ENERGY NEWS JUNE-2019

Petroleum Conservation Research Association

Sanrakshan Bhawan 10, Bhikaji Cama Place New Delhi 110066

INDEX

S. NO. SUBJECT PAGE

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1.1

1.2

2

2.1

3

3.1

3.2

4

4.1

4.2

4.3

5

TRANSPORT

-E-Vehicles (EV)

-Oil & Gas run vehicles

ENVIRONMENT

- Air, Water & Sound pollution

ENERGY CONSERVATION

-Oil & Gas

-Electricity

RENEWABLES ENERGY

-Solar

-Wind

-Biomass

OTHERS

1-31 31-33

33-41

41-58

58-59

59-66

67-71

72

73-83

This Energy News contains excerpts of articles picked up from selected daily newspapers & magazines.

1

India to order taxi aggregators to go 40% electric by 2026

India plans to order taxi aggregators such as Uber and Ola to convert 40 per

cent of their fleet of cars to electric by April 2026, according to a source and

records of government meetings to discuss new rules for clean mobility. Uber

and Ola, both backed by Softbank Group, would need to start converting their

fleet as early as next year to achieve 2.5 per cent electrification by 2021, 5 per

cent by 2022, 10 per cent by 2023 before hiking it to 40 per cent, according to

the person and the records that have been reviewed by Reuters. Some taxi

players, like Ola, have previously tried to operate electric cars in the country,

but with little success given inadequate infrastructure and high costs.

Push for green drive- The Centre, however, is looking to push the new policy to

boost the adoption of electric vehicles (EVs) as it tries to bring down its oil

imports and curb pollution so it can meet its commitment as part of the 2015

Paris climate change treaty. The NITI Aayog is working with several ministries

on the new policy. Neighbouring China, home to the world’s top auto market,

is already leading the world in electrification by setting tough EV sales targets

for carmakers and offering incentives to taxi operators to increase their fleet of

clean-fuel cars. In a meeting in New Delhi on May 28, NITI Aayog officials and

the ministries of road transport, power, renewable energy and steel, as well as

the departments of heavy industries and trade, were among those

recommending taxi operators in India gradually convert to electric. They also

recommended that all new cars sold for commercial use should only be electric

from April 2026, a change that would also apply to Uber and Ola, said the

2

person who has direct knowledge of the matter but spoke on condition of

anonymity.

Food delivery vehicles- Motorcycles and scooters sold for commercial

purposes, like food delivery or for use by e-commerce companies, will also need

to be electric from April 2023, the person added. India has seen a boom in food

delivery apps like Zomato and Swiggy, which counts Naspers and Tencent as

investors. Sales by e-commerce firms like Amazon.com and Walmart-owned

Flipkart are also rising.

*****

India Inc Wants Niti’s EV Juggernaut to Move Out of the Fast

Lane

The meeting between Niti Aayog and industry representatives to draw up a

road map for the rapid adoption of electric vehicles (EVs) on June 21 wasn’t

exactly harmonious, according to people who attended. Battle lines had been

drawn weeks earlier, when the bosses of Bajaj Auto and TVS Motor Co had

made their views on an accelerated timetable eminently clear—they were

opposed to it. However, founders of electric vehicle startups were all for such

a move, said the people cited above. The government is reportedly thinking of

3

a 2023 deadline for three-wheelers and 2025 for all two-wheelers up to 150cc

capacity to go electric. Manufacturers pointed out that they have already been

forced to accept an accelerated timeline for tighter emission norms that go into

force next year and entail expensive redevelopment. Bajaj Auto managing

director Rajiv Bajaj expressed bewilderment over the logic of a ban on two- and

threewheeler vehicles powered by internal combustion engines (ICE) in three

to four years. It was more “shock and awe,” said the chief of the country’s

second-largest motorcycle company, referring to Niti Aayog discussion. Venu

Srinivasan, chairman, TVS Motor, India’s third-largest two-wheeler maker, was

equally critical. “You want to negate in one stroke” the strides made by India in

building the world’s largest two-wheeler market, which exports three million

vehicles annually, he told ET. A senior Niti Aayog executive defended the policy

think tank’s agenda and explained that the intention was to lower pollution and

stay in step with other global markets in terms of electric vehicle (EV)

technology. Srinivasan and Bajaj, who together represent more a third of India’s

twowheeler market and more than half of the three-wheeler market, argued

the case for more reasonable deadlines. Pawan Munjal, chairman of Hero

MotoCorp, India’s biggest twowheeler maker, didn’t attend. Srinivasan made

the presentation on behalf of Society of Indian Automobile Manufacturers

(SIAM), the industry lobby group. Bajaj and Srinivasan subsequently laid out

their case and responded to queries. While Niti Aayog wanted a comprehensive

road map for EVs in two weeks, Srinivasan said it would take at least four

months as stakeholders — supply chain including vendors and battery makers

— and global consulting firms would be approached. “No way can we go back

in two weeks,” he told ET in a phone interview. Niti Aayog officials had argued

that the issue was not new and had been deliberated upon at the Global

Mobility Conference last year, which many industry chieftains had skipped.

Srinivasan said the conference had not been meant for policy-making. Niti

Aayog got support from fledgling two-wheeler EV startups, represented by

Tarun Mehta, founder of Ather Energy, which makes electric two-wheelers, and

Sulajja Motwani of the Firodia group. Other EV startups backed their views but

Srinivasan pointed out that their volumes were low. “People who want to do it

tomorrow are making 1,000-odd vehicles annually,” he said. A startup

entrepreneurs cited the example of China, which produces 20 million

4

electrically powered motorcycles annually. Since EVs are more expensive, they

will require state assistance in this price-sensitive sector, Bajaj said. “I’m in awe

of the apparent willingness to subsidise EVs — an approximate ₹1 lakh per

vehicle — to help achieve reasonable price parity with ICE two- and three-

wheelers for an estimated minimum industry size of 25 million by 2025,” Bajaj

said. Srinivasan and Bajaj said they are in favour of monetary and other

incentives for transitioning to EVs. Niti Aayog officials said the courts could

impose a ban if the industry did not act voluntarily. They pointed to high levels

of pollution and the fact that fast action would help put India on the cutting

edge of EV technology, unlike in some other high-tech areas. Bajaj felt this view

was unrealistic. A ban on ICE vehicles would mean importing lithium ion

batteries, the costliest component in EVs, from China, offseting any drop in oil

imports. Further, India’s electric grid won’t be able to support the charging of

25 million EVs at night, Bajaj and Srinivasan said. “This is a complex issue… it

needs adequate thought,” Srinivasan said, adding that it will have a significant

bearing on an industry that employs a million. “Every manufacturer is working

on EVs.” Bajaj disputed the contention that EVs are superior in terms of

environment and experience. “In spite of all the fiscal sops in place, the great

electric revolution apparently can't get off the ground unless it stands on the

crutches of banning internal combustion engine two and three wheelers,” Bajaj

said. “Indian two and three wheelers that are the global benchmark for low

emission and high fuel efficiency must be banned within the next few years with

scant deliberation on where the employed are to go or from where the

electricity for charging is to come.” China’s ban on ICE vehicles meant it lost out

on the global marketplace, which was filled by Indian manufacturers such as

Bajaj Auto and TVS Motor, he said. “The unshakeable fact is that our industry is

world class, for it makes the lowest emission and highest fuel-efficiency vehicles

in the world, exports every year over 3 million vehicles worth about $3 billion

and employs at home across its supply chain one million people whose

contribution to India's GDP is anything but insignificant,” he said. Both Bajaj and

Srinivasan favoured a phased rollout of EVs. According to Srinivasan, certain

quadrants such as the most polluted regions could be taken up first for

implementation.

*****

5

Electric planes headed for takeoff

Electric-plane Company Eviation Aircraft Ltd., which just signed up its first customer, predicts that in a few years it may not be able to keep up with orders. “We’ll have a supply issue, not a demand issue,” Chief Executive Officer Omer Bar-Yohay said in an interview at the Paris Air Show. The founder of the Israeli venture capital-backed developer said U.S. regional airline Cape Air has agreed to buy a “double-digit” number of planes. The carrier flies on routes such as Boston to Martha’s Vineyard and New York to Nantucket. Eviation was showcasing a prototype, transported in pieces to the biennial exhibition, and is “talking to everyone” about future sales, said Bar-Yohay. Prospective customers include major U.S. carriers like United and JetBlue, which are interested in planes to feed hubs. Eviation’s plane, the Alice, is one of a host of electric models at the design stage, and its nine-passenger capacity and 650-mile range from a single charge could give it an edge in the commuter market, currently served by a variety of light aircraft. Interest in electric planes is growing as the aviation industry comes under criticism for increasing emissions of greenhouse gases. Eviation is planning a first flight later this year in the U.S. “We’re a bit ahead of the pack but I have no doubt others are coming,” Bar-Yohay said. Eviation contends its plane makes economic sense: Running costs for the Alice will be about $200 (Rs 14,000) per flight hour versus $1,000 (Rs 70,000) for a turboprop. The Alice will be slower than some conventional craft, with a cruising speed of 240 knots (276 miles per hour), half the pace of modern business jets but not far short of some turboprop models. Eviation is one of about 100 different electric-aircraft programs in development worldwide, up 30% since 2017, according to Roland Berger, a consulting firm. Zunum Aero, backed by Boeing and JetBlue, aims to bring a hybrid-electric commuter model to market by 2022, while MagniX Technologies is developing a propulsion

6

system for an all-electric plane. Easyjet has partnered with U.S.-based Wright Electric to develop a fullsized battery-powered airliner within a decade for flights of less than two hours, enough to link London with Paris or Amsterdam.

***** Govt. eyes strict emission rules to boost EVs

Unhappy over the auto industry’s resistance to the mandatory sale of electric

two- and three-wheelers from 2025, the government is looking at tougher

measures, including making emission standards stringent, to discourage the

production and purchase of vehicles that are fitted with internal combustion

engines (ICEs). The growing view in the government is that the auto industry

has traditionally resisted reforms toward cleaner vehicles, be it the introduction

of catalytic converters, use of CNG or even tougher emission standards such as

BS-VI and has always sought to block such steps. Even at a meeting in NITI Aayog

last week, industry representatives were seeking to stall the shift towards

electric vehicles (EVs) until the government think tank read out the riot act.

While NITI awaits the auto lobby’s recommendations, government officials are

working on ways to make petroland diesel-fired engines less attractive. One of

the options is to impose the Corporate Average Fuel Economy (CAFE) standards

that was used in the US. It is seen to have been effective in California that is

transitioning towards cleaner energy. “US, Europe and China have used various

7

tools to make greener vehicles attractive. We are also looking at ways to

discourage ICE engines,” a senior government official told TOI. The government

is finalising to fix targets by regulating carbon dioxide emissions and fuel

efficiency for auto makers. Among the options being explored is to mandate

limits and targets for emission intensity by every vehicle for auto makers and

provide flexibility to maintain their production mix between ICE and EVs. This

can be done through stiffer fuel efficiency reduction targets from the current

stipulation of around 8-10% over five years, a source said. This is expected to

push up prices of traditional vehicles that are currently on the road and make

electric more attractive. Officials said that work has begun on setting targets to

lower carbon emission at the corporate level for auto companies as opposed to

the individual models. So, an auto manufacturer will have to ensure that all the

models have an average emission level up to a certain level only.

*****

EV Push may Leave No Tanks to Fill at CNG Pumps, Burn Gas

Cos

The government’s plan to popularise electric vehicles (EVs) and phase out the

sale of fossil fueldriven vehicles beginning 2023 can put at risk the planned

investments of more than ₹1.2 lakh crore in city gas distribution business,

8

company executives said. Niti Aayog, which is leading the policymaking effort

for accelerated penetration of EVs in the country, has reportedly proposed that

only electric vehicles be sold after 2030. The proposed phase-out timelines for

different categories of fossil fuel-driven vehicles are April 2023 for three-

wheelers, April 2025 for twowheelers below 150 cc, and April 2026 for taxis.

The EV policy drive, which has unnerved automakers, is also scaring many

companies that have won city gas distribution licences in recent auctions. “This

will be disastrous for the city gas business,” said an executive at a state-run city

gas company that has licenses for several areas. The EV push has created

confusion among new licensees and may lead to companies missing work

programme targets they had quoted to win licences and slow down

investments in the sector, multiple executives at city gas firms said. “With such

bleak future for the industry, banks will not lend for city gas projects,” said

another executive. Executives did not want to be named for the fear of

annoying the government. Indian Oil, Hindustan Petroleum, Bharat Petroleum,

Adani Gas and Manila-based AG&P did not respond to ET’s emailed query on

how the government’s EV push would impact them. In just about a year, the

downstream regulator has awarded licences for 136 geographical areas

covering about half of India’s population. To win licences, the 20-odd state-run

and private companies have pledged to build 7,200 compressed natural gas

(CNG) stations, connect 3.5 crore homes with gas pipelines, and lay 156,000

inch-km of pipeline by March 2029. This, as per the regulator, would require an

investment of ₹1.2 lakh crore. Expansion plans by older licensees would require

additional investment. EV’s invasion would hurt sale of CNG, city gas

distributors’ most profitable business. CNG makes up three-fourths of the sales

revenue of Indraprastha Gas (IGL) and twothirds of Mahanagar Gas (MGL). IGL

and MGL mainly operate in Delhi and Mumbai, respectively. Gujarat Gas, which

operates in much of industrialised Gujarat, sells a fifth of its gas volume as CNG.

Three-wheelers and taxis are primary customers of the economical fuel besides

city buses as private car owners prefer not to wait in long lines outside CNG

stations for refilling. Two-wheelers mainly use petrol and their conversion to

electric is unlikely to affect city gas players. It is hard to shift households from

subsidised LPG to piped gas and when they do, they consume little, an

executive said. “Industries can be big consumers but not every licence area

9

would have the kind of factory population that Gujarat has. Second, they have

alternative cheaper fuels like fuel oil and coal available,” said an executive,

adding that exclusion of gas from GST also makes it less attractive. Executives

said it would be hard to build the city gas business without the most profitable

segment of CNG. Moreover, a typical new license area comprises two districts,

which means companies need to invest more to reach out to customers, unlike

say in densely populated places like Delhi or Mumbai, they said.

*****

Going Green: Ekart to deliver on E-vans

Ekart, the logistics arm of ecommerce marketplace Flipkart, said it will replace

nearly 40% of its last-mile delivery fleet with electric vehicles (EVs) over the next

nine months. The company is also setting up charging infrastructure at its hubs,

and expects these initiatives to cut carbon emissions by over 50%. Ekart clocks

about a million deliveries a day. “Our team is working with local ecosystem

partners to help them co-design concepts for electric vehicles best suited for

the growing ecommerce industry,” said Kalyan Krishnamurthy, Group CEO,

Flipkart. Flipkart has currently deployed eight electric vans in Hyderabad, 10 in

New Delhi and 30 ebikes in Bengaluru. Mahindra & Mahindra and Tata Motors

are two leading manufacturers of electric vans. EVs will help cut costs, said

Amitesh Jha, senior vicepresident, Ekart and Marketplace at Flipkart. “Electric

freight mobility will play a key role in building a robust supply chain for the

future and reduce our dependence on conventional power sources,” he said.

Grocery retailer BigBasket uses electric vehicles for deliveries in Hyderabad and

Delhi-NCR, and solar power in seven warehouses across Bengaluru, Gurugram

10

and Chennai, founder VS Ramesh told ET. Food delivery app Swiggy too does

more than 1.5 million deliveries a month on cycles.

STARTUPS PUSH FOR E MOBILITY

With the government aggressively pushing for a shift to EVs to bring down oil

imports and curb pollution, startups are actively working to drive adoption of

these vehicles. Ride-hailing app Ola has been lobbying in favour of electric

vehicle regulations, including recommending that the government consider

battery swapping and quick charge as appropriate technologies. “India can

leapfrog problems of pollution and energy security by moving to electric

mobility, create millions of new jobs and economic opportunity, and lead the

world,” said Bhavish Aggarwal, cofounder, Ola. In March, the government

announced an outlay of ₹10,000 crore for the second phase of the Faster

Adoption and Manufacturing of Hybrid and Electric Vehicles scheme, or FAME

2, to boost electric mobility and increase the number of electric vehicles in

commercial fleets. The outlay is for three years till 2022.

*****

NITI Aayog, two-wheeler makers to brainstorm electric

roadmap today

Friday’s meeting between NITI Aayog and the two-wheeler industry will be

critical to draw up a pragmatic electric mobility roadmap for India. The Centre’s

policy think-tank has called for this session with the top management of two

11

and three-wheeler manufacturers. The last few weeks have seen some of the

big guns from Bajaj Auto, TVS Motor, Hero MotoCorp and Honda articulate their

concerns on the deadlines proposed for electrification in three-wheelers and

sub-150cc bikes/scooters. The Centre, through NITI Aayog, has indicated that it

is looking at 2023 and 2025 for a complete conversion to electric for these two

product categories. The industry, in turn, is upset with this ad hoc

announcement since stakeholders already have their hands full in meeting the

Bharat Stage VI emissions deadline that comes into effect from April 2020. From

their point of view, it is an important step to clean up the air and there is really

no need to hasten the electric programme. Quite rightly, manufacturers have

also said that this would lead to disruptions in the supporting ecosystem of

dealers, suppliers and the overall workforce if the internal combustion engine

is shown the door overnight. The Society of Indian Automobile Manufacturers

(SIAM) has also cautioned that it makes sense to take one thing at a time when

it comes to e-mobility. It is in this backdrop that the meeting between NITI

Aayog and the two-wheeler companies assumes tremendous significance. In all

likelihood, both sides will try and work out a deal where there is some give-and-

take. Perhaps, NITI Aayog may extend the deadline or mandate electric only for

select metros whose residents are literally suffocating in foul air. Two-wheeler

manufacturers have already made it known that they are all for e-mobility so

long as it is a logical, phased programme that will not hurt any of the

stakeholders involved. Startups that are into their own electric scooters have

reiterated that they have no problems embracing electric with immediate

effect. This is easier for them since they do not have the scale of their traditional

counterparts that make millions of motorcycles and scooters every year. Yet,

there are some serious concerns that need to be addressed first. While the

Centre is keen on showcasing India’s clean air drive to the rest of the world, this

should first be preceded by implementing a scrappage policy for all categories

of vehicles first, right from two-wheelers and cars to trucks and buses.

Necessary steps- Any product that is over 15 years old should be removed from

the roads and it is up to the think-tank in New Delhi to come up with an

incentive/compensation package for such a move. After all, it makes little sense

to think of electric and the like when there are other polluting vehicles on the

roads. It would just become an enormous exercise in futility. Two, going electric

12

is fine but what happens to two-wheeler manufacturers like Bajaj Auto, which

are heavily into exports? Over 40 per cent of the company’s production is

shipped overseas, which is truly a testimony to ‘Make in India’. But this will

become irrelevant if electric is made mandatory. For any exporting entity, be it

Bajaj, TVS or Hero, balancing between electric and the internal combustion

engines (ICE) for the domestic and overseas markets will become a tall order.

Three, suppliers who make ICE parts will find themselves marooned in an era

of electric. They will have to sack redundant employees who cannot cope with

the new regime and even close down operations if they are pushed to the brink.

This will be an extremely costly price to pay that also has the potential to wreak

havoc in an already fragile ecosystem where unemployment is on the rise. The

crisis could also extend to dealers who may face new challenges in retailing e-

bikes. Sale of parts in the aftermarket, which forms an important revenue

stream, will take a nosedive as the rules of the game change. These are real

issues that cannot be wished away even though it is becoming crystal clear that

the Centre is not going to give up on its drive to go electric.

Unrealistic targets- It was not too long ago when policy-makers drew up a

grandiose vision of striving for 100 per cent electric in the automotive

ecosystem by 2030. Clearly, this was an impossible task given that precious little

had been done at the ground level in terms of providing for charging

infrastructure or fiscal sops to get the momentum going. One of the more

serious players in this space, Mahindra & Mahindra, has been facing headwinds

precisely because of these reasons. Since then, this unrealistic forecast has

been reduced to 40 per cent and thereabouts even though speculation is rife

that the Centre is keen on changing the goalpost all over again. The auto

industry, which is already facing slowdown challenges, will be in no mood to

oblige as was apparent in the recent spate of reactions to the electric roadmap

for two-wheeler companies. From manufacturers’ point of view, there is really

no point putting the cart before the horse when it comes to serious issues like

e-mobility. It is increasingly clear, however, that the present political regime

subscribes to disruption as a tool to ensure that the industry is constantly ahead

of the curve and does not slip into a somnambulistic mode. There is a feeling

within policy-maker circles that not all manufacturers are proactive when it

comes to change and would rather have the status quo continue. This perhaps

13

explains why legal intervention has been necessary from time to time, as in the

case of CNG being made mandatory for Delhi nearly two decades ago or the

more recent case of the move from BS III to BS IV. When this happened in March

2017, most manufacturers were left befuddled since they barely had four days

to clean up old stocks at dealerships and replace them with BS IV vehicles. There

has been no ambiguity on the BS VI deadline with the directive loud and clear

that as of April 1, 2020, manufacturers will not produce any BS IV vehicles. As

in other parts of the world, especially in Europe, where clean emissions have

almost become an obsession, India is equally keen to make a statement that it

is committed to this objective.

Sound policy needed- This is clearly the reason for the mega electric drive

except that it needs a sound policy on the lines of what China has formulated

and successfully executed over the years. The key for India is to take one-step

at a time where cities can be covered in phases first before endeavouring to

have the entire landscape virtually electrified. This is not going to be a walk in

the park for sure and the industry is perfectly justified in being apprehensive

about any radical shift to electric. After all, it is an all-new domain where

building expertise will take time. However, where the Centre could be right is

that it is equally imperative to start taking serious steps first. There is also every

possibility of paving the way for cheap Chinese electric parts that can literally

flood the market and pose a threat to Indian manufacturing. The following

decade will be a huge challenge for automakers as they look for a host of

solutions to tackle vehicular emissions in the subcontinent. Electric is inevitable

but there is no point giving a shock to the entire ecosystem at one go.

*****

Hyundai’s first electric for India feels like a no-compromise

crossover

Many international publications and news wires already have a section for

electric vehicles and there is news everyday in India too about electrics. In the

start-up space and amongst OEMs, in the two-wheeler and in the passenger

vehicle segments, the buzz around electrics is reaching a crescendo. The

14

numbers are still too small to even mention and the charging infrastructure for

supporting an ecosystem of electrics is even less worthy of mention. But, let us

hope that the government will match its targets and promises with action on

that front in the years to come. In the meantime, manufacturers like Maruti,

Hyundai, MG Motors, Ford, and Kia Motors have announced plans to launch

electrics in the future. Mahindra and Tata already have electrics on our roads.

The success of electrics in India will depend on two important factors — one

will be the availability of an easily accessible public charging infrastructure and

the second will be the car itself mustn’t seem like a compromise in any

department when compared to its internal combustion engine (ICE) equivalent.

An electric that will fit that profile perfectly is the Hyundai Kona and it is coming

to a showroom near you by the second week of July. To get a first-hand

experience of how the Kona EV actually feels on the road, I travelled to Seoul

last week to sample the car before it lands on our shores.

*****

SIAM pushes for enhanced penetration of alternative fuels

amid focus on EVs

Automobile industry body SIAM has proposed making petrol-powered two-

wheelers and passenger vehicles material compatible with 10 per cent ethanol

(E10) and 3 per cent methanol (M3) blends by 2025. In a white paper on

'Alternative Fuels for Vehicles' released recently, the Society of Indian

Automobile Manufacturers (SIAM) also said that by 2030, the auto industry

could make specific vehicles compatible with 20 percent ethanol (E20)-blended

gasoline depending upon sustained availability of fuels with separately labelled

15

dispensing at fuel stations. While electrification of fleet will be a major help

towards providing energy security and improving environment, SIAM said that

"India needs to work on other efforts, to not only complement this effort,

considering the ultimate objective of improving India's energy security". With a

requisite policy push and infrastructure development, to be done as an enabler

of fuel diversification effort by the government, the automotive industry aims

to achieve substantial penetrations of alternative fuel vehicles, it added.

Besides ethanol blends, four-wheeler industry would benefit from the

increased reach of CNG infrastructure, driving sales of CNG vehicles to save CO2

as well as reduce import bill, it said. For three-wheelers, CNG penetration can

be increased and by 2030, the gasoline-powered vehicles could be made

specifically to be compatible with E20 and diesel vehicles with B7 (7 percent

biodiesel), depending upon the sustained availability of fuels, it added. In case

of diesel-driven passenger vehicles, light commercial vehicles (LCVs) and heavy

commercial vehicles (HCVs), industry could make vehicles compatible with B7

bio-diesel blends by 2020, SIAM said in the white paper. Spelling out targets,

SIAM said, "For gasoline-powered two-wheelers and passenger vehicles,

industry will endeavour to make vehicles material compatible with 10 per cent

ethanol (E10) and 3 per cent methanol (M3) blends by 2025." Further, it said, "By

2030, industry could make specific vehicles compatible with 20 per cent ethanol

(E20)-blended gasoline depending upon sustained availability of the fuels with

separately labelled dispensing at fuel stations." For both two-wheelers and

four-wheelers, SIAM said that during the first phase by 2020, E10 material-

complaint vehicles would be continued to be made available across India. By

2025, in the second phase, all new vehicles will be E10 material-compliant and

will also be tuned for fuel efficiency, it added. In addition, vehicles will be made

material-compliant to gasoline fuel with 3 per cent methanol (M3). For four-

wheelers, SIAM said if CNG infrastructure is further doubled from the 2020 level

of 3,000 stations, penetration of CNG vehicles is likely to increase to more than

5.2 million vehicles, it said. During the third phase by 2030, based on fuel

availability and infrastructure, SIAM proposed two- and four-wheelers

specifically compliant to E20 to be produced, which will also be compatible for

M3 across India.

*****

16

GST on EVs may be reduced to 5%

India may cut the goods and services tax (GST) on electric vehicles to 5% from

12% to provide a stimulus to the sector that’s a high priority for the Narendra

Modi government. The GST Council is set to take up the proposal at its June 20

meeting, said a senior government official aware of the development. “There is

a proposal to cut tax rates on EVs among other issues,” the official told ET.

Lower duties are expected to encourage global manufacturers to invest in

India’s planned shift to electric vehicles in order to try and bring down pollution

levels. This comes as Punjab has written to the Centre seeking a review of tax

rates.

*****

How start-ups can turbocharge the EV revolution

While the government’s proposal mandating electric three-wheelers and two-

wheelers (by 2023 and 2025, respectively) has faced stiff opposition from the

conventional players, mobility solutions start-ups seem all set to benefit from

the move. Kapil Shelke, CEO and Founder of Pune-based Tork Motors, which

calls itself ‘India’s first electric motorcycle manufacturing start-up with

proprietary drive train technology’ said: “It is (the government mandate)

definitely a great opportunity for start-ups like us because we have spent a

good amount of years building this robust technology. Now, it’s time for us to

build vehicles on it and roll out the electric motorcycles, considering that there

17

is a market for at least 10 million vehicles,” he said. The company will be

launching its electric motorcycle, T6X, soon. While both traditional automotive

companies and start-ups are investing in the EV technology for two-wheelers,

the only difference is that the start-up business is focussed on EV alone, pointed

out Subrata Ray, Senior Group Vice-President - Corporate Sector ratings, ICRA.

Rajeev Singh, Partner, Deloitte India, said the government mandate would

definitely be an opportunity for start-ups, which may have faced headwinds in

their initial years due to the dearth of a suitable ecosystem for EVs. Despite such

constraints, since these companies have gone ahead and developed products

right from the scratch, this would be an opportunity to “encash some of the

efforts that they may have put in for the last so many years”, he explained. “We

are ready for this revolution whereas the existing players will have to invest a

lot in changing their existing systems and manufacturing units,” said Shelke

Charging infrastructure- Tork Motors is in the process of building its own

charging infrastructure, starting with Pune, with plans to extend to other cities.

“We are glad with the urgency in the government's voice to move the

automobile industry to electric by 2025. Electric vehicles are the need of the

hour and the sooner we get them on roads, the better it will be. With the start-

ups, government bodies and consumers enthusiastically reacting to electric

vehicles, it is time to get them out at the earliest,” said Shelke. As for Okinawa

Autotech Pvt Ltd, the Gurugram-based electric twowheeler maker which came

into being in 2015, its Founder and Managing Both traditional automotive

companies and start-ups are investing in the EV technology for two-wheelers

Director, Jeetender Sharma, said that if the established players also work

towards the new mandate, it would give support to companies like Okinawa, as

it will generate more awareness in the market about electric two-wheelers.

“The industry is huge with more than 20 million units, so there is a big scope for

everybody to grow (and) it’s the right time to start now,” he added. Okinawa is

planning to launch a motorcycle and scooter this year, with at least two

launches planned every year going forward. Talking about the advantages that

the start-up community has in this situation, Singh said, “I think the established

players will look to acquire some of these start-ups, rather than trying to do

everything inhouse. If someone has already got the business model and

products established, then they would like to acquire them rather than trying

18

to build everything in-house because that’s the way to cut down the

development time, to meet the deadlines. In case there is pressure on some of

the existing players, then they may want to look at these start-ups from the

perspective of acquiring them.”

*****

Online delivery companies may soon take to e-vehicles in

capital

The government Wednesday said it is collaborating with e-commerce and

urban logistics companies to induct up to 1,000 electric vehicles (EVs) in the

lastmile delivery segment in the next one year. Launching its first electric

vehicles freight pilot project, Delhi government said over 30 players in final-mile

urban delivery from across India have come together as part of its ‘urban

mobility lab’. “The goal is to pilot up to 1,000 electric vehicles for urban

deliveries in the city over the next 12 months. It is a first-ofits-kind project to

pilot and rigorously analyse the performance of EVs for urban deliveries,” said

Jasmine Shah, vice chairperson of Dialogue and Development Commission

Delhi, which organised the two-day workshop. Power distribution company,

Tata Power Delhi Distribution Limited, said it has inducted over 90 e-scooters,

37 e-rickshaws and four electric cars for carrying out operations in northwest

Delhi. “Delhi government believes electric vehicles are the future and it’s time

to bring this future into the present,” said transport minister Kailash Gahlot.

19

The government said policy framework for such EVs will be included in the

upcoming electric vehicle policy for Delhi. Dave Mullaney, director ofRocky

Mountain Institute’s global freight transport initiative — which has partnered

with the government for the ongoing urban mobility lab — said those involved

in the pilot project includes “titans of Indian industry, global e-commerce giants

and new homegrown startups.

*****

Future stock: Latest directive on e-bikes raises hackles of two-wheeler companies

The message was one of solidarity. Earlier this week, there were two no-

nonsense press statements issued by Rajiv Bajaj and Venu Srinivasan on the

same day. They were reacting to the Centre’s proposed move to have 100 per

cent electrification for three-wheelers and sub-150 cc two-wheelers by 2023

and 2025 respectively. The Managing Director of Bajaj Auto and the Chairman

of TVS Motor represent companies that are fierce rivals in the market. Yet,

there was consensus on this latest notification that it was unrealistic and

fraught with risks for the industry. Both Srinivasan and Bajaj made no bones

about the fact that this goalpost was impractical especially in a country which

is grappling with power shortages in many parts. Both CEOs welcomed the shift

to electric but warned that this was not the way to go about it in an ad hoc

manner. What was even more interesting was that the Society of Indian

Automobile Manufacturers (SIAM) had also made it clear in its own statement

issued a day earlier that this latest move on electrification was really a tall

20

order. Market leader Hero MotoCorp reacted later and pretty much stayed on

the same page as its predecessors as did Honda Motorcycle and Scooter India.

*****

Subsidy Proposals This Week to Set Up 5,000 E-charging

Stations

The government will within this week float two large proposals offering subsidy

to states for deployment of 5,000 electric charging stations in cities and

highways. This is the pilot electric infrastructure layout plan by the government

and aims at promoting India’s plan to shift 40% fleet to battery-operated

vehicles. Presently, there are 150 charging stations in India. Setting up stations

in cities will be open to all companies while only central utilities will be eligible

to deploy such infrastructure on highways. Two separate expressions of

interest for electric vehicle charging infrastructure in cities and on highways will

be floated by the department of heavy industries this week, an official said. For

securing subsidy for deployment of charging stations within cities, states

through their nodal agencies, mostly electricity distribution companies, will

have to submit their proposals to the department. Interestingly, for setting up

electric charging points at highways, proposals can be submitted only by central

public sector enterprises. For deployment of charging stations at highways

100% subsidy will be given on cost of charger and transformer, the official said.

21

The government has de-licensed public charging stations business for electric

vehicles enabling individuals to extend such facilities, but at a regulated tariff.

Companies like ABB, Acme Industries, Fortum India and a few Dutch firms are

actively considering setting up vehicle charging stations. State-run companies

like NTPC, GAIL India, Indian Oil Corp and Power Grid Corp have been exploring

diversification into electric vehicle charging infrastructure business. India has

recently approved phase-II of FAME India Scheme (Faster Adoption and

Manufacturing of (Hybrid &) Electric Vehicles in India), for a period of three

years commencing from April 1, 2019 with total budgetary support of ₹10,000

crore. The main focus of this phase of the scheme is the electrification of public

and shared transportation and laying of electric vehicles charging

infrastructure. The government targets setting up of one charging station every

three km in cities and every 25 km on both sides of highways.

*****

India-Taiwan JV 22KYMCO to export electric scooters from

India

Two-wheeler brand 22KYMCO, a collaboration between home-grown 22Motors

and Taiwan’s Kwang Yang Motor Company (KYMCO), will export its range of

scooters from its manufacturing facility in Bhiwadi, Haryana. “We are doing

extensive feasibility studies across the world for different markets. Our model

‘iFlow’, which is designed and developed in India, is going to be the first scooter

to be exported to other markets,” said Parveen Kharb, Founder and CEO,

22Motors. The company will also bring electric models from KYMCO to India and

will localise them for the Indian market. Kharb said that the commuter segment

can be easily serviced by electric two-wheelers, but the premium and the

performance segment is better served by conventional gasoline-powered

vehicles. Infrastructure development for the commuter segment is also easier

compared to the high-power segment, where prices will be driven up, he

added. 22KYMCO is already setting up infrastructure for charging points and

battery swapping stations in six cities — New Delhi, Ahmedabad, Pune,

Bengaluru, Hyderabad, and Kolkata — in addition to dealerships. The company

will offer battery swapping services for around ₹500, which will include battery

22

cost, infrastructure use and service costs. Kharb welcomed the government’s

push for electric two-wheelers taking over the sub-150 cc segment by 2025, but

called it an “aggressive statement”. “This goes with our strategy of products

too. In the commute segment, we are always talking about electric vehicles,”

he said, adding that the company plans to cater to the premium segment with

its gasoline-powered scooters such as the Like200 and the X-Town 300i ABS.

Sales of pricier scooters are on an upswing, although the overall number of

units is going down. Stressing that 22KYMCO is positioned as a premium brand,

Kharb indicated that it is not running behind huge sales’ numbers and is

targeting selling two lakh units in three years. “We are not looking at great

volumes now,” he said.

*****

E-Bike Plan Sparks Amity between Rivals Bajaj & TVS

Rivals Rajiv Bajaj and Venu Srinivasan have both opposed a proposal that’s

reportedly under consideration by the government — to mandate that all

twoand three-wheelers switch to battery power in the next few years. “To force

an unrealistic deadline for mass adoption of electric twoand three-wheelers will

not just create consumer discontent it (also) risks derailing auto-manufacturing

in India that supports four million jobs,” said Srinivasan, chairman of TVS Motor

Co, India’s third-biggest manufacturer of two-wheelers. The government is said

to be thinking of setting a 2023 deadline for three-wheelers and 2025 for all

twowheelers up to 150cc engine capacity. Manufacturers point out that they

have already been forced to accept an accelerated timeline for tighter emission

norms which will go into force next year and has entailed expensive

redevelopment. The domestic market for three-wheelers in FY19 was 700,000

units, while that for two-wheelers up to 150cc was more than 19 million units,

adding up to a gross value of over ₹1 lakh crore. The subject has united the

bosses of two companies that have previously fought each other over patent

applications, apart from competing in the two-wheeler market. In a separate

statement, the Bajaj Auto managing director said the industry does not have

any meaningful experience with electric vehicle (EV) technology to support a

transition of this scale within such a short deadline. Bajaj Auto is India’s largest

23

three-wheeler manufacturer. Other experts have cited the lack of charging and

other infrastructure that’s needed to ensure vehicles won’t run out of juice.

They pointed to long queues for compressed natural gas, a clean-burning fuel

used by cabs and autorickshaws. Srinivasan argued for a “gradual and seamless

adoption” of EVs to avoid “collateral damage” and ensure the technology-

driven disruption is positive and lasting. Bajaj said an appropriate transition

would be mandating Corporate Average Fuel Efficiency norms for all vehicle

categories, laying down strict targets for all vehicles. This will prompt

manufacturers to introduce clean-energy vehicles such as hybrids and EVs to

improve average fuel efficiency. “Basis the learnings from that experience, a

collective plan can be put together to scale up as desired,” Bajaj said. Experts

said two- and three-wheeler makers won’t have enough time to recover

investments they have made for the upcoming transition to BS-VI emission

norms from April 2020. “To me, it seems to be a decision taken in haste,” said

Avik Chattopadhyay, cofounder of brand strategy firm Expereal. “We should

not make such draconian decisions as China did, when it banned the sale of

two-wheelers in cities overnight in 2015, bringing their domestic industry to a

standstill.”

*****

Two-wheeler players seek ‘practical’ EV switchover targets

Domestic auto majors on Monday urged the government to follow a practical

approach in rolling out of electric vehicles, even as they cautioned that any

unrealistic target will lead to collateral damage by way of job losses. A day after

24

the Society of Indian Automobile Manufacturers (SIAM) cautioned the

government on its proposed ban on the sale of ICE (Internal combustion

engine)-based three-wheelers by 2023 and two-wheelers below 150cc by 2025,

top officials of the country’s leading two-wheeler companies have also

expressed concerns over the government’s plan. Venu Srinivasan, Chairman of

TVS Motor Company, said there should be a gradual and seamless adoption of

electric vehicles (EVs) to avoid any collateral damage, and that the technology-

driven disruption must be positive and lasting. He explained that auto-makers

everywhere were supportive of the overall goal of introducing EV and easing

consumers into electric mobility. “As a result, we have been doing serious

development work to ensure we can offer a mass-market EV product that

delivers on safety and high performance. This is necessary to co-opt consumers

into making a switch, so it’s driven by consumer willingness and, therefore,

adopted easily and widely. The supporting infrastructure for charging also

needs to be as robust as conventional fuel options,” he added. However, the

auto industry globally is still a long way away from making significant

development. “To force an unrealistic deadline for mass adoption of electric

two- and three- wheelers will not only create consumer discontent, but will also

risk derailing auto-manufacturing in India, which supports four million jobs,”

Srinivasan said.

*****

Auto sector on thin ice as slowdown persists

Plant shutdowns have become rather routine for automakers, with sales

plummeting by the day and no signs of a reprieve in sight. The first two months

25

of this fiscal have seen sales in free-fall mode. Market leader Maruti Suzuki is

reportedly contemplating cutting back on production in the coming weeks.

Mahindra & Mahindra has already made its intent known in a communique

saying it will go in for a closure of up to 13 days this quarter. If the slowdown

continues, more names could join the list. This is because companies will really

have no reason to produce cars/two-wheelers and contribute to inventory

pileups at dealerships. Industry captains are hoping the Budget will bring in

some positive news which could draw customers back to showrooms. For now,

lending by NBFCs has virtually dried up, which means even interested buyers

can’t access loans.

*****

Cos May Soon be invited to set up Battery Plants

The government is likely to soon issue tenders inviting companies to set up 50-

GW battery manufacturing base in India at $50-billion investment with

attractive financial incentives as the Cabinet is expected to consider the

proposal in a week. The battery manufacturing programme has been scaled up

to 50 GW in a proposal sent to Cabinet from 40 GW that was planned earlier, as

first reported by ET on May 8. The government is likely to offer subsidies and

duty cuts. This could include reducing minimum alternate tax to half and import

and export duty waivers or cuts for eight years for successful bidders, a senior

government official said. According to the final plan, Niti Aayog will seek

proposals from states to identify locations for plants and on providing duty

waivers and exemptions to the battery manufacturers. The states will be asked

to reduce state GST, facilitate land acquisition, provide concessional electricity,

single-window clearance and environmental clearance. Once the best

proposals are identified, the government think tank will invite bids from

companies to set up the plants at identified locations. This is probably the first

time Niti Aayog is executing a tendering process of this magnitude as it has

always been involved in the planning stage. “The draft Cabinet note has been

prepared and sent,” the government official said. “The timelines are likely to be

very stringent. Niti Aayog will have to conclude the bidding in six months from

Cabinet approval. As per the proposal, the companies will have to set up the

26

manufacturing facilities by 2022, after which they will get the incentives for

eight years till 2030. This clause is being pushed to ensure early setting up of the

manufacturing base. A minimum of five locations and maximum of 20 are likely

to be identified.” The large-scale battery-manufacturing proposal is aimed at

making storage systems competitive in India. Indian companies import

batteries and battery cells from countries like China and the US. With plans to

add 175 GW renewable energy generation capacity by 2022 and shift 30% fleet

to electric vehicles by 2030, the demand for battery storage is expected to be

at 300 GW.

*****

EVs: NITI Aayog tells 2-wheeler makers to pull up socks or lose

out to start-ups

Government think tank NITI-Aayog has told the two-wheeler industry that if

they don’t pull up their socks and prepare for conversion to electric vehicles

(EVs) then the start-up communities would take over. In a joint meeting

between senior management of NITI-Aayog and senior officials of the two-

wheeler industry, it was told that if the established players such as Hero, Honda,

Bajaj and TVS don’t start rolling out battery-powered two-wheelers, then India

would miss the E-mobility revolution just like how the country already missed

electronics revolution and semi-conductor revolution. Sources privy to the

meeting told BusinessLine that NITI-Aayog CEO Amitabh Kant sarcastically even

asked the players to inform when exactly can they launch the EVs. “He asked

how long do you need…25 years, 50 years. Can you give some time line…we are

27

in a hurry and cannot wait beyond (2025),” an industry source privy to the

meeting said quoting Kant. Kant was told by the traditional players that 2025 is

too early for the rollouts.

*****

Toyota Tsusho to gauge EV market before upping lithium

investment

Toyota Tsusho Corp , one of the world's biggest lithium producers, said on

Friday it would take at least two more years to properly gauge the global

electric vehicle (EV) market's direction before deciding whether to further

expand supply. Over the next 2-3 years, major automakers would be introducing

more electric cars, making EVs less of a fringe product, Masaharu Katayama,

head of the company's strategic metals unit, told Reuters in an interview. That's

also when it would become clear if people use these vehicles in any

fundamentally different way than traditional automobiles, he said, speaking at

the company's headquarters in Nagoya, Japan. "When we have clarity on that,

we can have much more clarity on demand for lithium." Lithium is one of the

core ingredients to make EV batteries. The EV market has boomed in recent

years, but still makes up just a fraction of total car sales. Demand has been

supported by subsidies and ever-tightening environmental regulations,

particularly in China and Europe. So far, Tesla Inc and a handful of Chinese

manufacturers have dominated the market, with Nissan Motor Co's Leaf being

the most prominent offering from a major automaker. However, industry giants

are ramping up those efforts. Volkswagen AG has promised almost 70 new

28

electric models over the next decade, while General Motors, which has stated

its commitment to an "all-electric future," plans to make its luxury Cadillac

brand electric only. Toyota Tsusho, which is part of the Toyota Group headed

by Toyota Motor Corp, currently produces about 15,000 tonnes of lithium

carbonate at its plant in Argentina through a joint venture with Australian miner

Orocobre. It's currently in the process of expanding production to 42,500

tonnes from 2021. Katayama says the "primary choice" if Toyota Tsusho

decides to increase production would be to expand the project again, rather

than hunting for new supply. "Our cost is very low, so we're very competitive.

...If we need more production, the resources are there. We just need to build

another plant." Katayama expects demand for lithium for decades, because it's

the most basic ingredient of EV batteries. But he sees the rarer and more

expensive metal cobalt as more like a spice, and vulnerable to industry-wide

efforts to reduce the amount required for battery production. Despite that,

Katayama said Toyota Tsusho is currently scouting for investment opportunities

in cobalt mines, although it's at an early stage. He declined to elaborate on the

region or size of investments they are eyeing. He did say that securing cobalt

supply is essential if producers are to prevent China from dominating the

market the way it's done in rare earths, an obscure class of metals essential for

technologies smartphones to satellites, and EVs. China used that dominance in

2010 amid a diplomatic row with Tokyo over a chain of disputed islets,

provoking a crisis that became known in Japan as the "rare earth shock".

"Investment is not enough, if you think about how China has maybe half the

cobalt resources," Katayama said. "Political influence is a worry. We have the

trauma from rare earths."

*****

Why kill ICE bikes in the electric rush, ask Bajaj and TVS

The first thing Rajiv Bajaj noticed was that there was not a single battery

manufacturer present at the NITI Aayog-called meeting last week with two-

wheeler companies on the electric plan. After all, this was about the electric

mobility roadmap, and the Bajaj Auto Managing Director was surprised that a

critical link to this vision statement was not present. Global battery makers

29

would have better articulated the scale of plants needed so as to “significantly

lower battery costs”. Insisting that it was time for two-wheeler manufacturers

to join the electric revolution, while citing China as a successful business model,

NITI Aayog had reiterated its stance that the internal combustion engine (ICE)

had to go. “What revolution? What ban? Doubtless electric has great merit but

keep in mind that the progressive ban by China on ICE vehicles made it possible

for the Indian two- and three-wheeler industry to exploit large global markets,”

Bajaj told BusinessLine. There was really no urgency to completely recast the

script with electric, especially when Indian two-wheelers had set the

benchmark globally for emissions and mileage. “Why ban an industry which is

world-class? If we are employing one million people and exporting over three

million vehicles, what are we talking about?” asked Bajaj. Venu Srinivasan,

Chairman of TVS Motor Company, who was also present at the meeting, said

Indian automakers were well aware of a national pollution issue that needed to

be tackled on a war footing. Yet, it was not as if vehicles were the main

polluters; power plants and refineries, industries like construction, and crop

burning emitted much more. “Given that most of our power is generated from

coal, the pithead to wheel carbon emission will not improve with electric

vehicles,” Srinivasan told BusinessLine. Further going from oil dependence to

being dependent on imported lithium cobalt and other rare elements-based

motors and batteries would not help the balance of payments situation. “In

fact, we are replacing one problem with a bigger problem; going from the frying

pan to the fire,” warned the TVS Motor Chairman. Bajaj also made it clear that

the industry was not anti-EVs by any stretch of imagination, but, for the same

reason, there was no reason for NITI Aayog to be antiICE either. While

reiterating that he welcomed electric and the accompanying fiscal sops to make

it happen, he cautioned that the present battery cost of $250/kWh would make

it a pricey option for the end-user. If e-bikes/scooters were to be affordable,

battery costs would have to come down to $100/kWh levels. Additionally, if

battery makers were assured of two million units annually from twowheeler

companies, there would be “enough volumes to justify investments.” On the

other hand, if the Centre were to subsidise evehicles to make them as

affordable as the ICE range, this would work out to ₹1 lakh/vehicle; on an

30

estimated 25 million twowheelers in 2025, it would be a staggering ₹250,000

crore.

Transition to BS VI- Bajaj said the present work on transiting from BS IV to BS VI

by April 2020 was an evolution in which the “degree of certainty is very high”.

On the contrary, for the electric revolution, there was hardly any proof of

concept given that it accounts for a minuscule part of the market right now.

“We are talking about taking it to 100 per cent when barely 0.01 per cent has

been implemented so far,” said Bajaj. Industry observers also warn that if the

Centre still chooses to go ahead with its 2025 electric plan, the risk of the market

being swamped with cheap Chinese products cannot be ruled out. Will the

Indian customer, used to far superior ICE models, buy these alternatives from

China? According to Srinivasan, electric two-wheelers will not be an option

either as they cost 80 per cent more than engine-based bikes. In all likelihood,

said Bajaj, the buyer would “sit tight” on his BS IV bike/scooter while giving the

cold shoulder to the BS VI option which would become irrelevant in an electric

era. Srinivasan said any “drastic shift” to electric would only increase India’s

dependence on China “as we move away from West Asia, which is our major oil

supplier”. The industry’s view is that lithium-ion batteries are the “only right

option” compared with Chinese use of lead acid batteries. “For now, we need

more time to study this subject and plan a transition. We have to deeply study

the carbon emissions equation, impact on investment and employment and

foreign trade balance as our export competitiveness will be eroded,” said

Srinivasan.

*****

UP First State to Invite EOIs to Set up EV Charging Stations

Uttar Pradesh has invited expressions of interest (EoIs) from companies to set

up charging stations for electric vehicles, the first state to do so after the Union

power ministry issued guidelines for such facilities last December to create the

infrastructure that will enable widespread use of the lesspolluting autos. Delhi

is perhaps the only city where such charging stations are available currently.

The Centre’s guidelines are directed at faster adoption of electric vehicles in

states such as Uttar Pradesh by ensuring safe, reliable, accessible and

31

affordable electric charging infrastructure. Uttar Pradesh has identified eight

cities, according to the EoI document that was issued on June 6 and seen by ET.

These are Lucknow, Kanpur, Varanasi, Agra, Noida, Prayagraj, Ghaziabad and

Meerut. It also wants them on the Agra-Lucknow Expressway, the Delhi-Agra

Expressway and the Eastern Peripheral Expressway, as well as the proposed

Purvanchal Expressway from Lucknow to Ballia that’s under construction. Three

major national highways passing through the state —NH-1, 24 and 27—have

also been earmarked for this. Charging at homes or offices will be permitted

through electricity distribution companies, the EoI said. “The vast infrastructure

and utilities needed to charge electric vehicles (EVs) hold the keys to

accelerating their deployment,” the EOI said. “The setting up of electricity

charging infrastructure can accelerate the growth of electric vehicles and thus

address the menacing problem of air and noise pollution.” The idea is to

promote affordable tariffs besides generating employment and income

opportunities for small entrepreneurs, the EOI said. It will support the creation

of charging infrastructure in the initial phase and eventually create a market for

the EV charging business, besides encouraging preparedness of the electrical

distribution system to adopt charging infrastructure, the EOI said. Uttar Pradesh

is proposing that setting up public charging stations (PCS) be a delicensed

activity and any individual or entity be allowed to establish them, provided that

they meet technical and performance standards and protocols laid down by the

power ministry.

*****

Honda launches BS-VI Active; says will revisit investments

amid slowdown blues

Honda Motorcycle and Scooter India (HMSI) on Wednesday unveiled its first BS-

VI compliant two-wheeler, the new Premium Activa 125, even as the company

said, it would reconsider manufacturing investments in India in light of the

recent auto industry slump. Minoru Kato, President and CEO, HMSI, said that

while work on constructing a new line at the company’s Gujarat facility would

continue, further investments in production capacity in India will be re-

evaulated. As Honda is reportedly working with Kawasaki, Yamaha, and Suzuki

32

in Japan on electric motorcycles, Kato said that such a collaboration would be

a good idea in India as well. However, he said that no concrete discussions have

taken place yet. The Activa has been a great performer for Honda over the

years, helping the company consolidate its second position in two-wheelers

behind erstwhile partner Hero Motocorp. The new Activa, apart from a cleaner

engine, also comes with features such as silent start, an idling stop system that

turns off the engine during brief halts, a front glove box, and a side-stand engine

inhibitor.

BS-IV model- The new BS-VI Activa will go on sale towards the end of second

quarter of 2019-2020. “Once we start the mass production of the Activa 125 BS-

VI, there will not be any more production of the BS-IV (model),” company

officials said. Honda officials further said that the new BS-VI compliant vehicle

pricing (expected to be at a 10-15 per cent increase) will affect sales. “In this

transition period, there may be a slowdown. There may also be a preponement

of buying of BS-IV before the final phase of closing it down,” officials stated.

However, Honda will continue to produce BS-IV for the export market, Kato said,

adding that the exports currently stand at 5 per cent (presumably of

production). With regard to the government’s intent of a complete shift to

electric vehicles (EVs) for two-wheelers below 150 cc by 2025, Kato echoed the

rest of the two-wheeler industry’s sentiment. “As of today, we can say 2025 is

too early to switch 100 per cent. We need to discuss with SIAM (Society of Indian

Automobile Manufacturers), and the government, to make a roadmap,” Kato

said.

*****

Transition to BS-VI poses challenges for auto industry: TVS

The transition to BS-VI emission norms from BS-IV will pose challenges for the

automobile industry with uncertainty of demand expected to be high in the

second half of 2019-20, according to TVS Motor Co. The Chennai-based company

also said the growth in two-wheeler industry during 2019-20 is expected to be

around 6-8 per cent over 2018-19 while stressing that any negative deviation

from normal monsoon is a cause for concern. “Majorly, industry will undertake

a significant change in migrating from BS-IV to BS-VI emission norms

33

commencing from April 1, 2020. Hence, in second half of 2019-20, BS-VI transition

will pose some challenges and the company is gearing itself to meet the same,”

TVS Motor Co said in its Annual Report for 2018-19. It further said, “Uncertainty

of demand due to upcoming emission regulation will be high in second half of

2019-20” and, therefore, “product readiness, supply chain readiness and

dealership readiness will be crucial.” Sharing its outlook with the shareholders,

TVS Motor Co said higher year-end inventory across trade and higher product

costs due to escalated commodity prices of last year, and advanced safety

regulation implementation from April 2019 can impact the industry growth in

the initial part of the year. On the other hand, the company said the trend of

increased crude prices and improved exchange to local currency is expected to

aid export market growth, especially in oil-dependent economies.

“Consequently, the growth in the two-wheeler industry during 2019-20 is

expected to be around 6-8 per cent over 2018-19,” it said. “Changing trade

policies of USA, Brexit and unforeseen challenges in Chinese economy can lead

to escalation of uncertainty in global economic growth,” it said.

*****

Scientists warn of ozone spike as mercury likely to rise in

three days

Scientists from the Union ministry of earth sciences have warned about a

possible spike in ozone pollution over the next three days because of rising

mercury levels. Even though the overall air pollution levels in Delhi was in the

moderate zone on Thursday, with the AQI hovering around 141 (on a scale of 0

– 500), scientists said that ozone was one of the main pollutants, along with

PM10 and PM2.5. “The mercury is expected to rise over the next three days,

which is likely to increase ozone production. The overall pollution levels could

rise to poor levels with ozone as one of the lead pollutants,” said a statement

issued by Safar, the pollution-forecasting agency of the ministry of earth

sciences, on Thursday. The India Meteorological Department (IMD) has forecast

that the temperature would remain around 40 degrees Celsius over the next

three days. On Thursday, the maximum temperature was recorded at 38.8

degrees Celsius. Even though Stratospheric ozone (ozone in the upper reaches

34

of the atmosphere) is good as it absorbs the sun’s harmful ultraviolate rays, it

is the ground level ozone — formed when vehicular and industrial fumes

undergo chemical reactions in the presence of sunlight — that can cause a

variety of health problems including chest pain, coughing, throat irritation, and

airway inflammation. “This year ozone level has consistently been elevated

because of heat waves in Delhi. There are very few occasions in a year when

ozone becomes one of the lead pollutants. Peak summer is one such period,”

said a Safar scientist. The Centre for Science and Environment released a report

on Wednesday, which also showed that ozone has emerged as a dominant

pollutant along with particulate matter on at least 28 days during summer of

2019 (April 1 to June 5) as opposed to only 17 days in 2018 summer. While in

2018 ozone pollution had exceeded the prescribed standards only on five

percent days, this year such number of days with high ozone pollution has shot

up to 16%. In several residential areas, such as Siri Fort, Aurobindo Marg, RK

Puram, JLN Stadium, Dwarka Sector 8 and Rohini, ozone pollution was higher

than prescribed on at least 50% days this year. In NCR, Faridabad and Ghaziabad

have experienced the biggest spikes. Compared to this, areas such as Aya

Nagar, Karni Singh Shooting Range, IGI airport, Lodhi Road, Mandir Marg, Pusa

Road, Patparganj, North Campus, ITO and Anand Vihar showed less ozone

pollution, with the pollutant exceeding the limit on less than five percent of

days. The eight-hour average standard for ozone exposure is 100 microgram

per cubic metre. The highest concentration in 2019 went up to 122 microgram

per cubic metre, which is 1.22 times higher than the eight-hour average

standard. During 2018, it had gone up to 106 microgram per per cubic metre.

“This is a matter of serious concern as ozone is a highly reactive gas and can

have adverse effect on those suffering from asthma and respiratory conditions.

If this trend continues and worsens, the Graded Response Action Plan will also

have to initiate action to address the precursor gases that form ozone — NOx,

hydrocarbons etc — and crack down on vehicles and industry,” said Anumita

RoychowdhuryRo CSE executive director (research and advocacy).

*****

35

Epic Pacific trash clean up underway

A floating device designed to catch plastic waste has been redeployed in a

second attempt to clean up a huge island of trash swirling in the Pacific Ocean

between California and Hawaii. Boyan Slat, creator of The Ocean Cleanup

project, announced that a 600-metre-long floating tube that broke apart late

last year was sent back to the Great Pacific Garbage Patch this week after four

months of repair. A ship towed the U-shaped barrier from San Francisco to the

patch in September to trap the plastic. But during the four months at sea, the

boom broke apart under constant waves and wind. “Hopefully, nature doesn’t

have too many surprises in store for us this time,” Slat tweeted. Fitted with

solar-powered lights, cameras, sensors and satellite antennas, the device

communicate its position in realtime, allowing a support vessel to fish out the

collected plastic and transport it to dry land. The plastic barrier with a tapered

three-metre-deep screen is intended to act like a coastline, trapping some of

the 1.8 trillion pieces of plastic that scientists estimate are swirling in the patch

while allowing marine life to safely swim beneath it.

*****

36

IIT team to mount devices on 200 cluster buses to check air

pollution

IIT-Delhi will put up pollution monitoring mechanisms atop 200 cluster buses to

gauge the air quality across the city during different times of the day in the peak

pollution period of September to February. The sensor-based devices will be

installed through a partnership with Delhi Integrated Multi-Modal Transit

System (DIMTS). “Each bus makes 16 trips daily, covering different routes — each

30-40km long. This deployment will collect particulate matter (PM) data across

different terrains, weather and times of the day,” said Rijurekha Sen, an

assistant professor at computer science department. An analysis of the data

can provide remarkable insights into the different factors affecting PM, added

Sen, the lead investigator. “These factors can be further ranked to suggest

remedial actions and devise appropriate PM control policies.” Aerogram, a low-

cost device, will be used to measure and understand different factors

contributing to the rise in particulate matters, she said. “We will start mounting

the units in August. By mid-September, we are hoping to ready 150-200 buses.”

Sen is working on the project under the aegis of Centre of Excellence for

Research on Clean Air, which provided the Rs 5-lakh seed money for the initial

pilot. Science & Engineering Research Board (SERB) of the Union science and

technology department has given Rs 1.3 crore for the project under the

IMPRINT scheme. “Our goal is to build a low-cost platform, which uses well-

calibrated, lowcost sensors and harnesses the computation and

37

communication power of IoT (internet of things). The platform should be robust

for mounting on vehicles, so that data collection across large urban expanses

becomes more scalable,” Sen said. Measuring other data like green cover,

traffic and vehicle classification are crucial for data-driven policy debates, she

said. As a pilot project, aerogram units have been kept at different locations on

the campus since December 2018. “Though reliability testing was the main goal,

the data gives some interesting insights,” Sen said. Even within the campus —

just 1.3 square km and mostly homogeneous with a lot of green cover — various

locations have slightly different PM levels, she added. Along with Sarita

Ahlawat, a Biotechnology Industry Research Assistance Council researcher, Sen

is building and deploying the sensors. Pravesh Biyani, an assistant professor in

the electronics and communications engineering department who is handling

the DIMTS collaboration, is also working on the deployment. Sayan Ranu,

assistant professor at the computer science department, and Arnab

Bhattacharya, associate professor of computer science and engineering at IIT-

Kanpur, will work on the large dataset after the deployment and correlations of

PM with different factors.

*****

How about an app for greener environs?

The Kerala Agricultural University (KAU) has launched an

app called ‘City Trees’ to guide the public in choosing the

right type of tree for their neighbourhood. The app,

launched to mark the World Environment Day 2019,

introduces selected ornamental and shade trees with

their botanical, trade and Malayalam name, habit, type,

crown, shape and flower colour so that a user can choose the right tree for

urban planting.

Urban greening- Urban greening is the simplest and most-efficient remedy for

global warming and many leading cities in the world have courted this option.

The app, developed by K Gopakumar, a professor at the College of Forestry, will

be available on the Google Play Store soon. According to Gopakumar, the

university has proposed different means to create, maintain and demonstrate

38

sustainable greenery models. After inaugurating the establishment of a

Miyawaki model forest on the Environment Day, he said it is a model worth

emulating in urban and peri urban locations. The Miyawaki model envisages

indigenous tree/shrub species on a minimum of two cents of land. This method

of afforestation, named after the Japanese botanist and plant ecologist Akira

Miyawaki, facilitates planting of more trees in a small space. The trees grow

faster too and are free of chemicals and fertilisers. The advantage of the

Miyawaki method is that the saplings need minimum maintenance. Atter

Miyawaki managed mini forests along the coastline of Japan to promote natural

vegetation on landspaces destroyed by natural calamities and human

interventions, this model has been adopted in many cities. The Kerala

Agricultural University has proposed this method to recreate the greenery of

Kerala destroyed by the recent floods and subsequent drought.

*****

परस ों विश्व पर्यािरण वििस है, इन छ टे तरीक ों से हम बचय सकते हैं धरती

अगर हम जलवायु पररवर्तन को रोक नह ीं सकरे्, र्ो उसक गतर् को ध मा जरूर कर सकरे् हैं। कुछ नई खोजें हमें ऐसा

करने के तलए रै्यार करर् हैं। 5 जून को तवश्व पयातवरण तिवस के आने से पहले हम आपको 8 पयातवरण क सहायक

च जोीं के बारे में बर्ा रहे हैं। िुतनया में हुए इन इनोवेशन से पयातवरण को होने वाला नुकसान कम हो सकर्ा है और ऊजात

के नए रासे्त तनकलरे् हैं।

वबजली पैिय करने ियली सड़क- फ्ाींस क कीं पन वैटवे ने ऐस सड़क बनाई है जो तबजल पैिा कर सकर् है। सड़क

के ऊपर फोटोवोल्टिक क एक लेयर तबछाई गई है, तजससे ररनू्यबल एनजी पैिा होर् है। साथ ह सड़क पर गातड़याीं भ

चलर् रहर् हैं।

समुद्र के पयनी से वबजली खी ोंचनय- अमेररका क ओतसला पावर ने एक ऐस तिवाइस बनाई है, जो समुद्र क गतर्ज

ऊजात को इलेल्टरि तसट में बिल िेर् है। यान समुद्र में एक कन्वटतर लगाया जार्ा है, जो एनजी से तबजल बनार्ा है। कई

सारे कन्वटतर लगाकर एक पावर प्ाींट भ बन सकर्ा है।

स लर क ल्ड स्ट रेज- आईआईट मद्रास से तनकल स्टाटतअप टैन90 ने सोलर कोल्ड स्टोरेज रै्यार तकया है। सोलर से

चलने वाल यह तिवाइस खेर्ोीं में होने वाल बबाति को कम करर् है। 300 से 500 तकलो फलोीं, सल्टियोीं या िेर प्रॉिर्स

को ठीं िे टेंपरेचर में रख सकर् है।

एक गयोंि से िूसरे गयोंि- बाींग्लािेश के कई गाींव एक-िूसरे को तबजल बेचरे् हैं। यहाीं पर सभ के यहाीं सोलर पैनल लगे

हैं, जो आपस में जुडे़ हुए हैं। एक तसस्टम के र्हर् इसे्तमाल के बाि तजर्न तबजल बचर् है, उसे पावर म टर के जररए

बेचा जार्ा है।

पयिर िेने ियले छ टे पोंख - अमेररका क V-AIR कीं पन 10 फ ट ऊीं चे हवा से चलने वाले टरबाइन बनाए हैं। ये केवल

14 तकम . प्रतर् घींटे क रफ्तार से चलने वाल हवा में तबजल पैिा कर सकरे् हैं। स्टि टलाइट के तलए ये ज्यािा बेहर्र हैं।

39

से्प्र से हरी-भरी ह ती वमट्टी- नॉवे क एक कीं पन ने तमट्ट को रेतगस्तान होने से बचाने के तलए एक से्प्र रै्यार तकया है।

इस से्प्र को तलल्टिि नैनोके्ल और पक तमट्ट से रै्यार तकया गया है। यह जम न के अींिर पान को रोके रहने का एक

नेटवकत रै्यार करर्ा है। तफर आसान से फसल या पेड़ लगाए जा सकरे् हैं।

ब तल ों क बयलू बनयनय- रोजाना क तजींिग में हम ग्लास क कई बोर्लोीं को इसे्तमाल करके फें करे् हैं। नू्यज लैंि क

कीं पन एके्स्प्लको ने एक मश न बनाई है, तजससे बोर्लोीं को प सकर बालू जैसे बनाया जा सकर्ा है। यह बालू नुकसान

नह ीं पहुींचार् और आसान से ररसाइकल हो जार् है।

पयनी के पयइप से वबजली - जमतन में लोगोीं से पैसा इकट्ठा करके बू्ल फ् िम ने पान के पाइप से पावर बनाने का तसस्टम

रै्यार तकया है। नगरपातलका क पाइपोीं में फ्लो होने वाले पान से टू्यब टरबाइन के जररये तबजल पैिा क जा सकर् है।

इस कीं पन ने हले्क वजन का हाइिि ोप्ाींट भ बनाया है, तजसे कह ीं भ ले जाकर तिवाइस को चाजत तकया जा सकर्ा है।

*****

For clean air, focus on energy efficiency

The threat of rising air-pollution is looming large across the world. According to

a report by the WHO, the elevated pollution levels have bred a host of

secondary issues like respiratory diseases, extreme weather conditions, crop

failure and biodiversity losses, demanding our urgent attention. The rising

pollution levels are rooted in rapid industrialisation and urban growth. This has

led to an ever-increasing demand for energy, to cater to the rising population.

Consequently, energy production and consumption continue to be one of the

largest contributors to global emissions. The current power demand is being

met through sources such as coal, natural gas, sun, wind and water. The

methods used to produce the energy result in the release of carbon monoxide

and carbon dioxide, which lead to increased emissions. If the generation of

energy spawns air pollution, then one of the most effective ways to reduce it is

to improve energy efficiency. According to an estimate by UN in its Global

Status Report, 70 per cent of the global carbon emissions can be reduced

significantly by increasing energy efficiency. While the push towards adoption

of renewable energy sources is a step in the right direction, investing in

improving energy efficiency can greatly bolster the charge against rising

emissions.

The India story- In 2015, the India Energy Outlook of The International Energy

Agency forecasted that the country’s energy use will more than double by 2040,

reaching 1,900 million tonnes of oil equivalent (Mtoe). This rising demand will

40

require interventions on a massive scale and increasing the efficiency of energy

use is the most feasible and affordable alternative. Recently, India emerged as

a global leader in the charge against rising emissions and has committed to

reducing the emissions intensity of its GDP by 33-35 per cent by 2030. Thus,

improving the energy efficiency of the nation gains greater import. Currently,

India has the world’s largest energy efficiency portfolio and has built a robust

ecosystem for stakeholders across diverse sectors. Energy efficiency

interventions such as UJALA has brought down LED prices to almost a tenth of

market prices and has helped reduce energy usage considerably. Installation of

LED streetlights alone has reduced annual GHG emissions by 1.39 million tonne.

Another important technology, which promises to cut India’s energy

distribution losses and consequently emissions are smart meters, which are set

to play an important role in aiding India’s energy transition. The five million

smart meters, which have been fitted across India, have already helped in

achieving a unit price which is 50 per cent lower than the market rate. E-

mobility too has significant potential in helping India achieve its climate change

goals and the government’s ongoing electric mobility programme envisages six

million electric and hybrid vehicles on roads by 2020. This will have a significant

impact on combating vehicular emission and help reduce it by 1.3 per cent by

2020.

Key initiatives- Some of the other crucial interventions that have already

helped India along on its path of energy efficiency are tri-generation and green

buildings. Implementing energy efficiency measures in buildings will unlock

substantial energy and cost savings for the next several decades. Additionally,

the tri-generation technology, which simultaneously generates electricity,

heating, and cooling energy from a single fuel input, is a remarkable solution to

meet the rising commercial and residential energy demands. Another

important area, which has traditionally had enormous GHG footprint and

substantial energy demand, is cooling and refrigeration. Taking cognisance of

this, the government is working towards an exhaustive National Cooling Action

Plan (NCAP), which aims to make cooling sustainable and energy efficient. We

have already seen laudable initiatives like the introduction of super-efficient

ACs, that have enormous potential in promoting smart cooling practices across

the nation. According to a report by The Shakti Foundation, the energy

41

efficiency market in India is pegged at over $23 billion. There is a vast potential

for energy efficiency advances in most industries, ranging from 46-88 per cent

in textile industry to 51-92 per cent in iron and steel industry. Thus, a collective

effort encompassing all the stakeholders, including the government, industry

and even users will usher in an era of energy efficiency in the nation. The

increased efficacy of our energy efficiency initiatives will enable our nation in

combating the menace of air pollution, along with helping it in achieving its

climate goals.

*****

Iran Oil Imports to be guided by India’s Energy Interests

India is hopeful that future negotiations between the US and Iran may help

restart energy imports from Tehran even as New Delhi maintains that its policy

on oil purchases from the Persian Gulf nation would continue to be guided by

its commercial and energy interests. The Iranian situation will be a key

discussion item on the agenda during talks between US secretary of state Mike

Pompeo and his Indian counterpart, S Jaishankar, in New Delhi on Wednesday.

India is engaging with the US on oil import alternatives in view of the US

sanctions on Iran, sources said. “We are engaging with the US on alternatives

for oil imports in view of the US sanctions on Iran. India’s decision will be guided

by its energy security needs,” one of the sources cited above said. Indian oil

companies have already taken the decision not to import more oil from Iran

after the US waivers ran out on May 2. The Indian Navy has deployed warships

in the Gulf of Oman and Persian Gulf to ensure the safety of Indian flagged

vessels operating in the region after tensions in the Strait of Hormuz. Naval

aircraft are also conducting surveillance in the area. The Information Fusion

Centre-Indian Ocean Region, which was launched in Gurgaon in December, last

year, is also keeping a close watch on the movement of ships in the Gulf region.

*****

42

India Intensifies Talks to Check Oil Prices as US-Iran Tensions

Rise

India has stepped up diplomatic initiatives with top oil producers as rising US-

Iran tension has pushed up crude prices and may raise freight and insurance

costs. While tension has been rising for a year since the US decided to re-impose

sanctions on Iran, recent attacks on oil cargoes in the Gulf region and downing

of a US drone by the Islamic Republic has magnified the anxiety. In just a

fortnight, oil minister Dharmendra Pradhan has spoken to US energy secretary

Rick Perry, Russia’s deputy Prime Minister Yury P Trutnev, UAE minister Sultan

Ahmed Al Jaber, and Saudi energy minister Khalid Al-Falih to discuss the

geopolitical situation and its effect on oil prices. He sought their help in keeping

prices at a reasonable level. For India, which imports 84% of its oil needs, any

supply disruption or a price flare can be damaging. Oil gained 5% in a week on

US-Iran conflict. “We are closely watching the situation. As of now supply lines

are ok,” said M Venkatesh, managing director of state-run Mangalore Refinery

and Petrochemicals Ltd. He said, so far, there was no impact on insurance and

freight. “If the tension persists, freight and insurance would naturally go up.

The risk has gone up, and shippers and insurers would start factoring in this

soon,” said another industry executive, who did not want to be named. Indian

Navy has deployed warship and aircraft to secure tankers headed to India from

the Persian Gulf region. It would be hard for one or two warships to fully secure

all oil cargoes meant for India but it can be a strong deterrent for anybody

43

wanting to harm ships, the executive said. Executives said a US-Iran war was

unlikely, as neither side seems to want it. “But if there is a war, it would get

over within days and is unlikely to affect supply lines for India,” the executive

said. Any attempt by Iran to block the Strait of Hormuz, through which about a

third of oil tankers pass, will not succeed since the US has a heavy military

presence there, the executive said. Also, the world will turn against Iran if it

were to attempt something like that, he said.

*****

ONGC Videsh, partners to invest $20 b in Mozambique LNG

project

ONGC Videsh Ltd, the overseas investment arm of

ONGC, and its consortium partners have announced

the Final Investment Decision (FID) in the

Mozambique LNG project. The Indian consortium is

expected to collectively invest $20 billion in the

two-train Golfinho/ Atum Mozambique LNG

Project. The first gas packet is expected in 36-48

months, ONGC said in a statement to the stock

exchanges. A meeting of senior ministers convened by Home Minister Amit

Shah on June 4 had approved the investment. Finance Minister Nirmala

Sitharaman, External Affairs Minister S Jaishankar, Petroleum and Natural Gas

Minister Dharmendra Pradhan and Commerce Minister Piyush Goyal were

present at the meeting. Also present were senior officials and NITI Aayog CEO

Amitabh Kant. ONGC has a participating interest (PI) in the Mozambique

Rovuma Area-1 Offshore Project through ONGC Videsh, while Bharat Petroleum

Corporation Ltd (BPCL) has a stake in it through Bharat PetroResources Ltd

(BPRL). The Mozambique government held a ceremony on Tuesday to announce

the decision. “The Mozambique LNG Project will be the first onshore LNG facility

in Mozambique consisting of initial two LNG trains with a total nameplate

capacity of 12.88 million tonnes per annum (mtpa) supported by the

development of the Golfinho/Atum fields located offshore entirely within Area

1,” a ONGC has a participating interest in the Mozambique Rovuma Area-1

44

Offshore Project through ONGC Videsh statement from ONGC said. “The project

has successfully secured an aggregate 11.1 mtpa of long-term LNG sales

(representing 86 per cent of the plant’s nameplate capacity) with key LNG

buyers in Asia and Europe. Additionally, the project will have a significant

domestic gas component for in-country consumption in Mozambique to help

fuel the economic development,” ONGC added. The FID signifies that the

Golfinho/Atum Mozambique LNG project will now advance to the construction

phase.

Stake holding- ONGC Videsh holds 16 per cent interest in the Mozambique

Rovuma Area-1 Offshore Project, out of which 10 per cent PI is held directly by

ONGC Videsh and another 6 per cent interest is held through its 60 per cent

shareholding in Beas Rovuma Energy Mozambique Limited (BREML). The

remaining 40 per cent of shares in BREML is held by Oil India Ltd. Anadarko

Mozambique Area 1 is the operator of the project with 26.5 per cent PI, and the

other partners are Mitsui E&P Mozambique Areal Ltd (20 per cent), ENH (15 per

cent), BPRL (10 per cent) and PTTEP Mozambique Area 1 Ltd (8.5 per cent).

*****

Panel to Consider Allowing Pvt. Cos to Sell Subsidized LPG

The government has set up an expert panel to consider allowing private firms

to sell subsidised cooking gas — a long-standing demand for companies like

Reliance Industries because state firms dominate the market by luring

customers with a lot of subsidies. Reliance Industries, which runs the world’s

biggest refinery at Jamnagar, is a big producer of LPG and has been lobbying the

government for years to permit private players to distribute subsidised

cylinders. State oil firms sell cylinders to customers at market price but buyers

are soon paid the subsidy in their bank accounts, which makes the fuel

effectively much cheaper than what is sold by private companies. The oil

ministry has set up a panel comprising five members including economist Kirit

Parikh, former petroleum secretary GC Chaturvedi, former Indian Oil chairman

MA Pathan, IIM Ahmedabad director Errol D’souza, and a joint secretary in the

petroleum ministry. The panel has to submit report by July-end. The panel has

the same experts who were in the committee that recently recommended

45

policy reforms regarding the setting up of petrol pumps, one key measure being

eliminating the condition of investing ₹2,000 crore in the oil sector to obtain

fuel retail license. The Terms of Reference of the expert committee on the

marketing of liquefied petroleum gas (LPG) include “review the existing

structure of LPG marketing in the country and assess whether competition

should be allowed in marketing of a controlled commodity which is deficient in

the country,” a recent memo by the oil ministry said. The panel will also “assess

the need, if any, to liberalise government policies to increase the participation

of private sector in LPG marketing in the country.” Reliance serves about a

million cooking gas customers across several states, which is tiny compared to

country’s customer base of 26.5 million. The country’s cooking gas customer

population has exploded in recent years due to the government’s focus on

taking cleaner fuel to more homes. About 20 million customers do not receive

subsidy — a potentially attractive segment private players can hope to lure with

better services. India has become the world’s second-largest LPG consumer. It

consumed 24.9 million metric tonnes of LPG in 2018-19, of which nearly half

was imported.

Pradhan Discusses Energy Issues with US Counterpart- Oil minister

Dharmendra Pradhan discussed with US energy secretary Rick Perry on Monday

the current volatility in the oil prices, its impact on Indian consumers and the

important role the US plays in stabilising global prices. Pradhan and Perry

discussed by phone the current global oil and gas situation and other measures

to take forward the agenda the two had set during the first term of the Modi

government. “Discussed ways to work together to enhance energy security,

further develop gas-based economy in India & expand energy and innovation

linkages to bolster the India-US Strategic Energy Partnership that was launched

in April last year,” Pradhan tweeted. They reviewed the current status of four

Working Groups created under the strategic energy partnership -oil & gas,

power & energy efficiency, renewable energy and sustainable development, an

oil ministry statement said.

*****

46

Ratnagiri refinery sets Aug deadline for Maharashtra

Maharashtra could end up losing the mega Ratnagiri refinery if no decision on

its revised land allotment is made by August. The 60-million-tonne (mt) project

has already been delayed by nearly two years and the stakeholders are clearly

in no mood to wait forever. “Going by the present timetable, the first phase will

be commissioned by 2025. Delaying this further is just not worth anyone’s

while,” said an industry source familiar with the project’s pace of progress.

Environmental issues- he original location for the refinery was Nanar in

Maharashtra’s Ratnagiri district but this was scrapped in March this year

following protests by the locals. They did not want the project commissioned in

an environmentallysensitive region and it was only a matter of time before this

became a political issue. The project was eventually shelved though the State

government assured the stakeholders that an alternative location would be

offered. Land was identified in Raigad district but little progress could be made

subsequently, as the country was heading for elections. With the BJP now back

in power at the Centre, the stakeholders of Ratnagiri Refinery & Petrochemicals

(RRPCL) are keen that the land is allotted soon. The lead promoters of RRPCL are

Saudi Aramco and Abu Dhabi National Oil Company with 25 per cent equity

each while IndianOil, BPCL and HPCL take up the balance 50 per cent. “Two years

have already gone by,” observed the source. The Maharashtra government is

keen to retain the project because it is a big deal from the viewpoint of

investments and employment generation, and with Assembly, elections are

round the corner. However, the RRPCL stakeholders need to be reassured that

work on an alternative location will be expedited. “If this does not happen, then

businessfriendly States like Gujarat could emerge as alternatives,” said the

source. Gujarat is already home to the refineries of RIL, Essar Oil (recently sold

to Rosneft) and IndianOil. The Gujarat government will clearly be delighted to

add another big name to its energy portfolio, say experts. The State is also

known for speedy approvals, as was evident in the case of the Tata Nano project

which was relocated in record time to Sanand from Singur. The Maharashtra

government will, however, pull out all the stops to retain the project. Yet, it will

also be aware that the stakeholders of RRPCL are unlikely to wait beyond

47

August. The Maharashtra government has identified land in Raigad district but

little progress has been made .

*****

Eicher unveils India’s first BS-VI compliant CV range

Eicher Trucks and Buses, a part of VE Commercial Vehicles Ltd (VECV), on

Monday unveiled the country’s first BS-VI compliant light-duty trucks — the

Eicher Pro 2000 series. The new range will be available in two variants — the

Eicher Pro 2049 and the Eicher Pro 2095XP. “We have a superior and long-

standing expertise in manufacturing and exporting base engines for Ethe uro-

VI requirements of the Volvo Group for the last six years. This extensive

experience with Euro-VI gives us the first-mover advantage to deliver products

engineered to cater to the new emission norms in the country,” said Vinod

Aggarwal, MD and CEO, VECV. “The select models that we unveiled will be fuelled

by our two new BS-VI engine platforms, equipped with an all-new state-of-the-

art cabin and industry-first features,” added Aggarwal. VECV is a joint venture

between the Volvo Group and Eicher Motors Ltd. The Eicher Pro 2000 series will

be available in BS-IV range across markets from Monday. The Eicher Pro 2049

10ft HSD is priced at ₹9.1 lakh, while the Eicher Pro 2095 XP 19ft HSD is priced

at ₹16.4 lakh.

*****

Vedanta, ONGC, RIL-BP among frontrunners in OALP II and III

bidding

Vedanta, ONGC, Reliance Industries–BP and Oil India Ltd (OIL) are among the

frontrunners to bag oil and gas blocks auctioned during the second and third

rounds of bidding held under the Open Acreage Licensing Policy (OALP). The

other bidders in the fray are Indian Oil Corporation and Bharat PetroResources,

among others, according to officials in the know. After delaying the bid

submission deadlines, the Directorate General of Hydrocarbons (DGH) has been

simultaneously conducting the second and third rounds of bidding under the

OALP. There are 23 blocks spread over 12 sedimentary basins in the third round.

48

In the second round, there are 14 blocks spread over seven sedimentary basins.

Out of the 23 blocks on offer in the third round, five are coal bed methane

(CBM) blocks. The 18 oil and gas blocks are based on the expression of interest

(EoI) submitted by the bidders and five CBM blocks have been carved out by

the DGH. In the second round, 10 blocks are based on EoIs submitted by the

bidders and four have been carved out by the DGH. Blocks offered in this round

follow the fiscal regime defined under the Hydrocarbon Exploration and

Licensing Policy. This includes reduced royalty rates, zero oil cess, a uniform

licensing system, marketing and pricing freedom, a revenue sharing model and

exploration rights on all the retained areas for the full contract life, among

others, according to the DGH.

*****

Saudis seek protection of oil supply

Saudi Arabia called for swift action to secure Gulf energy supplies, after the US

blamed Iran for attacks on two oil tankers in a vital oil shipping route that have

raised fears of broader confrontation in the region. Thursday’s tanker attacks

in the Gulf of Oman exacerbated the antagonistic fallout from similar blasts in

May that crippled four vessels. Washington, already embroiled in a standoff

with Iran over its nuclear programme, has blamed Tehran. Iran has denied any

role in the strikes on the tankers south of the Strait of Hormuz, a major transit

route for oil from Saudi Arabia, the world’s biggest crude exporter, and other

49

Gulf producers. Saudi energy minister Khalid al-Falih said, “There must be a

rapid and decisive response to the threat” to energy supplies, market stability

and consumer confidence after the attacks in the Gulf area, the Saudi energy

ministry tweeted. Iran, meanwhile, warned that it will continue scaling back

compliance with its nuclear deal commitments unless other signatories show

“positive signals”, Iranian President Hassan Rouhani told a meeting of Russian,

Chinese and other Asian leaders in Dushanbe, Tajikistan.

US GRANTS IRAQ NEW SANCTIONS WAIVER

The US has granted Iraq another 90-day waiver to continue with energy imports

from Iran despite reimposed sanctions, an Iraqi government source said on

Saturday.

‘BE CAREFUL,’ SAYS ARAB LEAGUE CHIEF

Ahmed Aboul Gheit, the head of the Arab League, urged Iran to “be careful and

reverse course”. He told UN chief Antonio Guterres in New York that there are

conflicting reports about Thursday’s tanker incidents.

UK JOINS US IN BLAMING IRAN FOR ATTACKS

The UK says it agrees with the US that Iran attacked the oil tankers. The foreign

office said “it is almost certain that a branch of the Iranian military” attacked

the oil tankers.

*****

Oil PSUs to lay world’s longest LPG pipeline between Kandla

and Gorakpur

IndianOil, Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corp

Ltd (HPCL) will be laying the world’s longest LPG pipeline, from Kandla (Gujarat)

to Gorakhpur (UP). An IndianOil statement said the 2,757-km cross-country

pipeline will connect three major States — Gujarat, Madhya Pradesh and Uttar

Pradesh — to the western coast and reach LPG to 22 bottling plants (BPs) of the

three oil-marketing companies (OMCs). A joint venture agreement to this effect

was signed here on Monday evening. The Kandla-Gorakhpur LPG pipeline is

50

estimated to cost about ₹10,000 crore. It will be implemented through a joint

venture company where IndianOil will hold 50 per cent and the other two OMCs

will hold 25 per cent each. “The pipeline will source LPG from three import

terminals on the west coast and two refineries (at Koyali and Bina) and supply

it to 22 bottling plants of the three OMCs connected en route — three in Gujarat,

six in Madhya Pradesh and 13 in Uttar Pradesh,” an official statement said.

Road-bridging- In addition, the pipeline will supply LPG to 21 more bottling

plants in Rajasthan, Gujarat, Madhya Pradesh, Maharashtra and Uttar Pradesh

through road bridging. Once completed, the single pipeline can transport up to

8.25 million tonnes of LPG per year, which amounts to about 25 per cent of

India’s LPG demand, the statement added.

*****

ONGC Q4 net slips 32% on drop in output

State-owned Oil and Natural Gas Corp (ONGC) reported a 32% drop in its March

quarter net profit as it faced a double whammy of a drop in production and fall

in prices. Net profit in January-March at Rs 4,045 crore was 31.6% lower than

net profit of Rs 5,915 crore in the same period of the previous fiscal year, the

company said in a statement. While oil production dropped 5% to 4.8 million

tonne, the price it realised for every barrel of crude oil sold was 3.6% lower at

$61.93. Gas production, however, rose 8.2% to 6.3 billion cubic metres. Also, gas

price climbed 16.3% to $3.4 per million British thermal unit. Revenue was up

11.6% to Rs 26,759 crore in the fourth quarter of 2018-19 as compared to Rs

23,970 crore a year back. ONGC board approved a final dividend of 15% (Rs 0.75

per share). This is on top of interim dividends of 125% (Rs 6.25 a share) declared

previously for 2018-19 fiscal. For the full fiscal 2018-19, net profit jumped 34% to

Rs 26,716 crore while revenue was up 29% at Rs 109,655 crore.

*****

51

ONGC’s R&D arm developing tech to use microbes to convert

residual oil in wells into methane

The Keshava Deva Malaviya Institute of Petroleum Exploration (KDMIPE), which

is the R&D arm of the public sector oil major ONGC, has made some progress in

its quest for identifying microbes that can convert ‘residual oil’ in oil wells into

methane that can flow to the surface easily. BB Chhabra, General Manager

(Chemistry) at KDMIPE, told BusinessLine that the Institute’s progress is more or

less on par with similar efforts elsewhere in the world.

Oil residues- Using bio-methanisation in oil wells is significant because a lot of

oil gets left behind in the wells after production through conventional means.

When a well is drilled into an oil-bearing sand zone, the oil flows upwards on

its own due to well pressure, but when the pressure drops, it has to be coaxed

to the surface. There are several ‘enhanced oil recovery’ methods, through

which oil is pushed up through the pipe – these include pumping water into the

well, using chemicals called surfactants that attach themselves to oil particles

and bring them up and even burning a part of the oil deep below (called ‘in-situ

combustion’), so that the heat lightens the remaining oil, like melting butter,

for easy flow. Different situations call for different solutions. However, even

with such measures, about half the oil residues in the reservoir gets left behind.

Here come the microbes. These microbes feed on the oil and burp methane, a

useful hydrocarbon. Methane, being a gas, flows upwards easily. The challenge

to scientists lies in identifying the best strains of microbes that would do the

job. Coming up with appropriate microbial strains is one of the projects, that

KDMIPE is engaged in. Chabbra and another scientist, Rakesh Tripathi, explained

that the quest hopes for three outcomes – identifying and characterisation of

the best (consortium of) microbes, a good assessment of the potential and

efficacy of the oil-to-gas process and the development of a nutrient medium

that would aid the conversion of oil to gas. Work has been going on with oil

samples collected from ONGC’s Ankeleshwar field and ‘proof of concept’ for

generation of methane has been established, Hiralal said.

Himalayan effort- KDMIPE’s primary engagement, though, is more with research into conventional oil production methods, including interpretation of

52

seismic data and conducting surveys. Its job, as Hiralal, Executive Director, KDMIPE, explained is to tell ONGC “where to go and where to go first” for drilling an exploratory well. One of its mandates is to find out if, and how much, oil the Himalayas bear. Early days, but this could open up a huge source.

*****

UAE Assures Supply of Oil, LPG to India, Says Pradhan

Oil cartel OPEC member UAE has assured India of uninterrupted supply of oil

and LPG despite disruptions in the Strait of Hormuz, Oil Minister Dharmendra

Pradhan said Monday. India is 83% dependent on imports to meet its oil needs

and is reliant on nations like the UAE to meet half of its cooking gas (LPG) needs.

Pradhan in Twitter posts said he held telephonic discussions with UAE Minister

and Abu Dhabi National Oil Company (ADNOC) Group CEOP Sultan Ahmed Al

Jaber over tensions in the Gulf region following attacks on two oil tankers last

week. “Expressed concern at the supply disruptions in the Strait of Hormuz. Dr.

Jaber assured me of oil and LPG supplies to India despite the disruptions,” he

tweeted. The attacks on oil tankers last week raised concerns over supplies

through the Strait of Hormuz that is the conduit for a fifth of the world’s oil.

“Spoke to UAE Minister of State and Group CEO @AdnocGroup H.E. Dr. Sultan

Ahmed Al Jaber and discussed ways to collaborate and work together to

strengthen our hydrocarbon engagement,” Pradhan said. During the telephonic

call, he also discussed UAE's lead role in ongoing India's strategic petroleum

reserves programme. The UAE has hired storages in the underground storages

India has built as insurance against supply disruptions. Pradhan said he also

spoke to OPEC Secretary-General Mohammed Barkindo on Monday. “SG

Barkindo reaffirmed India as an important partner for OPEC,” the minister said.

*****

Oil Slips as Factories, Housing in US Flash Latest Economic

Warnings

Oil slipped further into a bear market as American factories and homebuilders

offered the latest warning signs of weakening demand. Futures slid as much as

53

1.4% in New York, but regained some ground as OPEC and its allies worked to

schedule a meeting to extend supply cuts. In the US, the Federal Reserve found

a record slowdown in June for New York State factories while sentiment among

housing contractors unexpectedly dropped for the first time all year. Commerce

Secretary Wilbur Ross, meanwhile, downplayed expectations for a US-China

trade breakthrough at this month’s G-20 summit in Japan. “OPEC will inevitably

do what it needs to do, but that can’t happen without a lag," Bart Melek, head

of commodity strategy at Toronto’s TD Securities, said in an interview. “So the

question for the market now is what happens to the demand side of the

equation." Monday’s declines threatened to snuff out last week’s late rebound

for prices, which followed attacks on two tankers in a critical Persian Gulf

waterway. Swelling American stockpiles and the US-China trade rift have helped

drive prices into a bear market, down more than 20% since a late April peak.

The decline came despite signs the OPEC+ producer alliance was inching closer

to a gathering to formally extend production cuts. Iran, the lone holdout, is

willing to meet in late June or mid-July, Oil Minister Bijan Namdar Zanganeh

told reporters in Tehran on Monday, although a final date still wasn’t set. West

Texas Intermediate for July delivery dropped 30 cents to $52.21 a barrel on the

New York Mercantile Exchange at 11:55 a.m. Brent for August settlement fell 43

cents to $61.58 a barrel on London’s ICE Futures Europe Exchange. The global

benchmark price traded at a premium of $9.11 to WTI for the same month. As

the trade war drags on, pressure is building on OPEC+ to extend its output limits

into the second half of the year. The alliance will probably meet in “the first

week of July, and that will secure the rebalancing the market,” Saudi Energy

Minister Khalid Al-Falih said Sunday. Meanwhile, Saudi Crown Prince

Mohammed bin Salman joined with the US to blame Iran for the latest attacks

on tankers, according to an interview with Asharq Al Awsat newspaper. Prince

Mohammed said the international community needs to take a firm stance

against the country, according to the interview published Sunday. Iran has

denied culpability.

*****

54

GAIL Proposes, Regulator Disposes, Street Worries

GAIL (India), the country’s largest gas transmission company, lost over onetenth

of its market capitalisation on Thursday after the industry regulator raised gas

tariffs far below the analysts’ expectations. The gas transportation tariff under

the new norms of the Petroleum and Natural Gas Regulatory Board (PNGRB)

will increase by 4% for its most significant pipeline for FY20, compared with the

Street’s expectation of a 15-20% hike. The lower-than-expected tariff hike will

translate into 4-8% earnings downgrade for the current fiscal. The company

derives about onethird of the operating profit and 45% of the sum of part

valuation from the gas transmission segment. The other segments include

petrochemicals, LPG production, transportation, and natural gas marketing. The

gas regulator has computed tariff of the old Hazira-Vijaipur-Jagdishpur (HVJ)

pipeline and new HVJ pipeline on an integrated basis, which means it has

considered both the pipelines as one unit. The tariff is calculated based on

capacity utilisation, capital expenditure, inflation and economic life in such a

way that the pipeline earns a post-tax return of 12% and pre-tax return of 18%.

The procedure uses a discounted cash flow model to arrive at the gas

transmission tariff. The old and new HVJ are parallel pipelines and account for

nearly 60% of the gas transmission volume of GAIL. Historically, the regulator

has been computing the tariff of both the pipelines separately. The gas tariff of

the old HVJ and new HVJ were ₹25.46 and ₹53.65 per MMBtu, respectively,

under the old method of tariff calculation. GAIL had sought tariffs of ₹114 and

₹79 per MMBtu for old and new HVJ respectively. However, PNGRB approved

lower tariffs of ₹43.7 for the old pipeline and ₹56.7 for the new one. On an

55

integrated basis, the approved tariff for the pipeline is ₹41.1 per MMBtu. The

key reason for the tariff hike being lower than Street expectation is the

economic life of the pipelines under the integrated tariff regime, which has

been extended to March 2035 from March 2032. The higher economic life has

resulted in a relatively lower integrated gas tariff on account of the increase in

the number of years in the discounted cash flow model. Another explanation

for the lower tariff is that under PNGRB rules, a company has to forego 50% of

incremental regulated revenue for an existing network. The regulator has

considered new HVJ as an extension of the old HVJ, which has resulted in lower

blended tariff. The lower gas tariff for the key pipeline may lead to a downward

revision in the blended tariff for the current fiscal. In FY19, GAIL had blended

gas tariff of ₹1.47 per standard cubic metre. The 4% rise in tariff would translate

into marginal growth for FY20. Kotak Institutional Equities expects 6% increase

in GAIL’s blended tariffs for the gas transmission segment to ₹1.57/scm from

its earlier expectation of ₹1.62/scm. Consequently, it cut EPS for FY20 and

FY21by 3% and 4% respectively. CLSA said that tariff revision proved to be a big

disappointment and reduced the stock’s target price to ₹365 from ₹420 and

downgraded the stock from ‘buy’ to ‘underperform’.

*****

Petronet in a Bind with Capacity Expansion and Lower

Offtake

Moderating gas consumption in the country amid growing installed re-

gasification capacity are likely to weigh on the stock of Petronet LNG, India’s

56

largest re-gas terminal operator. With 4% return since the beginning of 2019,

the stock has underperformed the BSE Oil and Gas Index, which has gained 10%.

The company is in the business of converting liquified natural gas into gaseous

form and these conversion charges form its earnings. India’s gas consumption

fell by 1.6% year-on-year to 161 million metric standard cubic metres per day

(mmscmd) in April 2019, the lowest monthly growth in the past 12 months.

Barring city gas distribution and petrochemicals verticals, major gas consuming

sectors such as fertiliser, power and other industrial segments reported

contraction in demand. Of the total gas consumption in India, about 45% is

catered through LNG where gas conversion is required. The slowdown in India’s

LNG imports affected Petronet’s volumes which fell in the last three quarters

of FY19. For the full fiscal, its volume dropped by 1%. The company has

attributed the recent volume weakness to refinery shutdowns. It expects higher

utilisation of the Kochi terminal to drive up volumes in the current fiscal. A

significant recovery in gas offtake would, however, require policy push to start

the stuck gas-based power projects in the country. Until that happens, volume

growth in the medium term may not match the historical growth. Petronet’s

gas volumes had grown by 11.8% annually between FY14 and FY19 while the

average growth is expected to be 4% in each of the next four years. The short-

term volume growth will hinge upon whether the Kochi-Mangaluru gas pipeline

will be commissioned by June 2019 as guided by GAIL in its conference call with

analysts after releasing the March 2019 earnings. However, the project has

missed several deadlines in the past. This pipeline is critical for higher volume

offtake from the company’s Kochi terminal, which has been running at around

10% of utilisation due to unavailability of the pipeline network. Petronet is

expanding the Dahej terminal capacity to 17.5 million metric tonnes per annum

(mmtpa) from 15 mmtpa, and it is expected to complete by June 2019. Besides,

it plans to put additional tanks at Dahej, which would increase the capacity of

the terminal to 19.5 mmtpa. The capacity expansion amidst moderating LNG

volume growth would have a bearing on Petronet’s incremental utilisation. The

stock trades at 13.7 times the projected one-year forward earnings, a 9%

discount to its longterm average. Historically, Petronet’s stock has traded at a

premium to the state-owned energy stocks due to lower risk of regulatory

intervention. However, the valuation gap will depend upon how it deploys the

57

free cash flow. The company has been looking at several overseas investments.

Any investment diversification from the company’s core business will be

treated with caution by investors.

*****

Crude Stumbles to Worst May in Seven Years

Oil posted its worst May performance in seven years

as global trade tensions escalated, undermining the

outlook for energy demand growth. Futures

tumbled 5.5% in New York on Friday to a depth not

seen in more than three months. Equities also

plunged as investors deserted risky asset classes for

the safety of gold and US Treasuries. President

Donald Trump’s threat to punish Mexico with tariffs

because of illegal immigration darkened already-

parlous global trade prospects. Oil surged more than

40% to start the year on the strength of OPEC output

cuts and crises in Venezuela, Iran and other suppliers. But since peaking in late

April, prices have fallen off more than 19% as the US-China trade dispute

intensified. A jump in US gasoline stockpiles disclosed in a government report

this week added to angst about slackening demand. “People are trading to the

market and that’s dragging down oil,” said Jay Hatfield, whose energyfocused

Infrastructure Capital Advisors LLC oversees about $750 million. “People have

fears that global GDP is going to be reduced.” West Texas Intermediate crude

for July closed down $3.09 to $53.50 a barrel on the New York Mercantile

Exchange. For the month, the futures were off 16%, for the worst May since

2012. Brent for July settlement retreated $2.38 to $64.49 on London’s ICE Futures

Europe exchange. The global benchmark crude was trading at a premium of

$10.99 a barrel to WTI, the widest in almost a year. A key Chinese manufacturing

gauge for May dropped more than forecast. The world’s second-largest

economy is mobilizing its state-run energy industry to prepare for a long

struggle with the US, and has readied a plan to restrict exports of rare earths,

according to people familiar with the matter. For more, listen to Bloomberg’s

58

mini-podcast on global commodities markets. “Given oil markets are tethered

to the hip of risk markets currently, this is bad news for oil bulls,” said Stephen

Innes, head of trading at SPI Asset Management. Infracap’s Hatfield said crude’s

slump is an overreaction. The American economy remains strong, with summer

driving season about to kick up fuel demand, while OPEC stands ready to

support prices with continued output cuts, he said. Fuel consumption in the

U.S. has also been artificially depressed in recent weeks by heavy rains and

flooding, he said. “People tend to overreact on both sides,” Hatfield said. “We

don’t see this move down to the mid-$50s as sustainable”

*****

आईआईटी ने पयनी में हलचल से पैिय कर िी वबजली

आईआईट कानपुर के वैज्ञातनकोीं क र्कन क खोज सफल रह र्ो पान में अब हलचल भर से तबजल पैिा

कर ल जाएग । र्कन क के जररए पान का बहाव 0.5 तकलोम टर/प्रतर्घींटा होने पर भ तबजल बनाई जा

सकेग । जबतक अभ र्क हाइिि ो पावर प्ाींट में तबजल बनाने के तलए पान क रफ्तार कम से कम 20

तकलोम टर/प्रतर्घींटे होन चातहए। वैज्ञातनकोीं का िावा है तक यह िुतनया का पहला शोध है तजसमें पान के

इर्ने कम बहाव में तबजल उत्पन्न क जा सक है। आईआईट कानपुर के मैकेतनकल इींज तनयररींग तवभाग

के प्रो. तबशाख भट्टाचायत और उनक ट म ने कुछ माह के शोध के बाि इस र्कन क को खोजा है। प्रो.

भट्टाचायत ने बर्ाया तक इसके तलए स्माटत मैटेररयल स्टि क्चर एीं ि तसस्टम्स (एसएमएसएस) लैब में एक प्रोजेर

बनाया था। प्रो. तबशाख का िावा है यह िुतनया का पहला ररसचत है, तजसमें 0.5 तकम /घींटे से बहने वाले पान

से तबजल बनाई गई है।

इलेक्ट्रि कल एनजी में बिलय- एक एकू्यररयम में पान को भरा गया। इसके बहाव को 0.5

तकलोम टर/प्रतर्घींटा क रफ्तार ि गई। इस पान में एक तवशेष र्रह क तिवाइस को लगाकर मैकेतनकल

एनजी उत्पन्न क गई। तफर इसमें व आईव (वटेक्स इींडू्यस्ि वाइबे्रशन) र्कन क का प्रयोग तकया गया।

इससे मैकेतनकल एनजी को इलेल्टरि कल एनजी में बिल तिया गया। इस प्रयोग में ट म ने पान में हलचल

मात्र से 230 तमल वोि क िर से तबजल जनरेट क । इस शोध में सींस्थान के प्रो. मींगल कोठार , प्रो. सेन,

प्रो. केर्न भ शातमल रहे।

तकनीक से कई जगह उत्पयिन- व आईव र्कन क से तसफत लैब में सेंसर को तबजल िेने के तहसाब से

प्रयोग तकया गया है। जल्द इसका प्रयोग भार मात्रा में तबजल उत्पािन के तलए तकया जा सकर्ा है। र्कन क

से जगह-जगह तबजल बनाई जा सकर् है।

पररर् जनय पर कयम- प्रो. तबशाख भट्टाचायत ने बर्ाया तक सींस्थान के वैज्ञातनक कृर्सनम कीं पन और साइींस

टेक्नोलॉज तवभाग के एक पररयोजना पर काम कर रहे हैं। इसके र्हर् एक ऐसा सेंसर बनाया गया है, जो

नि या र्ालाब के अींिर 24 घींटे, 365 तिन रहकर पान क हलचल समेर् सभ िाटा उपलब्ध करार्ा रहेगा।

59

समस्यय से वमली पे्ररणय- व्यल्टि के द्वारा नि के पान क जाींच क जार् है। इस सेंसर को नि के अींिर

24 घींटे रखने के तलए एनजी कहाीं से ि जाए, यह समस्या थ । सोलर पैनल 24 घींटे काम नह ीं करेगा, तवींि

एनजी भरोसेमींि नह ीं है, इलेल्टरि क तिया नह ीं जा सकर्ा। र्ब लगा तक ऐसा शोध तकया जाए तक पान के

अींिर ह सेंसर क जरूरर् के अनुसार उसे तबजल तमल जाए।

*****

Solar power can save you ₹46,000 in yearly bill

The city’s muchneeded push for solar energy could be just around the corner

with Delhi Electricity Regulatory Commission (DERC) finally notifying the group

net metering (GNM) and virtual net metering (VNM) framework, which will

benefit thousands of RWAs, households and CGHS societies. Users will be able

to benefit from a single solar plant at one location with the surplus energy being

sent back to the grid and adjusted with the bill of each meter connected to it.

This will, in theory, allow members of a society and consumers to reduce their

monthly bills. After the Delhi solar policy was issued in 2016, the power

watchdog had constituted a committee for developing this framework and

issued draft guidelines under DERC (Net Metering for Renewable Energy)

Regulations, 2014 last year. The framework has finally been notified after

objections and comments were collected from the general public by January

2019. “The move will help in the promotion and deployment of renewable

energy projects in residential and agricultural sectors benefitting lakhs of

citizens and farmers. At present, we have about 630 net metering connections

and this number will shoot up once we implement the order. We are in the

process of making changes in the billing mechanism to implement it,” said a

Tata Power-DDL spokesperson. BSES said consumers can apply for net metering

on their website. “We had earlier launched a Solar City Initiative to bridge the

gap between the consumer and the vendor. Post-installation, BSES will carry out

an inspection to assess the quality and check whether it has been done

according to the minimum technical requirements,” said a BSES official. At

present, Tata Power has around 630 net-metered connections with a capacity

of 25 MW, while BSES has 1,600 with a capacity of 60 MW. According to BSES, a

100kW plant can save up to 1,27,750 units annually equalling annual savings of

Rs 9.26 lakh. A 5KW plant can bring annual savings of Rs 46,300. The discoms said

that to apply for the project, people can simply contact them after which a

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feasibility test would be carried out and bills assessed to find out the

requirement for a household or colony. “Depending on the consumption and

the bill amount, we will be able to decide on the solar panel capacity. Different

CGHS societies are thriving with solar panels capacities ranging from 50kW to

200kW,” said a BSES official. Vendors said the amount invested in a solar panel

can be recovered in the form of savings in just 5-6 years. “This is a safe estimate

and the actual invested amount is recovered in close to four years. There are

immense benefits to go solar as the product is a longterm investment,” said

Abhishek Dabas, co-founder at Zolt Energy, a private solarpanel supplying

company. Sanjeev Aggarwal, MD and CEO of Amplus Solar, said the risk in

investment is generally low and savings can be as high as 90% of the total bill,

depending on the plant size and consumption pattern. “On average, a 5kWp

standard rooftop installation will cost Rs 3-4 lakh. If one opts for subsidy, they

can avail 30% of the plant cost from MNRE through the state nodal agency,” he

added. However, Pujarini Sen, a campaigner at Greenpeace India, said the

notification process has taken far too long to allow people to avail subsidies for

solar plants. “The important thing now is to make the consumers aware about

it and facilitate it, especially at the residential level. Once popular, the load on

the grid and electricity bills will reduce, benefitting both the consumer and the

discoms,” she added.

*****

Solar PV installations down 49% at 1.7 GW in January-March,

says Mercom report

The total solar PV installations in India was down 49 per cent in the first quarter

of calendar year 2019 at 1,737 MW as against 3377 mw in the Q1 of 2018.

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Sequentially it was up 4 per cent over 1638 mw quarter on quarter. A Mercom

India Research’s report released on Q1 2019 India Solar Market Update shows

that the rooftop installations fell by 33% year-over-year (YoY).

General elections- “Activity in the Indian solar market was generally subdued

due to general elections. Auction activity also grounded to a halt during the

model code of conduct period. Rooftop installations were especially affected,”

said Raj Prabhu, CEO of Mercom Capital Group. Mercom India Research

forecasts India to install approximately 9 gigawatt (GW) of solar capacity in the

calendar year 2019. The large-scale solar project development pipeline for India

stands at 19.4 GW with 31.7 GW tendered and pending auctions at the end of Q1

2019. Mercom’s report estimates solar installations in India to reach 71 GW by

the end of 2022, almost 30% lower than the 100 GW target set by the

government. However, with an aggressive push and supportive policies, the

goal is still achievable. Bucking the trend from recent years, more new coal

capacity was added compared to solar or any other generation source in Q1

2019 with 58%. Solar, which has been the most added new capacity almost every

quarter over the past couple of years accounted for 32% of new capacity

additions.

Capacity addition- According to the report, India’s cumulative installed capacity

reached 30 GW at the end of Q1 2019. However, rooftop installations still only

make up 12% of total solar installations and the country has achieved only 9%

of its targeted rooftop capacity addition of 40 GW by 2022. Tariff caps have been

another contentious issue as government agencies have been cancelling

auctions after they have been conducted and winners announced. This has led

to a lack of interest in some of the recent auctions. Over 800 MW of solar

auctions were cancelled in Q1. In Q1 2019, investments in the Indian solar sector

totalled over $2.8 billion, 12% lower compared to investments made in Q1 2018.

Cumulative installed solar capacity in India reached 30 GW at the end of March

2019. Of this, cumulative rooftop solar installations amounted to 3.5 GW. Over

12 GW of solar was tendered, and 3 GW was auctioned in Q1. Mercom forecasts

India to install approximately 9 GW of solar capacity in the calendar year 2019.

Solar accounted for 32% of the new power capacity added in Q1 2019

*****

62

Telangana govt. to come up with new solar policy

The Telangana government is planning to come out with a new solar policy

factoring in the changes in the rapidly expanding renewable energy sector. The

policy framework will take forward the State government agenda and align with

the Centre’s larger target of achieving 175 GW (giga watt) capacity by 2022. The

State also plans to come out with fresh solar tenders for capacity addition

including for a couple of large floating projects in the two major reservoirs of

the State. Ajay Mishra, Special Chief Secretary, Telangana, said that the solar

policy announced about five years ago provided a push to the sunrise industry

with an installed capacity of about 3,600 MW. and cumulatively, the State’s

renewable energy capacity is up at 3,800 MW. Having achieved its near term

goals, it is time to re-strategise and look at setting up more capacity by coming

out with a new policy that is in tune with the changed requirements, he said.

Distributed- The distributed solar installation approach has made a big impact

on the State’s energy pool by enabling it to harness the potential of unused

transmission networks thereby paving the way for supplying power to deficit

locations. Speaking at the Federation of Telangana Chambers of Commerce and

Industry, Mishra said the State started with over 30 per cent power deficit and

industrial units had to face two days of power holidays in a week, and rural

areas had power barely for few hours. However, with a focussed approach, the

State managed to ensure 24x7 power supply within months of the new

government’s formation in 2014.

New capacity- “Thereafter, it has grown from strength to strength and we are

in the process of developing additional thermal power capacity of 9,000 MW

over the next few years,” he said. “Due to elections, fresh tenders could not be

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floated. We look forward to offer new projects factoring these changes and

including the lower prices at which new projects are coming up,” he said.

*****

Solar rooftop segment awaits policy sunshine

Ground-level implementation issues, last-mile problems, netmetre-related

concerns and inadequate finance options are all leading to a slower-than-

projected growth in the solar rooftop segment in the country. This is in spite of

the Central government’s stated objective of promoting the rooftop segment

across domestic, commercial, and industrial sectors. While problems vary from

one State to another, vendors seek a broad regulatory framework that could

brighten the horizon. Interactions with various players show that though the

sector holds huge promise, they want State governments to address concerns

to pave way for accelerated growth. Sanjay Banga, CEO, Tata Power Delhi

Distribution Ltd, said: “It depends on which State we are talking about in terms

of solar rooftop installations. It makes perfect economic sense, as the average

procurement cost has come down to about ₹2.60-3 a unit as against ₹4 a unit

for thermal power at the peak purchase price.” However, when it comes to

Delhi, there is no incentive for setting up a solar rooftop in the domestic sector,

as the tariffs are low and 50 per cent of around 400 units per month is

subsidised by the State. Of the 1.6 million consumers, 1.4 million use below 3

kwh capacity, he said. But in the commercial and industrial cases, it works out

well, as consumers save about ₹ 3-4 per unit when they install a unit or source

solar power.

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Billing issues- Gautham Nalamada, Executive Director, Photon Energy, said:

“There is a case for improving the netmetreing system with better-quality

smart-metres. In the current scenario, there are a number of complaints about

improper billing when excess power is exported from the unit to the grid.”

Hence, both vendors and consumers are unhappy as the billing goes awry.

States would have to look into the issue of how much can be carried forward

and reverted to the consumer when there is excess production. In Andhra

Pradesh, an innovative scheme has been initiated, wherein consumers are

offered a 1-kwh solar unit for ₹49,000, with an upfront payment of ₹15,000.

The rest is met with State and Central government funding. The State Discom

is offering 12,000 kits, of which Photon is executing an order for 3,500 kits,

Nalamada said. According to a Mercom report, rooftop installations were down

by 33 per cent during the first quarter. Raj Prabhu, CEO of Mercom Capital

group, stated in the report that after four quarters of solid growth, the decline

was due to difficulty faced in securing required approvals. However, the

segment is expected to bounce back in the second half. Vendors at the recent

‘Renewable Expo’ in Hyderabad were optimistic, and expressed hope that the

sector would embark on an accelerated growth phase. However, they were

concerned about lack of customised financing options, constantly evolving

Central and State policies related to taxes, net metreing hurdles, subsidy delays

and lack of consumer awareness, which, in turn, led to slow growth. During the

Expo, Ajay Mishra, Principal Secretary Energy of Telangana, had said that with

tariffs going up to ₹9 per unit for some domestic users who consume more

power, it would be benefitial for them to install rooftop units tosave on their

power bill. They will not need any subsidies. The payback works out to 3-4

years. Both domestic and commercial users can gain with solar installations.

*****

65

Adani Green Energy arm bags solar-wind hybrid projects of 600 MW

Adani Green EnergyNSE 2.77 % Wednesday said its arm Adani Renewable

Energy Park (Gujarat) has bagged 600 MW wind-solar hybrid projects in an

auction conducted by state-run Solar Energy Corporation of India (SECI). The

company has received Letters of Award (LOAs) from SECI for the 600 MW

projects. The fixed power purchase agreement (PPA) tariff is Rs 2.69/kWh for a

period of 25 years, it added. "Adani Renewable Energy Park (Gujarat) Ltd

(AREPGL), a Wholly-owned Subsidiary of Adani Green Energy Ltd (AGEL) had won

bids for setting up 600 MWac ISTS-connected Wind-Solar Hybrid Power Projects

in a Tender issued by SECI," the company said in a BSE filing. The projects are

expected to be commissioned by Q4 of FY2021. With this, AGEL's portfolio of

renewable generation capacity in India stands at 5.16 GW with 2.02 GW

operational projects and balance 3.14 GW in development stage.

*****

Solar Play: Vedanta to Bid Aggressively for Govt. Projects

The Vedanta Group plans to invest heavily in solar energy to generate 1,000

MW in a couple of years, and bid aggressively for government projects as the

metals and mining multinational seeks to increase generation and consumption

of emission-free power, Chairman Anil Agarwal said. Agarwal, who was in Delhi

for a pre-budget meeting with Prime Minister Narendra Modi and top officials,

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said he was inspired by the government’s aggressive push for increasing

renewable energy generation in the country which will reduce India’s

dependence on imported fuel and help reduce pollution. “Our maximum focus

for energy is in the renewables domain. We will be participating in large

government tenders that are coming. I’m looking at renewable energy sources

contributing 20% of the energy we generate,” Agarwal told ET. Vedanta will

continue to invest in oil and gas. It has bid and won many oil and gas exploration

blocks, from which it hopes to add to its sizeable production from its oilfields in

Rajasthan. India will continue to need oil and gas for a long time, and the

government needs to give incentives to companies involved in natural

resources as the sector has a phenomenal potential to create wealth, reduce

imports and create jobs, he said. In addition to investment in the conventional

energy sector, Vedanta wants to step up renewable energy generation to

balance its energy portfolio between fossil fuels and clean electricity

generation, Agarwal said. Vedanta aims to significantly expand its existing

portfolio of 300 MW of wind and solar energy capacity by participating in new

projects offered by the government, he said. “From 300 MW, our first goal is

1,000 MW. When we get there depends on government tenders. We are

looking at a couple of years, or three years,” Agarwal said. Agarwal said he fully

supported the government’s aim to significantly increase renewable energy

generation in the country because it was a clean, emission-free source and

costs had fallen rapidly in recent years making it a viable option. “The prime

minister’s dream is that 50% of India’s energy will come from renewable

sources. That’s a great dream. We fully support it.” The government’s

programme of tendering solar and wind energy projects has helped India

expand its renewable energy capacity rapidly and attracted companies from

Europe, Middle East and Africa, but project developers have complained that

cut-throat competition had reduced their margins considerably because

companies bid recklessly to win projects.

*****

67

Picking up the threads

One of the last moves of Raj Kumar Singh, the Minister for New and Renewable

Energy, before he demitted office in May last year with the dissolution of

Parliament for elections, was to call for a chintan baitakh, or a ‘mulling session’

with the industry to understand its problems and exchange views. Now that

Singh is back in the same office after being elected from the Arrah constituency

of Bihar, the industry is hoping that he will act swiftly on the views he gathered

at the chintan baitakh. During the five years of the NDA-I government, India

added 28,000 MW of solar and 14,500 MW of wind. Today, the country has 30,600

MW of solar power capacity and 35,600 MW of wind. These numbers, though

respectable in absolute terms, are way removed from their targets of 1,00,000

MW and 60,000 MW respectively, to be achieved by March 2022. The rise in solar

power capacity was primarily on the back of the fall in global module prices —

from around 63 US cents a watt in 2014, to 22 cents now. As for wind, out of

the 14,500 MW achieved during the five years, just one year (2016-17)

accounted for 5,500 MW, because in that year developers rushed to complete

projects before some incentives expired. Though the government began well

by, for instance, setting up ambitious targets, rolling out capacity auctions for

wind and solar and bringing down both wind and solar tariffs to well under ₹3

a kWhr, a concatenation of circumstances has led to the achievements not

being quite on the trajectory to the targets, calling for follow-through action in

the government’s second term.

Building on the foundations- The return of Singh to MNRE is positive for the

industry because he is already familiar with the issues at hand, whereas a new

minister would have taken time to acquaint himself with them. During Singh’s

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previous term in office (and during the time of his precedessor, Piyush Goyal)

the ministry laid a good foundation for the industry to grow. Industry insiders,

such as DV Giri, Secretary-General, Indian Wind Turbine Manufacturers

Association, acknowledge that the government has increased the volume of

business by bringing in tariff-based competitive bidding. Earlier, the respective

state electricity regulators fixed the per kWhr price of wind energy. Because

energy companies won opportunities to put up projects based on how low a

price they quote for their electricity, tariffs fell to a low of ₹2.43 a kWhr in a

Gujarat State tender of December 2017. In subsequent auctions, tariffs have

increased to ₹2.79 in the latest Solar Energy Corporation of India (SECI) tender,

in March this year. Wind industry leaders such as Ramesh Kymal, Chairman and

Managing Director of Siemens Gamesa; have noted that such low tariffs have

been made possible for higher volumes of orders for turbine manufacturers and

the long time, typically 18 months, given for developers to commission their

projects. This is advantageous because the developers can fine-tune their sites

and have more time to negotiate funding, and turbine manufacturers can

bunch orders and optimise component inventory. Similarly, for solar,

successive orders from Central and State governments have given the industry

“pipeline visibility”.

Need to address the stress- Just as the country was building up on this

foundation, a series of negative events happened in both wind and solar

sectors. In wind, because developers could put up their projects anywhere in

the country, they all rushed to the windiest sites in Gujarat and Tamil Nadu.

This brought in its wake land and evacuation issues. As for solar, the sector

underwent stress, first due to the uncertainty over the recommended 70 per

cent safeguard duty on imported modules and then the actual imposition of 25

per cent safeguard duty, caps on tariff in bidding processes, depreciation of the

rupee and uncertainty over application of GST rate on project construction

services (since resolved unsatisfactorily), though these factors were counter-

weighted favourably by continued fall in global module prices. As things stand

today, the government has tendered about 30 GW of wind and solar plants, and

there is more coming. Rupee depreciation has been checked, interest rates

seem to be stabilising thanks to the RBI’s accommodative stance, and solar

module prices are still seeing a downward bias. The operative environment for

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Indian renewable energy sector is very conducive. Industry leaders say that all

it needs is for the Minister to tap the policy environment here and there to

remove kinks that had set in.

Industry wish-list- In this regard, the industry has a longish wish list. Some fall

within the purview of MNRE and the rest, come under the State governments,

where MNRE could play a helpful role. One request of the industry has been

doing away with reverse auctions, in which bidders try to out-bid each other

and replace it with closed tenders, where the best bidder gets the project. In all

other government procurements, such as in defence and Railways, only closed

tender method is followed. The government has so far not accepted this

request, obviously with a focus on keeping the tariffs depressed. The wind

industry has requested for State-wise or substation-wise auction of capacity.

Since tenders are today so structured that the winner can put up his project

anywhere in the country, developers choose the windiest States of Gujarat or

Tamil Nadu. Consequently, projects get bunched up in these two geographies,

putting pressure on land and evacuation infrastructure, and hampering project

implementation. The scheduled dates of commissioning for the 2050 MW of

wind projects awarded under the first two auctions have passed, but only 950

MW has so far materialised. Another 4,000 MW should come up by February

2020, but only the brave believe it will happen. Hence the industry has

requested for State-wise or sub-station-wise auctions. The government seems

favourably inclined; Secretary Anand Kumar has himself said so. Presumably,

things will start moving favourably from now.

Remove tariff cap- The industry is very keen that the tariff cap, for both wind

and solar, be removed in the true spirit of market economy. The government

feels that if the cap is removed energy companies will collude and raise prices,

but industry observers say that forming cartels is impossible with so much of

competition. One industry source noted that the government has taken the

lowest tariff ever achieved in the bids — ₹2.44 a kWhr for wind projects — as

some kind of a benchmark and wants tariffs around that level all the time,

which is not possible because not all sites can support such low tariffs. There is

a cap of ₹2.50 a kWhr for solar projects and tender-specific caps for wind

projects. This is a sore point with the industry and many leaders hope for

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favourable resolution in Singh’s second term. Tulsi Tanti, the Chairman of the

Indian Wind Turbine Manufacturers’ Association, has asked for a fixed tariff of

₹3.25 a kWhr, which could come down annually by, say, 5 per cent, so that the

developers earn enough to pay off the debts in the earlier years. The

government is yet to formally respond to this. Yet another request of the

industry is for MNRE to prevail upon the State governments and have them pay

their dues to energy companies in time. Minister Singh has called upon the

financial sector to lend more to RE projects. Industry players note that banks,

apart from their own liquidity and NPA issues, hesitate to lend to renewable

energy companies whose State-government-customers not only don’t pay their

dues on time, but ironically extract the “timely payment” discount. Banks are

not going to lend unless they are confident of the financial health of their

borrowers. Industry leaders have said that rather than call upon banks to lend

more, Singh could help the industry by acceding to their demands. Only if this

is done will funds flow to this sector.

*****

OGPL hopes fair winds will help it sail out of the woods

This year, Tamil Nadu has been getting pretty good winds and the wind power

generation has gone up compared with last year. One company that is letting

out a sigh of relief is Orient Green Power Ltd. The wind power company, which

reckons it lost about ₹250 crore because the state-owned utility in Tamil Nadu

did not buy its electricity in the past years, ended 2018-19 with a loss of ₹33

crore. Also, it did not help that public distribution companies were not paying

wind energy companies their dues on time — OGPL has to get ₹30 crore from

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Andhra Pradesh alone. Timely receipt of dues would help companies such as

OGPL manage their finance costs. OGPL had to contend with finance costs of

₹192 crore last year, upon a ₹1,200-crore bank debt burden. Olympus Capital

and Bessemer Ventures-backed OGPL’s Managing Director and CEO, Sesha

Venkatachalam, says that 2018-19 was particularly bad because of poor winds

in Tamil Nadu, where the company has 310 MW (of its 425 MW) wind power

capacity. However, 2019-20 wind season has begun on the front foot. In April-

May period of this year, Tamil Nadu generated 1,585 million kWhr, compared

with 859 million in the corresponding period of last year — a 45 per cent jump.

There is no reason to believe that the rest of the wind season, which is yet to

peak, will not be as good. This has prompted Venkatachalam to observe that

the current wind year “looks bright”. NSE listed OGPL’s is a sad story of

renewable energy done in by the government-owned discoms, with first the

“backdowns” (or not buying electricity) and then delayed payments. That the

Tamil Nadu discom had a practical reason for the backdown – the inability of its

grid to handle large parcels of intermittent wind power — is not helpful to a

company that has to pay back its bank dues out of its electricity sales.

Thankfully, however, the phenomenon of backdown has gone and the state is

buying most of the electricity that wind and solar companies are generating.

The other problem, though, that of delayed payments, is a nation-wide

phenomenon that is bludgeoning all renewable energy companies and holding

back investments. Venkatachalam says that all States except Gujarat pay very

late, and ironically, also extract discounts that are due for prompt payment.

There have been reports that Telangana owes energy companies ₹2,400 crore.

OGPL, for instance, could get investors bring in cash to pay off bank debts, but

which investor would bring in cash if he doesn’t trust the investee’s biggest

customer? The parent, Shriram group, chipped in with ₹700 crore. It is today

owed about ₹450 crore and analysts believe that the group has little option but

to forget it. The company, formed in 2006 as a joint venture between Shriram

EPC, part of the Chennai-based Shriram group, and Bessemer Ventures, went

public in 2010, for ₹47 a share, to raise ₹900 crore. It is yet to pay a dividend.

Its shares closed today on the NSE at ₹4.05.

*****

72

TERI to audit handling of garbage by east, south corpns

The south and east corporations have decided to engage The Energy and

Resource Institute (TERI) to assess the volume of garbage collected in their

areas, its disposal and the discrepancies in the implementation of the solid

waste management (SWM) rules. The institute will work as the third party to

audit the initiatives taken by the corporations and find out their effectiveness.

It will also suggest solutions based on requirements in an area, said a senior

East Delhi Municipal Corporation (EDMC) official. “TERI’s team members will

randomly visit areas after collecting the lists of unauthorised and authorised

colonies from us. They will speak to people, check segregation at source, audit

arrangements made by us for decentralised processing and the final disposal of

garbage. The entire study will be conducted in three months and the cost will

be borne by us,” said the official. The move has come after National Green

Tribunal in March asked all three corporations to submit an action-taken report

to achieve 100% waste segregation, collection and full implementation of the

SWM rules in three model wards. NGT has asked the agencies to file the reports

after three months, complete the project in six months and implement the rules

in other wards in a year, said the official. “To substantiate our efforts, we have

decided to engage a third party for the audit.” While EDMC has issued the work

order for TERI, South Delhi Municipal Corporation, (SDMC) is providing colony

details. “We want to develop full infrastructure to implement SWM Rules 2016

and take corrective steps on the basis of report,” said an SDMC official. In 2018,

too, EDMC had conducted a similar evaluation through TERI. Lack of awareness

(63%), unwillingness to segregate (40%), and lack of space for two bins (23%)

were identified as the main problem areas. It had also highlighted the need to

engage informal waste collectors.

*****

73

Sustainable modifications in your home

Air pollution, high-energy consumption, water shortage and waste

management are acute problems. They also increase our monthly expenses.

However, there are investments you can make in your house to do good to the

environment while also getting returns by way of savings.

Power saving- There are at least five different ways by which you can save on

your power bill, some of which do not add to extra cost. One is through the

design of the house. A well-ventilated house with suitable lighting can reduce

heating, cooling and lighting energy needs. For example, orienting the house to

face south helps minimise energy consumption by capturing the sun’s heat in

the winter and blocking it in the summer. Two, the materials you use in

construction can alter your energy consumption. Many traditional and local

building materials may be more suitable than mass-produced or popular ones

such as red brick or concrete. For instance, mud and bamboo and other natural

materials can offer more energy-efficiency. There are also many new-age

materials that can provide more thermal comfort. In a completed house, fixing

air leaks in windows and doors and adding curtains can save you cooling cost.

Three, harnessing solar power is a great way to reduce your lighting bill. This

can be done in a few ways. A simple one in design is using skylights that can

reduce your lighting requirements. Solar lanterns that can be charged during

the day cost under ₹500. Four, you can install and use solar water heaters to

cut your geyser usage. The caution, however, is that this investment may take

a while to payback, based on your geyser usage and whether there is enough

solar power during the periods you need them. As the calculations vary with

regions, be sure to do the maths on the investment and energy savings. Five,

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solar panels can be used to generate electricity. Here again, the cost economics

need to be worked out based on your usage and whether there is net metering

(which reduces your battery storage costs, which can be substantial). In

apartments, given the limited roof space and multiple users, the economics

may work out better than in independent homes.

Water saving- Given the water shortage in many cities and the need to buy

water, solutions that reduce water usage pay for itself. A first step that many

apartments take is installing individual water meters to monitor usage and bill

based on that. This has been shown to reduce consumption (by up to 30 percent

in some cases). There are also many adapters that you can attach to taps.

Rainwater harvesting is a great way to recharge groundwater. Reclaiming used

water with sewage treatment plants is another way to reduce water intake.

These can save up to 90 per cent of power costs in operation. Treated water

can be used for gardens and flushing, and would require changes to the

plumbing system, if done as a retrofit. You can also buy units that generate

drinking water from the moisture in the air. These may cost about ₹40,000 and

can give 20 litres of water in a day. There is also running cost of about half a

unit of power per litre of water. These can save water wasted in RO purifiers.

Other savings- Having a terrace garden helps cool the house and supply

vegetables. You can also compost kitchen waste and use it in the garden. There

are also urban versions of biogas plants that can be used as a replacement for

cooking gas. For example, 10 kg per day of bio-waste material generates fuel to

cook for about two hours per day. Biogas plants cost about ₹40,000, and there

are extra costs such as installation and a new stove. Installing smart sensors —

that detect usage — and controllers — that turn off devices when not used —

is another way to save power and water. When doing calculations, giving

weightage to the overall cost to the society can tilt the balance towards

sustainable products.

*****

75

Renewable is the future, but thermal will co-exist for some

time: JSW Energy CEO

Prashant Jain, Joint MD & CEO, JSW Energy, part of

the $13billion Sajjan Jindal-led JSW Group, has seen

an interesting couple of years. It diversified into EV,

put a team together, lined up investments and then

decided to pull the plug. On the power front, the

sector has been under stress, but the Supreme Court

ruling on stressed assets offered some relief. Jain

spoke to BusinessLine on a range of topics, including

priorities for the new government, reasons for the group’s exit from the EV

business, efficiency measures it is taking to reduce the debt and the road ahead

in the backdrop of all this. Excerpts.

Opost the Supreme Court’s decision to quash the RBI circular concerning

resolution of stressed assets, is there a better visibility across all stakeholders

in the power sector?

The macro picture is that the power sector is stressed and the reason is simple-

- demand and supply. If you look at the 9 to 11th Five- Year Plans, whatever

capacity we added was always lower. In the 12th Plan, as against a planned

capacity of 88 GW, the addition was around 143 GW. Additional capacity,

coupled with economic slowdown, energy efficiency measures and reduction

in distribution losses from 27 per cent to 5 per cent helped during this period.

Also, the demand from the manufacturing sector was lower and coal mining re-

allocation added to the stress. All this resulted in a reduced demand for power.

However, there are reasons to cheer. The overcapacity created is starting to get

absorbed. Merchant tariff prices are also going up. The power demand is

growing by 6 per cent. Also, new capacity addition is moderating. In 2016-17, it

was 24 GW and now it is 12 GW. So, no new capex is taking place. For a country

with a GDP at 7 per cent, power addition is 6 per cent.

76

Is the capacity addition restricted to certain segments like renewables?

For solar, the gestation period is 18-24 months. In the renewables space,

capacity is not getting added. This can be seen from the fact that against a

target of 22 GW, only 8 GW got added in the 2019 fiscal. It is not happening

across-the-board. So, you will see power outages.

You have decided to shelve your EV project. Why?

What we realised is that there are a few factors. Firstly, the policy shift by the

Centre and incentives veered towards mass transit. Also, we feel that EV uptake

in India will be slower. The cost of a vehicle is prohibitively high and India is a

home for low-cost cars. Eighty per cent of sales of Indian vehicles is below

$10,000. Hence, we backed out and prefer to maintain capital cushion for

growth opportunities in power and other related businesses.

You were not aggressive with your capex plans for acquisitions last year. Will

this year be different?

I strongly believe that renewable is the future. That doesn’t mean that thermal

has no future. What I mean is that the capacity added in renewables will be

much faster. Both will co-exist for some time in India. Meanwhile, we see

consolidation in the thermal sector and will look at inorganic growth. In solar

and wind, it will be organic growth.

Is the price per unit in solar an issue?

The prices have moderated now. It is as low as ₹2.42 per unit. Now, the tariff is

₹2.80₹2.90 and on the other side there is a decrease in panel prices. As soon as

we have rationality in the sector, we will take a quick plunge. We have the

capability and the balance sheet to do so.

Your net debt-to-equity ratio is one of the lowest in the industry (0.85: 1).

How did you achieve this?

In the last two years, we have been looking to reduce debt. It was ₹16,000 crore

and now it has come down to ₹10,000 crore. Also, our networth has gone up.

We reduced our receivables from discoms. lso, we increased our operating

77

EBITDA by increasing our long-term PPA portfolio. Add to that, internal

efficiencies which played a part despite wage increases. This allows us to repay

our debts and interest costs. The latter will be in three digits.

Independent power producers have been affected by domestic coal shortfall.

How have you managed?

We set up capacities based on both domestic and imported coal. In plants

where we use imported coal, there too we have ensured that 50 per cent of the

coal is domestic. However, there is not enough coal produced in India. The

government should speed up coallinkages in certain cases as there is a shortfall

in domestic production. Nevertheless, we have done PPA with our

counterparties wherein the power sold based on imported coal is totally passed

through (which means end-consumer pays for it). This year imported coal prices

have fallen by almost 40 per cent.

You had plans of solar panel manufacturing. What’s the update?

The moment we started to look at panel manufacturing, there was a shift in the

government policy in China. Also, China is slowing down on its renewable

capacity addition. The Indian government too has put safeguards against

Chinese imports. For these reasons, we didn’t go ahead with it.

*****

फसल ों के अिशेष से तैर्यर ह गय बयर् डीजल, पर्यािरण प्रिूषण पर लगेगी लगयम

फसलोीं के अवशेष (पराल ) से अब बायोि जल बनाने क रै्यार

क जा रह है। इससे न तसफत वायु प्रिूषण कम होगा, बल्टल्क

पयातवरण सींरक्षण को भ बढावा तमलेगा। यह सींभव होगा

तहमालय जैवसींपिा प्रौद्योतगक सींस्थान पालमपुर क बिौलर्।

इस सींस्थान के तवशेषज्ञोीं ने बायोि जल बनाने क र्कन क

रै्यार क है। हालाींतक, शुरुआर् िौर में इसक लागर् अतधक

है, लेतकन तवशेषज्ञ इसे कम करने के प्रयास में जुटे हुए हैं। िेश

के बडे़ राज्योीं में फसलोीं के अवशेषोीं को खेर्ोीं में ह जला तिया

जार्ा है। इससे वार्ावरण प्रिूतषर् होर्ा है और स्वास्थ्य पर

तवपर र् असर पड़र्ा है। पयातवरण को होने वाले इस नुकसान को चुनौर् मानरे् हुए काउीं तसल ऑफ

साइींतटतफक एीं ि इींिल्टस्टि यल ररसचत (स एसआइआर) के पालमपुर ल्टस्थर् तहमालय जैवसींपिा प्रौद्योतगक

78

सींस्थान ने तवशेष पररयोजना के र्हर् फसलोीं के अवशेषोीं से बायोि जल रै्यार करने में कामयाब हातसल

क है। पींजाब, हररयाणा, उत्तर प्रिेश और महाराष्ट्ि में तकसान बडे़ स्तर पर खेर् बाड़ कररे् हैं और यहाीं

फसलोीं के अवशेषोीं को खेर्ोीं में ह जला िेरे् हैं। इससे पयातवरण िूतषर् होर्ा है।

ऐसे तैर्यर वकर्य जयतय है बयर् डीजल- मक्का, धान, गेहीं और गन्न फसलोीं के अवशेषोीं को बार क बनाकर

पाउिर में पररवतर्तर् तकया जार्ा है और इसमें 5 हाइिि ोक्स मेतथल फुरफुराल (5-एचएमएफ) यान काबततनक

तमश्रण तमलाया जार्ा है। इससे ह बायोि जल रै्यार तकया जार्ा है। इसे गातड़योीं में इसे्तमाल करने से इींजन

क कायत क्षमर्ा बढर् है।साथ ह , गातड़योीं से तनकलने वाले काबतन उत्सजतन क मात्रा में भ कम आर् है।

क्यय है बयर् डीजल ?- बायोि जल जैतवक स्रोर्ोीं से प्राप्त और ि जल के समरु्ल्य ईींधन है,जो परींपरागर्

ि जल इींजनोीं को तबना पररवतर्तर् तकए ह चला सकर्ा है। भारर् का पहला बायोि जल सींयींत्र ऑस्टि ेतलया के

सहयोग से काक नाड़ा सेज में स्थातपर् तकया गया है। तहमालय जैवसींपिा प्रौद्योतगक सींस्थान पालमपुर के

तनिेशक िॉ. सींजय कुमार के मुर्ातबक, 'बायोि जल बनाने में सींस्थान महत्वपूणत भूतमका तनभा सकर्ा है।

इसक लागर् को तकस प्रकार कम तकया जाए, यह चुनौर् है। पयातवरण सींरक्षण के तलए ह इस प्रोजेर को

तलया है। तकसानोीं से कच्च सामग्र लेकर उनक आतथतक ल्टस्थतर् भ मजबूर् होग ।'

*****

Green power fights heat wave blues

A sharp rise in generation

from renewable and hydel

sources has kept spot power

prices in check, making

adequate power available at

affordable rates for meeting

record demand due to the

heat wave sweeping across

the country. “There is no

shortage of power. There is

plenty of renewable power

available. Hydel systems like

Bhakra-Beas have stored

adequate water. Thermal

plants are doing well. We

are prepared (to meet

demand spike),” power

minister R K Singh told TOI. A 24% increase in generation from renewable energy

79

projects and 10% increase in supply from hydel projects in the April-May period

have checked spot power prices in the region of Rs 3.40 in spite of the demand

spike. This has allowed states to buy power to keep blackouts at bay. Consider:

Energy supply gap during April-May declined to 0.4% of the demand from 0.7%

in the same period of 2018. Similarly, peak shortage stood at 0.5% against 0.7%

in the same period last year. Higher renewable and hydel generation have also

prevented faster depletion of fuel stock at coal-fired plants, which increased

production by just 2.5% from a year-ago period. This will allow them to be

better position to tackle additional demand due to sweltering heat seen from

July onwards when rains also impact coal supply. A concerted effort by the coal

and power ministries over the last few months have built fuel inventories good

for 15 days operation at 112 out of 114 power plants monitored by the Central

Electricity Authority. Gneration from coal-fired plants accounted for 72% of

total generation in the April-May period.

*****

EU leaders to debate push for zero emissions by 2050

EU leaders will this week discuss setting a target of zero net greenhouse gas

emissions by 2050; European officials said on Monday, following elections that

highlighted climate change fears. European Union leaders meeting on Thursday

and Friday in Brussels will debate the 2050 target of “climate neutrality” that

the environmental group WWF says now has the support of 16 of the EU’s 28

countries. “We urgently need to step up our action to manage this existential

threat,” a draft of the EU’s strategic agenda for the next six years says. “The EU

must lead the way, by engaging in an in-depth transformation of its own

economy and society to achieve climate neutrality,” according to the draft. The

draft contained a footnote, saying the wording may be adjusted to reflect the

results of the summit debate, which an EU source said would focus on the 2050

target. The source said that a number of EU countries want more debate on

financing the shift from an economy running on fossil fuels, especially those in

eastern Europe, to one driven by clean energy. The source, speaking

anonymously, that “I’m sure everyone will agree on this target, but only in

December,” when the leaders hold their annual year-end summit. The growing

80

stress on climate action comes after May 23-26 elections to the European

Parliament where Green parties made substantial gains. Spurred by a wave of

student strikes, voters in many countries highlighted climate concerns and the

Parliament’s main political blocs for the first time adopted climate action as a

rallying cry.

*****

Dispute resolution panel to be set up for solar, wind projects implemented by SECI, NTPC The Ministry of New and Renewable Energy (MNRE) has decided to set up a

three-member dispute resolution committee (DRC) to look into disputes beyond

contractual agreements between solar or wind power developers and Solar

Energy Corporation of India (SECI) or state-run power giant NTPC. This

mechanism will cover all those projects that would be implemented through or

by SECI and NTPC. Solar and wind power industries have been demanding to

set up such dispute resolution mechanism. "It is felt that there is need to erect

a transparent, unbiased dispute resolution mechanism, consisting of an

independent, transparent and unbiased DRC), for resolving the unforeseen

disputes that may arise in implementation of contractual agreements and also

for dealing with issues which are beyond the scope of contractual agreements

between solar power developers/ wind power developers and SECI / NTPC," an

MNRE office order said. According to the order, a three-member DRC will be

set up with the approval of the new and renewable energy minister, consisting

of eminent persons of impeccable integrity. The upper age for the DRC

members shall be 70 years, and its members shall be chosen from the eminent

persons located in Delhi-NCR to avoid expenditure on air travel and

accommodation. The selection of the DRC members would be such that there

is no conflict of interest involved. The mechanism of DRC will be applicable for

all solar or wind schemes, programmes and projects being implemented

through or by SECI and NTPC. The DRC will consider cases including appeal

against decisions given by SECI on extension of time requests based on terms

of contract and all requests of extension of time not covered under the terms

of contract. It will examine all such cases referred to it, including the cases

where the developer is not satisfied with the decision of SECI or NTPC and it

81

decides to appeal after paying the required fee. The order said the

recommendations of the DRC, along with the MNRE's observations, will be

placed before the new and renewable energy minister for final decision. To

arrive at any decision, the Committee will be free to interact with the relevant

parties of the case and shall record their views. No lawyer shall be permitted to

present the case before the DRC, it added.

*****

Producing water out of thin air

Ramesh Kumar Soni’s aim was to get into an IIT. He was in Kota, Rajasthan, his

home State, preparing for the IIT entrance, but couldn’t make it. While

preparing for the JEE, Ramesh heard that nanotechnology was an evolving area,

one where the next big wave was going to happen. This brought him to SRM

University in Chennai for a B.Tech in nanotechnology. As luck would have it,

Ramesh joined as a project associate in the chemistry department at IITMadras,

partly fulfilling his ambition of getting into an IIT, where, apart from being the

founder of VayuJal, he is also pursuing an Master’s. It was his interest and

qualification in nanotechnology that got him interested in developing

atmospheric water generators, to tap the moisture in the air to produce re-

mineralised, potable water. He started working on this in 2015 and looked at

various materials and surfaces that can be used in the water generator unit. He

even participated in a global competition on making atmospheric water

82

generators (AWG), marking the stepping stone for the venture. “We got this

company formed. We got financial support from Engineers India Ltd (a

Government of India enterprise),” says inter-disciplinary Ramesh. VayuJal has

produced four AWGs so far – three of 100 litres a day capacity and one 400litre-

a-day unit, all of which are being tested out in various locations in and around

IIT-M. VayuJal has started working on a 2,000-litres-a-day water generator with

solar back-up. Given the water starved situation in Chennai, or for that matter

in most parts of the country, this can be an ideal solution, feels Ramesh. There

are even requests for smaller units, of say 30 litres a day capacity, that can be

used in individual apartments.

How it works- How does the AWG work? It is, explains Ramesh, something

similar to an air-conditioner, where there are different surfaces involved and

where there is condensation of water. This condensed Ramesh Kumar Soni

(left), Director & CEO, and Ankit Nagar, Co-founder & Director, VayuJal

Technologies Pvt Ltd, with an atmospheric water generator manufactured by

their company and installed at the Taramani Guest House in IIT-Madras water

is filtered, treated, re-mineralised and made fit for drinking or cooking. The

structures used for cooling the air, says Ramesh, draw inspiration from cactii.

Just as the cactii have small thorn-like structures, the cooling surface in the

AWG too has some structures that is used to cooled the air. When air passes

through it, the relative humidity content goes high and water starts to come

out of it. The effort is to speed up the condensation process so that more water

is produced. The rate at which water is produced depends on the ambient

temperature, humidity level, volume of air passing over the coil and the unit’s

capacity to cool the coil. The AWGs are power-intensive and that is why VayuJal

is working on reducing the power consumption or using solar panels on the

larger units to produce more water so that AWGs become attractive for a larger

market. The AWG works well in areas where the relative humidity is high,

especially coastal places such as Chennai. Ramesh says VayuJal is working on

making a unit that will work well in desert conditions as in his native Rajasthan.

The problem there is that the units will consume more power than those in

coastal areas. VayuJal designs the components and structures and gets them

made by vendors, after which it assembles them itself. The components include

compressors, air filters, water filtration, heat exchanger coils, evaporators,

83

condensers and a few fans. Where does the nanotechnology part come in? In

the evaporator, says Ramesh. The part where condensation happens. “We are

trying to increase the heat transfer and the condensation efficiency. If both go

higher, we will have lesser power consumption per litre of water produced,” he

adds. According to Ramesh, a litre of drinking water produced by VayuJal’s

AWGs cost ₹1.8-2, considering electricity tariff at ₹6 a unit. These numbers, he

adds, depend on the cost of electricity, ambient temperature and relative

humidity. “We are working to reduce operational cost to ₹1.5 a litre and

minimise the impact of ambient humidity on the machine’s water generation

capacity so that they can run even in arid States such as Rajasthan,” says

Ramesh.

Commercial plan- VayuJal, he says, is ready for commercial production, even as

it works on improving the technology. “Jaisalmer (in Rajasthan) is our ideal test

site. If you succeed in Jaisalmer with lesser power consumption, if a common

man can buy it there, that day we would say VayuJal is a success. Right now, we

are on that journey,” says Ramesh. The 100-litre-a-day unit costs ₹1.5-1.6 lakh,

while a 400-litre unit costs ₹5.5 lakh. Ramesh is keen to bring down the price of

both, for which the company is revisiting its bill of materials to see if it can do

with fewer components and bring in IoT to improve efficiencies. He would

rather bootstrap for some more time before going in for outside equity funding.

*****