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June 2012Volume 1 | Issue 2 | `100

This Issue is Complimentary

www.InfralinePlus.com

The ComPleTe energy SeCTor magazIne for PolICy and deCISIon makerS

Gone In A?

WhIffDepleting gas supplies leave power plants in the lurch

Coal Minister Sriprakash Jaiswal on the fiasco about coal blocks allocation

Should diesel be deregulated? Our expert view

GET, sET, GoLN Mittal’s oil refinery in Punjab gets started

India’s Political PlightTo side with the powerful USA or choose Iran instead

Director, Essar Power on the challeges of power infrastructure

AK Agarwal on PFC’s new subsidiary to fund RE projects

GREEN INFRA AT THE FOREFRONT OF POWERING INDIA NATURALLYWE ARE MAKING THE GREEN DIFFERENCE

Since 2008 we have built a business that straddles all five verticals of Green Energy – Wind, Solar, Hydro, Biomass and Energy Efficiency.

Currently generating approx 225 MW of Green Energy, reducing up to 4,55,660 tons of carbon emission annually and with the presence across 6 states in India, we are on our way towards becoming a diversified 5 GW renewable energy company by 2015.

www.greeninfralimited.in • [email protected]

1

Editor’s LetterWe are here again with the second edition of InfralinePlus. Since we launched the magazine, nothing much has changed in the Energy sector, the bottlenecks that derail the infrastructural growth do not seem to vanish any time soon. But we, at Infraline, have already initiated a process that we want the government to adopt – empowerment. We have made a humble beginning to empower the team leads to take their own decisions. As the citizens of this country, we are doing what we want our government to do on a larger canvass.

In this issue, we offer the challenges that lie before power producers. Expecting huge gas output, both public and private companies had installed capacities to generate power. With gas output diminishing, some of the plants face shut down. Uncertainty looms large both in the minds of domestic and foreign investment in the sector.

In the month gone by, we also witnessed power utilities locking horns with Coal India over the penalty clause suggested in the new fuel supply agreement. Power companies feel the penalty clause that has been introduced may not ensure sufficient coal supplies. The quantum of penalty imposed on the coal supplier, may not serve the purpose.

We also bring you excerpts of an informal chat with Coal Minister Sriprakash Jaiswal. The minister shares the concerns of the government in handling the shortage of coal in the country. Despite having adequate coal resources, Indian industries have to import coal to meet up the shortage. The Association of Power Producers has often raised voice seeking the coal sector deregulation. The government – the behemoth that it is - always needs lot of time of time to take decisions. In most of the cases decision comes when the damage crosses the saturation point!

Our team has decoded the draft of ‘surplus coal policy’ and tried to explain whether the government is batting for the public sector. ‘A picture speaks a thousand words’—don’t skip our photo-feature on Tata Power – into the business of lighting bulbs since 1911. Here, we must put on record that we did not expect the acknowledgement and support that we have got from the industry, academia and the government. The suggestions and criticism will only help us improve with every edition and serve you better.

(This is Yogesh’s last note before the magazine went into print)

YOGESH GARGCEO and Editor InfralineEnergy Research and Information Services

Registered Office14th Floor, Atmaram House, 1, Tolstoy Road, New Delhi - 110001 Tel. : +91-11-46250000 Email: [email protected]

Branch Offices

EditorialYogesh Garg, Editor Alok Sharma, Assistant editor Pallavi Chakravorty, Assistant Chief-sub editorDesk Archana Khatri Das, Rewriter

AnalystsRaeesa Zeb Debjit Das

News TeamPankaj Bhagat Shivangie Shrivastava

Design TeamGopal Thakur, Art Director

June 2012 | Vol 1 No 2

NoidaA-31, Sector 3, Noida Tel.:+91-120-3800000

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Form IVPlace of Publication 14-D, Atmaram House, 1, Tolstoy Road

New Delhi - 110001

Periodicity of its Publication : MonthlyPrinter’s Name: Mr Yogesh GargNationality IndianAddress 14-D, Atmaram House, 1, Tolstoy Road

New Delhi - 110001

Publisher’s Name Mr Yogesh GargNationality IndianAddress 14-D, Atmaram House, 1, Tolstoy Road

New Delhi - 110001

Editor’s Name Mr Yogesh GargNationality IndianAddress 14-D, Atmaram House, 1, Tolstoy Road

New Delhi - 110001

Printed at M/s. International Print-O-Pac LimitedAddress B-206, Okhla Industrial Area, Phase-I,

New Delhi - 110 020Name and address of individuals who own the newspaper and partners or shareholders holding more than one percent of the total capital Owner: M/s Infraline Technologies (India) Private Limited, 14-D, Atmaram House, 1, Tolstoy Road, New Delhi - 110001

Shareholders holding more than one percent of total Capital of the owner Company1. Mr Yogesh Garg, 60, Siddhartha Enclave, New Delhi - 1100142. Ms Shashi Garg, 60, Siddhartha Enclave, New Delhi - 110014

I Yogesh Garg hereby declare that the Particulars given above are true to the best of my knowledge and belief.

SdYogesh GargSignature of the Publisher

He may have left us but his dream of serving the large existing clientele of the company shall be fulfilled by the team he built. We thank the readers for their massive interest and confidence in the product. We shall all strive to fulfill our founder’s dream and belief. - Team Infraline

2

June 2012 www.InfralinePlus.com

ContentsEditor’s Letter 1

To the one who started it allWe pour our hearts out for Yogesh Garg, Editor of InfralinePlus and CEO of Infraline Energy, whose untimely death is yet to sink in...

Plus- Photo EssayThrough the lens: Tata Power’s various power projects across India

Power

News Brief p8In Conversation: KVB Reddy, Director, Essar Power Ltd. p10Expert Speak: Ashok Kumar Khurana, Director General, Association of Power Producers p12Expert Speak: Neeraj Pathak, Head of a HR Consultancy firm p14Statistics p18

Coal

COVER DESIGN: GOPAL THAKUR

Adieu... 3

Cover StoryPower Plants Getting ‘Gas’ Bumps Paucity of natural gas supply leaves power plants in a fix. Big players like GAIL and NTPC stall upcoming power projects, expansion plans.

4

8 20

InfralinePlus

News Brief p20In Depth: Surplus coal policy moots selling of surplus coal to CIL at production cost p22In Depth: CIL’s move to shift from UHV to GCV pricing draws flak p24In Conversation: Union Minister of Coal, Sriprakash Jaiswal p28Statistics p30

Oil and Gas Renewable 5232News Brief p32In Conversation: President, PermaPipe Inc., Fati Elgendy p34In Depth: LN Mittal’s Punjab oil refinery finally gets started p36Expert Speak: Aabhas Pandya, an industry veteran and senior journalist p38Expert Speak: Rahul Kashyap, head of a consultancy company p41Expert Speak: Dr. Prasoon Dwivedi, University of Petroleum and Energy Studies, Dehradun p44News Analysis p49Statistics p50

News Brief p52

Expert Speak: Udai S. Mehta

Associate Director, CUTS & Gaurav

Shukla, Research Assistant p53

In Conversation: AK Agarwal,

Executive Director, Renewable

Energy, PFC p54

Statistics p56

p58

4

58

The information about the sad and tragic death of Yogesh came as a bolt from the blue. In fact, at that very moment I was trying to speak to him on his mobile phone when one of my colleagues informed me that the news was appearing on one of the TV Channels. I knew Yogesh for a few years when I was in the Ministry of Power, but I came to know more of him when I left the Government in January 2007. Yogesh met me within a few weeks, sometime in the month of February, 2007 with the suggestion that the organization which he had set up, viz. Infraline Energy could contribute more to the energy sector. We, during these discussions, came out with the conclusions that (a) Infraline Energy could facilitate a monthly Round Table to discuss on various energy issues which I should moderate, and (b) I should contribute a write up on a weekly basis on energy issues to be published on the Infraline Energy website. Both these initiatives worked well. Deliberations in the Round Tables covered extensively all the areas of energy and mostly with very specific conclusions and recommendations. Similarly, the weekly articles focused on each element of energy, analyzed policy initiatives, implementation strategy etc. and came out with suggestions and remedial actions. As a matter of fact, both these initiatives worked as the most important catchment area for my third book “Energy Security and Climate Change”.

My interactions with Yogesh were always focused at doing something which should be of interest for the Indian energy sector. In fact, he suggested to me to form a company which should focus exclusively on Energy Policies and should conduct studies and research and could aim at becoming the think tank for various authorities and agencies for formulation and review of energy policies. Because of various preoccupations I could not do that, I wish I could have done it. His ability to organize an institution, build up the team and motivate people was remarkable. Equally remarkable was his humility. The professionals in the energy sector will miss him a lot.

‘A thorough professional and a humble individual – Yogesh will indeed be missed’

By R.V. ShahiFormer Secretary, Ministry of Power

Obituary

4

CoverStoryJune 2012 www.InfralinePlus.com

Gas based power producers in india are now spending sleepless nights. already disturbed with inadequate coal supplies, most of these companies were banking on gas and had planned huge capacity addition coupled with investments to develop gas-based power generation units. but thanks to the continuous fall in domestic gas production, power companies like Lanco, GVK and Essar are having a tough time. the pain is not limited to private players, instead the paucity of natural gas in india is also hurting plans of state-owned companies like National thermal Power Corporation (NtPC) and Gas authority of india Limited (GaiL-india) who were gearing up to add gas-based power generation capacity.

in an attempt to diversify its business model and get a foothold in india’s fast-expanding power sector, GaiL had planned to set up five gas-based power units in usar, Maharashtra, Dibiyapur, uttar Pradesh, Vijaipur, Madhya Pradesh and in Kashipur and Haridwar in uttrakhand with an investment of `59 billion. However, now uncertainty looms over its projects in the absence of gas supplies.

NtPC, india’s largest power producer by capacity, has also slowed plans to expand the capacity of its gas-based power plants, Minister of State for Petroleum and Natural Gas r.P.N. Singh recently said in a written reply in the lower house of Parliament.

Singh said that due to the drop in natural gas production in the country, indian power stations received only 18.10 million standard cubic meters a day of gas supply during the financial year ended March 2012, against a committed volume of 28.90 million

standard cubic meters every day. Private power producer Lanco has

also warned the government that any further reduction in natural gas supplies would lead to shutting down of power plants. the company has also written to Pulok Chatterji, Principal Secretary

Dwindling Gas Plays Extinguisher to Power Projects… ► GAIL had announced to invest `59 billion to set up five gas-based power units

► Only 18.10 million standard cubic meters a day of gas was supplied to power firms in FY12

5


Generation Loss due to shortage of gas supply during 2011-2012

S. No Name Of Power Station

Installed capacity @

(MW)

Gen. loss due to short supply of gas as reported

(MUs)CENTRAL SECTOR1 Faridabad CCPP 431.59 02 Anta CCPP 419.33 03 Auraiya CCPP 663.36 04 Dadri CCPP 829.78 0 Sub Total (NR) 2344.06 05 Gandhar CCPP 657.39 2.096 Kawas CCPP 656.2 07 Ratnagiri CCPP I 740 714.498 Ratnagiri CCPP II 740 593.339 Ratnagiri CCPP III 740 1661.26 Sub Total (WR) 3533.59 2971.1710 Kathalguri CCPP 291 194.0211 Agartala GT 84 0 Sub Total (NER) 375 194.02 Total (CS) 6252.65 3165.2STATE SECTOR12 I.P. CCPP 270 013 Pragaticcgt-III 750 141.1414 Pragati CCPP 330.4 015 Dholpur CCPP 330 249.4216 Ramgarh CCPP 113.8 0 Sub Total (NR) 1794.2 390.5617 Dhuvaran CCPP 218.62 018 Hazira CCPP 156.1 0.5219 Utran CCPP 518 21.8420 Uran CCPP 672 224.45 Sub Total (WR) 1564.72 246.8121 Karaikal CCPP 32.5 022 Kovikalpal CCPP 107 155.2323 Kuttalam CCPP 100 13724 Narimanam GPS 10 025 Valuthur CCPP 186.2 0 Sub Total (SR) 435.7 292.2326 Lakwa GT 120 77.5627 Namrup CCPP 95 2728 Namrup ST 24 0

S. No Name Of Power Station

Installed capacity @

(MW)

Gen. loss due to short supply of gas as reported

(MUs)29 Baramura GT 58.5 030 Rokhia GT 90 0 Sub Total (NER) 387.5 104.55 Total (SS) 4182.12 1034.15PVT SECTOR31 Vatwa CCPP 100 403.1632 Trombay CCPP 180 29 Sub Total (WR) 280 432.16 Total (PVT S) 280 432.16PVT IPP SECTOR33 Rithala CCPP 108 141.7 Sub Total (NR) 108 141.734 Baroda CCPP 160 549.7735 Essar CCPP 515 036 Peguthan CCPP 655 037 Sugen CCPP 1147.5 921.96 Sub Total (WR) 2477.5 1471.7338 Gautami CCPP 464 960.3439 Gmr Energy Ltd -

Kakinada220 0

40 Godavari CCPP 208 435.3941 Jegurupadu CCPP 455.4 860.9742 Konaseema CCPP 445 488.0943 Kondapall 1 Extn

CCPP366 0

44 Kondapalli CCPP 350 757.7745 Peddapuram CCPP 220 565.3846 Vemagiri CCPP 370 409.0747 Karuppur CCPP 119.8 048 P. Nallur CCPP 330.5 049 Valantarvy CCPP 52.8 9.14 Sub Total (SR) 3601.5 4486.1550 Dlf Assam GT 24.5 124.76 Sub Total (NER) 24.5 124.76 Total (Pvt IPP S) 6211.5 6224.34 Grand Total 16926.27 10855.84@ Installed capacity is as on last day of the year.

to the Prime Minister, saying it was neither technically nor financially viable for units to operate at such low Plant Load Factor (PLF) or capacity and will shut down if there was any further cut in supplies.

there are various such capacities – private as well as public - which are ready but not running due to shortage of fuel.

another such example is the Delhi

government’s much talked about new gas-based bawana power plant which is almost ready, but not running. the

plant, with a total capacity of 1,500 MW, is crucial to feed the burgeoning city’s ever-growing demand for power that touched a staggering 5,100 MW last summer. the Central Electricity authority has projected Delhi’s power demand to rise to 8,700 MW by 2017. However, according to reports, the `45 billion bawana power plant, which was designed to meet such demand is currently producing merely about 300

Both NTPC and GAIL have stalled a number of their gas-based power

projects due to poor gas supplies

6

CoverStory


MW. reports suggest the completed first phase of the unit could have produced at least 750 MW had there been enough gas to fire its furnaces.

the main cause of the whole fiasco is the dwindling output from reliance industries’ D6 block in the Krishna Godavari basin due to geological issues involving its deepwater gas reservoir. reliance and its partner bP Plc are conducting extensive reservoir studies to find a way to raise production in D6.

With KG D6 field output witnessing a sharp fall from 61.5 mn cubic meters per day to 32.66 mn cubic meters a day over two years, the government has now made a pro-rata cut in gas supplies to 25 power plants who were allocated gas from KG basin fields. besides, plants, currently operating at less than 38 per cent of their capacity because of the supply reduction, may face further cuts in fuel supplies.

as per projections, gas production is likely to dip by 15.03 million cubic meter per day in 2012-13 and by an additional 3.42 million cubic meter per day dip in 2013-14 as against the availability of 42.67 mmscmd gas in 2011-12.

Over concerns that paucity of natural gas would have a telling effect on the future of the electricity generation sector, the power ministry has asked project developers not to plan their gas-based projects till 2015-16. it said that the oil ministry has not given any projection on the availability of the feedstock fuel for 2014-15 and 2015-16.

the country is estimated to have added fresh capacity of 53,922 MW during the Xi Five-year Plan period, which ended in March, more than twice the amount of 21,180 MW, added during the X Plan. but all the

S. No Name Of Power Station Installed Capacity @ (MW)

Located In The State

Gen (MUs) Gen Loss due to short supply of Gas as reported (MUs)

CENTRAL SECTOR1 Faridabad CCPP 431.59 Haryana 3067.72 02 Anta CCPP 419.33 Rajasthan 2694.6 03 Auraiya CCPP 663.36 Uttar Pradesh 3878.62 04 Dadri CCPP 829.78 Uttar Pradesh 5376.07 0 Sub Total (NR) 2344.06 15017.01 05 Gandhar CCPP 657.39 Gujarat 3684.07 2.096 Kawas CCPP 656.2 Gujarat 3638.4 07 Ratnagiri CCPP I 740 Maharashtra 2950.5 714.498 Ratnagiri CCPP II 740 Maharashtra 4846.46 593.339 Ratnagiri CCPP III 740 Maharashtra 3822.12 1661.26 Sub Total (WR) 3533.59 18941.55 2971.1710 Kathalguri CCPP 291 Assam 1765.17 194.0211 Agartala GT 84 Tripura 666.12 0 Sub Total (NER) 375 2431.29 194.02 Total (CS) 6252.65 36389.85 3165.2STATE SECTOR12 I.P. CCPP 270 Delhi 1243.72 013 Pragati CCGT-III 750 Delhi 331.38 141.1414 Pragati CCPP 330.4 Delhi 2560.05 015 Dholpur CCPP 330 Rajasthan 2253.77 249.4216 Ramgarh CCPP 113.8 Rajasthan 536.79 0 Sub Total (NR) 1794.2 6925.71 390.5617 Dhuvaran CCPP 218.62 Gujarat 1008.7 0

Power Generation Loss during the year 2011-12

new plants are working below capacity because they are not getting enough coal or gas.

While power producers are forced to depend on expensive imported gas to save some of their investments, it has led to increase in cost of power. the rupee depreciation has also had a direct increase of 35% on the cost of gas-based power, thereby increasing power tariffs by around 44 paise per kilowatt hour.

to tackle the problem of scarcity of fuel at gas-based power stations, private power firms have urged the government to pool domestic and imported natural gas.

the industry is of the view that the biggest challenge before power projects developers is to secure adequate and appropriately priced fuel to keep the power costs affordable.

For Suggestions email at [email protected]

7


S. No Name Of Power Station Installed Capacity @ (MW)

Located In The State

Gen (MUs) Gen Loss due to short supply of Gas as reported (MUs)

18 Hazira CCPP 156.1 Gujarat 907.62 0.5219 Utran CCPP 518 Gujarat 2987.98 21.8420 Uran CCPP 672 Maharashtra 4668.78 224.45 Sub Total (WR) 1564.72 9573.08 246.8121 Karaikal CCPP 32.5 Puducherry 251.46 022 Kovikalpal CCPP 107 Tamil Nadu 705.75 155.2323 Kuttalam CCPP 100 Tamil Nadu 413.29 13724 Narimanam GPS 10 Tamil Nadu 0 025 Valuthur CCPP 186.2 Tamil Nadu 1114.56 0 Sub Total (SR) 435.7 2485.06 292.2326 Lakwa GT 120 Assam 771.99 77.5627 Namrup CCPP 95 Assam 565.73 2728 Namrup ST 24 Assam 0 029 Baramura GT 58.5 Tripura 357.62 030 Rokhia GT 90 Tripura 419.1 0 Sub Total (NER) 387.5 2114.44 104.55 Total (SS) 4182.12 21098.29 1034.15PVT SECTOR 31 Vatwa CCPP 100 Gujarat 459.26 403.1632 Trombay CCPP 180 Maharashtra 1567.9 29 Sub Total (WR) 280 2027.16 432.16 Total (PVT S) 280 2027.16 432.16PVT IPP SECTOR33 Rithala CCPP 108 Delhi 241.83 141.7 Sub Total (NR) 108 241.83 141.734 Baroda CCPP 160 Gujarat 668.74 549.7735 Essar CCPP 515 Gujarat 135.89 036 Peguthan CCPP 655 Gujarat 3067.07 037 Sugen CCPP 1147.5 Gujarat 7592.16 921.96 Sub Total (WR) 2477.5 11463.86 1471.7338 Gautami CCPP 464 Andhra Pradesh 2898.67 960.3439 Gmr Energy Ltd - Kakinada 220 Andhra Pradesh 1200.03 040 Godavari CCPP 208 Andhra Pradesh 1282.46 435.3941 Jegurupadu CCPP 455.4 Andhra Pradesh 2833.49 860.9742 Konaseema CCPP 445 Andhra Pradesh 2266.22 488.0943 Kondapalli Extn CCPP 366 Andhra Pradesh 2203.54 044 Kondapalli CCPP 350 Andhra Pradesh 2030.94 757.7745 Peddapuram CCPP 220 Andhra Pradesh 1318.82 565.3846 Vemagiri CCPP 370 Andhra Pradesh 2066.81 409.0747 Karuppur CCPP 119.8 Tamil Nadu 797.1 048 P. Nallur CCPP 330.5 Tamil Nadu 1526.19 049 Valantarvy CCPP 52.8 Tamil Nadu 377.51 9.14 Sub Total (SR) 3601.5 20801.78 4486.1550 DLF Assam GT 24.5 Assam 0 124.76 Sub Total (NER) 24.5 0 124.76 Total (PVT IPP S) 6211.5 32507.47 6224.34 GRAND TOTAL 16926.27 92022.77 10855.84 @ Installed capacity is as on last day of the year.* Normative gas requirement at 90 % PLF taking GCV of gas=9000k.Cal/SCM (except for Ramgarh CCGT for which GCV is 4150 kCal/SCM), station heat rate - 2900 k.Cal/kWh for open cycle and 2000 k.Cal/kWh for combined cycle and is as on last day of the year.MUs - Million UnitsMMSCMD - Million Standard Cubic Meters per DayHSD - High Speed Diesel

NewsBriefs | Power

8


BHEL board finally clears the merger of Bharat Heavy Plate and Vessels (BHPV) with Bhartat Heavy Electricals Ltd. The long-awaited clearance has

brought joy to employees of the BHPV, which is coming out of the red after being made a subsidiary of the BHEL in 2010. Since then the merger has been pending.

Power sector losses are accumulating as states continue to follow a cautious and staggered approach on tariff hikes despite

the hefty increase in electricity purchase costs in recent years. Several states have started assessing their discoms’ annual revenue requirements (ARR) over the past few years. In most cases, tariff hikes have followed, though they are often far below requirements.

NTPC expects to almost double investments for expansion activities at `21,000 crore in the current fiscal. The

state-run company had spent about `11,000 crore in 2011-12. NTPC, which has an installed generation capacity of 37,514 MW, is looking to increase the capacity in the coming years, especially with thermal power projects.

Chennai-based Empee Group of Companies is planning to set up a mega thermal power project of up to 1,320

MW in Tamil Nadu with an investment of around `6,500 crore. With the increased tariff for electricity, the company sees a growth opportunity in the power sector. Plans are on the cards to commence work on the plant in the next six months and complete the project in the next three years.

Government is mulling a new restructuring package in order to rescue the already in the red state electricity boards from

further financial deterioration. The package is currently being discussed between the Finance Ministry, Power Ministry and the Planning Commission and is expected to be unveiled in a couple of months time.

The Ontario’s Independent Electricity System Operator (IESO) in North America has gone

live with Bangalore-based MetricStream’s Enterprise GRC Platform. MetricStream will automate implementation and monitoring of compliance to electric reliability standards set by the North American Electric Reliability Corporation (NERC) and the Northeast Power Coordinating Council (NPCC).

World Bank would give `13,000 crore for infrastructrual development of power generation facilities in the North East which would be executed by

Power Grid Corporation of India (PGCIL). The PGCIL is building an 800 KV substation in Arunachal Pradesh and another substation at Byrnihat in Meghalaya, which is nearing completion.

The projected power demand of 1,354.87 billion units by 2017 will be met as 85,000 MW capacity addition is planned during the 12th

Plan. The 18th Electric Power Survey (EPS) report estimated the energy requirement in the terminal year of 12th Plan period (2012-17) at 1,354.874 billion units. The actual energy shortage was 8.5 per cent and peak demand shortage was 10.3 per cent.

ABB Ltd won an order worth around $33 million from NTPC Limited, India’s largest power company, to build two substations

in the western Indian state of Maharashtra. The substations will facilitate transmission of electricity from new power generation plants being constructed in the region.

Major power producers in the private and public sector, including Tata Power, NTPC, Torrent Power and Mahagenco, have

opposed the proposal floated by the Association of Power Producers (APP) to pool domestic gas with RLNG (regasified liquefied natural gas), on the ground that this would lead to higher tariffs.

BHPVBHEL Merger cleared

NTPC and Coal India have agreed to sign new fuel supply agreements (FSA) on 2009 terms. Only one clause is to be changed, by NTPC,

that is the trigger for incentive and penalty. Coal India has agreed to this condition. The Coal Ministry has directed Coal India to sign it.

NTPC - CIL To sign new FSA on 2009 terms

Discoms sink States skirt sharp tariff hikes

NTPCPlans ` 210 bn investment this fiscal

Empee GroupMega TPP of up to 1,320 MW in TN

Cash-strapped SEBsGovt mulls a new restructuring package

Ontario’s IESO Goes Live with MetricStream solution

The Adani Group dedicated to the nation its first private sector high voltage direct current (HVDC) power transmission system, providing coal-

fired thermal electricity generated at Adani Power Ltd’s (APL) Mundra facility in Gujarat to Mohindergarh in Haryana, a distance of 1,000 km. APL has commissioned 500 kiloVolt system that has a 2,500 MW of transmission capacity.

Adani Group’s 1,000-kmPower Transmission system kick starts

World Bank`130 bn for power generation in NE

12th Plan Period 85,000 MW capacity addition planned

NTPC and ABB $33 mnorder to strengthen Indian power grid

Pooling of gas with RLNGOpposed by the major power producers

I was one of the many who saw his passion for work, relentless working hours and meticulous working style with attention to the slightest of the details. His enthusiasm in all facets of life shall remain unmatched. The day seems incomplete without his motivation and those never ending brain storming sessions. There are not many like him and it’s certain that God only takes the best.

-Ruchi Sharma

I found Yogesh synonymous with ‘Energy’ and ‘Enthusiasm’, a man with a very ‘Clear Vision’. He had the vigour and capacity to think equal to a hundred minds put together. His presence was the single driving force behind what InfralineEnergy is today.

- Debjit Das

A firebrand... that’s what Yogesh was. A man with an enviable stock of energy, and an infectious smile... He had clear goals and defined ways to achieve them. Indeed, he had a lot to imbibe from. I hope we do justice to his legacy.

- Pallavi Chakravorty

A bundle of knowledge - Yogesh - was ever willing to share what he already knew. He used to say that we all make mistakes but once corrected, it should not be repeated. Though he hardly made mistakes but whenever he did, he would readily accept and take a corrective measure and expected others to learn through his experiences. He is the ‘Only One’ & nobody can replace him. Many thoughts are there in my mind but I feel it’s apt to refer to him as the finest Mentor ever.

- Neeru Puri

Full of life, super energetic and always willing to try new things is how we all will remember Yogesh (He always discouraged us whenever anybody addressed him as Sir). ‘Infraline’ was his heart and soul and we were his family. He wore many hats-sometimes he would play a mentor, friend or guide. Exuding positivity – Yogesh would always encourage people at Infraline to believe in themselves and gave enough room to make them realize their potential. On a personal note, I would always cherish the beautiful memories spent with him.

- Sarika Bhasin

Writing about him is both easy yet difficult because there is an ocean of thoughts in our minds, full of the memories he has left us with. Though the association with him does not go long back, the kind of energy and exuberance within him to advance in life was so overwhelming that I believe we all have started envisioning or rather living it. I still feel him as a driving force to consistently improve. He will always live in our hearts….

- Shruti Gupta

For me he was more of a mentor and a teacher and much less of a boss. He was a teacher who taught us how to push limits and overcome our weaknesses. His never ending excitement and spirit was an inspiration and driving force for one and all. He was one man I would always look up to whenever there is any difficulty; I knew he would act as a savior and he did every single time. He was a real hero.

- Komal Sharma

Yogesh Sir was extremely helpful towards me & my family. He will always live in our hearts.

- Ashok Kumar

Yogesh, you will be remembered for your enthusiasm towards work, excitement for Infraline Quiz and being DJ at the Cricket Stadium. You were full of life with a smile on your face. We miss you and we will take Infraline to new heights as you are with us always.

- Ashit Sengupta & Prerna Singh

My Boss and his passion will always with me. A man of integrity, he touched my life over the years, and had a generous heart. He never asked anyone to do anything he would not do himself. He put in many 16 hour days and nothing ever slowed him down.

- Ashish Madhav

Sky was never the limit for Yogesh. There is no middle path for Yogesh as he believed that there always exists the right path. His words like “either you convince me or get convinced” was the mantra for his success. I have never seen a CEO like Yogesh who was easily approachable at any point of time. He always listened to all despite his busy schedules and proposed efficient solutions to difficult problems.

- Radha Krishna Tripathy

A Famous quote by US President sums up Yogesh’s aura - “If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” That is what Yogesh did to his Infraline Family. Whatever limited interaction I had with him, I could make out that he was a Power House. Could drive 100 people with his energy, do 1000 things at the same time and be an inspiration for one and all.

- Manoj Narang

Yogesh was highly talented and always full of energy. A fast growing entrepreneur for his age and achieved so much. He always led from the front and set examples for others.

- Q A Nasir

The ‘One Man Army’ – Yogesh – possessed every virtue one could think of. Dedication, top editorial thoughts, creativity,out of box solutions and much more. He was actively involved with the functioning of each and every department of Infraline Energy.

- Gopal Thakur

Yogesh was the epitome of energy and enthusiasm and the hardest working soul that many of us will ever know in our lives. But the most special thing about Yogesh is that he transcended the borders of work and touched our lives in a very special way. Most of our thought processes became attuned to his way and before we could realize he had left a bit of himself with all of us

-Raeesa Zeb

I joined as a fresher in Infraline and during my last two years, I think I learned a whole new life through him. One of the things I would like to mention is that he never said no in any situation. In any situation, he could come up with various alternatives and resolve it. A true visionary- 2 years ago he showed me a picture of the organization, and today we are way ahead of that. Although he is no more with us physically, but will always be in my heart as a mentor and teacher for life.

-Raushan Kumar

Your vision is now our vision ...

Thanks Yogesh for

being a part of our lives and we will truly fulfill

your vision.

Infraline Family

10


Power infrastructure in the country is under unrelenting pressure to perform and meet the demands of a growing economy. Speaking with infralinePlus, KVB Reddy, Director, Essar Power Ltd. spoke at length about the challenges the industry is facing in an effort to metamorphose itself from a caterpillar into a butterfly

How do you foresee Essar Power’s future growth in the light of issues such as FSA, environmental clearances and Coal Ministry’s proactiveness on block development front?Essar is on track to commission 6,700 MW of power by 2014 as against the target of 9,670 MW. Due to the issues raised above, we have deferred implementation of three projects aggregating 2,970 MW subject to achievement of critical

milestones. these projects include a 1,320 MW imported coal project at Salaya (Jamnagar) and a 600 MW petcoke cum imported coal project at Salaya (Jamnagar).

What is the situation on the supply side of raw material and power equipment? How do you see BHEL’s stand, where it wants the government to impose 21% import duty on power equipment, even when it is not capable of meeting the demand on its own.the delays in environmental approvals are affecting mining in domestic captive coal blocks. While the ‘go, no-go’ classification has been done away with, industry is still awaiting actual clearances like forest approval, environment approval etc to come through. as such, the industry continues to reel under a severe

shortage of coal, the situation has been further compounded by change in mineral export laws in countries such as, indonesia and australia, which has steeply increased the cost of imported coal.

We feel that development of the power sector is critical for India, and any duty which significantly increase the cost of equipment, would be detrimental to projects and increase price of electricity to end-consumers. Also, with domestic manufacturers of equipment unable to meet the demand of projects in time, putting any curbs in import of equipment is not justified.

Has the situation on the human resource front improved for domestic power producers because of downturn in the developed world?the requirement of manpower for the

Heat of import duty hike in power sector will be on end-consumer

InConversation

11


both domestic and international coal based projects – the latter, though more expensive, is required particularly, as current regulatory environment is hampering full utilisation of domestic coal resources.

Is the target to set up about 78,000 MW capacity in the current Five Year Plan an achievable target?Currently, the concern is both, on the supply and the demand side. On the supply side, poor availability of fuel (both coal and gas), transmission capacity bottlenecks, slow pace of obtaining statutory approvals for land acquisition, are key factors affecting capacity creation.

Several projects at the development

Availability of debt capital at reasonable cost is critical for any business, particularly infrastructure, as debt typically finances 75%

of the project cost

power sector is largely local, while there is a challenge in hiring skilled manpower even in india, there is no impact of global recession.

What are your views on surplus coal supplies? Even when the Planning Commission had proposed to allow it considering the wider benefits, Coal Ministry seems to oppose the idea, as it would throw open a bigger challenge for Coal India and the Ministry.the reserves of Essar’s captive mines are just adequate for our own power plants and there will be no surplus coal available for us.

Is importing coal a feasible solution for meeting fuel supplies for power generation? india’s power deficit is significant and will continue unless the installed capacity and output grows adequately to bridge the gap. this will require

stage are being deferred/ kept on hold due to the above mentioned reasons.

Significant rise in the interest rates in the last three years has also affected fund raising. Availability of plentiful debt capital at reasonable cost is critical for any business, particularly infrastructure, as debt typically finances 75% of the project cost. The current state of capital markets is also not conducive to raising equity, funding new projects has become extremely challenging.

On the demand side, absence of tariff reforms have led to high losses and financial stress for distribution companies, which are the main bulk procurers of power. While default situations are currently moderate, poor cash flows are affecting ability of distribution companies to off-take power, which is creating additional uncertainty for capacity creation.

While the government’s target and the actual capacity addition achieved in the past year is laudable, the challenges faced by the industry will make the target achievement much more difficult. However, we remain optimistic that the government is cognizant of these factors and is taking active steps to address them.

For full version of the interview, visit www.infraline.com For suggestions email at [email protected]

12


Ashok Kumar Khurana, Director General of association of Power Producers (aPP) feels that importing coal to plug deficit can only be a short term solution and does not address the larger problems like, constraints in blending of imported and domestic coal or inland transportation. in an interview with infralinePlus, he reiterated that the long-term solution for bridging the gap in demand and supply of coal lies in deregulation of the sector.

The widening gap between demand and supply of coal is pressing for higher imports. By what percentage do you expect India’s coal import growing in the short term? Where do you see coal prices moving in the same period?india’s coal imports will keep rising in near future considering sluggish growth in domestic coal production and the problems that coal-based power plants are facing. While the Working Group on Power for 12th Plan has estimated that imports will rise to 213 metric tonne by 2016-17, as per the recent studies, it appears that technical constraints in blending and logistical constraints of inland transportation may limit imports to a lesser

amount. Looking at the volatile conditions

of international coal trade and resource nationalism being exhibited by major suppliers, it is very difficult to predict the impact on coal prices. However, growth sentiments are presently

weak due to recessionary trends and the moment the demand picks

up the prices are likely to show an upward trend again.

There is a significant difference in the prices of domestic and imported coal and to add to the woes, the power sector in the

country is regulated. How, do

you see coal imports affecting the bottom-line of the power companies? Since retail tariff of power is regulated, and considering the increase in share of imported coal likely over the near future, it has become essential to devise a uniform coal price pooling solution encompassing the entire coal fired generation base. this is expected to help the power companies absorb the additional cost of imported coal, and avoid the situation of only certain projects being affected due to the price impacts of imported coal. a mechanism

also needs to be formulated to allow pass-through of the

additional cost of power generated through imported coal, and without these measures, it will be difficult for power companies to safeguard

their bottom-line and might lead to generation capacity

remaining stranded, or working at sub-optimal levels at a time of rising power deficit in the country.

What is the impact of recession in the western world? Has the situation of human resource front improved for domestic power producers because of downturn in the developed world?Factors such as inflation, weakening demand profile and progressively increasing current account deficit- all have put pressure on the rupee; this has adversely affected the indian power sector as imported coal and gas prices

‘Importing coal to meet supply deficit is a short-term solution’

InConversation

A progressive

policy on surplus coal is

needed to enhance domestic coal

production from allotted captive

blocks.

13


are denominated in uS$. On the human resource front, there has not been much change.

Reportedly, the industry has suggested the government to set up power plants in the coastal belt, which would be fuelled by imported coal. Subsequently, Centre may mandate seven-eight states to buy power from those plants to ease out burden on individual power units. It is also expected to help in reducing transportation cost for inland power units. What are your views on the same and do you feel such an idea could be implemented in India where States oppose every move of the Centre?this idea is not feasible as one cannot compel anyone to buy power from specific plants in the current de-regulated power market where power procurement through competitive bidding is the mandated option of buying power.

You must be aware that the industry has also said that it would ask the government to facilitate overseas (coal, coking coal mines) acquisition by initiating government-to- government talks. Aren’t we late, as most countries had started this practice long back? China already controls huge resources in Africa. Do you see this plan meeting a success?there are still good resources available in emerging destinations such as Mozambique, etc. industry players themselves have been active in securing overseas fuel sources. However, from the industry’s point of view, augmenting domestic coal production remains an important concern. Looking at the increasing current account deficit and resource nationalism, imported coal can, at

on power equipments will lead to longer lead times, overall delays and consequently significant cost over-runs. thus, the demand is completely wrong and while it seeks to protect the industry, it will adversely impact the consumers who would have to pay more for the power consumed.

Are state governments (especially non-Congress) cooperative in giving state level clearances in the light of political developments such as NCTC and RSF where the two are opposed to each other?No comments.

What are your views on surplus coal supplies? Even when the Planning Commission had proposed to allow it considering the wider benefits, Coal ministry seems to oppose the idea as it would throw open a bigger challenge for Coal India and the Ministry? A progressive policy framework on surplus coal is an imperative to enhance domestic coal production from allotted captive blocks. This will bridge the widening coal deficit by deploying advanced recovery techniques and increased capital expenditure. Looking at the increasing current account deficit of the country, logistical constraints involved with inland transportation of coal from port to demand centers, and technical limitations on quantum of blending of imported coal for plants originally designed for domestic coal, it may not be possible to meet the coal deficit entirely through the import of coal. Thus, the need of the hour is to augment the domestic coal production by all means necessary, so that the growth envisaged for the 12th Plan is not impeded by lack of fuel to power India’s generating stations.

best, be a medium-term option. in the long term, we need to augment the domestic coal production by opening up the coal sector.

How do you see the power companies’ growth in the light of issues such as FSA, environmental clearances and Coal ministry’s pro-activeness on block development front?in the short term, these issues are going to impact adversely. However, looking at the demand and supply position, and demographic profile, the indian economy will continue to grow and so will the power sector. these issues will soon settle down and in the long term the power sector’s fundamentals are strong.

What is the situation on the supply side power equipments? How do you see BHEL’s stand, where it wants the government to impose 21% import duty on power equipments even when it is not capable of meeting the demand on its own?the domestic equipment manufacturers are already overburdened with existing orders and are not in a position to meet the demand of the power project developers. On the other hand, while the arun Maira Committee recommended an import duty of 14% on power equipment, depreciation of the indian rupee has already led to an implicit duty of more than 15-17% on such equipment since early 2010. imposition of additional import duty For full version of the interview, visit www.infraline.com

For suggestions email at [email protected]

Imposition of additional import duty on power equipment

will lead to longer lead times, overall delays

and consequently significant cost

over-runs.

Infraline follows the practice of formulating a Research Report Calendar detailing research subjects along with methodologies likely to be taken up in a given calendar year. Each research topic is subjected to different filters like relevance, impact, shelf life of the analysis and value add to the industry. In this context, we have prepared the following list of published reports for the year 2011 -2012 and upcoming reports for the year 2012.

PUBLISHED REPORTSReport Topic Report Type Sector Launch

DatePrice (`)

Mining Equipment Market in India 2012 Market Research Series Mining July-12 75,000Power Backup Solutions Market Research Series Power July-12 1,00,000Power Sector Opportunity Mapping for Indian States Indexing Series Power July-12 1,00,000Iron Ore Outlook 2050: Resource Mapping, Benchmarking & Global Sourcing Opportunities Strategic Business Insight Mining July-12 75,000

Benchmarking Indian Solar PV Module Manufacturers & International Suppliers Benchmark Report Series Renewable July-12 75,000

Evaluating the Emerging Global LNG Markets Assessing the Impact on LNG Sourcing Options for India Business Report Series Oil & Gas July-12 1,00,000

Indian Coal Outlook 2020: Block-wise Supply Estimation & Non-traditional Sourcing Strategies under Transforming Policy Regime

Outlook Report Series Coal June-12 35,000

Renovation and Modernisation of Power Plants in India: USD 6.5 Billion Opportunity Business Report Series Power April -12 50,000

Solar Power Outlook: 2017 and Beyond - Marching Towards Grid-parity Business Report Series Renewable March-12 50,000

Investment in Indian Roadways - An Opportunity Untapped Business Report Series Infrastructure March-12 40,000Merchant Power Plants in India: Evaluating the Business Case Business Report Series Power March-12 50,000

Power market dynamics in India: Envisioning the $5.5 billion opportunity Business Report Series Power March-12 50,000

Steam Coal Imports – Sourcing Options, Prices & Economics Business Report Series Coal March-12 50,000

Switchgear Market in India 2011 Market Research Series Power Feb-12 1,00,000Energy Efficiency in India: $16 Billion Opportunity Business Report Series All Jan-12 50,000Power Procurement in India : Analysis The Need for Smart Planning Business Report Series Power Nov-11 50,000

City Gas Distribution in India: Demystifying the Opportunity, Growth and Investment Potential Business Report Series Oil & Gas Nov-11 50,000

Benchmarking Indian BTG Market Benchmark Research Series Power Oct-11 1,00,000Proposed Thermal Power Projects 2011 Business Report Series Power Sep-11 50,000Diesel & Gas Engines Market in India-2011 Market Research Series Oil & Gas Sep-11 1,00,000Fuel for Power Generation in India: Options and Consequences Business Report Series Power Aug-11 50,000

Natural Gas Market in Gujarat: Assessing the progress and prospects Business Report Series Oil & Gas Aug-11 50,000

Wind Power Outlook in India: 2015 Business Report Series Renewable Aug-11 30,000Captive Coal Mining in India - Trends, Investments & Competitive Bidding Business Report Series Coal Aug-11 50,000

Directory on Upcoming Renewable Power Plants: Understanding Future Dynamics Business Report Series Renewable Jun-11 50,000

Evaluating the attractiveness of business opportunity in Biomass Power in India Business Report Series Renewable Jun-11 50,000

Global Coal Acquisitions and Imports: Opportunities and Sustainability Assessment for India Business Report Series Coal May-11 50,000

Shale Gas: An Unconventional Energy Source Potential and prospects in India Business Report Series Oil & Gas Jan-11 75,000

Coal Washeries in India: A $5 billion Opportunity Business Report Series Coal Sep-10 50,000

14th Floor, Atmaram House,1, Tolstoy Road, Connaught Place, New Delhi - 110001, India +91 11 46250000 (B), 9560626589 (M) [email protected]; [email protected]

For more details, visit http://www.infraline.com/Store/Books-and-Reports.htm

ExpertSpeak

15


get connected to india’s electricity grid. Currently, blackouts and load shedding artificially suppresses demand; this demand will be sought as revenue potential by power distribution companies.”

the picture appears beautiful and full of potential but has serious challenges in hand for which finding a practical, real time answer is a huge challenge particularly for recruiters. the most basic expectation that power companies have from future recruits is core domain knowledge, long-term commitment and the conviction to work in tough physical conditions. With students getting access to comfortable and glitzy employment opportunities in tier a cities and other metros, it is very difficult to procure quality talent pool for power plants. their mindset is focused on not just to earn good money but also be able to spend it on a weekend at the best of restaurants or visiting the local malls. Whereas, a typical power industry job would require people to slog it out at plants which are located outside cities and thus have very little or no access to the ‘glam quotient’ associated with metros.

in fact, when i visited a few college campuses to evaluate and hire candidates for our clients belonging to both it and Power Companies, it was disheartening to know that just 10% of the candidates wanted to get into

core technical jobs associated with power. Majority wanted to work in it companies. a Power company’s core strength is not sales & marketing but operations, which is a pure technical job (a lot of slog) and this acts as a deterrent to a lot of young population to work in the sector.

Challenge remains on the demand side as well, because power companies have a very stringent hiring process which is primarily based on strong technical knowledge. they simply

cannot afford to be flexible on the deliverables.

Oil and Gas: With the government allowing foreign investment in oil and gas, this sector is lucrative as well as far as business potential is

concerned. but it grapples with similar Hr issues which

Human resource opportunity in an industry is essentially dependent on one key factor, the rate at which that particular industry has the potential to grow. Energy sector companies, be it thermal, hydro electric, wind, small hydro, biomass, and waste to electric-ity, nuclear and solar energy, the rapid growth witnessed in all is likely to offer immense employment and growth opportunities in the near future. How-ever, there are challenges for which there are no concrete solutions yet. that includes human resources.

Mckinsey in its report titled: Powering india: 2017 categorically states: “if india continues to grow at an average rate of 8 per cent for the next 10 years, the country’s demand for power is likely to soar from around 120 GW at present to 315 to 335 KW by 2017, 100 GW higher than present estimates. Four key factors will drive this demand; india’s manufacturing sector is likely to grow faster than in the past. Domestic demand will increase more rapidly as the quality of life for more indians improve. about 125,000 villages are likely to

Tough on-site working conditions and lack of long-term commitment in prospective candidates is making it tough for the human resources recruiters to identify quality talent pool for energy sector companies. Neeraj Pathak, who is leading a human resource consulting company discusses at length the problems that power sector companies have to deal with on a regular basis.

Energy Sector struggles to employ a committed workforce

The basic

expectation that power companies have from future

recruits is core domain knowledge, long-term commitment and the conviction to work in

tough conditions.

16


primarily revolve around: average aging workforce which is expected to retire in near years, requirement for skilled and specialised work force and tough work conditions.

it becomes all the more peculiar because the high level of technical domain expertise required makes the availability of courses in esteemed institutes like the iits and some Nits more difficult. this is a clear indication of the situation wherein private colleges keep themselves focused on more popular courses like it, iteS, etc.

Manpower deficit leads to huge losses for companies because it results in delayed projects, cost overruns and as a result financial intuitions and lenders on those projects also make things difficult for the oil companies.

in times to come, it will be noticed that Employment opportunities in sectors, power as well as oil & gas will essentially be driven by research and Development. the challenge here is not so much from sales & marketing perspective but hiring and retention of good and technically strong people.

in fact, in one of my conversations with the Head of a private oil refining company, i was astonished on hearing that both Power and Oil & Gas industry have traditionally been male dominated and the situation continues to be the same with the majority of workforce being men. Maybe it is the roughshod associated with a typical field job that dissuades them from

pursuing them as career options.the bigger challenge is people

join oil & gas companies for financial gains but that motivates them only till

a certain period of time or age. Once that drive goes down, it is very difficult to keep them motivated and hence the challenge for the Hr head is to not let negativity affect the employee in his functioning.

the most critical and core areas of operations like, installation, construction, commissioning and service jobs in these industries faces enormous Hr challenges, from not getting trained employees to people willing to change jobs frequently.

referring specifically to solar

industry, it faces Hr issues on all fronts. ranging from technology to sales & marketing, there is an enormous dearth of quality candidates

on all fronts. i would sum

up the situation thus: there is a market and future for power and oil & gas but they face challenges like r&D, lack of human resources as major ones. So, what is the way forward?

it is as follows: leadership development is the key for these industries

to grow on a sustainable basis. it is important that people are groomed within organisations and provided appropriate training and leadership skills at regular intervals. Hr heads of organisations should ensure employees are overall satisfied. it is not necessary that just monetary rewards like holiday packages, promotions, etc. can be effective in retaining top talent; it is a well established fact that non-monetary rewards can be just as effective as monetary ones to retain good talent.

the 12th five year plan (2012-17) has projected to create more than than 6 lakh jobs in the power sector. Of these, 85% will be primarily based on technical knowledge. a lot of power projects will be taken up by private companies as well, hence the employment opportunities will be available in abundance. it seems this is just a beginning.

ExpertSpeak

The bigger challenge is people join oil & gas companies for financial gains but that motivates them only till a certain period of time or age. Once that drive goes

down, it is very difficult to keep them motivated


Great Eastern Energy Corporation Ltd. (GEECL) is the Pioneer in the field of Coal Bed Methane (CBM) in India.

GEECL’s first CBM block is the Raniganj (South) block (210 sq. km) in the Damodar Valley, West Bengal with an estimated Gas-in-Place of 2 TCF. GEECL commercialised CBM for the first time in India in 2007.

GEECL was awarded a second block at Mannargudi, Tamil Nadu, situated at the southern part of India under CBM IV in 2010. The Block spreads over an area of 667 sq. km. The CBM resource of the block is estimated at 0.98 TCF as per the Directorate General of Hydrocarbons (DGH).

GEECL’s pioneering effort is helping in maintaining the ecological balance in West Bengal’s coal bearing areas where methane gas is escaping into the atmosphere and damaging the ozone layer. It will result in the demethanation of coal-beds and avoidance of methane emissions into the atmosphere.

GEECL has laid its own dedicated pipeline which runs through the heart of the Asansol-Durgapur Industrial belt, supplying CBM gas to various industrial consumers in the Asansol-Durgapur area. We also supply CNG via cascades to vehicles through a franchisee agreement with Indian Oil Corporation Limited (IOCL) and Bharat Petroleum Corporation Limited (BPCL).

GEECL is also involved in various CSR activities in Asansol-Durgapur area for the benefit of the people and has undertaken number of initiatives, including sponsorship of medical camps, sporting events, health initiatives, etc.

GEECL became the first CBM Company in India to receive the Quality, Health & Safety and Environment certification (ISO 9001:2008, OHSAS 18001:2007, ISO 14001:2004) by TUV NORD CERT GmbH for its operations in the Raniganj (South) block and for its Corporate Office at Gurgaon.

Our Vision: To maximise the Economic Recovery of the Reserve, whilst Maintaining International Quality, Health, Safety & Environmental Standards.

Corporate Office: Signature Towers - ‘A’, 14th Floor, South City, NH-8, Gurgaon - 122 001, Haryana, India

Regd. Office: M-10, ADDA Industrial Estate, Asansol - 713 305, West Bengal, India [email protected], www.geecl.com

Upstream

Midstream

Downstream

18

StatisticsPowerJune 2012 www.InfralinePlus.com

Comparison of Actual Generation and Targets set for Gas-based Power Plants in 2011-12

Gt Plant Moni-tored

Capacity

Sector March 2011 April 2010-March 2011 March 2012 April 2011 - March 2012

Target Gene-ration

Target Gene-ration

Target Gene-ration

Target Gene-ration

(MW) (MU) (MU) PLF (MU) (MU) PLF (MU) (MU) PLF (MU) (MU) PLFPlants Having Gas Allocation From KG D6 BlockAnta CCPP 419.33 CS 266 225 72.23 2800 2488 67.73 256 242 77.6 2846 2694 73.14Auraiya CCPP 663.36 CS 280 374 75.75 4400 4369 75.19 366 235 47.61 4267 3877 66.54Dadri CCPP 829.78 CS 485 466 75.47 5500 5400 74.29 422 484 78.46 5386 5375 73.74Faridabad CCPP 431.59 CS 263 285 88.88 2900 3155 83.46 260 301 93.66 2844 3068 80.92Gandhar CCPP 657.39 CS 397 291 59.60 4400 4058 70.47 330 315 64.46 4062 3681 63.74Kawas CCPP 656.20 CS 392 305 62.44 4400 3882 67.54 354 424 86.92 4063 3636 63.08Ratnagiri CCPP I 740.00 CS 267 313 56.87 3200 4148 63.99 264 403 73.23 3159 2934 45.14Ratnagiri CCPP II 740.00 CS 266 365 66.36 3200 3136 48.37 264 405 73.6 3159 4911 75.55Ratnagiri CCPP III 740.00 CS 267 312 56.75 3200 4593 70.85 264 80 14.54 3159 3879 59.68Dholpur CCPP 330.00 SS 189 210 85.45 2247 1995 69.01 192 174 70.98 2100 2255 77.79Dhuvaran CCPP 218.62 SS 134 115 70.57 1531 891 46.54 85 84 51.64 1000 1005 52.36Hazira CCPP 156.10 SS 105 81 69.94 1180 1023 74.80 102 71 61.31 1150 907 66.15Hazira CCPP Ext 351.00 SS 0 0 0.00 0 0 0.00 131 0 0 513 0 0I.P. CCPP 270.00 SS 133 114 56.93 1500 1368 57.85 118 67 33.29 1549 1246 52.54Pragati Ccgt-III 500.00 SS 502 4 0.97 1920 6 0.56 484 40 10.74 1810 318 7.25Pragati CCPP 330.40 SS 144 60 24.37 2400 2336 80.70 208 221 89.85 2400 2557 88.11Uran CCPP 672.00 SS 410 441 88.28 4800 5587 76.62 410 365 72.97 4800 4669 79.1Utran CCPP 518.00 SS 253 262 67.96 2959 2947 64.95 246 184 47.68 2900 2990 65.71Baroda CCPP 160.00 PS 111 26 22.09 1258 844 60.18 96 19 15.72 1120 669 47.58Essar CCPP 515.00 PS 170 76 19.84 2000 1444 32.00 142 8 2.17 1700 144 3.19Gautami CCPP 464.00 PS 207 268 77.60 2439 3331 81.95 282 162 46.84 3300 2893 70.98Gmr Energy Ltd -Kakinada

220.00 PS 115 114 69.65 1350 960 49.84 0 74 45.31 0 1201 62.14

Godavari CCPP 208.00 PS 115 111 71.67 1367 1464 80.37 137 105 67.7 1600 1282 70.19Jegurupadu CCPP

455.40 PS 260 253 74.69 3000 3094 77.56 262 211 62.39 3087 2828 70.7

Konaseema CCPP

445.00 PS 199 199 60.02 1941 2350 66.44 258 140 42.33 3070 2260 57.81

Kondapalli Extn CCPP

366.00 PS 163 198 72.86 1545 2044 70.09 212 117 43 2441 2203 68.52

Kondapalli CCPP 350.00 PS 210 157 60.35 2500 2134 69.59 213 187 71.74 2202 2031 66.05Peddapuram CCPP

220.00 PS 121 116 70.97 1445 1427 74.06 134 75 46.1 1600 1282 66.35

Peguthan CCPP 655.00 PS 447 248 50.85 4889 3667 63.92 306 196 40.19 4300 3072 53.39Rithala CCPP 108.00 PS 48 20 38.05 244 89 57.50 82 19 23.8 475 241 29.55Sugen CCPP 1147.50 PS 513 693 81.22 6031 8217 81.74 510 498 58.39 7818 7592 75.32Trombay CCPP 180.00 PS 129 140 104.34 1509 1569 99.49 132 136 101.73 1513 1568 99.15Vatwa CCPP 100.00 PS 69 38 50.87 780 671 76.54 65 26 34.45 671 458 52.11Vemagiri CCPP 370.00 PS 205 228 82.73 2430 2816 86.87 234 124 44.95 2800 2065 63.54Sub-Total 15187.67 7834 7110 87265 87504 7821 6194 88864 81791 Plants - Gas/Liquid Fuel - Not Located On HBJ PipelineAgartala GT 84.00 CS 55 56 89.14 611 644 87.53 56 58 92.05 611 666 90.28Kathalguri CCPP 291.00 CS 149 185 85.59 1700 1834 71.94 145 145 66.82 1725 1765 69.06Maithongt (LIQ.) 90.00 CS 0 0 0.00 0 0 0.00 0 0 0 0 0 0R. Gandhi CCPP (LIQ.)

359.58 CS 96 211 79.01 2100 1903 60.41 196 104 38.76 2134 713 22.57

Baramura GT 58.50 SS 17 30 69.32 188 226 50.07 23 31 71.34 271 359 69.78Basin Bridge GT (LIQ.)

120.00 SS 13 33 37.09 150 52 4.93 0 0 0 0 30 2.81

Haldia GT (LIQ.) 40.00 SS 0 0 0.00 0 0 0.00 0 0 0 0 0 0Karaikal CCPP 32.50 SS 23 13 52.81 255 195 68.65 23 23 96.03 257 256 89.53Kasbagt (Liq. 40.00 SS 0 0 0.00 0 0 0.00 0 0 0 0 0 0Kovikalpal CCPP 107.00 SS 57 63 79.55 644 664 70.81 47 65 81.65 538 708 75.33Kuttalam CCPP 100.00 SS 60 0 0.00 682 173 19.70 43 0 0 509 413 47.05

19


Total Coal Import by Power Utilities during 2011-12 Figures in Million Tonnes (MT)

S. No. Board/Utility Annual target of imported coal

Receipt at TPSs during April 2011 to February

2012

Receipt at TPSs during March, 2012

Available at Port

Total Prorata receipt %

Power Plants Designed on Indigenous Coal1 HPGCL 1.450 1.213 0.008 0.000 1.221 842 RVUNL 1.450 0.973 0.000 0.000 0.973 673 UPRVUNL 1.080 0.000 0.000 0.000 0.000 04 MPGCL 0.800 0.348 0.052 0.000 0.400 505 Torrent AEC 0.500 0.268 0.000 0.000 0.268 546 GSECL 1.480 0.593 0.060 0.017 0.670 457 Maha Genco 3.350 2.101 0.403 0.000 2.504 758 Reliance 0.600 0.754 0.028 0.009 0.791 1329 AP Genco 1.600 1.395 0.293 0.000 1.688 10610 TNEB 1.800 2.833 0.285 0.069 3.187 17711 KPCL 0.900 1.139 0.135 0.000 1.274 14212 DVC 1.730 0.000 0.000 0.000 0.000 013 CESC 0.500 0.180 0.000 0.137 0.317 6314 WBPDCL 1.000 1.027 0.007 0.000 1.034 10315 NTPC 15.450 11.246 0.821 0.158 12.225 7916 NTPC (JV) Ind Gandhi 0.300 0.274 0.000 0.000 0.274 9117 Reliance ROSA 0.300 0.781 0.102 0.000 0.883 29418 NTPC SAIL Power Co 0.300 0.082 0.097 0.000 0.179 6019 TATA (Maithon RB) 0.210 0.000 0.000 0.000 0.000 020 CSEB 0.200 0.000 0.000 0.000 0.000 0 Sub Total 35.000 25.207 2.291 0.390 27.888 80 Power Plants Designed on Imported Coal21 Trombay 2.800 2.315 0.252 0.000 2.567 9222 JSW Energy 6.300 5.542 0.641 0.000 6.183 9823 Adani Power 5.000 6.444 0.844 0.000 7.288 14524 Uduppi 4.200 1.464 0.159 0.000 1.623 3925 Mundr Aumpp 1.700 0.000 0.000 0.000 0.000 0 Sub Total 20.000 15.765 1.896 0.000 17.661 88.000 Total 55.000 40.972 4.187 0.390 45.549 82.000

GT Plant Moni-tored

Capacity

Sector March 2011 April 2010-March 2011 March 2012 April 2011 - March 2012

Target Gene-ration

Target Gene-ration

Target Gene-ration

Target Gene-ration

(MW) (MU) (MU) PLF (MU) (MU) PLF (MU) (MU) PLF (MU) (MU) PLFLakwa GT 120.00 SS 88 67 74.61 877 766 72.89 84 63 71.11 822 762 72.33Namrup CCPP 95.00 SS 43 52 74.04 491 509 61.13 48 50 70.1 555 566 67.79Namrup ST 24.00 SS 8 0 0.00 85 21 10.03 0 0 0 0 0 0Pamporegps (LIQ.)

175.00 SS 0 0 0.07 0 14 0.92 0 3 2.62 0 9 0.57

Ramgarh CCPP 113.80 SS 63 30 35.78 710 301 30.21 43 39 46.49 489 536 53.63Rokhia GT 90.00 SS 30 38 56.05 336 444 56.25 37 41 61.28 424 421 53.21Valuthur CCPP 186.20 SS 99 65 47.01 1229 548 33.58 63 36 25.79 700 1083 66.2Cochin CCPP (LIQ.)

174.00 PS 75 78 60.24 800 223 14.63 61 0 0 362 49 3.19

Goa CCPP (LIQ.) 48.00 PS 27 27 75.88 330 292 69.51 25 0 0 300 254 60.19Karuppur CCPP 119.80 PS 61 52 58.15 735 820 78.17 65 82 92.38 731 797 75.75P. Nallur CCPP 330.50 PS 213 216 87.73 2259 2494 86.15 180 234 95.2 2500 1526 52.57Valantarvy CCPP 52.80 PS 26 31 79.12 325 370 80.03 34 32 81.97 409 378 81.45Sub-Total 2851.68 1203 1247 14507 12493 1173 1006 13337 11289 Total 18039.35 9037 8358 101773 99997 8994 7200 102201 93080 Note: The Table Excludes Generation From Units Below 25 Mw.

NewsBriefs | Coal

20


Coal India has so far signed pacts with 18 power plants for supply of the fuel, amid electricity producers’ reservations about certain clauses of the

revised fuel supply agreement, including those related to penalty. CIL has entered into fuel supply pacts with Reliance Power for its Rosa Power project, Lanco Anpara Power, Bajaj Hindustan and CESC, among others.

Coal India (CIL) has signed a pact with government of Limpopo, South Africa for jointly identifying, exploring and developing coal

mines. In order to execute the pact, it would be required to set up a subsidiary of the PSU firm in South Africa. In this JV, CIL will have majority share while the public enterprise of Limpopo will have at least 26% stake.

State power utility Mahagenco has been issued show cause notices for inordinate

delay in developing captive coal blocks allotted to it. Timely work on the blocks would have ensured proper supply of coal for four of the seven thermal power stations in the state, which are currently facing huge shortage of coal, hampering power generation and also leading to losses.

With a host of virgin coal blocks allocated to state PSUs and private entities in Odisha, the state government has sought the participation of Mahanadi Coalfields Ltd to develop

common infrastructure and building of rail-road corridors. The CMPs and transport corridors to evacuate coal are being planned for Talcher and Ib valley coalfields in the state.

PTC India Ltd has revived its plans to acquire small coal mine in Indonesia. This would be the company’s fourth attempt, as previous

projects were not given a go-ahead by its board. It is trying to rope in a partner, which may be an Indian player or local company in Indonesia. PTC India wants to bring the coal to India for selling it to power plants. It has earmarked `300 cr for acquiring coal asset.

Legacy Iron, the Australian arm of state-owned NMDC is set to acquire six coal tenements in

Queensland. The move to acquire coal assets is part of its strategy to become strong in steel making related fields. The company will pay Australian $6 million via staged payments to Subiaco capital, Velarium Holdings and Sara Bella Energy as cash payment and refundable deposit.

NTPC plans to spend as much as `82, 521 crore over a decade to secure overseas coal supplies as prices of the fuel tumbled to a

19-month low. The utility may sign five or 10-year contracts for the first time to import as much as 150 million MT of coal. Production constraints at state monopoly Coal India Ltd. are forcing the New Delhi-based generator to step up purchases abroad.

Recently Jharkhand government has cleared three joint venture proposals for development of high grade coal blocks. The coal blocks will

be developed by Jharkhand State Mineral Development Corporation in association with Jindal Steel and Power Limited, Orissa Manganese and consortium of Coal Engineering and AMR Construction.

Reliance Power Ltd (RPL), facing allegations of having received undue

benefits in the surplus coal diversion issue, has requested the national auditor Comptroller and Auditor General of India (CAG) to drop its observations on the matter. The government’s latest decision not to review an earlier approval given to the company to divert surplus coal from Sasan project has reaffirmed the permission.

CIL is to write to the Coal Ministry stating its decision to quit ICVL, a special purpose vehicle formed to acquire mines abroad. The pull-out move was

approved by CIL board. The Coal Ministry after receiving a letter from CIL, stating its decision to walk out of ICVL, will make recommendations to the Steel Ministry and seek its permission to exit ICVL.

The Government has finalised rating agency Crisil as a consultant, which would fix the methodology to determine the reserve

price of 54 coal blocks, which the Ministry of Coal plans to auction during this fiscal. The Ministry, which has almost finalised the rules for bidding of blocks, had decided to go in for the competitive bidding route, in order to bring in greater transparency in the process.

CIL-Govt of LimpopoPact to develop coal mines in SA

FSAWith 18 power plants

Mahagenco rapped for delay in developing captive coal blocks

Odisha Govt - MCLaid to develop coalfields infrastructure

PTC IndiaEyes coal block in Indonesia, again

Legacy Iron to acquiresix coal tenements in Queensland

NTPC$15 bn to secure overseas coal supplies

The MoC has received a request from DD International for clubbing its 15,000 tpa linkage with the LoA for 15,000 tpa and treat the kiln capacity

as 1x30,000 tpa instead of 2x15,000 tpa. Accordingly, the MoC has asked SECL to send an inspection team to visit the unit physically and submit a report to the Ministry at the earliest.

SECLTo look into request of DD International

JharkhandClears power and mining projects

RPowerAsks CAG to drop audit note

ICVLCIL plans to quit

CRISIL Consultant todetermine reserve price of coal blocks

22

InDepthJune 2012 www.InfralinePlus.com

Surplus Coal Policy: Is government batting for PSU?

► The draft policy moots selling of surplus coal to CIL at production cost

► The coal so transferred would be sold by CIL through an e-auction

Coal india Limited, the world’s largest coal producer is facing an uphill struggle to meet the domestic coal demand. Sensing the maharatna company’s predicament, it appears that government is now attempting to help the public sector undertaking through the blocks allocated to private firms. the government is working on a ‘policy on surplus coal’, and it may do just that. “after all, these blocks originally belonged to Coal india, so what is the harm in routing surplus coal to the company, “opined a senior official from the Coal Ministry.

as per the policy, which is underway, private companies will be asked to sell the surplus coal produced in mines allocated for captive use to CiL at production cost, or without any margin.

“any surplus coal produced shall be transferred to the nearest CiL subsidiary. the price payable by CiL to

the government may impose a policy guideline mandating captive mining companies to sell the surplus coal to the public sector company without any profit.

the policy, if implemented, would work towards discouraging companies to produce more than what they need for captive consumption. industry experts, however, see the move as regressive. at a time, when the gap between coal output and demand is

the allocatee would be either the cost of production or the notified price of CiL for the corresponding grade of coal, whichever is lower,” a draft policy floated by the coal ministry for inter-ministerial consultations, said.

Now, the catch in the policy is that,

The catch in the draft is that, the government

may impose a policy guideline mandating

captive mining companies to sell the

surplus coal to the PSU without any profit

23


rising, the government should work towards encouraging companies to boost output rather than penalising them for efficiency. Nonetheless, companies do need permission, if they intend to mine more than what was permissible in the lease agreement.

“Our biggest concern (by allowing private companies to enter commercial sale of coal) is private companies with captive mines may produce surplus output to garner profits. if this happens, it would circumvent the existing law that which does not allow these to profit through coal sales,” said a senior coal ministry official.

the draft policy statement said that the coal so transferred would be sold by CiL through an e-auction. under the e-auction, coal is sold at spot market price. around 10 per cent of the total coal produced by CiL, which accounts for over 80 per cent of the domestic coal production, is sold through e-auction. “any surplus coal produced/generated (from the captive mines).... shall be transferred to nearest Coal india (CiL) subsidiary....(and) shall be disposed by e-auction by the CiL,” it said.

a committee of Secretaries will be asked to give its recommendation, followed by inter-ministerial discussions. the Cabinet Committee on Economic affairs (CCEa) is expected to take a call after that. “… it is clear that the new policy will be implemented prospectively,” a senior coal ministry official opined.

an empowered group of ministers (EGoM), in its meeting last month decided to stick to an earlier decision where the government allowed reliance Power to use surplus coal produced from mines allotted for the Sasan project in Madhya Pradesh to its Chitrangi project nearby. the EGoM is headed by

Finance Minister Pranab Mukherjee.One may assume that the new

policy will not affect the permission already given for use of reliance’s Sasan uMPP incremental coal for its Chitrangi Project. However, the application of reliance Power to use surplus coal from blocks allocated to the tilaiya (in Jharkhand) uMPP will be processed under the new policy on surplus coal.

the draft also recommends penal action, including coal block cancellation, against companies, which have been allotted captive blocks, are found selling coal. “any attempt to sell coal along with rejects shall amount to breach of law as well as breach

of terms and conditions of allocation/mining lease/

FSa...and the company attempting to do so shall invite penal action, including cancellation of allocation and/

or termination of mining lease/FSa,” the

document said.Since 1973, coal mining has

remained the exclusive domain

of the public sector. Coal Mines Nationalisation act came into force in early 70s. However, later, through a series of amendments to the act, the government had allowed private companies to mine coal for specified captive use in end-use projects. as of now, 28 (operational) captive mines contribute about 35 million tonnes of the total 530 million tonnes of coal produced in the country.

Once implemented, the new policy would pave the way for the government to fast-track progress of its ultra Mega Power Plants (uMPP) programme, under which it wants to award at least 13 uMPPs to private developers. according to the policy guidelines, incremental coal produced from captive mines should be sold by a private developer to the nearest Coal india mine at a transfer price set by the government.

incidentally, another legislation, ‘the Commercialisation of Coal Mining bill’, which is aimed at allowing private companies into commercial sale of coal has been gathering dust since 2000.

Once implemented, the new policy would pave the way for the government to fast-track progress of its Ultra Mega Power Plants (UMPP) programme,

under which it wants to award at least 13 UMPPs to private developers

The draft also

recommends penal action, in-

cluding coal block cancellation, against

companies, which have been allotted captive

blocks, are found selling coal.


24


Disquiet over Coal Pricing ► Move to switch over to GCV pricing may lead to a gradual rise in coal prices to global levels

► Imported coal has low toxic elements that makes it less polluting

Coal india Limited’s (CiL) move to shift from useful Heat Value (uHV) to Gross Calorific Value (GCV) grading and pricing has drawn a lot of opposition from coal consumers. it’s not so much the fear of rise in prices, but the absence of infrastructure to implement the framework that caused major concerns.

the shift was intended to encourage coal producing companies to boost production of superior grades of coal. india is the only major coal producing country that did not follow the GCV system.

the move to switch over to GCV

to GCV will affect the power sector and other consumer industries adversely, and therefore it should be done in a phased manner.

Since 1970s, indian coal is classified on the basis of uHV, which is based on ash and moisture content of coking coal, in line with the centers directives. CiL has been advocating a changeover to GCV-based sales since 1998. Each such attempt – the previous being in 2008 – has faced with severe opposition, in particular from the power sector, which anticipated a pricing motive behind the move.

pricing is likely to lead to a gradual rise in coal prices to international levels. at present, the average price of indian coal is 30-60 percent lesser than the international price, and a sudden move

At present, the average price of Indian coal is 30-60 percent lesser

than global prices, and a move to GCV will

affect the power sector adversely

25


an insight into the comparison of quality and price differential of indian and imported coal would explain why the move to GCV attracted criticism. CiL worked on the recent move on the recommendation of the tL Shankar Committee in 2010, and the integrated Energy Policy document of the Planning Commission.

Quality and price differential of Indian and imported coal Most of indian coal comes from open cast mines, making it difficult for miners to keep the quality consistent.

industrial application seeks better coal quality. the imported coals have low toxic elements like mercury, lower silica and alumina content, thus it is less polluting and advantageous for industrial applications vis-à-vis indigenous coal. On an average, the coal from the overseas destination has a 30-40 percent higher calorific value compared to indian coal.

a comparison of the energy price of the pit head Grade E coal produced by Northern Coalfields Limited (NCL) of CiL and the indonesian and South african coals on an equated energy basis reveals the disproportionate price disparity in the domestic and international coal.

Grade E coal from NCL is an overall representative of CiL’s total coal production having weighted average GCV of 4704 kcal/kg. there is a sharp contrast in the price of indian and

imported coal, which can be seen in Figure 2.

CiL is attempting to reduce the gap between international coal price and domestic coal which is about 75 percent in certain coal varieties like C, D and part of E grades.

The Delayed Move Since 1990s, CiL has been trying to shift to the GCV system, but the move did not get materialised, mainly due to protest from the power sector. under GCV, coal is categorized into 17 grades instead of seven under uHV method, with GCV ranging from 2,200 Kcal/kg to 7,000 Kcal/Kg.

the internationally-accepted grading and pricing GCV policy measures the amount of heat liberated from carbon and hydrogen in the coal when heated. Due to the high ash content in indian coal, the uHV mechanism is followed that takes into account the heat trapped in ash. typically in indian coal, GCV is 25 percent higher than uHV. india

is the only major coal producing country, globally that does not follow the GCV system.

the uHV pricing, does not take environmental cost into consideration. boilers of thermal power plants are designed to use low ash content coal and the use of low-grade coal affects the performance of the boiler. the GCV based pricing is an internationally accepted benchmark and technology driven. it incentives the use of washed coal in thermal power plants, thus minimising the adverse impact on the environment.

CiL has continually kept grade adjusted prices of its coal at discounted rate with respect to imported coal in the past. in Fy 2010, it gave a discount of about 57 percent with respect to the global prices. indian government is considering pricing the domestic coal at par with international coal. Keeping the indigenous coal at some price parity with imported coal will reduce losses and add to revenues of

Country Moisture Content (%)

Ash Content (%)

Sulphur Content (%)

Calorific Value (Kcal/

Kg)

Volatile Mat-ter (%)

Australia 6-11 6-17 0.3-0.8 6000-7200 14-36Indonesia 10-12 4-12 0.1-0.95 4100-6700 28-42China 7-15 8-12 0.3-0.8 6500-7000 24-32South Africa 8-9 12-15 0.45-0.55 5850-6500 23-25India 1-18 9-34 0.2-0.8 3500-5000 11-38Source: Infraline Analysis

Table 1: Indian Coal Vs Imported coal

26

InDepth


indigenous producers. the changing trend of pricing indian coal at par with international coal can be seen from in Figure 3.

CiL’s stand, that the changeover from uHV to GCV system is revenue neutral, is not correct. the revised system would result in an increase in the cost of coal by 50 percent to 180 percent, depending upon the coal grade and the mine concerned.

Mr alok Perti, Secretary Ministry of Coal (MoC) at infralineEnergy’s annual Summit on Overseas Coal in india, 2012, said that the coal prices in the country increased, because earlier pricing of the mineral was on the cost plus basis and not the calorific value; but the need to link the prices to calorific value led to the price increase.

N.C. Jha, former Chairman and Managing Director of Coal india also said that, delinking local prices from global rates would help offset a projected 12.5 percent rise in prices. “the new pricing is based on the weighted average price of coal for the erstwhile uHV-based grades, which have been suitably extrapolated for the GCV slabs on the basis of price per million calorie for various grades so as to bring about a revenue neutrality as a whole,” said Mr Jha. He also said that despite the change in pricing method, CiL will continue to offer between 25 to 77 percent discount to power

sector customers, and 25 to 66 percent discount to others.

the new regime would generate additional revenue of about `28, 000 crore. However, as per CiL, the new pricing is not only revenue neutral in total, but for some of its subsidiary, will lead to losses. Mr N.C. Jha, stated that the worst affected mine would be the Western Coal fields (WCL). under the new policy it is assumed that WCL will incur a loss of `450 crore. to set off these losses, CiL will charge 10 percent more than the rest of the subsidiaries. the earlier move of CiL to levy extra six percent on the coal from Eastern Coalfields Ltd (ECL), as it is a sick subsidiary and listed with the board for industrial and Financial restructuring, was also withdrawn. instead, only customers of WCL will have to pay 10 percent extra.

Consumer’s Concerns?the announcement of new pricing regime led to huge protests from consumers including power, cement and steel companies that expected the coal prices to go up. the Coal Consumer association of india (CCai) said that it is not against the GCV system; however the move could have been executed after correcting the prevailing inconsistencies. CiL should maintain international standards which the firm is not following. before, CiL finalises

the new regime, it should note that the ash and moisture content of indian coal is quiet high as compared to coal from South africa, indonesia and other countries. Hence, CiL should also give 100 per cent washed coal, which currently stands at about 10 percent of total supply. besides, as per reports, the size of CiL coal varies which is not in case of imported coal. Further, CiL’s coal also contains bulk impurities such as shale, stones, boulders, etc which are absent in imports.

the CCai demanded a temporary rollback of the decision. the association envisages the minimum coal price hike of five percent, which could even go up to 168 percent. this would result in an adverse spillover effect on the related sectors. the cost of cement would increase by `8 to `10 per bag. Fuel cost for cement and steel plants could also increase up to 70 percent. raw material cost for sponge iron could increase up to 15 percent. the cost of power generation could increase 35 percent, and would therefore put additional burden on the state distribution utilities, which are unable to fully recover the increasing cost of generation by way of tariff which is subject to regulatory bodies.

the Ministry of Power (MoP) urged MoC to hold a meeting of stakeholders to have a comprehensive view on the matter and create requisite technical and legal framework, before coal companies switchover to the GCV based coal grading and pricing regime.

the power ministry reiterated that adoption of GCV system needs to be preceded by the prerequisites in line with the international practice. these include availability of sized coal (-50 MM), sampling at unloading point (power utility end), third party sampling, adoption of auto-mechanical sampler, bOM calorimeter and disincentive/penalty for supplying coal below the specifications. For fixing the price of coal as per the GCV regime, other coal quality parameters like ash,

27


iM, tM, VM, fixed carbon, sulphur, size of coal should also be specified in addition to GCV.

MoP requested MoC to issue instructions to CiL to put the implementation of GCV based pricing system in abeyance till the CiL and its subsidiary companies meet the essential prerequisites, such as supply sized coal and improved and automated sampling techniques, in line with the international practice. Declaration of GCV should be done through a scientific way, based on actual calorific value verified through proper sampling of each rake of coal.

the power utilities are of the view that a Coal regulatory authority should be set up. this is essential before implementing the GCV based pricing

mechanism on a trial basis for three months. a Coal regulatory authority rather than CiL should be responsible and regulate the shift to GCV regime. till then the present system of uHV based pricing shall continue.

the india Coal Merchant association also supports setting up of a Coal regulatory authority, which should not only for the pricing issues but also to look into the coal supply and quality concerns.

The Road AheadCiL has given in to the pressure from the consumer industries and rolled back the price hike that came into effect after the company shifted to the new coal pricing mechanism based on GCV.

New Price Old PriceS. No

GCV Band

Ash % (ADB)

UHV Pit head RoM price

for non coking coal

(INR/ton)

Grade UHV Ash %

Pit head RoM price

for non coking coal

(INR/ton)

Increase (Power utilities)

Power utilities

Power utilities

Abso-lute

%

1 Above 7000

<8.80 4900 A >6200 <15 3690 1210 32.79

2 6700 - 7000

12-9 6416-6830 4690 3690 1000 27.10

3 6400 - 6700

15-12 6002-6416 4460 3690 770 20.87

4 6100 - 6400

17-15 5726-6002 4130 B 5600 - 6200

15-19 3590 540 15.04

5 5800 - 6100

20-17 5312-5726 3990 C 4940 - 8600

19-24 1050 2940 280.0

6 5500 - 5800

23-20 4898-5312 2940 1050 1890 180.0

7 5200 - 5500

26-23 4484-4898 2060 D 4200 - 4940

24-29 880 1180 134.09

8 4900 - 5200

30-26 3832-4484 1890 E 3360 - 4200

29-35 730 1160 158.9

9 4600 - 4900

33-30 3518-3932 1680.00 730 950 130.14

10 4300 - 4600

36-33 3104-3518 970.00 F 2400 - 3360

35-42 570 400 70.18

11 4000 - 430G

39-36 2690-3104 880.00 570 310 54.39

12 3700 - 4000

42-39 2276-2690 630.00 570 60 10.53

13 3400 - 3700

45-42 1862-2276 630.00 G 1300 - 2400

42-50 430 200 46.51

14 3100 - 3400

49-45 1310-1862 620.00 430 190 44.19

15 2800 - 310C

52-49 896-1310 620.00

16 2500 - 2800

55-52 484-896 550.00

17 2200 - 2500

58-55 62-482 480.00

Source: ICMW

While the company will continue with GCV based grading of the mineral, it will not link the prices with international rates. as per MoC, an assessment will be made for coal pricing. after a trial period of three months, the results would be assessed, if CiL has a loss or if profit rises, suitable action will be taken.

Coal Minister Sriprakash Jaiswal stated that the proposed GCV based mechanism was aimed at bringing more efficient grading and pricing system. Mr. N.C. Jha, addressing the concerns regarding the high ash and moisture content and inconsistent quality in CiL’s coal compared to international coal said, “for that we have kept band of 300 kcal for each band of grades, while, price for international coal changes in narrow band of 50 kcals”.

to conclude, the stakeholders are not against the GCV pricing mechanism, but have not been able to take the inconsistencies in implementation of the new pricing regime in stride. Lack of proper legal framework, the infrastructure inadequacies, lack of appropriate coal quality standards are the major concerns, observed actually resisting the needed price decision. if only CiL could address these concerns in the assessment quarter of January-March, 2012. it is ironical that even after the deregulation of coal prices, after conformance of Colliery Control Order, 2000, the price increase by CiL, has been less than inflation on yearly basis. During the ten-year period from January 2000 to January 2010 saw a 4.9 percent increase in coal prices by CiL, which is lower than the inflation rate prevailing over the same period. the point is that the coal prices of CiL are significantly lower than the landed cost of imported coal in india. Further, the prices do not reflect the market price for coal at a domestic or international level. Sooner or later the shift to GCV pricing is there to make its way in the indian coal scenario.

Table 2: Impact on coal price due to CIL’s move to change over from UHV to GCV based pricing


28


Following the draft report by the Comptroller and auditor General on coal blocks being allocated to firms without bidding, the opposition stalled the functioning of the Parliament several times demanding discussion and tabling of the report. union Coal Minister Sriprakash Jaiswal, who is at the helm of affairs in the ministry, spoke to infralinePlus’alok Sharma and categorically denied the charge, saying that the ministry did not deviate from the rules and regulation meant for block allocation.

Sir, the CAG draft report has raised significant questions on the process of allocating coal blocks between 2004-2009. According to the draft report the firms had made staggering gains worth Rs. 10.67 lakh crore. Please throw light on the issue.the report is yet to be tabled in the Parliament, so it would not be fair to jump the gun before the report is made public. However, i want to clarify that there was no foul play in allocating the blocks. the government followed all necessary procedures. it placed advertisements in newspapers for allocation of coal blocks and invited applications. When interested parties applied, the ministry consulted concerned state governments before giving away the blocks to the firms.

the coal blocks were allocated through a screening committee headed by Coal Secretary. One also has to understand that the dynamics of the (coal) sector have changed over the past few years. Coal commands premium now but it was not the case earlier... that time when the blocks were given (without auction) there was not much demand... naturally, there was not much value.

But, what is the rationale in inviting bids for coal blocks now?See, one has to wait for the right time to go for a change (in the process). in mid 2000, there were not many companies interested in acquiring coal blocks. Even if we had gone in for the bidding, i would not assume that investors would have come forward… With so much of perceived value in the blocks, bidders will come.

Does government foresee a better price for itself while auctioning coal blocks.allocation of coal blocks was never looked upon as a potential source for generating revenue for the Central Government. the intent of the government was to induce rapid development of infrastructure which was so very essential to keep the economy on a high growth trajectory. Hence the question of maximizing revenue does not arise at all. the idea of introduction of bidding cropped up only in the wake of increasing demand for captive coal blocks and the consequent necessity of putting in place a process which is demonstrably more transparent.

We followed the law in coal block allocation: Jaiswal

InConversation

29


With finite natural resources and coal companies facing issues of strikes, monsoon and naxal problems, how would government ensure optimum output from existing mines.(Smiles…) unfortunately, the government has not found any solution against the monsoon. but we are working towards acquiring mines overseas to boost the supplies. We are planning to set up a fund to help public sector companies in acquiring coal assets overseas. though, Coal india Ltd (CiL) has surplus resources for investing outside, we feel that the government should provide additional financial support in buying stake in large assets outside the country.

Here, i would also want to add that

Coal commands premium now but it was

not the case earlier... That time when the blocks were given

(without auction) there was not much demand

as the economy grew in size, the demand for coal also grew, particularly due to expansion in the energy sector. it was felt that Coal india Ltd alone would not be able to meet the growing demand and, therefore, the option of giving a bigger role to the private sector was explored.

What are the measures that the government plans to follow in ensuring that the blocks are given to serious players only? Given the increasing gap in demand and supply of power, there is a need to ramp up coal output.the government has already issued show cause notices to a number of firms that were sitting on the blocks. We have asked those firms to explain as to why was investment not made towards developing the block. after carefully going through the responses, the ministry will take a call on de-allocation of the blocks.

the government has already incorporated bank guarantee clause, to inject seriousness among the bidders. Going forward, no company will be allowed to sit idle on the resources.

the boards (of PSu companies) need to be proactive as any delay in reaching a may result in losing the opportunity.

There are many power producers including state-owned NTPC, which is not comfortable with the penalty clause in fuel supply agreement. Is there any scope to change the penalty clause, as companies believe that it is biased towards Coal India.Not everybody has a problem. Some companies have already signed FSas with Coal india. However, we are trying to address their issues. if required we may re-work on the penalty clause. but, i believe Coal india will be able to supply raw material to companies as per their agreement.

What is the progress on coal regulatory bill?Cabinet discussed the issue and it was then decided that Empowered Group of Ministers should look into the concerns. Once EGoM discusses the issue, we may then proceed further.


30

StatisticsCoalJune 2012 www.InfralinePlus.com

State-wise status of coal resource position of the country from April 2010-April 2011

State As on Resources (million tonne)

Proved Indicated Inferred Total

(1) (2) (3) (4) (5) (6)

Gondawana Coalfields

Assam

1/4/2010 0 3 0 31/4/2011 0 3 0 3

Andhra Pradesh

1/4/2010 9,257 9,730 3,029 22,0161/4/2011 9,297 9,728 3,029 22,054

Jharkhand

1/4/2010 39,633 30,992 6,338 76,9641/4/2011 39,761 32,591 6,584 78,936

Bihar

1/4/2010 0 0 160 1601/4/2011 0 0 160 160

Madhya Pradesh

1/4/2010 8,505 11,267 2,216 21,9881/4/2011 8,871 12,192 2,063 23,126

Chhattisgarh

1/4/2010 12,441 30,230 4,011 46,6821/4/2011 12,879 32,390 4,011 49,280

Maharashtra

1/4/2010 5,360 2,984 1,965 10,3081/4/2011 5,490 3,094 1,949 10,533

Orissa

1/4/2010 21,507 32,074 12,726 66,3071/4/2011 24,492 33,987 10,680 69,159

Sikkim

1/4/2010 0 58 43 1011/4/2011 0 58 43 101

Uttar Pradesh

1/4/2010 866 196 0 1,0621/4/2011 866 196 0 1,062

West Bengal

1/4/2010 11,753 13,030 5,071 29,8531/4/2011 11,752 13,132 5,071 29,955

Gondawana Coalfield

1/4/2010 109,320 130,564 35,559 275,4441/4/2011 113,408 137,371 33,590 284,369

Tartiary Coal Fields 0

Arunachal Pradesh

1/4/2010 31 40 19 901/4/2011 31 40 19 90

Assam

1/4/2010 349 33 3 3851/4/2011 465 43 3 511

Meghalaya

1/4/2010 89 16 471 5761/4/2011 89 16 471 576

Nagaland

1/4/2010 9 0 307 3151/4/2011 9 0 307 315

Tertiary Coalfields

1/4/2010 478 89 799 1,3671/4/2011 594 99 800 1,493

India 1/4/2010 109,798 130,653 36,359 276,8101/4/2011 114,002 137,470 34,390 285,862

Increase / Decrease (-) In Resources Due To Exploration In 2010-11

4,204 6,817 -1,969 9,052

Source: Geological Survey of India. Data may not add up to respective total due to rounding off.

31


Inventory of geological resources of coal by type as on April 1, 2010 and 2011

Company-wise details of coal production during the XI Plan and projection for XII Plan

Plan-wise Areas Covered Under Regional and Detailed Exploration

Type of Coal As on Reserve (MT)

Proved Indicated Inferred Total

(1) (2) (3) (4) (5) (6)Prime Coking 01/04/2009 4,614 699 - 5,313

01/04/2010 4,614 699 - 5,31301/04/2011 4,614 699 - 5,313

Medium Coking

01/04/2009 12,448 12,064 1,880 26,39301/04/2010 12,573 11,940 1,880 26,39301/04/2011 12,573 12,001 1,880 26,454

Blendable/Semi Coking

01/04/2009 482 1,003 222 1,70701/04/2010 482 1,003 222 1,70701/04/2011 482 1,003 222 1,707

Non Coking (Including High Sulphur)

01/04/2009 88,175 109,804 35,819 233,79801/04/2010 92,129 117,012 34,257 243,39801/04/2011 96,333 123,768 32,287 252,388

Total* 01/04/2009 105,720 123,570 37,921 267,21101/04/2010 109,798 130,654 36,359 276,81101/04/2011 114,002 137,471 34.389 285,862

*Including Sikkim

Company 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 XII PlanActual Actual Actual Actual Actual Target Anti 2012-13

Target2016-17Target

ECL 30.47 24.06 28.14 30.06 30.81 33.00 31.00 33.00 45.00BCCL 24.21 25.22 25.51 27.51 29.04 30.00 30.20 31.001 37.00CCL 41.32 44.15 4S43.24 47.08 47.52 51.00 49.00 55.00 92.00NCL 52.16 59.62 163.65 67.67 66.25 68.50 68.50 70.00 82.00WCL 43.21 43.51 44.70 45.74 43.65 45.50 43.80 45.00 45.00SECL 88.50 .93.79 101.15 108.01 112.71 112.00 113.75 117.00 145.00MCL 80.00 88.01 96.34 104.08 100.28 106.00 103.00 112.00 167.00NEC 1.05 1.10 1.01 1.11 1.06 1.00 0.75 1.10 2.00CIL: 360.92 379.46 403.74 431.26 431.32 447.00 440.00 464.10 615.00SCCL 37.71 40.60 44.54 50.43 51.33 51.00 51.00 5.3.10 57.00Other Public Sector# 1.77 2.02 1.84 3.30 1.81 3.55 Private-IISCO 7.04 7.21 7.28 7.21 7.03 8.40 17.75 18.00 23.00Captive* 17.61 21.17 29.87 35.03 34.60 38.25 36.15 39.f0 100.00Meghalaya 5.79 6.54 5.49 5.77 6.97 5.80 Grand Total: 430.84 457.00 492.76 533.00 533.06 554.00 544.90 574.40 795.00# Includes IISCO, DVC, JSMDCL & JKML% APMDTCL * Includes B-EMTA, ICML, JSPL, Hiandalco, Monnet, BLA, CML, Panem, PEL & INL.

Estimated Coal Demand and Availability Position During 2012-13 (figures in million tonne)

S. No

Description 2012-13

1.1 Coal requirement for plants designed on indigenous Coal

488

1.2 Coal requirement for plants designed on imported coal

24

1.3 Total 512

2. Coal availability from indigenous sources

2.1 From CIL sources 347

2.2 From SCCL 33

2.3 From captive mines 25

2.4 Total coal availability from indigenous sources

405

3. Shortfall of indigenous coal (1.1 - 2.4)

83

Plan Prognosticated potential coal bearing area

(sq. km)

Covered by regional exploration

% Remaining to be covered by regional exploration

Covered by detailed exploration

% Proved (MT)

Indicated (MT)

Inferred (MT)

Total (MT)

End of VIII Plan 15079 8526 56 6553 4824 56 70.443 89.750 41.761 201.954End of IX Plan 17303 10535 60 6768 5048 48 87.319 109.378 37.41 7 234.114End of X Plan 17303* 11992 69 5311 5568 46 95.866 119.769 37.666 253.301End of XI Plan 17619*

(17303 + 316**)14013 79 3606

(770+2836***)7188* 51 114.00 137.47 34.39 285.86****

Beginning of XII Plan

18279 4226 (1430+2836***)

*Tentative Estimate, **Addl. Area identified during X Plan, *** Includes 2836sq km area under CBM Blocks,****Around 10.87Bt of coal has been extracted from 1950 to 2010-11 from these resources, + Does not include area covered by detailed exploration by captive block allocattees.

NewsBriefs | Oil & Gas

32


Petrol in Delhi will now cost `73.18 a litre with the public sector oil marketing companies raising the prices by `7.54 a litre. This is the steepest increase that

the country has seen. Though petrol prices were deregulated in June 2010, there is an artificial control in place. This is evident by the fact that the increase came just a day after the Budget session of Parliament ended.

Refusing to buy the argument by RIL on the KG-D6 block cost recovery issue, the Petroleum and Natural Gas Ministry has directed the Directorate-

General of Hydrocarbons (DGH) to take necessary action as per the notice served on RIL. The government has moved ahead on the issue of appointing an arbitrator for the case.

BP and Videocon Industries are turning out to be big gainers in the bidding war between Thailand’s biggest oil explorer PTT Exploration and

Production and British oil giant Shell Plc for the stake held by Cove Energy in the prospective gas block in Mozambique. Since January this year, their assets have soared by `24,000 crore.

Taking energy co-operation forward, India and the US are discussing import of LNG from the US. The US currently has a surplus,

while India has a deficit, with many of its gas-based power plants languishing. At a recent meeting between the two countries, the US delegation made a presentation on oil and gas markets, including the impact of LNG and shale gas on gas markets.

The Oil Ministry has refused permission to oil PDUs for acquiring Asian Development Bank’s stake in Petronet LNG Ltd so as to keep the nation’s

largest liquefied natural gas importer a private company. The ADB on August 23 last year offered to sell its 5.2 per cent stake in PLL, in which GAIL, IOC, BP and ONGC hold 12.5 per cent stake each.

Britain and Argentina have been feuding over the sovereignty of the Falkland Islands for 180 years. Now, an outside player has decided

to take the plunge on what might be there under the stormy southern Atlantic waters and invest – India. India’s OVL is now in talks to buy 25 percent of two exploration blocks in the Falklands’ offshore waters.

India’s decision to pullout from certain oil blocks claimed by Vietnam in the South China Sea is to benefit Sino-India ties. China had raised objections to Indian oil

exploration projects in the region. Amid tensions between China and Philippines, India’s non-involvement in the South China Sea would be beneficial to both the regional security and Sino-Indian relations.

The Petroleum and Natural Gas Regulatory Board asserting its right to frame regulations, in order to protect the interest of consumers, stood by its April 9 order cutting down, with retrospective effect, the network

tariff and compression charges for CNG (compressed natural gas) distributed by Indraprashta Gas Limited (IGL) in Delhi and adjoining areas.

BPCL is the best- performing energy stock on the MSCI AC Asia Pacific Index this year and analysts say its foray into exploration in Africa to counter refining losses may mean there’s

more growth to come. Bharat Petroleum’s 54 percent surge this year makes it the only refiner among the top 10 gainers on the MSCI AC Asia Pacific Index and the best performer on India’s 50-share Nifty Index.

KG-D6Centre to appoint arbitrator

OIL AND GASSteep rise in petrol prices

Mozambique bidding warBP and Videocon Industries big gainers

Government of Kerala and Petronet LNG Limited, promoters of the LNG terminal coming up on Puthuvype island, are learnt to have reached

an understanding on land for an LNG-based power generation facility. The government had identified 50 acres for the project, which proposed setting up a 1,250 MW plant.

KeralaLand for LNG power plant

India-USLNG imports

Government says NO to oil PSU buying ADB’s stake in Petronet LNG

FalklandsIndia decides to invest in oil fields

India will pay close to $13 per million British thermal unit for natural gas it will buy from Turkmenistan through a pipeline passing through

Afghanistan and Pakistan, almost three times the rate government has fixed for domestic gas producers. The higher rate agreed is in contrast to the stand Oil Ministry had taken in stonewalling a request from RIL and its partner BP.

Natural gas from Turkmenistan$13 per million British thermal unit

South China Sea ONGC pulls out

IGL vs PNGRBRegulator submits its case

BPCLBeating refiners on African exploration

ONGC has drawn up plans to enter the marketing and re-gasficiation of LNG and into the City Gas Distribution (CGD) business. The company

feels that the share of natural gas in Indian primary energy basket is expected to increase from 11 per cent to 20 per cent by 2025. Dependence on imported LNG is set to increase substantially.

ONGCTo get into LNG marketing

InConversation

34


Given the dependence on oil and gas for a country’s economic growth, where do you see India standing at this point in time?India is diversifying its sourcing of oil and gas, exploring for its own resources, both onshore and offshore, as well as modernizing, updating and upgrading its offshore flow lines and transportation lines.

What are the challenges before Indian companies that wish to go for pipeline insulation? Is cost a concern, keeping in view the state-owned oil marketing companies’ dependence on the government for

subsidies? In the wake of high global crude prices, are margins also a matter of concern?Insulation and, sometimes, heat tracing a pipeline is utilised for flow assurance. Heavy crude is very viscous and cannot be pumped from one location to another unless heated and insulated. There are other methods and technologies for heavy crude transportation such as heated tanker trucks which are very expensive, keeping in mind the current state of road infrastructure in the country. Also, some chemical additives can be used to decrease the oil viscosity and, hence, improve its flow ability. Our solution for providing long-term, dependable and quality-insulated (and sometimes heated) pipelines

is the best solution for heavy crude transportation. It is efficient, long- lasting and environment friendly. Of course, economic concerns are part of every decision making process in India or in any other country, but we have been very successful when given the

opportunity to demonstrate our solutions.

Are more companies willing to go for insulation?

What kind of safety cover

would your technology provide

in oil and gas transportation and how financially viable will it be?We are experiencing some success in the Indian market and getting a lot of enquiries about insulation. We have served major Indian oil & gas companies from within and outside of India. Our technology provides long-lasting and long-term solutions

for heavy crude transportation. We also supply

solutions to most international and multinational oil companies in the Gulf of Mexico, Latin America, West Africa, Middle East

and now, in India. Our

Perma-Pipe inc., a leading North american manufacturer of pre-insulated district heating and cooling piping systems entered india in 2008. Since then there has been no looking back as the company has managed to make a firm ground for itself here. President Fati Elgendy, seen as a ‘turnaround artist’, who has been with the company for more than 32 years, spoke to infralinePlus about his vision for the company’s india arm and its prospects in the country.

Exploiting heat to move crude through pipelines

Our technology

make the pipes corrosion pro-

tected, insulated and installed, which is why they are the safest and the most economical bet for heavy crude

transportation.

35


technology make the pipes corrosion protected, insulated and installed, which is why they are the safest and the most economical bet for heavy crude transportation.

What kind of growth opportunities do you foresee in the sector? Are you also mulling over tie-ups in the Indian market?We have just started our fully-owned facility in India as we see a significant opportunity in providing insulated pipeline solutions for heavy crude and sulfur transportation, in the nuclear industry as well as in the district heating and cooling markets here. With the Indian economy growing at a steady pace, a larger segment of the middle class would be able to

afford heaters and air conditioners. Till now, these needs were met with split units and central air conditioning. However, district cooling and heating save approximately 50% of the power requirement, they are easier to maintain and economical. We believe that this nascent market will grow and prosper. Our goal is to serve diverse market segments, and train and keep the best Indian talent gainfully employed. We strongly believe that business is people. Hire the best, train them, respect them and give them room to grow and prosper because if you take care of your people, they will take care of you.

Your company has tie-ups with few private Indian companies. How do you propose to move forward? Do you have plans to get associated with state-run firms? Are government policies conducive to the segment’s growth, or there is a need for policy reforms?We would like to stay independent but work with every reputed Indian firms and work towards providing a “one stop shop” for all customer needs. Currently, we are not looking for tie-ups, however, we never say never, so we will carefully evaluate every opportunity for collaboration presented to us in due time.

Any plans for a tie-up with any marketing firm? Also, besides insulation, are there any other products that you might offer to Indian companies? Insulating pipes for transporting fluids underground and above ground is our core business. We have over 50 years of experience in this field and we want to continue to offer the same in years to come.


The company also provides a complete line of heat-traced process

piping systems for freeze protection, temperature maintenance, heat up

and reheat.

36


Mittal’s Punjab Dream comes true, Oil Refinery gets started

Meet india born billionaire, Lakshmi Narayan Mittal or LNM -- as he is popularly known as within his company, owner of the world’s largest steel making company, arcelor Mittal. L N Mittal was in india recently for commissioning of his `21,500 crore refinery project in bhatinda, Punjab. the refinery is a joint venture between Mittal Energy investments and state-owned refiner Hindustan Petroleum Corporation Ltd (HPCL).

Just a day after the announcement of the JV by Prime Minister Dr Manmohan Singh (on april 28), came the news from London that Mittal has retained the crown of britain’s wealthiest man. and this was despite his personal worth sliding by 4.8 billion pounds to 12.7 billion pounds last year.

the annual list of the richest earners was published this april by british Prime Minister, David Cameron. the list is based on identifiable wealth, including land, property and other items such as, art, racehorses or significant shares in publicly quoted companies, but does not include bank accounts. With a personal wealth of uS$20.7 billion, Mittal is also the richest asian as well as indian. He is counted as the second wealthiest man in Europe, and the sixth wealthiest man in the world.

the steel king is currently working on multiple plans for india. From interests in the oil and gas sector

to the three steel projects in india -- one each in Jharkhand, Odisha

and Karnataka. Each of the two steel plants in Jharkhand

and Odisha will be set up as integrated steel plants, each with a capacity of 12 million tonne per annum. the capacity of the steel

plant in Karnataka is 6 mtpa, and the cumulative investments in setting up of these three plants is a whopping `1,10,000 crore.

Despite such huge investment commitments, Mittal has not been able to progress much in these projects. Land acquisition and procedural delays have hampered Mittal’s ambitious plans in india. the Nri billionaire refuses to give up hope and expects the approvals to come soon. For him,

“the india story is intact and is definitely not over.”

in a recent interaction with

media persons in New Delhi, Mittal had said, “Whether it is political uncertainty or the

talk of a policy paralysis, india

will continue to grow because this is a country

with tremendous potential and aspiring youth, who are looking to the world to make a difference.”

However, it’s not that these procedural delays do not bug him. as any other businessman, he too gets affected by such delays. “i am a little bit concerned and do feel bad when delays take place but i am not giving up now,” he had said this in his recent media interaction.

Mittal’s oil and gas foray wasn’t either an opportunity that was offered to him on a platter. being a landlocked

► Commissioned `21,500 crore in a refinery project in Bhatinda, Punjab in a JV with HPCL

► Refusing to give up, Mittal awaits approvals to his `1.1 lakh crore steel plants for India

“It took us over

600 approvals for commissioning

the Bhatinda refinery project and although we dealt with three states, this project

stands commis-sioned”,

- LN Mittal

37


refinery, the project had inherited disadvantages compared to other coastal refinery projects of reliance, Essar and others. Mittal, who has been waiting for over five years now to get regulatory and land approvals for his steel projects said, “it took us over 600 approvals for commissioning the bhatinda refinery project and although we dealt with three states, this project stands commissioned ahead of our steel projects that were planned much before.”

“Every project has its own problems and we have to address each project differently. Just because the refinery project happened first, i can’t say this project is better or worse than my other steel projects,” he had added.

On the slow pace of his steel

projects, Mittal had said, “My projects are not happening does not mean that the country doesn’t need steel.”

While back in 2009, the company had changed tactics in Jharkhand by announcing that it would try and set up smaller 3 million tonne steel plants instead of one 12 mt plant for speedy execution. a smaller steel plant would mean the requirement of land and iron ore would go down substantially. However, it has not yielded results so far as the company’s project has run into resolute tribal resistance. in Odisha, there has been hardly any movement and the

Mou has also lapsed, pending renewal. the company’s best bet so far is

in the proposed 6 million tonne steel plant in Karnataka where there is some progress on land acquisition. However, following a Supreme Court judgment, iron ore mining is banned in the state. Only state run National Mineral Development Corporation (NMDC) is allowed mining and that too is capped. as a result, steel plants in the state like JSW’s Vijayanagar facility, are suffering. in the changed circumstances, arcelorMittal’s `30,000 crore project does not appear viable as without captive iron ore and coal, it would not be able to produce steel competitively.

So, while Mittal continues to struggle for clearances for his steel projects, he is also open to new investments in the energy space that includes taking up joint exploration and production projects along with HPCL within the country by bidding into NELP rounds as also scouting for investments in projects overseas.

Million tonnes

Million tonnes

Capacity of steel plants each in Jharkhand and

Odisha

Capacity of steel plant in Karnataka

12

6

Steel

1100Billion

Investment com-mitted in setting up three steel projects

Energy

Invested `21,500 crore in the Bhatinda refinery project in Punjab as JV with state-owned Hindustan Petroleum (HPCL)

• `4,000 crore -- Mittal’s share of investment already gone in commissioning Bhatinda refinery

• Joint venture companies with ONGC and ONGC Videsh to explore oil and gas in India and abroad; started in Nigeria but no substantial progress on ground.

• Got an exploration block with HPCL in the NELP-7 round of bidding

Looking at fresh exploration opportunities with HPCL

• To expand the refinery to 11.5 mtpa in the first phase and go to 18 mtpa subsequently

With a personal wealth of US$20.7 billion, Mittal is also the richest Asian

as well as Indian

A view of Guru Gobind Singh Refinery petro-chemical plant, a joint venture of HPCL-Mittal Energy Limited, in Bhatinda


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thanks to the spurt in prices even as domestic prices were controlled, state-owned oil marketing companies - indian Oil Corporation Ltd, bharat Petroleum Ltd, and Hindustan Petroleum Corporation Ltd - incurred a

payout for the government is a massive 16% of its total fiscal deficit of `5.22 tn in 2011-12.

While petrol prices were decontrolled with much fanfare, even those have not been raised due to political compulsions.

the government too had taken an “in principle” decision to deregulate diesel prices but needless to say, that announcement is in deep, deep freeze.

OMCs are currently incurring a gross revenue loss of `13.65 on every litre of diesel sold.

So, in the light of massive drain of finances, which can be productively used elsewhere by both the government and upstream oil companies, should this system of subsidies be dismantled?

the answer is neither a straight yes nor a straight no. indian economy is

ask any economist on the need for diesel price deregulation and it’s a no brainer. Diesel prices must be benchmarked to international prices, pat comes the reply.

ask the same question to any politician and even hint of a diesel price deregulation will be met with stiff resistance.

Caught between the need for sound economics and better fiscal management on one hand, and myopic populism on the other, diesel price deregulation has become a political hot potato.

Some of the more pragmatic politicians admit in private that its time the exchequer puts an end to subsidising oil products that cost a bomb to import because subsidies mean the end consumer doesn’t realise the true value of the product.

india’s oil imports for the last financial year that ended on March 31 were a staggering $155.64 bln, up 47% on year.

bulk of this jump in cost came from a spurt in global oil prices with indian basket of crude oil averaging $111.89 per barrel in 2011-12 compared with $85.09 a year ago.

Diesel prices have become a burning issue in today’s inflation hit economy. It has left the government in a catch 22 situation, whether to continue subsidising and keep incurring losses or deregulate prices. Aabhas Pandya, an industry veteran analyses the complex issue.

De-regulation of Diesel: Who will bite the bullet?

Diesel, and other

oil products’ price deregulation has been

an albatross around the neck of successive

governments. None of the governments have had

the courage to take tough decisions

gross revenue loss or under-recoveries of `1.38 trillion on diesel, cooking gas, and kerosene. Of this, diesel alone accounted for nearly `760 billion.

this gross revenue loss is being met by upstream oil companies like Oil and Natural Gas Corp Ltd (ONGC), which give discount to OMCs on purchase of crude oil, and the government.

according to reports, for 2011-12, the government will end up paying `835 bn to OMCs while upstream companies will pay the remaining `550 bn.

to put it in perspective, `835 bn

40


somewhat unique with its predominant agrarian set up and where diesel is used in abundance to power both tractors and water boosting pumps.

again, bulk of the commodities in india is transported through trucks and other commercial vehicles and they too guzzle a lot of diesel.

Clearly, the life of the common man is intrinsically linked to the fuel and thus, it is no surprise that politicians of all hues want to steer clear of this vexed issue.

Given the huge price gap between diesel and petrol cars, sales of the former have shot up significantly and that is only adding to the demand for the fuel.

Global oil prices are likely to stay elevated and may even rise as and

when global economy revives. thus, these levels of subsidy payouts are surely not sustainable and must end.

While there is a need to free prices of oil products, the need is to do it in a gradual manner so that the impact is felt only over a period of time.

For a start, the government needs to identify the needy and those living

below the poverty line so that they continue to get compensated even as diesel prices are deregulated in a phased manner.

a beginning has been made by running pilot projects in some states where cash subsidy on kerosene and fertilisers is directly transferred to the beneficiary. While many families below the poverty line may not be using diesel directly, a mechanism can perhaps be worked out where certain part of the population is paid subsidy linked to hike in diesel prices.

Similarly, the government has been planning subsidy support for farmers using water pump sets that run on diesel.

Here though, the government needs to tread with caution because farmers in some states of the country are prosperous and can afford to pay the market price for the fuel.

third, there is a need to levy higher tax on diesel vehicles, especially cars and sports utility vehicles. there was lot of buzz of a higher levy in the budget for 2012-13 but eventually the finance ministry seemed to have buckled under pressure from car companies.

Diesel, and other oil products’ price deregulation has been an albatross around the neck of successive governments. None of the governments have had the political courage to take tough decisions, communicate to the people in an effective manner and plan it in such a way that the blow is softened.

While the current government too has been emphasizing the need for decontrol, whether it too has the political gut to take this “unpopular” step is a million dollar question. However, it’s evident that someone now has to bite the bullet or oil prices may end up lighting up the fiscal deficit.

ExpertSpeak

The views in the article of the author are personal For suggestions email at [email protected]

2.6 Trillion

Cumulative subsidy borne by Government

owned companies

155.64$ Billion

India’s imports for the last financial year ended

March 31

Some of the more pragmatic politicians

admit in private that its time the exchequer puts

an end to subsidising oil products that cost a

bomb to import.

ExpertSpeak

41


To be US’ ally or Mullah’s last best friend? India needs to think

the multi-billion dollar question raging from the far East to the very West is whether india will side with its new and powerful ally, the united States of america or will New Delhi become Mullah’s last best friend.

the latter term has been used provocatively by the Wall Street Journal against india, which has publicly not appeared as a fanatic friend in Washington’s proposed oil sanctions against tehran.

any decision by the Government of india must be objective, dispassionate and fair to indian needs and aspirations – both immediate and long term.

Split between two friendly nations, it’s a very tough tightrope that india has to walk. if the July 1, 2012 deadline is real, time too is running very fast for New Delhi. the iran riddle, however, hasn’t really come as a surprise as the uS Secretary of State Hillary Clinton’s visit to india seems to suggest or the decision makers in the establishment would like us to believe. it has been brewing for quite a while and if the bureaucrats and policy framers did not formulate a response for this situation, none but they are to be blamed squarely

for the current imbroglio.as early as in March 2005, uS

secretary of state Condoleezza rice had publicly expressed concerns over india’s energy ties with iran. it seems to have been lost in time.

Let us try to analyse why india should or should not continue importing oil from iran at the cost of inviting sanction from the uS.

the strongest argument coming in favour of not toeing the uS line is hinged on india’s sovereign right to an independent foreign policy. that india should not buckle under

american pressure. this is followed by

another domestic political point in case that any

decision against iran would not go down well with the large Shia Muslim population in india.

the political arguments of this nature have sought to project india in poor light right since it attained

independence. the country has done only too well to reject these as flimsy. india’s sovereignty and refusal to have given in to big powers at the worst of times should be not only a reminder for those having interest in denigrating india but force them now to give up issuing such certificates to a world power like New Delhi.

as far as the Shia Muslim connect is concerned, the indian democracy has shown enough maturity, strength and resilience in the past. the responsibility now lies more with the political class especially ruling Congress-led uPa in not sparking a controversy where none exists for petty electoral gains.

the economic reasons favouring continued oil trade with iran are perhaps more sound. the foremost being the current isolated situation

of iran will allow india to negotiate crude oil at the

cheapest possible rate. Facing international ostracisation and economic strangulation, tehran would be only too willing for any breather in the current situation that it finds

itself in. iran has also expressed its willingness

to enter into rupee trade with india. this

proposal appears to benefit

india.

Rahul Kashyap heads a consultancy company, which advises companies on various issues including conflict management. Before starting the consultancy firm he was heading media division at Greenpeace India. Kashyap explores the pros and cons of Oil diplomacy on India’s ties with the US, and Iran.

“The strongest argument

coming in favour of not toeing the US line

is hinged on India’s sovereign right to

an independent foreign policy”

42

ExpertSpeak


However, the fact remains that indian efforts to correct huge trade imbalance with iran failed in the past. india’s exports touched just 10 per cent of its imports from the islamic state.

as China invariably is part of any economic discourse, it features in the iran tangle too. it is very likely that beijing will continue importing oil from iran. being a permanent member of the Security Council gives the Communist state a stick to beat the uS with, using this leverage and economic advantages in the current situation, China will get a relative economic advantage over india. interestingly however, China, along with russia that has presumably good ties with iran, has itself ramped up its supplies from Saudi arabia.

in a bid that appeared he was playing to the iranian galleries while addressing media along with Clinton, india’s External affairs Minister SM Krishna spoke about the religious, cultural and civilisational links india has with the Gulf region.

this is also the root of the sentiments against iran in india. the first and foremost argument coming in favour of discontinuing or reducing oil trade with iran is that india should this is as a payback time. iran has in the past never cared for india’s sensitivities and indulged in unrelenting attacks on indian interests. tehran always voted

in favour of Pakistan in the united Nations and repeatedly raised the ante on the Kashmir issue in the name of islam. this, despite New Delhi having never embarrassed iran on prickly issues like state of minorities in the country, women’s rights, censorship human rights violations, etc.

the argument that a nuclear iran will result in instability in the Persian Gulf region is indeed a strong one. it will be even more disturbing than a nuclear capable Pakistan especially as it is likely to be more rogue with the newly acquired weapon.

instability in the Gulf region would mean large scale evacuation of indian working in West asia, more than it had to in the iraq wars. this is not only a costly affair but would result in lost opportunities and immediate loss of remittances from the expats there.

there is also a likelihood that iran will try to polarise countries on religious lines, fomenting anti-americanism that has the potential to reach indian shores. there is every possibility that jihadist elements would feel bolstered and terror attacks may see a further rise. india cannot afford

to ignore this. according to the visiting american Secretary of State, india is beginning to feel the impact as she blamed iran for an attack on an israeli diplomat in the national capital in February this year.

Historically, india’s oil supply is limited to select geographies and one of the reasons that she has not been able to take strong positions in the past with regards to countries in the Gulf. Diversification of oil supplying countries would reduce dependence on the current suppliers and crisis situations can be met better in the future. Oil related arm twisting may

become a thing of the past.

Some petro experts have pointed out that with Shale oil that would come from new sources like Canada, reliance

would be the biggest beneficiary as it has the refining technology for the same. Even at the risk of sounding pro-reliance, the fact also remains that the indian company has suffered as it has had to stop export of oil products to iran, which had once crossed a billion dollar mark.

by siding with the uS-led international community, india will be able to avoid economic sanctions. as recession refuses to give way, the real fear of losing a large market opportunity should be able to force Government india’s national economic interest should be the guiding force while taking decision on the matter of oil trade with iran.

While many raise eyebrows over nuclear power plants in india after the tragedy in Japan, the investments are only looking up. During the american leader’s visit to india, both Krishna and Clinton welcomed the talks between uS companies and Nuclear Power Corp. of india Ltd for setting up new atomic power plants here.

The argument that a nuclear Iran will result

in instability in the Persian Gulf region is indeed a strong

argument.


as a blessing in disguise, siding with the uS would speed up oil exploration in the indian Ocean closer home. Many geologists believe there is a strong likelihood of oil being discovered off the indian shores. uS firm anadarko and italy’s Eni are to be roped in for the purpose.

the country’s focus on energy independence would perhaps be the best thing to happen as an outcome of the current situation. So far, india has focused on imports for its energy needs even as the deficit kept increasing in the power thirsty nation on the high economic development course. the lopsided policy did not allow the Government push that was needed for development of renewable and other clean and alternative energy sources like solar and wind that could have easily provided for the household needs as well as fed into the grid.

the need of the hour would be for the think tanks to re-strategise on how to reduce the energy gap and reduce foreign dependence.

With little time for india to take a decision in this regard, a stark reflection of its current position appears by the fact that as Hillary Clinton was pressuring india into reducing oil imports from iran, a delegation from the Gulf nation concluded a deal on

importing sugar, rice and soybean that would be essential during the time of the economic squeeze that the uS has planned on it.

Faced with dealing with two friendly countries having frosty ties with each other, indian can turn this into a golden opportunity of peace. as the negotiations with iran don’t seem headed anywhere in the absence of a credible interlocutor, New Delhi appears to be rightly placed for this role. india appears better placed than all P5 +1 (permanent members of the uN Security Council and Germany) in tehran seeing reason and abandon pursuit of nuclear weapons. and undertone was perhaps there when Krishna told Clinton that he favoured “a peaceful and negotiated settlement of issues relating to iran’s nuclear programme.” if india can achieve this, nothing can get better for world peace otherwise, it just might join the larger, saner voice that the uS is leading with april already showing 34 per cent decline in crude oil import from iran to 269,000 barrels per day (bpd) from 409,000 bpd in March. in april 2011, the import from iran was about 449,000 bpd.

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Prime Minister Manmohan Singh suggests to US secretary of state Hillary Clinton that India cannot lose sight of its energy security needs. Though it wants Iran to fulfill international obligations.


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45


prices. the degree to which oil price influence such economies depends mainly on the energy policies adopted, pricing mechanism implemented, structure of the energy markets and the degree to which the international price changes are transmitted. india is also a victim of higher oil prices in the international market due to its high dependence on petroleum imports. the increasing demand for petroleum products for electricity generation, transportation, industrial production and domestic needs has made the indian economy more vulnerable to oil price shocks.

the manufacturing industry accounts for about 75% of the world’s yearly coal consumption, 20% of global oil consumption, and 44% of the world’s natural gas consumption. Furthermore, the manufacturing industry also uses 42% of all electricity produced. the industrial/ manufacturing sector is one of the major consumers of energy in india

in which oil refining industry being a capital and lucrative industry has its own position. the oil refining industry in india provides inputs to virtually any economic sector including transport and chemical, to name a few. an oil refinery spends about 58% of their operating costs on energy, which makes it an important opportunity for cost reduction. Studies show that efficient use of energy could be the largest and the most profitable way to reduce costs. it proves that there is a huge techno-economic opportunity for the cost-effective energy investments in the industrial sectors.

the emissions in oil refineries also make

energy efficiency an attractive opportunity to reduce the emissions and operating costs.

the governmental policies in energy

efficiency has made the indian oil refineries a designated consumer resulting in energy efficiency measure to improve the competitiveness through increased energy efficiency and reduced environmental impact.

Studies have showcased that the cost-efficient energy conservation measures are not always implemented, implying the existence of an energy efficiency gap, explained by the existence of barriers to energy efficiency. the so called energy efficiency barriers or gap is also used to describe the profitable efficient technologies that fail to achieve market success.

Prior to the industrial revolution, people depended primarily on the renewable sources of energy; animal power, human labour, wind and biomass combustion, etc. With the development of the steam engine at the birth of industrial revolution, the use of coal followed by other fossil fuel contributed to profound changes in production processes and other related activities. the industrialisation along with the growth of population results in high dependence of energy. as per the statistics, india depended on 70% of imported oil and gas of the total consumption of oil and gas in the year 2005. it is well known that the domestic natural energy resources (conventional sources) are at the peak and is going to deplete in the near future.

the recent supply disruptions in the international crude oil market followed by the escalating prices of crude oil have prompted policy makers in oil importing countries to face the challenge of coping with higher oil

Studies show that efficient use of energy could be the largest and the most profitable way to reduce costs. Oil refineries, which spend a considerable amount on energy, however, have not been able to achieve energy efficiency. Dr. Prasoon Dwivedi, Associate Professor & Head, Centre of Excellence for Energy Economic Research, University of Petroleum and Energy Studies, Dehradoon, talks about the gaps in energy efficency in oil refineries

Energy efficiency, a distant dream for Indian Refineries

What may come

as a surprise… Organizational

barriers also play an important role in im-pending the energy efficiency drive in

the industry.

46


a study was conducted at university of Petroleum and Energy Studies, Dehradun, uttarakhand, india, to identify various barriers that hinder the implementation of energy efficiency measures in indian refineries. Survey was done from about 200 energy managers of various refineries; energy auditors, employees of various refineries and academicians.

the study has brought to light various barriers that prevent the implementation of energy efficiency measures in refineries, which can be classified as assignable barriers and random barriers. the variables which are in control of the organisation/refinery are called assignable barriers and which are not in control of the organization/ refinery are called random variables. these identified barriers are as follows

Assignable Barrierstechnological barriers, which includes technology being inappropriate in the site, possible poor performance of equipment, technical risks such as risk of production disruptions, difficulty in accessing external technical information and expertise; Financial barriers, which includes energy

used being cheap, lack of budget funding & capital, cost required for identifying opportunities, analysing cost effectiveness and tendering, cost incurred due to production disruption/ hassle/ inconvenience, other priorities for capital investments; Organisational barriers (which includes organisational structure and long decision chains, low priority given to energy management, there is a lack of coordination between departments, companies’ culture does not encourage staff to give suggestions for improvement, energy objectives are not integrated into operating, maintenance or purchasing procedures, lack of policies, procedures and systems), managerial/ employee barriers, which includes management finds production more important and is concerned about time required to improve energy efficiency, management believe there is no/ little scope for improvement, there is no

specific person or committee dealing with energy and energy manager lacks influence, lack of staff awareness, time and other priorities, employees in companies do not want to change the way they work.

Random BarriersExternal agencies, which includes difficulty in obtaining finances for energy efficiency projects, government does not give sufficient financial incentives to become energy efficient, environmental policies and legislation relating to energy are weak, authorities are not strict in enforcing environmental regulations; other barriers, which includes benefits of implemented energy efficiency measures are not quantifiable.

although, various institutional and policy measures have been taken to promote energy efficiency in the country like setting up bureau of Energy Efficiency (bEE) and Energy Conservation act, Energy Conservation award, Energy Education and Nodal Officer award, etc. but still, few more measures should be taken to improve the energy efficiency. these measures may broadly cater to three large areas related with technological, social and policy areas and behavioral areas in the refinery industry in india.

the study has recognised the organisational barriers as an important factor which is impending the energy efficiency drive in the industry. in this context, there is a need to develop the skill set among refinery employees so that energy efficiency can be ensured at the grass root level. therefore, government should do the training Need assessment (tNa) related with energy efficiency in refineries and should impart trainings in the refinery industry. So, that gap can be merged between the policy making and policy implementation.

ExpertSpeak


The emissions in oil refineries also make energy efficiency an

attractive opportunity to reduce the emissions and operating costs.

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NewsAnalysis

49


the last petrol price hike that created a commotion across the country became just more hard-hitting with the element of steepness in it that stunned the country.

burning of effigies, protest marches by consumers, the aam aadmi rhetoric by politicians -- is the usual scenario which is witnessed after most of the fuel price hikes.

it is time that the common man or aam aadmi begins to take the fuel price hike in his stride. Clearly, there seems to be more fuel shocks in the government’s stock that are waiting to hit the hapless consumer.

after the petrol price increase in May, the sharpest hike ever, the government may soon up the prices of the three regulated petroleum products, diesel, kerosene and LPG.

Despite protests opposing the recent hike of `6.28 per litre of petrol, the Empowered Group of Ministers, headed by Pranab Mukherjee, is likely to meet soon to hike prices of subsidised fuels – diesel, kerosene and LPG -- in the country.

the state-owned oil marketing companies, that are free to revise prices of petrol, argue that the recent increase has been necessitated to offset the impact of rising international product price and weakening rupee over the past few months.

in fact, indian Oil, the biggest oil retailer in the country, said an additional increase of `1.50 per litre is required to cover the under-recovery of `1,056 crore incurred by the company so far in the current fiscal on sale of petrol below market prices.

the government is also backing

the argument and has ruled out any possibilities of an immediate rollback of the hike in petrol prices, putting an end to all speculations. Petroleum Minister S. Jaipal reddy said the government would watch the situation for a few days before making any further changes in the price of auto fuel.

However, reddy said the government plans to work out a mechanism in consultation with states to lower the prices.

“i have spoken to finance minister Pranab Mukherjee. We both have decided to consult state governments on petrol. State governments have to sacrifice something, centre needs to sacrifice something,” reddy told reporters in a recent press meet.

States charge value added tax (Vat) on petrol, which is levied on an ad-valorem basis. So, with every price hike a cascading impact comes in the form of higher Vat. For instance, while the oil companies recently raised prices by `6.28 per litre, the actual increase in Delhi was well over `7.50 a litre. Most

states levy Vat in the range of 20-30 per cent. in absolute terms, the current Vat on petrol in West bengal is `16.08 per litre and `14.78 in tamil Nadu. by contrast, the central government levies a specific excise duty of `14.78 per litre.

Even though the government decontrolled prices of petrol in June 2010, companies have been unable to pass on the required increases on a regular basis due to political pressure. the three state-owned oil retailers – indian Oil Corp, bharat Petroleum Corp and Hindustan Petroleum Corp – had last increased petrol prices in the first week of November 2011. after that the companies, in fact, slashed prices of the fuel on two different occasions.

the current trend again points to a possible marginal drop when prices come up for review during the next fortnight. However, reddy maintains that the companies will take a view only after watching the international product prices and currency situation for some time.

Fuel Price shock unleashed, more in the offing

A slice of public protest against the steepest petrol price hike ever

50

StatisticsOil & GasJune 2012 www.InfralinePlus.com

Source-wise Natural Gas Supply (2009-10 to 2011-12) in MMSCMD

Sector-wise Natural Gas Consumption (2009-10 to 2011-12) in MMSCMD

*Others include (Court mandated customers, customers with consumption less than 50,000 SCMD, internal P/L line pack and other smaller industries)

Growth in Natural Gas Supplies Y-o-Y (2010-11 & 2011-12)

Source 2009-10 2010-11 2011-12ONGC 49.06 50.16 50.88OIL 6.61 5.42 6.6Panna Mukta Tapti 14.41 12.01 11.9Other JVs 4.42 4.13 3.4Long Term R- LNG 23.7 26.7 25.13Spot R- LNG 8.65 8.34 21.2KG-D6 41.38 55.35 47.2

Total 148.23 162.11 166.31Source: Industry, Infraline Research

Sector 2009-10 2010-11 2011-12Power 60.49 63.59 61.4Fertiliser 37.37 38.52 37.7LPG + Other Liquid HC 6.46 6.83 7.2Refineries + Petrochem 18.93 20.16 25.5City gas/ CNG (D+T+I&C) 9.48 13.3 13.9Steel 7.13 8.03 7.21Others* 8.37 11.68 13.4Total 148.23 162.11 166.31Source: Industry, Infraline Research

51


Projection of Crude Oil Production in XIIth Plan (in MMT)

Projection of Natural Gas Production in XIIth Plan (in BCM)

Total Projected Crude Oil & Natural Gas Production in India during XIIth Five Year Plan

2012-13 2013-14 2014-15 2015-16 2016-17 TotalONGC 25.045 28.27 28.002 26.286 25.456 133.059OIL 3.92 4.00 4.06 4.16 4.20 20.34Pvt./JV 13.34 13.30 12.70 12.10 11.50 62.94

Total 42.305 45.57 44.762 42.546 41.156 216.339Source: Industry, DGH

2012-13 2013-14 2014-15 2015-16 2016-17 TotalONGC 25.266 25.472 26.669 28.215 38.676 144.298OIL 3.30 3.80 4.00 4.27 4.45 19.82Pvt/JV 23.71 32.38 39.4 40.43 41.46 177.38Total 52.276 61.652 70.069 72.915 84.586 341.498Source: Industry, DGH

NewsBriefs

52


The government has initiated the process of putting in place a policy to auction, or award, offshore wind farms in a way that could be

similar to the auction of oil and gas blocks. The ministry of new and renewable energy has constituted an inter-ministerial panel of secretaries, to frame policy guidelines, approve and oversee execution projects and identify private or public sector partners.

The Welspun group plans to put up 500 MW of solar photovoltaic capacity by 2016-17, the rating agency CARE has said. Last week

Welspun successfully bid for a 125 MW solar energy project in a tender floated by the Madhya Pradesh Government, quoting a tariff of `8.05 a unit.

Ministry of new and renewable energy has constituted solar energy industry advisory council (SEIAC) to

advice it on various technology related matters, attracting investments across the value chain, suggest steps required to encourage R&D and drive down costs and make the Indian solar industry globally competitive. Anand Mahindra, vice-chairman and MD, M&M, will be its chairman.

India plans to more than double its amount of clean power generation capacity to almost 53,000 MW by 2017 under the latest five year plan.

Over the coming period, the nation plans to add 15,000 MW of wind farms, 10,000 MW of solar power, 2,700 MW of power based on biomass and biofuels, and 2,100 MW of small hydroelectric projects.

The Suzlon Group will commission a 138-MW wind power project

for the South African Government. The bid project was submitted by Cennergi under the second window of the ‘Request for Bids’ for the Independent Power Producers Programme. The project will come up in Eastern Cape. Cennergi chose to use 66 of Suzlon’s 2.1-MW turbines for the project. The project is expected to start in 2013.

The Haryana Government would set up five biomass projects costing `230 crore to generate about 51 MW of power

for which it has signed n Memorandum of Understanding (MoU) with four companies. Two of these projects would soon be completed. The state government had set up four Micro-Hydro power projects which have started generation

GAIL (India) is all set to establish a firm hold in the “green energy” sector and plans to set up 100 MW wind energy generation project

(WEG) in Tamil Nadu and Karnataka and six other states at a cost of `620 crore. The company is setting up another 14 MW WEG project in Gujarat partly for captive use in the State and party for sale to the State utility.

ReNew Power Limited, has announced plans to invest `6,000 crore (over $1.1 billion) to

set up 1,000 MW of wind energy projects across the country. The company has sold a majority stake to Goldman Sachs in 2011 for `1,000 crore. ReNew Power recently commissioned its first wind energy project with 25.2 MW of capacity.

The country’s first solar ‘Renewable Energy Certificates’ were issued. NSE and BSE-listed M and B Switchgear Ltd was issued 249 RECs

by the National Load Despatch Centre in New Delhi. RECs are generation-based ‘certificates’ awarded to those generating electricity from renewable sources such as wind, biomass, hydro and solar, if they opt not to sell the electricity at a higher tariff.

Alstom disbursed a Euro 90K grant to a husk power systems project for a green project in India which

aims to minimize water usage by over 80% and save 150,000 tonne of CO2 by 2014. Alstom announced launch of Dry Gasifier project in India in collaboration with Husk Power Systems(HPS)-USA, one of the world’s lowest cost providers of biomass based renewable energy equipment.

Gamesa India will soon become the manufacturing hub for the 850-KW wind turbines for its Spanish

parent. The Indian subsidiary will also look to export the 850-KW turbines to North Africa and UK. With Gamesa India having set up a manufacturing facility to make the turbines, the Spanish parent plans to stop making this class of turbines and producing higher capacity turbines.

Welspun500 MW solar power projects by 2016-17

Government PolicyAuction or award offshore wind farms

MNRESets up special solar energy council

RE installationsIndia targets to double by 2017

Suzlon138 MW wind power project for S. Africa

Five biomass ProjectsHaryana to invest `2.3 billion

GAILMakes foray into wind energy

New and Renewable Energy Minister Farooq Abdullah said that Gujarat’s solar power plant atop a water canal has shown the nation

the way and it will be replicated by Damodar Valley Corporation. DVC has over 2,000 km of canal network on which it wants to mount solar panels that can generate up to 1,000 MW of electricity.

DVCTo replicate Gujarat’s solar plant

ReNew PowerTo invest $1.1 bn in Indian wind energy

M&B SwitchgearGets India’s first solar REC

Husk Power Systems ProjectAlstom grants Euros 90,000

Gamesa India to manufacture850 KW wind turbines

ExpertSpeak

53


the renewable energy industry in india is evolving fast as globally high crude oil prices and dwindling domestic coal and gas resources have brought the issue of energy security under focus.

as the scope of clean and ‘green’ energy is expanding, certain mistaken notions linked to renewable energy are becoming clearer. a recent survey conducted by CutS international as part of an on-going project, Demand Side Management & renewable Energy in india: Capacity building of CSOs, which was implemented in West bengal and Gujarat, has revealed encouraging results. More than 680 consumers out of 1,000 respondents expressed their willingness to shift to renewable energy sources and were ready to pay an extra amount up to five to ten percent, if provided with uninterrupted and reliable electricity supply. this was a significant finding, as it is a popular misconception that indian electricity consumers are cost sensitive and not willing to pay extra for improved services.

the willingness to pay is linked to the level of awareness, which was quite impressive. More than 90 percent respondents have heard of renewable energy or clean energy. Out of this 90 percent, close to 100 to 94 percent of the respondents, respectively in Gujarat and West bengal, were aware of solar

energy. the awareness on wind and hydro energy was less compared to solar energy, that showed a distributive pattern of renewable energy resources. Gujarat has more potential than West bengal for wind energy; therefore, awareness level in Gujarat was 18 percent more than West bengal. Similarly, awareness of hydro energy in West bengal was 38 percent more than the awareness level of Gujarat. the survey strengthens the argument that solar energy has become a synonym of renewable energy and thus, there is a need to create more awareness about other sources of renewable energy.

Further, the issue of climate change has become quite important and the CutS survey revealed high awareness among the respondents on climate change. it is interesting to note that while the media, academia, etc. are trying to challenge and debate the validity and implications of climate change, 85-90 percent respondents in both the states accepted that climate change is happening and that it will affect the evolution of future generations. 79 and 64 percent in Gujarat and West bengal respectively, considered it as the most important issue compared to other contemporary issues which the world is facing today.

thus, it is quite evident from the survey findings that majority of the respondents were aware of issues such as climate change, renewable energy, etc. Despite high level of awareness regarding renewable energy amongst people, why are renewable energy and energy efficiency not getting the expected growth so far in india?

it has been observed that there is a wide gap between awareness and

practice across all the stakeholder categories. Policies and regulations are being framed without any inputs from the consumers. there seems to be a general lack of motivation among consumers to adopt rE and EE. EE tends to cost a fraction as compared to setting up of new power plants, but unless proper incentives and market mechanisms are put in place, it would be difficult to expect majority of the consumers to adopt rE and EE.

the survey clearly indicates that though india has made impressive strides in generating awareness and perception towards clean energy, the real challenge lies in maintaining this momentum and concentrate on deployment in the years to come.

Civil society organisations could play a vital role in the transition towards sustainable energy. they can ensure that regulators take steps to implement ambitious clean energy programmes and ensure transparent and socially beneficial clean energy development in india.

Udai S. Mehta Associate Director, CUTS and Gaurav Shukla, Research Assistant, CUTS write on the importance of adapting to renewable energy. They also highlight the findings of a survey by their organisation on the awareness of clean energy in India

Getting it Right about Green Energy


Udai S. Mehta speaks on...

54


Power Finance Corporation has stepped into financing green energy projects, and has even formed a subsidiary for the purpose. Speaking with infralinePlus, AK Agarwal, Executive Director, renewable Energy at the company, shared PFC’s vision and concerns in rE financing.

What is the constitution of PFC’s renewable energy portfolio at present?PFC’s rE portfolio consists of around 500 MW small hydro, 330 MW biomass, 170 MW Wind and around 55 MW of Solar PV Projects.

What is the total value of PFC’s Renewable Energy portfolio?Our rE portfolio is about `3,000 crore, and out of that small hydro is the biggest component.

What are the parameters for determining viability of a project?We assess the commercial and technical feasibility to determine the financial viability of the project. While looking at the commercial viability, we measure the risk profile of the project covering power sale arrangements, tariff admissible, tie-up of various inputs,

clearances, permissions, contractual arrangements, land, etc. We prefer the module meets the iEC standards. Further, we also like to manufacture whose technology is proven, their modules are installed, and are under operation somewhere so as to have a performance record.

The US EXIM Bank has a de facto policy of funding only bigger operations, say 25 MW plants rather than 1-2 MW ones. Do you have a similar preference?in solar we fund even 1 MW project, but for other rE Projects we are not funding below 5 MW. However, we understand that rE Projects are generally smaller in size and require quick financial closure. Considering this, PFC has formed a subsidiary for funding rE projects.

Do you think there is a degree of skepticism in lending to solar projects in India?there are two

basic issues in supporting solar projects.

One is the

reliability of insolation data. the second is the life of the solar panels in indian conditions. When we finance a project, we need a reasonable amount of authenticity. as for the wind projects, Centre for Wind Energy technology provides authentic wind profile and helps in computation of possible generation and revenue potential of any wind project. Now, it is understood that

they have also been given the task by the ministry

to do the insolation data studies. in the absence of such data, it is difficult to reliably establish the generation

from a Solar Project. the financials from

any project depend on the generation, which is why these are early days in the financing of solar projects.

Right now, are you relying on the third-party verification of insolation data? there is more than one source available for insolation data, but all of them rely mainly on satellite data, however, wide variations are observed in these data. the data measured on actual site would only extend authenticity which is not available for most of the sites currently.

Do you think the wear-and-tear and the life-span of cells is an issue in India?india is a tropical country with a lot of suspended dust particles in the atmosphere. the generation in this condition needs to be watched. the

Our RE

portfolio is about `3,000

crore, and out of that small hydro

is the biggest component.

Our hitch to fund Solar projects stems from panels’ lifespan in Indian conditions

InConversation

55


degradation of Solar Cells/ Modules is a major area of concern under indian conditions during the entire project life. We will be in a position to know about this after a few years of operation of the Solar Plants being installed in india.

Does it make business sense for players with substantial equity to quote tariffs at very low rates?it may not be prudent to fund the entire project cost through equity since equity is normally costlier than loan. it is more so when very low tariff is quoted for solar project. it may be alright to declare financial closure through equity so long as the requirement is to be met.

Do you see industry achieving the target of 1000 MW set under National Solar Mission by 2013?right now we do not see any such eventuality.

Three major issues project developers have with local financing are the cost of funds, short tenure, and a mandate for a debt-equity ratio vis-à-vis comparable foreign projects. What are your thoughts on it?the area of concern in any solar project, as explained earlier, do not allow a loan tenure of more than 10-12 years, excluding the construction period and 6 months moratorium, DE ratio of more than 70:30. PFC considers a rebate of 25 bps in the interest rate of all rE projects including solar projects.

What about grid parity for solar generated power?From various analysis carried out it is expected that the price of solar energy would gradually fall and grid parity can be expected sometime between 2015-17. Once grid parity is achieved, solar projects will really pick-up.

So, where do you see solar tariffs settling this year?

Currently, we are appraising even 100 MW Solar thermal Project and 25 MW Solar PV Project.

What do you think of the REC mechanism? Are lenders reluctant to fund projects taking this route?though rEC is a good mechanism, lenders may not be in a position to accept it presently for funding purpose since it is untested and rPO is not enforceable.

How long do you think trading in RECs will pick up?trading under rEC mechanism has started. the rPOs are still not mandatory. there are indications that the rPOs would become mandatory and would have stringent panel provisions thereby enhancing the marketability of rECs. Once this happens, trading would pick up.

Talking of the wind sector…government has suspended the subsidy support. How do you see the sector performing in the coming days?Subsidy support has neither been confirmed nor withdrawn. Further, generation from wind is approaching grid parity. We see a good potential of capacity addition in wind.

Do you think India will generate a major amount of its energy from renewable in the near future?We expect substantial amount of capacity addition through rE Projects in the 12th Five year Plan.

Are you financing any major off-grid projects in solar?till now we have not funded any off grid projects in Solar. the major risk in funding of grid solar project is uncertainty in revenue stream.


the tariff quoted for JNNSM batch ii projects, though on the lower side may be considered to be feasible by 2013.

Leaving out JNNSM projects, which states in your view are model states for financiers?Our thinking is that we should fund solar projects currently in that State only where discoms are having cash profit.

You will be setting up a new company for disbursal of loans for renewable projects. What is the need for such an agency?PFC is organised to fund large projects where loan size is also big. renewable Projects are normally small loans. in order to take care of such requirement of rE Projects and also to have focused approach considering the ambitious plan of Government of india for rE Projects, PFC decided to have a separate subsidiary for funding rE Projects.

Is your focus shifting towards renewables?PFC would continue to fund all projects in the power sector as it is doing now, and the subsidiary has been set up for funding rE Projects, where quick financial closure is required. Further, we also hope to get cheaper funds so as to extend our loan to rE Projects at competitive rates.

Going forward, would you gravitate towards funding bigger projects in solar too, instead of the 1-10 MW range?

PFC would continue to fund all projects in the power sector; the

funding of RE Projects where quick financial

closure is required would be done by its

subsidiary

56

StatisticsRenewableEnergyJune 2012 www.InfralinePlus.com

State-wise status of Projects Allocated under JNNSM (As on May 11, 2012)

State-wise Biodiesel Installed Production Capacity, May 2012

State-wise Wind Power Potential of India

S. No. State / UT Capacity (MW)

1 Andhra Pradesh 21.8

2 Chhattisgarh 4

3 Delhi 2.5

4 Gujarat 654.8

5 Haryana 7.8

6 Jharkhand 4

7 Karnataka 9

8 Madhya Pradesh 2

9 Maharashtra 20

10 Orissa 13

11 Punjab 9

12 Rajasthan 197.5

13 Tamil Nadu 15

14 Uttar Pradesh 12

15 Uttarakhand 5

16 West Bengal 2

Total 979.4

S. No. State Installed capacity (tonnes per day)

1. Andhra Pradesh 2510

2. Chhattisgarh 13

3. Gujarat 60

4. Haryana 30

5. Maharashtra 210

6. Uttrakhand 50

7. West Bengal 500

Total 3373

S. No. State Installed capacity (tonnes per day)

1. States/UTs Installable Potential (MW)

2. Andhra Pradesh 5394

3. Gujarat 10609

4. Karnataka 8591

5. Kerala 790

6. Madhya Pradesh 920

7. Maharashtra 5439

8. Rajasthan 5005

9. Tamil Nadu 5374

10. West Bengal* 22

11. Orissa 910

12. Andaman & Nicobar 2

13. Arunachal Pradesh* 201

14. Assam* 53

15. Chhattisgarh* 23

16. Himachal Pradesh* 20

17. Jammu & Kashmir* 5311

18. Lakshadweep 16

19. Manipur* 7

20. Meghalaya* 44

21. Nagaland* 3

22. Sikkim* 98

23. Uttarakhand* 161

24. Uttar Pradesh* 137

Total 49130*Wind potential is yet to be validated with measurements

57


Month-wise Solar/Non-solar REC inventory report since inception

REC Trading Volume and Price at PXIL report

Month, Year Opening Balance REC Issued REC Redeemed Closing Balance

Mar, 2011 0 532 424 108

Apr, 2011 108 4503 260 4351

May, 2011 4351 28270 18502 14119

June, 2011 14119 27090 16385 24824

July, 2011 24824 30224 18568 36480

Aug, 2011 36480 31813 25096 43197

Sept, 2011 43197 74612 46362 71447

Oct, 2011 71447 126544 95504 102487

Nov, 2011 102487 135697 105527 132657

Dec, 2011 132657 88055 111621 109091

Jan, 2012 109091 102348 171524 39915

Feb, 2012 39915 200736 206188 34463

Mar, 2012 34463 203819 199737 38545

Apr, 2012 38545 122369 71226 89688

May, 2012 89688 30236 0 119924

Total 1206848 1086924

Date of Auction

REC Type Buy Bid (No. of certificates)

Sell Bid (No. of certificates)

MCP (Rs./Certificate)

MCV (No. of certificate)

Mar’11 Solar 3025 0 0 0

Non Solar 324 274 2225 274

Apr’11 Solar 0 0 0 0

Non Solar 0 565 0 0

May’11 Solar 0 0 0 0

Non Solar 4500 5322 1500 4500

June’11 Solar 0 0 0 0

Non Solar 10000 3183 1500 483

July’11 Solar 0 0 0 0

Non Solar 14766 9800 1550 3900

Aug’11 Solar 0 0 0 0

Non Solar 38101 8155 1710 3000

Oct’11 Solar 0 0 0 0

Non Solar 33869 3201 3000 3201

Nov’11 Solar 2 0 0 0

Non Solar 20882 30317 2800 9373

Dec’11 Solar 5 0 0 0

Non Solar 21179 14336 2950 5679

Jan’12 Non Solar 18113 6072 3051 6064

Feb’12 Solar 1007 0 0 0

Non Solar 28933 19045 3051 15706

Mar’12 Solar 3319 0 0 0

Non Solar 51401 7405 3100 7383

Apr’12 Solar 225 0 0 0

Non Solar 26813 26842 2201 8949

58

PhotoEssayJune 2012 www.InfralinePlus.com

1

tata Power started its operations in 1911 as tata Hydroelectric Power Supply Company. Five years later i.e. in 1916 the company was merged with the andhra Valley Power Supply Company. today it has an installed capacity of over 5,000 MW with presence in thermal, hydro, solar and wind besides operations in transmission and retail.

The company is working towards adding 8,500 MW by the end of the current financial year, of which 5,050 MW would come from plants in Mundra and Maithon. Tata Power’s current generation capacity is 5,297 MW, out of which about 22 percent comes from clean sources.

the company is going for a five-fold growth in near future and would commission the first ultra Mega Power Project in the country besides a slew of mega projects that are under implementation.

as far as its thermal power projects are concerned, tata Power has plants located in trombay (Mumbai), Mundra (Gujarat), Jojobera and Maithon both in Jharkhand, Haldia in (Wb) and belgaum (Karnataka). Hydro stations are in the Western Ghats (Maharashtra) and wind farms in ahmednagar, Supa, Khanke, brahmanwel, Gadag, Samana and Visapur.

as compared to its peers, tata Power is the only company that enjoys near perfect security in terms of raw material linkage. For coal supplies, the company has access to over 100 million tonne through bumi resources. it also sources coal from Mandakini (Odisha) and tubed (Jharkhand). it has a significant international presence through its equity stakes in coal mines in indonesia and clean energy projects in bhutan and indonesia.

to minimise revenue losses, the company has started trials of blending low-grade coal, and initial reports suggest blending up to 50 per cent is feasible. the measures taken to rein in leakages should help keep a check on losses. the second unit of Maithon and Mundra are expected to be commissioned in the June and September quarters.

in January this year, tata Power commissioned a 25 MW solar power project in Mithapur, Gujarat. the

company plans to set up 300 MW of solar power capacity by 2017. it is also looking at solar rooftops on buildings. On wind front, it currently has an installed capacity of 375 MW, and it plans to add 150 MW every year till fiscal 2015. tata Power is developing the 236 MW Dugar Hydro Power project in Himachal Pradesh in partnership with S N Power, Norway. it is also developing power from waste gases generated during steel-making.

To add 8,500

MW capacity by the end of the current

financial year.TATA Power:

The growth story continues...


1

2

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3

3

60


1. Trombay unit - The lifeline of Mumbai. Working for the vision - “To be the most admired and responsible integrated Power Company with a global footprint.”

2. Mumbai Unit - Lighting the bulbs in the commercial capital of India.

3. Tata Power is erecting Mundra UMPP through its wholly-owned subsidiary Coastal Gujarat Power Ltd. Located in the Kutch district of Gujarat, the project consists of five units, each of 800 MW which will generate saleable power of 3,800 MW to be supplied to five states - Gujarat, Maharashtra, Rajasthan, Haryana and Punjab.

4. Maithon Power is a 74:26 joint venture between Tata Power and Damodar Valley Corporation. The JV is implementing a 2x525 MW coal-fired power project in Jharkhand.

5. Tata Power commissions 25 MW Solar Project in Mithapur, Gujarat. Took a big leap in enhancing its Solar Energy Portfolio by setting up one of the largest solar project in the country.

6. The 4,000 MW Mundra UMPP is the first of the UMPPs, which heralds the entry of 800 MW super critical boiler technology in India which is environment friendly and efficient.

7. Thanks to the plant at Trombay, Tata Power has been in the forefront to supply uninterrupted quality power to the city of Mumbai and nearby areas. A vigilant Tata Power employee poses for a photograph.

PhotoEssay

7

6

4

5

GREEN INFRA AT THE FOREFRONT OF POWERING INDIA NATURALLYWE ARE MAKING THE GREEN DIFFERENCE

Since 2008 we have built a business that straddles all five verticals of Green Energy – Wind, Solar, Hydro, Biomass and Energy Efficiency.

Currently generating approx 225 MW of Green Energy, reducing up to 4,55,660 tons of carbon emission annually and with the presence across 6 states in India, we are on our way towards becoming a diversified 5 GW renewable energy company by 2015.

www.greeninfralimited.in • [email protected]

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BEYOND COMPETENCE






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Magazine Title Code: DELENG18199 Form 2: (I-11)/Press/2012

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