The World Cheated at Copenhagen..

It is to inform you that the world once again cheated by the big fats of world economies.Just to save the face at last moment, they came out with a 5 page Copenhagen accord and the crux is nothing; no time limit;no pledge;no assurance from the developed countries and yes throwing some money to the poor nations to suffer much at the expense of carbon.

Voluntary targets ( non sense..as if all are disciplined and will not allow any development to take place in their country at the behest of saving the environment)..non sense.

Role of India is still doubtful as it succumbed to pressure and signed the accord at the last moment.Alas! we could have bargained better.

The face saving attitude will never do any good to the country and the world at large..My sayigs at last came true ..it is carbon Carbon everywhere..truely it is

Carbon for All at Coenhagen.............

Developed country voters don’t care about moral CO2 arguments

Here’s something for the world leaders attending the Major Economies Forum today in London to think about. US and UK voters, to be specific, don’t care much about responsibility for historical emissions, according to a survey by Harris Interactive commissioned by the FT.

Only a minority of respondents in those countries believe that developed countries should help developing countries meet the cost of reducing their greenhouse gas emissions. And there is strong support across all the countries surveyed for the view that China should make the most emissions cuts, thanks to its recently-attained status as the biggest emitter:

Check the wording of that first question, though - it’s rather stark and makes no mentioned of historical emissions. But as the second table above shows, making that point in the question only seems to hold sway with mainland Europeans, who are a lot more supportive of rich countries contributing to the cost of poorer countries than Britons or Americans.

There’s also a large number of apparently undecided respondents on these questions, which was evident in many of the answers to other questions in the survey (more on those below).

Reaching agreement at Copenhagen requires participation from developing countries, who after all are going to contribute most of the growth in greenhouse gas emissions for decades to come. Those developing countries don’t see why they should have to pay for a low-carbon development when the developed world grew rich while consuming cheap fossil fuel with abandon. This, as Fiona Harvey alludes in the FT, is why some developed world leaders have been keen to praise China’s efforts to reduce emissions in recent months.

Either way, the moral/historical argument actually seems to be detrimental, at least in terms of persuading Americans that their government should be helping out developing countries. Look at the “Net agree” figures for US respondents in the breakdown for two questions (the first of which is illustrated above) on whether developed countries should contribute to poorer countries’ carbon-reduction efforts:

“How much do you agree or disagree with the following statements? – Developing countries have not caused as much climate change, so developed countries should be prepared to give more aid to them to deal with the consequences.”

Versus this:

“How much do you agree or disagree with the following statements? – Developed countries, such as the US and EU member states, should help fund developing countries, such as China, in their efforts to reduce emissions.”

Yep - slightly more Americans (and Spaniards) were supportive of rich countries funding poor countries when the topic of historical emissions was not mentioned. Brits gave similar responses on both questions. The differences aren’t huge, but it’s slightly counter-intuitive that some people think that rich countries should provide funding, but not because they are more responsible for historical emissions.

Another interesting result is that energy security actually rated lower as a concern for UK and Italian respondents than it did three years ago:

Coutsey:

http://blogs.ft.com/energy-source/2009/10/19/developed-country-voters-dont-care-about-moral-co2-arguments/

Coal Price increase : Power sector feels the pinch..

Coal price hiked last was December12, 2007 ......

• The Union Government allowed Coal India to hike prices by 11 per cent on an average with effect from October 16, 2009. The price rise comes after nearly two years. The hike in prices may leave a positive impact of Rs 4,600 crore on the company’s bottomline on an annualised basis. Without the price hike, the company would have ended the year with lower profits due to negative impact of a wage hike . The Union Government has also allowed CIL to implement a remunerative pricing mechanism to remove the fundamental weakness of two of its perennially sick subsidiaries — Bharat Coking Coal (BCCL) and Eastern Coalfields (ECL) — despite owning the country’s best coal reserves.
• The prices of coal produced by all other subsidiaries have been increased by 10 per cent. According to a CIL release, BCCL will have a higher price rise of 15 per cent for its 30-million-tonne raw coal production which include the country’s only source of prime coking coal. ECL is allowed to charge import-linked prices for A and B grade thermal coal production, accounting for over 30 per cent of the approximately 31 mt total production.
• The coal price hike would leave a maximum of 0.16 per cent inflationary pressure on the economy. It is estimated that for the power sector, the cost of coal would increase by Rs 77 a tonne and the price of electricity would go up 5 paise a unit. The price of cement is expected to move up by Rs 20 a tonne.
• The price hike was long overdue and after the wage revision of CIL, it became impossible for the coal companies to maintain a healthy profitability ratio. Some projects became unviable due to financial implications of the wage revision.
• But on the other hand, it directly impacts the coal consuming sectors, particularly power sector the most. The power sector already started lobbying the regulatory commission to pass through the price hike to the consumers. Gujarat State Electricity Corporation Limited (GSECL) has already expressed its concerns on coal price hike.
• The revival of economy is a good sign for the industries. Coal production which has weightage of 3.2% in the IIP (Index of Industrial Production) registered a growth of 6.5% (provisional) in September 2009 and electricity generation (weight of 10.17% in the IIP) registered a growth of 7.5% (Provisional) in September 2009.Thogh the signs of improvement in growth is quite encouraging, the price increase may send a wrong signal to the market which is already struggling to come out of global recession. The steel sector may absorb the price hike but it would be very difficult for the cement sector to absorb the cost. Currently the cement sector is not increasing the cement price and watching the market movements but they will definitely pass on the increase in coal price hike to consumers.
• On one hand when the country is under severe power shortage scenario, it is to be seen that how consumers behave to a hike in power sector tariff due to price hike by the major input for the sector (i.e) coal.

Carbon for All at Copenhagen!! Is anybody listening?

What to expect at Copenhagen! A complete disaster and a big failure..

The big guns in term of carbon emissions( read US and Australia) with their big kitty will never bow down to so called G77 Countries and never take a global target of reducing emissions.

It is clear now when US is all set to take a domestic legislation for carbon reduction not a global commitment as others perceive.

The Targets:

Global Consensus: 40% reduction over 1990 levels for industrialized countries

US Tagets: 20% below 2005 levels by 2020..no where near the global consensus and joining its chorus Australia, one of the major emitters of CO2.

US has increased its green house emissions by at least 16% between 1990 and 2005 and never committed to Kyoto protocol.

Take a look at its global share, having 5% of world’s population, releases 18% of total global emission and have a share of 30% of the global stock of carbon emission.

Australia at the other hand increased its carbon emission by 40% after 1990 and was not a party to Kyoto protocol. It is a loyal ally to the US at this front.

I am never convinced at carbon credits being introduced by Kyoto protocol. No doubt carbon emission a global phenomenon and how could buying certain credits help reduces the overall carbon emission.

It is nothing but weighing the carbon emission in terms of money. It clearly indicates that there is compensation to virtually everything and if you have the money keep going polluting environment and buy carbon credits with your bucks and name them as green bucks.

What a solution!! This is just an eye wash and at best US will buy carbon credits to showcase its concerns for global emission.

The real criminals are no doubt the US and Australia who despite their large share in carbon stocks is reluctant to take carbon reduction target.

What best we can expect, an internal target for US and it will keep pressurize other nations to buy their point or perish.

India and China may resist it but I sincerely doubt their capability in bringing US to the negotiation table to discuss for a global emission reduction target. The US now pressurizing India to pay heed to what they say and pressure mounting on to break the G77 countries and it may take any course to break this grand alliance. And if it happens, it will be a global disaster.

It’s high time to differentiate US at least on carbon emission front and make it abide by the global emission target. Is it possible? The question remains to be answered and all eyes will be set for Copenhagen!!

Coal Reserve Of World And India

Check out this SlideShare Presentation:

Coal Reserve Of World And India

View more presentations from rajan lanjekar.

Proposed Modification to the Mega Power Policy

Following are the modifications proposed to the Mega Power policy :

1.     There shall be no mandatory requirement of privatization of distribution in the power purchasing states.

2.     There shall be no mandatory requirement of inter-State sale of power.

3.     The present dispensation of price preference available to the domestic bidders in case of PSU projects will continue for a period of five years or till competitive bidding for all new generation projects is introduced for public sector projects under the Tariff Policy, 2006 as amended from time to time, whichever is earlier. However, the price preference will not apply to tariff based competitively bid projects of PSUs.

4.     The benefits of Mega Power Policy will also be extended to supercritical projects to be awarded through ICB with the mandatory condition of setting up indigenous manufacturing facility provided they meet all other eligibility criteria of Mega Power Policy.

5.     There shall be no further requirement of ICB for procurement of equipment for these projects if the requisite quantum of power has been tied up or the project has been awarded through tariff based competitive bidding as the requirements of ICB for the purpose of availing deemed export benefits under chapter 8 of the Foreign Trade Policy would be presumed to have been satisfied. In all other cases, ICB for equipments shall be mandatory.

6.     The mega power benefits would also be extended to such expansion unit(s), even if the total capacity of expansion unit(s) is less; than the threshold qualifying capacity, provided the size of the unit(s) is not less than that provided in the earlier phase of the project granted mega power project certificate. All other conditions stipulated while issuing the mega power status certificate to the earlier project will continue to be applicable.

7.     Before, the power starts flowing into the grid, the mega power projects would be required to tie up power supply to the distribution companies / utilities through long term PPA(s). They may sell power outside long term PPA(s) in accordance with the National Electricity Policy (NEP), 2005 and Tariff Policy (TP), 2006, as amended from time to time. Where the developer has achieved financial closure (investment decision by the Board in case of Public Sector Company / Corporation /Authority) but has not tied up requisite long term PPA, developer could apply for mega power status by furnishing a legally enforceable undertaking / bond to the MoP.

8.     MoP would issue guidelines for monitoring the above mentioned conditions of the Mega Power Policy through a monitoring Committee headed by Joint Secretary.

CERC capped short term power price to a max of Rs 8 for 45 days..

At last exercising its right under EA2003,CERC issued order capping short term power price in the range of Rs 0.10 to Rs 8 per unit for a period of 45 days.It is applicable only for interstate day ahead power market for power exchanges and traders.

The effect of such order to the power market would be studied in the time frame and further actions will be taken by the CERC after the time period.

A shortfall of Rs 5 lakh crore slows down the pace of capacity addition

India is targeting to achieve 350GW of power generation by 2017 with 27000MW capacity addition per year.

If MoP (state) is to be believed, India is currently facing a shortfall of Rs 5 lakh crore for financing power projects which keeps a tab on the momentum of power capacity addition in the country..

Though developers argue to enhance the exposure limit of the banks and financial institutions to power project financing but financing institutions are still skeptical about the financing of generation based power projects due to its inherent risks.

One solution the govt can think of (ie) the ECB (external commercial borrowing) by financial institutions like PFC and REC may be brought under the automatic route that does not require the approval of RBI.

Besides the funding problem, one of the major drawback to the power developers are fuel linkage. The power ministry should focus more on securing coal linkages, natural gas and LPG for power plants.

India should have a long term fuel map for securing fuel linkage to its power plants in advance and it should go all out to secure fuel for future needs of energy.

100 days action plan of coal ministry: the road so far…

Unlike power ministry which could only add 60% generation target of its 100 days action plan, Coal ministry claimed to fulfill completely what it planned for its 100days action plan.

The coal ministry took a softer approach and did not take any coal production target as it was aware about the rainy season ahead and it knew that in monsoon season, coal production could not be paced up because of inherent problems. It targeted the other segment, basically the ongoing programmes and the policy initiatives.

The 6 point agenda that was set for 100days action plan and its status is given below:

Agenda1: Commencement of ‘Forward e-auction’ for actual consumers for meeting their long term requirement

Status: Achieved

The coal ministry planned to introduce “Forward e-auction” for actual consumers of coal only in order to ensure that certainty of availability of coal to the actual coal consumers for a reasonable period time at a competitive price. Under “Forward e-auction” only actual consumers can bid for their requirement ranging from one quarter (3 months) to the maximum of 4 quarter and the deliveries will be made accordingly to successful two highest bidders. CIL was in the process of launching this scheme after completing the registration and verification of actual consumers intending to avail this scheme

CIL started forward E-Auction in WCL on 17/18 August 2009 and ECL kicked off the same on 3rd of September 2009 and the rest are in the process of starting it in the month of September 2009.

Agenda 2: Publishing guidelines for Mine Closure for adoption by coal companies

Status: Achieved

Decommissioning and closure of mines is an important area at the end of mining activity from environmental and socio-economic points of view. A the time of taking this agenda, there were no specified guidelines for taking up closure of mines although it is mandatory under Mineral Concession Rules, 1960. Therefore, coal ministry had proposed to publish appropriate guidelines to enable coal companies to adopt the same for closure of mines.

The Ministry published the set of guidelines for mine closure for adoption and compliance by companies mining coal and uploaded on the ministry’s website in August 2009. The ministry in its release said that the land reclamation/ restoration activities and environment preservation are the requirement and responsibility of the mine owner towards the society at large.

Agenda 3: Commissioning of First Unit (125 MW) of the Barsingsar Mine-cum-Thermal Power project of NLC in Rajasthan

Status: Not Achieved

Barsingsar Lignite mine (2.10 MTPA) cum Power Plant (2x125 MW) was approved earlier by Government in December 2004 for a capital investment of Rs.1368.25 crore (lignite mine for Rs.254.07 crore and Thermal Power Station for Rs.1114.18 crore). The mining project was to be commissioned in June 2009 and the project was on schedule. The TPS got delayed due to the delay on the part of equipment contractor BHEL.

Unit-I is scheduled for commissioning in October 2009 and Unit-II in January 2010. The mining project has been commissioned in June, 2009 as per schedule. and the coal ministry taking all efforts to light of the First Unit of 125 MW on 11 September, 2009

Agenda 4: Securing CCEA approval for setting up of Empowered Committee of Secretaries to consider the proposals of Coal India Limited for investment abroad which are beyond its financial powers of Rs.1000 core

Status: Achieved

At the time of setting the agenda, the government was considering the proposal to set up an Empowered Committee of Secretaries constituted on the lines of the one set up for the consortium of SAIL, NTPC, CIL, RINL and NMDC to consider the overseas investment proposals of CIL, which are beyond CIL’s financial powers of Rs. 1,000 crore. The Committee of Secretaries had already recommended the proposal. After detailed discussion and suggestions from different ministries, coal ministry obtained CCEA approval for constitution of an Empowered Committee of Secretaries for quick decisions on the proposals for investment abroad which are beyond the financial power of Coal India Ltd., i.e. Rs.1000 crores

Agenda 5: Publishing guidelines for Underground Coal gasification projects.

Status: Achieved

Government notified coal gasification (both surface and underground) as end use under captive mining policy for allotment of blocks to potential entrepreneurs.It was felt at that time that being a new activity/ technology, operational guidelines were required to be framed for proper exploitation of coal blocks under UCG.

Fulfilling its promise, coal ministry prepared a set of guidelines to facilitate, benefit and guide the new entrepreneurs spearheading this technology in India.

Agenda 6: Satellite imagery based reports on land restoration/reclamation – posting on website (for 35 projects).

Status: Achieved

The coal ministry decided that in order to increase awareness about environmental consciousness in the coal sector, satellite imagery based reports depicting the status of restoration and reclamation of mined-out areas in respect of 35 projects to start with, would be released and posted on the website. The ministry decided to follow these up with Annual updates which would provide a mechanism for proper monitoring of the mined blocks.

For proper restoration/reclamation of mined-out areas, the satellite imagery-based report provides a very strong tool for the industry and administrative authorities to monitor its progress. Satellite Imagery reports on land restoration and reclamation for thirty five projects have been completed and the same has been uploaded on the website of the coal companies as well as in the website of Coal India Limited.

Conclusion:

The coal ministry has several challenges and it needs to find suitable solutions to bring forth the much awaited coal reforms to the sector. The MMDR amendment bill which would allow the coal blocks to be offered on competitive bidding basis has been discussed a lot. Despite regular monitoring and issuance of warnings, the coal production from captive blocks is not at all encouraging.

Though the coal ministry is plagued with lot of problems, it saved the face of UPA government on the basis that it delivered the promises made in its 100 days action agenda.

BSES Rajdhani and BSES Yamuna violating code of conduct; power situation worsens……..

At the time of Delhi privatization in 2002, two separate companies ( BSES A Rajdhani and BSES Yamuna) were given two separate areas for distribution of power.As per the MOU with Delhi Govt, they were supposed to compete with each other so as to bring efficiency and competitiveness to the system. Even they were registered as two different companies.

But after 7 years of privatization, nothing seems to have been improved in power distribution in Delhi. People are always at logger heads with the discoms (specially with BSES discoms).

Massive load shedding, inflated billing, poor service are some of the major achievements of the private discoms. The customers are getting hugely inflated bills because of improper long term power projection by the discoms and the discoms resorting to high price short term power purchase. These anomalies can be well attributed to failure in administrative system. After several warning from DERC  to have separate CEOs for the two companies, there seems to have no urgency in this matter.

Though it is well known that the parent company of these two discoms is Reliance but then they need to bring in efficiency by competing with one another.

Looking at the functioning of the two discoms, it is found that not only they share a common CEO but even they have a common customer care center. This is a complete violation of EA2003.

The two companies are having a combined base of 25 lakh consumers .It is the consumers who sufferer the most at the hands of the discoms. The poor functioning by the two discoms lead violent protests in some areas in Delhi.

It is high time that distribution companies pay heed to the consumers complaint and change their way of functioning so as to provide relief to the masses.

CERC to cap short term power price: Is it a good idea?

CERC constantly monitors the short term power purchasing price of traders and through exchanges. In its recent notification, it wants to cap the short term power price to be at a maximum level of Rs 11 per unit.

As per CERC, at peak time ( morning 9 to 10 AM and evening 6 to 7 PM) , the traded price of electricity is touching a high of nearly Rs 15 per unit at PXIL and IEX which is not at all desirable.

It finds that the volume cleared at higher price were in the range of 650MWh to 850MWh during August 10 to August 16, 2009.Rather than load shedding, the distribution companies are buying power at a higher rate and also drawing UI power from the grid.

The situation aggravates due to drought like situation in many parts of India , specially northern region. The high temperature in the northern region also drives huge demand for power in urban areas.

The higher price is just a reflection of high demand with supply deficit scenario and is completely unrelated to fuel price as the fuel prices are somehow stable in this period.

The purchase of power at this higher price not only affects the financial health of the distribution companies but also it will directly reflect at the retail tariff paid by the consumers.

Recently there were protests from Mumbai and some parts of Delhi due to unreasonable hike in retail prices for power. People even denied to foot for the power bills and registered cases in grievance redressal forum.

CERC which is custodian to protect consumers’ interest issued draft order to limit the price applying its power under the proviso to clause (a) of sub section (1) of section 62 of electricity act 2003.

It wants to fix the price for 45 days period under trial basis. Though CERC is empowered to cap for a period of 1 year, it chooses 45 days taking traders and exchanges concern.

The commission in its draft says that it is equally conscious of long term interest of investors, future investment plans and mostly reasonable rate of return.

Now the big question is that what is reasonable rate of return? Based on its calculation, CERC finds that the price of power could be at most Rs 10.94 taking naphta as fuel choice for power generation (including fixed charge at 60% availability).

The UI price of power including the additional 40% fine charge, the total price comes out to be Rs 11.03 per unit (includes transmission charge and transmission loss).

Thus, it is of opinion that distribution utilities can buy power at Rs 11 per unit without overdrawing from the grid, jeopardizing the whole transmission grid.

It also takes into consideration of CEA’s load generation balance report while formulating the price cap band. The load generation report forecasts that for 2009-10, the estimated energy shortage in the country would be 8.8% and the peak shortage to be at 18.1%.

Having all permutations and combinations, CERC is planning to have a price band from Rs 0.10 to Rs 11 per unit for 45 days period.

Though it brings cheer to the distribution farms who are buying at such a higher price, the traders are skeptical about this decision. They fear that it will affect the profitability of power selling companies and would be hindrance for proper power market development.

This kind of capping of traded power price gives wrong signal to power developers especially to merchant power developers who bears all the risk to gain in such a deficit scenario.

India is always in trouble as it wants to develop a middle path for power sector and is always critical how to treat power ( service or commodity), unlike in foreign countries where there is a power surplus scenario and customers have a wide choice to decide their power suppliers.

India needs to define and find out what would be the reasonable rate of return to the developers? There is a long queue of companies to enter into power generation segment. This kind of move by CERC may trigger bit of unrest among companies.

Some experts in the field of trading and power exchange believes that by capping the maximum price CERC gives an unwanted ammunition to the power sellers to bid at a higher price and as a result the average power purchase price at the exchanges will rise which would be of more harm than what is prevailing right now. It may possible that more volumes will remain unsold as it will not find any buyers at a higher price.

CERC in the mean time has also given permission to power exchanges to sell the extra power that remain unsold by a mutual negotiable rate between the seller and the purchaser on day ahead basis and it is feared that it may trigger a price rise in the short term power business.

On the other hand, CERC can not wash its hands off the responsibility towards power consumers. Ultimately, it’s the end users who suffer most when distribution utilities buy power at a higher cost.

There is an urgent need to control the spiraling short term power prices so as to safeguard the consumers from this type of situation. India is a country of uncertainty with delayed monsoon, drought like situation, floods, tsunamis and untimely elections etc. Anytime this kind of events crop up, power market behaves abnormally and companies make extra ordinary profits by taking advantage of calamities.

There is a need for self discipline and if it is not possible, there are always other means to make them fall in line. CERC’s controlling of short term power price is a right step taken at the right time.

60% generation target achieved by Ministry of Power for its “100 days program”; nothing to cheer about

Out of 5653MW target commissioning set by the power ministry for its 100 days agenda, only 3378MW commissioned. In a review meeting, analyzing further, it was said that 550MW capacity under firm feasible for commissioning. 1145MW capacity already synchronized on designated fuel and about to commissioning and 415MW capacity is to be followed up for synchronization.

1. Projects under firm feasible for commissioning :

a. Budge Budge U-3, West Bengal (250 MW)

b. Turangullu U-2, Karnataka (300 MW)

2. Synchronized projects but not commissioned:

a. Giral U-2, 125 MW

b. Kota TPP U-7 , 195 MW

c. Kutch Lignite U-4, 75 MW

d. Vijayawada ST-4, U-1, 500 MW

e. Suratgarh TPP-IV, U-6, 250MW

3. Followed up projects for synchronization:

a. Chandrapura U-7, DVC, 250 MW

b. Konaseema ST, 165 MW

RGGVY:

· Target: 5000 villages and 12 lakh BPL families

· Achieved: 4000 village and 13.5 lakh families

R-APDRP:

· Target: Rs 925 crores to be sanctioned for projects

· Achieved:1614 crores sanctioned.

Captive Coal block monitoring: a complete eye wash...

Anyhow the long awaited reply from CCO ( Coal Controller Organization ) finds its destination. I called back Mr Panda, director CCO to enquire about the answer but he had revealed the unimaginable. They do not monitor the associated end use project and if coal production starts early ( he is sure that it wont be) then the coal ministry will take a call how to best use that coal or at best they will transfer the coal to one of the CIL subsidiaries. How rubbish!!! So it is now very clear after one get the coal block , it may not necessarily go for end use project development , rather it would mine coal and sell in the open market and this has been the practice of many and at best they can divert the coal to other end use project because virtually there is no one to monitor.CCO is there but for the namesake only. According to the director CCO, it is very hard to maintain the data and they do not have a proper database to maintain the data. Even coal companies are not providing them the required data and they are yet to get any data for their quarterly review of the projects.But I wonder if CCO do not have the required data then how can they provide the status report for the coal ministry's review on June 22, 2009.Captive coal development remains one of the black hole, after the coal block is allocated to any party, they become the unsaid owner of the block and use the block according to their use. MoC is not very strict on monitoring the coal block development as well as milestone of the associated end use project. All the review meetings and threatening are nothing but a completely eye wash to the public at large.

Living with the virus H1N1

Sitting on the information highway is really very difficult when you are aware of bit by bit happenings around you and there is more in store as media is hyper active in the metros. Media is a necessary evil so as to make people aware about the facts and figures but they create a panic like situation in case of a viral attack or any terrorist attack.

Like in case of swine flu, people are quite aware about the facts ( whom to contact, where to contact, medicines, preventive actions and all) but the news which comes in form of breaking news and the state wise figures of death, like in case of election results are really worrisome. People take stock of all these things and live with the fear of virus.

As of now, no deaths reported in Delhi but the panic the news creates is enormous. I commute daily from Noida to Delhi in a chatter bus and people are scared to travel and their reactions change when some body sneeze or shows cough and cold like symptoms. They keep thinking, is this people affected? May be I am the next victim.

People do live in fear and the obvious example is my close knit group in Noida. We cancelled one of our possible trips to a place nearby because of swine flu and decided to stay at home and enjoy.

The irony is that when something major/minor happens in any metros, it spreads like jungle fire as Media do their bit to make it a tadka news for one and all. The footage showing breaking news like: Cases reported till now in India: XXXX…Deaths reported: Pune: XXX, Mumbai:XXXX, Ahmedabad: XXXX..and so on and the time machine constantly showing some figures upward really make life miserable to one and all living in the metro. People far off living in villages do not have to worry about it as for them there are other things to worry about.

They have other problems like drought situation, water shortage, spiraling prices of vegetables to cope up with. The spread of news is far more than the spread of the virus itself and directly and indirectly it affects the economy. It is good news for some (medicine manufacturers, mask distributors, chemists, doctors) while very bad news for others like ( malls, cinema theaters, tourism, transportation as people refrain themselves going to any crowded areas).

In India, we have more deaths in cases like malaria, dengu, diarohea and some unknown diseases. Villages disappear in no time and there is no fuss about it, no concerns nothings. But if the matter is a global phenomenon and most likely to attack the haves rather then have nots, as the travelers are the sole carriers of this flu , the govt shows some sincerity to solve the matter.

I do not know how dangerous the swine flu virus is. Of about 2 million cases world wide, the fatal rate is less than 1%, it clearly shows there is nothing to panic. Proper medication can help reduce the effect of disease.

The big question is : what should be the role of the citizens, society and the government in this kind of situation. Media should be instructed to make people aware about the complexity of the problems and the steps to be taken to tackle the issue and not to create panic by overstating the problems. Govt should take fast actions so as to arrange the necessary medicines, doctors, facilities, proper monitoring of the situation, speedy development of vaccines and allowing the private hospitals to join the war and no one should take extra mileage out of this situation. People must come forward to take voluntary actions and pledge not to make this epidemic a profitable charity.

This is time not to worry but to focus and live as usual without fear. Take necessary steps to make the body and mind active and let the nature take its own way to tackle the problem.

The election effect on Short term power transaction in India

Introduction:

Amidst the economic downturn, there is some good news for Indian industry as stability is back with a bang with UPA getting near to the majority on its own. The reform is the first agenda for the new government and particularly the infrastructure sector looks bright in its prospect.

As far as power sector is concerned, there has been significant improvement in the growth in actual generation over the last few years. As compared to annual growth rate of about 3.1% at the end of 9th Plan and initial years of 10th Plan, the growth in generation during 2006-07 and 2007-08 was of the order of 7.3% and 6.33% respectively. However, growth rate was meager at 2.71% with 723.556 BUs generated during the year 2008-09 over 704.469 BU during 2007-08

Among the several issues faced by power sector, the short term transaction of power (via bilateral trading, UI mechanism and power exchanges) is much debated nowadays. CERC in its efforts to rationalize the short term price of power came up with new set of guidelines reducing the bandwidth of frequency to make the grid function in a disciplined manner, reducing the UI rate so as to give a proper signal to reduce price in power exchanges, making stringent penalty system for any violations including summoning of chiefs of Discoms.

Despite all these guidelines from CERC which had been effective from April 01, 2009, nothing seems to have changed in the month of April and May 2009. The two months unfolded a drama in Indian democracy as India witnessed general polls for Lok Sabha in five phase elections from April 16 to May 13. The weather was unkind at this crucial time as the heat wave was on several parts of the country and the states were finding it difficult to provide 24x7 power.

The economic recession though quite harsh on Indian manufacturing sector provided little relief to power sector. The state governments had to face all the music as elections were round the corner and states could not afford to load shedding in these turbulent times since power is one of the major issues for the general elections. Under the direct or indirect pressure from the state governments, state discoms had no option but to buy short term power at a higher rates and resort to overdrawl from the grid. Despite several warnings from the CERC, they constantly drew UI power from the grid thus pressurizing the whole system. At times, aggressive trading in power exchanges was also witnessed at unbelievable rates of Rs 15 per unit.

It is said, “everything is fair in love and war”. And so it goes for elections as well. Strict instructions from the top authority not to shed load in the areas where election were scheduled, made the distribution companies go that extra mile by purchasing short term power at a higher cost or to overdraw from the grid at the cost of grid security. So the people who otherwise faced a long duration of load shedding had the last laugh as they got power at will..thanks to the great election tamasha!

The higher purchasing rate coupled with UI payables and penalties there of, will ultimately burden the end customer only.

In India, elections are fought with 3 basic things Pani, bijli and sadak i.e water, electricity and roads. Electricity is one of the prime needs of the electorate, the state government irrespective of any party can not do much but to provide power at any cost. Infraline study highlights the ill effect of making 24x7 power available during the election journey in India.

Short term power transaction in India

Though most of the power generated in India is in the form of long term PPA, distribution utilities very often prefer to take the route of short term buying of power bilateral trading and through UI mechanism to reduce their demand supply mismatch in the crisis. After the introduction of power exchanges, buying power through exchanges also started. However, the volume traded in power exchanges is only a meager 3 to 4 % of the total short term power transacted in the country. According to the market monitoring report for February 2009 by CERC,

1. It was found that of the total electricity generation, 3935.62 MUs (6.89%) transacted through short term i.e. 2148.94 MUs (3.76%) through Bilateral (through traders and direct between distribution companies), followed by 1569.11 MUs (2.75%) through Unscheduled Interchange (UI) and 217.57 MUs (0.38%) through Power Exchanges (IEX and PXIL).

2. Of the total short-term transactions, Bilateral constitute 54.60% (42.63% through traders and 11.97% direct between distribution companies) followed by 39.87% through UI and 5.53% through Power Exchanges.

3. Top 5 states selling electricity are Chattisgarh, Delhi, Gujarat, West Bengal and Punjab and top 5 states purchasing electricity are Rajasthan, Andhra Pradesh, Maharashtra, Karnataka and Tamil Nadu.

Short term power transaction during the election months (April and May 2009)

Elections were held in India in 5 phases from April 16, 2009 to May 13, 2009 with 124 loksabha constituencies in phase I, 141 in phase II, 107 in phase III, 85 in phase IV and 86 in last phase. Details of election schedule in Annexure-I. Analyzing the election dates and phases and the states going to be polled, it can be seen that:

Just before the election commenced, starting from April 1, 2009 the short term price in power exchange touched Rs 10 per unit and the trend picked up from there touching an all time high of Rs 15 per unit and an average Rs 10 per unit.

States where polling was conducted saw a high level of volume of power traded through power exchange with rates picking up and after the elections were over in that particular area, the utilities resorted to load shedding and other areas picked up from there. The trend for UI was also similar in nature with the discoms hugely overdrawing power sidelining the CERC guidelines and jeopardizing the grid. Bilateral trading also saw a huge growth in volume in these months at a rate similar to the power exchanges.

A comparative study of different states with respect to overdrawl of power and power purchased through exchanges and bilateral trading confirmed such trends. A study of major defaulters states like Andhra Pradesh, Tamil Nadu, Karnataka, Uttar Pradesh in April and May 2009 highlighted the gross indiscipline by the state discoms overlooking all the rules, guidelines and warnings of CERC.

Warning by power ministry on over drawl issues:

Ministry of Power issued a stern advisory to Northern States overdrawing power asking them not to overdraw from the Grid when the grid frequency drops below 49.5 Hz.. In its warning note, the ministry said that in case States failed to discipline their utilities, they will have to face the consequences. States / Utilities had been warned that overdrawal of power beyond its availability may have serious and adverse ramifications for the Grid. MoP also advised all State generating utilities including NTPC and NHPC to function at optimum level so as to avoid any adverse situation.

In view of the rising demand due to the summer season coupled with elections, the over-drawal of power by the constituent States threatened the security of the integrated Northern-Eastern-Western grid.


To Be Continued...........

Dedicated Freight Corridor: Logistics Simplified (part – III)

Continued from Volume V, Issue No. 49…

The Dedicated Freight Corridor is proposed to be completed in a time frame of 5 years through a Special Purpose Vehicle (SPV). Since DFC would be complementary and not competitive corridor to Indian Railways as most of the traffic would continue to originate and terminate on Indian Railway’s network it will be under the administrative control of Ministry of Railways.
The dedicated freight corridors will cover 10 states of India with maximum investment and track length in Uttar Pradesh. The table below provides approximate State wise length of track and cost of DFC on both western and eastern routes:

Map of Western Freight Corridor



Western Freight Corridor (Delhi Mumbai Industrial Corridor)
The 1,469-km-long dedicated western freight corridor, linking Jawaharlal Nehru port to Dadri near Delhi, is expected to be completed in 2011 at a cost of Rs 11,446 crore. Fit for double stock container train movement, the corridor will be routed through Vadodara, Ahmedabad, Palanpur and Rewari.
The western corridor will carry container traffic from the western ports to destinations in Delhi, Haryana, Punjab and Uttar Pradesh and the eastern corridor will mostly carry coal and steel cargoes. The movement of trains with computerized control system will considerably reduce cost of operations, which is expected to benefit the industry and thermal power plants. Top
The western corridor is known as the Delhi-Mumbai Industrial Corridor (DMIC). DMIC has been designed to transform it into a Global Manufacturing and Trading Hub. This will be the biggest infrastructural project ever undertaken in the country. The government has also doubled the investment funds for the project from $50 billion to $90 billion (Rs 3,60,000 crore). The mega project will be developed with Japanese assistance and includes the development of an industrial infrastructure between Delhi and Mumbai which would run parallel to the 1,483-km railway freight corridor.
The corridor will be spread over an area of 4,00,000 sq. km and will be fully furnished with world-class roads, port and airport connectivity, power supply and multi-modal transport hubs. It will be 1,483 km long and 300 km wide. As per the rules of the mega infrastructural projects in the country, this industrial corridor would have to be constructed through public-private partnership.
It would significantly improve Indo-Japanese trade and economic relation. On the domestic front the project is expected to bring about a major expansion of infrastructure and industry in the states along the route of the corridor. The industrial corridor will cover six states namely, Uttar Pradesh, Delhi-NCR, Haryana, Rajasthan, Gujarat and Maharashtra. It will also link 10 cities with more than 10 lakh population each which include Faridabad, Surat, Delhi, Greater Mumbai, Meerut, Jaipur, Ahmedabad, Surat, Vadodara, Pune and Nashik.
The corridor project will involve the upgradation of key airports, setting up of food processing parks, ports on the west coast and power plants. The industrial corridor will have three green field ports, six airports and a 4,000-megawatt power plant. The corridor will encompass many special economic zones (SEZs), for which tax sops are given by the government. The Delhi-Mumbai industrial corridor will be constructed along the major transport facilities like highways, passenger train connectivity and rail freight corridors so as to facilitate imports and exports. Top
As per the proposed plan, the development of the industrial corridor will be undertaken in two phases. The first phase will be from 2008-2012 while the second phase will be from 2012-2016. Phase I will include the setting up of one investment region (IR) of about 200 sq. km and one industrial area (IA) of smaller sizes in each of the five states. Although, the corridor would pass through the six states, the national capital, Delhi which is also included in the six states, will not be able to enjoy the benefits of industrial development due to scarcity of land.
The industry department has planned to develop investment regions that will be spread over at least 200 sq. km, and an industrial area of 100 sq. km. The major economic activities will thus take place over these spaces. As of now, the industry department has identified 5 investment regions and 5 industrial regions for phase I of the project.
The table below shows the investment regions and industrial areas.
Investment Regions
Industrial Areas
Dadri-Noida-Ghaziabad
Meerut-Muzaffarnagar
Manesar-Bawal
Faridabad-Palwal
Khushkhera-Bhiwadi-Neemrana
Vadodara-Ankleshwar
Ahmedabad-Dholera
Alewadi/Dighi Port
Igatpuri-Nashik-Sinnar
Jaipur-Dausa

The investment regions and industrial areas have been identified for specific purposes. The investment regions, Dadri-Noida-Ghaziabad are identified for general manufacturing, Manesar-Bawal for auto components, Khushkhera-Bhiwadi-Neemrana for general manufacturing, Pitampura-Dhar-Mhow, Bharuch-Dahej for petroleum and chemicals and Igatpuri-Nashik-Sinnar for general manufacturing. While the industrial areas that have been short-listed for purposes include Meerut-Muzaffarnagar for engineering, Faridabad-Palwal for manufacturing, Jaipur-Dausa for marble/leather/textiles, and Neemuch-Nayagaon, Vadodara-Ankleshwar and Alewadi/Dighi in Maharashtra..

to be continued..............