specialists
and service providers for G&G,
Laboratory studies, Petrophysical
and Hydrofracturing
Appalachian basin consists of Utica
shale, Marcellus shale and Burket
shale. Furthermore, Appalachian
basin is likely to have greater than
2,500 Tcf of unproven recoverable
64 reserves, therefore, making it the
largest mega giant natural gas field
in the world
Nearly all wells in Appalachian
basin use extremely flexible
multistage Plug & Perf cased
completions and Focused
Ion Beam Scanning Electron
Microscopy is used to confirm the
best landing zone
The key influences for the American
shale gas development are environ-
mental issues, skilled workforce,
technology, pipeline capacity, rig
availability, regulatory & land
issues, gas price and resource base
RoqSCAN is a fully portable real
time automated mineralogical
system that has been exclusively
developed by CGG and Carl Zeiss
to work with both conventional
and unconventional reservoirs.
In the low oil price environment,
RoqSCAN is a cost-effective and
convenient solution applicable for
all types of geological plays and it
provides the necessary data for the
design of an optimized well
Factors impacting debris cleaning
Four basins have been
prioritized for having
shale potential by ONGC
namely, Cambay, KG,
Cauvery and A&AA. In
Indian basins, kerogen is
dominantly type III
are flow rate, hole size, hole angle,
rate of penetration, drilling fluid
properties, cutting size & shape and
mineralogy.
Session II- Management and
Development of Shale Gas Resources
in India
Speakers: Mr. Ajoya Nanda Borthakur,
GM, Oil India Ltd.;
Mr. Himanshu Pant, Lead Fracturing
Engineer, Baker Hughes, India; Mr.
Thomas B. Murphy, Director, Penn
State Marcellus Centre for Outreach
and Research
Key discussion points:
As per the resource triangle,
conventional reservoirs are easy
to develop and they are present in
small volume as compared to the
unconventional reservoirs
Sweet shales represent the target
location or area within a play that
has the best potential production
OIL has 6 blocks for exploration of
Shale oil/gas in Assam, Arunachal
Pradesh and Rajasthan and OIL is
in the preliminary stage in process
of acquiring fresh conventional
cores for the evaluation of blocks
Horizontal drilling is a directional
drilling in which a well in initially
drilled vertically till the kick off
point , then the drill bit is deviated
from the vertical plane around
a curve and is drilled in near
horizontal inclination to intersect
areservoir
Typical fracturing process involves
pumping of thousands of barrels of
water and proppant down the well
through perforations in the casing
towards the target shale zone.
Hydraulic pressure creates cracks
in shales and to keep them open,
solid proppants are added to the
pumped fluid
Depending on the properties of
shale formations, fracturing fluid
may be water based, oil based or
acid based. Moreover, Service
providers adjust the proportion of
fracturing fluid additives to the
unique conditions of each well
In shale exploration, down hole
technical issues include water
quality, induced seismicity,
Naturally Occurring Radioactive
Material (NORM), methane
migration, emerging geology, well
yield trends, decline curve analysis
and regulatory issues
Key water management options
include, direct reuse (blending),
on site treatment, off site
treatment and UIC well disposal.
Treatment technologies include,
bag filters, chemical precipitation,
electrocoagulation, evaporation
and filtration
Major risks for shale oil/gas
production in the U.S. include,
separating possible vs. probable
risk, wellbore integrity, water
contamination, air emissions,
health, climate and gaps in research
It takes comparatively shorter time
to drill a well in U.S. The direct
 December 2016
www.InfralinePlus.com

mass is almost 3 times higher than

either China or the U.S.
There are three building blocks for
the shale economics; Single well
EUR (Estimated Ultimate Recovery)
drilling cost, completion cost and
crude & gas netbacks. Moreover,
Typical cost breakup for shale wells
are 31% drilling cost, 63% com-
pletion cost and 6% facilities cost
Owing to low drilling cost, many
operators follows the strategy to
just drill well and hold it in their
inventory and complete them later
International Standard Operating Procedure (SOP) for continuous flow of oil/gas in
lower price environment
should be followed to make matter more clear. The hurdle IRR that every shale
Furthermore, statutory clearance should be fast operator considers for shale well is
tracked and the coordination among ministries 15% and it can be expected to be up
should be increased in order to avoid any delays to 30% in high potential acreages.
Further, the breakeven prices are
and uncertainties in their respective roles typically in the range of $27 $40
per barrel and for the gas acreages,
workforce required to drill a single and pricing freedom for the crude it is about $2- $2.5 per BOE. 65
well is 420 individuals working in oil and natural gas produced
150 different occupations. Water produced during dewatering Panel Discussion: Policy Framework
of CBM blocks, can be used in for Exploration and Exploitation of
Session III- Policy and Economics hydraulic fracturing for the pro- Shale Oil/Gas in India
Consideration in Shale Gas Projects duction of shale oil/gas Moderator: Prof. Anirbid Sircar,
Speakers: Mr. Manish Maheshwari, Materiality, Marketability, Envi- Director and Professor, SPT-PDPU
CEO, EOL; Dr. Venkatesh Raman ronment & Sustainability and Eco- Panel Members: Shri Mahendra
Prasad, Partner, Jyoti Sagar Associates; nomics are four major catalysts for Pratap, Dy. DG, DGH; Mr. Manish
Mr. Abhishek Sinha, Vice President, the production of shale oil/gas Maheshwari, CEO, EOL; Shri Arun
Transaction Advisory Services, EY Entry 53, list 1 of schedule VII in Kumar, GGM-Basin Manager, ONGC;
the Constitution of India states that Mr. Vilas Tawde, Vice President, Head
Key discussion points: it is only the Federal Government Commercials, EOL; Dr. Venkatesh
The Prime Minister of India during or Union Parliament which can Raman Prasad, Partner, Jyoti Sagar
the UrjaSangram has set a target to implement policies in the Oil and Associates; Mr. Abhishek Sinha, VP,
reduce the oil import dependence of Gas sector and Union of India is a Transaction Advisory Services, EY
10% by 2022 and reduction of 50% trustee of the public when dealing
by 2030 by increasing the domestic with natural resources Key outcomes:
production Shale E&P issues should be NOCs like ONGC and OIL are
To boost Indian E&P sector, Hydro- addressed so that fine balance permitted three Assessment phases of
carbon Exploration and Licensing between the rights of the stake- a maximum period of 3 years each.
Policy (HELP) is announced in holders and business community Further, the company shall carry out
March, 2016 and the guidelines are can be achieved the following with respect to target
in the formulation stage. Four main In India, 2/3rd of the population shale sections: Environmental Impact
facets of HELP are uniform license depends on the land and India has Assessment (EIA) Study, including
for exploration and production of 10 times more population density as sourcing of water and its disposal;
all forms of hydrocarbon, an open compared to the U.S. and 2.5 times G&G studies; Drilling of pilot/test
acreage policy, easy to administer than that of China. Furthermore, wells; Coring, Hydro Fracturing
revenue sharing model, marketing the share of arable land to total land etc.; Geo Chemical studies; Geo
 December 2016
www.InfralinePlus.com
Event-Focus
Mechanical/ Geo Hazard/ Geo
Technical studies; Resource
Assessment for Shale Gas and Oil
In order to make a robust policy
framework for Indias shale
exploration, different policies
from countries having proven
shale reserves like U.S., Pakistan,
China, Scotland etc. needs to be
analyzed and their commonalities
66
should be identified. For instance,
China follows 3-tier policy regime
and China is set to become No.2
shale gas producer by 2040,
environmental issues in England &
Scotland can be studied etc.
Different attributes of HELP like
unified license, open acreage policy
will be constructive for shale
exploration in India
Tax benefits should be provided
to the operators in order to attract
private investment alongside the
investment from NOCs
Risk aside, it can be witnessed from
Essars CBM production that in
unconventional field development
early movers takes the advantage.
Therefore, early players in the
Indian shale plays will have an edge
over their competitors
CBM and Shale can be developed
from same acreages. This can result
in the better management of the
marginal cost and sustained pro-
duction of hydrocarbons
Ambiguity and complexity in gas
pricing needs to be addressed. As
Any business has to
make commercial
sense; operators will
be attracted to exploit
shale plays only if they
will see potential for this
molecule to reach the
end consumer
in Eastern offshore, where gas
pricing is market driven. Likewise,
for shale gas, market driven pricing
should be followed. This attribute is
included in HELP
National Core Repository can
be set up in India wherein the
core samples can be provided to
operators, academia etc. for further
studies and research purposes
International Standard Operating
Procedure (SOP) should be
followed to make matter more clear.
Furthermore, statutory clearance
should be fast tracked and the
coordination among ministries
should be increased in order to
avoid any delays and uncertainties
in their respective roles.
Summary
The International Shale Oil & Gas
Workshop - 2016 ended on a dazzling
note and highlighted the paramount
factors for the establishment of robust
shale oil/gas policy. With difference in
opinion about shale reserves in India;
Indias basin studies were presented
by ONGC and OIL suggesting that the
prioritized basins have more type-III
kerogen and less type-II kerogen.
Further, in order to determine the
right amount of gas/oil in place, it
is extremely vital to assimilate the
reservoir characteristics which can be
done with the help of log data, seismic
data or core samples.
Any business has to make
commercial sense; operators will be
attracted to exploit shale plays only
if they will see potential for this
molecule to reach the end consumer.
This demands strong infrastructure
in place. Besides, the government
has taken a leap forward in this
regard by introducing HELP and
setting up the stiff target to reduce
import dependence. In addition, the
administration should also allow
private operators and academia to
get core samples for their further
studies by setting up of National Core
Repository. Moreover, all concerns
of different stakeholders in the value
chain should be addressed. To make
this happen, different issues in shale
exploration like water management,
water treatment, regulatory issues,
land acquisition, workforce,
technological challenges, gaps in
legislation etc. needs to be addressed
in a priority basis by taking different
shale policies of producing countries
like the U.S. and China as a precedent.
Oil and gas prices in the market can
soon rebalance themselves owing to
the changing geopolitics and OPEC
decision to cut production and this
price stability is also set to play a
part in the development of shale
plays in India. As the shale industry
will unfold in India, calculated risk
can be taken by the players so that
they can capitalize early and can see
themselves in the vanguard to garner
maximum benefits.
For suggestions email at feedback@infraline.com

OffBeat
Demonetization impact positive for
energy and infrastructure sector
Corruption in power equipment procurement expected to come down,
feel experts
Cash-driven real estate sector could be hit hard by money recall
By Team InfralinePlus
In one of the biggest financial reforms
post-independence, the Government, on
November 8, announced its decision to
demonetize Rs 500 and Rs 1000 currency
notes and replaced them with new ones
in a bid to tackle the incidence of black
money and corruption. While the move
has been much appreciated by analysts
and financial experts, it has, in the short
term, taken its toll on the infrastructure
sector especially in areas where cash
transactions are predominant.
The sum of old Rs.500 and Rs.1000
notes in the circulation is Rs.14.2
trillion, and it constitutes 86% of the
total value of currency. This decision
will force the total cash pass though
the formal banking system to get
authenticity. In 1978, when demon-
etization was carried out for the first
time in India, as much as 75 per cent
of the money had returned in the
system, while the remaining 25 per
cent vanished.
December 2016
www.InfralinePlus.com
67
Impact on energy sector
The energy sector has been an immedi-
ate beneficiary of demonetisation, with
motorists and truckers queuing up at
petrol pumps to refill their fuel tanks
while electricity consumers making a
beeline to pay their arrears and current
dues by using scrapped Rs 500 and Rs
1000 notes. An industry expert said
while power distribution companies
have got collateral benefit in the form
of quick clearance of arrears and cur-
 December 2016
www.InfralinePlus.com
OffBeat
Bank notes in circulation as on March 2016 March
(Source: RBI)
Denomination No of units in circulation (Million
pieces, with share in bracket)
Rs 100 15778 (17.5)
Rs 500 15707 (17.4)
Rs 1000 6326 (7.0)
rent dues, the long-term benefit would
be felt in procurement of power equip-
ment in which money often changes
hand.Demonetisation and other steps
being taken by the government will
reduce, if not eliminate, corruption in
power equipment procurement, said
Ashok Khurana, director general, as-
sociation of power producers. Another
unintended benefit has been huge in-
crease in payment of outstanding dues
to utilities, Khurana added. There is
no major impact of demonetisation on
the coal sector as cash economy is non-
68 existent in the industry, say experts.
Demonetization is likely to have
a positive impact on power and coal
sector in the long term by boosting the
investors confidence in our economy
and bringing in more FDIs in the
country. However, in the shorter run,
cash crunch will have a minor impact
in the sector especially on the small
players who are heavily dependent on
daily cash flows to meet their opera-
tional business requirements.
Demonetization has turned Banks
liquidity position into surplus with huge
amount of cash deposits. This extra
liquidity may lead to a possible fall in
interest rates for the developers when
they seek Credit from Banks to fund
their projects. Further, Project Cost will
be reduced and more people will be
willing to invest in the Power Projects.
Demonetization will also go a long
way in controlling black money, coun-
terfeit currency and corruption. This
will help in bringing foreign investors
in the country who were earlier wary of
entering in the country due to negative
image of rampant corruption in the
country. FDIs are much needed for
severe financial stress. For example,
Gujarat Urja Vikas Nigam Ltd
(GUVNL), the cumulative power bill
Share in total value of notes in
circulation collection of its subsidiaries stood at
Rs. 2,002 crore as on November 19 as
9.6
against Rs 1,849 crore in October 2016
47.8 and Rs 1,665 crore in November 2015.
38.6 The Bareilly zone of UP Power
Distribution Company Ltd, where
strengthening of our power networks average daily collection of bills used
and bringing in efficiencies in the to be Rs 2-3 crore, saw over Rs 25
system. This will ultimately benefit the crore deposited just on a single day
consumers in the form of 24*7 Power after demonetisation. The corporation,
to All (including Industrial Consumers) which has over Rs 1000 crore in unpaid
at economical rates. electricity bills across the state, has set
Revenues of the State Electricity up 154 special camps in Bareilly zone
Departments and Power Distribution to deal with people making long queues
Companies have increased significantly to pay their pending power bills.
since the Governments announcement Paschimanchal Vidyut Vitaran
that Electricity Bills can be paid in old Nigam, one of the five state-owned
currency notes of Rupees 500 & 1000 discoms in Uttar Pradesh, saw bill
till November 24, 2016. collection of Rs 500 crore in four days
Defaulters lined up to clear their alone post demonetisation a tenfold
dues and this is a win-win situation for increase over normal days. The three
the Distribution Companies who have discoms in Rajasthan collected close
struggled to collect the bills dues from to Rs 480 crore in four days after the
the consumers and are reeling under announcement of demonetisation. The
Demonetization is likely to have a positive impact
on power and coal sector in the long term by
boosting the investors confidence in our economy
and bringing in more FDIs in the country. However,
in the shorter run, cash crunch will have a minor
impact in the sector especially on the small players
who are heavily dependent on daily cash flows

monthly collection in the state is nor-
mally around Rs 2,000 crore.
The demand for electricity has been
slow in recent years and one of the
obvious reasons is poor bill collection.
But now that discoms have seen a
dramatic improvement in their cash
flows, they might feel encouraged to
buy electricity from the free market to
meet their power requirements.
Demonetization has led to liquidity
crunch in the economy affecting indus-
trial production. This will lead to con-
traction in power demand and may cause
small losses to the power plants devel-
opers and the distribution companies due
to unutilized capacity. However, it is a
short term impact of demonetization and
situation is going to ease soon.
Demonetization has hit Coal Indias
E-Auction plans meant to offer coal
to traders and non-power producers.
These coal consumers have run out
of cash in hand due to drying up of
payments from their customers as a
result of demonetization. Cash in hand
is necessary for these consumers to
employ casual laborers for loading
and unloading coal on trucks and also
advance payments is to be made to
participate in E-Auctions.
Inspite of Coal Indias best efforts
to protect the interests of small traders
by extending the deadline to pay the
upfront payments from November 11
According to experts,
the oil and gas sector
will not be adversely im-
pacted by the demoneti-
zation of high currency.
The refining margins,
production of petro
products, gas transmis-
sion and LNG import
will not be affected by
the demonetization of
the high currency
to November 18, 2016 to participate in
E-Auctions in view of demonetization,
cash crunch situation has not eased
keeping the small traders out of CILS
forthcoming E-Auction.
The ban on old Rs.500/1000 notes
has hurt Illegal coal trade. The coal
mafia operating in Jharkhand is finding
it difficult to find the buyers for the
coal smuggled from the abandoned
coal mines. Earlier, they used to trade
the smuggled coal to the local roadside
eateries, hotels, brick kilns and other
furnace based industries locally and
also smuggle to West Bengal and other
States through trucks.
Most of the buyers pay in Rs. 500
currency notes and after demoneti-
December 2016
www.InfralinePlus.com
zation, people are unable to pay for the
smuggled coal. The illegal coal traders
are also worried that the cash collected
by them in this business has become
illegal tender and they are now worried
how they are going to change the old
currency to new.
In the oil and gas sector, auto fuel
retailers are expected to see a sharp
pick-up in sales post demonetisation
as the government has allowed use of
scrapped notes for purchase of petrol
and diesel. Petrol pumps will also
benefit from the permission given to
them to install card swipe machines to
dispense up to Rs 2000 cash per card
holder in a day.
According to experts, the oil and gas
sector will not be adversely impacted
by the demonetization of high cur-
rency. The refining margins, production
of petro products, gas transmission
and LNG import will not be affected
by the demonetization of the high 69
currency. In addition, capacity utiliza-
tions, capacity expansions, marketing
margins and tariffs for gas utilities are
independent of demand. Hence, the
downstream sector would still remain
unaffected. However, for the near
term the demand of petrol, Diesel and
CNG may rise up for the month of
November16 and early December16,
as the Government allowed the use
of old 500 currency notes at the retail
outlets till December 15. This would
give a significant impact on the petro
products consumption during the last
quarter of 2016.
Lower industrial activity and drop
in consumption pattern can potentially
lead to the slow growth or negative
growth for LNG and Fuel Oil for
commercial and industrial end users.
However, it appears to be a short term
trend and is expected to bounce back
after 12 months.
The demonetization of high
denomination currency should only
have a marginal impact on the Indian
oil and gas sector, Deutsche Bank has
said. The bank said it sees a marginally
 December 2016
www.InfralinePlus.com
OffBeat
adverse medium-term impact on sales
of petroleum products. It reiterated its
preference for state-owned refiners in
the oil sector and Petronet LNG among
the gas utilities.
Real estate prices set to
plunge
But cash-driven real estate sector could
be hit hard by money recall. Analysts say
property prices will fall in the wake of
demonetisation as also interest rates on
bank loans, potentially creating pos-
sibility for genuine buyers to invest in
flats and other residential properties.
Real estate has been the swamp of black
money as actual transaction rates, which
are much higher than government-noti-
fied rates, are never declared. As per the
industry practice, the difference is paid in
cash. Also, there are lots of benami prop-
erties which could come under scanner of
the government which is armed with new
70 and more powerful anti-benami property
law, Prohibition of Benami Property
Transactions (PBPT) Act, which came
into effect on November 1.
The PBPT Act prohibits recovery of
the property held benami from bena-
midar by the real owner. Properties
held benami are liable for confiscation
by the government without payment of
compensation. According to the new
law, people caught with benami prop-
erties could serve up to seven years of
rigorous imprisonment and will have
to pay a significant fine. Additionally,
the properties will be confiscated.
Under the Act, a transaction is named
benami if property is held by one
person, but has been provided or paid
for by another person. A person could
also face rigorous imprisonment for
up to five years for knowingly giving
false information and will have to
pay a fine of up to 10 per cent of the
market value of the property.
A 2012 white paper on black
money by the Finance Ministry stated
that the real estate sector in the country
accounts for nearly 11 per cent of the
GDP, but a recent report by Ambit
Cash-driven real estate
sector could be hit
hard by money recall.
Analysts say property
prices will fall in the
wake of demonetisation
as also interest
rates on bank loans,
potentially creating
possibility for genuine
buyers to invest in flats
and other residential
properties. Real estate
has been the swamp of
black money as actual
transaction rates are
never declared
Capital says Indias black economy
stands at over Rs 30 lakh crore or about
20 per cent of the total GDP. If the
ministrys 2012 assessment holds true
today, real estate may be hiding more
than 50 per cent of the black money.
Prime Minister Narendra Modi has
already said that the next target of his
government in the fight against black
money would be benami properties.
Housing prices in 42 major cities
across India could drop by up to 30 per
cent over 6-12 months after the demon-
etisation of high-value notes, wiping
out over Rs 8 lakh crore worth market
value of residential properties sold and
unsold by developers since 2008, said
PropEquity, a real estate research firm.
In the aftermath of demonetisation
impact on Indian real estate sector,
market value of residential property
of Rs 8,02,874 crore is expected to be
wiped off in the next 6-12 months,
PropEquity said in a statement.
According to PropEquity research,
residential real estate valuation in the
top 42 cities in India, sold and unsold,
will take a tumble and fall up to 30
percent, from Rs 39,55,044 crore to Rs
31,52,170 crore, it added.
In a recent report, rating agency
Fitch stated that homebuilders in the
NCR will continue to face the heat as
most sales of the higher-end prop-
erties were to high-net worth indi-
viduals and investors, two categories
of buyers that have been hit badly by
the governments crackdown on black
money. Homebuilders with greater
exposure to large-ticket premium
property projects are likely to be the
most affected. Furthermore, we expect
homebuilders more exposed to projects
in the National Capital Region (NCR)
to be hit more than in other regions,
because NCR is known to have a
greater reliance on cash-based transac-
tions Fitch said.
According to PropEquity, maximum
fall on total market valuation will be

in Mumbai Rs 2,00,330 crore followed
by Bangalore by Rs 99,983 crore and
Gurgaon Rs 79,059. Indian realty is
now bracing for sub-prime level crisis,
which is expected to deeply impact
the core of unorganised real estate and
black money, the research firm said.
According to Colliers International,
another real estate research firm, the
Delhi-NCR property markets are
already reeling under low transaction
volumes due to circle rates being
higher than the market rate. Demon-
etization will only see demand for
real estate here reduce even further,
it added. We expect lot of secondary
market transactions (resales) coming
down in volume. For every five buyers
out there, there is only one buyer
willing to pay all-cheque. And usually,
people want to take at least 20 to 30
per cent of the amount in cash, but this
will now go away for the time being,
Samir Jasuja, CEO and Founder
of PropEquity, is quoted as saying.
There will be almost a complete stop
in resales in the coming weeks as this
move will take some time for real
estate sector to absorb, he added.
Heavy toll on toll collections
Private developers of highways and ex-
pressways have also found themselves
at the receiving end of cash crunch
resulting from demonetisation, with
the government suspending collection
of toll on national highways pend-
ing improvement in cash availability.
Transport is another sector that has
been hit hard by demonetisation as they
are unable to undertake their business
due to non-acceptance of old tender
notes by state authorities, toll plazas
and labourers. According to industry
estimate, more than 20 crore people are
associated with the sector.
The All India Motor Transport
Congress (AIMTC), which is an apex
body for transporters in the country,
has said that the withdrawal limit of
Rs 10,000 per day and Rs 20,000 per
week has brought transport to a halt.
The body said that the sector is facing
an acute financial crunch as 80 per cent
of its operational costs are paid in cash.
Private developers
of highways and
expressways have also
found themselves at
the receiving end of
cash crunch resulting
from demonetisation,
with the government
suspending collection
of toll on national
highways pending
improvement in cash
availability
December 2016
www.InfralinePlus.com
Movement of goods and passenger
vehicles has also been impacted as
tourist buses and cabs are supposed to
pay taxes in cash at state borders.
The Delhi Transporters Association
echoed similar thoughts, saying the
trucking business is largely cash-reliant
for its en-route expenses that include
fuel purchase, toll payments and
covering costs for truckers boarding,
vehicular repairs and payments to
loaders and unloaders. We are worst
affected due to demonetisation of Rs
500 and Rs 1,000 currency notes. Yet,
never did we call for a strike and not
even once tried to hamper flow of
essential commodities for the larger
public interest, Manjinder Singh
Dhaliwal, Secretary, Maharashtra Tank
and Lorry Owners Association, is
quoted as saying.
After demonetisation was
announced on November 8, many
decided to look for ways to acquire
accepted currency, truck drivers, single
71
operators and many in the business
have suffered. Hardships in getting
the money exchanged quickly at fuel
pumps or banks have added to their
woes. In an effort to let go off their
old higher denomination notes, most
of our customers and clientele have
passed on the abolished notes to
us. They threaten us to accept them
without which we dont stand a chance
of receiving any revenue from them,
Dhaliwal added.
Transporters say that the withdrawal
limits imposed by the government are
too low for middle-sized and large-
scale operators. Due to loss of business,
many fear they could face difficulties in
paying installments for loans taken to
purchase vehicles. Mindful of default
on loan repayment, the government has
given addition 60 days to borrowers
to repay their loans. The exemption is
applicable to loans repayable between
November 1 and December 31.
It has been decided to provide
an additional 60 days beyond what is
applicable for the concerned regulated
 December 2016
www.InfralinePlus.com
OffBeat
entity for recognition of a loan account
as substandard, the Reserve Bank said
in a notification.
Rating agency ICRA has estimated
operators loss during the first 10 days
after demonetisation at Rs 460 crore,
which the state-owned agency NHAI
will have to compensate. The monthly
compensation expenditure for 115 toll
projects of NHAI operated by private
players is estimated to be Rs 1,380 crore.
The concession agreement provides
adequate safeguard against such losses
and the developers are likely to apply
for compensation under the change
in law provision (compensation if
aggregate financial impact exceeds the
higher of Rs 1 crore and 0.5 per cent
of realisable fee) and the force majeure
clause (extending the concession by the
number of days the force majeure was
prevalent), ICRA had said.
Projected decline in road traffic and
72 the exemption of road tolls following
the withdrawal of high-value banknotes
may pose short-term cash flow concerns
for toll road operators, companies and
analysts said. While the government
plans to compensate these companies
for their toll loss, there would likely
be short-term pain as traffic plunges
on low economic activity, they said.
Demonetisation could drag down
2017-18 GDP growth to 5.8 per cent,
Ambit Capital said in an update.
Analysts said the exemption on toll
collection could result in cash flow
constraints for road projects for interest
payments at the end of the month. The
cash flow impact would be serious
wherever the revenue of road projects
is linked to the repayment of loans.
Under the concession agreement for
road projects, companies need to apply
for compensation against such losses
under the change in law provision. The
government could also compensate by
extending the concession by a corre-
sponding number of days.
In case of cash compensation,
anything less than 100 per cent will be
a negative for toll-based road projects,
EPC Construction Vs Building Material
EPC Construction (Neutral Impact)
Most of these projects have big ticket
sizes and revenue is from larger
corporate houses and government
authorities, which do bank transaction
However, for small contractors, due
to cash crunch there will be some
disruption in medium term
Toll collection, which are mainly done
in cash, may face some disorder in
short-term
Rating agency ICRA has estimated operators
loss during the first 10 days after demonetisation
at Rs 460 crore, which the state-owned agency
NHAI will have to compensate. The monthly
compensation expenditure for 115 toll projects of
NHAI operated by private players is estimated to
be Rs 1,380 crore
industry experts said. That aside, traffic
is expected to be lower in the coming
quarter due to slump in economic
activity, which means loss for operators.
Road projects had seen a traffic growth
of about 6 per cent in fiscal 2016 and an
equivalent growth in the first half of the
current fiscal year, but this is likely to
slow down in the second half. Overall
traffic growth at the end of the current
fiscal may be just about 3 per cent, said
an analyst. These operators also face the
risk of credit rating downgrade in the
wake of demonetisation.
An analyst explained that more than
the amount of toll collection, rating
agencies are concerned about the
actual timing of the release of pay-
ments. Because toll road companies are
operating at very thin cushion in terms
of debt servicing and these companies
have to make interest payments on a
monthly basis, and debt repayments on
monthly or quarterly basis, they could
face rating downgrade. Even beyond
this exemption period, overall toll
revenue in this fiscal year may be lower
than what the companies would have
expected prior to demonetisation.
The government could reimburse
companies for the loss of toll income
Building Material (Short Term Negative
Impact)
Likely to be negatively impacted as the
underlying real estate demand (60-65% of
consumption) will be severely impacted
due to shortening of black money
Large part of transactions made in cash in
the sector like paints and other materials,
hence likely to be negatively impacted
calculated either on the basis of their
October average or the average of first
eight days of November. It could pay
75 per cent immediately and the rest
over time, but there is no final decision
on this. NHAI has said it is looking at
an overall impact of Rs 500-700 crore
for the first 10 days of toll collection.
It will compensate 75 per cent of the
loss immediately, and the balance 25
per cent will be done on a detailed
evaluation of the loss. However, Paytm
has bagged NHAI deal for automatic
toll collection. All toll charges will
be deducted from digital wallets. In
addition, the digital platform will
operate toll booths across the country.
Going forward, as the hue and cry
over the cash crunch settles down,
the benefits of demonetization will be
visible to all. The immediate fallouts
of demonetization which includes
hurting illegal coal trading activities
and boosting power bills collections,
shows that this move is a correct step
towards cleaning up our economy,
bringing in more transparency and best
practices in the country and help revive
the economy.
For suggestions email at feedback@infraline.com

Reports & Studies
Oil consumption wont peak before 2040; India to drive demand growth: IEA
The International Energy Agency (IEA)
expects global oil consumption to peak no
sooner than 2040, leaving its long-term
forecasts for supply and demand unchanged
despite the 2015 Paris Climate Change
Agreement entering into force. The Paris
accord to cut harmful emissions seeks to
wean the world economy off fossil fuels in
Indias carbon emissions increased by over 5pc in 2015: study
Indias carbon emissions from burning
fossil fuels increased by 5.2 per cent while
Chinas decreased by 0.7 per cent in 2015,
according to new research which found that
global CO2 emissions remained nearly flat
for three years in a row. India contributed
6.3 per cent of all global CO2 emissions,
with emissions increasing 5.2 per cent, in
2015 continuing a period of strong growth,
according to researchers at the University of
East Anglia (UEA) in the UK and the Global
Carbon Project. Global carbon emissions
from burning fossil fuels did not grow in
2015 and are projected to rise only slightly
in 2016, marking three years of almost no
growth, they said. The projected rise of only
0.2 per cent for 2016 marks a clear break
Green bonds can potentially fund renewable energy: Report
With the government setting an ambitious
target of 160 GW of solar and wind capaci-
ties by 2022, green bonds can be a potential
option to support the funding needs, a
recent report said. Green bond is a debt
instrument used to raise funds from inves-
tors and the proceeds are used only towards
financing green projects. According to a re-
port released jointly by Assocham and Crisil,
to meet the renewable energy target, there
is a need to look at innovative channels
for financing and banking alone would not
be able to support the huge requirements.
Green bonds could be a potential option
to support these funding needs. These pro-
ceeds could either be used for funding the
the second half of the century in an effort to
limit the rise in average world temperatures
to well below 2 degrees Celsius (3.6
Fahrenheit) above pre-industrial times. But
while demand for oil to power passenger
cars, for example, may drop, other sectors
may offset this fall. The difficulty of finding
alternatives to oil in road freight, aviation and
petrochemicals means that, up to 2040, the
growth in these three sectors alone is greater
than the growth in global oil demand, the
IEA said in its annual World Energy Outlook.
From 2020, the European Union will impose
much tougher legislation to control vehicle
emissions, which many expect to quickly
erode use of traditional fuels such as gasoline
and diesel, a major source of oil demand.
from the rapid emissions growth of 2.3 per
cent per year in the decade to 2013, with
just 0.7 per cent growth seen in 2014. The
data shows emissions growth remained
below one per cent despite GDP growth
exceeding 3 per cent.
appetite and commitment of investors in
capital expenditure of green projects such
as renewable energy projects or refinanc-
ing existing loans of eligible green projects
of the issuer, the report said. The report
also noted that while the green bonds are
December 2016
www.InfralinePlus.com
India needs $50 billion to install 40 GW
rooftop solar, says BNEF
Bloomberg New Energy Finance (BNEF)
has suggested that a massive financial
boost is required if India plans to meet
its aggressive target to have 40 GW of
installed rooftop solar capacity by March
2022. BNEF recently reported that the
rooftop solar power segment has been the
fastest-growing renewable energy sector
in India over the last few months. How-
ever, despite the supportive regulatory de-
velopments, substantial financial support
will also be needed to carry on the growth
momentum. India has seen a recent surge
in rooftop solar power projects over the
few months with several home owners 73
as well as industries setting up projects
under net-metering schemes and for cap-
tive consumption. Attractive net-metering
provisions and high industrial electricity
tariffs have driven consumers towards this
sector. In spite of these positive develop-
ments, around $50 billion of additional
investment would be needed over the next
six years to achieve 40 GW of installed
rooftop solar capacity.
relatively nascent in the Indian context with
only few of the renewable energy indepen-
dent power producers issuing these bonds,
globally first green bond was issued in 2007.
Though the initial issuances remained
small, they have gained lot of prominence
in the past couple of years due to increasing
making climate-responsible investments,
it said. Given that green bonds would
facilitate attracting a category of investors
which are environment friendly and demand
investments in green/sustainable financial
instruments, these could be a good option to
part fund the huge investment needs of the
renewable energy sector, the report said.
 December 2016
www.InfralinePlus.com

People in News
Susheel Kumar is new coal secretary, Rajeev Kapoor is secretary, MNRE
As part of a high-level bureaucratic
reshuffle, the government shifted coal
secretary Anil Swarup to the Ministry of
Human Resources Development (HRD) as
Secretary, School Education and Literacy.
He was replaced by Susheel Kumar
who is at present serving as Secretary,
Department of Border Management in
the Home Ministry. Swarup, an Indian
Administrative Service (IAS) officer of
the UP cadre, was handed the charge of
Government appoints new NHAI Chairman
The government has appointed Yudhvir
Singh Malik as the Chairman of National
Highways Authority of India (NHAI). Malik,
an 83 batch Haryana cadre IAS officer,
was earlier posted as special secretary in
74 Niti Aayog. The outgoing chairman Raghav
Chandra, an 82 batch Madhya Pradesh
cadre IAS officer, has been moved to the
National Commission for Scheduled Tribes
as secretary. Malik will have a huge task at
his hands meeting governments ambitious
road construction target of 10,000 km for
the current year. Malik will also have to
get the work started on the Delhi-Meerut
expressway. Prime Minister Narendra Modi
has been personally monitoring this project
and has already told the roads ministry to
the coal ministry in October 2014 under
power, coal, renewable energy and mines
minister Piyush Goyal. Prior to joining
the coal ministry, Swarup was serving as
an Additional Secretary in the Cabinet
Secretariat. He is generally credited for
successfully developing the model for
allocation of natural resources through
coal mine auctions. Swarup enjoys the
image of a go-getter and was hand-picked
was Prime Minister Narendra Modi for
the job. Also, Rajeev Kapoor, Director at
Lal Bahadur Shastri National Academy of
Administration, has been appointed as the
new secretary of the Ministry of New and
Renewable Energy.
finish the work within the timeline of two
years. The NHAI has a budgetary funding
of Rs 22,000 crore and has been given
permission to raise bonds worth Rs 50,000
crore. In the current year, the authority
plans to undertake highway construction
works of around Rs 70,000 crore.
Saptarshi Roy takes over as Human
Resource Director of NTPC
NTPC, Indias largest power utility
company, announced Saptarshi Roy,
Executive Director, NTPC has taken
over as Director, Human Resources
(HR), of the company for a period of
five years from the date of assumption
of charge of the post on or after
November 1. Roy will remain HR
director of NTPC till the date of his
superannuation or until further orders,
whichever is the earliest. He replaces
U.P. Pani who has relinquished the
charge of the post of Director (HR)
of the Company consequent upon
attaining the age of superannuation
on 31st October 2016. 56 year old
Saptarshi Roy is graduate in Electrical
Engineering, with career spanning over
36 years of contribution in NTPC as
Regional Executive Director (North)
and ER-I Regions as well as Executive
Director (Corporate Planning) besides
Head of HR at Projects and Corporate
Office.

HPCL appoints VS Shenoy as Director-Refineries, S Jeyakrishnan to head marketing

over from BK Namdeo, who retired on

HPCL has appointed Vinod S Shenoy
as Director-Refineries. Shenoy takes
October 31, 2016. During his career
spanning over 31 years, Shenoy has held
various positions in the Refinery Divisions
and Corporate Departments of HPCL.
The company also announced that S
Jeyakrishnan has assumed charge as
Director (Marketing). Prior to this, he was
the Executive Director (Retail) of HPCL.
During his tenure across the various
Marketing SBUs, HPCL became Indias
largest lubricant marketer, augmented
infrastructure, developed robust processes
and undertook several pioneering enhanced productivity and profitability and
customer centric initiatives which established HPCL as the preferred brand.
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Spot E-Auction Prices and Allotment

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