India to Cooperate with Germany on Energy Sector…

India and Germany have discussed bilateral cooperation in the fields of renewable energy, energy efficiency, solar energy, clean coal technology and carbon capture and sequestration. Some countries are reviewing their nuclear power programmes. Reports indicate that the Governments of Germany and Switzerland plan to phase out nuclear power by 2022 and 2034 respectively. Italy has decided not to reintroduce nuclear power. The demand for growth in power generation in these countries can be met by renewable energy sources. This appears to be the reason to be the reason for their distancing from harnessing nuclear energy.

In view of India’s vast and growing energy needs, nuclear energy is an important clean energy option and will be pursued with full regard to safety, environment and livelihood of the people in the neighbouring areas along with other energy sources, including solar energy, as no single energy source would be adequate to meet India’s energy requirements, said  the Minister of State in the Prime Minister’s office Sh V Narayanasamy.

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Renewable energy ministry of India seeks 10-fold increase in fund outlay…

According to reports, the renewable energy ministry has sought a 10-fold increase in fund outlay for the next five years. The ministry estimates requirement of Rs 40,000 crore to ramp up its capacity to 30,000 mw by 2017.

An outlay of Rs 4,000 crore was earmarked for development of renewable energy in the 11plan period of 2007-12. India’s present renewable energy capacity is over 20,000 mw of which wind farms alone generate 14,000 mw while the rest is shared between biomass, small hydro and urban-industrial waste. Solar energy capacity currently stands at 35 mw.

“The progress in the renewable energy sector is happening at a fast pace but it’s not so impressive. Road-map for the next five years is very crucial for its growth,” renewable secretary GB Pradhan said at 11th Sustainable Energy Summit on Wedenesday.

The ministry also has plans to achieve grid parity in the solar energy sector by 2017, which means that electricity generated by solar plants would be sold at the same rate as conventional electricity. Along side, it will also increase the quantum of grid connected solar power aiming at 20,000 mw.

“To achieve it, we need a strong domestic manufacturing base which can absorb technology advancement,” said Pradhan. In just two years, capacity of grid connected solar power has increased from 2 mw to 35 mw in 2011. By the end of 11th plan, ministry hopes it will reach 300 mw.

The government is also encouraging solar power with its Jawaharlal Nehru National Solar Mission, which aims to tap solar power in India, estimated to be around 5,000 trillion kWh per year energy.

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Moser Baer emerges as 1st solar PV manufacturing company globally to be accredited with ‘Green Leaf Mark’ certification…

Moser Baer Solar (MBSL), a subsidiary of Moser Baer India has been awarded ‘Green leaf’ Mark by Intertek AB Semco, Germany for its latest Max Series ‘Lead free’ solar PV modules. Intertek’s Green Leaf Mark certifies that this product has been independently tested and found to conform to the multiple existing environmental regulations, such as RoHS laws, REACH and Eco Design.

With this MBSL has been accorded the rights to display the prestigious ‘Green Leaf’ mark on product packaging, at point of purchase in displays, product advertising and literature to highlight its superior environmental credentials.

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Karnataka Renewable Energy receives 22 bids for setting up solar projects…

• Karnataka Renewable Energy Development Ltd (KREDL) has received 22 bids for setting up solar power projects under the ‘Karnataka solar policy’. Today was the last day for submitting the bids. Mr N S Prasanna Kumar, Managing Director, KREDL, said. As part of its 350 MW programme, KREDL had floated a tender inviting bids for setting up projects that total to 80 MW. The projects would be allocated under ‘reverse bidding’ process. They will be allocated to bidders who have quoted the steepest discounts to the tariff fixed by KREDL (Rs 14.50).

• Mr Kumar however declined to comment on the other details such as the total capacity of all the bids submitted and the prices offered. “We cannot check the technical details of the bids till the RFP (request for proposals) for bidders under the Phase I Batch II of the National Solar Mission is closed,” Mr Kumar pointed out. (The last date for submission of bids under the Batch II of NSM is December 2. Disclosing the winning tariffs in Karnataka would influence the bidding process under NSM.) The allocation of projects with respect to these tenders would start soon, he said. The government has identified land to set up the 80 MW of solar plants, which would be allotted for a period of 30 years of lease, Mr Kumar said.

• However, it is learnt from sources that only two bids, totalling 20 MW, have been received for ‘solar thermal’ projects. KREDL had invited bids for 30 MW of solar thermal and 50 MW of photo voltaic. While the ‘thermal’ part of it has been under-bid, the PV portion has received bids for substantially more than 50 MW. Apar t from the projects under the solar policy, Mr Kumar had recently said that projects with a total capacity of 200 MW would be taken up under the REC scheme of the Ministry of New and Renewable Energy (MNRE). “Some companies have already applied for projects under REC mechanism and we will allot the ‘REC mechanism projects’ very shortly,” Mr Kumar said. For these, however, there is no deadline as it is a “continuous process”.

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Petroleum Ministry may block domestic gas supply for merchant power plants

• The Petroleum Ministry has proposed that domestically produced natural gas should not be supplied to power plants that do not sell electricity to state-run power utilities at regulated rates. “There is no proposal before the government to ban gas supply to merchant power plants,” the Oil Minister, Mr S. Jaipal Reddy, said in a written reply to a question in Lok Sabha. “However, there is a proposal in which domestic gas will be available only to those power plants that supply electricity to state power utilities under a Power Purchase Agreement (PPA) at regulated rates,” he said. Domestic natural gas is available at one-third the price of imported LNG.

• Against the demand of 230 million cubic meters per day, domestic production amounts to 142 mmcmd, including about 42 mmcmd from Reliance Industries’ eastern offshore KG-D6 fields. KG-D6 gas and other domestically produced gas is priced at $4.20 per million British thermal units, while imported gas in its liquid form (called liquefied natural gas, or LNG) costs upward of $13-14 per mmBtu. “In view of the scarcity of domestic gas, the current and future allocations of domestic gas will be subject to the condition that the entire electricity produced from this gas shall be sold under long-term Power Purchase Agreements to the grid/distribution companies at regulated tariffs approved by the regulator(s),” an Oil Ministry official said.

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NTPC gets approval to exit International Coal Ventures consortium…

• The power ministry has approved NTPC Ltd’s proposed exit from International Coal Ventures Pvt. Ltd (ICVL), in a move that could hurt India’s efforts to acquire overseas coal assets. ICVL was promoted by five state-owned firms two years ago to buy coal mines overseas. While Steel Authority of India Ltd (SAIL) and Coal India Ltd own 28% each of ICVL, NTPC, Rashtriya Ispat Nigam Ltd and NMDC Ltd own 14% each. The 14% share of India’s largest power generation utility in the consortium, which hasn’t managed to close a single purchase, is expected be split proportionately among the remaining partners.

• The exit will end the acrimony among the partners that surfaced last year when then steel minister Virbhadra Singh had said that NTPC and Coal India could exit the consortium if they wished to. ICVL was floated on the coal ministry’s initiative and has an initial equity capital of Rs.3,500 crore and authorized capital of Rs.10,000 crore. An NTPC spokesperson confirmed that the exit is taking place and that the details will be worked out after “requisite due diligence”. Coal India continues to be part of the consortium. A top power ministry official, who spoke on the condition of anonymity, said earlier that it had informed the steel ministry “that NTPC would like to opt out”.

• Mint reported on 21 September that ICVL seemed headed for a split with NTPC wanting to exit. NTPC subsequently made a presentation to its parent ministry elaborating on the reasons for this. According to NTPC, while the power producer needs thermal coal to fuel its power projects back home, ICVL’s o ther stakeholders are largely interested in metallurgical coal reserves to feed their steel mills. And the thermal coal offered to it does not meet the utility’s technical requirements. “Our controlling ministry has given its assent to our proposal. We have already received a letter in this regard. Now, only the process part is left. Our share will be proportionately acquired by the remaining partners,” said a senior NTPC executive aware of the development who didn’t want to be identified.

• The exit could actually work to the benefit of NTPC, said an expert. “For NTPC, the development may mean a focused approach in the pursuit of coal resources,” said Dipesh Dipu, director, consulting (mining), at Deloitte Touche Tohmatsu India Pvt. Ltd. “Chasing opportunities on its own and simultaneously being part of a consortium may have led to strategic ambiguity.” Still, the breakup will pose a challenge to “the efforts of the government to create a sovereign fund like arrangement and create a unified acquisition resource pool in the form of ICVL,” he said.

• NTPC’s decision comes at a time when the country is facing its worst coal shortage. India faces a shortage of both metallurgical and thermal coal. A top ICVL executive who didn’t want to be identified said the company “had received a copy of the (power ministry’s) letter”. This person said the company would discuss what needs to be done with the power utility’s stake. While private Indian firms have been successful in securing coal resources overseas, government-owned entities such as ICVL and NTPC have not been able to do so. The split in ICVL only highlights the challenges involved, Dipu said.

• “While government-owned firms have been in the race too it seems the compliance requirement (for) procedures and lack of tolerance to risk-taking has caused them to be slow. Alignment of individual corporate objectives may hav e been yet another reason for the same,” he added. NTPC, which generates 8 megawatts (MW) of every 10MW it produces by burning coal, is looking to increase installed capacity from 34,854MW now to 75,000MW by 2017 and 128,000MW by 2032. It needs 160 million tonnes (mt) of coal in fiscal 2012, of which around 16 mt has to be imported. The utility has already placed orders for importing 12 mt of coal and placed a tender on Monday to import another 4 mt.

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Financial Tech launches 5 new energy exchange solutions

• Financial Technologies (India) Ltd (FTIL) on Thursday said it has launched five new software solutions in the power trading arena. A leader in multi-asset and multi-currency trading and settlement solutions, the company launched its PowerARMS, Tradedart, TSO Computation System, Registry and ECS (Exchange Customisation Services) offerings in the Indian market, which are capable of allowing global power exchanges to operate seamlessly across borders. These end-to-end applications featuring seamless connectivity cover various aspects of power exchanges and their clearing operations a company statement said.

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Power companies fail to lift e-auctioned coal - 50 lakh tonnes of coa l offered by CIL in October remains unused

• A recent and shocking development in the Indian coal sector has brought planners and bureaucrats face-to-face with the stark policy conundrum afflicting the sector. It also brought to the fore the criticality of coal as an input for key infrastructure industries in the power, steel, sponge iron, cement and fertiliser sectors. It all began last week when cabinet secretary Ajit Kumar Seth was chairing a high-level meeting on coal shortage. The huddle saw Coal India Ltd (CIL) revealing that power utilities failed to lift even a single tonne from the 50 lakh tonne of e-auction coal the state-owned miner offered it in October.

• Such kind of a mute response from the power companies to the coal quantity specially earmarked for them on demand enabled CIL -- the world’s largest coal miner -- to emerge clean in the ongoing tussle with the power ministry over fuel shortage for power plants. The Kolkata-based company had offered the quantity in a one-of-its-kind experiment involving diversion of coal meant for spot sales to the power sector.

• The ministry had accused the Maharatna of curtailing supply to power companies and selling coal on e-auction to fetch higher prices. E-auction had to be stopped for a few days to accommodate the diversion experiment which worked as a litmus test for the power sector’s offtake capacity. “Just that power companies could not lift the offered coal proves that banning e-auction, as has been demanded, is not a solution,” a senior CIL official said on Thursday. “Coal India cannot be held responsible for the power sector’s woes on fuel crunch. We have enough coal to supply to power sector utilities, but they have failed to lift it,” he said.

• The pri mary reason for the subdued response by power utilities to e-auction coal is logistical difficulty. As a matter of policy, any coal quantity tied up at e-auction has to be lifted from mine heads, significantly increasing the buyer’s input cost. The cost of transporting coal through road is on an average at least five times higher than Indian Railways’ Rs 125-per-tonne-kilometer charges. Besides, the quality of coal sold in the spot market is also a suspect, according to experts. “While e-auction coal was offered to us, we did not take part because of concerns on transportation and quality,” said a senior executive from NTPC Ltd, India’s largest power generator. The state-owned energy services provider requires over 160 million tonnes of coal by the end of this fiscal to run 36,000 Mw of its installed power capacity.

• The Association of Power Producers said the e-auction offered only an ad-hoc window even as the power industry was looking for a long- term solution for coal shortage. “Also, the increased price of this coal owing to transport is not a pass through for private companies,” pointed out Ashok Khurana, director-general of the industry body. “Only when these two aspects are clear that the power industry will lift coal.”

• For the record, the demand for coal in the country has grown at an annual rate exceeding 8.4 per cent over the past five years. The supply, on the other hand, has fallen grossly short of it, registering a dismal annual growth rate of 5.4 per cent during the same period. For the current financial year (2011-12), India’s coal demand is estimated at 696 mt, while a mere 554 mt is likely to be available. That leaves a gap of 142 mt -- to be met through imports.

• More than 80 per cent of India’s annual 530 mt of coal production comes from CIL. The 1975-founded company sold around 10 per cent of its 431 mt production through e-auction last fiscal, wh ile 18 per cent of its revenue came from the scheme. For, coal was sold at e-auction at a premium of a whopping 81 per cent over the notified price of Rs 900 per tonne. This compelled the buyers to opt for the costly e-auction coal, thanks to historic shortages.

• Despite reporting flat production in 2010-11, the company denies any lag in output. another senior CIL official said it “isn’t the power ministry’s business” to question the company’s production. “They should only ask for supply. We are providing it,” he said. Further, “thanks to evacuation constraints, we have more than 50 mt stock at the moment. But this is prone to catching fire. Thus, increasing production beyond a point will only add to stocks.”

• A majority of coal transport in the country occurs through the rail route. The coal ministry had identified two chief reasons for last month’s severe coal crunch: lack of adequate rail connectivity to major coalfields and unavailability of railway rakes. That had brought a third of the total 81 power stations with a capacity of 87,000 Mw on the brink of closure. Adding to the travails were heavy rainfall disrupting transportation and a simmering unrest in Telangana region that supplies coal in a big way.

• While CIL requires 200 rakes for daily offtake, the availability is only less than 180. Of these, an average 127 rakes were used for despatch of the material to power utilities in October. The coal ministry has been trying to push rakes availability to 180 for the sector. As for the planning commission, it has identified another major bottleneck in the movement of coal to end-users: the time taken by the Railways for building critical rail links. Four rail links were identified as critical for the evacuation of coal from CIL’s coalfields during the current Plan period. This included Tori-Shivpur rail link in North Karanpura (Jharkhand), Gopalpur-Jharsuguda (Ori ssa) in Ib Valley, Baroud-Bijuri in Mand-Raigadh (Chhattisgarh) and Sattupalli-Bhadrachalam link (Andhra Pradesh) in Singareni Collieries Company command area.

• The commissioning of these lines was expected to enable movement of 130 mt of coal to end-users, much more than the current domestic shortage of 86 mt. However, none of the links has been commissioned so far. In fact, the Jharkhand government recently rejected forest clearance for the Tori-Shivpur link.

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