Despite UDAY bailout package, net loss of Uttar Pradesh’s discoms rises
Even the Ujwal Discom Assurance Yojana (UDAY), a whopping Rs 39,000 crore financial dose, appears to have failed to inject life in Uttar Pradesh’s ailing power sector so far. That is what the Centre’s latest analysis report on the distribution companies’ performance indicates. The Centre has found the UP discoms to have further slipped on all the operational and financial parameters of performance since UP government took over their 75% of the Rs 53,2,11 crore debt with support of the Central government in January 2015. Curiously, the only positive thing that has been found about the discoms is that they have been consistent in getting the power tariff increased for consumers every year with electricity having been costlier in the state by more than 40% in the last three-four years. “As per the analysis, UP is the second largest state to take over the discoms’ debt (Rs 39,000 crore) and has also been successful in restructuring discoms’ debt of Rs 10,700 under UDAY,” says Ritu Maheshwari, executive director, Rural Electrification Corporation (REC) in her report (dated May 31) to UP’s principal secretary, energy, and Uttar Pradesh Power Corporation Ltd (UPPCL) chairman Alok Kumar. She adds, “But the overall net loss of the discoms of the state has increased to Rs 7932 crore in financial year (FY) 17 from Rs 7,791 crore in FY 2016. On the operational front, the discoms’ aggregate technical and commercial (AT&C) losses have been found to have increased to 27.6% from 25.7% in the FY 2016, instead of decreasing as per the undertaking given by them under UDAI. “The UP discoms’ AT &C losses at 27.6% are significantly higher than the national average of 19.8%,” she observes in her report ‘Analysis Report of Uttar Pradesh under UDAY for FY 2016-17’. A component-wise break up as given in the report also shows negative trends. “For example, billing efficiency has reduced from 78.8% to 78.2% against UDAY states’ average of 83%, collection efficiency from 94.3% to 92.6% against UDAY states’ average of 97%,” it discloses. Similarly, power purchase cost in the report has also shown a 4% increase in the FY 2017 (Rs 4.63 per KWh) in comparison to the 2016 level of Rs 4.45. The progress on feeder segregation during 2016-17 has been found zero which, according to the report, is in contrast to the fact that some of the discoms have a high proportion of agriculture sales. It is also observed that there are still around 18% unmetered and 22% un-formalised domestic households in the state, the report says. On the positive side, the report says, the state has been regular in tariff hike and overall revenue realised at the state level is stable. Revenue has increased steadily from Rs 2.81 per kWh in 2013 to Rs 3.99 per kWh (41.9%) at the end of FY 17. This probably the only ‘achievement’ the UPPCL/discoms can boast of. Maheshwari, who is holding a high-level meeting with officials here on Tuesday, has in her report expected the state/utilities to look into the analysis and address concern areas immediately so that the trajectory agreed by the state in the UDAY MoU can be achieved at the end of the FY 2018-19. Reacting to the report, UP Rajya Vidyut Upbhokta Parishad president Avadhesh Kumar Verma said it was ridiculous that discoms had been found good only at getting tariff increased while failing on all the fronts of operational and financial performance. “The state government must fix the accountability of the officials who signed an agreement under UDAY committing to reducing losses and increasing collection efficiency, among other things,” Verma demanded. Pat Lafontaine Jersey
Indian Power Surplus Outlook Signals Lagging Electrification
India expects to have a surplus of power for the first time in at least 13 years, a sign that the country’s goal of full electrification may be lagging. The country’s power plants are forecast to produce 8.8 percent more electricity than its distributors will demand during the year to March, the Central Electricity Authority said in an annual generation report last week. That would be the only surplus in records going back to the year ended March 2006. The narrowing deficit in recent years, and the projection for a surplus this year, have been aided by slowing demand growth from state distribution companies, known as discoms, who struggle to purchase enough electricity for the populations they serve. The CEA defines demand as the amount of power that distributors buy, not necessarily how much electricity would be needed for the whole country. That helps explain why an estimated 45 million rural households lack electricity and several cities face regular blackouts. “One of the main reasons for the lower growth in power demand is the reluctance of discoms to increase their purchases to supply uninterrupted power,” said Shantanu Jaiswal, an analyst at Bloomberg New Energy Finance. “Several power stations in India are running at low capacity factors, producing a fraction of the power they are built to generate.” Demand for electricity grew 2.6 percent in the last fiscal year, slipping for a second year and undershooting the CEA’s 9 percent forecast. Consumption this year is estimated to increase by 7.6 percent, according to Bloomberg calculations based on the CEA’s outlook. India’s slowing economic expansion may be a challenge to the country hitting the CEA’s power demand growth estimates. Gross domestic product grew at the weakest pace in more than two years in the three months to March, dragged down by Prime Minister Narendra Modi’s cash ban in November and the weight of the country’s bad bank debts. The utilization rate at India’s coal-fired power stations, which dominate the nation’s electricity generation, is declining as capacity grows faster than discoms are able to purchase power, leading to a glut. Supply last year increased by 4.1 percent, compared with the CEA’s forecast of 12.8 percent. “We have enough capacity to generate more and consume more,” CEA Chairman Ravindra Kumar Verma said in a phone interview. “However, due to reasons like breakdown of transformers, inadequate transmission capacity and distribution infrastructure, we’re forced to switch off our generation.” Modi’s government is aiming to supply power to all citizens in the world’s second-most populous nation by 2019. To help reach that goal, his administration launched a debt-restructuring program aimed at making all state retailers profitable by that year. Most of India’s provincial electricity retailers lose money selling below cost to poor and agricultural customers and through power theft. State-run distributors held combined debt of 4.3 trillion rupees ($67 billion) as of September 2015, the latest year of available data. The results of the plan to turn around the retailers are emerging, said Sabyasachi Majumdar, senior vice president at rating agency ICRA Ltd. Discoms are taking steps to reduce theft, while the falling price of renewables and efforts to bring down fuel costs will make cheaper electricity available to them. “In the power sector all these things take time. It will not improve overnight,” said Ashok Kumar Khurana, director general at Association of Power Producers, a lobby group of private-sector generation companies. “All of these reforms show impact in the medium-term, not the short-term. Terrance West Authentic Jersey
Power cuts across Delhi as demand touches new high
With Tuesday’s peak power consumption — 6,526 MW at 3.31pm — breaching even Monday’s record demand, the highest since 1902, social media and complaint centres filled with hundreds of complaints of power outages across the capital. On Monday, the peak demand had touched 6,361 MW at 3.06 pm. Multiple and prolonged power cuts ranging from 1 to 8 hours — some of which lasted the whole night — occurred since Monday evening, even forcing the chief minister to take note of the situation. Areas like Laxmi Nagar, Janakpuri, Aya Nagar, Chhatarpur, Uttam Nagar, Paschim Vihar, Narela, Jahangirpuri, Burari, Pattparganj and even south Delhi localities like Vasant Vihar, South Extension and Defence Colony reeled under multiple power outages, with people complaining of lacklustre consumer support by the three power distribution companies — BSES Rajdhani Power Ltd and BSES Yamuna Power Ltd and Tata Power Delhi Distribution Ltd. “In two days we have had 20 power cuts and we spent the whole night without electricity,” said Madhav Anand, a resident of Aya Nagar phase-6. A resident of Uttam Nagar, Gaurav Anand, said “All my calls were rejected by the customer care centre even though we faced a power cut for 14 hours at a stretch.” Mitashi Sinha, a resident of South Extension-II, said that they faced frequent power cuts in the locality throughout the day, which collectively lasted for over 5-6 hours. However, discoms said that there is enough provision to meet the power demand and outages are occurring due to “local faults”. “Due to extreme heat and power demand the electricity network does not get sufficient time to cool down. This, at times, leads to local faults. Another common reason is unprecedented load growth in high power theft areas, which leads to power trip or ‘burn out’ of distribution equipment,” said a power official. He added that declaration made by the consumers, about required load and about enhancement of load with passage of time is crucial to maintain the distribution network’s health and to “ensure quality power at home and office”. A BSES spokesperson said that company has “invested substantial resources to strengthen the network to ensure reliable power supply during upcoming summer months”. “We have even increased the call centre strength by over 150%, besides deploying additional manpower and mobile transformers,” he added. Praveer Sinha, CEO of Tata power, said, “we are working in cooperation with the government and have already increased our call centre and maintenance staff. The problems of outages are arising due to local faults.” Officials from power ministry, however, refused to comment on whether the situation warranted a response from Delhi government but attributed the “stress on the system” for the power outages. Robin Salo Womens Jersey
Arvind Kejriwal pushes for compensation from power discoms
Delhiites may be compensated by power distribution companies for unscheduled power cuts if Lt Governor Anil Baijal approves the Aam Aadmi Party (AAP) government’s proposal. Chief Minister Arvind Kejriwal has directed Chief Secretary MM Kutty to place the proposal before the LG today, a day before his weekly meeting with Baijal. Last year, the AAP government had implemented its decision to penalise discoms for unscheduled power cuts. However, this was later struck down by the Delhi High Court as the LG’s prior approval had not been sought. In his written direction to the chief secretary, Kejriwal said, “The file of compensation to be paid to every consumer by discoms for power cuts of more than two hours to be placed before the LG today itself for approval.” According to the compensation policy on power outages that was struck down by the high court, a penalty of Rs 50 per hour per consumer was to be levied for the first two hours followed by Rs 100 for every subsequent hour. The fine amount would be adjusted in the consumers’ monthly bills. The policy stated that if any consumer approached the Delhi Electricity Regulatory Commission (DERC) after 90 days with a complaint that he or she had not received his compensation, DERC would have to order and ensure payment to all consumers affected by that power cut. Rocky Bleier Womens Jersey
HPCL to raise Rs. 270 billion for Rajasthan refinery
Hindustan Petroleum Corp. Ltd (HPCL) will shortly approach the market to raise Rs. 270 billion in debt for its 9 million tons per annum (mtpa) Rajasthan refinery, two people aware of the development said. HPCL and the Rajasthan government which own 75% and 25%, respectively, in the joint venture—HPCL Rajasthan Refinery Ltd—will bring in the balance equity component of the Rs. 431.29 billion project. “Preliminary work on the refinery has begun. HPCL will be hitting the market to raise funds for the venture in two-three months. The firm plans to raise Rs. 270 billion through debt and the rest would be funded through equity,” said a banker aware of the development. He spoke on condition of anonymity as he is not allowed to speak to media. On 18 April, HPCL and the state government had signed an agreement to build the refinery at Pachpadra in Barmer district. The refinery will be able to process local crude from Vedanta Ltd’s Barmer oil field, apart from imported crude oil. Of the 9 mtpa capacity, two mtpa will house the petrochemicals complex. The state has allotted 4,800 acres for the refinery, which was conceived in 2012-13. HPCL did not reply to an email sent on Thursday. “HPCL is in the process of seeking approvals from the government on the project. Once that is over, the fund-raising cycle will begin. The plan is to look at both domestic and international markets for funds,” said the second of the two persons quoted earlier. Oil minister Dharmendra Pradhan had on 18 April said the plan was to begin construction work in this fiscal and complete the refinery in the next four-five years. HPCL, India’s third largest state-run refiner, plans to operate more than 60 mtpa of refining capacity by 2030, the company had said at its September annual general meeting in Mumbai. The company’s total refining capacity at present is 24.8 mtpa. Currently, HPCL is expanding capacity at its Mumbai refinery from 6.5 mtpa to 9.5 mtpa at a cost of Rs. 42 billion, and its Visakhapatnam refinery from 8.3 mtpa to 15 mtpa at a cost of Rs. 208 billion. HPCL-Mittal Energy Ltd (HMEL), a joint venture between HPCL and Mittal Energy Investments Pvt. Ltd, Singapore, also operates the 9 mtpa Guru Gobind Singh refinery at Bhatinda in Punjab. The company plans to raise its capacity to 18 mtpa and set up a petrochemical complex there in a few years. HPCL and Mittal Energy Investments hold a 49% stake each in the venture, with financial investors owning the rest. HPCL will also hold a 25% equity in a mega refinery planned in Maharashtra, a joint venture (JV) between Indian Oil Corp. Ltd, Bharat Petroleum Corp. and HPCL. “Given the capital costs involved in stand-alone refineries, getting sponsors for such projects is very important. However, with HPCL being a state-run entity, they would get incentives. Also, new refining capacities make India surplus in petroleum products and we will have to export the products for some time till domestic demand catches up,” said K. Ravichandran, senior vice president and group head, corporate ratings, ICRA Ltd. India’s annual refining capacity today stands at 235 mtpa. Of this, 194 mtpa of products are consumed domestically. The country is in the process of increasing its refining capacity to around 310 mt by 2023 to become a refinery hub. Jason Garrison Womens Jersey
Saudi-Qatar’s true battleground is 5,500 kilometers east in India, China and Southeast Asia
That’s because the petroleum market’s center of gravity, along with that of the global economy, is in Asia these days. As recently as the 2003 Iraq War, the U.S. and Europe accounted for more than half of the world’s oil imports. The share has now fallen to barely more than a third, as imports by the north Atlantic countries have stood still while those by China, India, South Korea and the Philippines have surged. That makes the stance of Qatar’s major Asian trading partners — Japan, South Korea, India and Taiwan — a crucial factor in how the embargo will play out. More than half of the Emirate’s liquefied natural gas exports go to those four countries, or about two-thirds if you add China and Thailand. To see how this might play out, it’s worth considering the dynamics of Asia’s gas market, and the differing degrees to which the countries are dependent on Qatar and its Arab rivals. Take Japan. It’s Qatar’s largest export destination and the buyer of almost a fifth of its traded gas — but Australia and Malaysia are its more important LNG suppliers, with the Emirate accounting for just 17 percent of imports in 2015 and as little as 12 percent in recent months. Saudi Arabia, by contrast, supplies close to 40 percent of Japan’s crude. The disparity is heightened by the fact that Japan is short of oil, and awash in natural gas. Its regasification plants are running at about 44 percent of capacity compared to 88 percent at its oil refineries. Should Jera Co. choose this moment to press its long-standing case for renegotiation of gas contract terms with Qatar Petroleum, it could find itself with a great deal of short-term leverage. Chidobe Awuzie Jersey
Gulf-Qatar rift: What it means for India and the global oil market
To get a sense of some of the developments about Qatar look at this piece of statistic plus a bit of news. According to the US Energy Information Administration, production of shale oil in USA is expected to reach 5.4 million barrels a day in June, its highest level in more than a year. The recovery outpaces estimates for every most month since August last year. The piece of news is the fast expanding relationship of Qatar with India. Shale has put American capital and labour to work, a huge domestic political dividend, after price of crude oil from Opec nations soared past $49 a barrel since the 14-member countries agreed since November 2016 on a production cut. In this environment, the US juice can begin to sell at about $47 a barrel, given its lower quality but enough to bring more and more of its onshore fields into production. It is vital for the Trump administration to ensure that Opec keeps its production capped. Opec can keep it capped if Iran does not open the tap of its vast reservoir too much and that means both USA and Saudi Arabia should be on the same side of the field. The Saudis can ensure their diktat runs with two of the large oil producers—UAE and Kuwait, both of whose royal families are blood relations of Riyadh. But Qatar isn’t, even though its royal family too hails from the same desert. And Qatar’s rise is linked to its suddenly deepening relationship with India. There are reasons for it. The first of those is natural gas which Qatar like Iran has plenty of but Saudi Arabia doesn’t have much of. And countries like India wanting to use their growing economic clout want the gas to flow. There are no Opec-like restrictions on gas prices and it is cheaper. So, if Qatar plays around with its gas reserves and along with Iran dominating its market, there are enough reasons to make the Saudis worried about their politico-economic hegemony getting cut and the USA worried about its domestic recovery. Qatar in the past three years has become almost a strategic ally for India. The Qatar government has offered to fill up India’s strategic reserves for free in exchange for buying its natural gas and easier access for Doha’s capital into the Indian economy. One of those is the one its kind permission given to Qatar Airways to fly as a domestic airline in India. In fact the Doha-New Delhi connection has been noticed across Middle East with alarm. The Indian market is one where all the oil producers would want to be involved, and especially Saudi Arabia. The latter’s share of the Indian imports had risen sharply in the post sanctions period. The pole position, Qatar has taken with India and which is like to intensify once the work on the gas pipeline begins in earnest could be a spoke. It is not without reason that UAE announced it will set up a Hindu temple to please the Indian government last year. If the coming together has been noticed, Doha’s increasing cultivation of Iran has therefore even more reason to get Riyadh worried about the fresh inroads of Iran into the Indian market. And consequently USA. The impact of Trump’s visit has just begun to unravel. Iran hobbling back to regain market share that it has lost since the sanctions on it were imposed would love the support from Qatar to regain some its role as a power broker, a position it had once enjoyed as one of the five founding members of Opec. Since the sanctions, Opec had become unipolar world with the entire hegemony having shifted to Saudi Arabia. USA has the same reasons to support the Saudis, just as India will for Qatar—the domestic economy. In this desert storm, India may not face a rising price for its crude but might have to figure out many other choices like how much presence it should for capital flows from other nations of the Gulf. So unlike the Gulf crises of the last century, India is in a new position vis-a-vis the Middle East. A lot of Monday’s developments have got to do with the road to New Delhi too. John Ross Authentic Jersey
Hindustan Oil Exploration Company updates on Dirok Gas Development Project
As updated earlier, Hindustan Oil Exploration Company Limited had completed Phase 1 of Dirok Gas Development and successfully tested the gas flow during last week of March 2017 and have been supporting Oil India Ltd., the Licensee of the block, to secure Petroleum Mining Lease (PML) as approved and recommended by the Government of India to the Government of Assam to commence commercial gas sales by May 2017. The Assam State Board for Wildlife (SBWL) headed by the Chief Minister had recommended the project in full including all the wells. However, the Standing Committee of National Board for Wild Life (NBWL), Ministry of Environment and Forests, during its meeting held on 15 May 2017 while approving the overall project, imposed restrictions on oil and gas wells located within one kilometer of Wild Life Sanctuaries. As the wells located within the 1 km area were drilled after submission of wild life management plan and duly approved by the appropriate authorities and this one kilometer restriction around Protected Areas were not part of any previous guidelines of Ministry of Environment and Forest, a representation is being submitted to the Ministry of Environment and Forests, for removal of this restrictive new condition. The representation of the Company is supported by the nodal ministry, Ministry of Petroleum and Natural Gas. We expect that the matter will be placed before the Standing Committee of NBWL for reconsideration in the light of its wider adverse implications across all oil and gas producing wells located within 1 km of Protected Areas. All project activities of Phase 2 are on track. We have successfully drilled Dirok 5 well. After its ongoing testing and completion, the rig will commence drilling of Dirok 6 well. Due to this unforeseen development, we anticipate further delays in issue of PML to Oil India Ltd. and now expect to commence commercial gas sales only during July – September quarter, post review of our representation by NBWL. We remain confident of resolving this issue with the support of Ministry of Petroleum and Natural Gas and reiterate our earlier guidance of exiting Q2 FY 2018 with a production level of 25 million standard cubic feet per day and a plant capacity to process 36 million standard cubic feet per day (equivalent to 1 million standard cubic meters per day). Shares of HINDUSTAN OIL EXPLORATION CO.LTD. was last trading in BSE at Rs.71.85 as compared to the previous close of Rs. 72.8. The total number of shares traded during the day was 64454 in over 560 trades. The stock hit an intraday high of Rs. 73.3 and intraday low of 71.7. The net turnover during the day was Rs. 4663687. Willie Roaf Jersey
MGL’s piped natural gas supply to begin in Uran
Mahanagar Gas Limited, country’s major city gas distribution company inaugurated Piped Natural Gas (PNG) supply in Uran at the hands of Shri Dharmendra Pradhan, Honourable Union Minister of State for Petroleum and Natural Gas. Targeted at the residents of Uran region MGL has already laid down an infrastructure of Steel and Polyethylene pipeline in the area and will be connecting various areas of Raigad in phases for piped gas supply. The work of pipeline laying commenced in Uran area and approximately 4Km MP network has been laid and 50 nos PNG connections have already been done. Initially gas supply to these 50 consumers in Uran is now commencing. Spreading its network in phases, MGL plans to provide the convenience of the safe, convenient, cost effective and environment friendly piped natural gas to almost all feasible households in Uran area benefiting about 3200 households and about 16000 people. The PNG benefits will be extended to other nearby areas by connecting more than 7000 households, covering about 35000 people in coming years. This will not only help people in Uran area but interior parts too by making available about 40,000 domestic LPG cylinders initially and about 90,000 LPG cylinders in the coming two years. In view of the vehicles opting for the eco-friendly fuel, the 1st DBS CNG station has been commissioned at Shiv Shankar Auto Care in Karjat. Further, MGL will be opening two new CNG stations at retail outlets (ROs) of Oil Marketing Companies (OMCs) to provide convenience of cost effective and environment friendly CNG to about 1500 Auto rickshaw and about 2000 other vehicles in this area in Uran. Chris Beck Authentic Jersey
Gulf-Qatar rift: What it means for India and the global oil market
To get a sense of some of the developments about Qatar look at this piece of statistic plus a bit of news. According to the US Energy Information Administration, production of shale oil in USA is expected to reach 5.4 million barrels a day in June, its highest level in more than a year. The recovery outpaces estimates for every most month since August last year. The piece of news is the fast expanding relationship of Qatar with India. Shale has put American capital and labour to work, a huge domestic political dividend, after price of crude oil from Opec nations soared past $49 a barrel since the 14-member countries agreed since November 2016 on a production cut. In this environment, the US juice can begin to sell at about $47 a barrel, given its lower quality but enough to bring more and more of its onshore fields into production. It is vital for the Trump administration to ensure that Opec keeps its production capped. Opec can keep it capped if Iran does not open the tap of its vast reservoir too much and that means both USA and Saudi Arabia should be on the same side of the field. The Saudis can ensure their diktat runs with two of the large oil producers—UAE and Kuwait, both of whose royal families are blood relations of Riyadh. But Qatar isn’t, even though its royal family too hails from the same desert. And Qatar’s rise is linked to its suddenly deepening relationship with India. There are reasons for it. The first of those is natural gas which Qatar like Iran has plenty of but Saudi Arabia doesn’t have much of. And countries like India wanting to use their growing economic clout want the gas to flow. There are no Opec-like restrictions on gas prices and it is cheaper. So, if Qatar plays around with its gas reserves and along with Iran dominating its market, there are enough reasons to make the Saudis worried about their politico-economic hegemony getting cut and the USA worried about its domestic recovery. Qatar in the past three years has become almost a strategic ally for India. The Qatar government has offered to fill up India’s strategic reserves for free in exchange for buying its natural gas and easier access for Doha’s capital into the Indian economy. One of those is the one its kind permission given to Qatar Airways to fly as a domestic airline in India. In fact the Doha-New Delhi connection has been noticed across Middle East with alarm. The Indian market is one where all the oil producers would want to be involved, and especially Saudi Arabia. The latter’s share of the Indian imports had risen sharply in the post sanctions period. The pole position, Qatar has taken with India and which is like to intensify once the work on the gas pipeline begins in earnest could be a spoke. It is not without reason that UAE announced it will set up a Hindu temple to please the Indian government last year. If the coming together has been noticed, Doha’s increasing cultivation of Iran has therefore even more reason to get Riyadh worried about the fresh inroads of Iran into the Indian market. And consequently USA. The impact of Trump’s visit has just begun to unravel. Iran hobbling back to regain market share that it has lost since the sanctions on it were imposed would love the support from Qatar to regain some its role as a power broker, a position it had once enjoyed as one of the five founding members of Opec. Since the sanctions, Opec had become unipolar world with the entire hegemony having shifted to Saudi Arabia. USA has the same reasons to support the Saudis, just as India will for Qatar—the domestic economy. In this desert storm, India may not face a rising price for its crude but might have to figure out many other choices like how much presence it should for capital flows from other nations of the Gulf. So unlike the Gulf crises of the last century, India is in a new position vis-a-vis the Middle East. A lot of Monday’s developments have got to do with the road to New Delhi too. Terrell Edmunds Womens Jersey