Power utilities can save up to Rs 20,000 crore through improved scheduling: Piyush Goyal
Power, coal, renewable energy and mines minister Piyush Goyal today launched an app that provides information on availability of cheaper electricity to state power utilities allowing improved scheduling and optimum utilization of coal. The app named Merit Order Despatch of Electricity for Rejuvenation of Income and Transparency (MERIT) can help distribution utilities achieve savings of upto Rs 20,000 crore annually, Goyal said. “With 1,20,000 crore units of electricity being consumed in the country now, which will go up to 2 lakh crore units in five years, this app, at a conservative estimate, can help save 10 paise per unit…which makes for a straight saving of Rs 20,000 crore a year for discoms,” news agency IANS quoted Goyal as saying. The app has been developed by the power ministry in association with POSOCO and Central Electricity Authority (CEA). The app is designed to display information regarding the merit order which includes daily state-wise marginal variable costs of all generators, daily source-wise power purchases of respective states with source-wise fixed and variable costs, energy volumes and purchase prices. “The initiatives launched today will reflect a government in action fulfilling the promises made to the people of India. It also provides an opportunity to the people and the media to monitor our work and keep questioning what is happening in the power sector,” Goyal said at the launch. The electricity tariff Policy of 2016 mandates the state discoms to follow the merit order for procurement of power and provides that there should be uniformity in the merit order mechanism. “Most states follow merit order operation. However, details in this regard need to be made transparently available. Hence, there was a need to have a mechanism to quantify deviation from merit order and check its reasonableness. The adherence to merit order optimizes the power procurement cost and benefits both utility and ultimate consumer,” the ministry said in a statement. Goyal also launched an e-bidding portal that aims to facilitate states in inviting bids for procurement of power from the prospective Independent Power Producers (IPPs) in a transparent manner by transferring their domestic coal under the scheme of flexibility in utilization of domestic coal. “Few years back, when coal linkage rationalisation was undertaken, it led to huge savings. This portal is again going to bring in improvement in savings. It will also provide flexibility in a transparent method of buying power,” power secretary Ajay Kumar Bhalla said. The portal has been jointly developed by the ministry of power, along with PFC consulting Ltd and MSTC Ltd. The successful bidder on the app will be selected through the e-reverse bidding process. Phil Esposito Authentic Jersey
ONGC rescinds pacts with Schlumberger, Halliburton
State-run ONGC has rescinded the initial pacts for outsourcing production from its ageing fields in Gujarat and Assam to international service providers Schlumberger and Halliburton after the oil ministry objected to the contract being handed over without bidding. Oil and Natural Gas Corp (ONGC) had on December 7 last year signed Summary of Understanding (SoU) to give its Kalol field in Gujarat to Halliburton and Geleki field in Assam to Schlumberger to help in raising production above the current baseline output. Though the agreements were signed in presence of Oil Minister Dharmendra Pradhan during the bi-annual Petrotech Conference, the ministry felt it was not proper to give away such contracts on nomination basis, sources privy to the development said. The ministry in no uncertain terms told ONGC that such nomination contracts will not be acceptable, they said. The ONGC board, which had approved the MoU, thereafter too took a similar and cancelled the SoUs, they said.The company last week invited expression of interest (EoI) from service providers for undertaking production enhancement from its mature oil and gas fields. The 15-year Production Enhancement Contract (PEC) will require the oilfield service producer to commit to invest in capital expenditure and operating expenditure to increase production form the existing ‘baseline’ output. HomeIndustry ONGC rescinds pacts with Schlumberger, Halliburton ONGC rescinds pacts with Schlumberger, Halliburton State-run ONGC has rescinded the initial pacts for outsourcing production from its ageing fields in Gujarat and Assam to international service providers Schlumberger and Halliburton after the oil ministry objected to the contract being handed over without bidding. By: PTI | New Delhi | Published: July 5, 2017 3:09 PM 7 SHARES Facebook Twitter Google Plus The ONGC board, which had approved the MoU, thereafter too took a similar and cancelled the SoUs, they said. (Reuters) State-run ONGC has rescinded the initial pacts for outsourcing production from its ageing fields in Gujarat and Assam to international service providers Schlumberger and Halliburton after the oil ministry objected to the contract being handed over without bidding. Oil and Natural Gas Corp (ONGC) had on December 7 last year signed Summary of Understanding (SoU) to give its Kalol field in Gujarat to Halliburton and Geleki field in Assam to Schlumberger to help in raising production above the current baseline output. Though the agreements were signed in presence of Oil Minister Dharmendra Pradhan during the bi-annual Petrotech Conference, the ministry felt it was not proper to give away such contracts on nomination basis, sources privy to the development said. The ministry in no uncertain terms told ONGC that such nomination contracts will not be acceptable, they said. The ONGC board, which had approved the MoU, thereafter too took a similar and cancelled the SoUs, they said.The company last week invited expression of interest (EoI) from service providers for undertaking production enhancement from its mature oil and gas fields. The 15-year Production Enhancement Contract (PEC) will require the oilfield service producer to commit to invest in capital expenditure and operating expenditure to increase production form the existing ‘baseline’ output. “The remuneration model will be a tariff which is to be paid in $per barrel of oil and $per million British thermal unit for gas for any ‘incremental’ hydrocarbon produced and saved over the baseline,” the EoI said. “Baseline shall be prepared by ONGC and vetted and certified by a third party of international repute.” All the oil and gas produced will belong to ONGC and the service provider arrangement is being entered into to get the best technology available, sources said. Under the terms of SoUs signed in December last year, Schlumberger and Halliburton were to invest capital and share technical expertise in the two stagnant but producing oilfields. If they are able to increase output, they were to be paid a pre-determined fee on each additional barrel of crude oil produced. Besides Schlumberger and Halliburton, ONGC was also in talks with Weatherford International and Baker Hughes Inc for similar arrangement for other fields. But after the oil ministry disapproval, all such deals are off and all such contracts will be entered only when a service provider offers the highest increase in output in a competitive bidding, sources said. Demetri Goodson Womens Jersey
AirAsia India says GST to shave off Rs 400 crore from airlines
Low-cost carrier AirAsia India today said the new tax regime will leave the aviation industry poorer by about Rs 400 crore annually if the government does not roll back the levy. “On an average, an operator will have to pay an additional Rs 10-12 crore per aircraft in additional levies, which include the 5 per cent duty on plane imports. This will put an additional Rs 400-crore tax burden on the airlines that lease out planes,” AirAsia India managing director and chief executive Amar Abrol said here. But he said the airline has decided not to pass on this additional burden to customers as it expects the government to rollback the duty. “The problem is that credit set-off of 3 per cent is available only on services and not on purchase of machinery or aircraft imports. Overall, it seems to be a negative impact and the details are being worked out,” he said. However, the 1 per cent reduction in taxes on economy ticket to 5 per cent in GST is good for the industry, he said. “As of now there is 5 per cent levy on aircraft imports. The industry is discussing with the aviation and finance ministries for exempting this. We will also have to pay 3 per cent GST on lease rentals but that is is available for credit set-off,” Abrol said. The three-year-old airline closed last fiscal with a revenue of Rs 1,000 crore and Abrol said he hopes to cross that number by December this year as the company will be deploying four more planes by then. “We are getting our 11th plane this week, which will be deployed from August 1. By Diwali, we will have three more. This should help us increase frequencies,” he said, adding the airline hopes to have the magical 20 planes by 2018 Diwali. Meanwhile, the airline announced adding Bhubaneshwar to its list of destinations and also adding six new routes connecting New Delhi, Jaipur and Bagdogra to Kolkata. The airline, which began operations in June 2014, had reported a net loss of Rs 7.8 crore in the March 2017 quarter, down from Rs 26 crore in the December and Rs 65 crore in the September quarter. Devontae Booker Jersey
Hindustan Powerprojects, Lanco in dispute over bank guarantees
Hindustan Powerprojects has begun to invoke Rs. 500 crore bank guarantees of Lanco Infratech, citing non-fulfilment of a work contract, triggering abitter row between the companies. Lanco, which is already facing the heat from lenders, has written to nine banks urging them not to allow encashment of bank guarantees it had submitted as the contractor for Hindustan Powerprojects’ Annupur power project in Madhya Pradesh. In its note to bankers, Lanco has alleged serious malpractices by Hindustan Powerprojects which it says are worthy of official investigation. Lanco did not respond to ET’s queries but Hindustan Powerprojects has strongly denied the allegations and said it had exercised its legal rights to protect the interests of stakeholders. “Considering the unfulfilled contractual obligations, Hindustan Power exercised the legal remedial action that is available to the company as part of its contract. Lanco Infratech had approached the High court for an injunction against Hindustan Power from encashing the bank guarantee which the Hon’ble court had rejected on Saturday, 01/07/2017,” the company said in an emailed response to ET’s query. Lanco told bankers in its letter, seen by ET, that encashing bank guarantees was discussed at a meeting between Hindustan Powerprojects Chairman Ratul Puri and Lanco Executive Chairman L Madhusudan Rao on June 30 at a hotel in Delhi. Lanco alleges that in the course of the meeting attempts were made to allure its chairman to agree with the encashment of bank guarantees. It further alleged that Hindustan Powerproject’s chairman had said that his company needed money to tide over its own financial difficulties. Hindustan Powerprojects denied these allegations. “Hindustan Power has always followed the highest standards of integrity in the truest spirit and denies the baseless allegations made by Lanco Infratech with an intention to thwart the legal recourse available to us,” it said. “With a view to safeguard the interests of our stakeholders and the operations of the thermal asset, the company had to encash the bank guarantees. To put things in perspective, Hindustan Power has multiple claims against Lanco Infrastructure including large cash advances and unfinished work at the thermal site,” it said. Lanco has demanded a CBI enquiry into the matter and stated that in 2013 Hindustan Powerprojects coerced Lanco to exit bidding process for power supply to Uttar Pradesh by threatening to encash the same bank guarantees. J.J. Nelson Womens Jersey
Discoms save Rs 12,000 crore interest outgo after states take over debt
Power distribution companies have saved Rs. 12,000 crore interest outgo after states took over their debt as part of the Centre’s Ujwal Discom Assurance Yojna (UDAY), the Union power ministry has said. Governments of 16 states have taken around Rs.2.08 lakh crore debt of the distribution companies as per terms of UDAY agreements. These loans were running at interest rates of around 11%-12% per annum and now be serviced by states at 7%-8.5%. A few discoms have also restructured their balance loan portion, reducing the interest burden by another 3%-4%, the ministry said in a statement issued on Tuesday. The average gap between cost of power supply and revenue has decreased to 45 paise in FY17 from 59 paise in FY 16 in the backdrop of reduced interest outgo, tariff rationalisation and improved billing, it said. At all India level, billing efficiency has increased by 2% to 83% in 2016-17 while the average aggregate technical and commercial loss has come down to 20.2%. Power procurement cost has reduced in many states including Goa, Jammu & Kashmir and Gujarat. The average cost of power purchase has reduced to.`4.16 per unit from .`4.20 per unit in FY16. While 16 states, including Jharkhand, Chhattisgarh, Rajasthan, Uttar Pradesh, Punjab, Bihar, Haryana, Jammu and Kashmir, Andhra Pradesh and Tamil Nadu, joined Uday for debt recast, while 10 other states including Gujarat, Uttarakhand, Goa, Karnataka, Manipur, Sikkim, Arunachal Pradesh and Kerala joined for operational benefits. Puducherry is also part of the scheme for improving operational efficiency of its discom. As per the scheme, total liability opted for restructuring by 15 states through bond issuances was Rs. 2.69 lakh crore. So far, states have issued bonds of entire .`2.09 lakh crore and discoms have issued bonds worth Rs.23,000 crore. Bonds worth .`37,000 crore are yet to be issued. In all, 86% of the restructurable debt of states has been restructured so far under Uday, the statement said. Evgeny Svechnikov Authentic Jersey
Waste-to-energy plant will be a new problem for Gurgaon, say greens and RWAs
Environmentalists and members of the civil society have declared their opposition to the state government’s decision of installing a waste-to-energy plant in Bandhwari, saying the model is unsuited to Indian cities. According to environmentalists, the system’s major drawback is that it is a centralised one, which discourages the practice of segregation at source. The Union ministry of urban development and National Green Tribunal have been pushing for waste segregation at source, which is also a more environment-friendly garbage management strategy. “Almost 60% of Indian waste is wet waste, with a very high quantity of kitchen waste. This has very low energy and is hence unsuitable for power generation. As a result, ultimately, a large percentage of the garbage will still end up in landfills, beating the whole point of waste management,” said Keshav Jaini, president, RWA, Garden Estate, who has been working on waste management for several years. Another big argument put forward by experts and environmentalists is that by burning waste, the model is likely to cause air pollution. “As per NGT guidelines, waste has to be segregated and detoxified with bio-culture, before it can be burnt. Or else, it will release noxious fumes, polluting the air further,” said a national-level solid waste management expert. She requested not to be named. Gurgaon has seen several examples of schools and residential societies practising waste segregation at source, with many of their residents also involved in campaigning for a more sustainable zero-waste lifestyle. These societies include Garden Estate, Nirvana Country, Vipul Greens, Hamilton Court and Vastu CGHS. “Across the city, so many people and societies are doing segregation and composting the natural and sustainable way. Instead of encouraging this, the proposed model goes on to discourage waste segregation at source and decentralised treatment plants,” said Neelam Ahluwalia, a former environmental journalist. Among other problems involving waste-to-energy plants, the critic’s group has pointed out that such plants have failed in Europe and China. Instead of taking ideas from China, which is itself battling high pollution levels, we should look for suitable models within the country. The waste-to-energy plant, proposed in Gurgaon, is in partnership with a Chinese player. “The NGO Centre for Science and Environment had also published a book, written by Sunita Narain and Swati Singh Sambyal in 2016, Not In My Backyard, on how and why waste-to-energy plants don’t fit India. The government must look into the points they raised. They should work with cities like Warangal and Pune, which have successfully executed decentralised waste management plants,” said Ahluwalia. There are other concerns that remain largely unanswered, such as impact of the model on local flora and fauna, or on garbage workers and rag-pickers? The larger argument among residents and activists is that instead of discarding waste, we must find value in it by treating and recycling it as much as possible. MCG officials said their chosen integrated solid waste management model follows all required guidelines.“The proposed model is approved under all NGT guidelines and rules set by the Centre,” said MCG commissioner V Umashankar. The corporations of Gurgaon and Faridabad signed an MoU with a Chinese company on June 30 for the project. Talks for a waste management project in Gurgaon have been going on since the Bandhwari plant closed down in October 2013. In 2016, the government decided that the replacement WTP would be a waste-to-energy plant. Dave Winfield Womens Jersey
NTPC bets $10 billion on coal power despite surplus, green concerns
India’s state-run power utility plans to invest $10 billion in new coal-fired power stations over the next five years despite the electricity regulator’s assessment that thermal plants now under construction will be able to meet demand until 2027. In the first phase, India’s biggest power producer, NTPC , plans to build three new plants with a combined capacity of more than 5 gigawatts (GW), nearly double the capacity of those currently being phased out, five senior company officials said. The company has not made the investment public because it has not yet received government approval. If approved, the plan could set back efforts by the world’s third-largest greenhouse gas emitter to control carbon output and raise questions about Prime Minister Narendra Modi’s vow to stand by commitments under the Paris climate accord. The proposal also comes as several coal-fired stations built in the last power boom a decade ago are standing idle due to softer-than-expected demand. State-controlled Coal India is struggling to sell its stockpile as a result. But other indicators indicate demand will pick up, a top NTPC executive said, asking not to be named because the plan had not yet been announced. “I don’t think (the current) electricity surplus will be there for a long time,” he told Reuters. “We should not fool ourselves.” More than 300 million of India’s 1.3 billion people are still not hooked up to the grid, according to NITI Aayog, which makes policy recommendations to the government. As connections improve, the panel reckons, the country’s per-capita power consumption could jump around a third to up to 2,924 kilowatt-hours by 2040 from 2012 levels. In the next decade, the around 50 GW of capacity from thermal plants due to come online by 2022 will meet demand, the Central Electricity Authority (CEA) said. Additional supplies will come from sources such as solar and wind, it said. Asked about NTPC’s plan, CEA chairman RK Verma said the commercial decisions of the company were its own affair. “NTPC is a commercial organization and they must be having their own commercial considerations,” Verma said. For its part, a spokesperson at NTPC would say only: “NTPC takes decisions after consulting both the CEA and the ministry of power.” THERMAL VS RENEWABLE Solar power generation capacity in India has more than tripled in three years to more than 12 GW since Modi targeted raising energy generation from renewable sources to 175 GW by 2022, against total installed capacity at the end of May of 330.3 GW. Around 78 percent of generated power in India at the moment still comes from coal-fired plants, however, making it one of the biggest users of the dirty and cheap fuel in the world. Carbon dioxide emissions from India’s thermal plants are expected to jump to 1,165 million tonnes by 2026/27 from 462 million tonnes in 2005, the CEA estimates. Emission intensity, measured in carbon dioxide emissions versus GDP, is likely to fall, however. India is undergoing a programme to retrofit several coal-fired plants to reduce emissions. The plants planned by NTPC are “supercritical”, meaning they are 2-3 percent more efficient than conventional plants and therefore have lower emissions. NTPC’s proposal is likely to be greeted with alarm by environmental activists who are already worried by the CEA’s statement that existing power plants are unlikely to meet India’s emission norms before the Paris deadline of December this year. “Adding more power plants would aggravate health impacts even further,” said Sunil Dahiya, an energy activist with Greenpeace in New Delhi, when asked about the possibility of new coal-fired plants. NTPC’s proposal is to build plants of two 660 megawatt (MW) units each at Singrauli in central India’s Madhya Pradesh and Talcher in Odisha in the east. The biggest plant, with a capacity of 2.4 GW in the eastern state of Jharkhand, was close to getting clearance from the environment ministry, one of many steps in the process of getting government approval, one of the senior company officials said. A plan announced by NTPC last year to generate 10 GW of energy from renewable sources by 2022 was making slow progress due to land acquisition issues, another company official said. Max Muncy Authentic Jersey
Brazil wind, solar projects stall as power demand remains sluggish
Brazil’s government will not award new licenses for wind and solar power generation projects, despite requests from the renewable energy sector, as power markets struggle with oversupply in a sluggish economy, a top official said. Brazil was one of the world’s fastest growing markets for the wind power sector in the first half of the decade with a flurry of farms appearing along the nation’s vast, windy coast. But a deep recession that began in early 2014 and from which Brazil is only now emerging brought the trend to a halt. The last licenses for new wind or solar generation projects were awarded in 2015. An auction for licenses was called off in 2016 and it is unlikely new licenses will be issued this year. “We cannot choose a segment and say it is insulated from the crisis, give it a guaranteed demand,” Deputy Energy Minister Paulo Pedrosa said at a Sao Paulo conference last week. “Strictly considering the technical side, we have to say no.” Pedrosa said the government has received requests from wind and solar equipment makers to resume licensing. He said pressure also comes from governors of states holding the bulk of the wind generation capacity in Brazil. Despite those pressures, Pedrosa said it was impossible to even guess when the government will resume licensing for the projects. When it was booming at the turn of the decade, Brazil attracted global wind turbine manufacturers such as Denmark’s Vestas Wind Systems, U.S.’s GE and Spain’s Gamesa, who built plants in the country. Their order books are increasingly thinner, as old projects mature and there is no fresh demand. Newcomers such as photovoltaic panel makers BYD and Canadian Solar are likely to feel the orders’ drought as well. Erik Rego, a power sector consultant at Excelência Energética, agreed with the government’s stance. He said there is no need for new projects unless the government decides to stimulate the industry and build a buffer for when power consumption increases. Since there is no demand from power distributors to buy power forward, one way to create new projects would be to include them in a government plan to build spare capacity as a way to guarantee supply when demand increases rapidly, Rego said. But since this has a cost that in the end would have to be financed by consumers, there is resistance in the government to carrying such a plan out. Kareem Martin Womens Jersey
Indian oil refiners tap spot crude market to feed increased capacity
Indian companies have stepped up purchases of high-sulphur crude oil from the Middle East and Russia in the spot market to feed demand from expanded refining capacity, trade sources said. Four refiners in the world’s third largest crude importer bought 9 million barrels of Middle East and Russian crude loading in July-August via spot tenders last month, drawing down excess supplies in the market after China’s demand slowed. Refiners such as Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) have opted to buy more spot crude as they gradually ramp up output, rather than increase long-term crude supplies, the sources said. IOC expects to run its new 300,000-bpd Paradip refinery at full capacity this year, while BPCL plans to ramp up output at its Kochi refinery to 310,000 bpd by September after an expansion, they said. An IOC spokesman said his company’s high-sulphur crude oil purchases from the spot market have risen as operations at the Paradip refinery stabilised. IOC has bought 5 million barrels of high-sulphur oil for August, he said, adding “there could be more”. “Refiners are buying heavier grades to increase middle distillate and fuel oil yields” as refining profits for these products have strengthened, said Ehsan Ul Haq, director at London-based consultancy Resource Economics said. Indian refiners have also increased spot purchases during a period of abundant supplies, allowing them to react quickly to market changes and pick up cargoes when prices are competitive. IOC said in May it plans to buy 68 percent of its oil needs from term suppliers, down from 80 percent earlier. Mangalore Refinery and Petrochemicals Ltd (MRPL) and BPCL have bought Omani and Bahraini crude while IOC bought 5 million barrels of Abu Dhabi, Iraqi and Russian Urals crude. [CRU/TENDA] Bharat Oman Refineries Ltd (BORL) also purchased 1 million barrels of Russian Urals, traders said. MRPL and BORL seldom buy high-sulphur crude while IOC and BPCL have increased purchases this year, they said. Sellers include Litasco, the trading arm of Russian producer Lukoil, Sinochem Corp and Vitol, traders said. The companies did not respond to e-mails and calls seeking comments. BPCL could buy more sour crude this week as it has issued a tender seeking oil for August arrival, a trader said. ALL-TIME HIGH India is buying more Brent-linked Urals crude this year, with imports to hit an all-time high of 4 million barrels in July, after the price gap between Brent and Dubai narrowed to multi-year lows of below $1 a barrel. Global crude markets remain oversupplied, weighing on Brent and West Texas Intermediate prices, despite a deal among members of the Organization of the Petroleum Exporting Countries and some non-OPEC producers to extend output cuts. Some Indian refiners are also exploring the feasibility of importing U.S. crude, sources said, joining other Asian buyers such as China and Japan that stepped up imports from the United States this year on weak WTI prices. IOC issued its first ever tender seeking sour crude from the United States and Canada, trade sources said on Tuesday. Still, India’s crude demand is expected to fall early in the fourth quarter as several refineries are scheduled to shut for maintenance. Brian Elliott Womens Jersey
Diesel imports intensify, may be curbed by monsoon
India’s diesel imports have intensified with state-owned refiner Hindustan Petroleum Corp (HPCL) entering the spot market on Tuesday to seek its seventh cargo of the fuel for July, trade sources said. But imports could slow as monsoon season starts in India, they added. HPCL is seeking 60,000 tonnes of 40ppm sulphur gasoil for delivery into Vizag over July 20-25 in a tender that closes on July 5. This is the state-owned company’s seventh cargo requirement for July, though it was not clear if all previous tenders have been awarded. HPCL-Mittal Energy Ltd (HMEL) was expected to start up its 230,000 barrels per day Bathinda refinery in northern Punjab after it shut for planned maintenance in late April, but the refinery is still not back in operation, an industry source said, though this could not immediately be confirmed. India’s diesel demand has been strong despite the start of monsoon season due to several power outages which has boosted diesel demand in back-up power generators, an industry source said. It is still early days in India’s monsoon season. Once rains intensify, demand for the fuel in the agriculture sector could slow, the source added. Oil pricing agency S&P Global Platts said on Tuesday it will include Singapore’s Jurong Aromatics Corp as a loading point in its pricing process known as Market on Close for gasoil and jet fuel from Aug. 1. Sellers in the MOC process will be able to nominate JAC as a loading point for cargoes traded on a FOB Straits basis, it said, following a review last month. Myanmar’s refined fuel consumption growth is set to outperform the rest of Asia from 2017 to 2026 due to factors including strong economic growth, a rapid rise in car ownership and a surge in aviation traffic, BMI Research said in a note. Already the sixth-largest net fuel importer in Asia, Myanmar’s imports are expected to grow to over 345,000 barrels per day (bpd) by 2026 from an estimated 212,000 bpd in 2017, it added. Chukwuma Okorafor Womens Jersey