On-Paper electrification does not give power to villages in Hathras
Nagla Fatela in Hathras district is not the only village in Uttar Pradesh that has been declared as electrified only on paper. The power ministry has found that 20 of the 25 villages in the district have been declared as energised by the power distribution utility but the households do not have connections. The ministry has found gross violations of the terms on which funds were released to Uttar Pradesh for rural electrification under the Deen Dayal Upadhyay Gram Jyoti Yojana, a senior government official said. Nagla Fatela came into the limelight after media reports highlighted that the village, referred to as electrified by Prime Minister Narendra Modi in his Independence Day speech, did not have electricity access. The PM had said that although the village was only three hours away from Delhi, it took 70 years for electricity to reach there. During field visits conducted by Rural Electrification Corporation’s engineers, called gram vidyut abhiyantas, on August 18-19, it was found that though new infrastructure has been laid, electricity connections have not been released by Dakshin Vidyut Vitaran Nigam Ltd, a unit of the Uttar Pradesh Power Corporation Ltd. The distribution utility has certified all 25 villages as energised. Most of the households in the 20 villages in Hathras district have illegal, unmetered electricity connections, the official said. The Centre is carrying out field verification in all 1,450-odd villages declared as electrified by Uttar Pradesh through central assistance.Uttar Pradesh’s principal energy secretary and Uttar Pradesh Power Corporation chairman Sanjay Agarwal was not available for comments. “Most new infrastructure in these villages is lying idle as the lines have not been charged due to lack of clearance from electoral engineers. Also, we have found that in Uttar Pradesh contractors are paid on erection of infrastructure, while under Deen Dayal Upadhyay Gram Jyoti Yojana the payments can be made only after releasing connections and continous energisation,” the official said. Rural Electrification Corporation last week wrote a letter to Uttar Pradesh’s principal energy secretary, asking the power distribution companies in the state to avoid such discrepancies. The corporation also sought directions to distribution companies in the state and electoral inspectorate for immediate continuous energisation and release of connections from the new infrastructure Bobby Wagner Womens Jersey
Reliance Energy says no to govt plan for uniform tariff
Reliance Energy has refused to accept the proposed uniform tariff plan for residential consumers claiming it would cause them loss, energy minister Chandrashekhar Bawankule said on Tuesday. Addressing a press conference at Mantralaya, Bawankule said all other electricity providers — BEST, Tata Power and MahaDiscom — have agreed to a uniform tariff plan. “They (Reliance) claim they will suffer a loss of Rs 150 crore if they agree to the tariff plan,” Bawankule said adding that the government would use its special power to make the company agree. The proposal with regard to carrying out an audit of Reliance Energy and Tata Power is now with the law and judiciary department, he said. “Once we have their approval we shall begin the audit,” said Bawankule. A Reliance Energy spokesperson said: “Energy tariff determination is a prerogative of the Maharashtra Electricity Regulatory Commission. Reliance Energy’s views on uniform tariff are consistent with MERC. We are not against implementation of uniform tariff but at the same time, we want to protect the interest of all consumers.” In an earlier order, the state electricity regulatory commission noted that “comparison between the category-wise tariffs of different licensees has to be seen in the context of the cost of supply, the consumer mix, consumption mix, current level of cross-subsidy, and other factors”. A power expert said that Reliance Energy serves more than 20 lakh residential consumers as compared to BEST which has six to seven lakh and Tata over five lakh, so the proposed uniform tariff plan will affect Reliance the most. Valtteri Filppula Womens Jersey
‘APEPDCL aims to provide uninterrupted power supply’
Mudavatu M Nayak, chairman and managing director of Andhra Pradesh Eastern Power Distribution Company Limited (APEPDCL), has several plans up his sleeves to transform APEPDCL into one of the best discoms in the country. A graduate in mechanical engineering from Andhra University, Nayak joined the Indian Administrative Service in August, 2005. Before he took over as the CMD of the APEPDCL in July, Nayak served as the district collector of Vizianagaram. In an interview with V Kamalakara Rao of TOI, Nayak speaks about his plans to develop APEPDCL and protect the interests of its over 50 lakh consumers. What’s the current status of the APEPDCL? We have reduced the transmission and distribution losses. The sale of meters is up by 84%. We have strengthened the network system. It has surplus power, and ranks among the best discoms in the country. However, there is a gap between the consumer and the service provider. We will reduce this gap. The services will be streamlined. The toll free number 1912 will be strengthened. A dedicated ADE-level officer was appointed to handle consumer grievances. There are interruptions in power supply. This is due to maintenance of power lines. What are your plans to reduce interruptions in power supply? The discom has installed equipment to prevent interruptions in power supply. We identify outage feeder on a real time basis to improve power supply. We have also planned to replace the existing ordinary conductors by advanced imported covered conductors. It will reduce power supply interruptions. We will implement this on a pilot basis in Visakhapatnam. Are the applications for new connections cleared promptly? Yes. I noticed several applications for new connections pending with us. We are now attending to them. Some of the applications were kept pending for technical reasons. What is your main objective? My plan is to see all APEPDCL consumers get uninterrupted and quality power supply. We will achieve this. What are the core areas before you? The core areas are better services to consumers, strengthening of power supply network and infrastructure and improving the quality of our staff. Are any new ventures or projects coming up soon? We have planned to install 146 sub-stations in next 18 months. This will reduce voltage fluctuation and power interruptions. We have proposed indoor sub-stations in urban areas including Visakhapatnam and outdoor sub-stations in rural areas. Infrared meters will also be installed in next three months. Are there any information technology-enabled projects? Supervisory Control and Data Acquisition (SCADA) is being planned in sub-stations. It works on IT. Smart grids and smart meters are also planned. We will install smart meters in 1,000 houses on pilot basis. Remote-operated agricultural pump sets are also part of our plan. Do you have any ‘outsourcing’ plans? We will extend all our services through Mee-Seva centres. Consumers need not approach us for any service. They can go to the nearest Mee-Seva centre. This will reduce the burden on our staff. It will also help the consumers. We are also planning to launch a pilot programme of door-to-door collection of electricity bills at Rajam town in Srikakulam district. We are planning to use the Kaizala App, which helped government officials for group communication during the Krishna Pushkaram. The Kaizala App can help my staff too. Any plans to use social-networking platforms? Presently, we are not on Facebook and Twitter. We will explore these platforms too. What is present status of underground power supply network project for Vizag city? We will shortly go for tenders for the first phase of the project aided by the World Bank. What steps do you plan to take to check corruption? Corruption prevails everywhere. I hope the IT-enabled smart systems and awareness among the consumers about the ill effects of bribe will bring down corruption. We take action whenever we receive complaints from consumers. Antoine Bethea Jersey
Essar’s plea for duty exemption rejected
A day after the Supreme Court declined permission to Essar group promoter, Ravikant Ruia, to leave the country the company received a shock over electricity duty. On Wednesday the bench of Justice M R Shah and Justice A S Supehia in Gujarat high court dismissed an appeal filed by Essar Steel Ltd and Essar Power Ltd against a single-judge bench order holding the company liable to pay Rs1,038.27 crore towards electricity duty to the state government. Essar has been seeking electricity duty exemption for its power plant set up at Hazira for over two decades. But the government rejected its demand, as it sold power to other entities. The duty exemption was available only to captive power plants, the government maintained, and said Essar had not sought prior permission to set up the plant to meet the purpose of selling electricity. The state government had first refused Essar group’s claims for duty exemption on electricity in 2003, and asked it to pay more than Rs1,000 crore that was due. Essar group had then approached the high court. The court asked the company to make a representation to the government and decide the issue afresh. But in 2009, the government rejected Essar’s application, asking it to pay up Rs 1,038.27 crore. Essar group went to court again with the high court’s single-judge bench, in 2010, upholding the state government’s order. The group then appealed against the order, which was dismissed on Wednesday. The case history shows Essar Steel Ltd had sought permission and set up a 20 MW captive power plant at Hazira in 1990, and later upgraded its capacity to 30 MW. This captive plant was granted electricity duty exemption by the state government as per its policy, on both the occasions. The company later wanted to set up another captive power plant of 300 MW in Combined Cycle Mode and obtained due permission from the state government as well as the Centre. But with changes in electricity policy in the Centre in 1991-92, which allowed private participation in power generation, the group founded Essar Power Ltd to sell electricity to other entities. The company, however, continued to seek electricity duty exemption from the state government according to its scheme prevailing in the early 1990s. The government rejected Essar group’s claims in 2003 with the state energy department stating the company has been selling power to GEB, and therefore the benefit of a captive power company cannot be given to Essar. James Develin Jersey
Russia’s oil production hits 25-year high
Russia’s daily oil production approached 11 million barrels in recent months, hitting a record high since 1991, authorities said on Wednesday. “Oil production amounted to 10.71 million barrels per day in August 2016, although it was down 1.6 per cent month-on-month. However, daily oil production increased by 0.1 per cent in August 2016 compared with the same month in 2015,” Xinhua news agency reported citing the authorities as saying. The rising oil production preceded a historic agreement to stabilise oil prices signed by Russia and Saudi Arabia on September 5 on the sidelines of the G20 summit in the Chinese city of Hangzhou. Under the deal, the two countries will form a working group to monitor the market and draft recommendations to stabilise oil prices and ensure steady investment in the industry. Saudi Arabia and Russia are both major oil exporters and experienced substantial drops in revenues since the oil price slump began in June 2014, when oil was traded at $110 a barrel. Oil hit a 13-year low of less than $27 a barrel at the beginning of 2016. Mitchell Marner Jersey
China’s Oil Paralysis An Opportunity For India To Enhance Energy Security
China’s state-owned oil companies, which were extremely active between 2002 and 2013 acquiring foreign oil fields, have gone really quiet over the past three years, with oil prices crashing and oil fields available at much lower prices than before. The reason for this is a mix of internal politics and weakening financials, the latter driven by the acquisition binge of the past decade. Their paralysis means that one major potential global buyer of oil fields is out of the race, which should mean lower asset prices for other buyers, such as India, and Indian companies ought to make the most of this window of opportunity, of a market with few buyers at a time when assets are cheap. This impasse that Chinese firms are going through also shows the downside of a system where the dominant political party is closely intertwined with all sectors of the economy: most senior officials of state-owned companies are also members of the Chinese Communist Party. From 2002-2010, China’s state-owned oil companies – led by Sinopec, CNOOC and PetroChina – spent $83.2 billion, acquiring oil and gas fields across the world. The next three years (2011-2013), Chinese firms were in overdrive, spending an additional $72.5 billion on oil fields. The year 2013 saw three of the biggest deals ever by Chinese firms (Refer Table 1). International Energy Agency Chinese companies accounted for 35 percent of all petroleum deals greater than $1 billion during the year. Post-2013 however, acquisitions by Chinese companies fell off a cliff. During 2014, deal volume from China in the petroleum sector fell over 75 percent, while during 2015, Chinese firms accounted for less than 1 percent of all acquisitions upstream. What changed? The reason for this slowdown has been largely political. In December 2014, Zhou Yongkang, the former head of China’s security services and a member of the 17th Politburo Standing Committee, was expelled from the Communist Party and arrested. In June 2015, he was sentenced to life in prison for corruption, and an estimated $14 billion worth of assets was seized from him and his family. A number of Zhou’s supporters/protégés have also been stripped of their positions and sentenced to long prison terms. His downfall is linked to the Chinese President Xi Jinping’s drive to purge rivals from positions of influence. Unfortunately for China’s oil giants, Zhou’s base of influence includes the petroleum industry. He is a geophysical engineer and worked in China’s petroleum sector for 32 years and went on to head the China National Petroleum Corporation, the state-owned oil giant. Many of his supporters who have been investigated and sentenced are also senior officials in the petroleum sector. The deals that they concluded, including overseas acquisitions, are now being scrutinised for corruption. Some of the biggest acquisitions, such as Nexen and Kashagan, have also run into trouble. The Chinese oil industry, therefore, seems to be in the doldrums as far as external investments are concerned. Meanwhile, the fall in oil prices has not helped. Chinese companies bought most of their assets when the oil price was high and are now losing money on these fields. Profitability has dipped (Refer Table 2). The reduced cash flows and their existing capital expenditure commitments limit their ability to buy new assets. These Chinese firms have been the major rivals for India’s state-owned ONGC in its quest to acquire oil fields outside India. In multiple cases, ONGC was outbid by Chinese firms with their bigger balance sheets and willingness to pay much higher prices. A prime example of this was the bid for the giant Kashagan oil field in 2013, which CNPC stole from under the frontrunner ONGC’s nose. There is thus an opportunity here for India’s oil majors to acquire oil fields overseas, with fewer worries about being barrelled out by the competition. This has turned out to be a blessing, as Indian companies are not saddled with expensive assets generating poor returns. Now that prices are lower, the same money can fetch them much more. India needs to act before the tide turns, either on oil prices or on Chinese policy. There are two ways Indian firms can act. First, they must buy assets in politically stable, friendly and oil-rich countries: Russia, Iran, the US and Canada fit the bill. Indian public sector firms have already acquired oil fields in Russia, they must now move on to the other three. Gateway House has, in the past, identified the US and Canada as two stable, oil-rich countries with transparent public markets suitable for Indian investment. The low price of oil has pushed a hundred shale oil producers in the US to bankruptcy – Indian companies can invest in some of these firms where a financial infusion can make a difference. Iran has invited Indian firms to invest in developing a gas field, which it was unable to do because of Western sanctions on it. With sanctions out of the way, this project has to be pushed through. Buying developed assets is an expensive proposition even in present times. Indian firms, too, need to explore, and given their limited experience and success, tying up with an exploration company with a strong track record may be a better approach. The most successful explorers are not usually the global oil majors, but smaller, more focused companies such as Anadarko, Tullow Oil and Cairn (UK). Bharat Petroleum has already tried this approach with Anadarko and reaped rich dividends. Indian oil firms need to identify and ally with such partners. In the current scenario, as exploration spends are being cut back, a financial partner willing to shoulder costs will be welcome. By not going overboard with investments during the boom, Indian oil companies are already in a strong position. By judiciously increasing investments during the downturn, they can create long-term value and energy security for the nation. Eric Berry Womens Jersey
Cairn India, ONGC get 10-yr Barmer block extension beyond 2020
Private explorer Cairn India and its state-run partner ONGC will get a 10-year extension for the Barmer oil and gas block in Rajasthan beyond 2020, when the current production-sharing contract (PSC) ends. The Barmer block is the biggest onshore oil producing project in India and its current output hovers around 166,943 barrels of oil equivalent per day. On July 28, the Delhi High Court asked the Centre to decide “within five weeks” whether it will extend the PSC for the block — RJ-ON-90/1, spread over 3,111 sq km west of Barmer. Cairn India had moved the court seeking extension of the PSC and permit to export crude oil from the block. Cairn India said in its latest presentation that the Rajasthan PSC extension till 2030 could mean conversion of an estimated 250 million barrels of oil equivalent (mboe) into reserves. While the extra investments required to tap these reserves could not be ascertained, gross capital expenditure of more than $800 million is required for Raageshwari Deep Gas and Bhagyam polymer flood, which are part of the asset. FE has learnt that the decision to extend the PSC by 10 years has been taken after the issue was “deliberated in detail” at a recent meeting chaired by petroleum minister Dharmendra Pradhan. The government, however, is yet to officially communicate the decision to Cairn India. The extension comes with a caveat that the explorer would have to share 10% additional “profit petroleum” during the extended duration. Profit petroleum is the main source of revenue for the government from a hydrocarbon block. It is calculated using what is called an investment multiple that denotes how many times the earnings are to the investment. Sources privy to the development told FE that the government has arrived at the decision after “carefully examining several surveys that shows that increasing Centre’s share of revenue from the prolific block would not impact the economical viability of the project”. The government, however, was keen that the rise won’t be steep to hamper “the ease of doing business”, the source said. Cairn India declined to comment for this story citing that the matter is sub judice. The Vedanta Group company has forked out Rs 23.64 billion towards profit petroleum in FY16 on a consolidated basis. A chunk of it would be towards hydrocarbon output from Barmer block. The consolidated profit petroleum shared in FY15 stood at a little over Rs 47.34 billion. One of the sources also added that the decision is in line with the Cabinet decision of March 10 where a policy has been put in place on grant of extension to the PSC for 28 small and medium-sized discovered fields. It has been decided that government’s share of profit petroleum during the extended period of contract shall be 10% higher for both small and medium-sized fields, than the share as calculated using the normal PSC provisions in any year during the extended period and hence will vary from year to year based on the investment multiple and post-tax rate of return. Other key projects include recovery potential of about 100 mboe from polymer flood in the Mangala and Aishwariya fields. Cairn India said that it continues to take measures to improve economics of key projects in core Mangala, Bhagyam and Aishwariya fields, Barmer Hills and satellite fields, and invest in pre-development activities to ensure their readiness for development with grant of extension of PSC. Marvin Jones Jr Womens Jersey