Akshay

Analysis: India`s renewable energy policy
By Kushal Jeena

NEW DELHI, India (UPI) -- India needs to work out a comprehensive renewable energy policy that could add 20 percent of its current power capacity through non-conventional energy sources over the next two decades, Indian energy analysts say.

'The government needs to prepare a long-term policy for non-conventional energy sources if it is determined to increase power capacity in the long-run,' said Udai Lal Pai, a noted energy analyst.

He said priority should be given to wind energy, as India has fast been emerging as one of the world`s premier wind-energy generating nations. But, Pai said, the lack of a comprehensive policy for non-conventional sources of energy and administrative apathy toward the sector has slowed down the pace of wind, biogas, biomass and solar energy resources and growth.

India has displaced Denmark as the world`s fourth-largest wind-energy generating nation in terms of installed capacity, at 4,253 megawatts, with an average of growth rate of 35.7 percent over the past three years. China has the highest growth rate, at 38.8 percent. Its current wind-power generating capacity is reached 1,025MW.

'India`s wind-power generation capacity is much more than its nuclear capacity. It produces about 5,300MW of energy through wind power,' said V.S. Subramanium, secretary of the Department of Non-Conventional Energy.

The south Indian state of Tamil Nadu is the country`s largest producer of wind power, after the western state of Maharashtra. Tamil Nadu contributes 3,300 MW of a total 5,300 MW of wind power. The gross wind energy potential in India is estimated at 45,000 MW, whereas the technical potential is limited to 13,000MW.

Wind could be the one India`s largest renewable energy sources, with the fastest growth prospects, provided the government and non-governmental organizations and private players in the power sector come forward and show a similar interest to that shown to fossil fuels.

The Non-Conventional Energy Ministry, with the help of the Power Ministry, could ask the Central Electricity Regulatory Commission to direct provincial power distributors to fix minimum purchase quotas of renewable energy.

Electricity distributors would have to buy a minimum percentage of their requirements from renewable energy sources, depending on the availability of energy and its impact on retail tariffs.

As a step in this direction, the India Energy Forum, an NGO, has demanded a law making it mandatory for provincial electricity boards to buy renewable energy to boost private investment in this sector.

Although the country generates so much wind power, few Indians use it, as there is little awareness among the populace about renewable energy. Even electricity boards are unwilling to buy wind power. This attitude has contributed to the widening of the demand-supply gap of power in the country.

'The ministry will look into whether a new legislation would be required to force state electricity boards to buy a minimum quantity of renewable energy when the installed capacity of country`s non-conventional energy has reached to 7,200MW,' said Vilas Muttemwar, minister for non-conventional energy sources.

The annual turnover of India`s renewable energy industry, including power generation technologies for wind and other sources, is more than $667 million. It is projected that the market in India for renewable energy will be lucrative, and it is growing at annual rate of 20 percent. Investment in the sector is estimated to be about $3 billion.

Several U.S. power companies -- GE Power Systems, Solar Wall, NRG System, Alstom Power, Shell, Duke Solar and Sundanzer -- have shown interest in the Indian renewable energy market. Despite the prospects, the absence of a national renewable policy is hindering the development of the domestic sector. A policy draft for renewable energy has been pending with the federal government for some time.

Indian energy experts say that the generation target of 20,000 MW by 2012 may be difficult to achieve unless a comprehensive non-conventional energy policy is put in place to invite domestic and global investment.

'India cannot survive forever with more than 80 percent dependence on foreign energy sources like crude oil and natural gas. India`s future growth depends on availability of cheap alternative fuels,' Pai said.

In its ninth five-year plan, the government set an ambitious target of 1,000 MW of additional wind capacity installations. There are 1,800 MW wind plants operating in the states of Tamil Nadu, Maharashtra, Madhya Pradesh, Gujarat, Karnataka and Kerala.

In 1991, the government launched a private power policy to attract private investors to the sector. It yielded some results, as the country`s economy was also opened up at the same time. But after a period of interesting growth, investment fell sharply from mid-1996 onward; possible reasons were favorable fiscal policies and the lowering of capital cost and poor grid management.

The Ministry of Non-Conventional Energy Sources` guidelines for wind farm development urgently require a fresh look, as does the strengthening of institutions at the federal and provincial level.

(Comments to energy@upi.com)

Copyright 2006 by United Press International

__________________
If at first you don't succeed, call it v1.0!

Akshay

PM's recipe for energy security

Amid extremely volatile global oil markets and increase in prices of natural gas and imported coal, which have put enormous pressure on domestic prices, Prime Minister Manmohan Singh on Wednesday said there was need to examine the relevance of the entire gamut of taxes and subsidies in the energy sector.

"The extreme volatility that we have seen in international oil markets, coupled with similar magnitudes of price increases in natural gas and imported coal, has put enormous pressure on domestic prices," Singh said addressing the energy conclave on 'Implementing the Integrated Energy Policy' organised by IRADe.

"We need to factor in the economic cost and the environmental cost of alternative sources of energy while setting their prices. Only then we will be able to ensure that the energy security we desire gets translated into reality," he added.

Pricing policies play an important role in consumers' selection of energy sources, he said adding, "We must examine the relevance of the entire gamut of taxes and subsidies on various energy forms and energy using devices."

Singh also expressed concern over the mounting losses in the power sector and called for a new management strategy to deal with the situation in the energy sector.

"There are transmission and distribution losses as high as 40-50 per cent in several parts of the country and the new management system will have to deal with this harsh reality," Singh said.

Looking at the requirement of energy in India in next 25 years, Singh said the power sector alone would need Rs 60 lakh crore and such scale of investment would come only when there are proper returns.

The Integrated Energy Policy has estimated energy requirements in the year 2030, to be higher than existing level by a factor of anywhere between 4 and 5, if the Indian economy grows at around 8 per cent annually, the Prime Minister said.

"The figures for future requirements are gigantic. Electricity generation capacity would need to go up from our current installed capacity of a 131,000 MW to 800-950,000 MW.

This would imply huge annual imports of oil � anywhere between 300 to 400 million tonnes and coal imports that could touch 800 million tonnes annually," Singh said.

Can we afford to follow this energy path? Singh asked while raising a host of questions.

"How can we ensure that such vast quantities of energy are available to us? What would be the investment and foreign exchange requirements? India urgently needs to define a new paradigm of development for its energy sector," he said.

And this paradigm would have to focus on both the demand side and supply side. This calls for judicious use of available domestic resources and focus on efficiency at all levels, Singh said.

India is short of modern energy resources like oil, gas and uranium and even coal is not as abundant as is generally believed. "Thus we must use our energy resources optimally and efficiently," Singh said.

The exploration, production of fuels, electricity generation, T&D of power and setting up a gas grid, require large investment and this would be possible only if the sectoral policies were consistent and there were reasonable returns on the investments.

"Both the public and private sectors have to play important roles here, Singh said adding, "We need to develop public private partnerships in ways that attract the needed investment and provides energy services to the consumers at least cost," Singh said.

Singh also called for developing all resources - coal, gas, oil, hydro and nuclear along with renewables, such as wind and solar.

On the nuclear energy development, Singh said, "The speed with which we can develop nuclear power is constrained by the availability of uranium. The civil nuclear agreement we have entered into with the United States, and our discussions with the Nuclear Suppliers' Group, should help in accelerating the development of nuclear energy."

Akshay

Assam power supply to improve, says minister
Supratim Dey / Kolkata/ Guwahati

Private partners for joint development of projects would be selected through advertisements inviting bids soon.

Industry will get uninterrupted supply of power in the near future, according to Padyut Bordoloi, power and industries minister of Assam.

"Power availability is the priority of the Government of Assam and having revamped the transmission and distribution (T&D) system, the priority now is for attaining self-sufficiency in power generation," he told the Confederation of Indian Industry (CII).

Two special economic zones (SEZs), two special economic regions (SERs), a gas cracker project, a plastic park and other 10 industrial growth centres would be constructed in Assam in the next 10 years, the minister said, admitting that the government needed a transmission plan to meet future power requirements.

Availability of coal was not a problem in the state.

The challenge was to "harness resources to augment the existing generation as quickly as possible to increase generation to sell extra power to the rest of India".

He claimed the government had since 2004 worked to reform the power sector and make it efficient and make the state self sufficient in power.

Reform started in 2004 with massive investment in capacity addition and modernisation of the existing T&D system.

"The goal is to enhance carrying capacity of the system from present 880mw to 1300mw by 2008", he added.

The minister said after the reform process started, Assam State Electricity Board (ASEB) rushed to finish delayed projects and took up new projects.

As a result, 11 small projects were commissioned between August 2005 and May 2006.

As part of reforms, ASEB was unbundled into five corporations on December 10, 2004, called the Assam Power Generation Corporation Limited (APGCL), Assam Electricity Grid Corporation Limited (AEGCL), Upper Assam Electricity Distribution Corporation Limited (UAEDCL), Lower Assam Electricity Distribution Corporation Limited (LAEDCL) and Central Assam Electricity Distribution Corporation Limited (CAEDCL).

Efforts were being made to reduce losses of the electricity board.

ASEB's annual T&D energy loss in the last five years was Rs 2655.97 crore, and the aim was to bring this down in 2005-2006 to Rs 623 crore.

Losses were caused by an ageing network, low line capacity, inadequate transformer capacity, non-billing, non-collection, unaccounted supply and theft.

Except for the Karbi-Langpi hydel project, no investment was made in the generating sector in Assam in 30 years.

Consequently, the demand-supply gap widened and the situation worsened.

To attain self-sufficiency, investment of Rs 10,000 crore was needed in the generation sector in Assam, said Bordoloi.

The government had lined up projects like commissioning of the delayed Karbi-Langpi hydel power project, hopefully by October 2006, revival of the Bongaigaon Thermal Power Project by NTPC with capacity of 750mw and modernisation of the Namrup TPP.

The government was also planning a greenfield JV power project in Namrup.

Other power projects in the pipeline included the Lower Kopili hydel power project, Borgulai coal-based thermal power project in Tinsukia, and PPP project with a capacity of 180mw in Badarpur in Barak Valley.

Private partners for joint development of the projects would be selected through advertisements inviting bids soon, said the minister.

These projects will create 2101mw of power for the state.

The government will also seek additional power linkages from the 200mw Kahelgaon TPP, the 600mw Lower Subansiri Project and another 200mw from the proposed ONGC gas-based project in Tripura between 2006 and 2012, adding up to 1900mw.

Besides the reform process, the government was investing in rural electrification under the Assam rural electrification policy notified in February 2005, covering 7,000 villages under the Rajiv Gandhi Vidyutikaran Yojna.

Users said they expected improvements in the power delivery systems following the reforms and a change in quality, service and style of functioning of ASEB.

Akshay

Read below the complete profile of Indian power sector.

Indian Power Sector - A Profile

Akshay

Here is a working paper by Rahul Tongia on

The Political Economy of Indian Power Sector Reforms

Akshay

Here is another working paper by Joël Ruet on

A New Paradigm for the Indian Power Sector: Going Beyond the ‘Silver Bullet’ Privatisation

SLASH

Check this out.
The New Hyderabad airport.

New Greenfield Hyderabad International Airport
Mumbai and Banglore are going to get similar ones.

Both Hyderabad and Banglore airports will be completed by April 2008 and work is going really smoothly and constructors are confident about meeting the deadline.

Akshay

Thanx for the link Slash.

Do you have any similar links for Bangalore airport?

Tronic

nice... do you have any links for the Chandigarh International Airport???

__________________
Nabha Sparasham Deeptam
-Touch The Sky With Glory

Akshay

IT can be used to push infrastructure, say experts

New Delhi, Aug 25 (IANS) India's tremendous growth in information technology (IT) should now be used to create a competitive advantage in the country's infrastructure building industry, experts said Friday.

'In a globalised economy and world like ours, India with its tremendous potential needs to catch up in the race which can only be possible if it is supported by a proper infrastructure,' said Jay Bhatt, vice president, building solutions division, Autodesk Inc. a US-based software services company.

Addressing a Confederation of Indian Industry (CII) organised seminar here, Bhatt said: 'We plan to bring to India rivet models based on building information modeling (BIM) technology that is now being extensively used in the US for time-saving and cost-effective purposes.'

'Information technology will save time and cost inputs, which will in turn create world-class infrastructure for India,' said Nalin Sharma, former executive director of architecture, IAAI (International Airports Authority of India).

P.S. Rana of HUDCO (Housing and Urban Development Corporation Ltd) said, 'It is a myth that India is going through rapid urbanization. What we are seeing now is apparent, and to achieve free market opportunity in infrastructure it is imperative for us to abolish state monopoly in real estate.'

Rana also emphasised on the need for more special economic zones (SEZ) to be constructed in India for harnessing entrepreneurial potential of the country's workforce.

Ravindra Singh Verma, associate director, project management for Cushman and Wakefield, said: 'The biggest problem that India's infrastructure industry faces is finishing a project on time. With the use of various tools of IT we can not only save time but provide sustainable infrastructural edge to the country.'

Akshay

UPDATE 1-Boeing sees high India demand for jets over 20 yrs
Mon Aug 28, 2006 8:18am ET169

NEW DELHI, Aug 28 (Reuters) - U.S. aerospace firm Boeing Co. (BA.N: Quote, Profile, Research) forecast on Monday India would need 856 new jet aircraft worth more than $72 billion over the next 20 years, more than it had expected previously due to faster economic and traffic growth.

The Chicago-based firm also said it saw a "considerable increase" in India's air freight market as exports were estimated to grow 5-6 percent a year until 2016.

"From last year to this year, we have doubled our forecast," Dinesh Keskar, Boeing's senior vice president of sales for south and southeast Asia, told reporters at a news conference in the Indian capital, New Delhi.

"Economic growth, liberalisation and airlines' operational efficiency are three fundamental drivers behind air travel in India," he said, noting lower fares were also helping.

The number of people flying within India is rising rapidly due to more affordable air travel and a booming economy. The domestic aviation market is forecast to grow more than 20 percent a year until 2010.

Indian airports handled over 73 million passengers in the fiscal year to March 2006, a 24 percent increase on the year before, of whom 51 million were domestic fliers.

But the surge in passenger numbers, coupled with the launch of a string of new airlines in recent years, has put massive strain on airport infrastructure which anyway falls well below international standards.

India, Asia's fourth-largest economy, has embarked on a drive to upgrade its ports, roads and airports, which estimates suggest may cost $150-200 billion.

Boeing also said Indian carrier Air Sahara would buy 10 737-800 aircraft in a deal estimated at about $700 million. Deliveries would begin mid-2009.

SLASH

This is Banglore International airport.I like Hyderabad more than this one.

http://bialairport.com/img/flash/video01.htm

http://bialairport.com/img/flash/video02.htm

http://bialairport.com/img/flash/video03.htm

Akshay

India Min:To Ease Infrastructure Investment Rules -Report

MUMBAI -(Dow Jones)- The Indian federal government will ease its policies and regulations on infrastructure investments in order to attract investors and sustain the country's high growth rate, Finance Minister P. Chidambaram was quoted as saying Wednesday by the Press Trust of India.
The report didn't specify which regulations would be targeted or when such changes would take place.
"The (infrastructure) policy and regulatory shortcomings are being smoothed out....Our policy thrust in this regard is on creating efficient regulatory structures and enhancing investment," Chidambaram said.
India can absorb $150 billion of total foreign direct investment over the next five years, but regulatory issues have hindered investments in the country's infrastructure, the report said.
However, the government is confident of "deeper and broader" political consensus on reforms, it said.
"We are emphasizing effective public-private partnerships, given the difficulties involved in direct government provision of many infrastructure services," Chidambaram said.
India's economy has been growing at a "brisk pace" of over 8% during the last three years, and has been identified as the only economy capable of maintaining gross domestic product growth of over 3% until 2050, the finance minister said.

Akshay

Why India will overtake China
Despite recent growth, political oppression will keep the Asian tiger on a tight leash.
By Cait Murphy, Fortune assistant managing editor
August 31 2006: 7:09 AM EDT

NEW YORK (Fortune) -- On behalf of thousands of peasants from his native village, Ma Wenlin, a self-taught lawyer in northern China, sued the local government in 1997 to recover taxes that had been illegally assessed.

His chances didn't look too bad: Neighboring peasants had just won a similar case, a result that the Chinese press trumpeted as proof of the progress in the country's legal system.

In Ma's case, though, the courts refused even to hear the suit. Many of his clients were harassed and imprisoned for their presumption. When Ma persisted, going as far as petitioning the highest authorities in Beijing, he was arrested, taken into custody, beaten, and convicted of "disrupting social order."

His sentence: five years hard labor.

Ma Wenlin's story, told in Wild Grass: Three Stories of Change in Modern China by Ian Johnson, is first of all a specific human tragedy, both for him and for his overburdened clients, who scrape a mean living from the soil of the Loess Plateau, only to have their savings confiscated by corrupt, greedy and unaccountable officials.

But it also evokes a larger question: Are the impulses that animate the repression against the likes of Ma a comparative economic disadvantage for China?

And if so, might India, with its radically different traditions of democracy and freedom, eventually surpass China as an economic force?

At first glance, the answer to the latter question seems obvious: no. In 1980, China and India had roughly the same income per head; now China's is about double, fueled by a growth rate (9 percent) half again as brisk as India's. China gets more than 10 times as much foreign direct investment, and has five times India's share of world trade.

China has higher literacy and better infrastructure. It takes a month to start a business in China, and three in India. China has more savings, less debt and less poverty.

"If this is a race, India has already been lapped," concluded the Economist in a survey of the two Asian giants.

Political infrastructure

And yet beneath the surface there are trends that suggest that India can close the gap, and over time, even move ahead. Why? Because its democratic political system is more stable and better at accommodating change than China's autocracy.

But wait, even many Indians blame democracy for the country's poor economic performance for so long. They're wrong. India made a lot of poor economic decisions not because it was democratic but because, well, people made bad decisions.

At least India's democracy never did anything quite so mad as launch a Great Leap Forward (30 million dead) or the Great Proletarian Cultural Revolution (millions more).

The inspirational first generation of Indian leaders was, unfortunately, soaked in the thinking of the Fabian socialists (if only Nehru had gone to, say, Chicago, in the 1930s rather than London, how different India's history might have been!). They believed that growth comes from government plans, not profits, and that capitalism was the cause of poverty.

India adopted this outlook, added a dash of autarky, and created a mixed economy that managed only the "Hindu rate of growth" (about 3 percent) for two generations.

In 1991, impelled by crisis, India broke out of this mind set. Since then, India has undergone a peaceful cultural revolution. The Fabians are in retreat; entrepreneurs are social heroes; and the country has a newfound confidence that it can excel in the global economy.

In short, India is nearing a tipping point of economic transformation. The pace of change is not steady, but its direction is inexorable. Consider the current government, a coalition in which the Communist parties are crucial partners (and India's communists are considerably more economically orthodox than the Chinese variety). Even so, the recent budget managed to continue privatization, open pensions and mining to foreign investment, and cut corporate taxes and tariffs.

It is hard to argue that investment, competition and deregulation are bad, or anti-poor, or somehow un-Indian when the deregulation of the telecom industry helped to create the brilliant Indian IT industry.

Demonstrable success

These early successes have created momentum for more change, and a virtuous circle is beginning to close. Now it is obvious, even to the communists, that the parts of the Indian economy that are humming, such as drugs, auto parts and IT, are the ones that are most open and that this is no coincidence. Outsiders are beginning to notice.

In 2003, a survey by the Federation of Indian Chambers of Commerce and Industry found that 40 percent of companies were "positive" on India as an investment destination; last year, that figure rose to 73 percent.

China's hardware - in the form of bridges, roads, ports and the like - is incomparably better than India's. Anyone who has ever been to both Shanghai and Bombay, the countries' respective commercial capitals, does not need any convincing that Shanghai is the more modern and efficient city.

But in important ways, India's economic software is superior. India's banks report about 10 percent non-performing loans; China admits to 20 percent and the true figure could be double that.

India's capital markets work the way they should; China's are a rigged casino. India has more engineers and scientists; its domestic entrepreneurs have made a bigger mark.

And while no one in his right mind wants to go near the creaky, backlogged Indian civil courts, India is a country that does try to govern by the rule of law. China, ultimately, is a country that will break the rule of law whenever the party feels like it or deems its power to be threatened even if that "threat" is a few thousand poor peasants and their lawyer.

It is also worth noting that China's one-child policy means that it will face the costs of a rapidly aging population much sooner than India.

Since 1992, when Deng Xiaoping decided to gun for growth, China's economy has been running flat out. Over the same period, India's has accelerated from a crawl to a brisk jog; in a good year, it can deliver 8 percent growth. But with the example of positive change behind it, plus a reasonable monsoon and the willingness to learn from China's successes, it is not hard to imagine India growing at China-like speed.

It is at that point that its institutional strengths (a much richer civil society and a government that can be held accountable) give it a decided advantage.

At some point, a market economy requires a reasonably open and flexible political order. In China, that implies the end of the Communist Party's monopoly of power, or at least the chance to challenge it without being imprisoned. China's rulers are nowhere near countenancing that.

For all the advances in personal freedom in China over the past 15 years - and these have been enormous - the Communist Party's clenched grip on power has not relaxed. It's a whole lot less traumatic for a democratic country to open its economy, as India is doing, than for a dictatorship to open its politics, as China is not doing.

And that's why, a generation or so down the line, it is India that is going to be the Asian tiger that everyone watches.

Akshay

Constructive prospects
Wednesday, August 30, 2006 21:50 IST
Vivek Kaul & Ajoy Das

Infrastructure and construction companies have been a bit under the weather despite the sharp rebound in the stock market since mid-June. Between May 2 and August 30, construction shares have lost market value in the range of 25-35%, with the worst performers losing more than 50%. So what’s wrong?

Apparently, the market is now looking not merely at bulging order books, but also at future execution risks. When order books have to be executed, many things can go wrong, especially if the orders bagged have clauses that can dent profits.

According to Edelweiss Securities, construction companies need to pay greater attention to project execution now, though there are a few worries on the numbers front as well.

In a sample of eight construction companies covered by the Edelweiss report, revenues in the first quarter of 2006-07 (Q1) grew by a healthy 43%. Earnings grew even faster by 51%, indicating better margins.

Most of this growth came via order-book accretions in 2005-06. Edelweiss expects revenues and earnings to grow by a healthy 48% and 62% this financial year, with the order books growing by over 20% to Rs 50,000 crore for these eight companies.

The major raw materials used by the construction industry, cement and steel, have seen considerable price fluctuations in the recent past. The report says that companies have got used to this.

They have also protected themselves by building price escalation clauses into their contracts. Moreover, they are also entering into committed raw materials supply agreements at the backend. This should help them maintain profits even if important raw materials see prices escalating.

Further, to diversify their portfolio of services, these companies are getting into newer segments like roads, irrigation and power. With the government emphasising public-private partnerships, even smaller and mid-sized players like IVRCL, Nagarjuna Construction and Madhucon Projects are getting into the game, which was once dominated by the likes of L&T and Gammon. The report remains bullish on the sector and feels that the recent fall in prices makes construction stocks an attractive proposition.

Steel will not melt: Recent news reports about an impending cut in domestic steel prices may impact sentiment more than bottomline.

The relative stability in international prices has brought calm to the home markets, enabling leaders like Tata Steel and Steel Authority of India Ltd to either maintain prices or offer bulk discounts to special buyers. Some marginal cuts in list prices cannot be ruled out for September-October, since this will help ease pressure on the government.

The price cuts are unlikely to affect the bottomline because steel producers are planning to play the volumes game to offset it. As things stand, inventories in the domestic and global markets are lower than forecast and consumption continues to rise.

In commodity steel, prices of hot rolled coils have fallen to $540 per tonne from $600 per tonne over the past month. Prices in the domestic markets are around Rs 27,000 a tonne. In contrast, international prices of high-value products are hardening, with Chinese firms like Wuhan Steel, Anshan Steel and Taiyuan Steel increasing the prices of silicon cold-rolled steel. Corus in Europe has hiked prices of stainless steel.

In the domestic market, inventories are reported to have fallen sharply following strong demand from the automotive and construction sectors. Commodity steel producers like SAIL and Rashtriya Ispat Nigam Ltd will be riding this trend to push higher volumes into the market and offset negotiated discounts.

Other steel companies like Tata Steel, Bhushan Steel and JSW will be aiming to gain higher realisations from value-added flat products for auto and consumer durables sectors.