By 2026 India’s power demand would be met: TERI
Current installed capacity and the capacity under construction would be able to meet India’s power demand till about 2026 and no new investments are likely to be made in coal-based power generation till that time, said a report released by The Energy and Resources Institute (TERI) on Monday. The report also estimates that beyond 2023-24, new power generation capacity could be all renewables, based on cost competitiveness of renewables as well as the ability of the grid to absorb large amounts of renewable energy together with battery-based balancing power. The report titled, ‘Transitions in the Indian Energy Sector – Macro Level Analysis of Demand and Supply Side Options’ was released by Piyush Goyal, minister for power, coal, new and renewable energy and mines, at a conference organised by TERI. TERI is a Delhi-based think tank working on environment and energy issues. “Universal access to electricity is one of the primary aims of the government, and meeting demand is a major facet of this initiative. We see India becoming the energy capital of the world. We are looking at several initiatives towards making solar energy price competitive to coal,” said Goyal, while speaking at the conference. The report also said that between 2014 and 2024, India has a 10-year window and during this if the price of solar and battery reaches the Rs5/unit mark, all new capacity additions would be in renewables. TERI director general Ajay Mathur, who was present on the occasion, said “the target to achieve the UNFCCC (United Nations Framework Convention on Climate Change) commitments presents tremendous opportunity to put India at the forefront of economies transitioning towards low carbon growth”. “This includes improving electricity access, clean technology development, manufacturing, and job creation. Our report shows that the cost of renewable electricity and its storage is on a steady decline and could stabilise at around Rs5 per KWh. This would enable India to move decisively towards renewables for future generation. What this means is that India has a 10-year window where no new investments are likely to be done in coal, gas, or nuclear energy generation,” Mathur said. “The decarbonisation of power generation is also an opportunity to move other carbon-based sectors like transport to electricity, thus multiplying the benefits of clean energy generation,” he added. India has an ambitious target of 175,000 MW of renewable power by 2022 including 100,000 MW of solar power. Doug Gilmour Womens Jersey
ODHISA:POWER TARIFF MAY SOAR TO RS 6.80 PER UNIT
The Odisha Electricity Consumers’ Association on Monday apprehended that domestic consumers would have to pay Rs 6.80 per unit against the existing tariff of Rs 4.80 this year due to the inefficiency of the State Government and the Odisha Electricity Regulatory Commission (OERC). “If we examine the power tariff hike proposals of the power distribution, generation and transmission companies submitted to the OERC, there may be a hike of Rs 6.80 per unit from this year. However, we strongly opposed it at the ongoing public hearing being held by the OERC,” said association president Ramesh Satpathy. He said the power distribution companies have been demanding before the OERC that nearly 65 lakh customers have used 24,550 units in 2016-17 and the demand would increase to 25,877 units in 2017-18. “However, only 50 per cent of the estimated power reaches the people due to the mismanagement and inefficiency of the State Government,” rued Satpathy. Holding the State Government solely responsible for the present power crisis and possible power tariff hike, Satpathy said though Odisha Hydro Power Corporation (OHPC) was formed 20 years ago to generate more power by renovating Burla, Chipilima, Balimela, Rengali, Upperkolab, Upper Indravati and Macchakunda projects, but the corporation is yet to have a CMD to look into the daily affairs. He said this year OHPC has generated mere 5,800 million units against the 7,000 million units earlier. The OHPC currently places its electricity generation costs at Rs 1.82 per unit. However, it is supplying electricity at 83 paisa per unit. OPGC also batted for a tariff hike to Rs 2.2 from existing tariffs of Rs 1.9. Gridco has sought 46 per cent tariff hike. Projecting a revenue deficit of Rs 3214.39 crore at the existing bulk supply price (BSP) of power, the Grid Corporation of Odisha Limited (Gridco) has demanded 46 per cent hike in the BSP for 2017-18. Montae Nicholson Jersey
How BHEL stands to gain from the power ministry’s new equipment advisory
There appear to be sunny days ahead for India’s largest power equipment manufacturer Bharat Heavy Electricals Ltd (BHEL) which has been struggling with a broader slowdown in new orders for long. The power ministry has just extended an existing advisory that mandates state-run generators to insist on phased domestic manufacturing plan from supercritical equipment suppliers. Experts say the new guideline on indigenous manufacturing of supercritical equipment that also includes doing away with the Deed of Joint Undertaking (DJU) in case certain conditions are met is a major positive for the domestic Boiler-Turbine-Generator (BTG) manufacturers. “This advisory will have a trickle down benefit on the profitability of BTG manufacturers with a lag of around 1.5-2.5 years as the order execution cycle for BHEL is 36-48 months,” Vivek Jain, Associate Director at research firm India Ratings told ETEnergyWorld. The Cental Electricity Authority (CEA), the power ministry’s technical planning wing, has extended the earlier advisory for three years through October 2018. The advisory is applicable only to central and state utilities and the private sector firms are free to choose from the BTG suppliers. Analysts say the private sector’s participation will remain muted since they have been hit the most owing to muted demand and lack of Power Purchase Agreements (PPAs). Not surprisingly, the Plant Load Factor (PLF) of private sector coal-based plants has slumped to 56.3 per cent in the nine months ended December 2016 from 83.9 per cent in 2009-10. Therefore at a time when bulk of the fresh capacity orders will come from the central and state utilities, such an extension in the timelines is positive for BTG manufacturers, experts say. The benefit does not end here. The CEA advisory also stipulates the BTG manufacturers will not have to furnish a Declaration of Joint Undertaking (DJU) if they meet three conditions — eight supercritical boilers manufactured or supplied in India by the company have achieved commercial operation; four such boilers should have achieved commercial operation for a duration of at-least one year; and performance guarantee tests have been successfully completed by any two boilers. Under the DJU clause, the domestic manufacturer has to furnish a guarantee from one of its collaborators, generally a large international technology company. In order to provide guarantees, collaborators take a higher share of the orders, impacting the gross margins of BTG manufacturers. As of October 2016, BHEL commissioned 12 sets of supercritical boilers and 10 sets of supercritical turbine generators. BHEL’s gross margins have historically been stable due to the company’s indigenization efforts but declined to 36.6 per cent in April-December period current fiscal from 37.7 per cent in the corresponding period previous fiscal on account of higher share of contracts executed under DJU clause as the order book shifted towards supercritical projects. “The order book of BHEL now has supercritical set contracts with DJU clauses and thus the gross margin expansion is some time away. The execution of the new projects without DJU clause will begin to reflect in the gross margins only once BHEL wins new projects,” Jain said. Other experts were cautiously optimistic about the impact of the new guidelines. According to Sabyasachi Majumdar, Senior Vice President at ratings agency ICRA, the CEA advisory will result in increased market share for domestic BTG manufacturers and easing of competitive pressure from low-cost Chinese suppliers in the long run. “However, the real benefit could take 2-3 years to materialize because of other factors including the pace of demand pickup in the sector which will determine PLFs and also the impact of the new emission norms being worked upon,” he said. BHEL reported a net profit of Rs 93 crore for the quarter ended December 2016 as compared to a net loss of Rs 1,101 crore recorded in the corresponding quarter previous fiscal. Total income of the company rose 17.5 per cent to Rs 6,461 crore during the quarter from Rs 5,496 crore in the corresponding quarter. The company’s order book position has shrunk 11 per cent to Rs 98,400 crore at the end of December 2016 from Rs 110,730 crore in March 2016. Kyle Brodziak Womens Jersey
U.S. shale oil output to rise in March to highest in 10 mths -EIA
U.S. shale oil production for March is expected to rise by the most in five months to its highest rate since May last year, government data showed on Monday, as energy companies boost drilling on the back of crude prices that are hovering over $50 a barrel. March oil production is forecast to rise by nearly 79,000 barrels per day to 4.87 million bpd, according to the U.S. Energy Information Administration’s drilling productivity report. That would be the biggest monthly rise since October. In the Permian shale play of West Texas and New Mexico, output is forecast to rise by more than 70,000 bpd to 2.25 million bpd, in what would be the biggest monthly rise since January 2016. Meanwhile, Eagle Ford production in Texas is expected to rise by 14,000 bpd to 1.08 million bpd, the first monthly increase since December 2015, EIA data showed. In North Dakota’s Bakken field, production is forecast to fall by nearly 18,000 bpd to 976,000 bpd, the fifth consecutive month-on-month decrease. U.S. natural gas production from the seven biggest shale basins was projected to increase to a record high 49.1 billion cubic feet per day in March, the EIA said. That would be up over 0.5 bcfd from February and would be a third monthly increase in a row. EIA projected output would decline in only one region in March, the Eagle Ford. Output there is expected to ease by 25 million cubic feet per day to almost 5.6 bcfd, its lowest level since November 2013. Output in the Marcellus formation in Pennsylvania and West Virginia, meanwhile, is set to rise by almost 0.2 bcfd to a record high 19.1 bcfd in March, a fifth consecutive increase. EIA also said producers drilled 760 wells and completed 668 in the biggest shale basins in January, leaving total drilled but uncompleted wells (DUCs) up 92 at 5,381, the most since April. Cal Ripken Womens Jersey
LPG gains, higher petrochemical capacity to power gas utility GAIL
GAIL, India’s largest gas transmission company, reported earnings revival for the sixth consecutive quarter in the December quarter due to higher demand for imported gas. The momentum is likely to continue owing to strong realisation from LPG segment and capacity ramp-up in the petrochemicals plant in the fourth quarter. In the December quarter, the LPG segment reported more than two-fold jump in operating profit (EBIT) due to restart of Kandla terminal, high demand from the hinterland and lower domestic gas prices that kept the cost of production low. As a result, the contribution of the LPG segment to total profit before tax increased to 25% in Q3 as compared to 10% a year ago. The earnings growth in the LPG segment is likely to continue due to higher realisation in the March quarter.LPG price in January was Rs 30.6 per kg and rose to around Rs 34.9 in February. The average price in the December quarter was Rs 26.9 per kg. Typically, one rupee increase in price lifts up operating profit by Rs 30 crore. In addition, the petrochemicals segment is likely to be a key contributor to the earnings growth owing to higher capacity utilisation. GAIL had shut down the second unit of the pet rochemicals plant at Pata between the third week of November and the third week of January as demonetisation push down polymer demand.Despite the shutdown, revenue from the division grew 4% sequentially in the quarter. The management expects that the use of petrochemical capacity will reach 80% and 90% in FY18 and FY19, respectively, from the current 72%. The petrochemicals segment will account for nearly a quarter of the total EPS growth for the next year. Analysts are cautious about the risk from long-term contracts benchmarked to Henry Hub – a gas pricing gauge used in the US. The supply of these contracts will start from early next year. Given that the landed cost of the US gas is expected to be higher and the prices of imported gas are lower, the Street expects GAIL to bear some losses on the long-term contracts. However, during an analyst call after the latest quarterly results, GAIL said that it was confident of selling the contracted supply from Henry Hub. The company is working on converting short-term supply agreements to long term to improve revenue visibility. However, it may end up compromising on the marketing margin. GAIL’s stock has outperformed the S&P BSE Oil & Gas index in the past three months. However, it still trades at a meagre premium to its long-term average given worries over the potential impact of the US contracts. Mookie Wilson Authentic Jersey
IOC plans to use half the capacity of country’s proposed longest LPG pipeline
State-run Indian Oil Corporation plans to use nearly half the capacity of the country’s longest liquefied petroleum gas (LPG) pipeline. The balance capacity of the proposed pipeline is to be used by the public sector corporations Hindustan Petroleum and Bharat Petroleum, and Reliance Industries. Petroleum & Natural Gas Regulatory Board (PNGRB), the downstream regulator, has invited bids from interested parties by June 6 to lay a 2,650-km long LPG pipeline from Kandla in Gujarat to Gorakhpur in Uttar Pradesh, with additional feeder lines of Pipavav-Ahmedabad and Dahej-Koyali. The pipeline will have a capacity of 6 million metric tonnes per annum, including common carrier facility for any third party on open access basis. The main line will be about 2,000 km long. Indian Oil Corporation had written to the PNGRB about four months ago, saying it was interested in building such a pipeline between Gujarat and Uttar Pradesh to cater to the rising demand for cooking gas in the country. Following such expression of interests, the regulator has to hold consultations with all stakeholders. Based on their feedback, it has to firm up the specifications for the proposed pipeline and then open it to formal bids. During the consultation, GAIL said the proposed pipeline would hurt the company’s underutilised LPG pipeline that partly runs on the same route, and therefore shouldn’t be built. During the consultation, the companies supporting the pipeline had to intimate PNGRB how much capacity each of them planned to use. IOC has committed to use 3 million metric tonnes of pipeline capacity while HPCL and BPCL have committed 1.8 million tonnes and 1.7 million tonnes respectively. RIL has committed 242,000 metric tonnes. These companies will source some LPG from their respective refineries closer to the proposed route but plan to substantially import LPG for this pipeline. Ports at Kandla, Pipavav and Dahej will be the import points. Those planning to bid must have a minimum net worth of Rs 1,855 crore and furnish a bid bond of Rs 15 crore. The bidders are allowed to deviate up to 5 per cent from the indicative route mentioned in the bid document for preparing the feasibility report. Josh Martin Womens Jersey
Rs 5 lakh crore worth of orders signed for roads, ports: Gadkari
The government’s road and highway building programme has enough cash to build the crucial infrastructure, Road Transport and Shipping Minister Nitin Gadkari has said. “We have signed contracts worth Rs 5 lakh crore for infrastructure, roads, ports. It is a remarkable contribution from our investors. We do not have any problem, we are receiving public, private investment… we are receiving good response for the Public-Private Partnership, Build-Operate-Transfer and hybrid annuity (models),” Gadkari told Assocham TV in an interview. As per the 2017-18 Budget, presented by Finance Minister Arun Jaitley earlier this month, the AAA-rated National Highways Authority of India (NHAI) has been permitted to raise Rs 70,000 crore through infrastructure bonds, he said. “For NHAI, triple-AAA rating is there. We already have permission from the Finance Minister for raising Rs 70,000 crore infrastructure bonds.” “My toll income is Rs 10,000 crore per year. So, I can monetise for 15 years and I get Rs 2 lakh crore. There are 101 projects which are ready with where I am going to monetise and I will get Rs 1.25 lakh crore… so, money is not the problem,” he added. Besides, there is easy availability of low-cost overseas loans, the minister said. “We are getting Rs 3,000 crore in dollar loans with 2.25 per cent interest, and we can raise Rs 50,000 crore without hedge with two per cent interest”. Gadkari was responding to a question by Assocham TV about how realistic the plans for the transport sector were when the private sector was facing severe financial stress. He also said his ministry was working on a number of waterway projects for improving inland connectivity within big metros like Mumbai, as well as for inter-city connectivity. Kareem Martin Jersey
Thermal power plants may get more time to meet emission norms
Power Minister Piyush Goyal today said the Environment Ministry is on board to consider extension of December 2017 deadline for coal-based thermal power plants to meet stricter emission norms. “I don’t want that we import equipment (to meet deadline for meeting emission norms). We realised after discussions that it would put more burden on the consumer and they will have to pay more for electricity,” Goyal told reporters at an NTPC conference here. He was responding to queries on Environment Ministry’s tougher norms for power plants relating to consumption of water, particulate matter, SO2, NOx and mercury. “We took up the issue with Environment Ministry. They agreed with us that deadline should be extended so that old polluting plants can be replaced with supercritical super efficient plants. This will reduce the pollution to just 10 per cent of the existing levels of these old plants,” he said. “The discussions are on to increase the deadline. I think it should be extended (beyond December 2017) because it should be done in a way so that the poor should not be affected,” the minister added. In December, 2015, the Environment Ministry had brought new norms for coal-based power stations to cut down emissions of particulate matter (PM10), sulphur dioxide (SO2) and oxides of nitrogen (NOx) and improve the ambient air quality around power plants. The ministry had for the first time fixed SOx and NOx norms for power stations and mandated that plants adhere to these guidelines by 2017. According to industry estimates, the cost for technical changes at these plants could be up to Rs 1.5 crore per megawatt. Besides, the domestic capacity to manufacture power equipment for the upgrade is not more than 15 GW a year, compared to demand of around 40 GW per annum for meeting SOx norms alone. The minister is of the view that instead of going for renovation and modernisation, the power plants should be replaced with latest energy efficiency and less polluting technology. He had also announced replacement of 11 GW of old power plants of NTPC at an investment of over Rs 50,000 crore in the next 3-4 years. Jihad Ward Authentic Jersey
Pay more to fly! Airfares set to soar on costlier jet fuel
India’s delicately balanced current account wouldn’t be the only major casualty of costlier crude oil: Local travelers now have to pay more to fly within the country as expensive jet fuel propels airlines to raise domestic fares that had tracked global energy prices to plunge to record lows last year. Higher consumer fares in January reflect the persistent rise in aviation-fuel prices, which increased 8% on-month in November at the New Delhi airport, the country’s busiest. After a brief lull in December, prices firmed in January and February, breaching the levels of 2015 when the cycle of declines began. The trend has led carriers to pass additional fuel costs on to consumers, many of whom switched to airlines after the gap between air and upper-class train fares narrowed in 2016. A senior executive at Jet Airways, India’s second-biggest airline by market share, said the airline has recently revived the practice of levying a fuel surcharge — a fare component linked to movements in jet fuel prices — on domestic flights. “We used to charge between Rs 100 and Rs 300 depending on short- and longhaul sectors. Now we charge as much as Rs 700,” he added. Jet-fuel is the biggest cost item for Indian carriers. Prices of petroleum products began rising since last spring after the 2015-16 winter witnessed record lows for crude oil, with global prices breaching $30 a barrel on their way down to levels not seen since the 1980s. However, after a period of consolidation that analysts believed would have put many shaleoil producers out of business, global crude oil prices began firming and have now stabilized around $55 a barrel, a level that some believe would be maintained over the medium term. Airlines had clubbed fuel surcharge with the base fare component in 2015 after an advisory from the Directorate General of Civil Aviation, the country’s aviation regulator. No-frills carrier SpiceJet has separated the two components over the last six months, although the fuel surcharge hasn’t been increased yet, said a spokesperson. Travel company executives said overall fares have increased in January. According to data on Makemytrip, the country’s biggest online travel portal, average fares dropped in November and December but rose in January. Ticket prices for the Delhi-Mumbai sector rose to Rs 4,266 in January, compared with Rs 3,908 the same month last year, Rs 4,914 on the Mumbai-Bangalore sector compared with Rs 4,573 a year earlier, and Rs 4,473 on the Mumbai-Chennai route, compared with Rs 3,784 last January.Rival Cleartrip noticed divergent trends that showed those booking early stood to benefit. Last year, spot-booking fares too had fallen drastically. “An analysis of the last three months of airfare data for the top 20 air travel sectors reveals that the increased cost to airlines, contributed by the fuel prices surge and the rupee’s depreciation, has resulted in a 15% increase in airfares for a booking window of 0-14 days,” said Samyukth Sridharan, president and chief operating officer of Cleartrip. “At the same time, we see that the airlines have been quite aggressive in offering deals to passengers who plan in advance, reflected in a 21% yearon-year drop in fares on an average for travel bookings made over 14 days in advance.” Last year, airlines had offered substantial discounts across sectors and made attractive offers for ticket-buyers who planned their travel in advance, resulting in lower yields. To be sure, the industry’s ability to charge more will depend on the direction in aviationfuel prices and seasonal changes in air-travel demand. “February and March are lean months, and the airlines may not have room to increase so much. But there will be increases subsequently if jet fuel prices continue their climb,” said a senior executive at a budget carrier. Wayne Gretzky Jersey
New airline Zoom to take off on February 15
The government’s regional connectivity push seems to have finally struck the right note, with Zoom Air, India’s newest airline, launching its inaugural flight on the Delhi-Durgapur route on Sunday morning. The move makes Zoom Air the tenth national carrier in the country. The airline, which will start daily scheduled operations on the Delhi-Kolkata-Durgapur sector from February 15, is marketing itself as a premium commuter airline with on-board snacks and beverage service. The airline has started operations with a Bombardier CRJ 200 aircraft and will get the second aircraft on February 26. “As of now, we do not plan to exceed the five aircraft number. We are also not planning to compete with established players by connecting tier 1cities.Even if we connect two tier 1 cities like Delhi and Mumbai, it will be via Surat,“ Koustav M Dhar, chief executive officer of Zoom Air, told ET. “We are going to be India’s first national carrier with a regional fleet,“ he said. He added that the second and third aircraft will be used to connect destinations such as Amritsar, Surat and Mumbai and Jabalpur, Kolkata, Shillong and Aizwal. Dhar also stated that they are in talks with airlines for code share flights. “A codeshare arrangement gives us surety of passengers. We are in talks with four international and two domestic airline operators to operate code share flights for them. I cannot name them now because I am not allowed to,“ Dhar said. Brad Richards Jersey