RBI rate cut to give a fillip to power investments, says industry
The latest decision by the Reserve Bank of India (RBI) to cut the repo rate by 25 base points (bps) will create greater investment opportunities for developers in the power sector, according to the industry. “Considering there is a high degree of stressed assets in the country, the cut by 25bps will act as a fillip and can prompt the banks and lenders to make funds available to the industry especially infra and power at a lower rate,” said Nidhi Narang Chief Financial Officer at Hindustan Power. She added the development can lead to kick-starting the investment cycle in the core sectors of the economy. The rate cut – from 6.5 per cent to 6.25 per cent – is the first announced by the central bank in six months and is part of new RBI Governor Urjit Patel’s first Monetary Policy review. “It’s clear that India is determined to maintain a 1.5 to 2 per cent real rate of interest. This will satisfy the urgent need for growth and also encourage savings, said Pratik Agarwal, Chief Executive at Sterlite Power. The RBI and the government have set a retail inflation target of four percent for the next five years with an upper tolerance level of six percent and lower limit of two percent. According to Eon Electric Chairman and Managing Director V P Mahendru, the cut is Repo Rate will further provide momentum to manufacturing growth which has seen a dip in recent months. “The rate cut will improve market liquidity and thus create additional demand. Investor’s sentiments are also likely to strengthen, considering that the government has already undertaken various other economic reforms such as early implementation of GST to address concerns faced by investors,” he said. Experts said a benign food inflation was the key reason for the Monetary Policy Committee to unanimously support the rate cut. While the slight 25 bps cut may not please the common man much, it is a positive development for industries. Al Davis Authentic Jersey
France’s power major EDF Energies Nouvelles’ calls off deal with Acme Cleantech
French power major EDF Energies Nouvelles’ (EDF EN) has called off its partnership with Gurgaon-based green technology solution provider Acme Cleantech Solutions over differences in strategy, marking an end to its first venture into the Indian solar energy The Paris-based state-run power major, however, remains bullish about clean energy projects in the country. “Yes, the process (of separation) is complete,” Antoine Cahuzac, CEO at EDF EN, told ET. EDF EN, along with Luxembourg-based EREN Renewable Energy, had formed a joint venture with Acme, called Acme Solar, in December 2013. Acme Solar is the second biggest solar developer in the country (after the beleaguered SunEdison, which is on the verge of selling its India assets) with 600 MW of installed capacity, amounting to 7% of the market share. It has another 500 MW under construction and 400 MW more in the pipeline across 15 states. EDF and EREN both hold 25% in the JV company, with the domestic partner holding the rest. “Acme is a very dynamic company but after a while we felt we no longer shared the strategy we had in common at the beginning of the partnership,” said Cahuzac. EREN too has quit the joint venture along with EDF EN. What impact this will have on ongoing Acme Solar projects is not yet clear. “We hold about 130 MW of solar capacity from our JV with Acme,” Cahuzac added. Trouble had been brewing at Acme Solar for some time with the foreign partners uncomfortable with the company’s aggressive bidding and manner of project execution, according to industry sources. “I think Acme is the No.1solar developer in India and we are not looking to be number one at any price,” said Cahuzac, confirming this view. “I don’t want to be over aggressive because I may then get stuck with a project, which does not provide the return I expect. I will be stuck with constraints which is very painful.” Acme declined comment on Cahuzac’s response. As late as June, Acme executives had insisted that while there was some friction, there would be no breakup. “There is no plan or attempt on EDF or EREN’s part to get out of the Indian market, or anything like that,” Nikhil Dhingra, chief financial officer at Acme Solar Holdings, had said. But he admitted the difference in outlook. “For them, India is one of many markets, for us it is the only market,” said Dhingra. “We have a much bigger appetite for exposure in India” Despite the Acme setback, EDF EN is upbeat on India’s renewable energy sector with plans to set up 2,000 MW in the country, investing $2 billion. But currently, it is only looking at wind and hydro power. In early 2016, it joined hands with domestic wind developer Sitac RE to set up 164 MW of wind farms in Gujarat. The project is expected to be complete by March 2017. Separately, EDF, EDF EN’s parent company and one of the world’s biggest power generators — is in talks with the Nuclear Power Corporation of India to build six nuclear reactors of a combined capacity of 10,000 MW at Jaitapur in Maharashtra. Stan Musial Authentic Jersey
Power utility may not face crisis despite wind energy tapering off
Tamil Nadu’s claims of being a power surplus state is all set for a reality check with the wind season coming to an end. After more than five months of a dream run during which time Tamil Nadu Generation and Distribution Company (Tangedco) evacuated more than 4,000 MW wind energy on many days, the power utility’s thermal capacity is now being put to test. Many thermal plants were shut for maintenance or run on low capacity to facilitate maximum evacuation of wind energy in recent months. The government even amended section 11 of the Electricity Act to allow sale of power to other states. But now, all the conventional sources will have to be tapped to meet the demand, which is not expected to reduce at least till in the monsoon sets in. Demand from farmers will go up as they are dependent on groundwater for samba cultivation. “We have so far evacuated more than 10 million units of wind power since the start of wind season in May. Compared to the previous years, the wind energy evacuation has set a record. Now, the wind power generation is slowly tapering off and the generation has come down from 4000MW to around 600MW,” a senior Tangedco official told TOI. But there is no crisis like previous years. “It is not summer and the demand is below 15,000MW. We have enough thermal capacity on standby mode and we have started using them in place of wind. We also have continuous supply of nuclear power from Unit 1 of Kudankulam,” he said. Power is also available in the power exchange. “As of now we are purchasing 100MW from the power exchange at Rs 2.47 per unit. If the demand increases, we will increase the purchase from the exchange as the cost is less,” he said. Meanwhile, Unit 1 is to be shut down for refueling and Unit 2 of Kudankulam plant is likely to be reconnected to the grid, thereby compensating the loss. “We will be shutting down Unit 1 in December for refuelling and it will take one month before it is restarted,” Kudankulam site director R S Sundar told TOI. Tangedco also has 900MW of private power generation capacity, which has been stopped since the start of the wind season. “Only after exhausting all other sources, will Tangedco be opting to use power from private companies. The cost of power from these companies is Rs 5.10 per unit,” the official said. My Account Jersey
Better power promise for Barasat belt
Intermittent power disruption that plagues the Madhyamgram-Barasat belt will cease once a 132 kV sub-station lying dormant for years becomes operational early next year. “We have resolved a long-standing problem that prevented the stringing of high tension power lines on towers leading to the 132 kV sub-station at Mahispota in North 24-Parganas,” state power minister Sobhandeb Chattopadhyay said on Tuesday. The sub-station was constructed seven years ago but could not be used as villagers, inspired by the movement against farmland acquisition in Singur, refused to allow power lines to be drawn over their land until the government paid compensation. The problem that had kicked off during the final days of the Buddhadeb Bhattacharjee government remained unresolved in Mamata Banerjee’s first term when Manish Gupta was power minister. Chattopadhyay leveraged his political experience to rope in local MLAs Rathin Ghosh and Jyotipriya Mullick for convincing the people. “The state utilities will dip into their CSR fund to finance road, water and sanitation projects. But we have explained that higher payout by way of compensation is not possible as the law does not permit it. Around three towers have to be erected and 4 km power lines have to be drawn to connect the sub-station. Once it becomes operational, the entire belt will get uninterupted power,” he said. Stalemate over a 400 kV Power Grid Corporation sub-station at Rajarhat was also resolved with help of MLA Rezzak Mollah. Demarcus Lawrence Womens Jersey
Indian Oil Corporation plans to lay 2,000-km LPG pipeline from Kandla to Gorakhpur
Indian Oil Corporation is planning to lay a 2,000-km pipeline to carry liquefied petroleum gas (LPG) from its Kandla import terminal on the west coast to Gorakhpur in the deep east to cater to growing demand for cooking gas in the country. The operator of the largest liquid hydrocarbon pipeline network in the country submitted an ‘expression of interest’ to the downstream regulator, the Petroleum and Natural Gas Regulatory Board, to lay, build and operate a common carrier LPG pipeline. Following this, the board has begun a public consultation on the matter. The pipeline could cost Rs 5,000-6,000 crore to build, according to industry executives. Read More: Indian Oil Corporation plans to lay 2,000-km LPG pipeline from Kandla to Gorakhpur In the first five months of the current financial year, India’s LPG consumption grew 10.5% over that a year ago, a rate that’s likely to sustain as the government aims to expand cooking gas consumer base 60% in three years. Of the 8.4 million metric tonnes consumed between April and August, just a little more than half was produced locally. The expected growth in local demand will, therefore, increase India’s dependence on import. “The deficit between indigenous supply and demand of LPG linked to IOCL’s bottling plants is expected to reach a level of about 10 mmtpa (million metric tonnes per annum) by 2031-32. Considering the aforementioned deficit figures for LPG, it is essential to import LPG at the nearest port and then transport it to the bottling plants through the most economical modes,” the company said in its ‘expression of interest’. It further said, “Additional import capacities are being built at Paradip, Cochin, Kandla etc to meet the increasing requirement of imports. West coast remains the most suitable to import LPG to meet the demand of North and Central India.” The company plans to raise the capacity of its LPG import terminal at Kandla to 5 mmtpa from the current 1.5 mmtpa. The proposed pipeline comprising 1,841 km of mainline and 146 km branch lines to Ujjain and Varanasi will have a carrying capacity of 3.75 mmtpa. The pipeline will have intermediate pump stations at Koyali refinery and at Indore. It will deliver LPG to bottling plants at Ahmedabad, Ujjain, Bhopal, Kanpur, Allahabad, Varanasi, Lucknow and Gorakhpur. The proposed pipeline will also draw fuel from Gujarat refinery and connect the company’s eight LPG bottling plants whose capacities are also planned to be raised. Indian Oil Corporation currently operates and maintains nearly 12,000 km of hydrocarbon pipelines. The company caters to nearly half of the country’s 18 crore LPG consumers. Indian Oil, Hindustan Petroleum and Bharat Petroleum together operate about 188 LPG bottling plants with a bottling capacity of about 15.2 mmtpa. State firms sold nearly 17.2 million tonnes of LPG in 2015-16. Ty Montgomery Authentic Jersey
India and Russia may agree to create an “energy bridge”
India and Russia may agree to create an “energy bridge” – envisaging a gas supply pipeline – at their next annual summit in Goa on October 15, besides additional stakes for Indian companies in oil and gas fields in the Arctic and Baltic regions. The oil and gas sector is emerging as the next big area of bilateral cooperation after defence. When Prime Minister Narendra Modi meets President Vladimir Putin, India and Russia could agree to set up the pipeline for gas supply from Russia. India and Russia launched an industry-level working group on gas delivery from Russia at an inter-governmental commission held in New Delhi in September and directed their ministries to finalise “concrete outcomes” in key areas of trade and investment before the summit. The working group was led by Gazprom, Russia’s biggest gas company, and a group of Indian companies “for creating an ‘energy bridge’ between the two countries through possible gas pipelines for direct gas delivery from Russia to India,” the Ministry of External Affairs said in a statement dated September 13. Indian and Russian oil and gas companies are working towards finalisation of investments in each other’s countries, the ministry said. Senior officials told ET that Indian energy companies are exploring investment options in Russian assets in the Baltic and Arctic regions. The Cabinet Committee on Economic Affairs (CCEA) on September 28 granted approval to a consortium of state-owned companies to purchase stakes in companies operating two Russian oilfields for more than $3 billion to augment India’s energy security. The consortium of Oil India Ltd., Indian Oil Corporation Ltd. and Bharat Petro Resources Ltd. will acquire a 23.9% stake in JSC Vankorneft and a 29.9% holding in LLC Taas-Yuryakh. The stakes will be bought from Rosneft Oil Company, Russia’s national oil company, which owns both the operators. Earlier last month, Oil & Natural Gas Corporation, India’s biggest energy explorer, agreed to buy an additional 11% stake in Vankormneft, owner of the Vankor oil and gas fields in Siberia, Rosneft’s second-largest by output, which accounts for 4% of Russia’s production. “Daily production from the field is around 421,000 barrels per day (bpd) of crude oil on an average and together with the earlier acquisition of 15%, ONGC Videsh’s share of daily oil production from Vankor will be about 110,000 bpd,” ONGC said in a statement on September 14. Once the transaction is completed, ONGC Videsh, the company’s overseas arm, will have a 26% stake in JSC Vankorneft. Following his visit to Russia in June, Petroleum & Natural Gas Minister Dharmendra Pradhan said a consortium of Indian oil companies led by ONGC Videsh was considering purchase of part of the $11 billion stake that Russia was selling in Rosneft. Brett Pesce Jersey
Vadodara Gas Ltd reduces prices of CNG, PNG
Vadodara Gas Ltd (VGL), a joint venture company formed by the Vadodara Municipal Corporation and GAIL Gas Ltd, has reduced piped natural gas (PNG) prices for domestic use and compressed natural gas (CNG) for automobiles. VGL will now provide PNG to domestic users at a rate of Rs 22.90 per cubic meter against the previous rate of Rs 23.50 per cubic meter. The new prices have become effective from October 1. The price of CNG has been revised to Rs 42.50 per kg against Rs 44 per kg earlier. The new CNG prices came into effect from Tuesday. VGL took the decision following an intimation from the Petroleum Planning and Analysis Cell (PPAC) of the union ministry of petroleum and natural gas. The PPAC had on September 30 informed VMC regarding a reduction in the basic price of natural gas provided under the administrative price mechanism. VGL officials said that there was a reduction of around 15 per cent in the basic price. Earlier, the prices had been reduced in the month of April this year. VGL caters to around 79,000 domestic gas consumers and around 40,000 vehicle owners in the city. Derek Roy Authentic Jersey