April 2017

Volume 5 | Issue 12 | `100

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The Complete Energy Sector Magazine for Policy and Decision Makers

Digital Transformation
beckons Indias energy landscape

Amendments to Mega Power Small hydro projects

Policy to bring much needed need special
relief to private developers treatment

Alok Perti Suyash Gupta Yogendra Prasad Mahadevan Anand

Former Coal Secretary Director General Former chairman Managing Director
Government of India Indian Auto LPG Coalition NHPC ANDRITZ HYDRO Pvt Ltd
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InfralinePlus
The Complete Energy Sector Magazine for Policy and Decision Makers
April 2017 | Volume 5 | Issue 12

Editors Letter Editorial

Shashi Garg, Editor
Indian energy landscape is undergoing a tectonic
shift thanks to the pressures of urbanization, rapid
expansion of renewable-based capacity as well News Team
as various other energy efficiency measures being Ashok Kumar
taken by the Government. All of this has created a
new ecosystem, wherein every element must fall in
place to ensure a smooth transition. This is where the Analyst
importance of digitization cannot be overstated. Kalyan Verma
As India marches ahead on aggressive power
capacity addition through renewables and distributed
generation, it needs to be fully prepared as well as equipped to address
Content Consultant
challenges arising from grid instability. Data collection and exchange are growing
News Monster
exponentially and managing this data will be critical for the country, for there are
both threats as well as opportunities. The solution to this lies in digitization and
this is where the country will have to invest heavily to leapfrog into Era 4.0.
Today, the country has reached at the point of transition to a new era where
power generated from clean sources will be at a premium, networks will need to Business Development
be flexible to the incorporation of new low-carbon technologies and customers
Manoj Narang, Director
will demand greater insight and control over their own consumption with greater
Tel.: 0120-6799106 / 100
use of Information and Communication Technology (ICT), more than ever before.
Email: manoj.narang@infraline.com
Expanding the use of smart grid technologies will also be instrumental as India
strives to rapidly increase generation from variable renewable sources. We feel
it is high time that the country embraces the digital revolution for sustainable
use of its energy.
Advertisement
Talking of capacity addition, India brought a major policy reform in March
by amending the Mega Power Policy. This is indeed a welcome move and it Ashwini Solomon
couldnt have come at a better time given the rising number of Non Performing Tel.: 0120-6799157/100
Assets in the power sector which, as per reports, has crossed a mammoth Mobile: +91 9811708110
Rs 1.5 lakh crore! The banking community has been facing a torrid time in
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recovering its loans and this policy intervention is expected to strike the right advertising@infraline.com
cord among investors.
Having said that, the country needs to utilise its natural resources judiciously.
This is where we must accelerate exploration of Underground Coal Gasification
(UCG). This technology can play a crucial role in harnessing energy given Circulation & Subscription
the huge coal reserves and particularly low and deep seated coal resources Sneha Pandey
in India. Due to increasing gas prices and limited availability of natural gas in Tel.: 0120 6799125
regional consumer markets, investments in coal gasification technology is the Email: sneha.pandey@infraline.com
need of the hour.
India must also promote its other sustainable source of energy Hydro power.
The New Hydro Power Policy is expected to bring much needed relief for hydro
power developers who have been intending to develop mega hydro projects. Form IV
The Government is also keenly working towards reducing the cost of generation Periodicity of its Publication: Monthly
from hydel sources which augurs well for the sector. At the same time, adequate Printers / Publishers /
Mrs Shashi Garg
attention must also be given to develop pumped storage hydroelectric projects Editors / Owners
which can go a long way in meeting power requirement during day time when Nationality Indian
power frequency is high. Simultaneously, India must harness Small Hydro Address
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 April 2017
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InfralinePlus

Contents
Editors Letter
3

Cover Story 34
Digital transformation beckons
Indias energy landscape
The development of a fully-fledged,
low-carbon economy with increasing
deployment of renewable sources
will require changes to the existing
transmission and distribution
infrastructure. Smart technologies
will be a vital component of this
transformation. Increasingly,
consumers expect reliable supply,

34
clean energy, responsive service, new
facilities and cost efficiency from their
utilities. Smart grids can enable all that
4 and more.

Power
6 18
News Briefs p6
In Conversation: Mahadevan Anand, Managing
Director, ANDRITZ HYDRO Pvt. Ltd p10
In Depth: Amendments to Mega Power Policy to bring
much needed relief to private developers p12
Statistics p16
Coal
News Briefs p18
Expert Speak: Alok Perti, former coal secretary,
Government of India p22
In Depth: Commercial coal mining talks gather steam
once again p25
In Depth: Underground Coal Gasification: India needs
to probe further p29
Statistics p32

Topics Covered Topics Covered

Hydro power policy Coal mining
Thermal capacity Coal transportation
Non Performing Assets Underground coal
 April 2017
www.InfralinePlus.com

Oil and Gas Renewable

41
News Briefs p41
In Conversation: Suyash Gupta, Director General
Indian Auto LPG Coalition p44
In Depth: Marketing and pricing freedom to give CBM
producers a leg-up p46
In Depth: Petchem manufacturers on capacity
expansion overdrive p50
Statistics p54
56
News Briefs p56
Expert Speak: Yogendra Prasad, former chairman,
NHPC p61
In Depth: Small hydro projects need special treatment
 p63
Statistics p66

Topics Covered Topics Covered

Petroleum demand Small hydro
Alternate fuels Carbon emissions 5

Petrochemical growth Financial incentives

Expert Speak/Interview

Mahadevan Anand, Alok Perti,

Managing Director, Former Coal Secretary,
ANDRITZ HYDRO Pvt. Ltd Government of India

Off Beat
Port sector on cusp of explosive growth 68
Reports & Studies
71
People in News
Suyash Gupta,
Director General,
Yogendra Prasad,
Former Chairman,
73
Indian Auto LPG Coalition NHPC
 April 2017
www.InfralinePlus.com
NewsBriefs | Power National
19 states under Uday invoked tariff revisions
About 19 of the total 22 states that have
joined the Ujwal DISCOM Assurance Yojana
(UDAY) programme has invoked revisions
in the tariff structures till December 2016,
said a report by CARE Ratings.Uday is the
financial turnaround and revival package
Government falls way short of renovation and maintenance targets
The renovation and modernisation of ailing
thermal power plants under the 12th Five
Year Plan has been severely affected by
poor financial condition of state utilities
6 as a mere 4,702.26 MW capacity could be
modernised against the planned target of
around 30,000 MW for the period 2012-17.
Higher project cost of more than 1.5-2.0
crore/MW made companies apprehensive
to go ahead with the renovation and
maintenance (R&M) exercise. The poor
financial conditions of utilities on account
of higher outstanding from the discoms
had been another cause of concern. State
utilities undertook modernisation or life
extension for 15 power units of around
China poses security threat in power sector
A bid by Chinese, state-owned companies
to enter Indias power transmission sector
has raised national security concerns in
Indian power gear circles. Local power gear
makers lobby group, the Indian Electrical
Equipment Manufacturers Association
(IEEMA), has raised a red flag over the
issue. IEEMA has cautioned against the
associated risks if Chinese firms are
allowed to bid and operate transmission
projects in India.After entering the
consumer goods and power generation
equipment market in India, Chinese firms
are now eyeing the nascent transmission
sector where multi-billion dollar contracts
are up for grabs.China Southern Power
for electricity distribution companies of
India (DISCOMs) launched by Power
Minister Piyush Goyal in November 2015.
The revival roadmap is through allowing
the concerned state governments to take
over 75 percent of their debt and pay back
the lenders by selling bonds. Discoms were
allowed to issue bonds for the remaining 25
per cent of their debt. Uday has put a target
of 15 per cent for aggregate technical and
commercial (AT&C) losses and presently
three of the 16 states on which information
is available have a number of less than 15
per cent, the report added.Four states,
Bihar, Jharkhand, Manipur and J & K have
losses of over 30 per cent while UP is close
to this mark at 29.3 per cent.
2,230 MW capacity, while the central
utilities modernised or took life extension
for 17 power units or 2,472.26 MW capacity
as of December 31, 2016, as per the Central
Electricity Authority Report.
subsidiary of state-owned China Southern
transmission networks in India. Several
Finance ministry pulled up for
slashing power funds
At a time when the Centre has given
a commitment to provide electricity
access to all households of the country
and 24x7 uninterrupted power supply,
a high-level parliamentary panel
has pulled up the finance ministry
for initiating budgetary cuts in the
allocations to the power ministry. At
the same time, the power ministry has
been advised to use funds allotted to
it as per their original demand so that
targets are fulfilled. The parliamentary
committee on energy has noted that
against Rs 22,770 crore sought by the
power ministry for the forthcoming
financial year (2017-18), the finance
ministry allotted it only Rs 13,880 crore.
The Centre had sought Rs 12,600 crore
for its most prestigious scheme of rural
electrification (Deen Dayal Upadhyaya
Gram Jyoti Yojana). However, it received
only Rs 4,841 crore from the finance
ministry for 2017-18.
Grid International (HK Company Ltd.), a
Power Grid Co Ltd., has partnered with
CLP India Private Ltd. to build power
Chinese firms are gearing up to participate
in bids invited by Central sector and State
sector utilities for establishment, operation
and maintenance of transmission lines for
periods ranging from 25 to 35 years.In
bids called for the inter-state transmission
system projects involving investments
worth more than Rs 3,000 crore, China
Southern Power has submitted qualification
documents to build, own and operate power
transmission networks in India.

NewsBriefs | Power National
Kudankulam becomes second nuclear plant to generate 1,000 Mw power
Unit 2 of Kudankulam nuclear power plant
reached its full capacity of 1,000MW recently,
becoming the second nuclear reactor in
the country to generate 1,000MW. Unit 1
which was re-started after maintenance
also touched 800MW at the same time. It
5-yr old power plants to be turned into super critical plants: Piyush Goyal
All power plants, which are over 25 years
old, will be phased out and converted into
super critical plants to augment generation
capacity and reduce pollution, Power Minis-
ter Piyush Goyal said. Goyal told Lok Sabha
that these old power plants of NTPC, which
together produced around 11,000 MW power,
will be phased out gradually and converted
into super critical plant.Such plants are
six to eight time less pollutant and will be
able to generate more power, he said. Goyal
said during 12th Plan till September 2016,
a total of 3,000 MW of inefficient thermal
generating capacity has been retired, which
will result in better utilisation of more ef-
ficient plants. The Minister said to revive and
NTPC clocks highest-ever annual gross power generation of 263.95 BU
NTPC and its group companies collectively
achieved highest ever cumulative gross
generation of 263.95 billion units during
current year surpassing previous annual
best of 263.42 billion units recorded in FY-16.
Generation of the group registered an annual
growth of 4.71% over last year.NTPCs pit
head coal stations, with total capacity of
25840 MW, recorded capacity utilisation of
95.71% on that day and cumulative monthly
capacity utilisation of 91.4% for March-17. As
many as 29 units of NTPC coal plants have
generated at a capacity utilisation level of
more than 100% on that day.NTPC stations
have continued excellent performance in
the current month with Vindhyachal station,
was learnt that both the units will generate
more than 1,800MW till mid-April when Unit
1 will be shut down for re-fuelling though
Unit 2 will continue power generation. Tamil
Nadu will get around 1,000MW from both
the units.We have a achieved a milestone
with Unit 2 early morning today as it touched
1,000MW. Since August last year, the unit has
been generating power at various capacities
and after reaching near full capacity, tests
were undertaken and the reactor was re-
started. Since then it has been generating
power, site director Hari Narayan Sahu said.
The unit will undergo further tests but will
keep generating power. Meanwhile, Unit 1 will
reach the maximum capacity of 1,000MW
and continue till mid April.
manufacture, supply, erection and
improve utilisation of the stranded gas based
power generation capacity in the country, the
Centre has sanctioned a scheme supported
with Power System Development Fund for
utilisation of gas based power generation
capacity for 2015-16 and 2016-17.
Indias largest power station having capac-
ity of 4760 MW, achieving highest ever day
generation of 114.254 million units at full
capacity utilisation. Mouda Thermal Power
station also recorded highest ever day gen-
eration of 31.2 million units on March 9, and
April 2017
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BHEL forays into power project
development
Bharat Heavy Electricals Limited (BHEL)
has commenced commercial operation
of its first 800 MW unit highest-rating
coal-based supercritical thermal power
plant. The milestone was achieved for
the first unit of the 2x800 MW Yeramarus
thermal power station of Raichur Power
Corporation Limited (RPCL), in Raichur
district of Karnataka. Significantly, the
commercial operation of this unit also
marks BHELs foray as a developer into
the field of power generation. Karnataka
Power Corporation Ltd. (KPCL) and BHEL 7
are the main equity partners of RPCL, the
owner and operator of this power plant.
BHEL did complete design, engineering,
commissioning of this state-of-the-art
supercritical project on turnkey basis. It
has supplied all the critical equipment
like boiler, turbine and generators,
electrical, key packages of balance
of plant, and has also carried out the
associated civil works.
solar generation of NTPC touched maximum
of 2.353 million units on March 12. NTPC, the
countrys largest power utility contributed
24 % of countrys generation. NTPC is the
third largest power company in terms of
coal based power generation capacity, 2nd in
capacity utilisation, 3rd in machine availabil-
ity and 7th in terms of electricity generation.
NTPC has total installed capacity of 48,188
MW from its 19 coal based, 7 gas based, 10
solar PV, one hydro and 9 subsidiaries and
joint venture power stations. The company
has capacity of over 23,000 MW under imple-
mentation at 23 locations across the country
including 4300 MW being undertaken by joint
venture and subsidiary companies.
 April 2017
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NewsBriefs | Power States
Discoms owe Rs 4,911.07 crore to Delhi govts power companies: CAG
Apex auditor CAG has pointed to
outstanding dues of Rs 4,911.07 crore
owed to the Delhi governments power
generation companies by private discoms,
forcing them to resort to heavy short term
borrowings. The performance audit report
of CAG tabled in the Delhi Assembly today
stated Outstanding dues of Rs 4,911.07
Tangedco cuts losses by Rs 2,000 crore in one year
Tangedcos losses have come down by
nearly Rs 2,000 crore over the past year,
the discom having ended this financial
year with a loss of Rs 3,675.76 crore. It
has seen a 5% increase in sale of power
8 due to which the revenue has increased
by Rs 2,000 crore and the cost of fuel has
also reduced due to availability of local
coal. The financial position of the discom is
considerably better after a record loss of
Rs 13,500 crore in 2013-14. With the debts
being taken over by the government under
the Uday scheme, the discom is hopeful of
a break-even in 2017-18, mainly due to the
interest cost coming down. In our budget
estimates we thought we will end the year
Discoms in Odisha owe about Rs 7,000 crore to Gridco
Operating in losses for four consecutive years,
the state-owned bulk power trading utility
Grid Corporation of Odisha Limited (Gridco)
has outstanding receivables of more than Rs
7,000 crores from the four power distribution
companies (discoms) operating in the state.
Bulk of this outstanding dues are pending
against the Central Electricity Supply Utility
(Cesu), currently managed by the Odisha
Electricity Regulatory Commission (OERC).
The company owes Rs 2592.94 crore to Grid-
co as on December 30, 2016. The three other
discomsNorth Eastern Electricity Supply
Company of Orissa Limited (Nesco), Western
Electricity Supply Company of Orissa Limited
(Wesco) and Southern Electricity Supply
crore recoverable from discoms adversely
affected the cash flow of IPGCL and PPCL
and the companies had to resort to heavy
short term borrowings. The report found
that out of planned commissioning of six
power plants of 3,340 MW capacity by the
end of 12th five-year plan, only 1,500 MW
PPS-III, Bawana has been commissioned
while other projects have been held up due
to non-availability of either gas or land. It
also highlighted deficiencies in capacity
addition programmes, excess consumption
of fuel, non-achievement of generation
targets and plant load factor norms, by
the two power generation companies
during the period 2011-12 to 2015-16.
with a loss of Rs 6,374.17 crore in 2016-17.
But due to better fuel price and sale of
power, our loss has come down by half
of what we had anticipated, a Tangedco
official said.
Company of Orissa Limited (Southco)have
to pay Rs 1,410.41 crore, Rs 1,777.71 crore
and Rs 1089.27 crore respectively. These
three discoms are now functioning under
the supervision of Gridco since March 2015
Tamil Nadu seeks Rs 17K crore from
Centre for power infra boost
Tamil Nadu Electricity Minister P Than-
gamani met the Union Minister for Power
Piyush Goyal recently, pushing various
demands that included the release of Rs
17,000 crore to carry out improvement
works in a bid to make Chennais infra-
structure cyclone and flood resilient. The
conversion of 230 kV overhead transmis-
sion lines to 230 kV underground cables
and the conversion of existing Distribu-
tion Transformer structures to Ring
Main Units (RMUs) in the city were also
included in the estimate sought to be
given either as grant or as soft loan. The
minister also brought up the longstand-
ing demand for allocation of the entire
2000 MW, the total capacity of Unit 3
and Unit 4 of the Kudankulam Nuclear
power project, for Tamil Nadu. As per the
existing arrangement, Kerala, Karnataka
and Puducherry are also allocated power
from the project. The reason was Tamil
Nadu going to extraordinary lengths to
ensure the smooth commissioning of the
power project.
following revocation of distribution licences of
the Anil Ambani-led Reliance Infrastructure
Limited by the Odisha Electricity Regula-
tory Commission (OERC). While bulk of the
supply power bills of four discoms stood at Rs
3,320.26 crore, the outstanding loan including
the interest has swelled to Rs 2,343.59 crore
till the end of last year. The net worth of the
company has turned negative. Gridco reported
a loss of Rs 1455.49 crore in 2013-14, Rs
109.74 crore in 2014-15 and Rs 392.30 crore
in 2015-16. An inter-state trading license is a
prerequisite for trading of power outside the
state. The negative net worth of the company
has rendered it ineligible for obtaining such
license, according to sources.

NewsBriefs | Power International
IFC invests $100m in Pakistan hydro plant
The International Finance Corporation is
investing $100m in a 720 MW hydropower
plant in Pakistan. The IFC, which is part of
the World Bank Group, says the Karot run-
of-river project is one of the largest private
sector renewable energy projects in the
country and is needed to help address
severe power shortages and spur growth.
IFCs support for the $1.7bn project on
the Jhelum River marks the IFCs first
Australia floats $1.5 billion hydro upgrade to help plug power gap
The Australian government may spend
up to A$2 billion ($1.5 billion) to expand a
huge hydro power scheme to help solve an
energy crisis, although the main owners of
the dam have yet to be consulted. The idea
was floated by Prime Minister Malcolm
Turnbull as the country looks to plug a gap
in power and gas supplies that has already
led to blackouts and outages across the
eastern half of the country. Australia is
on track to become the worlds largest
exporter of liquefied natural gas (LNG), yet
its energy market operator has warned of a
domestic gas crunch from 2019 that could
trigger industry supply cuts and broad power
outages. The 2,000 megawatt expansion
Indonesia adds 500 MW into electricity grid from new mobile power plants
President Joko Jokowi Widodo recently
inaugurated the operation across the
archipelago of eight gas-based mobile
power plants (MPP) with a total capacity
of 500 megawatts (MW). Each of the eight
power plants has an electricity production
capacity of between 25 MW and 100
MW. They are located in Lombok in West
Nusa Tenggara, Bangka Island, Lampung
in South Sumatra, Pontianak in West
Kalimantan, Bengkalis in Riau Islands,
Belitung Island and Nias and Medan in
North Sumatra. Some of them have been
operating since last year. Mempawah,
home to some 250,000 people, is located
next to the West Kalimantan provincial
project finance engagement with China
Three Gorges Corporation (CTGC), one
of the worlds largest renewable power
companies. In 2015, IFC acquired a 15
per cent stake in China Three Gorges
South Asia Investment Limited, CTGCs
renewable energy platform company
in Pakistan, to help develop a series of
renewable energy projects in the country.
Pakistan has been suffering from a severe
power deficit resulting in load shedding
of over six hours per day on average,
hampering the countrys economic growth
and development. The Karot plant, which
should be operational in five years, is
expected to generate 2970 GW/h of net
energy annually.
of the Snowy Hydro scheme could power
the equivalent of 500,000 homes and meet
demand in peak periods in the eastern states,
Energy Minister Josh Frydenberg said. The
plan so far is just for a feasibility study to be
completed by the end of this year.
capital of Pontianak, whose new MPP
April 2017
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Fiji Parliament passes Electricity Bill
The Fiji governments next step to divest
shares in Fiji Electricity Authority and
to have an independent regulator was
taken as the Electricity Bill was passed
in parliament. The Electricity Bill is
a result of governments intention to
corporatise FEA and create a company
that will be registered under the
Companies Act 2015. Attorney General
Aiyaz Sayed-Khaiyum said the company
will subsequently be partially divested.
Under the Electricity Act 1966, the
FEA is currently enjoying monopolistic
status in the retail, transmission and
9
distribution of electricity in Fiji. FEA
also performs regulatory functions of
approval of licences and compliance
with safety standards. The new law also
has regulatory reform in the electricity
industry of Fiji. Sayed-Khaiyum said given
the proposed partial divestment, it is not
appropriate for the company to regulate
the electricity industry or to issue
electricity related licences.
can generate up to 100 MW of electricity.
The current government is aiming to
exponentially increase the amount of
power available to the nation by 2019
through an ongoing program to generate
an additional 35,000 MW of electricity.
The project is basically a continuation
of the attempt by then president Susilo
Bambang Yudhoyono during his first
presidential term in 2005 to generate an
additional 10,000 MW of electricity to
keep the reserve margins the difference
between capacity and peak demand
within the International Energy Agencys
recommended level of 20 to 35 percent.
 April 2017
www.InfralinePlus.com

InConversation
We are open to acquisitions in
the Indian hydro power market
With the new hydro policy expected to be finalised soon, the sector
is abuzz with new opportunities for developing mega projects. It is
felt that while enough attention is being given to renewable energy,
the hydro sector also needs to up the ante when it comes to
meeting Indias energy needs. In this regard, InfralinePlus speaks
to Mahadevan Anand, Managing Director, ANDRITZ HYDRO Pvt.
Ltd - a global supplier of electromechanical systems and services
for hydropower plants - on the challenges being faced by the hydro
sector and the companys growth plans.

How was Andritzs growth
performance last year in India as
well as globally?
Andritz has shown a steady and continu-
at the moment but we have our eyes
open. A very important milestone was
achieved in 2016 with the synchronis-
Mahadevan Anand, Managing Director, ANDRITZ
ing of all 6 units of 200 MW of the HYDRO Pvt. Ltd

10 ous growth in India for the last couple
of years. In spite of a complete slack in
the power sector, we managed to book
some good orders from the India region
as well as the South East Asian markets.
Looking at the anticipated orders ex-
pected in 2017, we are also enhancing
our capacity and increasing manpower.
Globally too there is a slump in the
hydro markets but the Andritz Group
has outshined in the pulp and paper
segment. Additionally, the company
has made important acquisitions in
China. Further, slow markets and com-
petitors that are aggressively reducing
their costs force us to have a close eye
on maintaining our competitiveness.
The acquisition of companies with
complementary products has been key
for Andritzs global success. However,
in India, with our existing state-of-
the-art manufacturing set-up, we are
also looking at expanding these units
by increasing the bays, which could
happen as early as Q1 2018.
We are also open to acquisitions in the
Indian market for specific products
which is very preliminary to talk about
Teesta III hydro project in Sikkim
which added 1200 MW to the national
grid. Andritz is proud to be the core
contractor for this important project.
What are the companys growth
plans for India? What will be its
major focus areas for the next
2-3 years?
Andritz is planning to double its
order intake in the coming 1-2 years
by focussing on key markets. We are
readying a work force of over 1500
skilled employees to tackle the ambitious
growth plans. We will continue to focus
on the hydro market and high capacity
multi-purpose projects. Additionally, we
are ready to increase our efforts in the air
pollution control segment, which has just
begun to take-off in India. Looking at the
Indian market in totality, we may also
bring in more products and technology in
diversified areas.
We are eagerly waiting for Indias
beleaguered hydro sector to pick-up
speed and with the much awaited
Hydro Policy which is expected within
2017, we would be keen to continue
our leading position in this space. The
policy will surely bring in much needed
relief for hydro power developers who
have been intending to develop mega
hydro projects.
While Andritz has already contributed
with supplies aggregating over 22,000
MW in India and Asia, we are clearly
focussing on clean green renewable
energy specifically in the hydro power
domain and continue to sustain our
leading position in the market.
What are some of the most
promising and emerging
technologies for the hydro power
segment? What are some of the
new solutions that Andritz plans
to offer to the market?
Global technology providers like An-
dritz focus and invest huge amounts on
R&D. We have developed technology
in plant automation, turbine efficien-
cies, created a complete water-to-wire
solution for hydro project developers
and also are the first foreign company
to set up an advanced coating facility in

India for under water parts to increase
plant life.
Another important and critical area
is the complete operation and mainte-
nance of hydro plants which we are now
actively involved. We also undertake
annual maintenance contracts for the
plants limited to the power house.
Further, we now have the complete
expertise in the service & rehabilitation
of hydro power plants. While we now
have this diversified portfolio, we have
also broad based our manufacturing
capacity to address the mini hydro
market by being capable of manufac-
turing and supplying turbines from 300
kW to 800 MW unit size in India.
What are your expectations on
equipment orders in the hydro
power segment in the next one-
two years?
While we are expecting the govern-
ment in India to revive the hydro
market, foreign companies like Andritz
who are perfect examples of Make in
India are not allowed a free hand at
bidding for projects through the G2G
bilateral route.The preference is mainly
given to certain government-owned
equipment suppliers, which nullifies
the very purpose of Make in India.
We are however hopeful that projects
totalling near 3000-4000 MW could be
tendered in the coming one-two years
in the Indian market.
What is your outlook for the
power sector in India in the next
few years?
With the focus shifting to environ-
mental concerns, coal is surely not the
solution for the future. Renewable en-
ergy like solar and wind are not alone
capable of justifying power demands
for the country. The only alternative
is from hydro power which is a clean
energy source. Unless the policy mak-
ers take cognisance of its importance,
we do not expect any big developments
to come by. Solar power is picking
up steam but hopefully the trending
levelised tariffs could end in a bubble
burst. We expect initiatives like UDAY,
Make in India, RPO and HPO to come
to aid in putting greater thrust in Indias
power sector.
The government intends to bring
hydro power under the ambit of
renewable energy, along with
small hydro. How will it impact
the sectors growth?
While we are expecting
the government in
India to revive the
hydro market, foreign
companies like Andritz
who are perfect
examples of Make in
India are not allowed
a free hand at bidding
for projects through
the G2G bilateral route.
The preference is
mainly given to certain
government-owned
equipment suppliers,
which nullifies the very
purpose of Make in
India
There are talks of the new Hydro Pow-
er Policy and bringing all hydropower
projects under the ambit of renewable
energy (RE). This if implemented,
would extend the benefits of RE to
all hydropower projects including
subsidies (Rs. 1.5 to 20 Crore/MW),
tax benefits and power off-take (RE
defined projects get preferential sale
of power). This in particular is aimed
at bringing relief to private develop-
ers. This will work absolutely fine if
hydropower comes under the RE ambit
especially considering the fact that the
share of RE has increased over 14%
from a mere 3% share in 2005.
April 2017
www.InfralinePlus.com
The government is considering
several ideas to reduce the cost
of power generation from hydel
sources, including the possibility
of gradual escalation of tariffs.
Your views?
This is a very crucial issue today.
Hydro power projects under imple-
mentation for the last couple of years
have faced inherent delays leading to
tariffs reaching as high as Rs. 5.5-6.5/
unit. Such uneconomic values make
the entire proposition unviable for
commercial use. Front loading of
equity could be one way to reduce
tariffs, introduction a minimum 15%
through HPO, lower interest rates and
tax holidays are other ways to help
reduce the saleable tariffs of hydro
projects. There are discussions on
these issues, which we hope will fruc-
tify in the coming months.
More than 6,000 MW of hydro 11
projects in India are currently
stressed. How has the slowdown
in the hydro sector in last few
years impacted the sectors
growth. Has financing been a
concern?
I would rather say that the hydro sec-
tor is in coma rather than a slowdown.
We have not seen any new projects
come up in the last 4-5 years. In spite
of over 83,000 MW of untapped
hydro potential in the country, we
have utilized less than 10% of this
potential. The hydro share in India
has been dwindling constantly for the
last 10 years. Today hydro contrib-
utes to about 14% against the thermal
figure. Secondly, there has been no
fresh infusion of equity in projects and
debt financing has almost come to nil.
These negative traits continue because
of project cost overruns coming from
geological problems, untimely clear-
ances, debt ridden IPPs and no clear
mandate from policy makers.
For suggestions email at feedback@infraline.com
 April 2017
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InDepth
Amendments to Mega Power Policy to bring
much needed relief to private developers

12

Amendments will help avoid potential stressed assets worth INR 1.5 lakh crore
To bring down power tariff for making electricity more affordable for consumers

By Team InfralinePlus

Cast your mind back to start of the new
financial year in April 2015 and we
were informed about the time ticking
bomb in the Indian banking sector. This
bomb was referred to the rising number
of Non-Performing Assets (NPAs) in
the infrastructure sector, especially
power. According to a CRISIL report
released in 2015, power projects with
around 46 GW capacity were said
to facing viability issues due to lack
of long-term purchase agreements,
inadequate fuel supply and aggressive
bidding to win projects. Out of this 46
GW, about 36 GW were coal-based
projects within which tariff under-
recovery has impacted 20 GW of ca-
pacities, while the rest were said to be
reeling because of inadequate feedstock
and poor electricity offtake by state
distribution companies (DISCOMs).
The remaining 10 GW of gas-based
projects have become unviable because
of dwindling fuel supplies from the
Krishna-Godavari (KG) basin, even
after the introduction of scheme to
bail out these projects through PSDF.
Loans to these projects were said to
be around INR 1.5-2 lakh crore, with
about two-thirds lent by public sector
banks. Of these loans, as much as INR
75,000 crore of loans or nearly 15%
of aggregated debt to power generation
companies are still at risk of becom-
ing delinquent in the medium term.
Fast forward to the new financial

year (April 2017) and post con-
stant discussions at inter-ministerial
levels, it seems there is relief in the
offing for private power developers
and developers of so-called mega
power projects. The government will
bring changes to the Mega Power
Policy (MPP) which is expected to
help projects worth over 30,000 MW
thermal capacity avail the benefits
of mega status. The amendments
will help avoid potential stressed
assets worth INR 1.5 lakh crore. This
initiative besides addressing concerns
of the banking sector stakeholders will
also bring down the power tariff for
making electricity more affordable
for domestic as well as industrial and
commercial consumers. Thermal power
plants of over 1,000 MW and hydel
projects of over 500 MW currently
enjoy mega power project status that
gives them exemption from excise
duty besides lower customs duty and
deemed export benefits.
Salient features of current &
likely amendments to Mega
Power Policy
It is proposed to extend the Mega
Power Policy benefits in proportion to
the extent of signed Power Purchase
Agreements (PPAs) as provided in Tar-
iff Policy 2006 once the threshold ca-
pacity of the Provisional Mega project
gets commissioned and also extend the
time period for Provisional Mega proj-
ects to get final Mega Status from 36
months to 60 months. The government
may also grant additional 60 months to
such projects where equipment has not
been imported yet in order for them to
avail fiscal benefits.
Over the last 2-3 years, states have
not called for competitive bidding
due to poor financial health of their
respective DISCOMs and of lack of
demand prompting a discussion on the
need to make the changes to the policy.
The policy currently requires the
developer to have long-term PPAs for
65 (host state obligation) - 85 percent
April 2017
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Fiscal, duty exemptions under Mega Power Policy
(a) Zero Customs Duty: In terms of the notification of the Government of India
dated 1st March, 2002, the import of capital equipment would be free of
customs duty for these projects.
(b) Deemed Export Benefits: Under Chapter 8(f) of the Foreign Trade Policy,
Deemed Export Benefits is available to domestic bidders for projects both
under public and private sector on following the stipulations prescribed
therein.
avail the benefits of the policy. With
This initiative besides the host states where 15 projects are
addressing concerns said to be located, demanding that 35%
of the banking sector of the electricity be allotted to them,
stakeholders will the developers were unable to meet the
also bring down the 85% competitive bid criteria. This is
power tariff for making likely to be reduced to 65% which
will benefit projects with a capacity of
electricity more 22,000 MW.
affordable for domestic Another policy change that is
as well as industrial and expected to help the developers, relates
commercial consumers. to releasing the bank guarantee furnished
Thermal power plants by them in proportion to the percentage
of over 1,000 MW and of capacity signed up by them through 13
long-term PPAs. Earlier, the bank
hydel projects of over guarantee was released only after 85%
500 MW currently enjoy capacity had been tied up for sale.
mega power project Through the amendments to the
status policy, tying of untied capacities is
expected to improve power availability
of a plants capacity through tariff- and ensure cash flows to these projects,
based competitive bidding in order to bringing relief to banks and financial
Figure 1: Evolution of Mega Power Policy
2014 - Policy amended and mandating
developers to tie up at least 65 percent
of installed capacity/net capacity through
competitive bidding and 35 per cent
under regulated tariff of host state under
long term PPAs
2006 - Post Finance Ministry's
notification (Department of 2017 - New amendments to
Revenue), import of capital
equipment to be free of
include a tax holiday for 10 years
and a waiver from customs duty
customs duty for mega power
projects 2009 - New Mega Power
on equipment imports. Also
proposed to extend the time
Policy was unveiled with an
objective to increase power
period for provisional mega
projects to get final Mega Status
availability, reasonable tariffs
and increased fiscal benefits
from 36 months to 60 months
and also to sign PPAs
for developers
1995 - Introduction of
Mega Power Policy to
incentivise capital
expenditure into large
power projects
Source: Ministry of Power (MoP)
 April 2017
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InDepth

institutions that have extended loans to and some of them were taking too capacity/net capacity through com-
such projects. long for finalizing the bids that were petitive bidding and 35 per cent under
received at that time. The developers regulated tariff of host state under
Evolution of Mega Power had requested that any power project long term Power Purchase Agreement
Policy: 1995 - Present tying up the long term PPA of their (PPA) with DISCOMs/State designated
The Mega Power Policy was intro- part capacity be given Mega benefits agency to avail benefits under the
duced in November 1995 for provid- proportionately. In other words, if any policy. The amendment had provided
ing impetus to development of large developer was able to achieve less this dispensation would be one time
size power projects in the country than 85% power tie up, they can be and limited to 15 projects which are
and deriving benefit from economies extended mega benefits in the pro- located in the states having mandatory
of scale and quick capacity addition. portion of the tied up PPA. host state power tie up.
Under Mega policy, fiscal benefits in In 2012, a list of 111 power projects,
the form of zero duty imports, income with a total capacity of 167 GW was NPAs in the power sector:
tax waiver etc., were extended to the frozen to enjoy mega power project An assessment
certified Mega power projects. status. Out of these, 25 were provi- While the gross NPAs in the sector
The Policy was amended in 2009 sional mega projects of independent had increased from 1.3 percent to 4.4
to make it liberal and operationally power producers (IPPs). As per the percent in financial year 2015-16, the
more effective. Amended Mega Policy original guidelines, no greenfield stressed assets as measured by gross
allowed the developers to tie up all project was to be given the mega status NPAs and restructured standard assets
power to even one state and as per after July 2012. The policy was later continue to remain steady, close to 14
National Electricity Policy they could amended in 2014 mandating developers percent last year. According to a data
also sell power upto 15% outside to tie up at least 65 percent of installed published by the Reserve Bank of
the long term PPA. Thus, the policy
stipulated that the private power
14
companies must tie up only 85% of
The Mega Power Policy was introduced in
power of the plant with DISCOMs / November 1995 for providing impetus to
State designated agencies through tariff development of large size power projects in the
based competitive bidding. country and deriving benefit from economies of
Based on the representation from
the industry that there had been delays
scale and quick capacity addition. Under Mega
in signing of PPA through competitive policy, fiscal benefits in the form of zero duty
bidding (which is mandatory for imports, income tax waiver etc., were extended
grant of mega power status), MoP to the certified Mega power projects
in consultation with Department of
Revenue, issued guidelines for issuance
of Provisional Mega Certificate where
the projects undertake to sign long term
PPA of at least 85% of plant capacity
within 36 months from the date of
issuance of such Provisional Mega
certificate, to enable the developers
to continue with the execution of the
project and tie up PPAs in that three
year period with an undertaking to that
effect backed by bank guarantee.
Developers had also represented that
even if they had commission the plant
they were unable to get the benefits of
Mega Policy as they were unable to
tie up 85% power through competitive
bidding because not many states are
calling bids for procurement of power
 April 2017
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Table: Stranded Capacity without PPAs capacities (10,000 MW) without PPAs
will be exposed to the vagaries of the
Under-
Commissioned Total Capacity short-term electricity market.
States Construction
Capacity (MW) (MW) The Ujwal Discom Assurance
Capacity (MW)
Yojana (UDAY), launched by the
Chhattisgarh 4636 990 5626
government for financial turnaround
Madhya Pradesh 1824 1200 3024 and revival of power distribution com-
Odisha 1315 - 1315 panies, will have definite impact on
Maharashtra 3098 1080 4178 the buying capacity of the distribution
utilities. But thats going to be more
Himachal Pradesh 1174 244 1418
long term and sustainability would
Sikkim 96 535 631 depend on the overall turnaround of
Uttarakhand - 76 76 the distribution segment.
Andhra Pradesh 1150 2020 3170
Gujarat 945 945 Way forward
Recent trends indicate that short term
Tamil Nadu 942 150 1092
(including day ahead) prices have
Karnataka 980 980 remained lower in comparison to the
Rajasthan 120 120 prices under LTPPAs. With the onset
Uttar Pradesh 198 198 of ambitious renewable energy (RE)
programme in the country, DISCOMs
Gas-based projects 5000 5000
will now have to tie-up significant por-
Total (in MW) 21280 6493 27773 tion of the RE capacity in order to fulfil
Source: Motilal Oswal Securities Limited (MOSL) document their renewable purchase obligations 15
(RPOs). This leaves very little scope
India (RBI) last year, the infrastructure for developers to sign LTPPAs (based
sectors share in gross non-performing Constraints of power on thermal power) with utilities.
assets of banks was 13.90 per cent in purchase agreements The policy decision is expected to
June 2016, higher than 12.69 per cent (PPAs) as well as fuel be welcomed by the promoters of the
in December 2015, and the power sec- supply agreements mega power projects as most of their
tors contribution to these numbers was projects have seen a sharp increase in
5.97 per cent in June 2016.
(FSA) are majorly re- cost because of execution delays, non-
Constraints of power purchase stricting these plants availability of fuel and depreciation of
agreements (PPAs) as well as from approaching the the rupee. However, a lot will depend
fuel supply agreements (FSA) are power market and find- on how Power Ministrys flagship
majorly restricting these plants from ing buyers. Further, scheme, UDAY, will help in complete
approaching the power market and revival of distribution segment which
finding buyers. Further, coal linkages
coal linkages are given in turn will allow DISCOMs to sign
are given to power plants on the basis to power plants on the PPAs going forward.
of Long Term PPAs signed by them. basis of Long Term With the increasing adoption of
However, since the past 2-3 years there PPAs signed by them renewable power (particularly solar) and
has been little or no activity on the growing preference for competitively
part of the DISCOMs to issue fresh though power generation has increased bid merchant contracts mean the thermal
tenders for long term PPAs (LTPPAs) and there is new installed capacity of power industry can no longer have
with power producers setting up power 12,000 MW, lack of power purchase the luxury of stable long-term PPAs.
plants under Case-1 Bidding. power agreements continues to keep However, with states adopting UDAY
Power plants are generally built on plant load factor at its lowest. There wholeheartedly and with amendments
a 70:30 debt equity ratio and if plant has been an increase in private sector to the mega power policy, the light is
load factor falls below 65 per cent capacities without PPAs in the last finally beginning to appear at the end of
return on investment falls to such a three years. If PPA signing does not tunnel for private sector developers.
low level that it becomes difficult for commence soon, by the end of fiscal
the company to service its debt. Even of 2018, nearly 15% of private sector For suggestions email at feedback@infraline.com
 April 2017
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StatisticsPower
Performance of Coal/Lignite Based Thermal Power stations during 2002-03 to 2014-15
Sp. Sec. Fuel
Sp. Coal oil cons. Partial Loss (%) due to
Capacity Generation PM Op.Av. Aux. (ml/ kWh)
Year PLF (%) FO (%) cons. (kg/
(MW) (MU) (%) (%) Cons (%)
kWh) Equipment LSD/ RSD
etc. (%)
2002-03 61152 383379 72.34 8.3 9.87 81.83 9.55 0.71 0.68 9.55 1.57
2003-04 62727 398412 72.96 8.59 9.48 81.93 9.91 0.7 2.3 9.09 1.98
2004-05 64646 415484 74.82 8.23 8.84 82.93 8.57 0.71 1.37 8.35 0.92
2005-06 66449 426138 73.71 9.48 8.74 81.78 8.44 0.7 1.77 7.08 2.1
2006-07 67596.5 451480 77.03 8.43 8.14 83.72 8.29 0.72 1.89 6.15 1.02
2007-08 70569.5 475552 78.75 7.5 7.71 84.76 8.17 0.73 1.4 6.3 0.52
2008-09 74914.5 498019 77.22 5.66 9.29 85.05 8.33 0.74 1.93 8.21 0.27
2009-10 80439.5 535433 77.53 6.05 8.85 85.1 8.34 0.72 1.51 7.57 0.46
2010-11 86137 553696 75.08 5.83 10.32 83.85 8.49 0.72 1.85 9.88 1.43
2011-12 97768 606684 73.32 5.93 11.46 82.61 8.44 0.72 1.83 8.34 1.09
2012-13 118024.5 689036 70.13 5.71 13.59 80.69 8.15 0.7 - 9.8 0.88
2013-14 132624.5 792477 65.56 5.02 17.64 77.35 8.16 0.69 - 8.96 3.16
2014-15 147297 878320 64.29 4.66 19.05 76.29 8.02 0.68 - 9.41 2.22

Details of energy shortage in the country during last two decades (FY1992 to FY2016)
Requirement Availability Shortage
16 Year
(MU) (MU) (MU) (%)
1991-92 2,88,974 2,66,432 22,542 7.8
1992-93 3,05,266 2,79,824 25,442 8.3
1993-94 3,23,252 2,99,494 23,758 7.3
1994-95 3,52,260 3,27,281 24,979 7.1
1995-96 3,89,721 3,54,045 35,676 9.2
1996-97 4,13,490 3,65,900 47,590 11.5
1997-98 4,24,505 3,90,330 34,175 8.1
1998-99 4,46,584 4,20,235 26,349 5.9
1999-00 4,80,430 4,50,594 29,836 6.2
2000-01 5,07,216 4,67,400 39,816 7.8
2001-02 5,22,537 4,83,350 39,187 7.5
2002-03 5,45,983 4,97,890 48,093 8.8
2003-04 5,59,264 5,19,398 39,866 7.1
2004-05 5,91,373 5,48,115 43,258 7.3
2005-06 6,31,554 5,78,819 52,735 8.4
2006-07 6,90,587 6,24,495 66,092 9.6
2007-08 7,39,343 6,66,007 73,336 9.9
2008-09 777,039 691,038 86,001 11.1
2009-10 830,594 746,644 83,950 10.1
2010-11 861,591 788,355 73,236 8.5
2011-12 937,199 857,886 79,313 8.5
2012-13 995,557 908,652 86,905 8.7
2013-14 10,02,045 9,59,614 42,431 4.2
2014-15 10,68,923 1,030,785 38,138 3.6
2015-16 11,14,235 10,90,713 23,522 2.1
 April 2017
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Average Power Purchase Cost (APPC) Details for different States/Discoms for
FY15 & FY16
State Discom APPC for FY16 APPC for FY15
BYPL - 3.78
Delhi BRPL - 4.19
TPDDL 4.12 4.09
SBPDCL 3.9 3.9
Bihar
NBPDCL 3.9 3.88
Jharkhand JBVNL 4.14 3.98
West Bengal WBPDCL 4.24 4.14
Chhattisgarh CSPDCL 3.09 -
Madhya Pradesh MP Discoms 3.53 3.16
MSEDCL - 3.75
Maharashtra R-Infra 4.14 4.51
BEST - 5.52
Haryana Haryana Discoms - 3.71
Kerala KSEB - 3.39
Tamilnadu - 2.62
BESCOM 3.89 -
Karnataka
GESCOM 2.83 2.38
17
AP AP Discoms 3.6 -
UK UPCL 2.61 2.51
J&K J&KPDCL 3.6 3.52
Goa Goa Discom 3.66 3.9
Telangana Telangana Discom 3.88 -
Meghalaya 2.48 2.49
Punjab 2.25 2.39
Himachal Pradesh 2.25 2.19
PVVNL - 4.41
Uttar Pradesh
NPCL 5.03 4.59
PGVCL 4.15 4.13
DGVCL 3.76 -
Gujarat
MGVCL 3.76 -
UGVCL 3.76 -
 April 2017
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NewsBriefs | Coal National
Coal supplies to power plants to depend on PPAs
Power companies that win coal contracts with
the Coal India Ltd (CIL) in the forthcoming
auctions will have to ensure that they sign
long and medium-term contracts for power
supply with discoms within two years. Coal
supplies to the power plants will start only
after they sign the power contracts. The Cabi-
Indias coal imports for blending halve in current financial year
Coal imports by power utilities for blend-
ing with domestic coal have halved during
April 2016 and January 2017 against the
previous corresponding period on account
of more coal being made available by Coal
18 India.According to data compiled by the coal
ministry, between April 2016 and January
2017, power utilities imported 16.6 million
tonnes of coal against 31.6 million tonnes
during the corresponding period in 2015-16.
The quantity of coal imported by the power
utilities in 2015-16 had decreased to 37.1
million tonnes from 48.5 million tonnes in
2014-15.In fact, total coal imports have
been consistently reducing over the last
three years. Between April and December
of 2016-17, 144.87 million tonnes of coal
Centre warns Odisha of moving away coal production as MCL miss target
The Centre has warned Odisha that Coal
India will have to move away its production
from the state if the government there does
not improve law and order situation and ac-
cused it of being very casual. Coal Secretary
Susheel Kumar said that the production of
Mahanadi Coalfields Ltd (MCL), a Coal India
arm, has been hit due to sporadic stoppage
of work at some mines due to protests and
it may miss the output target by 20 million
tonnes this financial year. Mahanadi Coalfields
Ltd. (MCL) is targeting production of around
167 million tonnes (MT) in 2016-17. Odisha
government is also very casual.... I conveyed
it to Chief Secretary (of Odisha) that if you do
net Committee on Economic Affairs (CCEA)
is likely to consider the new coal contracts
policy for power plants in its next meeting.
The clause was required to ensure misuse of
coal. However, private power companies call
the clause unfair as discoms have not been
floating power requirement tenders regularly.
They say the proposed auctions will put win-
ning companies at a disadvantage when they
compete for bagging power supply tenders
floated by state distribution companies. As per
the proposed policy, the government will auc-
tion coal for companies that have the letters of
assurance (Lo-As) for coal signed by state-run
Coal India with power plant developers.
was imported against 146.12 million tonnes
during the same period in 2015-16. Total coal
imports in 2015-16 was 199.9 million tonnes
as compared to 217.8 million tonnes in
2014-15.Over the last several months, Coal
India jacked up production and has managed
to ease supplies. This resulted in transition
from a coal deficit scenario to a surplus one.
problems, like relief and rehabilitation (R&R)
secretary, Coal, to Odisha to take stock of the
not do it (improve the law and order situation)
then we will move away from Odisha. We
will leave Odisha and do more production
from somewhere else in the next year, the
secretary asserted.Moving away implies that
Coal India will reduce the target of MCL and
raise the target of some other subsidiary. Coal
India targets a production of 598 MT in the
current fiscal of which 167 million tonnes will
Indias coal reserves could remain
unused in future: Piyush Goyal
Indias vast coal reserves could remain
unused in future, thanks to the expected
mega shift towards clean energy genera-
tion sector, the countrys power, coal, re-
newable energy and mines minister Piyush
Goyal said.In the evolving world energy
scenario, it is quite possible that Indias
coal reserves remain unused in the times
to come as we would be shifting towards
cleaner energy technologies like solar and
wind, among others, Goyal said. He added
the policies followed by the previous gov-
ernment have led to wastage of precious
foreign exchange reserves over the years in
importing coal and feeding domestic power
plants, overlooking the reserves the coun-
try has. Goyal said the country has seen a
huge ramp up in the production of domestic
coal in the last 3 years -- to the tune of
more than 100 MT -- but the quantity of
coal produced this year is less as compared
to the previous two years. The country has
the ability to produce more coal but it is
held back by market forces and that means
India will have sufficient coal in coming
years and imports would not rise, he added.
be contributed by MCL.There were serious
in MCL, the Secretary said, adding that he had
rushed a team of officials, including additional
situation. In MCL because of R&R issues
they (protesters) come and stop production....
you reach a stage when you have to proceed,
crack new ground. That can only be possible
if the people who are living there are shifted
to some other place. They (the villagers) are
not shifting, Kumar said.Coal India which
accounts for over 80 percent of the domestic
coal production is eyeing one billion tonnes
output by 2020.

NewsBriefs | Coal National
India has 80 million tonne of coal stocks at power plants and mines
India had total coal stocks of a whopping 80
million tonne (MT) at its power plants and
coal mines put together at the end of Febru-
ary, thanks to the ongoing slump in the de-
mand for power from distribution utilities and
the low capacity utilization of thermal power
stations.India is currently facing no difficulty
Satellites being used to check illegal mining
Satellites are being used for surveillance
aimed at checking illegal mining in the coun-
try and the data is quickly passed on to the
state governments for action, the government
told the Lok Sabha. The Ministry of Mines,
through Indian Bureau of Mines (IBM), has
developed the Mining Surveillance System
(MSS) in collaboration with the Ministry of
Electronics and Bhaskaracharya Institute
of Space Applications and Geo-Informatics
(BISAG) to use the space technology to
check illegal mining, Minister for Mines Piyush
Goyal said. MSS uses the Satellite Remote
Sensing Technology together with Informa-
tion Technology. MSS is a transparent and
bias-free system having a quick response time
and capability of effective follow-up, he said
NTPC okays Rs 3,000 crore investment for Talaipalli coal mining project
State-run power giant NTPC has approved
investment of Rs 3,004 crore for Talaipalli
Coal Mining Project which has an
estimated 18 million tonnes per annum
capacity in Chhattisgarh.In line with
the Corporate Disclosure requirements,
we wish to inform that the Board of
Directors of the Company has accorded
investment approval for Talaipalli Coal
Mining Project (18 Million Tonnes per
annum) at an appraised current estimated
cost of Rs 3,004 crore, NTPC Ltd said in
a statement.According to the statement,
coal mining is integral to NTPCs fuel
security strategies. NTPC realises that
in meeting its coal demand, said Piyush
Goyal, minister for Power, Coal, Renewable
Energy and Mines in a written reply in Parlia-
ment. The coal stock with thermal power
plants as on 28 February was 26.15 MT
(equivalent to 17 days requirement). Further,
the vendible stock with Coal India Ltd (CIL)
was 54.85 MT, a coal ministrys statement
said quoting Goyal. The minister also added
the government has taken steps to increase
the domestic production including efforts to
expedite environment and forest clearances,
pursuing with states for assistance in land
acquisition and coordinated effort with Rail-
ways for movement of coal.
in reply to questions.He said a user-friendly
mobile app has been developed for MSS
which is used by the inspecting officials of the
state governments to submit their geo-tagged
inspection reports.Using this mobile app, the
citizens can also report unusual mining activ-
ity which is likely to be illegal mining, thus
making it a participative and citizen-centric
monitoring system, the minister said.
April 2017
www.InfralinePlus.com
Competition Commission
imposes Rs 591 crore penalty on
Coal India, three subsidiaries
Fair trade regulator Competition
Commission of India has imposed a
penalty of Rs 591 crore on Coal India Ltd
for imposing unfair and discriminatory
conditions on fuel supply agreements
signed with power producers.It is
ordered that the fuel supply agreements
shall be modified in light of the
observations and findings recorded in
the present order. For effecting these
modifications in the agreements, CIL
shall consult all the stakeholders, the
commission in a 56 page order said.
The order comes on complaints from 19
Maharashtra State Power Generation
Company and the Gujarat State
Electricity Corporation against Coal
India and its subsidiaries -- Mahanadi
Coalfields, South Eastern Coalfields and
Western Coalfields. The total penalty is 1
per cent of Coal Indias average turnover
in the last three years which is Rs 5.9
lakh crores. The state-owned miner has
been directed to deposit the penalty
amount within 60 days.
greater self reliance on coal will go
a long way in ensuring the sustained
growth of power generation.NTPC has
been allotted coal blocks namely, Pakri-
Barwadih, Chatti-Bariatu, Kerandari,
Dulanga, Talaipalli and Chatti-Bariatu
(South), Banai, Bhalumunda and Mandakini
B. These mines have total geological
reserves of around 7.15 billion tonnes.
These blocks have production potential of
107 MMTPA catering to requirement
of 20,000 MW. Pakribarwadih has block
area of 46.26 sq km and mine capacity
of 18 MTPA with mineable reserve of
641 MMT.
 April 2017
www.InfralinePlus.com
NewsBriefs | Coal International
Chinas Jan-Feb coal output dips despite push to raise supplies
Chinas coal output fell 1.7 percent in the first
two months of the year, even after Beijing
urged miners to ramp up output to replen-
ish supplies during the cold winter months,
U.S. coal exports and imports decline in 2016
The United States remained a net exporter
of coal in 2016, exporting 60.3 million
short tons (MMst) and importing 9.8
MMst. U.S. coal exports fell for the fourth
consecutive year, down 13.7 MMst from
20 2015, with 2016 exports less than half
of the record volume of coal exported in
2012 (125.7 MMst). Slow growth in world
coal demand combined with supplier
competition was the primary factors
contributing to the decline in U.S. coal
exports. U.S. coal exports declined through
most of 2016 despite mid-year increases
in international coal prices. Lower mining
costs, cheaper transportation costs, and
favorable exchange rates continue to
provide a market advantage to other major
Indonesia port graft investigation disrupting coal shipments
Indonesia is cracking down on corruption
and widespread graft at some of its top coal
export hubs, disrupting shipments to destina-
tions across Asia. Indonesia is the worlds
top exporter of thermal coal, still the main
feedstock for global power generation. Inter-
ruptions to coals output and shipment can
impact seaborne prices of the fuel as well as
wholesale electricity markets. The investiga-
tions are targeting port operations along the
large anchorage area off Samarinda in East
Kalimantan, delaying ships waiting to load
new supplies from the regions mines. Police
initially raided four port facilities, including the
Samudra Sejahtera Stevedores Cooperative
reversing tough measures to cut the countrys
reliance on fossil fuels. Miners produced
506.78 million tonnes of coal in January and
February, the National Bureau of Statistics
said. That compares with 513.5 million tonnes
in the first two months of 2016 and 546.5
million tonnes in 2015.The Statistics Bureau
provided information for January and February
together to smooth the impact of the Lunar
New Year holiday, and did not give a separate
monthly breakdown. In November, the govern-
ment lifted a limit on the number of days ther-
mal coal miners can operate each year, in a bid
to meet surging demand from utilities during
the months-long winter heating season.
coal-exporting countries such as Australia,
Indonesia, Colombia, Russia, and South
Africa. Nearly 80% of the coal exported
by the United States in 2016 went to 10
countries. Declining exports to 9 of those
10 countries accounted for two-thirds of
the total drop in U.S. exports.
(Komura) office, a Transportation Ministry
statement said, based on allegations of
blackmail, corruption, money laundering, and
thuggery. East Kalimantan Police said that
authorities were targeting stevedores that
were asking coal companies in the Mahakam
Mitsubishi says it may sell stakes
in Australia thermal coal mines
Japanese trading company Mitsubishi
Corp may sell stakes in Australia thermal
coal mines as it presses on with a switch
to core assets such as coking coal after
slumping to its first-ever annual loss last
year, a spokesman said on. The Nikkei
business daily reported that Mitsubishi is
looking to unload its 31.4 percent stake
in the Clermont mine, and may also sell
stake in the Hunter Valley operation. The
firm plans to raise its stake in Canadas
Montney shale gas field, buying more
shares from partner Japan Oil, Gas and
Metals National Corp.We are considering
all options including selling a stake in
the Clermont coal mine and we have
hired Rothschild as financial advisor for
the deal, a spokesman said. Mitsubishi
is also considering whether or not to sell
its 32.4 percent stake in Hunter Valley
thermal coal mine in Australia after
its partner Rio Tinto decided to sell its
Australian coal assets to Chinas Yancoal,
the spokesman said.
area to pay extra fees to load ships. One coal
mining company had been asked by steve-
dores to pay 3 billion rupiah ($225,000) per
month in illegal fees based on tonnage. Such
fees had been charged on shipments since
last year and that police estimated Komura
had amassed several hundred billion rupiah
from the illegal charges. Transportation Minis-
ter Budi KaryaSumadi said in the ministry
statement he had asked police not to hesi-
tate in cracking down on all forms of illegal
fees.The crackdown follows coal shipment
disruptions that occurred last month, when
authorities put up road blocks in investigations
that prevented workers from accessing ports.
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 March 2017
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ExpertSpeak
Need to fast track modernization of coal
transportation to improve productivity
In this article, Alok Perti, former coal secretary, Government of
India, talks of the need to improve and modernize coal transporta-
tion infrastructure in India to increase coal production. Perti feels
that while there is still scope for improvement in movement of coal
by rail, especially in the major potential coal producing areas, there
is also a need for coal companies to set up modern coal handling
plants along with adequate coal washing facilities.

Coal production in India has been
constantly increasing with demand and
this has had a fall-out on the methods
of transportation being employed by the
coal companies and the coal users. In
1973 when coal mining was national-
ized, the production was about 80
million tons and this was mainly from
22 underground mines located in parts of
West Bengal and erstwhile Bihar. The
famous mines of Jharia and Raniganj
are in these areas. With exploration,
increasingly more and more areas were
brought under mines. The main areas
where coal was found are in the Gond-
wana belt which spreads over large
portions of the states of Jharkhand,
Odisha, Chhattisgarh, Madhya Pradesh,
Uttar Pradesh, West Bengal and Maha-
rashtra. Some coal is also found in the
North Eastern states but the origin of
this is different. Moving this mineral
out to the users requires an elaborate
transport infrastructure both for rail as
well as road. These coal bearing areas
in the country have unfortunately not
been the focus areas for development of
good infrastructure, as a result when the
demand for coal grew rapidly mainly
for power generation, movement of coal
to utilities became a major hurdle.
Trends in movement of coal
Coal is being moved from the mines to
the end users by various means. Rail is
the dominant means followed by road
and MGR (merry go round). Small
quantities are transported by belts and
rope conveyors. Table 1.0 provides
details of the trends noticed in the past
several years in coal movement.
It can be seen that the maximum
increase has been in road transport.
It has almost doubled
in the last ten
years. Rail
movement Establishment
has of adequate
improved coal washing
significantly
in the last
facilities is
four years. imperative
Movement
through MGRs
has been more or less
steady. This is because MGRs caters
to only pithead power stations and
establishment of such power stations
have considerable gestation periods.
While the number of such power
utilities is increasing, the coal supply
does not seem to reflect this increase
in demand. These figures are related to
the movement of coal from the mine
lease areas of CIL and SCCL against
linkages and movement of coal by other
private and public sector companies
from their captive mines or against
e-auction. Normally, a railway rake will
be transporting 3600 mts, except in the
North East where coal transport is still
being done through meter gauge rail
lines. If we presume that loading will
be on an average 300 days, then one
Alok Perti, former coal secretary, Government
of India
rake loading per day would mean
transportation of one million tons
annually. A truck is expected to
transport anything between 10 to
20 mts, depending on the capacity.
For transporting,one million tons of
coal by road would require anything
between 50,000 to 100,000 truck
loads. Moving coal in bulk through
road transport will lead to excessive
air pollution and extensive damage to
roads. For supply to power stations and
large steel plants, the mode of transport
should be rail and only small consign-
ments should move by road. Unfortu-
nately in India, coal movement by road
is increasing much more rapidly than
rail. The mail reason for this is the lack
of proper infrastructure for moving coal
by rail.
Inadequacy of rail
infrastructure
The main method of transportation
is the railways. Coal mining is being
expanded by Central Coalfields Ltd
(CCL), Mahanadi Coalfields Ltd
(MCL), Eastern Coalfields Ltd (ECL),
South Eastern Coalfields Ltd (SECL)

Table 1.0: Trends in movement of coal (2006-07 to 2015-16)
YEAR RAIL ROAD
2006-07 202.7 81.5
2007-08 212.8 101.7
2008-09 226.24 118.3
2009-10 236.47 127.6
2011-12 249.3 148.33
2012-13 276.1 142.4
2013-14 273.3 146.9
2014-15 296.8 150.6
2015-16 313.1 151.9
and Northern Coalfields Ltd (NCL).As
far CCL and ECL are concerned, the
North Karanpura area has the potential
to enhance annual production by about
70-80 million tons. In the master plan
prepared by CIL, there is a proposal
to build a rail network in the area to
evacuate the mineral. Since this area
is densely forested, the Ministry of
Environment did not give clearance for
forest diversion for several years and as
a result coal production had to be sup-
pressed. In addition, this area also had
insurgent activities which restrained
the establishment of rail infrastruc-
ture. Subsequently, the Ministry of
Railways had to re-align the railway
line squirting the forest. Finally, the
clearance was accorded in 2012 and the
work was to be started. This a project
to establish about 60 kms rail line. The
MOEF & CC later imposed a restric-
tion of rail movement during night in
the area. It is not known whether this
has been lifted. The work on this sector
has been initiated and is progressing
well. It is still a single line, though this
will require strengthening if the full
potential of the area is to be exploited.
Similarly, the Talcher and Ib valley
areas of MCL have additional potential
of producing about 80-100 million tons
annually. Here again there are rail lines
proposed. The progress has been tardy
mainly because it was taking years to
get environment and forest clearances.
Land acquisition in this area was also
difficult. The procedure of getting NOCs
March 2017
www.InfralinePlus.com
completed in the next 2-3 years.
CIL had initiated these proposals
MGR BELT ROPE
some 10years ago and this excessive
87.9 7.13 6.33 delay had resulted in the company
90.0 7.4 6.5 suppressing its production despite
92.8 15.94 8.83 having the necessary environment and
97..4 13.5 4.77 forest clearances. Expansion projects
of coal mines were also held up due to
86.8 13.1 3.7
lack of EC and Forest clearance. This
94.6 13.14 3.2 combined effect of lack of rail infra-
88.6 19.7 2.9 structure in critical areas and delay in
93.52 23.45 2.83 awarding EC and forest clearances for
98.2 28.14 2.43 expansion projects resulted in slow
growth of coal production.
from Panchayats under the provisions
of the Forest Rights Act is also quite Coal handling: Lack of
troublesome. Invariably, the quorum modern technology in mines
required for holding these panchayat- Besides the need to have a good and
sabhas was easily fulfilled and hence modern infrastructure of railway in the
meeting had to be convened by the col- coal mining areas, it is also necessary
lectors repeatedly for this purpose. to have rapid loading systems to ensure
The third critical area is the Mand- bulk movement of coal to large users.
Raigarh area in South Eastern Coal- A power plant of 1000 MW should get
fields Ltd. Here, the initiative taken by about 4.0 to 4.5 million tons annually 23
the state government to team up with to be able to operate efficiently at 85%
CIL and the Ministry of Railways to PLF. This would mean that such a power
expedite the implementation of the plant should be receiving on an average
project helped to move faster. IRCON of 4.0 rakes per day. Today, we are think-
was given the responsibility for both ing of mega plants of capacities of 4000
project formulation and execution. to 6000 MW. Getting 16 rakes of coal
The project envisages construction of every day would demand a very efficient
about 60kms of rail line in a large coal highly-automated system to unload and
bearing land area which has a huge convey to the boiler of the power station.
potential to produce about 70 million Similarly, mines producing 10 million
tons of coal annually. The project is tons and above would require a rapid
now progressing and is expected to be loading system. Conventionally, the
 March 2017
www.InfralinePlus.com
ExpertSpeak
coal companies had been loading coal
in rakes at railway sidings which meant
initial movement from mine to rail-
way siding by truck or tipper and then
either manual loading or with mechani-
cal shovels. This is a time consuming
process limiting the loading capacity. In
newer mines the coal is being crushed at
the mine-pit and transported by con-
veyor to the silo for rapid loading. Lack
of such modern facilities for transporting
coal within the mines not only limits
the loading capacities but gives ample
opportunity to unscrupulous transport-
ers to pilfer the coal. Except in Northern
Coalfields Ltd such facilities are not
adequately available and the progress
of establishing them is dismally slow
despite the urgent need to do so.
There is the classic case of a very big
mine in SECL where even the Ministry
of Environment, Forest and Climate
Change had given an ultimatum that
24 if a proper coal handling plant is not
established they would be constrained
to close the mine. Putting up a modern
system of coal handling can help to
increase the speed of loading of railway
rakes and also provide the necessary
arrangement required for installation
of auto analyzers needed to measure
the calorific value and hence determine
the quality. Unfortunately, despite the
coal company being flushed with funds,
the enthusiasm to set-up modern coal
handling plants is lacking.
Conditions imposed by MoEF
on movement of high ash coal
Most Indian coal as we know has very
high quantities of ash. Ash content
in most of the coal in India is around
40% and in some places even as high
as 52%. MOEF & CC had imposed a
restriction on movement of high ash
coal stipulating that coal of less than
34% ash will be allowed movement
beyond 1000 kms from the coal mines.
Further, no movement of coal having
more than 34% ash can be allowed
In newer mines the
coal is being crushed
at the mine-pit and
transported by conveyor
to the silo for rapid
loading. Lack of such
modern facilities for
transporting coal
within the mines not
only limits the loading
capacities but gives
ample opportunity
to unscrupulous
transporters to pilfer
the coal. Except in
Northern Coalfields Ltd
such facilities are not
adequately available
to environmentally sensitive areas.
Subsequently, in 2012 this limit was
proposed to be brought down to 500
kms. This should have been achieved
by 2014-15 but because of lack of ad-
equate coal washing facilities this date
has been extended repeatedly. The coal
companies are trying to set up a good
number of washeries but unfortunately
the process of tendering has been such
that in each case it is taking consider-
able time to place orders. In some cases
the matter has also been challenged
in courts. However, the end result is
that such a stipulation will put severe
restriction on the movement of coal
if adequate facilities for washing are
not established. With the current level
of production, there will be need to
beneficiate about 250-270 million tons
of coal and the present capacity includ-
ing the private sector is just about 130
million tons which is running at sub-
optimal efficiency (less than 50%).
Way forward
The improvement in movement of coal
by rail has been noticeable and despite
very good progress there is need for
further improvement. Firstly, there is
need to strengthen the rail infrastructure
in the three potential coal producing ar-
eas to a level that is adequate to handle
the increased production. There may
be need to have double or triple lines
in these areas. The Eastern Rail Freight
Corridor being constructed will be a
great boon for coal movement from the
eastern region to northern India, once it
is operational and connected to the rail
networks in the major coal producing
areas. The coal companies also need to
improve their internal arrangements by
setting up modern coal handling plants
in at least most large mines having
capacities of over 5 million tons. Fur-
ther, to be able to meet the requirement
of the MOEF&CC, the establishment
of adequate coal washing facilities is
imperative.
The views in the article of the author are personal
For suggestions email at feedback@infraline.com

InDepth
Commercial coal mining talks
gather steam once again
To contribute 500 million tonne annually to cater to the demand from other sectors
Peak deficit expected to come down to 2.5 per cent in the current year
By Team InfralinePlus
The clamor for introducing commercial
coal mining in India is picking up once
again, with government said to be de-
veloping a framework document which
is expected to be published for public
comment before the end of the current
financial year. This will likely pave the
way for inviting private sector min-
ers to bid for coal blocks to be put up
for auction exclusively for such use in
the next financial year (2017-18). The
government has decided to open com-
mercial mining of coal after more than
a year of deliberations. The coal blocks
allotted to states last year under the
new auction process were for captive
usage only and auction for commercial
mining was not permitted.
Next year (2017-18) in the coal
sector, we will allocate 25 mines.
Of these, two will be allotted and 23
auctioned, some for coking coal and
April 2017
www.InfralinePlus.com
25
some for sectors other than power,
like cement, and four for commercial
mining, it was recently announced by
the coal secretary.
With the amended Coal Mines
(Special Provisions) Act, 2015
already in play after being passed in
Parliament, mining and sale of coal is
open for private companies as well.
The idea of commercial mining has
been gaining ground because private
 April 2017
www.InfralinePlus.com

InDepth

sector/ mining operators have not Figure 1: Overall scenario for commercial coal mining
been able to achieve much even after
they were allotted blocks either on
Commercial
nomination basis or through auction mining and sale of
Post auction of The government is
last year. In fact, several operators have cancelled coal now finalising
coal is now
mines for end use, terms such as
not even been able to start production allowed under the
the government eligibility criteria
new Coal Mines
from blocks that are ready to produce. (Special
now mulling to and whether and
Since nationalisation of coal blocks award mines for how to set up
Provisions) Act,
market sale of coal revenue sharing.
in 1973, commercial coal mining has 2015
remained a monopoly of state-run
behemoth Coal India. India sits on
reserves of 301.56 billion tonnes and contribute 500 million tonne annually Will coal giants romance
annually produces roughly over 500 to cater to the demand from other to the idea?
million tonnes. The great majority of sectors/end use. Coal Indias (CIL) This move is likely to attract coal block
the output is produced by the public output has shown an impressive bids from Indian conglomerates such
sector monopoly, Coal India Ltd growth rate in recent months, but there as the Adani Group and GVK, but the
(CIL), practically the only producer of are still challenges to contend with. government should open up the sector
commercial coal. Lack of modern technology, issues quickly for leading world players, such
The decision to open up coal with manpower, land acquisition as BHP Billiton, Rio Tinto, Anglo-
mining to private companies is aimed and problems with environmental American and Peabody Energy to
at enhancing domestic production of clearances need to be addressed if the come in and do commercial mining.
coal to 1.5 billion tonnes/year by 2020. country is going to get anywhere close These companies have far greater
Commercial mining is expected to to its ambitious target. resources and access to technologies
26 to produce coal in a much cleaner and
Since nationalisation of coal blocks in 1973, efficient way. Over the past decade it
has been alleged that we do not have
commercial coal mining has remained a monopoly the technology, capability and capacity
of state-run behemoth Coal India. India sits on to do underground coal mining. This is
reserves of 301.56 billion tonnes and annually where the bigger companies can help
produces roughly over 500 million tonnes. The us, and this will also help us in cutting
great majority of the output is produced by the down our carbon footprints. But there
public sector monopoly, Coal India Ltd, practically are challenges in that too. Coal prices
are at multi-year lows amid global
the only producer of commercial coal oversupply, and foreign companies
have faced obstacles to investing in
India, such as problems in getting land
and environmental approvals. Some
private companies also worry that the
best quality mines would be left for
Coal India.
The challenge would be the
involvement of CIL (which controls
more than 80 percent of the nations
production) and how will the private
players respond to such competition
from the coal giant. It is expected that
large mines would allow commercial
miners to achieve economies of scale,
allowing them to compete with the
only commercial producer, CIL.
However, blocks would first be offered
to state government-owned entities so
 April 2017
www.InfralinePlus.com

It is expected that the investments and efficiencies that come with

this will help to address the shortages and efficiency problems.

Rationale for In particular, it is expected that such a regime would be the best
way to attract international best practices and technology to the
commercial countrys coal mining.
coal mining? It appears that this has been the experience in countries like Indonesia
where coal production has gone up rapidly after opening up the sector
to private participation, though questions have been raised about the
social and environmental sustainability of such an approach.

that they could commercially mine the An even bigger challenge lies in the Rationale for commercial
dry fuel and sell it in the open market. fact that the government will have to coal mining
It is expected that private miners will offer mines with reserves of more than Increasing coal imports have not only
be given the next chance. This may 1 billion metric tons to enable scale affected the countrys trade deficit
scupper the competition and put off of operation and use of technology and energy security, but also resulted
several biggies such as Adani Mining, and allow investors complete pricing in an increase in power generation
Jindal, GVK and GMR. freedom. costs. In turn, this has led to some
contractual disputes about who 27
Increasing coal imports have not only affected will bear the increased the cost of
power generation, due to ambiguities
the countrys trade deficit and energy security, in policies such as the New Coal
but also resulted in an increase in power Distribution Policy (NCDP). This
generation costs. In turn, this has led to some uncertainty about fuel supplies
contractual disputes about who will bear the and power generation cost has also
increased the cost of power generation, due to resulted in a significant amount of
ambiguities in policies such as the New Coal stranded power generation capacity.
Distribution Policy Is the timing right?
India has an ambitious plan to double
its coal production to 1.5 billion tonnes
a year by 2020, as part of governments
push to bring power to 300 million
people who lack proper access to elec-
tricity, and give a boost to manufactur-
ing and is to open up commercial coal
mining to private companies for the
first time in four decades, with the aim
of shifting the worlds third-biggest
coal importer towards energy self-
sufficiency.
However, the million-dollar
question that prevails - that by
introducing commercial coal mining,
is the government ignoring the current
scenario of demand-supply mismatch
in the coal sector. The country has
 April 2017
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InDepth
turned surplus and exploring export
options as demand has lagged rise in
production and dispatch.
While the production has been
increasing continuously there has
not been many takers of coal. Coal
demand has remained subdued; it did
not increase as per the increase in the
production. CIL has achieved 8.6%
increase in production this year so
far vs an average of 1-3% production
growth between 2009-10 & 2013-14.
Coal production grew by 6.9% in
2014-15.
At the same time, electricity demand
from financially beleaguered state
electricity distribution companies
(DISCOMs) has not shown similar
corresponding increase. The peak
deficit between power demand and
supply during last year was 3.2 per
cent. The government in its estimates
expects it to come down to 2.5 per cent
28 in the current year.
The government is not keen
on revising the coal production
target despite a Central Electricity
Authority (CEA) report not foresee
any immediate requirement for
fresh capacity addition from coal-
based source up to 2027. Given the
massive capacity addition plans in
the renewable sector, CEA estimates
there is no requirement for new coal
plants in 2022-27. This may lead to
significant demand-supply mismatch
in future. As per the records available
with Ministry of Coal (MoC) and
Coal India (CIL), supply of coal to
the power sector by state-owned CIL
saw a fall of 6 per cent at 33.7 million
tonnes in November 2016. The supply
of coal by CIL in April-November
period of the ongoing fiscal also
dropped by 4 per cent to 250.7 MT.
Based on demand projections
done in the draft national electricity
While the production
has been increasing
continuously there
has not been many
takers of coal. Coal
demand has remained
subdued; it did not
increase as per the
increase in the produc-
tion. CIL has achieved
8.6% increase in pro-
duction this year so far
vs an average of 1-3%
production growth
between 2009-10 &
2013-14
plan, CEA estimates new coal-based
capacity requirement of 44,085
MW in 2022-27. Since, 50,025 MW
of coal power projects already in
different stages of construction and
likely to yield benefits in 2017-22,
CEA does not foresee any immediate
requirement for fresh capacity
addition from coal-based source up
to 2027. Seeing the muted demand
from DISCOMs owing to recurring
financial troubles and increasing
preference towards buying power
through the exchange route, it will
become impossible for the government
to auction all the cancelled coal blocks
while also factoring in the record
production by CIL.
Conclusion
Pricing under commercial coal mining
and valuations of coal blocks at
the time of auction will be crucial,
since India has not yet established a
coal regulator, which is essential in
any free pricing regime. Harnessing
Indias coal potential is constricted
by political and socio-environmental
factors. Despite the advancements in
technology, it has failed to develop
adequate transportation infrastructure
to swiftly move coal freight. In
addition, substantial coal deposits lie
under Indias already shrinking forest
cover, which houses endangered
species and a large tribal population.
While the government needs to
fast-track other sources of energy
such as renewables, LNG and shale,
Indias dependence on coal means
it must find ways to ramp up coal
production. Commercial mining in the
coal sector should be one of the more
viable solutions but surely not the
only one. It is safe to say that talk for
commercial coal mining is once again
gathering steam. However, seeing the
phenomenal rise of renewable energy
sector in India, this steam may fizz
out soon.
For suggestions email at feedback@infraline.com

InDepth
Underground Coal Gasification:
India needs to probe further
Huge potential for coal gasification globally given its wide applications
CMPDI has identified 7 blocks for development of UCG technology in India
By Team InfralinePlus
Having signed the Paris Agreement
on climate change last year, India
has committed to cut down its carbon
emissions significantly by 2030.
However, at the same time, it cannot
afford to compromise on energy
security, which is a key component
for economic growth. To resolve
this dilemma, the country needs
to explore all possible options for
generating energy. One such option
is Underground Coal Gasification
(UCG).
Coal is the paramount source of
energy globally including in India.
A substantial amount of the worlds
coal resources are deeply sited to be
mined by traditional methods. It is not
technically feasible or economically
viable to mine all coal resources and
this is where UCG finds its usefulness.
Gasification that occurs underground
April 2017
www.InfralinePlus.com
29
can convert much of this stranded coal
into syngas without having to mine it
can then be used to produce power and
other useful products.
UCG uses a similar process as
surface gasification and it allows
countries that are endowed with
coal to fully utilize their resource.
In UCG, the actual process takes
place underground, generally below
1,200 feet. The underground setting
 April 2017
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InDepth

provides both the feedstock source as & Technology (S&T) pilot project at factors including coal type, operating
well as pressures. The main difference Merta Road Lignite Deposit was taken pressure andtemperature, water
between the two gasification up by the CIL/CMPDI for ascertaining ingress to the process, and the type
processes (surface gasification and the techno-economic viability of the of oxidant used (air or oxygen). The
UCG) is that in UCG the cavity project. However, on apprehension consequential syngas after cleaning
itself becomes the reactor so that of contamination of groundwater, the can be used either as raw material for
the gasification of coal takes place project could not be pursued further. synthesis of liquid fuels and chemicals
underground instead of the surface. UCG is a method of extraction including fertilizer/urea or as a fuel for
In order to provide energy security of energy from coal or lignite electricity generation.
UCG is envisaged in the country. In resources which are regarded as
India, the work related to development uneconomical to work through Policy framework
of UCG was initiated in early 80s conventional mining methods. In In December 2015, the central
by Coal India and Oil and Natural this method coal is converted into government approved a policy
Gas Corporation (ONGC) separately a combustible gas in-situ through framework for development of
with Soviet Experts. While CIL/ a physico-chemical process. The underground coal gasification in coal
CMPDI activities were confined produced syngas is a mixture and lignite bearing areas in India. The
to the coal seam having shallow of hydrogen, carbon monoxide, approved policy is broadly on the
occurrence, ONGC took up the studies methane, carbon dioxide and higher lines of existing policy for Coal Bed
in areas having occurrence of coal/ hydrocarbons. The composition of Methane development on revenue
lignite in deeper horizon. A Science the gas produced depends on many sharing basis is adopted for offering
the blocks through competitive
CMPDI is the nodal agency for all business relat- bidding. Subsequently, the Central
ed proposals and regulations related to UCG. It is Mine Planning and Design Institute
(CMPDI) has identified 7 blocks (5
30 also identified for conducting the bidding process Lignite & 2 Coal) for development of
and evaluation of bids. CMPDI, on two occasions UCG technology in India (Table 1.0)
had invited tenders from interested companies CMPDI is the nodal agency for
for operationalization of UCG projects earlier, all business related proposals and
however owning to various issues in absence of regulations related to UCG. It is also
any clear policy on UCG these were annulled identified for conducting the bidding
process and evaluation of bids.
CMPDI, on two occasions had invited
tenders from interested companies for
operationalization of UCG projects
Electricity earlier, however owning to various
issues in absence of any clear policy on
UCG these were annulled. Availability
of large amount of cheap natural

Usage
gas, the danger of contamination of
underground water, non-availability of
Further suitable drilling technology, and failure
Fertilizer
of processed
to produce
chemicals
to administer proper control over
gasification process are some of the

Syngas reasons which are becoming hurdle in

the process of making UCG as popular
fuel. However, with the efforts put in
by many countries over the years, the
technology of UCG has matured for
Transporta commercial application.
tion fuels In January 2016, an Inter-
Ministerial Committee (IMC) under the
chairmanship of Additional Secretary
 April 2017
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Table 1.0: Blocks identified by CMPDI for development

of UCG
S. No. Name of Lignite Blocks Type of Block Location of Block Benets of UCG
1 Sindhari West Lignite Barmer,Rajasthan No need for coal Mining,
2 ChoklaNorth Lignite Barmer,Rajasthan handling and transportation
No need for disposing of
3 Nimbalkot Lignite Barmer,Rajasthan ash or slag
4 Nagurda Lignite Barmer,Rajasthan Signicantly lower capital
cost for project
5 Dungra Lignite Surat,Gujarat development
6 Yellendu (Dip Side) Coal

7 Bandha-Singrauli Main Basin Coal

(Coal) was constituted for identification selection of suitable consultancy non-mined coal seams using injection
of areas to be offered, deciding organization for technical evaluation of of oxidants, and bringing the product
about blocks to be put to bidding or blocks for examining their suitability gas to surface through production wells
awarding to PSUs on nomination for undertaking Underground Coal drilled from the surface. The syngas
basis, proposing mechanism for Gasification (UCG) projects through eliminates surface damage and solid
bidding process and other related global bidding for UCG development. waste discharge, and reduces sulfur
matters. Recently CMPDI, on behalf dioxide (SO2) and nitrogen oxide
of MoC (Ministry of Coal) has invited Process of UCG (NOx) emissions in comparison to
an Expression of Interest (EoI) for The process of UCG is carried out in traditional coal mining and processing.
Underground combustion produces 31
There is a huge potential for coal gasification NO2 and SO2 and lowers emissions,
including acid rain. These kind of
globally, as the technology enables production initiatives can bolster Indias efforts to
of fuels and feedstock for many applications meet its clean energy commitments.
such as transport, chemicals production, heat India has pledged to reduce its
emissions intensity of its gross
and power generation. Even low grade coal can
domestic product by 33-35% by 2030
be used for gasification; the technology is of compared with 2005 levels.
primary interest in many regions There is a huge potential for coal
gasification globally, as the technology
enables production of fuels and
feedstock for many applications such
as transport, chemicals production,
heat and power generation. Even low-
grade coal can be used for gasification;
the technology is of primary interest
in many regions. Underground coal
gasification technology can play a
crucial role in harnessing energy given
the huge coal reserves and particularly
low and deep seated coal resources in
India. Increasing gas prices and limited
availability of natural gas in regional
consumer markets are driving factors
for investments in coal gasification
technology.

For suggestions email at feedback@infraline.com

 April 2017
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StatisticsCoal
Production and Despatch of Coal - FY12 to FY16 (Provisional & Actual)
Production [Million Tonnes] Despatch [Million Tonnes]

Year Type of Data Non- Non-

Coking Coking
Coking Coal Total Lignite Coking Coal Total Lignite
Coal Coal
Coal Coal
Provisional 51.654 488.286 539.94 43.105 51.528 483.624 535.152 42.5
2011-12 Actual 51.66 488.29 539.95 42.332 51.723 483.576 535.299 41.883
Change(A-P) 0.01 0 0 -1.79 0.38 -0.01 0.03 -1.45
Provisional 51.834 505.873 557.707 46.598 55.212 514.555 569.767 46.312
2012-13 Actual 51.582 504.82 556.402 46.453 55.859 511.277 567.136 46.313
Change(A-P) -0.49 -0.21 -0.23 -0.31 1.17 -0.64 -0.46 0
Provisional 56.818 508.948 565.766 44.271 58.302 512.949 571.251 43.897
2013-14 Actual 56.818 508.947 565.765 44.271 58.464 513.596 572.06 43.897
Change(A-P) 0 0 0 0 0.28 0.13 0.14 0
Provisional 57.451 554.984 612.435 48.257 56.614 551.016 607.63 46.941
2014-15 Final 57.446 551.733 609.179 48.27 56.438 547.334 603.772 46.954
Change(A-P) -0.01 -0.59 -0.53 0.03 -0.31 -0.67 -0.63 0.03
2015-16 Provisional 60.887 578.347 639.234 43.843 59.213 572.956 632.169 42.212
N.B1: P = Provisional Data; F = Final Data; D = Differences between the Final Data and the Provisional Data.
N.B2: The difference between the final and provisional figures is in general negligible and less than 0.5.
32
Inventory of Geological Reserve of Coal
Reserve (Million Tonnes)
As on Type of Coal
Proved Indicated Inferred Total
Prime Coking 4,614 698.71 0 5,313
Medium Coking 13,389 12,114 1,879 27,382
1/4/2015 Semi Coking Coal 482.16 1,004 221.68 1,708
Non - Coking 1,13,129 1,29,425 29,639 2,72,193
Total * 1,31,614 1,43,241 31,740 3,06,596
Prime Coking 4,614 699 0 5,313
Medium Coking 13,303 11,867 1,879 27,049
1/4/2014 Semi Coking Coal 482 1,004 222 1,708
Non - Coking 1,07,509 1,28,937 31,047 2,67,494
Total * 1,25,909 1,42,506 33,148 3,01,564
Prime Coking 4,614 699 0 5,313
Medium Coking 13,269 11,893 1,879 27,041
1/4/2013 Semi Coking Coal 482 1,003 222 1,707
Non - Coking 1,04,816 1,29,037 30,999 2,64,852
Total * 1,23,182 1,42,632 33,100 2,98,914
Prime Coking 4,614 699 0 5,313
Medium Coking 12,837 11,951 1,880 26,669
1/4/2012 Semi Coking Coal 482 1,003 222 1,707
Non - Coking 1,00,211 1,28,515 31,081 2,59,807
Total * 1,18,145 1,42,169 33,182 2,93,497
 April 2017
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List of Major Global Coal Traders

Sl No Coal Traders
1 GLENCORE
2 NOBLE GROUP
3 VITOL GROUP
4 TRAFIGURA
5 Global Coal
6 Global Coal Traders
7 MERCURIA ENERGY GROUP LTD
8 LOUIS DREYFUS HIGHBRIDGE ENERGY LLC
9 BULK TRADING SA
10 Phoenix Global DMCC
11 FLAME SA
12 Jera Trading
13 PSM Energy
14 Devi Group of Companies
15 KTC group
16 PEABODY ENERGY
17 Tata International Limited
18 China Shenhua Energy Company Limited
19 CEMEX 33
20 Swiss Singapore Overseas Enterprises Pte Ltd (SSOE)
21 RWE Supply & Trading

Overburden Removal of CIL and subsidiaries during 2015-16

(Figures in Million Cubic Metres)
Company 2015-16 2014-15 (% of Growth)
ECL 119.219 94.047 26.77
BCCL 148.591 103.901 43.01
CCL 106.778 97.378 9.65
NCL 338.089 210.614 60.53
WCL 155.146 122.914 26.22
SECL 175.367 158.268 10.8
MCL 98.414 89.221 10.3
NEC 7.304 10.185 -28.29
CIL 1,148.91 886.528 29.6
 April 2017
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CoverStory
Digital transformation beckons
Indias energy landscape
34
To increase efficiency, reliability & sustainability of power grid and systems
DISCOMs to make major investments in big data opportunities in next 5 years
By Infraline Bureau
Increasing urbanisation, rapid capac-
ity addition in the renewable energy
segment, energy efficiency measures &
trading and electric vehicle programme
are some of the important factors that
will bring a comprehensive change in
the energy landscape in India in the
next 10 years. Indias rapidly growing
economy has fueled an intensifying
demand for energy. India is now the
fourth-largest generator of electricity
after Japan, United States and China
though still comparatively low energy
access rate of 81% (World Bank, 2015)
leaving a considerable population
without reliable access to electricity.
The development of a fully-fledged,
low-carbon economy with increasing
deployment of renewable sources
will require changes to the existing
transmission and distribution infra-
structure. Smart technologies will be a
vital component of this transformation.
Increasingly, consumers expect reliable
supply, clean energy, responsive
service, new facilities and cost effi-
ciency from their utilities. Smart grids
can enable all that and more.
Infrastructure companies in Asian
countries have the advantage to leapfrog
ahead of those in the developed econ-
omies given the increasing investments
in greenfield projects in these countries.
Hence, these countries are expected to
have fewer legacy issues pertaining to
outdated systems, processes, techno-
logical capabilities, etc., which will have
to be addressed in the wake of techno-
logical advancements.
Digital innovations have already
begun to transform the energy industry
all around the world. They help open the

way for multi-directional energy flows in
the grid, for real-time demand adjustment
in response to supply patterns, for
creating a suitable energy mix from dif-
ferent sources and more. Together, these
changes brought about through digital
innovation will increase the efficiency,
reliability, and sustainability of the power
grid and other systems.
Enabling drivers for digital
revolution: Smart Grids
Indias journey from an ageing trans-
mission & distribution (T&D) to a
smart grid-enabled network infrastruc-
ture can have several enabling drivers.
Clearly transition from conventional
to renewable generation will throw up
radically new challenges. Identification
of the appropriate new technologies
and move to actualisation of the same
will be the need of the hour.
The challenges of climate change
and the continued growth of electricity
demand (albeit at tepid growth rate)
are putting increasing stress on Indias
electricity network infrastructure. The
existing distribution grid infrastructure
is primarily designed for one-way flow
of electricity and limited consumption
in the home. With the growing imple-
mentation of large-scale, intermittent
renewable energy generation, distributed
generation and electric vehicles, the
operational limits of the network as it is
currently designed will be reached.
The country is now at the point
of transition to a new era where
power generated from clean sources
(renewable energy) will be at a
premium, networks will need to be
flexible to the incorporation of new
low-carbon technologies and customers
will demand greater insight and control
over their own consumption with
greater use of Information and Com-
munication Technology (ICT), more
than ever before.
Expanding the use of smart grid
technologies will also be instrumental
as India strives to rapidly increase
generation from variable renewable
sources. Smart grid systems can help
integrate multiple, variable renewable
energy sources by directing the power
efficiently to electricity end users.
Particularly, in the context of recent
initiatives such as Digital India and
Smart City, consistent power supply is
a basic requirement.
Indias journey from an
ageing transmission &
distribution (T&D) to
a smart grid-enabled
network infrastructure
can have several en-
abling drivers. Clearly
transition from con-
ventional to renewable
generation will throw
up radically new chal-
lenges. Identification
of the appropriate new
technologies and move
to actualisation of the
same will be the need
of the hour
Figure 1: Opportunities for a utility driven by digital
revolution
Source: McKinsey & Company
April 2017
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Digital revolution for
utilities: Opportunities
The one important thing to remem-
ber what is happening on the power
network at all stages of the value chain
will only grow stronger, and the need
to support a variety of data streams
from the field and route them efficient-
ly, is only going to grow exponentially
in future.
As consumers become more mobile,
connected via social media and more
conscious of their energy needs, they
are beginning to expect more from their
energy experience than just keeping the
lights on. Utilities/ distribution com-
panies (DISCOMs) face a key choice
of where and how quickly they should
transition from the traditional and clas-
sical to smart technologies.
As more distributed, renewable
energy is integrated into the grid,
and as the sector learns to cope with
two-way power flows, the utility
35
will face new safety and protection
challenges. Add to that the addi-
tional two-way data flows that will
accompany dynamic pricing (time of
day pricing), and the interaction of
that price signal with a future home
 April 2017
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CoverStory
energy management system that
allows customers to shed load and
shift their peak.
The future of demand response is
well on its way and with so many smart
grid projects envisioned in the country
and further advancements in field of
information & communication tech-
nology (ICT), this will soon become a
reality. The question that begs: are Indian
Utilities/ DISCOMs/ other agencies
prepared for this paradigm shift?
The utility will want to understand
precisely how much load is being shed,
both on individual feeders and in the
aggregate. Ideally these data flows,
like those for AMI and Distribution
Automation, would use the same
communication network, which is the
backbone AMI support infrastructure.
Management of that communication
network will become crucial to the
DISCOMs business in future.
36 Automated Distribution Man-
agement Systems (ADMS), Outage
Management Systems (OMS),
Geographic Information Systems
(GIS)for network management, the
transition from Automated Meter
Reading (AMR) to Advanced Metering
Infrastructure (AMI), and the inte-
gration of these with SCADA (Super-
visory Control and Data Acquisition),
all require a different skill set from the
electrical engineers of decades past
who are at the middle management
level running DISCOMs today, and
will retire before the Ujwal Discom
Assurance Yojana (UDAY) scheme
reaches maturity stage.
To accomplish such large scale
capacity addition and improvement
of operational performance, trained
manpower would be required at every
stage of design, planning, engineering,
procurement, handling and storing,
management of inventories and spares,
construction, commissioning and oper-
ation & maintenance of power plants.
There is also the associated operation
and upkeep of the soon-to-be auto-
mated transmission and distribution
Figure 2: Emerging themes under Internet of Things
(IoT) for Utilities
Smart Grids
Digital Billing Smart Homes
Emerging
Themes for
Digital Utilities
Connected
Data Security
Buildings
Big Data and Mobile
Advanced Interactive
Analytics Services
Source: McKinsey & Company
Electricity generation plants, oil refineries, and
manufacturing facilities are large, distributed
complexes. These involve intricate operations and
need to be continuously monitored and controlled
by the system operators to ensure efficiency.
Technological advancement, during the last few
decades, has made it possible to command and
control these operations remotely through Indus-
trial Control Systems (ICS), designed to support
industrial processes
system, plus the commercial aspects generation of electricity networks will
of customer-focused energy sales and be essential.
collection of revenue, as well as man-
agement of personnel and finance. Digital revolution for
DISCOMs under the UDAY scheme utilities: Threats
face a daunting task in improving effi- Electricity generation plants, oil refin-
ciency and consumer service levels, if eries, and manufacturing facilities are
they are to meet their operational effi- large, distributed complexes. These
ciency targets. Over the next five years, involve intricate operations and need
DISCOMs will make major invest- to be continuously monitored and con-
ments in big data opportunities. To trolled by the system operators to en-
be useful, stored data must be readily sure efficiency. Technological advance-
accessible and must produce actionable ment, during the last few decades,
information for all departments. In- has made it possible to command and
house capacity at the DISCOMs to control these operations remotely
manage the data analytics of the next through Industrial Control Systems

Table 1: Use of ICT in Smart Grid Functioning
Primary
Description of Functions
Function
Load control and Economical load dispatch
dispatch scheduling and optimization
help to select the right
dispatch for the right load at
the right time, reducing the
cost of generation (startup,
operations, and wind down)
Load shaping Shaping the load during
peak demand times reduces
the idle and standby
generating capacity
Distributed, The integration of micro-
renewable grids as well as customer
generation premises with the utility
infrastructure
Generation Diagnoses and maintenance
equipment of the generation equipment
maintenance reduces faults and prevents
their propagation
Transmission- Energy management
grid monitoring systems and transmission
and control SCADA for data acquisition
needed for the following
functions: 1) outage
management, 2) Volt/VAR
management, 3) state
estimation, 4) network
sensitivity analysis, 5)
automatic generation control,
and 6) phasor data analysis.
Maintenance The transmission control
of transmission center is the first line of
control center defense for transmission
fault detection and
prevention
Equipment Maintenance of transmission The smart grid helps asset
maintenance equipment, including
breakers, relays, switchers, preventive maintenance
transformers, and regulators,
prevention of faults
Source: White Paper on The Smart Grid Vision for Indias Power Sector by PA Consulting Group, USAID
How the smart grid affects
these functions
Generation
The smart grid helps with
the scheduling of committed
generating units so as to meet the
required load demand at minimum
operating cost while satisfying
all units and system equality and
inequality constraints
Demand-side management
helps to manage and accurately
estimate demand to as to meet
demand without extra generation
The smart grid enables distributed
generation and automated
adjustment of feed-in tariff regulation
to receive premiums in the case
of forced switch-off of distributed-
generation asset for balancing
The smart grid helps asset
management and conditioning in
preventive maintenance. It also
helps accessing newly sensed
data
Distribution
Automatic regulation of load tap
changer and capacitor banks for
voltage regulation.
Wide-area phasor management
and control for grid optimization
and control.
Volt/VAR management using
capacitor switches and controls.
Automated operations eliminate
human interventions in fault
prevention, detection, isolation,
and correction
management and conditioning for
April 2017
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How an intelligent communications
infrastructure enables and
amplifies the smart grid impact
Economic load dispatch during
unforeseen events warrants
robust real-time communication
infrastructure between the demand
and generation functions
Load shaping with DSM involves
reliable communication between
AMI and CIS (customer information
systems) and generation functions
Infrastructure is needed to confirm,
analyze, and dispatch available load
to distribution generation sources
Data from utilities need to be
transferred to the generation
control center for better equipment
conditioning and monitoring 37
Substation automation results in
two-way communication between
transmission SCADA equipment and
the energy management system.
Communication between
transmission and generation units is
necessary for automatic generation
control.
Real-time communication between
primary and backup transmission
control center, transmission,
generation, and distribution units
is necessary for control center
operations.
Security technology deployment
provides for secure data sharing
between transmission and other
utility functions.
Data from transmission equipment
need to be transferred to the
generation control center for
better equipment conditioning and
monitoring
 April 2017
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CoverStory
(ICS), designed to support industrial
processes. The largest subgroup of ICS
is SCADA systems. Over time, the ICS
have evolved from isolated systems to
open architectures; highly interconnect-
ed with other corporate networks and
the Internet. This has increased their
vulnerability to computer network-
based attacks. Therefore, the protection
of these information networks becomes
as important as protecting all the con-
stituents of critical infrastructure.
According to a report by WIPRO
Technologies on Facing the reality
of cyber threats in the power sector
(2013), it highlighted that traditionally
transmission sub-sector has faced the
brunt of majority of the attacks aimed
at power systems. It also pointed out
that, with increased use of ICT, power
systems have become increasingly
complex and interconnected. Today
the role of information technology and
telemetry have increased substantially
38
in the distribution and generating
sectors, making them integrated, and
thereby exposing the entire value chain
of the power sector to cyber threats.
Going into 2017, the threats to these
sub-sectors due to the use of ICS
have been demonstrated through the
examples of Stuxnet (said to be worlds
first digital weapon - a 500-kilobyte
computer worm discovered during
investigation at Natanz uranium
enrichment plant in Iran) and more
recent power grid failures in Ukraine
due to repeated software hacks.
An attack on a smart grid/other
power system has the potential to
breach the privacy of the consumers to
cause blackouts, overloads, device mal-
functions, data tampering, or even cata-
strophic cascading effects that could
bring down the existing infrastructure.
Hence, in the era of smart technologies
coupled with an aim of an overall
digitisation of the energy sector and as
the government and private enterprises
invest heavily in digital technologies,
they must continue to implement a
robust cyber security infrastructure.
Getting familiar with Internet of Things (IoT)
Internet of Things is an emerging paradigm of internet connected things that
allows the physical objects or things to connect, interact and communicate
with one another similar to the way humans talk through web in todays
environment. It connects systems, sensors and actuator instruments to the
broader internet.
IoT is not just about connecting machines, devices and appliances, but
also allows the things to communicate, exchange control data and other
necessary information while executing applications towards machine goal.
How IoT impact industries?
o Energy & Electrical Power
The major area where IoT deals with energy management systems is the
smart grid. IoT extends the benefits of smart grid beyond the automation,
distribution and monitoring being done by the utilities. The task of the IoT in
the field of electrical energy include:
Advanced Metering Infrastructure (AMI)
SCADA (Supervisory Control and Data Acquisition)
Smart Inverters
Remote control operation of energy consuming devices
Smart grid
o Manufacturing and Industries
IoT deals with real-time optimization of production and supply chain
networks in a manufacturing industry by networking sensors, actuators,
control systems and machinery together. In case of process industries, it
automates the process controls, service information systems and operator
tools using digital controllers in order to achieve enhanced productivity
and safe distribution system. The tasks of Industrial Internet of Things (IIoT)
include:
Real-time monitoring and control of processes
Deploying smart machines, smart sensors, and smart controllers with
proprietary communication and internet technologies
Maximize safety, security and reliability through high precision automation
and control
o Home and Building Automation
IoT devices are used to monitor and control electronic, electrical and
mechanical systems in homes and buildings in order to improve convenience
and safety. The tasks of IoT in this domain include:
Smart lighting by adapting ambient conditions based switching
Web application and mobile apps enabled wireless and internet connected
lights
Smart appliances management and control
Intrusion detection systems, alarm systems and surveillance systems
Safety systems such as smoke and gas detection
Home entertainment management such as video, audio and projectors

Digital revolution in
renewables & energy
efficiency
By early 2017, investors in various
fields have grabbed the opportunity to
mainstream into clean energy business
and convert those opportunities
into reality, simultaneously. Several
developing countries have envisioned
a green economy going forward, with
electricity generated from renewable
energy (RE) sources dominating the
fuel mix in their total energy mix. India
is no different from others, with its
commitments to the United Nations
Framework on Climate Change
(UNFCCC) and an aim to generate
about 40% cumulative electric power
installed capacity from non-fossil
fuel based energy resources by 2030
with an equal importance on energy
efficiency schemes through National
Action Plan on Climate Change
(NAPCC) and Perform Achieve and
Trade (PAT) scheme of the Bureau of
Energy Efficiency (BEE) under the
Ministry of Power (MoP), Government
of India (GoI).
However, with strong anticipated
growth comes the challenge of scaling
operational excellence and maintaining
profitability. Companies seek improved
methods to manage much larger
capacities, with many more physical
assets, located in widely distributed
With strong anticipated
growth comes the
challenge of scaling
operational excellence
and maintaining
profitability.
Companies seek
improved methods to
manage much larger
capacities, with many
more physical assets,
located in widely
distributed and remote
areas which make it
rather more difficult
and remote areas which make it
rather more difficult.
Moreover, the availability of
solar and wind energy is largely
determined by the weather conditions,
and therefore characterised by
strong variability. As a result, power
generation from these sources cannot
easily be matched to the electricity
demand, like power generated from
conventional plants such as coal-fired
units and gas stations. Integration of
large amount of fluctuating RE in the
grid is a serious technical challenge
for grid managers to ensure smooth
April 2017
www.InfralinePlus.com
operations of the Indian grid - the fifth
largest in the world.
Today, power plant operators are
increasingly looking at digital solu-
tions to simplify and automate decision
making in power plants in order to
optimize performance and asset avail-
ability. The most important function
to identify optimization opportunities
and track improvements is in the IoT
itself. Under IoT, smart appliances are
embedded with sensors and are inter-
connected. Data is collected through
the sensors and transmitted to the grid.
However, as sensors and data
processing becomes cheaper every
day, we will see more availability
of data, and the expectation is that it
will be processed in near-real-time. In
addition to analyzing data for learning,
near-real-time analytics allows power
plant operators to react quickly to
avoid problems, address them before
they become serious, offer help or 39
simply better prepare in advance for an
emerging issue to reduce its impact.
We can take an example of a wind
farm in this case. A sensor that col-
lects real-time data from turbines that
is quickly analyzed and turned into
actionable insights is a key compet-
itive advantage. Operators are already
using advanced sensors to continually
assess acceleration, temperature and
vibration. Extracting data from wind
turbines uncovers trends for per-
formance optimization to increase pro-
ductivity and predictive maintenance
to minimize downtime.
Apart from wind/solar generators,
the implementing institutions such as
State Load Dispatch Center (SLDC),
Regional Load Dispatch Center
(RLDC), National Load Dispatch
Center (NLDC) and Regional Power
Committee (RPC) need to be geared
up with adequate infrastructure and
trained manpower. Implementation of
full-fledged Scheduling mechanism and
Settlement system within the States has
been long pending and it will bring in
synergy and optimization.
 April 2017
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CoverStory
S ynthes is
G IS different types of
geos patial data
Government of India has embarked
on an ambitious mission to integrate
100 GW of solar power and 60 GW
of wind power by 2022. For this to
become a reality there is an urgent
need to adopt path breaking measures
in the Grid operation. Extending
real time SCADA data from the
Renewable Generators would provide
Situational awareness to the System
Operators about the ramp events.
Establishment of Renewable Energy
Management Centers (REMC) would
facilitate trading of RE sources (market
participation) across the states.
With the view to combat climate
change effects through large scale
40 deployment of renewable energy
projects, one of the most effective
solutions to address the lack of
scheduling/high intermittency
while allowing scale up of these
technologies is the use of energy
storage technologies. Energy storage
options need to be explored and a
significant push towards the R&D of
these technologies is required. Energy
storage not only provides means to
absorb higher penetration of variable
wind and solar photovoltaic (PV)
generation into the electricity system,
it also helps in effective utilisation of
transmission and distribution assets
(T&D) assets, provides competitive
frequency regulation service (grid
ancillary service) ad enables the
thermal generation plants to operate
more efficiently.
It is expected that, IoT along with
smart metering, cloud computing, and
wireless connected sensors could not
only help the consumer to produce, use
and efficiently manage power supply
but in case of extra generation, also
supply it back to the grid which will
further monetise the consumer.
R eveals s patial
patterns
Other technologies for
Smart Utilities
(i) Geographic Information Systems
(GIS)
GIS is a suite of software tools for
mapping and analyzing data which
is geo referenced (assigned a specific
location on the surface of the Earth,
otherwise known as geospatial data).
The real power of GIS is through
With the view to combat
climate change effects
through large scale de-
ployment of renewable
energy projects, one
of the most effective
solutions to address
the lack of scheduling/
high intermittency while
allowing scale up of
these technologies is
the use of energy stor-
age technologies
using spatial and statistical methods
to analyze attribute and geographic
information. GIS applications enable
the storage, management, and analysis
of large quantities of spatially distrib-
uted data.
(ii) Geospatial Technology
Currently geospatial data and tech-
nology are used tactically by electric
power utilities all around the world for
many purposes including asset man-
agement, outage management, disaster
management, renewable energy, rural
electrification planning, energy density
mapping, etc.
With increased emphasis on
reducing carbon emissions post
UNFCCC Paris Convention (December
S implifies
confirmation of
obs ervation by others
2015), the renewable sources of elec-
tricity generation are being explored
and promoted all throughout the
world, including India. As a result
of this, the share of wind & solar in
the total installed capacity is going to
go up. Geospatial technologies will
have a very critical role to play in this
evolving scenario. Also, the off-grid
and decentralised distributed gen-
eration (DDG) projects are gathering
pace in India. Not only these projects
take some load off the grid, but also
facilitate rural electrification drives.
Conclusion
India today is in a strong position for
an advanced smart grid infrastructure.
A few factors are in the countrys favor
include growing pressure to improve
transmission efficiencies, increased
emphasis on power cost management
and reliability, increasing adoption of
renewable energy, including captive
micro-installations in industrial and resi-
dential spaces, which require options for
feeding electricity back into the grid and
rapid IT infrastructure growth across the
country, including broadband access.
Smart Grids with automation, inte-
grated controls, and new technologies
such as connected sensors can help in
faster restoration of electricity after
outages, efficient power transmission,
reduced management expenses and inte-
gration of energy systems that are run on
both conventional & non-conventional
energy sources. Utilizing the IoT & ICT,
the stakeholders could pave the way for
greater grid automation as well as more
efficient energy management and overall
digitisation of the Indias energy sector
and bringing the country very much on
par with developed economies.
For suggestions email at feedback@infraline.com

NewsBriefs | Oil & Gas National
Frances GDF to exit Petronet by selling entire 10percent stake
Frances GDF International plans to sell
its entire 10 percent stake, worth over Rs
2,900 crore, in Petronet LNG Ltd. GDF, a
unit of French energy giant Engie SA, has
written to Petronet -- Indias biggest im-
porter of liquefied natural gas -- expressing
its desire to exit the company. It has offered
ONGC arm OPal starts exports from Rs 30,000 crore Dahej plant to Singapore
ONGC Petro Additions (OPaL) has begun
exports to Singapore and intends to float
a tender soon for exporting more products
to other countries. The first consignment
of butadiene was shipped to Singapore,
and the company wants to export more
products benzene, etc. to other coun-
tries as well for which it will be floating
tenders, Opal chief executive K Satyanara-
yana said. The Rs 30,000-crore OPal plant
is the first one set up under the petroleum,
chemicals and petrochemicals invest-
ment region (PCPIR) in the Dahej SEZ,
under which it has to export 50 per cent of
production. The city-based OPal is a joint
venture promoted by ONGC, GAIL and
OIL signs MoU with Houston Univ to augment reserves base
Oil India Limited (OIL) has signed an MoU
with the University of Houston in a bid to
augment its reserves base and maximise
recovery from its ageing oilfields. The MoU
was inked in the presence of Petroleum
and Natural Gas Minister Dharmendra
Pradhan. The MoU was signed by Utpal
Bora, CMD, OIL, and University of Houston
(UH), represented by Chancellor and
President Renu Khator. Terming the MoU
as historic, Pradhan said this will go a long
way for the pilot study of CO2 capture
technology application in Assam oil fields.
Innovation, institutional hand-holding
and scientific temperament is the way
the stake to Petronets principal promoters
-- GAIL India Ltd, Oil and Natural Gas Corp
(ONGC), Indian Oil Corp (IOC) and Bharat
Petroleum Corp Ltd (BPCL). We have been
informed by GDF International, which is
holding 10 percent equity share capital in
the company, that they proposed to divest
their entire shareholding in the company,
Petronet said. Petronet said GDF Inter-
national has also sent a communication
to each of the promoters offering a first
right of purchase/refusal in relation to the
proposed sale of 10 percent equity shares
in the company in the same proportion in
which the promoters are holding equity
shares in the company.
Gujarat State Petroleum Corporation. This
plant was commissioned by Prime Minister
Narendra Modi on March 7. Satyanarana
said this is the single largest petrochemi-
cals plant in the country and is working at
full capacity now.
ahead for oil and gas sectors growth,
Pradhan said. If there is (a) good strategy,
innovative technology and willpower, a
good ecosystem can be formed that will
April 2017
www.InfralinePlus.com
Centre made Rs 1.99 lakh crore from
levies on petrol, diesel in 2015-16
The massive jump in excise duty on
petrol and high speed diesel helped
the government mop up nearly 40% of
its indirect tax kitty from the two auto
fuels in 2015-16, compared to 34% in
the previous financial year. A study by
the Comptroller and Auditor General
(CAG) showed that Union excise duty
collection shot up almost 70% from
Rs 1.69 lakh crore during 2013-14 to
Rs 2.87 lakh crore in 2015-16, with a
majority of the contribution being from
petrol, diesel, cigarettes and gutka. The
indirect tax kitty includes duties from
customs, central excise and service 41
tax.Excise revenue from petroleum
products, which made up for 52% of col-
lections in 2013-14, went up to almost
69% during 2015-16 as the government
resorted to a massive increase in levies
in the wake of falling global prices.The
central excise duty on petrol and high
speed diesel increased from Rs 1.2 per
litre and Rs 1.46 per litre to Rs 8.95 per
litre and Rs 7.96 per litre respectively
during the last two financial years.
help in more oil recovery from the oilfields,
Pradhan said. The major focus of the MoU
is collaboration in the areas of improved
oil recovery and enhanced oil recovery
(EOR) for augmenting the production from
matured fields, improvement in drilling
and well intervention practices, seismic
interpretation and reservoir characterisation
studies, and unconventional hydrocarbon
studies. It is believed that this collaboration
will help OIL to further consolidate and
upgrade the various initiatives the company
has undertaken to improve production
and contribute significantly to the energy
security of the country.
 April 2017
www.InfralinePlus.com
NewsBriefs | Oil & Gas National
ONGC puts on production two oil wells discovered in Assam
ONGC has put to production two
discoveries it has made in Jorhat district
in Assam in 2016-17. After almost three
years this is ONGCs biggest discovery in
Assam.Director (Onshore) of ONGC, Ved
Prakash Mahawar said, After three years
Oil field leases may be extended 4 years before expiry
The government will extend the lease
for oil or gas fields four years before the
initial 20-year term expires, failing which
an extension plea would be deemed to
42 have been rejected, says a draft proposal
on the new exploration policy aimed at
eliminating extension uncertainties faced
by contractors. Billionaire Anil Agarwal-
owned Cairn India has been lobbying
the government for years to extend
the contract to operate the oil and gas
block in Barmer, Rajasthan, by 10 years
after the initial 20-year agreement runs
out in 2020. Cairn contributes nearly
30% of Indias domestic output and has
urged the court for more than a year to
ONGC to invest Rs 21,500 crore in Indias deepest gas discovery by 2023
State-owned ONGC will invest over Rs
21,500 crore to develop Indias deepest
gas discovery by 2022-23, helping it
more than double output from its prime
KG basin block.Oil and Natural Gas Corp
(ONGC), which had last year firmed up an
investment of Rs 34,012 crore in bringing
to production 10 oil and gas discoveries in
its Bay of Bengal block KG-DWN-98/2 (KG-
D5), plans to invest another Rs 21,528.10
crore in developing the ultra-deepsea UD-1
find.We have submitted to the Directorate
General of Hydrocarbons a declaration of
commerciality (DoC) for the UD-1 find. We
will submit a final investment plan, called
we have done reserve accretion 10 Million
metric tones in Assam. We have made two
good discoveries Sufayan and Dayalpur.
We getting production of 50 tones per day
from these fields and the overall production
of Jorhat asset have increased from 350
tones per day to 400 tones per day.He
added, As soon as we discovered these two
fields we put them on production. We are
working on the development plan of these
fields and production will further increase.
From the two assets of Jorhat and Assam
in this fiscal year we have a target of
production of .96 Million Metric Tonnes
(MMT) which we will achieve, already we
have achieved 98 percent of the target.
direct the government to quickly decide
on an extension. The draft rules, when
formalised, will not apply to the Barmer
block but will end the kind of uncertainty
Cairn faces today for blocks awarded
under the new exploration policy.
the field development plan, by end-2017 and
hope to bring the discovery to production
by 2022-23, ONGC Director (Offshore)
GAIL to invest Rs 1,750 crore on gas
distribution network
State-run gas company GAIL (India)
Ltd has committed an investment
of Rs 1,750 crore to build a City
Gas Distribution (CGD) network in
Bhubaneswar and Cuttack. Of the
envisaged investment, Rs 1,000 crore
would be spent on Bhubaneswar while
the remaining Rs 750 crore has been
set aside for Cuttack. Gas distribution
to households in the twin-city region is
expected to be a reality by December
2019 or early 2020.The Jagdishpur-
Haldia-Bokaro-Dhamra natural gas
pipeline being built by GAIL would
be the feeder line for gas supplies
in Odisha. This pipeline is being
constructed at a cost of Rs 13,000
crore, of which Rs 4,000 crore is being
spent in Odisha. In two to three years,
the entire pipeline would be constructed
and commissioned, said A K Singh,
executive director, GAIL (India) Ltd.
In Odisha, the 2,619-km Jagdishpur-
Haldia-Bokaro-Dhamra natural gas
pipeline would have a network of 762
km, covering 13 districts.
Tapas Kumar Sengupta said.ONGC plans
to drill nine wells on the discovery that
lies in water depths of 2,400-3,200 metres
and will produce a peak output of 19
million standard cubic metres per day. The
company had previously decided to develop
other discoveries in KG-D5 block and leave
the UD-1 find in the same block for a later
date as it thought there was no technology
available to produce gas from such water
depths.Sengupta said that there are
consultants who have showed to ONGC that
discoveries deeper than UD-1 have been put
to production in recent times, particularly in
Gulf of Mexico.

NewsBriefs | Oil & Gas International
Cambodia to revise oil contract, paving way for first oil
Cambodia will sign a revised production
sharing contract soon with Singapore-listed
explorer Kris Energy to develop an offshore
field that could finally produce the countrys
first oil after years of delays. Cambodia is
revising some fiscal terms in the 2002 con-
tract for the Cambodia Block A field in the
Big oils plan to buy into the shale boom
Exxon Mobil Corp., Royal Dutch Shell
Plc and Chevron Corp., are jumping into
American shale with gusto, planning to
spend a combined $10 billion this year,
up from next to nothing only a few years
ago. The giants are gaining a foothold in
West Texas with such projects as Bongo
76-43, a well which is being drilled 10,000
feet beneath the table-flat, sage-scented
desert, and which then extends horizontally
for a mile, blasting through rock to capture
light crude from the sprawling Permian
Basin. While the first chapter of the U.S.
shale revolution belonged to wildcatters
such as Harold Hamm and the late Aubrey
McClendon, who parlayed borrowed money
Deloitte forecasts about $55 a barrel oil prices to average in 2017
According to the most recent forecast
from financial advisory firm Deloitte,
oil costs ought to average around $55
US a barrel in 2017 for West Texas
Intermediate, which ought to be sufficient
for some thinned down Alberta producers
to work beneficially.Its significantly
better than what the average was through
last year, which is bringing some optimism
into the sector, said Andrew Botterill
with Deloittes resource evaluation and
advisory group. Obviously, it isnt at a
level thats going to allow all producers
to produce all of their inventory, Botterill
added. But it certainly is better than
Khmer Basin, after Kris Energy Ltd became
the sole stakeholder last year. Cambodia
has struggled to develop oil fields in the Gulf
of Thailand, as few companies are willing to
invest in the area following the 2014 global
oil price slump. Kris Energy hopes to begin
initially producing around 8,000 barrels per
day of low-sulfur oil early next decade. But
it first needs to find a partner to back the
development, which is estimated at below
$200 million.Were not in a rush to farm
things out. What we are looking for are good
credible and stable partners that can share
the risk and cost of the project, said Kelvin
Tang, KrisEnergys chief operating officer
and president of its Cambodia operations.
into billions, Bongo 76-43 is financed by
Shell. If the big boys are successful, theyll
scramble the U.S. energy business, boost
American oil production, keep prices low,
and steal influence from big producers,
such as Saudi Arabia.
to limit production is one variable
people to really see how many barrels are
April 2017
www.InfralinePlus.com
Chevrons $1 billion sale of China oil
fields stalls
Chevron Corp.s sale of its stakes in
Chinese offshore oil fields operated by
state-owned CNOOC Ltd. has stalled.
Bids that Chevron received for its
interests in three fields in Chinas Bohai
Bay didnt meet its expectations it is
learnt. Chevron had aimed to sell the
assets for as much as $1 billion. The
U.S. oil and gas explorer is considering
keeping the Bohai Bay holdings for now.
The assets had drawn interest from
Chinese suitors including AAG Energy
Holdings Ltd., Brightoil Petroleum
Holdings Ltd. and Shanghai-traded Meidu 43
Energy Corp. Oil majors such as Royal
Dutch Shell Plc and BP Plc have been
looking to shed overseas assets to focus
on their home markets. Chevron, based in
San Ramon, California, has said it wants
to raise as much as $10 billion from asset
sales this year and it agreed in December
to sell Asian geothermal assets to Ayala
Corp. Shell is considering a sale of its
stake in a Malaysian liquefied natural gas
export plant.
weve seen for some time. And with
reductions in operating costs that
companies have realized in the last
year or two, there are more plays that
are going to be economic. According
to Deloittes outlook, the OPEC consent
affecting everything, except that single-
handedly isnt probably going to build
costs generously at any point in the near
future.Its going to take some time for
going to leave the system with the OPEC
cuts, Botterill said.
 April 2017
www.InfralinePlus.com
InConversation
Massive shale gas output from US
has spurred growth in LPG market
Suyash Gupta, Director General, Indian Auto LPG Coalition
(IAC) shares his views on the auto LPG market in India,
global trends and what India needs to do to tackle the
growing menace of air pollution. Excerpts:
Please highlight the recent
developments in the Indian auto
LPG market.
500+ cities in the country are covered
with around 1100 auto LPG filling
stations. More than half of these are
owned by Public Sector through IOC,
HPC, BPC. In the private sector,
companies like Reliance, Total Oil,
Aegis, and SHV - SuperGas have taken
44 up lead in setting up these stations.
About 25 lakh vehicles in the country
are estimated to be running on LPG
today. Most of these vehicles are
aftermarket conversions with less than
20 % accounting for OEM Models.
Auto LPG for the past several years
has been about 40% of the price of
petrol. While this made it significant
cheaper than petrol, yet its running cost
was higher than that of diesel. However
with effect from October 1, 2016, the
PSUs radically cut down the pricing of
auto LPG to around 50% of the price of
petrol. This effectively made it not just
50 % cheaper than petrol but cheaper
than diesel as well in terms of running
costs and comparable to CNG.
For a city like Lucknow, the
running cost of petrol vehicle (with an
estimated mileage of 14.3 km/ litre),
comes out to be Rs. 5.11 per km, for
diesel vehicle, running cost comes
out to be Rs. 3.45 per km, for CNG
vehicle, the running cost comes out
to be Rs. 2.69 per km, whereas, for
an LPG vehicle it is even cheaper and
comes out to be Rs. 2.58 per km.
On account of this, industry has
already seen an increase in the sales
volumes. Industry-wide monthly sales
jumped from around 26 thousand
tonnes in the month of October 2016 to
over 30 thousand tonnes in December
2016, thus registering a 16% growth.
Owing to these radical changes,
industry is expected to close this fiscal
year with an overall growth of more
than 4% over the last year.
How auto LPG is helping as
a step- forward to a cleaner
transport fuel and helping in
tackling pollution?
Auto LPG is the worlds 3rd most
selling automotive fuel after petrol
and diesel. More than 26 Million
vehicles run on auto LPG globally,
consuming more than 26 million
tonnes of LPG. Auto LPG is a low
hanging fruit with extremely clean
emissions. LPG has 22 percent lower
CO2 than petrol, 96 percent lesser
NOx than diesel and 68 percent lesser
than petrol, and PM - 120 times lower
emission than diesel.
It also provides tremendous
opportunity to avoid usage of high
polluting carcinogenic diesel-fuelled
cars for personal and public transport.
That Auto LPG has helped various
Governments globally to tackle air
quality issues and emerges from the
fact that several similar counties like
Turkey and Korea are one of the
biggest users of LPG globally. It is
Suyash Gupta, Director General, Indian Auto LPG
Coalition (IAC)
notable to mention here that more than
40% of the four wheeler vehicle cars in
Turkey run on LPG.
It is a low hanging fruit in terms of
the fact that all other similar cleaner
fuels need huge amount of capital
investment as well as a gestation period
running into several years to build
pipeline and related infrastructure,
whereas an Auto LPG station can be set
up in as quickly as over a 60 to 90 day
period, thus providing an immediate
relief and impacting urban air quality.
In the wake of rising prices of
petroleum, what is the future of
auto LPG as the future fuel of
India?
On account of the massive shale gas
outputs coming from the US, LPG
market globally has seen a major
growth. LPG prices have come down
from being at around $1200/tonne to
about $500/ tonne.
With the shale impact expected to
continue, LPG prices are expected
to remain at lower levels in the
foreseeable future.

India is projected to be one
of the biggest car markets in
India in future. Please provide
suggestions on reducing
vehicular pollution in India. What
are the advantages of auto LPG
as a fuel in comparison to others
like biofuels and upgraded
emission norms like BS-IV?
India needs to adopt the right mix of
cleaner fuels. While bio fuels look
great on paper, yet availability of the
same shall always remain a challenge
particularly on account of Indias
efforts to ensure availability of food for
masses at lower prices. Any increase in
demand of bio fuel shall undoubtedly
impact prices.
Meanwhile in terms of the much
talked Electric vehicles, Government
needs to realise and consider the total
well-to-wheel emissions, particularly
for a country like India which produces
most of its electricity from coal-
India needs to adopt
the right mix of cleaner
fuels. While bio fuels
look great on paper, yet
availability of the same
shall always remain a
challenge particularly
on account of Indias
efforts to ensure
availability of food
for masses at lower
prices. Any increase
in demand of bio fuel
shall undoubtedly
impact prices
April 2017
www.InfralinePlus.com
based power plants. Electric vehicle
may ultimately be more pollutant
than gaseous fuel. To adopt any fuel
strategy the government really needs to
formulate a judicious mix of all cleaner
fuel available. LPG offers one such
solution which is available immediately
What are the key issues being
faced by the auto LPG industry in
India? What are your suggestions
to address the same?
One of the key issues is differential
pricing on various grades of
LPG, which results in diversion
on subsidized domestic LPG to
automotive usage. Secondly, there
is a need for OEMs to push LPG
variants.
For suggestions email at feedback@infraline.com
45
 April 2017
www.InfralinePlus.com

InDepth
Marketing and pricing freedom
to give CBM producers a leg-up

46

India holds worlds fourth largest coal reserves

CBM is being seen as an alternative source for boosting countrys energy security

By Team InfralinePlus

Indias natural gas demand is projected
to outpace supply in the foreseeable
future, which means dependence
on imported LNG would go up. As
per one estimate, LNG imports will
rise by nearly five times in 2029-
30 from the level of 2012-13. The
incremental demand for imported
natural gas could further rise if
production from domestic sources
falls below projection. Coal bed
methane (CBM), an unconventional
gas, can help in mitigating countrys
natural gas shortages, thereby putting
a check on rise of LNG imports.
However, extracting CBM has proved
more difficult than conventional gas.
Consequently, as many as 18 out of 33
CBM blocks have been relinquished
by operators.
Even a big upstream player like
ONGC has struggled to produce
CBM. The upstream major was
awarded 9 CBM blocks. But it has
relinquished 5 of these blocks. Given
difficulties in mining CBM, the
International Energy Agency (IEA)
 April 2017
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is not very bullish on unconventional Analysis Cell notified prices or selling tion difficult, risky and costly. Even its
gas addressing Indias energy prices, whichever is higher. ventilation to atmosphere adds green
security concerns. In this context, In 2014, the new domestic natural house gas causing global warming.
the significance of the governments gas pricing guidelines also included However, CBM is a remarkably clean
recent decision to allow marketing CBM blocks, which resulted in CBM fuel if utilized efficiently. CBM is a
and pricing freedom to CBM gas gas beyond this date to be priced clean gas having heating value of ap-
producers cannot be overstated. at natural gas rates. Consequently, proximately 8500 KCal/kg compared
Specifically, the Union cabinet has contractors who had discovered to 9000 KCal/kg of natural gas.
allowed CBM contractors freedom CBM reserves started going slow on India holds worlds fourth
to sell their production at a price production plans. After announcement largest coal reserves and it is not
discovered though arms length of new pricing policy, these contractors surprising that CBM is being seen
transactions. Of course, the contractors are now expected to expedite as an alternative source for boosting
will have to follow transparent development work to bring their output countrys energy security. As per
procedures for price discovery. In case, to the market as soon as possible. estimate by the Directorate General
there is no third party buyer available of Hydrocarbons, India has 92 trillion
for CBM production, a possibility that CBM potential in India cubic feet (tcf) of CBM reserves spread
cannot be ruled out given the poor CBM is generated during coalifica- across 12 states.
pipeline network in the country, the tion process which gets adsorbed on The government formulated CBM
contractor can sell gas to its affiliates. coal at higher pressure. However, it is policy in 1997. Under the policy, four
Royalty and other dues will be payable a mining hazard. Presence of CBM in rounds of CBM bidding rounds have
on the basis of Petroleum Planning and underground mines makes coal extrac- been implemented by the petroleum
ministry, which led to award of 33
CBM blocks with estimated reserves of
The Union cabinet has allowed CBM contractors 62.4 tcf. Of this, only 9.9 tcf has been 47
freedom to sell their production at a price established as Gas in Place (GIP).
discovered though arms length transactions. Two CBM blocks in West Bengal
Of course, the contractors will have to follow by GEECL and Essar Oil, one in
Jharkhand operated by ONGC and
transparent procedures for price discovery. In one in Madhya Pradesh operated RIL
case, there is no third party buyer available for are producing CBM. Four blocks, one
CBM production, a possibility that cannot be in west Bengal and two in Jharkhand
operated by ONGC and one in
ruled out Chhattisgarh-MP operated by RIL are
in development phase and are likely
to start CBM production soon. India
produced 1.07 million standard cubic
meter per day (mmscmd) CBM gas in
2015-16.
In India Energy Outlook 2015, the
IEA acknowledged that as a country,
India has large unconventional
hydrocarbon resources, including
CBM. Although private companies
such as RIL and Essar are already
engaged in the development of CBM,
commercial development is a long way
ahead, the agency said.

Challenges in harnessing
CBM potential
India faces serious challenges in
harnessing potential due to the
 April 2017
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InDepth

difficulty of land acquisition, high is a significant expense compared to integrated gas pipeline infrastructure
cost of disposing water released from that of conventional development due is needed to ensure expeditious
CBM blocks, poor infrastructure to to the presence of high total dissolved harnessing of CBM reserves.
evacuate gas and the cumbersome solids (TDS) and salinity. Sustaining CBM production is a
procedures for obtaining statutory Petroleum mining lease and key challenge. Due to their geological
clearances. Due to large number of petroleum exploration licence are makeup, CBM formations can offer
required wells for efficient drainage issued by state governments on highly variable production and two
of CBM, land acquisition challenges the recommendation of the central wells drilled in close proximity can
are severe. CBM blocks in Jharkhand, government. This mechanism often see radically different productivity
Chhattisgarh and Madhya Pradesh are leads to delay. Getting clearances for rates. Indian coal is also of a relatively
mostly in remote and primarily tribal starting mining is another big challenge low grade. Because of this, its lower
area. In addition, poor land record for operators. Operators need to obtain porosity and permeability can be a
and multiple holdings also complicate as many as 30 clearances before they challenge to production.
challenges of land acquisitions. can start CBM mining. A house panel recently queried the
CBM wells produce large volumes Most of CBM blocks are located petroleum minister about availability
of water during the initial period to in remote and inaccessible areas of gas transport infrastructure in areas
lower the pressure in the coal seams which lack industrial activity. That where CBM blocks fall. In reply
till the critical adsorption pressure and means gas production cannot be the minister said, CBM produced
as the quantities of produced water consumed locally. Nor is there pipeline from these blocks are being sold off
decline the gas production increases. infrastructure in these areas to transport to customers in the vicinity of these
Cost to dispose of the produced water gas to consumption centres. So, producing blocks. In Jharia CBM
block, CBM produced is being sold
off by filling CBM in cascades and
Sustaining CBM production is a key challenge. transported on trucks. In Raniganj
48
Due to their geological makeup, CBM East CBM block, contractor (Essar
formations can offer highly variable production Oil Limited) has constructed pipelines
and two wells drilled in close proximity can see from Gas Collecting Station/Gas
Gathering Station to individual
radically different productivity rates. Indian coal vendors. Similarly, operator of
is also of a relatively low grade. Because of Raniganj South CBM Block GEECL
this, its lower porosity and permeability can be has built pipelines from its GCS/GGS
to individual customers. Reliance
a challenge to production Gas Pipeline Limited (RGPL), one
of the subsidiary of RIL is laying
around 300 KM of natural gas
pipeline from Shahdol in Madhya
Pradesh to Phulpur in Uttar Pradesh to
transport gas from RILs CBM blocks
(Sohagpur East and West).
Due to serious challenges in
extracting CBM gas in India, the
International Energy Agency has
said that CBM might not contribute
more than 31 per cent of its total gas
production by 2040. Developing gas
transportation infrastructure has proved
a mammoth challenge for policy
makers. Industry remains reluctant to
invest in pipeline infrastructure due
to low and geographically uneven
demand for LNG whose spot prices are
highly volatile.
 April 2017
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In Union Budget 2014, the 36-47 per cent, to this demand in removed, the PNGRB report said.
government announced the the projected period. The share of The PNGRB report also touched on
construction of an additional 15,000 the fertilizer sector in overall gas the controversial issue of gas pricing,
km of gas pipelines on a public-private consumption in the country is expected saying the government had to make
partnership (PPP) basis along with to go down from 25 in 2012-13 to 15 investment in the upstream and mid-
viability gap funding (VGF). However, per cent in 2029-30 owing to higher stream gas sectors attractive to meet
the work on the project is moving growth in other sectors. The report growing demand.
at a slow speed. In this context, the forecast 7.2 per cent annual growth in The investment and infrastructure
industry has suggested that Carrier gas supplies reaching 400 mmscmd required for developing a CBM block
First, Commodity Later policy should by fiscal 2021-22 and 474 mmscmd is not at par with conventional natural
be followed for the development of in fiscal 2029-30. On the other hand, gas. Drilling of natural gas well
the domestic gas market. In a survey supply from domestic sources is approximately till 3000 meter-depth
conducted by consulting firm PwC projected to rise from 101.11 mmscmd nominally costs $8 million. However,
recently, respondents overwhelmingly in fiscal 2012-13 to 156.7 mmscmd the nominal cost of drilling a CBM
supported the idea of Carrier First, in fiscal 2016-17 and 230 mmscmd in well is $1.2 million.
Commodity Later policy. fiscal 2029-30. Due to low productivity large
As per estimates of a study The PNGRB report was critical of number of CBM wells are required to
commissioned by Petroleum and the current government policy that be drilled against single conventional
Natural Gas Regulatory Board, India determines priority in gas allocations hydrocarbon well to produce the
will have to import as much as 214 and the volumes supplied. The Gas same quantity of gas. Natural gas
mmscmd of LNG in 2029-30. Utilization Policy creates artificial produced from a conventional well
Gas-based power generation is demand and discourages new suppliers is produced at high pressure whereas
expected to contribute the highest, and hence needs to be progressively CBM produced at surface is at much
lower pressure. Therefore, there 49
The investment and infrastructure required is a need for higher compression
stages at the Gas Collecting Station/
for developing a CBM block is not at par with Gas Gathering Station. Moreover,
conventional natural gas. Drilling of natural condensates and water often
gas well approximately till 3000 meter-depth accompany Natural gas during its
production. In CBM operations, water
nominally costs $8 million. However, the has to be continuously dewatered from
nominal cost of drilling a CBM well is the coal seams to increase the CBM
$1.2 million production.
CBM operations work on a marginal
scale of economics in comparison
to conventional natural gas where
margins are high and so is the period
of production. The producing life of a
CBM well is up to 15 years however
the average producing life of a natural
gas well is 20 to 25 years.
In view of the above-mentioned
challenges, the marketing and pricing
freedom granted by the government
for CBM is expected to go some way
in boosting investors confidence.
However, more needs to be done. Land
acquisition and clearances are two
areas wherein investors need a helping
hand from the government.

For suggestions email at feedback@infraline.com

 April 2017
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InDepth
Petchem manufacturers on
capacity expansion overdrive

50

Petrochemical products fetch better margins compared to fuels

Petrochemical industry constrained by inadequate domestic availability of natural gas

By Team InfralinePlus

Keen to tap the growing demand for
petrochemical products, domestic
refiners are investing big time to build
petchem production facilities even
as other manufacturers are unable to
utilise their existing capacities due to
weak demand. According to experts, as
margins fall due to growing competi-
tion, domestic refiners are increasingly
pursuing integration of refining with
petrochemical business for value ad-
dition. What is supporting this trend
is the fact that petrochemical products
fetch better margins compared to fuels,
experts add.
Leading players like RIL, Indian
Oil, BPCL and HPCL have invested
heavily in petrochemical production
capacity expansion in recent years.
For example, state-owned refiner
BPCL is investing Rs 4,600 crore
to build a propylene derivative
petrochemical project in its Kochi
refinery. The company expects to
complete the refinery expansion by the
end of FY17 and to start operations
in 2017. RIL recently commissioned
the first-phase of paraxylene (PX)
production facility at Jamnagar.
The private refiner hopes to become
worlds second second-largest PX
producer after the commissioning the
full capacity.
 April 2017
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State-owned Gail India and HPCL Table 1 India: global rank in polymer consumption (1988)
have together planed a Rs 30,000- Country Polymer consumption (mt)
crore petchem unit in Andhra Pradesh. US 16.6
Indian Oil plans to invest Rs 34,000 Japan 6.4
crore in its Paradip petchem complex Germany 4.3
in Odisha by 2021. Earlier, the oil China 3.7
PSU spent more than Rs 14,000 crore Italy 3.1
to build naphtha cracker facility at its CIS 2.4
Panipat refinery. France 2.4
Experts say that with shrinking UK 2.2
refining margins, it has become Taiwan 1.9
almost inevitable to look for value Korea 1.8
added opportunities to be integrated India 1.6
in the complexes through petro-
Source: CPMA
chemical integration. The fact that
most of the petrochemical produces of 81,000 tonnes annually. It has
invite a higher degree of margin The fact that most 70 per cent equity in a joint venture
vis--vis the fuels, there is a strong of the petrochemical company, Brahmaputra Cracker
case for integration between refinery and Polymer (BCPL), at Dibrugarh,
produces invite a
and petrochemical complex, wherein, Assam. GAIL also has stake in
both feed as well as energy inte- higher degree of ONGC Petro additions (OPaL)
gration can be exploited for soliciting margin vis--vis the new petrochem project at Dahej, to
higher revenues, they add. fuels, there is a strong produce high and low density poly-
GAILs plant at Andhra Pradesh is ethylene, or PE, (HDPE and LLDPE) 51
part of a plan to expand its presence case for integration and polypropylene.
in petrochemicals. The unit will have between refinery and Although India imports certain
three feeds naphtha, ethane and petrochemical complex, categories of petrochemicals, it is also
propane. Naphtha will be supplied an exporter of some. RIL and IOC
from the Visakhapatnam refinery of
wherein, both feed have been exporting petrochemicals
HPCL, through a 150-km pipeline. as well as energy for some time now. GAIL entered
The ethane and propane feeds will integration can be the overseas market for the first time
be imported via the Kakinada port. this year with about 7,500 tonnes of
exploited for soliciting
The complex will produce a million polymer exports so far to Bangladesh,
tonnes of ethylene with derivatives, higher revenues Nepal, Vietnam and China. GAIL
to go into manufacturing of deter-
gents, paints and coatings, cosmetics
and textiles. A detailed feasibility
report is under work.
GAIL and HPCL joined hands after
HPCLs plans to team with Frances
Total, the Lakshmi N Mittal Group and
Oil India for a 15-million tonne a year
unit at Visakhapatnam was put on the
back burner because of viability issues.
The two companies are now in talks to
bring in a third partner. There are also
plans to import ethane from the US for
the plant.
GAIL has interest in three pet-
rochem plants, including its own
complex at Pata in Uttar Pradesh
that has been expanded to a capacity
 April 2017
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InDepth

Table 2 India: global rank in polymer consumption (2000) will reverse. Indian players are almost
Country Polymer consumption (mt) doubling total PE capacity, which
remained 2.9 million tonnes a year over
US 27.3
those five years, the report says. RIL,
China 14.4 GAIL, IOC and Haldia Petrochemicals
Japan 9.1 (HPL) are key PE players in India.
Germany 6.4 HPL was operating at lower utilisation
Korea 4.7 due to working capital funding issues,
the report said.
Italy 4.7
In 1988, India was the tenth largest
France 4.1 consumer of polymers in the world.
UK 3.5 However, because of robust growth in
India 3.4 demand, India is now worlds largest
Brazil 3.4 producer of polymers. Its demand grew
by 14 per cent between 2000 and 2015.
Taiwan 3.3
India has currently excess PE production
Source: CPMA capacity. However, with domestic
demand growth at more than 10 per cent
produces HDPE and LLDPE. They annually and capacity addition unable
account for 88 per cent of Indias total According to a recent to keep pace, the country will have to
PE consumption. HDFC Securities import PE from 2019.
report, PE consumption PE is primarily used in packaging
Demand supply scenario like plastic bags, plastic films, geo mem-
According to a recent HDFC Securities
in India grew at a branes, containers including bottles,
52
report, PE consumption in India grew compounded annual etc. Demand for polypropylene (PP), a
at a compounded annual growth rate growth rate (CAGR) of thermoplastic polymer, too is growing
(CAGR) of seven per cent in the five seven per cent in the at a brisk pace. During 2016-21, PP
years ended 2015. However, produc- demand is projected to grow by 11.8
five years ended 2015.
tion grew only a five per cent yearly. per cent. However, capacity addition
This has made India a net importer of However, production is expected to keep pace with demand,
PE. The import share in total consump- grew only a five per meaning India will continue to have
tion has increased from 14 per cent in cent yearly. This has surplus production during this period.
FY08 to 42 per cent in FY15. made India a net PP is used in a wide variety of applica-
However, over the next two to three tions including packaging and labeling,
years, the demand-supply scenario
importer of PE textiles -- ropes, thermal underwear and
carpets --, stationery, plastic parts and
Table 3 India: global rank in polymer consumption (2015) reusable containers of various types,
laboratory equipment, loudspeakers and
US 38.9
automotive.
China 31.3 Purified terephthalic acid (PTA) is
India 12.5 a raw material used in making high-
Japan 11.5 performance multi-purpose plastics
such as polybutyl terephthalate(PBT),
Germany 9.4
polyethylene terephthalate(PET), and
Korea 7.4
polytrimethylene terephthalate (PTT).
Italy 6.8 Domestic PTA demand is projected to
Brazil 6.7 grow by 7.7 per cent annually in period
CIS 6.2 up to 2021. India is a net exporter of
PTA and it is projected to have surplus
France 6.1
capacity in coming years.
UK 5.2
India is a net importer of PVC, or
Source: CPMA styrene. The domestic demand-supply
 April 2017
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gap is expected to widen in the period Projections: polyethylene production capacity, demand,
running up to 2021 as annual con- surplus or deficit (kt)
sumption rises by 9.75 per cent. India Production
had PVC shortfall of 146 kilo tonne Year Demand Surplus or deficit
capacity
in 2016, which is projected to go up
2016 4,980 4,421 559
to 2980 kilo tonne in 2021 as demand
2017 5355 4793 562
outpaces supply.
2018 5355 5209 146
Inadequate availability of 2019 5355 5681 -326
natural gas a concern 2020 5355 6199 -844
The Indian petrochemical industry is 2021 5355 6755 -1400
constrained by inadequate domestic
Source: Industry
availability of natural gas, which is
used as a feedstock in addition to naph- Projections: polypropylene production capacity, demand,
tha by the industry. In that context, the surplus or deficit (kt)
governments decision to halve import
Production
duty on LNG is expected to some way Year Demand Surplus or deficit
capacity
towards addressing domestic industrys
2016 5047 4108 939
feedstock concerns. Petrochemical
plants using naphtha as feedstock face 2017 5115 4497 618
fluctuations in their profitability due to 2018 5815 5405 410
volatile nature of the naphtha market. 2019 5815 5405 410
Analysts say Indian companies should 2020 6315 5936 379
import naphtha from West Asia under 2021 6815 6515 300 53
long-term contract to avoid
Source: Industry
price uncertainty.
Meanwhile, RILs revenue from
Projections: PTA production capacity, demand, surplus or
petchem business during October-
December 2016 increased by 17.8 to Rs deficit (kt)
22,854 crore ($ 3.4 billion), primarily Production
Year Demand Surplus or deficit
due to increase in prices across polymers capacity
and polyester chain. Petrochemicals 2016 7075 5319 1756
segment EBIT increased sharply by 2017 7400 5678 1722
25.5 per cent to Rs 3,301 crore ($ 486 2018 7400 6047 1353
million), supported by favorable product 2019 7700 6431 1269
deltas and marginal volume growth,
2020 8900 6878 2022
according to the company.
2021 8900 7362 1538
PP and HDPE prices showed
marginal increase of 1 per cent on a Source: Industry
sequential basis whereas PVC prices
increased by 12 per cent. PP delta growth slowed down due to demoneti- polymers, driven by a strong pull from
strengthened on account of softness in zation of old currency notes announced the multilayer film, HM pipe, HD
propylene prices due to ample supply by Prime Minister Narendra Modi raffia and monofilament segments. PP
after the restart of cracker units post on November 8. However, demand demand was 5 per cent higher, aided
maintenance shutdown. PE delta is expected to revive as the effects of by consumption from raffia packaging,
softened with a firm naphtha price demonetisation are absorbed and the fibre filament and appliances sector.
environment. PVC deltas strengthened economy readjusts to the new normal. PVC demand witnessed a marginal
amid increasingly stringent environ- In the third quarter, domestic growth rate of 1 per cent due to lower
mental regulations impacting coal- polymer demand was 5 per cent higher demand on account of seasonality and
based production inChina. compared to the same period last year. high rural exposure.
During the October-December 2016 PE demand witnessed the highest
quarter, the pace of domestic demand growth rate of 8 per cent among all For suggestions email at feedback@infraline.com
 April 2017
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StatisticsOil & Gas

Coal Bed methane (CBM) gas development in India (February, 2017)
Prognosticated CBM resources 92 TCF
Established CBM resources 9.9 TCF
Total available coal bearing areas 26,000 Sq. KM
Exploration initiated 17,200 Sq. KM
Blocks awarded 33 Nos.
Production of CBM gas February, 2017 45.51 MMSCM
Production of CBM gas-Cumulative April 2016-February, 2017 519.739 MMSCM

Refineries: Installed capacity and crude oil processing (MMTPA / MMT)

Crude oilprocessing
Installed
Com- 2014- 2015- February April-February
Refinery capacity
pany 15 16 2016 2017 2015-16 2016-17
(1.4.2016) 2017 2016-17
(Actual) (Target) (Actual) (Target)
Barauni (1964) 6 5.9 6.5 0.5 0.5 0.5 6 5.7 6
Koyali (1965) 13.7 13.3 13.8 1.2 1 1 12.6 12.3 12.8
Haldia (1975) 7.5 7.7 7.8 0.6 0.6 0.6 7.1 7.1 7
Mathura (1982) 8 8.5 8.9 0.7 0.6 0.7 8 7.9 8.4
Panipat (1998) 15 14.2 15.3 1.3 1.2 1.2 13.9 13.9 14.2
IOCL
Guwahati (1962) 1 1 0.9 0.04 0.08 0.07 0.8 0.9 0.8
54 Digboi (1901) 0.7 0.6 0.6 0.04 0.05 0.04 0.5 0.6 0.5
Bongaigaon(1979) 2.4 2.4 2.4 0.2 0.2 0.2 2.2 2.2 2.3
Paradip (2016) 15 - 1.8 0.5 1 0.9 1.3 8.9 7
IOCL TOTAL 69.2 53.6 58 5.1 5.2 5.3 52.5 59.3 58.9
Manali (1969) 10.5 10.2 9.1 0.9 0.5 0.4 8.2 8.9 9
CPCL CBR (1993) 1 0.5 0.5 0.05 0.05 0.04 0.5 0.5 0.5
CPCL-TOTAL 11.5 10.8 9.6 0.9 0.5 0.5 8.7 9.4 9.5
Mumbai (1955) 12 12.8 13.4 1.1 0.7 0.9 12.2 12.5 12.9
BPCL
Kochi (1966) 9.5 10.4 10.7 0.9 1.3 1.1 9.8 10.7 10.7
BORL Bina (2011) 6 6.2 6.4 0.5 0.5 0.5 5.8 5.5 5.7
Numaligarh (1999) 3 2.8 2.5 0.2 0.2 0.2 2.3 2.4 2.5
NRL
BPCL-TOTAL 30.5 32.2 33 2.7 2.7 2.7 30 31.1 31.8
ONGC Tatipaka (2001) 0.1 0.1 0.1 0.007 0.004 0.007 0.06 0.04 0.08
Mangalore (1996) 15 14.6 15.5 1.3 1.3 1.2 14 14 14.5
MRPL
ONGC TOTAL 15.1 14.7 15.6 1.3 1.3 1.2 14.1 14 14.6
Mumbai (1954) 6.5 7.4 8 0.7 0.5 0.7 7.2 7.1 7.7
HPCL
Visakh (1957) 8.3 8.8 9.2 0.8 0.7 0.8 8.4 8.2 8.5
Bathinda (2012) 9 7.3 10.7 0.7 0.7 0.8 9.8 8.6 9.8
HMEL
HPCL- TOTAL 23.8 23.5 27.9 2.2 1.9 2.3 25.4 23.9 26
Jamnagar (DTA)
33 30.9 32.4 2.6 2.6 2.5 29.6 29.6 30
(1999)
RIL*
Jamnagar (SEZ)
27 37.2 37.1 3 3 2.9 33.9 33.9 34.1
(2008)
EOL Vadinar (2006) 20 20.5 19.1 1.7 1.7 1.6 17.3 18.6 19.2
All India 230.1 223.3 232.9 19.5 18.8 19.1 211.5 219.9 224.1
* RIL target for 2016-17 is previous year crude processing.
 April 2017
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StatisticsOil & Gas

LPG consumption (Thousand Metric Tonne)
February April-February
LPG category 2014-15 2015-16
2016 2017 Gr (%) 2015-16 2016-17 Gr (%)

1. PSU Sales :

LPG-Packed Domestic 16,040.40 17,181.70 1519.4 1574.1 3.6 15571.8 17206.3 10.5

LPG-Packed Non-Domestic 1,051.00 1,464.40 136 157.2 15.6 1322.3 1629.8 23.3

LPG-Bulk 315.7 317.2 24.4 28.7 17.4 283.2 336.1 18.7

Auto LPG 163.8 170.9 14.2 13.7 -3.4 156.3 152.5 -2.4

Sub-Total (PSU Sales) 17,570.90 19,134.20 1,694.00 1,773.80 4.7 17,333.60 19,324.70 11.5

2. Direct Private Imports 429.2 489 53.3 35.5 -33.3 437.5 341.7 -21.9

Total (1+2) 18,000.10 19,623.20 1,747.30 1,809.30 3.5 17,771.10 19,666.40 10.7

Status of PNG connections, CNG stations and CNG vehicles across India (Nos.)
PNG connections
CNG No. of CNG
stations vehicles
Domestic Industrial Commercial
State Entity operating Geographical region
55
As on As on As on As on As on
1.3.2017 1.3.2017 1.3.2017 1.3.2017 1.3.2017

Haryana City Gas, Sonepat, Faridabad,

Haryana 31 52,599 240 163 1,25,227
Adani . Gurgaon

Andhra Bhagyanagar Gas

Kakinada, Vijayawada 12 3,534 0 41 15,666
Pradesh Ltd

Bhagyanagar Gas
Telangana Hyderabad 24 2,321 5 23,545
Ltd

Tinsukia, Dibrugarh,
Assam Assam Gas Co. Ltd Sibsagar, Jorhat, 0 29,965 400 1,000 0
Golaghat

Gandhinagar, Mehsana,
Sabarkantha, Nadiad,
Sabarmati Gas Ltd,
Halol, Hazira, Rajkot,
Gujarat Gas Ltd,
Khambhat, Karjan-
Adani Energy Ltd ,
Palej, Valsad, Navsari,
Vadodara Gas Ltd,
Gujarat Surendernagar, Vadodara, 380 16,41,340 4,256 14,718 10,5,937
Hindustan Petroleum
Ahmedabad, Surat,
Corporation Ltd,
Ankleshwar, Bharuch
Charotar Gas
& surrounding areas,
Sahakari Mandal Ltd
Bhavnagar, Jamnagar,
Vapi, Anand

Dewas, Vijaipur, Indore

Madhya Aavantika Gas Ltd,
including Ujjain, Gwalior, 23 10,560 88 56 22,765
Pradesh GAIL Gas Ltd
Pithampura *

Rajasthan GAIL Gas Ltd Kota 3 157 16 1 5,550

 April 2017
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NewsBriefs | Renewable National
Solar park tenders, power purchase on hold as Rewa bids disrupt market
The low bid received for the Rewa solar
park in Madhya Pradesh has jolted
the market in many ways. While most
states are rethinking their tenders, many
have gone slow on buying solar power
contracted at higher rates. Solar Energy
Corporation of India (SECI) has extended
the deadline for three solar parks, Charanka
Make in India: Renewable Energy sector sees fast growth
India is making giant leaps in the
renewable energy sector. In 2016-17
financial year, renewable power projects
output rose by 26%, which makes Indias
56 renewable energy sector as the fastest
growing in the world. Indian is expected
to be the third biggest solar market from
2018 onwards after China and United
States of America. Being the 5th largest
power generation portfolio in the world,
Indias renewable energy contribution
stands at 44.8 GW, which includes 27.4 GW
of wind power and 8.06 GW of solar power
installed capacity. Under the Make in India
campaign, Prime Minister Modi aims to
raise the renewable capacity to 175 GW by
NTPC installs Indias largest floating solar PV plant in Kerala
NTPC recently started power generation from
Indias largest floating solar power plant at
Kayamkulam in Kerala. The 100 kWp floating
solar generation plant, largest of its kind in
India, was indigenously developed as a part
of Make in India initiative, at Rajiv Gandhi
Combined Cycle Power Plant (RGCCPP) in
Keralas Kayamkulam district. Solar panels
mounted on floating boards that hold them in
place saves land usage and has been found
to be efficient than the ones installed on land.
These floating platforms were indigenously
developed by NTPC Energy Technology Re-
search Alliance, the R&D arm of NTPC Ltd, in
collaboration with Central Institute of Plastic
in Gujarat, Bhadla in Rajasthan and Kadapa
in Andhra Pradesh. It is learnt that the
tenders had been put on hold after solar
tariffs declined to a levelised Rs 3.3 per
unit at the Rewa solar power park. At the
Bhadla solar power park, the portion of
the project to be built by domestic content
has been scrapped. The cost of solar
power has fallen so low that we now have
to rethink the process. The reason for
shelving the domestic content requirement
is in line with the effort to bring down the
cost, said an SECI executive. One reason
for the Rewa park receiving low bids is
Madhya Pradesh has provided assurances
over power offtake and offered a sovereign
guarantee in case of purchase default.
2022 from 45 at present. This will include
100GW of solar power and 60GW from
Wind power. National Resource Defense
Council estimates that more than 1 million
full time equivalent jobs will be created by
the Solar Industry alone, by 2022.
the panels and requires lesser installation
Engineering & Technology (CIPET), Chennai
and a patent has been applied for. The system
was installed by Swelect Energy Systems Ltd,
Chennai with support from NETRA & NTPC
Kayamkulam station in a short span of 22
days.Such systems are fast emerging as an
Germany extends assistance to Indias
energy efficiency programme
Germany will provide additional funding
of 200 million euro to Indias energy
efficiency programme, taking its total
commitment to the green initiative to
600 million euro. At German Embassy
(in Delhi), the German Development Bank
(KfW) signed -- on behalf of the Federal
Ministry for Economic Cooperation and
Development (BMZ) -- a loan agreement
with Energy Efficiency Services Ltd (EESL)
over Euro 200 million (Rs 1,400 crore), a
statement by German Embassy said. With
the loan agreement signed in the presence
of German Ambassador Martin Ney, the
total German commitment for better
energy efficiency in India stands at 600
million euro (Rs 4,200 crore). State-run
EESL uses the funds to invest in energy
efficiency measures in various sectors like
domestic households, public buildings,
street lighting, water supply and other
public facilities, agriculture and industry.
It also provides related services to clients
for successful implementation of projects.
The programme thus contributes to a
more efficient use of energy and therefore
reduces greenhouse gas emissions.
alternative to conventional ground mounted
photo-voltaic systems which are land inten-
sive. It has various benefits like conserving
water through reduction of evaporation,
increased generation due to cooling effect on
time than conventional land mounted ones,
NTPC said. Installation potential of such
type of systems in India is huge because of
abundance of water bodies, within NTPC, the
potential is about 800 MWp in various reser-
voirs in existing stations.Particularly in Kerala,
due to availability of water bodies and lack of
presence of enough land, this type of system
has a great potential, it said.

NewsBriefs | Renewable International
Solar capacity grows over 3 folds to 10K MW in three years
Indias solar power generation capacity
has crossed 10,000 megawatt (MW), a
more than three-time jump in less than
three years as government pushes for
renewable energy sources to meet galloping
demand. The milestone came as NTPC Ltd
commissioned a 45 MW solar power project
India forecasted to become worlds 3rd largest solar market in 2017
Taiwan based market researcher
EnergyTrend has predicted that India to
become the 3rd largest solar market in the
world in year 2017. EnergyTrend expects
that India to add at least 10 gigawatts
to its domestic PV installations in 2017.
While China remains the largest regional
market, its domestic PV installation target
for this year is slightly lower than last
years according to the latest government
announcement, said EnergyTrend analyst
Celeste Tsai. As for the second-place
U.S., the countrys current political climate
is not conducive to the growth of its PV
market. At the same time, Japan will
continue to lower its feed-in tariff rates
over the next few years. Because India
Suzlon to increase R&D focus
Renewable solutions company, Suzlon,
has invested close to $250 million in the
last five years towards R&D and plans
to continue investing in this space with
an aim to reduce the cost of energy
further by 20-25 per cent in the next five
years. The companys annual capex is
in the range of Rs 300-400 crore each
year, which is spent on maintenance and
R&D of current and future products. The
company is focusing on lowering the
Levelised Cost of Energy (LCoE) by 20
per cent in the next five years with new
turbines, more efficient turbines to make
previously unviable sites viable, increasing
at Bhadla in Jodhpur, Rajasthan. Bright
Future: India has crossed 10,000 MW of
Solar power capacity. More than 3 times
increase in less than 3 years, Power, Coal,
Mines, New & Renewable Energy Minister
Piyush Goyal said. India solar power
generation capacity stood at 2,650 MW on
May 26, 2014. As much as 14,000 MW (or
14 gigawatt) of solar projects are currently
under development and about 6 GW is to
be auctioned soon. In 2016, about 4 GW
of solar capacity was added, the fastest
pace till date. According to power ministry
estimates, another 8.8 GW capacity is likely
to be added in 2017, including about 1.1 GW
of rooftop solar installations.
still maintains strong demand for PV
products, it has the potential to overtake
Japan to become the worlds third largest
solar market by taking at least 14% of the
years total PV demand.
its plant load factor and stabilise the
grid in India. The company is envisioning
gigawatt size projects supported by
increasing digitisation and best-in-class
service. Talking about the companys
R&D strengths, Tulsi Tanti, chairman and
managing director, Suzlon Group, said,
April 2017
www.InfralinePlus.com
National
Inox Wind looks to sell its stake in new
project
Inox Wind Infrastructure Services Ltd.,
one of the four winners of the first wind
power auction held in October, is already
looking to sell a stake in the 250 MW proj-
ect it was awarded. Several buyers have
shown interest, with ReNew Power, which
lost out in the auction, close to clinching
a deal. Inox won the bid quoting a tariff
of Rs 3.46 per unit, lower than the prevail-
ing wind tariff, which varies between Rs
4 and Rs 6 across wind producing states
that is fixed by each states power regula-
tor. Mytrah Energy (India), Green Infra
Wind Energy and Ostro Kutch Wind also
won 250 MW each, with an identical tariff.
Re-New Power had bid at Rs 3.47 per unit.
Although the auction was formally noti- 57
fied last October, the bids were opened
only late in February. Since then, Inox
Winds parent company Inox Renewables
is said to have decided to move out of de-
veloping wind farms and concentrate on
its core business of manufacturing wind
power generating equipment. In early
March, Inox Renewables sold its entire
portfolio of wind farms of about 260 MW
to Chennai-based Leap Green Energy Pvt.
for an undisclosed sum.
We are industry leaders particularly in
aerodynamic technology which is one of our
biggest USP. We have our R&D centres in
Germany, Netherlands, Denmark and India.
Last year, we established a Blade Science
Centre in Vejle, Denmark, which will work
on the development of aerodynamics, pitch
control systems, smart controls and new
structures. The companys new area-
Wind-Solar Hybrid solution is expected to
leverage the complementary generation
cycle of wind and solar. This enables better
utilisation of the existing grid and also
helps to save land and power evacuation
infrastructure costs.
 April 2017
www.InfralinePlus.com
NewsBriefs | Renewable International States
Karnataka mulls competitive bidding for wind power
After the success of the recent central
government-sponsored auction of wind
power capacity, Karnataka is looking to
do the same. Wind power companies have
always sold energy at rates fixed by the
respective State electricity regulatory
Telangana set to lead India in solar power generation by year-end
Energy minister G Jagadishwar Reddy
said that Telangana is set to become the
biggest solar power generating state in the
country by the end of this year. Currently,
Rajasthan, which generates 1,300 MW solar
58 power, tops the list. As of now, Telangana
expects to have an installed capacity of
1,456 MW of solar power by April this year
and that is expected to touch 2,000 MW
by the end of this year. The state has set
itself a goal of generating 5,000 MW of
electricity from solar power in the next
few years, he said. Reddy said that China
built hybrid generating stations combining
hydel and solar units but to generate one
mega watt in this manner, would require
an investment of Rs 20 crore. On hydel
Arunachal to relook hydropower policy
Small hydropower projects in Arunachal
Pradesh are facing delays in execution
with some being stalled for almost a
decade. In all, there are nearly 140
hydropower projects (large and small) in
the State stuck in the long development
period that were allotted after policies
came out in 2007-2008. The delay has
also been prolonged due to regulatory
changes from the Ministry of Environment
and Forests, including the introduction
of Basin study, which mandates that the
entire river should be studied as a whole
before proceeding with a project. State
Commissioner (Power and Finance) Ashish
commissions, and these feed-in tariffs have
ruled around Rs 4.50 a kWhr. Tamil Nadu,
the windiest state, pays Rs 4.16 a kWhr.
However, in the countrys first tariff-based
auctions, held last month, the market-
determined tariffs slid to as low as Rs 3.46
a kWhr. This has come as an eye-opener
to State governments, who now see an
opportunity in competitive bidding to procure
power cheaper. Karnatakas Energy Minister
DK Shivakumar said that the State is
working on a plan to auction wind capacity.
Shivakumar ruled out opening signed power
purchase agreements for re-negotiations.
We cant do that, he said, but observed that
feed-in tariffs would have a natural death.
power generation, he said that TSGenco is
studying the viability at Kaleshwaram lift
irrigation project. He also said that the lower
Jurala Hydro Electric project with 240 MM
(6x40 MW) was commissioned in October
2016 and Pulichintala hydro power project
in September 2016 and the remaining
three units would be completed in 2017-18
financial year.
Kundra said that Arunachal Pradesh is
going to take a fresh look at the prevailing
Two solar plants come up in
Andamans, to replace 47 MW of
diesel-run capacity
Authoritys plans to set up Solar Photo-
voltaic (SPV) power plants in two sites
of Andaman and Nicobar Islands are
currently underway. As per reports, two
power plants have battery storage of upto
25 MW, which is just half of the islands
present operational generation capacity.
The project is aimed at replacing 47 MW
of diesel-run generation capacity that pro-
vides electricity to the habitable parts of
archipelago of over 572 islands in the Bay
of Bengal, near the 10 MW of renewable
generation that is at present operational
there. In the meantime, the Centre took
countrys solar power generation capacity
to next level few days back by install-
ing Indias largest Solar PV Plant at
Kayamkulam, Kerala. The setting up of the
plant is a huge step in achieving the goal
of affordable 24X7 power as it is expected
to generate about 100 KWP power. India,
in last few years has made significance
progress in renewable sector and hopes
to provide round the clock power supply to
all citizens of the country.
hydropower policy. The Chief Minister is
the minister in-charge of hydropower and
is keen to give it a fresh impetus. There
is a list of 10 large projects which have
been identified in conjunction with Ministry
of Power which are tracked regularly but
we will have to find innovative solutions
to overcome the challenges of financial
closure, he said. There are 95 allotted
small hydropower projects with capacities
of less than 100 MW in the State. Of these,
17 have been in the works since 2007 with
some yet to receive the Central Electricity
Authority of Indias techno economic
clearance.

NewsBriefs | Renewable International
Tunisia to invest $1 billion in renewables in 2017
According to the Energy General Direction of
the Tunisian Ministry of Energy and Mines,
650 MW of the total 1,000 MW will come
from solar photovoltaic (PV) power, with
the remaining 350 being supplied by wind
energy. At the same time, the private sector
plans to invest a further 600 million into the
development of renewable energy capacity
South Australia plans 100MW battery, dispatchable renewables
In a major energy strategy upheaval, the
South Australian government is providing
significant funding to support energy storage
projects, starting with a 100MW grid-
connected battery that will be the largest
in the country. The aim is to modernise the
states grids and help support the increasing
penetration of renewable energy capacity.
Blackouts in the region caused a vicious
nation-wide debate about what had caused
the power cuts last year, with the matter
still unsettled in some quarters. South
Australias new plan was announced just
a few days after Tesla chief Elon Musk
confirmed via Twitter that his company
could solve South Australias grid crisis
with a 100MW battery, which he would
Three solar thermal plants in Chile could generate electricity 24 hours a day
The Chilean government recently gave
the go-ahead on a massive solar thermal
plant that is expected to produce
electricity 24 hours a day, seven days a
weeka considerable feat for a plant that
depends solely on solar energy. The plant,
proposed for a site in Chiles Tamarugal
province, would consist of three 150
megawatt solar thermal towers, which
become heated as mirrors placed around
each tower reflect sunlight onto it. That
heat is transferred to molten salt, which
circulates through the plant during the day
and is stored in tanks at night. The salt, a
mixture of sodium nitrate and potassium
in 2017, the Ministry added. Under new
plans, Tunisia has committed to generating
30 per cent of its electricity from renewable
energy sources in 2030. Last year, a total
of 579 gigawatt hours (GWh) of renewable
electricity was produced in the country, with
a combined capacity of 342 MW. The initial
phase of the 1,000 MW of installations has
already begun. In the second phase of its
energy strategy, the nation intends to install
1,250 MW between 2021 and 2030. The
news follows the findings from a recent
report stating the entire Middle East and
North Africa (MENA) have more than 5.7
gigawatts (GW) of solar energy capacity in
the pipeline.
provide free of cost if not commissioned
within a 100 days of being asked. Following
this, John Grimes, CEO of the Australian
Energy Storage Council, said that the state
government has been at pains to stress
that there will be an open, competitive
tender process to build the 100MW project.
nitrate thats kept at a balmy 1,050
degrees Fahrenheit (566 degrees Celsius),
is used as a heat transfer fluid. As energy
is needed, the salt can be dispatched to a
April 2017
www.InfralinePlus.com
Worldwide solar power growth
increased by 50 percent in 2016
New reports from SolarPower Europe
show that solar power had a very good
year last year. Worldwide, installed solar
power capacity grew by an amazing 50
percent in 2016, with the largest growth
occurring in the U.S. and China. The total
amount of solar capacity added last
year was more than 76 gigawatts (GW),
while 2015 saw 50 GW installed. The
total global solar power capacity is now
about 305 GW, a major leap from the 50
GW installed worldwide a mere 7 years
ago. The U.S. and China both doubled
the amount of solar power they added in
2015, leading all other countries in solar
growth. China added 34.2 GW and the 59
U.S. added 14 GW. Europe, however, saw a
20 percent downturn in growth compared
to the previous year, but there was
still progress. Europe has now passed
its goal of 100 GW of installed power,
reaching 104 GW. The UK led Europe with
almost 30 percent growth, but the pace
of growth has stalled there compared
to past years thanks to the removal of
subsidies and incentives for residential
solar installations and solar farms.
heat exchanger, where it will lend its heat
to water to create a super-heated steam.
That steam is used to move a traditional
steam turbine to create electricity.
Because the molten salt will stay hot for
hours in its thermal storage tankeven
throughout the night or during a cloudy
morningthe molten salt is said to store
that thermal energy. SolarReserve, the
US-based company that proposed this
project, has also proposed two othersa
260 MW, 24-hour plant near the city of
Copiap in the Atacama Region of Chile,
as well as a 390 MW, 24-hour plant in the
Antofagasta Region.
 April 2017
www.InfralinePlus.com
ExpertSpeak
Increasing supply of renewable energy to
help replace carbon-intensive energy sources
Yogendra Prasad, former chairman, NHPC, makes a strong case for
promoting renewable energy in India. According to him, deployment
of renewable energy will not only help reduce green house emission,
but will also lead to significant opportunities for job creation.
Everyone knows that today power
sector is the most important sector for
economical growth and prosperity of
any nation. Human activity is overload-
ing the atmosphere with carbon dioxide
and other global warming emissions
which trap heat steadily, drive the
planets temperature and creates sig-
nificant harmful impacts on our health,
environment and climate. Electricity
production accounts for more than 50%
60 of global warming emissions with the
majority generated by coal-fired power
plants in the world. Natural gas plants
produce more than 10% total emissions
approximately in the world. In contrast
to this, most renewable energy sources
produce very little global warming
emissions. According to data aggre-
gated by International Panel of climate
change, life cycle global warming
emissions associated with renewable
energy including manufacturing, instal-
lation, operation and maintenance and
dismantling etc. are minimal. Com-
pared with natural gas, which emits
CO2 between 0.6 to 2 Pounds Carbon
dioxide equivalent/kWh and coal
which emits CO2 between 1.4 to 3.6
pounds equivalent/kWh, wind emits 02
to 04 pounds of C02/kWh, Solar 0.07
to 0.2 pounds CO2/kWH, Geothermal
0.1 to 0.2 pounds/kWh and Hydro 0.1
to 0.5 pounds CO2/kWh. Renewable
electricity generation from biomass can
have a wide range of global warming
emissions depending on the references
and method of harvesting.
Increasing the supply of renewable
energy would allow us to replace
carbon-intensive energy sources
significantly in the world. Generating
electricity from renewable energy
rather than fossil fuels offers sig-
nificant public health benefits. The air
and water pollution emitted by coal
and natural gas plant is linked to
breathing problems, neurological
damage, heart
attack and
cancer etc. It is
Replacing essential to
fossil simultaneously
fuel with
develop pumped
renewable
energy has
storage
been found hydroelectric
to reduce projects
premature
mortality and lost
work days. It reduces overall health
care cost. The aggregate national
economic impact associated with these
health impacts of fossil fuel is sig-
nificantly high. Wind, solar and hydro
electric system generate electricity with
no associated air pollution emissions.
The geothermal and biomass energy
systems emit some air pollution but
total air emissions are generally much
lower than those of coal and natural
gas-fired plants. In addition, wind
and solar energy require essentially
no water to operate and hence do not
pollute water resources at all. As such,
they do not interfere with agriculture,
drinking water systems or other
important water needs. In contrast,
fossil fuel can have a significant impact
on water resources.
Yogendra Prasad, former chairman, NHPC
Greater job creation in
renewable
Jobs and other economic benefit
are very high in developing renew-
able energy systems in comparison
of coal and gas-fired systems. Fos-
sil fuel technologies are typically
mechanical and capital intensive, the
renewable energy industry is more la-
bour intensive. Based on this, on aver-
age, more jobs are created for each unit
of electricity generated from renewable
sources than from fossil fuels. The
technical potential of each renewable
energy source is based on their overall
availability given certain technological
and environmental constrains. How-
ever, it is important to note that all of
the technical potential cannot be tapped
due to conflict in land acquisition as
well as higher short term cost of the
resources. In adding to this, there may
be some limitation in transmitting all
the power to be generated as well as
several hindrances by the local people
and other hurdles.
As on date, renewable energy which
has been developed is a tiny fraction of
its total potential available for elec-
tricity worldwide, but numerous studies
 April 2017
www.InfralinePlus.com

have shown that renewable energy are also getting royalties based on In contrast, fossil fuel prices are
can be rapidly deployed to provide a the project annual revenue. Similarly, varying dramatically on upper side.
significant share of electricity needs of farmers and rural land owners can also With development of more solar and
the world. The jobs directly created in generate new sources of supplemental wind power project the only problem
the renewable industries and growth in income by producing feedstock for bio- is that in day time the power frequency
the renewable industry creates multiple mass power generation. goes high due to more power generation
effects. For example, industries in in the power system that the demand
renewable industries supply chain of Affordable power which is detrimental for safety of
benefits to unrelated local business With the development of renewal generators life of generating plants for
with benefit from increase of household energy, electricity can be provided which it is essential for us to develop
and business incomes. In addition to poor population of the country by simultaneously the pumped storage
to creating new jobs, the renewable stabilizing the prices of energies in hydroelectric projects for which lot of
energy offers important economic local future. The costs of renewable tech- potential is there in the country and
benefits to the people. Local gov- nologies are declining steadily and projects are also identified by Central
ernment collect property and income have been projected to drop in future. Electricity Authority (CEA). There is
taxes and other taxes from renewable For example, the average price of solar lot of shortage of power during peak
energy project owners. These revenues panel has dropped almost sixty percent hours during morning and evening
can help support vital public services approximately since 2011. The cost of for which storage typed hydroelectric
especially in rural communities where generating electricity from wind has projects must be developed to balance
projects are often located. Owners of dropped 20% in last five years. Cost the frequency as per grid code of
the land on which wind project are of renewable energy could decline Government of India. For this, lot of
built often receive lease payments on further in future with the enhancement potential is available in the country and
very high side in comparison to their of technologies. In hydro projects, after details of which are available withCEA.
agricultural products per megawatt commissioning the projects, the cost of (Yogendra Prasad has worked in the 61
of installed capacities. Local people energy declines day-by-day. post as CMD of NHPC, SJVPC and as
Chairman of NHDC and Uttrakhand
In addition to creating new jobs, the renewable Jal Vidhyut Nigam Limited. He has also
worked as honorary Vice Chairman
energy offers important economic local benefits
of International Hydro Association,
to the people. Local government collect property National Hydro Association, President
and income taxes and other taxes from renew- of Central Board of Irrigation &
able energy project owners. These revenues can Power, and Special Advisor (Energy) to
help support vital public services especially in ru- Govt. of Uttarakhand).
ral communities where projects are often located. The views in the article of the author are personal.
For suggestions email at feedback@infraline.com
 April 2017
www.InfralinePlus.com
InDepth
Small hydro projects need
special treatment
62
SHPs projects are economical source of electricity, entitled to fiscal sops
India has estimated potential to generate 20,000 mw power from small hydro projects
By Team InfralinePlus
The Union power ministry is plan-
ning to come out with a new national
hydropower policy in 2017-18, which
would incentivise large hydel projects
at par with small hydropower projects
(with capacity of up to 25 mw). The
envisaged policy will definitely help
in expeditious harnessing of Indias
unutilised hydropower potential esti-
mated at above 1 lakh mw but it could
also undercut prospects of small hydel
projects (SHPs) which need differential
treatment to compete with large ones.
India has nearly 43,000 mw
installed capacity based on large
hydel projects against the potential
to generate 1.5 lakh mw electricity.
The pace of capacity addition remains
quite slow due to challenges like
geological and hydrological risks
involved in building hydel projects,
which often lead to undue delays and
cost escalation in project costs. That
in turn makes tariff unpredictable.
That is the reason power distribution
companies are reluctant to sign long-
term power purchase agreements with
hydropower projects.
In contrast, SHPs projects are
an economical source of electricity
because they are entitled to fiscal sops
like renewable energy plants. If the
distinction between SHPs and large
hydel projects goes away, the latter
would become commercially more
attractive as they enjoy economies of
scale, undermining growth prospects of
SHP projects.
The Centre has mooted radical
policy changes in the existing hydro
policy as it tries to push hydel gener-
ation as a counterbalance to the massive
deployment of renewable capacity such
as solar and wind. Since India does not
have much fuel for gas-based power
plants, there is now a policy push to the
hydro sector as hydel generation can
be ramped up and down, depending on
availability of electricity from solar and
wind projects.
There will be a major thrust on
hydro sector by different ways to
bring down cost of electricity from
this renewable source, power minister

Piyush Goyal said recently. Hydro
power is also renewable energy. We
are working on a position paper after
studying all international experiences,
we will look very seriously to see
whether these should be categories as
renewable power, Goyal said.
Advantages of small hydro
SHP plants have certain inherent advan-
tages over large hydro and other power
projects. For example, they can generate
clean energy at a competitive cost and
have features that make them suitable for
meeting electricity requirements during
peak hours. They are less affected by
rehabilitation and resettlement (R&R)
problems vis--vis large hydro power
plants and can meet the power require-
ments of remote and isolated areas.
Small hydro can be further subdi-
vided into mini hydro, usually defined
as less than 1,000 kW, and micro hydro
which is less than 100 kW. Micro
hydro is usually the application of
hydroelectric power sized for smaller
communities, single families or small
enterprise. SHP plants may be con-
nected to conventional electrical distri-
bution networks as a source of low-cost
renewable energy. Alternatively, small
hydro projects may be built in isolated
areas that would be uneconomical to
serve from a network, or in areas where
there is no national electrical distri-
bution network.
Since SHPs usually have minimal
reservoirs and civil construction work,
they are seen as having a relatively
low environmental impact compared
to large hydro projects. Small hydro is
often developed using existing dams
or through development of new dams
whose primary purpose is river and lake
water-level control, or irrigation. Many
companies offer standardized turbine
generator packages in the approximate
size range of 200 kW to 10 MW. These
water to wire packages simplify the
planning and development of the site
since one vendor looks after most of the
equipment supply.
Since overhead engineering costs get
minimised and development costs spread
over multiple units, the cost of such
systems is improved. While synchronous
generators capable of isolated plant
operation are often used, small hydro
plants connected to an electrical grid
system can use economical induction
generators to further reduce installation
cost and simplify control and operation.
Policy interventions
The recent amendments by the Central
Electricity Regulatory Commission
SHP plants have certain
inherent advantages
over large hydro and
other power projects.
For example, they can
generate clean en-
ergy at a competitive
cost and have features
that make them suitable
for meeting electricity
requirements during
peak hours. They are
less affected by rehabil-
itation and resettlement
(R&R) problems
(CERC) in grid code are a positive
for SHP plants with less than 10 MW
capacity. As per the amendments, re-
newable energy power plants including
SHPs with installed capacity of less
than 10 MW will be treated as must
run and will not be subjected to merit
order dispatch principles.
Also, the allowed variation of up
to 30 per cent of the schedule and the
burden of applicable Unscheduled
Interchange (UI) charges to be shared
among system users on an all-India
basis and not on project developers
and permission to fine-tune schedules
(based on the forecast) as close as three
hours before the actual generation
should facilitate further integration of
SHP projects.
April 2017
www.InfralinePlus.com
India has estimated potential to
generate 20,000 mw power from
small hydro projects. It had targeted
to harness at least 7,000 mw capacity
by the end of March 2017. But actual
capacity addition was just 4,300 mw,
far less than the target.
The comptroller and general (CAG),
which recently audited small hydel
scheme, found glaring irregularities
in implementation of these projects
in areas ranging from preparation of
feasibility studies states to approval
to detailed project reports in states
like Himachal Pradesh and Arunachal
Pradesh. In certain cases, project devel-
opers struggled to obtain environment
clearance and acquire land, which led
them to finally abandon allotted projects.
The CAG report observed delays
and problems in conducting feasibility
studies for identifying potential sites
for setting up Small Hydro Power
projects, which was a critical planning 63
activity for development of small hydro
power. In Himachal Pradesh 37 consent
letters were issued but the IPPs did not
submit any DPR even after five years.
And out of 88 DPRs submitted by
Himurja to the Department of Energy
for technical approval, none had been
approved and the IPPs had not sub-
mitted feasibility study reports for 78
projects allotted to them.
Further, due to delays and problems
in according technical approvals to
DPRs, allotment of projects, acquiring
land and obtaining forest and envi-
ronmental clearances, several projects
could not be taken up and completed
in time. In Arunachal Pradesh, the state
government had entered into agreement
with private developers for setting
up 52 small/mini/micro hydro power
projects of 714 MW but none had been
commissioned. Similarly, in Chhat-
tisgarh the state nodal agency sanc-
tioned 50 SHP projects of 612 MW but
none had been commissioned.
The national auditor recommended
that the nodal agency, Ministry of New
and Renewable Energy (MNRE), must
 April 2017
www.InfralinePlus.com

InDepth

ensure that pre-requisites such as land

and statutory clearances are obtained
before release of central financial assis-
tance to developers in order to avoid
time and cost overruns. It also recom-
mended that the MNRE should focus
on reviewing SHP projects that are
held up or are under performing to find
solutions to the problems hindering the
completion of these projects.
Audit also found delays and problems
in conducting feasibility studies for iden-
tifying potential sites for setting up SHP
projects, which was a critical planning
activity for development of small hydro
Power. In Himachal Pradesh 37 consent
letters were issued but the IPPs did not
submit any DPRs even after five years.
Approved projects could not be com-
pleted for various reasons such as negli-
gence of contractors, midway changes in
design, etc. This led to significant time
and cost overruns. In Bihar, 15 projects
had not been commissioned even after a
64
delay of 37 to 88 months and incurring
an expenditure of Rs 128 crore, the audit
report said.
Audit also observed deficiencies in
post-commissioning maintenance of
the projects. Test check revealed that
60 projects in five states were shut
down, under repair and maintenance
or working below capacity, resulting
in loss of power generation, revenue
losses, unfruitful expenditure on out of
order plants, wasteful expenditure on
abandoned plants, etc.
There were instances of non-
recovery of liquidated damages,
environmental dues, commitment fees,
diversion of funds, excess payments
to developers, non-revision of tariffs,
etc. There were also deficiencies in
monitoring and evaluation of projects
by MNRE and state agencies.
But experts are optimistic that
demand for power from SHPs would
remain strong given the Narendra Modi
governments reliance on non-fossil
fuel generated electricity to drive the
Indian economy. According to credit
rating agency Icra, the demand for
Presently, SHPs account for 10 per cent of Indias
total renewable power generation capacity. This
share can go up if problems facing SHP develop-
ers are addressed by the government. But SHP
projects, especially those in remote areas face in-
frastructural bottlenecks in power evacuation. The
single biggest challenge is the construction risk
SHP is likely to go up significantly, not attractive enough for developers.
given the support now available from Timely revision of power tariffs
improved fiscal and regulatory mea- by regulators to ensure that the tariffs
sures. India has targeted to meet 40 per fully cover the capital costs likely to be
cent of its electricity requirement from incurred by developers would remain
non-fossil sources by 2030. critical for the viability of SHP plants.
Presently, SHPs account for 10 per The lack of consistency in SHP tariff
cent of Indias total renewable power norms across states hinders invest-
generation capacity. This share can go ments in the sector with several states
up if problems facing SHP developers having tariffs which do not ensure
are addressed by the government. adequate returns on investments.
But SHP projects, especially those in Besides, Renewable Purchase Obliga-
remote areas face infrastructural bottle- tions regulations also vary from state to
necks in power evacuation. The single state, said power sector experts.
biggest challenge is the construction Apart from being an economical
risk, given that most SHP projects are source of electricity, SHP projects
located in remote, hilly/mountainous can also cater to Indias peak power
regions with severe infrastructural demand a potential that must be
constraints, says Icra. tapped given the difficulty of ramping
The locational hurdles also serve to up gas-bed generation capacity. The
prolong the gestation period and push government must provide a differ-
up the per-MW capital costs even as ential treatment for SHP projects if it
the power evacuation and transmission wants this potential to be harnessed
facilities at the sites remain inadequate. expeditiously.
Further, the preferential tariff being
offered to developers in some states are For suggestions email at feedback@infraline.com
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 April 2017
www.InfralinePlus.com

StatisticsRenewableEnergy
Programme/ Scheme wise Physical Progress in 2016-17 (Cumulative upto the month
of February, 2017)
FY- 2016-17 Cumulative Achievements
Sector Achievement (April
Target (as on 28.02.2017)
- February, 2017)

I. GRID-INTERACTIVE POWER (CAPACITIES IN MW)

Wind Power 4000.00 2373.90 29151.29

Solar Power 12000.00 2803.77 9566.66

Small Hydro Power 250.00 73.15 4346.85

BioPower (Biomass & Gasification and 400.00 157.00 8182.00

Bagasse Cogeneration)

Waste to Power 10.00 7.50 114.08

Total 16660.00 5415.32 51360.88

II. OFF-GRID/ CAPTIVE POWER (CAPACITIES IN MWEQ)

Waste to Energy 15.00 5.57 164.45

Biomass(non-bagasse) Cogeneration 60.00 0.00 651.91

Biomass Gasifiers
2.00 0.00 18.34
-Rural
66
-Industrial 8.00 4.30 168.54

Aero-Genrators/Hybrid systems 1.00 0.29 2.98

SPV Systems 100.00 131.91 438.95

Water mills/micro hydel 1 MW + 500 Water Mills 0.10 MW + 100 Water Mills 18.81

Total 187.00 142.17 1463.98

III. OTHER RENEWABLE ENERGY SYSTEMS

Family Biogas Plants (in Lakhs) 1.00 0.42 49.52

REC Report March 2017

Indian Energy Exchange

Cleared Volume Cleared No. Of

Year | Month Type Buy Bids (REC) Sell Bids (REC)
(REC) Price(Rs/REC) Participants

Solar 112,445 3,871,976 112,445 3,500 622

March2017
Non-Solar 572,357 9,370,586 572,357 1,500 627

PXIL

Buy Bid (No. of Sell Bid (No. of MCP (Rs. / MCV (No. of certificate)
Year | Month Type
certificates) certificates) Certificate) Qty (MWH)

Solar 31,177 1,139,108 3,500 31,177

March'2017
Non-Solar 316,346 3,267,336 1,500 316,346
 April 2017
www.InfralinePlus.com

State Wise & Source Wise Renewable Energy Generation for the month of February,
2017 (All fig. in MU)
Name of State/ Total
Wind Solar Biomass Bagasse Small Hydro Other
UT/ Organisation Generation
Chandigarh 0.00 0.45 0.00 0.00 0.00 0.00 0.45
Delhi 0.00 0.26 0.00 0.00 0.00 11.32 11.58
Haryana 0.00 3.08 14.80 0.00 10.75 0.00 28.63
HP 0.00 0.00 0.00 0.00 83.42 0.00 83.42
J&K 0.00 0.00 0.00 0.00 20.78 0.00 20.78
Punjab 0.00 80.13 36.84 39.77 12.43 17.40 186.57
Rajasthan 353.29 183.69 19.08 0.00 1.51 0.00 557.58
Uttar Pradesh 0.00 29.04 15.39 575.85 2.71 6.34 629.32
Uttarakhand 0.00 3.17 0.00 22.22 24.60 0.00 49.99
NTPC-Dadri, Fbd, Un-
0.00 10.68 0.00 0.00 0.00 0.00 10.68
chahar, Sing.& Bhadla
Oil India Ltd 12.37 2.11 0.00 0.00 0.00 0.00 14.47
Total NR 365.66 312.61 86.11 637.84 156.20 35.07 1593.48
Chhattisgarh 0.00 11.19 108.22 0.00 1.62 0.00 121.03
NTPC Raj garh
0.00 7.43 0.00 0.00 0.00 0.00 7.43
(Chhattigarh)
Gujarat 550.71 152.19 1.92 0.00 3.36 0.00 708.18
Madhya Pradesh 251.73 127.10 3.20 0.00 19.40 3.62 405.06
Maharashtra 245.26 52.93 50.44 234.59 79.34 0.00 662.57
Dadra and Nagar Haveli 0.00 0.15 0.00 0.00 0.00 0.00 0.15
Daman & Diu 0.00 1.60 0.00 0.00 0.00 0.00 1.60 67
Total WR 1047.70 352.60 163.78 234.59 103.73 3.62 1906.02
Andhra Pradesh 221.50 163.58 30.11 24.62 20.58 0.68 461.08
Telangana 13.41 162.32 19.02 21.37 3.93 7.69 227.74
Karnataka 353.43 82.78 15.39 53.84 82.78 30.30 618.51
Kerala 3.42 2.74 0.00 16.58 0.00 0.00 22.74
NTPC Ramagundam 0.00 40.55 0.00 0.00 0.00 0.00 40.55
Tamil Nadu 480.85 196.87 21.70 50.63 1.57 0.00 751.60
Lakshadweep 0.00 0.20 0.00 0.00 0.00 0.00 0.20
Puducherry 0.00 0.04 0.00 0.00 0.00 0.00 0.04
Total SR 1072.61 649.07 86.21 167.04 108.85 38.67 2122.46
Andaman Nicobar 0.00 0.39 0.00 0.00 1.07 0.00 1.46
Bihar 0.00 11.86 0.00 35.38 1.28 0.00 48.52
Jharkhand 0.00 3.25 0.00 0.00 0.00 0.00 3.25
Orissa 0.00 18.86 0.00 0.00 7.82 0.00 26.68
Sikkim 0.00 0.00 0.00 0.00 1.50 0.00 1.50
West Bengal 0.00 1.51 0.00 117.39 11.95 0.00 130.85
DVC 0.00 0.01 0.00 0.00 9.29 0.00 9.30
NTPC Andman/Talcher 0.00 1.64 0.00 0.00 0.00 0.00 1.64
Total ER 0.00 37.52 0.00 152.78 32.91 0.00 223.21
Arunachal Pradesh 0.00 0.01 0.00 0.00 0.03 0.00 0.03
Assam 0.00 2.85 0.00 0.00 1.35 0.00 4.20
Manipur 0.00 0.01 0.00 0.00 0.00 0.00 0.01
Meghalaya 0.00 0.00 0.00 0.00 2.33 0.00 2.33
Mizoram 0.00 0.00 0.00 0.00 4.00 0.00 4.00
Nagaland 0.00 0.00 0.00 0.00 2.58 0.00 2.58
Tripura 0.00 0.00 0.00 0.00 3.01 0.00 3.01
NEEPCO 0.00 0.62 0.00 0.00 0.00 0.00 0.62
Total NER 0.00 3.48 0.00 0.00 13.30 0.00 16.78
All India Total 2485.97 1355.28 336.10 1192.25 414.99 77.36 5861.95
 April 2017
www.InfralinePlus.com
OffBeat
Port sector on cusp of explosive growth
New model concession expected to go a long way in improving
investment sentiments
Sagarmala project could lead to annual logistics cost savings of close
to Rs 35,000 crore
68
by Team InfralinePlus
As Indias international trade picks up
pace after nearly two years free fall,
entailing increased flow of cargoes, the
pace of capacity addition in the domes-
tic port sector is likely to quicken in
coming days. Also bolstering sentiments
about the port sector is the governments
plan to increase its exports to $900 bil-
lion by 2020 from nearly $260 billion
in 2015-16. On the import side, Indias
fast-growing demand petroleum con-
sumption means higher crude oil import.
Indian ports handle about 90 per
cent by volume and 70 per cent of
value of the countrys export-import
cargo. Meanwhile, the government
has decided to halve the timeframe
for implementation of its flagship
Sagarmala project, which envisages
port-led development model to boost
exports. Countries like the US, Korea
and China have reaped huge benefits
from this model of growth. However,
the success of the project critically
hinges on private participation.
In this context, the governments
recent move to de-risk private investors
through introduction of a new model
concession is also expected to go a long
way towards improving investment
sentiments about the sector. The revised
MCA has provides that concessionaire
will hold 51 per cent equity until 3
years after Commercial Operation Date
(COD) and 26 per cent thereafter for
another 3 years. Hence, the private party
would be free to exist after 6 years from
COD. The concessionaire may approach
the Concessioning Authority to waive
the equity holding requirement during
the second 3 year term if performance
parameters have been achieved during
the first three year period.
The new MCA is also aimed at
facilitating availability of low cost
long term funds to concessionaire so
as to improve the financial viability
of the projects and is based on the

Model Tripartite Agreement approved
by Department of Economic Affairs.
Under this agreement, the conces-
sionaire can issue bonds on completion
of one year of operation for refinancing
of debt, which will help in optimising
project financing costs.
The new agreement also provides
for compensating developers for all
unforeseen changes in law except
imposition of new direct tax. It also
has provisions for a mid-term review
by a Review Board at the end of 15
years from COD to arrive at required
mitigation measures. The triggers and
nature and quantum of mitigation mea-
sures will be as per guidelines issued
by the Government in this regard.
Presently, revenue share is payable
on Gross Revenue, calculated as per
tariff ceilings even if concessionaire
has to allow discount to keep the
charges competitive. With a view to
have a balanced risk allocation, the
new MCA provides that concessionaire
will be entitled to approach Port to con-
sider and approve discounts on ceiling
traffic and revenue share will be paid
on the approved discounted tariff of the
approved revenue share. Cargo storage
charges will be excluded while com-
puting Gross Revenue for the purpose
of Revenue Sharing.
The Union cabinet has also
approved shipping ministrys proposal
to replace the Major Port Trusts Act,
1963 with the Major Port Authorities
Bill, 2016, which will allow PPP
operators to fix tariff based on market
conditions. An independent Review
Board has been proposed to be created
to carry out the residual function of
the erstwhile TAMP for Major Ports,
to look into disputes between ports
and PPP concessionaires, to review
stressed PPP projects and suggest mea-
sures to review stressed PPP projects
and suggest measures to revive such
projects and to look into complaints
regarding services rendered by the
ports and private companies operating
within the ports would be constituted.
Rating agency recently said in an
update, The Indian port sector is at
a crossroads. Relatively untapped all
these decades as far as its potential to
contribute to economic development is
concerned, it is poised for the big leap
over the next decade, if only the Union
governments ambitious roadmap
translates into change at the ground,
nay, port level.
In FY16, major ports, with a
volume of 606 million tonnes, regis-
tered moderate 4 per cent growth over
the previous fiscal, largely due to a
slowdown in coal imports. A decline of
22 per cent in iron-ore cargo volumes
The installed capacity
of the ports has gone
up to 1716 million
tonne per annum (mmt-
pa) in 2015-16 from
1312 mtpa in 2012-13
and is projected to
reach 1897 MTPA by
the end of the 2016-17.
Similarly, cargo traffic
handled by the ports
has increased to 1072
mt in 2015-16 from 934
mt in 2012-13 and is
expected to hit 1133 mt
by the end of 2016-17
was another factor behind the subdued
performance. But industry sources
said that cargo throughput at the major
ports in the current fiscal has increased,
driven by a five-fold increase in iron
ore cargo volumes.
The volume of seaborne cargo
traffic handled by ports is mainly
shaped by the levels and changes in
both the global and domestic activity.
Cargo traffic at Indias 12 major ports
during first six months (April-Sep-
tember) of 2016-17 was 315.42 million
tonnes, registering growth of 5.2 per
cent over the previous year. The growth
April 2017
www.InfralinePlus.com
in cargo handled by the non-major
ports was 4.9 per cent compared to
1 per cent decline of recorded in the
corresponding period of previous year.
Over the medium to long term, the
outlook for cargo growth continues to
be strong, driven by domestic require-
ments, said analysts.
The installed capacity of the ports
has gone up to 1716 million tonne
per annum (mmtpa) in 2015-16 from
1312 mtpa in 2012-13 and is projected
to reach 1897 MTPA by the end of
the 2016-17. Similarly, cargo traffic
handled by the ports has increased to
1072 mt in 2015-16 from 934 mt in
2012-13 and is expected to hit 1133
mt by the end of 2016-17. Major ports
added a record 94 MTPA capacity
in 2015-16, which took aggregate
capacity to 965 MTPA from 871 MTPA
at end of the preceding fiscal.
National perspective plan on 69
Sagarmala project
Meanwhile, the government has
unveiled national perspective plan on
its ambitious Sagarmala project which
envisages port-led industrialisation and
economic development of the country
and make Indian exports competitive. In
a major boost to port-led development
model, the government has decided to
reduce timeframe of its ambitious Sagar-
mala project by half. Following Prime
Minister Narendra Modis intervention,
it has been decided to finish Sagarmala
project in five years instead of 10 years
to create 1 crore jobs, shipping minister
said at the maiden Maritime India
Summit. The programme could lead to
annual logistics cost savings of close to
Rs35,000 crore, he added.
This plan is based on four stra-
tegic levers - optimising multi-modal
transport to reduce cost of domestic
cargo, minimising time and cost of
export-import cargo logistics, lowering
costs for bulk industries by locating
them closer to the coast, and improving
export competitiveness by locating dis-
crete manufacturing clusters near ports.
 April 2017
www.InfralinePlus.com

OffBeat

The Sagarmala project is an amalga-

mation of 150 projects categorised
into port modernisation, connectivity,
port-led industrialisation and coastal
community development, with the gov-
ernment planning to invest Rs 12 lakh
crore under various programmes.
Under the port modernisation
drive, 53 projects are expected to be
undertaken to ensure the port han-
dling capacity is increased by 1,000
mmtpa, which includes 6 new mega
port projects. Projects under this sub-
category are expected to come at an
investment of $15 billion. Similarly, in
Under the port modernisation drive, 53 projects
the connectivity category, $30 billion
investment is projected for 10,000
are expected to be undertaken to ensure the port
km of new connectivity infrastructure handling capacity is increased by 1,000 mmtpa,
projects as well as 7 new dry ports. which includes 6 new mega port projects.
Under port-led industrialisation, 27 Projects under this subcategory are expected to
industrial clusters will be developed come at an investment of $15 billion. Similarly, in
with estimated investment of $15 the connectivity category, $30 billion investment
billion. The Sagarmala project is
70
is projected for 10,000 km of new connectivity
expected to give a big boost to the
Make in India programme.
infrastructure projects as well as 7 new dry ports
The clusters will have industries
Challenges in implementing through various initiatives like award
from the energy, bulk materials as
Sagarmala project of new projects, bringing in clarity on
well as discrete manufacturing seg-
But challenges in implementing the tariff front, increase in the autonomy
ments, all of which will be able to use
Sagarmala project are just as formi- of major ports, plans for Sagarmala
high-quality infrastructure which is
dable, with as much as Rs 4 lakh crore and other connectivity related projects,
fully integrated with the corresponding
of investment needed in infrastructure. to revive non-functional ports, to
ports. A separate perspective plan for The project would be successful only if encourage coastal shipping and to
the CEZs and a detailed master plan the private sector chips in with its share improve the logistics modal mix.
for major ports are also being worked of investment. And this is not likely But experts said that the near-to-
out. Successful implementation of to happen unless the structural and medium term outlook for the port sector
Sagarmala can be a game-changer in systemic issues hindering growth are remains subdued because of uncertainty
terms of savings, employment gen- resolved, said analysts. over particular cargo categories like
eration, and value creation. Studies Jaideep Ghosh, Partner & Head of imported coal, due to narrowing domestic
have shown than the Sagarmala project Transport, KPMG, said, The overhaul demand-supply gap following the
would help in bringing down logistics of Indias port infrastructure was long increase in coal production by Coal India.
costs for domestic manufacturers, overdue. The Sagarmala initiative is On the other hand, iron ore export
thereby improving competitiveness of quite grand in its scope though it might volumes could improve to some extent,
Indian exports. be too ambitious to implement in a on low base, due to export contract of
In India, there are a large number of decades time. It seems a better idea to NMDC, elimination of export duty on
coal-based power plants located 800- develop port-based clusters on a pilot low grade iron ore and restarting of
1,000 km away from mines. Coal trans- basis at one or two places before the plan mining operations in Goa - as has been
portation costs for such projects via rail is implemented at a pan-India level. evident in the five month volumes in
or road alone account for up to 35 per According to Icra, the Centre has FY2017, where iron ore volumes have
cent of power generation cost. Coastal shown strong intent to develop port witnessed a jump.
shipping can bring down coal transpor- infrastructure and has been addressing
tation costs by up to 60-80 per cent. the constraints faced by the sector For suggestions email at feedback@infraline.com

People in News
B P Kanungo appointed RBI Deputy Governor
B P Kanungo has been appointed Deputy
Governor in Reserve Bank of India (RBI)
Power Secretary P K Pujari gets additional charge of DoT Secy
Power Secretary Pradeep Kumar Pujari
has been given the additional charge
of the post of Secretary, Department
of Telecommunications (DoT). The
move comes after former Telecom
Secretary J S Deepak was named Indias
next Ambassador to the World Trade
Organisation (WTO).The competent
authority has approved assignment of
additional charge of Secretary, DoT to
Pujari with immediate effect. Pujari is a
1981 batch IAS officer of Gujarat cadre.
Deepak, a 1982 batch IAS officer from
Uttar Pradesh cadre, was on March 1,
shifted from the Telecom Ministry and
made Officer on Special Duty in the
Commerce department.
Ex-MNRE Secy Upendra Tripathy to be ISA Director General
Former New and Renewable Energy
Secretary Upendra Tripathy has been
appointed as the full-time interim Director
General of International Solar Alliance.
Piyush Goyal, Union Minister for Power,
Coal, New and Renewable Energy and
Mines, and Ms Segolene Royal, Minister
for Environment, Energy and Marine
Affairs, Government of France, jointly
decided to appoint Upendra Tripathy, as
the Interim Director General (IDG) of the
International Solar Alliance (ISA) on a
full-time basis. Tripathy was secretary
Ministry of New and Renewable Energy
from April 1, 2014 until October 31, 2016.
Tripathy is an Indian Administrative
Service (IAS) officer of Karnataka Cadre.
He has worked with local, provincial
for three years. The Appointments Com-
mittee of Cabinet (ACC) has approved his
appointment to the post with effect from
the date of taking over the charge on or af-
ter April 3. He has been appointed in place
of R Gandhi. The ACC has also named
Dilip S Shanghvi as Member, Western
Local Board of RBI. The appointment of
Shanghvi, the promoter of Sun Pharma-
ceutical Industries Limited, to the post is
for a period of four years. Kanungo was
in March last year appointed as executive
director in the central bank.
and union governments in India for
the last 36 years. The International
Solar Alliance (ISA) was launched on
November 30, 2015 as a coalition of the
April 2017
www.InfralinePlus.com
PESB recommends N B Gupta as
PFCs Director-Finance
The Public Enterprises Selection Board
(PESB) has recommended Naveen
Bhushan Guptas name for the post
of director finance at Power Finance
Corporation. At present Gupta is
general manager finance at PFC. PESB
had shortlisted 13 candidates for the
post eight from PFC, two from NTPC,
one each from BSNL, SECI and the
department of expenditure. PFC is into
financing power projects as well as 71
transmission projects. The company is
planning to tap a significant portion of
the Rs 6 lakh crore investment that is
likely to go into the renewable sector
in India.
solar resource rich countries jointly by
Indian Prime Minister Narendra Modi and
French President Francois Hollande in
the presence of the then UN Secretary
General Ban Ki Moon on the first day of
the Paris Climate Conference or CoP21.
The ISAs mission and vision is to provide
a dedicated platform for cooperation
among solar resource rich countries where
the global community including bilateral
and multilateral organisations, corporates,
industry, and stakeholders can make a
positive contribution to assist and help
achieve the common goals of increasing
use of the solar energy in meeting energy
needs of prospective ISA member
countries in a safe, convenient, affordable,
equitable and sustainable manner.
 April 2017
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People in News
Dharmesh Arora appointed managing director of FAG Bearings India
Dharmesh Arora has been appointed as the
managing director of FAG Bearings India
Maninder Singh Juneja appointed as MD & CEO of NBHC
National Bulk Handling Corporation (NBHC),
Indias leading provider of integrated
commodity and collateral management
services of agri-commodities has announced
appointment of Maninder Singh Juneja as
the managing director and CEO. Juneja
joined True North (erstwhile India Value
Fund Associates) in December 2016 as
72 the managing director which owns 100
per cent of NBHC. Juneja takes reins
from Anil Choudhary, founder MD & CEO,
NBHC, who will continue to associate with
NBHC as an executive vice-chairman in the
company. Juneja was previously associated
with ICICI Bank as senior general
manager. The changing agriculture and
Major bureaucratic reshuffle in central government, 16 Joint Secretaries appointed
As many as 16 Joint Secretaries have been
appointed in different central government
departments as part of mid-level bureau-
cratic reshuffle effected in March. Of the
total bureaucrats, only six are from Indian
Administrative Service (IAS) and rest from
other central services like Indian Revenue
Service (IRS) and Indian Information Service
(IIS), among others. Anita Karwal, a 1988
batch IAS officer of Gujarat cadre, has been
appointed Joint Secretary in Department of
School Education and Literacy. Shri Prakash,
an officer of Central Secretariat Service, will
be JS in Home Ministry, an order issued by
Personnel Ministry said. Aparna S Sharma,
also from the same service, will be JS,
Department of Chemicals and Petrochemi-
cals. Mihir K Singh has been moved out of
Information and Broadcasting Ministry and
effective March 6, 2017. Arora is currently the
president and CEO of the Schaeffler Group,
a leading global integrated automotive and
industrial supplier, in India (the parent com-
pany of FAG Bearings India), a position that
he will continue to hold. He will also continue
to be the managing director of INA Bearings
India, another group company of Schaeffler
in India. FAG Bearings India together with
INA Bearings India and LuK India forms the
Schaeffler Group in India. Arora replaces Ra-
jendra Anandpara, who has decided to leave
the company for personal reasons.
banking policies paradigm is creating new
opportunities in terms of being able to serve
farmers. I look forward to participating in
this exciting journey where I can take NBHC
forward, build synergies and craft linkage
with other financial services, create value,
Juneja said.
appointed as JS in Department of Animal
Husbandry, Dairying and Fisheries. He is a
Bihar cadre IAS officer. Ashok K R Parmar,
will be new JS in I and B Ministry in place of
Singh. Parmar is a 1992 batch IAS officer of
Jammu and Kashmir cadre. Manoj K Pingua
has also been appointed JS in the same min-
istry. He is at present Joint Secretary, Minis-
try of Tribal Affairs. U Venkateswarlu, a 1986
batch IAS officer of Tripura cadre, has been
appointed JS, Department of Social Justice
Oil Ministry brings Shazia Ilmi on
EILs board
State-run Engineers India Ltd said that
Shazia Ilmi Malik has been appointed
as additional director (non-official
part-time independent). Ministry
of Petroleum and Natural Gas has
approved the appointment of Ilmi from
March 27, 2017 to January 30, 2020 or
till further order, whichever is earlier,
the company said in a BSE filing.
According to the statement, her inter-
se relationship between the directors of
Engineers India Ltd is NIL. Earlier, Ilmi
was appointed as a brand ambassador
for the Prime Ministers Swachh Bharat
Mission programme. She is also a
member of the Film Certification
Appellate Tribunal.
and Empowerment. He is at present Financial
Commissioner, Employees State Insurance
Corporation (ESIC) under the Ministry of
Labour and Employment. Sandhya Shukla, an
officer of Indian Audit and Accounts Service,
will be new Financial Commissioner, ESIC.
Venudhar Reddy Nukala, an IIS officer, has
been appointed as JS, Department of Invest-
ment and Public Asset Management. IRS
officer Ruby Srivastava will be Director (Fi-
nance), Nuclear Power Corporation of India
Ltd. Niva Singh and Vandita Kaul will be Joint
Secretaries in Ministry of Minority Affairs and
Department of Financial Services, respective-
ly. Raman Kant Mishra, an officer of Indian
Forest Service, has been named as Additional
Director General, National Museum under the
Ministry of Culture. Chandrakar Bharti, will be
JS, Department of Defence Production.

Reports & Studies
EU must shut coal plants by 2030 to meet climate pledge: Study
The European Union must close all 315 of
its coal-fired power plants by 2030 in order
to meet its commitments under the Paris
climate agreement, a research institute
IIT Bombay: Chennai and Mumbai have high wind energy potential
Of the six cities studied by Indian Institute
of Technology, Bombay researchers, Chennai
and Mumbai seem to have the highest poten-
tial to harvest wind energy during the time
when the wind energy potential is very high
(active period) during the monsoon period.
Compared with these two cities, Indore,
Ahmedabad and Kolkata have less potential
to harvest wind energy; Delhi has the least
potential. The results were published in the
journal Meteorology and Atmospheric Phys-
ics. The researchers studied the strength of
southwest wind during the time of the mon-
soon and called the period when the wind
energy potential is high, the active period and
the period when the wind energy potential
is low, the break period. The high wind
Renewable energy expansion cannot deliver Paris climate goals
Expansion of renewable energy cannot by it-
self stave off catastrophic climate change, sci-
entists have warned. Even if solar and wind ca-
pacity continues to grow at breakneck speed, it
will not be fast enough to cap global warming
under two degrees Celsius (3.6 degrees Fahr-
enheit), the target set down in the landmark
2015 Paris climate treaty, they reported in the
journal Nature Climate Change. The rapid
deployment of wind, solar and electric cars
gives some hope, lead author Glen Peters,
a researcher at the Center for International
Climate and Environmental Research in Oslo,
Norway, said. But at this stage, these tech-
nologies are not really displacing the growth
in fossil fuels or conventional transportation.
said recently. The goal set at the December
2015 Paris conference to maintain average
temperature increases to less than two
degrees Celsius (3.6 degrees Fahrenheit)
over pre-industrial levels requires the
gradual closure of EU coal plants, Climate
Analytics said. The long-term temperature
goal adopted under the Paris agreement...
requires a rapid decarbonisation of the
global power sector and the phase out of
the last unabated coal-fired power plant
in the EU by around 2030, the report said.
Climate Analytics estimated that the EUs
carbon budget, which is how much carbon
dioxide it can emit to stay under two de-
grees Celsius, is at 6.5 giga tonnes by 2050.
The institute said the EU will exceed the
energy potential during the active period also
coincides with more rainfall; there is less
rainfall and less wind energy potential during
the break period. The idea behind the study
was know what the implications of the active
and break periods would have on energy
Earth is overheating mainly due to the burning
of oil, gas and especially coal to power the
global economy. Barely 1C (1.8F) of warming
so far has already led to deadly heat waves,
drought and super storms engorged by rising
seas. The 196-nation Paris Agreement set a
collective goal to cap warming, but lacks the
April 2017
www.InfralinePlus.com
budget by 85 percent by then if it continues
with current emissions rates at coal plants.
It said there were 315 coal plants across
the 28-nation bloc, and that 11 newly an-
nounced plants would raise EU emissions
to almost twice the levels required to limit
temperature rises. We find the cheap-
est way for the EU to make the emissions
cuts required to meet its Paris Agreement
commitments is to phase out coal from the
electricity sector, and replace this capacity
with renewables and energy efficiency
measures, said Paola Yanguas Parra, a
lead author of the report. Parra said Ger-
many and Poland had the most work to do
as they were together responsible for 54
percent of emissions from coal.
demand scenario in the major cities, said
Prof. Subimal Ghosh from the Department
of Civil Engineering, IIT Bombay, and one of
the authors of the paper. Our study tries to
answer the question if possible extraction of
wind energy in the six cities can be relied on 73
to meet the additional power demand during
prolonged dry spells in the monsoon season.
Mumbai and Chennai have predominantly
higher-than-average wind energy potential
during the active period compared with the
break periods. In the case of Delhi, besides
that the likelihood of wind energy potential
being above average is much less, a large
number of high-rise buildings further damp-
ens the prospects of efficient wind energy
extraction.
tools to track progress, especially at the coun-
try level. To provide a better toolkit, Peters
and colleagues broke down the energy system
into half-a-dozen indicators -- GDP growth,
energy used per unit of GDP, CO2 emissions
per unit of energy, share of fossil fuels in the
energy mix, etc. Wind and solar alone are not
sufficient to meet the goals, Peters said. The
bottom line, the study suggests, is how much
carbon pollution seeps into the atmosphere,
and on that score renewable have -- so far
-- barely made a dent. Investment in solar and
wind has soared, outstripping fossil fuels for
the first time last year. And renewables share
of global energy consumption has increased
five-fold since 2000.
 April 2017
www.InfralinePlus.com
Reports & Studies
UDAY has been successful in restoring financial health of power distribution cos: Report
The Ujwal DISCOM Assurance Yojana
(UDAY) scheme for financial and operational
reform of power distribution companies
(DISCOMs) has been undeniably suc-
cessful in achieving its most important
China, India led slowdown in coal power development, says report
Chinas clampdown on new coal
projects and reluctance by backers
to provide further funds in India are
mainly responsible for last years
drop in the amount of coal-powered
74 generation capacity under development,
environmental groups said in a report.
Greenpeace, the Sierra Club, and
CoalSwarm found global pre-construction
planning fell 48% and new construction
starts dropped 62% last year compared
with 2015, according to the report, titled
Boom and Bust 2017: Tracking The Global
Coal Plant Pipeline. China last year
imposed restrictions on further expansion
of coal-power capacity amid increasingly
low utilization rates at existing plants,
Indian gas prices far below average production cost: Icra
The new natural gas prices for producers
in India are well below the average cost of
production, rating agency Icra has noted.
The government had recently marginally
cut the natural gas price paid to producers
to $2.48 per million British thermal unit
(mbtu) effective for six months from April
1. With the latest marginal fall from $2.50
per mbtu for the second half of 2016-17, the
domestic price is now well below the average
cost of production for many producers for a
sustained period, leading to losses, which has
forced the industry to seek a floor price, Icra
said in a report. The material appreciation
in the Indian rupee against the US dollar,
if it sustains, would have a further adverse
objective of restoring financial health
of DISCOMs by transferring almost 75
percent of their debt to the state govern-
ments and reducing interest cost burden
on the remaining 25 percent debt, a Bridge
to India report says. DISCOMs were under
heavy burden and their financials were in a
mess back in 2015 with aggregate debt of
Rs 4.3 trillion (USD 65 billion) and annual
losses of Rs 600 billion (USD 9 billion) at the
end of March, 2015. Out of the total debt of
Rs 3.8 trillion (USD 58 billion) attributable
to the 26 UDAY states and union territories,
61 percent has been already transferred
to state governments and/or refinanced in
the form of state government guaranteed
bonds. Another 10 percent is expected to
according to the report. In India, the
ministry of power said in June that the
country had enough coal-fired plants
to meet demand through 2019, while a
draft National Energy Plan, released in
impact on the gas producers, Icras Senior
Vice-President K. Ravichandran said. The
issue of such low prices for a sustained period
making exploration and production unviable,
even for benign geologies, would have to be
be similarly restructured shortly.These
measures alone are expected to reduce
annual aggregate interest cost burden by
Rs 160 billion (USD 2.4 billion) (down 65
percent). More importantly, apart from the
one-off financial engineering exercise, a key
difference of UDAY over previous restructur-
ing schemes is that it is designed to reduce
incentives for state governments to meddle
in power pricing and DISCOM operations,
the report says. All ongoing financial losses
of the DISCOMs must be funded directly by
the respective state governments instead
of commercial borrowings. If this aspect is
enforced in principle, we believe that it will
break the cycle of financial boom and bust
for DISCOMs forever.
December, said no further coal power
capacity beyond that currently under
construction will be needed until at least
2027. In China and India, 68 gigawatts
of construction is frozen at more than
100 project sites, according to the
report. The research also found that coal
plant retirements are taking place at an
unprecedented pace, with 64 gigawatts
of retirements in the past two years,
mainly in the European Union and the US.
Meanwhile, the report identified 10 hot
spot countries including Turkey, Indonesia,
Vietnam and Japan, that have failed to
develop their renewable-energy sectors in
step with their peers while continuing to
build and plan new coal plants.
addressed on a priority in order to incentivise
domestic production and balance the interest
of upstream producers with consumers,
the report said. As per the new gas pricing
formula approved in October 2014, gas prices
are to be revised every six months. The
price was $5.05 per mbtu when the formula
was first applied in November 2014. The
government has, however, raised the ceiling
price for gas exploration in difficult areas like
deep seas which are unviable to develop as
per the existing pricing formula. The cap for
the April 1, 2017 to October 31, 2017 period
will be $5.56 per mbtu, up from $5.3 per
mbtu, which could incentivise development of
such projects, Icra said.
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