Gyan Research weekly newsletter on #energy sector

1. © Gyan Research and Analytics Pvt. Ltd., 2015 1
Policy News
 MFP shifts risks to developers
Under the planned Marginal Fields Policy (MFP), the government’s auction of 69 oil and gas fields by
market-linked pricing and revenue sharing mechanism will shift the risks to developers. According to this
policy, developers will have to estimate three basic variables before placing a bid - exploration,
development and production costs, market prices and quantum of hydrocarbon extractable
will. However, the policy will simplify the calculation of the government’s share of profit from the 69
marginal fields as a percentage share of gross revenue from the production of hydrocarbons.
Industry News
 Tawang basin to have 11 hydropower projects
According to the 'Perspective Plan for Development of Tawang River Basin’, 11 out of the 13 proposed
hydropower projects will be implemented in the Tawang river basin, Arunachal Pradesh. The projects
have a total capacity of 2,700 MW. However, two projects more with 100 MW total capacities cannot be
implemented due to their unfavourable impact on the surrounding mountain ecosystem and biodiversity-
rich forests. Implementation of six projects will be carried out in the first phase of 0-5 years; the rest will
be implemented in the second phase of 5-10 years. The project will not lead to any displacement of
habitation because of its run-of-the river schemes and non-creation of reservoirs. A balanced approach to
attain maximum power production with minimum damage to the environment is yet to be worked out.
 VOC Port Trust’s 100 kW solar power plant inaugurated
A 100 kW solar power plant has been installed on the roof of the administrative building of the V.O.
Chidambaranar Port Trust. The plant is expected to generate 170,455 units per annum and is connected
directly to the Port Low Tension grid in the complex. The port has plans to establish another 400 kW
direct grid connect solar power plant, thereby reducing carbon emissions by 119 metric tonnes per year.
As part of the Green Port initiative the port has also submitted a proposal to set up a 500 kW solar power
facility by 2016 to the Shipping ministry.
 ABB installs 2 GW solar power inverters
Swiss engineering major ABB has supplied solar power inverters of 2 GW in India, doubling capacity from
1 GW it in five months. As of now, ABB has 50 percent market share of India’s total solar capacity of 4.1
GW. The company received additional orders from leading solar power, solar engineering, procurement
and construction companies. Its Bangalore facility manufactures central inverter series rated from 100 to
1 MW. These are designed for multi-megawatt photo-voltaic (PV) power plants and large PV installations
on commercial and industrial buildings. Under the National Solar Mission, India targets 100 GW of solar
capacity generation by 2022.
Energy News
September 5, 2015 – September 11, 2015

2.  IGL scampering to meet government-set PNG target
Indraprastha Gas Limited (IGL) has unleashed an intensive marketing campaign to meet the government-
set target of adding three lakh households in FY2016. This target is part of the government’s aim to bring
access to piped natural gas (PNG) for one crore households, in four years. It is also more than half of what
IGL has achieved in 16 years of existence. The company’s marketing agents are selling the idea of safer
piped fuel through campaigns in parks, shopping areas, housing and other areas, along with aggressive
radio campaign. IGL acquired a record one lakh households in 2014-15 and another 50,000 in the first five
months of the current fiscal. The company is yet to reach 250,000 households for the next seven months.
 Numaligarh Refinery focusing on INR 20,000 crore expansion
The Numaligarh refinery of Bharat Petroleum Corporation Limited (BPCL) in Assam has asked for excise
concessions and capital subsidy from the Centre and state governments for the expansion of its proposed
refinery. The refinery plans to expand capacity by three-fold to 9 million metric tonnes per annum
(MMTPA), with an investment of INR 20,000 crore. It will also include a 6 MMTPA crude oil pipeline for
the movement of imported crude oil from the east coast. Both the refinery and BPCL have cleared the
expansion project and a detailed feasibility report has been prepared. The company has plans to enter
the markets of neighbouring countries.
 Toshiba JSW bags thermal power order from UPRVUNL
Toshiba JSW has secured an order worth INR 3,436 crore from the Uttar Pradesh Rajya Vidyut Utpadan
Nigam Limited (UPRVUNL) to set up a 660 MW thermal power plant in Aligarh district. Toshiba will be
responsible for the engineering, procurement, and construction of the plant. The civil and boiler island
package will be completed in 48 months from the time of the contract, and the facility is expected to be
commissioned in September 2019. At present, UPRVUNL has a generation capacity of 4,933 MW.
 SunEdison inks MoU with Tamil Nadu
Renewable energy firm SunEdison has signed an Memorandum of Understanding (MoU) with the Tamil
Nadu government to develop wind and solar power projects of 2 GW capacity in the next five years. The
project is a part of SunEdison's overall initiative to develop 15.2 GW clean and cost-effective wind and
solar power in India, by 2022. With this MoU, the company is extending its support to the state
government’s vision of clean energy. SunEdison develops, finances, builds, owns and operates renewable
power plants across the global. It delivers reasonably priced electricity to residential, commercial,
government and utility customers.
 OIL gets green nod for 1 mmscmd gas production
Oil India Limited (OIL) has got clearance from the Ministry of Environment and Forests for the production
of 1 million metric standard cubic meter (mmscmd) of gas per day. The production will involve drilling
wells in Dandewala, Bagitibba and Tanot mining lease blocks in Jaisalmer, Rajasthan. The 20 wells will
have depths varying between 1,200-2,200 metres. The estimated cost of the project is INR 96 crore. OIL
has been asked to monitor air quality near the human settlement areas, implement measures to control
the noise from the drilling activity, maintain environment safety and prepare oil spillage scheme.
© Gyan Research and Analytics Pvt. Ltd., 2015 2
Energy News
September 5, 2015 – September 11, 2015

3.  RSGL to develop natural gas infrastructure
Rajasthan State Gas Limited (RSGL) and the Rajasthan State Petroleum Corp, signed an MoU to invest INR
2,700 crore, to develop natural gas infrastructure in the state. The agreement is aimed at establishing
compressed natural gas (CNG) stations on highways and the distribution of natural gas to state industrial
clusters. Further, a mega compression facility is proposed to be developed at Neemrana for this purpose.
This will open up the CNG corridor on NH-8.
Investment News
 JSW Energy set to acquire Bina thermal power
JSW Energy will sign a binding agreement to acquire Bina Thermal Power Plant from Jaiprakash Power
Ventures for INR 3,500 crore. It will be JSW’s third acquisition in the past one year, doubling its capacity
of power generation to 6,000 MW from 3,140 MW at present. The deal will be signed in the next few
days, after the completion of the first deal for the two hydropower plants - 1,091 MW KarchamWangtoo
and 300 MW Baspa-II. Bina Power, with 500 MW of installed capacity, has sufficient infrastructure to
ramp it up to 1,500 MW, with marginal investment.
 OVL gains INR 700-crore
The overseas arm of Oil and Natural Gas Corporation (ONGC), ONGC Videsh Limited (OVL), has gained INR
700 crore on a Euro 525 million loan, which was raised to fund its Mozambique acquisition. The loan was
raised through a seven year bond issued in July 2014, at a competitive interest rate of 2.75 percent per
annum. Currently, the Euro is equivalent to USD 1.12; it was USD 1.36 seven years back – a possible
reason for the gain. In addition, OVL has raised USD 750 million by selling dollar denominated bonds for
five years and USD 750 million by selling 10-year bonds.
© Gyan Research and Analytics Pvt. Ltd., 2015 3
Energy News
September 5, 2015 – September 11, 2015
State-wise Estimated Potential of Renewable Power in India (as on 31.03.2014)
States Share of Renewable Power (Percentage)
Andhra Pradesh 11
Gujarat 25
Jammu and Kashmir 5
Karnataka 13
Maharashtra 7
Punjab 3
Rajasthan 4
Tamil Nadu 11
Madhya Pradesh 4
Uttar Pradesh 3
Remaining States and Union Territories 14
Total Potential 147,615 MW
Source: Ministry of Statistics and Programme Implementation
Weekly Snapshot

4. © Gyan Research and Analytics Pvt. Ltd., 2015 4
Energy News, September 5, 2015 – September 11, 2015
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