Energy Times

Volume 7 No.-3

October 2012

Energy Times
A Monthly Newsletter by Energy Management Executives In This issue
P.1 Huge Investment in Power System

Volume 1, Issue 1

P.2 Indian Industry Trends

Newsletter Date

P.3 Global Industry Trends P.4 Start-ups

Blackout Spurs huge investment in Power System

To prevent another grid failure like those on July 30 and 31 that kept more than half of the countrys 1.2 billion without electricity, government is spending huge amount to strengthen and stabilize the power system by its expansion and upgradation. These Power cuts are common across swathes of India as the country battles outages that the government shaves about 1.2 percentage points off annual economic growth. Recently government has announced the Rs 1,930-crore project that is undertaken by Power Grid Corporation of India to connect the Southern Electricity Grid to the national network. Currently, all regional electricity grids are inter-connected except the Southern. This would facilitate the creation of the All India Synchronous National Grid when all the five grids Northern, Eastern, Western, North Eastern and Southern are interconnected. The setting up of national highway of electricity grid would be beneficial to all regions by augmenting the inter-regional capacity of Southern region with rest of the grid. For instance, after the Southern Grid is connected, it would allow import of electricity from other regions to the Southern region during peak demand as well as export of surplus power from the Southern region during off-peak demand. In addition, due to the existing and planned renewable generation capacity, the Southern region would get access to bigger market. Moreover, it would help in preventing massive blackouts, like the ones that happened on July 30 and 31. Further Govt. plans to spend 13.73 trillion rupees to expand and upgrade its power systems in the next five years, most of which will be led by generators including stateowned NTPC Ltd. (Indias largest producer), Tata Power ltd., Reliance Power Ltd. (RPWR), Adani Power Ltd. (ADANI) and Lanco Infratech Ltd. (LANCI).
Re f:B loombe rg.c om (Naresh Gupta, EMP)

Lighting a Million lives campaign by TERI

The Energy and Resources Institute (TERI) in collaboration with LEAD Pakistan, the Alternative Energy Development Board (AEDB) Pakistan and the Buksh Foundation will launch the clean energy Lighting a Million Lives (LaML) campaign in Pakistan on October 12. This according to R.K. Pachauri will enhance bilateral relation where we face common problems such as the lack of energy access for a large part of the population, particularly in rural areas. TERI will facilitate the access and use of solar lighting devices among Pakistans rural communities after successful interventions in Africa, South Asia and South East Asia. According to an estimate, nearly 2.2 billion litres of kerosene are used each year for lighting purposes, while about 5.5 million tonnes of CO are emitted into the atmosphere by burning of kerosene. On the other hand, each solar lantern in its 10year life replaces about 500600 litres of kerosene, mitigating about 1.5 tonnes of CO. Marking the culmination of these events, a benefit concert will also be held in Pakistans culture hub, Lahore, on the evening of October 13.
Ref.-The Hindu, 10th Oct (Surobhi Deb, EMP)

Inside this issue:

INDIAS FIRST SOLAR WATER TREATMENT PLANT HOW BPCL HEDGES ITS OPERATING COST CHINAS TOP 5 FACE HURDLES WORLDS LARGEST DAM COMPLETED SELCO SOLAR: A SOCIAL ENTERPRISE WORLDS FIRST GREEN CRUDE FARM 2

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Energy Times
Think outside the Barrel
Headlines Scan
Cabinet approved bailout to cash-strapped power distributors to restructure Rs 1.9 lakh crore of losses they have accumulated due to lack of periodic tariff revisions and free power schemes. State-owned oil companies IOCL, HPCL & BPCL are working on a plan to revise petrol prices once every week or in 10 days but the hike is unlikely to be more that a rupee per litre. For the first time an Indian University, RGTU will have low-cost and most efficient solarbased futuristic power plant on Cross Linear Concentrated Solar Power (CL-CSP). This has 30% efficiency against the conventional 15%. A 40-percent fall in water inflow to the hydel reservoirs due to 24percent deficit in monsoon rainfall, skyrocketing consumption and inadequate forecasting have pushed Kerala into a huge power crisis. CIL has refused negotiations with regard to supply of 15 per cent of imported coal on costplus basis as part of fuel supply agreement (FSA). MNRE has identified five user industries which require low and medium temperature heat (60 to 250 degrees) for installation of 45,000 square metres of solar collectors -panels that generate heat from suns rays-by March 2017. CESC and Tata Power Ltd. has taken over maintenance & billing operations of JSEB.

India keen to set up Wave Power plants

Alongside the Indian gov- mobile industry with an inernment, SDE IsA Typical Wave Power Plant rael will work with organizations such as the Indian Energy Development Agency, the Electricity Regulation Committee (MERC) and the PTC amongst others. tention to create wave As part of the project, SDE power plants with a total Israel will create a string of capacity of 100 MW. partnerships with Indian SDE says it has developed a companies including auto- unique sea wave power plant for generating electricity from wave power at a cost of only two cents per kWh. As per Company source, essentially it consists of a series of buoys positioned on top of a breakwater which moves up and down with the motion of the waves. This generates hydraulic pressure which is then transformed into electricity. Ref.-renewableenergyfocus.com
(Rituraj, EMP)

Delhi gets first solar water treatment plant

The first water A Solar based Water Treatment Plant shit and will treatment plant be operated that operates on by NGO Sosolar technolcial Awareogy was inauness, Newer gurated at the Alternatives R a j k i y a (SANA). Pratibha Vikas Around 750 Vidyalaya and will treat families from the economi5,000 litres of waste water cally weaker section living daily. near east Delhi's Surajmal The project was inaugurated Vihar will soon be receiving by chief minister Sheila Dik- solar treated potable water. Under this, waste water from nearby areas will be treated to meet World Health Organization standards using solar powered panels and micro-ionising water purification processes. This will provide each of 750 family with five litres of potable water daily.
Ref.-The Times of India, 2nd Sept (Rituraj, EMP)

How BPCL recovers its operating cost by Hedging?

The purpose of hedging programme is to ensure the operating costs for the refineries are covered. Petroleum Companies take a view on what could happen in the markets and ensure that their product portfolio does not fall below a specified target. To do this, BPCL trades derivatives tied to Singapore prices for oil product cracks, freight and bunker derivatives and some precious metals. BPCL currently operates within the international over -the-counter swaps markets. Most corporate have been dealing with forex for quite some time. Petroleum hedging has begun to be used much more recently. Overall commodity hedging is slightly on the lower end compared to other asset classes. The reason for this is major contribution of service sector in the Indian economy. Foreign exchange has needed to be hedged for a while since physical exports and imports have been in foreign currency. So naturally, currency hedging had previously taken priority. BPCL only do bilateral contracts. They dont engage in any cleared derivatives (OTC or exchange), nor do they use brokers. Their entire focus is on OTC bilateral trade with their registered counterparties.
(Mahendra Kumar, EMP)

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Energy Times
Wind, water, Sun: Energy for the long run
Chinas Top 5 Generating Companies Face Business Hurdles
Chinas five largest power generators own half of that countrys power generating assets. Faulty policies and the rapidly changing global economy have made it difficult for these companies to fulfill the high expectations arising from enactment of the Power System Reform Scheme of 2002. Chinas State Council issued the Power System Reform Scheme (Scheme) on April 12, 2002. The Scheme called for restructuring (generation unbundling) state-owned power assets owned by the State Power Corp. into five major power generation corporations and two power grid corporations. By the end of 2010, these five corporations represented 49% of Chinas power generation capacity. Today, the Top 5 face seemingly insurmountable problems that threaten their continued existence. The predicament faced by the Top 5 is caused by three principal factors: Soaring Coal Prices: Thermal power accounts for about 73.41% of the countrys installed capacity. Similarly, the Top 5 relied on thermal power generated continuing rise of domestic coal demand and international crude oil prices has sharply pushed up Chinas coal prices. Since 2009, coal prices decreased somewhat, although the price has been very volatile. Stagnant Electricity Market Reforms: The electricity generation sector has been unbundled successfully, but the electricity price reform portion of the Scheme, part of the core market reforms, has stagnated. All electricity generators sell electricity to the power grid corporations at a fixed benchmark price determined by the government. Customer prices (residential and industrial) are likewise fixed by government tariffs. However, the mechanism to allow competitive bidding for electricity sales by generation companies is still not in place. The fixed generation price means that the generation companies cannot pass on cost increases, such as the rapidly rising price of coal, to the power grid corporations or consumers in a timely manner. Unfavorable Economic Conditions: To deal with rising inflation, The Chinese central bank (the Peoples Bank of China, PBC) has raised the loan interest rate and deposit reserve rate since early October 2009. The undesirable side effects of the PBCs actions were reduced funds supply, limited credit, and soaring capital project financing costs. As capitalintensive enterprises, power generation companies are facing a soaring interest expenditure on existing liabilities (commercial bank loans) and unprecedented difficulties in finding a means to finance construction of new power generation facilities.
Ref: powermag.com (Ajay Rawat, EMP) (Deepankar Sharan, EMP)

by coal for about 80% of their installed capacity in 2010. Fuel costs for those plants accounted for more than 70% of the total cost of generating electricity. When coal prices fluctuate wildly, the Top 5s cost to produce electricity also quickly changes. The Chinese government gradually deregulated coal prices beginning in 2002 and completely relaxed the regulation of coal prices in 2005. In recent years, the

Worlds Largest Dam Completed

China in early July installed the 32nd and final turbine of its mammoth Three Gorges Dam, virtually completing the 1994-initiated hydropower project on the middle reaches of the Yangtze River. All that remains is a ship lift, which should be completed by 2015, authorities say. The worlds biggest power project, the 22.5-GW dam accounts for nearly 10% of Chinas total installed hydro capacity of 230 GW, and it figures prominently in Beijings future ambitions to retain hydropowers 20% share in Chinas overall generation mix as it vies with i t s n e i g h b o r s for coal imports and grapples with pressure to tamp down carbon emissions.
The Three Gorges Dam, the worlds largest capacity hydroelectric power station, was completed and fully functional this July. The $50 billion project has 34 generators: 32 main generators, each with a capacity of 700 MW, and two plant power generators, each with capacity of 50 MW, bringing its total capacity to a stunning 22.5 GW. The project uses Francis turbines.

Ref: powermag.com

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Energy Times
Cleaner Energy For a Cleaner World
Headlines Scan
Welspun Energy Limited (WEL), leading renewable energy company and IPP, has been selected for the Asian Power Award for being one of the most innovative power producers in Asia for their 15 megawatt (MW) solar power project at Anjar in Kutch district of Gujarat. Union Government is planning to cancel nearly 3 crore LPG connections on the basis of report submitted by Oil companies after identifying names having two or more gas connections. Under fire for failing to meet its production target, Coal India has stepped up its supply to the power sector in the last six months and met 90% of the 173 milliontonne supply target for the power sector. India and Japan have reconfirmed the importance of civil nuclear cooperation, on the occasion of the 6th IndiaJapan Energy Dialogue. Kerala State Electricity Regulatory Authority has asked industrial consumers to voluntarily observe austerity in consumption of electricity, reducing HT & EHT consumption to 75% of peak and restricted people from using power for displays & hoardings, etc.
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SELCO Solar: A Social Energy Enterprise

In todays world the basic needs of human being have increased to four from earlier count of three namely Food, Shelter, Cloths and the fourth being ENERGY. SELCO Solar Pvt. Ltd. was established in 1995 with its headquarters in Bangalore, Karnataka. They provide sustainable energy solutions Path of success always brings with it difficult situations as well and the success story of SELCO has not been different from this natures phenomenon. But despite of initial difficulties today SELCO employs more than 170 people across 28 energy service centres in Karnataka and Gujarat and have sold over 1,35,000 solar home lighting panels. SE L C O s L if e Changing Model: Busted Myth 1: The seed came from a street vendor who once said to Mr. Harish Hande (MD, SELCO) Rs. 300 a month is expensive, but Rs.10 a day is fine. This inspired Mr. Hande to understand the problem was more of financing for poor. Today SELCO works along with Grameen Banks, Cooperative Societies, Commercial Banks & Financial institutions with innovative loan schemes to suit the poor. Busted Myth 2: They provide training to the members of family/business about how to maintain the system. Apart from that two visits in 6 months at each installation helps to keep the systems healthy. Busted Myth 3: SELCO is a for-profit organisation. They achieved breakeven in 2001. For their commitment towards sustainable energy solutions for poor, SELCO has been awarded with Ashden Awards ( Green Oscars) for sustainable energy in 2005 & 2007. Mr Harish Hande has also been awarded at various levels. He received the Social Entrepreneur of the year award from Schwab Foundation. Even after much accolades and success SELCO remains committed to Energy for Poor. (Nikhil Bhat , EMP)

to under-served people and businesses. This Social Enterprise was established to counter a few myths: Myth 1 : Poor people cannot afford sustainable technologies Myth 2 : Poor people cannot maintain sustainable technologies. Myth 3 : Social ventures cannot be run as social entities.

Worlds First Commercial Algae to Energy Green Crude Farm

Worlds first Algae based green crude oil production developed by Sapphire Energy Inc. is now operational. When completed, the facility will produce 1.5 million gallons per year of crude oil and consist of approximately 300 acres of algae cultivation ponds and processing facilities. With only sunlight and carbon dioxide, Sapphire Energy is turning algae into renewable, low-carbon green crude. Sapphire has already developed technology to produce transportation fuels, including 91-octane gasoline, 89-cetane diesel and jet fuel. By 2014, the facility hopes to produce 100 barrels of green crude per day. Sapphire hopes its commercial demonstration project will m a k e g r e e n crude a viable alternative fuel.
Algae Farm at New Mexico, U.S.

Ref: Sapphireenergy.com (Shourabh Roy, EMP)

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