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Nl energy oct 10 - oct 16, 2015


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Gyan Research weekly newsletter on #energy sector

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Nl energy oct 10 - oct 16, 2015

  1. 1. Policy News  Odisha to renovate three hydel projects Odisha government plans to invest about INR 887 crore to renovate three major hydro-power stations at Chipilima, Hirakud and Balimela, in phases. The three power stations will increase production of green electricity in the state. Of the total amount, INR 158 crore will be expended to renovate Hirakud’s two units (37.5 X 2), which will take its capacity to 86 MW from the current 75 MW. Another INR 65.67 crore will be spent on the Chiplima project and INR 664 crore on the Balimela hydel project. The renovation project is expected to take nearly 54 months to complete. Though Odisha has six hydro-power stations with installed capacity of 2,008 MW, it manages to generate only 535.0507 MW of power.  Foundation for 800 MW Wanakbori power plant laid The Gujarat government has laid the foundation stone for a 800 MW super critical coal-based thermal power project at Wanakbori, in Kheda district. Bharat Heavy Electricals Limited (BHEL) will roll out the plant at a cost of INR 4,465 crore in the next three years. The eighth unit will use super critical technology that will consume lesser fuel and result in less emission - it will burn 25 percent less coal than the previous units. The earlier seven units at Wanakbori have 210 MW capacity each adding up to a total capacity of 1,470 MW. The new unit will be the eighth unit at the Wanakbori thermal power plant.  Government to introduce transparent LPG cylinders The central government will introduce transparent cooking gas cylinders to make it almost impossible for vendors to deliver lower than the promised quantity. This will help to solve one of customers’ biggest complaints regarding liquefied natural gas (LPG). The price of the cylinders will range between INR 2,500 to 3,000 - double the price of the regular steel cylinders. Initially, the government will import the transparent cylinders and the old steel cylinders will be moved to the rural areas. The initiative may be rolled out by March 2016. This is the most significant step after the improvement in service quality with direct cash transfers and subsidy surrender campaigns that have improved the government's finances and plugged leakage areas. Industry News  PTC India, SECI ties up for solar power trade Power trading company, PTC India Limited, has signed a Memorandum of Understanding (MoU) with Solar Energy Corporation of India (SECI) for 3,000 MW solar power trade. This deal will help to sell and purchase of power for a period of 25 years from the date of commercial operation of each of the projects. As per the agreement, SECI will facilitate the solar projects development at various locations in India on behalf of the central public sector undertakings (CPSUs) or any other government or private agencies. PTC will buy the solar power offered by SECI for onward sale through a competitive route or reverse auction process. © Gyan Research and Analytics Pvt. Ltd., 2015 1 Energy News October 10, 2015 – October 16, 2015
  2. 2. © Gyan Research and Analytics Pvt. Ltd., 2015 2  Adani Power to supply 50 MW to Indian Railways Adani Power has inked an agreement with the Indian North Central Railways to supply 50 MW power at INR 3.69 per kWh for three years. This move will result in savings of about INR 150 crore annually for the railways. The power will be supplied from the company’s 4,620 MW Mundra plant in Gujarat. The Central Electricity Authority (CEA) has recommended that the railways procure power directly from power generators that are 'deemed licensees' instead of discoms. This agreement was the first step in the migrating strategy.  Punj Lloyd bags INR 367 crore contract in Odisha Punj Lloyd has bagged an INR 367 crore engineering, procurement, construction and commissioning contract from Indian Oil Corporation (IOC) at the Paradip refinery in Odisha. This is the company’s second order in Paradip refinery. Through this new order, the company’s total order backlog stands at INR 21,833 crore.  IPCL to purchase three stressed power plants Kolkata-based India Power Corporation Limited (IPCL) is in talks with the Jharkhand, Rajasthan and Uttarakhand governments to acquire three stressed power plants with a total capacity of about 1,000 MW. The company is estimated to spend between INR 500 to 800 crore for the purchase of the plants, on a 70:30 debt-equity ratio, with funds acquired through a mix of debt and internal reserves. IPCL is negotiating with the bankers and management of these projects. Currently, the company operates 100.2 MW of wind assets in Karnataka, Rajasthan and Gujarat. It plans to expand its electricity distribution area.  IOC to sell 5-kg LPG cylinders in rural India IOC will sell subsidized 5 kg LPG cylinders to people in rural India to promote clean fuel for cooking. Up to 112 kg of subsidized cooking gas per year will be distributed to rural consumers below the poverty line. Currently, the company sells 14-kg cylinders in urban areas at subsidised rates. Its 5 kg cylinders are available at market price through kirana shops and petrol pumps for families with temporary residency in cities. IOC is working on the logistics and is in the process of setting up infrastructure. The company plans to lay pipelines at major centres, which will connect liquefied natural gas (LNG) terminals or bottling plants to refineries. This initiative will increase the speed of delivery and reduce the cost of transportation. IOC expects to grow consumption of LPG cylinders to 25 metric tonne (mt) by 2023 from the current 18 mt, with most of the growth coming from rural and semi-urban areas.  NBV expects to restart 50 MW power plant Power, mining and ferro alloys company, Nava Bharat Ventures Limited (NBV), is expected to restart operations of its 50 MW power plant by October 25, 2015, with efficiency of the unit and improved turbine heat rate. The renovating and overhauling of the power plant at Paloncha, Telangana, was started on August 24, 2015. Energy News October 10, 2015 – October 16, 2015
  3. 3. © Gyan Research and Analytics Pvt. Ltd., 2015 3  IOC to set up Paradip-Durgapur LPG link IOC will construct the proposed Paradip-Durgapur LPG link by 2016, to increase supplies. The Paradip port terminal will link Paradip to Muzzafarpur touching Haldia, Durgapur and Patna and will be built at a total expenditure of INR 2,700 crore. Another LNG terminal at Dhamra port in Odisha with 5 million tonnes capacity will be set up at a cost of INR 690 crore. The completion of the pipeline construction will leave no backlog in supplies for the company. IOC expects demand of LPG connections would rise to 25 mt by 2023 from the current 18 mt.  Suzlon commissions wind power project Wind turbine maker, Suzlon Group, has completed the commissioning its 50.40 MW wind power project for Ostro Energy Private Limited in Tejuva, Jaisalmer, Rajasthan. The facility comprises 24 wind turbine generators of 2.1 MW each. The power project will supply electricity to over 28,000 homes and control 0.10 million tonnes of carbon dioxide emissions, annually. Suzlon has handled the entire project lifecycle, from construction to commissioning. It has also been contracted to undertake operations and maintenance services of the turnkey project for the next 12 years. This turnkey project is part of Suzlon's 1,300 MW Jaisalmer wind park.  Hinduja Group to invest INR 8,000 crore in two power plants The Hinduja Group will invest around INR 8,000 crore to set up two power plants in Vizag Hinduja Power Plant, in Visakhapatnam district of Andhra Pradesh. Each of the power units will have a capacity of 520 MW. One of the plants is scheduled to start operating by the end of October 2015, while the other will be operational by December 30, 2015. The company expects to recover 15.5 percent of the project cost through returns. The Andhra Pradesh Electricity Regulatory Commission has started working on it. Investment News  Welspun receives funding of USD 617 million Welspun Renewables received another funding of USD 617 million, of which USD 405 million was received as debt, USD 165 million as equity and the remaining in the form of line of credit. The investment came through a combination of debt and equity infusion by its promoters and existing and new investors. However, the company did not reveal details of the equity investors. These deals prove that the renewable energy sector is a major investment choice and global players are interested in it. The company will be setting up 5 GW capacity, of which 1 GW will be commissioned this year. Welspun Renewables has solar and wind projects across eight states and has generated over 1.375 billion units of clean energy, thereby diminishing 1.2 million tonne of carbon dioxide emissions. Energy News October 10, 2015 – October 16, 2015
  4. 4. © Gyan Research and Analytics Pvt. Ltd., 2015 4  IOC to invest USD 5 billion on expansion IOC will invest around USD 5 billion for expanding its exploration and production business. In the next five to seven years, it will spend USD 2.6 billion to acquire new assets which are becoming available as fallout of the global crude oil crash. The company continues to invest as part of a consortium with other state firms and prefers producing or near-producing assets to eliminate risk. It is in advanced talks with international potential strategic partners and is planning to participate in domestic auction of hydrocarbon blocks. IOC has minority stake in the 10 blocks at home and seven overseas. The company will invest USD 4 billion in an integrated upstream and LNG project in Canada, of which USD 1.6 billion has already been invested. It will invest INR 50,000 crore to expand capacity of its existing refineries in the next five-seven years. Further, IOC will be upgrading all its refineries at an expense of INR 15,000 crore and setting up new petrochemicals plants for INR 30,000 crore by 2022. Energy News October 10,2015 – October 16, 2015 Weekly Snapshot Region-wise Availability of above 25 MW as on October 14, 2015 Region Thermal (Excluding Gas & Diesel) Nuclear Hydro Stabilised Capacity (MW) Capacity on Line (MW) Stabilised Capacity (MW) Capacity on Line (MW) Stabilised Capacity (MW) Capacity on Line (MW) Northern 34,573.00 26,905.00 1,620.00 1,300.00 18,170.27 14,725.07 (Percentage of Capacity) 100.00 77.82 100.00 80.25 - - Western 62,321.00 46,647.00 1,840.00 1,460.00 7,392.00 6,842.00 (Percentage of Capacity) 100.00 74.85 100.00 79.35 - - Southern 28,452.50 23,542.50 2,320.00 1,320.00 11,357.70 9,277.10 (Percentage of Capacity) 100.00 82.74 100.00 56.90 - - Eastern 30,255.00 21,945.00 - 0.00 4,193.45 3,792.95 (Percentage of Capacity) 100.00 72.53 - 0.00 - - North Eastern 60.00 0.00 - 0.00 1,242.00 1,212.00 (Percentage of Capacity) 100.00 0.00 - 0.00 - - All India 1,55,661.50 1,19,039.50 5,780.00 4,080.00 42,355.42 35,849.12 (Percentage of Capacity) 100.00 76.47 100.00 70.59 - - Source: CEA
  5. 5. © Gyan Research and Analytics Pvt. Ltd., 2015 5 Market Entry Strategies Market/ Marketing Research Pre-Feasibility, Feasibility & TEV Studies Equity Research & Valuation Economic Intelligence Our Business Practices Business Research Central Delivery Centre BD-9, Sector-1, Salt Lake City Kolkata - 700 064, India Phone: +91-33- 40060084 Corporate Office LG 37-38, Ansal Fortune Arcade, Sector - 18, Noida - 201 301 Delhi NCR, India Phone: +91-120- 2511945 E-mail: Website: Branch Office - Mumbai Branch Office - Bangalore Branch Office - Hyderabad Energy News, October 10, 2015 – October 16, 2015