GAIL objects to HPCL’s gas pipeline project
Hindustan Petroleum Corporation’s plan for a cross country pipeline to move LPG received on the west coast to bottling plants over 600 km away in the hinterland has hit a roadblock with GAIL (India) raising objections to the project. The project, GAIL fears, could mean the end of the road for its pipeline that for more than a decade has been bringing LPG from the port city of Vishakhapatnam, on the eastern coast, to bottling plants in Cherlapalli, near Secunderabad. The resistance is in response to an expression of interest HPCL had submitted to PNGRB, the regulator, earlier this year to lay and operate a liquefied petroleum gas pipeline from Hassan in Karnataka to Cherlapalli, near Secunderabad in Telangana. The oil marketing company proposes to move the product from its Mangaluru LPG import facility. Hassan is one of the injection points on HPCL’s Mangaluru-Hassan-Mysuru-Sollur LPG pipeline. The plan involves laying a 620-km long pipeline from Hassan to Cherlapalli with a tap-off point (TOP) at Anantapur in Andhra Pradesh. HPCL, which has bottling plants in both Cherlapalli and Anantapur, over time wants to supply LPG from Cherlapalli to its facilities in Nagpur and Chandrapur, Maharashtra. In the EOI, the company expected LPG demand to pick up from southern Andhra Pradesh, Telangana and eastern parts of Maharashtra. In its response, GAIL said it had “strong apprehension that in case HPCL’s LPG pipeline comes into existence, HPCL may cater [to] the entire demand of Cherlapalli from the new connectivity. Sooner or later, the other two OMCs may also start utilisation of [the] proposed pipeline.” Besides HPCL’s, Cherlapalli also hosts LPG plants of Indian Oil and Bharat Petroleum Corporation. Thus, it would render the Vishkhapatnam-Secunderabad LPG Pipeline “created at a considerable cost to the exchequer, starved and under-utilised to a major extent.”The 600-km-long facility was readied in 2003 at a cost of around ?5 billion. GAIL said it is not inclined towards any other pipeline in the region until its pipeline is fully utilised by HPCL and other oil marketing companies. Creation of a new connectivity by HPCL, it said, would result in duplication of infrastructure. Steve Santini Womens Jersey
Solar rooftop drive: People’s movement essential to enhance installations in India
The government has set an ambitious target to develop 175 gigawatt (GW) renewable energy by 2022, comprising 100GW solar, 60GW wind, 10GW biomass and 5GW small hydro projects. Of the total 100GW solar installation, 40GW would be rooftop and the balance 60GW would be ground-mounted utility scale. The Draft National Electricity Plan released recently by the Central Electricity Authority of India (CEA) has envisaged additional 1,00,000 MW renewable energy during 2022-27. Considering similar percentage of rooftop addition during 2022-27, it is expected that rooftop solar would be further added to about 24,000MW. Thus, the total rooftop installation until 2027 would be 64,000MW. This has become more crucial now, upon the ratification of the Paris Agreement. The total solar installation in India currently is to the tune of 9,000 MW. Of this 9,000MW, rooftop installation is about 1,020MW, comprising 377MW industrial, 263MW commercial, 121MW government and 260MW residential. Most of the installation—853MW (85%)—was developed under the capex model, and the balance 15%, i.e, 167MW, was developed under the opex model. The target set by the government is about 1,500MW in FY17. The balance 38,500MW rooftop needs to be installed in the next 5-6 years, i.e, about 6,500MW per year. International experience Globally, rooftop installation has picked up or is picking up, as there is pressure on the availability of land. In fact, 40-50% of the total installation in many countries is rooftop (see accompanying chart). The lessons learnt are that soft loans, tax credits, the role of municipalities and market-based economy have yielded better results than the earlier policy of feed-in-tariff and direct capital subsidy. Rooftop potential It is estimated to be about 1,24,000MW. The urban settlement is about 77,370 sq km, with 38% residential, 4% commercial, 3% industrial and the balance 55% others. Taking into account the global experience, even if 30% of the total solar installation on residential/small commercial rooftop is considered, we need about 40 lakh residential/small commercial installations with an average 3kW solar installation per roof. Thus, one could well imagine the effort required to involve 4 million roofs, though it is merely 1.3% of the total 300 million houses existing in the country. Recently, the government identified about 7,000MW rooftop installation on government and institutional buildings. About 500MW was tendered earlier and awarded. Another large tender of 1,000MW comprising 700MW opex model and 300MW capex model has been invited by the Solar Energy Corporation of India (SECI), with subsidy varying from 35% to 90%. To meet the gigantic task, residential/small commercial less than 10kW need to be involved on a large scale. However, various issues need to be addressed. * Degradation of rooftop solar modules is higher than ground-mounted ones, as the cooling effect is better in the latter type. An initial study pointed out that rooftop installation degradation is as high as 2.5% per year, as against 0.6-0.8% on ground-mounted installation. A detailed survey needs to be carried out to further study the degradation pattern. * To increase the rooftop penetration in the residential, commercial and industrial sectors, awareness must be brought to all the stakeholders, i.e. a ‘people’s movement’ through strong campaigning. * There are lot of teething troubles in implementation, as it is an emerging area that needs to be streamlined, including net metering approvals, delays in approvals from discoms, large variation of solar penetration percentage in a feeder amongst various discoms, scientific determination through modelling/appropriate software in determination of percentage penetration of solar installations, etc. Then there is lack of clarity on responsibility of bearing the cost augmentation of distribution system due to solar rooftop installation. There is also a need for standardisation of installation methodology to minimise installation time and better cooling/lesser degradation and to reduce the cost. Other issues are liberalisation or waiving of inspections of small-size solar installations at consumer premises, waiving building height approvals from municipalities or authorities, capacity building of discom staff to handle emerging areas, and availability of pan-India skilled manpower in solar installation and O&M. *Suitable quality control of solar module availability in the Indian market for easier access of good quality products by small customers. *Easy access of finance for small solar installations is a critical success factor to enhance the penetration of rooftop. In addition to Capex models, third-party models such as Opex and lease model financial products must be introduced, like a home or a car loan, in a big way for smaller installations. Brett Hundley Womens Jersey
Govt’s solar park plan a lifeline for power transmission business
The government’s decision last month to double solar park capacity to 40,000 megawatts (MW) in three years has opened up a new business opportunity worth up to Rs20,000 crore for power transmission companies. Adding new 50 ultra-mega solar parks to the 34 under construction in 21 states, as decided by the cabinet on 22 February, will need to significantly widen the green energy corridor—the transmission network for the solar parks—an official at Solar Energy Corp. of India, a state-owned company in charge of implementing various solar power projects, said. The ongoing Rs13,000-crore green energy corridor-II project connecting the 34 parks under construction and new transmission projects will be identified keeping in mind the location of the new parks, said the official, requesting anonymity. Transmission networks within the state where projects come up will be assigned to transmission utilities by the states, while inter-state projects will be assigned by the central government. Since construction of solar parks takes way less time than setting up a transmission corridor, transmission projects that need quick execution will be assigned to central or state transmission firms, while those for power plants that will come up at a later stage are likely to be auctioned as it affords sufficient time for a tariff-based bidding, an official in the power ministry said requesting anonymity. According to I.S. Jha, chairman and managing director of Power Grid Corp. Ltd, which prepared the road map for the green energy corridor-II, not all the proposed new solar parks may come up at new locations and many could be in the solar and land resource rich states such as Madhya Pradesh, Rajasthan, Tamil Nadu and Gujarat, where such parks are already operating. “The required additional transmission capacity may be a mix of inter-state and intra-state. In the case of a new solar park, generally, the cost of transmission comes to Rs50 lakh to Rs1 crore per MW, depending on location,” said Jha. Under the green energy corridor project-II, 32 transmission projects—Rs8,041 crore of inter-state networks and Rs4,745 crore of intra-state network—are being constructed. Under the original 100 gigawatt (GW) solar capacity addition plan, 20GW was to come from solar parks which needed high-end transmission network and 40GW each from roof-top projects and distributed power projects, both of which require very limited transmission network. This has now been recalibrated to provide for 40GW of solar park capacity, merging with it a part of the planned distributed solar capacity. According to Reji Kumar Pillai, president and chief executive officer of India Smart Grid Forum, a public-private partnership of the power ministry, the real challenge of integrating renewable energy into the gird is in the roof-top segment. Integration of renewable energy into the low-voltage distribution grid is a major engineering challenge for power distributors, whereas transmission utilities are better-equipped to manage integration of MW-scale solar plants and wind farms connected at high voltage, he said. Jaron Brown Authentic Jersey
Cheap Chinese imports hurt domestic solar cell, module makers
Indian solar cells and modules manufacturers have not able to cash in on the opportunity of rising solar power installations thanks to Chinese competition. Between April and October 2016, India imported solar power material worth more than $1 billion. Solar power installations in India reached 4 GW in 2016, up from 883 MW in 2014. Installations are expected to surpass 9 GW in 2017. The Centre wants to ramp up domestic manufacturing to reduce imports of solar modules but the challenge is competition from Chinese manufacturers. Also, the World Trade Organisation (WTO) ruled last year that India’s domestic content requirements discriminated against US manufacturers. The Indian solar cells and modules industry mainly focuses on exports to Europe. India had exported almost $1 billion in solar modules before the National Solar Mission was set up. Exports boomed in 2008 due to global demand, but slowed down thereafter. As manufacturing took off in China, prices dropped to record low levels. From the beginning of 2011 through the end of 2012 module prices fell from $1.80/W to $0.65/W. State funded Chinese manufacturers captured most of the global market. The installed capacity of domestic solar cells and modules in India was estimated to be 2,815 MW and 8,008 MW, respectively, while the operational capacity of solar cells and modules was 1,448 MW and 5,246 MW, respectively, in December 2016. However, manufacturers said the working module manufacturing capacity was approximately 3 GW at the end of 2016. This disparity in figures is due to obsolete manufacturing lines that are still being counted by manufacturers as operating capacity, according to Mercom’s Manufacturing Tracker. In April-October 2016, export and import activity totalling $1.22 billion was registered in the sector. Of this, India imported solar materials worth more than $1 billion. “The problems plaguing the sector are lack of scale, insufficient government support and an underdeveloped supply chain,” a manufacturer said. Manufacturers were hoping for incentives to scale up production, but the Union Budget disappointed them. They also wanted more clarity on state-level incentives so that they could determine the states in which to locate new manufacturing units. According to Mercom, Indian modules typically cost 10 per cent more than Chinese ones. With highly competitive auctions for solar parks, like the one in Rewa, Madhya Pradesh, solar energy tariffs have fallen below Rs 4/kWh. Such tariffs are only viable with cheaper Chinese panels. Patrick Chung Authentic Jersey
Thermal power generation to reduce by half in next five years
Coal-fired power generation is expected to grow 4.05 per cent during 2017-18, suggests Central Electricity Authority (CEA) in its latest estimates. Hydel on the other hand is expected to grow 5.52 per cent, while nuclear will grow only about 2.43 per cent during the same year. CEA has estimated that coal-fired power plants are likely to generate 9,58,444 million units of power in 2017-18. In contrast it had estimated a total generation of 9,21,129 million units of power in 2016-17. About 89 per cent of the estimated power generation from coal-fired power plants has already been achieved between April 1, 2016 and January 2017. The estimate pegs growth of conventional power generation, which includes thermal, nuclear, hydel and import from Bhutan, at 4.35 per cent during 2017-18. Around 12,29,400 million units of power is likely to be generated from the conventional sources in 2017-18 against 11,78,000 million units in 2016-17. Nevertheless, CEA has also estimated that all coal-based thermal power plants need to brace for drastic fall in capacity utilisation to as low as 48 per cent by 2022 as additional non-thermal electricity generation capacities come on stream. CEA has predicted that by 2022 many plants may get partial or no schedule of generation at all – meaning many thermal power plants may have to be kept idle for lack of demand. According to CEA, installed capacity from different fuel types at the end of 2021-22 in base case works out to be 523 gigawatt including 50 GW of coal based capacity addition currently under construction and likely to yield benefits during 2017-22. “In order to accommodate high quantum of renewable energy into the grid, thermal plants are likely to run at low plant load factor (capacity utilisation) in future,” CEA predicted in its report. In fact, it has suggested that a market mechanism through regulatory intervention needs to be evolved so that the owners of thermal plants are able to recoup the investment and at the same time, customers are not unnecessarily burdened with high tariff. “Technical viability of plants goes for a toss if they run under 55 per cent capacity utilisation – a fact which is recognised by the Central Electricity Regulatory Commission. It is detrimental for the plant boilers and leads to drastic reduction in plant life,” said power sector experts. “These plants are designed to run at very high capacity utilisation – around 85 per cent. When they runs much below full load, it consumes more coal leading to under recovery of energy charges, as regulations does not provide for this.” “Plants without power purchase agreement for even a portion of their capacity are in for trouble. Reduction in capacity utilisation leads to decline in revenue income for the plant. At less than 60 per cent capacity utilisation the margin, which would otherwise provide for operating costs including interest cost, other than coal costs, would get wiped off. These plants are headed for trouble,” he said.
Rajasthan, Haryana, Chhattisgarh discoms major gainers under UDAY
The power distribution utilities in Rajasthan, Haryana, Chhattisgarh and Punjab are among major gainers in lowering their interest cost under UDAY scheme meant for revival of discoms. “State power distribution companies (DISCOMs) are reporting handsome savings and improvements in operational efficiency and found ways of cutting down power theft under Ujwal Discom Assurance Yojana (UDAY),” a senior official said. UDAY scheme was rolled out about 15 months ago in November 2015. As many as 22 states have joined the scheme so far. Elaborating further, the official said,”Utilities in Rajasthan, Haryana, Chhattisgarh and Punjab are among the major gainers in lowering their interest cost. The Rajasthan government projected a saving of Rs 4,697 crore, Dakshin Haryana Bijli Vitran Nigam projected a saving of Rs 766 crore and Chhattisgarh projected a saving of Rs 526 crore.” “Dakshin Haryana DISCOM has achieved the book profit of about Rs 78 crore in first half of this fiscal in the backdrop of Rs 479 crore loss in fiscal 2016. This is commendable achievement by the DISCOM after joining UDAY,” the official said. Out of 22 states under UDAY fold, power tariff orders for 2016-17 have been issued in 18 states. Therefore, they are working towards maintaining the financial viability and operations on commercial principles of State DISCOMs. The official said that Finance Ministry has already given permission to 12 states – Jharkhand, Uttar Pradesh, Haryana, Chhattisgarh, Rajasthan, Punjab, Bihar, Jammu & Kashmir, Andhra Pradesh, Himachal Pradesh, Maharashtra and Madhya Pradesh to issue bonds to the tune of Rs 1,94,681.49 crore. The states issued bonds worth Rs 1.83 lakh crore under the UDAY scheme to revive their debt laden discoms. State run power giant NTPC has been handholding state electricity generation utilities in improving their operational efficiency through organising various workshops involving knowledge transfer relating to productivity enhancement and deputing its staff to study processes of various project sites. The official said,”With coal rationalisation and import substitution, NTPC has been able to achieve savings of 32 paise/unit. Even considering coal price hike, increase in clean energy cess & railway freight, there is a net benefit of 6.5 paise/Unit.” Some of the initiative by the states to improve their performance include Manipur DISCOM-MSPDCL’s effort to install pre-paid electricity meters to reduce the outstanding consumer debts, energy theft and improve the billing efficiency. The revenue collection has gone up from Rs 88.61 crore in 2012-13 (Rs 7.38 crore monthly average) to Rs 175.95 crore in 2015-16 (Rs 14.66 crore monthly average). T.J. Oshie Authentic Jersey
Indian Oil Corp may take Odisha govt to court on Paradip refinery tax sops
State-owned Indian Oil Corp (IOC) may drag the Odisha government to court for reneging on its promise to give tax concessions to its Rs 34,555 crore Paradip refinery in the state. Less than two months after serving the first show-cause notice, the Odisha government on February 22 wrote to its single-biggest investor saying it is withdrawing the promised 11-year deferment on payment of sales tax on Paradip refinery products sold in the state. “We are trying to explain to them that we came to Odisha only based on their commitment to give certain tax incentives. Now, they cannot go back on them. If we don’t succeed the only option left for such will be to take it up legally,” a top company official said. The Odisha government is basing the withdrawal on two grounds – that the project was delayed by six years and the size of the refinery has been changed to 15 million tonnes a year from the previously agreed 9 million tonnes. “They do not have a case on both the counts. For one, we had way back in 2006 informed them in writing about the decision of doing a larger size refinery together with petrochemical plant,” he said. As regards delay, the official said the state government should have conveyed its decision of not giving the tax incentives way back in 2009 when the investment decision was taken and conveyed to them. “This clearly is an after-thought. They had in 2004 given us a set of eight tax incentives. While the VAT exemption was to kick in when the refinery started commercial production, the state government allowed the others including construction time incentives to be availed between 2009 and 2015. We had taken a benefit of Rs 550 crore on these count,” he said. The withdrawal of VAT exemption will cost Rs 2,000 crore to IOC this year and will progressively increase every year as more petrol and diesel as well as petrochemicals are sold within the state. Odisha had originally offered the tax incentives to IOC and its then partner Kuwait Petroleum Corp (KPC) in December 1998 to invest in setting up a refinery in the state. These investments were withdrawn in February 2000, leading to the company shelving the project. It restored the incentives and signed an MoU with IOC on February 16, 2004, for providing a set of eight sops. The state government withdrew the tax incentives in “public interest”, citing 6-year delay in commissioning of the project that was larger in capacity than originally planned. IOC, however, is quick to point out that the February 16, 2004, MoU clearly allowed change in design, capacity and configuration of the project. The official said the Odisha government was informed about the change in capacity and the delay in construction caused by cyclone, land acquisition and law and order problems. If the MoU was sacrosanct, the state government should have withdrawn the concessions in 2009 itself, allowing IOC to reassess its investment plans, he said, adding the size of the refinery should not matter as VAT deferment is limited to 2 million tonnes of products sold in the state. Amari Cooper Womens Jersey
Floating Liquefied Natural Gas production bows out as U.S. exports roil market
Once considered the future of gas production, floating liquefied natural gas (FLNG) projects have been firmly relegated to the backburner as global gas producers seek cheaper ways to compete with a surge in U.S. shale supplies and slumping prices. FLNG projects – mega tankers fitted with gas extraction and liquefaction facilities – allow producers to tap offshore gas wells and ship LNG without having to build costly pipelines to onshore plants. Owners can move the vessels to new fields when production at an old one ends, slashing asset end-of-life costs. The projects were popular with producers in the early-2010s when gas demand and prices were rising, and before the shale revolution unlocked U.S. oil and gas reserves that crushed global energy prices. But a combination of the massive costs of outfitting a tanker with the necessary equipment – into spaces a fraction of the size of land-based installations – and a collapse in benchmark gas prices has halted interest in adding to the two current projects – Royal Dutch Shell’s long-delayed $12.6 billion Prelude project off northwest Australia, due to come online in 2018, and Petronas’ PFLNG Satu project in Malaysia. Shell has been a major proponent of FLNG, but spot prices have halved since the major reached its final investment decision (FID) on Prelude in May 2011. “There was maybe an expectation when Prelude was being conceived that this was the future and every LNG project would look like that,” said Shell’s executive vice president Steve Hill at a media briefing in Singapore last month. “I think that got kind of superseded by the U.S. being the primary source of new LNG supply … Maybe it was the switch from Australia to the U.S. that meant floating (production) didn’t kind of take off in the way that was expected.” Woodside Petroleum shelved plans to build the $30 billion Browse FLNG project off western Australia last March because of global oversupply. Partners in the project include Shell, BP, PetroChina, Mitsui & Co and Mitsubishi Corp. While FLNG remains the project’s preferred option, Woodside is pushing to make the case to its partners that bringing gas from Browse and the southeastern Scarborough field into existing or expanded facilities onshore would be a cheaper option. “It’s about infrastructure sharing and it’s about taking a sensible approach … and making sure capital is used efficiently,” Woodside CEO Peter Coleman told reporters following the group’s annual results last month. GDF Suez and Australia’s Santos also scrapped a proposed FLNG project for the Bonaparte LNG field off northern Australia in June 2014. Meanwhile, monthly U.S. LNG exports have risen above 1 million tonnes since the start of this year, hitting a record 1.05 million tonnes in February, Thomson Reuters Eikon trade flow data shows. Another 8.6 billion cubic feet per day of U.S. gas production (68.3 million tonnes per annum of LNG) is currently under construction and scheduled to come on stream by 2020. “With the market headed for oversupply until the early-2020s, it would be difficult to find a bankable new FLNG project in the near term,” said Edmund Siau, a gas analyst at energy advisory FGE. Otis Sistrunk Jersey