September 2015

Volume 4 | Issue 05 | `100

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THE COMPLETE ENERGY SECTOR MAGAZINE FOR POLICY AND DECISION MAKERS

Defunct Indraprastha
Power Unit
...to shine as
REVENUE- solar power station

SHARING
...new norm in
Hydrocarbon Exploration
Indian Railways
Eyeing
power units to cut
energy bills

Ivan Saha DK Saraf Lajpat Shrivastav Sanjay Seth

President & Chief Technical Chairman and Managing Former CEO, Moser Baer Power Managing Director
Officer, Vikram Solar Director, ONGC & Infrastructures Ltd Hitachi Metals (India) Pvt Ltd

Interim solution is to Crude oil & natural Non-availability of There are more than
use an intelligent mix gas prices are expected adequate and cheap forty reputed licensed
of renewables and to rise in a couple of power may derail Make in AMDT makers
traditional power sources quarters India plan in India
InfralinePlus
THE COMPLETE ENERGY SECTOR MAGAZINE FOR POLICY AND DECISION MAKERS
September 2015 | Volume 4 | Issue 05

Editors Letter Editorial

Indias energy sector is witnessing action like never
before, be it oil & gas, power, coal or renewable sector. Shashi Garg, Editor
The country seems to be in a hurry to exploit resources
to generate energy both via conventional and clean News Team
energy means. Change of stance in hydrocarbon Ravinder Nagar
exploration sector, clearances to stalled power projects,
diluting stand on no-mining-areas gives a sense on Analysts
governments seriousness for energy generation. Sambit S Mohanty
The Cover Story talks about government switching Abhishek Gupta
to revenue sharing model and dumping production
Content Consultants
sharing to make hydrocarbon exploration more
interesting. Under the new regime, fields estimated to Solutions FaKtory
contain oil and gas worth around `70,000 crore, will be given out for 20 years to
bidders. The model will be first introduced for 69 marginal oil fields held for many
years by national oil companies.
On Coal front the number of blocks, where mining will be banned, is likely to be Business Development
reduced from the originally identified 206 to less than 35. Reports suggest that
after more than a year of deliberations between different agencies, the environment Manoj Narang, Director
ministry has figured that the government does not have mapped data of where Tel.: 0120-6799106 / 100
Indias perennial rivers, its hydropower and irrigation projects are located. So, the Email: manoj.narang@infraline.com
ministry has decided to dispense with the parameters measuring the importance
of forests that are essential for these features.
The two opposing governments chose to drop their differences for revival of a Advertisement
clean energy project.
Anshul Sharma
The defunct Indraprastha power station in the capital will soon start generating Tel.: 0120-6799136
electricity but this time as a solar power station. Interestingly the governments at the Mobile: +91 9953848494
Centre and in Delhi have kept their political differences aside for the clean project.
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The project was closed in 2010 after some four decades of pumping out pollutants
from its 240 MW thermal units.
In Oil & Gas section, we bring you the diplomacy behind two much talked about
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trans-national oil & gas pipelines. The pipeline project plans come in the backdrop
of the International North-South Transport Corridor that promises to cut the costs Mamta Negi
involved in transporting goods to Central Asia by 30 percent. The proposed Tel.: 0120 6799100
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pipeline, the Iran-Pakistan-India pipeline, and crude and gas pipelines from Russia
and Kazakhstan.
In the power segment do read our analysis on UMPPs. Ultra Mega Power Projects
once came with a promise to provide electricity to millions of people who do not
have access to it. However, uncertainty over fuel supplies, block allocation, land
acquisition, change in bidding process etc have dented the confidence of power Form IV
companies that are already struggling to improve their balance sheets. Periodicity of its Publication: Monthly
Printers / Publishers /
Our Offbeat section covers the shift that is happening in Indias agriculture sector. Mrs Shashi Garg
Editors / Owners
Many states plan to replace traditional water pumps with solar powered agriculture Nationality Indian
pumps. India deploys about 19 million electric pumps to water its agriculture 14-D, Atmaram House, 1, Tolstoy Road
produce and government gives subsidy of over `67,000 crore to the agriculture Address
New Delhi - 110001
sector. Maharashtra plans to replace half a million electric pumps with solar- 14-D, Atmaram House, 1, Tolstoy Road
Place of Publication
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InfralineEnergy Research and Information Services owner Company
1. Mrs Shashi Garg, 60, Siddhartha Enclave, New Delhi-110014
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I Shashi Garg hereby declare that the Particulars given above are true to
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1, Tolstoy Road, New Delhi - 110001 A-31, Sector 3, Noida Sd
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Signature of the Publisher
 September 2015
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InfralinePlus

Contents
Editors Letter
1

Cover Story 33
Government may auction

33 69 oil, gas elds under

new model
The fields, estimated to contain
oil and gas worth around
`70,000 crore, will be given out
for 20 years to bidders. Even
better, companies will bid for
these fields on a revenue-sharing
basis. The new model will be
first introduced for 69 marginal
oil fields held for many years by
national oil companies such as
Oil and Natural Gas Corp. Ltd
(ONGC) and Oil India Ltd.
2

Power Coal
4 17
News Briefs: National p4 News Briefs: National p17
In Depth: Road ahead not encouraging for In Depth: Govt may allow mining in
Mega power projects p6 inviolate blocks p19
In Depth: Railways eyeing stalled power projects
In Depth: Falling fossil fuel prices leave
to cut its energy bills p9
Coal India to tweak e-auctions p22
In Conversation: Sanjay Seth, Managing Director
Hitachi Metglas (India) Pvt Ltd p12 Expert Speak: Lajpat Shrivastav, Former CEO
Moser Baer Power & Infrastructures Ltd p25
Statistics p15
In Depth: Govt pushing Coal India to cut
prices of high grades p29

Statistics p31

Topics Covered Topics Covered

Transmission and distribution network Coal auction
Demand, supply gap Price linkage
Fuel transportation
Regulatory environment
Evacuation
 September 2015
www.InfralinePlus.com

Oil and Gas Renewable

38 50
News Briefs: National p38 News Briefs: National p50

In Depth: Relaxed sanctions on Iran may help In Depth: Perovskite touted to lead charge in
revive gas pipeline via Pakistan p40 mainstreaming renewable resource p52
In Depth: PE firms increasingly eyeing
In Depth: Upstream oil firms realisation moving
green energy assets in India p55
in pressure zone p42
In Conversation: Ivan Saha, President &
In Depth: Govt must iron out issues on Chief Technical Officer, Vikram Solar p58
ethanol supply front p46
In Depth: Defunct Indraprastha power station gets a
Statistics p48 new lease of life as solar power station p62
Statistics p64

Topics Covered Topics Covered

Exploration Solar technology 3
Crude oil imports Hydro power
Blending Green utilities

Quotes InfraWatch 66
Container freight rates becomes the first casualty
of slump in China

OffBeat 69
India moves forward towards solarisation of agriculture
Mayank Ashar Debasish Mishra
Chief Executive and Managing senior director,
Director, Cairn India Deloitte

Anil Razdan Kameswara Rao

Former Power Secretary, leader (power and utilities),
Govt of India PricewaterhouseCoopers
 September 2015
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NewsBriefs | Power
NTPC Kahalgaon faces threat of closure over
delayed Ash Dyke Lagoon
Kahalgaon Super Thermal Power plant
will face closure after 2017 if its fail to
build a new lagoon for dumping waste
ash slurry because of encroachment on
its land in a nearby village where it has
to come up. If a new Ash Dyke Lagoon-
3D does not come on time there is a danger of closure of the plant
after 2017, Group General Manager of NTPC N N Mishra said. Mishra
said the proposed lagoon has to come at Majdaha village, about 2.5
km from the plant in Kahalgaon in Bhagalpur district, but due to
encroachment on the land the work could not start. He said the NTPC
authorities have approached Bhagalpur district administration several
times on the problem but so far the issue had not been resolved.
HC sets aside power project awarded to BHEL
The Madras High Court quashed proceedings issued by Tamil Nadu
Generation and Distribution Corporation (Tangedco) on September
27, 2014 for awarding contract for setting up two units of 660 MW
Supercritical Thermal Power Project at Ennore Special Economic
Zone in Chennai to Bharat Heavy Electricals Limited (BHEL).
Allowing a writ appeal led by CSEPDI-TRISHE Consortium,
an Indo-Chinese private venture, a Division Bench of Justices R.
Sudhakar and K.B.K. Vasuki reversed an order passed by a single
judge on April 7 upholding the grant of the contract to BHEL. The
judgment, reserved in Chennai, was delivered here as Mr. Justice
Sudhakar is at present heading the High Court Bench here.
4 Besides promoting environmental cause, such initiatives also help
Tata Power increases consumer base over 2 million
Tata Power Company has increased its consumer base over 2 million
in two Metro cities - achieving 6.18 lakh consumers in Mumbai and
over 14.4 lakh in Delhi. Also, the number of changeover consumers
in Mumbai during 2014-15 was 1.05 lakh. TPC has been providing
power at the lowest tariff to the low end residential consumers. In
the past few years, the consumer strength in Mumbai alone rose
by around 2 lakh, an ofcial said. TPC has been providing reliable
and uninterrupted power to its consumers, he said. The increased
Mumbai consumer base of 6.18 lakhs was aided by the addition of
19,000 direct and 1.05 lakh changeover consumers during 2014-
15. In Delhi, Tata Power has a registered consumer base of 14.4
lakh, spanning across an area of 510 sq. km. in northern and north
western Delhi, the ofcial said.
Himachal to refund `280 crore to Adani Power
Himachal Pradesh cabinet decided to refund the upfront premium
of `280 crore in lieu of Jangi-Thopan (480MW) and Thopan-
Powari (480MW) hydel projects to Adani Power Limited. With
some ministers against the idea of returning the premium, heated
arguments took place in the cabinet meeting. According to sources,
some ministers were not in favour of the decision and opposed it.
But, at the end, the agenda was approved with the condition that
upfront premium would be returned only after receiving the money
from Reliance Energy. Following the cabinet decision, the ground
has been cleared for the allotment of 960 MW Jangi-Topan-Powari
project. In September 2013, cabinet meeting chaired by chief
minister Virbhadra Singh had given its approval to initiate action for
damages-penalty against Brakel Corporation in the implementation
of Jangi-Thopan-Powari (960MW) hydro project, said the source.
GE, Alstom ahead in race for bagging locomotive
projects in Bihar
GE and Alstom are believed to be ahead of other bidders in the
race to bag contracts for the setting up of multi-crore diesel and
electric locomotive factories in Bihar that are among the top eight
infrastructure initiatives which are being monitored by the PMO.
According to railway sources, while the nancial bids for a diesel
factory at Marhora was opened today, price bids for the Madhepura
electric locomotive factory were opened recently. Marking the rst
major FDI offer for railways, two US multi-nationals -- GE and EMD --
are learnt to have submitted nancial bids for the `1,000 crore factory
at Marhora. The project is for a total of 1,000 diesel locomotives --
700 of 4,500 horse power (HP) and 300 locos of 6,000 HP -- over 10
years using state-of-the-art technology. Railway sources said that the
price quoted by GE seems to be lower than that by EMD.
Tata Power Delhi Distribution Ltd launches Pay
power bills online
In a bid to encourage its customers to Go- Paperless Tata Power
Delhi Distribution (TPDDL) in association with PayUMoney, an online
payment solution, has launched a Pay and Win Scheme. TPDDL
customers can now easily pay their bills online through PayUMoney
and win exciting prizes like ACs, LEDs, tablets etc.
Pay & Win Scheme is exclusively for consumers who pay
their electricity bills through Net Banking option on PayUMoney.
Commenting on the special scheme, Praveer Sinha, CEO & MD &
TPDDL said, We at TPDDL have been promoting e-payments in a big
way and tie-up with PayUMoney is one more step in that direction.
in enhancing consumers convenience as they can make payments
anytime and from anywhere.
Essar awards `80-cr contract to Alstom for Neyveli
thermal power plant
Alstom T&D India has bagged a contract worth close to Euro
11 million (`80 crore million approximately) from Essar Projects
India Ltd to supply transformers package for Neyveli New Thermal
Power Project (NNTPP) in Tamil Nadu. The 1000-MW greeneld
Neyveli New Thermal Power Project, being developed by Neyveli
Lignite Corporation Limited, will be the rst lignite-red 2X500 MW
power plant in the country and major source of power to the energy
decient southern states. Under the scope of the contract, Alstom
will be engaged in designing, engineering, manufacturing, testing,
installation and commissioning of a set of generator transformers,
inter-connecting transformers, station transformers up to 200MVA,
80 MVAR reactor along with other associated equipment. All the
equipment will be engineered and manufactured in Alstoms world
class facilities in India.
CEA restricts capacity of JP hydro plant sold to JSW
Around ve months after the Jaypee group sealed the deal to sell two
operating hydro power plants to JSW Energy, the Central Electricity
Authority (CEA) has restricted the capacity of one of these, Karcham
Wangtoo in Himachal Pradesh, to 1,000 Mw as against 1,200 Mw cited
by Jaypee in its rate petition. In November last year, the Sajjan Jindal-
owned JSW Energy acquired two hydro power plants of a cumulative
1,391 Mw capacity of Jaiprakash Power Ventures (JPVL) for ` 9,700
crore. Earlier, the Anil Ambani-promoted Reliance CleanGen was
looking to buy Jaypees entire hydro portfolio.

NewsBriefs | Power
State electricity boards losses widen to
`3 lakh cr: Icra
The debt-laden state electricity boards accumulated losses have
widened by 58% to a whopping `3 lakh crore in the two years to
March 31, 2014, Icra said in a report. The government had designed
a nancial restructuring plan (FRP) in FY 13 for these entities
when their accumulated losses stood at R1.9 lakh crore. SEBs/
discoms in Uttar Pradesh, Tamil Nadu, Rajasthan, Haryana, Bihar,
Jharkhand, Andhra Pradesh and Telangana that accounted for over
70% of the losses then, signed up for the FRP in September 2012.
The continuing rise in SEBs losses is primarily due to their failure
in implementing timely tariff revisions, although this is mandated
under FRP. For the current scal, the state electricity regulatory
commissions (SERCs) of 20 states have issued tariff orders but the
states that are part of FRP have suffered delays of 6-11 months in
tariff determination, Icra said.
Rajasthan electricity board to pay minimum interest
to lenders
A repayment crisis at the Rajasthan state electricity board (SEB) has
been temporarily averted after the utility agreed to pay a minimum
pending interest to its lenders. The payment of minimum interest
will help the Rajasthan SEB escape the bad loan tag and give it three
months to come up with a viable repayment plan. The decision came
at a meeting between SEB representatives, lenders and nance
ministry ofcials last week after bankers declined to consider any
fresh restructuring of loans. In this three-month period, Rajasthan
SEB is expected to come up with a viable restructuring plan for
short-term liabilities worth over `50,000 crore, which would be
acceptable to the nance ministry, bankers and the Reserve Bank of
India (RBI), according to two bankers familiar with the matter.
CG bags `300 crore order from Power Grid
Corporation
Avantha Group company CG has bagged `300-crore order from
Power Grid Corporation (PGCIL) for supply, erection, testing and
commissioning of power transformers at various sub-stations
across the country. The orders include 765 kV transformers for the
Chittorgarh and Ajmer sub-stations, both part of the green energy
corridor, an initiative by the government, to facilitate evacuation
of renewable energy into the national grid, the company said in a
statement. CG has also bagged orders for the supply of 400 kV
transformers and reactors to Power Grid, a large part of which is
meant for the Green Energy Corridor, for the evacuation of solar
power to the 400 kV grid in addition to system strengthening projects.
Coal Ministry imposes `1 lakh penalty on GVK Power
The Ministry of Coal has imposed a penalty of ?1 lakh on GVK
Power (Goindwal Sahib) for intentionally delaying the submission
of requisite documents to allow coal mining to start at the Tokisud
North mine in Jharkhand. The company, a part of the Hyderabad-
based GVK Power and Infrastructure, was the prior owner of the
mine which was sold in the coal mine e-auctions earlier this year
to Essar Power (Tokisud North mine) for a price of `1,110 a tonne.
GVK Power had also participated in the bidding but had lost out to
Essar. The mine has extractable reserves of 51.97 million tonne
and fetched the highest bid amongst those reserved for the power
sector. The Coal Ministry has also asked GVK Power to submit the
documents by September 15.
September 2015
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Tata Power to scale up generation capacity to 18,000
MW by 2022
Tata Power has issued its strategic intent for the year 2022, which
lays emphasis on scaling up generation capacity and value-added
businesses, including services and trading. By 2022, the company
plans to increase the generation capacity from 8,750 megawatt
(Mw) to 18,000 Mw, with 20-25 per cent from clean and green
sources (both 25 tonnes per annum of coal and coal equivalent),
4,000-Mw distribution and decentralised distributed generation
and 10-x growth in value-added businesses. According to the
company, the potential future growth areas in India include the
1,600-Mw coastal Maharashtra, Dehrand project, the 380-Mw Dugar
hydroelectric joint venture project; and 1,980-Mw Tiruldih power
project. Tata Power completed the acquisition and possession of
private land for Dehrand in 2014-15.
CERC allows 24-hr trading at power bourses
Power regulator CERC has extended the trading session time up to 24
hrs a day on energy bourses IEX and PXIL to help optimum utilisation
of capacities by producers and distribution companies. In its order, the
Central Electricity Regulatory Commission (CERC) has directed the
Power Exchange of India Limited (PXIL) and Indian Energy Exchange
(IEX) to start operation of extended market session by August 1.
However, the two exchanges have already extended their market
sessions. We expect the market to greatly benet the distribution
companies and generators manage and balance their systems better.
The market will also facilitate the utilities in large-scale integration
of renewable energy, especially wind and solar capacities as also
envisaged by the government, IEX said in a statement. 5
`75,000 crore of power loans could be at risk: Crisil
Nearly `75,000 crore in loans could be at risk if viability concerns in
the power sector are not resolved, rating agency Crisil said in its report
released recently. The rating agency noted that 46,000 megawatts
of power projects are facing viability issues due to a lack of long-term
buyers for electricity, inadequate fuel supply, and aggressive bidding to
win projects and coal blocks. Total loans to these stressed generation
projects are currently about `2.1 lakh crore (trillion). A sixth of it, or
about `35,000 crore, is for projects which have the cushion of a strong
parent. Additionally, projects with loans of `1 lakh crore could become
viable if their payment proles can be structured appropriately. This
leaves the remaining `75,000 crore of loans at risk. said Pawan
Agrawal, chief analytical ofcer, Crisil Ratings.
ABB India bags `125-cr order from Power Grid Corp
Power Grid Corporation of India Ltd (PGCIL) has awarded an `125
crore order to ABB India for the extension of three substations in
Vadodara, Manesar and Malerkotla. The order, which is a part of a
larger contract (valued `175 crores) awarded to ABB Group, was
booked in the second quarter of 2015. Gas-insulated switchgear
(GIS) will be used to accommodate the expansion of all three
existing substations. While in Vadadora and Manesar this involves
the extension of the current 765/400 kilovolt (kV) GIS substations,
in Malerkotla the substation will be upgraded from air-insulated
switchgear (AIS) to GIS. Commissioning is scheduled for the end of
2016. This GIS solution will help the customer extend substation
capacity, within the limited space, considerably more than a
traditional air insulated switchgear solution, said N Venu, president,
power systems division, ABB India
 September 2015
www.InfralinePlus.com

InDepth
Road ahead not encouraging
for mega power projects

! With balance sheets under stress, companies not willing to swell capex
! Projects based on overseas coal, domestic coal block allocation have suffered

Infraline Bureau

Ultra Mega Power Projects once
came with a promise to provide
electricity to millions of people who
do not have access to it. However,
uncertainty over fuel supplies, block
allocation, land acquisition, change in
bidding process etc have dented the
 
 
was given out. The power sector
itself has changed with large power
companies having over-leveraged
balance sheets that cannot take on
more capital expenditure.
Price of power generated from
Power Finance Corporation to buy
it for breach of representation - the
de-allocation of the Chhatrasal coal
block, which was linked to the project.
The company has already given
up the Tilaiya UMPP because of the
slow pace of land acquisition by the


 the Sasan ultra mega power project Jharkhand government and has not
are already struggling to improve their (UMPP) in Madhya Pradesh is perhaps made progress on the Krishnapatnam
balance sheets. one of the cheapest in the country. The UMPP in Tamil Nadu. Tata Powers
  project generates power at `1.19 a UMPP at Mundra in Gujarat, based on
not the only thing which has happened unit. Even then Reliance Power wants 

 
 September 2015
www.InfralinePlus.com

selling power at `2.26 a unit. Despite Mundra and Sasan coal and domestic coal block
If this was not enough, the producing 8,000 Mw of power, the allocation have suffered, and the
Union government had to cancel inference is that the UMPP experiment, UMPPs are no exception. In fact, they
the two-year long bidding process launched with much fanfare during have fared better than other recent
for two UMPPs in Tamil Nadu and
 thermal projects, says Kameswara
Odisha after all private companies
pulled out and government-controlled
NTPC and NHPC emerged as the
winning bidders.
For the Tamil Nadu UMPP, Adani
Power, CLP India, Jindal Steel &
Power, JSW Energy, Sterlite Energy
and Tata Power were in the fray, but
only four of them bought the request
for proposal document and none
decided to proceed further. NTPC
submitted its bid, which wasnt
opened since it was felt that at least
three quotes should be available for
 
Singh-led United Progressive Alliance
government, has failed.
RV Shahi, the former Union power
secretary who played a critical role
in drawing up the UMPP blueprint,
rejects outright that the model is
at fault. Two projects are running
successfully, he says. According to
him, the key innovation in the UMPP
plan was to reduce the pre-construction
risks of signing power purchase
agreements (PPAs), getting land
and other clearances before inviting
competitive bids.
Rao, leader (power and utilities),
PricewaterhouseCoopers.
But there are lessons for both the
government and private investors.
Policy stability and project preparedness
are necessary, which the previous model
has not delivered... On their part, some
bidders underestimated development
risks, and banked on upsides that didnt
come through, says Rao.
As an industry expert points out,
Reliance Powers low tariff for Sasan
should be seen in the context that any
company will bid low because of the
"# Shahi says problems arise when 
" 

Similarly, the Odisha UMPP saw these risks are not taken care of, like in factors. In this case, the company bid a
$  '$#*'  low tariff in anticipation of extra coal
only NTPC and NHPC were left as bankers and promoters gets shaken, "
the rest pulled out, which led to the the former bureaucrat says. available, it may not want to continue 7
cancellation of the auction. Most projects based on overseas supplying power at the same price.

Changing rules
For the Tamil Nadu UMPP, Adani Power, CLP While putting the UMPPs on hold,
India, Jindal Steel & Power, JSW Energy, Sterlite the government decided to come out
Energy and Tata Power were in the fray, but only with a fresh draft for bidding. An
four of them bought the request for proposal expert committee was set up for the
purpose. According to India Ratings,
document and none decided to proceed further. the proposed changes could increase
NTPC submitted its bid, which wasnt opened developer interest in UMPPs as they
since it was felt that at least three quotes should try to address the concerns of investors
be available for choosing the final winner and lenders on the previous guidelines.
These guidelines cover risk areas
" 
%
THE STATE OF UMPPS charge quote, ownership of asset,
Status Company Levelised tariff for incentives for performance, land
kilowatt/hour (`) acquisition and termination of contract.
Sasan Power, in Sasan, Commissioned RPower 1.19
The key reason for the failure of
Madhya Pradesh
the previous bidding guidelines was
Jharkhand Integrated PPAs terminated RPower 1.77
Power, in Tilaiya, the unwillingness of lenders to fund
Jharkhand a 4,000 Mw power project with an
Coastal Gujarat Power, Commissioned Tata Power 2.26 estimated investment outlay of `20,000
in Mundra, Gujarat "
Coastal Andhra Power, Tariff revision RPower 2.33 operate and transfer model where
in Krishnapatnam, petition in CERC; the asset ownership did not vest with
Andhra Pradesh Construction stalled the developer. The current guidelines
UMPPs where Odisha Integrated Power, in Bedabahal propose a build, own and operate
bidding was stalled Coastal Tamil Nadu Power, in Cheyyur model which will result in greater
 September 2015
www.InfralinePlus.com

InDepth

Though the draft is yet to be given



that will need to be decided before the
companies bid for another round of
UMPPs is whether the sluggish market
is good enough for such large projects.
At a time when existing generation
capacities are running low, is it prudent
enough to put up large projects?
Shahi dismisses any suggestion for
a need to pause here. According to
him, mega projects give economies of
scale. Four years have already been
wasted. Capacity addition has been
good in the last few years because of
action taken in the past, but for the
last two years or so, there has been
nil project activity which will impact
capacity addition.

For suggestions email at feedback@infraline.com

8 
   "+
said India Ratings in a report.
Besides, the guidelines provide for
better fuel cost pass-through as they
SUPER-CRITICAL MEGA THERMAL
envisage full escalation on the base POWER PROJECT FOR SALE
tariff based on the Central Electricity
Regulatory Commission (CERC)
norms. Earlier, a fuel cost bid was
A Super-critical Mega Thermal Power
divided into two parts which required


/%

Project to be located in Sambalpur
of the fuel cost over the life of the district of Odisha for which MoU has
project, leading to viability issues.
Escalations based on the CERC norms been signed with the State Government

 

 "3 is up for sale. 6 (1) declaration for Land
associated with mining costs.
The draft norms also propose Acquisition has already been issued and
a segregation of operating and
infrastructure assets into two separate
the Land Acquisition is in progress. Water
special purpose vehicles (SPVs). The
land for the coal block as well as the
already allocated by the Government
power plant would be housed under with various other statutory clearances.
an infra SPV, while the plant would
be developed under an operating SPV. Interested parties may contact:
The move will lead to the mortgage
of land and power asset separately to Mr. UMA SHANKAR RATH, Director,
raise money; however, this could pose
challenges in the sale of asset, India Mobile No.- 09437481555/ 09937020940.
Ratings said.
 September 2015
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InDepth
Railways eyeing stalled power
projects to cut its energy bills

! Transporter exploring many options including sourcing energy from exchanges

! Aims at cutting its electricity bill by seeking competitive bids from power producers

Infraline Bureau

Facing problems with high energy bills,
Indian Railways is exploring options
to reduce electricity bills by nearly
one-third by seeking competitive bids
from power producers, sourcing from
electricity exchanges and reaching
bilateral arrangements. Among other
options there is also a suggestion on
the table of entering power generation
segment which means the transporter
may buy ailing power generation
railways also move coal, the initiative
may also reduce delivery time of fuel
to the power units.
The abundance of distressed projects
in the power sector may provide
Indian Railways, which needs about
12 billion units of electricity a year,
an attractive opportunity to buy assets
at a cheap price. Companies, which
started building power projects in
anticipation of faster economic growth
slowdown that caused growth to sink
below 5 percent. In addition, several of
these power plants are beset with fuel
shortages and high borrowing costs that
have hurt the ability of the companies
to repay creditors.
Indian Railways power
consumption is growing at an average
5 percent a year and its power bill
is estimated at `12,500 crore in the
year to 31 March. The plan is at a
units to cut its huge power bills. Since $" conceptual stage, said a person aware
 September 2015
www.InfralinePlus.com

InDepth

of the development. Acquiring such
:<$=
plan to set up a transmission system to
wheel power for its network.
A panel headed by Ajay Shankar, a
former secretary of the department of
industrial policy and promotion, has
suggested, among options, that the
national transporter consider buying
such assets. The panel was constituted
by the Indian Railways earlier this year
to review the functioning of the railway
boards public-private partnership cell.
$%$
a focus on capacity augmentation
and modernization. The government
hopes to leverage the public-
private partnerships to improve its
freight business and investment
in its infrastructure.
Cash-strapped state electricity
boards (SEBs) have been unwilling
to procure electricity, given the low
tariffs they earn for power supply,
slow progress in reducing losses and
higher power purchase costs. SEBs
Power projects with a combined
capacity of 46,000MW are facing
viability issues in the absence of
long-term electricity buyers and
because of inadequate fuel supply, their
developers having bid aggressively to
win the projects and coal block links,
according to a 28 July report by rating
company Crisil Ltd.
Of this, 36,000MW are coal-based
projects within which tariff under-
recovery has impacted 20,000MW of
capacities, while the rest are reeling
><$@  are laden with debts of `3.04 trillion because of inadequate feedstock and


#*@$" and accumulated losses of `2.52
power generation assets have been
suggested by the Ajay Shankar
committee. We are evaluating the
options, he said. Indian Railways is
considering options such as buying
equity in distressed power assets and
new power projects and setting up
captive plants, said another person.
10 Buying out an asset will, however,
pose the problem of asset management
for the Indian Railways, said Anil
Razdan, former power secretary.
Railways are already in a joint
venture with NTPC for a power project
and will have to develop their full
3"
"

$# high borrowing costs that have hurt the ability of
The choices for railways can be to
either develop their own expertise,
set up a joint venture with NTPC or
tie up with a power trader for their
electricity needs.
Stalled power projects are also a
major concern for bankers. As of 31
March, 607 projects with investments
poor electricity off-take by discoms,
trillion. This, in turn, has hit power the report added.
generation projects. The railways plans to source
The abundance of distressed projects in the
power sector may provide Indian Railways,
which needs about 12 billion units of electricity
a year, an attractive opportunity to buy assets
at a cheap price. Companies, which started
building power projects in anticipation of faster
economic growth about five years ago, had to
weather a slowdown that caused growth to sink
below 5 percent. In addition, several of these
power plants are beset with fuel shortages and
the companies to repay creditors
10 percent of its electricity needs
through renewable energy sources
by 2020 and signed agreements
with the ministries of power and
renewable energy on Wednesday for
cooperation in electricity transmission,
worth more than `4.85 trillion were "$ $

 
" green energy.
collated by the Centre for Monitoring The national transporter plans
Indian Economy Pvt. Ltd. Of these, 33 to reduce electricity bills by nearly
projects, representing over `1 trillion one-third by seeking competitive
in investment, were in the electricity bids from power producers, sourcing
segment. The stressed project from electricity exchanges and

 reaching bilateral arrangements. This
would certainly feel relieved, plan was articulated in this years
Razdan said. railway budget.
Railway minister Suresh Prabhu, As part of this strategy, it is trying
in his February budget, unveiled to take advantage of its position as
a plan to invest `8.5 trillion in the the largest consumer of power in the
 September 2015
www.InfralinePlus.com

Navin Tandon, member, electrical,

Railway Board.
The MoUs provides a framework
under which both parties may

  
reliable and economical generation,
transmission, distribution, trading,
supply, marketing of electricity and
country to bring down its electricity
costs by calling for bids from power
producers to supply 1,010 MW of
electricity over three years.
By calling for competitive bids, the
"$ $:<$+
the government said in a statement.
Piyush Goyal, Indias minister for
power, coal and renewable energy,
said that the partnership between
his ministries and the Railways has
very ambitious targets to cut the
cost of power. All equipment will be
domestically sourced, which will give
Railways plans to boost to governments programmes
reduce its electricity like Make in India, Skill India and will
bill by nearly one- create jobs, he said.
The plan to use domestic equipment
$%
 

tariffs. The transporter is seeking to
reduce its electricity cost to less than
`5 per unit from the present average of
around `7 per unit.
Other Options
Indian Railways is also planning to
set up a renewable energy capacity of
1,200 MW and a transmission system
to carry the power generated in an
attempt to cut its power costs. The
national carrier is also conducting an
energy audit to estimate the amount of
savings that can be made.
Railways needs about 12 billion
units of electricity a year, with
third by seeking
competitive bids from
power producers,
sourcing from
electricity exchanges
and reaching bilateral
arrangements. The
transporter is seeking
to reduce its electricity
cost to less than `5 per
unit from the present
average of around `7
per unit
through renewable energy sources
comes in the backdrop of an ongoing
trade battle with the US at the World
Trade Organization (WTO), where 11
a dispute settlement panel has been
established to hear US complaints
against Indias domestic content
requirements on procurement of solar
cells and modules under the Jawaharlal
Nehru National Solar Mission
programme (JNNSM).
The Railways is trying to take
advantage of its position as the largest
consumer of power in the country
to bring down its electricity costs. It
has also called for bids from power
producers to supply 1,010 MW of
electricity over three years. It has
consumption growing at an average by 2020, said A.K. Mittal, chairman, 3"<$
5 percent a year. Its power bill is Railway Board, at the signing of four Energy Management Co. Ltd for
estimated at `12,500 crore for the agreements between the ministry of sourcing electricity in the eastern
$# railways and the ministries of power region (350 MW), west (440 MW) and
The equipment for the green power and renewable energy recently. north (220 MW).
capacity will be sourced from domestic These agreements are for Railway minister Suresh Prabhu
manufacturers with about 1,000 MW to cooperation in electricity transmission, said that the railways was paying
be produced from sunlight and the rest "$ $

  the highest tariff despite being the
from wind. The exhaustive rail network green energy. largest consumer. The idea is that we
of the national carrier gives it the right The national transporter plans to must buy electricity on our own. The
of way, which in turn makes it easy to build a transmission network as per agreements will deal with all these
set up electricity transmission link. the recommendation of the Central aspects, he said.
The Railways also plans to source Electricity Authority, Indias apex
10 percent of its electricity demand power sector planning body, said For suggestions email at feedback@infraline.com
 September 2015
www.InfralinePlus.com

InConversation
One MW electricity saved in technical losses is
same as saving 1.4 MW of generation capacity
Hitachi groups association with India dates back to 1933
when it was exporting electric fans & then steam locomotives
& hydro power turbines in 1950s. In todays scenario when
plugging transmission losses in power sector remains a
challenge for Indian power utilities, Hitachi Metals (India)
Private Ltd, a 100 per cent owned subsidiary of Hitachi
Metals, Ltd. has much to offer. Mr. Sanjay Seth Managing
Director of Hitachi Metals (India) Pvt Ltd speaks to
InfralinePlus about the challenges in power sector and how
: $
#

Kindly share the journey of Grade Metals Products and Materials,

Hitachi Metals (India) Pvt Ltds
journey and the sectors in which
12 the company is present?
Hitachi Metals (India) Private Limited
is a 100% subsidiary of Hitachi Metals
Ltd. Japan. We are a group of around
36 thousand employees worldwide
having total revenue consolidated
1,004 billion (US $ 8.4Bn). Hitachi
Metals Ltd Japan is majority owned
by Hitachi Ltd Japan which is
9,762 billion (US $ 81Bn) group in
2: Magnetic Materials & Applications,
3: High Grade Functional Components
& Equipment, 4: Wire, Cable &
Related products. We are basically
Materials Company operating in
Power, Electrical & Power Electronics,
Automotive, Infrastructural, and Steel
& allied Industries.
How are you contributing to the
Power Sector in India in terms
of technology?
Sanjay Seth
Managing Director Hitachi Metglas (India) Pvt Ltd
savings can rise to the level of 200 per
cent. This is a huge saving for all the
Utilities in India, given the investments
required to generate energy. Today the
transmission and distribution losses
(also AT & C Losses) are of prime
annual turnover. [= concern for any Utility and there is
[ & leading producer of Amorphous a growing awareness in the country
India by acquiring Metglas business Metal which is known by the brand to save energy. There is no point in
from Honeywell International in name of Metglas. This material is investing money to generate additional
August 2003. Hitachi Metglas India X
 "$ power and feed these losses.
is involved in Manufacturing of Soft magnetic core losses which can be Each MW saved at the distribution
Magnetic Cores for specialized power  
""$  end in terms of technical losses would
electronics applications. Later in electrical apparatus like transformers. be equivalent to saving about 1.3
May 2006 Hitachi Metals India was We work very closely with all the to 1.4 MW in terms of generation
established as a sales and marketing stakeholders in the power distribution capacity. We need to use more and
center for the Indian market. In April sector and share our technology which
 X
=
2015 this year we merged Hitachi
Metglas India with Hitachi Metals
India combining manufacturing with
Sales & Marketing as one unit for
future growth aspirations in India.
helps in reducing the carbon footprints
in the globe. Our technology helps
reduce the No Load losses (NLL)
in a Distribution Transformer by a
whopping 60-75 per cent as compared
system to reduce losses as this will
save us additional time, money and
efforts required for generating energy.
Distribution transformers are a major
source contributing to losses in the
\$  to the conventional Silicon Steel system and our products reduce the
business segments to operate 1: High and under harmonic conditions the losses substantially.
 September 2015
www.InfralinePlus.com

What are the major challenges to use and make the system more and Association) and are happy to say
for you in Indian Power Sector?
"$ #'
" that ITMA with all its members
]
 of amorphous raw material is almost have fully supported the cause in
not the same. Every utility has its own the same as that of the silicon steel, the interest of the Country. We are



#  
 very much enthusiastic after Power
When we brought this technology into loss savings throughout the life Ministers address where he asked
India way back in 1995 there was issue
 
of acceptance of such an advanced
product and also apprehensions about
availability of material, price, life
expectancy and reparability. Over
of the equipment besides saving
the environment.
The other concern is the import
of Non-Prime Grade of Silicon
Steel, Used / Seconds in India
`
at least level Star 4 & Star 5 in all
Central Government funded Projects
like DDUGVY & IPDS. This will
encourage manufacturers to use
these two decades our technology which doesnt give level playing """$ 
of AMDTs (Amorphous Metal _' 
 materials like Prime Silicon Steel or
Distribution Transformers) has thrived, manufacturers. This needs to be Amorphous Metal.
prospered and matured in India. Today stopped completely and we are
we are proud to say that there are more 

$ 
 You also have manufacturing
than forty reputed AMDT makers in
India and several repair facilities are
established across various states to give
comfort to the Utilities. Raw material
is available in abundance and price
government for total ban on imports of
Used/Seconds/Non-Prime Silicon steel
into India. There are still cases of such
imports coming into India which needs
to be stopped completely as the life of
operations in India. What are the
products made at your factory
in India?
We in our factory manufacture very
advanced Soft Magnetic Material
has been consistent over these years to the Distribution Transformer reduces |
"
$

support the industry.
We have also established
independent Core Makers in India who
can supply cores to prospective and
capable manufacturers who desire to
by usage of these materials. In case of
Amorphous Core there is no Second/
Used Material which can be generated
hence malpractice stops completely
and you get the best performance in
from Amorphous Metglas material
used in Power Electronic Applications 13
like Solar Inverters, UPS, Inverters /
Power Supplies / Drives in Industrial,
Rail-Road transportation, Medical
  terms of losses. # 


 
transformers here. This technology is We are also members of ITMA Inductors / Chokes working at Power
now available for the entire industry (Indian Transformer Manufacturers & High Frequencies.

How is your India factory

products contributing to
Renewable Energy Sector &
what are their unique features
Majority of our products from our India
$
$"" ]
}
$~~
as they are used in Solar Inverters
globally. Most of the balance products
""$ ]

$
Systems which are basically Inverters
used in UPS, Rail-Road transportation,
Industrial Drives like Fuel Cells etc.
It is a lesser known fact that our
  
higher frequency magnetic applications
of Inverters. The Inverters used in
Power conversion associated with
Renewable Energy Segments like
PV, Fuel Cell etc. demand very high
 September 2015
www.InfralinePlus.com

InConversation

 $ 
 :  What are your challenges related
they operate internally at very high have increased in the range of 0.2 to to India market & how do you
switching frequencies to generate 0.5 per cent at big power levels like visualize the future
high quality pure sine wave output. 500kW system. In addition, nowadays Although we are export oriented unit,
Compared to a conventional inverter industry is also moving towards we have a small share of sales in Indian
we use in our home for power back-up Transformer-less UPS architecture markets for our factory products. More
which is in the range of 80 to 90 per from conventional Transformer based than 10 years back when we established
 $~: 

" $#> Indian factory our local Indian sales
#
 $ $
"X
 were zero. In past few years our share
special topologies & components. of Inductors / Chokes which we cater of sales within India has gone up to
Even a fraction of improvement of using Amorphous Metglas material. double digit in percentage due to various
 $~:$ Our factory is Export Oriented Unit activities happening in Indian PV sector.
high weightage. This is where our
Amorphous Metglas material based
cores used in Inductors / Chokes
contributes. We have experience
wherein replacing conventional Silicon
Steel based Inductors / Chokes with
Amorphous Metglas material based
""$"$ 
systems both in Renewable Energy &
Industrial Power Conversion sector.
What is your focus related to
India market, although your
factory is Export Oriented Unit.
Investors already see the social and
economic appeal of PV and are moving
out from conventional sources. The
new National Renewable Energy Act
under consideration by our government
& push on solar projects is making the
demand bigger in India. Also the energy
 

 
helps our endeavors to grow local sales.
We in our factory manufacture very advanced As far as challenges are concerned,
Soft Magnetic Material Cores with specific cut I would like to point facts like for
14 geometry made from Amorphous Metglas example recent bids in PV sector have
material used in Power Electronic Applications touched as low as around 5.2INR per
like Solar Inverters, UPS, Inverters / Power unit kWh which is encouragement
for expansion but also caution on
Supplies / Drives in Industrial, Rail-Road
cost. Lower price demand leads
transportation, Medical etc. for the specific manufacturers cutting down on BOM
applications of Inductors / Chokes working at "
 
Power & High Frequencies substitutes. Our challenge is to educate
our customers on Total Ownership Cost
   #
With programs like Make in India we
are seeing more global manufacturers
arriving in India with whole new range
 "$"$ 

which should increase our contribution
in the domestic sector & will invariably



healthy growth.
I would also like to add that
at Hitachi Metals India we are
committed to Hitachi Social
Infrastructure Strategy by selling high
 $

energy & decrease global warming
in the future.

For full version of the interview, visit www.infraline.com

For suggestions email at feedback@infraline.com
Region-Wise Power Generation Summary
FY16 FY15 FY 14
Installed Generation Generation Installed Generation Generation Installed Generation Generation
Capacity Target (MU) Achieved Capacity Target (MU) Achieved Capacity Target (MU) Achieved
(MU) (MU) (MU)
Northern
Thermal 46274.76 89005.72 76307.93 43787.75 213312 209839.68 40577.75 207657 195123.61
Nuclear 1620 4240.24 4746.38 1620 10479 10523.42 1620 10664 11898.36
Hydro 17796.77 33776.48 40138.59 16529.44 61804 65827.69 15994.75 61597 63335.84
Total 65691.53 127022.44 121192.9 61937.19 285595 286190.79 58192.5 279918 270357.81
Western
Thermal 77844.42 145796.85 138909.33 68397.4 315914 338389.28 63826.3 292416 285948.77
StatisticsPower

Nuclear 1840 4649.25 5049.36 1840 11056 13777.79 1840 12363 13632.03
Hydro 7447.5 6224.4 6342.7 7447.5 15918 15788.38 7447.5 15843 22853.06
Total 87131.92 156670.5 150301.39 77684.9 342888 367955.45 73113.8 320622 322433.86
Southern
Thermal 36722.76 73596.23 72691.98 32494.57 170936 172854.59 32494.57 157021 164502.09

Nuclear 2320 5434.84 5832.24 1320 13765 11587.27 1320 12173 8642.56
Hydro 11398.03 11674.24 9581.4 11398.03 31603 31703.04 11398.03 29454 32810.79
Total 50440.79 90705.31 88105.62 45212.6 216304 216144.9 45212.6 198648 205955.44
Eastern
Thermal 28812.92 64079.39 63877.89 26195.13 152475 150060.51 24995.13 150503 140297.34
Hydro 4113.12 5548.56 5354.1 4113.12 10884 12195.85 4113.12 11191 11619.77
Total 32926.04 69627.95 69231.99 30308.25 163359 162256.36 29108.25 161694 151917.11
North Eastern
Thermal 2008.7 3687.64 3032.66 1411.24 5966 7037.12 1411.24 5140 5274.92
Hydro 1242 1989.68 2095.63 1242 4088 3540.57 1242 4178 4079.51
Total 3250.7 5677.32 5128.29 2653.24 10054 10577.69 2653.24 9318 9354.43
All India- Summary
Thermal 191663.56 376165.83 354819.79 172286.09 858603 878181.18 163304.99 812737 791146.73
Nuclear 5780 14324.33 15627.98 4780 35300 35888.48 4780 35200 34172.95
Hydro 41997.42 59213.36 63512.42 40730.09 124297 129055.53 40195.4 122263 134698.97
Renewable 36470.64 31692.14 29462.55
Energy Sources
www.InfralinePlus.com
September 2015

Total 275911.62 449703.52 433960.19 249488.32 1018200 1043125.19 237742.94 970200 960018.65
15
 September 2015
www.InfralinePlus.com

StatisticsPower

Peak Demand Supply Scenario - July 2015

Region State Year Peak Demand Peak Met Surplus/ Surplus /
(MW) (MW) Decit(MW) Decit(%)
Eastern Andaman & Nicobar 2015 40 32 -8 -20
Bihar 2015 3159 3084 -75 -2.4
16 DVC 2015 2780 2750 -30 -1.1
Jharkhand 2015 1117 1099 -18 -1.6
Orissa 2015 3867 3845 -22 -0.6
Sikkim 2015 83 83 0 0
West Bengal 2015 7760 7740 -20 -0.3
North-Eastern Arunachal Pradesh 2015 110 108 -2 -1.8
Assam 2015 1487 1326 -161 -10.8
Manipur 2015 139 139 0 0
Meghalaya 2015 316 316 0 0
Mizoram 2015 79 78 -1 -1.3
Nagaland 2015 140 138 -2 -1.4
Tripura 2015 250 250 0 0
Northern CHANDIGARH 2015 299 299 0 0
Delhi 2015 5743 5743 0 0
Haryana 2015 8360 8311 -49 -0.6
Himachal Pradesh 2015 1337 1337 0 0
Jammu & Kasmir 2015 2461 1969 -492 -20
Punjab 2015 10824 10824 0 0
Rajasthan 2015 8431 8431 0 0
Uttar Pradesh 2015 14263 13373 -890 -6.2
Uttarakhand 2015 1948 1948 0 0
Southern Andhra Pradesh 2015 6908 6847 -61 -0.9
Karnataka 2015 9189 8705 -484 -5.3
Kerala 2015 3505 3436 -69 -2
Lakshadweep 2015 8 8 0 0
Pondicherry 2015 368 344 -24 -6.5
Tamil Nadu 2015 13411 13411 0 0
Western Chhatisgarh 2015 3741 3410 -331 -8.8
Dadra & Nagar Haveli 2015 725 725 0 0
Daman & Diu 2015 281 281 0 0
Goa 2015 409 405 -4 -1
Gujarat 2015 14423 14397 -26 -0.2
Madhya Pradesh 2015 7121 7121 0 0
Maharashtra 2015 19694 19226 -468 -2.4

NewsBriefs | Coal
Govt tells coal power plants to subsidize 15GW of
solar power
Prime Minister Narendra Modis government has ordered some of
Indias oldest coal-red power plants to help make solar farms more
competitive by bundling together electricity from both technologies for
sale to the grid. The decision requires state-controlled NTPC Ltd to sell
cheaper coal power along with more expensive solar as a single unit.
The effect of the order is to reduce the price distribution companies
pay for solar power and force them to take more of the cleaner form
of energy. The mechanism is unique to India, where the state-run
distribution companies have been losing money because theyre unable
to charge customers enough to cover the costs of electricity they buy
in the market. The programme will help persuade distributors to buy
solar power and support Modis goal of having 100 gigawatts of solar
capacity by 2022, up from less than 4 gigawatts now.
Mumbai Port Trust to stop handling coal
Mumbai Port Trust has decided to put an end to its coal handling
operations in Sewri. There was a campaign against the port trusts
handling of coal highlighting the extent to which the coal has
devastated the environment and severely affected the health of
those living around it. About 1.5 lakh metric tonnes of coal form
toxic mountains on the eastern sea front today. Fisherfolk, residents
and students at a nearby maritime institution suffer respiratory
problems because of it. The phlegm they cough up each day is black
with coal. Warehouses in the area have lost business as coal dust
accumulates in them. Much of the imported coal, which arrives by
ship and is stored on port lands, is then transported by rail wagons
to Mahagenco plants in Nashik and Bhusaval. A portion of the coal
is used by local steel plants.
Trade unions strike: Coal India may not see
much impact
With trade unions observing nationwide strike,
production is likely to suffer at most of the state-
owned companies. But, Coal India arguably the
single largest employer after railways, may be
less affected. If the trend over the last couple
of years is correct, CIL will end up producing
anything between 70-80 per cent of its average
daily production of 1.2 million tonne (August). The
credit goes to outsourcing of coal. Over the last decade, CIL became
increasingly dependent on private miners to extract coal. The share of
outsourcing has increased from 50 per cent of total production, merely
ve years ago, to 55 per cent. The central trade unions hardly have any
penetration in this segment. Most of the large contractor-operated
mines were open during the last couple of strikes.
CPPs oppose Coal ministry move to scrap
fuel linkages
Captive power producers (CPPs) have opposed the proposal of Coal
ministry to do away with coal linkages for such units. The Indian
Captive Power Producers Association (ICCPA) feels this retrograde
step will blunt the competitive edge of CPP based industries that
have grounded huge investments in the last two decades. Coal based
CPPs with capacity of 41,000 Mw that have invested more than `
two lakh crore are set to be jeopardised if the proposal takes effect.
Besides, the move is also seen to affect investments of the order of
`65 lakh crore in related industries.
September 2015
www.InfralinePlus.com
Mega Tree Plantation Drive by Tata Power Delhi
Distribution
Tata Power Delhi Distribution
(TPDDL) recently organized a mega
tree plantation drive to contribute to
a greener and sustainable planet, in
association with CRPF, ITBP, RWAs,
IWAs and various schools & colleges.
TPDDL has been recognized as one of
the Greening Agencies by Department of Forest & Wildlife, GoNCTD.
With mega tree plantation drive, TPDDL aims at spreading message of
ecological restoration by tree plantation. The tree plantation drive is a
continuation of TPDDLs mega plantation campaign Harit Ek Pahal,
which was launched 4 years back. Under the mega plantation drive
Harit Ek Pahal, TPDDL has planted over 95,000 saplings till now out
which 16,000 have been planted this year. Besides this, Company has
always set a standard in adopting sustainable practices in its business
model by providing customers access to energy-efcient processes
and using innovative technology.
Odisha to earn over `45,600 crore from coal
block auction
Afrming NDA-led Centres resolve to maintain transparency in coal
mine allocation, Coal and Power Minister Piyush Goyal said Odisha is
set to gain over `45,600 crore from the current phase of coal block
auction. Mineral-rich Odisha will benet immensely from the process
of coal block auction. The state is all set to earn over `45,600 crore
after the present phase of coal mine auction, he said. The Union
Minister was speaking at a function where Odisha Chief Minister 17
Naveen Patnaik laid the foundation stone of Mahanadi Institute of
Medical Sciences and Research (MIMSR), a `492 crore CSR project
of Mahanadi Coalelds Limited (MCL), in Talcher Coalelds of Odisha.
Claiming that coal mines were earlier being allocated free of cost
in an arbitrary manner, Goyal said the Narendra Modi government
has introduced e-auction route, making allocation of coal blocks an
entirely transparent affair.
Central Coalfields pitches for transporting coal by rail
The nation could save `12,000 crore annually, besides cutting down
green house gas emission, if coal is transported by rail instead of
trucks in command areas of Central Coalelds Limited, a top CCL
ofcial said. It takes `5-5.50 per km per tonne coal to transport by
trucks while its `1.30-1.50 by rail transport - a difference of `4, CCL
Chairman-cum-Managing Director Gopal Singh said.
No green nod for Coal India to expand output in
existing units
State-owned Coal India, which is targeting 908 million tonnes of
output by 2020, has been denied environment clearance for expansion
of one-time production capacity by 50 per cent in existing operations
without public hearing. With future coal mining projects stuck in delay
over acquisition of land and rehabilitation and resettlement (R&R)
issues, among others, CIL had applied for environment clearance
for one-time production capacity expansion by 50 per cent in existing
operations without public hearing. Blanket permission for 50 per
cent expansion without public hearing under 7(ii) of EIA Notication,
2015, and without capping for sustainable mining cannot be given, an
Expert Appraisal Committee (EAC) of the Environment Ministry said
after assessing the proposal at a recent meeting.
 September 2015
www.InfralinePlus.com
NewsBriefs | Coal
Environment panel refuses expansion of coal mine in
Chhattisgarh
An environment ministry committee has declined the expansion of
a major mine run by a Coal India subsidiary in Chhattisgarh citing
serious violation of environmental laws, including not being able to
maintain air quality in its area of operation. The Kasmunda coal mine
expansion proposal of South Eastern Coalelds, a Coal India subsidiary,
had sought environment approval for a 10-time expansion of its existing
mining capacity from six million tonnes per annum. The request was,
however, opposed by local environment groups and the EIA Resource
Centre, saying the mining in the area has resulted in high air and water
pollution in Korba district of Chhattisgarh, home to a large number of
tribals. The ministry expert appraisal committee on coal mining, in its
last meeting, found value in the contention of the NGOs as the project
proponent failed to give satisfactory replies to the allegations.
One-third of coal blocks up for auction in
wildlife habitats
The latest survey conducted using Global Information System (GIS)
by Greenpeace India shows that of the 101 coal blocks that are up for
auction this year, 35 are in the habitats of tigers, leopards or elephants.
Twenty of these blocks are within 10 km of a protected forest area
or within 15 km of an identied wildlife corridor. An order issued by
the Ministry of Coal on December 18, 2014, had identied these 101
coal blocks for auction/allotment. The blocks are spread across
eight States - Madhya Pradesh, Jharkhand, Orissa, Chhattisgarh,
Maharashtra, Andhra Pradesh, Arunachal Pradesh and West Bengal. Of
the blocks up for auction, 39 critical blocks cover a total forest area of
18 more than 10,500 hectares. Greenpeace India collected GIS data from
ve States for 46 coal blocks spread over 10 coal elds. Data for the
remaining 55 blocks of 101 was not available. In addition, many village
boundaries overlap with the areas of the listed blocks, which call for
approvals from grama sabhas under the Forests Rights Act, 2006, and
prior to forest diversion under the Forest Conservation Act 1980.
NTPC commissions Unit 1 of 500 MW of Vindhyachal
Super Thermal Power Station
NTPC has commissioned Unit - 1 of 500
MW of Vindhyachal Super Thermal Power
Station. With this, the total installed
capacity of Vindhyachal Super Thermal
Power Station has become 4,760 MW and
the total installed capacity of NTPC group has become 45,548 MW.
NTPC is the largest power generating company in the country. It
has also diversied into hydro power, coal mining, power equipment
manufacturing, oil & gas exploration, power trading & distribution.
Gujarat thermal power plants set for major overhaul
State-run thermal power plants in Gujarat are set for a major
overhaul. This would make them more energy efcient; reduce
variable cost of power generation and maintenance cost. The state
power generation company Gujarat State electricity Corporation
Limited (GSECL) has decided to replace existing old and inefcient
units by new supercritical technology units. First phase would see
replacement of over three decade old 120 MW units at Gandhinagar,
Ukai and Sikka thermal power plants. Current GSECL is having total
installed thermal power capacity of 5884 MW using fuels like coal,
lignite and gas. It operated runs over a dozen power plants including
hydro power plants in the state.
Govt has identified 200 sites for new thermal power
projects
The government has identied 200 large pithead and coastal sites
for setting up of thermal power projects with likely gross generation
capacity of over four lakh megawatt, Parliament was informed. Yes,
Sir. Central Electricity Authority (CEA) had got the studies conducted
for identication of large pithead and coastal sites based on satellite
mapping using remote sensing technology, Power Minister Piyush
Goyal said in a written reply to Rajya Sabha. He was replying to a
question whether studies have been conducted to explore or nd out
the feasibility of setting up of thermal power projects in the country.
The minister said, A total number of 200 potential sites with likely
gross installed capacity of 4,28,905 MW have been identied... This
include two coastal sites, namely, Divigi and Honavar in districts Uttar
Kannada, Karnataka.
Essar Power to restart work on `1,000 crore Tori
project in Jharkhand
Essar Power Ltd will soon
re-start construction work
on its `10,000 crore Tori
power project in Jharkhand,
using coal from the Tokisud
coal mine allocated in the
recent auctions. Work on the plant had been stalled since 2012-13
after the Comptroller and Auditor General (CAG) started an enquiry
into the allocation process of coal mines including the mine which
was to supply fuel to the project. Allocations were later scrapped in
September 2014 following a Supreme Court order. The reallocation
process saw Essar Power winning the bid for the Tokisud mine at a bid
of `1,110 for every tonne of coal mined.
Jharkhand signs MoU with Central Coalfield Limited
to set up sports varsity
Jharkhand government has signed an MoU with Central Coaleld
Limited to establish a Jharkhand Sports University and a Jharkhand
Sports Academy. Chief Minister Raghuvar Das said 1.32 crore youths
would be able of to get help from as the proposed university and
academy. Jharkhands sportspersons have been making the state and
country proud at the international level and bringing the two proposed
sports project on the ground will be like their dreams come true, he said.
The projects will also help them to sharpen their skill under coaches of
international standard, Das said. While CCL General Manager J Tiwary
signed on behalf of the PSU, Secretary of Art, Culture, sports and
Youth affairs, Avinash Kumar, signed on behalf of the government. Das
regretted that a mega sports complex developed at Ranchi for the 34th
National Games in 2011 was neither utilized nor maintained properly
and sportspersons faced difculties to practise.
Coal India to use drones to assess output
How much coal does Coal India produce? The buzz is that the annual
production gures are often inated to meet targets. To make its
numbers more authentic and root out corruption, the state-run miner
is now planning a technological intervention. Beginning 2015-16,
production and over-burden (the earth exposed for coal extraction
from opencast mines) removal will be measured by laser scanners,
according to a Central Mine Planning and Design Institute (CMPDI)
ofcial. We have already deployed three laser scanners. Four more
are ordered, the ofcial said.
 September 2015
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InDepth
Govt may allow mining
in inviolate blocks

19

! Final number of inviolate coal blocks may come down to less than 35 from 206 earlier
! Govt has no mapped information on rivers, dams & irrigation projects that would be impacted

Infraline News Service

There is a piece of good news for where mining will be banned, and the of coal in these forests was also
mining companies. The environment number of such blocks is likely to be to be restricted under the inviolate
ministry has decided to again dilute   "$ forest policy.
the parameters for identifying which 206 to less than 35. However, documents show the
of Indias 793 blocks are located Beside other parameters, the coal ministry repeatedly warned this
under healthy and important forest ministry was to map which forests are would severely impact many blocks.
patches, not to be chopped down. important as catchments for perennial Documents also show that after
'"  $` rivers and water bodies, irrigation more than a year of deliberations
the number of inviolate coal blocks, and hydroelectric projects. Mining between different agencies, the
 September 2015
www.InfralinePlus.com

InDepth



$" of all the blocks. The coal ministry among other things, had suggested a
the government does not have mapped has noted that three of these 25 limited scope of the inviolate policy to
data of where Indias perennial blocks, namely Lekhapani, Vijay free up mining.
rivers, its hydropower and irrigation West and Durgapur Extension in *>
$
projects are located. So, the ministry
has decided to dispense with the
parameters measuring the importance
of forests that are essential for these
features. This conclusion by the
ministry will now limit the inviolate
coal blocks to merely 35 for good.
Of these, too, the already operational
blocks are expected to be taken
off the list.
The 35 coal-bearing zones
constitute 7.86 per cent of the area
After more than a year of deliberations
Assam, Chhattisgarh and Maharashtra,
respectively, are already operational.
These too, it has recommended be
taken off the list.
Many environmental organisations
had earlier criticised the TSR
Subramanian committee report
for recommending a dilution of
the inviolate norms, which the
government is now close to achieving.
The committee had been formed to
review environmental laws, and,
rigorous and inviolate forest policy
was the right thing to do, in order to
rearrange coal mining in such a way
that it had less impact on forests,
tribal communities and wildlife. At the
same time, this would have ensured
greater certainty for investors and
project developers. But the ministry of
environment has showed it is unable
- or unwilling - to protect some of
Indias last remaining forests from
mining, said Nandikesh Sivalingam
from Greenpeace India.
The policy for inviolate forests was
between different agencies, the environment 
*\+
$
by then environment minister Jairam
ministry has figured that the government Ramesh, under the earlier United
does not have mapped data of where Progressive Alliance government.
Indias perennial rivers, its hydropower That policy, which stopped mining
20 and irrigation projects are located. So, the in 47 per cent of the areas in
ministry has decided to dispense with the 


parameters measuring the importance of by others in the UPA. This began the
process of dilution.
forests that are essential for these features. Under Jayanthi Natarajan it
This conclusion by the ministry will now was named the inviolate forest
limit the inviolate coal blocks to merely policy. Though the initial set of
35 for good parameters decided by an expert
committee to identify such forests
were comprehensive, the UPA,
and then the NDA government put
pressure to repeatedly dilute them.
The coal ministry advocated the
dilution and records show that under
both governments, the environment
ministry repeatedly tinkered with
the parameters and consequently
kept bringing down the area kept
out of mining.
Now, documents show that the
coal ministry also warned that a
large chunk of coal blocks near water
bodies would be sterilised if the
parameters recommended by experts
to identify the hydrological value
of forests were followed. Forest
Survey of India (FSI), an arm of the
environment ministry, was asked to
conduct detailed studies as to the
 September 2015
www.InfralinePlus.com

industry and make it transparent.

The mining industry in India has
been going through a slowdown for
several years due to a tepid market
and legal hurdles. Empowering state
governments to conduct mining is
likely to give the industry a breather.
The coal ministry is taking due
credit for the auction of some of the
204 coal blocks whose allocations
over two decades were cancelled by
the Supreme Court last September.
The auction of 40 operational coal
blocks will earn coal-rich states `2.85
lakh crore in 30 years.
But problems could surface after
three years. Power developers bid zero
and even negative for the coal blocks.
No commodity can be priced negative,
experts point out. The coal market
will be unstable if there is no cost and
The 35 coal-bearing zones constitute 7.86
#
per cent of the area of all the blocks. The
coal ministry has noted that three of these
25 blocks, namely Lekhapani, Vijay West and
Durgapur Extension in Assam, Chhattisgarh
and Maharashtra, respectively, are already
operational. These too, it has recommended
be taken off the list
nature of rivers. They requested
The coal ministry is now thinking
of allowing states to mine and sell
21
coal. This will be a big step towards
commercial mining, which is a
monopoly of Coal India and Singareni
Collieries. Given the regulatory
hurdles and legal challenges involved,
private players are wary of entering
the coal mining business.
The mines ministry is designing a
' 

 transparent method for allotting mines.
information from the Central Water related to hydrological data only Unlike coal, mineral auctions will be
Commission (CWC). adds to the tweaking already done conducted by state governments. But
After repeated back and forth by the ministry, which collectively bidding will not start anytime soon
communication between the has helped reduce the number of coal because states have just begun to
environment ministry, FSI and CWC, blocks where mining would have collect data on mineral deposits.
it was declared that information on to be banned. The world will have its eyes on
nature (perennial/non-perennial) of India if it can pull it off mineral

+ Easing of Policy auctions. Most mineral-rich countries
with any of the stakeholders. It One of the major initiatives of like Canada and Australia follow the
also concluded that the details of the National Democratic Alliance 

+
hydropower and irrigation projects "

 executive with a steel company.
were not available on a map. states through laws on mining coal Apart from new rules, the
The environment ministry then and other minerals. government is working on a tax
asked CWC to provide in writing their The Coal (Special Provisions) regime for minerals. The import and
inability to gather data. Subsequently Bill, 2015, opened coal mining for export duty on minerals like iron ore
the ministry on March 11, 2015, the private sector, and the Mines must align with the NDAs Make in
decided to amend the parameters and Minerals (Development and India initiative.
altogether in a meeting attended by Regulation) Amendment Act,

  # 2015, tried to boost the mining For suggestions email at feedback@infraline.com
 September 2015
www.InfralinePlus.com

InDepth
Falling fossil fuel prices leave
Coal India to tweak e-auctions

22

! Coal Indias margins may further shrink if wages are revision as per the current talks
! Analysts have forecast a further 10 per cent fall in global prices this year

Infraline News Service

Availability of cheap imports and when the talks of 20 to 30% wage which account for the bulk of Coal
abundance of fossil fuel has forced revision is being discussed. For the :=
#*
Coal India Ltd to revise the strategy worlds largest producer of the fossil effective market study and look at
for e-auctions as the price realization fuel, the fall in realisation per tonne supply strategy that would meet only
]"# 
in the company say if the trend of
rising costs continue in the company,
a large chunk of Coal Indias margins
may be wiped off especially at a time
of coal comes at a time when it is
already facing a rise in input costs and
salary bills.
The company plans to change
its supply strategy for e-auctions,
the residual demand through market
intervention, a senior Coal India
executive said.
Analysts say that if the trend of
rising costs at Coal India continues till

2017, the company may see a large
chunk of its margin getting wiped off
as a 20-30 per cent rise in salaries is
expected during wage talks which are
due in two years. Salaries constitute
almost 50 per cent of the cost of coal
production. Coal India usually sells
it entire output or as much as it can
load on rakes and trucks. However, it
is fast losing its ability to dump any
quality of coal at any price because
its heavily discounted rates are no
longer competitive in the face of
realisation of `2,184 per tonne against
`2,246 per tonne in the previous
corresponding period. This brought
average realisation from `1,487 per
tonne in the previous corresponding
period to `1,465 per tonne during the
quarter ended June 2015.
In the domestic market, the thermal
power sectorthe largest consumer
of coalhas abundance of coal. Now
every power plant holds enough coal
to operate for 29 days. However,
new power capacity addition has
September 2015
www.InfralinePlus.com
enough power, leading to falling
demand for coal.
In addition, the government had
announced a scheme under which
power plants with no fuel supply
contract will be offered 10 mt coal in
two categories. CIL is undecided at
the moment whether to consider this
as part of the total e-auction volumes
or mark it separately.
E-auction Volumes
Coal India Ltd (CIL)s e-auction
plunging international price of the dragged down capacity utilisation X 
fuel and surfeit of coal in the market.
Analysts have forecast a further
10 per cent fall in global prices this
year. If it does, Coal India would
lose its price advantage even for
inland power plants, another CIL
executive said. Falling international
price of coal has not only made Coal
Indias rates uncompetitive, but also
of these plants to about 59 per cent. $"
Distribution companies are not buying reached 16 million tonnes (mt), which
UJVN Limited
H.O. : UJJWAL Maharani Bagh, GMS Road,
Dehradun-248006 (Tel : 0135-2763508 & Fax:- 0135-2763508)
CIN No. U40101UR2001SGC025866,
Website : www.uttarakhandjalvidyut.com
CORRIGENDUM No. - 12 (Ramganga R.M.U.)
  

$ E-Tender Notice Reference: 01/DGM (M&U-GV)/2013-14 23
raise prices. Company executives said
raising prices will help the company Clause 20.1 and 23.1 of Section 1 is hereby revised
hold on to its margins. as follows:-
|:=
$"
extent is dependent on the realisation
from e-auction. While a small part
of overall volumes, e-action sales
contribute 35-40 per cent of total
Ebitda (earnings before interest, taxes,
depreciation and amortization).
Coal India has been allowed to
sell as much coal as it can through
e-auctions. However, people aware
of the matter said the companys
strategy now would be to auction only
the volume of coal that is required
in the market. Implementation of the
strategy may have already begun.
Despite a near 12 per cent rise in
overall coal production, Coal India
sold the same volume of coal at
16.78 million tonnes (MT) during the
quarter ended June 2015, against 16.8
mt in the year-ago period.
Despite a proportionate decline in
e-auction volumes, realisations kept
declining. During the quarter ended
June 2015, the company managed a
Last date / Time for receipt of bid in the portal
: 19.12.2015 up to 16:00 Hrs
Date of opening of bid (Part-I) on the website
: 22.12.2015 at 11:00 Hrs
CORRIGENDUM No. - 9 (Chilla R.M.U.)
E-Tender Notice Reference: 03/DGM (M&U-GV)/2013-14
Clause 20.1 and 23.1 of Section 1 is hereby revised
as follows:-
Last date / Time for receipt of bid in the portal
: 11.12.2015 up to 16:00 Hrs
Date of opening of bid (Part-I) on the website
: 14.12.2015 at 11:00 Hrs
Other terms and conditions will remain unchanged.
For eligibility criteria and further details please visit web
site, https://uktenders.gov.in.
i-la-% 472@;wtsoh,u fyfeVsM fnukad 14-09-2015 DGM (M&U-GV)
Avoid wasteful use of Electricity
 September 2015
www.InfralinePlus.com

InDepth

24 is over 12 per cent of its April-June

quarters total offtake. The trend is Analysts say that if the trend of rising
likely to continue throughout the costs at Coal India continues till 2017,
$

" the company may see a large chunk of its
register record e-auction sales in the margin getting wiped off as a 20-30 per cent
current year. rise in salaries is expected during wage
CIL recorded an offtake of 129.39

X 
talks which are due in two years. Salaries
registering an 8 per cent growth. constitute almost 50 per cent of the cost of

  coal production. Coal India usually sells it
$$
12 per cent at 121.35 million tonnes
(mt) as against 108.32 mt in the same
period last year.
Incidentally, in the corresponding
entire output or as much as it can load on
rakes and trucks
As a result, CIL ended improvement in output, we were in a
X $ FY15 selling about 45 mt coal position to sell 16 mt via e-auction in
CIL clocked e-auction sales of 16.78 through e-auction. X+ #
mt. Against a total offtake of 119.60 Later, the ministry has allowed CIL >"|: 

X  to revert to the old system, removing trend is likely to continue and the
CILs e-auction volume was about 14 the cap on e-auction volumes with e-auction volume is likely to be at
per cent of the sales. effect from April 2015. Thus, CIL was the same level throughout the year.
However, in September 2014, again allowed to increase e-auction In that case, if CIL meets its
Coal Minister Piyush Goyal directed volumes to 10 per cent of total sales, offtake target of 550 mt in the current
CIL to pare e-auctions by about 50 which is the standard practice. $|:=
per cent to 25 mt in 2014-15 from 58 In the absence of cap, there is no volume at 12 per cent of sales
mt last year. After initially opposing hard and fast rule. It has gone beyond will be at 66 mt.


|:$  12 per cent earlier as well. But yes,
keeping its e-auction sales to seven |:=
$

$
per cent of the total sales. the power sector. With an remarkable For suggestions email at feedback@infraline.com

ExpertSpeak
Holistic approach need of the
hour to revive power sector
Having over four decades
of experience in the power
sector, Lajpat Shrivastav,
has experience of working
with some of the most reputed
companies like NTPC, L&T, Tata
Power, Bechtel, Atomic Energy
& Hindustan Power & has held
senior level positions including
CEO and Director.
Government has just completed one
September 2015
www.InfralinePlus.com
same reason the per capita consumption
is always used as a measure to evaluate
the economic development of the
country. The Indian power sector has
been through the worst phase over past
several years for variety of reasons,
some of the major reasons being coal
crisis, literally paralyzed government
machinery failing to address concerns
but the most critical being non
implementation of reforms in distribution
sector. The distribution sector plays the
most critical and important role in the
$  $
analyze the performance; the biggest
achievement of the new government
has been to revive & boost the overall
economic sentiments, moral & hope of
the common man as well as corporate
India & revived hope that preventing
corruption is not an impossible task
and provide safety and comfort to
entire value chain and hence while one
may have several options for adding
generation capacity needed for growth
of the economy, but such investment will
not be sustainable, unless the health of
this critical sector improves and becomes
self sustaining.
The following statistics will give a
glimpse in to the magnitude of problem:
25
Lajpat Shrivastav, Former CEO
Moser Baer Power & Infrastructures Ltd
Non Performing Assets during the past
few years, running in to thousands or
probably lacs of crores of rupees due to
above reasons. Although setting up of


  Only 8000 MW capacity has been a huge target of 175 GW by 2022 is a
is resulting in speed in decision making tied up through Case-1 bidding over welcome move by new government, it is
and implementation. One of the most
welcome changes which cant be easily
noticed by general public and common
men is the focus & speed with which the
entire government machinery is working
and this becomes especially more
credit worthy because this government
inherited a literally paralyzed system.
Our countrys Image has also
%$
In the same period close to 50000
MW capacity addition has taken place
Close to 30000 MW capacity
still operates on diesel fuel which
produces very expensive power,
roughly @ `15 per kWh resulting in
to huge foreign exchange outgo&
causing additional burden on current
equally a concern because it is expected
to be based on non-conventional sources.
The reason for this concern is that if
demand projections are done correctly
and power is made available to every
home as planned by government, the
requirement of power will be huge &
far beyond what is being projected.
Further if major share comes from
improved outside India as a potential
investment destination and now the entire
world is actively engaging with India in
a dialogue to participate in the Make in
India campaign & to make investments
in Indias infrastructure development
& setting up manufacturing facilities in
$
under duress.
Modi government has inherited a
situation where most of the leading
private sector power sector companies
in India are suffering from severe

non-conventional sources, it would not
only increase average cost of power but
will also not be adequate for meeting
cyclical demands, for which conventional
energy best suited. However probably
the challenge for the government is

 $ there is not enough coal to meet even
India to become cost competitive. commissioned assets are sub-optimally the existing demand in visible future.
It is universally known that Power utilized partly due to non availability Hence this could potentially be the
drives the economic growth and of coal and partly non availability of /  
development of a country and for the buyers. India has seen creation of huge government. Such large capacity coming
 September 2015
www.InfralinePlus.com

ExpertSpeak

from non-conventional sources would I will now come to the main subject afford repeat of similar situation
not be sustainable, unless the distribution matter of this article ie what are some again, because it will spell disaster
sector is revived and Discoms become of the serious concerns facing power for the future investment as well as
$" 

" sector and what could potentially be image of the country.

has been deliberated in this article.
The good news is that the new
government led by Modi has already
demonstrated seriousness and
commitment to tackle the situation head
the solution.
It is of utmost importance for the
government to realize that if the
companies who have already made
huge investments in power sector
In the past, central governments
have constituted many committees
to suggest measures to revive the
sector, like BK Chaturvedi panel,
Shunglu committee etc and among
3
 are allowed to continue to suffer and
of very important & bold initiatives
on policy front to boost the overall
economic sentiments and moral of the
country and creating hope, where none
existed one year back. Some of these
are e-auction of coal blocks, increasing
the production of coal marginally,
implementation of measures to improve
the condition of poor and average income
groups, taking up implementation
of GST and amendment to the Land
Acquisition Bill, make in India campaign
and more recently Digital India
26 campaign, to name a few, within just one
 
"
their many recommendations, one
the assets keep turning in to bad and/
or Non performing assets, and if the
root causes for this are not analyzed
& addressed on top priority basis,
any further investment in generation
capacity would not be sustainable and
it would run the risk of turning in to
bad investment/asset.
I am reminded of the situation
in 1992 when immediately after
Narsimha Rao led government
initiated reforms in power sector, a
large number of Indian as well as
foreign companies came forward
thing was common ie reform and
improvement of the Distribution
sector without which the sector will
never improve. A lot has already
been written in media and spoken in
conferences on this topic highlighting
the urgent need for action. In fact
statistics shows how most states
dont want to purchase power even
while resorting to load shedding &
simultaneously becoming net seller of
power because they suffer net loss for
every unit of electricity supplied by

}'
year. However the bad news is that so
far there is no improvement on ground
with respect to power sector as a whole
& companies continue to suffer due to
above mentioned issues.
There is an urgent need to identify
issues which can help power sector in
short term and those which can help in
long term and start tackling them one
by one on top priority basis. This is a
historic moment for BJP as also for India
and BJP should not lose this opportunity.
It is ironic that though dynasty within
Congress ruled this country for
maximum number of years, but the credit
for changing the course of economic
growth for better, rests with Narsimha
Rao led congress government. It is now
an opportunity for Modi to make India
a power house in terms of economic
growth & simultaneously prove to the
masses that they have rightly placed their
to invest in power sector (mainly
generation sector)but the euphoria
died in few years time and only
very few projects saw the light of
the day, and most other companies
winded up their plans to invest in
Indian power sector. India needs
huge foreign investment to improve
its infrastructure and therefore cant
The Indian power sector
has been through the
worst phase over past
several years for variety
of reasons, some of the
major reasons being
coal crisis, literally
paralyzed government
machinery failing to
issue has been dealt with later in this
article). It is farfetched to imagine
that when 50000 MW commissioned
capacity mainly based on coal has no
takers, how would Discoms buy more
expensive solar power. It would be
nave to believe that without reviving
distribution sector, power sector
will perform better and investments
made in generation capacity
would be sustainable.
Suggestion 1: The most important
suggestion would be for government
to create two task forces: One lead by
Honble Finance Minister Shri Arun
Jaitley to address big ticket reforms
and initiatives where consensus &
support of other parties is required
and simultaneously create another
team lead by Honble Minister of
State for Power, Coal and MNRE
to address equally urgent but

#
The non-availability of adequate
and cheap power has the potential
to derail Mr Modis plan for Make
in India and of achieving double
digit growth of economy.
address concerns but smaller issues which are within the
the most critical being jurisdiction of the government to
non implementation solve. Further in order to list out &
of reforms in prioritize the issues based on their
distribution sector impact in improving the situation, it
would be essential to start an open
 September 2015
www.InfralinePlus.com

house meetings/dialogue with PM

and/or Mr Jaitley where most of the
important Ministries are represented
by their respective secretaries
and private sector & PSU power
companies & Leading Banks are
represented by the top management,
as was started during the last year
 > 
in prioritizing the critical issues &
resulting in some quick actions.
Suggestion 2: In my opinion
India should adopt an approach for
planning for two or more consecutive
Five Year plans. Even though this

$  
It is of utmost importance for the government to
long term strategy & planning,
resource mobilization & taking up
realize that if the companies who have already
implementation in a phased manner. made huge investments in power sector are
This will be good for projects having allowed to continue to suffer and the assets keep
long gestation periods like, Inter- turning in to bad and/or Non performing assets,
connecting rivers, cleaning of Ganga and if the root causes for this are not analyzed
river, modernization of all airports
& addressed on top priority basis, any further
and building airports where it doesnt 27
exist etc. This will similarly help in
investment in generation capacity would not be
long term capacity addition through sustainable and it would run the risk of turning in
coal by identifying critical constraints to bad investment/asset
and removing them in a planned
manner. Even if it is not feasible to political interference etc. This also h Even assuming that solar power
plan coal based capacity addition in remains one of the main reasons why will achieve grid parity sooner
immediate future because of coal State Discoms avoid meeting the than later due to economy of scale
shortage, if micro planning is done
and targets are set for increasing
production for 13th Plan, capacity
addition from coal can be planned for
at least 13th Five Year Plan.
actual demand of power and manage
with load shedding to cut losses per
unit of electricity supplied.
h Government has been extending

"
provided by government, but it would
still continue to be in excess of `6
per kWh. One of the major reasons


" why 50000 MW of capacity from
Suggestion 3: '


$ 

" conventional sources remains untied
observations & suggestions that may health of Discoms, but unless root is that their tariff is between `5 to 6
help power sector are as follows: 

#[
h The accumulated losses due to
continuing poor performance of State
Discoms is already approaching
`300000 crores. The major
contributor for this situation is the
gap between the cost to serve vs the
tariff realized per unit for supplying
power to consumers (this is in the
range of `1 per kWh), which in turn
performance of the Discoms would
not improve on a sustained basis.
Therefore unless the monopoly of
state Discoms is challenged through
measures like Implementation of
Open Access, separating the feeders,
genuinely privatizing the distribution
to contain the corruption & theft and

health of Discoms improves and they
stop suffering losses for every unit of
electricity supplied by them, merely
imposing solar purchase obligations
on Discoms wouldnt help & would
not be sustainable.
h India has traditionally lacked in
implementing success stories from

 $ other countries. Lessons can be
results from a number of issues like the situation is unlikely to improve. learned from China as to how they
 
$ However this is easier said than done, achieved such phenomenal growth in
level, high AT&C losses & theft of because of the Political Will required their infrastructure including power


 $ for implementing these measures. and coal, similarly how Germany
 September 2015
www.InfralinePlus.com

ExpertSpeak

achieved such phenomenal success awareness among rural masses and farmers and help them learn how to
in solar power & became world (2) Implement Net metering through operate & maintain them. This way
leader. The key success stories can be policy initiative to facilitate surplus government will ensure that slowly
implemented with suitable changes as power to be pumped in to the grid farmers will become independent
necessary for India. by individuals and corporate. This in meeting their power demand
As an example, statistics below has been already successfully tried without having to rely on grid power
shows that capacity addition through in Germany & forms a major part of 
 $
solar projects worldwide has seen their success story. corruption associated with subsidized
phenomenal growth after the h It would be equally important power to farmers.
countries adopted awarding of the to promote agencies to provide h With 50000 MW conventional
projects on Feed In Tariff (FiT) basis; single window facility for capacity lying idle and unutilized
From the above data it is clear that guidance during project design and fully, it is criminal to allow diesel
based power of close to 30000
Country Introduction Solar PV Solar PV Growth in %
on FiT installation in installation in CAGR
MW to continue to operate. Even
MW MW imported coal based power is
Prior to FiT Post FiT cheaper than diesel based power &
Germany 2002 296 36013 62% requires less foreign exchange outgo.
China 2011 800 18300 378% Hence diesel based power must be
Italy 2008 458 17614 107%
France 2008 104 4697 114%
ruthlessly discouraged and phased
out in a time bound manner though
India needs to re-think its strategy for execution, operations & repair and proper planning & policy support.
awarding solar projects to developers maintenance for such solar projects/ This would partly address the issue
which is currently predominantly gadgets especially in rural areas.  "$ 
 
28 based on competitive bidding basis. Right now most people discard available capacity.
May be competitive bidding route such equipment & gadgets once it h It is most critical for the
would suit after initial stabilization becomes defective because they \

period in a couple of years. dont know who to approach for of 50000 MW capacity remaining
h The revival & improvement repair and maintenance & such unutilized leading to serious
in Distribution sector would be agencies are not readily available. 



time consuming process and also
extremely complex. Hence it would
be imperative for India to seriously
consider capacity addition through
roof top solar
projects, solar heaters, solar gadgets
like solar lantern, solar cookers
etc. But this would require two
things, (1) lot of efforts to create
h Supplying subsidized power to
farmers is not a sustainable option
and is also causing misuse and loss
of revenues for the distribution
companies. Government needs to
come out with a long term sustainable
solution for this. One suggestion
would be to distribute (one time)
subsidized solar agriculture pumps to
The views in the article of the author are personal
For suggestions email at feedback@infraline.com
as well as banks. If this is done, it
will provide much needed comfort

companies and foreign investors.
This would require some innovative
thinking, pending revival of
distribution sector which would be
time taking and complex process.
h Implement segregation of feeders
across the country through policy
initiative on top most priority basis.
h Implement Open Access across the
country on top priority basis but such
that states do not impose unrealistic
cross subsidy surcharge on anyone
who wants to chose supplier other
than State Discom as also impose
other restrictions of allowing use
of their transmission & distribution
infrastructure etc.
 September 2015
www.InfralinePlus.com

InDepth
Govt pushing Coal India to
cut prices of high grades

29

! The move may force some of the subsidiaries of Coal India into losses
! Higher grade coal is extracted from deep where the cost is higher

Infraline News Service

:3  bulk of the companys premium coal of the energy it holds irrespective of its
worlds biggest coal miner, the and have only recently managed to turn overall quality. Thus, consumers pay the
government wants Coal India to cut around after ailing for several years. same price for the energy part in coal
prices of premium grades of coal. The |
 either for inferior grades or premium
company executives, however, fear that premium thermal coal used in electricity grades. The price varies because the
the move may throw its subsidiaries generation while Bharat Coking Coal lower quality contains lower quantum of
|@|" mostly produces premium coking coal energy while the higher quality contains
Coal into loss making. used in the metallurgical industry. higher quantum of energy. This is not
The two subsidiaries produce the Internationally, coal is sold on the basis |
 September 2015
www.InfralinePlus.com
InDepth
or with Bharat Coking Coal, said a
senior Coal India executive.
Industry experts feel that the
country needs better market design
to have more competitive prices for
coal. The fossil fuel remains our main
source of commercial energy. Coal
India subsidiaries need to compete for
custom on the basis of price, quality
and supply. It should also invest in
proven technologies such as long-wall
mining systems, to boost productivity
 $#
wanting to pick up lower quality coal Tough Call
from the company because the inherent
Eastern Coalfields Bharat Coking
energy price is much less. produces Coal produces
However, higher grade coal is premium thermal premium cooking
primarily from underground mines coal coal
where the cost of extraction is higher. Two cos produce Have only recently
The company made a loss of `2,600 bulk of Coal Indias managed to turn
crore on this variety last year. At premium coal around after alling
current prices, it remains a loss making for several years
proposition. The loss is just about made Higher grade coal Eastern Coalfields
good by the price of coal extracted is from under- made a loss of
ground mines `2,600 cr on high
from open-cast mines where cost of where cost of grade coal last
extraction is less. extraction is higher year
>|
  Now, if prices of higher grades
energy that consumers pay for lower
quality coal is at a deep discount while
the price of energy they pay for higher
grade coal is only a shade more than the
cost of extraction.
are reduced, we would start making
losses on the entire range of coal we
sell. However, if Coal India irons out
the difference in energy prices in low
grade and high-grade coal, Eastern
This results in the consumers | 
 higher grades with increased income
from lower grades, a senior Coal India
executive said.
Internationally, coal is sold on the basis of If the difference in energy price
30 the energy it holds irrespective of its overall within coal is to be ironed out, the hike
quality. Thus, consumers pay the same price in prices of lower variety would have
to be a steep one which might not be
for the energy part in coal either for inferior accepted by consumers, he said. In
grades or premium grades. The price varies |

because the lower quality contains lower around 20 million tonnes of higher
quantum of energy while the higher quality grades of coal, which constitutes almost
contains higher quantum of energy. This is 50 per cent of its total coal production.
not the case with either Eastern Coalfields or Thus, 50 per cent of its coal is sold at
deep discounts while the rest is sold
with Bharat Coking Coal at a price which barely covers the
production cost, he added.
We have been doing a tightrope
walk and any tweak without taking care
of the entire array of our products will
lead to losses for the company that has
come out of BIFR (Board for Industrial
and Financial Reconstruction) in 2013
and barely managed to wipe off years of
accumulated losses upwards of `10,000
crore, said a company insider.
The situation is more or less the same
@|"|#'=
a big discount on lower-quality coal
while the higher quality fuel is slightly
costlier, hence lowering prices of the
#

For suggestions email at feedback@infraline.com

 September 2015
www.InfralinePlus.com

StatisticsCoal
Status of Captive Coal Block (as on 13 August 2015)
Sl. Coal Block Current Allocatee State Lease Peak Rated Geological
No. Area Capacity Reserve
(Ha) (MTPA) (at Allotment)
1 Bhaskarpara CREST Steel & Power Pvt. Ltd. Chhatisgarh 920.00 1.00 47
2 Chotia Bharat Aluminum Company Limited Chhatisgarh 1142.22 4.00 34
3 Gare Palma (IV/1) Bharat Aluminum Company Limited Chhatisgarh 978.65 6.00 125
4 Gare Palma (IV/2 & Jindal Power Limited Chhatisgarh 964.65 6.25 226
IV/3)
5 Gare Palma (IV/4) HINDALCO Industries Limited Chhatisgarh 884.84 2.00 125
6 Gare Palma (IV/8) Ambuja Cements Limited Chhatisgarh 491.00 2.00 107
7 Gare Pelma Sector II Maharashtra State Power Generation Chhatisgarh 2583.00 23.60 768
Company Limited
8 Gare Palma (IV/5) HINDALCO Iindustries Limited Chhatisgarh 828.26 1.10 126
9 Gare Palma (IV/7) Monnet Ispat and Energy Limited Chhatisgarh 335.74 5.90 156
10 Gare Palma Sector-I Gujarat State Electricity Corporation Chhatisgarh 6.00 6.00 900
Limited
11 Gare Pelma Sector III Chhattisgarh State Power Chhatisgarh 639.00 6.50 210
Generation CompanyLimited
12 Gidhmuri Chhattisgarh State Power Generation Chhatisgarh 1614.00 N/A 80
Company Limited
13 Parsa Rajasthan Rajya Vidyut Utpadan Nigam Chhatisgarh 1252.00 5.00 180
Limited
14 Parsa East & Kanta Rajasthan Rajya Vidyut Utpadan Nigam Chhatisgarh 2388.00 10.00 360
Basan Limited
15 Paturia Chhattisgarh State Power Generation Chhatisgarh 733.00 N/A 269
Company Limited
16 Talaipalli NTPC Limited Chhatisgarh 2113.00 20.72 965 31
17 Tara Jindal Power Limited Chhatisgarh 1801.31 6.00 259
18 Badam Bihar State Power Generation Company Jharkhand 491.00 3.00 144
Limited
19 Banhardih Jharkhand Urja Utpadan Nigam Limited Jharkhand 1200.00 N/A 920
20 Brinda Usha Martin LIimited Jharkhand 1377.62 0.68 35
21 Dumri HINDALCO Industries Limited Jharkhand 279.00 1.00 17
22 Ganeshpur GMR Chhattisgarh Energy Limited Jharkhand 237.00 4.00 137
23 Jitpur Adani Power Limited Jharkhand 300.00 4.00 81
24 Kathautia HINDALCO Industries Limited Jharkhand 938.27 0.90 29
25 Kerandari National Thermal Power Corporation Jharkhand 654.00 6.00 188
Limited
26 Lohari Araanya Mines Private Limited Jharkhand 405.00 0.20 10
27 Meral Trimula Industries Limited Jharkhand 949.87 0.50 17
28 Moitra JSW Steel Limited Jharkhand 293.54 1.00 215
29 Pachwara Central Punjab State Power Corporation Limited Jharkhand 1300.00 15.00 562
30 Rajbar E&D Tenughat Vidyut Nigam Limited Jharkhand 1720.00 10.00 385
31 Saharpur Jamarpani UP Rajya Vidyut Utpadan Nigam Ltd Jharkhand N/A 7.00 600
32 Sisai Usha Martin LIimited Jharkhand 1377.62 N/A 15
33 Sitanala Steel Authority of India Limited Jharkhand 321.00 0.30 108
34 Tokisud North Essar Power MP Limited Jharkhand 605.00 2.00 93
35 Amelia (North) Jaiprakash Power Ventures Limited Madhya Pradesh 728.75 2.80 119
36 Bicharpur UltraTech Cement Limited Madhya Pradesh 500.00 0.75 36
37 Mandla North Jaiprakash Associates Limited Madhya Pradesh 1041.60 1.50 195
38 Mandla South Jaypee Cement Corporation Limited Madhya Pradesh 560.00 0.30 72
39 Sial Ghoghri Reliance Cement Company Private Madhya Pradesh 429.00 0.30 30
Limited
40 Belgaon Sunflag Iron and Steel Company Limited Maharashtra 150.00 0.27 15
41 Kiloni Karnataka Power Corporation Limited Maharashtra 200.00 2.50 39
42 Majra Jaypee Cement Corporation Limited Maharashtra 626.05 0.48 31.03
43 Manora Deep Karnataka Power Corporation Limited Maharashtra 400.00 2.50 44
44 Marki Mangli - I Topworth Urja and Metals Ltd Maharashtra 731.42 0.33 34.34
 September 2015
www.InfralinePlus.com

StatisticsCoal
Sl. Coal Block Current Allocatee State Lease Peak Rated Geological
No. Area Capacity Reserve
(Ha) (MTPA) (at Allotment)
45 Marki Mangli III BS Ispat Limited Maharashtra 275.00 N/A 6.19
46 Nerad Malegaon Indrajit Power Private Limited Maharashtra N/A 0.36 19
47 Dipside Manoharpur Odisha Coal and Power Limited Odisha 695.00 8.00 350
48 Dulanga NTPC Limited Odisha 657.00 7.00 260
49 Mandakini Mandakini Exploration and Mining Odisha 649.00 7.50 290
Limited
50 Manoharpur Odisha Coal and Power Limited Odisha 653.00 8.00 181
51 Naini The Singareni Collieries Company Ltd Odisha N/A 18.00 500
52 Talabira I GMR Chhattisgarh Energy Limited Odisha 170.30 3.00 22
53 Utkal C Monnet Power Company Limited Odisha 576.55 3.37 208
54 Tadicherla-I Telangana State Power Generation Telangana 930.00 2.50 61
Corporation Limited
55 Ardhagram OCL Iron & Steel Ltd. West Bengal 800.00 0.40 122
56 Barjora West Bengal Power Development West Bengal 50.00 0.50 8
Corporation Limited
57 Barjora North West Bengal Power Development West Bengal 927.00 3.00 85
Corporation Ltd.
58 Gangaramchak West Bengal Power Development West Bengal 150.00 1.00 4
Corporation Limited
59 Gangaramchak West Bengal Power Development West Bengal 150.00 1.00 10
Bhadulia Corporation Limited
60 Kasta (East) West Bengal Power Development West Bengal 1950.00 5.50 105
Corporation Ltd.
32 61 Khagra Joydev Damodar Valley Corporation West Bengal 903.00 3.00 196
62 Sarisatolli Calcutta Electricity Supply Corporation West Bengal 669.72 3.50 140
(CESC) Ltd.
63 Tara (East) West Bengal Power Development West Bengal 400.00 4.00 84
Corporation Ltd.
64 Tara (West) West Bengal Power Development West Bengal 400.00 4.00 125
Corporation Limited
65 Trans Damodar The Durgapur Projects Limited West Bengal 379.34 1.00 103.2
 September 2015
www.InfralinePlus.com

CoverStory
Hydrocarbon exploration; India
switches to revenue-sharing

33

! Government likely to auction 69 oil, gas elds under the new model
! The policy allows successful bidder to sell at the prevailing market price of gas

Infraline Bureau

In what could incentivise hydrocarbon licensing policy (Nelp) has been tepid. The government has been debating
exploration in India, the government '
 the incentive regime for hydrocarbon
has adopted revenue-sharing model for and gas worth around `70,000 crore, exploration, swinging between two
hydrocarbon exploration and production. will be given out for 20 years to bidders. optionsthe existing cost-recovery
Experts believe the new approach is a Even better, companies will bid for these model and the alternative revenue-
more transparent and market-oriented "#' sharing model. The change reorders
regime and will attract investment in the 
  incentives for hydrocarbon exploration
sector. The governments move comes in
" 
$$ in the country.
the backdrop of waning investor interest
in the Indian hydrocarbon sector, with
around 70 per cent of Indian basins
remaining largely under-explored.
Even response to the new exploration
by national oil companies such as Oil
and Natural Gas Corp. Ltd (ONGC) and
Oil India Ltd. The Union cabinet took
a policy decision to call for competitive
bids for these blocks.
The current production sharing
contract (PSC) framework allows for cost
recovery by exploration and production
(E&P) companies before they pay the
government its share of revenue.
 September 2015
www.InfralinePlus.com

CoverStory

The move is consistent with the optionsthe existing cost-recovery 

 
"#
observation of the Comptroller and model and the alternative revenue- 
"
"$
Auditor General (CAG) that the PSC
does not provide adequate incentives
to private contractors to reduce
sharing model. became necessary for the Government
The government is testing the model to scrutinize cost details of private

"+
 participants and this led to many delays
capital expenditure. involved in the process. and disputes. Under the new regime,
: 
"
 The earlier contracts were based
instances involving the PSC framework,
the government auditor had effectively
accused Reliance Industries Ltd (RIL) of
goldplating costs. RIL, which has denied
this, is currently locked in arbitration
proceedings with the government over
the Government will not be concerned
with the cost incurred and will receive
The change that a share of the gross revenue from the
the policy brings sale of oil, gas etc, the government said
about is that the in a statement.
India has inked 310 PSCs so far,
licence granted "
""
cost recovery. to the successful arbitration cases.
It is a paradigm shift. With the bidder will cover all Another change that the policy
cabinet decision, the government hydrocarbons found in brings about is that the licence granted
moved to revenue-sharing model the field. Earlier, it was to the successful bidder will cover
""
  limited to one, and a
hydrocarbons. Successful bidders have
to share minimum revenue even if they
sell hydrocarbons at a cheaper price,
thus protecting governments income,
petroleum minister Dharmendra
$ #
Earlier, it was limited to one, and a
separate licence was separate licence was required if any
required if any other other hydrocarbon, such as gas, was
hydrocarbon, such as discovered and exploited. The new
gas, was discovered
$ 
"
34 Pradhan said. and exploited. The new allows the successful bidder to sell at
'
" policy for the marginal the prevailing market price of gas, rather
have been put on the block were than at an administered price.


fields also allows the We will invite international bidding
on a nomination basis, but remained successful bidder to } #@

undeveloped because they lie in rough sell at the prevailing be made public in three months. We
terrain or had low reserves. market price of gas, hope new technology will come and
The government has been debating rather than at an investments will increase. In the 69 oil
the incentive regime for hydrocarbon
exploration, swinging between two
administered price ` 
89 mmt (million metric tonnes) worth
`70,000 crore which can be exploited
over a period of 20 years. At the current
(price of) $45 per barrel, the price
of produce will be `3,500 crore per
annum, Pradhan said.
The new policy for the marginal
 
to sell at the prevailing market price of
gas, rather than at an administered price

The Beneciaries
Shares of oil exploration companies such
as Shiv-Vani Oil & Gas Exploration
Services, Jindal Drilling & Industries,
and Hindustan Oil Exploration Company
zoomed, surging up to 20 per cent, as the
government decided to auction 69 idle
" #
Dharmendera Pradhan, MoS (I/C), Petroleum & Natural Gas Shares of Selan Exploration
 September 2015
www.InfralinePlus.com

35

Technology, Dolphin Offshore

The earlier contracts were based on the
Enterprises, and Aban Offshore too
gained from the development. concept of profit sharing. Under the profit
'

" sharing methodology, it became necessary
holding 89 million tonnes of oil
and gas resources, worth `70,000
crore at current rates, will be given
to explorers offering the maximum
revenue from hydrocarbon produced to
the government.
This is a shift from the controversial
production sharing contract (PSC) and
cost recovery model to a more equitable
revenue sharing model that protects
government interest in both low oil and
for the Government to scrutinize cost details
of private participants and this led to many
delays and disputes. Under the new regime, the
Government will not be concerned with the cost
incurred and will receive a share of the gross
revenue from the sale of oil, gas etc
Experts Take the bidders would be given the right to
Analysts see the governments move sell gas to customers of their choice,
as a precursor to adopting the revenue- unencumbered by the governments
high oil price scenarios, Pradhan said. "
 "# allocation policy.
Bidders will be asked to quote The Centre could either usher in the Other than crude oil and gas, the
the revenue they will share with the open acreage policy or opt for the 
 

$
government at low and high end of price tenth round of new exploration and exploit unconventional resources such
and production band to capture windfall licensing policy (Nelp) auctions for the " $$
of steep rise in prices as well as quantum

$# #*

"

jump in production. As per the CCEA decisions for shift from cost-recovery model to
The government will allow 
"  revenue-sharing. At the same time,
companies to sell oil as well as natural bidders for them would have the 



"
 

 freedom to sell crude oil or natural gas licensing regime. This is a primary
price and with no restriction on who they at market-determined prices without step towards ease of doing business,
sell the produce to. any government interference. Moreover, Pradhan said.
 September 2015
www.InfralinePlus.com

CoverStory

["

 Exploring new
opportunity, Pradhan cited the example
Shift to revenue-sharing model, as opposed to cost-recovery
of the Cairn India-operated Mangala
69 small oil & gas fields given up by ONGC and Oil India to be auctioned
</=@
 Hydrocarbon reserves of 89 mtoe, pegged at `77,000 cr at
$\|
# current rates
*'$
 Once these fields are on stream, Indias oil import bill to
reduce by `3,500 cr annually
per cent of countrys crude oil output,
Bidding to be based on revenue-share matrix; market-
the minister noted. determined pricing for crude oil and gas
Departing from the past, discovered Policy for priority allocations of gas wont apply to
blocks of the national oil companies these fields
are being relinquished to have them
developed by operators who are Royalty rates* (%)
  $ Crude oil Natural gas
small-size operations. If this step by The period within which
the government bears fruit, the energy 12.5 10 10 10 production would begin
security agenda will get serviced
substantially, Deepak Mahurkar, leader, 5 5 Onland 3 years
oil & gas, PwC India, said. Shallow Water 4 years
DK Saraf, chairman and managing
director, ONGC, said: The economics Onshore Shallow water Deep water Deep water 6 years
for us would be different compared to *Same as applicable to NELP blocks
the nomination regime, so we would
consider on a case-by-case whether per cent on appraisal and development
36 it works for us or not. He added the While no cess would wells. For revenue-sharing, the bidders
prices of crude oil and natural gas were be charged from these would have to quote two rates lower
expected to rise in a couple of quarters fields for crude oil revenue point and higher revenue
or latest in a year or two and this would point, which would be determined


#'
production, royalty has based on production and price of the
currently proved reserves in these 69 been fixed at 12.5 per hydrocarbons. In simple terms, there

  cent for onshore, 10 would a revenue-sharing matrix over the
and oil equivalent. per cent for shallow  $ 
In the revenue-sharing regime, water and 5 per cent directly linked to output levels and price.
the bidders will have to indicate the

%
quantity of oil and gas they will share
with the government at various stages of
production along with the rates. So, the
governments remuneration is delinked
for first seven years for
deep and ultra deep
water fields. For gas
fields, the royalty rates
'"
revenue share because it would not have
protected the Centres interest in case of
any windfall gains.
While no cess would be charged from
from the quantum of investment made have been decided at  

in developing the block and extracting 10 per cent for onshore $$%#

the hydrocarbons. and shallow water, for onshore, 10 per cent for shallow
Under the present production-sharing 
 $
contract (PSC) system, applicable for
while it would be 5 per 

#
blocks auctioned under all the previous cent for deep and ultra "$$
Nelp rounds, an explorer gets to recover deep water decided at 10 per cent for onshore and
costs incurred during the exploration shallow water, while it would be 5 per
$ "

"
 cent for deep and ultra deep water.
the government. an opportunity to try out the revenue- Unlike the current production sharing
Given the current low oil price sharing model with the market pricing contract, the explorers of these 69
regime, a round of Nelp auction might mechanism, said an industry expert.
""
not attract lot of investor interest. It '" 
" the freedom to carry out exploration
is prudent on part of the government would take place on two parameters activities throughout the life cycle of the
$
  80 per cent of revenue sharing and 20 #:
"
%

 September 2015
www.InfralinePlus.com

cannot extend exploration after the entitled to recover before giving the the government allocates rights to
development stage is achieved. "

#[ explore hydrocarbon blocks through a
The contract would be for 20 years, the scope for disputes and mistrust will bidding process and has done this in nine
which could be extended by another 10 now more or less shrink. phases so far for 360 blocks, with an
$ $ # This is an excellent move by the investment of around $21.3 billion.
PSU explorers ONGC and Oil government to try out revenue-sharing Hydrocarbon explorers in India have
India would also be allowed to bid for

" $ made a total payment of $15.41 billion
#' can be applied in the next Nelp (New to the Union government as royalties,
Arunachal Pradesh, Assam, Tamil Nadu, Exploration Licensing Policy) round and 


#
Rajasthan and Nagaland. other licensing rounds, said Debasish billion to state governments since 1994.
'"

% Mishra, senior director, consulting, >

$ 

timelines to commence production from Deloitte Touche Tohmatsu India Pvt. Ltd. secretary Vijay Kelkar recommended
$   The move from the existing PSC the continuation of the present PSC
years for shallow water and six years for regime to revenue sharing model should framework, which was contrary to the

#:$%
 result in simpler approval process and recommendations of another committee

 less intrusive regulatory process for headed by C. Rangarajan, former
would be taken back. investors, he added. chairman of the economic advisory
The move is a step in the right council to the prime minister, which
What it Means direction to monetize hydrocarbon favoured a revenue-sharing regime. The
This means the old contentious resources in the country, a Cairn India governments intent to move to a new
production-sharing contract (PSC) will Ltd spokesperson said. "
$ 

be buried. The PSC route, which allowed
exploration and production companies
(EPCs) to recover their drilling
and investment costs before giving
Also access to all forms of petroleum secretary Vivek Rae at the
hydrocarbons and market pricing for gas Petrotech meeting in January 2014.
are positive developments. We now look In a written reply to the Rajya 37
forward to the bid documents for greater Sabha on 31 July, Pradhan said: Some
"
 
 clarity, the spokesperson said. of the major issues/constraints in the
messy. It created huge scope for disputes A senior ONGC executive said, We existing PSC model are i. Inadequate
over gold-plating of investments and 
# incentives for the operator to keep the


 
"# you are talking about 50s of blocks, cost low. ii.Require constant and micro
In the past, it led to much acrimony everything gets evened out. monitoring by the government... leading
between the government and Reliance India approved Nelp in 1997it to procedural delays and arbitrations. iii.
Industries over how much the company took effect in January 1999to boost Assessment of recoverable costs leads
had invested and how much cost, it was hydrocarbon exploration. Under Nelp, to dispute between the government
and contractor. iv.Provide opportunity
to operator to leverage/ manipulate
Investment Multiple in their favor based

" #+
The governments efforts to push
hydrocarbon exploration in the country
stems from broader concerns around
energy security.
Indias energy import bill of around
$150 billion is expected to balloon to
$300 billion by 2030. India, the worlds
fourth largest energy-consuming
country, imports 80 per cent of its crude
oil and 25 per cent of its natural gas
requirements. The country trails the US,
China and Russia, accounting for 4.5 per
cent of global energy consumption.

For suggestions email at feedback@infraline.com

 September 2015
www.InfralinePlus.com
NewsBriefs | Oil & Gas
Cairn India goes public with its demands for free-
market pricing for oil & gas
Cairn India, intent on getting its Barmer oileld
contract extended, has gone public with its
demands for free-market pricing for oil and gas
and special incentives for difcult elds. Close
on the heels of the government announcing
a regime free from its interference for small
and marginal elds, the Vedanta Group company in a quarter-page
advertisement in newspapers also pitched for early contract extensions
for seamless planning and linking of the cess to oil price to avert any
undue burden on producers. So, for instance, the ad says free market
price for oil and gas benets mainly the government. In another place,
it says early contract extension enables long-term capital investment.
ONGC will have multiple gains from Russian oil deal
Oil and Natural Gas Corporations (ONGC) buyout of 15% stake in
Vankorneft Oil project in Russia has received a thumbs up from most
analysts as there are clear benets. For one, the
deal will enable ONGC Videsh (OVL), ONGCs
overseas subsidiary, to source 66,000 barrels of
oil from Vankorneft daily or about 3 million tonnes
of oil annually, from the word go. Vankorneft is a
subsidiary of Russian oil giant Rosneft. Analysts
believe output from this project could provide
about one-third of OVLs production and say, the deal valuations at
an estimated $1.27 billion and $1.35 billion are also inexpensive. The
deal value of 15% stake is $2.46/barrels of oil equivalent (boe) which
38 is lower than OVL & Oil deal with Videocons 10% stake at $2.97/boe
and CNPC (China National Petroleum Corp)-ENI deal at $2.8/boe in
Mozambique, said an analyst India Nivesh Research. This buyout will
take OVL closer to achieving its medium-term production target.
Kerala HC restrains BPCL union from strike
The Petroleum Employees Association of the Bharat Petroleum
Corporation Limited (BPCL) has been restrained by the Kerala
High Court from participating in the September 2 strike called by
central trade unions. The order was issued by the court on a petition
led by the BPCL, which stated that the association taking part in
the strike amounted to violation of the provisions of the Essential
Services Maintenance Act and the Industrial Disputes Act. It was
illegal for the association to go on strike, the petroleum company
stated. The court directed the union not to obstruct the workers who
were willing to work. The smooth functioning of the plant shall not
be obstructed. No strike should be called to disrupt operations of
BPCLs installation at Irumpanam and transportation of petroleum
products including LPG, the order said.
Government recovers additional profit of `368 crore
from RIL for gas output shortfall
The government has recovered `368 crore as additional prot from
Reliance Industries-operated KG-D6 block, Oil Minister Dharmendra
Pradhan told Parliament. This is about one-third the amount it would
recover as the gas elds prot has increased after the oil ministry
rejected costs of $2.37 billion claimed by Reliance and its partners.
The government disallowed a part of the costs to penalise Reliance
for a sharp fall in gas output after spending heavily on infrastructure
for a much higher production. Reliance has challenged the
governments decision and taken the matter to an arbitration panel.
ONGC Videsh reaps `700 cr gain on Euro bonds issue
ONGC Videsh Ltd, the overseas arm of state explorer Oil and Natural
Gas Corp (ONGC), has made a gain of about `700 crore on a Euro loan
it had raised to nance its Mozambique acquisition. OVL had raised
Euro 525 million (about USD 712 million) through a 7-year bond issue
in July last year to part nance its USD 4.125 billion purchase of a 16
per cent stake in Mozambiques offshore Rovuma Area 1, which holds
as much as 75 Trillion cubic feet of gas reserves. The decision to
go for a Euro bond issue has paid dividends. We have made a gain of
about `700 crore on account of foreign exchange changes. When we
raised the loan, one Euro was equivalent to USD 1.36. Today the ratio
is 1.12:1, OVL Director (Finance) S P Garg said. The exchange rate
change means OVL will have to repay `700 crore less as its revenues
are mostly dollarised.
GAIL launches tenders for up to 17 LNG cargoes
State-run GAIL (India) Ltd has launched two tenders for up to 17
cargoes of liqueed natural gas (LNG) for delivery in western India,
sources said. The company is seeking ve cargoes for deliveries in
October to December at its 5 million tonne per annum (mtpa) LNG
terminal at Dabhol in Maharashtra, the source said. In a second
tender GAIL is seeking delivery of one LNG cargo a month in 2016
at either Dabhol or Dahej LNG terminal in Gujarat state, the sources
said. Petronet LNG operates the 10 mtpa Dahej plant. The last date
for submitting bids for the two tenders is Aug. 26. GAIL had also
purchased two cargoes for September delivery from BP and BG
Group, the sources said.
RIL successfully tests presence of natural gas in
contentious discoveries
Reliance Industries has successfully tested presence of natural
gas in one of the two KG-D6 block natural gas discoveries which the
sector regulator DGH had previously refused to recognise. RIL had
completed Drill Stem Test (DST) on the Dhirubhai-29 (D-29) gas
discovery that established presence of hydrocarbon, sources said.
A rig used to conduct the DST will now be moved to the other nd,
D-30 in the Bay of Bengal for conducting similar test, they said. The
Directorate General of Hydrocarbons (DGH) had refused to recognise
the 2007 gas discoveries of D-29, 30 and 31 in the eastern offshore
KG-D6 block in absence of its prescribed conformity test, DST. RIL
had done its own conformity tests but in absence of surface ow
that could be established through DST, the DGH refused to recognise
them and the company could not bring them to production.
Essar Oil to more than triple petrol pump
count to 5,000
Essar Oil, Indias second largest private oil rm, plans to more than
triple its petrol pumps to 5,000 by the end of next year, Chairman
Prashant Ruia said. Essar currently has 1,550 petrol pumps, the
highest owned by any private company, and another 1,600 are in
various stages of implementation. Going forward, our expanding
retail network will be a great value creator... Our network is expected
to reach 5,000 operational outlets by the end of next year, he said.
The gradual increase of `0.50 per litre per month in diesel prices
initiated by the previous UPA government in January 2013 and
reduction in crude oil prices during the NDA regime in 2014-15 led to
full de-regulation of diesel prices. These factors enabled (Essar Oil)
to enter the market, hitherto unavailable to private players due to
the subsidy regime, he said.

NewsBriefs | Oil & Gas
Braving All Odds, GAIL Vows to Implement
LNG Project
In its second coming, Gas Authority of India (GAIL) has vowed
to implement the LNG pipeline project in Kerala at any cost. But
even though the situation remains highly conducive, geographical
challenges in the state pose a major hurdle to the company. In
order to lay the 508km-long pipeline in the state, the company
has to factor in 830 crossings, including roads, water bodies and
railway lines. Simply put, there are at least two hurdles every km,
which is the highest anywhere in the country. Out of these total
crossings, GAIL pipeline has to cross 530 roads in Kerala, meaning
that the time lag will be huge. Currently, the laying of the pipeline is
under way in Palakkad and Kasargod districts and in other districts,
including Kozhikode and Malappuram--which had earlier witnessed
opposition from the locals, where the work will resume soon. Plans
are afoot by the PSU major to clear the work in the October-May
window which is the only feasible period in Kerala to carry out such
works. We have been instructed to continue the pipeline laying work
under any circumstances, said a senior company ofcial.
HPCL launches bio-diesel in three cities
Hindustan Petroleum Corporation Limited has launched eco-friendly
Bio-Diesel Blended Diesel B5 HSD New Delhi, Visakhapatnam and
Hyderabad. On the occasion of World Bio-Fuels Day, Minister of State
(Independent Charge) for Petroleum and Natural Gas Dharmendra
Pradhan launched sale of product in New Delhi. In Hyderabad, V.
V. Srinivasa Rao, Inspector General of Police, TSSP Battallions,
Telangana has launched sale of Bio-Diesel Blended Diesel (B5 HSD)
from HPCLs Happy Service Station, Lakdikapool in the presence of
Ch Srinivas, Chief Regional Manager and State Level Co-ordinator
for Oil Industry in Telangana and K.A. Devan, Terminal In-charge,
Ghatkesar Terminal, HPCL, according to a statement. This HPCL
initiative is a step towards promotion of greener fuels and nding
alternate fuels to reduce our carbon foot print. It is an environment
friendly fuel which has almost no sulphur or aromatics and has about
10 per cent built in oxygen.
Indraprastha Gas unleashes intense marketing
campaign to add 3 lakh households in FY16
Indraprastha
Gas Limited has
unleashed an
intensive marketing
campaign to chase
a government-
set target of
adding three
lakh households in the current scal, more than half of what it has
achieved in 16 years of existence, but it is up against a messy urban
planning and a sluggish property market. Prime Minister Narendra
Modi wants one crore households across India to have access to
piped natural gas (PNG), a safer and more convenient fuel for cooking,
in four years. This means almost quadrupling from the current level,
leading the government to set targets for city gas distributors such
as IGL. In the rst ve months of the current scal, the company
added another 50,000 or so households. That leaves a staggering
250,000 households for the next seven months. Narendra Kumar,
the managing director of IGL, is using a combination of demand-
generation and capacity-enhancing measures to meet the target he
admits is quite steep.
September 2015
www.InfralinePlus.com
HPCL scraps plan to build refinery in Andhra
Pradesh amid capacity glut
Hindustan Petroleum Corp has shelved a plan to build a renery
in Andhra Pradesh, although it will go ahead with a proposed
petrochemical unit, the companys chief said. We will just do the
petrochemical plant, said Nishi Vasudeva, chairman and managing
director of HPCL, adding that the companys renery at Visakhapatnam
is being almost doubled, obviating the need to add capacity in the
state at present. State-run HPCL will build the petrochemical plant
in partnership with GAIL Ltd, the government-owned gas distributor.
The two companies had discussed the possibility of setting up a
renery-cum-petrochemical complex for years, but the inability to
nd foreign partners to fund the project has kept the plan from taking
off. Its early days, Vasudeva said, adding there was no nal decision
on inducting a foreign partner, a funding plan or even an equity
structure between GAIL and HPCL for the project.
Vadinar Refinery recognised for its
safety performance
The Oil Industry Safety Directorate (OISD) awards Essar Oils Vadinar
Renery with the Best Safety Performance Renery of the Year 2013
2014 award. As well as this award, two Essar Oil employees, Akshay
Patel and Dhaval Modh, were awarded individual safety awards for
their work in preventing unsafe situations at their respective work
places. Minister of Petroleum & Natural Gas (MoPNG) Dharmendra
Pradhan presented the awards and C. Manoharan, Director of the
Renery, received the award on behalf of Essar Oil. The criterion
used to evaluate award winners is based various conditions, such as 39
complexity of operations, accident free man-hours worked, volume
of the products handled, direct and indirect loss die to any incident,
hazard potential of the complex, no major incident during the period.
ONGC takes PMs Swachh Bharat drive to Himalayas
Oil producers usually prefer to bake the Earth for prot. But ONGC is
bucking that trend by using some of its prot to nurse the ground and
clean up key sources of water in the Himalayas. The agship explorer
has joined four expeditions launched by the Indian Mountaineering
Foundation, the apex mountaineering body, to take PM Narendra
Modis Swatchh Bharat campaign to Himalayan heights - literally.
The expeditions will bring back mountains of garbage, left behind by
scores of climbers and thousands of trekkers, from four regions in the
Himalaya that are popular destinations among adventure seekers.
ONGC, OIL under pressure to raise output, make
profit despite crude price slide
Indian state rms are pushing ahead with exploration efforts,
bucking the global trend of lower capital expenditure in the wake
of the crash in crude oil prices, as they face intense pressure from
the government to raise domestic output and production remains
protable for them even at the current price levels. The marginal
decline in Indias oil and gas production in 2014-15 has continued
in the four months of the current scal year, posing a challenge to
Prime Minister Narendra Modis plan to cut the countrys oil imports
by a tenth by 2022. This has put state-run Oil and Natural Gas
Corporation (ONGC) and Oil India Ltd (OIL), which make up two-
thirds of local oil production, under increased pressure to explore
and produce more. ONGC and OIL are going ahead with their
planned capital expenditure for 2015-16, company executives said.
 September 2015
www.InfralinePlus.com

InDepth
Relaxed sanctions on Iran may help
revive gas pipeline via Pakistan

40

! Several projects that are important for Indias energy security are being discussed
! Efforts are also being made with Russia for transportation of oil & gas to India

Infraline Bureau

With the BJP-led National Democratic
Alliance working on simultaneous plans
for having transnational crude oil and gas
pipelines to India from Turkmenistan,
Russia and Kazakhstan, the chances
of having energy pipelines look better.
While, the proposed lifting of sanctions
(TAPI) gas pipeline, the Iran-Pakistan-
India pipeline, and crude and gas pipelines
from Russia and Kazakhstan.
This comes in the backdrop of
subdued international energy prices,
with producing countries seeking
buyers as their respective economies
Indias growing demand for energy and
also energy security. Vladimir Shkolnik,
Kazakhstans energy minister, had
recently visited India, wherein a joint
working group was set up to examine
the possibilities of such a pipeline from
Kazakhstan, an Indian government
on Iran are expected to help the revival
#
plans for a gas pipeline from Iran through
Pakistan to India.
Indias pipeline project plans come in
the backdrop of the International North-
South Transport Corridor that promises
to cut the costs involved in transporting
goods to Central Asia by 30 per cent. The
proposed pipeline projects include the
Turkmenistan-Afghanistan-Pakistan-India
are heavily dependent on exports for
revenues. A case in point is Russia,
which is particularly affected due to the
twin onslaught of low oil prices and
Moscow facing Western sanctions for the
annexation of Crimea and its support for
rebels in neighbouring Ukraine.
There are several projects in various
stages of planning and discussions. They
are very important from the viewpoint of
  
Similarly, efforts are being made
with Russia for transportation of both
oil and gas to India. The pipeline from
Turkmenistan is a serious proposal with
plans with Russia and Kazakhstan in
advanced stages of discussions.
State-owned TurkmenGaz is to lead
the multinational consortium with a
majority investment in the $9 billion,

1,814km pipeline project, which is
expected to have a capacity of 90 million
standard cu. m per day (mscmd) of gas
from Turkmenistans Gunorta Yoloten-

# 

 nuclear deal in 2008, several Iran-related
planned for supply to India.
The International North-South
September 2015
www.InfralinePlus.com
of external affairs, said the countrys availability of gas from these diverse
energy pipeline diplomacy was back with sources, said Anil Razdan, former
positive developments. power secretary.
After India and the US signed a civil India is also looking at a second
route through Irans Chabahar port that
Indian projects have either been put on will help it join another transit corridor
hold or dropped. India decided to focus linking Iran and Oman with several
'
|"
 on the TAPI gas pipeline instead of the
between India, Iran and Russia in 2000.
The route connects Mumbai in India
to Bandar Abbas port in Iran and then
Bandar-e Anzali in northern Iran on the
Caspian Sea coast. From there, goods are
expected to be transported to Astrakhan
in Russia and then to Central Asia.
India sees this route as shorter than
the current one that goes through the
Suez Canal and the Mediterranean Sea.
While the Suez Canal route takes 45-60
days, the North-South Corridor will
take 25-30 days. From Indias point of
view, the North-South Corridor will
help India bypass Pakistan to reach out
to Central Asia. Soumen Bagchi, joint
secretary, energy security, at the ministry

Central Asian republics.
Iran-Pakistan-India pipeline project.
Indias petroleum minister Dharmendra
Pradhan met with Irans petroleum
minister Bijan Namdar Zangenah
recently at Vienna, where the possibility
of building gas pipeline from Iran to
India through various alternate routes
was discussed.
Indias pipeline diplomacy should
get back into play. I have been a strong
votary that we should work with Iran
for an undersea pipeline. For our energy
security, we are going to be dependent on
gas. So it is important that we work on
pipelines from the West and the East and
from the land as well as the sea routes.
It is of course a matter of feasibility and
Also, when Prime Minister Narendra
Modi visited the Central Asian nations
of Uzbekistan, Kazakhstan, Kyrgyzstan,
Tajikistan and Turkmenistan in July,
energy security was a key theme.
The TAPI pipeline project was also
discussed during Modis visit to
energy-rich Turkmenistan.
In a statement in June, the petroleum
ministry said, Both sides are keen to
expand our cooperation in the area of
hydrocarbons. Various proposals are
currently under discussions between the
two sides. We also agreed to conduct
a feasibility study on transportation of
crude oil and gas from Kazakhstan to 41
:
\}X
natural gas).
Indias pipeline diplomacy should get back into India follows the US, China and
play. I have been a strong votary that we should Russia in total energy usage, accounting
for 4.4 per cent of global energy
work with Iran for an undersea pipeline. For our consumption. India imports 80 per cent
energy security, we are going to be dependent of its crude oil and 25 per cent of its
on gas. So it is important that we work on natural gas requirements. Petroleum
pipelines from the West and the East and from product consumption in India has also
the land as well as the sea routes. It is of course been growing. According to the oil
a matter of feasibility and availability of gas ministry, it grew 3.14 per cent to around
163.17 million tonnes (mt) in 2014-15.
from these diverse sources, said Anil Razdan, India also sourced 189.43 mt of crude
former power secretary oil last year.
The price of oil in the Indian energy
basket has been around $50 per barrel,
starting 4 August. The Indian energy
basket represents the average of Oman,
Dubai and Brent crude. The price rose to
$49.37 per barrel on Tuesday.
Indias emergence as the fourth
largest consumer of energy in the world
has coincided with a collapse in global
oil prices. The resulting buyers market
has only strengthened Indias negotiating
power, said Pradhan recently.

For suggestions email at feedback@infraline.com

 September 2015
www.InfralinePlus.com

InDepth
Upstream oil firms realisation
moving in pressure zone

42

! Popular consensus for crude prices says it will remain muted in near term
! Lower crude prices will reduce total under-recoveries

Infraline Bureau

With global crude oil prices at a six- 

  = barrel in the June quarter. However,
and-a-half year low, upstream oil and were impacted in the June quarter the silver lining was 91 per cent fall in
gas companies like the state-owned Oil due to fall in oil prices, the easing subsidy sharing to `1,100 crore, which
and Natural Gas Corporation (ONGC) of subsidy sharing burden meant net resulted in net realisation to $58.9 per
and private sector Cairn India need to realisation impact were moderated. barrel compared with $47.2 per barrel
brace up for an impact on their realisa- However, with the oil prices coming in the same quarter last year. With the
tions, experts say. down below $45 per barrel, their crash in the global crude oil prices,
Tracking the sell-off in global equity bottom-line will get hugely impacted the realisations would come under
markets, benchmark Brent crude fell in this quarter, said Debasish further pressure. The Indian basket
   Mishra, senior director at consultancy of crude has averaged around $51
March 2009. Brent crude for October  _# per barrel since the beginning of the
delivery fell $1.79 on Londons Inter ONGC witnessed a 41 per cent drop September quarter in July. Mishra said
Continental Exchange to $43.69 a barrel. in its gross realisation to $63.8 per the recent developments are hinting at
 September 2015
www.InfralinePlus.com

$"""
and not going to bounce back to three
digits in a hurry.
Lower crude prices will reduce
total under-recoveries and, as a result,
ONGCs net oil realisation for the nom-
will fall below the crude prices of $60
per barrel, the report said.
For Cairn India, an arm of the
metals and mining giant Vedanta, the
drop in crude prices translated into a

Experts said the latest rout in crude
prices also provides an opportunity for
companies to recalibrate their port-
folios by investing in acquiring assets.
OVL, for instance, has piled up

`348 a lot of assets (oil and gas blocks),
X$ crore in the June quarter. Total income which are in the exploration phase, at

[_| also dropped 41 per cent to `1,619 high prices. But the success has not
report. It, however, added there are crore. The company had in March been very good. This may be the right
multiple overhangs for the company. announced a 58 per cent cut in capacity time for recalibration, said a senior
The popular consensus for crude %
 $ analyst from an accounting and consul-
prices is that they will remain muted in
#
the near term owing to shale oil sup-
plies in the US, rise in output in Iran
and a persistent focus on market share
by the OPEC. ONGC Videsh (OVL)
to $500 million. While announcing
the June quarter results, Cairn Indias
Chief Executive Mayank Ashar had
said optimisation in capital cost of
projects to improve economic viability
$
Crude Awakening
State-owned Oil and Natural Gas Cor-
poration (ONGC) and Oil India, two
/
$ in a low oil price scenario was among public sector units that are being read-

#\|
 the key highlights during the quarter.
The popular consensus for crude prices is that
they will remain muted in the near term owing
to shale oil supplies in the US, rise in output in
Iran and a persistent focus on market share by
ied for disinvestment, were among the
few companies in India to rue falling
crude oil prices. This drop, from an av-
erage of $111.89 a barrel in 2011-2012
to $84.15 for the year ended March
2015, has eaten into the margins and
 "
# 43
the OPEC. ONGC Videsh (OVL) and joint venture So far, the NDA has been able to
profits are directly linked to oil prices. Even reap the gains of falling crude oil prices
ONGC profits will fall below the crude prices of by cutting retail prices of petrol and
$60 per barrel diesel, and taking these fuels outside
the purview of administered pricing.
 September 2015
www.InfralinePlus.com

InDepth

44 so with duties at `7.75 per litre on

State-owned Oil and Natural Gas Corporation petrol and `6.50 for diesel.
(ONGC) and Oil India, two public sector units The challenge, nonetheless, will be
that are being readied for disinvestment, were two-fold - the subsidy provided for the
among the few companies in India to rue falling current year could increase and coupled
with excise duty cut could impair the
crude oil prices. This drop, from an average "
=#
of $111.89 a barrel in 2011-2012 to $84.15 means that the decision not to charge
for the year ended March 2015, has eaten upstream companies any subsidy may
into the margins and profits of these oil and well be up for review.
gas producers In other words, Oil India and ONGC
will see the dream run ending even
before it started to come true. For
But the big question is: Will it bite the companies came from LPG. ONGC, a barrel of crude oil could have
bullet and pass on the burden of higher got $106.72 last year but the com-
prices to consumers? Tinkering prices pulsion of bearing a subsidy of $65.75
A large part of the answer depends Since January this year, petrol and a barrel, left it with a net realisation
on how the government-owned oil diesel prices in Delhi have risen 8 of just $40.97. The subsidy burden
"
"

 per cent at `66.29 a litre and `52.28 on the upstream companies-ONGC,
can cope with rising crude oil prices. respectively. And just as the entire Oil India and GAIL (India) together-
Although petrol and diesel prices have   "

 has soared from `14,400 crore in
been deregulated so that consumers on to consumers with the government 2009-10 to `67,021 crore in 2013-14
now pay market-linked prices for these increasing excise duty on petrol and but lower prices and no burden
fuels, subsidies continue for domestic diesel four times in quick succession sharing in the fourth quarter may bring
" }X

" between November 2014 and January
or LPG) and kerosene (which is tradi-
tionally considered a poor mans fuel).
Last year, for instance, more than half
the under-recoveries of oil marketing
down their burden to around `45,000
2015, it is likely that the entire increase crore in 2014-15.
in crude oil prices will not be passed
on either. Instead, the government may
lower excise - it has the leeway to do For suggestions email at feedback@infraline.com
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 September 2015
www.InfralinePlus.com

InDepth
Govt must iron out issues
on ethanol supply front

46

! Sugar mill owners say moving ethanol across States causes a net loss
! Suppliers say tax, logistics issues across States hurting company bottom-lines

Infraline Bureau

Earlier public sector oil companies
were the alleged villains of problems
on ethanol supply front now sugar
companies are targeting State
governments for creating problems
in selling ethanol to oil retailers.
The suppliers say they are ready to
meet requirements of oil marketing
companies provided State-level issues,
including taxation and transportation,
different rates across States. For
example, Maharashtra and Uttar
Pradesh impose an export fee of 1.50
and 1 a litre respectively. On the
other hand, other States impose an
import duty.
There are nitty-gritty issues with
the States but a lot of sensitivity has
been created due to which ethanol

He added that the company is now
calling for supplies on a monthly basis
rather than yearly or six-monthly
contracts. I think we are in the right
direction and moving well, he said.
Sugar mill owners say moving
ethanol across States causes a net loss.
For example, transporting ethanol from
Maharashtra to Gujarat causes a net


#'%
 loss of 4.5 a litre due to the 1.5 a litre
are resolved. is also giving more stability. Our ethanol export fee in Maharashtra and the 3 a
Taxation on ethanol, a key bio-fuel blending level is at 3 per cent now, said litre import duty imposed in Gujarat.
used for blending in petrol, attracts B Ashok, Chairman, IndianOil. The movement of ethanol and
 September 2015
www.InfralinePlus.com

issue. The industry has the capability

Obtaining permits for moving bio-fuels such   
as ethanol is also an issue. The industry has amount is contracted and then one
the capability to fulfil tenders but the issue is if doesnt get permissions from the
States, then there are heavy penalties
the amount is contracted and then one doesnt
which become a disincentive, 47
get permissions from the States, then there are Tarun Sawhney, Vice-Chairman
heavy penalties which become a disincentive and Managing Director, Triveni
Engineering & Industries Ltd.
the unreasonable approach of State human consumption is not in the
governments is the biggest issue. One, State List, said Abinash Verma, Shortfall
the State List under the Constitution Director General of the Indian Sugar The Ministry for Petroleum and
clearly states that liquor for human Mills Association. Natural Gas had informed a
consumption is within that list. Obtaining permits for moving parliamentary panel that 8.5 crore
Therefore, alcohol not meant for bio-fuels such as ethanol is also an litres was the total shortfall in ethanol
availability as on May 31, 2015. For
bio-diesel, the issue is more to do with
production capacity. According to the
Oil Ministry, India will require 3.5
million tonnes of bio-diesel to achieve
5 per cent blending while availability is
only 1 million tonnes.
The Oil Ministry has already begun
work to sort out some of these issues.
Launching the retail sales of biofuel
blended diesel, Minister of State
(Independent Charge) for Petroleum &
Natural Gas Dharmendra Pradhan said,
We are in talks with States to set up a
single tax structure for bio-fuels and if
% 
taxes for bio-fuels.

For suggestions email at feedback@infraline.com

 September 2015
www.InfralinePlus.com

StatisticsOil & Gas

Crude Oil Processed by Reneries 2015-16
(000 Metric Tonnes)
OIL COMPANIES APR MAY JUN JULY
INDIAN OIL CORPORATION LTD (IOCL)
IOCL-KOYALI, GUJARAT 604 1204 1176 1256
IOCL-MATHURA, UTTAR PRADESH 675 699 733 757
IOCL-PANIPAT, HARYANA 1293 1366 1212 1191
IOCL-HALDIA, WEST BENGAL 647 663 667 663
IOCL-BARAUNI, BIHAR 474 527 541 534
IOCL-GUWAHATI, ASSAM 94 95 93 85
IOCL-DIGBOI, ASSAM 29 55 51 49
IOCL-BONGAIGAON, ASSAM 236 231 200 213
IOCL TOTAL 4052 4841 4675 4749
HINDUSTAN PETROLEUM CORPORATION LTD (HPCL)
HPCL-MUMBAI, MAHARASHTRA 551 420 654 690
HPCL-VISAKH, ANDHRA PRADESH 739 807 588 466
HMEL-GGSR, BATHINDA, PUNJAB 896 925 897 922
HPCL-TOTAL 2186 2153 2139 2078
BHARAT PETROLEUM CORPORATION LTD (BPCL)
BPCL-MUMBAI, MAHARASHTRA 1137 1164 1056 1099
BPCL-KOCHI, KERALA 894 928 903 928
NRL-NUMALIGARH, ASSAM 1 151 261 253
BORL-BINA 2 571 601 631
BPCL-TOTAL 2033 2814 2821 2911
CHENNAI PETROLEUM CORPORATION LTD (CPCL)
CPCL-MANALI, TAMILNADU 901 907 904 705
CPCL-NARIMANAM, TAMILNADU 39 43 48 49
CPCL-TOTAL 940 950 952 754
OIL & NATURAL GAS CORPORATION LTD (ONGC)
ONGC-TATIPAKA, ANDHRA PRADESH 4 4 5 5
48 MRPL-MANGALORE, KARNATAKA 1111 1336 1463 1107
ONGC TOTAL 1115 1340 1469 1112
RELIANCE INDUSTRIES LTD (RIL)
RIL, JAMNAGAR, GUJARAT 2024 2740 2714 2816
RIL-(SEZ), JAMNAGAR, GUJARAT 3020 3104 3023 2490
RIL TOTAL 5044 5844 5737 5306
ESSAR OIL LTD., VADINAR, GUJARAT 1719 1764 1690 1755
GRAND TOTAL 17090 19706 19483 18666

Production of Petroleum Products by Reneries & Fractionators

(000 Metric Tonnes)
PRODUCTS APRIL MAY JUNE JULY
LPG 778 842 810 814
NAPHTHA 1390 1542 1422 1369
MS-III 881 935 970 947
MS-IV 395 446 496 547
MS Others 973 1464 1422 1468
ATF 618 789 924 950
SKO 539 562 648 690
HSD-III 3383 4237 3977 3466
HSD-IV 1153 1411 1591 1476
HSD Others 2561 3020 2824 2970
LDO 36 27 42 35
LUBES 83 89 82 82
FO 744 916 690 1014
LSHS 43 73 47 52
BITUMEN 490 514 434 298
RPC/Petcoke 825 1044 1070 1037
Others 1535 1570 1686 1964
TOTAL, OF WHICH : 16426 19483 19136 19179
REFINERIES 16150 19198 18873 18947
FRACTIONATORS 276 286 263 233
16426 19483 19136 19179
 September 2015
www.InfralinePlus.com

Import/Export of Crude oil and Petroleum Products

(000 Metric Tonnes)
IMPORT/EXPORT APRIL MAY JUNE JULY
IMPORT*
CRUDE OIL 15535 17454 15619 17732
PRODUCTS
LPG 683 809 645 708
MS/ Petrol 120 163 174 138
Naphtha 80 364 212 233
SKO/ Kerosene 35 0 6 0
HSD/ Diesel 10 0 5 5
LOBS/ Lube oil 132 149 141 141
Fuel Oil/LSHS 21 135 263 76
Bitumen 64 77 70 70
Others 755 944 881 883
PRODUCT IMPORT 1902 2643 2397 2254
TOTAL IMPORT 17437 20097 18017 19986
PRODUCT EXPORT
LPG 24 19 20 22
MS/ Petrol 935 1341 1286 1357
Naphtha 576 492 614 683
Aviation Turbine Fuel 153 260 377 501
HSD/ Diesel 1366 1495 1809 2181
SKO/ Kerosene 1 1 1 1
LDO 0 0 0 0
LOBS/ Lube Oil 4 1 3 1
Fuel Oil/LSHS 363 498 130 162
Bitumen 8 10 8 4
Others 313 424 274 319
TOTAL PRODUCT EXPORT 3743 4542 4524 5229
NET IMPORT 13693 15555 13493 14756
Note:
Source: Oil Companies. All figures are Provisional.
POL imports by private parties taken from raw data of DGCI&S which is with a 2 month lag period.
IOCL: Nepal sales taken in exports of IOCL. For Nepal exports, average US$ exchange rate considered
BPCL: For Nepal and Bhutan exports, average US$ exchange rate considered 49
*LNG import not included

Consumption of Petroleum Products : April-July 2015 (P)

(000 Metric Tonne)
PRODUCT Apr-15 May-15 Jun-15 Jul-15
(A) Sensitive Products
LPG 1480 1497 1487 1576
SKO 568 577 567 576
HSD 6487 6440 6296 5710
Sub total 8535 8514 8350 7862
(B) Major Decontrolled Products
MS 1784 1834 1769 1672
Naptha+NGL 942 1240 890 1141
ATF 475 495 469 474
LDO 26 25 41 35
Lubricants & Greases 292 241 253 238
FO & LSHS 485 535 488 552
Bitumen 548 574 419 277
Sub total 4551 4943 4330 4387
(C ) Other Minor Decontrolled Products
Petroleum coke 1126 1554 1250 1231
Others 504 521 519 550
Sub total 1630 2076 1769 1780
All Products total 14715 15532 14449 14029
NOTE:
i) All figures are provisional
ii) The source of information includes Oil Companies, DGCIS & Major consumers.
iii) The consumption estimates represent market demand and is aggregate of :
(a) sales by oil Companies in domestic market, and
(b) consumption through direct imports by private parties.
While data for company sales are actual, that of private direct import are estimated, which may undergo change on receipt of actual data.
 September 2015
www.InfralinePlus.com
NewsBriefs | Renewable
Indias wind energy potential estimated at 302 GW
Indias installable wind energy potential has been estimated to
be 302 GW with towers of a height of 100 metres. This has been
estimated by the National Institute of Wind Energy and the new
ndings were released in the form of a wind atlas launched by the
Minister of State (Independent Charge) Power, Coal and New &
Renewable Energy, Piyush Goyal. At the launch, Goyal said that the
wind atlas can help states plan their transmission networks better
to take more wind energy. It can also help in development of hybrid
solar and wind systems which would help stabilise the grid and
better utilise the transmission network, Goyal said. Earlier, Indias
wind energy potential was measured to be at around 100 GW with a
tower height of 80 metres.
Suzlon Energy seeks shareholders nod to
raise `5,000 cr
Wind turbine
manufacturer Suzlon
Energys board has
sought shareholders approval to raise up to `5,000 crore through
the issue of securities. (It is proposed) to issue securities to
the extent of `5,000 crore, the company said in a notice to its
shareholders for Annual General Meeting scheduled on September
28. The decision to raise `5,000 crore by offering securities was
taken in the board meeting of the company recently. According
to the proposed resolution, these securities can be offered in
international as well as domestic markets. The company plans to
raise up to `5,000 crore by allotting equity shares, ADRs (American
50
Depository Receipts), GDRs (Global Depository Receipts), FCCBs
( Foreign Currency Convertible Bonds) or NCDs ( Non Convertible
Debentures) with warrants and such other securities.
Inox Wind bags 100 MW power project from
Ostro Energy
Inox Wind said it has bagged an order for a 100 MW wind power
project at Lahori in Madhya Pradesh from Ostro Energy. Inox Wind
Limited has bagged an order for a 100 MW wind power project at
Lahori, in the state of Madhya Pradesh from Ostro Energy, the
company said. Ostro Energy is backed by Actis, a global pan-
emerging market private equity rm with USD 7.6 billion of funds
under management, it said. Inox will supply and install 50 units
of its advanced 2MW DFIG 100 rotor dia Wind Turbine Generators
(WTGs) for Ostro Energy on a turnkey basis. The rotor has one of the
highest swept areas that makes it ideally suited to maximise returns,
especially in low wind areas, it said.
11 hydropower projects can be executed in Tawang
basin: Government
As many as 11 hydropower projects with a total capacity of about
2,700 MW can be implemented out of the 13 planned in the Tawang
river basin in Arunachal Pradesh, subject to strict environmental
safeguards and mitigation measures, says a government study.
However, the other two hydropower projects Tsa chu-I and
Thingbu chu with a combined capacity of over 100 MW should not
be implemented due to their possible impact on biodiversity-rich
forests and mountain ecosystems, it added. The study Perspective
plan for development of Tawang river basin was commissioned
by Arunachal Pradesh government to assess the impact of 13
hydropower projects planned in the basin following the direction
from the Centres Forest Advisory Committee.
MNRE to distribute solar devices in rural, tribal areas
The Ministry of New and Renewable Energy has announced a
programme for intensive distribution of renewable energy devices
to the rural and tribal people in the country. Under the programme,
devices like Unnat Chulhas, Solar Cookers, Solar Lamps, Solar
Home Lighting Systems and others will be distributed using
funds of the Compensatory Afforestation Fund Management and
Planning Authority (CAMPA), an ofcial statement said. According
to the statement, CAMPA has already issued circular providing the
guidelines for utilisation of funds to the state governments and union
territories regarding the programme.
Alstom to supply turbine generator for 700MW
Zungeru hydropower plant in Nigeria
China National Electric Engineering (CNEEC) has awarded a contract
to Alstom to supply electro-mechanical equipment and technical
services for the under construction 700MW Zungeru hydropower
project in Nigeria. Under the 50m contract, Alstom will provide
four 175MW Francis turbine-generator sets and related equipment
for installation at the $1.3bn hydropower plant. Alstom Hydro
China will be responsible for the equipment design, manufacturing,
supervision to the installation, commissioning, testing as well as
site services, as part of the contract. Expected to be the countrys
largest hydropower project upon completion, the Zungeru power
plant is being developed by China National Electric Engineering in
partnership with Sinohydro.
Lanco Infratech in talks with investors to infuse
equity in Teesta plant
Lanco Infratech has said
it has started discussions
with strategic investors
to infuse equity in Teesta
hydro power project for
its speedy completion.
Lanco, along with the lead lender for Teesta Hydro Electric project,
has initiated discussions with strategic investors to infuse equity
for the (cost) overrun portion, which will enable speedy completion
of the project, Lanco Infratech sai. According to the statement,
as part of a process to consolidate its businesses and to reduce
debt, Lanco Group has undertaken sale of some of its assets and
bringing in strategic investors in others. The process of bringing the
strategic partner on board is taking time. To avoid further delay in
the process, the lenders of the project have proposed Strategic Debt
Restructuring (SDR), which is in the process of approval.
Indias clean energy policy is crucial for
climate change
India has many economic targets to achieve for which free
and cheap energy is vital. India has the worlds second largest
population and fourth largest economy, with a per capita annual
GDP of $1,630. While the Indian economy has been among the
fastest growing in the world in the last two decades, the major part
of this growth is due to the service sectors, including information
technology, bio-technology, as well as media and entertainment. The
nation aims to reduce the poverty rate to 15 per cent, provide full
employment, ensure food, energy and economic security and double
per capita income. The ambition to achieve this target has increased
Indias emissions more than 65 per cent in the last 10 years.

NewsBriefs | Renewable
India, US invest $8 mn for off-grid clean energy fund
Aiming at accelerating the commercialisation of innovative off-grid
clean energy solutions, India and US on Friday announced an
investment of $8 million in the PACEsetter Fund. The PACEsetter
Fund is the principal funding arm of Promoting Energy Access
through Clean Energy - an initiative of the Indian and US
governments to harness commercial enterprise and bring clean
energy access to unserved and underserved individuals and
communities. The announcement was made by US Ambassador
Richard Verma and New and Renewable Energy Secretary Upendra
Tripathy on the sidelines of an event hosted by The Climate Group
(TCG) - an international non-prot organisation working towards
achieving a low carbon future.
Himachal allocates hydro plant to Reliance Energy
The Himachal Pradesh cabinet reallocated a multi-million dollar
hydropower project, that was under litigation, to Reliance Energy
Ltd, an ofcial said here. The cabinet agreed to allot 960 MW
Jhangi-Thopan-Powari Hydel Project in Kinnaur district to Reliance
Energy Ltd, a government ofcial said. He said that if Reliance
Energy does not accept the offer, the project may be re-advertised
for fresh bidding. The Thopan-Powari-Jangi hydropower project, one
of the most viable ones, requires an investment of over `7,000 crore
and aims to generate 4,000 million units per year.
Govt plans to reduce cost of rooftop solar panels
Coal, power and renewable energy minister Piyush Goyal said the
government is planning to bring down the cost of rooftop solar
panels. We are hoping to scale the demand for rooftop solar, and
in the next seven years, we have plans to roll out 40,000 MW
for rooftop solar, which is massive. Concurrently, we will start
procurement through reverse bidding which should help bring down
the prices. To what extent the prices will come down, I cannot say
at this point, Goyal said. In reply to another query, the minister
conceded that the nation is facing huge transmission and distribution
losses in the aggregate, particularly in the eastern and northern
parts. In states like Bihar, its upwards of 40 per cent.
Tata Power keen to generate more from renewables
Tata Power is considering
acquiring stranded assets
of power companies, if
they are found attractive
enough, said Cyrus Mistry,
Chairman of the company.
The company appreciates
the measures taken by
the new government for
infrastructure development. It hoped that the locked equity
in these assets is also opened up, he said. Due to slowdown in
economy, lack of fuel linkages and environmental clearances,
power project worth `1 lakh crore have been stuck. Power
companies such as JSW Energy and NTPC also have similar
strategies for inorganic growth. Mistry said for enhancing power
generation, the company besides focussing on fuel availability was
also increasing renewable energy capacities through solar and
wind power projects. The domestic hydro power sector has a lot of
untapped potential, which can be harnessed for a desirable level of
power generation mix, he said.
September 2015
www.InfralinePlus.com
UP to announce Biomass Energy Policy 2015
Uttar Pradesh is targetting 1,000 megawatt (mw) of biomass energy
under the new UP Biomass Energy Policy 2015, which is being
nalised. The government is mulling providing 100 percent stamp
duty on acquiring private land for setting up biomass power plant. If
such plant is set up under a joint venture with state nodal agency UP
New and Renewable Energy Development Agency (NEDA), the latter
would provide land as its equity share. The draft policy is ready and
now NEDA is soliciting suggestions from experts and general public
before the government implements it. The policy would be effective
for the next 10 years and be subject to amendments.
MNRE urges Indian institutions and ministries to
take up rooftop solar
Indias central government ministries, state government
departments and institutions such as schools have been requested
to take up rooftop solar by the Ministry of New and Renewable
Energy (MNRE). After 2-3 years of falling prices, it is now economical
to generate power through grid-connected rooftop solar according to
a letter from MNRE joint secretary Tarun Kapoor to all government
parties and other institutions. With an installation life of 25 years,
the payback period for rooftop solar is now around 5-6 years. The
letter comes in the wake of the Government announcement that
40GW of the countrys overall 100GW by 2022 solar target is to
come from rooftop solar.
Vikram Solar signs agreement with UK
solar distributor 51
Vikram Solar has signed an agreement with UK distributor
Edmundson Electrical Greentech (EEG). The company is to supply
its Eldora Ultima modules for total capacity of 25MWp to EEG for
distribution in the UK photovoltaic market. In April, Vikram Solar
had struck a similar deal with EH Smith Builders Merchants. The
company has been active in the Indian solar power market and
is credited with the rst oating solar project of the country. In
January the company launched the research and development
installation which uses ten 1-kilowatt peak berglass photovoltaic
modules that produce 14 MWh of solar power annually. In May,
the Kolkata-based solar company announced plans to increase its
output in West Bengal by more than thrice by end of this scal. At
that time Gyanesh Chaudhary, the managing director and CEO of
Vikram Solar, said had set August as the deadline for completion of
phase-1 expansion of its module manufacturing unit at Falta in West
Bengal by 250 MW.
Emmvee Solar to enter domestic photovoltaic market
Emmvee Solar, the makers of Solarizer water heaters, will get
into solar photovoltaic (PV) power project development in India
by the end of this year. The company has set up two solar projects
of about 14 MW in Europe, and is looking at projects of over 5 MW
capacity here, D. V. Manjunatha, Managing Director of the company,
said. Currently, the company is into manufacturing and retailing
of solar water heaters and manufacturing solar crystalline PV
modules. Over the last few years, it has also started providing
solar solutions across segments. It provides engineering-
procurement-construction (EPC) services for power projects,
installs solar systems for industrial applications such as telecom
towers, railways or installing rooftop solar systems for commercial
and residential buildings.
 September 2015
www.InfralinePlus.com

InDepth
Perovskite touted to lead charge in
mainstreaming renewable resource

52

! Efciency levels in lab tests have reached 20 per cent-levels

! The mineral was discovered in the Ural Mountains of Russia by Gustav Rose in 1839

Infraline News Service

]>  "` cells. The mineral was discovered in the called perovskite, a lot cheaper than
an article named Outshining Silicon, Ural Mountains of Russia by Gustav silicon, has been knocking about in
it was an indication that the time of Rose in 1839 and is named after Russian  $
perovskite was fast approaching. The mineralogist Lev Perovski. lab tests have reached 20 per cent-levels
authors Varun Sivaram, Henry Snaith The trick in solar energy is that conventional silicon cells took two
and Samuel Stranks said right in the  $=#: $  decades to get to. Are perovskites, then,
blurb that the upstart material could produces more electricity from sunlight, the wonder material that will accelerate
make solar cells that are cheaper and but also lasts long, you are the winner. mainstreaming of solar? Opinion,
 # [" $

 however, is divided.
Perovskite is a mineral composed of power. Sivaram, 26, who advises the
calcium titanate, used for making solar In the last three years, a mineral Governor of New York on renewable
 September 2015
www.InfralinePlus.com

"$%

= $ in air and contain lead, a toxic metal. problems to be serious concerns, but
in labs to exceed silicon in two years. Making Perovskite modules as not deal-breakers.
Few disagree. As pure technology, the durable as silicon modules requires Any technology hatching in the lab
perovskite solar cell is the long- technological advances that have yet to will need to leap across the valley of
awaited breakthrough. Among the third be demonstrated, says Keith Emery, death to reach the markets, because the
generation solar cells (after crystalline Research Director at the National already heavily-invested incumbents


 Renewable Energy Laboratory in the "
#
proven to be better than dye-sensitised United States (US). Experts believe that commercialising
and organic cells. I can categorically Sivaram, a perovskite-backer, perovskites are out of the range of
 


 agrees that a good deal of product start-up companies and venture funds,
exciting, says Sivaram, who has development and engineering will be but could happen if the large solar
worked on all the three. required to bring perovskite cells to companies get into the act.
market. However, while Emery feels it These companies could make strategic
The Challenges is premature to talk of perovskites in investments for scaling up production
However, perovskites have technical the market until the technical problems of perovskite solar cells for high-value
challenges to overcome. They degrade are solved, Sivaram believes the niche applications, such as for the
military, because these cells are of high
New & Renewable Energy programme *  $""3%#
Sector FY- 2015-16 Cumulative Sivaram says perovskites can be
Target Achievement achievements (as chemically tweaked for various
on July 31, 2015) applications, and large solar companies
Grid-Interactive Power (capacities in MW) could make it happen. These
Wind Power 2400 421.3 23864.91 (perovskites) could potentially be used
Solar Power 1400 357.68 4101.68 for decorative, building-integrated 53
Small Hydro Power 250 75.2 4130.55 windows that can make power,
Bio-Power (Biomass 400 0 4418.55 says Prof Nitin Padture, Institute for
& Gasification and
Bagasse Cogeneration) Molecular and Nanoscale Innovation of
Waste to Power 10 12 127.08 the Brown University, US.
Total 4460 866.18 36642.77 



*Progress in 2015-16 (during the month of July, 2015) perovskite and the conventional
cells. Pointing to a viable path to
commercialisation, Sivaram says
Perovskite is a mineral composed of calcium 




titanate, used for making solar cells. The mineral with silicon companies to add a
was discovered in the Ural Mountains of Russia by perovskite layer to the silicon solar
Gustav Rose in 1839 and is named after Russian panel. Such tandem cells, according
mineralogist Lev Perovski to Oxford Photovoltaics, a company
co-founded by Henry Snaith, can
produce 20 per cent more energy than
just silicon cells, and the additional costs

$#
An important factor that weighs in
favour of perovskites is energy payback,
or the time it takes to offset the energy
that went into producing a material. If
you take into account all the energy that
went into the manufacture of a silicon
solar cellfrom mining and purifying
silicon to baking it into ingots and
"  $
it takes three years for a silicon cell to
save (or payback) that much of energy.
 September 2015
www.InfralinePlus.com
InDepth
54 In contrast, perovskites give back in just
three months, according to scientists at
the Northwestern University of the US.
The solar cell user industry is
keeping a sharp eye on the unfolding
developments in perovskites. It is
an interesting technology and we are
very keenly following the progress of
perovskites, says Pashupathy Gopalan,
>
Experts believe that
commercialising
perovskites are out of
the range of start-up
companies and venture
funds, but could
happen if the large
India had only 12 MW of solar capacity.
The MNRE has set a target of 100
GW of solar capacity to be achieved by
2022. An ambitious target, and the big
question is whether it would be met.
A Citi group report, titled Energy
Darwinism II, has projected that Indias
solar installations in 2020 would be
26,523 MW a respectable number,
  solar companies get
US solar major, SunEdison.
4GW Milestone
Grid-connected solar power
installed capacity has crossed the
4 GW-mark, according to data
but way below the target. Such installed
capacity would make India the fourth
into the act. Companies largest solar market, after China
could make strategic (148,141 MW), Japan (64,863 MW) and
investments for scaling the US (64,133 MW).
up production of
perovskite solar cells Wind industry
released by the Ministry of New and for high-value niche  
Renewable Energy.
 $
Against a target of 1,400 MW for
applications, such as were 412 MW, according to the MNRE

 for the military, because data. Wind industry experts feel that,

 $ these cells are of high due to a variety of factors, the target
358 MW, or 25 per cent. On the basis efficiency, light-weight of 2,400 MW for the full year is not
of projects awarded in the recent and flexible likely to be met.
months, both under the federal and The Citi report forecasts Indias
States schemes, solar industry experts wind capacity at 38,690 MW by 2020.
 948 MW in the previous year. The governments target for 2022 is
current year will exceed 2,500 MW. Solar capacity reaching the 4-GW 60,000 MW.
This contrasts favourably with the milestone is said to be creditable
1,112 MW installed in 2014-15 and considering that as recently as in 2010, For suggestions email at feedback@infraline.com
 September 2015
www.InfralinePlus.com

InDepth
PE firms increasingly eyeing
green energy assets in India

55

! India has pushed renewable energy to the top of its energy security agenda
! Government is creating the ecosystem for promoting green energy in India

Infraline News Service

As India needs about $200 billion to Group AG to raise $150-200 million.  $ " 
meet its target of installing 100 GW ' $" investments in the green energy
of solar power and 60 GW of wind for an opportunity to invest in India, development and manufacturing space.
power by 2022, many private equity given the scales involved here and also The National Democratic Alliance
} 
"  #'  government has pushed renewable
New York Stock Exchange-listed big plans. A case in point being NRG, energy to the top of its energy security
are planning an India entry. ReNew which has one of the largest global agenda and is looking to provide
Power Ventures Pvt. Ltd, a renewable renewable energy platforms, said an green power at less than `4.50 per
energy producer, being in talks with industry expert. unit. According to the government,
]`  >"   the Indian clean energy market is
 September 2015
www.InfralinePlus.com

InDepth

"$$ Concomitantly, a lot of policy action $200 billion in assets, operates one
to the extent of 94 per cent of total has also been taken in the sector at the of the largest publicly-traded green
investment in the sector. centre as well as state level. CARE energy platforms globally with 7,300
With affordable tariff holding key Ratings believes more than central megawatts (MW) of installed capacity.
to the success of Indias green energy
"

plans, state-owned NTPC Ltd plans to
supply electricity from 10,000MW of
solar power capacity that it is setting
up on its own, at `3.20 per unit, by
bundling it with unallocated power
scheme (mainly JNNSM), it is the
states who would be the key driver in
facilitating solar capacity addition,
CARE Ratings wrote in a 27 August
report. JNNSM is the Jawaharlal Nehru
National Solar Mission.
*@
its India plans and has looked at Leap
Green and Mytrah, said a person
aware of the development.
The interest stems from the fact that
India has pushed renewable energy to
to bring tariffs down. In addition, it
plans to sell electricity at around `5 per
unit for 15,000 MW that it is buying
on behalf of the ministry of new and
renewable energy.
The government has put a lot
]@>
Management is taking its second bet
on the Indian green energy sector and
is evaluating a potential investment
in companies such as Mytrah Energy
Ltd and Leap Green Energy Pvt.
the top of its energy security agenda
and is looking to provide green power
at less than `4.50 a unit. India needs as
much as $200 billion to meet its target
of installing 100 gigawatts (GW) of
solar power and 60,000 MW of wind
of focus on the solar energy space. #@<"$ power by 2022.
Solar power capacity is projected $@ A second person added that
to grow 24 times from 2015 to 2022. Asset Management and with around *@":"
the numbers involved.
@

Brookfield had earlier tied up with Indias largest Indias largest power generation utility
power generation utility NTPC Ltd, GE Energy NTPC Ltd, GE Energy Financial
56
Financial Services, Asian Development Bank Services, Asian Development Bank
(ADB) and Kyushu Electric Power Co. Inc. for (ADB) and Kyushu Electric Power
setting up 500 MW of non-conventional power Co. Inc. for setting up 500 MW of
non-conventional power generation
generation capacity. Brookfield Renewable

$#@<
Power Inc., a subsidiary of Brookfield Asset :#$ @>
Management, exited the proposed renewable Management, exited the proposed
power joint venture (JV) in 2009 in the wake of the renewable power joint venture (JV)
worldwide financial melt-down in 2009 in the wake of the worldwide

#
 September 2015
www.InfralinePlus.com

Singapore-based Sembcorp Industries

Ltd acquired a 60 per cent stake in
IDFC Alternatives-backed renewable
"$
\:  ]
million in February.
In the same month, Actis Capital
committed $230 million to create an
Indian renewable energy platform
called Ostro Energy Pvt. Ltd. In
2012, Morgan Stanley Infrastructure
Partners invested $212.03 million in


|

JP Morgan Asset Management
Holdings Inc., the investment arm of
JPMorgan Chase and Co., plans to sell
half its stake in Leap Green Energy.
Avista Advisory Group and Macquarie
The interest stems
from the fact that India
Energy Pte Ltd.
Analysts believe that the
government is creating the ecosystem
for promoting green energy in India.
With the proposed amendments to
the Electricity Act 2003, the National
Tariff Policy 2005, the announcement
of the National Renewable Energy Act,
2015, the expected announcements
on the national and state renewable
energy policies and renewable energy
plans, a near complete demand- 57
creation framework for renewables
is being formulated at the central
government level, Bridge to India, a
has pushed renewable "$"

Capital are advising JP Morgan on the energy to the top of 27 July report. .
deal, which could potentially be in the its energy security Meanwhile, Gammon Infrastructure
range of $200-225 million.
JP Morgan holds about a 75 per cent
stake in Leap Green Energy, acquired
in tranches since 2010. Leap Green
Energy, founded in 2006, is promoted
by former Formula 1 driver Narain
Karthikeyans family. JP Morgan has a
agenda and is looking
to provide green power
at less than `4.50 a unit.
India needs as much as
$200 billion to meet its
target of installing 100
/@
Asset Management Inc. for a stake sale
in some of its infrastructure assets,
managing director K.K. Mohanty said.
There were also reports in sections
of media about Gammon Infrastructure
selling nine of its special purpose
total investment of about $100 million
in Leap Green Energy.
AIM-listed Mytrah Energy in a 16
April statement announced that it has
raised $60 million of new capital in the
form of a non-convertible debenture.
gigawatts (GW) of solar
power and 60,000MW of
wind power by 2022
Aion Direct Singapore Pte Ltd, the
@> `500
crore and that an announcement
was due shortly.
Gammon Infrastructure Projects
is a subsidiary of Gammon India
Ltd. Gammon Infrastructures
'"3 
 statement added.
  
/


existing 543 MW operating portfolio X$}
 operational road projects and four
and the recently concluded $70 million shown an increasing interest under construction on a public private
"

 in green energy assets in India. partnership (PPP) basis. The company
of the equity required to take Mytrah ReNew Power Ventures Pvt. Ltd, a also has two port assets and two
Energys generating capacity beyond renewable energy producer, being renewable energy projects.
1,000 MW. in talks with Switzerland-based PE
The new capital has been provided 
\
>\
by Merrill Lynch International and $150-200 million. A subsidiary of For suggestions email at feedback@infraline.com
 September 2015
www.InfralinePlus.com

InConversation
Large scale storage solutions needed
for uninterrupted 24X7 solar power
Ivan Saha,| ' $
heads the Technology team of Vikram Solar and is responsible
for research, innovation and new product development. He
speaks to InfralinePlus on the challenges solar industry faces
and the possible solutions that can expedite the growth of the
sector. Excerpts

Solar energy is touted to be the duties have helped the new government
next big revolution in Indias
energy space. How do you
view the excitement among
stakeholders. Is the target of
100,000 MW by 2022 achievable?
We feel that the target is attainable. But
58 it will ultimately depend upon the key
enablers, who should be in sync with
each other.
Finance is the most critical factor
to achieve the target. Proper funding
"$=#
There is another school of
thought that introduction of
Solar power may upset the whole
grid, as solar power disappears
when the sun sets, just as
electricity demand rises to its
daily peak, with homes switching
on lights and stoves. Meeting Ivan Saha
President & Chief Technical Officer, Vikram Solar
peak needs will require a big
 
are absolute necessary to execute the
projects. In addition to it, reducing
the project completion time, setting
up proper infrastructure, special
incentives for solar energy projects,
with support from State as well as
Central Government, ease of access

cushion of idle thermal power
during the day, a huge hidden
cost of solar power.
This is a myth doing rounds that during
the night when the power requirement
increases drastically, solar power is not
suitable or cant meet the peak demand.
Though globally solar power plants are
same plant can give a night and day
solution, respectively.
How long do you think
Solar power would become
sustainable or its pricing be
on par with other sources of
energy generation? Given the
/" "$ getting commissioned more & more,
projects, prompt and fast allotment of
land, separate capital subsidy over and
above central subsidy on the project
cost for grid tied, off grid & roof-top
solar systems, setting up panels for
single window clearance and fast track
approval of solar power projects. Along
with the above, skilled manpower is a
critical necessity.
Since 2010, when MNRE launched
JNNSM, India has grown from almost
0 GW solar capacity to over 4.1 GW in
mere 5 years. Key strategic decisions
like the abolition of anti-dumping
nancial mess most of the state
still we can say that we are on the very
early stage and lots can be achieved
from setting up large scale solar parks
to commission innovative utility scale
solar power plants and meet the ever
increasing power demand. The critical
path to uninterrupted 24X7 solar
power is the development of large
scale storage solutions, on which a
tremendous amount of work is going
on globally. The interim solution is to
use an intelligent mix of renewables
and traditional power sources. As
for example, wind & solar in the
electricity boards, how can they
purchase expensive power?
Solar industry has already reached
the grid parity in the states like
Rajasthan, Gujarat, Maharashtra in
terms of LT power for the industrial
use, diesel replacement, etc. More
rapid deployment of solar will happen
once the other states also reach grid
parity for the residential sector.
Recently record low bids for solar
contracts in India has started to happen
with foreign EPC project developers
winning tender with a bid of INR 5.05
 September 2015
www.InfralinePlus.com

(US$0.080) per kWh for a 50 MW allocated in the individual state But there were some reasons behind

$#> budgets are still very less, which needs it. Solar module manufacturing in India
glance these prices sound very far- to be revised. started its journey long back, but only
fetched, but at the same time reverse recently with the positive initiatives
bidding in India has always been in a There seems to be competition from the Central Government & the
way that has attracted low prices. With from China in terms of pricing Make in India campaign got a positive
the current euphoria in the Indian solar of PV cells. Does Chinese ambience & supporting environment
sector, this is another step forward and

good for the solar industry in general
and will help India to reach grid parity
sooner, may be within the next 5 years.
However, there needs to be strict
moderation of quality standards of
components in these projects. Lower
cost should not be synonymous with
inferior quality. And with the poor
 
 
state electricity boards, to achieve
grid parity faster, compromising on
quality & planning projects with
unrealistically low cost will result in
disrupt the growth of the solar sector.
ROI varies from one state to another

"
$
from solar, electricity tariff, power
purchase agreement (PPA), evacuation
charges & availability of other required
infrastructures. State governments need
to infuse more money in the electricity
boards to help them to purchase the
solar power. The amount of money
manufacturers have advantage 3#:
vis-a-vis Indian companies started solar module manufacturing
because they have better more than 20 25 yeas back but they
incentives for manufacturing? have been plagued by lack of scale, zero
It is true that India currently lags manufacturing incentives and an almost
behind in Solar module and cell non-existent demand in the domestic
manufacturing capacity vis a markets. In late 2000s a few hundreds
vis to China. of MW of cell and module capacities
Proper funding & allocation of financial resources
are absolute necessary to execute the projects. In
addition to it, reducing the project completion time,
setting up proper infrastructure, special incentives
for solar energy projects, with support from State
as well as Central Government, ease of access to
59
project financing for solar energy projects, prompt
and fast allotment of land, separate capital subsidy
over and above central subsidy on the project cost
for grid tied, off grid & roof-top solar systems,
setting up panels for single window clearance and
fast track approval of solar power projects
 September 2015
www.InfralinePlus.com

InConversation

were set up with modern technologies

but they were quickly outpaced and
out bidded by the GW scale Chinese
juggernaut. The Chinese manufacturers
used to get huge incentive from their
Republic Government which helped
them to surge ahead.
But today, the scenario is changing
fast. MNRE along with other nodal
agencies like RECI, IREDA, etc have
introduced a few game changing
policies, opening the market for
more investment in both module
manufacturing and cell manufacturing
along with announcing large scale
MW projects & solar parks. The
Indian solar market is fast changing
with parity based projects gaining
momentum. To minimize the demand-
supply gap, the market has been
created to increase the manufacturing # 3"

 scenario for the solar sector in India.
capacity of solar cells and modules New Town Kolkata, West Bengal. We always feel that the biggest
in the country. So, today while India challenge is to have a general
60 is targeting to achieve 100 GW of Also work is currently going on some conducive environment for solar in a
solar power by 2022 and announcing
huge solar projects across the country
and attracting huge investments by
big Indian & International groups in
module manufacturing sector, domestic
players are also enhancing their
production capacity.
Kindly share details of some of
the ongoing projects and how
would it change the energy
dynamics of the country?
In the last 12 months, we achieved
quite a few milestones in terms of
commissioning large scale MW
projects along with installing projects
MW projects across India including
some very prestigious rooftop kW
projects. Vikram Solar did the 1st
rooftop installation at an international
airport in India, the Cochin
International Airport, Kerala, which
recently has been announced to be the
1st in the world to be powered solely
on solar energy.
In continuance with our expertise
in installing rooftop solar plant at an
airport, currently work is going on
for rooftop installations at Calicut
International Airport, Kerala & Netaji
Subhas Chandra Bose International
Airport, Kolkata, West Bengal.
$:
regulatory framework, technological
expertise, least-cost business models
and uniform policy. Government of
India has recently set state-wise targets
for installation of grid-connected solar
rooftop systems as part of its plan
to achieve 40 GW of rooftop solar
power by 2022. States with the highest
targets include: Maharashtra (4.7GW),
Uttar Pradesh (4.3GW), Tamil Nadu
(3.5GW), Gujarat (3.2GW), Karnataka
(2.3GW), Rajasthan (2.3GW), Madhya
Pradesh (2.2GW), West Bengal
(2.1GW). The State nodal agencies,
RECI (Renewable Energy Corporation
 #
1. Successfully installed and
commissioned 48 MWp solar plant
at Kachaliya, Madhya Pradesh.
2. 100 kW solar power plant at
McLeod Russel Tea estate,
Attarekhat, Assam.
3. 100 kW solar power plant at
Dibrugarh University, Assam.
4. 250 kW rooftop solar power plant at
Auckland Jute Mill, West Bengal.
In addition to the above mentioned
projects, we have commissioned
a total of more than 12 kW
projects across India.
States too now seem to compete
against each other in going
after Solar power installations.
What benet do you see for
consumers?
This is actually a very encouraging
of India) and State power distribution
companies will be in charge of
implementation of this rooftop solar
programme. The solar industry is
going through a transformation
phase and every month, one state
or the other is coming up with their
regulatory policies and announcing
large scale MW projects along with
rooftop policies in line with the target
to achieve 100 GW of solar energy
 September 2015
www.InfralinePlus.com

by 2022. As the end result, this will requirement of JNNSM Phase. Also, Our current market domain is Asia,
$  we are planning to expand our module Europe and Americas . In the next 2
they will also get an option to be part line from existing 200 MW to 500 years , we are expecting to get more
of the green & clean energy revolution. MW by September, 2015 & reach 1.2 involved in the African, Australian &
GW by end of 2018. However, within South American Market.
What is your long term strategy. the multi crystalline technologies,
Will you continue to focus equally newer technologies such as PERC is You have presence in the US and
on manufacturing and EPC? seeing the light of the day which can Europe too, what kind of growth
Vikram Solar is determined to be
  $ do you see for yourself from
a market leader in the solar energy compared with 15% as in the case with those markets.
segment bringing energy closer to the multi crystalline. We have a long term The solar sector is very dynamic today
people of India and other parts of the strategy to invest in PERC technology. and as a key player in the industry we
world .Vikram Solar, which is already We want to equally focus on our need to be active and agile. Our Group
forward integrated, is planning on EPC segment and plan to increase the has established itself internationally
backward integration by adding a 100 current installed capacity of 120 MW over the past decades and Vikram
MW solar cell manufacturing line to 500 MW by the end of 2016 & reach Solar is now building on the strong
by end of 2016 to cater to the DCR 1 GW by 2018. global footprint. Our team thoroughly
evaluates the target markets and assesses
The solar industry is going through a high potential regions for solar PV
projects. In the past year, we have built
transformation phase and every month, one state
a strong international sales team, which
or the other is coming up with their regulatory is analyzing market trends and demand
policies and announcing large scale MW projects across the globe carefully. We have been
along with rooftop policies in line with the target participating in various international 61
to achieve 100 GW of solar energy by 2022. As trade shows such as Intersolar Europe,
the end result, this will invariably benefit the end Intersolar North America, Solar Power
International North America, which has
consumers as they will also get an option to be
helped us to get insights of the European
part of the green & clean energy revolution & US market.
Europe is an important market for us
globally. We were able to build a strong
customer base there and are supplying
"   
the European market. Last year, we
entered the UK PV market which is a
big step for us.
The US market is another
interesting geography for us. Vikram
Solar as an India based producer of
high quality PV modules has great
prospect to gain market share here.
With new products based on PERC
technology & 72 cell modules, CAN/
|]> |
"'
1 status by Bloomberg, we are very
positive that we can position Vikram
Solar as a strong and reliable business
partner in the Americas.
For full version of the interview, visit www.infraline.com
For suggestions email at feedback@infraline.com
 September 2015
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InDepth
Indraprastha power unit gets a new
lease of life as solar power station

62

! State-of-the-art solar power station to light up Delhi Secretariat during India-Africa Summit
! Delhi govt has sought the assistance of MNRE and the SECI

Infraline News Service

Cementing Indias commitment for
green energy, the defunct Indraprastha
power station in the capital that
was closed in 2010 after some four
decades of pumping out pollutants
from its 240 MW thermal units will
soon start generating electricity but
political differences aside for the
clean project.
The occasion will be the India-
Africa Summit in October that will see
leaders from more than 50 countries
from that continent attending. Delhis
Ring Road will shine bright with the
symbolic more than anything else--the
commitment of the Modi and Kejriwal
governments to clean energy and
addressing climate change concerns.
While the state-of-the-art solar
power station will light up the Delhi
Secretariat, the summit itself will be
this time as a solar power station. 3 
 hosted at the nearby Indira Gandhi
Interestingly the governments at the generating 1 megawatt of electricity. Indoor Stadium, which for years
Centre and in Delhi have kept their Its not much but the power will be used to be coated with soot from

the chimneys of the Indraprastha
power station.
The Centre is supporting the Delhi
government, which is in advanced
discussions with the ministry of new
and renewable ener gy (MNRE) and
the Solar Energy Corporation of India
(SECI), to set up a 5 MW solar plant
The Delhi government has already
written to the urban development
secretary on land lease issues and held
rounds of meetings with MNRE and
]|: #
Revamping the power sector and
switching to clean energy is one of the
pledges made by Aam Aadmi Party.
September 2015
www.InfralinePlus.com
have written to the urban development
ministry on land related issues, Delhi
power minister Satyendra Jain said.
We have also sought the assistance
of MNRE and the SECI as we have no
experience in setting up solar power
projects on our own.
Jain said the 5MW solar plant was
at the site. The Delhi government *$ being viewed as a pilot project and
is soon expected to sign a power at the Indraprastha power plant and plans are afoot to scale this up and
purchase agreement with SECI for possibly convert other units to solar
getting the new avatar of the power energy as well. The Rajghat power
station up and running in time for the station is one of those being considered
Africa summit. for the solar switchover, he said. It is
The Centre is keen on ensuring that at another of Delhis old and now near
least a 1 MW unit is ready at the time of defunct, coal-based power plants.
the summit. A solar lit Delhi Secretariat The Indraprastha switchover was
in the back drop of the venue will be a discussed at a meeting of the SECI
powerful example of Indias dedication board last week and it was agreed that
to safeguard the environment. if not 5 MW at least some capacity of
solar power must be generated in time
While the state-of-the-art solar power station will for the October summit.
light up the Delhi Secretariat, the summit itself Given the paucity of time, a 1MW
$
"
will be hosted at the nearby Indira Gandhi Indoor a limited tender, a highly placed
63
Stadium, which for years used to be coated with < '
soot from the chimneys of the Indraprastha of anonymity.1MW should be also
power station. The Centre is supporting the Delhi  

_
government, which is in advanced discussions Secretariat. The remaining 4 MW
with the ministry of new and renewable energy units will be set up later through an
open tender system.
(MNRE) and the Solar Energy Corporation of India
(SECI), to set up a 5 MW solar plant at the site
For suggestions email at feedback@infraline.com
 September 2015
www.InfralinePlus.com

StatisticsRenewableEnergy
Category Wise Breakup of 1,00,000 MW Solar Power Target
Category I Proposed Capacity Category II Proposed
(MW) Capacity (MW)
Rooftop Solar 40,000 Scheme for Decentralized Generation of Solar Energy Projects by 10,000
Unemployed Youths & Farmers
PSUs 10,000
Large Private Sector/IPPs 5,000
SECI 5,000
Under State Policies 20,000
Ongoing programmes incl. past achievements 10,000
Total 40,000 60,000
Source: MNRE

Status of Grid Connected SPV Rooftop Projects Sanctioned to States/UTs/SECI/PSUs and Other
Government Agencies:
Sl. State/UTs Projects Projects Sanctioned/Implementation Under NCEF Total Achievements
No. Sanctioned NCEF - I NCEF - II NCEF-III NCEF -IV NCEF-V Sanctioned Under Through Total
under BY SECI BY SECI BY MNRE By MNRE BY SECI (MWp) MNRE/ their own
MNRE (26.6 (50 MWp) to SNAs to MGAs to Ware NCEF/S resources
Scheme to MWp) (54 MW) (52 + 52 houses ECI (3
SNAs/State MW) (73 MW) - 8)
Deptts.
(MWp)
1 2 3 4 5 6 7 8 9 10 11 12
1 Andhra 5.5 2 3.5 4 0 0 15 2.46 2.455
64 Pradesh
2 Bihar 0 0 1 0 0 0 1 0 0
3 Chhattisgarh 0 2.05 0 5 0 0 7.05 1.75 1.75
4 Chandigarh 6.06 0.5 0 2 0 0 8.56 5.3 5.3
5 Delhi 0 2 2 8 25 0 37 4.32 3.87 8.19
6 Gujarat 5.75 0 2 0 0 0 7.75 0 9.75 9.75
7 Goa 0 0 0 2 0 0 2 0 0
8 Jharkhand 0 0 2 0 0 0 2 0 0
9 J&K 0 0 0 0 0 0 0 0 1 1
10 Haryana 0 2 2 5 0 0 9 1.13 1.13
11 Kerala 1.28 0 0 5 0 0 6.28 0 0
12 Karnataka 0 2 3 0 0 0 5 1.5 0.4 1.9
13 Madhya 5 0.25 1 0 0 0 6.25 0.1 0.1
Pradesh
14 Maharashtra 0 2 5 0 0 0 7 0.67 0.67
15 Odisha 0 1 0 4 0 0 5 0.86 0.86
16 Punjab 5 0 2 0 0 0 7 0 7.52 7.52
17 Rajasthan 6 3.25 1 0 0 0 10.25 0.3 0.3
18 Tamil Nadu 6.74 5 5 5 0 0 21.74 6.6 6.6
19 Tripura 0 1 0 0 0 0 1 0 0
20 Telangana 0 0 0 4 0 0 4 1.54 1.54
21 Uttarakhand 5 0 0 2 0 0 7 1.61 1.8 3.412
22 Uttar Pradesh 2 1.5 3 5 0 0 11.5 1.08 1.08
23 West Bengal 2.38 1 0 3 0 0 6.38 0.63 0.63
24 Ministry of 0 2.5 0 0 50 0 52.5 0 0
Railways
25 Allocated to 0 0 0 0 19.79 0 19.79 0 0
PSUs
26 Pending 0 1.05 17.5 0 9.21 73 100.76 0 0
Allocation by
SECI under
NCEF
Sub Total 50.71 29.1 50 54 104 73 360.81 29.85 24.34 54.187
Source: MNRE
 September 2015
www.InfralinePlus.com

State-Wise Status of Solar Cities (As on 19.08.2015)

Sr. No State Cities for which in-principle Amount Amount Status of Master Plans Solar City Cell
approval given Sanctioned in Released in (Rs. Created
(Rs. Lakh) Lakh)
1 Andhra Pradesh 1. Vijaywada 46.4 15.4 Prepared Yes
2 Telangana 2. Mahbubnagar* - - Under Preparation No
3 Assam 3. Guwahati 45.45 7.72 Prepared No
4. Jorhat 49.18 24.18 Prepared Yes
4 Arunachal Pradesh 5. Itanagar 47.49 16.49 Prepared Yes
5 Chandigarh 6. Chandigarh 49.75 39.75 Prepared Yes
6 Chhattisgarh 7. Bilaspur 43.43 12.43 Prepared Yes
8. Raipur 43.43 12.43 Prepared Yes
7 Gujarat 9. Rajkot 47.45 12.72 Prepared Yes
10. Gandhinagar 50 14 Prepared Yes
11. Surat 43.46 8.46 Prepared Yes
8 Goa 12. Panji City 43.3 1.65 Prepared No
9 Haryana 13. Gurgaon 47.45 7.45 Prepared No
14. Faridabad 48.75 17.75 Prepared Yes
10 Himachal 15. Shimla 42.95 26.94 Prepared Yes
Pradesh 16. Hamirpur 42.8 26.8 Prepared Yes
11 Karnataka 17. Mysore 43.25 5.62 Prepared Yes
18. Hubli-Dharwad 43 1.5 Prepared No
12 Kerala 19. Thiruvananthapuram* - - Under Preparation No
20. Kochi 48.84 19.42 Under Preparation No
13 Maharashtra 21. Nagpur 48.93 4.46 Prepared Yes
22. Thane 49.84 18.84 Prepared Yes
23. Kalyan-Dombivli 49.57 24.57 Prepared Yes
24. Aurangabad 50 7.86 Prepared No
25. Nanded 50 3.74 Prepared No
26. Shirdi 43.48 1.74 Prepared Yes
14 Madhya Pradesh 27. Indore* - - Prepared No
28. Gwalior 49.55 9.78 Prepared Yes
29. Bhopal 48 19 Prepared No
30. Rewa 50 13.55 Prepared Yes
15 Manipur 31. Imphal 48.56 4.28 Prepared Yes
16 Mizoram 32. Aizawl 48.09 17.09 Prepared Yes 65
17 Nagaland 33. Kohima 46.98 20.47 Prepared Yes
34. Dimapur 48.95 4.47 Prepared No
18 Delhi 35. New Delhi (NDMC area) 50 2.25 Prepared No
19 Orissa 36. Bhubaneswar 47.37 3.68 Prepared No
20 Punjab 37. Amritsar 45 11.5 Prepared No
38. Ludhiana 45 11.5 Prepared Yes
39. SAS Nagar (Mohali) 50 2.24 Under Preparation No
21 Rajasthan 40. Ajmer 50 1.35 Under Preparation No
41. Jaipur* - - Under Preparation No
42. Jodhpur 43.5 1.75 Prepared No
22 Tamil Nadu 43. Coimbatore 49 24 Prepared No
23 Tripura 44. Agartala 45.49 14.44 Prepared Yes
24 Uttarakhand 45. Dehradun 47.4 12.7 Prepared Yes
46. Haridwar & Rishikesh 45 5 Prepared Yes
47. Chamoli Gopeshwar 44.95 13.94 Prepared Yes
25 Uttar Pradesh 48. Agra 48.89 38.89 Prepared No
49. Moradabad 50 25 Prepared Yes
50. Allahabad 49.82 2.45 Under Preparation No
26 West Bengal 51. Howrah 50 4.31 Under Preparation Yes
52. Madhyamgram 50 4.15 Prepared No
53. New Town Kolkata 50 11.26 Prepared Yes
27 Jammu & Kashmir 54. Leh* - - Under Preparation No
28 Puducherry 55. Puducherry 49.4 - Prepared No
Total 2369.15 610.97

REC Trading Volume and Price for August 2015

Though IEX
REC Type Buy Bid Sell Bid Total Volume Traded Equlibrium Price No. of Participants Date of Auction
(REC) (REC) (REC) (INR/REC)
Solar 26,402 1,744,953 26,402 3,500 308 August 15
Non Solar 77,236 8,355,780 77,236 1,500 675
Source : IEX

Though PXIL
REC Type Buy Bid Sell Bid MCP MCV Date of Auction
(No. of certificates) (No. of certificates) (INR/Certificate) (No. of certificate) Qty (MWH)
Solar 30,045 3,986,936 1,500 30,045 August 15
Non Solar 15,526 835,053 3,500 15,526
Source : PXIL
 September 2015
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InfraWatch
Container freight rates becomes
the first casualty of slump in China

66

! In less than three months, rates to hire container space to import from China have fallen by 64%
! Cost of shipping a 40-foot container from Shanghai port to JNPT has dropped to $300

Infraline Bureau

A sharp decline in trade has led to an
overcapacity in the cargo shipping
industry. Freight rates have fallen off a
cliff as more signs emerge that Chinas
economy is slowing. Data shows that
Chinas factory output in August fell to
the lowest in three years. Rates to hire
lines and freight forwarding agents
said. An exporter can ship a 40-foot
container to China for as low as $5,
two Mumbai-based freight forwarding
agents said.
Shipping lines and agencies
that buy container space for resale
customers happy and prevent
containers going empty, industry
executives said.
The freight rate crash is a
throwback to Indias airlines cutting
fares as low as `1 to prevent seats
3$"
$#[
container space to import from China are offering heavy discounts, and shipping rates occasionally tip into
have fallen by 64 per cent in less than even paying their clients up to $25 so-called negative freight category

  


" per container, as they try keeping where exporters sometimes get paid to
 September 2015
www.InfralinePlus.com


travel empty to China.
The collapse in container freight
rates is nothing short of a bloodbath.
Days are here where shipping lines

are carrying containerized cargo for
negative freight, said C.R. Nambiar,
an executive of a shipping agency
based in Mumbai. In other words,
shipping lines are carrying containers
to Singapore and China for paying
the shipper money anywhere between
$10 to $25.
area to reduce losses. They keep
moving their inventory at any cost
and, in the process, damage the whole
freighting discipline, he said.
However, another executive from
NVOCC countered the argument.
Yes, there is heavy undercutting
going on to tide over the crisis for
now. But the market should not forget
that death of NVOCCs will lead to
a monopolistic condition dominated
by shipping lines, the executive said
hinting that NVOCCs are checking the
pace in seven months. Commerce
ministry data on 14 August showed
both exports and imports contracted
10.3 per cent in July, leading to a trade
 #"
high. In comparison, Chinas exports
fell 8.3 per cent in July, its biggest
drop in four months.
Though the yuan devaluation
has sparked exchange rate volatility
and is expected to further erode
competitiveness of Indian shipments,

$>"
Attributing the negative freight dominant position of shipping lines. will only have a temporary impact on
to the presence of a large number of Another executive at an the rupee as India has adequate foreign
non-vessel owning common carriers 

"  exchange reserves.

(NVOCC), Nambiar said that these shipping rates have crashed more than Freight rates to and from Ningbo,
entities buy space in shipping lines 60 per cent in the past three months. Shanghai and Shenzhen in China are
and resell them to actual exporters. Indias merchandise exports seeing dynamic changes, said Hiren
NVOCCs are only interested in contracted for the eighth month in Trivedi, logistics head at freight
rotating the containers within a trading a row in July, though at the slowest " <$#
Ltd. Trivedi said rates crashed mainly
due to the decline in exports from
Indias merchandise exports contracted for India and imports from China. 67
the eighth month in a row in July, though at Cost of shipping a 40-foot container
the slowest pace in seven months. Commerce from Chinas Shanghai port to Indias
ministry data on 14 August showed both Jawaharlal Nehru Port is now around
exports and imports contracted 10.3 per cent in $300 compared with $850 three
July, leading to a trade deficit of $12.8 billion, months ago, according to two freight
an eight-month high. In comparison, Chinas forwarding executives.
exports fell 8.3 per cent in July, its biggest drop ' :
in four months shippers can send an export container
for free in many cases. He also pointed
 September 2015
www.InfralinePlus.com

InfraWatch

out that Indian freight forwarders are purchase of Chinese goods costlier for located near Jawaharlal Nehru Port
receiving so-called kick-backs from European importers, he said. '*'"
their Chinese counterparts. If so, this is grist to the mill of those shipper. But where is the cargo?
Citing the troubled times, arguing that China timed its switch to He said that its a double whammy
|
"" a market-driven exchange rate in order
incentives of $5-10 in certain cases
as a prize for nominating an Indian
shipper who is willing to send or
receive a consignment, Trivedi said.
Data from the Port of Hamburg
released also show much damage
this currency surge may be doing to
Chinese companies. Axel Mattern, the
ports chief executive, said a 10.9 per
cent drop in trade with China was the
chief reason why volumes of container
cargoes passing through the port fell 6.8
for Indian shippers as there is little
to disguise what is really currency
warfare, or a beggar-thy-neighbour
strategy as it used to be known. The
Chinese central bank has dismissed
such claims as nonsense. It has
intervened to stabilize the yuan.
The port of Hamburg said trade
with Russia collapsed by 36 per cent,
the latest evidence that the rouble
crash and deepening recession has
forced Russian consumers to cut back
drastically on purchases of imported
cargo to ship out of India and little to
bring into the country. An executive
from Container Shipping Lines
Association, an Indian shipping lines
lobby, said rates to China and Europe
have crashed more than 50 per cent.
Shipping lines are going to incur
huge losses. I dont see any imminent
revival in the freight rates, the
executive said.
China is Indias largest trading
partner, followed by the US and the
%
# cars and heavy goods. United Arab Emirates. The latest data
*_"%
 
the years the euro was on average 19 Who benets?
per cent lower than the yuan, making An executive from a freight forwader
Unless the overall export volume increases, the
68
situation is likely to continue in this manner.
Large agro commodities that normally get
traded are at a standstill nowonion, soya, raw
cotton, to name a few. Besides, the hard fact is
that unless China buys from India, there is no
escape for Indian container freight rates
released by the statistics department
recently showed Indias gross domestic
product (GDP) growth slowed to 7 per
cent in the April-June quarter from 7.5
per cent in the January-March quarter
as measured at market prices.
There are more troubles for China.
For China, the Purchasing Managers
Index (PMI) was 49.7 for August,
matching the median estimate in a
Bloomberg survey and down from
50 in July. A reading below 50
indicate contraction.
Unless the overall export volume
increases, the situation is likely to
continue in this manner. Large agro
commodities that normally get traded
are at a standstill nowonion, soya,
raw cotton, to name a few. Besides,
the hard fact is that unless China
buys from India, there is no escape
for Indian container freight rates,
Nambiar said.
But the scene could be worse, if as
a result of the current impasse, a few
lines or NVOCCs were to pull out. At
present, the ships are sailing largely
because of lower bunker or ship fuel
costs. Its time the government takes
a serious look at the growth of Indias
exports, Nambiar said.
For suggestions email at feedback@infraline.com
 September 2015
www.InfralinePlus.com

OffBeat
India moves forward towards
solarisation of agriculture
Maharashtra plans to replace half a million pumps with solar-pumps
States bear huge expenses on servicing agricultural connections

69

Infraline Bureau

India deploys about 19 million electric a million electric pumps with solar- $#>:

pumps to water its agriculture produce powered agriculture pumps over the towards the solarisation of agriculture,
and government gives subsidy of
$
" industry experts believe that there
over `67,000 crore to the agriculture
sector. States such as Maharashtra,
Andhra Pradesh, Gujarat, Rajasthan
are planning to replace these pumps
with solar powered agriculture pumps.
The state of Maharashtra earlier this
year announced plans to replace half
%$#_
this December.
Other states, including Andhra
Pradesh, Bihar, Gujarat, Karnataka,
Rajasthan and Telangana, have too
planned similar steps. The central
government wants to give capital
subsidies for 100,000 solar pumps
are few important questions need to
be answered. What is the potential of
solar-based irrigation? Are there cost-
effective ways to increase deployment?
And, what potential downsides need to
be mitigated?
India has 19 million electric pumps,
 September 2015
www.InfralinePlus.com
OffBeat
which roughly accounts for 22 percent
of power sales (against eight per cent
of power revenues). The agriculture
power subsidy burden was close to
`67,000 crore in 2013-14 and has
which are both expensive to run and
environmentally hazardous.
Indian agriculture is both under-
irrigated (net irrigated area is only 45
per cent) and over-irrigated (more than
(PMKSY) aims to give assured water
to all cultivable areas. However, it
has become increasingly challenging
to provide affordable irrigation
services through conventional
been rising steadily. Despite such high 60 per cent of irrigation is now from " 

government expenditures, farmers have groundwater). A severe groundwater environmental perspectives.
to contend with unreliable and poor crisis is looming in several states ]




quality power supply. On this account even as millions of farmers remain irrigation gaps, mitigate greenhouse
and due to long wait times for new vulnerable to the vagaries of the gas emissions and help farmers adapt
connections, more than 9 million diesel monsoon. The recently launched to climate change impacts. Pumpsets
pumpsets are also being used in India, Pradhan Mantri Krishi Sinchai Yojana (from 0.5 horsepower to 20 HP) could
be used for irrigation depending on
India has 19 million electric pumps, which the farm size, cropping pattern and
groundwater levels. The potential is
roughly accounts for 22 percent of power immense. Even if only 15 per cent of
sales (against eight per cent of power Indias pumpsets were converted to
revenues). The agriculture power subsidy solar, it would be equivalent to adding
burden was close to `67,000 crore in 2013-14 nearly 20 gigawatts of solar capacity
and has been rising steadily. Despite such }
""


` 
high government expenditures, farmers have HP). Five million solar pumps could
save 23 billion units of electricity or 10
to contend with unreliable and poor quality billion litres of diesel and 26 million
power supply. On this account and due to long tonnes of carbon dioxide annually.
70
wait times for new connections, more than 9 But high upfront costs impede
million diesel pumpsets are also being used deployment. Solar pumps roughly cost
in India, which are both expensive to run and around `100,000 per HP, almost 10
environmentally hazardous times costlier than diesel or electric
pumps. Central and state subsidies as
 September 2015
www.InfralinePlus.com

71

high as 90 per cent of the capital cost both to encourage the uptake of solar potentially lower total system costs (by
are offered. Such a high subsidy rate pumps on a large scale. reducing water demand and, hence,
$  Despite government support, would pump size and costs).
pumps had to be deployed at scale. Is a farmers invest in solar pumps? This Secondly, there are concerns around
budget neutral strategy possible? would depend on the cost of alternatives over-exploitation of groundwater, if
]"
" for farmers who have to wait for pumps have zero or low operational
expenses on awarding and servicing years to get agriculture connections. costs. Technical solutions are needed
agricultural connections. On ground Alternatives include investing in tatkal for remote monitoring and pump
experience suggests that a solar panel connections (about `1-1.5 lakh), using control (ABB is developing a mobile
would function well for 15 years. In the diesel pumps (about `70,000 annual application for the same) or integrating
same time period, the subsidy on every operational costs), or simply depending with soil moisture sensors. Other
[ on rains (with low crop productivity). solutions that could be explored include
be about `230,000 (net present value). Such opportunity costs associated with tying the subsidies for solar pumps to
The expenses include initial connection the choice of electric pumps, set against micro-irrigation and water harvesting
costs and recurring power subsidies.  " or even integrating with the grid (along
'
  make solar pumps attractive. with net metering). Such measures
the capital cost of a solar pump by up to Still, multiple challenges remain. could reduce water consumption or give
45 per cent. In states with close to zero First, how to make solar pumps farmers an alternative source of income.
power tariffs and/or higher connection $
 Thirdly, with limited market
costs, capital subsidies as high as
" 
: penetration currently, spurious and
60 per cent could be provided. So, products and new business models are poor quality products could adversely
instead of subsidising electric pumps, needed. For instance, Claro Energy  
#$
state governments could divert the
same resources as upfront solar pump
subsidies. They could provide capital
subsidies or interest rate subsidies or
is provides irrigation as service controls and performance benchmarks
by renting out mobile solar pumps are urgently needed, allowing
to farmers. Besides, solar pumps competent manufacturers and service
combined with micro-irrigation could providers to compete.
 September 2015
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OffBeat

All of the above solutions need sustainable irrigation in India. The programmes, which would
further research and pilot testing. be brought under one roof, are
Yet, solar pumps offer dividends Programs Amalgamated "
3"

"
 The newly launched Pradhan
PMKSY, 100 GW of solar energy,
and Make in India. If deployed
and scaled up, with appropriate
programme of the ministry of water
Mantri Krishi Sinchai Yojana resources, integrated watershed
(PMKSY), with an allocation of management programme of the
`50,000 crore spread over a period ministry of rural development and
 
="  $
"
 land resources, and the farm water
improved irrigation practices and major ongoing irrigation programmes management component of the national
groundwater monitoring, they could of the Centre to achieve a holistic mission on sustainable agriculture of
become cost-effective solutions for development of irrigation potential. the department of agriculture.
The scheme also aims at bringing
the ministries, departments, agencies,
Solar pumps could help fill irrigation gaps, ""
mitigate greenhouse gas emissions and help creation, use and recycling of water
farmers adapt to climate change impacts. - under a common platform so that a
Pumpsets (from 0.5 horsepower to 20 HP) could comprehensive and holistic view of
be used for irrigation depending on the farm the entire water cycle is taken into
size, cropping pattern and groundwater levels. account and proper water budgeting
is done for all sectors - households,
The potential is immense. Even if only 15 per agriculture and industries, Agriculture
cent of Indias pumpsets were converted to Minister Radha Mohan Singh said.
solar, it would be equivalent to adding nearly Singh said it would be implemented
72 20 gigawatts of solar capacity (assuming an in project mode, which means the
average pump size of five HP). Five million solar district administration draws up its own
pumps could save 23 billion units of electricity irrigation plan with the help of district
  
or 10 billion litres of diesel and 26 million other departments. The state irrigation
tonnes of carbon dioxide annually plan will be an amalgamation of all
district plans.
*'" 
the programme for effective
implementation and monitoring is being
formulated in consultation with the
departments concerned and ministries,
and will be issued soon, the minister
said. The PMGSY was one of the big
poll promises of the BJP. Finance
Minister Arun Jaitley allocated `5,300
crore towards this in the budget for
2015-16.
>" 
2011-12, around 46.34 per cent of
Indias net sown area of around 140.80
million hectares was under irrigation.
In 2000-01, around 40.5 per cent of
net sown area was under irrigation,
a rise of around 5.8 percentage point
in a decade.

For suggestions email at feedback@infraline.com

RNI No: DELENG/2012/45441