Monday / December 9.


egNEW DELHI: In line with the government’s plans to boost domestic output of coal, India’s largest thermal power producer, NTPC Ltd, could soon become one of the major coal-producers of the country as well.


NTPC plans to produce up to 300 million tonnes of coal within the next four to five years, chairman and managing director Arup Roy Choudhury told Hindustan Times.


“As we expect more coal blocks coming to us, the company is confident of achieving a coal production of 300 million tonnes in the next five years. NTPC wants to be self-reliant in its coal requirements,” he said.


At present, the company meets 90% of its annual coal requirements of 160 million tonnes — or 144 million tonnes — from Coal India Ltd. With a total power generation capacity of over 43,000 MW, NTPC has in its fold ten coal blocks with reserves of around 5 billion tonnes and production potential of 100 million tonnes of coal.


These blocks and those to be allotted would cater to substantial requirement of the company’s generation capacity. “NTPC is making all efforts to extract these reserves as soon as possible to augment generation,” Choudhury said.


According to coal ministry sources, NTPC will be one of the biggest beneficiaries of coal block allocation to government companies, following the recent Supreme Court order on deallocation of coal linkages. “The government will soon sign agreements for 14 coal blocks for supporting capacity worth 30,000 MW,” sources said.


“Another three coal blocks with reserves of 220 million tonnes will be allotted to an eligible company (which could be NTPC) for mining.”

(Source: Hindustan Times, October 31, 2014)




NEW DELHI: The Competition Commission of India (CCI) has cleared Adani Power’s proposed deal with Lanco Infratech to buy latter’s 1,200-MW imported coal-fired power plant at Udupi in Karnataka for more than Rs 6,000 crore, marking the biggest acquisition in India’s thermal power industry. “Post the combination, the combined market share of Adani, both in terms of installed capacity and electricity generation, would not be significant enough to raise any competition concern. The proposed combination is not likely to have any appreciable adverse effect on competition in India,” the CCI observed while clearing the deal.


The deal, the largest in thermal power in terms of value and capacity, catapults the Adani Group, already India’s biggest private sector power producer, to a bigger league with a capacity of nearly 10,000 MW while helping Lanco reduce debt.


Adani Power’s current installed power generation capacity is 8,580 MW. It is also in the business of power transmission in some regions of India. Udupi is India’s first independent power project in the country based on 100% imported coal with a captive jetty of 4 million tonne per annum and an external coal-handling system located at Mangalore port.

(Source: The Economic Times, October 31, 2014)




SHILLONG: The Meghalaya government will provide micro grid systems in some villages in the state where power will be generated using renewable resources and energy thus saved will be routed to industries, Chief Minister Mukul Sangma said today.


“We have identified certain villages in the state where there is a possibility of them being delinked from the main grid after they are provided with renewable power,” Sangma said while addressing a national seminar on how power sector impacts on economic growth and industrial development.


He said these micro grid systems would be set up in a radius of one to two kms and in a cluster of villages, while generation of power would solely be on renewable resources like solar, wind and biomass.


The project, if successful, would be beneficial to the state and once the set up is in place and the clusters of villages delinked from the grid, the energy thus saved could be routed to industries where it (power) could be sold at a higher rate, the Chief Minister said.


Earlier, state Chief Secretary P B O Warjri said changes in the erstwhile electricity board to three fully corporatised bodies has faced some hiccups.


“There are many challenges as we change from a government- run culture (in the erstwhile Meghalaya Electricity Board) to a corporate culture (the newly formed generation, transmission and distribution companies),” he said.


The new corporate bodies have to present their accounts professionally and adopt new ways of functioning, Warjri said.


Meghalaya Electricity Regulatory Commission chairman P Anand Kumar who also addressed the seminar, said the country in general and Meghalaya in particular has to generate five to six per cent more power if it expects its economy to grow by eight to nine per cent in a year.


Kumar also called for improvement of the transmission system, enabling states to share and exchange power during surplus periods and avail the same during lean seasons.

(Source: The Economic Times, October 31, 2014)




ITANAGAR: The Arunachal Pradesh power department has ordered all the districts to restrict power load in view of the shortage of power due to the onset of low hydro season in the north east region.


An official order issued by chief engineer ( transmission, planning and monitoring zone) today said that power supply to consumers may be affected in the form of local load shedding.


Stating that the restriction was ordered in view of the overall grid operation in the state and the region, executive engineer N Perme said the order would remain in force until reviewed, depending upon the availability of central sector power.


Power would be drawn from central sector power sources from November next, he said.

(Source: The Economic Times, October 31, 2014)





HYDERABAD: Power Grid Corporation of India has commissioned the first 765-kV double circuit line from Nellore to Kurnool, thereby linking the South India Grid. According to a statement, in the past year Power Grid, by commissioning the 765-kV Raichur to Solapur line, has enabled One nation-One grid by integrating the Southern Grid with the rest of India. In addition, three other 765-kV sub-stations at Raichur, Kurnool and Nellore have been commissioned. About 9,000 MVA (megavolt ampere) transformation capacity has been added during this period. Power Grid stated that these systems have greatly facilitated import of power from other regions.

(Source: Business Line, October 31, 2014)




NEW DELHI: Public sector hydro-power generator NHPC Ltd’s net profit for the second quarter of fiscal 2014-15 dropped 3.3 per cent to Rs. 684.10 crore on the back of higher finance costs. The company’s net profit in the same quarter last year was Rs. 707.58 crore.


However, NHPC did improve its net revenues in the quarter. Its net revenue increased by 27 per cent to Rs. 2,098.79 crore, from Rs. 1,650.02 crore in the same quarter last year.


The company’s finance costs in the quarter more than doubled to Rs. 288.36 crore, from Rs. 120.31 crore in the similar previous period.


This impacted the company’s net profit.


The profit from operations before finance costs had improved 11.6 per cent to Rs. 1,156.82 crore from Rs. 1,036.36 crore in the same quarter the previous year.


On Thursday, NHPC’s share price remained almost flat on the BSE at Rs. 20.

(Source: Business Line, October 31, 2014)





NEW DELHI: In the midst of several government announcements to provide more funds for the clean energy sector, the state of the Rs 1,000-crore solar water heater industry has become some kind of a paradox, where discontinuation of a subsidy has resulted in shutting down of companies due to debt and halving of sales. Supreme Solar, a Karnataka-based company run by young entrepreneurs, which manufactures around 40,000 units of solar water heaters annually, is planning to scale down production.”


A lot of people in the northern states were shifting from conventional power to solar water heaters but that has now been arrested. Winters have not even started but sales are down 20%,” Director of Supreme Solar, M Ganesh Pai, told ET, adding that sales were rising during the subsidy period. The Ministry of New and Renewable Energy ( MNRE) discontinued a subsidy on solar water heaters with effect from October 1 this year, which has led to a drastic drop in sales of this clean solution, say industry players.


This subsidy made solar water heaters affordable, costing anywhere between Rs 15,000 and 20,000, which made them cheaper by 60% in special states such as Uttarakhand, Jammu & Kashmir, Himachal Pradesh and the North-East, and by 30% in others. The subsidy went directly to MNRE-approved manufacturers/channel partners, who then passed on the benefit to consumers.


However, according to the ministry, the subsidy amount, which started out with Rs 20 crore three years ago, widened to a demand of over Rs 120 crore now. “It is now time to expand the use of solar water heaters in the country. But the government department in charge of disbursing funds has not been forthcoming about increasing the subsidy amount. We could not pay manufacturers on time, they have accumulated debt and so we decided to discontinue it,” a senior ministry official said, requesting anonymity.


Meanwhile, companies complain that absence of subsidy has made the product unattractive — demand has dropped between 20% and 50% this year — in the northern states, which was understood to be the most important market due to the long winters. Another MNRE-approved manufacturer Velnet Non-Conventional Energy Systems Pvt Ltd complains that there’s a large amount of subsidy pending with the government that needs to be disbursed.

(Source: The Economic Times, October 31, 2014)




ZURICH: Tata group has invested in a Swiss start-up solar company as several companies from the European country vie for a share in the Indian solar energy market which is seen as having a huge potential due to its growing energy needs.


“Tata is an investor in Flisom and has a significant investment in the company,” Chief Operating Officer of Flisom Sudheer Kumar said speaking at the company’s research office in Dubendorf here.


Asked about the Tata share of investment in the Swiss start up that deals with Solar energy generation equipment, Chief Executive Officer of Flisom Ulfert Ruhle merely said there were no majority stakeholders in the company.


“We have several investors and no one is a majority stakeholder but we can tell you that Tata is among the top investor,” Ruhle added.


Ruhle and Kumar are of the view that India has a huge potential for exploiting the solar energy to meet its future energy requirements.


The energy requirements are growing in India and they have to look for sources of new and renewable energy, they said adding a country like India can generate significant electricity from Sun light.


Kumar said the copper indium gallium selenide (CIGS) solar cells developed by his company were suited for a country like India.


“We have developed these cells on a thin film which can be folded and stored inside the house at night.


While the cost of manufacturing and installation is lower than other solar cells, the efficiency is good and processing takes place at high speed,” he added.


Meyer Burger, another company dealing with Photovoltaic materials which is setting up two Solar power plants in Gujarat and Kerala, is also hoping to do more business with Indian companies and is ready to pass on the technology as well.


“Nuclear energy may not be enough for India. This will provide energy to big cities like Mumbai but there will be energy requirement in rural parts of the country too. This is where solar energy can be of help,” Peter Pauli, CEO of the Meyer Burger, said.


Pauli said his company will be able to set up the solar power plants which have a cumulative capacity of generating over 950 megawatts of power within 18 months of getting approval from the government.


“We are ready to be faster. It is now for the other side ( Government of India). We hope the change in the Government will expedite the process,” Pauli added.


The Meyer Burger official said the cumulative cost of the two solar power plants would be in the range of US Dollar 800 million, including the cost of buildings.


Several other Swiss companies involved in research in Solar energy field are hoping that Indian companies and government take keen interest in renewable energy equipment.


They felt China was dumping huge quantities of such equipment to put companies based in the West nearly out of business.


“China is the market leader in photovoltaic field. In fact it controls the huge segment of the market. India is one of the few countries which can emerge as a viable alternative as the Chinese have brought down the prices which is to such a low that no one can compete with that,” a researcher at Ecole Polytechnique Federale de Lausanne (EPFL) said.

(Source: The Economic Times, October 31, 2014)




WASHINGTON: A Michigan University study of 25 garment factories in Bangalore has shown that green technology saves energy, boosts profits and productivity in industrial units.


The study conducted over a period of three years from 2010 to 2013 has stated that switching to LED lights in factories not only saves energy, it boosts productivity and increases profits.


LEDs or light-emitting diodes create less heat than traditional lights, so they help keep factory floors cooler. When workers are more comfortable, they produce more and are less likely to be absent – a major problem for employers, it said.


“Heat stress stops the body’s capacity to exert, so workers are less able to complete production targets,” said assistant professor at the University of Michigan Ross School of Business and one of the study’s authors Achyuta Adhvaryu.


“LEDs create a productivity gain that dwarfs the energy savings,” he added.


The garment factories in the study were not air conditioned and had hundreds of people laboring on machines that ran constantly in buildings with multiple stories.


Similar work conditions are found in Bangladesh, China, Indonesia, Vietnam and other major exporters in the $200 billion apparel industry.


Due to climate change, finding ways to keep factories cooler will become increasingly challenging for businesses in developing countries, which on average are hotter than developed nations, the report said.


The researchers studied the staggered rollout of the LED lights in the factories over four years. They found the LEDs cost about $6,300 to install, and the energy savings was about $3,000 per year.


According to the report increased profits from efficiency gains were more stark — an increase of $41 per operating day for each factory, or nearly $13,000 per factory per year.


The paper’s co-authors were Namrata Kala of Yale University and Anant Nyshadam of the University of Southern California.

(Source: The Economic Times, October 31, 2014)





NEW DELHI: Even as the government is drafting rules to auction coal blocks, power firms have already started working on strategies to identify suitable blocks. While fierce competition is expected for blocks with higher coal reserves and infrastructure to transport the dry fuel, industry executives say there could be increased “cooperation” among companies and that some of them may form joint ventures to bag promising coal blocks.


On September 24, the Supreme Court cancelled the mining permits of 204 coal blocks allotted to captive users between 1993 and 2011. Operators of producing coal blocks have six months to return the assets to the government. Many of the blocks had been allotted to power producers. The government now aims to auction close to 200 blocks by the end of the current fiscal year through March.


“Producing blocks with existing and possible rail linkages to evacuate coal will be the most sought-after assets by bidders. Blocks having promising reserves too will command a premium, while bidders will not be interested in coal blocks that are located away from the end-use plants and need to deal with government and locals for tedious clearance process and rehabilitation,” said an official with one of the firms that is planning to participate in the bidding process.


He said prior allottees of the blocks will have a tough time to secure the same assets due to competition, but will have an advantage since they have better knowledge about the blocks. An executive with another power project developer said the remaining life of producing blocks will determine the valuations as further coal mining may not be possible in certain blocks.


“Also, developers of producing blocks are mining even more coal as they have less than five months to return their assets,” said the executive, who added that some of the previous owners may withdraw from the race.

(Source: The Economic Times, October 31, 2014)





KOLKATA: The backdrop for the Coal Mines (Nationalisation) Act (CMNA) of 1973, leading to the formation of Coal India (CIL) in 1975, was sluggish annual growth of two per cent, lack of private investments and mismanagement by private parties.


The Act worked but only to an extent. CIL, in a monopolistic position since, has raised annual production to 462 million tonnes (mt) from 79 mt earlier. The increase is way behind demand requirements and India had to import 171 mt in 2013-14, a rise of 18 per cent over the previous year. The Planning Commission believes coal imports could go up to 185 mt at the end of the 12th Plan (2012-2017), based on total demand of 980 mt and domestic supply of 795 mt.


The supply mismatch is in spite of India having coal reserves of at least 250 billion tonnes, one of the largest in the world. Naturally, the chorus for private coal mining gained momentum in the past couple of years, with the 12th Plan document noting, “It is simply not logical to keep private investment out of coal, when it is allowed in petroleum and natural gas.”


P C Parakh, the Union government’s former coal secretary, writes in his recent book, Crusader or conspirator—Coalgate and other truths: “Had we opened coal to the private sector for commercial mining, along with the power sector, in the early 1990s, we would by now have at least half a dozen large coal mining companies in the private sector.”


The Narendra Modi government has taken the first step towards opening the sector to private players with its recent ordinance on e-auction of blocks. The ordinance has inserted a section in the CMNA, according to which government and private companies “may carry on coal mining operations in India, in any form either for own consumption, sale or for any other purpose, in accordance with the prospecting licence or mining lease, as the case may be”, paving the way for an end to CIL’s monopoly.


Will CIL have reason to worry? Finance Minister Arun Jaitley has said the larger interest of the public sector would be fully protected. And, experts say competition will be beneficial for the company. The decision could also mean the entry of global mining majors such as BHP Billiton and Rio Tinto, which have so far steered clear of India even though foreign direct investment up to 100 per cent was allowed in captive mining. Opening the sector will mean that end-use (as in captive mining) will not be specified and global players could grab the opportunity to sell in a country with a huge supply shortfall. Also, entry to India means access to the world’s fifth largest reserves.


“It will increase production and bring in new technologies, which will immensely help the sector. CIL, too, will benefit,” says former CIL chairman and managing director Partha S Bhattacharyya.


However, these global majors would wait for a word on pricing from the government, which is silent on that aspect. Many say coal prices could go up sharply, a potentially tricky decision for the government. China opened its mining sector in 1978 and there has been a 40-plus per cent rise in thermal coal prices in the past couple of years.


Bhattacharyya makes light of these concerns. “Yes, prices might go to international standards. But we are becoming self-sufficient in coal, so what is the problem? The choice is ours, whether we can afford to import coal,” he says.


Currently, CIL’s notified price is 30-40 per cent lower than international prices. As reserves are given almost free of cost, CIL has the lowest production cost in the world, from as low as Rs 400 to around Rs 1,600 a tonne in open cast mining and Rs 1,500-4,500 a tonne for underground mining.


When, the blocks are e-auctioned, a private party will obviously try to recover the auction price, which will increase their cost of production and, in turn, pass it on to the customer. For CIL, too, if prices are kept at international levels, it would financially benefit the company.


To ensure checks and balances, a regulatory body might be set up, which could be given pricing power if commercial mining is allowed by private entities. The coal ministry had introduced the Coal Regulatory Authority Bill, 2013 in the Lok Sabha; it is yet to get Parliament’s nod. The Bill did not give pricing power to the body, on the reasoning that CIL was the lone entity in the sector. As and when the sector is opened, the logic would not hold ground.


The regulator can put in place clauses that help in developing the sector. The exercise should attract mining majors which can bring in new technologies, rather than becoming an experimental ground for cash-rich companies with no expertise.


Not everybody is optimistic about the prospect of a drastic change after the sector’s opening. They say the private sector’s record before 1973 was poor, with hardly any company having invested in modern mining technologies.


The Centre had allocated 218 coal blocks for captive mining since 1993, with reserves of at least 48 billion tonnes, mostly to the private sector. Only 42 were operational and total production from captive mining reached only 50 mt in 2013-14, the Supreme Court found before cancelling all the allocations. Environmental clearances were a big problem for CIL and the private sector.

(Source: Business Standard, October 31, 2014)


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