Wind power auction: PTC India to facilitate 1,000 Mw electricity trade
PTC India Ltd, India’s largest power trading company, will act as the trading partner for sale and purchase of power from wind power projects selected through the government’s first-ever auction of wind power projects of 1,000 Megawatt capacity. PTC will be the nodal entity for supplying power to utilities after entering into a power purchase agreement (PPA) with successful bidders. With the just concluded wind power auction fixing the tariff at Rs 3.46 per unit for 25 years, the stage is now set for wind power to emerge as a credible renewable power source in the country, PTC said in a statement. The auction will allow non-windy states to get wind based power from states that are rich in wind resources. The competitively discovered price at Rs 3.46 per unit is an outcome of expected optimization in project cost, machines efficiency and payment counter party risk. The projects are expected to be commissioned in eighteen months. Solar Energy Corporation (SECI), which conducted the auction, is expected to allow 1,050 MW at the cut-off price and issue Letter of Interest (LoI). “We are the nodal trading partner for renewable resources based power generation, which is the energy for the future. We expect the share of renewables in overall power generation to steadily rise in the coming years as more and more solar and wind projects start producing power. The competitively priced wind power will encourage consumers to switch to cleaner sources of energy,” said Deepak Amitabh, Chairman and Managing Director, PTC India. The Ministry of New and Renewable Energy (MNRE) had formulated the scheme for procurement of power from large wind power projects in June 2016 to enable non-windy States to meet their non-solar Renewable Purchase Obligations (RPOs) by buying wind power connected to inter-state transmission grid, thereby enlarging the wind power market. Unlike conventional power, where fuel charges escalate each year, the discovered tariff in the wind auction is constant throughout the life of the projects, around 25 years. Looking at the attractive tariffs, a few state utilities have expressed interest in purchasing wind power under this scheme. Riley Sheahan Jersey
Modi govt plans Buy Indian policy
To promote its flagship Make In India programme, the government is proposing its own version of the US’s Buy American policy through a national government procurement policy, according to a government official familiar with the plan. The policy being considered involves purchases of Rs2 trillion a year but doesn’t include defence equipment. Under the proposed policy, the central government will provide special preference to companies producing in India; this could be in the form of a relaxation in turnover and experience conditions as well as price preference in products and services it is buying for its own use. The purchases could range from mobile phones and computers to stationery and medicines, and even steel or aluminium for government and railway projects. When implemented, the scheme, which is compliant with the norms of the World Trade Organization (WTO), will incentivise companies to manufacture in India, given the scale of government purchases. The central government estimates that the purchases could be around Rs2 trillion a year. That number will grow once state governments, municipal bodies and government educational institutions start doing the same. A group of secretaries, headed by commerce secretary Rita Teaotia, made the recommendation earlier this month and Prime Minister Narendra Modi is believed to have signed off on it. The commerce ministry is now giving final touches to the policy, after which the expenditure department in the finance ministry will notify it. “The recommendation to the prime minister was that the Make In India policy has to be government-wide and that one of the tools (for this) is government procurement. We have a powerful tool (for this) which is compliant with WTO rules,” added the government official who asked not to be identified. Under WTO rules, if government is buying for itself and not for commercial purpose, then it may provide preference to domestic products. In the Jawaharlal Nehru National Solar Mission case which India lost to the US at the WTO, the country was planning to impose mandatory local content requirements on solar power developers who would sell power on commercial basis. The US follows a similar policy under the Buy American Act, 1933, under which it prefers US-made products for government purchases. The new e-market platform GEM (Government e-Market) which is used to procure goods and services for the government in a transparent manner will be used to roll out the new policy. “We can emphasize preference for domestic products in government procurements and we can monitor its implementation across ministries through the GEM platform,” the official said. Sunil Kant Munjal, chairman, Hero Corporate Service Pvt. Ltd, described the plan as “bold” and said it would help create “100 million jobs”. “ It is a big boost for Make in India,” he added. Both Indian companies and multinationals which have been in India for some time and have significant manufacturing facilities in the country would benefit, said Venugopal Dhoot, chairman, Videocon Industries. “In consumer durables, production is largely happening in Thailand and they get imported here at zero duty. With this move, they will be forced to manufacture them here in order to supply to the government. It seems like the Modi government is standing by its objective of promoting local industry,” he added. Daniel Sedin Authentic Jersey
More trouble for PDC as Govt sits on power selling proposal
While J&K Power Development Corporation (PDC) is struggling to find buyers for energy generated from 450-MW Baglihar-II owing to slump in the market, the State Government has sat on a proposal to allow the Corporation to sell power from the project on existing lower rates in the market, resulting in mounting losses to the PDC. Sources said more than a month ago the Corporation, after failing to get any buyer, moved a proposal to the Government to allow it to sell the energy from the project to the Power Trading Corporation (PTC) at the prevailing rates in the market which are lower than the per unit cost that was firmed up by the PDC for the project. Top officials from the PDC had met their PTC counterparts in New Delhi. “We could have settled at the rate of around Rs 3 per unit though we could have negotiated on the rates. Though these (Rs 3) rates were definitely lower but the Corporation would have been able to fetch some revenue,” said a senior PDC official. The PDC had earlier firmed up per unit cost at Rs 4.13 including water usage charges but the Corporation apprehends owing to slump in the markets it won’t be able to get this (Rs 4.13) rate. The official said the Government wasn’t however responding to PDC’s proposal, forcing it to continue with the sale of power to PDD at much lower rates of around Rs 2.50 per unit. “Despite settling at lower rates (with the PDD) we are not getting the payments regularly,” said the official. A part of revenue generated from sale of power has to go for clearance of the loan borrowed from different financial institutions for construction of the project earlier. The Corporation had in total borrowed Rs 1689 crores loan from the financial institutions which per the agreement has to be repaid in 10 years on quarterly basis. “The immediate worry is that if we are not able generate revenue from the sale of power it will negatively impact the loan repayment process which can hurt the Corporation’s credibility as well,” said the official. The Corporation started debt clearance in July 2016. “There are no buyers interested to buy the power at the firmed up rates. Instead of sitting back and doing nothing we need to find the buyer even if it means at lower cost. The Government can’t let the losses to pile. Whatever is the rate prevailing in the market we should be able to sell the power on the same basis to prevent losses,” said the official. “There are no options available except for selling power at lower rates for short term and generating some revenue.” The project, designed to generate power between May and September with annual generation of 1,302 million units, was first run on trial basis in September 2015 and it started commercial operations from April 2016. “Let the Government allow us to sell the power at least on short term basis to prevent further losses to the Corporation,” said the official. Another official said: “It was shocking on part of the government not to allow the Corporation to sell power in the energy market. This delay is at the cost of financial health of the PDC and is hurting it badly.” He said on one hand the Government was not making timely payments to the PDC for the power it gets from Baglihar-II and on the other hand it wasn’t allowing the PDC to sell power in the energy market. “This is beyond reason and is only hurting Corporation’s financial health,” said the official. Donald Trump Authentic Jersey
Tata Power generation capacity up 8% in Q3 FY’17
Tata Power on Tuesday announced a generation capacity increase of over 8% in the third quarter of the current fiscal compared to the year-ago period. “The company, together with all its subsidiaries and jointly controlled entities, has a gross generation capacity of 10,496 MW and a presence in all the segments of the power sector viz. Fuel Security and Logistics, Generation (thermal, hydro, solar and wind), Transmission, Distribution and Trading, thereby, reinforcing its position as the largest integrated power company in India,” Tata Power said in a statement. According to the statement, standalone generation stood at 13,022 MUs (million units) in Q3 FY’17, as against 12,032 MUs during the same quarter of FY’16. Tata Power MD & CEO Anil Sardana said in the statement, “Tata Power has and will continue to create tangible value for its stakeholders. We have in this quarter spread our footprint across two additional geographies, namely, South Africa and Zambia where additional generation is welcome. We will continue to be part of India’s growth story while selecting greener & good projects in select international geographies.” The company said that it is firmly on the road to generating 30-40% of its total generation capacity from non-fossil fuel sources by 2025. The company said that it has completed the acquisition of 1,141 MW of renewable power projects comprising about 990 MW solar power projects and about 150 MW wind power projects. Xavier Williams Womens Jersey
Bank investors beware! Power loans may trip next
In order to give better clarity of the stress they were carrying on their balance sheets, three large banks at the beginning of fiscal 2017 disclosed lists of close to Rs 1 lakh crore of loans from where they expected future slippages to evolve. Three quarters down the line, close to 39% of these “watch-list” accounts have slipped into the non-performing category , while only about 6% – Rs 6,100 crore -was either recovered or upgraded from the list. It appears difficult to conclude which lender has optimally managed its list of loans that would cause future pain given varied parameters. Among the three lenders that created inventories of stressed assets, or loans to “below investment grade companies”, the slippages from the lists have been varying. At 55%, the announced quantum of slippage from the watch list was the highest for Axis Bank, followed by SBI (44%) and ICICI Bank (27%). With such high level of recognition, Axis appears on track to recognise a substantial portion of the watch list as NPAs as it guided in April last year -the slippages are commensurate with the level of bad assets growth. Between March and December 2016, Axis reported the steepest rise of 355 basis points in its gross NPA ratio, as against ICICI’s 199 bps and SBI’s 73 bps growth. The nature of lists differs, too. Axis has only included its fund-based exposures to the list even as in the last nine months it also saw close to Rs 464 crore of devolvement from the non-fund-based (credit guarantees) exposure into the watch list. ICICI Bank includes nonfund-based exposure of the slipped accounts from the list in the total exposure. While Axis has termed its list to be a “closed“ one with no additions to be made over two years ending FY18, SBI has not ruled out changes though the quantum is unlikely to be that big. This makes the run-rate of slippages from outside the list an interesting tool to gauge the purpose of the watch list. Although SBI, which is confident of not overshooting its FY17 guidance of Rs 40,000 crore of fresh slippages into NPAs, close to a quarter of it so far has come from outside the watch list. ICICI has seen 48% of its gross slippages come from outside its “further drilldown list” and expects this runrate to continue. Axis has missed its guidance in this regard, with the outside watch list slippages from corporate book rising from 11% to 30%. In terms of sectoral recognition, the iron and steel space accounted for a fourth of total slippages from the watch list, and the power sector for more than a third, which is likely to bring the next bout of slippages. Shaquill Griffin Authentic Jersey
Discrimination on religious ground in electrification in UP: Piyush Goyal
Minister of state (independent charge) for power, coal, new and renewable energy and mines Piyush Goyal accused the UP government of partiality on the ground of religion on the issue of electrification and power supply in the state. “In its probe report, a high power committee pointed out that discrimination on religious ground was found in implementation of Deen Dayal Gram Jyoti Yojna in eight village of Moradabad,” said Goyal while talking to reporters here on Tuesday. He said that on the complaint of Moradabad MP a high level committee was constituted, which visited eight villages of the district on July 22, 2016. “Many other MPs also contacted me with similar complaints that the areas populated with particular caste and religion are facilitated with power supply and electrification,” he said adding that it is a very serious matter showing the biased temperament of the state government. However, the UP government in its written reply said that no discrimination is done in providing power connection, he added. “The chief minister claims that there is 24-hour power supply in the state. Fact surfaced with the outcome of a survey conducted by an NGO one week before and after the polling in different areas. It was found the power supply was normal before the polling, but after the polling frequent power cuts were noticed,” said Goyal adding that the Akhilesh government is not serious about state’s development, which is evident of the fact that state did not sign the ‘power for all’ agreement. “UP is the only state in the country that did not sign the ‘power for all 124×7’ agreement, which aims at providing uninterrupted power supply to all by August 2022,” he said. He further state that the UP also refused to purchase power from the centre at cheap rate saying that it has surplus electricity. “Against the target of giving 32,33,913 power connections during the 12 Five Year Plan, the state could give only 5.26 lakh connections, which is 16% of the target,” he said adding that it shows that the UP government wants to keep people deprived of electricity. “To hide the fact the state also stopped providing data of power supply since August 2016,” he alleged. Justin Williams Jersey
BP lifts outlook for core oil business after cost cuts
British oil major BP lifted the outlook for its core oil and gas divisions on Tuesday, saying it would be able to balance its books with crude prices as low as $35 to $40 a barrel by 2021 thanks to its tough spending cuts. BP said its upstream business, which includes its main oil and gas production fields, is expected to generate free cash flow of $13 billion to $14 billion by 2021, nearly double an outlook presented last year of $7 billion to $8 billion by 2020. The refining and marketing business, known as downstream, is expected to generate $9 billion to $10 billion of free cash flow by 2021, BP said. The oil major, which was forced to raise billions of dollars from asset sales to pay for the clean-up of its 2010 Gulf of Mexico oil spill, made around $7 billion in cost cuts last year by tightening investments, cutting staff numbers and through depreciation in service costs. “We expect this combination of continued cost discipline with the growing cash flow from our core businesses will steadily drive down the cash balance point of the business,” BP Chief Financial Officer Brian Gilvary said. “Over the next five years we expect this to fall to around $35-40 a barrel for the group overall.” Earlier this month, BP lifted this year’s break-even oil price to $60 a barrel because it is investing more in new projects. LaDainian Tomlinson Authentic Jersey
Sanjiv Singh appointed IOCL chief
Sanjiv Singh was today appointed Chairman of the Indian Oil Corporation Ltd (IOCL), the country’s largest commercial enterprise. The Appointments Committee of Cabinet approved his appointment to the post for a period of five years, an order issued by the Personnel Ministry said. Singh is at present the Director of Refineries at the IOCL. He was selected for the top job after government headhunters Public Enterprise Selection Board (PESB) interviewed eight candidates. He will be assuming the charge on or after June 1, the order said. Thomas Hickey Womens Jersey
TN gas project safe, will generate Rs 300 crore, 500 jobs, says Centre
The proposed hydrocarbon projects in Neduvasal and Karaikal, which have run into rough weather, are not the first in Tamil Nadu, and they are as safe as three similar projects operating in the state, the Centre has said. The projects would generate 500 direct jobs and Rs 300 crore, the Union ministry of petroleum and natural gas said in a statement on Monday, and Tamil Nadu can earn `40 crore in royalty by implementing them. Seeking to dispel fears of environmental contamination and health hazards, ministry officials said misconceptions were fuelling protests in the state. There are three similar operational exploration blocks of approximately 1,461sqkm in the state. “Under nomination regime, 31 mining leases (approximately 3,500sqkm) have been granted in the state from where 600 tonnes of oil and 30 lakh cubic metres of natural gas are produced per day. Till date, more than 700 wells have been drilled for extraction of oil and gas in Tamil Nadu. These active operations are not hampering agriculture in nearby areas and do not pose any known environmental impact or health hazards on living beings of the operational area,“ the ministry statement said. It said extraction of oil and gas is a well-established practice and the industry uses state-of-the-art technology and takes maximum care to protect the environment. “The operators also get environment impact assessment done before carrying out any drilling and other activities.“ The statement said oil and gas ex traction were being carried out from deeper earth area (generally 1,000m) and thus does not affect groundwater aquifers located at much shallower levels. Drilling and production of oil or gas require very limited surface land area (generally 120X120 sqm) which does not affect farming or the soil of the entire lease area. Additionally, operators are required to follow strict environmental norms for use of operational land, the statement said. Allaying fears on methane being a dangerous gas, the government note said this gas was being used as household fuel globally as piped natural gas (PNG). Others concerns about adverse environmental impact on nearby areas and people living there are also misplaced, as all petroleum operations require clearance from the environment and forests ministry , wherein public hearing is an integral part. The ministry note also trashed allegations of irregularities in the process of awarding contracts to Gem Laboratories, saying these fields were offered through an open and transparent international competitive bidding process. Neduvasal has been home to protests in the past few days, with agitators alleging that besides the impact on soil and underground water table, production of methane gas would impact the health of people living in the area. Gem Laboratories won the block, identified as CYONDSF Neduvasal 2016, in the first oil field auction conducted by the Narendra Modi government, in December. But protesters are mainly targeting ONGC since it remains the largest driller in the Cauvery basin, while others are small players, said an officer. Andrei Mironov Womens Jersey
Jaitley’s Plans For Oil And Gas Require Caution And Review
Finance Minister Arun Jaitley has revived through his budget speech a proposal first made in the mid-90s, and then in the early 2000s, that our public sector undertakings in the oil and gas sector be merged into one giant oil behemoth whose market value would top $100 billion, close to that of Exxon. In arguing for “an integrated public sector oil major to match the performance of international and domestic private sector oil and gas companies”, Jaitley succinctly summed up his reasons for such a move: “It will give them the capacity to bear higher risks, avail economies of scale, take higher investment decisions and create market value for shareholders”. Those who opposed the proposal in its earlier avatars are in the forefront of again raising a resounding “No”. They say competition will be stifled; monopolistic tendencies will be reinforced in marketing practices; inefficiencies will increase because Indians cannot effectively manage mega-enterprises, especially in the public sector; that funds can be found in partnerships rather than mergers; that mergers will lead to lay-offs; and that ripe old chestnut – that the “culture” of nationalized companies is radically different to that of the companies born in the womb of the public sector. A word by way of background is, I think, necessary to appreciate the argument on both sides of the divide. The oil sector essentially comprises two segments: upstream and downstream. “Upstream” refers to exploration and exploitation of crude oil and gas; “downstream” to refining, transportation, marketing and imports-exports. As for “upstream”, oil was discovered at Digboiin upper Assam in the 1860s, second only to the first discovery at Pennsylvania in 1859. Then, over the next 100 years or so, no world oil major found any crude anywhere else in the country. By independence, therefore, the conventional wisdom was that India was hydrocarbons-deficient and there was nothing anyone could do about that except import whatever was required. One man disagreed: K D Malaviya, a junior minister for Mines in the Nehru government. Determined to prove that an indigenous Indian effort could succeed where foreign endeavours had failed, he persuaded the cabinet to let him set up the Oil and Natural Gas Commission (ONGC) in Patiala House, Dehradun. ONGC struck gas in Ankleshwar, Gujarat, and began its saga towards emerging as India’s own giant, the discovery of Bombay High off-shore, operationalized in the early ’70s, being its single most important find. The principal reason behind ONGC succeeding where others had failed was the primacy given to intensive innovative research by the ONG Commission. But once ONGC was converted from a Commission into a Corporation, its eye got firmly fixed on the financial bottom-line. And after it got a guaranteed rentier income by being allowed under the reforms of the ’90s to sell its crude oil in the domestic market at international prices, it has grown enormously wealthy because crude prices have gone through the roof – but without a single path-breaking oil discovery to its credit. Instead of technological breakthroughs, ONGC has moved its huge unearned income downstream into oil refining at Mangalore and miscellaneous other projects. R&D and “knowledge networking” with technology innovators the world over have been given the go-by. Worse, ONGC have set the example for each oil PSU to seek upstream-downstream integration, leading to a wide dispersal of national resources, instead of concentrating these scarce and precious resources in one mega-entity. Downstream, when war broke out with Pakistan in 1965, the Western powers directed their private oil multinationals operating in India to stop making any oil available to the government of India with a view to starving our armed forces of the fuel essential to the prosecution of the war. An infuriated Indira Gandhi decided to nationalize these companies as a measure of crucial national security. And so were born a plethora of smaller oil PSUs (Bharat Petroleum, Hindustan Petroleum, etc) to join the Indian Oil Corporation, by far the biggest corporation of the lot, in the downstream public sector. The division of work was clear: ONGC and a few smaller PSUs upstream; IOC and its smaller sisters downstream; and the Gas Authority of India Ltd (GAIL), with one or two others, to look after the natural gas segment, both upstream and downstream. The well-intentioned economic reforms of the ’90s found their reflection in the petroleum sector. The New Exploration Licensing Policy (NELP) was the key reform measure. It threw open upstream exploration to multinationals and Indian private sector companies. It also enabled the extant oil sector PSUs to start encroaching on each other’s territory, upstream entities going downstream, and downstream entities sailing upstream. Liberalization also meant Indian companies being encouraged to acquire, explore and exploit foreign properties to give a new dimension to India’s search for energy security. NELP’s specific policy innovation was that upstream crude discovered in India would be marketed in India at international prices, while the domestic price of petroleum products (like petrol) and gas would be market-determined. It worked beautifully for a while. Foreign majors started taking an interest in both upstream and downstream investment, as did Indian private sector enterprises like Reliance and state-owned start-ups like the Gujarat State Petroleum Corporation (GSPC). For upstream India, 2003 was the golden year. On-shore, Cairn struck oil in Barmer (where both ONGC and Shell hadfailed) and, off-shore, Reliance and GSPC announced such huge finds off-shore the Krishna-Godavari basin that informed observers began asking whether India was not likely to become self-sufficient in its energy requirements. Abroad, our participation in the oil and gas find in Sakhalin, at the eastern outreach of the Russian Federation, threw us in the company of the Big Boys. We were now in competition with China and would beat the problem of “peak oil” by throwing Indian multinationals, public and private, into the international arena. At the stage when these reforms were being undertaken, the late ’90s, oil was selling internationally at $10 a barrel. Price controls on petrol and other products could be relaxed or even abolished. As